In a recent Tennessee limited liability company case, a twenty-nine percent (29%) member was awarded nearly $900,000 against the other two members of the LLCs at issue for those members’ conduct in wrongfully terminating his membership and shutting him out of the operation of the LLCs. The opinion is instructive…
Under Tennessee law, the prevailing party in a lawsuit, with some exceptions, cannot recover a judgment from the opposing party in the case for the attorney’s fees the prevailing party incurred in prosecuting or defending the case. By far, the two most prevalent exceptions to that rule are: (1) When…
In a recent breach of contract case involving a construction subcontract, the Court of Appeals of Tennessee held that the contract at issue was enforceable even though the parties never signed a written agreement. This case is a reminder that a legally enforceable contract may, in some cases, be created…
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…