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State v. Kentucky Insurance Guaranty Association5/30/1997
st instance unless there were underlying substantive violations. Thus KIGA II and Whitley Development are fully consistent with each other and supportive of our Conclusion that the Cabinet's causes of action against KIGA arose no later than the dates on which the notices of noncompliance regarding substantive reclamation violations were issued.
In light of the clearly applicable precedent in KIGA II and Whitley Development, the Cabinet's reliance on federal case law regarding accrual of a cause of action is misplaced. As for the Cabinet's argument that public policy favors a finding that a cause of action does not accrue until administrative proceedings are concluded, we disagree. The Cabinet would have no incentive to resolve promptly its claims against KIGA if it were allowed an unlimited time to pursue administrative proceedings, with the only time constraint being a requirement that a judicial action be filed within seven years of the Conclusion of those administrative proceedings. The Cabinet's statutory obligation to abate violations in the "most expeditious manner possible" is best encouraged and the public interest in minimizing surface coal mining's adverse effects on the Commonwealth is best honored by requiring the Cabinet to recognize that a cause of action accrues against KIGA when an administrative action could be commenced, not when it is concluded.
III. EVEN WHERE THE VIOLATIONS ARE UNABATED AND CONTINUING,
THEY DO NOT CONSTITUTE AN EXCEPTION TO KRS 413.220(3)
The Cabinet's third argument is that the statute of limitations does not apply because the violations giving rise to the bond forfeitures are unabated and continuing. In support of its position, the Cabinet relies primarily on several state and federal cases involving nuisance and trespass claims. To counter the Cabinet's continuing violation theory, KIGA cites the exclusivity of the tolling provisions contained in KRS 413.240 and policy considerations favoring the Conclusion that
KRS 413.220(3) commenced to run upon issuance of the notices of noncompliance. Agreeing with KIGA's position, the circuit Judge referred to KRS 413.150 which applies the limitations provisions prescribed by Chapter 413 to the Commonwealth and private persons alike, "except where a different time is prescribed by statute." Emphasizing the General Assembly's retention of a clearly articulated right to extend or change the limitation periods set out in Chapter 413, the trial Judge found significant the lack of a statutory provision removing continuing violations from the periods set forth in KRS 413.220(3). He also noted that placing no time limitation on the Cabinet's election to pursue a claim would greatly reduce the incentive for the Cabinet to act swiftly in such matters. We agree.
In Schwerman v. Commonwealth, 99 Ky. 296, 38 S.W. 146, 148 (1896), the Court considered the factors for tolling the statute of limitations applicable to actions against sureties. At that time, the statute was codified as section 2551, a predecessor to KRS 413.220(3). The court concluded that "the only conditions or acts which do stop the running of statutes of limitation in favor of sureties are prescribed in section 2552," a predecessor to KRS 413.240. In light of this long-standing case law, we are persuaded the trial Judge's analysis is correct: the legislature has the ability to carve out an exception to
KRS 413.220(3) for continuing violations, so its inaction must be construed to manifest an intent to include them within the limitations period.
The Cabinet argues that the lower court's reasoning is insufficient because it does not address the "well-established" common law regardi
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