Maness v. Collins

Sammie Maness (plaintiff) owned and operated SKM Wood Products, LLC, a wood manufacturing business. An acquaintance of Maness, Joannie Collins (defendant), approached him with an offer to purchase the business for $1.3 million. Maness agreed and the parties executed an Asset Purchase Agreement (the Agreement). The new owners of the business, called SKM, LLC (defendant), included Collins serving as the accountant, Collins’ brother-in-law, Mike Smith (defendant), working part-time, and Smith’s son, Josh Smith (defendant) (collectively Defendants), managing the day-to-day operations. Maness entered into a three-year employment contract with SKM to serve as its production manager. Additionally, Maness signed a non-competition agreement. After a few months, it became well known at SKM that Josh Smith had a drug addiction problem and often undercut Maness’ authority with the employees. After Maness fired an employee for unprofessionalism, Smith admonished Maness and re-hired the employee. Thereafter, Maness often sat in his office doing very little work. Shortly thereafter, Maness was fired by SKM for failing to fulfill his job duties. Maness spent the next year building a house and did not seek alternative employment. Instead, Maness filed suit against Defendants for breach of the employment agreement and a declaration that the non-competition agreement was invalid. The trial court held that the parties failed to produce any evidence regarding the validity of the non-competition agreement; that Defendants lacked just cause in firing Maness; and that Maness failed to mitigate his damages. Consequently, the court awarded no damages payable to Maness. Maness appealed and Defendants cross-appealed.