Summary
This amended opinion and order from the Business Court of Texas addresses a defendant's motion for summary judgment seeking specific performance of a mandatory buy-sell option clause in LLC company agreements. The court finds the agreements valid and unambiguous, ruling that the plaintiff's failure to respond to the buy-sell notice within the contractual 30-day deadline conclusively deemed him to have elected to sell his membership interests. Consequently, the court grants specific performance, orders the transfer of membership interests effective December 19, 2024, and awards attorneys' fees while rejecting the plaintiff's defenses regarding valuation and unclean hands.
Topics
Practice areas
Questions Presented
- Whether the company agreements and their mandatory buy-sell option provisions were valid and enforceable.
- Whether Crain's failure to respond within the contractual thirty-day period conclusively elected to sell his membership interests to Northern.
- Whether alleged prior breaches, fiduciary misconduct, unclean hands, or valuation disputes created a genuine issue of material fact or barred specific performance.
- Whether Northern was entitled to specific performance, including an effective closing date and valuation method.
- Whether Northern proved entitlement to attorney's fees incurred in obtaining summary judgment.
Holdings
- The company agreements, including their buy-sell option clauses, were valid and enforceable, and their unambiguous terms had to be enforced as written.
- Because Crain did not make an election within the contractual thirty-day period, he was conclusively deemed to have elected to sell his membership interests to Northern.
- Northern was entitled to specific performance requiring Crain to sell and assign his membership interests in the NC entities.
- The assignment and closing were to be effective December 19, 2024, and the valuation was to follow the company agreements' fair-value clause and the amounts stated in Northern's August 16, 2024 offer notice, excluding valuation of the Woodhaven Project.
- Northern was entitled to $25,772.50 in reasonable and necessary attorney's fees incurred in obtaining summary judgment.
Key quotations
“If such election notice is not given within such thirty (30) period it shall be conclusively deemed that the Offeree has elected to sell its Membership Interest to the Offeror.” (at 10)
“If a party does not perform its obligations . . . the other party shall have the right to compel specific performance of such obligations. All parties agree that damages are an inadequate remedy for a breach of this Agreement.” (at 11)
Factual background
Crain and Northern each owned a 50% membership interest in Northern Crain Realty, LLC and its two subsidiaries, and each signed substantially identical company agreements. Those agreements contained mandatory buy-sell provisions requiring an offeree to elect within thirty days either to sell its interest or purchase the offeror's interest, with silence conclusively deemed an election to sell. Northern sent Crain a buy-sell offer notice on August 16, 2024; Crain received it but did not respond by the September 19 deadline, later refused to close, and filed suit. Northern tendered cashier's checks on March 13, 2025, but Crain did not negotiate them or complete the sale.
Procedural history
Crain sued Northern in June 2025, asserting claims including breach of fiduciary duty relating to Northern's acquisition of the Woodhaven Project. Northern counterclaimed for specific performance and declaratory relief. Northern then moved for summary judgment on his specific-performance counterclaim. The court granted the motion and ordered the transfer of Crain's membership interests, while denying Northern's request for appellate attorney's fees for lack of supporting evidence.