2006-05-30 LMC acknowledge receipt of lawsuite
LMC
~~
~ ,,()~.j'ieague of Minnesota Cities
F J I Y.ttJ\ Claims Department
145 Universit;~..wev.t, St. Paul, MN 55103-2044
"'Uc?'(651) 281-1200 . (800) 925-1122
Fax: (651) 281-1297 . TDD: (651) 281-1290
www.lmnc.org
League 0/ Minnesota Cities
Cities promoting exceUence
May 30, 2006
Larry Kruse, City Administrator
City of Albertville
PO Box 9
Albertville, MN 55301-0009
RE: TrustMember: City of Albertville
Claimant: Gold Key Development, Inc.
Our File: 11056480
Dear Mr. Kruse:
On behalf of the League of Minnesota Cities Insurance Trust (LMCIT), this letter will formally
acknowledge receipt of the lawsuit filed in Wright County District Court entitled "Gold Key
Development, Inc., a Minnesota corporation, Plaintiff, vs. City of Albertville, Defendant".
Please be advised that I have assigned the handling of the defense of this case to the law firm of
Iverson Reuvers, LLC with offices at 9321 Ensign Ave. S., Bloomington, Minn. 55438
Specifically, Attorney Paul D. Reuvers has been assigned the handling of this case. I have given
Mr. Reuvers instructions to file a timely appearance on your behalf and to take those steps
necessary to protect your immediate interests. If you have any questions for Mr. Reuvers, feel
free to contact him at 952-548-7205.
In general terms, the plaintiff alleges the city is in default of the Development Agreement
regarding the Prairie Run Subdivision in that it has essentially shut down development by
refusing to issue certificates of occupancy or building permits for lots with elevations less than
953.9 feet. The plaintiff alleges the city has breached the Development Agreement and that they
have suffered significant and substantial damages as a result. The plaintiff seeks declaratory
relief from the Court along with money damages, attorneys fees, costs and disbursements.
Please be advised that any investigation made or action taken by representatives ofthe LMCIT
on this claim is done with a full Reservation of Rights under the Covenant #CMC26464 with a
coverage period of October 1, 2005/06 on a claims made basis. Any investigation, adjustment or
defense of the claim or any action whatsoever by representatives of the LMCIT will not
constitute a waiver of any rights the LMCIT might have under the covenant.
It is, of course, understood that you do not waive any of your rights under the rovenant.
AN EQUAL OPPORTUNITY/AFFIRMATIVE ACTION EMPLOYER
11056480
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05-30-06
I would specifically refer you to the Comprehensive Municipal Coverage form under Coverage
D. which states in part:
COVERAGE D. LAND USE, DEVELOPMENT OR FRANCHISE LITIGATION
1. COVERAGE AGREEMENT
Except as provided below, for any land use, development or franchise litigation which is
first filed or served by or against the city or a city officer or employee during the annual
coverage period of this agreement, LMCIT will pay the following on the city's behalf:
a. 100% of the first $25,000 of litigation costs which are incurred after the litigation has
been reported to LMCIT; 85% of the next $225,000 oflitigation costs incurred after the
litigation has been reported to LMCIT; and 60% of any litigation costs in excess of
$250,000 which are incurred after the litigation has been reported to LMCIT; and
b. 50% of any necessary legal fees for counsel to represent the city which the city incurs
prior to reporting the litigation to LMCIT.
LMCIT's total liability for litigation costs, as defined in SECTION 1- COVERAGE D. LAND
USE, DEVELOPMENT OR FRANCHISE LITIGATION, for all land use, development or
franchise litigation which is first filed or served against the city during the annual coverage
period of this agreement shall not exceed $1,000,000, regardless of the number of suits,
defendants, or claimants.
The amount LMCIT pays for litigation costs for land use, development or franchise litigation is
subject to the Municipal Liability Deductible shown in the Municipal Liability Declarations or
the General Annual Aggregate Deductible, if any, shown in the Common Coverage Declarations.
Land use, development or franchise litigation means:
a. Any litigation relating to the application or interpretation ofa city's land use, zoning,
subdivision, orsirnilar ordinance or regulation; or
b. Any litigation relating to the city's involvement in the financing or approval of any
development or redevelopment project.
c. Any litigation relating to the granting, refusal, interpretation, or enforcement of any franchise,
ordinance, permit, license, or other mechanism through which the city authorizes or
regulates the provision of cable communications, electricity, gas, heat, telephone, or other
public utilities within the city.
Any litigation meeting the criteria listed above will be considered to be land use, development or
franchise litigation in its entirety, regardless of whether the litigation may assert other claims as
well.
. .
11056480
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05-30-06
Litigation costs means:
a. Legal fees for counsel appointed pursuant to LITIGATION MANAGEMENT;
b. Necessary legal fees for counsel to represent the city which the city incurs prior to
reporting the litigation to LMCIT;
c. Necessary litigation expenses other than legal fees;
d. Damages which the city is required to pay;
e. Supplementary payments made or incurred as defined in SECTION V-
SUPPLEMENTARY PAYMENTS.
Also, I refer you to the definition of Damages. Damages means money damages, and includes
awards for attorneys' fees with respect to suits alleging violations under federal civil rights laws,
state human rights laws or the federal or state constitution.
With respect to any land use, development or franchise litigation, damages also includes amounts
the city is obligated to pay for loss of use of property during the time prior to a final
determination by the court that enforcement of a land use, zoning, subdivision, or similar
ordinance or regulation constitutes a taking of private property.
Damages does not include any of the following:
d. Injunctive or equitable relief, or quasi-judicial or administrative orders.
g. Amounts due under the terms of any contractual obligation, except for liability:
(1) assumed in a covered contract; or
(2) assumed in an employment contract between the city and its employees.
LMCIT will handle this matter as land use, development or franchise litigation. Accordingly, to
the extent it is determined that the relief sought by the plaintiff does not meet the definition of
damages, then coverage would not apply.
In addition to the above mentioned coverage issues which I have cited, there could be further
coverage defenses or exclusions that may be applicable. I reserve the rights of the LMCIT to
raise such further coverage defenses or exclusions as are applicable.
In the event that there are additional pleadings served upon you in conjunction with this case,
please forward those items to us immediately. If you have any questions, feel free to contact me
at 651-281-1282.
ary(i ~r;!!Y .yours,
. ~r(t%~
ark Rossow
Litigation Supervisor
. ,
11056480
cc: Paul D. Reuvers, Attorney at Law
cc: Michael C. Couri, Attorney at Law
cc: Middleton & Asso.
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05-30-06