Opinion ID: 887644
Heading Depth: 1
Heading Rank: 1

Heading: Claims Against Capitol Indemnity Co.

Text: ¶ 13 The District Court concluded that a no action clause in the policy between Capitol and Community Mutual barred any recovery by the Board. This no action clause was included in the 1983-1984 policy between Capitol and Community Mutual, which in effect, provided that Capitol cannot be required to pay any claimed loss unless the claim against the insured is tried in court, or the claimant, the insured, and Capitol all agreed to a settlement. ¶ 14 The Board contends that Capitol should be barred from asserting its no action clause defense because such a defense was not articulated in Capitol's letter denying the Board's claim for reimbursement. Under Montana's Unfair Trade Practices Act, an insurer has an obligation to inform the insured of all policy defenses it intends to rely upon. Portal Pipe Line Co. v. Stonewall Insurance Co. (1993), 256 Mont. 211, 217, 845 P.2d 746, 750 (citing § 33-18-201(14), MCA). We conclude, however, that the Board's argument is inapposite. Even if the Board is correct that § 33-18-201(14), MCA, would have required Capitol to disclose all possible defenses in its denial letter to the Board, Capitol would still be permitted to assert its statute of limitations defense, as such was included in the denial letter. ¶ 15 Assuming arguendo that the Board would otherwise have a claim against Capitol, through subrogation of Community Mutual's rights, then, as the Board recognizes in its brief, it would stand in the shoes of Community Mutual. See DeTienne v. Farmers Union Mut. Ins. Co. (1994), 266 Mont. 184, 189, 879 P.2d 704, 707-08. Any defenses Capitol has against Community Mutual may thus be asserted against the Board. See 16 Lee R. Russ & Thomas F. Segalla, Couch on Insurance § 234:67 (3d ed. 2005) (Since a subrog[ee] . . . stands in the shoes of an insured, it is subject to the same defenses as could be asserted against its insured, including a statute of limitations[.]) (footnote omitted). ¶ 16 The District Court did not address Capitol's statute of limitations defense in its final order, however, this defense was included in Capitol's answer to the Board's original complaint and has been argued throughout the briefing in this matter. [3] Further, if we reach the same conclusion as the district court, but on different grounds, we may nonetheless affirm the district court's judgment. Safeco Ins. Co. of America v. Liss, 2000 MT 380, ¶ 25, 303 Mont. 519, ¶ 25, 16 P.3d 399, ¶ 25. ¶ 17 A period of limitations begins to run from the time the claim for relief accrues. Section 27-2-102(2), MCA. Capitol claims that the limitations period began to run when Community Mutual could have first filed a claim with its insurer, Capitol, for payment of the cleanup costs. Capitol argues that such date occurred no later than 1989, when Community Mutual began paying for the cleanup. Conversely, the Board claims that the limitations period could not have began to run until July 2001, when Capitol denied the Board's claim for reimbursement of the amount it paid Community Mutual. ¶ 18 We conclude that the limitations period began to run when all the elements accrued for Community Mutual to file a claim with Capitol. This was sometime in 1989. To conclude otherwise would effectively nullify the purpose of any statute of limitations. See Nelson v. Twin Bridges High School (1979), 181 Mont. 318, 321, 593 P.2d 722, 724. As we concluded in Nelson, in an insurance setting, if the statute of limitations did not begin to run until the plaintiff's claim had been denied, [t]here would be no limitation on when the claim could be filed. The [defendant] could be sued at any time in the future at the option of the plaintiff, simply by delaying presentation of a claim[.] See Nelson, 181 Mont. at 321, 593 P.2d at 724. [4] ¶ 19 The longest possible period of limitations that could be applicable is eight years. Section 27-2-202(1), MCA. This is well short of the approximately twelve years that passed before the Board made its claim against Capitol. We therefore conclude Capitol is correct that any claim the Board may have had against it was barred by the statute of limitations.