Norbeck v. Flathead Cnty., 438 P.3d 811

Background

Plaintiffs Amber and Andrew Norbeck bought a lot in the Harvest View Subdivision in December 2008, built and moved into a home finished January 2010, and experienced immediate and ongoing problems with the subdivision public water system (no water during construction, flooding when connected, muddy water, low pressure).
Developer William Koenig engaged Birk Engineering (Birks) to design subdivision infrastructure; DEQ had issued a Certificate of Subdivision Plat Approval (COSA) and subdivision improvement agreements (SIAs) in 2008 that required completion of the public water system by a set date; those instruments were recorded and excepted in plaintiffs’ title policy.
DEQ later issued Notices of Violation (2013–2014) and an Administrative Order on Consent with Koenig in 2014 regarding the incomplete water system; plaintiffs learned of DEQ’s involvement by 2013 and decided to sell in 2014 but were told conventional financing was unavailable because of the DEQ notices.
Plaintiffs sued multiple defendants in November 2014 asserting MUTPA, negligence, negligent misrepresentation, nuisance, constructive fraud, and punitive damages; claims (except one directed only at Glacier) were pleaded generally against all defendants.
District Court granted summary judgment to Glacier and Fidelity (September–October 2017), establishing as a factual/legal determination that plaintiffs’ claims accrued no later than May 1, 2010; plaintiffs did not appeal those final judgments.
The District Court then granted summary judgment to DEQ, Birk Engineering, and Flathead County on statute-of-limitations grounds (applying the discovery rule and law-of-the-case), and the Montana Supreme Court affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
When did plaintiffs’ claims accrue for statute-of-limitations purposes?	Claims did not accrue until 2014 when plaintiffs learned DEQ Notices prevented conventional financing and impaired saleability.	Claims accrued by May 1, 2010 because plaintiffs had actual and constructive notice of water-system defects and recorded COSA/SIAs.	Held: Accrual no later than May 1, 2010; limitations bars apply.
Does the discovery rule delay accrual because COSA/SIAs were complex or self-concealing?	COSA/SIAs were self-concealing/complex; plaintiffs lacked knowledge until DEQ notices in 2013.	Plaintiffs had actual notice of defects (water outages, flooding, muddy water) and constructive notice from recorded COSA/SIAs and title exceptions; they failed to investigate.	Held: Discovery rule inapplicable; plaintiffs had sufficient notice to trigger inquiry by May 1, 2010.
Is the District Court’s prior accrual determination (re: Glacier/Fidelity) binding on the other defendants (law of the case)?	That determination only applied to Glacier/Fidelity; plaintiffs contend they didn’t receive some orders and did not intend to waive appellate rights.	Claims were pleaded generally against all defendants; the unappealed determination became law of the case and binds all parties.	Held: Law-of-the-case applies; unappealed accrual ruling (May 1, 2010) governs all defendants.
Are MUTPA, constructive fraud, and punitive-damage claims viable against DEQ/Flathead?	Plaintiffs initially asserted them.	Defendants argued DEQ/Flathead cannot be liable under those claims.	Held: Plaintiffs conceded those claims as to DEQ/Flathead; remaining tort claims time-barred.

Key Cases Cited

Christian v. Atl. Richfield Co., 380 Mont. 495, 358 P.3d 131 (Mont. 2015) (discovery rule and accrual; lack of knowledge does not postpone accrual absent concealment or due diligence failure)
Draggin' Y Cattle Co. v. Addink, 372 Mont. 334, 312 P.3d 451 (Mont. 2013) (application of discovery rule where facts are concealed or self-concealing)
E.W. v. D.C.H., 231 Mont. 481, 754 P.2d 817 (Mont. 1988) (total extent of damages not required to start limitations period; discovery doctrine limits)
Bergin v. Temple, 111 Mont. 539, 111 P.2d 286 (Mont. 1941) (cause of action accrues when rights are infringed)
Pederson v. Rocky Mountain Bank, 364 Mont. 258, 272 P.3d 663 (Mont. 2012) (claims not filed within limitations are barred)
Osterman v. Sears, 318 Mont. 342, 80 P.3d 435 (Mont. 2003) (MUTPA two-year limitations period)
Christianson v. Colt Indus. Operating Corp., 486 U.S. 800 (1988) (law-of-the-case principle promotes finality; prior rulings govern subsequent stages)
Arizona v. California, 460 U.S. 605 (1983) (law-of-the-case explained as rule that previously decided issues should govern later stages)