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2007-05-04 Memo in Opp to Summary Judgment05/04/07 13:13 FELHABER LAW � 9529461501 NO.504 D01 Felha]�er Larson Fenton & Uogt A Professional Assoctatfun —Attorneys at Low 444 Cedar Street I Suite 2100 St. Paul, Minnesota 55101.2136 651 222 6321 1 Fax: 651 222 0905 From: Re: Message: To: Jason Kuboushek Cindi Matt Anton van der Merwe John Markert Stephen F. Yoch FAX COVER SHEET pate; May 4, 2007 Number of Pages (Including this sheet): 30 Transmitter Name: Deb M Transmitter Phone: 651 312 6029 TC/Alberiville/Cold Key et. al. Fax Number: 952-946-1501 763-682.4465 612-339-7655 952-841-0041 PLEASE CALL TRANSMITTER IMMEDIATELY IF ANY PAGES ARE RECEIVED IMPROPERLY, CONFIDENTIALITY NOTICE The document(s) accompanying this fax may contain confidential information which is legally privileged. The information is intended only for the use of the intended recipient. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution or the taking of any action in reliance on the contents of this telecopied information except its direct delivery to the intended recipient named above is strictly prohibited. If you have received this fax in error, please notify us immediately by telephone to arrange for return of the original documents to us. 0s 04 07 13:13 FELHABER LAW 9529461501 NO.s04 P02 MINN114PO4IS 220 South Sixth Street I Suite 2200 Mlnneapolla, MN 55402-4504 612 339 6321. I Fax 612 336 0535 Fel, er Larson Fe on LVogt A Prnjesslonal Association —Attorneys at taw Stephen E. Yoch syoch®felhaher.com (651) 312-6040 Reply t0 St. Paul May 4, 2007 SENT VIA FACSIMILE AND U.S. MAIL Ms. Cindi S. Matt Mr. Jason J. Kuboushek Jobnson, Larson, Peterson & Matt, P.A. Iverson Reuvers, LLC 908 Commercial Drive 9321 Ensign Avenue South Buffalo, MN 55313 Bloomington, MN 55438 ST. PAUL It" Cedar Street I Suite 2100 St. Paul, MN 55101.2136 651 222 6321 1 Fox 651 222 8905 Mr. John A. Marken Mr. Anton J. van der Merwe Coleman, Hull & Van Vliet, PLLP Arthur Chapman 8500 Normandale Lake Blvd., Suite 2100 81 South Ninth Street, Suite 500 Minneapolis, MN 55437 Minneapolis, MN 55402-3214 Re: T/C Homest Inc, v. City of Albertville and Gold Key Development Court File No.: 86-CV-06-4997 Consolidated with _Gold Key Development, Inc. v. City of Albertville Court File No.: CV-06-2998 Dear Counsel: Enclosed and served upon you in the above -referenced matters are: T/C Homes, Inc.'s Memorandum in Opposition to the City of Albertville's Motion for Summary Judgment; T/C Homes, Inc.'s Memorandum of Law in Opposition to Short -Elliott -Hendrickson Incorporated's Motion for Summary Judgment; SBY/dsm Enclosures cc: B. TO (via e-mail) W. Ortell (via email) D. Olson (via e-mail) phtruly n yours, Lr/ e. Yoch J� 9TPL-W0rd!97542.1 w Jelha6er.coro 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 IP03 Felhaer :Larson Fen on & Vogt A Professional Association — Attonieys at Law Stephen E. Yoch MINNEhPOt1S (651) 312.6040 2211 50111h Sixth Slrect I Suite 2200 syochofelhaher-com Minneopohs. MN 55402.4304 Reply to St. Paal 612 339 6321 1 Fax 612 338 0535 May 4, 2007 ST PAUL 441 Cedar Street I Suite 2100 St. Paul. MN 55101-2136 651 222 6121 1 Fax 651 222 B905 Court Administrator Sent Via Federal Express Wright County District Court Ten Second Street NW, Room 201 Buffalo, MN 55313-1192 Re: TIC Homes, Inc. v. City. of Albertville and Gold Key Develonment Court File No.: 86-CV-06-4997 Consolidated with Gold Key Development, Inc. v. City of Albertville Court Pile No.: CV-06-2998 Dear Court Administrator: Enclosed for filing in the above -referenced matters are the following: 1, T/C Homes, Inc.'s Memorandum in Opposition to die City of Albertville's Motion for Summary Judgment; 2. T/C Homes, Inc.'s Memorandum of Law in Opposition to Short-Ellion- Hendrickson Incorporated's Motion for Summary Judgment; 3. Affidavit of Service; and 4. Check in the amount of $110.00 for the filing fees. If you have any questions regarding this filing, plede do not. hesitate to contact me, Enclosures cc: B. Tutt C. Matt I. Kuboushek J. Markert A. van der Merwe STPL-word:6801.1. www_leihaher com 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 D04 STATE OF MINNESOTA COUNTY OF WRIGHT T/C Homes, Inc., VS. DISTRICT COURT TENTH JUDICIAL DISTRICT Case Type; ➢eclaratory Judgment/Breach of Contract Court File No. CV-06-4997 Gold Key Development, Inc., Defendant and Third Party Plaintiff, vs. Hedlund Engineering, Third Party Defendant, and City of Albertville, Defendant and Third Party Plaintiff.. vs. SHORT-ELLIOTT-HENDRICKSON, INCORPORATED T/C HOMES, INC.'S MEMORANDUM IN OPPOSITION TO THE CITY OF ALBERTVILLE'S MOTION FOR SUMMARY JUDGMENT Third Parry Defendant and Cross Defendant. Gold Key Development, Inc. Court rile No. CV-06-2998 Plaintiff, V. City of Albertville, Defendant and Third Party Plaintiff, V. SliORT-LLLIOTT-IIENDRICKSON, INCORPORATED Third Party Defendant. STPt- Word:102428.2 05/04/07 13:13 FELHABER LAW � 9529461501 NO.504 1?05 INTRODUCTION The City of Albertville's (the "City") motion is flawed and should be denied because it imposed a moratorium on the Prairie Run plat based upon photographs, within its sole possession which it did not disclose to anyone yet now claims are so significant that the development must be stopped. Tltis is akin to: "I could tell you, but then I'd have to ki11 you." The City withheld these photographs and let the development proceed, but it now attempts to hold itself above accountability. Notably, the City's motion ignores the factual dispute that is at the crux of the claims against it. Summary judgment must be denied because material facts remain in dispute as to the City's failure to disclose photographs related to the 1.00-year high water level. The facts show that the City failed to disclose the photographs and approved the original Prairie Run plat without reference to the photographs. TIC Homes, Inc. (`TiC") purchased lots and commenced construction in the development in reliance upon the City's approval of the plat. Years later, the City used its photographs to impose a moratorium. Tactual issues remain as to whether the City was negligent and can be estoppel from enforcing its ordinances based upon information it failed to provide to the developer and its engineer. Consequently, the City's motion for summary judgment must be denied. TiC has appropriately brought its request for mandamus. In the interests of judicial efficiency, and in compliance with Minn. Stat. § 586.08. TIC has included in its Complaint both the request for mandamus and its tort and contractual claims. TIC's Complaint is sufficient to satisfy the statutory requirements. As a result, the City's motion for summary ,judgment should be denied in its entirety. STPL-Word:102028.2 2 05/04/07 13:13 FELHABER LAW � 9529461501 NO.504 1706 FACTUAL SUMMARY The facts of the case have been extensively briefed and need not be repeated here. The most objective and detailed recitation of the facts provided by Gold Key is relied upon by TIC and is incorporated herein by reference.' The City Failed to Disclose its Photographs Regarding the Fligh Water Level On June 24, 2003, the City received complaints from at least 56 homeowners whose homes were flooded or damaged during an enormous rain event. See Gold Key's Memorandum of Law in Support of Summary Judgment, p. 8 (citing Sutherland Depo. at 28 and 124). Many of the homes were adjacent to what would become the Prairic Run Development. Id. at p.9 (Sutherland Depo. at 28-30). John Sutherland, the City Zoning Administrator, took photographs of the houses affected by the flooding (hereinafter the "Photographs") and shared them with "anyone who was interested," including the City Administrator, Larry Kruse, and Peter Carlson of Sh'H. Id. at p.9 (Sutherland Depo. at 15-18, 20-22). The City did not provide the Photographs, or raise any concerns about the flooding and potential affect on the future Prairie Run Development, with any other party. Id. at pp. 9-10. (Sutherland Depo. at 1.6-18 and 84; Carlson Depo. at 81-82 and 144; Schultz Depo. at 65-66). The Photographs were available to the City and the City Engineer prior to the time the preliminary plat of Prairie Run was approved. However, the plat was approved using the elevation line of permanent aquatic vegetation and the City made no mention of the 1 The adoption by TIC of Gold Key's recitation of the facts should not be as an acknowledgment or waiver of any claims against Gold Key. Such claims are not the subject of the pending motions. 3TPL-Ward:1020Ya.2 3 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 Photographs. Id. at p.14 (Johnson Depo. at 38-39; Hedlund Depo. at 70-71; Sutherland Depo. at 63). At a June 7, 2004, City Council meeting, the City Council approved the final plat of Prairie Run and accepted it as in compliance with Minn. Star. § 505.03, subd. 2. Id. p.12 (Kruse Depo. at 41-42). TIC later purchased lots from the developer and built homes on the lots in reliance upon the City's approved grading plans and pen -nits. Id. p.14 (Sutherland Depo. at 87-89; Johnson Depo. at 108-1.09). The City Based Its Current Moratorium Upon an Analysis of PhotograRbs it Failed to Disclose to A_yane The City (for the second time)2 declared a default of the development based upon further analysis of the photographs. id. p.19. Affidavit of Cindi Matt attached to CK's Motion for Summary Judgment ("Matt Aff. ") at Ex. L. On December 1., 2006, the City wrote a letter to Gold Key indicating that the City had now set the highest known water elevation at 951.47 feet above sea level, based upon further analysis of its Photographs. Id. Using this new created flood level, the City declared Gold Key in default of paragraph 13.P. of the Development Agreement and informed Gold Key that it would not be issuing building permits for Any lots, even those lots that met the ordinance requiremems regarding elevations. Id. (Matt Aff. at Exs. I, and P). Due to die moratorium, TIC continues to incur substantial damages, because it has been unable to build on its lots or sell the lots for which it has already built houses. See TIC Complaint. 2 The City initially imposed a moratorium in November 2005, relying primarily upon an undisclosed culvert risk assessment. See TIC's Memorandum in Opposition to SEH's Motion for Summary Judgment at pp. 2-3 and fn A. P07 STM-word 102028.2 4 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 1?08 ARGUMENT I. STANDARD OF REVIEW. The City ignores significant fact questions which preclude dismissal of T/C's claims, and it fails to meet its substantial burden by not addressing directly the Photographs relied upon by the City. Rule 56.03 of the Minnesota Rules of Civil Procedure provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and chat either party is entitled to a judgment as a matter of law." See Minn. R. Civ. P. 56.03 (West 2006). Summary judgment is appropriate only against a party who fails to establish the existence of an element central to its case and on which that parry will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Tibbetts v. Crossroads. Inc., 411 N.W.2d 535, 539 (Minn. App. 1987). In order for a moving party to prevail, it must demonstrate to the court that "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Celotex Corp., 477 U.S. at 317. A fact is material if its resolution affects the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). On a motion for summary judgment, all evidence and inferences are to be viewed in a light most favorable to the nonmoving party. Campion v. County of Wright, 347 N.W.2d 289, 291 (Minn. App. 1984). if the nonmoving party produces competent evidence showing a genuine material factual dispute, summary judgment is not appropriate. See Kletschka v. Abbort- Northwestern Hospital, Inc., 417 N.W.2d 752, 754 (Minn. App. 1988). STP1: WoM:W2O2A.2 5 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 IP09 The City repeatedly asserts that it.. is entitled to summary judgment without addressing its unexplained failure to provide the Photographs which the City considered sufficiently Important to justify shutting down the project. The City's failure to address this crucial issue mandates denial in its motion for summary judgment. H. WHETHER THE PHOTOGRAPHS SHOULD HAVE BEEN DISCLOSED IS A QUESTION OF FACT WHICH PRECLUDES SUMMARY JUDGMENT. A. Factual Issues Remain as to T/C's Negligent Misrepresentation Claina. The City's motion to dismiss TIC'S negligence and negligent misrepresentation claims must be denied. Negligent misrepresentation of fact is actionable against government officers and employees, because members of the public have no other access to factual information maintained by the government except through those individuals. Mohler v. City of St. Louis Park, 643 N.W.2d 623 (Minn. App. 2002). Applied to the case at hand, the City withheld factual information (specifically the Photographs), and affirmatively represented that the plat was reviewed, approved, and that there was no other informationt pertaining to the water level. T/C's negligence claims are based upon the City's factual misrepresentations and its failure to disclose the Photograpbs. it is undisputed that the City was the only parry that was aware or had access to the Photographs, and that the current moratorium issued years later was based upon the Photographs. Supra pp.3-4. As a result, factual issues remain as to whether the City should have disclosed the Photographs, and whether the City misrepresented that no other information was available pertaining to the water level. Such issues preclude summary judgment. STPt-Wont:102028.2 6 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 D10 a. Factual Issues Remain as to T/C's Nep-Heence Claim Summary judgment is also not appropriate as to T/C's negligence claim because factual issues remain as to whether the City should have disclosed die Photographs. In Gilbert v. Hillman, 371 N.W.2d 542 (Minn. 1985), the court ruled that die plaintiff landowner was allowed to sue the county based upon misinformation supplied by the county. The court distinguished the same two cases heavily relied upon by the City (I-loffert and Cracraft and explained: The county misconstrues, however, the circumstances giving rise to the Gilberts' claim. In this case, unlike in Cracrrlft or in Nn.fert, it was the county's own conduct towards die Gilberts themselves, not the conduct of a third person, which forms die basis of dte Gilbert's complaint. The Gilberts did not claim or seek to prove that the issuance of a permit and publication of the standard plan formed the basis of their negligence action here. Rather, they contended that the county acted negligently by requiring them to build a particular system designed by I4yrkas for them, which it knew or should have known created an unreasonable risk of injury to the Gilberts. In Loshbough v. Township of Ruzzle, 258 N.W.2d 96. 102 (Minn. 1977), we acknowledged the principle that: [A] governmental unit owes a particular individual a duty of care when its officer or agent, in a position and with authority to act, has or should have had knowledge of a condition that violates safety standards prescribed by statue or regulation, and that presents a risk of serious harm to the individual or his property. When such serious injury is reasonably foreseeable, the governmental unit has a duty to exercise reasonable care for the individual'& safety. In Cracrc{li we recognized that the breach of such a duty of care owed by a governmental unit to a private individual "can be the basis of a lawsuit against the municipality just as it can be the basis of a lawsuit against private for feasors." Id. at 546, s•r?L-wurd:102028.2 7 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 D11 The case at hand is more analogous to Gilbert than to Cracraft/hloffert because T/C's negligence claim pertains directly to the action of the City and its failure to disclose its Photographs. The City's current moratorium relied upon the Photographs. The City knew or should have known that the Photographs were relevant, and TIC has been harmed by the City's failure to disclose them. At the very least, the rationale for the City's negligent or intentional withholding of the "important" Photographs justifies denial of the City's motion. C. Summary Judgment Is Not Appropriate Because the City was Aware of the Facts Giving Rise to the Inijury. Summary judgment is farther inappropriate in this case, because the City was aware of the facts giving rise to the injury suffered by T/C. To Pettinger v. Village of Winnebago, the Minnesota Supreme Court affirmed a claim against a city and its engineers where a city was aware of significant problems with a sewer system and had actual notice of flooding problems, but allowed a project to proceed. 58 N.W.2d 325, 329 (Minn. 1953). "Where a municipality has actual or constructive notice of a defect in its sewer sufficiently long to enable it to remedy a condition prior to the act resulting in damage complained of, that is sufficient notice." Id.; see also Johnson v. Country of Nicollet, 387 N.W.2d 209, 212 (Minn. App. 1986) (in reversing a grant of summary judgment, the court found a question of fact where a county engineer knew of a hazardous road condition and failed to act). There is no dispute that the City had in its possession the Photographs before plat approval. Supra pp. 3-4. At the very least, there is a sufficient fact question regarding the knowledge of the City concerning the conditions leading to the moratorium, and in [Uri) Elie damage suffered by TIC, to preclude summary judgment. STPt-Word:If 028.2 8 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 ill. ISSUES OF MATERIAL FACT REMAIN AS TO WHETHER THE CITY MAY RE ESTOPPED FROM ENFORCING ITS ORDINANCES. A City may be estopped from enforcing its own ordinance in exercising its zoning powers, if a property owner detrimentally relies in good faith on some governmental act or omission. Ridgewood Dev. Co, v. State, 294 N.W.2d 288, 292 (Minn. 1980). Generally, for equitable estoppel to apply a plaintiff must demonstrate that a defendant., through its language or conduct, induced the plaintiff to rely, in good 'faith, on the same, to its injury, detriment or prejudice. Id. Estoppel is available as a defense against a government if the government's wrongful conduct threatens to work a serious injustice and if die public's interest would not be unduly damaged by the imposition of the estoppel. Id. The City concedes it approved the preliminary plat in August 2003 and the final plat on June 7, 2004, using the aquatic vegetation line as the high water mark. The City subsequently issued building permits to TiC mandating building heights which TiC satisfied. The City's failure to disclose the Photographs, and subsequently imposing a moratorium based upon those same Photographs, is wrongful conduct that has resulted in significant damage to TIC. Consequently, summary judgment is not appropriate. in Semler Construction, Inc. v. City of Hanover, the court determined that die city improperly refused to grant final plat approval when preliminary plat approval had been given and relied upon by the developer. 667 N.W.2d 457,466 (Minn. App. 2003). in denying the city's motion, the court noted that the city made affirmative acts dial the developer committed substantial resources in reliance on the city's representations. Id. D12 srrt.-wom:162028.2 9 05/04/07 13:13 FELHABER LAW � 9529461501 NO.504 D13 TIC relied upon the City's approval of the plat when it purchased and built on the lots. The City's failure to disclose the very information upon which it later based its moratorium is a wrongful, affirmative act. Finally, Minn. Stat. § 462.355, Subd. 4, provides that no moratorium may impede a subdivision that has been given preliminary plat approval prior to the effective date of the interim moratorium ordinance. In addition, Minn. Stat. § 462.358, Subd. 3c creates a "reasonable reliance" doctrine and further prohibition against the retrospective application of laws, or vested rights doctrine. TIC relied upon the City's approval of the plat, and the City should be estopped from imposing a moratorium long after plat approval occurred. Therefore, the City's motion must be denied. IV. ISSUES OF MATERIAL FACT REMAIN AS TO WHETHER THE CITY IS IMMUNE FROM ITS FAILURE TO DISCLOSE THE PHOTOGRAPHS. Minnesota law holds that where a city's employee's duty or act did not involve any balancing of social, political or economic considerations, such actions were not immune from liability. See Waste Recovery Coop v. Hennepin County, 517 N.W.2d 329 (Minn. 1994). In Waste Recovery Coop, the court held that the county was not immunized under doctrines of discretionary immunity or official immunity from liability for its employees' erroneous conclusion that telephone books collected at depositories for recycling were a waste because the employee's duty was to enforce the County ordinance, and the decision did not involve any balancing of social, political or economic considerations. Id. at 333; see also Boop v. City of Lino Lakes, 502 N.W.2d 409 (Minn. App. 1993) (plaintiff claimed the city's improper planning and failure to remedy neighbor's failed septic system caused water damage to plaintiff's property and damage to his health, question of whether the city exercised due care STPL-Word:102028.2 10 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 IP14 and enforcement of nuisance ordinance was factual issue inappropriate for summary judgment); See also Android v. rllefson, 391 N.W.2d 836 (Minn. 1986); Gilbert v. Hillman Construction, Inc., 371 N.W.2d 542 (Minn. 1985) (county was liable when it negligently designed a septic system and required that system to be constructed in accordance with those plans). In our case, the City is not immune because it failed to provide relevant information (the Photographs) in its sole possession regarding the water level, which it used years later to issue its moratorium. An analogous case exists with Soto Foods, Inc. v. Larson -Peterson & Associates, 497 N.W.2d 276 (Minn. App. 1993), where the City of Park Rapids began a process to upgrade its wastewater treatment facility. Id. at 278. Larson -Peterson & Associates, an engineering firm, was retained by Elie city in connection with the project. The city sold a lot in its industrial park to Soto Foods for a potato processing plant. Permits were issued to Soto Foods for operation of the system. After the actual construction of the new treatment system was completed and placed into operation, it was discovered that the DOD capacity of the system had been exceeded and the ponds were dead. Consequently, it was determined that Soto Foods was not in compliance with the new city ordinance limiting the 130D concentration of waste introduced into the system. Id, at 279. Soto foods commenced an action alleging against both tie city and the engineers negligence in the design of the new system and breach of the employment contract by the engineers to build an adequate system, alleging it was a third parry beneficiary of the employment contract between Elie city and the engineers. Soto Foods argued that the city and the engineers failed to gather sufficient inrortm ation about Soto Foods. Thus, as a direct result 9TPL-Word:1021128.2 I 1 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 D15 of the defendant's failure to contact Sota, BQD capacity sufficient for Sota Foods was not built into the system. Both the city and the engineers moved for summary judgment arguing they were immune from suit under the doctrine of discretionary immunity. The trial court denied the summary judgment motions of the city and the engineers. The Court of Appeals upheld the trial court's ruling. The court noted that the doctrine of discretionary function immunity provides for an exception to the general rule of municipal tort liability. See Minn. Stat. §§ 466.02, 466.03, subd. 6 (1990). However, in applying discretionary function immunity standard, the court recognized that "[t]he critical inquiry is whether the challenged governmental conduct, involved a balancing of policy objectives." Id. at 280. The court explained: Not all acts involving the exercise of judgment by agents of the government are protected as discretionary functions. The protection afforded by the discretionary function exception does not extend to professional or scientific judgment where such judgment does not involve a balancing of policy objectives. Instead, government conduct is protected only where the state produces evidence that the conduct was of a policy -making nature involving social, political, or economical considerations. )oven where decisions require the exercise of professional judgment, the professional evaluation of complex factors does not "convert" an operational decision into a discretionary function, absent a demonstration that immunity is essential to avoid judicial interference with governments] policymaking. Id. at 280 citing Nusbaum v. County of Blue Earth, 422 N. W.2d 713, 722 (Minn. 1988). The Sota court concluded that: the city and the engineers negligently failed to obtain information regarding Sota Foods' sewage discharge during the planning stages of the new system and that this error was based upon the scientific and professional judgment of the engineers and therefore, discretionary immunity does not apply to this challenged conduct. Id. at 28.1. The Court determined that there were disputed facts as to who was responsible for obtaining information. Id. at. 282. sTrt.•wom:1e2o2s.2 12 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 P16 There is no dispute that the City had in its possession the Photographs before plat approval. Like the city in Sora which failed to obtain crucial information, the City's failure m disclose the Photographs did not involve the "implementation of policy." At the very least, whether these Photographs should have been disclosed to the public is a fact question that bars summary judgment. IV. T/C SATISFIED THE REQUIREMENTS TO ASSERTS ITS REQUEST FOR MANDAMUS RELIEF. T/C's request for mandamus relief is procedurally correct. TIC may bring its request for mandamus relief, as well as its tort and contract claims in this proceeding pursuant to the statute and in the interest of judicial economy. Specifically, Minn. Stat. § 586.08 allows the following: No pleading or written allegation, other than the writ, answer, and demurrer, shall be allowed. They shall be construed and amended, and the issues tried, and further proceedings had, in the same manner as in a civil action. The demurrer need not be noticed for argument, but the issues raised thereby may be disposed of as are other objections to the pleadings (Emphasis added). In district court, either parry is entitled to have any issue of fact tried by a jury, as in an ordinary civil action. See Minn_ Stat. § 586.12; see also State ex Tel Colter v. Barr, 8 N.W. 899 (Minn. 1.881). Additionally, in Nolan and Nolan v. City of Eagan, a property owner was permitted to simultaneously pursue an inverse condemnation claim by way of a petition for mandamus against city and state for flooding on its property, and alternatively, tort claims, in interests of Judicial efficiency. 673 N.W.2d 487 (Minn. App. 2003), review denied. The court held that the statute governing mandamus (Minn. Slat. § 586.08) permitted "further proceedings" in the same manner as in a civil action. See also Semler Construction, Inc. v. City of Hanover, 667 aTK Word; n2028.2 13 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 D17 N.W.2d 457 (Minn. App. 2003) (court determined that factual issues remained on whether city was estopped from granting approval, and on remand district court must reconsider issuing writ compelling city to certify final approval of plat). T/C asserted its claim for mandamus relief in accordance with the statute. TIC may bring this request along with its additional tort and contract claims in the interest of judicial efficiency, and is entitled to have any issue of fact tried therein. TIC has satisfied the procedural requirements of the statute, and factual issues remain as to the City's failure to provide information on the water level before imposing a moratorium. Consequently, the City's motion to dismiss on such procedural elements should be denied. Moreover, TIC is entitled to mandamus relief. As discussed above, the City's actions were not discretionary and have resulted in substantial damages to TIC. The writ can be invoked where site petitioner has met all standards required by law for the issuance of the license of permit and the denial on the part of the official was clearly arbitrary. Bnri t v. Cit of 131oomin tg_ott, 203 N. W.2d 396 (Minn. 1.973). In determining whether an official has acted arbitrarily and whether a license or permit should be should be issued or revoked, a court in a mandamus proceeding will not confine its consideration to the facts existing at the time of the application but will take into account the facts existing at the time of the hearing. Rose Bros. Lumber v. Clousin , 268 N.W. 844 (Minn. 1936). Where petitioner for mandamus seeks to compel public officials to perform governmental duty, burden is on them to show they cannot perform. State v. Neisen, 217 N.W. 371 (Minn. 1928). In this case, the City approved the plat and allowed TiC to build. All of the requirements as to elevation and grading were met by TIC. In light of she compliance with the STPL-Word102028.2 14 a 05/04/07 13:13 FELHABER LAW � 9529461501 NO.504 D18 approved plans, as well as the City's wrongful withholding of Photographs related to the water level, the City's decision to place a moratorium is clearly arbitrary. As a result, the City's motion to dismiss TIC's request for mandamus relief must be denied. CONCLUSION Summary judgment must be denied because too many essential material facts remain in dispute to the resolve the issue of the City's negligence and immunity on summary judgment. Additionally, TIC has appropriately brought its request for mandamus. In the interests of judicial efficiency, and in compliance with Minn. Stat. § 586.08, TIC has included in its Complaint both the request for mandamus ,lid its tort and contractual claims T/C's Complaint is sufficient to satisfy the statutory requirements. As a result, the City's motion for summary judgment should be denied in its entirety. Dated: May 4, 2007 , FENLON 4 VOGT, P.A. 0 13 444 Cedar Street, Su St. Paul, MN 55101. 651-222-6321 ATTORNEYS FOR TIC HOMES, INC. STPL-Word:102028.2 15 05/04/07 13:13 FELHABER LAW � 9529461501 NO.504 D19 STATE OF MINNESOTA COUNTY OF WRIGHT TIC Homes, Inc., DISTRICT COURT TENTH JUDICIAL DISTRICT Case Type: Declaratory Iudgment&each of Contract Court File No. CV-06-4997 Plaintiff and Cross Claimant, vs. T/C HOMES, INC.'S MEMORANDUM OF LAW Gold Key Development, Inc., IN OPPOSITION TO SHORT-ELLIOTT-HENDRICKSON Defendant and Third Party Plaintiff, INCORPORATED'S vs. MOTION FOR SUMMARY JUDGMENT Hedlund Engineering, Third Party Defendant, and City of Albertville, Defendant and Third Party Plaintiff. VS. SHORT-ELLIOTT-HENDRJCKSON, INCORPORATED Third Party Defendant and Cross Defendant. Gold Key Development, Inc. Plaintiff, V. City of Albertville, Defendant and Third Pansy Plaintiff, V. SHORT-> LLIOTT-HENDRICKSON, INCORPORATED Third Parry Defendant. Court File No. CV-06-2998 STPt.-Won1:101992.1 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 D20 INTRODUCTION Short-Elliott-Hendrickson's ("SEH") Memorandum ignores controlling Minnesota case law, as well as substantial fact questions which preclude summary judgment. SEH made serious errors on the Prairie Run Plat which it seeks to avoid in a motion essentially claiming sovereign immunity. In a factually similar situation, Minnesota specifically ruled that fact questions preclude summary judgment against both a city and its engineer. See Sota� Foods, Inc. v. Larson, Peterson & Associates, Inc., 497 N.W.2d 276 (Minn. App. 1993). The Sota ease also held that summary judgment was not appropriate as to claims of third parry beneficiaries. Accordingly, SEII's motion should be denied in tonal FACTUAL SUMMARY The facts of the case have been extensively briefed and need not be repeated here. The most objective and detailed recitation of the facts provided by Gold Key is relied upon by TIC Homes, Inc. ("TIC") and is incorporated herein by reference.' SEH's Factual Statement attempts to downplay its long standing knowledge concerning the alleged 100-year flood level which formed the basis of the City of Albertville's (the "City") imposition of a building moratorium in November 2005. See Affidavit of Cindi Matt attached to Gold Key's Motion for Summary Judgment ("Matt Aff.") at Ex. S (citing Wright County Culvert Risk Assessment as grounds for moratorium). In particular, it was noted by SEH that the City relied upon Wright County's 100-year high water level calculation for County hitch 9 in refusing to allow the project to proceed. See SEII's Brief at p.6. What ' The adoption by TIC of Gold Key's recitation of the facts should not be as an acknowledgment or waiver of any claims against Gold Key. Such claims are not the subject of the pending motions. STPr.-W oN: a0 a992. a 2 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 D21 SF I fails to highlight for this Court is that SEH had this crucial document in its possession long before plat approval or the City's November 2005 imposition of the moratorium. Affidavit of Jason Kuboushek attached to the City's Motion for Summary Judgment ("Kuboushek Aft.") at Ex. F. Indeed, the culvert risk assessment by Wright County was stamped "Received Jul 012003 Short Elliott Ilendrikson Saint Cloud MN." Id. In fact, while SEH had in its possession the document which it acknowledged was "important," it never provided this document to either Gold Key or Hedlund Engineering. .Matt Aft. at Ex. H (Moberg Depo. at 27-38). SEH's possession of this crucial document,' which the City and its Current engineer deemed sufficiently important to shut down the project' and SEWS failure to disclose this information, supports denial of the motion for summary judgment. The other fact which SEH fails to disclose to the Court is that SEH never reviewed the plat prior to final plat approval. Indeed, its factual recitation is devoid of any reference to the fact that SEH did not engage in die type of plat review that is typically performed by a city engineer. See Gold Key's Memorandum in Support of Summary Judgment at pp. 38-39, ci_ ring Matt Aft at Ex. F (Carlson Depo. at pp. 12, 18-21, 44-45. 49-50, 69, 111-112, 173-175). The complete failure of SEH to review the plat was an error which runs contrary to the City's expectation that a city engineer would catch errors that might exist in plans submitted by a developer or its engineer. Gold Key's Memorandum in Support of Summary Judgment at pp. 20-26. This crucial engineer's review memorandum was not generated in this case by SEH. Id, = Kuboushek Aff, at Ex. F. a Matt Aft. at Ex. S. s'rpl- •word:1n1992.1 3 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 P22 SEH exacerbated the problem by failing to disclose the fact that it did not review the plat until late in this litigation. Matt Aff. at Ex. H (Moberg Depo. at pp. 27-38). In the fall of 2005, Robert Moberg, an SEH employee, discovered that SEH had not done the typical plat review because no "memorandum" existed in the file, Despite the extreme concern caused by this revelation, no disclosure was ever made to the City, Dolton & Menk, Gold Key, or any of the builders. Id. In fact, SEH appears to have waited until the last possible minute when discovery of the oversight was inevitable, to disclose its failure to engage in the appropriate review. LEGAL ARGUMENT I. SEH CITES THE SUMMARY JUDGMENT STANDARD, BUT FAILS TO APPLY IT TO THE MOTION FOR SUMMARY JUDGMENT. SEH's boilerplate citation to the requirements for summary judgment ignores the significant fact questions which preclude dismissal of T/C's claims. Indeed, SEH fails to meet its substantial burden by even addressing directly the impact of the "important" ditch 9 risk assessment relied upon by the City and deliberately withheld by SFH.° Rule 56.03 of the .Minnesota Rules of Civil Procedure provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that either party is entitled to a judgment as a matter of law." See Minn. R. Civ. P. 56.03 (West 2006). Summary judgment is appropriate only against a party who 4 The November 29, 2005 letter from the City Attorney imposing a moratorium relies most heavily upon the November 20, 2000 Risk Assessment by Wright County. The November 29, 2005 letter is attached to the Affidavit of Cindi Matt as Ex. S and the Risk Assessment is attached to the Affidavit of Jason Kuhoushek as Ex. F. 8TPt.-Wor4:101092.t 4 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 P23 fails to establish the existence of an element central to its case and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986), Tibbetts v. Crossroads, Inc., 41.1 N.W.2d 535, 539 (Minn. App. 1987). Stated in the negative, summary judgment will not lie if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Id. In order for the moving party to prevail, it must demonstrate to the court that "there is no genuine issue as to any material fact and that the moving patty is entitled to judgment as a matter of law." Celotex Corp., 477 U.S. at 31.7. A fact is material if its resolution affects the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). On a motion for summary judgment, all evidence and inferences are to be viewed in a light most favorable to the nonmoving party. Campion v. County of Wright, 347 N.W.2d 289, 291 (Minn. App. 1984). If the nonmoving parry produces competent evidence showing a genuine material factual dispute, summary judgment is not appropriate. See Kletschka v. Abbott - Northwestern Hospital, Inc., 417 N.W.2d 752, 754 (Minn. App. 1988). SEH repeatedly asserts that it is entitled to summary judgment without addressing the central reason why the project was shut down, its unexplained failure to provide documentation which the City considered sufficiently important to juspfy shutting clown the project, and why SEH never engaged in an appropriate plat review. SEH's failure to address these crucial issues in its motion for summary ,judgment undermines both its credibility and dooms its motion. STPLWorcl:101991.1 5 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 D24 11. SEH IS NOT IMMUNE FROM A NEGLIGENCE CLAIM AND ITS MOTION FOR SUMMARY JUDGMENT SHOULD DE DENIED. SEH string cites a number of cases for the general proposition that a duty only exists if imposed by common law or contract. SFH's Brief at pp. 9-10.5 Crucially, SEH then rams to cases which rely on sovereign immunity to avoid liability.6 however, both the sovereign immunity cases are profoundly distinguishable and SEE ignores the controlling case law. The Court of Appeals was faced with a very factually similar situation in Sora. Sota Foods brought suit against the City of Park Rapids and its engineer Larson -Peterson & Associates, Inc. Sota, 497 N.W.2d at 279. Sota asserted negligence and third party beneficiary claims against Larson -Peterson based upon the negligent design of a sewer treatment facility which resulted in repeated shut downs and damage to Sota Foods. The city and its engineers moved for summary judgment. Id. at pp. 282-83. The rejection of the engineer's motion for a summary judgment is directly analogous to S1 H's pending motion. SEH, like the engineer in. Sota, provided negligent engineering services which damaged a third party (in our case TIC). The court found that fact questions concerning the activities of the engineer precluded summary judgment on both the negligence and third -party beneficiary claims. Id. SGH's entire brief turns on Cracraft and I'loffert. Both cases essentially stand for the same proposition. That is, work performed by a building inspector or city official is within die 5 See Service Masher, In Re Norwest Bank, Germann, Rasmussen, and Prosser, Law of Torts. 6 Cracraft v. City of St. Louis Park, 279 N.W.2d 801 (Minn. 1997) and Hoffert v. Owatonna In Towne Motel, Inc., 199 N.W.2d 158 (Minn. 1972). STPI- Wun1: 1111902.1 6 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 D25 city's discretionary function and is therefore immtme. Both cases involved personal injury to parties who sought to sue a city' for injuries sustained as a result of allegedly defective inspections by a city official. This is obviously profoundly different than the facts before this Court. The claims against: SF-1-1 are not predicated upon the actions of an employee of the City performing its discretionary function. Instead, TIC's claims are against an independent consulting engineer performing an operational function of reviewing a submitted plat. Indeed, this situation is far more analogous to the situation in Sota where the "trial court concluded the engineers were, as a matter of law, independent contractors and therefore, not protected by municipal immunity even if it should turn out the city is entitled to immunity." Sota 497 N.W.2d at 282. The record is replete with confirmation that SEH was not a captive city engineer, inspector, or employee, but rather an independent and outside consultant. Thus, unlike Sota where there was a question of fact whether the engineer was "independent," there is little doubt in this case that SEH is not entitled to immunity and thus is responsible for its negligence and injury to third parties such as TIC. Finally, summary judgment is inappropriate in this case because SEH was aware of the facts giving rise to the injury suffered by TlC. As discussed above, as early as July 1, 2003, SEH had in its possession the ditch 9 culvert risk assessment which identified a high water mark which the City relied upon in imposing a moratorium on the project. Supra Footnote 4. Minnesota courts have repeatedly held that parties holding information which ultimately lead to damage bars claims of immunity. In Pettinger v. Village of Winnebago, the Minnesota Supreme Court affirmed a claim against a city and its engineers where a city was aware of ' The City of Owatonna. in Hoffert and. the City of Sr. Louis Park in Cracraft. STPL-Wora:101M-1 7 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 D26 significant problems with a sewer system and had actual notice of flooding problems, but allowed a project to proceed. 58 N.W.2d 325, 329 (Minn. 1953). "Where a municipality has actual or constructive notice of a defect in its sewer sufficiently long to enable it to remedy a condition prior to the act resulting in damage complained of, that is sufficient notice." id.; see also Johnson v_.Coun-ry of Nicollet, 387 N.W.2d 209, 21.2 (Minn. App. 1986) (in reversing a grant of summary judgment, the court found a question of fact where a county engineer knew of a hazardous road condition and failed to act). There is no dispute that SEH had in its possession the culvert risk assessment before plat approval. Kuboushek Aff. at Ex. F. In fact, the document itself is stamped: "Received Jul 01 2003 Short Elliott Flendrikson Saint Cloud MN." Id. At the very least, there is a sufficient fact question regarding the knowledge of SEH concerning the conditions leading to the moratorium, and in turn the damage suffered by TlC, to preclude summary judgment. III. WHETHER TIC IS AN INTENDED TIM PARTY BENEFICIARY TO THE CONTRACT BETWEEN SEH AND THE CITY IS A QUESTION OF FACT PRECLUDING SUMMARY JUDGMENT. As with its motion to dismiss T/C's negligence claims, SEH string cites, without analysis, cases for the proposition that to be a third party beneficiary must satisfy the "intent - to -benefit" test.' In determining the intent of the parties to the contract, and whether any benefits should accrue to a third party, all circumstances surrounding the contract should be considered. The absence of a third party's name alone does not preclude a finding of intent to benefit a third party if circumstances show otherwise. Chard Realty, Inc. v. Clty of Shakopee, See SEH Brief at pp.14-15. sTPL word: tnd "2.1 8 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 D27 392 N.W.2d 716, 720-21 (Minn. App. 1986); see also Concordia Coll. Corp v: Salvation Army, 470 N.W.2d 542, 545 (Minn. App. 1991). SEH chooses to ignore both the Sota case and the testimony of Mr. Carlson (SEH,s own employee). The City expected SEH to catch any errors that may have existed in the plans submitted by the developer and its engineer. Matt Aff. at Ex. E (Kruse Aepo. at pp. 112-133). Indeed, Mr. Carlson specifically testified that SEH should have reviewed die plans submitted by Prairie Run but did not. Id. at Ex. F. (Carlson Aepo. at pp. 20-21). The Sota case involved a claim against a city and its engineer for negligent design. The member of the public (in that case Sota Foods) brought an action as s third party beneficiary of the contract between the city and its engineers. 497 N.W.2d at p, 279. In denying the city and its engineer's motion for summary judgment, the court held that Sota Foods could maintain its third party beneficiary claim, and found questions of fact which precluded summary judgment. Id, at 282-83. The testimony of Mr. Carlson and the City alone demonstrate the intent of the City that its engineer review plans submitted for any errors or failure to comply with City standards. Matt Aff. at Ex. E. (Kruse Aepo, at pp. 102, 112-113, and 135-136) and Ex. F (Carlson Aepo. at pp. 20, 118-119, ..130-132, and 163); Mundstock Aff, at ¶ 12. See Gold Key's Memorandum of Law in Support of Summary Judgment at pp. 20-26. Indeed, Mr. Carlson specifically testified that SEH understood that others (including Gold Key, Hedlund and the builders), would be spending "a lot of money ... based upon the final plat" which SEH should have told the City id did not review. Matt Aff. at Ex. F (Carlson Aepo. at P. 125). STPLWord:101992.1. 9 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 D28 As in Sota, there is a question of fact whether a member of the public injured as a result of negligent work performed, pursuant to a contract between a city and its engineer, warrants summary judgment. Here, we have a particularly egregious failure by an engineer to review a plat at all and a virtual admission of an error by the engineer. Matt Aff. at Ex. F (Carlson Depo. at pp. 20-21). SEH bears a substantial burden to avoid summary judgment and cites neither controlling case law, nor any facts to overcome its admitted duties to carefully review the plat. With the absence of controlling case law indicating otherwise or dispositive fact, this Court is compelled to deny SEH's motion. CONCLUSION This Court is presented with unequivocal testimony that SEH did not review the plat prior to approval and that SEH bid this fact until it was revealed in discovery. In the face of this error, SEH now moves for summary judgment ignoring the controlling case law. Denial of the motion is especially appropriate when SEH had in its possession and failed to disclose the very document (the culvert risk assessment) upon which the City and its new engineer relied upon in shutting down the project. There is, at the very least, a question of fact whether SEH should he liable for its failure to disclose this "important" document and whether the patties reasonably intended that builders such as T/C could rely upon a city engineer performing its services for the City on the Prairie Run development, as SEH apparently always did in the past. Accordingly, SEH's motion for summary judgment should be denied in its entirety. 3TPL-Wan1:141992.1. 10 05/04/07 13:13 FELHABER LAW � 9529461501 Dated: May 4, 2007 FELI-IARER, By: Smote) n E. Yo 02139 1) 444 a at Street, S . e 2100 St. Paul, MN 551 -2136 651-31.2-6029 ATTORNEYS FOR TIC HOMES, INC. , FENLON & VOGT, P.A. N0.504 D29 STPL-worn:i0igq 1 11 05/04/07 13:13 FELHABER LAW � 9529461501 N0.504 STATE OF MINNESOTA ) ) ss. AFFIDAVIT OF SERVICE BY FACSIMILE COUNTY OF RAMSCY ) AND U.S. MAIL Deborah S. Murphy, being first duly sworn, deposes and says that on May 4, 2007, she served true and correct copies of: L T/C Homes, Inc.'s Memorandum in Opposition to the City of Albertville's Motion for Summary Judgment; 2. TIC Homes, Inc.'s Memorandum of Law in Opposition to Sltort-Elliott- Hendrickson Incorporated's Motion for Summary Judgment; by facsimile and in St. Paul, Minnesota, first class mail, postage prepaid, in an envelope addressed to the following persons: Mr. Jason J. Kuboushek Iverson Reuvers, LLC 9321 Ensign Avenue South Bloomington. MN 55438 F! 952 946 1501 Ms. Cindi S. Matt Johnson, Larson, Peterson & Matt, P.A. 908 Commercial Drive Buffalo, MN 55313 F: 763-682-4465 Subscribed and sworn to before me this 4 May 2007. N taty blic Mr. Robert W. Kettering, Jr. Mr. Anton J. van der Merwe Arthur Chapman 81 South Ninth Street, Suite 500 Minneapolis, MN 55402-3214 F: 61.2-339-7655 Mr. John A. Markert Coleman, Hull & Van Vliet, PLLP 8500 Normandale Lake Blvd., Suite 2100 Minneapolis, MN 53437 F: 952-841-0041 P30