Willis v. Donnelly

This dispute centers on whether shareholders in closely held corporations can be held hable to an individual who agreed to a contractual business arrangement with the corporations. We agree with Petitioners Michael and Francie Willis (the Willises) that they cannot be held hable to Respondent Dan Donnelly under breach of contract and breach of fiduciary duty theories. We address other issues as well.

I. Background

A. Factual Background

Michael Willis (Willis) is a successful Houston entrepreneur. In the late 1980s, he became intrigued with the idea of opening a high-end spa, where customers…