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2007-05-31 Hedlund Memo in OppSTATE OF MINNESOTA COUNTY OF WRIGHT T/C Homes, Inc. a Minnesota corporation, Plaintiff, V. City of Albertville, DISTRICT COURT TENTH JUDICIAL DISTRICT CASE TYPE: DECLARATORY JUDGMENT/ BREACH OF CONTRACT Defendant/Third-Party Plaintiff, V. Short Elliott Hendrickson, Inc., Third -Parry Defendant. T/C Homes, Inc., a Minnesota corporation, Plaintiff and Cross Claimant, vs. Gold Key Development, Inc., a Minnesota corporation Defendant/Third-Party Plaintiff, VS. Hedlund Engineering, Third -Parry Defendant, VS. City of Albertville, Defendant/Third-Party Plaintiff, vs. Short Elliott Hendrickson, Inc. Third -Party Defendant. Judge Court File: 86-CV-06-2998 Court File: 86-CV-06-4997 Page 4- HEDLUND ENGINEERING'S MEMORANDUM OF LAW IN SUPPORT OF GOLD KEY'S MEMORANDUM REGARDING MOTION TO INTERVENE BY MAJESTIC AND LEGACY AND CITY'S MOTION TO AMEND SCHEDULING ORDER AND TO AMEND ITS COUNTERCLAIM AGAINST GOLD KEY INTRODUCTION Hedlund joins in the positions set out by Gold Key in support of Legacy and Majestic's Motion to Intervene and in opposition to the City's motion for a 90 day extension of all deadlines as to the claims of all parties, and will not reprise the arguments made by Gold Key on these two issues. Hedlund also joins in the opposition set out by Gold Key with respect to the City's proposed amended counterclaim against Gold Key, but respectfully submits additional argument on this issue. ARGUMENT Apparently recognizing that its moratorium was a mistake, and ignoring its original elevation and drainage claims that have been the premise of this lawsuit since commencement, the City, on the eve of the discovery deadline, seeks to amend its counterclaim to advance a new and not vet disclosed violation ofMPCA rules and regulations by Gold Key. This latest effort by the City comes on the heels of the City's similar tactic at the recent summary judgment hearing on May 15, where the City advanced new and previously undisclosed claims of breach by Gold Key (Leichty affidavit dated 05/04/07: (a) failure to account for tailwater effect, (b) failure to properly calculate off -site drainage, and (c) failure to install a pond "skimmer"). These desperate efforts by the City constitute an improper and untimely attempt at the 11 ' hour to find any possible violation of City, county, state or federal laws or regulations, no matter how far removed from the original claims that were the basis of the moratorium, and to amend in an attempt to create new fact issues in a forlorn effort to justify its mistaken moratorium. The City's notice of default letter to Gold Key on December 1, 2006 imposed a moratorium Page -2- on the development based upon claimed violations of specific elevation and drainage ordinances. These two claims -elevations and drainage -are adopted in the City's Answers to Interrogatories, dated December 28, 2006 and have never been supplemented. After nearly 18 months of investigation,12 months of formal discovery, 12 depositions, and about 10,000 pages of documents, two things are absolutely clear this case: ELEVATIONS: The City has completely failed to produce any evidence to support its elevation claims and has completely failed to respond to expert analysis by Gold Key expert engineer Mundstock, who testifies that all 52 lot elevations complied with, and exceeded, the requirements of the Development Agreement and City ordinances in effect in 2004 with respect to structure low opening elevations based upon the ordinary high water level, a level endorsed by the Development Agreement between the City and Gold Key and by applicable City Ordinances. This conclusion is unchallenged by the ci . Moreover, these elevations claims were not set out in the City's original counterclaim and are not set out in the proposed amended counterclaim. 2. DRAINAGE: The City has completely failed to produce any evidence to support its drainage claims and has completely failed to respond to expert analysis by Gold Key expert engineer Mundstock, who testifies the drainage was properly designed to provide a permanent and rate controlled solution for the discharge and removal of all natural water that accumulates on the property, and that, absent the periodic flooding of the 2,300 acre County Ditch # 9 watershed, there is no deficiency in the drainage system ofthe 33.7 acre Prairie Run property. These conclusions are unchallenged by the City, despite the fact that these drainage claims were set out in the City's original counterclaim and are set out in the proposed amended counterclaim. Page -3- The specific drainage claims set out by the City engage City Ordinances § A-600.13(c) (1) re: 100 yr storm peak runoff, § A-700.6 re: permanent drainage solution; and § A-700.6 re: one-half the runoff rate. The irrefutable and unchallenged fact is that the City has failed to support these specific drainage claims. These claims require sophisticated engineering analysis of sub -catchments, including drainage, reach, and ponds, for both the pre -development run-off rates and the post - development run-off rates, based upon 2, 10, and 100 yr events, and the water capture, storage, and discharge system for the removal of natural drainage. Expert Mundstock has done the engineering analysis on behalf of Gold Key and Hedlund. In response to the City's specific claims, Mundstock concludes that the Prairie Run drainage system provided a permanent solution for removal of all natural drainage and provided a post -development run-off rate that did not exceed ''/z the pre -development run-off rate (§ A-700.6), and provided apost- development 100 yr storm peak run-off rate that did not exceed the pre -development 100 yr storm peak run-off rate (§ A-600.13 (c) (1)). Mundstock Rev.Aff¶ 16-19. In stark contrast, the City has no engineering analysis providing expert opinion support for any of its specific drainage claims. The City's position on these claims amounts to "You violated the ordinances because we say you did." Now the City seeks to add insult to injury by amending to assert the notoriously vague claim that the "the drainage ponds on the Prairie Run plat violate applicable Minnesota Pollution Control Agency ("MPCA") rules and regulations." Amended Counterclaim ¶ 66. The only previous reference to an alleged MPCA violation was raised for the first time on May 4, 2007 in Mr. Leichty's affidavit (as described in Gold Key's Brief at p.8-10), but it is unknown whether the issue raised by Mr. Leichty is the same issue that is the subject of the City's amended counterclaim. The indications are that the MPCA issue that is the subject of the City's amended counterclaim might be a different issue: Mr. Leichty raised an MPCA issue in his affidavit on May 4, 2007; counsel for the City Page -4- notified the parties that the City received "verbal notice of violation" of MPCA rules and regulations on May 23, 2007. If the May 4 and May 23 alleged MPCA violations are one and the same, then the motion to amend must be denied because the new claim cannot survive summary judgment. See Gold Key Brief at p.10-12. If the May 23 claim is distinct from the May 4 claim, then the motion to amend must surely be denied on the grounds of the severe prejudice all parties will suffer if the City is allowed to amend to assert a brand new claim at this late stage. See Gold Key Brief at p. 7-8. Indeed, even if it is the May 4 claim that is the subject ofthe City's proposed amended counterclaim, the motion to amend must be denied on the grounds of severe prejudice as well as on the grounds of an inability to survive summary judgment. CONCLUSION For these reasons, including the reasons set out by Gold Key Development, the motion to intervene by Majestic and Legacy must be granted and the City's Motion to Amend Scheduling Order and to Amend its Counterclaim Against Gold Key Development must be denied. Dated: /'/0- c?-7 , 2007 ARTHUR, CHAPMAN, KETTERING, SMETAK & PIKALA, P.A. By: ✓% 1/ 1 Robert W. �ett� i r. ) Anton J. van der Merwe (#226166) 500 Young Quinlan Building 81 South Ninth Street Minneapolis, MN 55402 Telephone: 612-3 3 9-3 5 00 ATTORNEYS FOR HEDLUND ENGINEERING, SERVICES, INC. Page -5- STATE OF MINNESOTA ) )ss. COUNTY OF HENNEPIN ) AFFIDAVIT OF SERVICE VIA FACSIMILE TRANSMISSION AND U.S. MAIL Kimberly A. Bartlett, of the City of Minneapolis, County of Hennepin, being first duly sworn on oath deposes and states that she is a secretary in the office of Arthur, Chapman, Kettering, Smetak & Pikala, P.A., 500 Young Quinlan Building, 81 South Ninth Street, Minneapolis, MN 55402-3214, and on May 31, 2007, she served the following documents: Hedlund Engineering's Memorandum of Law in Support of Gold Key's Memorandum Regarding Motion to Intervene by Majestic and Legacy and City's Motion to Amend Scheduling Order and to Amend its Counterclaim Against Gold Key (Re: T/C Homes, Inc. v. City of Albertville and Gold Key Development v. Hedlund Engineering Services, Inc.; Our File: 36039) Cindi Matt, Esq. Johnson, Larson, Peterson & Matt, P.A. 908 Commercial Drive Buffalo, MN 55313 Facsimile: 763-682-4465 Jason Kuboshek, Esq. Iverson Reuvers 9321 Ensign Ave. S. Bloomington, MN 55438 Facsimile: 952-946-1501 Steve Yoch, Esq. Felhaber, Larson, Fenlon & Vogt, P.A. 444 Cedar St., Suite 2100 St. Paul, MN 55101-2136 Facsimile: 612-338-0535 John A. Markert Coleman, Hull & Van Vliet, PLLP 8500 Normandale Lake Blvd., Suite 2110 Minneapolis, MN 55437 Facsimile: 952-841-0041 by causing to be transmitted to the last known facsimile, which are above -referenced, true and correct copies of the above -named documents. She further deposes and says that she understands this facsimile service needs to be followed by the mailing of hard copies of the above -named documents to the person being served. Kimberly A. ffartlett Subscribed and sworn to before me this 3 1 " day of May, 2007.