Judge Jerry Bullard
The Business Court has dismissed for lack of jurisdiction a legal malpractice claim, as well as numerous fraud and breach of fiduciary duty claims under the anti-fracturing rule, that Plaintiff added to the case after removal from district court.
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 and Tyler Goldthwaite (No. 25-BC08A-0014; 2025 Tex. Bus. 49; December 17, 2025) arose from a dispute between business partners. Crain and Northern created Northern Crain Realty in 2020 for the purpose of representing buyers and sellers in residential and commercial property ventures. NC Realty had two subsidiaries, Northern Crain Property Management, LLC and Northern Crain, LLC. In June 2025 Crain, individually and on behalf of the Northern Crain entities, sued Northern, Goldthwaite, and several other defendants in Tarrant County district court. Northern and the other defendants removed the case to the Business Court in July. Crain filed a motion to remand, which the court denied. Crain then amended his petition to nonsuit the other defendants. He also added claims against attorney Goldthwaite, including breach of fiduciary duty, fraud, negligent misrepresentation, misappropriation of confidential information, and legal malpractice. He further brought four new claims against Northern and Goldthwaite. Goldthwaite filed a Rule 91a motion to dismiss in October 2025, asserting that he did not represent the Northern Crain entities but only Northern. Crain responded that Goldthwaite “held himself out” as the Northern Crain entities’ lawyer and “later betrayed [them] by assisting [] Northern in forming competitive entities.”
In an opinion by Judge Bullard, the court denied Goldthwaite’s Rule 91a motion as moot. First, the parties did not dispute that the Business Court had no jurisdiction over Crain’s legal malpractice claim against Goldthwaite and had to dismiss it. Crain, however, unsuccessfully contended that his remaining claims against Goldthwaite were distinct from the legal malpractice claim. Under Texas law’s anti-fracturing rule, a party cannot split a single legal malpractice claim into multiple causes of action by “repackaging” the same factual allegations as distinct theories. Here Crain’s breach of fiduciary duty claim fell into that category because Crain “[did] not allege any conduct that could constitute a breach of fiduciary duty(s) outside of Goldthwaite’s alleged professional failures.” Consequently, the court dismissed that claim without prejudice. It reached the same conclusion about Crain’s misappropriation of confidential information and various fraud and misrepresentation claims. All of these claims stemmed from Goldthwaite’s alleged attorney-client relationship with the Northern Crain entities and Crain’s unhappiness with the alleged legal services Goldthwaite provided, so the anti-fracturing rule applied.
Judge Bullard dismissed Crain’s claims without prejudice. He explained that although § 25A.006 directs the Business Court to remand an “action” over which it has no jurisdiction to the court from which it was removed, it “does not provide a similar process for individual claims over which the Court does not have jurisdiction—especially a claim added to an “action” after it is removed to the Court.” Section 25A.004, however, “‘excludes certain “claims” from the Court’s jurisdiction and provides for supplemental jurisdiction over other ‘claims.’” In view of the statutory language, Judge Bullard determined that “a court lacking jurisdiction over a claim is completely without power to do anything other than dismiss it.” And because the court had no jurisdiction over the legal malpractice claim to begin with, it denied Goldthwaite’s Rule 91a motion as moot.
