G & W Warren’s, Inc. v. Dabney

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The Warrens owned and operated a Harley-Davidson motorcycle dealership in Salinas for approximately 38 years. Intending to retire, the Warrens contacted a potential buyer, Dabney, who owned a Harley-Davidson dealership in Riverside. The Warrens’ corporation and Dabney executed various agreements, including a master “Asset Purchase Agreement” that incorporated a Guaranty signed by Dabney, under which he “agree[d] . . . to guarantee . . . the collection and receipt of all amounts” required under section 2 of the Agreement, under the promissory note(s), and under the lease. The Agreement allowed Dabney to assign his rights and obligations as buyer to a corporation that he controlled, with the assignment to relieve Dabney of all obligations under the Agreement. Dabney assigned his rights under the Agreement to Monterey Motorcycles, Inc., which defaulted on its obligations under the Agreement. The dealership was sold to a third party. The Warrens sued and won a judgment of $2,746,318 against Dabney. The court of appeal reversed, agreeing that the Guaranty did not apply to a covenant not to compete agreement and two consulting agreements. View "G & W Warren's, Inc. v. Dabney" on Justia Law