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DBA Enterprises, Inc. v. Findlay

Colorado Court of Appeals
28 U.C.C. Rep. Serv. 2d 1297 (1996)


Facts

In March 1992, Lauretta and James Findlay (defendants) sold their lawn-fertilization business, Lawn Doctor, Inc., to DBA Enterprises, Inc. (DBA) (plaintiff) for $72,500. Part of the purchase was paid by a promissory note for $53,750. The transaction was governed by a bill of sale that included a non-compete covenant prohibiting the Findlays from operating their lawn-maintenance business, Acres Green Maintenance (Acres Green), within a specified area until 1998. The promissory note provided that the Findlays’ obligation to pay on the note was conditioned upon the fulfillment of bill of sale’s terms, including the non-compete covenant. After the completion of the sale, the Findlays operated Acres Green in a way that potentially violated the bill of sale’s non-compete covenant. DBA responded by terminating payments on the promissory note. Thereafter, DBA brought suit against the Findlays for breach of contract. The Findlays counterclaimed, seeking enforcement of the promissory note. At trial, the Findlays produced the original note, along with evidence establishing that DBA defaulted on payments and that the amount still due on the note totaled $46,300. The trial court found the Findlays liable to DBA for breach of contract and dismissed the Findlays’ counterclaim, determining that the Findlays had failed to establish a prima facie case. The Findlays appealed.

Rule of Law

Issue

Holding and Reasoning (Roy, J.)

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