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City of Fairbanks v. Amoco Chemical Co. (1/30/98), 952 P 2d 1173
<![CDATA[
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.
THE SUPREME COURT OF THE STATE OF ALASKA
CITY OF FAIRBANKS, )
a municipal corporation of ) Supreme Court No. S-7682
the State of Alaska, )
) United States District Court
Plaintiff, ) Case No. F87-54 CI (JKS)
)
v. )
) O P I N I O N
AMOCO CHEMICAL COMPANY, )
a corporation a/k/a AMOCO ) [No. 4940 - January 30, 1998]
CHEMICALS COMPANY, )
a successor of and formerly )
known as AMOCO CHEMICALS )
CORPORATION, and AMOCO )
REINFORCED PLASTICS COMPANY, )
a corporation, )
)
Defendants. )
______________________________)
Certified Question from the United States
District Court for the District of Alaska,
James K. Singleton, Judge.
Appearances: Joseph W. Evans, Birch, Horton,
Bittner & Cherot, Anchorage, for Plaintiff.
Marcus Clapp, Clapp, Peterson & Stowers, Fairbanks, for Amoco
Chemical Company. Gary Foster, Law Offices of Gary Foster,
Fairbanks, and Christopher E. Zimmerman, Call, Barrett & Burbank,
Fairbanks, for Amoco Reinforced Plastics Company.
Before: Compton, Chief Justice, Matthews,
Eastaugh, Fabe, and Bryner, Justices.
EASTAUGH, Justice.
I. INTRODUCTION
The City of Fairbanks brought suit following collapse of
sewer pipe manufactured by Amoco Reinforced Plastics Company. The
United States District Court for the District of Alaska has
certified the following questions of state law concerning the
timeliness of the lawsuit:
1. Where a municipal corporation
purchases defective goods and learns that it relied on inaccurate
information furnished by the vendor, do claims for negligent and
intentional misrepresentation simultaneously accrue or is accrual
of the claim for intentional misrepresentation delayed until the
municipal corporation has notice of the vendor's scienter? Further,
if notice of scienter is required, must the notice be actual or
will inquiry notice suffice to start the statute of limitations
running?
2. Where a municipal corporation
asserts a claim under the Alaska Unfair Trade Practices Act (AS
45.50.471, et. seq.), is the claim governed by the two-year statute
of limitations set forth in the Act (AS 45.50.531(f)) or by the
six-year statute of limitations governing claims by municipal
corporations (AS 09.10.120)?
We conclude that a municipality's intentional
misrepresentation claim does not accrue until it has actual notice
of all elements of the cause of action, including scienter, and
that the statute of limitations for public entities, AS 09.10.120,
governs a municipality's Unfair Trade Practices Act claim.
II. FACTS AND PROCEEDINGS
From 1973 to 1980, Amoco Reinforced Plastics Company
(ARPCO) manufactured reinforced plastic pipe known as Techite.
ARPCO was a subsidiary of Amoco Chemicals Company and we refer to
the two companies collectively as Amoco. [Fn. 1] In marketing
Techite, Amoco claimed that the pipe could "withstand severe
loading conditions, extreme temperature variations, and aggressive
chemical attack,"and "can be installed with assurance that
corrosion resistance will not be a concern."
In 1974 the City invited bidding for a large-diameter
sewer pipe project. The City chose Techite pipe for the project
and installed it in 1975. In late 1978, within four years of its
installation, the Techite pipe, serving approximately 5,000 people
and carrying 1,000,000 gallons of untreated sewage per day, began
collapsing.
Following unsuccessful repairs, the City "sliplined"
smaller diameter iron pipe into the Techite line, substantially
reducing its carrying capacity. The City estimated that the
failure of the Techite pipe cost the City $39 million.
In a July 25, 1979, letter to the City, Amoco attributed
the structural failure of the pipe to "improper bedding at the time
of initial installation"or "changes in the native soil
conditions." As of 1980, the City believed that the cause of the
collapses was due to one or more of the following: a pipe defect,
improper construction techniques, or unanticipated soil conditions.
It reached no conclusions at that time about the cause of the
collapses or about litigation against potentially liable parties.
In 1986 the City first gained access to confidential
internal Amoco documents detailing Techite's vulnerability to
strain corrosion. [Fn. 2]
In September 1987 the City sued the Techite manufacturers
in state court. [Fn. 3] The case was removed to federal court.
The City's second amended complaint alleged two relevant causes of
action against Amoco: fraud (intentional misrepresentation) and a
claim under the Alaska Unfair Trade Practices Act, AS 45.50.471 et
seq.
The court held that statutes of limitation barred all of
the City's claims other than its common law fraud claim. In
October 1992 the court granted judgment as a matter of law against
the City on the fraud claim, because ARPCO had no duty to disclose
material facts relevant to the transaction. The City appealed.
The United States Court of Appeals for the Ninth Circuit reversed
in part and remanded for a new trial on the fraud claim. It also
reversed the dismissal of the City's statutory unfair trade
practices claim.
On remand, Amoco again moved for summary judgment on
limitations grounds on the fraud claim. Amoco argued that the
applicable limitations period began to run when the City had
knowledge of circumstances sufficient to put a reasonable person on
notice. The City cross-moved for summary judgment on the
limitations issue.
The federal district court, concluding that there was no
controlling Alaska precedent on the issues presented, asked us to
answer the certified questions listed above. We agreed to do so.
See Alaska R. App. P. 407.
III. DISCUSSION
A. Standard of Review
The certified questions present questions of law. "Our
consideration is thus de novo." D.D. v. Insurance Co. of N.A., 905
P.2d 1365, 1367 n.3 (Alaska 1995) (considering a certified
question). We adopt the rule of law that is most persuasive in
light of precedent, reason, and policy. Id. (citing Guin v. Ha,
591 P.2d 1281, 1284 n.6 (Alaska 1979)); Cummings v. Sea Lion Corp.,
924 P.2d 1011, 1022 n.18 (Alaska 1996).
B. Must a Municipality Have Actual Knowledge of a
Defendant's Scienter before a Fraud Cause of Action Accrues?
The first question is whether the applicable statute of
limitations, AS 09.10.120, began to run on the City's common law
fraud claim before the City had actual knowledge of Amoco's
scienter. [Fn. 4]
The City claims the limitations period did not begin to
run until it actually discovered Amoco's fraud in 1986, a year
before it filed suit; Amoco asserts that the limitations period
began to run when the City learned, more than six years before it
sued, that the pipe was defective and that Amoco had materially
misrepresented its qualities.
Alaska Statute 09.10.120, the statute of limitations for
public entities, provides:
An action brought in the name of or for the
benefit of the state, any political subdivision, or public
corporation may be commenced only within six years of the date of
accrual of the cause of action. However, if the action is for
relief on the ground of fraud, the limitation commences from the
time of discovery by the aggrieved party of the facts constituting
the fraud.
AS 09.10.120 (emphasis added). The emphasized language is a
statutory "discovery rule." We have not previously interpreted
this part of section .120.
We interpreted similar, but not identical, language in
another limitations statute, AS 09.10.230. See Carter v. Hoblit,
755 P.2d 1084, 1087 (Alaska 1988). [Fn. 5] We held that alleged
fraud victims were not required to act reasonably in order to be
entitled to the benefit of the statutory discovery rule contained
in AS 09.10.230. Id. at 1087. In doing so, we distinguished the
common law discovery rule for fraud [Fn. 6] from the statutory
discovery rule of AS 09.10.230, which we described as speaking of
"discovery of the fraud as a fact rather than as to when the fraud
might have been discovered had the victim acted reasonably."[Fn.
7] Id. We also reasoned that requiring due care of fraud victims,
especially in context of real estate fraud, "tends to reward the
defrauder." Id. Consequently, we held that plaintiffs' December
1983 fraud action was not time barred. Id.
The City argues that Carter controls the timeliness of
its common law fraud claim. It also argues that knowing that a
representation is false is to be distinguished from knowing of the
defendant's state of mind. It relies on a federal appellate
decision that distinguishes between knowledge of a false
representation (an element in both fraud and negligent
misrepresentation claims), and knowledge of the defendant's state
of mind (an element of a fraud claim not also required for
negligent misrepresentation). Nevada Power Co. v. Monsanto Co.,
955 F.2d 1304, 1307 (9th Cir. 1992) (holding that whether the
plaintiff's suit was timely depended upon a determination of when
the plaintiff could have, with proper diligence, discovered the
facts of fraud).
Amoco argues that, under both statutory and common law
discovery rules, the limitations period begins to run when a
plaintiff has information sufficient to alert it to begin an
inquiry in the exercise of due diligence. [Fn. 8] It further
asserts that Carter does not modify the discovery rule doctrine,
but only affects the period before the plaintiff learns that a
representation is untrue. Amoco reads Carter to hold only that a
plaintiff need not act reasonably in discovering whether the
defendant made misrepresentations, but to mandate the running of
the fraud limitations statute once plaintiff believes defendant's
statements were untrue, even if the plaintiff has no evidence of
defendant's scienter. In effect, Amoco would impose a duty of
reasonable inquiry to discover defendant's scienter in a fraud case
after a municipality learns that a representation was not accurate.
Amoco argues that tolling the limitations statute until
a plaintiff has actual notice of scienter would "eviscerate"the
statute. It reasons that the statute would rarely apply because,
before suing and commencing discovery, plaintiffs rarely have
access to direct evidence of defendants' scienter, and that,
moreover, AS 09.10.120 would never offer repose to defendants
innocent of fraud because there could never be evidence of scienter
sufficient to trigger the running of the statute. Amoco concludes
that the policy favoring a statute of limitations -- preventing
stale claims -- supports its reading of section .120.
As we noted above, the applicable limitations statute, AS
09.10.120, contains its own discovery rule, which delays
commencement of the limitations period until "the time of discovery
by the aggrieved party of the facts constituting the fraud." AS
09.10.120.
In construing the meaning of a statute, we look to the
meaning of the language, the legislative history, and the purpose
of the statute in question. Muller v. BP Exploration (Alaska)
Inc., 923 P.2d 783, 787 (Alaska 1996). "The goal of statutory
construction is to give effect to the legislature's intent, with
due regard for the meaning the statutory language conveys to
others." Tesoro Alaska Petroleum Co. v. State, 746 P.2d 896, 905
(Alaska 1987).
The language of the statute, which requires "discovery
. . . of the facts constituting the fraud,"favors the City's
interpretation. This language is equivalent to that of AS
09.10.230, which requires "discovery of the fraud"before the
limitations period begins to run. The language plainly implies
that the statute does not begin to run until the plaintiff acquires
knowledge; it plainly does not imply that the plaintiff is deemed
to know "facts"which might be learned upon diligent inquiry. Use
of the word "discovery"does not imply an imputation of facts that
might be learned.
The legislative history is uninformative. In Carter, the
concurring opinion argued that the legislative history of AS
09.10.230 required that the statute be construed to require
reasonable diligence. Carter, 755 P.2d at 1089 (Rabinowitz, J.,
concurring). The court rejected that analysis in terms equally
applicable to AS 09.10.120. Id. at 1087 n.5.
Section .120 was enacted in 1962 without any apparent
enlightening legislative history. See Alascom, Inc. v. North Slope
Borough, Bd. of Equalization, 659 P.2d 1175, 1179 (Alaska 1983)
(discussing application of section .120 by analyzing prior statute
governing actions by political subdivisions).
It would seem that the legislature's purpose in enacting
section .120 was to give public entities a longer limitations
period to vindicate public interests. That purpose is more
consistent with requiring actual notice of the facts of a fraud
than imposing a duty of diligent inquiry.
Amoco's arguments do not justify a different statutory
interpretation. The policy of discouraging stale claims must be
applied in light of the words of the statute. Also, absent
evidence of fraudulent scienter, defendants will not be exposed to
public entities' fraud suits, whether brought promptly or not. The
fact that a municipality does not pursue a timely negligent
misrepresentation claim should not bar a fraud claim if evidence of
scienter was not previously available. We note that the 1974 and
1975 Amoco documents the City obtained in 1986 are marked
"Proprietary - To be maintained in confidence." That implies they
would not have been disclosed voluntarily had the City inquired
when it first learned that the pipe might be defective.
The district court and the parties recognize that the
answer to the first certified question may turn on whether our
holding in Carter was altered by Bauman v. Day, 892 P.2d 817
(Alaska 1995).
The Baumans alleged that the Days misrepresented that
land the Baumans bought from the Days was free of permafrost. The
Baumans stopped paying property taxes in 1988 pending reassessment
of value due to the permafrost. Id. at 820. The superior court
dismissed the Baumans' fraud claim for untimeliness on summary
judgment, because the Baumans reasonably should have discovered the
permafrost no later than the time they stopped paying property
taxes. Id. at 826. We affirmed that ruling.
Bauman did not involve a statutory discovery rule. We
rejected the Baumans' argument that AS 09.10.230 controlled. Id.
at 825. We cited Carter as holding "that a fraud victim need not
have acted reasonably in order to obtain the benefit of AS
09.10.230's statutory discovery rule." Bauman, 892 P.2d at 825.
Given the inapplicability of section .230, there was no need to
consider whether a statutory discovery rule required actual
knowledge.
We stated in a footnote in Bauman:
The Baumans allege that in actions for
fraud, this court's decision in Palmer v. Borg-Warner
Corp., 838 P.2d 1243 (Alaska 1992), replaces the Lee
Houston [& Assocs., Ltd. v. Racine, 806 P.2d 848 (Alaska
1991)] "reasonable person"standard with an "actual
knowledge"standard. In the context of a due diligence
requirement for equitable estoppel, Palmer states that "a
party should be charged with knowledge of [a] fraudulent
misrepresentation or concealment only when it would be
utterly unreasonable for the party not to be aware of the
deception." Id. at 1251 (emphasis added). However,
nothing in Palmer relaxes the "reasonable person"
standard so much as to allow the statute of limitations
to run only when the person has actual knowledge of the
fraud.
Moreover, even if we were to require
actual knowledge, the requirement would be satisfied by
"express cognition, or awareness implied from 'knowledge
of circumstances which ought to have put a person of
ordinary prudence on inquiry.'"Poffenberger v. Risser,
290 Md. 631, 431 A.2d 677, 681 (Md. 1981).
Id. at 826 n.13 (second emphasis added). The emphasized language
in the second paragraph of the footnote led the federal district
court to reconsider its earlier prediction, based on Carter, that
this court would hold the City's common law fraud claim to have
been timely filed. Because Bauman held that the time for claiming
fraud began to run when the purchasers should have discovered that
the vendors misrepresented the condition of the land, the
emphasized language implies that actual knowledge of scienter is
not required, and that inquiry notice is sufficient.
Footnote 13 does not cite Carter or the two limitations
statutes (AS 09.10.120 and AS 09.10.230) containing their own
discovery rules. The suggestion in the footnote that a requirement
of "actual knowledge"would be satisfied by knowledge of
circumstances that would have put a prudent person "on inquiry"was
dictum, and was not made in the context of a discussion of a
statutory discovery rule. Footnote 13 did not overrule or modify
our holding in Carter.
We conclude that section .120 contains a statutory
discovery rule similar to that in Carter. Section .120 does not
include a requirement that the City, as an alleged fraud victim,
have acted reasonably. See Carter, 755 P.2d at 1087. The City's
fraud claim did not accrue and thus trigger the running of the
limitations period before the City had actual notice of scienter.
Evidence of scienter is usually circumstantial, and a
defrauded victim will normally have only indicia of scienter before
suing. Notice of the scienter element could not require knowledge
of conclusive evidence, because conclusive evidence of scienter is
rarely available, even through exercise of discovery. If that
level of notice were required, the limitations period for fraud
would never begin running.
Amoco argues that knowledge of the defective condition of
the pipe and belief that defendant's statements were untrue are
enough. Because the plaintiff's knowledge of the inadequacy of a
product or belief that there were inaccurate representations does
not prove the state of the defendant's mind when the defendant made
representations about the product's properties, we reject Amoco's
suggestion. The knowledge that section .120 requires is simply the
discovery of facts that are evidence of the defendant's state of
mind, i.e., evidence the defendant knew the representation was
false when made. [Fn. 9]
Carter does not identify what facts might have been
sufficient to put the plaintiffs on actual notice of Hoblit's fraud
before they learned the true state of the title in 1981. Because
we rejected a requirement of reasonableness and plaintiffs sued
well within the ten-year statutory period, it was not necessary to
discuss whether learning that only Hoblit had title was sufficient
evidence of scienter to trigger the running of the statute. In our
view, the title search provided evidence of Hoblit's scienter,
given the plaintiffs' alleged understanding, when they gave money
to Hoblit, that they were contributing to the purchase price of
property to be held in all three names. The deed was fundamentally
inconsistent with the plaintiffs' understanding that they shared
title and ownership with Hoblit. Although public records would
have disclosed the true state of title, the parties' dealings
before 1981 conveyed no facts to plaintiffs about the true terms of
the deed or title, and thus no facts about Hoblit's scienter.
In Carter, it may be that the limitations periods for
negligent and intentional misrepresentation (fraud) both began
running with the title search. In other cases, knowledge of a
misrepresentation does not necessarily also provide evidence of the
defendant's scienter -- i.e., evidence that the defendant intended
to misrepresent -- even though it triggers the running of the
limitations statute for negligent misrepresentation.
C. Alaska Statute 09.10.120 Governs the City's Unfair Trade
Practices Claim.
We next consider whether the statute of limitations for
public entities, AS 09.10.120, or the statute of limitations for
the Unfair Trade Practices and Consumer Protection Act [Fn. 10]
(Act), AS 45.50.531(f), [Fn. 11] applies to a municipality's claim
under the Act.
The City argues that section .120 applies to all actions
brought by a municipal corporation, and relies on Alascom, Inc. v.
North Slope Borough, Bd. of Equalization, 659 P.2d 1175 (Alaska
1983).
Amoco replies that AS 09.10.120 is the general statute of
limitations for municipal corporations, but that AS 45.50.531(f) is
the controlling statute when a claim is made under the Act. It
construes Alascom to mean only that section .120 trumps other
limitations statutes contained in AS 09.10. In Alascom we applied
the limitations period in section .120 rather than AS
09.10.070(a)(3). [Fn. 12] Alascom, 659 P.2d at 1179.
Section .120 was enacted by the legislature in 1962. Id.
The Act, however, was passed in 1970. See ch. 246, sec. 2, SLA
1970.
As a general rule, "'It is assumed that whenever the legislature
enacts a provision, it has in mind previous statutes relating to
the same subject matter, and all should be construed together.'"
Muller v. BP Exploration (Alaska) Inc., 923 P.2d 783, 788 (Alaska
1996) (quoting Hafling v. Inlandboatmen's Union of the Pacific, 585
P.2d 870, 877 (Alaska 1978)). The Act, however, fails to define
the term "persons"in its limitations provision. See AS
45.50.531(f). Absent a definition expressly including municipal
corporations or other public entities, we assume the legislature
did not intend when it passed the Act to adopt a limitations period
for municipal corporations different than that specifically
applicable to claims of public entities.
Moreover, Alascom provides guidance. We there held that
section .120 applied in a property tax dispute, based on our review
of the prior statute of limitations. 659 P.2d at 1179. The prior
statute did not prescribe a special limitations period for
political subdivisions, but rather prescribed the same limitations
periods applicable to private parties. Id. We concluded that "the
1962 amendment [section .120] evinces a legislative intent that a
general six-year statute of limitations applies when a borough
pursues a claim, regardless of the nature of the claim." Id.
Amoco also claims that the more specific and recent
statute of limitations should control. Section .120 is the older
statute, and Amoco argues that it is the more general statute.
Amoco quotes from In re Estate of Hutchinson, 577 P.2d 1074 (Alaska
1978):
It is an established principle of statutory
construction that all sections of an act are to be construed
together so that all have meaning and no section conflicts with
another. Further, where one section deals with a subject in
general terms and another deals with a part of the same subject in
a more detailed way, the two should be harmonized, if possible; but
if there is a conflict, the specific section will control over the
general.
Id. at 1075.
Here, as the City argues, it is not clear which statute
is more specific. Section .120 applies to a specific party, a
political subdivision, and AS 45.50.531(f) pertains to a specific
cause of action. If section .120 governs a city's unfair trade
practice claims, AS 45.50.531(f) will not become void or
insignificant. See, e.g., Journey v. State, 895 P.2d 955, 958-59
(Alaska 1995) (holding that principles of statutory interpretation
militate against a meaningless reading of a statute); Homer Elec.
Ass'n v. Towsley, 841 P.2d 1042, 1045 (Alaska 1992) (stating that
statutes should be construed so that no part will be inoperative or
insignificant). The two-year limitations period in AS 45.50.531(f)
will continue to apply to plaintiffs other than political
subdivisions.
A final consideration supports our choice. If two
limitations statutes may reasonably apply, preference is given to
the longer limitations period. See Lee Houston & Assocs., Ltd. v.
Racine, 806 P.2d 848, 855 (Alaska 1991) ("[D]oubts as to which of
two statutes is applicable in a given case should be resolved in
favor of applying the statute containing the longer limitations
period."). A similar preference is expressed in AS 09.10.010. [Fn.
13] That statute permits commencement of an action even after
expiration of a period prescribed in AS 09.10 if a different period
is prescribed elsewhere. Section .010 does not apply here,
however, because AS 09.10 contains the longer limitation, and the
shorter is found elsewhere. Our preference for the longer does not
conflict with AS 09.10.010, contrary to Amoco's argument otherwise.
IV. CONCLUSION
We interpret AS 09.10.120 to mean that a municipality's
claims for negligent and intentional misrepresentation do not
necessarily accrue simultaneously, and that a municipality's fraud
claim accrues under AS 09.10.120 only after the municipality has
actual notice of all essential elements of fraud, including
scienter. We also conclude that the timeliness of a municipality's
Unfair Trade Practices Act claim is governed by AS 09.10.120, not
AS 45.50.531(f).
FOOTNOTES
Footnote 1:
Amoco Chemicals Company is also known as Amoco Chemical
Company. The United States District Court held that Amoco Chemical
Company was the alter-ego of ARPCO. The United States Court of
Appeals for the Ninth Circuit reversed this ruling. See City of
Fairbanks v. Amoco Chemical Co., Nos. 92-36924, 92-36949, 1995 WL
15591, at *14-19 (9th Cir. Jan. 13, 1995). Because this decision
does not affect the certified questions, we refer to the
corporations collectively as Amoco.
Footnote 2:
Strain corrosion occurs when acidic effluent attacks the
pipe's resin-glass matrix, leaching calcium from the glass
filaments. This permits stress cracking of the filaments and
failure of the pipe wall. Strain corrosion is more likely in
plastic pipe like Techite when it is installed in wet, unstable
soil which may bend and deflect the pipe, creating a strain. The
soil in the Fairbanks area is wet and sandy and can be unstable;
the sewage that the collapsed pipe carried is "locally [renowned]
for its peculiar corrosiveness."
Failures of Techite in Alaska, California, Hawaii, and
North Dakota were alleged in at least five other lawsuits. See
Amoco Chemical Co. v. Certain Underwriters at Lloyd's of London,
No. B083904, 1996 WL 407855, at *3 (Cal. App. June 4, 1996)
(reversing judgment in favor of Amoco, which had sued its insurer
for indemnification of $45 million in legal fees and costs incurred
in defending suits alleging Techite failures).
Footnote 3:
The City later settled with all parties except ARPCO and Amoco
Chemical Co.
Footnote 4:
"The elements for a cause of action for knowing
misrepresentation or deceit include: a false representation of
fact, scienter, intention to induce reliance, justifiable reliance,
and damages." Barber v. National Bank of Alaska, 815 P.2d 857, 862
(Alaska 1991) (citing Restatement (Second) of Torts sec. 525
(1977)).
The scienter element requires that the defendant know the
falsity of the representation. The tort of fraudulent
misrepresentation "requires proof that the maker knew of the untrue
character of his or her representation." Bubbel v. Wien Air
Alaska, Inc., 682 P.2d 374, 381 (Alaska 1984) (citing Restatement
(Second) of Torts sec. 530 cmt. b (1977)).
Footnote 5:
Hoblit, Carter, and Smalley agreed in 1948 to purchase a
parcel of land and to hold title jointly. Hoblit, however, took
the deed in his name only. The deed was recorded in June 1973.
Hoblit paid all taxes and interim expenses, and declined
plaintiffs' offers of reimbursement. He offered to purchase their
interests in 1977, implying a state of ownership that concealed the
true state of the title. A 1981 title search revealed that only
Hoblit held title. Carter v. Hoblit, 755 P.2d 1084, 1085, 1087
(Alaska 1988).
Footnote 6:
See Sharrow v. Archer, 658 P.2d 1331, 1334 (Alaska 1983)
(holding statute of limitations for fraud not involving real
property is tolled only so long as reliance remains reasonable).
Footnote 7:
The discovery rule language in AS 09.10.230 provides: "In an
action upon a . . . fraud, . . . the running of the time within
which an action may be commenced starts from . . . the discovery of
the fraud . . . ."
Footnote 8:
Under the common law discovery rule as we most recently
summarized it, the limitations period begins to run when "the
plaintiff has information which is sufficient to alert a reasonable
person to begin an inquiry to protect his rights." Waage v. Cutter
Biological Div. of Miles Labs. Inc., 926 P.2d 1145, 1148 (Alaska
1996) (citation omitted) (involving claim against product
manufacturer). We have occasionally restated and elaborated on the
common law discovery rule, [Fn. 14]but in essence it delays
accrual of a cause of action, and therefore the running of the
pertinent limitations statute, until the plaintiff is aware of or
is deemed to be aware of all elements of the cause of action. See
Cameron v. State, 822 P.2d 1362, 1366 (Alaska 1991) ("[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").
Footnote 9:
In Barber v. National Bank of Alaska, 815 P.2d 857, 864 n.15
(Alaska 1991), we held that the scienter required for Barber's
punitive damages claim could be established by evidence that a
bank employee knew that a foreclosure sale had already taken place
when the employee told Barber several times that it had been
postponed. Such evidence would also establish scienter in a fraud
claim.
Footnote 10:
AS 45.50.471 et seq.
Footnote 11:
AS 45.50.531(f) provides: "A person may not commence an action
under this section more than two years after the person discovers
or reasonably should have discovered that the loss resulted from an
act or practice declared unlawful by AS 45.50.471."
Footnote 12:
AS 09.10.070 provides in part:
(a) A person may not bring an action (1) for
libel, slander, assault, battery, seduction, false imprisonment, or
for any injury to the person or rights of another not arising on
contract and not specifically provided otherwise; (2) upon a
statute for a forfeiture or penalty to the state; or (3) upon a
liability created by statute, other than a penalty or forfeiture;
unless the action is commenced within two years.
Footnote 13:
AS 09.10.010 provides: "A person may not commence a civil
action except within the periods prescribed in this chapter after
the cause of action has accrued, except when, in special cases, a
different limitation is prescribed by statute."
Footnote 14:
See, e.g.,
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