Case of evicted Minneapolis tenant poses questions about legality of power shutoffs

The night before Nichole Nalewaja was scheduled to move into her new apartment, she and her children slept in the stinging confines of a portable toilet. She promised them it would be the last time.

They had been homeless on and off for years, living in shelters and encampments, before Hennepin County ushered them into one of 10 units set aside for homeless families at the newly constructed Hook & Ladder Apartments in northeast Minneapolis.

That was last June. Nine months later, Hook & Ladder managers moved to evict Nalewaja, accusing her of violating her lease when she broke into a utility closet to turn her power back on after the landlord's contractor, JIT Services, had disconnected it. She says she never would have had to take matters into her own hands if the power hadn't been illegally cut off in the first place.

Nalewaja's case highlights how, while there are laws that protect Minnesotans from having their heat and utilities cut off during cold months, the laws don't always apply.

Last month, Hennepin Housing Court sided with Hook & Ladder, finding that Nalewaja had violated the landlord's rules. Her eviction is on hold as her lawyers at Mid-Minnesota Legal Aid appeal.

"I just know how it goes," Nalewaja said. "I've been stuck. I'm trying to build stability, like we've been in and out of housing just too long. We don't even get to get comfortable."

Erik Hansen, a lawyer for Hook & Ladder, maintains it was legal for its third-party contractor JIT Services to shut off the power. He cited Housing Referee Mariam Mokri's decision in Nalewaja's case: "Because the proper notice was given, using JIT's internal guidelines to determine who was eligible for disconnect, the disconnect was not unlawful."

Minnesota law states that if a landlord, their agent or anyone else acting under the landlord's direction shuts off a tenant's electricity, the tenant is entitled to triple the damages caused.

Nalewaja's lawyers argue that Mokri erred by failing to recognize JIT — which Hook & Ladder contracted with to manage its electric submeter and bill tenants — as the landlord's "agent," and therefore prohibited from disconnecting anyone's power.

Their appeal now raises an interesting question: If a tenant breaks her lease in order to correct an allegedly illegal business practice, should the landlord be able to evict her?

"I think that's actually an open legal question — whether a breach in response to a breach is excused," said Daniel Suitor of HOME Line, a legal services nonprofit to which the Minnesota Attorney General's Office often refers questions about landlord-tenant law.

"I don't think there's good appellate guidance on that," he said, adding: "I think that breach of the law should justify some level of self-help by a tenant."

Suitor said HOME Line's lawyers rarely see utility shut-off cases because most landlords and utility billers know it's "very illegal" for them to shut off utilities for any reason.

Another state statute, regulating shutoffs during the cold weather months of October through April, says utilities must offer customers a payment plan before disconnecting their power, and report it to the state Public Utilities Commission (PUC). But that law only mentions public utilities like Xcel Energy and CenterPoint Energy. The PUC had no comment on the legality of anyone else disconnecting power during the cold weather months, said spokeswoman Cori Rude-Young.

Cold weather shutoff

Nalewaja, whose rent was almost entirely covered by the Minneapolis Public Housing Authority, said she didn't realize when she moved into the Hook & Ladder Apartments in June 2022 that she wouldn't be able to afford the utilities.

The first month's electric bill for her three-bedroom apartment totaled $187, while her monthly income was $900 and her expenses $880, she told the PUC's Consumer Affairs Office. She said she didn't understand why her electric bill was so high when Hook & Ladder had been designed to be energy-efficient. (According to Xcel, its average monthly residential bill for Minnesota homes in June was $109.)

While regulated utility providers like Xcel offer a measure of transparency and predictability in their billing, third-party billers such as JIT tack on various fees that are confusing to tenants and rapidly compound for those late to pay like Nalewaja, said her lawyer, Gary Van Winkle.

"Her bill after about four months was about $800," Van Winkle said. "This is for someone who was living in a subsidized property paying very low rent, and this billing dwarfs her other living expense overhead by quite a bit."

Complaints about utility billing at Hook & Ladder have been an ongoing challenge, said Kim Sheagren, a spokesperson for Avivo, a nonprofit that provides case management support for formerly homeless tenants.

"We have found resources to help cover portions of residents' electrical bills whenever possible and have brought concerns to Hennepin County," Sheagren said. "Situations like this make it hard for residents to keep their housing."

On Oct. 3, the start of the cold weather period, JIT shut off Nalewaja's power. Security camera footage caught her and her boyfriend going to the building's utility closet, where he broke the lock and then, at her request, reconnected the power for every tenant who had lost it. But in the process of doing so, the boyfriend accidentally disconnected the power for other units.

Hook & Ladder and JIT each assigned responsibility to the other for disconnecting tenants' power. The shutoff didn't involve Hook & Ladder at all, wrote Jeffrey Domingues, another lawyer for the landlord, in court documents.

"JIT Services was the entity that shut off [Nalewaja's] power, and the shutoff was due to a debt she owed to her utility provider, Xcel Energy," Domingues wrote.

However, during Nalewaja's trial last month, former Hook & Ladder live-in maintenance worker Edward Tomlinson testified that the landlord had asked him on several occasions to shut off the power of delinquent units. He refused, so the job went to JIT.

Tomlinson said that more than half the units could be disconnected at any time, and that when he lived there he also received inexplicably high utility bills, even for periods when he was out of town.

In a statement, Hook & Ladder attorney Hansen said that Tomlinson's only role regarding utility shutoffs was posting notices on apartment doors informing residents of a pending shutoff by JIT.

But in a statement to the Star Tribune, JIT's metering services director Zach DeBoer said his billing company only disconnects power when "the client and the property provide authorization and permission."

"When a client has contracted with us to manage disconnect services, and disconnections are permissible, we communicate details with the property regarding timing and scheduled units," said DeBoer.

Xcel Energy spokesman Theo Keith distanced the utility from both Hook & Ladder and JIT. When landlords install submetering at their property, as with Hook & Ladder, and hire a contractor to control electrical service to each unit, Keith said the tenants are no longer Xcel Energy account holders and lose tenant protections such as the Cold Weather Rule.

"We have no ability to control what the landlord and the landlord's contractor are doing," Keith said. "We never request a landlord's contractor to disconnect a tenant."