Bieter Co. v. Beatta Blomquist
| Decision Date | 18 February 1992 |
| Docket Number | No. 3-89 CIV 759.,3-89 CIV 759. |
| Parties | BIETER COMPANY, Plaintiff, v. BEATTA BLOMQUIST; City of Eagan; Federal Land Company; Eagan Tower Office Building Partnership; Eagan Heights Commercial Park; Advance Developers, Inc.; Cliff Road Properties; Hoffman Development Group, Inc.; HDG Associates Limited Partnership; Eagan Associates Limited Partnership; CRP of Eagan, Inc.; Robert L. Hoffman; Patrick C. Hoffman; and Jack F. Daly, Jr., Defendants. CLIFF ROAD PROPERTIES; Hoffman Development Group, Inc.; Advance Developers, Inc.; HDG Associates Limited Partnership; Eagan Associates Limited Partnership; CRP of Eagan, Inc.; Robert L. Hoffman; Patrick C. Hoffman; and Jack F. Daly, Jr., Third-Party Plaintiffs, v. DORSEY & WHITNEY, a Minnesota partnership; and Ryan Construction Company of Minnesota, Inc., a Minnesota corporation, Third-Party Defendants. |
| Court | U.S. District Court — District of Minnesota |
Lindquist & Vennum by R. Walter Bachman, Jr., and James McCarthy, Minneapolis, Minn., for plaintiff.
Hoff & Allen by George C. Hoff, and Thomas G. Barry, Jr., Minneapolis, Minn., for defendant Beatta Blomquist.
Best & Flanagan by Robert R. Barth and Cindy J. Larson, Minneapolis, Minn., for defendant Federal Land Co.
Fruth & Anthony by Joseph W. Anthony and Norman J. Baer, Minneapolis, Minn., for defendants Advance Developers, Inc., Cliff Road Properties and Hoffman Development Group, Inc.
Fabyanske, Svoboda, Westra & Davis by Gerald L. Svoboda, St. Paul, Minn., for third-party defendant Dorsey & Whitney.
Fredrikson & Byron by Thomas S. Fraser, and Todd A. Wind, Minneapolis, Minn., for third-party defendant Ryan Const. Co. of Minnesota, Inc.
The above entitled matter came on for hearing before this court on December 20, 1991 upon the motions of all defendants for summary judgment on plaintiff's complaint, and upon the motions of all third-party defendants for summary judgment on the third-party complaint. For the reasons set forth below, defendants' motions for summary judgment will be granted, and plaintiff's complaint will be dismissed.
This case arises out of intense competition between commercial developers of real estate in Eagan, Minnesota. Plaintiff Bieter Company ("Bieter") is a Minnesota partnership which owns land at the northeast quadrant of the intersection of Interstate Highway 35E and Diffley Road. When Bieter acquired this land in 1978 it was zoned for agricultural use. In 1983, the City amended its Comprehensive Land Use Guide Plan and designated the Bieter property to be D-II (mixed residential, 3-6 units per acre). Bieter desires to develop this property as a regional shopping center but has never obtained the necessary rezoning.
Federal Land Company, Eagan Tower Office Building Partnership, and Eagan Heights Commercial Park (collectively referred to as "Federal") are commercial real estate developers which own or control substantial portions of commercially zoned real estate in the City of Eagan, including two shopping centers a short distance to the north of the Bieter property, known as Yankee Square Center and Town Centre.
Advance Developers, Inc., Cliff Road Properties, Hoffman Development Group, Inc., HDG Associates Limited Partnership, Eagan Associates Limited Partnership, CRP of Eagan, Inc., Robert L. Hoffman, Patrick C. Hoffman, and Jack F. Daly, Jr. ("the Hoffman defendants") controlled and participated in the development of the property located at the northwest quadrant of the intersection of Interstate 35E and Cliff Road, a relatively short distance from the 35E-Diffley Road intersection. Currently located on this property is a shopping center known as "Cliff Lake Centre," whose anchor tenants are Target Stores and Cub Foods.
The final defendant is Beatta Blomquist. Blomquist was the mayor of the City of Eagan through December 31, 1987. In the time period relevant to this lawsuit, Blomquist was also the majority shareholder and officer of McBlom Enterprises, Inc., now known as Video Hollywood Style of Eagan, Inc., which operated video and photo stores in the City of Eagan.
The third-party defendants in this case are Dorsey & Whitney and Ryan Construction Company ("Ryan"). The Hoffman defendants assert claims for contribution and indemnity against these third-party defendants based upon their role in the development of Cliff Lake Centre, and specifically in their role in obtaining Target as an anchor tenant.
Bieter began making its plans for a regional shopping center known in 1986. Bieter formally announced its proposed development in September 1986 and in October 1986 formally filed applications with the City to seek amendment of the Comprehensive Guide Plan, rezoning of the Bieter property and preliminary plat approval for the center. At the time of its proposal, Bieter had solicited major tenants for the shopping center, including Northwest Racquet & Swim Club and Cub Foods, and had the commitment of Target Stores to be an anchor tenant.
Bieter proposed an ambitious development, involving four large anchor tenant stores, costing in the range of 50 million dollars, and requiring the rezoning of about 90 acres of land. Not surprisingly, the Bieter proposal met with opposition from both Federal and the Hoffman defendants, competing developers in Eagan. The defendants' opposition included writing letters to the Eagan City Council stating their opposition to any amendment in the Comprehensive Guide Plan, which was a prerequisite to the development of the Bieter property. In addition to speaking out against the Bieter proposal, the Hoffman defendants in January 1987 announced plans for a shopping center of their own on their property at 35E and Cliff Road. As will be discussed shortly, plaintiff alleges the defendants opposed the Bieter proposal through illegal as well as legal means.
The first public hearing on the Bieter proposal was held on November 25, 1986 before the Eagan Advisory Planning Commission ("APC"). After extensive discussion, the hearing was continued until the January 1987 APC meeting to allow further study. The Bieter proposal came once again before the APC on January 27, 1987. Presentations were made by the City staff and by Bieter representatives. Members of the public spoke both in support of and against the Bieter proposal. The APC decided by a 6-1 vote to recommend denial of Bieter's application. Dave Gustafson was the only APC member to cast a dissenting vote.
The Bieter proposal came before the Eagan City Council on February 3, 1987. The City Council at the time consisted of Mayor Blomquist, Thomas Egan, James Smith, Theodore Wachter, and Victor Ellison. The Council heard from the City staff, the Bieter representatives, and members of the public. The Council decided by a 4-1 vote to deny Bieter's applications for rezoning and a change in the Comprehensive Guide Plan. Bieter's proposal therefore failed. The only vote in favor (in support) of Bieter's applications was by Councilmember Ellison.
Bieter responded to the City Council's rejection of its proposal by filing a lawsuit in March 1987 in Dakota County District Court, claiming the City's denial was unreasonable, arbitrary and capricious, and that the City had "denied plaintiff all reasonable uses of its land." Some discovery was undertaken in that action, including the depositions of the City Council members. However, that lawsuit has been dormant since the summer of 1988.
After the rejection of the Bieter proposal, the Hoffman defendants, in cooperation with third-party defendant Ryan Construction Company, began pressing their proposed development at 35E and Cliff Road. On June 19, 1987 Target announced that it had committed to be an anchor tenant in the 35E and Cliff Road development, then labeled "Cliff Lake Galleria." Hoffman Development Group and Ryan Construction jointly filed a preliminary plat for the development in July 1987.
The issue of whether and where to build a new regional shopping center in Eagan became a key issue in the November 1987 elections. Ellison, who strongly opposed the proposed Cliff Lake development, defeated Blomquist in the mayoral race. Gustafson, the only APC member to vote in favor of the Bieter proposal, also won a seat on the City Council. The balance of the 1988 City Council would include Egan, Wachter, and Pam McCrea, a former APC member who was appointed to the Council by Ellison. Of course, the new mayor and Council would not take office until January 1988.
On November 5, 1987, the first City Council meeting after the election, the Hoffman defendants' "Cliff Lake Galleria" proposal came before the City Council. The APC had recommended denial of this proposal in October 1987. In the course of their presentation, the Hoffman defendants introduced a revised development plan consisting of a substantially scaled-back version of the shopping center. At the conclusion of the hearing, the City Council voted to refer this new proposal to the APC so that the City Council could act upon the proposal at its meeting on December 1, 1987. At the December 1, 1987 City Council meeting, the City Council approved the new Cliff Lake preliminary plat proposal by a 3-2 vote with Blomquist, Egan and Smith voting in favor, and Ellison and Wachter against. The City Council's approval of the preliminary plat was expressly contingent upon the developers meeting more than 20 conditions.
In late December 1987 Target advised Bieter in writing that it was no longer interested in pursuing opportunities with Bieter in Eagan.
The 1988 Eagan City Council, of which Blomquist was not a member, took a series of actions necessary for the Cliff Lake development (which had become known as "Cliff Lake Centre") to become a reality, including approval of a revised preliminary plat for Cliff Lake Centre on March 1, 1988. As the 1988 City Council...
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Bieter Co. v. Blomquist
...district court, we restrict our recitation to those facts necessary to resolution of the appeal before us, see Bieter Co. v. Blomquist, 784 F.Supp. 1405, 1406 n. 1 (D.Minn.1992), but at times we deviate from the district court, drawing what we see as reasonable inferences where the district......