--- name: tn-commercial-disputes description: > Subject-matter bundle for Tennessee commercial / business-to-business litigation. Covers Chancery Court (the principal commercial-equity forum), Davidson Business Court, the TCPA's narrow B2B reach under Pursell v. First American National Bank, Tennessee Uniform Trade Secrets Act (TUTSA, § 47-25-1701 et seq.), Uniform Voidable Transactions Act (§ 66-3-301 et seq.), Tennessee Revised LLC Act (§ 48-249-101 et seq.), Tennessee Business Corporation Act (§ 48-11-101 et seq.), Rule 9.02 fraud-with-particularity pleading, derivative actions, LLC/corporate dissolution and buy-out, business torts (tortious interference, civil conspiracy, conversion), Tennessee Uniform Arbitration Act (§ 29-5-301 et seq.) with FAA preemption, and Tennessee Securities Act (§ 48-1-101 et seq.). version: 0.1.1 --- # Tennessee Commercial Disputes > **NOT LEGAL ADVICE.** Tennessee commercial practice is heavily > Chancery-centric on equitable claims, with the unusual > **Pursell** rule narrowing the TCPA's reach to most business-to- > business disputes. Forum choice (Chancery vs. Circuit vs. > Business Court vs. federal diversity) materially shapes > available remedies and pace. Verify every statute number and > case citation against the current Tenn. Code Ann. and Tennessee > reporters before relying. Use this subject-matter bundle for Tennessee commercial / business-to-business civil litigation — contract, trade secret, fraudulent transfer, intracorporate (corporate / LLC) disputes, business torts, fiduciary-duty claims, and equitable enforcement. ## At a glance - **Chancery is the commercial forum**: Tennessee Chancery Courts hold equity jurisdiction and concurrent jurisdiction over most legal claims. Most contract / fiduciary-duty / trade-secret / non-compete enforcement / dissolution matters route to Chancery. - **Davidson County Business Court**: the 20th JD operates a designated Business Court division within the Chancery Court at Nashville. Cases are designated under a published threshold (typically business disputes exceeding a stated amount in controversy or involving particular subject-matter — confirm via the Davidson Chancery local rules). See `tn-davidson` for venue mechanics. - **TCPA narrow in B2B**: under *Pursell v. First American National Bank*, 937 S.W.2d 838 (Tenn. 1996), the **Tennessee Consumer Protection Act** at Tenn. Code Ann. § 47-18-101 et seq. generally **does not reach** purely commercial / business- to-business transactions. See `tn-consumer-debt` for the consumer-side TCPA framework. - **Fraud-with-particularity**: Tenn. R. Civ. P. 9.02 mirrors Fed. R. Civ. P. 9(b); every commercial-fraud claim must allege "the time, place, and contents of the false representation, the fact misrepresented, and what was obtained or given up as a consequence." - **Pre-suit notice for some claims**: business claims that piggy- back on the TCPA's narrow B2B carve-out trigger the **45-day pre-suit demand** under § 47-18-109(a)(1). Most pure breach-of- contract / fiduciary-duty / trade-secret claims do **not** have a pre-suit-notice gate. ## SOL catalog (the most-used) | Claim | SOL | Citation | |---|---|---| | **Breach of written contract** | **6 years** | Tenn. Code Ann. § 28-3-109(a)(3) | | **Breach of oral contract** | **6 years** | § 28-3-109(a)(3) (Tennessee treats both equally for written/oral up to typical commercial contracts) | | **Sale of goods (UCC § 47-2-725)** | **4 years** | Tenn. Code Ann. § 47-2-725 | | **Breach of partnership / fiduciary duty** | **3 years** (property) / **6 years** if written contract / sometimes treated as breach of contract — case-specific | § 28-3-105 / § 28-3-109 | | **Tortious interference (contract / business expectancy)** | **3 years** | § 28-3-105 | | **Common-law fraud** | **3 years** | § 28-3-105 (discovery rule) | | **TUTSA (trade secrets)** | **3 years** | Tenn. Code Ann. § 47-25-1709 (from discovery) | | **TUFTA / Uniform Voidable Transactions** | **4 years** (actual fraud); **1 year** from discovery for constructive | Tenn. Code Ann. § 66-3-310 | | **Conversion** | **3 years** | § 28-3-105 | | **Civil conspiracy** | follows underlying tort | — | | **TCPA (where applicable in B2B)** | **1 year** from discovery; max **5 years** | § 47-18-110 | | **Securities Act (Tennessee blue-sky)** | **1 year / 4 years** repose | § 48-1-122 | | **Promissory estoppel / unjust enrichment** | **6 years** (treated as quasi-contract) | § 28-3-109 | | **Accountings / equitable claims (Chancery)** | typically **6 years** by analogy to written-contract SOL; equity may apply laches | — | ## The six principal Tennessee statutes / doctrines ### 1. The TCPA and the *Pursell* B2B exclusion The Tennessee Consumer Protection Act at Tenn. Code Ann. § 47-18- 101 et seq. nominally prohibits "unfair or deceptive acts or practices affecting the conduct of any trade or commerce" — broad language that could read to cover B2B disputes. *Pursell v. First American National Bank*, 937 S.W.2d 838 (Tenn. 1996), narrowed the reach: the TCPA was intended to protect **consumers**, and a commercial dispute between sophisticated business entities, including disputes over the act of collecting a commercial debt or enforcing a commercial contract, is generally **outside the TCPA's scope**. Subsequent cases have refined the line — TCPA *may* reach B2B conduct where one side functions as a consumer or where the deceptive act is part of conduct affecting the broader consumer marketplace — but the **strong default is non-applicability** in pure B2B litigation. **Drafting implications**: - Do **not** plead a TCPA count in a pure B2B contract dispute unless there is a non-frivolous *Pursell*-distinguishing theory. Defense should move to dismiss under Rule 12.02(6) with *Pursell* citation. - Plaintiff should rely on contract-based remedies (breach, fraud, conversion, tortious interference) rather than the TCPA's treble-damages + mandatory-fee draw. ### 2. Tennessee Uniform Trade Secrets Act (TUTSA) — § 47-25-1701 et seq. Tennessee enacted the Uniform Trade Secrets Act in 2000. - **"Trade secret" defined** (§ 47-25-1702(4)): information that derives independent economic value from not being generally known and is the subject of reasonable efforts to maintain secrecy. - **Misappropriation** (§ 47-25-1702(2)): acquisition by improper means, or disclosure / use without consent by one who knew or had reason to know the trade secret was acquired by improper means / under duty of secrecy. - **Injunctive relief** (§ 47-25-1703): actual or threatened misappropriation may be enjoined. - **Damages** (§ 47-25-1704): actual loss + unjust enrichment; if neither is provable, a **reasonable royalty**. Willful and malicious misappropriation supports **exemplary damages of up to twice the compensatory award**. - **Attorney's fees** (§ 47-25-1705): the court may award fees to the **prevailing party** if (a) bad-faith claim of misappropriation, (b) bad-faith motion to terminate an injunction, or (c) willful and malicious misappropriation. - **Preemption** (§ 47-25-1708): TUTSA preempts conflicting state-law tort remedies for misappropriation, but leaves contract claims and tort claims **not based on** misappropriation intact. - **SOL** (§ 47-25-1709): 3 years from discovery / reasonable- discovery date. TUTSA cases often overlay **non-compete enforcement** (see `tn-employment` for the *Udom* reasonableness framework) and **fiduciary-duty / faithless-servant theories**. ### 3. Tennessee Uniform Voidable Transactions Act (formerly TUFTA) — § 66-3-301 et seq. Tennessee adopted the Uniform Fraudulent Transfer Act in 2003; the 2015 ULC amendments renamed it the **Uniform Voidable Transactions Act**. Tennessee's current chapter is at § 66-3-301 et seq. - **Actual fraud** (§ 66-3-305): transfer made with actual intent to hinder, delay, or defraud creditors. "Badges of fraud" catalog at § 66-3-305(b). - **Constructive fraud** (§ 66-3-306): transfer made without receiving reasonably equivalent value while the debtor was insolvent or rendered insolvent. - **Remedies** (§ 66-3-309): avoidance of the transfer; attachment; injunction; appointment of receiver; judgment against transferee for value of asset transferred. - **SOL** (§ 66-3-310): 4 years from transfer for actual fraud; 4 years from transfer for constructive; **discovery rule** carries a 1-year extension after the transfer would have been reasonably discovered. The UVTA is the principal tool for post-judgment commercial collection where a debtor has dissipated assets to insiders. See also `tn-post-judgment` for execution practice. ### 4. Tennessee Revised LLC Act — § 48-249-101 et seq. Tennessee operates **two parallel LLC statutes**: the **original 1994 Act** at § 48-201-101 et seq. (governing LLCs formed before 2006) and the **Revised LLC Act** at § 48-249-101 et seq. (governing LLCs formed on or after Jan. 1, 2006). Confirm the governing statute by date of formation. - **Member liability** (§ 48-249-114): members are not personally liable for LLC obligations; veil-piercing requires the *Dog House Investments* showing (Tennessee's reverse-veil and forward-veil framework). - **Dissociation** (§ 48-249-503): voluntary withdrawal under the operating agreement; involuntary dissociation on enumerated grounds. - **Judicial dissolution** (§ 48-249-616): on application of a member, if (a) not reasonably practicable to carry on; (b) members in deadlock and irreparable injury to LLC; (c) controlling members acting in manner illegal / oppressive / fraudulent. The dissolution remedy commonly drives **buy-out negotiations** in lieu of forced wind-up. - **Derivative actions** (§ 48-249-801 et seq.): demand requirement; pleading particularity per Rule 23.06. - **Fiduciary duties** (§ 48-249-403): duty of loyalty + duty of care + duty of good faith and fair dealing; the operating agreement may not eliminate the duty of good faith. ### 5. Tennessee Business Corporation Act — § 48-11-101 et seq. The Tennessee BCA tracks the Model Business Corporation Act. - **Shareholder derivative actions** (§ 48-17-401): demand on the board (no futility excuse since 1998 reform), 90-day wait, particularity per Rule 23.06; SLC review. - **Inspection rights** (§ 48-26-102): shareholders may inspect books and records on 5-day written demand with proper purpose. - **Judicial dissolution** (§ 48-24-301): grounds include director deadlock harmful to corporation; oppression / illegality / fraud by those in control; corporate assets being misapplied or wasted. - **Appraisal rights** (§ 48-23-101 et seq.): shareholders dissenting from merger / share exchange / certain asset sales have buy-out right at fair value as of immediately before the corporate action. - **Indemnification** (§ 48-18-501 et seq.): mandatory where director is wholly successful on the merits; permissive otherwise on good-faith finding. - **Fiduciary duties**: duty of care + duty of loyalty + good-faith standard at § 48-18-301 (directors). ### 6. Tennessee Uniform Arbitration Act — § 29-5-301 et seq. Tennessee's UAA largely mirrors the **Federal Arbitration Act** (9 U.S.C. § 1 et seq.); FAA preemption applies to most agreements involving interstate commerce. - **Enforcement** (§ 29-5-303): written arbitration agreements are valid and enforceable except on contract-formation grounds. - **Compelling arbitration** (§ 29-5-304): motion to compel; stay of court proceedings; severability of arbitration clause from main contract (Tennessee follows *Prima Paint*-style separability under the FAA where the underlying agreement involves interstate commerce). - **Vacatur grounds** (§ 29-5-313): corruption, fraud, partiality, exceeding powers, refusal to hear material evidence. Manifest- disregard is **not** a Tennessee vacatur ground (and is no longer a FAA ground after *Hall Street Associates v. Mattel*, 552 U.S. 576 (2008)). - **Confirmation** (§ 29-5-312): judgment on the award entered in Chancery or Circuit. SOL on confirmation: 1 year from delivery of award. ## Pleading-particularity (Rule 9.02) and the *Twombly/Iqbal* / *Jarboe* overlay - **Fraud (Rule 9.02)**: "the circumstances constituting fraud or mistake shall be stated with particularity." Tennessee reads this in line with the federal Rule 9(b). Plead the **time, place, contents, speaker, what was obtained or given up**. - **Notice-pleading otherwise**: Tennessee remains a **notice- pleading** jurisdiction for most commercial claims, but the Tennessee Supreme Court's adoption of *Jarboe v. Landmark Community Newspapers*, 2014, raised the **summary-judgment bar** post-*Rye v. Women's Care Center of Memphis*, 477 S.W.3d 235 (Tenn. 2015) (a Tennessee analog to *Celotex*). Discovery becomes the *de facto* test for whether a commercial claim survives. ## Equitable-remedy practice (Chancery) | Remedy | Standard | Authority | |---|---|---| | **TRO** (no notice) | Immediate and irreparable injury; certified efforts to give notice or reason why not | Tenn. R. Civ. P. 65.03 | | **Preliminary injunction** | (1) likelihood of success; (2) irreparable harm without injunction; (3) balance of equities; (4) public interest. See *Vance v. Schroering*, 1999 Tenn. App. LEXIS 84 | Tenn. R. Civ. P. 65.04 | | **Bond** | Required unless waived for good cause; Chancery sets amount | Tenn. R. Civ. P. 65.05 | | **Permanent injunction** | Same multi-factor with final-judgment standard | Tenn. R. Civ. P. 65.04 | | **Attachment** | Statutory grounds (non-resident, fraudulent transfer, etc.); bond + verification | Tenn. Code Ann. § 29-6-101 et seq. | | **Receivership** | Insolvent corp, dispute over property, dissipation risk | Tenn. R. Civ. P. 66; § 29-1-101 et seq. | | **Specific performance** | Real estate (presumptively); unique chattels; inadequacy of damages | Common-law equity | | **Constructive trust / accounting** | Unjust enrichment + traceable benefit + inadequate legal remedy | Common-law equity | ## Damages and remedies | Claim | Compensatory | Punitive | Treble / liquidated | Fees | |---|---|---|---|---| | Breach of contract | Expectation / reliance / restitution | **Not available** (contract-only) | Liquidated if K-stipulated and reasonable | American Rule (unless K shifts) | | Breach + fraud | Both K + fraud damages | Yes, on fraud count | — | American Rule | | TUTSA | Actual loss + unjust enrichment; reasonable royalty as fallback | Up to **2x compensatory** on willful & malicious | — | Prevailing party on bad-faith / willful (§ 47-25-1705) | | UVTA | Avoidance + judgment vs. transferee | — | — | Prevailing party in some constructive-fraud cases | | TCPA (where applicable) | Actual damages | — | **Treble** on willful or knowing | Mandatory to prevailing plaintiff (§ 47-18-109) | | Tortious interference | Lost profits + lost business expectancy | Yes, on intentional / malicious | — | American Rule | | Securities fraud | Rescission + compensatory | Yes | — | Prevailing party (§ 48-1-122) | | BCA derivative recovery | To corporation | — | — | Plaintiff fees on benefit-conferred theory | ## Forum strategy | Claim | Default forum | Notes | |---|---|---| | Breach of commercial contract | **Chancery** (with concurrent Circuit jurisdiction); General Sessions if ≤ $25k | Chancery preferred where equitable relief is also sought | | Trade-secret / non-compete enforcement | **Chancery** | Equity forum for TRO + injunction; verified complaint | | LLC / corporate dissolution + derivative | **Chancery** | Equity forum; SLC review | | TCPA (where it applies) | Chancery, Circuit, or General Sessions | Treble + mandatory fees draw makes plaintiff posture economical | | TUFTA / UVTA | **Chancery** | Equity forum for avoidance + receivership | | Federal diversity (out-of-state defendant + $75k) | **U.S. District Court** (E.D./M.D./W.D. Tenn.) | Removal possible; **Erie** state-substantive law applies | | Arbitration motion to compel | Chancery or Circuit | FAA-preempted in interstate-commerce contracts | | Davidson 20th JD business cases | Davidson Chancery Business Court | See `tn-davidson` | ## Drafting checklist - [ ] Identify the **operative contract** and its **forum-selection** and **arbitration** clauses before drafting; arbitration first. - [ ] Confirm the **6-year written-contract SOL** at § 28-3-109 or the **4-year UCC § 47-2-725** clock; for tort overlays use the 3-year § 28-3-105 clock. - [ ] Plead **fraud with Rule 9.02 particularity** — time, place, contents, speaker, what was obtained. - [ ] Do **not plead TCPA** in a pure B2B commercial dispute without a non-frivolous *Pursell* workaround. - [ ] For trade-secret claims: identify the trade secret with sufficient specificity to plead but not so broadly as to destroy secrecy; consider a **sealed protective order** for the trade-secret description. - [ ] For TRO / preliminary injunction: verified complaint + Rule 65.03 / 65.04 motion + bond + supporting declarations establishing **irreparable harm** (money damages inadequate). - [ ] For UVTA: plead **badges of fraud** with particularity (Rule 9.02 standard frequently applied to fraudulent-transfer claims). - [ ] For LLC / corporate derivative: comply with the **demand requirement** under § 48-17-401 / § 48-249-801; plead demand-made or demand-excused with particularity per Rule 23.06. - [ ] For dissolution: consider whether **buy-out negotiation** is preferable to forced wind-up; the dissolution petition is often a settlement lever. - [ ] For arbitration motion to compel: identify FAA vs. UAA governing law; severability of the arbitration clause; delegation clauses. ## Composition - For statewide format and caption: `tn-statewide-format` - For Chancery venue mechanics (Davidson Business Court): `tn-davidson`, `tn-shelby`, `tn-knox`, `tn-hamilton`, or `tn-county-courts` - For limited-jurisdiction commercial claims ≤ $25k: `tn-general-sessions` - For first responsive pleading: `tn-first-30-days` - For drafting motions / declarations / orders: `tn-draft-motion`, `tn-draft-declaration`, `tn-draft-order` - For SOL/limitations arithmetic: `tn-deadlines` - For TCPA / collection-agency-licensing parallel: `tn-consumer-debt` - For non-compete / fiduciary duty / TUTSA overlap with employment: `tn-employment` - For post-judgment commercial collection: `tn-post-judgment` ## References - `tn-law-references` — Tenn. Code Ann., Tenn. R. Civ. P., Tenn. R. Evid., federal-debt-laws + ucc-model symlinks - Tenn. Code Ann. Title 47 (UCC + Consumer Protection + Trade Secrets) - Tenn. Code Ann. Title 48 (Corporations + LLCs + Securities) - Tenn. Code Ann. Title 66 ch. 3 (UVTA / TUFTA) - Tenn. Code Ann. Title 29 ch. 5 (Uniform Arbitration Act) - Tenn. Code Ann. Title 29 ch. 1 / Title 29 ch. 6 (Equitable proceedings; attachment) - *Pursell v. First American National Bank*, 937 S.W.2d 838 (Tenn. 1996) — TCPA B2B exclusion - *Rye v. Women's Care Center of Memphis, MPLLC*, 477 S.W.3d 235 (Tenn. 2015) — summary-judgment standard - *Murfreesboro Medical Clinic, P.A. v. Udom*, 166 S.W.3d 674 (Tenn. 2005) — non-compete reasonableness - *Hall Street Associates v. Mattel*, 552 U.S. 576 (2008) — FAA vacatur grounds (impacts UAA practice) - Davidson Chancery Business Court rules — see `tn-davidson` + the local-rules pointer at `tn-law-references/references/ court-rules/Tenn-Local-Rules-Practice.md`