In the

United States Court of Appeals 

For the Seventh Circuit ____________________ 

No. 20-3378 

RICHARD JEFFERSON DEIBEL, 

Plaintiff-Appellant, 

v.

LARRY HOEG,

* AARON HOEG, and ROGER STEFFEN, 

Defendants-Appellees. 

____________________ 

Appeal from the United States District Court for the

Southern District of Indiana, Indianapolis Division.

No. 1:18-cv-03791-TWP-MJD — Tanya Walton Pratt, Chief Judge. 

____________________ 

ARGUED MAY 11, 2021 — DECIDED MAY 25, 2021 

____________________ 

Before EASTERBROOK, RIPPLE, and KANNE, Circuit Judges. 

* Counsel for appellees represents that Larry Hoeg died “shortly before this appeal was filed.” Fed. R. App. P. 43(a)(3) provides that the appellant may proceed as if the death had not occurred but that substitution of parties must be accomplished under Rule 43(a)(1) in the court of 

appeals. Both sides have ignored this requirement. Unless within ten 

days Deibel files an appropriate motion for substitution under Rule 

43(a)(1) we will dismiss Larry Hoeg as a party.
2 No. 20-3378 

EASTERBROOK, Circuit Judge. In 1986 Richard Deibel, Larry 

Hoeg, and Roger Steffen founded a filtration business, which 

they organized as Hy-Pro Corporation. Deibel became its 

president and received 2,500 shares, representing 12.5% of 

the authorized stock. Deibel guaranteed Hy-Pro’s payment 

of a $100,000 debt to a bank. Within a year Deibel demanded 

that Larry Hoeg leave. When Hoeg refused, Deibel quit. He 

held onto his stock even after withdrawing from management. 

Litigation ensued in state court. The suit was sejled, but 

the sejlement was not reduced to writing. Deibel insists that 

the sejlement had two terms: Hy-Pro would pay $15,000 to 

a corporation that Deibel controlled and arrange with the 

bank to release his guarantee. Hoeg and Steffen assert that 

the sejlement had three terms: the payment, the release, and 

Deibel’s surrender of his shares. It is unusual for outsiders to 

own stock in closely held corporations, so the third term of 

the sejlement (as Hoeg and Steffen depicted it) is not surprising. Soon the parties were back in state court, disputing 

the terms on which they had sejled their dispute. For reasons that this record does not reveal, Indiana’s judiciary 

closed the case without sejling the sejlement’s terms. 

Almost 30 years later, Deibel filed this federal suit to renew his contention that the sejlement allows him to retain 

his shares. The source of his new interest is the fact that HyPro was sold in 2017 for more than $20 million, and a 12.5% 

cut of that would exceed $2.5 million. The suit is governed 

by Indiana law, which sets a two-year period of limitations 

for claims of this kind. See Ind. Code §34-11-2-4. Unsurprisingly, the district court dismissed the suit as untimely. 2020 

U.S. Dist. LEXIS 211455 (S.D. Ind. Nov. 12, 2020). But Deibel 
No. 20-3378 3 

maintains that he was still an investor when the firm was 

sold in 2017—and, if not, that a firm’s refusal to recognize 

someone as an investor is a “continuing wrong” so that he 

can sue any time until the end of the universe. The district 

court thought that these contentions have neither factual nor 

legal support, and we agree with that conclusion. 

Since 30 years is more than an order of magnitude greater than the two years allowed by state law, we need not pin 

down the exact date on which Deibel’s claim accrued. It is 

enough to identify the years in which potentially important 

events occurred. The sejlement dates to 1992. Deibel did not 

return his shares, and the lawyer representing Hoeg and 

Steffen told them that Hy-Pro could cancel Deibel’s stock if 

he continued to hold the certificates. Hy-Pro did just that; 

Deibel has not been on the company’s books as a shareholder since 1992. He protested in state court that he (or his firm) 

had not received the agreed $15,000; counsel for Hoeg and 

Steffen sent a check for the money and again demanded the 

return of Deibel’s shares. The state court closed the case in 

1993 after a conference (which was not transcribed). 

In 1993 Deibel’s lawyer sent him a lejer telling him that 

Hy-Pro no longer considered him to be a shareholder. Counsel sent a similar lejer in 1995, adding that if Deibel disagreed with Hy-Pro’s action he could return to court. In 1997 

Deibel sent Hoeg a lejer complaining about what Deibel 

called the “conversion” of his stock. The same year Deibel 

received a lejer from the Internal Revenue Service telling 

him that Hy-Pro did not deem him a shareholder. That was 

significant because Hy-Pro was a Subchapter S corporation. 

It had taken advantage of a provision permijing corporations with ten or fewer shareholders to be treated as equiva-
4 No. 20-3378 

lent to partnerships. A Subchapter S corporation does not 

pay income tax, but it must report its profit and allocate that 

amount among the investors, who owe tax on their portions 

whether or not the corporation pays dividends. Deibel had 

been reporting himself to the IRS as one of Hy-Pro’s shareholders but had not reported either actual or imputed income, because Hy-Pro, which did not view him as a shareholder after 1992, had not told him what to tell the IRS. (Subchapter S corporations must provide their investors information about taxable income on form K-1, which Deibel had 

not received since 1993.) Deibel took the IRS’s advice and 

stopped identifying himself as one of Hy-Pro’s investors. After January 1998 he never tried to learn from Hy-Pro how 

much income a 12.5% owner should report, and he did not 

pay federal tax on any of Hy-Pro’s profits. 

Twenty years after ceasing to report to the IRS as an investor in Hy-Pro, Deibel filed this suit. The district court 

concluded that his claim accrued no later than 1998, when he 

stopped telling the IRS that he was a shareholder in Hy-Pro, 

thus demonstrating knowledge that he no longer owned 

stock in Hy-Pro. 

As Deibel sees it, corporations in Indiana lack the authority to cancel shares that investors have not returned—and, 

since a corporation can’t do so (“ultra vires,” Deibel calls it), 

then Hy-Pro didn’t do so and he must still be a shareholder. 

This is wishful thinking. People and corporations commit 

legal errors all the time. The existence of an error is a reason 

for litigation, not a reason why the error couldn’t have happened and therefore must not have happened. The record 

shows that Hy-Pro removed Deibel from its shareholder list 

in 1992. He took 26 years to sue, making this litigation far 
No. 20-3378 5 

too late unless a corporation’s refusal to recognize someone 

as an investor is treated as a continuing wrong. 

A continuing injury may exist without a continuing

wrong. If A kicks B in the shin, B may ache for days—but the 

time to sue starts running with the kick, not the last tinge of 

pain. See, e.g., United States v. Kubrick, 444 U.S. 111 (1979); 

PiBs v. Kankakee, 267 F.3d 592, 595 (7th Cir. 2001). Monthly 

kicks to the shin would be continuing wrongs—one tort per 

kick, each with its own period of limitations—but a continuing hurt from any given kick does not affect the time to sue. 

Federal law distinguishes not only between continuing 

injury and continuing wrong, but also between discrete 

wrongs and cumulative wrongs. National Railroad Passenger 

Corp. v. Morgan, 536 U.S. 101 (2002), illustrates the difference. 

The Court held that each discrete act—say, a refusal to hire 

someone—has its own period of limitations, even if the same 

defendant commits a series of similar acts. But when it takes 

multiple acts to add up to a single wrong—say, a course of 

harassment that in the aggregate may create discriminatory 

conditions of employment—the time to sue runs from the 

last such act rather than the first, because it takes multiple 

similar events to justify litigation. See also Turley v. Rednour, 

729 F.3d 645, 654–55 (7th Cir. 2013) (concurring opinion). In

Morgan’s framework, the cancellation of shares is a discrete 

wrong, and the time for suit begins immediately. 

We have been using illustrations drawn from federal law, 

and Indiana could take a different approach. It doesn’t, as far 

as we can see, but then it has never considered when a claim 

based on a corporate freezeout accrues. (“Freezeout” is a 

word often used to describe the exclusion of a minority investor.) Because Indiana is among the many states whose 
6 No. 20-3378 

corporate law is based on the ABA’s Model Business Corporation Act, we looked at how other states using the model act 

treat freezeouts. The dominant rule is that the claim accrues 

when the exclusion occurs. Here’s a statement from the Supreme Court of New Hampshire: 

The Houle court determined that a cause of action for freeze-out 

arose at a specific time: when the defendant shareholders notified the plaintiff shareholder of their decision to exclude him 

from a business venture. We concur with this reasoning and conclude that the wrongdoing alleged by the petitioner in this case

is not a continuing wrong.

Thorndike v. Thorndike, 154 N.H. 443, 447 (2006), citing Houle 

v. Low, 556 N.E.2d 51, 53 (Mass. 1990). North Carolina 

agrees. StraBon v. Royal Bank of Canada, 211 N.C. App. 78, 87 

(2011) (the continuing-wrong doctrine does not apply because “the continued deprivation of shareholder rights and 

nonpayment of dividends were not continual violations, but 

rather ‘continual ill effects’ of the conversion”). One state has 

found Thorndike distinguishable when a course of oppressive 

conduct occurs (a cumulative-violation situation). See Baur v. 

Baur Farms, Inc., 780 N.W.2d 249 (Iowa App. 2010) (nonprecedential). None of the cases we have located treats a simple 

freezeout as a continuing wrong, so we predict that Indiana 

will not do so either. 

Deibel was injured in 1992 when Hy-Pro cancelled his 

shares. The nature of that injury sank in no later than 1998. 

Waiting another 20 years to complain is far too long. 

AFFIRMED