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2000-07-26 Defendant's Memorandum of Law Opposing Plaintiff's Motion for TRO f ,. " STATE OF MINNESOTA DISTRICT COURT COUNTY OF WRIGHT TENTH JUDICIAL DISTRICT Leuer-Munsterteiger Properties, Inc. Court File # Plaintiff, DEFENDANT'S MEMORANDUM OF LAW OPPOSING PLAINTIFF'S MOTION FOR TEMPORARY RESTRAINING ORDER vs. City of Albertville, Defendant. FACTS Plaintiff Leuer-Munsterteiger Properties, Inc. has applied for approval from Defendant City of Albertville to subdivide and plat 73 lots for purposes of constructing Townhomes. Specifically, Plaintiff's application was for a planned-unit-development (pun) project to be called "Kollville Estates". Preliminary plat approval was given to the project by the Albertville City Council on April 3, 2000. The project was given preliminary approval with the understanding that the Townhomes were being constructed for owner-occupied residential use and not for a commercial apartment style venture. On June 5, 2000 the City Council approved the fmal plat, subject to several conditions and contingencies. These conditions and contingencies are set forth in the Findings of Fact and Decision and Planner's Report, both of which are attached to Defendant's affidavit herein. Among the conditions and contingencies required by the City are that the Plaintiff enter a Developer's Agreement and that Property Association 1 Covenants be submitted. Both of the aforementioned documents are subject to review and approval by the City Attorney. The Developer's Agreement is also subject to fmal approval by the City Council. On June 27, 2000 the City Planner prepared a memorandum outlining the "outstanding items associated with ... Kollville Estates." In this memorandum the City Planner recommended that these items be resolved "prior to placing the development agreement on the City Council agenda for consideration." Most, but not all, of these items have since been resolved. Both the Developers Agreement and Property Association Covenants, among other things, remain outstanding. Nonetheless, on July 17,2000, the Developer's Agreement was placed on the City Council agenda for final approval at Plaintiff's request. This concession was made by the City to assist Plaintiff in meeting its development timelines, but also with the understanding that all outstanding issues must be resolved before the fmal plat could be released. At the July 17th meeting the Developer's Agreement was amended to restrict leasing of the T ownhome units, except following acquisition upon foreclosure by a mortgage lender, in which case the units could be leased for a period of up to 60 days. The restriction is also to be placed in the Property Association Covenants. The purpose of the restriction was to prevent the development from becoming an apartment-style commercial venture. 2 A leasing restriction in some fonn could not have come as a surprise to Plaintiff. For several weeks prior to fmal approval of the Developer's Agreement, Plaintiff's attorney, Mr. David Eide, had been negotiating language related to lease restrictions. On July 12, 2000, Mr. Eide faxed proposed language restricting leasing. In the July 12, 2000 fax Mr. Eide notes that "these changes reflect our discussions of the morning of July 12, 2000." A copy of the July 12th fax is attached to Defendant's affidavit herein. On July 18, 2000, the day after the City Council meeting approving the amended Developer's Agreement, Plaintiff requested a special City Council meeting for reconsideration of the lease restrictions. Per that request, a special meeting was duly noticed and held on July 25, 2000 and 4:30. However, a quorum of the Council was unable to attend the meeting. The meeting has been rescheduled for 6:45 on July 31, 2000, to be held in conjunction with a previously scheduled City Council meeting. Plaintiff is infonned that the City Council intends to reconsider the leasing issue at that time. Plaintiff now brings this motion for a temporary restraining order. LEGAL STANDARD FOR ISSUING TEMPORARY RESTRAINING ORDER A District court may issue a temporary restraining order only if the applicant can demonstrate that it meets the following criteria: (i) That it does not have an adequate legal remedy. (ii) That it faces a real, substantial, and irreparable injwy. (iii) That it is likely to succeed on the merits of its claim. (iv) The public interest. (v) The administrative burden of enforcing the temporary decree. 3 Cherne v. Indus.. Inc. v. Grounds & Assoc., 278 N.W.2d 81,91 (Minn. 1979); Yager v. Thompson, 352 N.W.2d 71, 74 (Minn. App. 1984); AMF Pinspotters. Inc. v. Harkins Bowling. Inc., 260 Minn. 499, 110 N.W.2d 348 (1961); Cramond v. AFL-CIO, 267 Minn. 229, 126 N.W.2d 252 (1964). The Minnesota Supreme Court has held in State ex reI. Tumbladh v. District Com:t, 107 N.W.2d 307 (Minn. 1960) that courts will not enjoin actions of administrative agencies prior to completion of their proceedings absent extraordinary circumstances. On this point the Minnesota Supreme Court has stated that: This Court has held that the only exceptions to the long- settled rule that no one is entitled to an injunction against the actual or threatened acts of an administrative agency until the administrative remedies and the remedies of direct review have been exhausted are in a case showing the imminence of actual irreparable hann from action beyond the agency's jurisdiction or contrary to constitutional principles. Thomas v. Ramberg, 240 Minn. 1, 60 N.W.2d 18 (1953) In determining irreparable harm, the Court must weigh the hardships to both parties that may result from the issuance of a restraining order. Paradata of Minn. v. F o!, 356 N.W.2d 852 (Minn. App. 1984). In balancing the hanns, the Petitioner must show irreparable hann to trigger an injunction, while Respondent need only show substantial hann to prevent and injunction from issuing. See Yager v. Thompson, 352 N.W.2d 71, 75 (Minn.App.1984). Injunctive relief should be granted only in clear cases reasonably free from doubt and when necessary to prevent great irreparable harm. See North Central Public Service Co. v. Village of Circle Pines, 302 Minn. 53, 60, 224 N.W.2d 741, 746 (1974). 4 ARGUMENT 1. Plaintiff Has An Adequate Remedy At Law. Plaintiff has an adequate remedy at law. Plaintiff alleges in its pleadings that "it has suffered in excess of Fifty Thousand and 00/100 Dollars ($50,000.00) to be more specifically ascertained at trial." While the City disputes Plaintiff's claim, if for sake of argument the Court accepts this claim to be true, then it is clear that Plaintiff has an adequate remedy after a trial on the merits. 2. Plaintiff Does Not Face Irreparable Harm. The concept of an "adequate remedy at law" and "irreparable harm" are really two sides of the same coin. Plaintiff cannot be irreparably harmed if it has an adequate legal remedy. Plaintiff's statement in its pleadings that its damages will be "specifically ascertained at trial" is a tacit admission that an adequate remedy at law exists. More specifically, Plaintiff contends that is cannot close on its purchase of the property unless it can "record with the office of the Wright County Recorder the final plat for the Kollville Estates development." Nothing prevents Plaintiff from closing on the property as scheduled. Indeed, Plaintiff must own the property before any final plat approval may take effect. The Council's approval specifically requires that Plaintiff provide proof of ownership, in the form of a title commitment, as part of the fmal plat approval. The City cannot approve a plat for property which the applicant does not own. Not only is Plaintiff not irreparably harmed in this regard, Plaintiff must own the property before the plat can be released for recording. S ) ,- '. 3. Plaintiff Is Unlikely To Succeed On The Merits. Minnesota Statutes section 462.358 specifically allows a "municipality to condition its approval on compliance with other requirements reasonably related to the provisions of the regulations and to execute development contracts embodying the terms and conditions of approval. The municipality may enforce such agreements and conditions by appropriate legal and equitable remedies." This statute expressly authorizes a City to condition plat approval on execution of a development contract. Moreover, Plaintiff has applied for approval of Kollville estates as a PUD. The purpose of a PUD is to allow flexibility from the strict standards of the City's land use regulations. In other words, Kollville Estates would not otherwise be allowed under the City's land use controls, unless it is approved as a PUD. The development contract simply embodies the terms and conditions of the PUD approval as authorized by statute. Plaintiff contends that the City is attempting to regulate ownership of the Townhome units, rather than use. The City's leasing restriction does not dictate who can "own" individual units. Rather the leasing restriction goes to the use of the property. The purpose of the restriction is to prohibit the property from being used as a commercial leasing venture. This is not unlike other restrictions for commercial ventures commonly imposed by cities throughout the state. 4. The Public Interest Dictates That Plaintiff's Motion Be Denied. The Developer's Agreement is designed to cause compliance with its land use regulations and conditions or approval. Without such an agreement, the City does not 6 '. have an effective enforcement mechanism. The Developer's Agreement contains detailed engineering plans addressing construction and location of public utilities, grading, drainage, ponding and erosion control requirements, park dedication and trail requirements, landscaping, lighting, etc. Many of these items cannot be displayed on the plat itself. Nor can these requirements be spelled out in sufficient detail in Council findings of fact. If the City is required to release the plat without a recorded developer's agreement, not. only will it be prohibited from enforcing its lease restriction, it will also be unable to enforce its engineering and other requirements. In evaluating whether to issue a restraining order, the Court must weigh the hardships to both parties that may result from the issuance of a restraining order. Paradata of Minn. v. Fo!, 356 N.W.2d 852 (Minn. App. 1984). The public interest clearly requires that the City be allowed to enforce its infrastructure and other requirements and outweighs any of the hanns alleged by Plaintiff. 5. Plaintiff Has Failed To Exhaust Its Remedies. Plaintiff has requested a special meeting of the Albertville City Council. This request has been granted and the City Council will meet on July 31, 2000 to reconsider the leasing issue. At this meeting Plaintiff will have an opportunity to provide the City Council with additional information related to the impact of leasing restrictions on the project. By failing to avail itself of this opportunity before applying to the Court for 7 ~, ~.. , immediate relief, Plaintiff has failed to exhaust its remedies with the City. Therefore, Plaintiff's motion for a temporary restraining order is premature. CONCLUSION The Minnesota Supreme Court has held that the purpose of injunctive relief is to preserve the status quo until issues in dispute can be decided on the merits. Pickerign v. Pasco Marketing, 228 N.W.2d 562, 565 (Minn. 1975). Mandating that the City release the final plat of Kollville Estates does not preserve the status quo. Rather, it provides Plaintiff with a land use approval to which it is not clearly entitled, without any of the public safeguards that would be imposed during the normal course of business. For the foregoing reasons, Plaintiff's motion for a temporary restraining order must be denied. July 26, 2000 Marcus W. Miller Attorney 1.0. #269621 Attorney for the City of Albertville P.O. Box 369 705 Central Avenue East St. Michael, MN 55376-0369 (763) 497-1930 8