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2007-4-26 State of Minnesota, Wright County, District Court; Declaratory Judgment/Breach of Contract STATE OF MIIvIvESOTA DISTRICT COURT COUNTY OF WRIGHT TENTH JUDICIAL DISTRICT CASE TYPE: Declaratory Judgment/Breach of Contract Gold Key Development, Inc., Court File No. 86-CV-06-2998 a Minnesota corporation, Plaintiff, vs. City of Albertville, Defendant/Third Party Plaintiff, vs. Short Elliott Hendrickson, Inc., Third Party Defendant. T/C Homes, Inc., a Minnesota corporation, Court File No. 86-CV-06-4997 Plaintiff, vs. Gold Key Development, Inc., a Minnesota corporation, Defendant, Third Party Plaintiff, vs. � Hedlund Engineering, Third Party Defendant, and City of Albertville, Defendant/Third Party Plaintiff, vs. Short Elliott Hendrickson, Inc., Third Party Defendant. CITY OF ALBERTVILLE'S MEMORANDUM OF LAW IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT INTRODUCTION This case stems from an alleged breach of a planned unit development agreement ("Development Agreement") between the City of Albertville ("the City") and Gold Key � Development, Inc. ("Gold Key"). Both Gold Key and T/C Homes, Inc., a Minnesota corporation ("T/C Homes") seek to have the City issue certificates of occupancy and building permits in the Prairie Run development after it was determined several lots are at risk of flooding and the development's storm water holding ponds and storm water run-off rates fail to meet ordinance requirements. The City has refused to put any homes at risk and has instead found Gold Key in default of the development agreement, for its failure to meet all applicable ordinance requirements. The City brings this Motion for Summary Judgment seeking the dismissal of Gold Key's Declaratory Judgment and Breach of Contract claims and T/C Home's Mandamus and Negligence claims. STATEMENT OF ISSUES L DID GOLD KEY VIOLATE THE DEVELOPMENT AGREEMENT WHERE ITS PLAT DOES NOT COMPLY WITH THE CITY'S SUBDIVISION AND ZONING ORDINANCES? II. CAN THE CITY OF ALBERTVILLE BE ESTOPPED FROM ENFORCING ITS ORDINANCES? III. DOES T/C HOMES' REQUEST FOR MANDAMUS RELIEF FAIL AS A MATTER OF LAW? IV. DOES T/C HOMES' NEGLIGENCE CLAIM FAIL AS A MATTER OF LAW? 2 V. ARE T/C HOMES' MISREPRESENTATION CLAIMS ACTIONABLE? VL IS THE CITY ENTITLED TO IMMUNITY? VII. IS THE CITY ENTITLED TO ATTORNEY'S FEES UNDER THE DEVELOPMENT AGREEMENT? STATEMENT OF DOCUMENTS Affidavit of Jason J. Kuboushek with the following attachments: Exhibit A—Deposition transcript of Adam Nafstad with the following deposition exhibits: Exhibit 1 —June 23, 2004 SEH Flood Study Exhibit 2 — 2006 County Ditch No. 9 Flood Study Exhibit 3 —Amendment to the 2006 County Ditch No. 9 Flood Study Exhibit 4 —2006 Flood Storage Mitigation Exhibit 5 —June 25, 2003 Memo from NAC to City Administrator Exhibit 6 —December 20, 2005 Memo from BMI to Jon Sutherland Exhibit 7 —Map of Prairie Run parcel � Exhibit 8 — October 11, 2005 Memo from BMI to Jon Sutherland Exhibit 9—December 16, 2005 BMI Memo regarding Box Culvert Exhibit 10—July 5, 2006 BMI Memo regarding Prairie Run Pond Review Exhibit 11 —Notes from January 27, 2006 meeting Exhibit 12—Notes from Storm Water Plan meeting Exhibit 13 — December 2006 BMI map of Prairie Run Exhibit 14—Defendant's Answers to Plaintiff's Interrogatories Exhibit B —Deposition transcript of Lani Leichty with the following deposition exhibits: Exhibit 15 —February 9, 2006 fax from Colleen Allen to Lani Leichty Exhibit C — Deposition transcript of Brian Tutt with the following deposition exhibits: Exhibit 16— Building Permit Application for Lot 19, Block 2 Exhibit 17— Building Permit Application for Lot 18, Block 2 Exhibit 18 —Building Permit Application for Lot 20, Block 2 Exhibit 19— Building Permit Application for Lot 16, Block 2 Exhibit 20—Building Permit Application for Lot 15, Block 2 Exhibit 21 —Building Permit Application for Lot 14, Block 2 Exhibit 22—January 4, 2007 BMI map of Prairie Run Exhibit 23 — Option Agreement Exhibit 24—Amendment to Option Agreement Exhibit 25 — Contract for Deed Exhibit 26—T/C Homes' Summons and Complaint Exhibit 27 —Balance Sheet Exhibit 28 — MLS sheet for 5209 Kalenda Court NE 3 Exhibit 29 —House raising foundation estimate Exhibit 30 —T/C Homes' Answers to City's Interrogatories Exhibit 31 —April 27, 2006 letter from Brian Tutt to Dean Johnson Exhibit 32 — Calculations of costs for raising houses Exhibit 33 — February 17, 2006 letter from Brian Tutt to Dean Johnson Exhibit 34 —Lot Survey for Lot 19, Block 2 Exhibit D—Deposition transcript of Dean Johnson with the following deposition exhibits: Exhibit 35 —July 16, 2004 Development Agreement Exhibit 36 — Gold Key's Summons and Complaint Exhibit 37 — Gold Key's Answers to City's Interrogatories Exhibit 38 — October 1, 2004 correspondence from WCSWCD and Todd Udvig Exhibit 39 —November 29, 2005 correspondence from Attorney Couri to Dean Johnson Exhibit 40— Gold Key's Responses to the City's Request for Admissions and Interrogatories Exhibit E—Deposition transcript of Randall C. Hedlund with the following deposition exhibits: Exhibit 41 — Gold Key's Answer, Cross Claim and Third Party Complaint Exhibit 42— Hedlund Engineering's Answer to Third Party Complaint Exhibit 43 —Hedlund Engineering Invoices Exhibit 44— Loucks Survey Exhibit 45 —Hedlund Engineering Survey of Ditches Exhibit 46 — Plan Set for County Road 18 Exhibit 47— City Code Design Standards Exhibit 48 — Hedlund Engineering Drainage Calculations Exhibit 49 —Hedlund Engineering Grading Plan (west hal� Exhibit 50 —Hedlund Engineering Grading Plan (east hal� Exhibit 51 —August 17, 2004 correspondence between Laura Eklov and Todd Udvig Exhibit 52 —August 26, 2004 correspondence between Randy Hedlund and Todd Udvig Exhibit 53 — Correspondence between Jim Schulz and Dan Krocheski Exhibit 54 — October 13, 2004 correspondence between Randy Hedlund and Todd Udvig Exhibit 55 — Hedlund Engineering's Answers to City's Interrogatories Exhibit 56 —November 20, 2000 conespondence between Brian Walter and Wayne Fingalson Exhibit 57 —May 14, 2004 correspondence between Randy Hedlund and Todd Udvig Exhibit F—Deposition transcript of Peter J. Carlson with the following deposition exhibits: Exhibit 58 —Engineering Contract 4 Exhibit 59 — City of Albert��ille Comprehensive Plan Exhibit 60 —Resolution No. 02-69 � Exhibit 61 —August 12, 2002 letter from Colleen Allen to City Exhibit 62 —February 3, 2003 City Council Meeting Minutes Exhibit 63 —May l, 2003 Memo from NAC to City Exhibit 64 —May 30, 2003 correspondence from Glenn Huebner to SEH Exhibit 65 — Fax from Wright County to Plowe Engineering Exhibit 66 —July 7, 2003 City Council Meeting Minutes Exhibit 67—August 7, 2003 City Council Findings Exhibit 68 —August 4, 2003 City Council Meeting Minutes Exhibit 69—February 14, 2006 memo from SEH to City Exhibit 70—November 4, 2003 correspondence from NAC to Dean Johnson Exhibit 71 —November 18, 2003 Record of Conversation Exhibit 72 —2004 Feasibility Report Exhibit 73 —January 28, 2004 Memo to City from SEH Exhibit 74 —April 13, 2004 Memo from Stacy Lien to Ji�m Schulz Exhibit 75 —April 19, 2004 City Council Meeting Minutes Exhibit 76—April 25, 2004 Memo regarding status of specs Exhibit 77 —June 1, 2004 e-mail from Mike Couri to Peter Carlson Exhibit 78—June 2, 2004 Memo regarding Final Plat Exhibit 79—June 2, 2004 e-mail to Dean Johnson from Mike Couri Exhibit 80—June 7, 2004 City Council Meeting Minutes Exhibit 81 —Preconstruction meeting minutes Exhibit 82—June 15, 2004 letter from Wright County to Peter Carlson Exhibit 83 —June 24, 2004 letter from NAC to Dean Johnson Exhibit 84— September 3, 2004 Memo from SEH to City Exhibit 85 —November 3, 2004 Memo from NAC to City Exhibit 86 —December 20, 2005 Memo from Mike Couri to City Exhibit 87 — QA/QC Review Construction Drawings Exhibit G—Deposition transcript of Robert Moberg with the following deposition exhibits: Exhibit 88 —December 14, 2004 Planning Commission Meeting Minutes Exhibit H—Deposition transcript of Jim Schulz with the following deposition exhibits: Exhibit 89 —February 17, 2004 City Gouncil Meeting Minutes Exhibit 90—March l, 2004 City Council Meeting Minutes Exhibit 91 — SEH handwritten notes Exhibit 92 —Construction Plans Exhibit 93 —August 25, 2005 correspondence from Robert Moberg to Jim Schulz Exhibit I—Deposition transcript of Larry Kruse with the following deposition exhibits: Exhibit 94 —Plat of Prairie Run Exhibit 95 —March 13, 2007 correspondence to Attorneys Matt and Yoch Exhibit 96 —November 23, 2005 Memo from Robert Moberg to Mike Couri Exhibit 97 —December 19, 2005 City Council Meeting Minutes 5 Exhibit 98 — City of Albertville's Supplemental Answers to Interrogatories Exhibit 99—December 1, 2006 Default Letter Exhibit 100 —Application for General Storm Water Permit Exhibit 101 —Storm Water Pollution Prevention Plan Exhibit J— Deposition transcript of Jon Sutherland with the following deposition exhibits: Exhibit 102 —June 2003 Flood Spreadsheet Exhibit 103 —City of Albertville Inspection Notices Exhibit 104 —July 8, 2003 Planning Commission Meeting Minutes Exhibit 105 —July 8, 2003 letter to Planning Commission Exhibit 106—August 9, 2005 Memo regarding 5205 Kalenda Court Exhibit 107— Single Family Dwelling Permit Checklist Exhibit 108 —December 29, 2003, fax from Maria Haus to A1 Brixius Exhibit 109 —June 2005 Flood Spreadsheet Exhibit K - City of Prior Lake v. Harbor Lake Development Co., No. CO-90-2672, 1991 � Minn. App. LEXIS 748 (Minn. App., July 24, 1991). Exhibit L - Sheedy v. Mower Counry, Civ. No. CO-96-2328, 1997 Minn. App. LEXIS 756 (Minn. App. July 8, 1997). Exhibit M - Mrocek v. City of White Bear Lake, Civ. No. C9-94-2274, 1995 Minn. App. LEXIS 917 (Minn. App. July 18, 1995). Exhibit N - S.L.D. v. Kranz, No. CS-95-1987, 1996 Minn. App. LEXIS 368 (Minn. App. April 2, 1996). Exhibit O - Woodland Development Corporation v. City ofAndover, No. A05-1636, 2006 Minn. App. LEXIS 621 (Minn. App., June 13, 2006). STATEMENT OF FACTS A. Background of the Prairie Run development. The Prairie Run development is located on 33.5 acres north and west of the intersection of County Roads 19 and 18. See Exh. 5—June 25, 2003 Memo from NAC to City Administrator. Prior to being developed, the property was owned by Robert Heuring. Id. Mr. Heuring used the property for farming purposes. Id. 6 In 2002, Dean Johnson, Gold Key's secretary, learned the future Prairie Run parcel was for sale. Johnson depo., p. 11:6-1 S. Shortly thereafter, Mr. Johnson visited the site, but never walked the property lines or observed any wetlands. Id., pp. 11 and 12. Nor did he talk to Heuring about the history of the property. Id., p. 16. Nonetheless, he never had any concerns regarding the topography of the site. Id., p. 17. B. Pre-development process. At the beginning of any proposed project, the City will conduct a development team meeting with an interested developer. Sutherland depo., p. 133: 1-16. During the meeting, the City provides a developer or a developer's engineer a copy of the City's ordinances and advises them to contact Wright County, the Soil and Water Conservation District and any other agency which may have regulatory authority over the project. Id.,p. 132:10-16. The City also provides the developer information on the fees involved and a schedule of Planning Commission and City Council meetings. Kruse depo.,p. 24:19-25. After the predevelopment meeting, the next step is for the developer to submit a concept plan. Id., p. 25:16-25; Exh. 63. In this case, Gold Key retained Hedlund Engineering in 2002 or 2003 to work on the proposed plans. Johnson depo.,p. 14. Hedlund Engineering put together two or three different plans. Id., p. 19. As Hedlund Engineering was preparing the concept plan, it reviewed the City's Ordinances. Hedlund depo.,pp. 26-27. This review included looking at minimum lot sizes, setbacks, site elevation requirements and storm water management requirements. Id., pp. 27-28. Hedlund Engineering also reviewed a prior site survey conducted by Loucks. Hedlund depo.,pp. 31-33; Exh. 44. This survey showed the topography of the site and the large culvert under County Road 18. Id. Hedlund Engineering, however, wanted more information on the culvert and the two ditches — County Ditch No. 9 and the East/West ditch. 7 Hedlund depo., pp. 36-37. Therefore, it conducted its own survey of the ditches. Hedlund depo., p. 38; Exh. 45. This survey further highlighted the presence of the 8 foot by 12 foot culvert under County Road 18. Hedlund Engineering knew the culver�could affect the flow calculations for the Prairie Run property. Unfortunately, however, Hedlund Engineering chose not to incorporate the culvert into its drainage documentation. Hedlund depo.,pp. 39-40. Moreover, Hedlund Engineering never asked the County if it had any documentation regarding the culvert. Hedlund depo., pp. 48 and SS; Exh. 46. Instead; Hedlund Engineering began putting together the development application and submissions. C. Development Application. After the concept plan meets with either City staff or City Council approval, the developer is then advised to submit a development application. Id. The development application includes an application form, the site location map, preliminary plat,preliminary grading and drainage plan and preliminary utility plan. See Exh. 5, p. 1. The Prairie Run application was signed by Mr. Johnson, which included the following certification: I hereby apply for the above consideration and declare that the information and materials submitted with this application are in compliance with City Ordinance and Policy Requirements and are complete and accurate to the best of my knowledge. See Zoning Request Application, p. 2. Mr. Johnson, however, never reviewed the City's Ordinances, the grading plans, storm water control plans or any documentation regarding storm water on the property. Johnson depo.,pp. 21-22. Instead, he only reviewed the site plan and layout created by Hedlund Engineering. Id. Hedlund Engineering was also required to provide the City with a storm water pollution control plan. Hedlund depo.,pp. 61-62; Exh. 46. Under the Ordinance, a 100-year floodplain level was required. Id. Hedlund Engineering never did this. The City's Ordinance also required 8 the post-development run-off rate to be less than half the predevelopment run-off rate. Hedlund depo., pp. 58 and 62. To deterniine this calculation, Hedlund prepared a hydrology study. Exh. 48. The hydrology study, which was done with the HydroCAD program, was supposed to show the subdivision's run-off rates and to determine the size of the ponds in the subdivision. �i Unfortunately, Hedlund Engineering did not calculate any water flowing into the property from the east or from County Ditch No. 9. Hedlund depo., p. 68. Once the development application was submitted, the plans were distributed to the city engineer for review. Carlson depo., p. 18:23-25. This review would typically occur prior to the Planning Commission meeting. Kruse depo.,pp. 25 and 27. Typically, the city engineer will provide a report, but not always. Id.,pp. 28-30. On approximately June 7, 2004, the City approved the Plat of the Prairie Run Subdivision and accepted it as in compliance with Minnesota Statutes, Section 505.03. Pl's Compl. ¶ 8 (May 26, 2006). One month later, Gold Key and the City entered into a Development Agreement for the Prairie Run Subdivision, which was recorded with the Wright County Recorder as document number 940358. Id. at¶ 3. Paragraph 13.F. of the Development Agreement states: Developer represents to the City that said Plat complies with all City, county, state and federal laws and regulations, including but not limited to: subdivision ordinances, zoning ordinances, and environmental regulations. Developer agrees to obtain all required federal, state and local permits. If the City determines that said Plat does not comply, the City may, at its option, refuse to allow construction or development work in the plat until Developer so complies. Upon the City's demand, Gold Key shall cease work until there is compliance. Id., Ex. A. D. Issuance of Building Permits and Certificates of Occupancy. In the City of Albertville, Jon Sutherland, the Building Inspector, has the authority to issue and revoke building permits. Sutherland depo., p. 9:9-15. As part of his job duties, Mr. 9 Sutherland processes building permits and issues building permits upon interdepartmental review. Id. When a building permit application is submitted, the permit tech sends the information to Mr. Sutherland and the city engineer. Id., p. 40:15-20. The city engineer reviews the elevations around the perimeter of the house; elevations around the adjacent dwellings; elevations related to the plat; positive overflow elevations of important drainage ways; utility locations and conformance with city ordinance lowest floor and lowest opening elevations. Id., p. 41:10-42:10. An engineering review memorandum would then be prepared and sent to Mr. � Sutherland. Id., p. 42:11-17. Mr. Sutherland then reviews the engineering memorandum and is actively involved in the enforcement of the engineering items. Id.,p. 42:18-43:S. Typically, he follows the engineer's recommendations. Id. At the same time as the engineer's review, Mr. Sutherland is reviewing the survey; the building plans; the building code required building plans; floor plans; elevations and cross- sections. Ic�,p. 46:2-6. The plans need to comply with the building code before a permit may be issued. Id. Mr. Sutherland also has the authority to issue certificates of occupancy. Id., 37:22-24. After construction is complete, a builder will request a final inspection. Id., p. 47:17-25. Additionally, the city engineer with conduct an "as-built" survey review. Id., p. 48:8-22. E. Default Notification. During the fall of 2005, the City of Albertville experienced a significant rain event. On November 29, 2005, City Attorney Michael Couri wrote a letter to Gold Key advising that Gold Key was in default of paragraph 13.F of the Development Agreement because several of the lots in the Prairie Run development did not comply with City ordinances regarding the lowest 10 r - opening elevation of a building. See Exh. 39. The City also chose to hold onto "building permits � on the lots that appear to be of more concern." See Exh. 97,p. 7. On December 1, 2006, the City sent Gold Key another default letter setting forth the following deficiencies: 1) Subdivision Ordinance violations: • Section A-600.4(g) in that the lowest proposed opening (window or door) as shown on the grading plan dated OS/15/04 or as constructed on the following lots is less than two feet above the highest known water level (951.47) for these lots: Lots Not Built Upon = 8, 9, 10, 11, 17, 21, 23 and 24, all of Block 2 . Lots Built Upon= 7, 14, 15, 16, 18 and 19, all of Block 2. • Section A-600.13(c)(1) in that the post development 100-year storm peak discharge runoff rate exceeds the pre-development 100-year storm peak discharge runoff rate. � Section A-700.6 in that the surface and underground drainage systems on the plat do not adequately remove all natural drainage that accumulates on the developed property, nor do they provide a permanent solution for the removal of drainage water. • Section A-700.6 in that the plat discharges at more than one-half of the pre- development rate of runoff. 2) Zoning Ordinance violations: • Section 10009(d) in that the lowest floor as shown on the grading plan dated OS/15/04 or as constructed is less than two feet above the highest known surface water level (951.47) for adjacent ponds or wetlands for the following lots: Lots Not Built Upon= 8, 9, 10, 11, 12, 13, 17 and 24, all of Block 2. Lot Built Upon = 7, 14, 15, 16, 18 and 19 of Block 2. • Section 1000.9(d) in that the lowest floor as shown on the grading plan dated OS/15/04 or as constructed is less than one foot above the 100-year flood level of 949.9, as determined by the 2006 County Ditch No. 9 Flood Study, for adjacent ponds or wetlands for the following lots: Lots Not Built Upon = 8, 9, 10, 11, 12 and 13, all of Block 2. Lots Built Upon= 7 of Block 2. • Section 5000.4 (a) in that the lowest floor as shown on the grading plan dated OS/15/04 or as constructed is less than three feet above the 100-year flood elevation of 949.9, as determined by the 2006 County Ditch No. 9 Flood Study, for the following lots: Lots Not Built Upon = 8, 9, 10, 11, 12 and 13, all of Block 2. See Exh. 99. 11 Significantly, the Developer's own engineer admits the Prairie Run development is currently in violation of several provisions of the City's Ordinances: � Q: Is it your opinion that the Prairie Run development meets all the building elevation requirements in the Albertville ordinance? A: Except for the two feet above the highest known water elevation. Q: So you agree that that one is in violation? A: That's in violation. Q: And it's also in violation of the post-development rate exceeds the pre- development rate, correct? A: Yes. For a very small percentage of storms. Q: And it's also in violation that the plat discharges more than one-half of the pre- development runoff rate, correct? � A: In very rare circumstances, yes. Q: But it is in violation, correct? A: It's in violation. Hedlund depo.,pp. 178-79. STANDARD OF REVIEW Summary judgment is appropriate where, as here, there are no issues of material fact. Minn. R. Civ. P. 56.03 requires a motion for summary judgment be granted if there are no genuine issues as to any material facts and the moving party is entitled to judgment as a matter of law. A party opposing summary judgment must present specific facts showing there is a genuine issue of material fact for trial and cannot rely upon mere unsupported allegations of fact. Minn. R Civ. P. 56.05; see also Lundgren v. Eustermann, 370 N.W.2d 877, 881 (Minn. 1985). A fact issue is material if it affects the outcome of the case. See Anderson v. Liberty Lobby, Inc., 12 477 U.S. 242, 248 (1986). The existence of some alleged factual dispute or evidence that is merely colorable or not significantly probative will not prevent the granting of summary judgment. Id. at 249-50. ARGUMENT I. GOLD KEY, AND NOT THE CITY, BREACHED THE DEVELOPMENT AGREEMENT. Gold Key breached the Development Agreement because its Plat does not comply with all applicable provisions contained in the City's Subdivision and Zoning Ordinances. The deficiencies of the Plat are set forth in detail in City Attorney Couri's letter of December 1, 2006. See Exh. 99. Because the Plat is not in compliance with the City's Subdivision and Zoning Ordinances, as Gold Key's own engineer readily admits, the City's refusal to issue certificates of occupancy and building permits was proper and lawful in all respects. Contract interpretation is a question of law. See Travertine Corp. v. Lexington- Silverwood, 683 N.W.2d 267, 271 (Minn. 2004). The primary goal of contract interpretation is to determine and enforce the intent of the parties. Id. A contract must be interpreted in a way which gives all of its provisions meaning. See Current Tech. Concepts, Inc. v. Irie Enters., Inc., 530 N.W.2d 539, 543 (Minn. 1995). When there is a written agreement, courts must determine the intent of the parties from the plain language of the agreement itself. Travertine Corp., 683 N.W.2d at 271. Courts cannot remake contracts or imply provisions through judicial interpretation. In re Marriage ofBrodsky v. Brodsky, 639 N.W.2d 386, 393 (Minn. App. 2002). Here, the contract at issue is the July 16, 2004 Development Agreement, which provides in pertinent part: Planned Unit Development. Development of said Plat shall be as a Planned Unit Development with flexibility from the strict requirements of the City's Zoning Ordinance in relation to minimum lot sizes, lot widths, and set-back requirements. 13 Unless otherwise explicitly set forth in this Agreement, however, Developer must conform to the requirements of the R-1 A zone of the Albertville Zoning and Subdivision Ordinance, as well as all other applicable land use regulations. Developer agrees that the following conditions will be met on a continuing basis: C. All grading, drainage, utility, wetland mitigation, and transportation issues that arise during development of Said plat shall be subject to review and approval by the City Engineer. Exh. 35, ¶ 1. Instead of attempting to fix the grading and drainage problems identified by the City and City Engineer in 2005 and 2006, Gold Key sued the City for breach of contract. In addition, the Development Agreement contains other provisions which required Gold Key to comply with City, County, State and Federal laws and regulations. For example, Paragraph 10 states: Draina�e Requirements. Developer shall comply with all requirements set forth for drainage into any county ditch or other ditch through which water from Subject Property may drain, and shall make any necessary improvements or go through any necessary procedures to ensure compliance with any federal, state, county or city drainage requirements, all at Developer's sole expense. Similarly, Paragraph 13 (F) states: Developer represents to the City that said Plat complies with all City, county, state and federal laws and regulations, including but not limited to: subdivision ordinances, zoning ordinances, and environmental regulations. Developer agrees to obtain all required federal, state and local permits. If the City determines that said Plat does not comply, the City may, at its option, refuse to allow construction or development work in the plat until Developer so complies. Upon the City's demand, Gold Key shall cease work until there is compliance. Gold Key, however, has failed to comply with these provisions. Even viewing the evidence in a light most favorable to Gold Key, the record demonstrates the project simply does not comply with Section A-600.13(c)(1) and A-700.6 of the City Code. See Hedlund depo., pp. 178-179; Exh. 10. Because Gold Key cannot demonstrate compliance with all applicable provisions of the City's Ordinances, its breach of contract claim must be dismissed. 14 IL THE CITY OF ALBERTVILLE CANNOT BE ESTOPPED FROM ENFORCING ITS ORDINANCES. Gold Key and T/C Homes claim the City's approval of the grading plans prevents it from enforcing its ordinance. Gold Key's Complaint and Amended Cross Claim, ¶¶ 62-64; T/C Homes, Inc. 's Complaint and Amended Cross Claim, ¶¶ 31-33. Contrary to Plaintiffs' argument, a "municipality cannot be estopped from correctly enforcing the ordinance even if the property � owner relied to his detriment on priar [municipal] action." Frank's Nursery Sales, Inc. v. City of ', Roseville, 295 N.W.2d 604, 607 (Minn. 1980);Jasaka Company v. City ofSt. Paul, 309 N.W.2d 40, 44 (Minn. 1981); Prior Lake Aggregates, Inc. v. City of Savage, 349 N.W.2d 575, 580 (Minn. � App. 1984). Here, it is undisputed the City approved the Preliminary Plat in August of 2003 and Final Plat on June 7, 2004. The City also entered into a Development Agreement for this planned unit development ("PUD") on July 16, 2004. The presence of the Development Agreement and the � Planning Commission's and City Council's approval of the plats, however, does not estop the City from enforcing its ordinances. See City of Prior Lake v. Harbor Lake Development Co., No. CO-90-2672, 1991 Minn. App. LEXIS 748 (Minn. App., July 24, 1991) (unpublished, attached) (finding City was not estopped from enforcing its ordinances where planning commission and city council approved the PUD). Therefore, Plaintiffs' estoppel claims should be dismissed. 15 IIL T/C HOMES' REQUEST FOR MANDAMUS RELIEF FAILS AS A MATTER OF LAW. A. T/C Homes' Mandamus Claim is Procedurally Defective. In order to obtain mandamus relief, T/C Homes must comply with the procedural requirements of the mandamus statute. See Minn. Stat. ch. 586. Specifically, Minnesota Statutes § 586.05 provides: ' Writs of mandamus shall be issued upon the order of the court or judge, which shall designate the return day, and direct the manner of service thereof, and service of the same shall be by copies of the writ, order allowing the same, and petition upon which the writ is granted. In addition, Minnesota Statute § 586.08 provides: 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. T/C Homes has failed to serve and file a proper petition for a writ of mandamus or to obtain an Order from the Court as required by the mandamus statute. Minnesota Statute § 586.08 is clear, "No pleading or written allegation, other than the writ, answer, and demurrer, shall be allowed." T/C Homes' Complaint is insufficient to satisfy the statutory mandamus requirements. As a result, the Court should dismiss T/C Homes' request for mandamus relief. B. T/C Homes has an Adequate Remedy at Law. Alternatively, if the Court determines T/C Homes has satisfied the procedural requirements of the mandamus statute, T/C Homes' request for mandamus relief should fail because it has an adequate remedy at law. As the Court is aware, mandamus is an extraordinary remedy based on equitable principles and is awarded at the discretion of the district court. Coyle v. City of Delano, 526 N.W.2d 205, 207 (Minn. App. 1995). To be entitled to mandamus relief, 16 T/C Homes must show: `'1) the city `failed to perform an official duty clearly imposed by law'; � 2) [it] "suffered a public wrong" and was specifically injured by the city's failure; and 3) [it] has "no other adequate legal remedy." Breza v. City of Minrr�etrista, 725 N.W.2d 106, 109-110 (Minn. 2006) (quoting N. States Power Co. v. Minn. Metro. Council, 684 N.W.2d 485, 491 (Minn. 2004)). "It is well established that mandamus cannot be used for the purpose of reviewing the decision of a board or tribunal which has exercised its discretion within the jurisdiction conferred upon it by law." Mendota Golf v. City of Mendota Heights, 708 N.W.2d 162, 176 (Minn. 2006) (quoting Zion, 21 N.W.2d at 205). Mandamus requires the existence of a law specifically requiring the performance of an act which is a duty imposed on a person resulting from the office I�, that person occupies and a showing of a public wrong especially injurious to the petitioner. Friends ofAnimals & Their Environment (FATE) v. Nichols, 350 N.W.2d 489, 491 (Minn. App. 1984). Mandamus is only available upon a showing of a "clear and present official duty to perform a certain act" or, "[w]here the act the officials are being ordered to perform is a discretionary one, the party seeking the writ must establish that failure to perform it `was so arbitrary and capricious as to constitute a clear abuse of discretion."' Mclntosh v. Davis, 441 N.W.2d 115, 118 (Minn. 1989) (quoting Baker v. Connoly Cartage Corp., 57 N.W.2d 657, 658 (Minn. 1953)). Here, T/C Homes seeks to have the Court order the City, via mandamus, to issue certificates of occupancy (COs) and building permits. This claim should be dismissed because there is no "clearly defined duty" which requires the issuance of the COs or building permits in violation of the City's ordinances. See e.g., Glen Paul Court Neighborhood Ass'n v. Paster, 437 N.W.2d 52, 57 (Minn. 1989) (concluding that a city's failure to comply with a statutory 17 requirement of mailed notice to property owners rendered an amendment to the city's zoning ordinance invalid);Advantage Capital Mgn�t. v. City ofNorthfield, 664 N.W.2d 421, 427-28 � (Minn. App. 2003) (reviewing a writ of mandamus that required a city to issue a building permit where the petition was based on the claim that the city failed to grant or deny the building permit within the time limits prescribed by statute). Simply stated, the City properly declined to issue the COs and building permits because the Prairie Run development is in violation of the City's ordinances. Accordingly, T/C Homes' mandamus claim must be dismissed. Additionally, "[t]he district court lacks jurisdiction to issue a writ of mandamus if an adequate legal remedy exists." Lund v. Minn. State Colleges and Univ., 615 N.W.2d 420, 423 (Minn. App. 2000); Silver Bay Area Citizens for Quality Educ. v. Lake Superior Sch. Dist. No. 381, 448 N.W.2d 92 (Minn. App. 1989). T/C Homes could have brought a declaratory judgment a�tion to determine the right to a CO or building permit. See A.C.E. Equipment, Co. v. Erickson, 152 N.W.2d 739 (Minn. 1967). Thus, T/C Homes' mandamus claim must be dismissed. IV. T/C HOMES' NEGLIGENCE CLAIM FAILS BECAUSE THE CITY OWES IT NO DUTY. T/C Homes has brought a negligence claim against the City claiming the City breached its duty to T/C Homes by "providing negligent and inaccurate information in the plat, the Grading Plan, the Revised Grading Plan and the Second Revised Grading Plan." T/C Homes, Inc. 's Complaint and Amended Cross Claim, ¶ 37. An essential element of T/C Homes' negligent misrepresentation claim is the alleged misrepresenter owes a duty of care to the person to whom they are providing information. Safeco Ins. Co. v. Dain Bosworth, Inc., 531 N.W.2d 867, 870 (Minn. App. 1995). In order for T/C Homes to maintain a tort claim against the City, there must have been a breach of a duty owed them in their individual capacity and not merely some obligation owed to the general public. Cracraft v. Ciry ofSt. Louis Park, 279 N.W.2d 801, 18 803-804 (Minn. 1979). It is central to negligence law that "general duties owed to the entire public rather than a specific class of persons cannot form the basis of a negligence action." Id. at ��, 804. I In Hoffert v. Owatonna Inn Towne Motel, Inc., 199 N.W.2d 158, 160 (Minn. 1972), the plaintiff sought damages from a municipality for injuries supposedly caused by the negligent issuance of a building permit for the remodeling of a motel in a manner which violated the city's building codes. The Minnesota Supreme Court dismissed the tort claims, reasoning: The purpose of a building code is to protect the public. This is well stated in 7 McQuillin, Municipal Corporations (3 ed.) s 24.507, p. 523: `* * * The enactment and enforcement of building codes and ordinances constitute a governmental function. The primary purpose of such codes and ordinances is to secure to the municipality as a whole the benefits of a well-ordered municipal government, or, as sometimes expressed, to protect the health and secure the safety of occupants of buildings, and not to protect the personal or property interests of individuals.' Building codes, the issuance of building permits, and building inspections are devices used by municipalities to make sure that construction within the corporate limits of the municipality meets the standards established. As such, they are designed to protect the public and are not meant to be an insurance policy by which the municipality guarantees that each building is built in compliance with the building codes and zoning codes. The charge for building permits is to offset expenses incurred by the city in promoting this public interest and is in no way an insurance premium which makes the city liable for each item of defective construction in the premises. Hoffert, 199 N.W.2d at 160. The court concluded a building inspector acts exclusively for the benefit of the public and an individual who is injured by the wrongful issuance of a building permit does not have a cause of action. Id. In Cracraft v. City of St. Louis Park, the Minnesota Supreme Court reaffirmed the public duty doctrine. In Cracraft, the plaintiff sought damages from a municipality far injuries alleged to have been caused by the negligent inspection of premises controlled by third persons. The 19 court noted the common-law rule there is no duty to prevent the misconduct of a third person and held: At the outset then, there is no common-law duty imposed on any individual or any � municipality to inspect and correct the fire code violations of a third person unless there is a `special relation' between the parties. '�, * * * A duty of care arises only when there are additional indicia that the municipality has undertaken the responsibility of not only protecting itself, but also undertaken the responsibility of protecting a particular class of persons from the risks associated with fire code violations. 279 N.W.2d at 804, 806. The Cracraft Court stated there are at least four factors to consider in determining whether a municipality is acting for the protection of others: 1. Whether the municipality had actual knowledge of a dangerous condition. 2. Whether there was reasonable reliance by third persons on the municipality's representations or conduct. Reasonable reliance tends to impose a duty of care, but must be based on specific actions or representations which cause the persons to forego other alternatives of protecting themselves. 3. Whether a duty of care was created by an ordinance or statute setting forth mandatory acts clearly for the protection of a particular class of persons rather than the public as a whole. 4. Whether the municipality used due care to avoid increasing the risks of harm. Cracraft, 279 N.W.2d at 806-07. The court held absent legislative guidance, there is no special duty which requires a municipality to enforce the laws with reasonable care. Id. at 808. In Sheedy v. Mower Counry, Civ. No. CO-96-2328, 1997 Minn. App. LEXIS 756 (Minn. App. July 8, 1997) (unpublished and attached), the court, utilizing the Cracraft factors, rejected a claim involving the alleged negligent issuance of a building permit in a flood plain. The court found the public duty doctrine (and immunity) barred plaintiffs' tort claim. The court noted: 20 Specifically, the Sheedys did not show that Mower Counry assumed a duty on their behalf by virtue of the flood plain ordinance because: the record contains no evidence that Mower County had actual knowledge that the Sheedys' proposed residence was to be built in the flood plain; the Sheedys relied generally on Mower County's issuance of the permit, rather than relying specifically on a representation pertaining to the existence or nonexistence of the flood plain; the flood plain ordinance was designed to protect the public as a whole, not those who build in the flood plain; and Mower County s issuance of the permit did not increase the risk of harm of building in the flood plain. Id. at *3. Similarly, in Mrocek v. City of White Bear Lake, Civ. No. C9-94-2274, 1995 Minn. App. LEXIS 917 (Minn. App. July 18, 1995) (unpublished and attached), the court of appeals rejected claims against the city premised on the negligent issuance of a building permit: Citing Cracraft v. City of St. Louis Park, 279 N.W.2d 801, 805 (Minn. 1979), the city argues that Mroceks have no cause of action for negligence in the issuance of a building permit because the building code and zoning ordinances create only a duty owed to the public and duties owed to the public do not provide a basis for a private cause of action in tort. We agree. This lawsuit is based on the city's alleged negligence in issuing a building permit for a building that did not meet the requirements of applicable zoning ordinances. The zoning ordinances at issue in this case do not create any special duty that gives rise to liability in a negligence action. Id. at *3. Applying the Cracraft factors to the present case, it is clear the City did not owe T/C Homes a duty in its individual capacity but merely as members of the public at large when it approved the Prairie Run plat, the Grading Plan, the Revised Grading Plan and the Second Revised Grading Plan. Absent this showing, T/C Homes cannot maintain a negligence action against the City. A. No actual knowledge of a dangerous condition. The knowledge required for a special duty is knowledge of"a dangerous condition." McNamara v. McLean, 531 N.W.2d 911, 915 (Minn. App. 1995) (citing Cracraft, 279 N.W.2d at 21 806). This knowledge must be actual knowledge, not constructive knowledge, of a dangerous condition. See Hage v. Stade, 304 N.W.2d 283, 288 (Minn. 1981);Andrade v. Ellefson, 391 N.W.2d 836, 841 (Minn. 1986) (mere "constructive knowledge" of a dangerous condition is insufficient to create a private duty). Here, the City did not know the Developer and the Developer's engineer did not account for the 100 year flood elevation until November of 2005. See Exh. 39. Immediately upon realizing the Plat and the subdivision documentation did not comply with the City's Ordinances, the City informed the Developer. Id. Prior to this, the City did not have any knowledge of any such deficiency. Under the circumstances, T/C Homes cannot establish this Cracraft factor. B. No reasonable reliance. The second Cracraft factor is reasonable reliance. "A private duty is created under the second factor where there was `reasonable reliance by persons on the municipality's representations and conduct."'McNamara, 531 N.W.2d at 915 (citing Cracraft, 279 N.W.2d at 806-07)). Here, T/C Homes had a contract with Gold Key. It never had a contract with the City. Moreover, any documentation T/C Homes relied upon was public information which was not put together specifically for T/C Homes. Therefore, T/C Homes cannot demonstrate reasonable reliance. C. No applicable ordinance, statute or regulation that mandates a special duty. Cracraft's third consideration is whether a duty of care was created by an ordinance or statute setting forth mandatory acts clearly for the protection of a particular class of persons rather than the public as a whole. "A duty of care may be created by an ordinance or statute that sets forth mandatory acts clearly for the protection of a particular class of persons rather than the public as a whole." Cracraft, 279 N.W.2d at 807. Codes, ordinances or statutes that have not 22 � been drawn with sufficient specificity to create a duty to a class of individuals do not create�a special duty. See, id. (stating the same about duty to inspect). �� Here,there is no ordinance, statute or regulation that sets forth mandatory acts of the City � for the protection of T/C Homes. Rather, Minnesota Courts have held a"flood plain ordinance was designed to protect the public as a whole, not those who build in the flood plain" thereby precluding any special duty owed to the plaintiffs. Sheedy, at *9. Similarly, Zoning and Subdivision Ordinances are designed to protect the public, not individuals. Under the circumstances, T/C Homes cannot establish this Cracraft factor. D. The City did not increase the risk of harm. Finally, the City did not increase the risk of harm to T/C Homes. A legal duty cannot be imposed because of a municipality's alleged failure to decrease the risk of harm. See S.L.D. v. Kranz, No. CS-95-1987, 1996 Minn. App. LEXIS 368 (Minn. App. Apri12, 1996) (unpublished and attached). Here, the City has done nothing to increase the risk of harm to T/C Homes by interpreting the flood elevations, plat, subdivision documents or storm water plans. T/C Homes had already closed on the property long before the City provided any interpretations concerning the 100 year flood elevation. Moreover, T/C Homes could have conducted its own engineering studies on the property to review the elevations and storm water systems. Tutt depo., p. 2�; Exh. 23. They chose not to. T/C Homes did, however, choose to continue to purchase property in the Prairie Run Development even after the City sent Gold Key the default letter. Therefore, the City did not increase T/C Homes' risk where they knowingly purchased lots in a development which was in default. Under the circumstances, T/C Homes cannot establish this Cracraft factor. 23 Because T/C Homes cannot meet any of the Cracraft factors, the City is entitled to the dismissal of T/C Homes' negligence claims. V. T/C HOMES' MISREPRESENTATION CLAIMS ARE NOT ACTIONABLE WHEN THE INFORMATION RELIED UPON IS AVAILABLE TO THE PUBLIC. T/C Homes' claim the City provided negligent or inaccurate information must also be I dismissed. Negligent misrepresentation of fact is only actionable if a member of the public has �� no other access to the factual misrepresentation except through government officials. Mohler v. City of St. Louis Park, 643 N.W.2d 623 (Minn. App. 2002); Northernaire Productions, Inc. v. County of Crow Wing, 244 N.W.2d 279, 282 (Minn. 1976). Misrepresentations of law, in contrast, are not actionable. 244 N.W.2d at 281. The Northernaire Court, citing public policy considerations, refused to extend liability for opinions issued by the county zoning officials when that information is readily available to the public: Our holding is based on considerations of public policy. There is no dispute that the alleged misrepresentations were made in a good-faith effort to respond to plaintiffs' inquiries. Plaintiffs concede that defendants acted without malice or intent to deceive. To subject county officials to the prospect of liability for innocent misrepresentation would discourage their participation in local government or inhibit them from discharging responsibilities inherent in their offices. Their reluctance to express opinions would frustrate dialogue which is indispensable to the ongoing operation of government. * * * The plaintiffs here had alternative means of obtaining an interpretation of the zoning ordinance, either by consulting an attorney or by applying to the full County Planning and Zoning Commission for a formal interpretation pursuant to established procedures. Since plaintiffs could have obtained an authoritative interpretation without relying on the informal representations of these individual defendants, the dominant policy consideration, in our view, is to encourage participation in government by such officials rather than sanction tort liability to ensure access to accurate advice. Id. at 282. 24 The Mohler Court reached the same conclusion where a property owner who built a two- story garage under a city building perinit and zoning variance, failed to prove that he did not have access to applicable information. 643 N.W.2d at 637-38. Similar to Mohler and Northernaire, the 100 year flood elevations for the property were available to the public. Exh. 46; Hedlund depo.,pp. 54-SS. T/C Homes could have contact the County to determine the estimated 100 year flood elevations for the property. T/C Homes could have also had a formal survey or hydrological study conducted. In other words, T/C Homes could have "obtained an authoritative interpretation without relying on the informal representations." The information in the subdivision documents was not the only source by which T/C Homes could have obtained the information regarding the property. It was the ultimate responsibility of T/C Homes and the Developer to ensure the subdivision documentation was outside the flood plain, not the City. To hold otherwise, would make the City an insurer of builders and developers, to the detriment of the public. VI. THE ACTIONS OF THE CITY ARE PROTECTED BY IMMUNITY. The City is entitled to immunity for its decision not to issue any further COs or building permits and for its determination that the Prairie Run development is in default of the Development Agreement. A. Statutory Immunity. Under the Minnesota Tort Claims Act, a county is "subject to liability for its torts and those of its officers, employees and agents acting within the scope of their employment or duties � whether arising out of a governmental or proprietary function." Minn. Stat. § 466.02 (1998). � However, a county enjoys "statutory immunity" for"[a]ny claim based upon the performance or 25 I the failure to exercise or perform a discretionary function or duty, whether or not the discretion is abused." Minn. Stat. � 466.03, subd. 6 (1998). Pursuant to statutory immunity, a county's conduct is protected when the county produces evidence showing the conduct at issue was of a"policy-making nature involving social, poli�ical, or economic considerations." Nusbaum v. Blue Earth County, 422 N.W.2d 713, 722 (Minn. 1988). Furthermore, if the relevant conduct at issue involves a combination of policy- making and operational decisions, then the city is still entitled to immunity. Christopherson v. City of Albert Lea, 623 N.W.2d 272, 276 (Minn. App. 2001); Fisher v. Counry of Rock, 596 N.W.2d 646, 652 (Minn. 1999) ("[I]f in addition to professional or scientific judgment, policy considerations played a part in making a decision, then planning level conduct is involved and statutory immunity applies."). Statutory immunity applies when a government employee has "to make a judgment." Sheedy, 1997 WL 370406 at *3. Minnesota Courts have repeatedly held the granting of building permits is a discretionary action protected by statutory immunity. Anderson v. City of Minneapolis, 178 N.W.2d 215, 217 (1970); Mohler v. City ofSt. Louis Park, 643 N.W.2d 623 (Minn. Ct. App. 2002). The rational behind these determinations is: The act of an employee of the city in issuing the building permit in a doubtful case involved an exercise of discretion in the sense that the city's employees had to make a judgment as to whether the plans submitted in support of the application for the permit constituted a permissible use of the property in the area involved. Anderson, 287 N.W.2d at 217. On several occasions, Minnesota courts have indicated where a municipal decision or act resembles the issuance of a building permit, the decision or act is discretionary. See Wilson v. Ramacher, 352 N.W.2d 389, 393 (Minn. 1984) (issuance of permits to put fill on land); 26 Masonick v. J.P. Homes; 494 N.W.2d 910, 913 (Minn. App. 1993) (issuance of certificates of occ�upancy); McNamara, 531 N.W.2d at 914 (permit to construct a sewage treatment system). The public policy reason behind these determinations is it prevents municipalities from "being made guarantors of problem-free construction." Vrieze v. New Century Homes, Inc., 542 N.W.2d 62, 67 (Minn. App. 1996) (citing Hoffert, 199 N.W.2d at 160). Similarly, the City's actions in applying its ordinance or deciding not to enforce its ordinance are also protected. Any claim based upon performance of or failure to perform a discretionary function or duty cannot be asserted against a municipal corporation. This is true whether or not the discretion is abused. Minn. Stat. § 466.03, subd. 6. Here, the City has determined the Prairie Run development is in default of the Development Agreement because it does not comply with several provisions of the City's Ordinances, including storm water ponding and run-off rate requirements. Exhs. 98 and 99. The City chose to find the Developer in default because it wanted to make sure it wasn't "issuing additional building permits for homes that didn't meet the requirements of the code" and they "wanted to be proactive...." Kruse depo., p. 117. Moreover, the City believes it is its "ultimate responsibility [] to protect current and future homeowners...." Id. at p. 118. This type of decision to protect the health, safety and welfare of the public is exactly the type of decision statutory immunity was intended to protect. B. Official Immunity. Additionally, the City is entitled to vicarious official immunity. Official immunity is intended "to protect public officials from the fear of personal liability that might deter independent action." Pletan v. Gaines, 494 N.W.2d 38, 41 (Minn. 1992) (citing Janklow v. Minn. Bd. OfExam'rs, 552 N.W.2d 711, 715 (Minn. 1996). A"public official charged by law 27 with duties which call for the exercise of judgment or discretion is not personally liable to an individual for damages unless he is guilty of a willful or malicious wrong." Elwood v. Rice County, 423 N.W.2d 671, 677 (Minn. 1988) (quoting Sulsa v. State of Minnesota, 247 N.W.2d �'�� 907, 912 (1976)). Vicarious official immunity protects a governmental entity from suit based on �� the acts of an employee who is entitled to official immunity. See Wiederholt v. City of Minneapolis, 581 N.W.2d 312, 316 (Minn. 1998). The Minnesota Supreme Court has concluded "it would be anomalous"to impose liability on the government employer for the very same acts for which the employee receives immunity. Id. As discussed in the statutory immunity argument, the City's decision not to issue building permits and certificates of occupancy was discretionary in nature. The record is devoid of any evidence of bad faith or malice by City officials. Plaintiffs must present"specific facts evidencing bad faith" rather than "bare allegations of malice." Reuter v. City of New Hope, 499 N.W.2d 745, 751 (Minn. App. 1990) rev. denied, (Minn. Feb. 28, 1990). Because there is no evidence of bad faith or malice, the City is entitled to vicarious official immunity. VII. THE CITY IS ENTITLED TO ATTORNEY'S FEES UNDER THE DEVELOPMENT AGREEMENT. The Development Agreement specifically provides: Developer shall hold the City and its officers and employees harmless from claims made by Developer or third parties for damages sustained or costs incurred resulting from said Plat approval and development. Developer shall indemnify the City and its officers and employees for all costs, damages or expenses which the City may pay or incur in consequence of such claims, including attorney's fees. Third parties shall have no recourse against the City under this Gontract. See Exh. 35, ¶17. The Development Agreement also provides: Developer will pay all reasonable professional fees incurred by the City as a result of City efforts to enforce the terms of this Agreement. Said fees include attorney's fees, engineer's fees, planner's fees and any other professional fees incurred by the City in attempting to enforce the terms of this Agreement. The 28 Developer will also pay all reasonable attorney's and professional fees incurred �� by the City in the event an action is brought upon a letter of credit or other surety furnished by the Developer as provided herein. Id., ¶ 21. Under these paragraphs Gold Key must indemnify the City for all claims made aga'inst it based upon Plat approval of the development and in any action to enforce the terms of the Agreement. Here, Gold Key's lawsuit is challenging the City's ability to place the development in default under the Development Agreement. Additionally, T/C Homes' lawsuit is challenging the City's decision not to issue COs and building permits under the Development Agreement. Consequently, the City is entitled to indemnification under Paragraphs 17 and 21. In Woodland Development Corporation v. City ofAndover, No. A05-1636, 2006 Minn. App. LEXIS 621 (Minn. App., June 13, 2006) (unpublished, attached), the Minnesota Court of Appeals upheld a $450,671.53 attorney's fees and cost award under similar development agreement language. The Court noted the contract term which required reimbursement for all costs, including attorney's fees incurred in the enforcement of the development contract, was applicable to the case because the City was required to defend its contractual rights. Id. at *21. Similarly, the City is entitled to reimbursement far its attorney's fees incurred in this action because it is seeking to enforce its right under the Development Agreement to find the Developer in default and to halt the issuance of COs and building permits. Accordingly, the City requests an Order confirming the City is entitled to an award of its attorney's fees and costs under the Development Agreement in an amount to be determined by proper application to the Court. 29 CONCLUSION For the foregoing reasons, Defendant City of Albertville respectfully requests this Court grant its Motion for Summary Judgment. Dated: April 26, 2007. IVERSON REUVERS By Paul D. Reuvers, #217700 Jason J. Kuboushek, #304037 Attorney for Defendant City of Albertville 9321 Ensign Avenue South Bloomington, Minnesota 55438 Telephone: (952) 548-7200 30 IIVERSON REUVERS DIR�T95K5$°06HEK � ATTORNEYS AT LAW JKUBOUSHEK@NERSONU W.COM 7 JON K.IVERSON Aprll ZS� 2.007 PAULD.REUVERS JEFF M.ZALASKY JASON J.KUBOUSHEK Gre�01y M. B1Str3211 PAMELA J.F.WHITMORE BitLV V S AND MORGtiLV JASON M.HIVELEY SUSAN M.TINDAL 220� I�S Centef JEFFREYA.EGGE 8O SOUtlI Oth Street AM6ER S.LEE Minneapolis, MN 55402-2157 RE: Gold Key Development, Inc. v. City of Albertville v. SEH, Inc. T/C Homes v. Gold Key Development, Inc. Mediation Friday, April 27, 2007, 9:00 a.m. Dear Mr. Bistram: In lieu of a lengthy mediation statement, I have enclosed the City's Motion for Summary Judgment. The Motion sets forth the facts of the case, as well as the City's legal theories of recovery. I have also enclosed memoranda from the City's engineer, Bolton & Menk. Specifically, I have enclosed memoranda discussing the 8 x 12 box culvert on the property, the ponding and hydrology calculations of the property, as well as a map of the lots and their elevations. It is the City's position this plat does not comply with the City's zoning and subdivision ordinances. Therefore, the developer is in default of the Development Agreement. Moreover, we believe case law and the ordinance supports the position it is the developer and the developer's engineer who must assure the plat documentations meet all ordinance requirements. The City and its engineer are not the insurers of the plat documents. Thus, it is irrelevant whether or not the City's former engineer reviewed the plat documents. Prior to mediation, I met with the City and its consultants to come up with possible solutions. I have sent the attached letter to all counsel with the City's recommendations for possible solutions. These solutions include going through variance proceedings to correct the elevation deficiencies on the plat. Also, the City proposes a storm water storage facility upstream of the Prairie Run plat to alleviate the rate control and drainage problems. While the City cannot guarantee the variances would be approved, City staff and consultants would support the variance applications if the variances contained sufficient language to alert anyone who reviews them of the deficiencies which were being corrected. Moreover, the City would want the variances to be incorporated into the Court's settlement order. Therefore, they would be a matter of public record. The City's 1VERS0?��2EliVERS,LLC � 9321�NSIGNL�VENUESOUTH � BLOOMINGTON,:V1N 5�938 � 952.548.7200 � FAX: 952.548.7270 WWVJ.IVERSONLAW.COM April 2_S, 2007 Page 2 purpose for this request is to protect itself from any future potential lawsuit by property owners. The City has asserted counterclaims against Gold Key for the default of the Development Agreement and for the attorney's fees associated with the defense of the challenge of the City's actions under the Development Agreement. As of today, the City has the following expenses: 1) the City Attorney has expended approximately $10,000 to �15,000; 2) the City Engineer has expended approximately $25,000; and 3) we have approximately $100,000 in defense fees and $l 0,000 in costs. We believe under the terms of the Development Agreement the City is entitled to these expenses because had to defend these two cases which are challenging the City's decision to invoke certain provisions of the Development Agreement. See City's Memorandum of I aw in Support of Sum�nary Judgment,pp. 28-29. To date, we have not received any settlement demands from either Gold Key or T/C Homes. It is quite frustrating to attempt to prepare a City Council and its Insurer when we have no idea what the Plaintiffs are seeking to obtain. We look forward to discussing this with you further on April 27. Yours truly, IVERSON REUVERS :;' :�.'i: l% � �� !; ti, . � f, ��;.',,;r �,..' �1.�'�, y�`:N.-.. ,.,. Jl ! Jason,J. Kuboushek JJK:be Enclosures II� IIVERSON REUVERS J�S�N J.KL��USHEK � ATTORNEYS AT LAW DIxEcr 9s2s4s.�zo6 JKUBOUSHEK@IVERSONLAW.COM JON K.IVERSON AYrll 2'S� 2��7 PAULD.REUVERS JEFF M.ZALASKY JASON J.KUBOUSHEK Stephen E. Yoch PnMaLn 1.F.wxiTMoes FELHABER, LARSON, FENLON & VOGT 1nsoN:K.x�vcLEY 444 Cedar Street, Suite 2100 sUSAN M.r�NDnti JEFFREYA.EGGE St. Paul, MN 55101-2136 ,�,BER s.LEE Robert W. Kettering, Jr. ARTHUR CHAPMAN KETTERING SMETAK & PIKALA 500 Young Quinlan Building 81 South Ninth Street I Minneapolis, 1VIN 55402-3214 , Cindi Matt Johnson, Larson, Peterson& Matt, P.A ' 908 Commercial Drive Buffalo, NiN 55313 John A. Markert COLEMAN, HLTI,L & VAN VLIET 8500 Normandale Lake Blvd., Suite 2110 Minneapolis, MN 55437 RE: Gold Key Development, Inc. v. City of Albertville v. SEH, Inc. and T/C Homes, Inc. v. City of Albertville v. SEH, Inc. Dear Counsel: I have had an opportunity to meet with the City and its consultants regarding possible solutions to the Prairie Run situation. After reviewing the documentation and the site, the City has indicated it would be open to variance applications for the individual lots in Prairie Run regarding the elevation requirements. While the variance application would not be a guarantee of variance approval, the City staff and consultants would support any variance application. Moreover, the City would incorporate these variances into any court approved settlement. With respect to the drainage and rate control problems, the City proposes the parties agree to a compensatory storage system upstream of the Prairie Run plat. The facility would be upstream of the plat on the east-west ditch. Likely this storage would occur east of County Road 19 in the currently undeveloped parcels. The City does not believe there is sufficient room in the commercial part of the IVERSON REUVERS,LLC I 9321 ENSIGK AVENUE SOUTH I BLOOMINGTON,MN 55438 � 952.548.7200 � FAx: 952.548.7210 WWW.IVERSONLAW.COM April 2S, 2007 Page 2 Prairie Run complex to allow for sufficient storage. The size of this storage would be subject to further calculations. The reason the City has set forth the proposed resolution is not to serve as a starting point for further concessions, but rather to allow the parties and their engineers to consider these solutions so the mediation on Friday may be more efficient. That being said, the City would also be open to other possible solutions. Yours truly, IVERSON REUVERS ''--<, :-.'.;��-. .:, s� ti �,,�°. �,''�� ff �.✓, � -'.,a,,,�.�,..,... ,{��,. �r�''""" � �� Jason J. Kuboushek JJK:bh �O��N � � � N � , f ��_ Consu�fing �ngir��rs � Surv�y�� 12224 Nicollet Avenue • Burnsville, MN 55337 Phone (952) 890-0509 • FAX (952) 890-8065 MEh'IORANDUI�1 Date: December 16,2405 To: Adam Nafstad,P.E. From: Lani Leichty, P.E. Subject: County Ditch#9 Box Culvert at CSAH 18 Adam, I am wnting this memo in response to your inquiry as to whether the 100-Year High Water Level (HWL), as calculated by Brian D. Waiter,P.E. for Wright County, is a reasonable estimate. The HWL for the County Ditch#9 crossing at CSAH 18 (Jason Avenue)was deternuned by Mr. Walter's to be 951.5. Given the time constraints associa[ed with this review, I researched what information was available to deternune if this elevation was accvrate enough to be used as the governing HWL for the Prairie Run development. Knowing that the Prairie Run development ultimately discharges in[o County Ditch#9, [he water surface elevation of County Ditch#9 will have a tailwater effect on the outlet culvert from the Prairie Run pond. Th�resulting HWL for the Prairie Run pond will be the same eleva[ion or highec than the County Ditch #9 I-�WL, depending on the flow routing for the County Ditch#9 drainage system. A previous flood study was completed by SEH. We compared the HWI.resuIts from this study for this approximate area. The SEH study,based upon a 5.8"rainfall event,resulted in a HWL of 950.5. Given the recent stonr►events that have caused localized flooding in Albertville and the variability in hydrological modeling parameters, it seems practical to use the higher HWL of 951.5 from Mr. Walter's calculations for the Prairie Run development. Although there is a 1-foot difference in elevation between these HWL's, unless detaited calculations are completed that show a different HWL elevation should be used in [his area, I would recommend using 951.5 as the goveming elevation. Let me know if you have any further questions. 1 D� ��',,°�, �. . ., __ - �--.•_-��.-�--�fC`=d'--- lt�a�4�C �. �,<<:;:;::�s a ,�iOUY[ f��i;;a;>fli3i' B&M0519 BO l-�`t'C�N � M � ��! K , i t��_ Consulting Engineers � �urvey�rs 12224 Nicollet Avenue • Burnsviile, MN 55337 Phone (952) 890-0509 • FAX (952) 890-8065 MEMORANDUNi Date: Jul,y 5,2006 To: Adam Nafstad,P.E. From: Lani Leichty,P.E. Subject: Prairie Run Pond Reriew Following are review commen[s for the Frairie Run grading plans dated with a revision date of 11/14/03: l. The ponding catculations did not ta4ce into account the effects County Ditch No. 9 would have on the hydraulics of the system. The design sheets for the CSAH 18 12' x 8' box culvert for Wribht County, adjacent to this projec[, show [hat the 100-year high water level upstream for the box culvert is 951.5. The high water level for the wes[erly NURP pond in Prairie Run is shown as 947.Q0, which is 4.5-feet lower. 2. The outlet pipe for the above-mentioned pond is shown on the plans as 945.0, which is also the normal water level of the pond. This is only O.S-feet above the invert of the CSAf-I 18 box culvert in County Ditch No. 9. No tailwater effects from the ditch appear to have been taken into account when preparing the pond routing calculations. If they had, the resulting pond elevations would have been higher. 3. The 2006 Albertville Fiood Study resulted in a 100-year, 24-hour high water elevation of 950.9 for Prairie Run. 4. The 2004 F1ood Study Report,prepared by SEH, Inc., resulted in a HWI.of 950.5 for the upstreain side of the CSAH 18 box culvert. 5. Assuming that the high water level is 950.5 for this area all of he 'rie Run would be t onds in Pra� . . � P inundated dunng a 100-year, 24-hour storm event. No rate con[rol would be provided during the 100-year storm. The emergency overflow for the north pond is 948.5 and for the west pond the emergency overflow elevation is 949.5. 6. Offsite water is being routed through the storm water ponds. This will reduce the effectiveness of che ponds from removing sediment, since the water detention time will be reduced and a "flushing"effect will occur. 7. The e�sting ditch has been redirected into a wetland area in the northwest corner of the property. The new outflow eleva[ion for ihe redirected ciitch is shown as 947.0. With this elevation, water will back up in the ditch to elevation 947.0, which will inundate the outlet culvert hom the northerly storm water pond. Ttus may also cause standing water in the storm sewer pipe, reducing the capacity of the pipe. �___ _ � .':1 �<-� F:\_Civi1�ALB'I1T1521786�PrairieRun_Memo.doc --� /�C�',�;�f�� 3PC:d,� �. f;:1��4"t3�'v(:� ii r-iuj.;:ffCtii ti--.—..��-�.—..—=z„ :_ B&M0520 ` � 8. Another major c ;rn is the house pad elevations that have be� �i for the homes adjacent to tlie ponds and wetland areas. The storn� wa[er calculations for this development should be reviewed and or recalculated, given the above information. F:\_Civil�A LB'I�T15217861PrairieRun_Memo.doc B&M0521 ,. II �� 4�� + \ \ � \ � �I ��-' ��- � --L. � _—� ' ' l 1___._- i /1 ' ( \ `'� N �- E � I � \ I i i � .---- � O . p'�� d' M h � g M �o � < rn Vjh � � -�'`-� � oi �,y, Q o, --� i . . . g5�.26 J � Q - - - 953.38 � �� Q � CALCULATED `100=YEAR'HWL' 953.3 Q a949.$Q � � � HfGHEST KNOWN 95�.53 J WATER-EL.EVATION > 0� � =951.47 (2003) g`��' A . " " ` �� DARY 53R ST h�' � �� . . �,� � ��, � h� � A ^ � A . � � ' � �'h q`�ry �h� �h� �hv�' ��^>' ��h �� y,�. �� qCr 0 0 � �� . oo � , � � , o � o a � � . � ,— , , , � ,L--r _ , — � �. �� at ,.,;,� ;ti� ��-��w)�:�=�� I �' t t�,��'! ��4.1�:4 , j� / . . 1 ,ti 1 z k R�� rt. ��.w.� w � � � � ��i� Is�s " ��' 2,a- 1`� �� `'� �� j��1`�;� � ;�: �� , , `, f ,K i' � \�� ' �'{ Mn _ �M. .4 7 � f �}� 1��..�� v � r �� : {6? � ' t� �l�� - � .��. � . 1� w� . "1 y. .:� �..: .�.�'� ��'��l ��0� { SrJ�.9�J �' �Q1Q? �-i� � � � � �,;r � 953.61 �854.1�� 9 ;1` 1�`��' e �'� e62 ,h� 43' 2 ,�� (�' ��(,�� '2 � �' ^�• � 'Lr8 \�' V,(�'`9� 57.D4 �--��y ,r: � � � �. � t j �� s�� /�` � �� «%� ' . 0,'3` h , �ry/ a�r �-`�'�a� � �'i� '-"--�{953.7LF) �954. a`� ��rn h`� <��953.4 � �a��b�`y� .�"e Us g� (952.7 LOj o, /' ,�h' <�e \ � 9 / � ` 943.7 Lf �� U ; � � °� � � �at ��!,� ,� �� ,� 95� m � � ; � v� `Jei � � � � /�'�� •�S � (953.5I.F)� C� N DITCH N0. 9 `� g ��s�o5�ej,g e cs S T�` � s�� :; N/A � Z m �957.51.0� � �� U� � ,,, � PRAIRfE RUN ADO[T70N �� a`� o`? v �s�� TEMPORARY GA. ISSUEO �'y h� o o B�F�T N�A � Q � N�A .... p� ��0, �v S�g��A e � � � '; FlNAL C.O. ISSUE� � �r £ XXX.XX = AS-BUILT LOW OPENlNG ELEVATiOtV �'� � S "�ej _ ° s ' g Li4 Bt ; XX.X = AS-6UILT LOW F L�O R E I E V A T I O N (W A�K-O U � o,`� ,�? .� �ta et o �o^� � ` POND � � g M � N �D � (XXX.X LO) = PROPOSEO tOW OPENING ELEVATION PER (5 / 4 P ,.��., Q% (XXX.X lF) a PROPOSED LOW FLOOR EIEVATION PER (5/15 04 PLAN) �OBotton & Menk, Inc. 2006, All Rights Reserved ��n OF A�BERTVILLE BOLTC�N 8t MENK. INC. Consultin� Enpin�.►� e� s�r,,.Yo�, P RA1 R I E R U N AD D IT14 N ' MANKATO, AIN fAIRMONT, MN Sl.EHPY @YE, MN WILLMAR, MN AS—B U I LT E LEVATI 0 N S BURNSVILLE, MN CHASKA, MN RPlASEY, MN AMES, IA JANUARY 4, 2007 H: AL8 T1521786 CAD FREEBOARD.DWG 01-OS-2007 11:35 am ' B4 l_TON 8� t�/I � N K , I NC_ Consulting Engineers & Surveyors 12224 Nicoilet Avenue • Burnsville, MN 55337-6857 Phone (952) 890-0509 • FAX (952) 890-8065 MEMORANDUM I' Date: March 12,2007 To: Jason Kuboushek Cc: Adam Nafstad,P.E. From: Lani Leichty,P.E. Subject: Prairie Run Drainage Calculation Review Jason, Below is a summary of the drainage information from Hedlund Engineering regarding the Prairie Run development: The HydroCAD calculations for the existing and proposed condition contain the following information for the 2, 10 and 100-year,24-hour storm event. No offsite drainage azeas were taken into accoun[in the existing runoff condition. In the proposed condition, only 10.0 acres were taken into account. The drainage map prepared for the 2006 County Ditch#9 Flood Study by Bolton&Menk, Inc. shows the upstream drainage,including the site area to the central pond, to be 208.8 acres. The outlets from each pond assumed"Free Discharge",meaning that no downstream tailwater effects were taken into account. This is where a flood plain would have an impact on the function of the ponds. P�ND 2-YR STORM 10-YR STORM 100-YR STORM 1 N- 0.84 cfs 2.89 cfs 4.43 cfs Southwest Pond 945.47 946.09 946.88 2N- 0.65 cfs 2,62 cfs 4.17 cfs Nor[h Central Pond 946.46 947.11 948.26 Pre-Developed 34.0 Acres 4.0 cfs 25:1 cfs 60.3 cfs The NLJRP calculation,2.5-inch storm event, was also included to show the dead storage volume contained in the ponds. If the upstream drainage area to Pond 2N(North Central Pond)is accurate, at 35.0 acres,then the dead storage volume is correct. The drainage map prepared for the 2006 County Di[ch#9 Flood Study by Bolton&Menk, Inc. shows the upstream drainage area to be 208.8 acres. Assuming that this is correct,the dead s[orage volume required b the NPDES ermit i Y p s 8.6 acre-feet. The Hedlund Engineering calculation shows that 3.9 acre-feet of dead storage was provided. No floodplain information or high water level elevations were shown or discussed in the drainage information that was submitted.