Opinion ID: 2517002
Heading Depth: 1
Heading Rank: 4

Heading: issues

Text: ¶ 22 Does a separate period of limitation commence after each reimbursement payment made by the Board? ¶ 23 The Board also argues that our holding in Capitol Indemnity requires that a separate period of limitation commences after each of the 575 payments the Board alleges it made to the owners of the petroleum facilities. ¶ 24 As we noted both above and in Capitol Indemnity, the statute of limitations in these cases is based not on payment, request for payment, or denial of payment. Rather, it is based on when the claim accrues; that is, upon discovery of the leak and the subsequent obligation on the part of the owners to clean up the spilled petroleum, which triggered their right to maintain an action under an applicable insurance policy. ¶ 25 The Board relies on this Court's holding in St. Paul Fire & Marine Ins. Co. v. Thompson, 152 Mont. 396, 451 P.2d 98 (1969), for the proposition that a party has no claim for indemnification until payment of a judgment. In St. Paul, after entry of a judgment against an employee for negligence and his employer based on the legal theory of respondeat superior, the employer's insurer sought indemnification from the negligent employee. This Court held that the statute of limitations for the insurance company's indemnity claim did not start running at the time of the accident giving rise to the original injury, but, rather, only after the employee's liability had been determined in a separate court action. St. Paul, 152 Mont. at 403, 451 P.2d at 102. Once the employee and employer's liability had been established at trial and then upheld on appeal, the insurer's obligation to pay was confirmed. Only at that time was the insurance company's right to indemnification established. Had the employee been found not to be negligent, his employer would not have been liable through respondeat superior, and the insurance company would not have been required to pay damages to the plaintiff in the underlying case. ¶ 26 In essence, in St. Paul, the Court concluded that only once the employer's liability had been established through respondeat superior did the statute of limitations begin to run on the insurer's indemnification claim. Here, on the other hand, in this first-party case, the facility owners' liability for cleanup was established when the leaks were discovered and the obligation for cleanup occurred. Thus, this case is unlike St. Paul in that there the insurance companies' obligation to pay was dependent on a third party's recovery in tort, while in this case the claim under the insurance policies matured when the obligation to clean up arose. Once the alleged obligation to pay under the policies arose, the periods of limitation began to run both for the facility owners and for the Board as their subrogee. ¶ 27 The Board also cites Fulton v. Fulton, 2004 MT 240, 322 Mont. 516, 97 P.3d 573, in support of its position. In Fulton, a domestic relations case, we noted that monthly spousal maintenance payments due under a court order were, in essence, installment payments, each with a separate period of limitation. Fulton, ¶ 14. Here, on the other hand, the Insurance Companies were not obligated to make installment payments to the facility owners. Rather, if the losses were insured as alleged, the insurers had a contractual obligation to pay the facility owners the cost to clean up the petroleum spill up to the limits of their policies. Neither the facility owners nor the Board as subrogee sought to enforce this obligation within the applicable period of limitations. ¶ 28 St. Paul and Fulton are inapposite. The District Court's orders denying the Board's prayer for a separate period of limitation for each payment are correct applications of the law.