TCA § 48-18-601 — Limitation of actions for breach of fiduciary duty
AI-assisted research summary: Claims for breach of fiduciary duty by directors or officers must be filed within one year, with a three-year outer limit and a special one-year discovery period if there was fraudulent concealment.
Any action alleging breach of fiduciary duties by directors or officers, including alleged violations of the standards established in § 48-18-301 , § 48-18-403 or part 7 of this chapter, must be brought within one (1) year from the date of such breach or violation; provided, that in the event the alleged breach or violation is not discovered nor reasonably should have been discovered within the one-year period, the period of limitation shall be one (1) year from the date such was discovered or reasonably should have been discovered. In no event shall any such action be brought more than three (3) years after the date on which the breach or violation occurred, except where there is fraudulent concealment on the part of the defendant, in which case the action shall be commenced within one (1) year after the alleged breach or violation is, or should have been, discovered. Acts 1986, ch. 887, § 8.60; 2012, ch. 1051, § 35. Law Reviews. Unpacking Limited Liability: Direct and Vicarious Liability of Corporate Participants for Torts of the Enterprise (Robert B. Thompson), 47 Vand. L. Rev. 1 (1994). NOTES TO DECISIONS 1. Applicability. 1. Applicability. In an action against savings and loan directors for breach of fiduciary duties, the six-year limitation period in T.C.A. § 28-3-109 applied rather than the three-year limitation period in T.C.A. § 28-3-105 where the action was filed prior to the enactment of T.C.A. § 48-18-601 , which would otherwise clearly have controlled. Federal Sav. & Loan Ins. Corp. v. Burdette, 696 F. Supp. 1196, 1988 U.S. Dist. LEXIS 11038 (E.D. Tenn. 1988). The delayed effective date of T.C.A. § 48-18-601 was not an expression of intent that it should take effect prior to its expressly stated effective date, or be retroactively applied to all rights arising after its enactment, but before its effective date. American Network Group, Inc. v. Kostyk, 804 S.W.2d 447, 1990 Tenn. App. LEXIS 763 (Tenn. Ct. App. 1990). On January 1, 1988, the former limitation of six years was shortened to one year, and plaintiffs in action accruing before 1988 had one year after January 1, 1988, within which to sue, their suit not being barred by the former six year statute. American Network Group, Inc. v. Kostyk, 804 S.W.2d 447, 1990 Tenn. App. LEXIS 763 (Tenn. Ct. App. 1990). Since this section applies to the breach of fiduciary duties by “directors or officers,” it did not apply to an action by minority shareholders against a majority shareholder. Mike v. Po Group, 937 S.W.2d 790, 1996 Tenn. LEXIS 529 (Tenn. 1996).