RODNEY HARBACK v. EDDIE'S BODY SHOP, LLC, ET AL

This appeal arises from a breach of contract lawsuit following the sale of a body shop
business. Prior to the sale, the owner entered into a paint-purchasing agreement requiring
him to purchase $900,000 worth of paint over time in exchange for discounts and up-front
“pre-bate” payments. Under the paint-purchasing agreement, the paint supplier could
terminate the agreement if the business was sold without the supplier’s prior written
consent. The owner later sold his business to buyers pursuant to an asset purchase
agreement whereby the buyers agreed to take on the business’s paint-purchasing
obligations. The buyers initially kept buying paint from the same supplier but eventually
stopped. The paint supplier demanded repayment of the up-front funds from the prior
owner under his personal guarantee. The prior owner then sued the buyers, asserting that
they were required to hold him harmless. The buyers filed a counterclaim asserting that
the prior owner committed the first breach by selling the business without the paint
supplier’s consent, resulting in the buyers never receiving the expected value of the deal.
The trial court ruled in the prior owner’s favor. The buyers appeal. We affirm.