Judge Jerry Bullard
Michael D. Crain, Individually and Derivatively on Behalf of Northern Crain Realty, LLC, Northern Crain Property Management, LLC, and Northern Crain, LLC v. William “Will” Northern (2026 Tex. Bus. 72; October 7, 2026) arose from a dispute over a buy-sell option clause in a company agreement. In 2020 Crain and Northern created Northern Crain Realty and its two subsidiaries. Each held 50% membership interest in NC, and each entity was governed by identical company agreements. Each agreement contained a buy-sell option clause that provided for a mandatory buy-sell procedure should Crain or Northern seek to sell or buy membership interest in an entity. Something went south because in 2025 Crain sued Northern asserting breach of fiduciary duties in the acquisition of a country club and adjacent property. Northern counterclaimed for specific performance and a declaration that Crain’s attempt to expel Northern from NC was invalid and that the country club project was neither directly competitive with NC nor a violation of the company agreements. Northern also sought attorney’s fees.
If you think you’ve seen this case before, you have. In two prior decisions by Judge Bullard, the Business Court granted Northern’s MSJ seeking specific performance requiring Crain to sign and deliver to him an “Irrevocable Assignment of Membership Interest” for each Northern entity within a specified time. Judge Bullard’s order also awarded Northern’s attorney’s fees. In a second order, Judge Bullard ruled that a member of an LLC previously compelled to assign his membership interest by court order lacks standing to bring derivative claims on behalf of the LLC. Crain thus had no standing for his derivative claims against Northern.
In the third iteration, Judge Bullard granted Northern’s MSJ on the remainder of Crain’s claims. First, the court took up Crain’s breach of contract claim. The problem for Crain is that he admitted that he didn’t have any contracts with Northern. The only contracts at issue were the Northern Entities’ Company Agreements. Whatever duties Northern owed to those entities were governed by those agreements to the other entities, not to Crain. No valid contract, no breach of contract claim. The court granted both Northern’s no-evidence and traditional MSJs.
As to Crain’s quantum meruit claims, Northern argued that Crain’s desposition testimony showed no evidence of any valuable services Crain performed for or provided to Northern individually. Without such evidence, Crain couldn’t assert a valid quantum meruit claim. In fact, Crain admitted that no member could receive compensation for services to the company in the first place (absent unanimous consent). The same for Crain’s conspiracy claims. To make out a conspiracy claim, there must be two to tango. Here Crain could not identify Northern’s co-conspirator, not to mention an overt act and whether such act “may be characterized as criminal or tortious. The Court is left with unreasonable inferences from other facts and circumstances which, alone, do not raise more than a mere suspicion of conspiracy.” MSJ granted again.
Crain alleged that Northern misappropriated his confidential information. Again, the basis of Crain’s claim was that Northern obtained confidential information from the other Northern entities, not from Crain. Since Crain no longer had any derivative claims against Northern, he didn’t have this one, either. In any event, Crain never explained the alleged trade secret or confidential information, the resulting breach, or the damages. The claim thus failed on both no-evidence and traditional MSJ standards. Turning to Crain’s fraud and intentional mispresentation claim, the court observed once again that this claim derived from Northern’s alleged conduct with respect to the other Northern Crain entities, not from any representations Northern allegedly made to Crain individually. Crain’s negligent misrepresentation claim, as well as his fraud by nondisclosure claim, failed for the same reasons. In fact, Northern didn’t even have a fiduciary duty to Crain personally, so couldn’t have misrepresented or hid information in any event.
The court dismissed all Crain’s claims with prejudice. If this case demonstrates anything, it is that a party should never show up to the Business Court unless it has its stuff together. It won’t go well, and the judge will tell you exactly what you needed to do and didn’t. It has become crystal clear that the Business Court judges are ready, willing, and able to grant summary judgment ASAP, so parties making vague factual allegations and conclusory statements of law will find themselves back where they came from.
