Opinion ID: 546947
Heading Depth: 3
Heading Rank: 1

Heading: Conspiracy to Injure Business

Text: 37 Because the district court's jurisdiction over the state law claims was premised upon diversity of citizenship, the law of the forum state (Illinois) controlled the choice of which statute of limitations would apply. Klaxon Co. v. Stentor Electric Mfg. Co., Inc., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1943); McMahon v. Pennsylvania Life Ins. Co., 891 F.2d 1251, 1257 (7th Cir.1989). Applying Illinois' borrowing statute, Ill.Rev.Stat., ch. 110 p 13-210 (Smith Hurd 1985), 7 the district court concluded that Tennessee's three-year statute of limitations, T.C.A. Sec. 28-3-105, governed UST's claim of injury to business and dismissed it upon those grounds. 8 UST argues that the district court erred in applying the three-year statute of limitations in that its claim of injury to business is governed in Tennessee by the catch-all ten-year statutory limitations period set forth in T.C.A. Sec. 28-3-110(3). 38 The foundation upon which UST premises its claim in this regard is the Supreme Court's 1906 decision in Chattanooga Foundry & Pipe Works v. City of Atlanta, 203 U.S. 390, 27 S.Ct. 65, 51 L.Ed. 241 (1906). Chattanooga Foundry involved a claim alleging injury to business or property under Sec. 7 of the Sherman Antitrust Act. Because no federal statute of limitations expressly applied to such a claim for treble damages, and because Tennessee did not have a statute of limitations governing injury to business as such, the Court affirmed the lower court's decision to borrow Tennessee's residual ten-year statute of limitations to govern this federal claim. In so doing, the Court stated: 39 there is a sufficiently clear distinction between injuries to property and 'injured in his business or property,' the latter being the language of the act of Congress. A man is injured in his property when his property is diminished. He would not be said to have suffered an injury to his property unless the harm fell upon some object more definite and less ideal than his total wealth.... But when a man is made poorer by an extravagant bill we do not regard his wealth as a unity, or the tort, if there is one, as directed against that unity as an object.... We say that he has been defrauded or subjected to duress, or whatever it may be, and stop there. 40 Id. at 399, 27 S.Ct. at 67. Contrary to UST's assertions, we do not believe that this language created a doctrine in Tennessee under which injuries to business are governed by the residual ten-year statutory limitations period. 41 That Chattanooga Foundry did not establish such a general rule in cases alleging injury to business in Tennessee is evident from the fact that UST was unable to cite, and we were unable to find, any Tennessee cases in the 84 years since Chattanooga Foundry in which that statutory limitations period has been applied to an allegation of injury to business. Indeed, the cases in Tennessee which have addressed the issue of what limitations period applies to various types of injuries to business instruct that T.C.A. Sec. 28-3-110(3) is not the appropriate choice. 42 In Tennessee, the applicable statute of limitations for any cause of action is determined according to the gravamen of the claim. Vance v. Schulder, 547 S.W.2d 927, 931 (Tenn.1977); Prescott v. Adams, 627 S.W.2d 134, 137 (Tenn.App.1981). The gravamen of UST's allegation in Count 8 is that Busch conspired through various instances of extortion, mail fraud and wire fraud to injure UST's business. While there are no cases which support UST's assertion that these allegations are governed by the ten-year limitations period, a multitude of Tennessee cases have held that similar tort allegations involving one party's wrongful interference with a second party's business and/or business relationships are governed by Sec. 28-3-105's three-year limitations period. 43 In Budget Rent-a-Car of Knoxville, Inc. v. Car Services, Inc., 225 Tenn. 342, 469 S.W.2d 360 (1971), the Tennessee Supreme Court was presented with a claim in which the owners of the Budget franchise in Knoxville alleged that the defendants had conspired to force them to sell their business. In the process of ruling on the issues presented therein, the court expressly held that the complainants' tort allegations--i.e., the alleged conspiracy which forced them to sell their business--were governed by the three-year statutory limitations period set forth in T.C.A. Sec. 28-3-105. 44 More recently, in Dorsett Carpet Mills, Inc. v. Whitt Tile & Marble Distributing Co., slip op., 1986 WL 622 (Tenn.App. Jan. 2, 1986), aff'd in part, rev'd in part, 734 S.W.2d 322 (Tenn.1987), Whitt Tile brought a counterclaim against Dorsett in which it alleged fraudulent inducement of breach of contract, conspiracy, and wrongful interference with business. Judgment was entered in favor of Whitt Tile on its counterclaim. In affirming that judgment, the Tennessee appellate court noted that T.C.A. Sec. 28-3-105's three-year limitations period governed Whitt's allegations. See also Harvest Corp. v. Ernst & Whinney, 610 S.W.2d 727 (Tenn.App.1980) (suits in which fraud, deceit or conspiracy are alleged are actions in tort and are governed by Sec. 28-3-105). 45 As we pointed out before, the gravamen of UST's claim in Count 8 is that Busch conspired through various acts of mail fraud, wire fraud and extortion to injure UST's business. Thus, the damage alleged is injury to business and the means by which that damage was allegedly achieved are conspiracy and fraud. In this regard, we fail to see how UST's claim is any different from the conspiracy to injure business claim brought by the complainant in Budget Rent-a-Car which the Tennessee Supreme Court expressly held was governed by the three-year limitations period found in T.C.A. Sec. 28-3-105. In light of this Tennessee Supreme Court precedent and the absence of any modern authority instructing to the contrary, we reject UST's argument that a general injury to business doctrine exists in Tennessee mandating the application of T.C.A. Sec. 28-3-110(3)'s residual ten-year limitations period. 46 In the alternative, UST argues that any applicable statute of limitations on its common law claims was tolled by the duress Busch allegedly exercised over UST in the negotiation and execution of the December, 1980 contract. Because UST did not raise this argument before the district court, the argument has been waived and we need not consider its merit. Gray v. Lacke, 885 F.2d 399, 409 (7th Cir.1989), cert. denied, --- U.S. ----, 110 S.Ct. 1476, 108 L.Ed.2d 613 (1990); Zbaraz v. Hartigan, 763 F.2d 1532, 1544 (7th Cir.1985).