2007-05 Reply Memo in Supp. of Motion to AmendSTATE OF MINNESOTA 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.
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______________________________________________________________________________
CITY OF ALBERTVILLE’S REPLY MEMORANDUM OF LAW IN
SUPPORT OF ITS MOTION TO AMEND THE SCHEDULING ORDER
AND ITS COUNTERCLAIM AGAINST GOLD KEY
______________________________________________________________________________
INTRODUCTION
The City’s proposed Amended Scheduling Order and Counterclaim against Gold Key is
not a “desperate effort” to save its claims, nor will it “severely prejudice” the parties. Rather, the
proposed Amendments will allow all issues – liability and damages – to be fully disclosed and
discovered prior to a lengthy and complicated trial. Moreover, the City has acted as quick as
possible in proposing an Amended Counterclaim after receiving its oral notice of a violation
from the Minnesota Pollution Control Agency (“MPCA”).1 Accordingly, the City respectfully
requests the Court grant its Motion to Amend the Scheduling Order and its Counterclaim against
Gold Key.
ARGUMENT
I. THE CITY HAS SHOWN GOOD CAUSE TO AMEND THE COMPLAINT.
An amendment of the Scheduling Order is necessary because two new parties – Majestic
Builders and Legacy Homes – seek to join the lawsuit and to assert over one million dollars in
damages against the City and Gold Key Development. The City needs adequate time to conduct
written discovery, depositions and to have the evidence evaluated by experts. This cannot be
completed within 45 days. Moreover, an extension of the deadlines regarding all parties is
proper because the new claims will involve not only the City and Gold Key, but also Hedlund
Engineering and SEH. Attempts to limit discovery or motions will only lead to confusion and
conflicts.
1 To date, the City has not received the written Notice of Violation.
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Additionally, discovery disputes have arisen since the City filed its initial motion papers
which will make it impossible to complete discovery involving the current parties within the
current Scheduling Order. Specifically, the City has attempted to subpoena the financial records
of Gold Key’s and T/C Homes’ lenders and banks. T/C Homes, however, has objected to the
release of its records from Alpine Capital and Central Bank. See Affidavit of Kuboushek (June 6,
2007), Exh. A. Central Bank, through its own counsel, has also objected to the subpoenas and is
requesting the City first seek a Court Order. Id., Exh. B. Therefore, it is impossible for the City
to complete its discovery within the current Scheduling Order.
Finally, the City believes it is appropriate to extend all deadlines 90 days in light of the
new Notice of Violation from the MPCA. This violation, which the City will assert in its
Counterclaim against Gold Key in the proposed Majestic Builders and Legacy Homes lawsuit, is
related to the current lawsuit and will require additional discovery to inquire into the extent of
the violation and the proper remedy. Thus, the City will be seeking to acquire new evidence
regarding the violation from all parties.
II. ALLOWING THE CITY TO AMEND ITS COUNTERCLAIM WILL NOT
PREJUDICE THE OTHER PARTIES OR UNDULY DELAY THE
PROCEEDING.
In determining whether to grant a Motion to Amend, the Court may look at a number of
factors, including whether the adverse party would be prejudiced, and whether the prejudice
suffered by the adverse party can be weighed against the prejudice suffered by the moving party
if leave is denied. See Wilson v. City of Eagan, 297 N.W.2d 146, 151 (Minn. 1980). “[T]he
liberality to be shown in the allowance of amendments to pleadings depends in part upon the
stage of the action and in a great measure upon the facts and circumstances of the particular
case.” Bebo v. Delander, 632 N.W.2d 732, 741 (Minn. App. 2001).
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A. The Proposed Amended Counterclaim will not prejudice the parties.
Here, the parties will not be prejudiced by the proposed amendments. First of all, the
amendment to add language regarding the old ordinance will not prejudice the parties because it
is merely conforming the Counterclaim to the evidence in the case. See Minn. R. Civ. P. 15.02.
Deposition Exhibit 99 lists the old ordinance provisions which Gold Key is in default, while the
original Counterclaim listed the comparable new ordinance provisions.2 See Affidavit of
Kuboushek, Exh. C. In an attempt to clarify the Counterclaim and to bring it in conformance
with the evidence, the City is seeking to amend the Counterclaim to list both the old and new
ordinance provisions. This clarification will not prejudice the parties and should be granted.
Moreover, the City’s request to add new language regarding its oral Notice of Violation
from the MPCA will not prejudice the parties. The City brought the oral Notice of Violation to
all parties’ attention within 24 hours of receiving the notice and over six months prior to trial. It
also provided a draft Amended Counterclaim to all parties within 24 hours of receiving the
notice. The City has acted as quickly as possible to inform all parties of the Notice and to amend
the pleadings. Compare Tomlinson Lumber Sales, Inc. v. J.D. Harrold Co., 117 N.W.2d 203,
207 (1962) (not proper to amend Counterclaim as part of defendant’s surrebuttal at trial).
Additionally, from a judicial economy standpoint, it makes sense to add the MPCA
violation to the current lawsuit. Otherwise, the City would be forced to bring a separate civil
enforcement action against Gold Key. This would only cause the Prairie Run subdivision to be
shut down for a longer period of time. Accordingly, the City requests the Court grant its Motion
to Amend the Counterclaim.
2 Hedlund Engineering, in an attempt to deflect the liability claims, continues to argue the
City has abandoned or ignored its original counterclaims. This is not true. Rather, the City
submitted sworn deposition and affidavit testimony which explains the City’s basis for its
position. See Affidavit of Kuboushek, Exh. D-summation of closing argument.
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B. The Proposed Amended Counterclaim would survive a Motion to Dismiss.
Contrary to Gold Key’s and Hedlund Engineering’s beliefs, the proposed language
regarding the MPCA violation would withstand a Motion for Summary Judgment because it
meets the pleading requirements under Minn. R. Civ. P. 8.01 and because it shows Gold Key is
in default of the Development Agreement and in violation of the City’s ordinances.
As this Court is aware, “[a] pleading which sets forth a claim for relief … shall contain a
short and plain statement of the claim showing that the pleader is entitled to relief and a demand
for judgment for the relief sought.” Minn. R. Civ. P. 8.01. A specific legal theory does not need
to be stated if the pleadings contain factual notice of the claim and a request for relief. Padco,
Inc. v. Kinney & Lange, 444 N.W.2d 889, 891 (Minn. App. 1989). Here, the proposed Amended
Counterclaim, as part of a breach of contract claim, states “[t]he drainage ponds on the Prairie
Run plat violate applicable Minnesota Pollution Control Agency (“MPCA”) rules and
regulations.” It also asserts, as a result of the violation, Gold Key has breached the Development
Agreement and violated the City’s ordinances and the City has been damaged. Therefore, the
proposed Amended Counterclaim meets the legal standard set forth in Minnesota Rule of Civil
Procedure 8.01.
Additionally, the proposed Amended Counterclaim would survive a Motion to Dismiss.
The Development Agreement contains provisions which required Gold Key to comply with City,
County, State and Federal laws and regulations. For example, Paragraph 10 states:
Drainage 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.
Moreover, Paragraph 13F states:
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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.
Exh. 35. The oral Notice of Violation, however, indicates Gold Key did not comply with these
paragraphs in the Development Agreement and is, therefore, in default. Moreover, Gold Key is
also in violation of the City’s ordinances which require it to provide the City with permanent
storm water pollution controls which conform to the requirements found in the MPCA’s NPDES
permits. See Affidavit of Kuboushek, Exhs. E & F, City Ordinance 11-7-12(D) and former City
Subdivision Ordinance A-600.13. Thus, the proposed Amended Counterclaim would survive a
Motion to Dismiss and the City’s request should be granted.
CONCLUSION
The City respectfully requests the Court grant its Motion to Amend the Scheduling Order
due to the proposed intervention of two new parties and its Motion to Amend its Counterclaim
against Gold Key in light of the new evidence concerning the MPCA violation.
IVERSON REUVERS
Dated: June 13, 2023 By__________________________
Paul D. Reuvers, #217700
Jason J. Kuboushek, #304037
Attorneys for Defendant City of Albertville
9321 Ensign Avenue South
Bloomington, Minnesota 55438
Telephone: (952) 548-7200