We are being threatened with civil action law suit over our water fountain x our neighbor in gated community over a very loosely based CCR covenant

Neighbor disputes can be very frustrating and acrimonious.  I'm not sure what is so disturbing about your water fountain, but this sounds like frivolous (if not harassing) behavior by your neighbor.  Is something else going on here?  I would need to know more particulars.  In the interim, if your neighbor proceeded with a nuisance case (he could proceed with a lawsuit or go through HOA, depending on the CC&Rs, and HOAs often don't enforce them), the cause of action would be one for private nuisance, since I am assuming this neighbor is the only one offended by the fountain.  The neighbor would have to show your use of the water fountain interferes with his property rights, not just that it is a mere annoyance.  One of the leading cases on this topic says this:  [E]very annoyance or disturbance of a landowner from the use made of property by a neighbor does not constitute a nuisance. The question is not whether the plaintiffs have been annoyed or disturbed ... but whether there has been an injury to their legal rights. People who live in organized communities must of necessity suffer some inconvenience and annoyance from their neighbors and must submit to annoyances consequent upon the reasonable use of property by others. (Schild v. Rubin (1991) 232 Cal.App.3d 755 , 764.)  Take a look at your CC&Rs and Bylaws and see what they say about homeowners suing each other directly.  One thing you don't want to get into is a dispute with the HOA where you may be liable for their attorneys' fees.  Follow the procedures in the CC&Rs and Bylaws.