2007-05 Summary Judgment Reply MemomorandumSTATE 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 REPLY MEMORANDUM OF LAW IN
SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT
______________________________________________________________________________
INTRODUCTION
Contrary to Gold Key’s, Hedlund Engineering’s and T/C Homes’1 assertions, the Prairie
Run Subdivision does not comply with the City’s Subdivision and Zoning Ordinances or the
Development Agreement. More specifically, the evidence shows the Subdivision fails to meet
building elevation requirements, drainage requirements and State regulations. Therefore, the
City is entitled to summary judgment on these issues. The City is also entitled to summary
judgment because it is not estopped from enforcing its ordinances; the public duty doctrine bars
T/C Homes’ negligence claims; there is no valid misrepresentation claim and the City is entitled
to immunity on the tort claims.
ARGUMENT
I. THE CITY IS 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.
Gold Key’s response to the City’s Motion for Summary Judgment is to claim it offers no
factual support of its position. This is incorrect. The City submitted an extensive record and
provided cites to specific documents which indicate Gold Key is in default of the Development
Agreement, the City’s Ordinances, and State regulations. See Nafstad depo., pp. 85:13-14;
88:11-89:20. For example, even though Hedlund Engineering attempts to downplay his
testimony or argue it only applies in rare circumstances, the undisputed evidence shows he
1 While one might assume these parties have conflicting interests due to the Direct Claims,
Cross Claims and request for costs against each other, they have decided to enter into a Joint
Defense Agreement and have unified their resources to oppose the City’s Motion for Summary
Judgment. Hedlund depo., pp. 10:11 – 17:11.
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agrees the Prairie Run subdivision is in violation of the City’s ordinances. See Hedlund depo.,
pp. 178-79. These rare circumstances (i.e. 100-year events) are very important events. So much
so, that the City ordinances require all storm water ponds to be designed to handle 100-year
events. The Prairie Run ponds, however, fail to meet these standards.
Additionally, the City’s summary judgment motion should be granted because: 1) the
Subdivision Ordinance requires the Developer to determine the 100-year flood plain for its storm
water management plan, which it did not do; and 2) the Prairie Run subdivision violates other
environmental regulations.
A. The Developer was required to determine the 100-year flood plain for its
Storm Water Pollution Control Plan.
The City is entitled to summary judgment because Gold Key was 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.
Exh. 47, pp. 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
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Run subdivision is in violation of the City’s Ordinances because of it. Accordingly, Gold Key’s
request for summary judgment should be denied.
B. 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. The record, however, demonstrates Gold Key has failed to comply with these
provisions.
For example, Gold Key has failed to comply with the Minnesota Pollution Control
Agency (“MPCA”) National Pollutant Discharge Elimination System (NPDES) storm water
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, which was designed with the assumption that only
35 acres flow into it. The north pond, however, has approximately 214 acres flowing into it
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because Hedlund Engineering ran the East/West drainage ditch right through the pond.
Therefore, the north pond is approximately 279,000 cubic feet too small and is in clear violation
of NPDES permit requirements. Id. There is no evidence in the record of compliance with this
important water quality standard because Hedlund Engineering simply miscalculated the number
of acres flowing into the pond.
Moreover, the Prairie Run ponds fail to provide safeguards for the prevention of
discharge of floating debris from the site. Again, there is no evidence in the record of
compliance with this significant requirement. This represents another significant violation of the
NPDES permit, which Gold Key represented to the City was in compliance. 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, the City’s Motion for Summary Judgment should be granted.
II. THE CITY CANNOT BE ESTOPPED FROM ENFORCING ITS ORDINANCES.
Contrary to Gold Key’s and T/C Homes’ assertions:
[t]he law in Minnesota is clear that administration of zoning ordinances is a
governmental not a proprietary function, and the municipality cannot be estopped
from correctly enforcing the ordinance even if the property owner relied to his
detriment on prior city action. W.H. Barber Co. v. City of Minneapolis, 227
Minn. 77, 34 N.W.2d 710 (1948); State ex rel. Howard v. Village of Roseville,
244 Minn. 343, 70 N.W.2d 404 (1955); The Alexander Co. v. City of Owatonna,
222 Minn. 312, 24 N.W.2d 244 (1946).
Frank's Nursery Sales, Inc. v. Roseville, 295 N.W.2d 604, 607 (Minn. 1980). Furthermore, the
City is not bound by a prior erroneous application of its zoning ordinance. See id., 295 N.W.2d
at 607.
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Here, the City determined the Prairie Run subdivision violated the City’s ordinances. See
Exh. 99. Whether or not the City gave prior approval to the project, the City still cannot be
estopped from enforcing its Subdivision and Zoning Ordinances. Id.
Moreover, the City is not an insurer of the Prairie Run project. Gold Key and T/C Homes
in opposing the City’s estoppel argument suggest estoppel should apply because the City
approved the plans and “Gold Key and the builders have spent millions of dollars in reliance
upon the same.” Gold Key’s Memorandum in Opposition, p. 14. First of all, the law in
Minnesota is clear – estoppel is not a basis for recovering damages from the City. See Snyder v.
City of Minneapolis, 441 N.W.2d 781, 790-91 (Minn. 1989) (estoppel does not furnish a basis for
damages and is generally used as “a shield, not a sword.”). 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).2 Therefore, Gold Key’s and T/C Homes’
estoppel arguments must be dismissed.
Gold Key, T/C Homes and Hedlund Engineering also all refer to a “moratorium”
imposed by the City. The City, however, has not imposed a moratorium pursuant to Minnesota
Statutes § 462.355, subd. 4. Rather, the City found Gold Key in default of the Development
Agreement and has asserted its rights under the Development Agreement.3 There has been no
moratorium/interim ordinance passed. Contra Semler Construction, Inc. v. City of Hanover, 667
N.W.2d 457 (Minn. App. 2003). Therefore, any claim Minnesota Statutes § 462.355, subd. 4
prevents the City from enforcing its ordinances should be rejected.
2 This argument has been previously argued in the City’s Memorandum in Support of Its
Motion for Summary Judgment and in its Memorandum in Opposition to Gold Key’s Motion for
Summary Judgment.
3 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.
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Finally, any claim Minnesota Statutes § 462.358, subd. 3c prohibits the City from
enforcing its ordinances should also be rejected because this statute applies to amendments to the
City’s comprehensive plan or official controls. The City is not arguing the amendment to the
comprehensive plan or official controls should be applied to the subdivision. Rather, the City
has stated the Prairie Run subdivision failed to comply with the City’s ordinances and State’s
regulations in place at the time it was approved by the City. Accordingly, the City may enforce
its ordinances and require the subdivision to come into compliance.
III. T/C HOMES’ NEGLIGENCE CLAIM FAILS BECAUSE THE CITY OWES IT
NO DUTY.
The City of Albertville is entitled to summary judgment on T/C Homes’ negligence claim
because it owes T/C Homes no duty. Under negligence law, “general duties owed to the entire
public rather than a specific class of persons cannot form the basis of a negligence action.” See
Cracraft v. City of St. Louis Park, 279 N.W.2d 801, 804 (Minn. 1979). Moreover, the enactment
of a general ordinance under which a municipality assumes a public duty does not, without more,
create a duty to an individual when the municipality acts pursuant to that ordinance. Id. at 806
(applying doctrine to fire inspection conducted pursuant to ordinance).
In opposing the City’s duty argument, T/C Homes relies upon Gilbert v. Billman, 371
N.W.2d 542 (Minn. 1985). This reliance, however, is misplaced. In Gilbert, the county assumed
a direct duty to the plaintiffs by designing their septic system and requiring that it be constructed
in accordance with specific plans that were provided. Id. at 546-47; see also Sota Foods, Inc. v.
City of Park Rapids, 497 N.W.2d 276 (Minn. App. 1993) (fact dispute on liability where the city
designed the project). In this case, the City did not design the Prairie Run subdivision, draw the
Prairie Run Plat documents or conduct the hydrology studies on the proposed storm water ponds.
Rather it required Gold Key and its engineer to design the subdivision to meet the design
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standards set forth in its Subdivision and Zoning Ordinance. See Danielson v. City of Brooklyn
Park, 516 N.W.2d 203, 206 (Minn. App. 1994) (finding no direct duty where the city, pursuant
to an ordinance, ordered plaintiff to remove a tree that it incorrectly diagnosed as diseased);
McNamara v. McLean, 531 N.W.2d 911, 916 (Minn. App. 1995) (dismissing negligence case
where there was no evidence the county had designed the septic system or drew any sketches in
support of the proposed design); Universal Circuits, Inc. v. K&R Design, Ltd., No. C3-96-914,
1996 Minn. App. LEXIS 1190 at * 8 (finding the Gilbert theory does not apply where the city
did not design the project, rather it only required the plans to comply with its interpretation of the
applicable codes) (unpublished, attached). Therefore, T/C Homes’ negligence claim must be
dismissed.
IV. 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
dismissed because the photographs T/C Homes discusses were available to the public. 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.
Here, T/C Homes claims the City withheld or did not make available photographs of the
2003 flood. This is incorrect. Mr. Sutherland, who took the photographs, stated the photographs
were available to anyone who would have asked. Sutherland depo., p. 17:13-17. Neither Gold
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Key nor Hedlund Engineering ever sought this information.4 Moreover, the flooding of the
property was a matter of common knowledge. No one can seriously argue Gold Key (or its
engineer) was not aware of the flooding of its own property. In short, the purported
“unavailability” of photographs of flooding on the property is insufficient to support a
misrepresentation claim.
V. 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 the Prairie Run development is in default of the Development
Agreement.
A. Statutory Immunity.
For more than 30 years, Minnesota courts have consistently determined municipalities are
immune from liability for the issuance of zoning permits and approvals. See Anderson v. City of
Minneapolis, 178 N.W.2d 215, 217 (1970) (applying immunity to issuance of a building permit
by city employee where employee had to judge whether plans constituted permissible use of
property); Vrieze v. New Century Homes, 542 N.W.2d 62, 66 (Minn. App. 1996) (determining
the enforcement of a building permit and code provisions were entitled to immunity); Masonick
v. J.P. Homes, Inc., 494 N.W.2d 910, 913 (Minn. App. 1993) (determining the activity of
building inspector in issuing a certificate of occupancy was protected discretionary function);
Wilson v. Ramacher, 352 N.W.2d 389, 393 (Minn. 1984) (applying immunity to issuance of fill
permits and to approval of plat); Universal Circuits, Inc., No. C3-96-914, 1996 Minn. App.
4 This failure to do any due diligence or to request all information from the public entities
is consistent with Gold Key’s and Hedlund Engineering’s approach to the project. Specifically,
the undisputed evidence shows Gold Key and Hedlund Engineering failed to research the
property, the public facilities abutting the property or the City’s ordinances. See Hedlund depo.,
pp. 48:7-9; 55:4-14; Johnson depo., p. 42:5-20.
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LEXIS 1190 (holding the city’s interpretation of the code and determination of whether the
proposed plan complied with the code is the very conduct the Anderson court intented to
protect). In Snyder, the Minnesota Supreme Court reaffirmed the general rule that the issuance
of zoning permits and approvals is a protected discretionary function. 411 N.W.2d at 787. The
Court stated the primary consideration in determining whether statutory immunity applies is
whether the legislature intended to immunize the particular government function which gave rise
to the tort action. Id. (citation omitted). The Court noted:
More than eighteen years have passed since our decision in Anderson, ample time
for the legislature to have corrected any misapprehension this court may have
entertained in Anderson regarding legislative intent to protect municipalities from
liability in the issuance of building permits. Accordingly, we have no occasion to
question the continuing viability of Anderson.
Id.
Statutory immunity is absolute and is not qualified. See Minn. Stat. § 466.03, subd. 6
(municipality is entitled to immunity, “whether or not the discretion is abused.”); Janklow v.
Minnesota Bd. of Examiners for Nursing Home Adm’rs, 552 N.W.2d 711, 718 (Minn. 1996).
Therefore, even if the City’s decision regarding the ordinance and State regulation violations is
“incorrect” or even somehow an “abuse” of that discretionary judgment, the City is entitled to
statutory immunity for T/C Homes’ claims.
B. Official Immunity.
Based upon the cases cited by T/C Homes and the arguments raised by T/C Homes, T/C
Homes apparently is only opposing the City’s request for the application of statutory immunity.
Because T/C Homes has not raised any opposition to the City’s request for the application of
official immunity, the City is entitled to summary judgment. See Hunt v. IBM Mid America
Employees Federal Credit Union, 384 N.W.2d 853, 855 (Minn. 1986) (holding summary
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judgment is proper when the nonmoving party fails to oppose the motion by presenting specific
facts which create a genuine issue of fact.)
Even if T/C Homes had properly addressed the official immunity doctrine, the City
would still be entitled to summary judgment. If a public official is immune from liability under
the official immunity doctrine, the City as the employer is likewise immune. See Pletan v.
Gaines, 494 N.W.2d 38, 41-42 (Minn. 1992). To deny the City immunity would eviscerate the
very reason for immunity, which is to shield an employee’s exercise of independent judgment
from civil adjudication. Id. at 42.
Official immunity is distinguishable from the narrower doctrine of statutory immunity.
While both doctrines are analyzed in terms of whether discretion is involved, official immunity
and statutory immunity are based on entirely different rationales. Statutory immunity protects
policy-making activities, see Snyder, 441 N.W.2d 787, while official immunity is intended to
insure the threat of potential liability does not unduly inhibit the exercise of discretion required
to public officers in the discharge of their duties. See Watson by Hanson v. Metropolitan Transit
Com’n, 553 N.W.2d 406, 414 (Minn. 1996). Discretion has broader meaning in the context of
official immunity. Id.
A public official charged by law with duties calling for the exercise of judgment or
discretion is not personally liable for damages unless guilty of a willful or malicious wrong. Id.
In defining acts protected under official immunity, courts have distinguished between
discretionary duties (protected) and ministerial duties (not protected). A duty is ministerial
“when it is absolute, certain and imperative, involving merely execution of a specific duty arising
from fixed and designated facts.” Id.
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Here, the actions and decision of the city staff in determining the original Prairie Run
documents complied with the City’s ordinances and State regulations and the later decision the
documents did not comply with the ordinances or regulations are discretionary. Therefore, the
City is entitled to the protection of official immunity for the discretionary decision to halt
building in the development until compliance with all applicable rules and regulations is
achieved.
CONCLUSION
For the foregoing reasons listed above and contained in its Memorandum of Law in
Support of Summary Judgment and Memorandum of Law in Opposition to Gold Key’s Motion
for Summary Judgment, Defendant City of Albertville respectfully requests this Court dismiss
Gold Key’s and T/C Homes’ claims.
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