A recent Delaware decision is noteworthy because of its clarification of when the statute of limitations begins to run in connection with the alleged breach of a contractual indemnification clause.
The Superior Court ruled that an indemnification claim for environmental remediation liability accrued when the seller refused to indemnify the buyer–and not when the buyer discovered the contamination on which the indemnification claim was based. See Cooper Industries v. CBS Corp., C.A. No. N18C-03-175-WCC-CCLD (Del. Super., Jan. 10, 2019). The agreement at issue provided that the duty to indemnify was triggered when the buyer sustained losses. See footnote 58 and accompanying text, citing cases for the position that the breach does not occur until the claim was rejected. In light of that finding, suit was filed within the three-year SOL for contract claims. A more careful review of the detailed facts described in the court’s opinion is warranted for those who need to be familiar with the nuances of the latest iteration of Delaware law on this topic.