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HomeMy WebLinkAboutStatus of Motion to Dismiss it- LO~~E~ ., -""1 ...~ - )\]T ..~ ~. '.~.' (. ... '" ....' ~, ) "~ '':' , N\' ,.' r i I ! .: , \ ....................... ....... ...... LA W 1800 IDS Center 80 South Eighth Street Minneapolis, Minnesota 55402 FIR M Southside Office Plaza, Suite 2A 1810 Crestview Drive Hudson, WI 54016 !-0/l1ll/1'1I. Ndsoll. CO/I' & S{lIgehnx. P. A. (612) 339-8131 Minnesota W A TS (800) 752-4297 FAX (612) 339-8064 Stephen C. Rathke Attorney at Law Minneapolis Office (715) 386-8217 Twin City Line (612) 436-8085 FAX (715) 386-8219 (612) 336-9305 November 3, 1993 Mr. Frank Boyles City Manager City of Prior Lake 4629 Dakota St SE Prior Lake MN 55372 Mr. Doug Gronli Minnesota League of Cities 3490 Lexington Ave N St. Paul MN 55126 Mr. Robert Weisbrod Berkley Risk Service 920 Second Ave S Suite 700 Minneapolis MN 55402 RE: Priorview Ltd. Partnership v. ISO No. 719, et ale Our File No. P31893 Claim No. 11002679 Dear Clients: Our Motion to Dismiss in the above matter was argued before the Honorable Richard J. Menke at the Scott County Courthouse on November 3rd. There was a one hour delay in getting before the court. The judge permitted extensive arguments on the motion. The court gave the school district additional time to submit a reply brief. I told the court that we did not need the additional time since our reply brief had already been filed. The judge took the matter under advisement. Lommen, Nelson, Cole &: Stageberg, P.A. Mr. Frank Boyles Mr. Doug Gronli Mr. Robert Weisbrod November 3, 1993 Page 2 Enclosed is a copy of Plaintiff's brief. Plaintiff's argument generally followed the argument of the brief. The only new fact which came up concerned the date of the city's formal acceptance of the two phases of the road. The city engineer was unable to find a copy of the letters of acceptance. Plaintiff established that the dates were in 1987 and 1991. Plaintiff uses this late acceptance to argue that the statute of limitations does not bar the Complaint. The attorney for the school district and I argued that any cause of action which Plaintiff might have had had accrued prior to 1987 in spite of the dates of the letters. Judge Menke is a former DFL legislator who has been on the bench for approximately five or six years. He is also a resident of the City of Prior Lake. The judge gave no indication of his ruling and did not ask questions of any party. I will let you know as soon as I receive the judge's ruling. If you have any questions or concerns, please do not hesitate to contact me. Very truly yours, COLE & STAGEBERG, P.A. \.sz Stephen C. Rathke SCR: jrw Enclosure STATE OF MINNESOTA DISTRICT COURT COUNTY OF SCO 11 r iJ{ST JUDICIAL DISTRlCT COURT FILE NO. 93-08239 ---------------------------------------------------------- Priorview Limited Partnership, alk/a Priorview Limited, a Minnesota Limited Partnership, Plaintiff, v. PL~ IJ.lC ~.iS l\1t.,MORANDUM IN OPPOSITION OF DE14~NDANTS' MOTION FOR DISMISSAL Independent School District No. 179 and the City of Prior Lake, Defendants, ---------------------------------------------------------- Plaintiff Priorview Limited Partnership ("Priorview") submits this memorandum of law in opposition of both the Defendant's Independent School District No. 719 of Scott County ("School District") and the City of Prior Lake ("City") Motion for Dismissal. Priorview's claims against the School District and the City of Prior Lake for breach of contract, unjust enrichment, fraud and misrepresentation, fall within all applicable statute of limitations. Furthermore, Priorview has a cause of action against both parities based on the facts, circumstances and documentation surrounding the development of the property at issue in this litigation. I GENERAL BACKGROUND, Priorview is a Minnesota limited partnership that undertook a project to develop land within the boundaries of the City of Prior Lake and adjacent to land owned by the School District. Throughout this entire project, Priorview worked in conjunction with both the City of Prior Lake and the School District to develop the property that Priorview had purchased in order to benefit all parties including the City, the School District, Priorview as well as the public in general. Specifically, this project mandated that Priorview, the City, and the School District all work together in order for the construction to be completed within the requirements of all the parties. In 1982, Priorview proposed a development plan to the City Council of Prior Lake which was approved by the Prior Lake Planning Commission. Thereafter, at the request of Prior Lake City Council, Priorview submitted a proposal on November 3, 1982 for consideration by the School Board's Building Committee to be presented at a council meeting on November 8, 1982. (See Attached Exhibit 1). This proposal outlined the first of two phases by which the City, the School District and Priorview would work together to meet all standards and regulations as well as the individual parties' needs. In this original proposal to the School District Priorview outlined, among other issues, the estimated costs of both Phase I and Phase IT of the construction project. This letter from Priorview to the School District, further identified the benefits of - such improvement to all parties involved. Lastly, this letter purposed to the School Board, resolutions that should be considered at the School District's November 8, 1982 meeting. Id. On November 11, 1982, Cy F, Kruse, the Superintendent of the School District, followed-up with correspondence to Tom Steffens, one of the general partners of Priorview, outlining the conditions of Priorview's original proposal. (See Exhibit 2), Among other - provisions, the School District _indicated that along with paying a portion of the cost and expenses associated with the construction, the School District required that there be input on the "engineering plans and costs regarding any water drainage projects coincidental with the 2 construction of Phase I and Phase II roadways." Id. During this time there was further negotiations and discussions with Priorview, the City and the School District. The School District subsequently agreed to grant an easement to the City and to share the cost of the construction associated with this project with Priorview. Thereafter, the terms and conditions of the School District granting an easement to the City and the terms and conditions of sharing proportional costs in the construction of the roadway, and the requirement that all construction be approved and accepted by the City of Prior Lake . Were outlined in a document signed only by the School District on September 16, 1983. (See Attached Exhibit 3). Specifically, under the heading Dedication of Roadway, the School District identified that; "at the time Priorview provides the City of Prior Lake with an easement for the extension of Five Hawks planned as part of Phase II of the Priorview pun Project, the district will dedicate its private roadway to the public by means of an easement granted to the City of Prior Lake." Furthermore, the agreement indicated that the School District would share proportionate costs of both Phase I and Phase II with Priorview and which was contingent upon Priorview's "full compliance with the requirements of the City of Prior Lake." Id. Lastly, the School District authorized Priorview to go forward with improvements as agreed "in accordance with plans and specifications approved by the City of Prior Lake." Id. Priorview continued to develop the property as agreed upon by the School District and by the City of Prior Lake. During this time however, the School District contacted Priorview's General Contractor and indicated that there were some problems with ~e work that had been done, (See Exhibit 4). On June 21,1984, Robert A. Thehe P.E., indicated to 3 the City his opinion of why there were problems with the road construction, (See Exhibit 5). Moreover, Larry Anderson, on August 9, 1984, indicated that: "it is very disturbing to find work being done without notification so that the City can verify work compliance. The City of Prior Lake will not be able to accept Five Hawks Avenue until this issue is resolved." (See Exhibit 6). During this time, Priorview had submitted to the School District the bill for its portion of the costs of the development of Phase I. (See Exhibit 7). The School District failed to respond to this letter and on September 11, 1984, Priorview again enclosed copies of the invoices of the School District's proportionate share of the costs in the construction of the roadway. (See Exhibit 8). Next, the City of Prior Lake wrote to Priorview and indicated a list of deficiencies regarding the construction of Five Hawks Avenue. (See Exhibit 9). In this communication ~ from the City to Priorview it indicated a "punch list" of items that were deficient and needed to be completed and/or corrected. In response to the City's "punch list" Priorview's asphalt contractor, Northwest Asphalt, Inc., responded to Priorview on November 25, 1985. (See Exhibit 10). In this correspondence Northwest Asphalt responds to each deficiency as outlined by the City of Prior Lake. Specifically, Jack D. Van Remortel indicated that the problems with the construction of the road were due to "the unsuitable sub-grade foisted on us by the City engineer.,." Id. It was Van Remortel's belief that "the City should pay for the repairs made last year at the cost of $8,090.73, plus other items as highlighted in this correspondence." Id. Furthermore, Van Remortel indicated that "you [Priorview] are well aware that Larry Anderson has been - very vocal in his thoughts that this project was constructed in an inferior manner. To defend 4 ourselves against his attempt to get us to pay for his mistakes, we hired Instant Testing Company to take extensive tests in the construction of the roadway." Id. Lastly, Mr. Van Remortel indicates that "the tests confmn what we have been saying all along. That is the 12" base thicknes5 c.:,laimed by the School District. and confirmed bv Larry Anderson's visual inspection. just was not there, II (emphasis added), Instant Testing Company provided the results of their investigation, (See Exhibit 11). This testing and investigation indicated that the School District's and the City's representations that the original gravel road was adequate to sustain the development of a paved road was untrue. These tests were taken again on July 9, 1986. (See Exhibit 16). During this entire time, Priorview had not been paid by the School District, as agreed, and therefore asked that a meeting be set up to discuss the matter of payment. However, on April 18, 1985, the School District indicated to Priorview that a meeting that had been scheduled to discus.s the issues of payment on the construction of the road was now "pointless." In this correspondence, Gregory Mead of the School District indicated that any meeting regarding the payment on the road construction would be "pointless... because, obviously the School District will not do anything relative to payment until the City accepts that road." (See Exhibit 12). The School District's reasoning for this was that "it is best to be sure that the City assumes ownership of the road before anything else is considered." Id. It was not until July 21, 1987, that the City of Prior Lake indicated to Priorview that with the "satisfactory completion of the punch list items in the City's November 20, 1985 letter to Tom Steffens, the City of Prior Lake hereby accepts for perpetual maintenance Five Hawks Avenue..." (See Exhibit 13). This was the fIrSt indication of acceptance by the City 5 of Prior Lake since the beginning of this construction project. Furthermore, this was the first condition of the agreement as signed by the School District on September 16, 1983 and as memorialized in the letter from Gregory Mead to Priorview on April 18, 1985. (See Exhibits 3 and 12). On October 5, 1988, Priorview again contacted the School District to demand payment in connection with the roadway which had been accepted by the City on July 21, 1987. The correspondence highlighted all of the costs and expenses associated with the requirements of the City as well as the School District. It further highlighted the fact that the original credit given to the School District for $25,204.70 was under faulty and/or misleading information on the part of both the School District and the City of Prior Lake. (See Exhibit 14). Specifically, the letter indicated the testing and investigation completed_ by Instant Testing, for the sub-grade of the existing roadway on Five Hawks Avenue, had experienced numerous breakups in every year preceding the construction of the road. The school bus drivers were aware of this condition and this information was withheld from Priorview. Id. Furthermore, as Priorview's engineers and contractors had indicated, it would have been better to "bring in new material and do the road correctly in the fIrst instance rather than relying on the representation of the School District relative to the adequacy to the existing road." Id. Furthermore, this position is consistent with Mr. Van Remortel's letter dated, November_25, 1985, whereby he indicates that the base thickness claimed by the School District and also confrrmed by Larry Anderson's inspection was false. (See Exhibit 10). Lastly, it was not until October 3, 1991, that the City of Prior Lake fmallyaccepted 6 from Priorview its Phase II of the construction project whereby, "the City of Prior Lake accepts for continuous maintenance the sanitary sewer, water main, stonn sewer and streets within the public right of way for the above referenced platt." (See Exhibit 15). This acceptance by the City was the fmal contingency for the project as originally undertaken and which had been outlined in the School District's agreement, dated September 16, 1983 and its letter to Priorview dated, April 18, 1985, (See Exhibits 3 and 12), Since then, the City of Prior Lake accepted both Phase I and Phase II of the construction projects on July 21, 1987 and Ocotber 3, 1991, respectively, Priorview has fulfilled all its requirement, duties and obligation to the City of Prior Lake and the School District. Throughout this entire time, no monies have been paid to Priorview as agreed upon and which payment was contingent upon Priorview fulfilling its obligations to both the City and the School District. Priorview has been left with no other recourse other than filing the complaint against both parties for their breach of contract, unjust enrichm.ent, fraud and misrepresentation. As to Count I of Priorview's Complaint, it is clear from the facts that Priorview would not be paid until the City accepted both Phase I and Phase IT of the construction project. (See Exhibit 3 and 12), Both defendants in this case claim that the other party had nothing to do with them individually. But as the facts and documentation shows, all parities in this case had a vested interest in the project as outlined in the agreement dated September 16, 1983. Moreover, the payment that Priorview was to receive was contingent upon the completion and acceptance of the projects by the City, Unfortunately for Priorview, it is caught between the fingerpointing of both the School District and the City of Prior Lake. 7 The City claims that since it did not sign the part of the agreement of September 16, 1983, that it was not a party to its tenns and conditions. (See Exhibit 3). As outlined in the School District's written confll1l1ation on September 16, 1983, the School District would provide to the City of Prior Lake "an easement for the extension of Five Hawks planned as part of Phase II of the Priorview PUD Project, the district will dedicate its private roadway to the public by means of an easement granted to the City of Prior Lake." Also, as already mentioned, the agreement for the School District to pay Priorview was contingent upon and predicated to the fact that Priorview would only make improvements to the roadway in accordance with "plans and specifications approved by the City of Prior Lake." Id, Lastly, as indicated, the School District would not "do anything relative to payment, until the City accepts that road." (See Exhibit 12). Both the City and the School District now claim that this project had no benefit to eithe~ party and since neither profited from this project that they are now e~titled to walk away from it. As far as the School District is concerned, Priorview fulfIlled its obligations to the City in order to be paid in accordance with this agreement. The School District's only response is that since it was not a party to the discussions between Priorview and the City that the School District feels it should not pay. As to Count II, Priorview, in good faith, undertook the construction project of Phase I and Phase II consistent with the terms and conditions mandated by both the City and the School District. All parities in this case have benefited from the project undertaken by Priorview. Furthermore, Priorview has satisfied all the debts associated with the - construction of this project but, has received no compensation for its work undertaken. 8 Despite repeated demands for payment upon the School District and Priorview's receiving acceptance of both Phase I and Phase II on July 21, 1987 and Ocotber 3, 1991, respectively, no payments thereof have yet been made. As to Count III, as indicated earlier, Priorview agreed to credit the School District in an amount of $25,204.75 on the reliance and representations of both the School District and the City. This was indicated in Jack Van Remortel's letter dated November 18, 1985. (See Exhibit 10). The reliance upon this representation was made both by Larry Anderson of the City of Prior Lake and the School District. The representation was made that there was a suitable sub-grade for asphalt, which after testing, however, indicated that this was simply not true. In reliance upon the statements, Priorview was induced to believe the representations were true and has suffered damages a result of this representation. As to the claim for punitive_damages Priorview has withdrawn this demand, ll. LEGAL ISSUES 1. Priorview's claim against the School District and the City for breach of contract, unjust enrichment, fraud and misrepresentation are not bared by any applicable statutes of limitations. 2. Priorview's claims against the School District and the City for unjust enrichment does not fail to state a cause which relief can be granted. 3. Priorview's claim against the School District and the City for fraud and misrepresentation does not fail to state a claim upon which relief can be granted and does 9 comply with Minn. R, Civ. P. 9.02 by stating with particularity the circumstances constituting fraud and misrepresentation, ill. LEGAL ARGUMENT 1. THE CITY'S AND THE SCHOOL DISTRICT'S MOTION DO NOT MEET THE SUMMARY JUDGMENT STANDARD, Minn, R. Civ, P. 56.03 states, in part that... "Judgment shall be rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no 2enuine issue as to anv material fact and that either oartv is entitled to iud2lllent as a matter of law.. " (emphasis added) Summary judgment may be granted only if, after taking view of evidence most favorable to the non-moving party, the moving party has clearly sustained their btlrden of proof by proving that there was no genuine issue of material fact and that they are entitled to judgment as a matter of law. Summary judgment is not intended as a substitute fot trial when there are fact issues to be determined, Vacura v. Haar's Equi!>ment. Inc., 364 N. W.2d 387 (Minn. 1985). In this case presently before the court, the material facts are disputed and as a matter of law the court must deny the motions for summary judgment. Under rule 56 the court is allowed to consider materials outside the pleadings such as depositions, answers to interrogatories and affidavits in ruling on the motion. (see Minn. R. Civ. P. 56,03). Furthermore, the motion for summary judgment is directed to the merits of - the case rather than the formal allegations of the pleadings. Burma v. Stranckv. 357 N, W.2d 10 82, 89 (Minn, Ct. App, 1984). Since summary judgment deprives a litigant of a day in court, great care should be taken to permit a trial when there is any genuine issue of material fact and dispute. Abdallah. Inc. v. Martin. 242 Minn. 416, 65 N,W.2d 641 (1954). Summary judgment further determines whether there is any genuine issue of material fact; it does not determine the issue. Illinois Farmers Insurance Comoanv v. Taoemark Comoanv. 273 N.W.2d 152 (Minn, 1980). A material fact is one that will affect the result or outcome of the case. Zaooa v. Favhe. 310 Minn, 555,245 N.W.2d 258 (1976). The standards of giving the non-movement the benefit of favorable construction of the material considered, parallel the requirement that a pleading be construed in favor of the non-movement on a motion for judgment on the pleadings. Summary judgment has also been called "a blunt instrument" that should only be used when "it is perfectly clear that no issue of fact is involved, and that it is not desirable nor necessary to inquire into facts which might clarify the application of the law," Nord v. Herreid. 305 N,W.2d 337, 339. See also Donnav v. Boulware. 275 Minn, 37, 144 N.W,2d 711 (Minn, 1966). Should one or more genuine issue of material fact be in the case, summary Judgment must be denied. Home Mut. Ins, Co. v. Snvder., 356 N.W.2d 780 (Minn, Ct. App. 1984), In reviewing the standards as set-forth by Minnesota law it is clear that there are many genuine issues of material fact that exists in these circumstances for which the claims against the parties cannot be dismissed as a matter of law. - 2. THE PLAINTIFF'S CLAIMS ARE NOT BARRED AS A RESULT OF ANY 11 STATUTE OF LIMITATIONS ON ALL CLAIMS BROUGHT AGAINST THE CITY AND THE SCHOOL DISTRICT. 12 upon Priorview fulfilling its requirements to the City. (See Exhibits 3 and 12) This did not occur until July 21, 1987 for Phase I and October 3, 1991 for Phase II, (See Exhibits 13 and 15) Furthermore, other claims based on contract, quasi contract, fraud and misrepresentation have all been plead within the time frame as allowed under Minnesota law. 3. PRIORVIEW'S CLAIM FOR UNJUST ENRICHMENT AGAINST BOTH THE SCHOOL DISTRICT AND THE CITY STATES A CAUSE OF ACTION UPON WHICH RELIEF MAY BE GRANTED. Under Minnesota law the court in MeW v. Norton., ruled that the enforceability of an obligation is not necessarily predicated on intent, promise or privity but, rather on the principal of preventing unjust enrichment or the unjust retention of a benefit that represents a loss to another under circumstances that would violate equity and good conscience, Mehl v. Norton. 201 Minn, 203, 275 N,W. 843 (1937); See Also Town of Balkin v. Villaee of Buhl, 158 Minn. 271, 197 N.W. 266 (1924). Furthermore, the recovery on the theory of ~ quasi contract is permitted where there is no actual contract, express or implied in fact and where it would be unjust to permit the defendant to receive the benefits of the plaintiff's services without compensating him for theni or where there has been such a breach of a contract by the other that the other may choose to resend and recover in quasi contract. Roberee v. - Cambridee Co-oo CreamerY Comoanv. 248 Minn. 184,79 N.W.2d 142 (1956) As the court in Robenze has indicated "ordinarily there is no need to resort to the latter theory [unjust enrichment] when the evidence sustains a recovery on a theory of a contract implied in fact." In the unjust enrichment claim against the School District, the claim is used in the - alternate theory that the court finds that the agreement dated September 16, 1983, is not a 13 valid or enforceable contract. Furthennore, in Williams v. National Contractine Co. the court concluded that "where a School District contracts for an improvement, where it has power to make, but the contract is void because not made after competitive bidding as required by law, is that the District is obligated to pay for the reasonable value of any benefits it received through part perfonnance of the contract." Williams v. National Contractine Comoanv. 160 Minn. 293 (1924). Moreover, in Olson v. Indeoendent and; Consolidated School District No. 50., the court concluded that the "law substitutes the quasi contractual obligation of the District to pay the reasonable value of any benefit it receives... " Furthermore, the court in Olson ruled that when the "intended contract was not real: hence the law substitute the quasi contractual obligation," Olson v. Indeoendent and Consolidated; School District No. 50..20 N. W. 606, 607 (1928) In the facts this case, Priorview argues that the School District would be liable under either a breach of contract claim, if a valid .enforceable contract exists or alternatively, if the agreement is illegal or unenforceability, the allegation by the School District that no competitive bidding process has taken place in Phase II of the project, then the unjust enrichment claim would be available for the Priorview against the School. The Affidavit of William Schomokel indicates that "affiant has been given no evidence of Priorview's compliance with municipal bidding procedures for Phase II." Priorview is assuming that the School District is using this as some type of defense to an illegal or voidable contract and therefore, allows the alternative theory that the claim for unjust enrichment is proper against the School District. The School District's claim that it had not been unjustly enriched by the construction of the road, defies both state law and 14 common sense. Furthennore, that basis for unjust enrichment is not merely if one "profited" or not, but rather that it is "unjust" to pennit the Defendant to receive the benefit of the Plaintiff's services without compensation. Similarly, Priorview has a cause of action against the City on a quasi contractual basis and for unjust enrichment, if the court fmds that the agreement dated September 16, 1983, is illegal or enforceable and that the City received similar benefits as result of the development by Priorview. Priorview's claim for unjust enrichment against the City, must upheld for the following reasons: 1. As has been identified, there has been numerus cases on this point in which parties have the right to avail themselves to equitable theories including unjust enrichment in the situation where the benefits that were retained as long as there is "strong showing of benefit actually received by the City..." Rettman v. City of Litchfield. 354 N.W.2d 426. (1984) 2. The written Agreement in Exhibit 3 set out the obligations of the parties, and included the City as well as Priorview and the School District. Throughout the entire development phase, Priorview had to abide by all the terms and conditions as set-forth in this agreement as well as its local ordinance as a condition to precedent repayment by the School District. This repayment was contingent upon the City's approval and acceptance of all the work performed by Priorview. The City's claim that only Priorview and the School District entered into and "expressed written contract" leaves out the clear fact that the School District included the City in this agreement. 3. The obligations imposed upon Priorview by the School District in order to be 15 paid is identified in the April 18, 1985 letter, whereby it stated that "the School District will not do anything relative to payment until the City accepts that road." (See Exhibit 12) This acceptance came for Phase I of the construction project on July 21, 1987, for Phase II on October 3, 1991. (See Exhibits 13 and 15) Clearly, the City did more than "simply approve Plaintiff's proposal" but rather the entire obligations imposed upon Priorview by the City and the School District and payment thereof, were contingent upon the acceptance by the City of both phase I and Phase II of the construction project. 4. PRIORVIEW'S CLAIM FOR FRAUD, STATES WITH PARTICULARITY, A CLAIM FOR WHICH REUEF CAN BE GRANTED AGAINST THE CITY AND THE SCHOOL DISll<lCT. Priorview's claim of fraud and misrepresentation against both the City of Prior Lake and the School District identify the circumstances that the representations were made _ concerning the sub-grade of gravel road. Under Minnesota law, Priorview can show that all the requirements for fraud and misrepresentation exist. The following elements are necessary to show that fraud and misrepresentation do, in fact, exist: 1. There was a false representation by a party of a past or existing material fact susceptible of knowledge; 2, Made with knowledge of the falsity of the representation or made as of the parties own knowledge without knowing whether it was true or false; 3, With the intention to induce another to act in reliance thereon; 4, That the representation caused the other party to act in reliance thereon; 5. That the party suffer pecuniary damage as result of the reliance. 16 Soecialized Tours. Inc. v. Ha2en., 392 N.W.2d 532 (Minn, 1986). The rules of this state are liberal in determining what constitutes fraud and allowing a recovery; Woodward v. Westem Canadian Colonization Companv. (1916) 134 Minn. 8, 158 N.W. 706. Also, it is unnecessary that the person making the representation should receive any benefit from the deceit, or be in collision with the party benefited. Busterud v. Farmin2ton., (1887) 36 Minn, 320,31 N.W. 360; Batchelder v. Steffenson., (1921) 150 Minn. 215, 184 N,W. 852; Hansen v. Daniel Haves Co. (1922) 152 Minn. 222, 188 N.W. 317; Lehman v. Hansord Pontiac Co., (1955) 246 Minn. 1, 74 N.W.2d 305. Furthermore, although courts have set out general element of fraud and misrepresentation, courts are disinclined to lay down a hard and fast definition of fraud. Dimond v. Maheim (1895) 61 Minn, 178, 63 N. W. 495; Macomber v. Kinnev (1911) 114 Minn. 146, 128 N.W. 1001; Purcell v. Thorton., (1915) 128 Minn. 255, 150 N.W. 899. In this specific case, it is clear that the elements of fraud have. been met under the laws as prescribed by the State. First, as has been identified in Exhibit 10, Jack Van Remortel indicated that both the School District and the City had represented that the existing gravel road had been adequately maintained to sustain no further work necessary to proceed with the asphalt on the road. This false representation was made by both parties as a past and existing material fact suspectable of knowledge. Next, this l~!-,resentation was made with both the City's and School District's own knowledge, without knowing whether it was true or false, The intention of this inducement to have Priorview act in reliance upon it is clear when Priorview originally agreed to credit the School District the amount as indicated. (See Attached Exhibit 3) As a result of this representation and Priorview's reliance, Priorview 17 has suffered the damages as indicated. Lastly, this matter was relayed to the School District in Priorview's correspondence dated October 5, 1988, (See Exhibit 14), The representations that both the City and the School District made relative to the sub-grade to the graveled road were an expression of fact, rather than opinion, on which Priorview substantially relied. (See Exhibits 10, 11, 14 and 16) In this case, both the City and the School District possessed the knowledge of their statements and were capable of representing what the truth, as to the sub-grade of the gravel road, really was. The City and the School District were in the position to make the statement of the quality of the sub-grade and possessed the special knowledge to make such representation. See Brees v. Anderson. (1922) 154 Minn. 123, 191 N,W. 266 The court in Brees found fraud did in fact exist where a statement of the seller of a parcel of land indicated a certain quality, but in fact, was_not what the seller had expressed. In this situation the buyer could bring an action for fraud. Similarly, the improvement that was undertaken by Priorview was done so in reliance upon the representation made by both the City and the School District, relative to the quality of the existing sub-grade of the gravel road. After Priorview had undertaken the construction of the road, it was clear by the continual breakup of the asphalt that it was due to the unsuitable sub-grade of the gravel road, Furthermore, clearly had the proper representation made concerning the quality of the sub-grade, Priorview would have negotiated a different credit amount with the School District to take into consideration the further costs associated with increasing the quality and suitability of the sub-grade. 5. PRIORVIEW STATES WITH PARTICULARITY THE CIRCUMSTANCES 18 FOR A CLAIM OF FRAUD REQUIRED BY MINN. R. CIV. P. SEC. 9.02 Under the Minn, R, Civ. p, See, 9.02 requires "in all avennents of fraud or mistake the circumstances constituting the fraud or mistakes shall be stated with sufficient particularity. Malice, intent, knowledge and other conditions of mind of a person may be averred generally," Under Minnesota law, general statements of matters of fact constituting the fraud is sufficient. Also, it is unnecessary to allege minulety all the circumstances that may tend to prove the general charge. Cummines v. Thompson. (1872) 18 Minn. 246 (Gil. 228); Johnson v. Velve. (1902) 86 Minn. 46, 90 N.W.126 Priorview's claim for fraud against the party, consistent with rule ~9, 02 in all aspects, First, the claim is made against both the City and the School District which is supported by Exhibit No. 10 in that representations concerning the base thickness and the of the sub-grade and the quality of the gravel road, It is cleaJ' that this representation concerning the sub- grade was false and misleading in that these representations were in fact not true, (See Exhibits 10 and 14) Moreover, the representation was clearly material in that Priorview' s agreement with the City and the School District, Priorview agreed to credit the School District the specific amount of $25,204.70. (See Exhibit 3) Priorview also relied on these . false representation to its detriment, in that the continued costs of repairing the road and fulfilling its obligations to the City, were an amount in excess of $25,000 dollars. The City claims that had Priorview not agreed to the School District's terms, that the City would not have granted-the easement to the School District and that the City would not have approved Priorview's platt. It is clear once Priorview received the proper information concerning the quality of the sub-grade that Priorview wanted to eliminate the credit in 19 response to this false representation. (See Exhibit 14) Consequently, as the facts and circumstances show, the complaint was properly plead with sufficient particularity to state the claim for the facts and circumstances of the fraud that occurred. Thus, the fraud and misrepresentation claim, by Priorview, against the City and the School District must be upheld. 6, THE CITY CAN BE HELD LIABLE FOR FRAUD UNDER THE PUBLIC DUTY RULE, Under the public duty rule a claimant may show a breach of some duty owned to him or her as an individual and not merely a breach of some obligation owed to the general public. Roerhre v. Houehton.. (1919) 144 Minn. 231, 175 N.W. 542: Hoffert v. Owatonna In Town Motel. Inc. (1972) 293 Minn, 202, 199 N. W.2d 158; Cracraft v. City of St. Louis, Park. (Minn. 1979) 279 N.~.2d 801; Perkins v. National R,R. Passeneer COl"9., (Minn, 1979) 289 N.W.2d 462; Haee v. Stede (Minn. 1980) 304 N.W.2d 283. In the instant case a City's representation to Priorview was a duty that was owed to Priorview individually and was not represented to the general public. In this case Larry Anderson of the City of Prior Lake specifically represented that the sub-grade was of such quality and suitability that asphalt could be laid and school buses properly driven without break-ups occurring. As has- been discussed this clearly was not the case and the doctrine of discretionary immunity should not govern in this instance. Furthermore, the representation made by Larry Anderson was not in a policy making nature involving social, political or economical considerations. Nausbaum v. Blue Earth County, 422 N,W,2d 713, 722 (Minn. 1988). Priorview is not claiming that the act that the City approved the application for the sub-division and the PUD 20 was the basis for the claim of the fraudulent misrepresentation. Rather, the duty that was owed Priorview was the duty to represent the truthfulness in the quality and suitability of the sub-grade. Thus, the facts and circumstances of the representation that was made by the City, may be held liable for this misrepresentation, 7. PRIORVIEW'S REQUEST FOR PUNITIVE DAMAGE HAS BEEN WITHDRAWN. IV CONCLUSION Throughout the entire development of the construction project, Priorview worked together with both the City and the School District in good faith, in the completion of the construction projects. The agreement executed by the School District clearly states the duties and obligations imposed upon Priorview, as well as the conditional basis on how Priorview would be paid. Priorview complied with all the terms and conditions as required by the City and the School District and have yet to be compensated for any of their work. The School District and the City have been unjustly enriched at the- expense of Priorview in accepting the construction projects, but without compensation to Priorview as agreed, Lastly, Priorview relied to its detriment on both the City and the School District in its representation that the original sub-grade of the gravel road was acceptable for the application of asphalt. Priorview's claim for fraud has been plead with specificity, pursuant to Minnesota rules and states a cause of action for which relief can be granted against the School District and the 21 City of Prior Lake. Lastly, Priorview' s claims are not bared by the time limitations as set- forth in Minnesota Statute 541.04. Accordingly, both the City and School District's motion for summary jud!;u.lent against Priorview must be dismissed. Dated: :2 C( 7i. October, 1993 BOLOGNA & YOUNG By f}J / Daniel J. Young ~ Attorney Reg. ,#2 913 2100 Norwest inan a1 Center 7900 Xerxes A venue South Minneapolis, MN 55431 (612) 835-9001 Attorneys for Plaintiff Priorview Limited Partnership 22