Texas Business Court Decision – July 15, 2026

No. 25-BC04B-0010   Brik Stratton v. Kenneth Hogan, et al v. Carey Parsons, et al. (Fourth Division, Judge Sharp) 2026 Tex. Bus. 44

Corporate Dissolution/Wind-up of Corporate Business/Breach of Contract.

Background. This case arises out of the breakdown of a business relationship between plaintiff Stratton and defendant Hogan, co-owners of Stratton Hogan Clinics, Inc. (SHCI), a physical therapy business, and Stratton Hogan Real Estate, LLC (SHRE), which held the business’s real estate. After separation negotiations failed, Stratton sued for judicial dissolution, and the court appointed a wind-up supervisor by agreed order. The parties then brought competing claims for breach of fiduciary duty and breach of SHCI’s operating agreement; Hogan asserted claims against third-parties, including Stratton’s separately-owned Stratton Rehabilitation Clinic, Inc. (Stratton Rehab). Stratton and Stratton Rehab (together the Stratton Parties) later amended their pleading to add counterclaims against Hogan for disparagement, breach of contract (over nonpayment of a $300,000 promissory note SHRE owed Stratton Rehab), and conversion (Stratton’s claim that Hogan moved SHCI’s physical therapy equipment to another SHCI clinic without his consent). Hogan moved under Tex. R. Civ. P. 91a to dismiss the contract and conversion claims (Stratton dropped the disparagement claim).

Issues:

1. Whether Stratton’s conversion claim had a basis in law where he alleges Hogan converted equipment owned by SHCI, a corporation in which Stratton is only a co-owner and he sued in his individual rather than in a derivative capacity. Held: NO
2. Whether Stratton Rehab’s breach-of-contract claim, based on SHRE’s non-payment of the $300,000 promissory note, is subject to Rule 91a dismissal. Held: NO

Discussion.

1. On Stratton’s conversion claim, the court finds Stratton pleaded that Hogan converted equipment belonging the SHCI – not to Stratton individually – and failed to allege any ownership or possessory interest of his own, a required element of a cause of action for conversion. Because claims for injury to a corporation must ordinarily be brought by the corporation or derivatively on its behalf, and Stratton pleaded no derivative claim that could be treated as direct under Tex. Bus. Orgs. Code Sec. 21.563, his individual claim was not legally cognizable. The court also notes that Stratton’s own pleading conceded the equipment allocation remained pending before the wind-up supervisor, thus negating any present harm.
2.  On Stratton Rehab’s breach-of-contract claim, the court denies the motion to dismiss, finding Stratton Rehab adequately pleaded each element of breach of contract. Hogan’s argument that SHRE had not appeared in the suit was not a valid basis for Rule 91a dismissal, which must be decided solely on the pleadings. The court notes, however, that the wind-up process had already effectively resolved this claim by awarding full payment on the note, and Stratton Rehab conceded the claim remained in the pleading only to avoid an implied nonsuit; there is thus no live issue for trial.
3. While the court has partially granted Hogan’s motion to dismiss by dismissing Stratton’s conversion claim, it declines to make an award of attorneys’ fees  or costs to either party under Rule 91a.7.