Weld court denies water district’s motion to dismiss Eagle View Farms lawsuit

GREELEY — A Weld County District Court judge has denied the North Weld County Water District’s motion to dismiss a lawsuit filed by a developer over the district’s tap moratorium.

Judge Todd L. Taylor denied the motion June 15, allowing a lawsuit by Eagle View Farms LLC to proceed.

“Viewing the plaintiff’s allegations in the light most favorable to the plaintiff, the court denies the motion to dismiss for the reasons articulated in the plaintiff’s response,” the judge wrote in his order.

Greeley-based Eagle View Farms sued the Lucerne-based North Weld County Water District in February, alleging violations of a Water Service Agreement through which North Weld agreed to provide water service via taps for a development west of Lucerne and north of Greeley.

The project, located north of Seeley Lake at Colorado Highway 392 and Weld County Road 35, includes 24 lots. But development at the site was halted due to a tap moratorium imposed by the water district last fall.

The district imposed a moratorium on new taps in September, citing uncertainty over 1041 regulatory processes in Fort Collins and Larimer County over its planned NEWT III pipeline extending from North Timberline Road in Fort Collins 5.3 miles east into Larimer County.

North Weld also has acknowledged capacity issues stemming from the high rate of residential growth in the region, along with increased demand from commercial users, including dairies.

North Weld in March filed a motion to dismiss the case, arguing that the developer knew about the moratorium when it contracted to sell a lot in the Eagle View Farms development. 

“While the moratorium was in place, and with full knowledge of the imposition of the moratorium, the developer apparently entered into a contract with a potential buyer to sell one of the lots subject to the WSA,” attorneys for the North Weld County Water District said in the court filing.

Eagle View responded that “no legal or factual basis” existed to dismiss the case.

“… District made a promise to developer to provide taps pursuant to the WSA,” Eagle View’s attorneys stated in the motion to dismiss. “Developer fully performed its own obligations under the WSA. But district refused to provide taps. Therefore, based on core principles of Colorado contract law, developer can rightly pursue a remedy of specific performance against district for its failure to provide taps as promised under the WSA.”

North Weld, in an April 15 filing, countered that letters sent by the district in December 2021 “do not state the district will never provide taps nor do they state the district never intends to provide taps” and do not constitute a “repudiation” of the WSA.

“The purpose of the moratorium … was to address the reality of reduced water in North Weld county,” North Weld’s response continued. “Essentially, the district determined the dedication of water services to new developments was not feasible based on current water levels, and water must be conserved for already existing establishments.”

North Weld’s attorneys argued that Eagle View’s claims “fail to state a claim for relief and lack standing.”

But the judge’s ruling means that the case can proceed.

Ken Skogg, an attorney with Kutak Rock LLP representing Eagle View, praised the ruling.

“We appreciate the judge’s ruling, which clears the way for us to proceed to trial and immediately commence our comprehensive legal discovery, including depositions of North Weld, in further support of Eagle View Farm’s claims for damages and other relief,” Skogg said in a prepared statement. “We will follow the facts wherever they lead us. Based on the information we have already gathered as well as contacts and information from other affected parties, we believe our initial claims could be the tip of the iceberg in North Weld’s failure to properly exercise its fiduciary duties to the district and its patrons, along with the breach of its contractual obligations to my client.”

An attorney with Spencer Fane LLP, representing North Weld, declined to comment on the case.

The lawsuit is expected to go to trial in 2023.​​The Weld County District Court case, Eagle View Farms LLC v. North Weld County Water District, is 2022CV30072.

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