Property Owner's Association v. City of Omaha

Full title: PROPERTY OWNER'S ASSOCIATION, GEORGE M. CARR, DAVID BARKER and RUTH…

Court: United States District Court, D. Nebraska

Date published: Jul 3, 2002

8:02CV20 (D. Neb. Jul. 3, 2002)

Opinion

8:02CV20

July 3, 2002

MEMORANDUM AND ORDER

JOSEPH F. BATAILLON, United States District Judge.

This matter is before the court on Property Owner's Association's ("Property Owners") motion for a temporary restraining order, Filing No. 32;¹ Property Owners' motion for leave to file a supplemental complaint, Filing No. 33; and intervenor-plaintiff Edward Berg's ("Berg") motion for leave to intervene as plaintiff, Filing No. 34. A hearing on the motions was held on June 26, 2002.

1 Although denominated as a motion for a temporary restraining order, the motion is properly viewed as a motion for a preliminary injunction since the parties have been afforded notice. See Fed.R.Civ.P. 65.

This action is a challenge to the constitutionality of various provisions of the Omaha Municipal Code that deal with minimum habitability standards. The plaintiffs are a property owners' association and several of its members have been fined and "placarded" by the housing inspector for various housing code violations. Plaintiffs assert claims for violations of procedural and substantive due process, and for violations of state statutes and the Nebraska Constitution.

I. Motions for leave to intervene and to file a supplemental complaint

In their motion for leave to file a supplemental complaint, Filing No. 33, and to intervene as plaintiff, Filing No. 34, plaintiffs seek to add Edward Berg as a plaintiff. Edward Berg's property is the subject of the motion for injunctive relief. The City of Omaha ("City") has not voiced any objection to either motion and the court thus finds the motions should be granted. Plaintiffs will be allowed one week to file a third amended complaint adding Berg's allegations.

II. Motion for a preliminary injunction

Plaintiffs seek a preliminary injunction enjoining the City of Omaha from forcing the tenants of Edward Berg's rental property at 717 and 719 North 33rd Street in Omaha to vacate the property that has been "placarded" by the housing inspector.

A. Background

Chapter 48 ("Minimum Dwelling Standards") of the Omaha Municipal Code deals with housing and habitability. See Omaha, Ne., Municipal Code § 48-1 et seq. (1997). There are three mechanisms for enforcement of the ordinances: "placarding," "notices of violation," and "inspection fees." See id., §§ 48-23, 48-25 and 48-51. Under Chapter 48, an inspector inspects the property, then issues a "notice of violation" which warns the property owner to either remedy the alleged deficiencies or incur a penalty in the form of a $340.00 "inspection fee." Id., § 48-25. Typically, the owner is given 90 days in which to remedy the problems. Id., § 48-23(a). Along with the first notices, the inspectors are authorized to "placard" the property. Id., § 48-51. Placards declare that a dwelling is"unfit for human habitation." Id. If the deficiencies aren't remedied in the 90 days, the city can assess an "inspection fee" in the amount of $340.00 and direct compliance within 30 days, after which another $340.00 fee is assessed. Id., §§ 48-23-48-25. There is no procedure by which to challenge or contest the findings of the city inspectors under Chapter 48. Compare Omaha, Ne., Municipal Code §§ 48-27 to 48-36 (1980) (repealed) (providing for hearing and appeal) (Attachment B to Ex. 2, Affidavit of Andrew Strotman) with Omaha, Ne., Municipal Code §§ 48-23 to 48-25 (1997) (providing for notice of violation and inspection fees).

In support of their motion, Property Owners submit the affidavit of Edward Berg. Ex. 1. In his affidavit, Berg states that he owns rental property at 717 and 719 No. 33rd Street in Omaha (a triplex with a first floor apartment with an address of 719 No. 33rd St., a second floor apartment with an address of 717 No. 33rd St., and a garden level apartment with an address of 719A No. 33rd St.). Ex. 1 at ¶ 2. After an inspection by Housing Inspector Mike Honaker ("Honaker"), Berg was issued a "First Notice of Violation" regarding the property on February 1, 2002. Id. at ¶ 7. On the notice, the property was described as "717 No. 33 St. AKA 719 N. 33 St. — Entire Structure or Duplex" and twenty violations of the minimum dwelling standards were listed. Id., Attachment B. Berg was directed to take corrective action within 90 days of receipt of the notice or "an inspection fee of $340.00 will be assessed." Id. Berg contends that he disagreed that the corrective actions were required under the Omaha Municipal Code; for example, he did not think the furnace and boiler needed to be replaced, and thought items relating to carpet cleaning and screen repair were the responsibility of the tenants, but that he had no recourse to dispute the notice. Ex. 1 at ¶¶ 9-10. Berg further states that he made $5,000.00 worth of repairs, including replacing the entire front porch. Id. at ¶ 10.

The Housing Inspector again inspected the property on May 16, 2002. Id. at ¶ 11. Berg was issued a "Second Notice of Violation," again directed at the "Entire Structure or Duplex," listing the same twenty violations and stating, "the inspection revealed violations of the provisions of Chapter 48 requiring the dwelling unit to be placarded . . . as unfit for human habitation." Ex. 1, Attachment C.

On May 30, 2002, Berg received another notice of violation, captioned "First Notice of Violation." Id., Attachment E. The notice, again directed to the "Entire Structure or Duplex," informed Berg that the premises had been re-inspected on May 17, 2002 and that "the dwelling unit shall be vacated within 30 days of receipt of this letter and remain vacant until repaired." Id. The notice listed twelve violations for Apartment 719, twelve violations for Apartment 719A, and six violations for "basement." Id. In addition, Berg states that letters were sent to the tenants of apartments 719 and 719A telling them to vacate the premises within thirty days. Ex. 1 at ¶ 15, Attachment E. As a result of these actions, Berg states that his tenants have withheld rent. Ex. 1 at ¶ 15. Berg has also received inquiries from his bankers. Ex. 1, Attachments F G.

In response, the City has submitted the affidavit of Michael Honaker. Honaker states that he inspected the property in response to tenant complaints. He also states that "[i]t was, and is, my intent to require only the vacation of Apartment 719A." Filing No. 37, Affidavit of Michael Honaker at ¶ 13 ("Honaker affidavit"). He outlined several safety concerns and stated that "My reasons for requiring the vacation of 719A were: the malfunctioning boiler and the exposed electrical equipment in the basement in close proximity to 719A; the leaking toilet; the front door incapable of being locked; and the apparent vermin infestation." Id. Several photographs depicting the violations were attached as exhibits. See id., Ex. C through N. The photographs show property in serious disrepair and illustrate substantial safety concerns.

B. Discussion

The extraordinary remedy of a preliminary injunction should not be granted unless the movant has demonstrated: (1) the threat of irreparable harm to it; (2) the state of the balance between this harm and the injury that granting the injunction will inflict on other parties; (3) the probability that it will succeed on the merits; and (4) the public interest. Dataphase Systems, Inc. v. C L Systems, Inc., 640 F.2d 109, 113-14 (8th Cir. 1981) (en banc). No single factor is determinative, although the failure to demonstrate the threat of irreparable harm is, by itself, a sufficient ground upon which to deny a preliminary injunction. See Adam-Mellang v. Apartment Search, Inc., 96 F.3d 297, 299 (8th Cir. 1996); see also Modern Computer Sys., Inc. v. Modern Banking Sys., Inc., 871 F.2d 734, 738 (8th Cir. 1989) (en banc). The burden on a movant to demonstrate that a preliminary injunction is warranted is heavier when, as here, granting the preliminary injunction will in effect give the movant substantially the relief it would obtain after a trial on the merits. Calvin Klein Cosmetics Corp. v. Lenox Lab., 815 F.2d 500, 503 (8th Cir. 1987).

1. Irreparable injury

"`The basis of injunctive relief in the federal courts has always been irreparable harm and inadequacy of legal remedies.'" Bandag, Inc. v. Jack's Tire Oil, Inc., 190 F.3d 924, 926 (8th Cir. 1999) (quoting Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 506-07 (1959)). Thus, to warrant a preliminary injunction, the moving party must demonstrate a sufficient threat of irreparable harm. Id. A showing that an ordinance interferes with the exercise of constitutional rights can support a finding of irreparable injury. Planned Parenthood of Minn. v. Citizens for Community Action, 558 F.2d 861, 866 (8th Cir. 1977). Beyond the intangible injury of interference with his constitutional rights, Berg has not shown any injury that cannot be remedied with money damages. The court finds, however, that Berg's strong showing of interference with his Fifth Amendment right to procedural Due Process is sufficient to satisfy the threshold showing that he will suffer some irreparable harm.

2. Balance of harms

A showing of irreparable harm does not automatically mandate a ruling in the plaintiff's favor, the court must proceed to balance the harm to the defendant in granting the injunction. Hill v. Xyquad, Inc., 939 F.2d 627, 630-31 (8th Cir. 1991). The City's duty to enforce minimum dwelling standards must accordingly be measured against the intangible injury to Berg. Analysis of this factor could involve a factual determination with respect to the severity of the code violations at issue. The court declines to engage in such an endeavor. Let it suffice to say, at this point in the proceedings, that the City has shown, via photographs, that the violations at issue are indeed severe and potentially dangerous and that the City, and correspondingly the tenants, could be substantially harmed by the granting of the inunction. This potential harm outweighs any constitutional injury to plaintiffs.² Property Owners has not shown that its alleged injury outweighs the City's need to enforce its code.³

2 This finding depends in part on the fact that the court will expedite review of the important constitutional issue involved. The constitutional deprivation has been ongoing since the 1997 revision of the Omaha Municipal Code, and plaintiffs will suffer only a slight incremental enlargement of this injury while waiting for resolution on the merits.

3 Moreover, the harm to Berg created by the insufficiency of the notices at issue has been obviated to some degree by the information contained in Michael Honaker's affidavit. Berg has now been informed of the deficiencies that render his property uninhabitable. See Honaker affidavit at ¶ 13 (stating reasons for vacation notice).

3. Probable success on the merits

To succeed on a claim for violation of the right to procedural due process, a plaintiff must first prove that he or she was deprived of a protected life, liberty, or property interest and that the deprivation occurred without providing the plaintiff with due process. Llano v. Berglund, 282 F.3d 1031, 1034 (8th Cir. 2002). It is not seriously disputed that Berg can establish a significant property right in the collection of rent for his property. Once such a property right is established, a plaintiff is entitled to notice and "some sort of hearing" before the deprivation. Memphis Light, Gas Water Div. v. Craft, 436 U.S. 1, 19 (1978). To determine what process is due in a particular situation, the court must weigh, first, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail. Winegar v. Des Moines Indep. Comm. Sch. Dist., 20 F.3d 895, 899 (8th Cir. 1994).

Applying that analysis, Berg has shown a high probability of success on the merits. The private interest involved is significant, the risk of an erroneous deprivation is high, and the City has not shown that it provides any procedural safeguards.⁴ The City contends, however, that an "emergency situation" justifies its actions in this case. In extraordinary circumstances involving "the necessity of quick action by the State or the impracticality of providing any [meaningful] pre-deprivation process," the government may dispense with the requirement of a hearing prior to the deprivation. Logan v. Zimmerman Brush Co., 455 U.S. 422, 436 (1982). Thus, summary governmental action taken in emergencies and designed to protect the public health, safety and general welfare does not violate due process. Hodel v. Virginia Surface Mining Reclamation Ass'n, 452 U.S. 264, 299-300 (1981).

4 Although the government's interest in protecting the health and welfare of tenants is also significant, it has made no showing as to whether the provision of "some sort of hearing" would be burdensome. Also, it appears that the notice provided to Berg was woefully deficient.

The evidence presented to the court shows that the City may be able to show such an "emergency" defense to the constitutional violation, at least with respect to the property that is the subject of this motion. Thus, the court finds that, although Berg has shown probable success on the merits with respect to the constitutionality of the whole scheme, he has not shown that the City violated constitutional rights with respect to the rental property at issue.⁵

5 In other words, the court is convinced that if Berg had been afforded procedural protections, the apartment would nevertheless have had to be vacated because the violations are so severe.

4. The public interest

The City asserts that the public interest is served by enforcing the minimum dwelling standards, and Berg asserts the public interest is served by protecting the Constitution. The court finds both objectives are significant, but finds the City's interest in enforcing the housing code slightly outweighs the constitutional issue, at least with respect to the property at issue. The court further finds, however, that the important constitutional issues presented in this action warrant expedited review to prevent further constitutional injury to plaintiffs. Accordingly, the damage issues will be bifurcated from the issue of liability for a deprivation of constitutional rights. The constitutionality of the statute involves an issue of law that can be resolved on a motion for summary judgment. Accordingly,

IT IS ORDERED that:

1. Property Owners' motion for leave to file a supplemental complaint, Filing No. 33, and intervenor-plaintiff Edward Berg's motion for leave to intervene as plaintiff, Filing No. 34, are hereby granted. Plaintiffs shall file a third amended complaint adding Edward Berg's allegations on or before July 9, 2002.

2. Property Owners' motion for preliminary injunctive relief, Filing No. 32, is hereby denied.

3. Issues relating to damages are bifurcated from issues of liability.

4. Motions for summary judgment with respect to the constitutionality of various provisions of the Omaha Municipal Code shall be filed on or before September 1, 2002. Responses thereto shall be filed on or before October 1, 2002; progression of this case is not otherwise affected by this order.