Clarksville Towers, LLC v. Straussberger, No. M2020-00756, decided May 11, 2021. The Tennessee Court of Appeals affirmed summary judgment in favor of the president and sole owner of a corporation that contracted with the plaintiff to construct a building, and whose contractor’s license expired before completion of the project. The court stated that while the corporation could be liable for operating without a license, there was no evidence the president supervised, managed or was in charge of any part of the project and therefore he could not be considered a contractor. Nor was there evidence that he misrepresented the corporation’s licensing status.
Assignment of Rights
Hight v. Tramel, No. M2019-00 845, decided November 17, 2020. The Tennessee Court of Appeals affirmed the ruling that a former shareholder lacked standing to bring a lawsuit on the corporation’s behalf. The plaintiff claimed the corporation assigned its rights in a settlement agreement he entered into with the person who bought the corporation. However, the settlement agreement was clearly between the plaintiff and the buyer and the corporation was not a party. The corporation has a separate existence from its owner and has to assign its rights itself.
Residency Requirement Violates Commerce Clause
Tennessee Wine and Spirits Retailers, Assn. v. Thomas, No. 18-96, decided June 26, 2019. The U.S. Supreme Court held that a Tennessee law prohibiting companies from obtaining a license to operate retail liquor stores unless all of their directors, officers, and owners were Tennessee residents for the previous two years violates the Commerce Clause.
Peach Reo, LLC v. Rice, No. 2:12-cv-02752, decided 7/11/17. The U.S. District Court, Western District of Tennessee granted a motion for a charging order against the interests of the debtor member in six LLCs. The court rejected the member’s argument that a charging order was inappropriate because the operating agreements required consent before a member could assign its interests. The governing LLC statutes provide that a charging order is a lien – which is an interest in the property of another - and not an assignment of the interest.