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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Egner v. Talbot's, Inc. (07/31/2009) sp-6394
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| CAROL EGNER, f/k/a CAROL | ) |
| BURNS, and f/k/a CAROL CHURCH, | ) Supreme Court No. S-12714 |
| a shareholder in Talbots, Inc., | ) |
| ) Superior Court No. 1KE-06-201 CI | |
| Appellant, | ) |
| ) O P I N I O N | |
| v. | ) |
| ) No. 6394 - July 31, 2009 | |
| TALBOTS, INC., an Alaska corpor- | ) |
| ation; JEFFREY P. McNULTY, | ) |
| president of Talbots, Inc.; NANCY | ) |
| J. McNULTY, director of Talbots, | ) |
| Inc.; JANE T. CHURCH; and JANET | ) |
| MINNICH f/k/a JANET CHURCH, | ) |
| ) | |
| Appellees. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, First Judicial District,
Ketchikan, Trevor N. Stephens, Judge.
Appearances: Paul D. Kelly, Kelly &
Patterson, Anchorage, and Steven W. Edmiston,
Invicta Law Group, PLLC, Seattle, Washington,
for Appellant. Alexander J. Hildebrand,
Baxter Bruce & Sullivan P.C., Juneau, for
Appellee.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Carpeneti, and Winfree, Justices.
EASTAUGH, Justice.
I. INTRODUCTION
Alleging denial of her rights as a shareholder and
asserting other claims concerning ownership of Talbots, Inc.,
Carol Egner sued Talbots, Inc., her mother, her sisters, and a
brother-in-law in 2006. The defendants moved for summary
judgment, arguing that Carol had never been a shareholder and,
alternatively, that the contract statute of limitations barred
her claims. The superior court granted complete summary judgment
to the defendants on the statute of limitations issue.
We affirm. We hold that Carol was on inquiry notice no
later than 1986 that her status as a shareholder was disputed.
We also hold that her failure to make reasonable inquiry within
the applicable statutes of limitations precludes all claims
related to her purported shareholder status.
II. FACTS AND PROCEEDINGS
This case concerns claims relating to the ownership of
Talbots, Inc., a corporation that owns Talbots, a general
hardware and lumber store in Ketchikan.1 In 2006 Carol (Church)
Egner sued the corporation, Jane Church, Nancy McNulty, Janet
Minnich, and Jeffrey McNulty; her complaint alleged that she was
a shareholder of Talbots and that the defendants had violated
various duties allegedly owed to Carol. Carol is the daughter of
Jane Church and the late James Church Sr.; Carol is the sister of
Janet (Church) Minnich and Nancy (Church) McNulty and the sister-
in-law of Jeffrey McNulty. We refer collectively to the parties
Carol sued as the defendants. We refer interchangeably to
Talbots and Talbots, Inc.
In 1949 Jane Churchs parents sold all three hundred
issued shares in Talbots, Inc. to Jane and her husband, James
Church Sr. James Church Sr. received 153 shares; Jane received
147. Jane and James Sr. were the directors and officers of
Talbots, Inc. from 1949 to 1978. During this period James Sr.
managed the business and handled all corporate matters, except
those requiring Janes signature.
Jane and James Sr. had four children: Janet, Nancy,
Carol, and James Jr. All four children intermittently worked at
Talbots between 1958 and 1978. Carol stated in an affidavit that
she began working at Talbots in 1960 and that 1964 was her first
year of recorded earnings at the store.
Carol also stated in affidavits that her father, James
Sr., frequently told her that she owned stock in Talbots; that on
at least six occasions before 1978 she was offered the option of
a wage increase or stock and that she chose the stock; and that
on at least three occasions (the last of which was in 1968),
James Sr. showed her a stock ledger that indicated that she owned
shares of Talbots stock. The original stock ledger is not in the
record; it was destroyed in a fire sometime before 1978.
James Jr. stated in an affidavit that he also had
accepted offers from James Sr. to take Talbots stock in lieu of
wage increases during the same time period.
Janet, Carols oldest sibling, testified in her
deposition that she worked full- or part-time at Talbots from
1958 through 1984, with the exception of three gaps, one from
late 1965 though early 1968, and two in the early 1970s. Janets
responsibilities included daily bookkeeping, making bank
deposits, and placing orders for the store. She assumed a
managerial role after James Sr.s death in 1978. Janet testified
that she believed her parents owned Talbots in its entirety, that
she was never aware of any transfer of shares or offer of stock
to any of her siblings, and that any transfer or offer would have
been discussed by the entire family.
When James Sr. died in 1978, his wife, Jane, inherited
his shares. Jane testified at her deposition that she was the
sole shareholder of Talbots after James Sr.s death. Carol stated
in an affidavit that she had asked Jane for Carols stock
certificates after James Sr.s death, and that Jane had responded
by saying both that Carol did not own any Talbots stock, and that
Jane and Janet were taking care of things and that it took time.
The stock ledger produced in discovery after Carol sued
in 2006 had been generated in 1979, after James Sr.s death.
Jeffrey McNulty, Nancys husband, testified in his deposition that
because the defendants could not find a stock transfer ledger for
the 1949-1979 period, the share certificates and stock transfer
ledger were recreated with entries dating from 1975 on, based on
James Sr.s 1975 tax information. These reconstituted records
appear to support the defendants contentions that Jane already
owned 147 shares before James Sr.s death, that she inherited his
153 shares when he died, and that she was therefore the only
shareholder as of 1979.
Three share certificates, created in 1979 but backdated
to 1975, were for 153, 147, and 300 shares, respectively. The
defendants contend on appeal that there were only 300 shares
total, not 600 as the certificates imply. They contend that the
third certificate, for 300 shares, was erroneously backdated; it
should have been dated January 1979 and was intended to reflect
Janes ownership of the total of all 300 shares evidenced by the
first two certificates after her husbands shares were transferred
to her following his death in 1978. The third certificate
potentially supports Carols contention that there were more than
300 shares, and that she owned some of them even if Jane owned
300 after James Sr. died.
In March 1980 Jane, Janet, Nancy, and Carol entered
into a five-year voting trust agreement by which the three
sisters were to vote Janes shares. This agreement gave each
sister a one-third interest in the shares, including the rights
to vote and manage those shares, but not the right to collect
dividends. The agreement stated that Jane was the party of the
first part and that the first party owned all of the shares of
Talbots. As part of this agreement, Carol, Nancy, and Janet were
collectively issued one 300-share certificate dated March 7,
1980. Carol later asserted in an affidavit that she first
learned in 2006 (when she received defendants motion for summary
judgment), that this 300-share certificate had been issued.
In November 1980 the then-board (Jane, Janet, Nancy,
and Carol) met and determined that the voting trust agreement was
not working and agreed that Jane and Janet would manage Talbots
until other arrangements could be made. Carol signed the minutes
of that meeting. Janet and Nancy signed the back of the March 7,
1980 share certificate in order to transfer the 300 shares back
to Jane, but Carol did not sign. Carol later stated in an
affidavit (filed in response to the defendants summary judgment
motion) that she was not advised of what other arrangements would
be made, and that she did not sign and would not have signed a
document dissolving the voting trust agreement if she suspected
that it would terminate her interest in Talbots. By its own
terms, the voting trust agreement expired five years after it was
executed in 1980.
In a series of transactions between 1983 and 1986, Jane
sold her shares in Talbots to Nancy and Nancys husband, Jeffrey
McNulty. Carol stated in paragraph 23 of her August 10, 2006
affidavit, filed in response to defendants statute of limitations
summary judgment motion, that she did not find out that in 1983
my mother sold Talbots to Nancy and Peter McNulty until 1986.
In July 1995 Jane and Janet visited Carol at her home
and asked her to sign a document. The parties disagree about
what the document was. Carol stated in an affidavit that the
document was a stock certificate made out to Carol Burns (Carols
former name) and that it represented that she owned at least 100
shares of Talbots stock. She also stated that Jane and Janet
asked her to sign the back of the document for tax purposes and
that, when Carol asked to see the certificate, they refused to
give it to her and physically prevented her from taking it.
The individual defendants stated in affidavits that the
document was the stock certificate relating to the voting trust
agreement. The certificate transferred the 300 shares back to
Jane. Nancy testified in her deposition that she asked Jane and
Janet to ask Carol to sign the certificate. Although Nancy also
testified that, after consulting with the corporations attorneys,
she and Jeffrey had concluded that Carols signature was
unnecessary, Nancy stated in an affidavit that she wanted Carol
to sign to cur[e] any perceived problems with the certificate.
In November 2005 Carol wrote to Nancy to request a list
of shareholders for Talbots and any stock certificates issued to
Carol. Jane responded by letter to Carols request, stating that
Carol had never owned any shares of Talbots. In February 2006
Carols attorney made a written request on Carols behalf to review
the corporate records and documents for Talbots. An attorney for
Talbots responded, denying Carols request on the ground Carol was
not a shareholder.
In May 2006 Carol sued Talbots, her mother, her
sisters, and her brother-in-law. Her complaint asserted claims
for: (1) failure to allow full inspection of corporate books and
records;2 (2) failure to allow Carol to exercise various other
shareholder rights under the Alaska corporations code;3 (3)
breach of fiduciary duty; (4) conversion and misappropriation of
corporate funds; and (5) conversion of and trespass to Carols
shares.
The defendants moved for summary judgment, arguing that
Carols claims should be dismissed either because they were barred
by the six-year contract statute of limitations or because Carol
was not a shareholder.4 The superior court denied summary
judgment as to whether Carol was a shareholder, holding that
there were genuine issues of material fact as to that issue. It
nonetheless granted complete summary judgment for the defendants,
holding that the pertinent statutes of limitations barred all of
Carols claims. It therefore entered judgment against Carol.
Carol appeals, arguing that the superior court erred in
granting summary judgment on the statute of limitations issue.
She asks us to remand for an evidentiary hearing.
III. DISCUSSION
A. Standard of Review
We review summary judgment decisions de novo, affirming
if there are no genuine issues of material fact and the
prevailing party is entitled to judgment as a matter of law.5
In reviewing the grant of summary judgment, we view the facts in
the light most favorable to the party against whom summary
judgment was entered.6 We have held that [t]he evidentiary
threshold to preclude the entry of summary judgment is low.7
Under the discovery rule, the date on which the statute
of limitations begins to run is a question of fact.8 But it is a
legal question whether undisputed facts establish that a
plaintiff is on inquiry notice.9 Whether a claim is actually
barred by the statute of limitations is a question of law.10 We
review questions of law de novo, adopting the rule that best
reflects precedent, reason, and policy.11
B. Whether Carol Was Put on Inquiry Notice at Least Six
Years Before She Sued in 2006 that Her Shareholder
Status Was Disputed
The superior court held that the defendants presented
sufficient evidence to make out a prima facie case that Carol was
on inquiry notice as of 1986 at the latest, and that Carol failed
to demonstrate that there was a genuine dispute of material fact.
The court wrote:
[A]ny causes of action concerning her
[shareholder] status in Talbots, Inc. accrued
in 1978. By that time she had discovered, or
reasonably should have discovered, the
existence of all elements essential to any
such cause(s) of action. At the latest, any
such cause(s) of action accrued in 1986 when
she also knew that Ms. Church had sold her
stock to . . . Ms. McNulty and Mr. McNulty,
that they claimed that Ms. McNulty and Mr.
McNulty were the sole owners of Talbots,
Inc., and that Ms. McNulty had excluded her
from the business premises. There are no
genuine issues of material fact in this
regard.
(Footnote omitted.) The superior court therefore held that the
defendants were entitled to judgment as a matter of law on the
statute of limitations issue and entered complete summary
judgment for the defendants.
Carol argues that it was error to grant summary
judgment on the statute of limitations issue. She contends that
when the statute of limitations began running is a question of
fact that should not be resolved on summary judgment.
Carol filed her complaint in May 2006. The longest
potentially applicable statute of limitations was the six-year
statute for contract causes of action accruing before August 7,
1997.12 The essential question here is therefore whether Carol
was put on notice before May 2000 that she should begin an
inquiry to protect her rights.
When a cause of action accrues ordinarily presents a
question of fact13 that must be resolved at an evidentiary
hearing.14 Resolution of the issue on summary judgment is
appropriate only if the superior court has before it
uncontroverted facts regarding when the statute of limitations
began running.15 We apply the discovery rule to determine when a
cause of action accrues if an element of the cause of action is
not immediately apparent.16 Under the discovery rule, a cause of
action accrues when a reasonable person has enough information to
alert that person that he or she has a potential cause of action
or should begin an inquiry to protect his or her rights.17 The
question here is therefore whether Carol was put on inquiry
notice before May 2000.
A party moving for summary judgment bears the initial
burden of proving through admissible evidence (1) the absence of
genuine fact disputes, and (2) its entitlement to judgment as a
matter of law.18
Here the defendants filed exhibits with their summary
judgment motion. The exhibits included James Sr.s will and
related documents and the 1980 voting trust agreement and related
documents. The voting trust agreement stated that the first
party . . . owns all of the shares of Talbots, Inc. and described
Jane Church as the party of the first part. Carol signed that
agreement in 1980. Each of the four individual defendants also
filed affidavits. They collectively asserted that Jane owned
100% of the shares and sold them in 1983 to Nancy and Jeffrey
McNulty. The exhibits and affidavits made out a prima facie
showing that Carol was not a shareholder and had never been a
shareholder and that the store (or perhaps the corporation) was
sold to Nancy and Jeffrey McNulty in 1983. They also potentially
established that Carol, having signed the voting trust agreement
in 1980, was on notice as of 1980 that she owned no shares in the
corporation. On the timeliness issue, defendants asserted
generally that all of Carols claims accrued long before (and
certainly more than six years before) she filed suit in 2006.
Once the movant has made out a prima facie case, the
nonmovant, to avoid summary judgment, must set forth specific
facts showing that there is a genuine dispute of material fact.19
The evidence adduced by the defendants in moving for summary
judgment obliged Carol to demonstrate that there was a genuine
dispute of material fact about (1) whether she was a shareholder
and (2) whether, even after she signed the 1980 agreement, she
was unaware that her shareholder status was disputed.
As to the first issue, she succeeded: the superior
court denied summary judgment to the defendants on the issue
whether Carol was a shareholder. This issue is not before us on
appeal, so we assume that the superior court correctly held that
there was a genuine factual dispute about whether Carol was a
shareholder.
As to the second issue, we conclude that it is
controlled by the 1980 voting trust agreement Carol signed and
the admissions made in her August 10, 2006 affidavit opposing
summary judgment on the timeliness issue.
In paragraph 12 of that affidavit, Carol stated that,
after James Sr.s death in February 1978, Jane told me that I did
not own any Talbots stock. This averment was an admission by
Carol that in 1978, Jane had explicitly told her that Carol was
not a shareholder and had thus explicitly repudiated Carols
alleged status as a shareholder. Jane was then a director,
officer, and the sole or majority shareholder of Talbots.
The voting trust agreement described Jane as the party
of the first part and stated that the first party owned all of
the shares of Talbots. Carol signed that agreement in March
1980. The agreement undisputably put her on notice that Jane was
the sole shareholder of Talbots.
Paragraph 23 of Carols affidavit describes what Carol
claims she knew about the sale of Talbots to the McNultys and
also describes her December 1986 confrontation with Nancy at the
store:
I did not find out that in 1983 my mother
sold Talbots to Nancy and [Jeffrey] McNulty
until 1986. Sometime before Christmas in
1986 I went to the Talbots store to invite
Nancy and [Jeffrey] McNulty to a Christmas
open house I was holding. At that time I
believed they were merely managing the
Talbots store. During that meeting Nancy
took me into the Talbots office and told me
to get out of her store and never to come
around again.
(Emphasis added.) As to whether Carol was aware that there was a
dispute about whether she was a shareholder, the emphasized
sentence contains Carols admission that she became aware in 1986
that Jane had sold Talbots to Nancy and Jeffrey in 1983. Carol
also stated in another affidavit that in the spring or early
summer of 1980 Jane told Carol that Nancy might purchase Talbots,
and that Carol told Jane that Carol was delighted at the news
because I would then get my Talbots shares. By 1986 Carol was
aware both that the sale had occurred and that she had not
received any Talbots shares after the sale. That awareness,
coupled with what Carol admitted Jane told her in 1978 and with
the terms of the voting trust agreement Carol signed in 1980, put
her on notice that the corporation did not consider her a
shareholder and was not treating her as a shareholder.
Nancys demand that Carol get out of her store and never
. . . come around again read in isolation might permit an
inference that Nancy was speaking colloquially, not possessively,
about her store, even though the first sentence of paragraph 23
seems to preclude any such inference. But even if the December
1986 confrontation did not put Carol on notice that Talbots was
actually Nancys, the first sentence in paragraph 23 of Carols
affidavit established that Carol actually knew in 1986 that Carol
was not an owner of Talbots. That sentence was an admission
establishing that, as of 1986, Carol had actual knowledge of
facts putting her on notice that she needed to make inquiry to
protect whatever shareholder rights she thought she had in
Talbots.
Summary judgment was a permissible method for disposing
of claims relating to conduct that occurred within the applicable
limitations periods after Carol was put on inquiry notice no
later than 1986.20 We held in Mine Safety Appliances Co. v.
Stiles that although summary judgment is ordinarily an
inappropriate mechanism for determining whether the statute of
limitations has run, in cases in which there are uncontroverted
facts that determine whether a party reasonably should have begun
an inquiry to protect his or her rights, the court may make the
determination as a matter of law.21
The uncontroverted facts establish that Carol was put
on inquiry notice no later than 1986. She knew that Talbots had
been sold, that she was not considered an owner of Talbots, that
her shareholder status was denied or disputed, that she might
have a cause of action, and that she should begin an inquiry to
protect her rights.22
Because any applicable statute of limitations first
began running no later than 1986, the longest conceivably
applicable statute of limitations has long since expired.23 Our
conclusion that the cumulative effect of the 1978, 1980, and 1986
events placed Carol on inquiry notice makes it unnecessary for us
to consider whether those events were independently sufficient to
place her on inquiry notice.
Carol argues that she was a director of Talbots and
that the bylaws require that each director own one share of
stock, that she received mixed messages from Jane after James
Sr.s death in 1978, and that the 1980 voting trust agreement was
ambiguous.24 She appears to contend that her status as a
director, the mixed messages, and the alleged ambiguity create a
genuine issue of material fact about whether she was on inquiry
notice. As the superior court concluded, Carols assertions may
preclude summary judgment on the issue whether she was in fact a
shareholder. But the relevant terms of the voting trust
agreement are not ambiguous. They and her admission that she
knew in 1986 that Jane had sold Talbots to Nancy in 1983, taken
with Janes 1978 statement that Carol had no stock, require a
conclusion that Carol had a duty to inquire. The presence of a
genuine fact dispute about Carols shareholder status does not
create a genuine fact dispute about whether Carol knew enough to
put her on inquiry notice, and thus did not excuse her from
making a reasonable inquiry to protect her rights.
Carol argues that she had a lesser burden to conduct
an inquiry to protect her rights, because as a shareholder, she
was owed fiduciary duties. We have never adopted that rule,
although other jurisdictions have.25
We do not need to decide here whether to adopt such a
rule, because Carol was put on inquiry notice no later than 1986,
even assuming a fiduciary relationship between the parties were
deemed to have lessened Carols duty of inquiry. Her actual
knowledge as of December 1986 was completely inconsistent with a
belief that she was a shareholder or that the corporation
considered her a shareholder.
Moreover, there is no indication that the defendants
concealed the true state of corporate ownership from her, that
the 1986 events were equivocal, or that Carol relied on any
fiduciary relationship when she failed to make any inquiry.
Whether in a given dispute a reasonable inquiry would
have been productive potentially raises a question of fact.26
But there is no indication an inquiry would have been
unproductive here, and Carol asserts only that she was not on
inquiry notice, not that inquiry would have been unsuccessful or
futile. A reasonable inquiry would have confirmed one of these
alternative scenarios: (1) Carol was not a shareholder, (2) she
was a shareholder, or (3) there was a dispute about whether she
was a shareholder. In holding that Carol was on inquiry notice
no later than 1986 and in barring her claims, the superior court
necessarily determined that, had Carol reasonably inquired, the
corporation would have denied that she was a shareholder.27
Uncontroverted facts support that proposition. Given the
contemporaneous evidence of the 1978 and 1986 events and the
terms of the 1980 agreement, and the defendants sworn assertions
that Carol was not and had never been a shareholder, there is no
basis for thinking a timely inquiry would have led to a corporate
response confirming that Carol was a shareholder. Carol is
therefore deemed to have been on notice of all claims arising out
of the denial a reasonable inquiry would have provoked. Summary
judgment was the appropriate mechanism for resolving the
untimeliness of those claims.28
We conclude that Carol was put on inquiry notice no
later than 1986 that her shareholder status was disputed. All of
the potentially applicable statutes of limitations therefore bar
any shareholder-related claims that Carol could have then brought
(including those she brought in 2006 and those listed above in
footnote four) after making inquiry. We therefore affirm the
defendants summary judgment as to all claims involving alleged
conduct or losses that occurred during or before her 1986 store
visit. We separately address any possible claims for post-1995
conduct or losses relating to her shareholder status.
C. The Effect of the 1995 Events
We next consider whether the 1995 events had any
bearing on the timeliness of any of Carols claims. Carol
contends that the 1995 events, which she characterizes as a
meeting at which Jane and Janet asked her to sign a stock
certificate in Carols name, reconfirmed her status as a
shareholder. The defendants dispute that characterization of the
document, and alleged below that the certificate related to the
voting trust agreement. They argue here that the only
permissible inference is that the 1995 events were a repudiation,
not a reconfirmation, of Carols shareholder status.
The continuing violations doctrine allows plaintiffs to
rely on incidents occurring outside the statute of limitations
period to establish ongoing tort or contract claims in some
circumstances.29 We have applied this doctrine in the context of
shareholder rights actions.30 Carol seems to argue that even if
earlier events put her on inquiry notice, the 1995 events
reconfirmed her status as a shareholder, permitting claims for
continuing violations of her shareholder rights. If she were
correct, at least some of her claims might not be time-barred.31
The defendants argue that Carol cannot prevail on a
continuing violations theory, because events that occurred
outside the limitations period established a permanent violation.
We have explained that [t]he permanent violation triggers a
reasonable persons awareness of the alleged discrimination and
the need to assert her rights. On a subjective basis, if a
plaintiffs actions show that she knew her rights had been
violated by a certain point in time, the limitations period
starts running from that date.32 The presence of a permanent
violation outside the limitations period forecloses a plaintiff
from invoking the continuing violations doctrine to pursue claims
for conduct within the limitations period. The continuing
violation doctrine does not exist to give a second chance to an
employee who allowed a legitimate [discrimination] claim to
lapse.33
The superior court held here that because [a] permanent
violation occurred on or before 1986, the continuing violations
doctrine does not apply. Carol argues that it was error to so
hold, because she asserts that a contention there was a permanent
violation raises a factual question that must be resolved at an
evidentiary hearing. Although the inquiry into whether a
permanent violation has occurred is subjective and fact-
intensive,34 we have never held that it can never be resolved on
summary judgment.
The same facts that require a conclusion that Carol was
on inquiry notice no later than 1986 also require a conclusion
that a permanent violation occurred no later than 1986. The 1978
and 1986 events and the 1980 agreement were collectively
sufficient to trigger[] a reasonable persons awareness of the
alleged [wrongful conduct] and the need to assert her rights.35
The allegedly wrongful conduct was the denial of Carols claim
that she was a shareholder. In effect, there was a denial of her
alleged shareholder status. We assume for discussions sake that
some corporate conduct related to share ownership might not
amount to a permanent violation. For example, non-permanent
violations could account for a continuing failure to pay annual
dividends owed a shareholder. In comparison, non-payment
resulting from the claimants removal from the shareholder rolls
would arise out of a permanent change in the claimants status.
Because in that situation the continuing failure to pay a
dividend would result from the permanent violation, the
continuing violations doctrine would not allow the claimant to
pursue untimely claims accruing out of the permanent violation.
In an analogous context, in considering the timeliness
of employment claims, some courts look to whether the conduct
within the statute of limitations period was independently
unlawful. In National Railroad Passenger Corp. v. Morgan,36 the
United States Supreme Court considered the claims of an employee
who alleged discrete acts of discrimination both outside of and
within the applicable statute of limitations periods.37 The Court
held that the continuing violations doctrine permitted background
evidence about time-barred acts to support claims for discrete
acts that occurred within the limitations period and that were
independently discriminatory.38 But the Court also held that a
time-barred act could not be used to support a claim unless the
act that occurred within the statutory period and that formed the
basis for the claim was independently unlawful.39 For example, in
the employment context, a former employee may not introduce
evidence of a time-barred wrongful termination claim to support a
timely claim for denial of employment-dependent benefits, because
it is not independently unlawful to deny employment-dependent
benefits to a non-employee.40
We have not applied the Courts reasoning in Morgan to
discrimination claims in an employment context. But such claims
typically involve a continuing employment relationship.41 Here
Carol was on notice by 1986 that there was no continuing
corporate-shareholder relationship. In this context it seems
appropriate to consider whether the 1995 conduct was
independently unlawful.
It is not independently unlawful for a corporation to
deny shareholder rights to non-shareholders. Proving a
continuing violation of her shareholder rights would necessarily
require Carol to prove that the defendants wrongfully (or
erroneously) denied Carols shareholder status, a claim for which
the statute of limitations has long since expired. The denial
that Carol was a shareholder was a permanent denial of Carols
claim to shareholder status. That denial precludes us from
relying on evidence of Carols shareholder status to support
claims for alleged shareholders rights denials occurring within
the relevant statutory periods.
Likewise, the superior court did not err in concluding
that a permanent violation occurred on or before 1986.
It does not matter that the superior court held that
there was a genuine fact dispute about whether Carol was a
shareholder. All of Carols claims are time-barred because she
was on notice of a permanent violation no later than 1986. The
existence of a permanent violation means that Carol cannot
recover on a continuing violations theory. The 1995 events do
not give rise to any claims independent of those she would have
learned of had she made timely inquiry after 1986, and do not
involve independently wrongful conduct.42 A reasonable and
timely inquiry would have revealed the underlying basis for any
claims relating to her shareholder status and the denial of
rights she arguably would have had as a shareholder. This means
that none of Carols 2006 claims was timely. The superior court
did not err in holding that all of Carols claims are barred by
the applicable statutes of limitations.
IV. CONCLUSION
We AFFIRM the superior courts final judgment entered
upon summary judgment for the defendants.
_______________________________
1 Because this case was resolved on summary judgment, the
superior court did not make factual findings. Our fact
description relies on the superior court record, including
exhibits, affidavits of parties and other witnesses, and party
depositions taken after Carol filed her complaint. In describing
the facts, we take reasonable factual inferences in favor of the
nonmovant. Johns Heating Serv. v. Lamb, 46 P.3d 1024, 1030
(Alaska 2002). We are not finding facts or resolving factual
disputes.
The case caption on Carols complaint describes her as a
shareholder in Talbots Inc. Our use of that caption does not
imply any conclusion by us that she is in fact a shareholder.
2 AS 10.06.430.
3 Carols complaint alleged violation of these other
statutory rights: (a) the right to inspect bylaws and amendments,
per AS 10.06.233; (b) the right to notice of shareholders
meetings, per AS 10.06.410; (c) the right to view a shareholder
list, per AS 10.06.413; (d) the right to receive an annual
report, per AS 10.06.433(a); (e) the right to receive a response
to a written request for accounting records, per AS 10.06.433(d)
& (e); and (f) the right to notice and shareholder approval
before the sale of corporate assets not in the regular course of
business, per AS 10.06.568, .570(a)-(b).
4 The defendants motion also argued that the statute of
frauds barred Carols claims. The superior court denied summary
judgment as to that argument, and no party appeals that ruling.
5 Preblich v. Zorea, 996 P.2d 730, 733 (Alaska 2000)
(affirming grant of summary judgment because six-year statute of
limitations was triggered when client had sufficient information
to know former attorney might have engaged in malpractice).
6 Brannon v. Contl Cas. Co., 137 P.3d 280, 284 (Alaska
2006) (holding that, in suit for breach of duty to defend,
limitations period is equitably tolled until underlying action is
terminated due to final judgment).
7 Johns Heating Serv. v. Lamb, 46 P.3d 1024, 1032 (Alaska
2002) (citing Meyer v. State, Dept of Revenue, Child Support
Enforcement Div., ex rel. N.G.T., 994 P.2d 365, 368 (Alaska
1999)) (holding that homeowners who sued heating service company
for alleged negligent failure to repair furnace or warn of its
dangerous condition presented sufficient evidence regarding date
of discovery of defective condition to overcome summary
judgment); see also Meyer, 994 P.2d at 368 (holding that putative
fathers affidavit stating he did not have sexual intercourse with
plaintiff in paternity suit within possible period of conception
was sufficient to preclude summary judgment despite genetic
testing indicating 99.98% chance that he was biological father of
child).
8 Catholic Bishop of N. Alaska v. Does 1-6, 141 P.3d 719,
725 (Alaska 2006) (stating that determining when statute of
limitations begins to run is question of fact that precludes
superior court from granting motion to dismiss but noting that
once sufficient discovery is conducted, the statute of
limitations affirmative defense should be resolved in advance of
trial).
9 Mine Safety Appliances Co. v. Stiles, 756 P.2d 288, 292
(Alaska 1988).
10 Brannon, 137 P.3d at 284.
11 Law Offices of Steven D. Smith, P.C. v. Borg-Warner
Sec. Corp., 993 P.2d 436, 443 (Alaska 1999).
12 Former AS 09.10.050; ch. 26, 3, 55, SLA 1997.
13 Domke v. Alyeska Pipeline Serv. Co., 137 P.3d 295, 303
n.19 (Alaska 2006) (noting that statute of limitations issues
generally must be resolved pre-trial by the superior court acting
as factfinder, not as a matter of law); Williams v. Williams, 129
P.3d 428, 431 (Alaska 2006) (concluding that superior courts
decision to hold evidentiary hearing on statute of limitations
issue was proper because there was genuine issue of material
fact); Palmer v. Borg-Warner Corp., 818 P.2d 632, 634 (Alaska
1990) (stating that summary judgment is ordinarily inappropriate
means of adjudicating statute of limitations issues, but holding
that it was proper in this case because facts were truly
uncontroverted).
14 Williams, 129 P.3d at 430; Pedersen v. Zielski, 822
P.2d 903, 907-08 (Alaska 1991) (holding that evidentiary hearing
was necessary to resolve statute of limitations issue because
there were genuine issues of material fact).
15 Johns Heating Serv. v. Lamb, 46 P.3d 1024, 1033 (Alaska
2002); Mine Safety Appliances Co. v. Stiles, 756 P.2d 288, 292
(Alaska 1988).
16 Johns Heating Serv., 46 P.3d at 1031.
17 Id. (citing Mine Safety, 756 P.2d at 291); see also
Roach v. Caudle, 954 P.2d 1039, 1041 (Alaska 1998) (Under the
discovery rule a cause of action accrues when a person discovers,
or reasonably should have discovered, the existence of all
elements essential to the cause of action. (quoting Cameron v.
State, 822 P.2d 1362, 1366 (Alaska 1991))).
18 Alakayak v. British Columbia Packers, Ltd., 48 P.3d
432, 447-48 (Alaska 2002).
19 Id. at 448.
20 See Mine Safety, 756 P.2d at 292.
21 Mine Safety Appliances Co. v. Stiles, 756 P.2d 288, 292
(Alaska 1988) (citing Russell v. Municipality of Anchorage, 743
P.2d 372, 375-76 & n.11 (Alaska 1987)).
22 Cf. id. (It is uncontroverted that Stiles knew he was
hit in the head while wearing a safety helmet designed to protect
against such blows. The helmet cracked and the suspension clips
broke upon impact. Parker investigated the accident and the
result of that investigation was available to Stiles shortly
after the accident. In addition, Parkers safety officer kept the
helmet for two years where it was available for inspection.
These facts were available to Stiles the day of the accident.).
23 Six years is the longest limitations period potentially
applicable to Carols claims. Former AS 09.10.050, amended by ch.
26, 3, 55, SLA 1997. Statutory, tort, and contract claims are
subject to one-, two-, three-, or six-year statutes of
limitations. AS 09.10.053, .070, .090; former AS 09.10.050,
amended by ch. 26, 3, 55, SLA 1997.
24 We noted above that Jane told Carol both that she
owned no Talbots stock and that Jane and Janet were taking care
of things and that it took time. We conclude that the relevant
terms of the voting trust agreement are not ambiguous.
25 See Bacon v. Rives, 106 U.S. 99, 107 (1882) (holding
that statutes of limitations do not accrue against beneficiary of
trust until beneficiary receives notice that trust is closed or
that trustee has disavowed trust); Bennett v. Hibernia Bank, 305
P.2d 20, 32-33 (Cal. 1957) (holding that the statutory period
does not commence to run until the stockholder has knowledge or
notice that his rights are denied or that his status is
repudiated or controverted by the corporation because where a
fiduciary relationship exists, facts which would ordinarily
require investigation may not excite suspicion); Maguire v.
Hibernia Savings & Loan Socy, 146 P.2d 673, 681 (Cal. 1944)
(holding that in fiduciary relationship statute of limitations
does not begin to run until stockholder has knowledge that his
rights are denied or status controverted by the corporation);
Schneider v. Union Oil Co., 6 Cal. App. 3d 987, 994 (Cal. App.
1970) (holding that until shareholder has notice of some
unequivocal act that his rights were being disputed he or she has
right to regard [the corporation] as holding her interest in the
corporation in trust for her); Leek v. Alliance Fund, Inc., 806
P.2d 491, 494-95 (Kan. App. 1991) (holding that cause of action
to enforce distribution of corporate dividends payable on demand
does not accrue until there has been demand and refusal); Yeaman
v. Galveston City Co., 167 S.W. 710, 723-24 (Tex. 1914) (holding
that in corporation-shareholder fiduciary relationship statutes
of limitation have no application until there is a clear and
unequivocal disavowal of the trust, and shareholder receives
notice of that disavowal).
26 Pedersen v. Zielski, 822 P.2d 903, 908 (Alaska 1991).
27 We have not yet determined who bears the burden of
demonstrating the potential futility or productiveness of an
inquiry that was not made. On summary judgment, once the moving
party has made out a prima facie case that there is no genuine
issue of material fact and that the moving party is entitled to
judgment as a matter of law, the nonmoving party bears the burden
of demonstrating the existence of a genuine issue of material
fact. Alakayak v. British Columbia Packers, Ltd., 48 P.3d 432,
447-48 (Alaska 2002); see also Johns Heating Serv. v. Lamb, 46
P.3d 1024, 1033 n.29 (Alaska 2002). But it is unclear, once a
genuine issue of material fact has been shown, whether the
plaintiff must demonstrate that a reasonable inquiry would have
been futile, or whether the defendant must demonstrate that a
reasonable inquiry would have been productive. In this case
Carol offered no evidence that an inquiry would have been futile,
and the defendants offered sufficient evidence that an inquiry
would have been productive. It is therefore unnecessary to
determine who bears the burden, because the result here would be
the same under either standard.
28 Cf. Mine Safety, 756 P.2d at 292.
29 Reich v. Cominco Alaska, Inc., 56 P.3d 18, 25-26
(Alaska 2002); Hanson v. Kake Tribal Corp., 939 P.2d 1320, 1323,
1325 (Alaska 1997).
30 See Hanson, 939 P.2d at 1325.
31 The applicable statutes of limitations bar any claims
that accrued outside the limitations periods, working backwards
from the date Carol filed suit. For example, tort claims
accruing more than two years before she filed suit would be
barred by the two-year statute of limitations. Because Carol
sued in May 2006 and the longest limitations period potentially
applicable to her claims is six years, all claims accruing before
May 2000 would be time-barred.
32 Sengupta v. University of Alaska, 21 P.3d 1240, 1249
(Alaska 2001).
33 Id. at 1249 (quoting Roberts v. Gadsden Meml Hosp., 835
F.2d 793, 800 (11th Cir. 1988)).
34 See id.; see also Berry v. Bd. of Supervisors of
L.S.U., 715 F.2d 971, 981-82 (5th Cir. 1983) ([T]he particular
context of individual employment situations requires a fact-
specific inquiry by a trial judge which cannot be easily reduced
to a formula.).
35 Sengupta, 21 P.3d at 1249.
36 Natl R.R. Passenger Corp. v. Morgan, 536 U.S. 101
(2002).
37 Id. at 104-05.
38 Id. at 113.
39 Id.
40 See id. at 112-13.
41 Cf. Mahan v. Arctic Catering, Inc., 133 P.3d 655, 666-
67 (Alaska 2006) (Fabe, C.J., dissenting).
42 Carol argues that she has been a shareholder since her
father first granted shares to her during the 1960s. She does
not argue that she became a shareholder through any separate
event occurring between 1986 and 1995. We therefore assume that
she was not the beneficiary of any new devise or gift of
shareholder rights between 1986 and 1995.
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