Opinion ID: 449535
Heading Depth: 3
Heading Rank: 2

Heading: Idaho Law

Text: 14 Idaho has adopted the Restatement rule that the law governing interpretation of a contract is the local law of the state that has the most significant relationship to the transaction and the parties. Restatement (Second) of Conflict of Laws Sec. 188(1) (1971) (hereinafter cited as Rest. 2d); Rungee v. Allied Van Lines, Inc., 92 Idaho 718, 449 P.2d 378, 382-83 (1968). The relevant contacts include: 15
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18 (e) domicile, residence, place of incorporation, and place of business of the parties. 19 Rest. 2d Sec. 188(2). 20 The relationships are evaluated based on these relevant factors: 21 (a) needs of the interstate system, 22 (b) policies of the forum, 23 (c) policies and interests of other interested states, 24
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28 Id. Secs. 6, 188(1). 29 The insured property was located in Idaho, Montana, Nevada, Oregon, Utah and Wyoming. The dam was in Fremont County, Idaho. It was to block a tributary of the Snake River and its collapse would result in property damage toward the south and west, the direction of the flow of the river. That damage was primarily, if not exclusively, in Idaho. See 43 C.F.R. Sec. 419.0-5(o) (1984) (defining major disaster area within only Idaho). 30 The insurance policy was issued in Illinois. The address for Union Pacific in the policy was originally Nebraska and was changed to Utah. The address for USFIC was New York and its principal place of business was New Jersey. 31 USFIC argues that Illinois is the state with the most significant contacts. We disagree. The place of contracting is relatively insignificant when there is no other significant relationship between the transaction and that place. Rest.2d Sec. 188 comment e. None has been shown here. 32 When insurance is involved, the principal location of the insured risk normally is the state whose law applies. Rest.2d Sec. 193. That state has a natural interest in the issues that arise. Id. comment c. The significance of the location of the risk is less here, where risks in several states were insured. Id. comment b. None of the insured property, however, was located in Illinois. 33 Statutes of limitation traditionally were considered procedural in nature and were controlled by the law of the forum state. E. Scoles & P. Hay, Conflict of Laws Sec. 3.9 (1982). The Restatement adopts the traditional rule, providing that an action may be maintained if it is not barred by the forum statute of limitation, even if it is barred by the statute of limitation of another state. Rest.2d Sec. 142(2). The only exception is if the right and not just the remedy would be barred by a statute of limitation in the state whose law would otherwise be applied. Id. Sec. 143. The exception is almost invariably limited to causes of action created by the statute. Id. comment c. It does not apply here. 34 Under the circumstances, Idaho has the most significant relationship to the statute of limitation issue. Idaho is the forum state. The damage occurred there and it has a particularly strong interest in regulating statutes of limitation. See Idaho Code Sec. 29-110 (1980) (voiding contractual deviation from statutory standards). The contacts here were so diverse that choosing any other state's law would have to be a random decision. 35 Idaho Code Sec. 5-216 (1979) establishes a five-year statute of limitation for contracts, including insurance policies. See Harding v. Mutual Benefit Health & Accident Association, 55 Idaho 131, 39 P.2d 306, 307 (1934). Idaho Code Sec. 29-110 prohibits any condition in a contract that would reduce that period. 36 USFIC has argued that the Idaho legislature endorsed a one-year statute of limitation for insurance policies when it enacted Idaho Code Sec. 41-2401 (1977). That section requires that fire insurers issue policies only on the New York standard [form] as revised in 1943. Id. The form includes a clause specifying a 12-month limitation period for claims. The Idaho Supreme court has held that the 12-month limitation period specified in the form and in the USFIC policy is void under Idaho law. Sunshine Mining Co. v. Allendale Mutual Insurance Co., 107 Idaho 25, 684 P.2d 1002 (1984). 37 The United States acquired its claims in October 1978, less than three years after the dam collapsed, well within the five-year statutory limitation period. The six-year federal limitations period then became applicable. See 28 U.S.C. Sec. 2415(a). When the United States asserted its counterclaim in April 1979, less than three years after the dam collapsed, it was not time-barred.