2000-07-25 Support of Plaintiff's Motion for Temp Restraining Order
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STATE OF MINNESOTA
DISTRICT COURT
COUNTY OF WRIGHT
TENTH JUDICIAL DISTRICT
Leuer-Munsterteiger Properties, Inc.
Court File No.
Plaintiff,
v.
MEMORANDUM OF LAW IN
SUPPORT OF PLAINTIFF'S MOTION
FOR A TEMPORARY RESTRAINING
ORDER
City of Albertville,
Defendant.
FACTS
The facts are as set forth in the Affidavit of Ralph Munsterteiger and Michael Leuer, on file
herein.
ISSUE
Whether Plaintiff is entitled to a temporary restraining order compelling Defendant to sign
the final plat for Kollville Estates and release the final plat to Plaintiff for recording with the office
of the Wright County Recorder.
ANALYSIS
The five factors to be considered by the Court when determining whether to grant a
temporary restraining order are set forth in Dahlbet:g Brothers, Inc. v. Ford Motor Co., 137 N.W.2d
314,321 to 322 (Minn. 1965). Those factors are as follows:
1. The nature and background of the relationship between the parties before the dispute
giving rise to the request for relief;
2. The harm to be suffered by the Plaintiff if the TRO is denied, and the harm to be
suffered by Defendant if the TRO is granted;
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3. The likelihood of success on the merits;
4. The administrative burdens which will be imposed upon the Court in enforcing the
TRO; and,
5. The public interest.
1. The Nature and Background of the Relationship Between the Parties.
This factor favors granting the TRO. Plaintiff is a developer who has applied to Defendant
for approval, pursuant to Minnesota Statute and Defendant's ordinances, of a final plat for a
development known as Kollville Estates. The application for approval of the plat ofKollville Estates
was filed by Plaintiff in about November, 1999. Since then Plaintiff has had the matter reviewed
and considered by Defendant, by and through Defendant's Planning Commission, its City Council,
and its independent Planner. Numerous hearings and discussions have been held, so that the plat of
Kollville Estates would meet the requirements of Defendant's ordinances. The Kollville Estates plat
meets all of Defendant's ordinance requirements, which Defendant itself recognized when it gave
final approval to the plat at its June 5, 2000 City Council meeting.
2. Relative Harm to the Parties.
If the TRO is not granted, Plaintiff will suffer irreparable harm. See Affidavit of Ralph
Munsterteiger and Michael Leuer. Ifthe TRO is not granted, and Defendant continues to insist upon
a requirement that no townhomes located within the Kollville Estates plat may be leased (with a
limited narrow exception) before Defendant will sign and allow Plaintiff to record the final plat,
Plaintiffwill be unable to develop the property as intended, and in accordance with the substantial
investment of time and money Plaintiffhas already incurred in the course of obtaining approval for
development. Moreover, Plaintiff is scheduled to close on its final acquisition of the property on
Thursday, July 27, 2000. At that time Plaintiff also intends to close on the completion of its
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financing for construction of public improvements within the plat. Those closings are dependent
upon the ability to obtain from Defendant and record with the office of the Wright County Recorder
the final plat for the Kollville Estates development. Defendant has refused to sign and release the
Plat for recording unless various documentation (including the Development Agreement and the
homeowner's association documents associated with the townhouse development of Kollville
Estates) include language prohibiting the leasing of any townhomes located within the Kollville
Estates plat (with the narrow exception of allowing a mortgage lender to lease a townhome unit for
not more than 60 days following the acquisition of the townhome unit via a statutory foreclosure
process). Plaintiff cannot accept such a restriction which prohibits leasing, as that would then
destroy the economic viability of this residential townhome development. The development is
geared toward entry level buyers who will as a matter of necessity substantially rely upon the
availability of FHA insured mortgage financing in order to purchase a townhome unit. The inclusion
of a restriction prohibiting the leasing ofthe townhome units will render the project ineligible for
FHA insured financing. See Affidavit of Ralph Munsterteiger and Michael Leuer.
By its application for a TRO, Plaintiffis requesting that Defendant allow the plat to be signed
by its appropriate officers and released for recording with the office ofthe Wright County Recorder
immediately. That would allow the Plaintiff to complete its closing on the purchase of the property
and acquisition of financing necessary to construct the public improvements. Moreover, because
there is only approximately 3 to 3-112 months left to the "construction season" it is imperative that
Plaintiff be able to proceed promptly with construction of improvements so as to complete those
improvements prior to the end of the construction season in the year 2000. See Affidavit of Ralph
Munsterteiger and Michael Leuer. The issue as to whether Defendant has the right to include in the
townhome homeowners association documents for this project a restriction prohibiting leasing can
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be determined at a later date following a trial on the merits of the issue. There is no reason in the
interim to refuse to allow the plat itself to be recorded when the plat meets all of Defendant's
ordinance requirements.
If the TRO is granted, Defendant will suffer no harm. The issue as to whether it is proper
to include a restriction prohibiting leasing oftownhome units can be determined at a later date, and
if Defendant ultimately prevails on the issue, such a restriction can be added to the documentation
associated with this plat. However, as Defendant itself clearly recognizes, the plat itself meets all
of Defendant's ordinance requirements and there is no reason sufficient to support Defendant's
refusal to allow the plat to be released and recorded at this time.
3. Likelihood of Success on the Merits.
This factor substantially weighs in favor of Plaintiff, and clearly supports the issuance of the
TRO. Defendant has already approved the final plat for Kollville Estates at its June 5, 2000 City
Council meeting. See Affidavit of Ralph Munsterteiger and Michael Leuer and attachments thereto,
all of which are on file in this action. Defendant's attempt to add a new condition (i.e. the restriction
prohibiting the leasing of any townhome unit) at a City Council meeting on July 17, 2000, is
arbitrary and unreasonable, both on the merits, and especially when taking into account that
Defendant had already approved the final plat ofKollville Estates without such a prohibition against
leasing.
Defendant is a "statutory city" meaning that it is a municipal corporation that has not adopted
a home rule charter as provided under Minnesota law. See Minn. Stat. ~41O.015 and Country Joe,
Inc. v City of Eagan, 560 N. W.2d 681 (Minn. 1997). As a statutory creation, Defendant has no
inherent powers beyond those "expressly conferred by statute or implied as necessary in aid of those
powers which have been expressly conferred." Mangold Midwest Co v Village of Richfield, 274
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Minn. 347, 357, 143 N.W.2d 813, 820 (1966). Certainly Defendant has the right to impose
requirements and conditions upon its approval of development plats. However, where those
conditions and ordinance requirements have been met, denial of the requested action is arbitrary as
a matter of law. See Zylka v. City ofCl}'stal, 283 Minn. 192, 167 N.W.2d 45 (1969). Where a
subdivision ordinance such as Defendant's in this case specifies standards to which a proposed plat
must conform, it is arbitrary as a matter of law to deny approval of a plat which complies in all
respects with the subdivision ordinance. National Capital Corp v Village ofInver Grove Heights,
301 Minn. 335,222 N.W.2d 550 (Minn. 1974). Defendant clearly has recognized that Plaintiff has
met all of its ordinance requirements by granting the final plat approval at the June 5, 2000 City
Council meeting. (As stated in the Affidavit of Ralph Munsterteiger and Michael Leuer on file
herein, the other conditions not relevant to the leasing issue which is the subject of this litigation
have all been complied with or are routine, perfunctory type of requirements that Plaintiffhas or will
comply with.) See Good Value Homes, inc. v City of Eagan, ,410 N.W.2d 345 (Minn. App. 1987),
where the court determined that the City's denial of a preliminary plat approval is arbitrary and
capricious where the plat met all of the City's code requirements.
Not only is it arbitrary and unreasonable for Defendant to now try to impose a new condition
upon the plat approval sought by Plaintiff for Kollville Estates when Defendant has already approved
the final plat without this new condition at Defendant's City Council meeting on June 5, 2000, the
new condition that Defendant seeks to impose - that is, a prohibition against leasing of the townhome
units - is itself arbitrary and unreasonable and beyond the scope and authority of Defend ant. Plaintiff
submits that Defendant does not have any legal authority whatsoever to prohibit the leasing of
private property. Defendant has the right to regulate, by its zoning and subdivision ordinances, those
matters granted to Defendant by the enabling statutes. Minn. Stat. ~462.358 sets forth in Subdivision
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2a the standards and requirements that regulations may address including, for example, size,
location, grading, improvements of lots, structures, public areas, streets, roads, etc. Nowhere in
Minn. Stat. ~462.358 does it give Defendant the authority to prohibit the leasing of private property.
While Defendant has the right to control the use ofland, Defendant does not have the right to control
the ownership ofland. McQuillan, Municipal Corporations, 3rd Edition Revised, Section 25.119
and cases cited therein. Once Plaintiffs townhome plat has met all of Defendant's requirements for
approval, whether an individual resides in the townhome or decides to lease it to a friend, relative,
or complete stranger, is not within the authority of Defendant to regulate. In fact, the goal Of,
Defendant appears to be to restrict the ability of the townhomes ofKolleville Estates to be sold to I
lower income individuals. (See statements made by Defendant's City Council member as set forth I
in the Affidavit of Ralph Munsterteiger and Michael Leuer). Such a goal would in and of itself be
unlawful for a number of reasons, not the least of which is that such a goal is contrary to the express
purpose of the very statute which gives Defendant the right to regulate subdivisions in the first place.
Minn. Stat. ~462.358, Subd. la states in pertinent part that the purpose and authority for this statute
is to protect and promote the public health, safety and welfare and "... to promote the availability of
housing affordable to persons and families of all income levels...".
In summary then, it is highly likely that Plaintiffwill succeed on the merits of this dispute
for two significant reasons:
1. Defendant has already approved the final plat of Kollville Estates at a City Council
meeting on June 5, 2000 without a condition prohibiting the leasing oftownhome
units, and thus Defendant's attempt to add that condition at a City Council meeting
on July 17,2000, is not enforceable and is arbitrary and unreasonable as a matter of
law; and,
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, .
2. The new condition Defendant seeks to impose (the prohibition against leasing) is not
within the authority of Defendant as granted by the enabling statute which provides
Defendant its authority to regulate the subdivision of land and in fact is contrary to
the express authority and purpose of that statute.
4. Administrative Burden.
The granting of a TRO in this case will not create any administrative burden upon the court.
It would merely require Defendant to act in a manner that is consistent with the action Defendant
itselftook at its City Council meeting on June 5, 2000 when it granted final plat approval for the plat
ofKollville Estates. Once the plat has been recorded with the Wright County Recorder, there will
be no further administrative duty or action necessary. Therefore, this factor favors granting the TRO.
5. Public Interest.
This final factor also weighs in favor of granting the TRO. It is clearly against the public
interest for a city to enact regulatory controls as allowed by statute, take official action finding that
an applicant for plat approval has met those regulatory controls, and then over a month later try to
impose a new condition that in and of itself is arbitrary, unreasonable, and unlawful in that it is
beyond the authority of Defendant to impose. The public interest demands that Defendant act in a
manner that is consistent with its own ordinance requirements, consistent with its own prior official
action, and consistent with state law.
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CONCl,USION
All of the factors weigh in favor of the issuance of a temporary restraining order which
merely would require that Defendant act in a manner consistent with the final plat approval it
previously granted for the plat ofKolleville Estates, and allow the plat to be released to Plaintiff for
recording with the office ofthe Wright County Recor
Dated: ? (;51 C4
avid . Lenhardt (62169)
100 Central- PO Box 35
St. Michael, MN. 55376
Telephone: 763-497-3099
Attorneys for Plaintiff
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