2006-07-14 Summons
Felhaber Larson
Fenlon & VogL
A Professional Association - Attorneys at Law
MINNEAPOLIS
220 South Sixth Street I Suite 2200
Minneapolis, MN 55402-4504
612 339 6321 I Fax 612 338 0535
Stephen E. Y och
syoch@felhaber,com
(651) 312-6040
Reply to St, Paul
ST. PAUL
444 Cedar Street I Suite 2100
St. Paul, MN 55101-2136
6512226321 I Fax 6512228905
July 14, 2006
City of Albertville
City Hall
5975 Main Ave. N.E.
Albertville, MN 55301
Attention: Administrator
Re: TIC Homes, Inc. vs. City of Albertville and Gold Key Development, Inc.
Ladies and Gentlemen:
Enclosed and personally served upon you are a Summons and Complaint in the above-
referenced matter.
SEY Ikjp
Enclosures
cc: B. Tutt
STPL-Word:83735,1
www.felhaber.com
STATE OF MINNESOTA
DISTRICT COURT
COUNTY OF WRIGHT
TENTH JUDICIAL DISTRICT
Case Type: Declaratory Judgment/Breach of Contract
TIC Homes, Inc., a Minnesota corporation,
Court File No.
Plaintiff,
VS.
SUMMONS
City of Albertville and Gold Key Development,
Inc., a Minnesota corporation,
Defendants.
THE STATE OF MINNESOTA TO THE ABOVE NAME DEFENDANTS:
You are hereby summoned and required to serve upon Plaintiff s attorneys an Answer
to the Complaint which is herewith served upon you, within twenty (20) days after service of
this Summons upon you, exclusive of the date of service. If you fail to do so, judgment by
default will be taken against you for the relief demanded in the Complaint.
Civil cases are subject to Alternative Dispute Resolution processes as provided in Rule
114 of the General Rules of Practice for the District Courts (the "Rules"). Alternative Dispute
Resolution includes mediation, arbitration, and other processes set forth in the Rules. You
may contact the Ramsey County District Court Administrator for information about these
processes and about resources available in your area.
Dated: July tj, 2006 PEL
By:
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STATE OF MINNESOTA
DISTRICT COURT
COUNTY OF WRIGHT
TENTH JUDICIAL DISTRICT
Case Type: Declaratory Judgment/Breach of Contract
TIC Homes, Inc., a Minnesota corporation,
Court File No.
Plaintiff,
vs.
COMPLAINT
City of Albertville and Gold Key Development,
Inc., a Minnesota corporation,
Defendants.
Plaintiff for its Complaint against the above-named Defendants states and alleges as
follows:
1. Plaintiff TIC Homes, Inc. (hereinafter the "TIC Homes") is a duly formed
Minnesota corporation, with its principal place of business located in Dayton, Minnesota.
2. Defendant Gold Key Development, Inc. (hereinafter "Developer") is a duly
formed Minnesota corporation with its principal place of business located in Medina,
Minnesota.
3. Defendant City of Albertville (hereinafter "City") is a municipality located in
the County of Wright, State of Minnesota.
4. On or about July 16, 2004, Developer and City entered into a planned unit
development agreement (hereinafter "Development Agreement") for the Prairie Run
Subdivision, which was recorded with the Wright County Recorder as document number
940358.
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5. Upon information and belief, at the time the Development Agreement was
entered into, the City's engineer was Short Elliot Hendrickson, Inc., (hereinafter "SEH").
6. Upon information and belief, at the time the Development Agreement was
entered into and through the present, Developer's engineer was Hedlund Engineering
(hereinafter "Hedlund").
7. On or about June 7, 2004, the City approved the Plat of Prairie Run Subdivision
(hereinafter the "Plat"), the grading plan for the development and accepted the plat as in
compliance with Minnesota Statutes Section 505.03.
8. On December 22, 2004, the Plat was duly recorded in the office of the Wright
County Recorder as document number 940357.
9. On or about December 30, 2004, the TIC Homes and the Developer entered
into an Option Agreement which provided that the TIC Homes would purchase Lots from the
Developer.
10. Relying on information provided by the Developer and the City, the TIC Homes
purchased lots and constructed single family homes consistent with the terms of the Grading
Plan and plat approved by the City and its engineer SEH.
11. On information and belief, in late summer or early fall of 2004, the actual
grading of the Property was done by the City, in accordance with the Grading Plan which it
adopted.
12. On or about October 1, 2004, Colleen Allen, from the Wright County Soil and
Water Conservation District, wrote a letter to Todd Udvig of SEH, indicating, among other
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things, that their office was concerned about the flooding potential of a portion of the Property
when a ditch backs up.
13. After receiving Ms. Allen's October 1, 2004 letter and reviewing it together,
Hedlund and SEH jointly revised the Grading Plan (hereinafter the "Revised Grading Plan")
on or about October 14, 2004, raising the minimum elevation on several of the Lots even
higher than the 950.5 feet elevation which was set in the original Grading Plan.
14. The City and SEH were aware of and approved the Revised Grading Plan.
15. The City then graded the Property pursuant to the higher elevations set forth in
the Revised Grading Plan.
16. In approximately August or September 2005, the City of Albertville experienced
a significant rain event. No homes on the Property were flooded as a result of this rain event.
However, the City suspended a building permit which it had previously issued on a home that
Developer was building on Lot 7, Block 2, until such time as Developer prepared yet another
revised grading plan. Therefore, on or about October 11, 2005, Hedlund prepared another
revised grading plan (hereinafter the "Second Revised Grading Plan") and raised the elevations
of Lots 7-13, Block 2, located on the Property.
17. On November 29, 2005, the City Attorney wrote a letter to Developer declaring
Developer to be in default of paragraph 13. F of the Development Agreement. In his letter, the
City Attorney specifically indicated that "it has been discovered that the grading plan for the
Prairie Run plat does not account for the 100-year flood elevation (calculated at 951.5 by
Wright County)..."
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18. At no time was the TIC Homes aware of the flood plain level and it constructed
all of its homes consistent with the Grading Plan and instructions received from the Developer
and the City.
19. At the time the City declared Developer to be in default of the Development
Agreement, it refused to issue certificates of occupancy and new building permits. The TIC
Homes has been severely harmed as it has been unable to obtain certificates of occupancy or
building permits on homes it has constructed and lots which it currently owns.
20. It would be unjust, inequitable and unreasonable for TIC Homes to have to raise
any Lots or raise any houses upon Lots, based upon a 100-year elevation set after the homes
were constructed, especially when such information was unknown at the time construction was
done pursuant to the approved Grading Plan, Revised Grading Plan and Second Revised
Grading Plan, and when TIC Homes has incurred significant expenses in reliance upon the
information approved and provided by the City and Developer.
21. As a direct and proximate result of the City's declared moratorium and the
dispute regarding the proper flood level, six homes owned by the TIC Homes have been
adversely affected. Lots 14 and 15 of Block 2 have certificates of occupancy issued by the
City and are currently lived in, but, upon information and belief, the City now takes the
position that the homes were constructed at the incorrect level. Lots 16, 18, 19 and 20 of Block
2 have finished houses on them, but the City refuses to issue a certificate of occupancy and
these houses cannot be sold. The lots referred to herein shall be referred to as the "Impacted
Lots." As a result, the TIC Homes has been forced to incur the significant carrying costs of
these homes.
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22. The City's refusal to issue building permits and certificates of occupancy, as set
forth above, has caused TIC Homes approximately $200,000 in damages, which amount
continues to increase daily as a result of holding costs.
COUNT I
WRIT OF MANDAMUS AGAINST CITY
23. Plaintiff hereby real leges and incorporates by reference the paragraphs above as
if set forth herein.
24. The City and its engineer, SEH, provided an erroneous 100-year elevation.
25. The TIC Homes constructed its homes consistent with information provided by
the City.
26. The City's current moratorium of certificates of occupancy and building permits
is improper and unfair in light of the City's error.
27. The City should be ordered by this Court to immediately issue certificates of
occupancy and building permits on the Impacted Lots in accordance with the provisions of the
Development Agreement and the Ordinances that were in effect at the time of the Development
Agreement, and with the Grading Plan, Revised Grading Plan and Second Revised Grading
Plan which were all approved by the City.
COUNT II
NEGLIGENCE
28. Plaintiff hereby realleges and incorporates by reference the paragraphs above as
if set forth herein.
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29. The City and its engineer had a duty to provide accurate information to the
Developer and in turn the TIC Homes with regard to the minimum flood elevation.
30. The Developer had a duty to provide accurate information to the TIC Homes
with regard to minimum flood elevations in the plans it supplied to the TIC Homes.
31. The City andlor the Developer breached their duty to the TIC Homes by
providing negligent and inaccurate information in the plat, the Grading Plan, the Revised
Grading Plan and the Second Revised Grading Plan.
32. The TIC Homes relied, to its detriment, on information provided by the City
and the Developer in the plat, the Grading Plan, the Revised Grading Plan, and the Second
Revised Grading Plan.
33. As a direct result of errors and negligence by the City andlor the Developer,
TIC Homes is exposed to claims by current homeowners.
34. As a direct and proximate result of the negligence of the City andlor the
Developer, the TIC Homes has been damaged in an amount in excess of $50,000, in an exact
amount to be proven at trial.
COUNT III
ENFORCEMENT OF CONTRACT AGAINST DEVELOPER
35. Plaintiff hereby realleges and incorporates by reference the paragraphs above as
if set forth herein.
36. The December 30, 20004 Option Agreement between the Developer and the
TIC Homes is an enforceable contract.
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37. The Developer breached the Option Agreement by providing the TIC Homes
with the Impacted Lots.
38. Pursuant to Paragraph 15 of the terms of the Option Agreement, the TIC Homes
seeks to recover its "damages directly related to costs associated with correcting any non-
conforming condition on any Lot purchased by" TIC Homes from the Developer.
39. As a direct and proximate result of the Developer's non-performance, the TIC
Homes has suffered damages in excess of $50,000, in an exact amount to be proven at trial.
WHEREFORE, Plaintiff demands judgment of the Court as follows:
1. Ordering the City to issue certificates of occupancy and building permits for the
Impacted Lots;
2. Adjudging that TIC Homes is entitled to a judgment against the City andlor
Developer for negligence for providing defective plans specifying an incorrect flood plain level
in an exact amount to be proven at trial;
3. Adjudging that the TIC Homes is entitled to damages for the Developer's failure
to perform under the Option Agreement, in an exact amount to be proven at trial; and
4. For such other relief as the Court deems ju !. and equitable.
Dated: July Ii, 2006
By:
VOGT, P.A.
ATTORNEYS FOR PLAINTIFF
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ACKNOWLEDGMENT
The undersigned hereby acknowledges that costs, disbursements, and reasonable
attorney and witness fees may be awarded pursuant to Minn. Stat. ~ 549.211, subd. 2, to the
party against whom the allegations in this pleading at
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