RODNEY HARBACK v. EDDIE'S BODY SHOP, LLC, ET AL, E2025-00447-COA-R3-CV

Harback sold Eddie’s Body Shop to Defendants under an APA that included the existing PPG paint contract and required Defendants to perform its remaining obligations and hold Harback harmless. 1
The PPG contract required prior written consent before any sale of substantially all business assets and made attempted assignment without consent void. 2
After the sale, Defendants initially kept buying PPG paint but later told PPG they wanted to switch suppliers, and PPG then terminated the contract and demanded repayment from Harback under his personal guarantee. 3
Harback sued Defendants for breach and indemnity, and Defendants counterclaimed that Harback first breached by selling without PPG’s consent. 4
After a bench trial, the trial court found Harback’s consent-related breach was nonmaterial, found Defendants anticipatorily repudiated by abandoning the paint obligation, and awarded Harback reimbursement and attorney’s fees. 5
The Court of Appeals affirmed the judgment in full, including the fee award to Harback and denial of fees to Defendants. 6

Issue	Plaintiff's Argument	Defendant's Argument	Held
Did Harback attempt to assign the PPG contract? 7	Harback delegated only the paint-purchase duty, not the whole contract.	Harback attempted an invalid assignment without PPG consent.	No assignment; only delegation of performance. 8
Was Harback’s lack of PPG consent a material APA breach? 9	Any breach was harmless because Defendants still bought paint and suffered no loss.	The consent failure destroyed expected contract rights and was a first material breach.	The breach was nonmaterial. 10
Did Defendants anticipatorily repudiate the APA? 11	Defendants unequivocally said they would switch suppliers and stop performing.	They only explored other suppliers, not a total refusal.	Yes, Defendants anticipatorily repudiated. 12
Who is entitled to attorney’s fees under the APA? 13	Harback prevailed because Defendants committed the first material breach.	Harback’s breach bars any fee award to him.	Harback was entitled to fees; Defendants were not. 14
Did the trial court commit reversible procedural or substantive error? 15	The challenged rulings were supported by the proof and law.	Multiple errors required reversal or remand.	No reversible error; judgment affirmed. 16

Armbrister v. Armbrister, 414 S.W.3d 685 (Tenn. 2013) (bench-trial factual findings are reviewed de novo with a presumption of correctness 17)
Kelly v. Kelly, 445 S.W.3d 685 (Tenn. 2014) (legal issues are reviewed de novo and credibility findings receive deference 18)
MLG Enters., LLC v. Johnson, 507 S.W.3d 183 (Tenn. 2016) (contract interpretation turns on the parties’ intent from the contract’s ordinary language 19)
Action Chiropractic Clinic, LLC v. Hyler, 467 S.W.3d 409 (Tenn. 2015) (an assignment is a transfer of a property right 20)
Collier v. Greenbrier Developers, LLC, 358 S.W.3d 195 (Tenn. Ct. App. 2009) (assignment requires manifest intent to transfer rights 21)
Forrest Const. Co., LLC v. Laughlin, 337 S.W.3d 211 (Tenn. Ct. App. 2009) (materiality of breach is evaluated under Restatement (Second) of Contracts section 241 22)
United Brake Sys., Inc. v. Am. Env't Prot., Inc., 963 S.W.2d 749 (Tenn. Ct. App. 1997) (a party who materially breaches cannot recover for the other party’s later breach 23)
Wright v. Wright, 832 S.W.2d 542 (Tenn. Ct. App. 1991) (anticipatory repudiation requires conduct or words amounting to refusal to perform 24)
UT Med. Grp., Inc. v. Vogt, 235 S.W.3d 110 (Tenn. 2007) (repudiation before performance time is anticipatory breach 25)
Eberbach v. Eberbach, 535 S.W.3d 467 (Tenn. 2017) (contractual fee provisions are enforced according to their terms 26)