Opinion ID: 1238867
Heading Depth: 4
Heading Rank: 2

Heading: A Separate Cause of Action Accrued with Each Payment

Text: Kake argues that the cause of action accrued on the effective date of the plan not, as Judge Jahnke ruled, that a separate cause of action accrued with each discriminatory payment. Citing Howarth v. First National Bank of Anchorage, 540 P.2d 486, 490-91 (Alaska 1975), Kake argues that it is not necessary for an injury to occur in order for a cause of action in contract to accrue. It contends that a cause of action accrues at the time when the plaintiffs could have first maintained the action to a successful conclusion. Plaintiffs, on the other hand, contend that each discriminatory distribution gave rise to a new cause of action because each payment was a new wrong. They rely on, among other cases, Bibo, 770 P.2d at 294. One of the claims in Bibo was that controlling shareholders of a corporation made excessive compensation payments to a bookkeeping service in which the controlling shareholders had a majority interest. Id. at 292. Bibo, the minority shareholder, claimed that these excessive payments were, in essence, discriminatory dividends. Id. We held that a separate cause of action accrued with each payment to the bookkeeping service. Each excessive payment is a separate wrongful act. Id. at 294. It is our view that the Bibo precedent is applicable here. Acceptance of the rule advocated by Kake would permit a corporation to escape liability for a plan to pay illegal distributions by announcing the program and then awaiting the expiration of the period of limitations before actually paying the distributions. We see nothing to commend such a result. [1]