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2000-07-25 Complaint '. STATE OF MINNESOTA COUNTY OF WRIGHT DISTRICT COURT TENTH JUDICIAL DISTRICT Leuer-Munsterteiger Properties, Inc. Plaintiff, Court File No. v. COMPLAINT City of Albertville, Defendant. Plaintiff, as and for its Complaint against Defendant, states and alleges as follows: 1. Plaintiff is a Minnesota corporation engaged in the business of real estate development. 2. On or about September, 1999, Plaintiff entered into a Purchase Agreement whereby the Seller, Sylvester Kolles, agreed to sell to Plaintiff certain property located in the City of Albertville, Wright County, Minnesota, legally described as set forth on Exhibit A attached hereto and made a part hereof ("Property"). 3. Plaintiff acquired an interest in the Property with the intention of developing the Property for residential townhomes. 4. On or about November, 1999, Plaintiff filed an Application with Defendant for the approval of a plat for the development of the Property into seventy-three (73) townhomes in the initial phase, with Outlots to be developed in future phases. The first phase of the development of the Property is known as: "Kollville Estates" (hereafter "Townhome Project"). 5. Plaintiffhas expended substantial amounts oftime and financial resources in working with Defendant to obtain Defendant's approval of the Townhome Project. 6. Because ofthe nature of the Townhome Project, it is imperative that the Townhome Project be eligible to receive FHA insured financing in order to make the Townhome Project economically viable. 7. Throughout Plaintiffs discussions with Defendant, by and through Defendant's Planning and Zoning Staff, Planning and Zoning Commission and City Council, Plaintiff has made Defendant aware of the importance that the Townhome Project be eligible to receive FHA insured financing. 8. Since early on in the Townhome Project approval process engaged in between Plaintiff and Defendant, Defendant has indicated that Defendant's ultimate approval of the Townhome Project would include a provision stating that any leases of individual townhomes would be subject to a licensing procedure promulgated by Defendant. 9. On April 3, 2000, Defendant granted preliminary approval of the plat of the Townhome Project subject to a condition that any townhome homeowners association documents relevant to the Townhome Project include language requiring that a license be obtained from Defendant prior to the leasing of any individual townhome unit. 10. Plaintiff has complied with all requirements and conditions imposed by state law and Defendant's ordinances for the approval of the Townhome Project. 11. On June 5, 2000, Defendant moved and passed its Findings of Fact and Decision Granting Final Plat Approval to the Townhome Project with the condition (among other conditions not relevant to this litigation) that any townhome homeowners association documents for the Townhome Project include language requiring that a license be obtained from Defendant prior to the leasing of any townhome unit. 12. In reasonable reliance upon the actions taken by Defendant in the preliminary and final approval of the plat of the Townhome Project, which actions were consistent with the course of 2 discussions and proceedings engaged in by Plaintiff and Defendant for the past approximately nine (9) months, Plaintiff has scheduled the final closing on its acquisition of the Property and commencement of construction of required public improvements (such as, sanitary sewer, water and utilities) for the Townhome Project. 13. At a meeting held by Defendant's City Council, on July 17, 2000, Defendant suddenly passed a motion stating that the leasing of any townhome unit included in the Townhome Project is prohibited except for the limited right of a mortgage lender which has foreclosed on a townhome unit to lease the townhome unit for not more than sixty (60) days following acquisition ofthe townhome unit through the mortgage foreclosure process. 14. The action taken by Defendant on July 17,2000, is not consistent with the final plat approval granted by Defendant for the Townhome Project on June 5, 2000. 15. Defendant's purported attempt to prohibit all leasing oftownhome units within the Townhome Project will cause the Townhome Project to become ineligible for FHA insured financing and as a result thereof, the Townhome Project will not be economically viable in the real estate market. 16. Although Plaintiff has objected to Defendant's purported attempt to prohibit the leasing of all townhome units in the Townhome Project, Defendant has nevertheless failed and refused to sign off on the final plat ofthe Townhome Project and release the final plat to Plaintiff for recording in conjunction with Plaintiffs closing on its acquisition ofthe Property. 17. If Defendant does not release the final plat to Plaintiff for recording, Plaintiff will either be unable to close on its acquisition of the Property and/or Plaintiff will be unable to complete the construction of public improvements within the Townhome Project during the remaining 2000 construction season. 3 18. If Plaintiff is unable to close on its acquisition of the Property and/or is unable to complete construction of the public improvements for the Townhome Project during the remaining construction season of the year 2000, Plaintiff will suffer a substantial financial loss in an amount exceeding Fifty Thousand and 00/100 Dollars ($50,000.00). COUNT I PERMANENT INJUNCTION 19. Plaintiff restates and realleges paragraphs 1 through 18 above. 20. Defendant's action taken on July 17,2000, is contrary to the provisions of Minnesota law, Defendant's own ordinances, and the final plat approval for the Townhome Project granted by Defendant on June 5, 2000, and therefore said action is arbitrary and unreasonable. 21. A permanent injunction should be issued in favor of Plaintiff and against Defendant, prohibiting and restraining Defendant from requiring that the Townhome Project homeowners association documents and the Development Agreement to be entered into between Plaintiff and Defendant include a provision prohibiting the leasing of any townhome unit within the Townhome Project. COUNT II TAKING WITHOUT JUST COMPENSATION 22. Plaintiff restates and realleges paragraphs 1 through 21 above. 23. The action taken by Defendant prohibiting Plaintiff and its successors and assigns, from leasing any townhome unit located within the Townhome Project impairs and diminishes Plaintiffs rights to its Property and constitutes a taking of Plaintiffs Property without just compensation in violation of Article 1, Section 13, and Article 13, Section 4, of the Minnesota Constitution, and the Fifth and Fourteenth Amendments to the U.S. Constitution. 4 24. As a result of Defendant's taking of Plaintiffs Property, Plaintiff will suffer damages in an amount in excess of Fifty Thousand and 00/100 Dollars ($50,000.00) Dollars, to be more specifically ascertained at a trial. COUNT III VIOLATION OF DUE PROCESS 25. Plaintiff restates and realleges paragraphs 1 through 24 above. 26. Defendant has taken Plaintiff's Property without due process oflaw, in violation of Article 1, Section 7, of the Minnesota Constitution, the Fifth and Fourteenth Amendments to the U.S. Constitution, and Minnesota Statute Section 117.011 et seq. 27. As a result of Defendant's taking of Plaintiffs Property without due process oflaw, Plaintiff has suffered damages in an amount in excess of Fifty Thousand and 00/100 Dollars ($50,000.00) to be more specifically ascertained at a trial herein. WHEREFORE, Plaintiff prays for the following relief: 1. A permanent injunction against Defendant, restraining and enjoining Defendant from prohibiting the leasing of any townhome unit within the Townhome Project. 2. Judgment in favor of Plaintiff and against Defendant for Defendant's unlawful taking of Plaintiffs Property without due process and just compensation, in an amount in excess of Fifty Thousand and 00/100 Dollars ($50,000.00), to be more specifically ascertained at a trial herein. 3. Judgment in favor of Plaintiff and against Defendant for Plaintiffs reasonable attorneys fees . 5 Dated: 0/ Jt7/t;i avid J. enhardt (62169) 100 ast entral- PO Box 35 St. Michael, MN. 55376 Telephone: 763/497-3099 Attorneys for P . . 4. The undersigned hereby acknowledges witness fees may be awarded pursuant to inn. Stat. 9549.211, to th allegations in this pleading are asserted. 6