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Home My WebLink About1998-08-05 PACKET 13.A.REQUEST OF CITY COIJNCIL AG7�0(d COUNCiL AGEt�DA MEETIPdG ITEA�t # DAl'E 8/5/98 ' . PREPARED BY: Community Development Kim Lindquist ORIGIfVATING 13Er^AR i a'ViEi�i i S i AFr= RU i ri0F a.��a«��.�.��.�tr�tr�a.s�.atr��...��aa«�..�..� COUNCIL ACTION REQUEST Closed session: Legal update : l ' i : � � •''• ADVISORY COMMISSION ACTION �• ■• : • ■- : .- ■ -�- . . . . . ■ •. • • . , - ■ ..�- �• �_ � REVIEWED 0 ❑ 0 0 ❑ ❑ ❑ ACTUAL AfVI0UN7 APPROVED ❑ ❑ ❑ 0 ❑ ❑ ❑ DENIED ❑ ❑ ❑ ❑ ❑ ❑ ❑ � MEiVIQ/LETTER:1} Memo from Kim Lindquist dated 7/29/98 2} Letter fram Sharna Wahlgren to Karen Cole dated 7/24/98 ❑ ❑ � � - • � •-r � � 'r. : + �� • + �i l • •' - � � .�- •.. -• �. �: ! � • a• •.'-• • •, ,� ., �. � i 7 �� `�i' City Adminis4rator Clate «�«��A¢��.��.��m�.�..a��..��.�>��tr4atrasm �OIJNCIL ACl°IC7N TAI4EtV: [] P,PF'RQA�ED ❑ ��f�c� ❑ ��rw�� F:1G&20UPSWLA,NNIPlG\99981CI'TVCOUNVEBCQ set4lemenl nffer-cover.d� 11 ��_'�_ I . TO: Honorable Mayor and City Councii Ryan Schroeder, City Administrator FROM: Kim Lindquist, Community Development Director DATE: July 29, 1998 RE: JEBCO Lawsuit Attached is a memorandum from Karen Cole of Kennedy & Graven regarding the JEBCO lawsuit. The plaintiffs have made an offer to the City that is outiined in fhe memo. Basically, they are requesting that the City pay them $52,116.23 as a settlement for the lawsuit. As discussed in Ms. Cole's letter, the request appears high, especially since the complaint is asking for either a refund or expenditure of funds on storm water infrastructure. Staff has discussed with Bonestroo a number of improvement options which would permit expenditure of the funds, wouid directly benefit the properties which had paid into the storm water area charge fund, and would further implementation of the City's storm water management plan. In discussions with the City Administrator, staff cannot support settlement of the case. Along with the cost of settlement, the case has a dramatic impact upon the current opera4ions of the City from a development standpoint. Tne plaintiffs are requesting a refund of area charges even though they signed an assessment waiver and the development agreement, which also reinforces the assessment waiver. If the assessment waiver is not an adequate protection to the City against request for refunds of specialiy assessed items, tne City will have a difficuit time aiding in the financing of future development projects. Ju1-28-98 09:E6pm From-KeNNEDY & GRAVEh 47o P,Ilsnu�y Ccn[=c ?OD Su�,�ch Sud; Scrc�c M�nn=�po�� Mn 554D2 (G't2) 337-9300 cr[cphnpc (61'1) 337-93t0 fa�c �-m1�F arryeC�kcnnedygrav�n.con� 6123378310 T-76B P 02/�6 F-?52 KwRkN R- CQL� .9ROrney at Law (612)337-9212 kcole�k� unedy-� qv en.com Iuiy 28, 199& CON�IpENTIAi. .4TTORltiEYtCLIENT PR! VILEGEA YTA FACSIMII�E Kim Lindquist City of Cottage �Giova 1a16 BQth Street So Cottagc Crrove, M?�I SSU16 Ro6ett We�starad Berkley Risk Setvjces,tnc. 145 tiniversityAvenue Wesc St. Paul MN » 1U3-2�� RE: 3ebcu v. City of Cattage Grpve �RS File Na.: 11019773 pear Kim and BoU: We Teceived The attached offer of judgtnent frorn our opponents in the Jebco case. This ofYer is open until August 6, 1998. The offer was mas3e under rule 68 of the rule� of civii procedure Rule 68 offers are usually s��ade by efen ants, npt plaintiffs. A rule 68 offer made by a defendant makes the piainciff responsible for the defendant's costs and disbursements ii the evrntuai jud�ment is less favorable to plaintiff than the offer. A rulc 68 otfer made by ihe lap inuff does not, however, have any teal effect. Whether the eventual jud�nerGt is greater or less than the offer, the defendant is liable for ihe plaintiT�'s costs and disbursemems under rule 54.Q4 and Minn. Stat. § 549.04, as long as the plaintiff reCOVers anything. i.IndeT ihese legal reµuarzxnenis, the defendant may be hable for "cosis and disbur�ements" which are qsually modese compased to damages and fees. The bpttom line is that this offer of judgment should be viewed as a settlement offer in the amount of' �52,116.23. That amount seern� ttigh in light of the following: t�Rc-,a7nns A62Yi•sa Ju1-28-BB OB:OBpm Prom-KENNED� & GRkVEh 6123379310 T-768 P 03/06 F-762 KIm Lindquist Ro6ert Weisbrad luly 28, 1998 Page 2 • We have a strong waiver defensc as to the $81,846.95 aznottnt assessed tp the Jebco propetty. Even if wC dQ not prevaf! on this defeT3se through our pending summazy jucigznent mottion, we will be ablC to establish at trial that ob,jectipns as to this amc�ur.t were waivad. Whether the aasessments are viewed a� assessments under chapter 429 or chapter 444, there is no questlon that plaintiffs waived the payment o�the pTecise amount involved. • The City has rnginernng suppoiK from standard engineering texts that backs up ihe amount of thc: storm water area charge imposed • The Complaiz�t asks eiche: fos a zefund or foz constructian of the storru water improvemenU_ lf neCessary, the City is willing to expend the ampunt at issue on stonn waGex improvements thai would serve t.he plaintilfs' property. • Ac least some of the amount in question W�s likely passed pn to purchasers of the praperty and was thus not dama�es suffered by plaintiff's. (Plaintiffs do bave available an argument that t11e storm water azea char�e improperly requires them to pay the cvsts of handling normal drainage as well as dTainage caused by their development. Plaintiffs have not yet raised this argument.} At this time, plaintiffs fzce �he need ta obtain an engiAecring expert to Support thezr theory of recovery. They also faee our proposed an7endment to the answer, whieh would make piaintiffs liable f4r our attoiney fees tuider ihe Iangus�e of the subdivision agreemenc. When ail these factUrs are co�sidered together, plaintiffs' offrt loaks high. � wiA call you 6oth tomorrow to get your thoughu on the offer• Very truly yours, �� Karen R. Cple KRGcm cc: Robert Lang KRC-1a7h63 aE2v5-33 Ju1-28-98 G9:69pm From-KENNEDY 6 6RAVEN 6123378310 ?-768 P 04/O6 F-7S2 �.ARKIN, HOFFMAN, DT�Y �' 7-INDGR�N, I..TP. AT70RNEYS AT 6AW i5o0 nORWEST FinnrvClA� CENTER 740p X�.(tXE$ AVENl1E SOUTM �lOOMING74N. MIrvNE507/+ 65�gi-t�� TE�EPHONE{b1219 F� 141 88&3739 WA c PW�MCT ��RUJ'R t��`1M x�Clµf� �. uD�+ GR[Ni�r �..1CF$1b Mft. n VNI G<�'E � PNMF+�r tl�WFs iwom. ,. iF.rE M Y."(t46�� (XYIM4 '�'� �� NGFirCG u W�+� ♦ipnw ('Ane (yN( n Pf]l�4�E c�ain�FA+ rcAPKTM+ �Fi. �rvRa"riE w<E � �s^b July 2�1, 1498 ICaren R. Cole, Esq. Kennedy & Graven, Chartered 470 PiUsbury Center 26U South Sixth STreet Minneapolis, Mirulesata 555Q4 �: �ebco Group, Inc. eT al v. Ciry of Conage Grove pur File No.: 22,4Qb-00 c. � m �� ybRE K W�Nt" uC F. M.� c �� ma�r ^ ?wr�WU'� ,F�w�r�8('.triFn wOwGd'oF'�8 VIA FAX {337-931Q) A1VA U.S. MA.It� pear Ms Cole: Please find enclosed and served upon yau, an Offer of Judgment in the sum of $52,116.23 which is inclusive af the danzages swtained by our clients, incerest, attorneyS' fees, and any costs ta which they may be entitled. This fi�ure represents a�5% reduction of ihe darnages claimed, exclusive of interest As you may knov✓, ptu'suant to Rule 68 af the Minnesota Rules of Civil Procedure, your client has cen days xn which to accept this offer. lf ic is not accepted, it wiU be deemed withdrawn without any fuzther notice. As yau knpw, we consider che disputed iinpzovements to be govemed by Minn. Stat, Ch. 444, which concerns prospective improvemencs. As diatinguished fram impravements pursuanc w Minn. Stat. Ch. 429, we do not believe that there is any legal suppoa for an attempted waiver of an assessment for this type of improvement. !t seems our clients will each be in a becrer position ta reach a negotiated settlement of this matter before either part}' expends more time and money in discavery proceedings ar motion practice. We believe that it would be in oµr clients' mucuel best interests to negotizte a resolution of this maMer. I will be aui of ihe off'ice uncil .luly 31, �nd hope that we cat� talk about seAlement of this mattei on either luly 3 t or August 3. Please feel free w call Bill Griffith ac 896•3290 if you wouid like to discuss settlement of this matter before 7uly 31. ,_ ,.� ,�,, � Rn T2 h �� r � � �u1-28-88 09:09pR� From-KE�NEDY & GRAVEM1 612337831C T-?59 P �5/06 P-752 LARKiN, HOFFMAN> DALY c� L,INDGRBh� LTp- Karen R. Cole, Esq. July 24, 199� Page 2 Sincerel , � Shama A. Wahigren, for LARKIN> HOFFMnN, DAI.Y & LINDGREN, Ltd. &nclosure cc: Bernie R. Rullerc Jebco Group,Inc. William C. Griffith, Jr., Esq. t1AIS2t4 ut Ju1-28-BB 08:OBpm From-KENNE�Y & 6RAVEN 6123379310 T-758 P Go/O6 F-752 STATF. �F MINNE50TA C�UNTY OF WASI-IIAiGT�N 3ebca Crraup, inc., a Minnesota corporation; and Bernie R. auUert, plaintiffs-Petitianers, v. City of Cattage Crrove, a municipal corppration, Defendant-R espondent. DISTRICT COURT TENTH .1L'AICIAL DISTRiCT File No. C3-97-3804 CAS& TYPE: QFFER QF NFGMENT TQ: �Cbare d 47(� P ilsbury Cea ere2 Q si Su et Minneapolis, IvZinneso a PLEAS� TAI�E NOTIC� that pursuant to Rule 6$ of the M'tnrtesota Rules of Civil procedure, ihe Plaintiffs-Petitioners lebco Group, Ina. ttnd Bemie R. Buller[ hereby offer ttiat judgmen� be entered in theiz favor against the City of Cottage Grove in the sum 4f $52,116?3 wluch includes cosu and disbursements accrued. Acceptance of this offer is to be mad� by service af wciaen notace of accepcance within ten (iQ) days after service of this offer. If the offer is not accepted within ten (1Q) days, it is daemed withdrawn. D�c�a:�.�l �luly �9 William C. Griffith �1193343) 3harna A. Wahlgr�n (241581) LA.RK.[N> HQFFMAN> D.aLY & LINDGREN, Ltd- Attorueys for Plaintiffs-Fecitianeas 15Q0 Narwest Finanaiai Center 7900 Xenccs Avenue Sputh $lopmington, Minnesota a5431-1194 (612)835-380 oa�s2iz oi