Many, if not most, legal claims of an LLC must be filed directly by the LLC itself and cannot be filed by someone acting on its behalf. The Tennessee Revised Limited Liability Company Act, however, permits a member of an LLC, in certain circumstances, to bring a derivative action on…
Under Tennessee law, many claims arising from business disputes are barred if they are not filed with a court within four years (claims related to the sale of goods under the UCC) or six years (breach of contract claims not governed by the UCC). Those time periods begin to run,…
In a very recent breach of contract case, a former employee of the defendant was held not to have been constructively discharged from employment, and, therefore, was not entitled to a bonus provided for in his employment agreement. The Court of Appeals of Tennessee determined that the former employee voluntarily…
A former employer’s claims against a former employee and the former employee’s new employer for breach of a non-compete agreement and violating the Tennessee Uniform Trade Secrets Act (“Trade Secrets Act”) were dismissed in a case which is instructive on a couple of fronts. Mainly, the case illustrates the futility…
The Tennessee Revised Limited Liability Company Act (the “Act”) sets forth the circumstances under which a limited liability company (“LLC”) member or manager may be liable to the LLC or to other LLC members. An LLC member’s or manager’s potential liability can arise from two separate categories of conduct: (1)…
It is helpful to think of the potential personal liability of members of Tennessee LLC’s falling into two categories. The first category is the personal liability of a member to the LLC itself for the member’s breach of the duty of care, breach of the duty of loyalty, or the…
A recent construction defect case decided by the Court of Appeals of Tennessee illustrates how both the three-year statute of limitations for injury to real property and the six-year statute of limitations for breach of contract can both apply in a construction defect case. The trial court held that the…
In a 2022 case, the Court of Appeals of Tennessee relied heavily on the specialized training the former employer (“Employer”) gave its former employee (“Employee”) in upholding a trial court’s decision that the non-competition agreement signed by the Employee was enforceable. Unlike many cases involving former employers trying to enforce…
A plaintiff may obtain a judgment against a defendant under Tennessee law, and under federal law, if the defendant does not file a responsive pleading within the required time. Under the Tennessee Rules of Civil Procedure, a defendant must file a written response to a complaint within thirty (30) days…
When can a member, manager, director, or officer of a Tennessee limited liability company (“LLC”) expect the LLC to pay attorney’s fees when the member, manager, director, or officer becomes a defendant in a lawsuit or arbitration proceeding? If the individual is ultimately held individually liable in the lawsuit or…