Opinion ID: 2981392
Heading Depth: 3
Heading Rank: 1

Heading: Timeliness of Plaintiff’s Claims

Text: The district court outlined the factual allegations in the Complaint that support Plaintiff’s claims. These allegations begin with Defendants’ adoption of a new policy concerning underwriting guidelines in 2004 and Defendants’ subsequent implementation of high-risk lending practices. The district court explained that Plaintiff alleged that various misconduct occurred over the next several years, through 2008, where Defendants’ complicity in the violations of federal securities laws perpetrated by one of its subsidiaries resulted in a lawsuit against the subsidiary. The court determined that the facts alleged in the Complaint established that Plaintiff’s time to bring his action had expired, and Plaintiff attempted to avoid the timeliness issue by pleading that he discovered the alleged breaches in late 2009 and that Defendants fraudulently concealed their breaches. The district court found that Plaintiff insufficiently pleaded facts to support his claim of late discovery. On appeal, Plaintiff argues that Defendants have the burden to establish their affirmative defense that Plaintiff’s time for filing his Complaint had expired. Plaintiff further argues that, because of this burden, Defendants must show when Plaintiff’s claims accrued by establishing when 2 Because the parties agreed that each of Plaintiff’s claims involve the breach of fiduciary duty limitations statute, we will refer only to the breach of fiduciary duty claim. However, such reference encompasses all of Plaintiff’s claims. 9 and how a First Horizon shareholder reasonably should have discovered Defendants’ breaches of fiduciary duties prior to June 2, 2009. Plaintiff maintains that the district court erroneously relieved Defendants of this burden, failed to make a determination of when Plaintiff should have discovered Defendants’ breaches, improperly required Plaintiff to plead a response to the statute of limitations defense, and wrongly dismissed the Complaint as time-barred pursuant to § 48-18-601. Plaintiff’s arguments are not well-taken. Indeed, while a defendant ordinarily has the burden to establish its statute of limitations defense, when the court can ascertain from the complaint that the period for bringing the claim has expired, a plaintiff must affirmatively plead an exception to the limitations statute. Auslender, 832 F.2d at 356. In essence, a defendant has met its burden to establish its statute of limitations defense when a plaintiff admits facts in the complaint that establish that the statute has run. The burden then shifts back to a plaintiff to show that it qualifies for an exception. The Complaint here established that the events that Plaintiff alleged were breaches of fiduciary duties occurred between 2004 and early 2009. The statute of limitations for claims that assert a breach of fiduciary duty is one year. Tenn. Code Ann. § 48-18-601 (2012). Because Plaintiff filed his action on June 2, 2010, only claims arising on or after June 2, 2009, are timely. Most of the conduct that Plaintiff alleged was a breach of Defendants’ fiduciary duties occurred between 2005 and 2008. The latest occurring alleged breach related to Defendants’ failure to disclose information or misrepresentation of information in the 2008 Form 10-K, which some of the named Defendants signed in February 2009. Thus, from the face of the Complaint, all actions occurred before June 2, 2009, and all of Plaintiff’s claims are barred by the applicable limitations statute and should be dismissed unless the delay in filing can be 10 excused by a tolling provision. Plaintiff seemingly recognized this, as he devoted a section of his Complaint to the tolling of the limitations statute.