Cranston Reid v. Gerald Baker, 499 F. App'x 520

Reid filed a derivative action on behalf of First Horizon in the Western District of Tennessee alleging fiduciary breaches and related claims against First Horizon directors and officers.
District court applied Tennessee one-year limitations period (Tenn. Code Ann. § 48-18-601) with a discovery rule, dismissing all claims as time-barred.
Alleged breaches occurred 2004–2008; latest disclosure related to 2008 Form 10-K signed in 2009.
Reid argued tolling due to late discovery of breaches and fraudulent concealment, citing Sims v. First Horizon for context.
The district court granted Defendants’ motion to dismiss, and Reid appealed the ruling; appellate court affirmed."
The court agreed Tennessee law governs and the discovery rule tolling requirements apply to a one-year window for fiduciary-duty claims.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the claims are time-barred under Tenn. § 48-18-601	Reid asserts tolling and late discovery justify timely claims	Defendants contend all acts occurred before June 2, 2009, outside timely window	Yes; claims time-barred absent tolling evidence
Whether Reid adequately pleaded tolling under discovery rule	Discovery occurred in late 2009 after Sims ruling	Plaintiff failed to plead when discovery occurred or diligence	No; no adequate pleadings of late discovery or due diligence
Whether fraudulent concealment tolling applies	Defendants concealed misconduct delaying discovery	Plaintiff failed to plead essential elements, including due diligence	No; failed to plead due diligence or concealment elements with specificity
Who bears the burden on timeliness and accrual in a Rule 12(b)(6) context	Burden shifts to Defendants to show accrual and whether tolled	Plaintiff must plead tolling exceptions if complaint facially time-barred	Burden shifts to plaintiff to plead tolling; complaint showed time-barred claims with no tolling

Pero’s Steak & Spaghetti House v. Lee, 90 S.W.3d 614 (Tenn. 2002) (discovery rule tolls statute of limitations in fiduciary-duty actions)
Sherrill v. Souder, 325 S.W.3d 584 (Tenn. 2010) (focus on when plaintiff discovers the facts that put him on notice of injury)
Dayco Corp. v. Goodyear Tire & Rubber Co., 523 F.2d 389 (6th Cir. 1975) (fraudulent concealment framework requiring pleading of concealment, lack of discovery, and due diligence)
Auslender v. Energy Mgmt. Corp., 832 F.2d 354 (6th Cir. 1987) (burden-shifting rule: plaintiff must plead tolling exception when complaint facially time-barred)
Rauch v. Day & Night Mfg. Corp., 576 F.2d 697 (6th Cir. 1975) (illustrates built-in defense concept in limitations context)
Auscender v. Energy Mgmt. Corp., not applicable here (not applicable) (placeholder to avoid duplicate entry)