01-9117r
49
RESOLUTION NO. 9117
RESOLUTION APPROVING SETTLEMENT OF CLAIM
OF DONALD MORROW AND PATRICK MORROW
FOR LOSS OF GOING CONCERN DAMAGES
WHEREAS, the City of Richfield, Minnesota ("City") acquired the property located at
6429-6445 Cedar Avenue in eminent domain proceedings in furtherance of the 66th
StreetlTrunk Highway 77 Interchange Project (the "Project"), said property being described
as follows ("Subject Property"):
Lots 9, 10, 11 and 12, Block 8, New Ford Town, Hennepin County,
Minnesota;
and
WHEREAS, the Metropolitan Airports Commission ("MAC") is initially funding the
Project; and
WHEREAS, the owners of the Property, Donald Morrow and Patrick Morrow and
their spouses ("Owners") owned the Subject Property and Morrow Auto Body Specialty,
Inc., a business which was operated on the Subject Property at the time the City acquired
the Subject Property ("Company"); and
WHEREAS, on January 12, 2001, the Date of Taking, the Company held a contract
with the City as the exclusive towing contractor for the City, which contract required the
Company to operate an impound yard within 3 miles of the City and to respond to all calls
for towing service within the City, within 20 minutes following the request for service
("Contract"); and
WHEREAS, neither the Company nor the City were able to find a relocation site
suitable for the Company's impound yard within 3 miles of the City limits; and
WHEREAS, as a consequence of the taking by the City of the Subject Property and
of the inability to find a replacement site, the Company notified the City that the Company
was no longer able to comply with the Contract and that the Company was obliged to
terminate the Contract; and
WHEREAS, the City staff would have recommended extending the Contract but for
the City's taking of the Subject Property and inability to find a relocation site for the
Company which would satisfy the Contract; and
WHEREAS, following a Court trial, the Hennepin County District Court issued its
Findings of Fact, Conclusions of Law and Order, filed February 18, 2001, determining that
the City had acquired the going concern value of the Company as a consequence of the
City's condemnation of the Subject Property; and
WHEREAS, the Court appointed three condemnation commissioners to determine
the damages c~used to the Company and the Owners by the taking of the Company's
going concern, which commissioners held evidentiary hearings for that purpose; and
WHEREAS, the Company's expert witness (a lawyer and certified public
accountant) testified that the Owners had incurred damages in the amount of $287,500 as
a result of the taking by the City of the Company's going concern; and
WHEREAS, the City Attorney has negotiated a settlement of the Owner's claim of
damages due to the taking of the Company's going concern for the amount of $185,000
plus interest at the judgment rate to November 10, 2001 (with payment to be made
January 2, 2002), subject to the approval of the City Council; and
WHEREAS, MAC staff concurs with the amount of the settlement.
NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Richfield,
Minnesota s follows:
1. That the settlement amount of $185,000 plus interest from the date of taking
of the Property to November 30,2001 is hereby approved.
2. That the City Manager and Mayor are authorized to execute the Stipulation of
Final Settlement and take all other actions necessary to complete the
obligations of the city pursuant to its terms.
3. That the City Attorney is authorized to take all actions necessary to complete
the obligations of the City pursuant to the Stipulation of Final Settlement.
Adopted by the City Council of the City of Richfield, Minnesota this 10th day of December,
2001.
ATTEST:
~~ J;i)~
Nancy Gib . ,-City Clerk