The Business Court has granted a defense motion for summary judgment in a dispute over the enforceability of a buy-sell option clause in three nearly identical company agreements. The court awarded the defendant specific performance and attorney’s fees.
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 (No. 25-BC08A-0014; 2026 Tex. Bus. 4; February 2, 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.
Northern filed a motion seeking an order of specific performance requiring Crain to sign and deliver to him an “Irrevocable Assignment of Membership Interest” for each NC entity effective December 19, 2024. Crain responded that genuine issues of material fact exist concerning Northern’s alleged prior breaches, its alleged unclean hands, and its valuation of the membership interests absent the country club project’s potential profit.
In an opinion by Judge Bullard, the court granted Northern’s motion and awarded attorney’s fees. The court observed that “[o]ptions, preferential rights, and contractual buy-sell mechanisms are unilateral rights that must be exercised or timely challenged in the manner the agreement prescribes, and courts generally enforce deemed-election clauses as written” (citations omitted). In this case, the parties discussed dissolving the partnership in 2024 but could not agree on terms. Northern then sent Crain a written proposal for the division of the entities, to which Crain responded “with various allegations of Northern’s independent and unfair dealings.” But Crain never lodged a formal dispute under the company agreements’ dispute resolution. Northern instead sent Crain a buy-sell purchase offer notice pursuant to the company agreements.
Northern’s offer triggered a 30-day response period in which Crain could elect either to sell his membership interests or notify Northern he elected to purchase Northern’s interests. The parties, however, agreed to mediate the dispute during the agreements’ prescribed mediation timely, but Crain failed to appear. Northern proceeded to deliver cashier’s checks to Crain in the amounts prescribed by the offer notice. Crain never negotiated them, refused to close on the sale, and filed this lawsuit.
As a threshold matter, the court found that the company agreements were valid and binding on the parties. It then applied the plain meaning of the Buy-Sell option clause regarding notice and membership interest forfeiture. According to the clause, each member had a right to initiate a mandatory buy-sell option by providing written notice, which triggered a timeline for the offeree to make an election and notify the offeror. Absent this election and notice, the agreement conclusively deemed that the offeree elected to sell its membership interests, followed within a specified time by a closing. If a party didn’t perform its obligations, the agreement gave the other party the right to compel specific performance and specified that the parties agreed that damages were an inadequate remedy for the breach. Based on the contract, consequently, the court found that no genuine issue of material fact existed as the agreements’ validity or express terms.
And pursuant to the agreements, Northern was entitled to specific performance. Crain “intentionally forfeited his membership interest in each NC entity” when he failed to respond to Northern with his election. He further provided no evidence supporting his claims for breach of other provisions of the agreements (but not the buy-sell option). Northern, on the other hand, complied with the agreement in every respect. The court further enforced the agreements as of the specified date requested by Northern based on the 90-day closing deadline in the agreement, holding that “Crain should not benefit from his failure to comport with the Company Agreements, and equity favors dating the closing as the originally prescribed 90-day date.” Turning to the question of the valuation of the interests, the court looked to the fair value clause of the agreements and the agreements’ mechanism for disputing a party’s valuation.
Contrary to Crain’s claim about the country club project, however, the court found no evidence establishing that the NC entities or Northern’s membership in the country club project involved Crain or those entities. If Crain didn’t like the valuation, he should have disputed it in accordance with the agreements. He did not. Additionally, Crain produced no evidence of unclean hands or self-dealing. As to the attorney’s fees, the court found that Northern’s attorney presented clear, direct, and positive evidence that $25,772.50 was reasonable. Crain failed to controvert the attorney’s testimony, so Northern established as a matter of law the amount of fees incurred for purposes of obtaining summary judgment. The court ordered specific performance of the buy-sell option and awarded attorney’s fees to Northern.
