Red Mountain, LLC v. Fallbrook Public Utility District

Red Mountain, LLC (Red Mountain), owns undeveloped land adjacent to a drinking water reservoir (the reservoir) and surrounding property owned by Fallbrook Public Utilities District (Fallbrook). Red Mountain sued Fallbrook for breach of contract, specific performance, and inverse condemnation based on Fallbrook’s refusal to perform a written agreement to convey to Red Mountain a 60-foot easement for ingress and egress (the access easement) across Fallbrook’s property. Fallbrook filed a cross-complaint to quiet title and for declaratory and injunctive relief, in which it alleged that approximately 127 acres of Red Mountain’s property was encumbered by a nonexclusive “sanitary easement” (the sanitary easement), which entitled Fallbrook “to patrol, control and maintain sanitary conditions” in the easement area in order to keep the reservoir water free from contamination. Fallbrook alleged that the easement precluded Red Mountain from developing the land within the easement area.

While this litigation was pending, Fallbrook filed an eminent domain complaint against Red Mountain condemning a 134.24-acre parcel of land that included all or most of the sanitary easement area.…