Court Opinion

ID: 9732627
Source: CourtListenerOpinion
Date Created: 2023-08-26 16:28:26.582194+00
Date Added: 2024-06-11T18:26:30.700801
License: Public Domain

SABERS, Justice
(dissenting).
I dissent. A cause of action based on indemnity should be controlled by a statute of limitations based on indemnity — not on a statute of limitations based on a sale.
The majority thoroughly sets forth the opposing views as to whether the statute of limitations found in § 2-725 of the Uniform Commercial Code should apply to an indemnity claim. The majority then adopts the position that it should apply, but does so without any explanation as to why that position is preferable. In fact, the better position is that the § 2-725 limitation should not apply to an indemnity claim.
The right to indemnification arises when a person discharges a liability that equitably should have been discharged by another. Ebert v. Fort Pierre Moose Lodge #1813, 312 N.W.2d 119 (S.D.1981). An action for indemnification is based upon a contract, express or implied, that the person who should have discharged the liability will reimburse or indemnify the one who did. See McDermott v. City of New York, 50 N.Y.2d 211, 428 N.Y.S.2d 643, 406 N.E.2d 460 (1980). Such an indemnity claim is a separate cause of action, independent of the underlying liability. Id. As the court explained in McDermott: “The cause of action for indemnification interposed against the manufacturer of an allegedly defective product is independent of the underlying wrong_” Id., 50 N.Y.2d at 215, 428 N.Y.S.2d at 644, 406 N.E.2d at 461. Accordingly, an indemnification action should be governed by the six-year limitation applicable to an action upon a contract. SDCL 15-2-13(1). SDCL 57A-2-725, on the other hand, governs “[a]n action for breach of any contract for sale.” Since an indemnity action does not involve a contract for sale, it is inappropriate to apply SDCL 57A-2-725 to such an action.
Not only is it inappropriate to apply SDCL 57A-2-725 to this case, it is unconstitutional. Article VI, § 20 of the South Dakota Constitution guarantees a right of access to the courts of this state for resolution of a common law or statutory cause of action.* We have previously ruled that *419under this constitutional guarantee a statute of limitations may not prevent a cause of action before it accrues. Daugaard v. Baltic Co-op Bldg. Supply Ass’n, 349 N.W.2d 419 (S.D.1984). As Justice
Henderson explained in Daugaard:
How can a plaintiff be prevented from bringing a cause of action due to the passage of time prior to that action accruing? ... [T]he answer to this query is that it cannot, not without violating basic constitutional guarantees. Death cannot occur without there first being conception, nor dusk come without daylight. Neither can a cause of action expire before it accrues.
Id. at 425 (quoting McMacken v. State, 320 N.W.2d 131, 141 (S.D.1982) (Henderson, J., dissenting), affd on rehearing, 325 N.W.2d 60 (S.D.1982)).
Applying SDCL 57A-2-725 to Morris’ indemnity claim would result in preventing the cause of action before it accrues. Obviously, a cause of action may not be commenced before it accrues, see SDCL 15-2-1, and an indemnity action does not accrue until the party seeking indemnification suffers loss or damage. Wood River v. Geer-Melkus Constr. Co., 233 Neb. 179, 444 N.W.2d 305 (1982); accord McDermott; Beck v. Westphal, 141 Mich.App. 136, 366 N.W.2d 217 (1984). The earliest the patty seeking indemnification could suffer loss or damage would be the commencement of a claim against him for the underlying liability. In this case, a claim against Morris was not commenced until April 1986, over a year past the deadline SDCL 57A-2-725 would impose. In other words, if SDCL 57A-2-725 is applied to Morris’ indemnity claim, the time for bringing the action expired before the cause of action accrued. Simply put, Morris is prevented from seeking a remedy for the alleged injury. Article VI, § 20 prohibits such a result. •
The majority suggests that Morris is not denied a remedy because it was aware, of the warranty problems before the end of the SDCL 57A-2-725 limitation period. However, that would only allow Morris- to bring an action on the warranty, not an action for indemnity. Morris is not seeking to recover for a breach of warranty, but instead is seeking to be indemnified for a liability that it claims should equitably fall on Reinke. The indemnity action could not be brought by Morris until Sheehan instituted its action against Morris.
The majority also suggests that Morris is not entitled to be indemnified because it is not free from fault, and a party seeking indemnity must be free of fault. While the majority is correct that a party seeking indemnity must show it is free of fault, the majority misunderstands the type of fault that must be absent from the would-be indemnitee. The majority says Morris is not free from fault because it knew about the problems before the end of the warranty action limitation period, yet chose not to enforce their warranty rights. This is wrong. The relevant fault in an indemnity action is the fault in causing the problems with the product. See Wood River. The claimed defects include the paint on the interior of the pipes allegedly improper for submersible conditions causing it to flake off in large chunks and clog the end guns of the pivots. This is claimed to be solely the manufacturer’s responsibility (Reinke Manufacturing). Moreover, whether a particular would-be indemnitee is free from fault has nothing to do with the general question of what statute of limitations shall apply to the cause of action. The presence or absence of fault is a fact question for the finder of fact.
The majority’s holding also conflicts with our recent decision in Morgan v. Baldwin, 450 N.W.2d 783 (S.D.1990). That decision unanimously held that, where pleadings intertwined contract and medical malpractice causes of action, the longer (six-year) contract statute of limitations controlled both the contract cause of action and the legal malpractice cause of action, even though the three-year statute of limitations would have otherwise barred the legal malpractice claim. Should we have one rule which prevents indemnity claims against manufacturers even though within the statute of limitations and another entirely inconsistent rule which permits claims against lawyers even though otherwise barred by the statute of limitations?
*420We should reverse and remand for trial consistent with this writing.

 South Dakota Constitution Article VI, § 20 provides:
All courts shall be open, and every man for an injury done him in his property, person or reputation, shall have remedy by due course of law, and right and justice, administered without denial or delay.