2005-02-21 Pilot Land/KDV
~.. ..~,"
. Also licensed in nlinois
COURl, MACARTHUR &
RUPPE, P.L.L.P.
Attorneys at Law
705 Central Avenue East
PO Box 369
St. Michael, MN 55376-0369
(763) 497-1930
(763) 497-2599 (FAX)
courimacarthur@earthlink.net
Michael C. Couri*
Andrew J. MacArthur
Robert T. Ruppe**
David R. Wendorf
Kristen H. Carr
..Also licensed in California
February 21,2005
Kern, DeW enter, Viere, Ltd.
220 Park Avenue South
P.O. Box 1304
St. Cloud, MN 56302-1304
Re: City of AlbertviIle--Response to Auditor's Request for Information
Concerning Contingent Liabilities.
To Whom It May Concern:
As City Attorney for the City of Albertville, I advise you as follows in connection
with your examination of the financial statements of the City of Albertville as of December
31, 2004. This letter concerns only those claims or potential claims that have been brought
to the attention of this firm.
Subject to the foregoing and to the last paragraph of this letter, and except for the
Pilot Land Development Company, Inc. litigation described below, we advise you that this
firm is not currently engaged, nor has it been engaged any time since January 1, 2004, to
give substantive attention to, or represent the City of Albertville in connection with, pending
or threatened litigation, claims, or assessments asserted against the City of Albertville in
connection with, loss contingencies coming within the scope of the clause (a) of paragraph 5
of the Statement cfPolicy referred to in the last paragraph of this letter.
Weare aware of no claims or assessments which we believe are probable of
assertion and must be disclosed under said paragraph 5(a) of the Statement of Policy
referred to in the last paragraph of this letter.
Our office has commenced litigation on behalf of the City of Albertville against Pilot
Land Development Company, Inc., in an attempt to collect approximately $302,667.08 in
costs and expenses which the City incurred in processing various Pilot Land Development
Company, Inc. residential development applications. The nature of the claim is contractual
and is based upon language in several developer's agreements which require Pilot Land
Development Company, Inc. to reimburse the City for expenses incurred in processing
... ...
Kern, DeWenter, Viere, Ltd.
February 21,2005
Page 2 of2
Pilot's development applications. A summons and complaint was served upon Pilot Land
Development Company, Inc. on June 29, 2004, but has not yet been filed in court pending
settlement negotiations with Pilot Land Development Company, Inc. Current settlement
negotiations propose to settle this case for a $165,000 payment from Pilot Land
Development Company, Inc. to the City, but no such agreement has yet been signed. Ifno
settlement can be reached, I expect the City to pursue this case to trial. While I expect the
City to collect some of the reimbursable fees sought if this case proceeds to trial, I am
unable at this time to estimate how much may be collected as Pilot Land Development
Company, Inc. has not yet answered the litigation.
This response is limited by, and in accordance with, the ABA Statement of Policy
Regarding Lawyer's Responses To Auditor's Request For Information. Without limiting the
generality of the foregoing, the limitation set forth in such Statement on the scope and use of
this response (paragraphs 2 and 7) are specifically incorporated herein by reference, and any
description herein of any "loss contingencies" is qualified in its entirety by paragraph 5 of
the Statement and the accompanying commentary (which is an integral part of the
Statement).
Consistent with the last sentence of paragraph 6 of the ABA Statement of Policy and
pursuant to the City's request, this will confirm and correct the City's understanding that
whenever, in the course of performing legal services for the City of Albertville with respect
to a matter recognized to involve an unasserted possible claim or assessment that may call
for a financial statement disclosure, we have formed a professional conclusion that the City
of Albertville must disclose or consider disclosure concerning such possible claim or
assessment, we, as a matter of professional responsibility to the City of Albertville, will
advise the City and will consult with the City concerning the question of such disclosure
and applicable requirements of Statement of Financial Accounting Standards No 5.
If this office can be of further assistance to you in this matter, please feel free to
contact us.
?;11( ~
Michael C. Couri
Couri & MacArthur
cc: Mr. Larry Kruse