Appeals Court: Water district lacks immunity in Eagle View dispute

DENVER — The Colorado Court of Appeals has affirmed a lower court’s denial of governmental immunity in a breach-of-contract lawsuit filed by Eagle View Farms LLC against the North Weld County Water District.

The decision was announced June 20 in an opinion written by Judge Jerry Jones, with Judges Stephanie Erin Dunn and Eric Kuhn concurring.

The dispute stems from a moratorium on issuance of water taps that the Lucerne-based district imposed in September 2021. North Weld, in imposing the moratorium, cited 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.

Eagle View Farms, which is developing a 24-lot residential community just west of Lucerne and north of Greeley at Colorado Highway 392 and Weld County Road 35, filed suit in February 2022 in Weld County District Court, alleging violations of a Water Service Agreement through which North Weld agreed to provide water service for the project.

Eagle View claimed that it lost sales as a result of the moratorium.

North Weld sought to have the case dismissed in March 2022, arguing that Eagle View knew about the moratorium when it contracted to sell one of the lots. A judge in June 2022 denied the motion to dismiss.

North Weld in March 2023 filed a motion for summary judgment asking the Court to find that the developer’s claims and damages sought “arise from tort or carry underlying allegations that could also lie in tort, and therefore are barred by the Colorado Governmental Immunity Act,” according to a court filing.

Torts generally describe acts or infringements, other than contractual. Governmental bodies generally enjoy immunity from disputes arising from tort.

Eagle View argued that North Weld’s actions did not arise from tort but constituted breach of a contract, the Water Services Agreement.

A Weld County District Court judge ruled in May 2023 that the CGIA did not bar the developer’s claims, a ruling that North Weld appealed.

But a three-judge panel on the Court of Appeals unanimously affirmed the lower court’s ruling, with Judge Jerry Jones writing, “The District … contends that the nature of Eagle View’s injury stemmed from the moratorium. But the District doesn’t even attempt to say why adoption or enforcement of the moratorium was a tortious act. And in any event, the District’s adoption of the moratorium didn’t create a different kind of injury than that Eagle View would have suffered if the moratorium hadn’t been adopted but the District nevertheless refused to satisfy its contractual obligations under the WSA. The injury Eagle View suffered stemmed from the District’s breach of the WSA, regardless of the District’s stated reason for breaching the WSA.”

Attorneys for North Weld and Eagle View did not return calls seeking comment.

Eric Reckentine, district manager for North Weld, declined to comment.

The Appeals Court’s decision means that the case will proceed to trial in Weld County District Court.

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