2007-05 Memo of Law in Opp. to Gold Key SJSTATE 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.
2
______________________________________________________________________________
CITY OF ALBERTVILLE’S MEMORANDUM OF LAW IN
OPPOSITION OF GOLD KEY’S MOTION FOR SUMMARY JUDGMENT
______________________________________________________________________________
INTRODUCTION
Gold Key is not entitled to summary judgment because the Prairie Run plat
documentation does not comply with the City’s Zoning and Subdivision Ordinances or the
Development Agreement. Therefore, the City is not estopped from enforcing its ordinances to
protect the public health and safety of the citizens of Albertville. Moreover, Gold Key has not
acquired a vested right in a subdivision which does not comply with the City’s Zoning and
Subdivision Ordinances or the Development Agreement. Accordingly, the City requests Gold
Key’s Motion for Summary Judgment be denied.
STATEMENT OF DOCUMENTS
Affidavit of Jason J. Kuboushek with the following attachments:
Exhibit A – Deposition of Al Brixius with the following deposition exhibits:
Exhibit 110 – December 16, 2003 memorandum from Cynthia Putz-Yang to Alan
Brixius.
Exhibit 111 – June 7, 2004 City Council Findings of Fact and Decision, Prairie
Run Final Plat/PUD.
Affidavit of Lani Leichty with the following attachments:
Exhibit A – A USGS quadrangle map showing the watershed upstream of Prairie Run.
Exhibit B – A USGS quadrangle map of the Prairie Run subdivision and neighboring
properties.
Exhibit C - An aerial photograph of the Prairie Run subdivision and neighboring
properties.
Exhibit D – A NPDES permit application.
3
STATEMENT OF FACTS
The City of Albertville will rely on the Statement of Facts set forth in its Memorandum of
Law in Support of Summary Judgment and the exhibits submitted in support of its
Memorandum.
LEGAL ARGUMENT
I. GOLD KEY IS NOT ENTITLED TO JUDGMENT AS A MATTER OF LAW
BECAUSE THE PRAIRIE RUN PLAT VIOLATES THE CITY’S ZONING
AND SUBDIVISION ORDINANCES AND THE DEVELOPMENT
AGREEMENT.
Contrary to Gold Key’s belief, it has violated the Development Agreement because the
Prairie Run Subdivision does not comply with the City’s Zoning and Subdivision Ordinances
and other environmental regulations. As allowed under the Development Agreement, the City
may refuse to allow construction where the Plat fails to comply with “all City, county, state and
federal laws and regulations, including but not limited to: subdivision ordinances, zoning
ordinances, and environmental regulations.” Exh. 35, ¶ 13F.
Here, the City asserts Gold Key is in default because of the following violations:
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 05/15/04 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:
4
• Section 1000.9(d) in that the lowest floor as shown on the grading plan dated
05/15/04 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
05/15/04 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
05/15/04 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; Nafstad depo., p. 85:13-14, pp. 88:11-89:20 Moreover, the Developer’s Engineer
also admits there are violations:
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.
5
Hedlund depo., pp. 178-79. Despite this evidence, Gold Key believes it is entitled to summary
judgment. This is incorrect.
Additionally, Gold Key’s summary judgment motion should also be rejected because: 1)
sufficient data was available to determine the 100-year flood elevation; 2) the Subdivision
Ordinance requires the Developer to determine the 100-year flood plain for its storm water
management plan; and 3) the Prairie Run subdivision violates other environmental regulations.
A. Sufficient Data was available to determine the 100-year flood elevation.
Under both the City’s Ordinances and the Development Agreement, there is a provision
which allows the Developer and/or its Engineer to use the line of permanent aquatic vegetation at
the estimated high level elevation if “sufficient data” on high water levels “is not available….”
See Exh. 35, ¶ 13I & Zoning Ordinance section 1000.9, Subd. D. Here, however, sufficient 1 data
was available 2 for Gold Key and the Developer’s Engineer to use.
For example, the Developer’s Engineer admits the Wright County plan set for County
Road 18 and the Ditch 9 culvert show a 100-year flood frequency level of 951.5 feet. Hedlund
depo., pp. 54:12 – 55:2. A simple call to the County Engineer would have provided Gold Key or
Hedlund Engineering this sufficient data to determine the 100-year high water level. Nafstad
depo., p. 112:16-19; Carlson depo., p. 145:23-24. Mr. Hedlund, however, never reviewed the
plan set, never contacted the County or asked the County if they had any studies or flood
elevations regarding the culvert. Hedlund depo., pp. 48:7-9; 55:4-14. Nor did Gold Key ever
bother to contact the County to see if they had any information on the 8 foot by 12 foot box
1 The term “sufficient” is defined as “adequate, enough, as much as may be necessary,
equal to fit for end proposed, and that which may be necessary to accomplish an object.” Black’s
Law Dictionary 1433 (6th ed. 1990); State v. Brooks, 604 N.W.2d 345, 355 (Minn. 2000).
2 The term “available” is defined as “suitable; useable; accessible; obtainable; present or
ready for immediate use.” Id. at 135.
6
culvert. Johnson depo., p. 42:5-20. Instead, they blindly assumed no number existed. This,
however, is incorrect because sufficient data was available. Hedlund Engineering and Gold Key
simply failed to conduct any research.3
Moreover, the 100-year flood level information was provided to Hedlund Engineering in
April of 2004. Carlson depo., pp. 109:9 – 110:25. Hedlund, however, only made revisions to
some house elevations. Hedlund depo., pp. 91:22 – 92:9. He did not make any changes to the
pond elevations. Thus, the storm water ponds on the site are too low and the Prairie Run
Subdivision is in violation of the City’s Zoning and Subdivision Ordinances. See Nafstad depo.,
pp. 69:23-70:3; 71:19-22; 88:11-89:18. Accordingly, Gold Key is not entitled to judgment as a
matter of law. Instead, the City is entitled to dismissal of Gold Key’s breach of contract claims.
B. The Developer was required to determine the 100-year flood plain for its Storm
Water Pollution Control Plan.
Gold Key is also incorrect in asserting it could rely on the line of permanent aquatic
vegetation for all elevations in the Prairie Run subdivision. Even if it is determined it was proper
for Gold Key to use the line of permanent aquatic vegetation for high water elevations for
structures, which the City specifically denies, Gold Key was still required to determine the 100-
year flood plain level for its Storm Water Pollution Control Plan. Section A-600.13 (a)(1) states:
The storm water pollution control plan shall include:
***
iii. A map of the existing site conditions: existing topography, property
information, steep slopes, existing drainage systems/patterns, types of
soils, waterways, wetlands, vegetative cover, and 100-year flood plains.
3 The failure to look for data and to assume it did not exist is similar to Gold Key’s
admission it failed to look at the City’s Ordinances prior to Preliminary Plat submission, despite
verifying the documentation complied with the City’s Ordinance. See Johnson depo., p. 26:18-
25; Exh. 67.
7
Exh. 47, p. 600-14; see also exhibit 35, ¶¶ 10 & 13F. The submissions to the City, however, do
not include the 100-year flood plain level. Hedlund depo., p. 62:7-9. Moreover, there is nothing
in the ordinance which only requires Gold Key or its engineer to provide the 100-year flood plain
level “if available.” See Hedlund depo., p. 62:16-19. Therefore, Gold Key and/or its engineer
had an absolute duty to determine the 100-year flood plain level. See Nafstad depo., pp. 36:3-6;
38:14-20; 98:13-14; Brixius depo., pp. 49:17-23; 76:17-20. They did not do this and the Prairie
Run subdivision is in violation of the City’s Ordinances. Accordingly, Gold Key’s request for
summary judgment should be denied.
C. The Developer is in violation of Paragraphs 10 and 13F of the Development
Agreement.
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:
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:
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. Gold Key, however, has failed to comply with these provisions.
Specifically, Gold Key has failed to comply with the Minnesota Pollution Control
Agency (“MPCA”) National Pollutant Discharge Elimination System (NPDES) storm water
8
permit. Aff. Lani Leichty, ¶ 6 (May 4, 2007). The NPDES permit requirements state storm water
ponds (or wet sedimentation basins) must have a permanent water volume of 1800 cubic feet of
storage below the pond’s outlet for every acre which drains into the pond. Id. The Prairie Run
north pond has 106,000 cubic feet of storage based upon 35 acres following into it. The north
pond, however, has approximately 214 acres flowing into it because Hedlund Engineering ran
the East/West drainage ditch through the pond. Therefore, the north pond is approximately
279,000 cubic feet too small and is in violation of NPDES permit requirements. Id.
Moreover, the Prairie Run ponds fail to provide safeguards for the prevention of
discharge of floating debris from the site. Thus, they also fail to meet this NPDES requirement.
Id.
Because the Prairie Run Plat fails to meet the MPCA’s NPDES requirements, Gold Key
is in violation of Paragraphs 10 and 13F of the Development Agreement. Therefore, it was
proper for the City to find Gold Key in default and for the City to stop construction on the site.
Accordingly, Gold Key’s Motion for Summary Judgment must be denied and the City’s must be
granted.
II. THE CITY CANNOT BE ESTOPPED FROM ENFORCING ITS ORDINANCES.
"[E]stoppel is available as a defense against the government if the government's wrongful
conduct threatens to work a serious injustice and if the public’s interest would not be unduly
damaged by the imposition of estoppel." Ridgewood Dev. Co. v. State, 294 N.W.2d 288, 293
(Minn. 1980) (quoting United States v. Lazy FC Ranch, 481 F.2d 985, 989 (9th Cir.1973)).
“Because courts must also consider the public interest in applying estoppel against the
government, a governmental entity will be estopped only if it committed affirmative misconduct.
Concept Properties, LLP v. City of Minnetrista, 694 N.W.2d 804, 821 (Minn. App. 2005). The
9
City’s act or omission must be equivalent to an affirmative misrepresentation rather than a mere
impression. Id. (citing Brown v. Minn. Dep't of Pub. Welfare, 368 N.W.2d 906, 910 (Minn.
1985) (holding that Department of Public Welfare was not estopped from collecting funds when
no affirmative representation was made but "impression" was left that doctor need not comply
with payment)).
Gold Key asserts the City has wrongfully placed a moratorium on the Prairie Run
subdivision. This, however, is incorrect. Rather, the City has found Gold Key to be in default of
the Development Agreement and has asserted its rights under the Development Agreement.4
Under the Development Agreement, the
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, ¶ 13F.
Here, the City determined the Plat does not comply with the applicable regulations and,
therefore, invoked its right to refuse to allow construction. This is entirely different than a
moratorium under Minnesota Statute § 462.355. See Minn. Stat. § 462.355, subd. 4 (2006)
(setting forth a specific procedure for an interim ordinance/moratorium where a City is
considering adopting or amending its comprehensive plan or official controls). Moreover, a City
is not estopped from enforcing its ordinances. See Frank’s Nursery Sales, Inc. v. City of
Roseville, 295 N.W.2d 604, 607 (Minn. 1980); Jasaka Company v. City of St. Paul, 309 N.W.2d
40, 44 (Minn. 1981); Prior Lake Aggregates, Inc. v. City of Savage, 349 N.W.2d 575, 580 (Minn.
4 It is undisputed Gold Key signed the Development Agreement and had its attorney
review a draft of the agreement. Exh. 35; Johnson depo., p. 47:12-16.
10
App. 1984). Nor is a City bound by a prior erroneous application of its zoning ordinance. See
Frank's Nursery, 295 N.W.2d at 607; Prior Lake Aggregates, Inc., 349 N.W.2d at 580.
Accordingly, Gold Key’s estoppel argument must be denied.
Furthermore, Minnesota courts have made it clear – a municipality is not an insurer of
construction. Hoffert v. Owatonna Inn Towne Motel, 293 Minn. 220, 199 N.W.2d 158 (Minn.
1972). Mandating that municipalities become insurers of construction is contrary to the purpose
underlying the enactment and enforcement of building codes and ordinances. See Masonick v. J.
P. Homes, Inc., 494 N.W.2d 910, 913 (Minn. App. 1993). A city does not act as an insurer when
it issues building permits. Hoffert, 293 Minn. 220, 199, N.W.2d 158. Rather, the issuance of
building permits, building codes and building inspections are devices used by cities to ensure
construction within the county meets the established standards. Id. at 160. Consequently, the
issuance of building permits “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.” Id. The purpose of such devices “is not to make
municipalities insurers of construction.” Masonick, 494 N.W.2d at 913.
Therefore, the fact the City approved the subdivision submission, does not mean Gold
Key can violate the City’s ordinances. Rather, Gold Key is required to follow the zoning
ordinance just like every other citizen or developer. Thus, Gold Key’s estoppel argument must
be rejected.
III. GOLD KEY HAS NOT ACQUIRED A VESTED RIGHT IN A SUBDIVISION
WHICH VIOLATES THE CITY’S ZONING AND SUBDIVISION ORDINANCES.
The vested rights doctrine in Minnesota was developed to deal with state control over
private development through the use of zoning provisions and building permits. See Hawkinson
v. County of Itasca, 304 Minn. 367, 231 N.W.2d 279 (1975). Generally, Minnesota courts have
11
held, “there is no vested right in zoning matters.” Naegele Outdoor Advertising v. Lakeville, 532
N.W.2d 249, 254 (Minn. Ct. App. 1995), pet. for review denied, (Minn. July 20, 1995); Concept
Properties, LLP v. City of Minnetrista, 694 N.W.2d 804 (Minn. App. 2005) (expectation to
develop property and payment of sewer assessment did not create vested right), rev. denied,
(Minn. July 19, 2005); Yeh v. County of Cass, 696 N.W.2d 115 (Minn. App. 2005) (building
permits did not convey any vested right in fully constructed buildings and docks, which violated
the ordinance), rev. denied, (Minn. Aug. 16, 2005). In Concept Properties, the court explained:
As a general rule, a right becomes vested when it has ‘arisen upon a contract, or
transaction in the nature of a contract, authorized by statute and liabilities under
that right have been so far determined that nothing remains to be done by the
party asserting it.’ Id. (quoting Yaeger v. Delano Granite Works, 250 Minn. 303,
307, 84 N.W.2d 363, 366 (1957)). A mere expectation, desire, or intention to
develop a property in a particular way is not sufficient to create a vested right.
Wermager v. Cormorant Township Bd., 716 F.2d 1211, 1215 (8th Cir. 1983). To
acquire a vested right, a developer must have progressed significantly with
physical aspects of the project or made a binding commitment to develop the
property. Id. The purchase of property or acquisition of a building permit fails to
create a vested right in development. Hawkinson v. County of Itasca, 304 Minn.
367, 376-77, 231 N.W.2d 279, 284 (1975); Kiges v. City of St. Paul, 240 Minn.
522, 538, 62 N.W.2d 363, 373 (1953). Likewise, neither a municipality’s
preliminary approval of a project nor a determination that a development plan
would be consistent with applicable land-use regulations will create a vested right.
Ridgewood Dev. Co., 294 N.W.2d at 294.
694 N.W.2d at 819-820. A property owner, however, does not acquire a vested right in an illegal
use. See City of Robbinsdale v. Lee, 584 N.W.2d 11, 15 (Minn. App. 1998).
Here, the Prairie Run subdivision does not comply with the City’s ordinances or MPCA’s
requirements. Therefore, Gold Key has not acquired a vested right in this illegal subdivision.
Moreover, Gold Key has suffered no unjust substantial detriment. As the Minnesota
Supreme Court explained:
[I]n zoning cases decided under the [vested rights] theory, we have held that the
mere possession of a building permit, the incurring of some expense and the
assumption of obligations preliminary to construction, such as excavation, create
12
no vested right. Kiges v. City of St. Paul, 240 Minn. 522, 538, 62 N.W.2d 363,
373 (1953). Neither do expenditures associated with the acquisition of the
property, the removal of trees, the grading of the land or excavation. Hawkinson
v. County of Itasca, 304 Minn. 367, 374-77, 231 N.W.2d 279, 283-84 (1975) [(no
vested right where project partially completed and property owner spent $80,000
on a project estimated at a total cost of $275,000)].
Jasaka Co. v. City of St. Paul, 309 N.W.2d 40, 44 (Minn. 1981) (no vested right in tower 90%
constructed under building permit).
Here, the City stopped the project during its infancy and prior to the final construction of
the homes and roadways. The mere fact Gold Key continued to sell lots and allow builders to
work on homes after the City issued its default letter does not create a vested right. Thus, Gold
Key’s motion for summary judgment must be denied.
CONCLUSION
For the foregoing reasons, Defendant City of Albertville respectfully requests this Court
deny Gold Key’s Motion for Summary Judgment.
Dated: June 13, 2023. 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