tn-commercial-disputes

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)

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)

Damages and remedies

Forum strategy

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