Opinion ID: 1129411
Heading Depth: 2
Heading Rank: 3

Heading: Excessive Compensation Two-Year Statute of Limitations

Text: Appellees argued in the trial court that the two-year statute of limitations contained in AS 09.10.070 [5] barred Bibo's claims for excessive compensation paid prior to two years before commencement of this action, that is prior to September 20, 1983. Bibo argues that this statute does not apply to his claims. He contends, first, that AS 09.10.100, [6] which provides a ten-year period of limitations for actions not otherwise provided for, governs here. Bibo also argues, in the alternative, that his claims are founded on an implied contract between the Johnsons, as directors, and the corporation and thus the six-year statute, AS 09.10.050, [7] applicable to implied contracts should govern. [8] We find this argument persuasive. Directors of corporations are fiduciaries with respect to the corporation. Wolff v. Arctic Bowl, Inc., 560 P.2d 758, 767 (Alaska 1977). The assumption of the fiduciary duties of directorship in any corporation constitutes an agreement to honestly and diligently direct the business of the corporation. In Hughes v. Reed, 46 F.2d 435, 440 (10th Cir.1931) the court held that a corporation's action against directors for breach of their duties as such was an action for implied contract governed by the statute of limitations pertaining to implied contract, rather than a statute referring to actions for injury to the rights of another. See also Wallace v. Lincoln Sav. Bank, 89 Tenn. 630, 15 S.W. 448, 453 (1891). There is also authority holding that an action against corporate directors falls within the tort statute. See, e.g., Stewart Coach Indus., Inc. v. Moore, 512 F. Supp. 879 (S.D. Ohio 1981); Sabre Farms, Inc. v. Jordan, 78 Or. App. 323, 717 P.2d 156 (1986). We decline to follow these cases because of the preference given to the longer period of limitations when two periods reasonably may apply. Jenkins v. Daniels, 751 P.2d 19, 22 n. 6 (Alaska 1988); Safeco Ins. Co. v. Honeywell, 639 P.2d 996, 1001 (Alaska 1981). Actions against corporate directors for breach of fiduciary duty sound in contract, and are governed by the six-year statute. The two-year statute will not support the grant of summary judgment in this case. [9] The judgment is REVERSED and the case is REMANDED for further proceedings consistent with this opinion.