Elk Grove Development Co. v. Four Corners County Water & Sewer District
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The Supreme Court reversed the district court's entry of summary judgment in favor of Elk Grove Development Company (Elk Grove) and the Elk Grove Homeowners Association (HOA) and entry of an injunction enjoining the Four Corners County Water and Sewer District from using the Elk Grove Subdivision's water "sourced from any of the wells located within the Subdivision and from the Water Right for use upon property outside the Subdivision, holding that the district court erred in determining that the Subdivision Covenant was a reasonable restraint upon the alienation of a water right.
On appeal, the Water District argued that the Covenant was an unreasonable restraint on alienation because it usurped the State's jurisdiction over its water and violated the state water law requirement that waters be put to beneficial use. The Supreme Court reversed, holding that the district court erred to the extent that it held the Covenant was a reasonable restraint on the alienation of the Subdivision's water and Water Right and so enjoined the Water District.
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