REO Enters. v. Village of Dorchester , 306 Neb. 683 ( 2020 )


Menu:
  • Nebraska Supreme Court Online Library
    www.nebraska.gov/apps-courts-epub/
    08/07/2020 08:07 AM CDT
    - 683 -
    Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    REO ENTERS. v. VILLAGE OF DORCHESTER
    Cite as 
    306 Neb. 683
    REO Enterprises, LLC, a Nebraska limited
    liability company, appellee, v. Village of
    Dorchester, a Nebraska political
    subdivision, appellant, and
    Ange Lara, appellee.
    ___ N.W.2d ___
    Filed August 7, 2020.    No. S-18-970.
    1. Ordinances. Interpretation of a municipal ordinance is a question
    of law.
    2. Constitutional Law: Ordinances. The constitutionality of an ordinance
    presents a question of law.
    3. Judgments: Appeal and Error. An appellate court independently
    reviews questions of law decided by a lower court.
    4. Equal Protection. Equal protection requires the government to treat
    similarly situated people alike.
    5. ____. Equal protection does not forbid classifications; it simply keeps
    governmental decisionmakers from treating differently persons who are
    in all relevant respects alike.
    6. ____. When a classification created by governmental action does not
    jeopardize the exercise of a fundamental right or categorize because of
    an inherently suspect characteristic, equal protection requires only that
    the classification rationally further a legitimate state interest.
    7. Constitutional Law: Ordinances: Presumptions. Courts begin with
    a presumption of validity when passing upon the constitutionality of
    an ordinance.
    8. Equal Protection: Proof. Under the rational basis test, whether an equal
    protection claim challenges a statute or some other government act or
    decision, the burden is upon the challenging party to eliminate any rea-
    sonably conceivable state of facts that could provide a rational basis for
    the classification.
    9. Equal Protection. The rational basis test, which is the most relaxed and
    tolerant form of judicial scrutiny of equal protection claims, is satisfied
    - 684 -
    Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    REO ENTERS. v. VILLAGE OF DORCHESTER
    Cite as 
    306 Neb. 683
    as long as (1) there is a plausible policy reason for the classification,
    (2) the legislative facts on which the classification is based may ratio-
    nally have been considered to be true by the governmental decision-
    maker, and (3) the relationship of the classification to its goal is not so
    attenuated as to render the distinction arbitrary or irrational.
    10.   Equal Protection: Records. In equal protection claims, where the
    record does not contain information regarding the adoption of an ordi-
    nance, statute, or other governmental action, courts analyze the underly-
    ing legislative facts the governmental entity alleged to have considered
    when such basis is clearly apparent.
    11.   Equal Protection: Ordinances: Proof. The burden is upon a party chal-
    lenging an ordinance under an equal protection claim to eliminate any
    reasonably conceivable state of facts that could provide a rational basis
    for the classification.
    12.   Equal Protection: Legislature: Intent. Social and economic measures
    violate equal protection only when the varying treatment of different
    groups or persons is so unrelated to the achievement of any legitimate
    purposes that a court can only conclude that the Legislature’s actions
    were irrational.
    13.   Equal Protection. The rational basis test does not require a govern-
    mental entity to choose a specific course of action to address its legiti-
    mate interest.
    14.   Appeal and Error. An appellate court will not consider an issue on
    appeal that was not passed upon by the trial court.
    15.   Constitutional Law: Appeal and Error. A constitutional issue not
    presented to or passed upon by the trial court is not appropriate for con-
    sideration on appeal.
    Appeal from the District Court for Saline County: Vicky
    L. Johnson, Judge. Reversed and remanded for further
    proceedings.
    Kelly R. Hoffschneider, of Hoffschneider Law, P.C., L.L.O.,
    for appellant.
    Gregory C. Damman, of Blevens & Damman, for appellee
    REO Enterprises, LLC.
    Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
    Papik, and Freudenberg, JJ.
    - 685 -
    Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    REO ENTERS. v. VILLAGE OF DORCHESTER
    Cite as 
    306 Neb. 683
    Funke, J.
    The Village of Dorchester, Nebraska (Dorchester), appeals
    the district court’s order granting summary judgment for REO
    Enterprises, LLC (REO). In its order, the district court declared
    Dorchester’s ordinance No. 684 unconstitutional because it
    treated tenants and owners of property differently when apply-
    ing for utility services by requiring tenants to obtain a land-
    lord’s written guarantee that the landlord would pay any unpaid
    utility charges for the rented property. Dorchester claims that
    the district court erred in this declaration and that ordinance
    No. 684 does not violate the Equal Protection Clauses of the
    U.S. and Nebraska Constitutions. For the reasons set forth
    herein, we reverse the judgment and remand the cause to the
    district court for further proceedings.
    BACKGROUND
    REO is a Nebraska limited liability company which owns
    residential rental property in Dorchester. Prior to May 1, 2017,
    tenants who leased REO’s property applied for utility services
    with Dorchester, paid a deposit, and received water, sewer, and
    electrical services.
    On May 1, 2017, Dorchester’s village board passed ordi-
    nance No. 684 mandating the use of village utility services and
    setting forth terms for billing, collection of bills, and discon-
    tinuance of service. As relevant to the instant case, “Section
    3-002: Consumer’s Application; Service Deposit” provides:
    A. Every person or persons desiring utility services
    must make application therefor to the Village clerk, who
    shall require the applicant to make a service deposit and
    tap fees for water and sewer service in such amounts as
    set by resolution by the Village Board and placed on file
    at the Village office. . . . Utility services shall not be sup-
    plied to any house or private service pipe except upon the
    order of the utilities superintendent.
    B. Before a tenant’s utility application will be accepted,
    the landlord shall be required to sign an owner’s consent
    - 686 -
    Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    REO ENTERS. v. VILLAGE OF DORCHESTER
    Cite as 
    306 Neb. 683
    form and agree to pay all unpaid utility charges for his
    or her property.
    In July 2017, Ange Lara entered into a lease agreement with
    REO for the rental of REO’s Dorchester property. Pursuant
    to this agreement, Lara contacted Dorchester’s village clerk
    to apply for utility services and paid a $250 deposit with this
    application. At that time, Lara was informed that there was a
    prior, unpaid utility bill associated with a prior renter of the
    property and that she would not receive the services until this
    bill was paid and REO signed a form titled “Owner’s Consent
    and Guaranty of Payment for Unpaid Utility Charges for
    Rental Property.”
    Lara told a representative of REO about her interaction
    with the village clerk. An REO representative then contacted
    representatives of Dorchester and was informed of ordinance
    No. 684 and its requirement that REO sign the “Guaranty”
    before Lara could receive utility services for the property. The
    village clerk also reiterated the requirement that the prior ten-
    ant’s past-due bill be paid. REO responded to these require-
    ments by asserting that ordinance No. 684 is invalid and that it
    would not sign the “Guaranty.”
    Due to this noncompliance, Dorchester refused to provide
    Lara utility services at the property in Lara’s name. However,
    Dorchester did begin to provide services to the property
    through an account set up in an REO representative’s name. At
    the time of this action, Dorchester had retained Lara’s deposit
    and was continuing to provide utility services for the property,
    still occupied and leased by Lara, through the REO representa-
    tive’s account.
    In October 2017, REO filed a complaint seeking that the
    district court declare ordinance No. 684 void and unenforce-
    able and order Dorchester to pay REO’s attorney fees and court
    costs. REO alleged four claims as follows: (1) Ordinance No.
    684 violated the Equal Protection Clauses of article 1, § 3,
    of the Nebraska Constitution and the 14th Amendment to the
    U.S. Constitution; (2) ordinance No. 684 violated the Equal
    - 687 -
    Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    REO ENTERS. v. VILLAGE OF DORCHESTER
    Cite as 
    306 Neb. 683
    Credit Opportunity Act 1; (3) ordinance No. 684 violated the
    special legislation provision of article 3, § 18, of the Nebraska
    Constitution; and (4) ordinance No. 684 violated Nebraska’s
    Uniform Residential Landlord and Tenant Act. 2
    Dorchester filed an answer which claimed, in part, that
    REO’s complaint failed to state a claim upon which relief
    could be granted and that REO’s claims were barred in whole
    or in part by the doctrine of unclean hands, laches, waiver,
    and estoppel.
    In May 2016, REO filed a motion for summary judgment
    claiming there were no genuine issues of material fact and it
    was entitled to judgment as a matter of law. Dorchester, in turn,
    also filed a motion for summary judgment, agreeing there were
    no genuine issues of material fact and claiming it was entitled
    to judgment as a matter of law.
    Following a hearing, the district court entered summary
    judgment for REO and overruled Dorchester’s motion. In its
    order, the court analyzed REO’s claim that ordinance No. 684
    violated the Equal Protection Clauses. First, the court found
    that residential tenants and owners of Dorchester property were
    similarly situated under ordinance No. 684 for equal protection
    purposes. The court noted that by requiring a landlord to be a
    cosigner to a tenant’s utility obligations, but not requiring a
    residential owner to obtain a third-party cosigner, ordinance
    No. 684 treated tenants and owners differently. The court then
    found there was not a rational relationship between the dif-
    ference in treatment and Dorchester’s interest in collecting
    unpaid bills from tenants. Specifically, the court reasoned that
    Dorchester’s policy was applied to tenants irrespective of their
    creditworthiness and ability to pay without taking into account
    the tenants’ security deposits and the ability of Dorchester
    to impose liens on the rented property or provide other rem-
    edies to meet Dorchester’s offered goal. Thus, the court
    determined ordinance No. 684 unconstitu­tionally vio­lated the
    1
    15 U.S.C. § 1691 et seq. (2012).
    2
    Neb. Rev. Stat. §§ 76-1401 to 76-1449 (Reissue 2018).
    - 688 -
    Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    REO ENTERS. v. VILLAGE OF DORCHESTER
    Cite as 
    306 Neb. 683
    Equal Protection Clauses and, because it found this claim dis-
    positive, did not discuss REO’s remaining claims.
    ASSIGNMENT OF ERROR
    Dorchester assigns, consolidated and restated, that the
    district court erred by finding that ordinance No. 684 vio-
    lated the Equal Protection Clauses of the U.S. and Nebraska
    Constitutions.
    STANDARD OF REVIEW
    [1-3] Interpretation of a municipal ordinance is a question of
    law. 3 Similarly, the constitutionality of an ordinance presents
    a question of law. 4 An appellate court independently reviews
    questions of law decided by a lower court. 5
    ANALYSIS
    Equal Protection
    [4-6] The Nebraska Constitution and the U.S. Constitution
    have identical requirements for equal protection challenges. 6
    Equal protection requires the government to treat similarly sit-
    uated people alike. 7 It does not forbid classifications; it simply
    keeps governmental decisionmakers from treating differently
    persons who are in all relevant respects alike. 8 When a clas-
    sification created by governmental action does not jeopardize
    the exercise of a fundamental right or categorize because of
    an inherently suspect characteristic, equal protection requires
    only that the classification rationally further a legitimate
    state interest. 9
    3
    Wilkison v. City of Arapahoe, 
    302 Neb. 968
    , 
    926 N.W.2d 441
    (2019).
    4
    Dowd Grain Co. v. County of Sarpy, 
    291 Neb. 620
    , 
    867 N.W.2d 599
        (2015).
    5
    Wilkison, supra note 3; Dowd Grain Co., supra note 4.
    6
    Lingenfelter v. Lower Elkhorn NRD, 
    294 Neb. 46
    , 
    881 N.W.2d 892
    (2016).
    7
    Id. 8
        Id.
    9
    
        Id.
    - 689 -
    
                 Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    REO ENTERS. v. VILLAGE OF DORCHESTER
    Cite as 
    306 Neb. 683
    Ordinance No. 684 creates two classifications relevant to the
    instant action: (1) residential tenants and (2) residential owners.
    REO does not claim, and the district court did not find, that
    tenants are a suspect class or that ordinance No. 684’s differ-
    ence in treatment affected a fundamental right. Additionally, we
    have not held that a specific application and collection structure
    for payment of utility services by tenants and landowners is a
    fundamental right. As such, and because the interests at issue
    are economic, we apply the rational basis test. 10
    [7-9] This court begins with a presumption of validity
    when passing upon the constitutionality of an ordinance. 11
    Accordingly, under the rational basis test, whether an equal
    protection claim challenges a statute or some other government
    act or decision, the burden is upon the challenging party to
    eliminate any reasonably conceivable state of facts that could
    provide a rational basis for the classification. 12 The rational
    basis test, which is the most relaxed and tolerant form of judi-
    cial scrutiny of equal protection claims, is satisfied as long
    as (1) there is a plausible policy reason for the classification,
    (2) the legislative facts on which the classification is based
    may rationally have been considered to be true by the govern-
    mental decisionmaker, and (3) the relationship of the classifica-
    tion to its goal is not so attenuated as to render the distinction
    arbitrary or irrational. 13
    In this three-part analysis, we first consider the policy reason
    for the classification. 14 Under ordinance No. 684, Dorchester
    requires residential tenants to provide written guarantees
    from their landlords but does not require similar third-party
    guar­antees for residential owners. In requiring the written
    10
    See
    id. 11
         DeCoste v. City of Wahoo, 
    255 Neb. 266
    , 
    583 N.W.2d 595
    (1998).
    12
    State v. Montoya, 
    304 Neb. 96
    , 
    933 N.W.2d 558
    (2019); Lingenfelter,
    supra note 6.
    13
    See Lingenfelter, supra note 6.
    14
    Id. - 690 -
                 Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    REO ENTERS. v. VILLAGE OF DORCHESTER
    Cite as 
    306 Neb. 683
    guarantee, Dorchester claims it has a legitimate interest in
    maintaining a financially stable municipal utility by collect-
    ing from tenants who abscond without paying their bills
    when those bills are in excess of the tenant’s security deposit.
    Dorchester argues that requiring a landlord’s guarantee
    “‘remind[s] each landlord owner of its obligations and liabil-
    ity to . . . Dorchester and will further the goal of collection
    by reducing the possibility that . . . Dorchester will be faced
    with the administrative expenses associated with repeatedly
    resorting to cumbersome and expensive foreclosure or collec-
    tion proceedings.’” 15
    A village has the statutory authority to make and enforce
    all necessary rules and regulations in the use of its system of
    waterworks or water supply and the use of the water from such
    system. 16 Along with charges for the use of a village’s sewer
    system, 17 a village has the power to assess and collect from
    its inhabitants rates for the use and benefit of water used or
    supplied to them which includes the authority to enforce liens
    upon the real estate where the water and sewer system are used
    or supplied. 18 A village also has the authority to contract to
    furnish electricity to any person or corporation. 19
    Pursuant to its authority to provide and charge for utility
    services, Dorchester has a legitimate interest in ensuring col-
    lection of accounts for these services. By requiring a landlord
    to guarantee any unpaid utility charges not paid by the tenant,
    Dorchester increases the likelihood that it will be able to col-
    lect payment for services with minimal additional collection
    costs even if the tenants move away and collection efforts
    from the tenants are unsuccessful. Such guarantee involves a
    third party who is tied to real estate located within Dorchester
    15
    Brief for appellant at 13.
    16
    See Neb. Rev. Stat. § 17-537 (Cum. Supp. 2016).
    17
    See Neb. Rev. Stat. § 17-925.02 (Cum. Supp. 2016).
    18
    See Neb. Rev. Stat. § 17-538 (Cum. Supp. 2016).
    19
    See Neb. Rev. Stat. § 17-901 (Reissue 2012).
    - 691 -
    Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    REO ENTERS. v. VILLAGE OF DORCHESTER
    Cite as 
    306 Neb. 683
    and against whom collection may be more easily pursued.
    This consideration does not equally apply when determining
    whether to require a third-party guarantee from a residential
    landowner where the utility customer owns the land at issue
    and cannot as easily avoid his or her obligations without aban-
    doning the property to its creditors. We find ensuring payment
    for utility services is a plausible policy reason for the classifi-
    cations requiring landlords’ guarantees for tenants but not for
    residential owners.
    [10] We next consider whether the legislative facts on which
    the classification is based may rationally have been considered
    to be true. 20 Where, as here, the record does not contain infor-
    mation regarding the adoption of an ordinance, statute, or other
    governmental action, we have analyzed the underlying legisla-
    tive facts the governmental entity alleged to have considered
    when such basis is clearly apparent. 21
    Dorchester claims by requiring a landlord guarantee for ten-
    ants and not requiring a third-party guarantee for residential
    owners, it was recognizing that tenants are less likely to be
    creditworthy than owners and that collection from tenants who
    moved away is more difficult than from owners who are tied
    to the property within the village. In support of these alleged
    facts, Dorchester provided an affidavit from Dorchester’s vil-
    lage clerk and treasurer. She explained that “[i]n the past,
    [Dorchester] spent substantial resources in trying to locate
    former residential tenant utilities customers that . . . left town
    with unpaid utility account obligations” and “collections agen-
    cies would be used to collect these unpaid utilities accounts
    [and] charge 50% of the amount collected.” She also described
    that there remains an unpaid utility bill on REO’s property in
    the previous tenant’s name and that the location of the previous
    tenant is unknown.
    REO argues the affidavit should be viewed with skepticism
    in that it was conclusory and self-serving and failed to include
    20
    Lingenfelter, supra note 6.
    21
    See
    id. - 692 -
                 Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    REO ENTERS. v. VILLAGE OF DORCHESTER
    Cite as 
    306 Neb. 683
    specific information supporting its conclusion. REO contends
    that there is no evidence that Dorchester ever conducted a
    study or analysis of utility bill payment tendencies in order to
    establish that tenants were any more likely than property own-
    ers to fail to pay utility bills and, if so, at what level. REO’s
    argument is based upon the proposition that Dorchester had a
    burden to offer evidence in support of its alleged policy reason
    for the classification.
    We first note the court granted summary judgment in favor
    of REO, and as such, Dorchester is entitled to have the evi-
    dence viewed in its most favorable light and have all reason-
    able inferences deducible from the evidence. 22
    [11] Additionally, as stated above, the burden is upon REO
    as a party challenging the ordinance to eliminate any reason-
    ably conceivable state of facts that could provide a rational
    basis for the classification. 23 The U.S. Supreme Court has
    explained, “A State . . . has no obligation to produce evidence
    to sustain the rationality of a statutory classification.” 24 The
    Court further explained, “‘[A] legislative choice is not sub-
    ject to courtroom factfinding and may be based on rational
    speculation unsupported by evidence or empirical data.’” 25
    Contrary to REO’s argument, Dorchester was not required
    to present evidence to support the classification under ordi-
    nance No. 684, and instead, REO had the duty to disprove
    Dorchester’s alleged factual basis or establish the facts were
    not reasonably conceivable.
    As the district court correctly noted, individual residen-
    tial tenants and owners are not intrinsically with or without
    creditworthiness. However, other jurisdictions have recognized
    22
    See JB & Assocs. v. Nebraska Cancer Coalition, 
    303 Neb. 855
    , 
    932 N.W.2d 71
    (2019).
    23
    See, Montoya, supra note 12; Lingenfelter, supra note 6.
    24
    Heller v. Doe, 
    509 U.S. 312
    , 320, 
    113 S. Ct. 2637
    , 
    125 L. Ed. 2d 257
         (1993).
    25
    Id. - 693 -
                 Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    REO ENTERS. v. VILLAGE OF DORCHESTER
    Cite as 
    306 Neb. 683
    an increased likelihood that an individual who rents a prop-
    erty may have less available reachable assets and resources
    than an owner who may have applied for and acquired debt to
    buy the property or had enough resources to buy the property
    outright. 26 When analyzing the underlying facts Dorchester
    relied on in enacting ordinance No. 684, the question is not
    whether such assertion is correct but whether it may rationally
    have been considered to be true. 27 Accordingly, the inherent
    increased likelihood of a tenant’s lack of creditworthiness com-
    pared to a residential owners’ creditworthiness is an appropri-
    ate consideration.
    Even more compelling is Dorchester’s allegation that admin-
    istrative and collection costs associated with unpaid utility bills
    are more likely to increase when seeking payment for services
    provided to tenants versus residential owners. Tenants are con-
    nected to the property through a lease agreement which means
    their connection with that property ceases when they are no
    longer acting under the agreement. Dorchester noted in the vil-
    lage clerk’s affidavit that, in the past, this lack of continuing
    connection with the property can result in Dorchester’s spend-
    ing “substantial resources” in trying to locate the tenant to col-
    lect on unpaid services.
    REO argues that Dorchester does not define “substantial
    resources” expended to locate and collect from tenants in con-
    trast to residential owners. However, evidence of a study and
    a precise comparison is unnecessary to support Dorchester’s
    conclusion. 28 Residential owners own the property until they
    sell, abandon, or are removed. Dorchester, therefore, has a
    static source to contact and pursue collection from residential
    owners. It is rational to conclude that the costs associated
    26
    See, Midkiff v. Adams County Reg. Water District, 
    409 F.3d 758
    (6th Cir.
    2005); DiMassimo v. City of Clearwater, 
    805 F.2d 1536
    (11th Cir. 1986);
    Chatham v. Jackson, 
    613 F.2d 73
    (5th Cir. 1980).
    27
    See, Montoya, supra note 12; Lingenfelter, supra note 6.
    28
    See
    id. See, also, Heller,
    supra note 24.
    - 694 -
    Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    REO ENTERS. v. VILLAGE OF DORCHESTER
    Cite as 
    306 Neb. 683
    with locating a residential landowner is likely to be less than
    locating a previous tenant.
    Finally, we must consider whether the relationship of the
    classification to its goal is so attenuated as to render the dis-
    tinction arbitrary or irrational. 29
    [12] The village clerk’s affidavit claims Dorchester has
    expended substantial resources in pursuing collection of unpaid
    utility accounts from tenants who have moved away, including
    costs associated with locating the tenants and collection agen-
    cies. Landlord guarantees help to ensure that Dorchester can
    minimize these costs because the landlords are more directly
    tied to property within Dorchester and the guarantees provide
    another party to account for the amounts due. Such a third-party
    guarantee does not equally apply to residential owners who do
    not have a landlord third-party relationship and are already tied
    to the serviced property. Social and economic meas­ures violate
    equal protection only when the varying treatment of different
    groups or persons is so unrelated to the achievement of any
    legitimate purposes that a court can only conclude that the
    Legislature’s actions were irrational. 30 Here, we find ordinance
    No. 684’s treatment of tenants and residential owners was suf-
    ficiently related to Dorchester’s stated purpose so as not to
    render the distinction arbitrary or irrational.
    In DeCoste v. City of Wahoo, 31 the city enacted an ordi-
    nance which authorized collection of landfill management
    fees from city residents by adding the fees to the electri-
    cal bills of “‘all appropriate electrical customers.’” Because
    some city residents such as those within units of multiple-unit
    apartment complexes did not have individual electrical meters
    and electrical bills, a number of these residents did not have
    to pay the landfill management fees. 32 We determined this
    29
    See Lingenfelter, supra note 6.
    30
    Citizens for Eq. Ed. v. Lyons-Decatur Sch. Dist., 
    274 Neb. 278
    , 
    739 N.W.2d 742
    (2007).
    31
    DeCoste, supra note 
    11, 255 Neb. at 271
    , 583 N.W.2d at 599.
    32
    Id. - 695 -
                 Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    REO ENTERS. v. VILLAGE OF DORCHESTER
    Cite as 
    306 Neb. 683
    difference in treatment violated equal protection because the
    classifications did not rationally relate to the city’s objec-
    tive of funding its landfill management. 33 We reasoned that
    whether or not a residence had an electrical meter did not
    relate to landfill management and was wholly irrelevant to the
    city’s stated objective. 34
    The ordinance at issue in DeCoste is different than the land-
    lord guarantee requirement under ordinance No. 684, which
    directly relates to Dorchester’s objective. Dorchester provides
    utility services to properties and charges for the services.
    Ordinance No. 684 requires that the property owners of the
    residences who are provided the services, including landlords
    and residential owners, agree to the responsibility for payment
    of these utility charges. Having a landlord guarantee increases
    the likelihood that these bills are paid.
    REO argues the landlord guarantee requires a landlord to
    agree to cover unpaid bills for services the landlord will not
    receive. REO also claims allowing Dorchester to require a
    landlord guarantee would have far-reaching negative implica-
    tions and allow municipalities and power districts to require
    similar guarantees for rented farmland, industrial land, and
    commercial land which could greatly increase the potential
    liability of those landlords.
    This argument ignores the fact that a landlord receives a
    benefit from the property’s having access to and use of utility
    services in that a property which has access to utilities and in
    which this access is reliable and consistent has an increased
    property value. 35 The statutory scheme also assumes a property
    owner is a relevant party to the availability and use of utilities
    at a property in permitting the imposition of a lien against the
    owner’s property when a tenant fails to pay. 36 Finally, whether
    33
    See
    id. 34
         Id.
    35
    
         See Chatham, supra note 26.
    36
    See, § 17-925.02; § 17-538.
    - 696 -
    Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    REO ENTERS. v. VILLAGE OF DORCHESTER
    Cite as 
    306 Neb. 683
    ordinance No. 684 may influence other municipalities and
    power districts to require landlord guarantees which may have
    their own expanded implications is immaterial to the question
    of whether Dorchester’s landlord guarantee requirement fur-
    thers the legitimate interest of ensuring collection of accounts
    for the provision of utility services to Dorchester residents.
    REO also argues Dorchester “is already adequately protected
    by its ability to require the tenant to make a deposit . . . to cover
    the last month’s bill and to place a lien on the property for any
    amounts that remain unpaid for water and sewer services after
    application of the deposit.” 37 REO contends Dorchester can
    further limit its potential risk of nonpayment over the deposit
    amount by promptly shutting off utility services when a tenant
    fails to pay.
    [13] While Dorchester may have had alternate avenues to
    address its goal of ensuring payment of utility bills through
    higher security deposits and collecting from liens imposed on
    properties, the rational basis test does not require a govern-
    mental entity to choose a specific course of action to address
    its legitimate interest. REO has pointed to no authority under
    a rational basis review that would require a municipality to
    choose an individual means of pursuing its legitimate interest.
    Instead, the question remains whether the classification ratio-
    nally furthers a legitimate state interest. 38
    We find DiMassimo v. City of Clearwater 39 instructive.
    There, the 11th Circuit evaluated a requirement that a landlord
    join in a tenant’s application for utilities and found the require-
    ment was obviously related to the city’s legitimate purpose of
    maintaining a financially stable municipal utility. The court
    explained that “a landowner, whose property is readily subject
    to liens and foreclosure may be rationally presumed to be more
    readily held to account as the ultimate guarantor of the bills
    37
    Brief for appellee at 18.
    38
    See Lingenfelter, supra note 6.
    39
    DiMassimo, supra note 26.
    - 697 -
    Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    REO ENTERS. v. VILLAGE OF DORCHESTER
    Cite as 
    306 Neb. 683
    than a tenant who may freely abandon the lease, leaving behind
    only his outstanding debts.” 40 In addressing the plaintiff’s
    argument that the city already had adequate protection through
    liens and the ability to require greater security deposits, the
    court stated:
    Requiring a landlord’s joinder in the application for utili-
    ties serves to remind each owner of his obligations and
    liability to the City and therefore, furthers the goal of
    collection by reducing the possibility that the City will
    be faced with the administrative expenses of repeatedly
    resorting to cumbersome and expensive foreclosure pro-
    ceedings. A financial deposit sufficient to provide the City
    with the same degree of security would indeed be burden-
    some to any potential tenant. 41
    REO cites Golden v. City of Columbus 42 and O’Neal v. City
    of Seattle 43 for the proposition that classifications and dispar­
    ate treatment of tenants and owners is not rationally related
    to a municipality’s interest in collecting unpaid utility debts.
    However, these cases are distinguishable because they involve
    whether a municipality could require a tenant to pay a previ-
    ous, unpaid utility bill for the initiation and continuation of
    service even though the tenant had not received the previous
    service and had no previous relationship with the property. 44
    In Golden, the Sixth Circuit analyzed a city policy where,
    after a tenant moved into a property which was already receiv-
    ing water services, the city would terminate the services if
    the landlord owed for a prior tenant’s water usage. 45 The city
    would inform the tenant that water services would only recom-
    mence once the landlord satisfied that debt. The Golden court
    40
    Id. at 1541. 41
         Id. at 1542.
    42
    
         Golden v. City of Columbus, 
    404 F.3d 950
    (6th Cir. 2005).
    43
    O’Neal v. City of Seattle, 
    66 F.3d 1064
    (9th Cir. 1995).
    44
    Golden, supra note 42; O’Neal, supra note 43.
    45
    Golden, supra note 42.
    - 698 -
    Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    REO ENTERS. v. VILLAGE OF DORCHESTER
    Cite as 
    306 Neb. 683
    analyzed the equal protection claim solely with regard to the
    city policy’s irrationally differential treatment of tenants whose
    landlords owed the city for water service and other tenants
    whose landlords did not have such debt. The court found the
    policy violated equal protection because it treated tenants who
    moved into properties and whose owners were encumbered
    with preexisting utility debts differently from properties that
    were not. 46 The court expressed no opinion regarding the pol­
    icy’s differential treatment of landlords and tenants. 47 It is note-
    worthy that the court left undisturbed the city’s requirements
    that a tenant obtain a landlord’s consent prior to receiving
    utility services and that a property owner is liable for unpaid
    utility bills of a tenant. 48
    Similarly, in O’Neal, the Ninth Circuit analyzed a city pol-
    icy of refusing to provide water service to new tenants when
    there is a balance due for prior water service to the premises. 49
    The O’Neal court also found the policy treated tenants differ-
    ently based upon whether the properties were encumbered with
    preexisting utility debts. The court determined that this scheme
    was divorced from the reality of legal accountability for the
    debt because the person directly penalized by the scheme
    was not the debtor but an innocent third party with whom the
    debtor contracted.
    Requiring a tenant to pay previous, unpaid utility bills to
    initiate or continue service where the tenant was not a party to
    those services nor connected to the property is different from
    Dorchester’s requirement that a tenant obtain the landlord’s
    guarantee prior to the initiation of service. Unlike the tenants
    in Golden and O’Neal, landlords are connected to the property
    for which the utilities are being provided and, as discussed,
    receive a benefit from the availability and use of utilities at
    46
    Id. See, also, O’Neal,
    supra note 43.
    47
    Golden, supra note 42. See, also, Midkiff, supra note 26.
    48
    Golden, supra note 42.
    49
    O’Neal, supra note 43.
    - 699 -
    Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    REO ENTERS. v. VILLAGE OF DORCHESTER
    Cite as 
    306 Neb. 683
    their property. Landlords have agency in minimizing their risk
    by choosing a creditworthy tenant, mandating in the lease that
    the tenant promptly pay all utility bills, and terminating the
    lease should the tenant fail in that duty.
    On this third consideration, we find Dorchester’s goal of
    ensuring the collection of utility accounts through a cost-
    effective means is sufficiently related to, and not too attenuated
    from, ordinance No. 684’s requirement that a residential tenant
    obtain a landlord’s guarantee of payment while not requiring a
    residential owner to obtain a third-party guarantee.
    In consideration of all of the above, we find that ensuring
    collection of utility bills was a plausible policy reason for
    requiring tenants to obtain landlord guarantees but not requir-
    ing residential owners to obtain third-party guarantees. We
    further find that this classification was based on facts which
    Dorchester could rationally have considered to be true and
    that the classification was sufficiently related to the goal of
    ensuring payment of utility bills so as not to render the treat-
    ment arbitrary or irrational. Accordingly, ordinance No. 684’s
    requirement that a residential tenant obtain a landlord’s guar-
    antee for initiating utility services does not violate the Equal
    Protection Clauses of the U.S. and Nebraska Constitutions and
    the district court erred.
    Additional Claims
    Even though the district court declined to address REO’s
    remaining claims, REO asks that we address them on appeal,
    which claims include whether ordinance No. 684 violated
    the Equal Credit Opportunity Act; violated article 3, § 18, of
    the Nebraska Constitution; and violated Nebraska’s Uniform
    Residential Landlord and Tenant Act.
    [14,15] An appellate court will not consider an issue on
    appeal that was not passed upon by the trial court. 50 As to
    constitutional claims specifically, we have held that a con-
    stitutional issue not presented to or passed upon by the trial
    50
    Siedlik v. Nissen, 
    303 Neb. 784
    , 
    931 N.W.2d 439
    (2019).
    - 700 -
    Nebraska Supreme Court Advance Sheets
    306 Nebraska Reports
    REO ENTERS. v. VILLAGE OF DORCHESTER
    Cite as 
    306 Neb. 683
    court is not appropriate for consideration on appeal. 51 Based
    upon these established rules and REO’s failure to cross-appeal,
    we decline to address REO’s remaining claims on appeal and
    remand this cause to the district court for further consideration
    of the remaining claims.
    CONCLUSION
    Because the requirement under ordinance No. 684 that ten-
    ants must obtain a landlord guarantee in order to initiate utility
    services did not violate the Equal Protection Clauses of the
    U.S. and Nebraska Constitutions, we reverse the judgment of
    the district court and remand the cause for further proceedings
    to consider the remaining claims.
    Reversed and remanded for
    further proceedings.
    51
    Capitol City Telephone v. Nebraska Dept. of Rev., 
    264 Neb. 515
    , 
    650 N.W.2d 467
    (2002).