RODNEY HARBACK v. EDDIE'S BODY SHOP, LLC
CourtCourt of Appeals of Tennessee
Date FiledJuly 8, 2026
DocketE2025-00447-COA-R3-CV
JudgeJudge Kristi M. Davis
StatusPublished
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Full Opinion
07/08/2026
IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
April 15, 2026 Session
RODNEY HARBACK v. EDDIE’S BODY SHOP, LLC ET AL.
Appeal from the Chancery Court for Roane County
No. 2018-66 Tom McFarland, Chancellor1
___________________________________
No. E2025-00447-COA-R3-CV
___________________________________
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.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed;
Case Remanded
KRISTI M. DAVIS, J., delivered the opinion of the Court, in which JOHN W. MCCLARTY,
P.J., E.S., and WILLIAM E. PHILLIPS II, J., joined.
Sharon Reynolds Clark and Sara Newcomb Lawson, Kingston, Tennessee, for the
appellants, Eddie’s Body Shop, LLC, Adam Clark, and Brandon Moore.
George R. Arrants and Hilary L. Magacs, Knoxville, Tennessee, for the appellee, Rodney
Harback.
1
Chancellor Frank V. Williams, III, originally presided in this matter. In August 2022, while the
matter remained pending, Chancellor Williams was defeated for re-election.
OPINION
BACKGROUND
Before April 2017, Rodney Harback (“Plaintiff”) owned and operated Eddie’s Body
Shop (the “Business” or “Collision Center”), a sole proprietorship. On May 31, 2016,
Plaintiff and PPG Industries, Inc. (“PPG”) entered an agreement (the “PPG Contract”)
whereby Plaintiff would exclusively purchase PPG paint through PPG’s intermediary—or
“jobber”—Tasco Auto Color #24 (“Tasco”). Under the PPG Contract, Plaintiff was to
purchase $900,000 worth of PPG paint for the Business over time. Meanwhile, as an
incentive or “pre-bate,” Plaintiff received $140,000 from PPG and $15,000 from Tasco.
The PPG Contract provided, as relevant:
9.1 Termination Events. If, at any time during the Term: (a) Collision Center
is in default or breach of the terms or conditions of this Agreement and such
default is not remedied within thirty (30) days after written notice of such
default or breach is delivered by PPG or Servicing Jobber to Collision
Center; . . . (e) Collision Center sells substantially all of its assets or business
to another person or entity without the prior written consent of PPG and
Servicing Jobber; . . . (each of (a) through (g) above, a “Termination Event”),
then PPG shall have the right, at its option, to immediately terminate this
Agreement and shall have no further obligation hereunder.
***
11. Assignment. This Agreement is not assignable by Collision Center or
Owner, in whole or in part, without the prior written consent of PPG and
Servicing Jobber (which consent shall not be unreasonably withheld) and any
attempted assignment without such consent, whether by operation of law or
otherwise, shall be void. . . .
In addition, Plaintiff was required to personally guarantee the PPG Contract, such that he
would be required to pay back the money provided to him up-front if the minimum
purchase obligation was not met.
Several months after executing the PPG Contract, Plaintiff took steps to sell the
Business. On January 17, 2017, Plaintiff, as seller, and Adam Clark (“Mr. Clark”),
Brandon Moore (“Mr. Moore”), and Eddie’s Body Shop, LLC,2 as buyers (together,
“Defendants”), executed the Asset Purchase Agreement (the “APA”). The purchase price
2
Eddie’s Body Shop, LLC is an entity that was created to facilitate the purchase of Plaintiff’s
assets.
-2-
was $2,000,000.00. On March 31, 2017, the sale closed. As pertinent to this appeal, the
APA contained several key terms in Paragraphs (1), (8), (12), and (16), as follows:
1. ASSETS TO BE TRANSFERRED AND CONVEYED
On the Closing Date, as that term is defined in Section 5 of this Agreement,
subject to the terms and conditions set forth herein, Seller hereby agrees to
sell and convey to Buyer, and Buyer agrees to purchase from Seller, the
following assets:
***
c. All of Seller’s rights under an existing contract with P.P.G. Paint. Said
contract is a five-year contract to purchase paint, with approximately four
years remaining. Buyer covenants and agrees to perform all remaining
obligations imposed on Seller by said contract and hold Seller harmless
therefrom.
***
8. SELLER’S REPRESENTATIONS AND WARRANTIES
Seller represents and warrants to Buyer as follows:
a. Seller has full power and authority to execute, deliver and perform its
obligations under this Agreement, the instruments required hereby, and any
other agreements and instruments contemplated by this Agreement. Seller
has all requisite power and authority to own its properties and assets,
including the Assets (as defined herein), and to conduct its business as now
conducted. Seller is qualified to do business in all jurisdictions where it is
required to do so and has all necessary permits and authorizations required
to carry out Seller’s Business.
b. The execution and delivery of this Agreement, the instruments required
hereby, and the other agreements and instruments contemplated by this
Agreement have been duly authorized by all necessary actions of Seller and
by anyone else whose approval or authorization is required. Upon execution
and delivery, this Agreement, the instruments required hereby, and the other
agreements and instruments contemplated by this Agreement will be legal,
valid and binding obligations of Seller, enforceable against Seller in
accordance with their respective terms.
c. The execution and delivery of this Agreement does not, and the execution
and delivery of the instruments required hereby and other agreements and
-3-
instruments contemplated by this Agreement will not, and the consummation
of the transactions contemplated hereby and thereby will not (i) violate any
provision of law or any order, judgment or decree of any court or other
governmental or regulatory authority applicable to Seller; (ii) violate or result
in a breach of, an acceleration under, or constitute a default under, any
contract, lease, loan agreement, mortgage, security agreement, or other
agreement or instrument to which Seller is a party or by which it is bound or
to which any of Seller’s properties or assets is subject, which would prevent
Seller from transferring any of the Assets in the manner and as contemplated
by and in accordance with the terms and provisions of this Agreement; or
(iii) result in the imposition of any liens or restrictions on Seller’s Business
or any of the Assets.
***
f. Seller shall have and convey at the Closing good and marketable title to all
of the Assets free and clear of all liens, pledges, security interests and
encumbrances.
***
m. Neither the representations and warranties of Seller contained herein nor
in any certificate, Exhibit, inventory statement, income statement, balance
sheet, cash flow statement or other financial statement, delivered to Buyer
pursuant hereto or in connection with the sale of the Assets, contain any
untrue statement of a material fact or, taken together, omit to state a material
fact necessary in order to make the statements herein and therein not
misleading.
***
12. INDEMNIFICATION
a. Seller agrees to defend, indemnify and hold Buyer harmless from and
against, any and all claims, causes of action, damages, expenses, taxes,
assessments, interest, penalties, judgments, and costs, including reasonable
attorney fees, incurred directly or indirectly by Buyer arising out of or in any
way connected with:
(i) Breach of any of the representations, warranties, covenants and
agreements of Seller set forth in this Agreement, the instruments required
hereby, or any instrument or agreement delivered in connection with this
Agreement;
-4-
***
b. Buyer agrees to defend, indemnify and hold Seller harmless from and
against, any and all claims, causes of action, damages, expenses, taxes,
assessments, interest, penalties, judgments, and costs, including reasonable
attorney fees, incurred directly or indirectly by Seller arising out of or in any
way connected with:
***
(iii) The business responsibilities, expenses, costs and liabilities of Buyer,
including but not limited to the following:
***
(d) All obligations arising on and after the Closing Date regarding the
aforesaid P.P.G. Paint contract and any other contracts assigned by Seller to
Buyer;
***
16. REMEDIES
Subject to the other provisions of this Agreement, in the event of a breach of
any provision of this Agreement, the non-breaching party shall be entitled to
reasonable attorney fees, costs and expenses incurred for the enforcement of
said provisions, in addition to damages for the breach thereof. The remedies
set forth in the Agreement shall be cumulative, and no one shall be construed
as exclusive of any other or of any remedy provided by law, and the failure
or delay of any party to exercise any remedy at any time shall not operate as
a waiver of the right of such party to exercise any remedy for the same or
subsequent default at any time thereafter.
After the Business was sold, a legal dispute soon arose between Plaintiff and
Defendants over the paint-buying obligation under the PPG Contract. On May 11, 2018,
Plaintiff filed a complaint in the Roane County Chancery Court (the “trial court”) against
Defendants. Plaintiff alleged that Defendants had stopped buying PPG products; that PPG
notified Plaintiff of the PPG Contract’s termination and demanded repayment; and that, as
a result, Plaintiff repaid PPG. Plaintiff sought to recover from Defendants the sum he
repaid to PPG, alleging breach of the APA and interference with contractual and business
relations.
-5-
On June 11, 2018, Defendants filed an answer and counterclaim. Defendants stated
that Plaintiff had essentially kept them in the dark before closing by restricting their ability
to talk to vendors. Defendants stated further that they were not provided with a separate
valuation for the PPG Contract obligation. Defendants also asserted that, in a July 26, 2017
letter, PPG notified Plaintiff that the PPG Contract was terminated based on his assignment
of the contract without PPG’s prior written consent, a material breach of the PPG Contract.
In their counterclaim, Defendants asserted that, “[a]s a direct and proximate result of
[Plaintiff’s] breach of the representations and warranties as set out in the [APA],
[Defendants] have incurred monetary damages due to the loss of the purported valuable
assets agreed to be conveyed, but unable to be conveyed by [Plaintiff] to [Defendants],”
for which Defendants sought damages, attorney’s fees, costs, and expenses.3
On July 26, 2018, Plaintiff filed an answer to Defendants’ counterclaim. In his
answer, Plaintiff asserted that the PPG Contract was “identified, described, and available”
to Defendants, but they simply never asked to see it. Plaintiff asserted further that
Defendants were pursuing a new paint supplier well before PPG raised an issue of
Plaintiff’s alleged breach of the PPG Contract. Plaintiff also raised several affirmative
defenses, such as estoppel and unclean hands.
On November 8, 2019, Defendants filed a motion for summary judgment. In
February 2020, Plaintiff filed his response. On March 11, 2020, the trial court entered an
order denying Defendants’ motion, finding that there were sufficient disputed facts for trial.
On October 27 and 28, 2020, this case was tried.
Daniel Harman (“Mr. Harman”), a retired PPG territory manager, testified first. Mr.
Harman participated in negotiating the PPG Contract with Plaintiff. When Plaintiff later
sold the Business to Defendants, Mr. Harman found out after the fact. Mr. Harman said
that this was a departure from normal practice. Nevertheless, PPG allowed the PPG
Contract to continue as Defendants initially kept buying PPG paint and Plaintiff remained
a personal guarantor. According to Mr. Harman, Defendants inquired about discounts and
even wanted their own PPG agreement, but this was impossible so long as the original
contract was active. Mr. Harman explained that, for one, he needed to do his due diligence
as to Defendants’ creditworthiness in order for PPG to have a contractual relationship with
them. Mr. Harman testified that, instead, Defendants told him that they were opting for a
new paint supplier. Mr. Harman explained:
That’s -- when they said they were going to look at other options, that they
were going to change paint lines, that’s what they were going to do. They
were going to look and see what else was out there. There’s a lot of paint
3
Defendants also filed a third-party complaint against The Title Insurance of Chattanooga, Inc., a
matter which later was resolved between these parties and dismissed by the trial court with prejudice.
-6-
manufacturers with the same program. All major automobile paint
manufacturers have a body shop purchase agreement.
Consequently, Mr. Harman asked PPG to issue a termination letter to Plaintiff. In the
interim, whatever paint Defendants bought from PPG was credited on a dollar‑for‑dollar
basis toward Plaintiff’s remaining obligation, and PPG’s pricing terms remained the same
during this period.
In a July 26, 2017 letter entered into the record as an exhibit at trial, counsel for
PPG wrote Plaintiff informing him that he was in material breach of the PPG Contract and
demanding repayment, stating in part as follows:
You are in material breach of your obligations under Sections 9.1(e) and 11
of the [PPG Contract] (a copy of which is enclosed for your reference) by
failing to obtain PPG’s prior written consent to your attempted assignment
of the [PPG Contract] to [Defendants]. Accordingly, pursuant to Sections
9.1 and 9.2(a) of the [PPG Contract], PPG hereby terminates the [PPG
Contract] and demands repayment in the amount of $140,000.00. Please note
that Jobber may have independent claims against you under the [PPG
Contract] that are not addressed by this letter.
Defendants continued buying PPG paint through mid-August 2017. Mr. Harman
told Defendants that they were free to buy paint from whichever company they liked
because they had no contract with PPG, and PPG could not contract with Defendants so
long as the PPG Contract with Plaintiff was in effect. Questioned about Defendants’
continued purchase of PPG paint through mid-August 2017, Mr. Harman stated that “[y]ou
don’t change paint lines overnight” and “there’s a lot more involved with that.”
Following Mr. Harman’s testimony, Plaintiff took the stand. Plaintiff testified that
he told Defendants they were required to keep buying PPG paint. For Plaintiff,
Defendants’ agreement to take on this obligation was crucial to the sale. Defendants’
acceptance of the paint-buying obligation was also a basis for Plaintiff reducing the sale
price of the Business from $2.8 million to $2 million. Plaintiff testified:
Q. In connection with the $2.8 million sale price, did you negotiate a
reduction?
A. I did. I agreed to take $2 million.
Q. Why did you do that?
A. Just got to looking and I thought, well, maybe I was a little high on
it, so I come down on the price.
Q. Were there deal factors that you considered and relied on in your
agreeing to reduce the purchase price?
A. Not really, I mean, other than they had to fulfill the PPG. They
-7-
had to buy PPG paint for four and a half years or I wouldn’t have sold the
property, or I would have raised the price back up at least a quarter of a
million dollars to cover --
Q. Why? Why would you --
A. I was going to --
Q. -- raise it?
A. -- owe $140,000 plus interest, not to them, but if they paid it off in
payments it would have been $140,000 plus 20 years of interest. So I would
have added probably 200,000 at least to the cost of the property.
Q. Did you consider the buyer’s agreement to perform the PPG paint
purchase contract obligations that you had after they bought the business as
a --
A. I expected them to buy PPG paint. That was our agreement, you
know. If they entered into a new contract -- the PPG contract was me.
Q. And then you had a separate contract --
A. With them.
Q. -- with them.
A. That said they would buy PPG paint to keep my butt out of the
sling.
Q. And by that, what do you mean?
A. Well, I would have to pay the $140,000 out of my pocket if they
didn’t fulfill that agreement. And I wouldn’t have sold the shop had they not
agreed to it. We wouldn’t be here.
Regarding his willingness to share information with Defendants, Plaintiff testified:
Q. At any time prior to the closing or at the closing were there any
questions asked of you regarding the PPG --
A. No, sir.
Q. -- paint contract?
A. I would have gladly answered them had they asked.
Q. Now, subsequent to the closing did Mr. Clark or Mr. Moore or
anyone for the buyers contact you with questions about any of the operations
of Eddie’s Body Shop?
A. No, sir. They come in that day and said they were done with me,
and I could go.
Regarding the $140,000 he received up-front from PPG, Plaintiff testified that he
used much of that for the Business, such as for new equipment and improvements. Plaintiff
stated further that Defendants had the ability to review the PPG Contract but never asked
to see it. Ultimately, Plaintiff borrowed against his life insurance policies to pay PPG
$85,000 on its repayment demand. As a result, Plaintiff sought reimbursement from
Defendants under the indemnification clause of the APA.
-8-
Plaintiff emphasized that he told Defendants they were obligated to keep buying
PPG paint, and he believed they understood this. Plaintiff testified that he thought his
actions improved the value of the Business and that Defendants benefited from the PPG
Contract, such as by receiving up to 17% in discounts on paint. Plaintiff stated that he did
not intend to transfer the PPG debt to Defendants; he only wished to transfer his obligation
to buy PPG paint. On recross examination, Plaintiff acknowledged that invoices did not
reflect a 17% discount on paint and that Tasco had no written documentation of any such
discounts. Plaintiff also acknowledged that the PPG Contract is described as an asset in
the APA.
Next to testify was Greg Leffew (“Mr. Leffew”), an attorney hired by Plaintiff to
revise a draft sales agreement to include the PPG Contract. At the time, Mr. Leffew was
not furnished a copy of the PPG Contract. In late June 2017,4 Mr. Leffew was contacted
by Plaintiff or Plaintiff’s wife when PPG raised issues involving the sale of the Business
and the implications for the PPG Contract. Mr. Leffew communicated with PPG’s counsel
and was told a credit application was needed to approve any assignment. Mr. Leffew
informed Mr. Clark, who in turn told Mr. Leffew, that he had “worked out another
agreement to purchase paint.”
The trial court then heard Mr. Clark’s testimony. Mr. Clark stated that Plaintiff had
touted the PPG Contract as an exclusive opportunity with “extra discounts and rebates.”
Mr. Clark acknowledged that he had an obligation to buy PPG paint, but he also believed
at the time that Plaintiff had the authority to do what he did. Mr. Clark said that he did not
review the PPG Contract before the sale and instead took Plaintiff’s word for it. Mr. Clark
continued buying PPG paint through mid-August 2017 when he first bought paint from
another vendor. According to Mr. Clark, at a July 27, 2017 meeting with PPG and Tasco
representatives, he learned that he was no longer obligated to buy PPG paint and that he
could apply for a new contract. Mr. Clark denied that Mr. Leffew had previously asked
him to fill out a credit application. According to Mr. Clark, his prior communications with
Mr. Leffew involved a request from the latter to “backdate” certain documents, not a
request about PPG approval. Mr. Clark testified that he only switched vendors after
believing he had fulfilled his obligations to Plaintiff.
At this point, Mr. Harman was recalled for further testimony. Mr. Harman reiterated
that, sometime in July 2017, Defendants told him that they were going to stop buying PPG
paint. The trial court questioned Mr. Harman as follows:
THE COURT: Let me revisit something here that I was wondering
about. There was some discussion with [Defendants] about filling out a
credit application so that they can have their own contract with PPG as
opposed to anything that [Plaintiff] had with PPG --
4
The witnesses at trial were sometimes uncertain as to the precise dates for key events in the case.
-9-
THE WITNESS: Correct.
THE COURT: -- correct? But [Defendants] had been buying paint
from PPG or from Tasco without any contract between PPG and themselves,
right?
THE WITNESS: Correct.
THE COURT: Could that have continued?
THE WITNESS: Sure.
THE COURT: And at the same price and on the same terms?
THE WITNESS: Nothing would change. Their agreement with
[Plaintiff] we assumed was the best deal for them. It was an unusual
situation, and I was just trying to make the best use of an unusual situation.
A great deal of work had already taken place and it was easier for me, just to
be honest with you, just to continue doing business. I could --
THE COURT: And so who brought that up? Was that brought up by
PPG -- brought up by you on behalf of PPG or Tasco, or how did that come
up?
THE WITNESS: I don’t understand the question.
THE COURT: The possibility, or even the need, however you would
describe it, of their having their own contract for which they would need to
submit their own credit application and that sort of thing.
THE WITNESS: Well, they asked me.
THE COURT: They what?
THE WITNESS: They asked me if that could happen, if they could
get their own contract, and I explained to them I couldn’t have a contract
with the body shop with [Plaintiff’s] name and theirs at the same time.
THE COURT: Yes. I remember you saying that yesterday.
THE WITNESS: But was it possible, yes. But the way they were
purchasing now was kind of through [Plaintiff’s] agreement and their
agreement with him. If I got the credit app, I would run it through and say,
okay, you either qualify or you don’t qualify and we would go forward from
there.
THE COURT: And about when did that conversation take place?
THE WITNESS: Oh, my gosh. Probably June, somewhere in that
neighborhood.
THE COURT: So that was in June, then the termination letter was in
July. They continued to buy paint up until August?
THE WITNESS: Uh-huh.
THE COURT: And in August Tasco, you say, came and got their
equipment, and that was that?
THE WITNESS: That was the end of that. Probably sent them a final
bill for what was missing out of consignment. Other than that, I would
assume that would be the end of it.
- 10 -
After Mr. Harman’s additional testimony, Mr. Clark returned to the stand. Mr.
Clark testified that he never received the discounts that Plaintiff said came with the PPG
contract and that Tasco never showed any documentation of such discounts. Mr. Clark
testified further that, following his switch from using PPG paint, he entered into a new
contract with another supplier. On the question of how long it took to set up an exclusive
paint-purchasing agreement with a new paint supplier, Mr. Clark said it could take
“probably about a week,” and is a “little bit of a hassle.” Mr. Clark was asked whether he
had understood clearly that he agreed with Plaintiff to continue buying PPG paint
regardless of whether the PPG Contract was characterized as an asset:
Q. That provision -- or that claim states that [Plaintiff] either
intentionally or negligently misrepresented this contract as a, quote, asset,
when the same should have been characterized as a, quote, liability of the
business.
A. Okay.
Q. In your negotiations with [Plaintiff] and in your negotiations that
resulted in the purchase agreement and signing the purchase agreement and
closing, you weren’t confused about what obligation the PPG [C]ontract
represented? It was a paint purchase obligation that you were going to
continue to perform. I mean that’s accurate, right?
A. That’s what we agreed to.
Q. You weren’t confused about it, even though it was characterized as
an asset?
A. We understood that it was a purchase obligation, yes.
Q. And [Plaintiff] had actually identified that to you as the only
obligation that he had that he was passing through to you as the new owner.
Is that accurate?
A. That is accurate, yes.
Q. And he satisfied that by way of paying off any other debts and
obligations of the business. I think you have mentioned there might have
been a Yellow Pages bill that you got that maybe you shouldn’t have or
something.
A. That was not included in our agreement, but that’s all been taken
care of, so.
Q. So he basically didn’t leave you with any debt other than this
purchase obligation?
A. That is correct, yes. The business was free and clear.
Q. Okay. And you didn’t rely on any valuation of the PPG paint
contractual arrangement or the obligation to buy paint, you didn’t rely on any
dollar value of that -- from that as far as whether you did or didn’t close the
purchase or negotiate any different terms regarding the purchase, did you?
A. No, sir. That didn’t affect any terms of negotiation.
- 11 -
Returning to the subject of discounts promised, Mr. Clark testified that the value of
the PPG Contract would have been $90,748.15 had he received the discounts and rebates
indicated. Regarding his understanding of PPG’s actions against Plaintiff, Mr. Clark
testified:
Q. And in your countercomplaint there was discussion about you
didn’t know, or you had not received that July 26th letter when you stopped
purchasing paint in August?
A. Correct.
Q. But Mr. Harman told you that they were terminating, correct?
A. He told us that they were going after Mr. -- they had proceeded
with legal action against [Plaintiff], and we asked -- we specifically asked
them, you know, what -- if we sign a contract with you guys, what is that
going to do, and they told us that that legal action was already in progress.
There was nothing that we could do at that point. So if we signed with them
--
Q. It didn’t make any difference?
A. We could have signed a contract with PPG and they still would
have went after [Plaintiff] is what they explained to us.
After the witness testimony concluded, the trial court found that Plaintiff breached
the PPG contract by failing to obtain prior written consent for the sale of the Business from
PPG and Tasco but that the breach was harmless to Defendants as PPG kept selling them
paint. The trial court concluded further that Defendants anticipatorily repudiated their
obligation under the APA to continue buying PPG paint by expressing their intention to
use a different paint supplier, which caused PPG to terminate the PPG Contract and demand
repayment from Plaintiff. The trial court thus ruled in Plaintiff’s favor and reserved issues
of attorney’s fees and costs.
On January 19, 2021, before the trial court entered its written judgment, Defendants
filed a motion for additional findings of fact. After a hearing, the trial court denied
Defendants’ motion and instructed the parties to submit proposals for a judgment. On
October 1, 2021, the trial court entered its written judgment. The trial court found that,
while Plaintiff breached the representations and warranties of the APA by selling the
Business without prior consent from PPG, this breach was harmless to Defendants because
PPG allowed them to keep buying paint. The trial court determined that Defendants had
agreed in the APA to hold Plaintiff harmless on obligations arising out of the PPG Contract.
The trial court found further that, in July 2017, Defendants repudiated their obligation to
keep buying PPG paint when they told PPG that they wanted to go with another paint
supplier. This caused PPG to terminate the PPG Contract and seek repayment of the
$140,000 pre‑bate from Plaintiff, with Plaintiff ultimately paying PPG $85,000. The trial
court held Defendants liable for breach of the APA; ordered them to reimburse Plaintiff for
the $85,000 payment plus interest on his life insurance policy loans; and awarded Plaintiff
- 12 -
reasonable attorney’s fees and expenses to be determined at a later date. The trial court
dismissed Defendants’ counterclaim with prejudice.
Plaintiff subsequently sought discretionary costs, while Defendants filed a motion
to alter or amend and for additional findings. In November 2021, following a hearing, the
trial court denied Defendants’ motion while granting Plaintiff’s requests for discretionary
costs and attorney’s fees. So as not to interfere with Plaintiff’s ability to recover attorney’s
fees under the APA, the trial court also ruled that its judgment should be amended to
remove any reference to Plaintiff’s failure to obtain prior consent from PPG, finding that
this was not material to Plaintiff’s breach of contract claim.5 In December 2021, the trial
court entered orders granting Plaintiff discretionary costs and attorney’s fees.
On June 30, 2022, then-sitting Chancellor Frank V. Williams, III, signed an older
proposed order instead of the amended judgment he ordered. Both sides moved to set aside
the order, but the issue went unresolved for about a year. In June 2023, Plaintiff renewed
his request to set aside the order, and Defendants responded. In September 2023, the new
judge presiding over the case, Chancellor Tom McFarland, set aside the 2022 order and
reinstated the original October 2021 judgment as written.
Defendants then filed another motion to alter or amend and for additional findings.
On May 7, 2024, the trial court heard Defendants’ motion. On March 5, 2025, the trial
court entered an order denying Defendants’ motion. Chancellor McFarland determined in
his order that, given the procedural circumstances of the case, Defendants’ renewed motion
was timely and proper. Nevertheless, because Chancellor McFarland had neither presided
over the trial nor heard the witnesses testify, he concluded that he could not amend
Chancellor Williams’ findings. On April 2, 2025, Defendants timely appealed to this
Court.
5
At the November 2021 hearing, the trial court addressed counsel for Defendants, stating in part:
THE COURT: Okay. I will say again, [Plaintiff] was not in breach; did not cause
the breach of the contract between him and [Defendants]. [Defendants] caused it. It was
exclusively the conduct of [Defendants] that resulted in the termination of the sale of PPG
paint to [Defendants]. . . . [If the finding of Plaintiff’s breach] prevents your clients from
being responsible to [Plaintiff], then I’ll just amend the judgment to take that out, because
I have told you that I don’t think that had anything to do with it. It just provides the
backdrop against which your client[’]s breach of [Plaintiff’s] contract came about.
- 13 -
ISSUES
We restate and consolidate Defendants’ issues on appeal as follows:
1. Whether the trial court erred in concluding that Plaintiff did not attempt to assign
the PPG Contract to Defendants.
2. Whether the trial court erred in declining to find that Plaintiff’s failure to obtain
PPG’s prior written consent constituted a material breach of the APA.
3. Whether the trial court erred in finding that Defendants anticipatorily repudiated
the APA.
4. Whether the trial court erred in awarding attorney’s fees to Plaintiff.
5. Whether the trial court committed substantive and procedural errors requiring
reversal or remand.
STANDARD OF REVIEW
As stated by our Supreme Court,
In a non-jury case such as this one, appellate courts review the trial court’s
factual findings de novo upon the record, accompanied by a presumption of
the correctness of the findings, unless the preponderance of the evidence is
otherwise. See Tenn. R. App. P. 13(d); Armbrister v. Armbrister, 414 S.W.3d
685, 692 (Tenn. 2013). We review the trial court’s resolution of questions
of law de novo, with no presumption of correctness. [Id.]
Kelly v. Kelly, 445 S.W.3d 685, 691–92 (Tenn. 2014). We defer to a trial court’s
assessment of witness credibility absent clear and convincing evidence to the contrary. Id.
at 692. Clear and convincing evidence eliminates any “serious or substantial doubt about
the correctness of the conclusions drawn from the evidence.” Id. at 692–93 (quoting State
v. Sexton, 368 S.W.3d 371, 404 (Tenn. 2012)). Insofar as the abuse of discretion is
implicated, a trial court abuses its discretion when it “applies an incorrect legal standard,
reaches a decision that is illogical, bases its decision on a clearly erroneous assessment of
the evidence, or employs reasoning that causes an injustice to the complaining party.” In
re Estate of Greenamyre, 219 S.W.3d 877, 886 (Tenn. Ct. App. 2005).
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DISCUSSION
I. Whether Plaintiff attempted to assign the PPG Contract to Defendants
The trial court concluded, among other things, that Plaintiff did not attempt to assign
the PPG Contract to Defendants in the APA. The trial court noted that the word
“assignment” does not appear in Paragraph 1(c) of the APA where Plaintiff’s rights under
the PPG Contract are identified as an asset to be transferred and conveyed. On appeal,
Defendants argue that the trial court erred in concluding that Plaintiff did not intend to
assign the PPG Contract through the APA. The crux of Defendants’ argument on this issue
is that Plaintiff had no authority to assign the PPG Contract; that Plaintiff nonetheless
attempted to assign the PPG Contract through the APA; that the attempted assignment was
void from the beginning; and that therefore Defendants owe Plaintiff no duties arising from
the PPG Contract.
In general, a court’s role in interpreting a contract is to ascertain the intention of the
parties. “The intention of the parties is based on the ordinary meaning of the language
contained within the four corners of the contract. The interpretation of a contract is a matter
of law, which we review de novo with no presumption of correctness.” MLG Enters., LLC
v. Johnson, 507 S.W.3d 183, 186 (Tenn. 2016) (quoting 84 Lumber Co. v. Smith, 356
S.W.3d 380, 383 (Tenn. 2011)). Under Tennessee law, an “assignment” is a transfer of
property or right. Action Chiropractic Clinic, LLC v. Hyler, 467 S.W.3d 409, 411 (Tenn.
2015). As our Supreme Court has explained:
For an assignment to be valid, it “must contain clear evidence of the
intent to transfer rights, must describe the subject matter of the assignment,
must be clear and unequivocal, and must be noticed to the obligor.” 6
Am.Jur.2d Assignments § 82. Moreover, the intent of the assignor to transfer
the right must be “manifest.” Collier v. Greenbrier Developers, LLC, 358
S.W.3d 195, 201 (Tenn. Ct. App. 2009) (quoting E. Allan Farnsworth,
Contracts § 11.3, p. 709 (3d ed. 1999)). In determining whether the assignor
has demonstrated such a manifest intent, the Court shall consider “all the
circumstances, including works and other conduct.” 6 Am.Jur.2d
Assignments § 82. “[A]n equitable assignment is precluded when the
property subject to the equity is not definitely pointed out so that it may be
distinguished and identified.” Id. § 85.
Id. at 412. As for determining intent to assign,
[t]he owner may manifest this intention directly to the assignee or to a third
person. No words of a