June 26, 2019

Colorado Court of Appeals: Thompson Creek Townhomes, LLC v. Tabernash Meadows Water and Sanitation District

on June 10, 2010.

Summary Judgment—Specific Performance Regarding Water Taps—Governmental Immunity from Specific Performance.

Thompson Creek Townhomes, LLC (Thompson Creek) filed a suit for breach of contract and promissory estoppel against the Tabernash Meadows Water and Sanitation District (District), seeking specific performance and money damages for the District’s failure to reserve water taps for Thompson Creek’s residential development. The District filed a motion to dismiss, which the court considered a motion for summary judgment because the underlying operative facts were undisputed. The court granted summary judgment dismissing Thompson Creek’s specific performance and promissory estoppel claims and the remaining claims were dismissed by stipulation. The Court of Appeals affirmed the lower court’s decision.

In 2005, First Community Bank (Bank) acquired a parcel of real property known as Lot 16 through foreclosure. The District then had a policy of reserving water and sewer taps for landowners who paid “availability of service charges.” These charges were based on 50 percent of the monthly cost for the sewer and water service, and were to be paid quarterly. When the Bank acquired the Lot, these charges had not been paid for approximately three years. The Bank paid past due amounts to the District when it foreclosed, but it elected to defer any newly accumulating charges until the lot was sold.

In 2006, Lot 16 was sold to Thompson Creek. Before the closing, the District announced that it would no longer reserve taps in exchange for availability of service charges and would reserve them only if they were purchased outright. The District notified the Bank that no taps would be reserved for the Lot until they were purchased.

The closing occurred in early 2007. The Bank tendered payment for the accrued availability of service charges on closing, but the payment was rejected by the District. Thompson Creek filed suit, asserting claims for breach of contract and promissory estoppel, seeking specific performance and money damages. Thompson Creek appealed the judgment dismissing the claim for specific performance.

Thompson Creek argued that a contracting party may seek specific performance against a governmental entity, notwithstanding governmental immunity, if the performance it seeks involves a non-core governmental power. Thompson Creek contended that a contractual obligation to reserve water taps is such a non-core governmental power. The Court disagreed, finding no exception for governmental immunity from specific performance for such so-called non-core powers. The judgment was affirmed.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on June 10, 2010, can be found here.

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