No. 03-15-00025-CV 

Texas Court of Appeals

Third District

Austin, Texas

APPELLANTS, LAKEWAY REGIONAL MEDICAL CENTER, LLC AND SURGICAL DEVELOPMENT 

PARTNERS, LLC// CROSS-APPELLANT, LAKE TRAVIS TRANSITIONAL LTCH, LLC N/K/A LAKE 

TRAVIS SPECIALTY HOSPITAL, LLC

v. 

APPELLEES, LAKE TRAVIS TRANSITIONAL LTCH, LLC N/K/A LAKE TRAVIS SPECIALTY 

HOSPITAL, LLC// CROSS-APPELLEES, LAKEWAY REGIONAL MEDICAL CENTER, LLC,

SURGICAL DEVELOPMENT PARTNERS, LLC, BRENNAN, MANNA, & DIAMOND, LLC AND 

FRANK T. SOSSI

FROM THE 345TH JUDICIAL DISTRICT COURT, TRAVIS COUNTY, TEXAS

CAUSE NO. D-1-GN-12-000983 

APPELLANTS LAKEWAY REGIONAL MEDICAL CENTER, LLC’S AND 

SURGICAL DEVELOPMENT PARTNERS, LLC’S 

CROSS-APPELLEES’ BRIEF 

NORTON ROSE FULBRIGHT US LLP

Jeff Cody 

State Bar No. 04468960 

jeff.cody@nortonrosefulbright.com 

Barton W. Cox 

State Bar No. 2406508 

beau.cox@nortonrosefulbright.com 

James V. Leito IV

State Bar No. 24054950 

james.leito@nortonrosefulbright.com 

2200 Ross Avenue, Suite 3600 

Dallas, TX 75201-7932 

Telephone: (214) 855-8000 

Telecopier: (214) 855-8200

Counsel for Appellants/Cross-Appellees

ORAL ARGUMENT REQUESTED

NORTON ROSE FULBRIGHT US LLP

Joy M. Soloway 

State Bar No. 18838700 

joy.soloway@nortonrosefulbright.com 

1301 McKinney, Suite 5100 

Houston, TX 77010-3095 

Telephone: (713) 651-5151 

Telecopier: (713) 651-5246

WRIGHT & CLOSE, LLP

Jessica Z. Barger 

State Bar No. 24032706

barger@wrightclose.com

Raffi O. Melkonian 

State Bar No. 24090587

melkonian@wrightclose.com

One Riverway, Suite 2200 

Houston, TX 77056

Telephone: (713) 572-4321 

Telecopier: (713) 572-4320 

ACCEPTED

03-15-00025-CV

7932171

THIRD COURT OF APPEALS

AUSTIN, TEXAS

11/20/2015 3:24:06 PM

JEFFREY D. KYLE

CLERK

 FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 11/20/2015 3:24:06 PM JEFFREY D. KYLE Clerk
54151498 ii

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ....................................................................................v

STATEMENT OF THE CASE.................................................................................x

STATEMENT OF ISSUES AND CROSS-POINTS ..............................................xi

STATEMENT OF FACTS .......................................................................................1

I. Facts relevant to LTT’s cross-appeal relating to Section 2 of the 

Letter of Intent......................................................................................1

II. Facts relevant to LTT’s cross-appeal on its alleged 

misappropriation claim.........................................................................3

III. Procedural history.................................................................................5

SUMMARY OF ARGUMENT................................................................................6

STANDARD OF REVIEW......................................................................................8

ARGUMENT............................................................................................................9

I. The Trial Court Correctly Granted Summary Judgment in 

Lakeway Regional’s and SDP’s Favor on LTT’s 

Misappropriation Claim. ......................................................................9

A. LTT failed to prove the existence of a trade secret that is 

at issue......................................................................................11

1. Because the Project File is a collection of 

documents assembled by LTT’s trial counsel after

the lawsuit was filed, it is not a trade secret..................12

2. It remains unclear which purported trade secrets 

LTT believes are at issue...............................................16

B. There is no evidence that Lakeway Regional or SDP used 

or disclosed LTT’s purported trade secrets, and the 

evidence conclusively establishes that there was no use 

or disclosure. ............................................................................19

1. There is no evidence of use of a trade secret.................19
54151498 iii

2. The evidence conclusively establishes that there 

was no use of a trade secret. ..........................................24

3. There is no evidence of disclosure of a trade 

secret. .............................................................................24

4. The evidence conclusively establishes that there 

was no disclosure of a trade secret. ...............................26

C. There is no evidence that a purported disclosure or use 

caused LTT any damages, and the evidence conclusively 

negates causation......................................................................26

1. There is no evidence of causation. ................................27

2. The evidence conclusively negates causation. ..............29

II. The Trial Court Correctly Granted Summary Judgment in 

Lakeway Regional’s and SDP’s Favor on LTT’s Claim for 

Breach of Section 2 of the Letter of Intent.........................................31

A. Section 2 of the Letter of Intent is an unenforceable 

agreement to agree, foreclosing a claim for its breach. ...........31

1. The Letter of Intent contains several provisions 

showing that Section 2 is an unenforceable 

agreement to agree.........................................................32

2. Essential terms are lacking. ...........................................35

3. Section 2 is unenforceable for the separate reason 

that Section 3’s best efforts provision is 

prohibitively vague........................................................39

4. LTT’s remaining appellate arguments do not 

withstand scrutiny..........................................................40

B. Unfulfilled conditions precedent foreclosed LTT’s 

Section 2 claim.........................................................................41

C. SDP cannot be liable under Section 2 because it was not 

a party to the Letter of Intent. ..................................................44

III. The Trial Court Correctly Sustained Lakeway Regional’s and 

SDP’s Objections to LTT’s Summary Judgment Evidence...............45

A. The trial court did not abuse its discretion in sustaining 

Objection 2...............................................................................46
54151498 iv

B. The trial court did not abuse its discretion in sustaining 

Objection 4...............................................................................47

PRAYER.................................................................................................................49

CERTIFICATE OF WORD COMPLIANCE.........................................................51

CERTIFICATE OF SERVICE ...............................................................................52
54151498 v

TABLE OF AUTHORITIES

Page(s)

Cases

Bishop v. Miller,

412 S.W.3d 758 (Tex. App.—Houston [14th Dist.] 2013, no pet.) .............13, 23

Bryant v. Clark,

358 S.W.2d 614 (Tex. 1962) ..............................................................................40

CKB & Assocs., Inc. v. Moore McCormack Petroleum, Inc.,

809 S.W.2d 577 (Tex. App.—Dallas 1991, writ denied)...................................39

Clear Lake City Water Auth. v. Friendswood Development Co.,

344 S.W.3d 514 (Tex. App.—Houston [14th Dist.] 2011, pet. 

denied)...........................................................................................................42, 43

Cortez v. Weatherford Indep. Sch. Dist.,

925 S.W.2d 144 (Tex. App.—Fort Worth 1996, no writ)..................................15

Cudd Pressure Control, Inc. v. Roles,

328 F. App’x 961 (5th Cir. 2009).................................................................22, 23

DKH Homes, LP v. Kilgo,

03-10-00656-CV, 2011 WL 1811435 (Tex. App.—Austin May 11, 

2011, no pet.) (mem. op.)..................................................................32, 33, 36, 40

Fid. Fin. Servs. of the Sw., Inc. v. Corilant Fin., L.P.,

376 S.W.3d 253 (Tex. App.—Dallas 2012, pet. denied)....................................41

FM Props. Operating Co. v. City of Austin,

22 S.W.3d 868 (Tex. 2000).................................................................................45

Ford Motor Co. v. Ridgway,

135 S.W.3d 598 (Tex. 2004) ........................................................................25, 26

Fort Worth Indep. Sch. Dist. v. City of Fort Worth,

22 S.W.3d 831 (Tex. 2000).................................................................................31

Fuqua v. Fuqua,

750 S.W.2d 238 (Tex. App.—Dallas 1988, writ denied)...................................36
54151498 vi

Game Sys., Inc. v. Forbes Hutton Leasing, Inc.,

02-09-00051-CV, 2011 WL 2119672 (Tex. App.—Fort Worth 

May 26, 2011, no pet.) (mem. op.).....................................................................49

Gillis v. Provost & Umphrey Law Firm, LLP,

No. 05-13-00892-CV, 2015 WL 170240 (Tex. App.—Dallas 

Jan. 14, 2015, no pet.).........................................................................................25

Hancock v. Variyam,

400 S.W.3d 59 (Tex. 2013).................................................................................28

Hinojosa v. Columbia/St. David’s Healthcare Sys., L.P.,

106 S.W.3d 380 (Tex. App.—Austin 2003, no pet.)..........................................47

HK Partners, Inc. v. Power Computing Corp.,

No. 03-98-00124-CV, 1999 Tex. App. LEXIS 3981 

(Tex. App.—Austin May 27, 1999, no pet.).................................................46, 47

Houston Mercantile Exch. Corp. v. Dailey Petroleum, Corp.,

930 S.W.2d 242 (Tex. App.—Houston [14th Dist.] 1996, no writ).............26, 27

Hunter Bldgs. & Mfg., L.P. v. MBI Global, L.L.C.,

436 S.W.3d 9 (Tex. App.—Houston [14th Dist.] 2014, pet. denied).................27

II Deerfield Ltd. P'ship v. Henry Building, Inc.,

41 S.W.3d 259 (Tex. App.—San Antonio 2001, pet. denied)............................44

In re Bass,

113 S.W.3d 735 (Tex. 2003) ..................................................................11, 12, 19

Jacobs v. Satterwhite,

65 S.W.3d 653 (Tex. 2001) (per curiam)..............................................................6

Kachina Pipeline Co. v. Lillis,

No. 13-0596, 2015 Tex. LEXIS 914 (Tex. Oct. 9, 2015)...................................34

Karns v. Jalapeno Tree Holdings, L.L.C.,

459 S.W.3d 683 (Tex. App.—El Paso 2015, pet. denied)......................37, 38, 40

Kevin M. Ehringer Enters., Inc. v. McData Servs. Corp.,

646 F.3d 321 (5th Cir. 2011) ..............................................................................39
54151498 vii

King Ranch, Inc. v. Chapman,

118 S.W.3d 742 (Tex. 2003) ................................................................................9

Lamont v. Vaquillas Energy Lopeno Ltd., LLP,

421 S.W.3d 198 (Tex. App.—San Antonio 2013, pet. denied)..........................26

Leal v. McDonald’s Corp.,

No. 03-05-00500-CV, 2009 Tex. App. LEXIS 6151 

(Tex. App.—Austin Aug. 5, 2009, no pet.) (mem. op.) .....................................21

Lopez v. Munoz, Hockema & Reed, LLP,

22 S.W.3d 857 (Tex. 2000).................................................................................14

Martin v. Beitler,

No. 03-13-00605, 2015 Tex. App. LEXIS 6894 

(Tex. App.—Austin July 7, 2015, no pet.) (mem. op.)...........................31, 32, 36

McCalla v. Baker’s Campground, Inc.,

416 S.W.3d 416 (Tex. 2013) (per curiam) ...................................................36, 37

Mendoza v. Fid. & Guar. Ins. Underwriters, Inc.,

606 S.W.2d 692 (Tex. 1980) ..............................................................................14

Moayedi v. Interstate 35/Chisam Rd., L.P.,

438 S.W.3d 1 (Tex. 2014)...................................................................................34

Nguyen v. Allstate Ins. Co.,

404 S.W.3d 770 (Tex. App.—Dallas 2013, pet. denied)..................16, 18, 46, 47

Pickett v. Tex. Mut. Ins. Co.,

239 S.W.3d 826 (Tex. App.—Austin 2007, no pet.)............................................8

Precision Plating & Metal Finishing, Inc. v. Martin-Marietta Corp.,

435 F.2d 1262 (5th Cir. 1970) (per curiam) .......................................................24

Ramco Oil & Gas Ltd. v. Anglo-Dutch (Tenge) L.L.C.,

207 S.W.3d 801 (Tex. App.—Houston [14th Dist.] 2006, pet. 

denied).................................................................................................................45

Ramirez v. Colonial Freight Warehouse Co.,

434 S.W.3d 244 (Tex. App.—Houston [1st Dist.] 2014, pet. 

denied).................................................................................................................47
54151498 viii

Rusty’s Weigh Scales & Serv., Inc. v. N. Tex. Scales, Inc.,

314 S.W.3d 105 (Tex. App.—El Paso 2010, no pet.) ..................................27, 30

Ryland Group, Inc. v. Hood,

924 S.W.2d 120 (Tex. 1996) (per curiam) .............................................17, 18, 20

Sharifi v. Steen Automotive, L.L.C.,

370 S.W.3d 126 (Tex. App.—Dallas 2012, no pet.) ..........................................44

Star-Telegram, Inc. v. Doe,

915 S.W.2d 471 (Tex. 1995) ....................................................................8, 26, 45

Stewart & Stevenson Servs., Inc. v. Serv-Tech, Inc.,

879 S.W.2d 89 (Tex. App.—Houston [14th Dist.] 1994, writ 

denied)...........................................................................................................11, 17

Sw. Energy Prod. Co. v. Berry-Helfand,

411 S.W.3d 581 (Tex. App.—Tyler 2013, pet. granted)....................................14

T.O. Stanley Boot Co. v. Bank of El Paso,

847 S.W.2d 218 (Tex. 1992) ..............................................................................31

Trilogy Software, Inc. v. Callidus Software, Inc.,

143 S.W.3d 452 (Tex. App.—Austin 2004, pet. denied)............................passim

United Blood Servs. v. Longoria,

938 S.W.2d 29 (Tex. 1997) (per curiam)..............................................................9

Valence Operating Co. v. Dorsett,

164 S.W.3d 656 (Tex. 2005) ................................................................................9

Wellogix, Inc. v. Accenture, L.L.P.,

716 F.3d 867 (5th Cir. 2013) ..............................................................................23

York Grp., Inc. v. York S., Inc.,

No. H-06-0262, 2006 WL 2883363 (S.D. Tex. Oct. 10, 2006)..........................39

Rules

Tex. R. Civ. P. 193.6................................................................................................29

Other Authorities

Black’s Law Dictionary 562 (10th ed.) ...................................................................24
54151498 ix

Restatement of Torts § 757 cmt. b...........................................................................19

Restatement of Torts § 757 cmt. c ...........................................................................24
54151498 x

Lakeway Regional and SDP follow the same naming conventions used in 

their Opening Appellants’ Brief.

STATEMENT OF THE CASE

Nature of the Case: This case arises from a September 15, 2009 Letter 

of Intent between Robert Berry and Keith 

McDonald, the principals of LTT, and Lakeway 

Regional. CR5697. The stated purpose of the

Letter of Intent was to establish “ground rules” for 

exchanging information so that Lakeway Regional 

could decide whether to acquire a Lease for a 

hospital in Lakeway, Texas, which was then under 

construction. Id.

Lakeway Regional ultimately decided not to 

acquire the Lease, and this lawsuit ensued. LTT, 

as assignee of the rights of Berry and McDonald, 

asserted claims for breach of contract, 

misappropriation of trade secrets, and negligent 

misrepresentation against Lakeway Regional and 

its agent, SDP. CR4, 81. LTT later added the 

Attorney Defendants. CR122, 158.

Trial Court: 345th Judicial District Court, Travis County, 

Texas. 

Course of Proceedings: This case was resolved partially on summary 

judgment and partially by a jury trial. The trial 

court granted summary judgment against LTT on 

its claims for trade secret misappropriation and 

breach of Section 2 of the Letter of Intent. The 

jury returned a verdict favorable to LTT on its 

breach of contract claim. LTT appeals the 

summary judgment order, while Lakeway 

Regional and SDP appeal from the judgment on 

the jury’s verdict. CR12266, 12997; SCR3. 
54151498 xi

STATEMENT OF ISSUES AND CROSS-POINTS

1. Did the trial court correctly determine that Lakeway Regional and 

SDP were entitled to summary judgment on LTT’s claim for misappropriation of 

trade secrets? 

2. Did the trial court correctly determine that Lakeway Regional and 

SDP were entitled to summary judgment on LTT’s claim for breach of Section 2 of 

the Letter of Intent either because (A) Section 2 is an unenforceable agreement to 

agree, or (B) the summary judgment evidence conclusively established that at least 

two conditions precedent to Lakeway Regional’s obligations to perform under 

Section 2 were not satisfied and LTT had no evidence that either was satisfied? 

Also, did LTT waive error as to SDP because it failed to challenge all bases for the 

trial court’s summary judgment on its Section 2 claim—namely that SDP was not a 

party to the Letter of Intent?

3. Did the trial court properly exercise its discretion in sustaining 

Lakeway Regional’s and SDP’s objections to LTT’s summary judgment evidence? 
54151498 1

STATEMENT OF FACTS 

Lakeway Regional and SDP provided a comprehensive statement of 

background facts in their Opening Appellants’ Brief. The facts below are limited 

to those relevant to LTT’s cross-appeal. 

I. Facts relevant to LTT’s cross-appeal relating to Section 2 of the Letter 

of Intent. 

The Letter of Intent is dated September 15, 2009. CR5697. It addresses 11 

separate topics, which generally fall into two categories. 

The first category of topics concerns the acquisition of the Lease. Section 1, 

titled “Discussions and Negotiation of the Project,” sets forth the time period 

during which the parties would have negotiations regarding the project, which time 

period could be extended. Section 2, titled “The Proposed Outline of the Terms of 

the Project,” sets forth some of the terms and conditions that would be included in 

a full and complete agreement if Lakeway Regional decided to acquire LTT’s 

Lease, including that Lakeway Regional would reimburse Berry and McDonald 

reasonable and documented costs advanced by them plus pay them $1.5 million. 

Section 3, titled “Required Approvals for the Project,” sets forth five conditions 

precedent to Lakeway Regional’s obligations under Section 2 and a “best efforts” 

obligation to satisfy each condition precedent. Section 4, titled “Earnest Money,” 

provides that Lakeway Regional would deposit earnest money with an escrow 

agent and that if Lakeway Regional terminated the Letter of Intent for any reason, 
54151498 2

the earnest money would be paid to Berry and McDonald. Section 5, titled 

“Term,” states that the “Letter of Intent may be terminated by either Party, for any 

reason.” (Emphasis added.) Nowhere does the Letter of Intent impose any 

affirmative obligation on Lakeway Regional to consummate the transaction 

“outlined” in Section 2. 

The second category of topics sets out the ground rules for how the parties 

would conduct further due diligence and negotiations related to the potential 

transaction addressed in Section 2. Section 6 contains a standstill and noncircumvention provision, providing that Lakeway Regional would not share any 

information with third parties gained in the negotiation and development process or 

independently use any proprietary information. Section 9, titled “Confidentiality,” 

has numerous subsections. For example, Section 9.1, titled “Proprietary 

Information,” provides that “all information disclosed by any Party or its 

Representatives at any time to any other Party or its Representatives . . . shall be 

deemed ‘Proprietary Information.’” And Section 9.7 restricts the type of 

information that could qualify for protection by making clear that certain 

information was not proprietary, including information that was in the public 

domain as of the date of the Letter of Intent or was received from a third party with 

no restriction on further disclosure. 
54151498 3

Following the execution of the Letter of Intent, Lakeway Regional 

conducted due diligence on the project and ultimately determined that acquiring 

the Lease did not make economic sense. CR5709, 5840, 5857, 5859, 6031, 6264. 

On March 22, 2010, Lakeway Regional notified LTT of its decision. CR5709, 

5878, 6131. At that time, LTT did not claim that it believed Lakeway Regional’s 

decision was a breach of Section 2. This is consistent with the fact that Section 2 

was not a binding obligation, but only a “Proposed Outline of the Terms” for the 

proposed Lease acquisition. LTT raised Section 2 for the first time in its breach of 

contract lawsuit, filed in April 2012. CR4. 

II. Facts relevant to LTT’s cross-appeal on its alleged misappropriation 

claim. 

Sossi obtains LTT-related information months before any discussions 

between Lakeway Regional and LTT. More than a year before there were any 

discussions about the Letter of Intent, and as part of the process of developing 

Lakeway Regional, Lakeway Regional’s attorney, Frank Sossi, learned information 

about LTT’s Lake Travis Hospital from Health Care REIT and publicly-available 

documents. CR6013-14, 6435-36. The information Sossi learned from Health 

Care REIT about Lake Travis Hospital included financial information. 

Information that would have been publicly available to Sossi included a set of 

architectural plans for Lake Travis Hospital. Id.; see also CR5803, 6272. 
54151498 4

Lakeway Regional seeks financial support from HUD. As described in the 

opening briefs, part of Lakeway Regional’s strategy for funding its hospital was to 

obtain loan insurance from HUD. On March 17, 2010, following a lengthy 

application and review process, HUD issued its initial commitment for loan 

insurance to Lakeway Regional, indicating that it intended to insure Lakeway 

Regional’s loan. CR5884, 6014. On May 8, 2010, six weeks after issuing the 

commitment, HUD received a complaint from the CEO of another area hospital, 

questioning whether Lakeway Regional was in an underserved area because of the 

Lake Travis Hospital project, which was under construction. CR5614, 5719, 6141. 

In response to this complaint, HUD posed eight general questions about Lake 

Travis Hospital to Lakeway Regional’s lender. Id. Lakeway Regional’s lender 

forwarded HUD’s questions to Sossi. CR5718, 6140. In a two-page email dated 

May 10, 2010 (the “May 10 email”), Sossi answered those questions for Lakeway 

Regional. CR5716-17, 6138-39. The May 10 email had no attachments.

On May 21, 2010, the HUD-insured loan closed. CR6308. After the loan 

closed, Sossi had some further communication with HUD regarding LTT’s facility, 

including a June 21, 2010 letter (the “June 21 letter”) that Sossi sent to HUD’s 

Office of Litigation. CR8108-10. 

LTT accuses Lakeway Regional and SDP of misappropriating its trade 

secrets to convince HUD to issue loan insurance. LTT’s misappropriation claims 
54151498 5

hinge on Sossi’s communications with HUD, particularly the May 10 email. 

According to LTT, Lakeway Regional and SDP used and disclosed LTT’s trade 

secrets to HUD to convince HUD that Lake Travis Hospital was not a competitive 

facility. CR158, 172-74. But LTT has never articulated what LTT trade secrets 

were allegedly used or disclosed in the May 10 email or during any other 

communication between Lakeway Regional or SDP and HUD. Instead, below and 

now, LTT appears to claim that its so-called Project File is itself a trade secret. 

Cross-App. Br. 13-15. As explained below, the Project File cannot be a “trade 

secret” because it was actually created by LTT’s trial counsel, with Berry’s input, 

two years after this litigation commenced, and LTT’s trial counsel stated on the 

record that the Project File is not a trade secret that was misappropriated. CR7598-

600, 11494-500, 11506-07. 

III. Procedural history.

Two years after this case was filed, Lakeway Regional and SDP moved for 

summary judgment on LTT’s claims for breach of Section 2 of the Letter of Intent 

and trade secret misappropriation. CR4, 5602 (Lakeway Regional’s motion), 6020 

(SDP’s motion). The trial court, without specifying the bases, granted both 

motions. CR12266; see also CR12251 (Judge Yelonosky’s letter ruling states: 

“Reasons given are not exclusive of other reasons I may have, will not be 
54151498 6

incorporated in any order, and do not limit the bases of support for any order.”).1

 

The trial court also sustained in part Lakeway Regional’s and SDP’s objections to 

LTT’s summary judgment evidence. CR11486, 12261. LTT’s remaining claims 

were tried to a jury, which returned a verdict partially in its favor. CR12997.2

SUMMARY OF ARGUMENT

Summary judgment on LTT’s misappropriation claim was proper. 

Throughout this lawsuit, LTT has struggled to patch together evidentiary support 

for its trade secrets misappropriation claim. After two years of discovery, LTT 

mustered only superficial and conclusory responses to Lakeway Regional’s and 

SDP’s motions for summary judgment. 

LTT was unable to identify any specific information that qualified as a trade 

secret under Texas law, and so its trial counsel, with Berry’s input, created a 

purported trade secret just for this litigation and called it the “Project File,” hoping 

that the sheer volume of paper in the Project File would obscure the lack of any 

trade secret. 

 1 As discussed in Lakeway Regional’s and SDP’s Opening Appellants’ Brief, although Judge 

Yelenosky granted summary judgment on LTT’s Section 2 breach claim, Judge Livingston (who 

presided over the case during trial) submitted LTT’s breach of contract claim in broad form, 

meaning that Section 2 was impermissibly before the jury. See Appellants’ Opening Br. 49-57.

2 LTT also alleged a claim for negligent misrepresentation. CR174. It lost part of this claim on 

summary judgment and the remainder at trial. CR12266-67, 13003. Because LTT has not 

appealed either the summary judgment order or the final judgment as to the negligent 

misrepresentation claim, the claim is abandoned. Jacobs v. Satterwhite, 65 S.W.3d 653, 655-56 

(Tex. 2001) (per curiam) (“‘grounds of error not asserted by points of error or argument in the 

court of appeals are waived’”).
54151498 7

LTT was unable to present any evidence demonstrating how Lakeway 

Regional and SDP used or disclosed such information, and so it generally pointed 

to a few communications with HUD, hoping that speculation about the 

communications would overcome the lack of actual evidence of use or disclosure. 

LTT was unable to present evidence demonstrating how the alleged use or 

disclosure caused LTT any injury or damage, and so it presents a new damage 

theory on appeal, hoping to avoid the absence of causation evidence, all the while 

ignoring the uncontroverted evidence from HUD that knowing earlier about Lake 

Travis Hospital would not have effected its decision to provide insurance.

LTT similarly failed to controvert Lakeway Regional’s and SDP’s evidence 

that they neither used nor disclosed LTT’s alleged trade secrets. 

Summary judgment on LTT’s breach of Section 2 claim was proper. By 

its terms, Section 2 memorializes only an agreement to agree—lacking essential 

terms and being terminable by any party for any reason—and so is unenforceable 

as a matter of law. Also, the enforceability of Section 2 was dependent upon the 

satisfaction of five condition precedents set out in Section 3. Lakeway Regional 

and SDP conclusively established that two of the five were not met, and LTT failed 

to submit evidence that the conditions were satisfied or excused. Finally, SDP 

moved for summary judgment on the basis that as a non-party to the Letter of 

Intent, it had no duty or obligation under Section 2. LTT failed to challenge this 
54151498 8

independent basis for summary judgment, requiring that the summary judgment for 

SDP be affirmed. 

Objections to LTT’s summary judgment evidence were properly sustained. 

The problems with LTT’s misappropriation case manifested themselves in LTT’s 

summary judgment evidence, which relied on the voluminous, created-forlitigation “Project File” as the purported trade secret. Yet no LTT witness ever 

identified which portions of the Project File constituted a trade secret. For these 

and other reasons, the trial court properly sustained Lakeway Regional’s and 

SDP’s evidentiary objections. 

STANDARD OF REVIEW

The standard for review of a traditional summary judgment is well 

established. When the trial court does not state the basis for its decision in its 

order, this Court will affirm on any meritorious ground asserted in the motion. 

Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995); Pickett v. Tex. Mut. 

Ins. Co., 239 S.W.3d 826, 840 (Tex. App.—Austin 2007, no pet.). Thus, LTT was 

required to challenge every ground asserted in the motions in its brief. StarTelegram, 915 S.W.2d at 473. 

The standard of review of a no-evidence summary judgment is also well 

established. A no-evidence summary judgment is essentially a directed verdict 
54151498 9

granted before trial, to which a legal sufficiency standard of review applies. King 

Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750-51 (Tex. 2003). 

Because the propriety of a summary judgment is a question of law, review is 

de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).

Rulings on objections to summary judgment evidence are reviewed for an 

abuse of discretion. United Blood Servs. v. Longoria, 938 S.W.2d 29, 30-31 (Tex. 

1997) (per curiam).

ARGUMENT

I. The Trial Court Correctly Granted Summary Judgment in Lakeway 

Regional’s and SDP’s Favor on LTT’s Misappropriation Claim.

To recover for trade secret misappropriation, a plaintiff must establish: (1) a 

trade secret existed; (2) the trade secret was acquired through a breach of a 

confidential relationship or was discovered by improper means; (3) the defendant 

used or disclosed the trade secret without the plaintiff’s authorization; and (4) the 

plaintiff suffered damages as a result. Trilogy Software, Inc. v. Callidus Software, 

Inc., 143 S.W.3d 452, 463 (Tex. App.—Austin 2004, pet. denied). 

Lakeway Regional and SDP filed a hybrid motion for summary judgment on 

LTT’s misappropriation claim. They moved on traditional grounds on elements 

three (disclosure/use) and four (causation). CR5609, 5625-31, 6027, 6046-52. 

They moved on no-evidence grounds on elements one (existence of a trade secret), 
54151498 10

three (disclosure/use), and four (causation). See id.3

 Thus, LTT had the burden to 

come forward with evidence, and raise a fact issue, that it has specific trade 

secrets, that it gave those specific trade secrets to Lakeway Regional and SDP, 

that Lakeway Regional and SDP disclosed or used those specific trade secrets, and 

that disclosure or use of those specific trade secrets caused LTT injury. None of 

this was shown below or now on appeal.4

First, LTT claims that its Project File—a collection of materials exceeding 

2,000 pages—qualifies as a trade secret. But it cannot be a trade secret because it 

was created two years after LTT initiated this litigation by LTT’s trial counsel for 

this litigation, and it includes correspondence among SDP and third parties. 

Second, there is no evidence of use or disclosure of any alleged LTT trade 

secret. LTT claims that Lakeway Regional and SDP used or disclosed LTT’s trade 

secrets in two ways: (1) in writing, through the May 10 email or the June 21 letter 

or (2) orally, during various meetings. CR11801-06, 11905-11; Cross-App. 

Br. 23-27. LTT never, however, connected any specific alleged trade secret to 

anything in these communications. In fact, Lakeway Regional’s and SDP’s 

 3 Contrary to LTT’s assertion (Cross-App. Br. 9-10), Lakeway Regional and SDP made noevidence points on the element of existence of a trade secret. CR5628 (Lakeway Regional’s 

motion: “[T]here is no evidence that the information that LTT claims is Protected Information 

actually qualifies as a trade secret under Texas law.”); CR6049 (stating same in SDP’s motion).

4 LTT’s amended summary judgment responses can be found at CR11790 (to SDP’s motion) and 

CR11899 (to Lakeway Regional’s motion). 
54151498 11

summary judgment evidence conclusively established that there was no use or 

disclosure of any alleged trade secret.

Third, LTT failed to bring forth legally sufficient evidence of causation—

that it was injured from some alleged disclosure or use of a trade secret. Lakeway 

Regional and SDP meanwhile presented uncontroverted evidence that negated the 

element of causation.

Thus, as detailed below, summary judgment was proper on LTT’s 

misappropriation claim for these reasons. 

A. LTT failed to prove the existence of a trade secret that is at issue.

To qualify as a trade secret, the information or documents must be used in 

the plaintiff’s business, and it must provide the plaintiff with the “‘opportunity to 

obtain an advantage over competitors.’” In re Bass, 113 S.W.3d 735, 739 (Tex. 

2003) (citation omitted); see also Trilogy, 143 S.W.3d at 463 (concluding that a 

trade secret is “for continuous use in the operation of the business”). LTT had the 

burden to show the existence of a “trade secret.” See Stewart & Stevenson Servs., 

Inc. v. Serv-Tech, Inc., 879 S.W.2d 89, 96-98 (Tex. App.—Houston [14th Dist.] 

1994, writ denied) (if the subject matter appropriated is not a trade secret, there is 

no liability for misappropriation). 

The big question is “What is the secret that was used or disclosed?” 

Frankly, if LTT had a valid claim, answering this question should have been an 
54151498 12

easy task. But that has not been the case. Despite a lengthy discovery process 

lasting two years, multiple rounds of briefing in the trial court (e.g., CR9627, 

11899), and briefing before this Court, it remains a mystery which purported trade 

secrets LTT claims were misappropriated. 

1. Because the Project File is a collection of documents 

assembled by LTT’s trial counsel after the lawsuit was filed, 

it is not a trade secret.

The focus of LTT’s argument for the existence of trade secrets has been the 

so-called “Project File,” which is a 2,033-page collection of documents. CrossApp. Br. 13 n.4, 42 n.15. Fatal to LTT’s misappropriation claim is that the Project 

File was not used in its business. There is no evidence—and Berry certainly never 

swore in his declaration—that the Project File, as a “compilation,” was used in 

LTT’s business. Nor could it have been. As Lakeway Regional and SDP pointed 

out in support of their objections to LTT’s summary judgment evidence 

(CR11486), the Project File was assembled by LTT’s trial counsel with 

subsequent input from Berry, more than two years after the litigation was filed. 

CR11494-500. Thus, the timing of the Project File’s creation makes it impossible 

under the law to satisfy the “used in one’s business” requirement. In re Bass, 113 

S.W.3d at 739. Similarly, since the Project File as a compilation was not used in 

LTT’s business, it could not have given LTT a competitive advantage over others. 

Id.
54151498 13

Further, the Project File contains documents that were not owned by LTT. 

When constructing the Project File, LTT’s trial counsel included emails produced 

by SDP during the litigation for which no one at LTT was a recipient. Indeed, the 

third document in the Project File (CR8682) is an email from Scott Brinker (of 

Health Care REIT, a third party) to Eddie Alexander (SDP’s CEO) and Sossi that 

was sent before SDP and Lakeway Regional signed any confidentiality agreement, 

and that email contains no information that could possibly be construed as a trade 

secret. It merely states that LTT’s principals were willing to have a discussion 

about the project.5

LTT’s cases also fail to advance its argument. In those cases, the alleged 

trade secret was information compiled to create a competitive advantage, not 

compiled at a later date for litigation purposes. See, e.g., Bishop v. Miller, 412 

S.W.3d 758, 764-71 (Tex. App.—Houston [14th Dist.] 2013, no pet.) (describing 

the evidence that supported the jury’s finding that a compilation of 13 items 

constituted a trade secret). Indeed, in one cited case, the compilation trade secret is 

exactly what you might expect: a person used some ingenuity to mine public- and 

semi-public raw production data to identify sweet spots for oil and gas exploration 

 5 The Project File includes many other documents which clearly do not contain trade secrets, 

such as the Confidentiality Agreement between SDP and LTT (CR8686), emails regarding 

revisions to the draft of the Letter of Intent (CR8709), the Letter of Intent (CR8721), the Escrow 

Agreement (CR8737), drafts of a lease assignment (CR8786), correspondence between counsel 

(CR8797), transmittal emails (CR8824, 8833), and the Lease (CR8858). 
54151498 14

that had not yet been identified. See Sw. Energy Prod. Co. v. Berry-Helfand, 411 

S.W.3d 581, 597-98 (Tex. App.—Tyler 2013, pet. granted). LTT did nothing of 

the sort here, and instead relies on its lawyer-created compilation. 

Moreover, as Lakeway Regional and SDP pointed out in their objections to 

LTT’s summary judgment evidence (CR11488), LTT’s counsel stated during the 

deposition of LTT’s trade secrets expert that LTT was not claiming that the Project 

File was a trade secret that was misappropriated:

MR. COX: Let’s go back on the record. Counsel, I understand you 

have a statement you’d like to make on the record.

MR. WINGARD: Sure. Because I think it will help short-circuit 

testimony today, I want to state that LTT does not contend that the 

Project File, which is Bates labeled 7875 through 9907 and was 

labeled Exhibit 324 in Mr. Berry’s deposition, that that document in 

its entirety constitutes a trade secret that was misappropriated in its 

entirety. However, LTT does contend that information contained 

within the Project File discreetly or in combination with other 

information is misappropriated.

CR11506-07 (emphasis added). Because LTT unequivocally stated that it was not 

asserting that the Project File constituted a trade secret, it is now foreclosed from 

claiming otherwise. See Lopez v. Munoz, Hockema & Reed, LLP, 22 S.W.3d 857, 

864 (Tex. 2000) (“Quasi-estoppel precludes a party from asserting, to another’s 

disadvantage, a right inconsistent with a position previously taken.”); Mendoza v. 

Fid. & Guar. Ins. Underwriters, Inc., 606 S.W.2d 692, 694 (Tex. 1980) 

(identifying circumstances where testimony will constitute a binding judicial 
54151498 15

admission and recognizing that “it would be unjust to permit a party to recover 

after he has sworn himself out of court by clear, unequivocal testimony”); Cortez v. 

Weatherford Indep. Sch. Dist., 925 S.W.2d 144, 150-51 (Tex. App.—Fort Worth 

1996, no writ) (party’s deposition testimony acted as a conclusive judicial 

admission supporting summary judgment against that party). 

It should be noted that throughout the case, LTT has gone back and forth on 

whether the Project File itself is a trade secret, sometimes claiming that it is and 

sometimes claiming that parts of it contain trade secrets. That volley continues 

here. On the one hand, LTT cites cases for the proposition that “a compilation of 

distinct information may be protected as a trade secret.” Cross-App. Br. 11-13. 

But on the other hand, LTT never outright says the Project File is such a 

“compilation,” instead noting that it is “a compilation of all the documentary 

evidence reflecting” not just LTT’s trade secrets but also its “proprietary 

information.” Id. at 13 (emphasis added); see also id. (“materials contained in the 

Project File constitute LTT’s trade secrets”); id. (referring to “trade secrets 

included in that compilation”). 

LTT made similar statements below without ever exactly contending that the 

Project File itself was a trade secret. E.g., CR11921 (referring to “trade secrets 

contained in the Project File”); CR11922 (referring to Project File as “containing 

and reflecting the trade secrets”). And, most importantly, in his declaration 
54151498 16

supporting LTT’s summary judgment response, Berry never says the Project File 

itself is a trade secret, noting instead that “[m]uch of the information in the Project 

File is or reflects confidential and proprietary information that provided LTT with 

a competitive advantage, and LTT considered this information a trade secret.” 

CR7607 (emphasis added). 

LTT’s inability—several years into this litigation—to simply state, in clear 

terms, that the created-for-litigation Project File is a trade secret should tell the 

Court all it needs to know about the strength of LTT’s trade secret arguments.

2. It remains unclear which purported trade secrets LTT 

believes are at issue.

What pieces of the alleged “Project File” are a trade secret? LTT has yet to 

establish this fact.

Components of the Project File have yet to be identified as trade secrets. 

In his declaration, Berry broadly identified certain categories of information in the 

Project File as alleged trade secrets (e.g., current state of construction, physician 

support, and sources and uses of funds). CR7607. But he never identified where 

that information can be found in the voluminous, 2,033-page Project File. Berry 

cited to the entirety of the Project File. CR7606 (referencing the “Bates range of 

the Project File”). This is insufficient. See, e.g., Nguyen v. Allstate Ins. Co., 404 

S.W.3d 770, 776-77 (Tex. App.—Dallas 2013, pet. denied) (trial courts are “‘not 
54151498 17

required to sift through voluminous’” evidence to see if a fact issue exists (citation 

omitted)). 

To remedy this deficiency, LTT filed amended summary judgment 

responses—weeks after Berry submitted his declaration and after Lakeway 

Regional and SDP had objected to the Project File. CR11486, 11790, 11899. In 

doing so, LTT’s trial counsel purported to identify certain “confidential, 

proprietary and trade secret information” within the Project File by category and 

Bates number. See CR11814, 11919; Cross-App. Br. 14-15. The documents 

identified by LTT’s lawyers amount to 786 pages of the Project File. But no 

witness testified that any of these documents were actual trade secrets. That is, 

Berry never supplemented his declaration to confirm that the specific documents 

identified by LTT’s trial counsel were, in his view, trade secrets, as opposed to 

being simply “confidential” or “proprietary” under the Letter of Intent. See 

Stewart & Stevenson, 879 S.W.2d at 99 (“[T]here is no cause of action for 

misappropriation of confidential information that is not either secret or, at least 

substantially secret.”). Instead, LTT relied on Berry’s prior declaration, which 

generally claimed that the “trade secrets in the Project File were not generally 

known or readily available to the public,” without identifying the specific material 

or information. See CR7608. Berry’s statement, however, is conclusory and 

lacking any probative value. See Ryland Group, Inc. v. Hood, 924 S.W.2d 120, 
54151498 18

122 (Tex. 1996) (per curiam) (“Conclusory affidavits are not enough to raise fact 

issues.”); see also infra at Section III.

Notably, LTT’s amended responses did not even reference many of the 

categories of trade secrets that Berry identified (e.g., the three examples given at 

the beginning of this section). In other words, the trial court was required to 

review the 2,033-page Project File (some of which LTT acknowledges is not a 

trade secret), and on its own, specifically identify which documents or information 

in the Project File were actual trade secrets. Nguyen, 404 S.W.3d at 776-77. 

No document or information outside of the Project File has been identified 

as a trade secret either. LTT makes a passing reference to “other things” besides 

the Project File as “substantial evidence of the existence of LTT’s trade secrets.” 

Cross-App. Br. 13 (“In its response to Defendants’ motions, LTT included (among 

other things) the Project File . . . .”). However, LTT never identified any trade 

secret that exists outside of the Project File. And Berry’s declaration only vaguely 

refers to information that was “conveyed to Defendants verbally” without 

identifying what that information was. CR7606. 

In sum, the failure of Berry (or any other witness) to identify which specific 

LTT documents or information allegedly constitute a trade secret is fatal to LTT’s 

claim. That LTT’s trial counsel submitted argument purporting to identify LTT’s 

trade secrets is no evidence of LTT’s trade secrets. As a result, neither the parties 
54151498 19

nor the Court can even begin to analyze the six-factor test for evaluating the 

existence of a trade secret. In re Bass, 113 S.W.3d at 739 (quoting factors from 

Restatement of Torts § 757 cmt. b (1939)). 

Although this Court can affirm summary judgment on this ground alone, 

Lakeway Regional and SDP will address the other elements of LTT’s 

misappropriation claim.

B. There is no evidence that Lakeway Regional or SDP used or 

disclosed LTT’s purported trade secrets, and the evidence 

conclusively establishes that there was no use or disclosure.

Having failed to show the existence of a trade secret, LTT unsurprisingly 

cannot show that Lakeway Regional or SDP actually disclosed or used any trade 

secret. While the focus of this element has been the May 10 email and other 

communications with HUD, the shortcomings are the same whether one looks at 

use or disclosure. There is no evidence of what trade secret was used/disclosed or 

how it was used/disclosed (e.g., what specific aspect of the HUD communications 

actually used/disclosed a trade secret). Indeed, the uncontroverted evidence 

established that Sossi did not use/disclose any LTT trade secret when 

communicating with HUD about LTT’s facility. 

1. There is no evidence of use of a trade secret.

“‘Use’ of a trade secret means commercial use, by which a person seeks to 

profit from the use of the secret.” Trilogy, 143 S.W.3d at 464. The evidence of 
54151498 20

use or disclosure must be tethered to an identified trade secret. Id. at 463 (referring 

to use of “the” trade secret found to be in existence).

As with much of this case, the May 10 email is the focal point of LTT’s use 

argument. According to LTT, Lakeway Regional and SDP used LTT’s trade 

secrets in the May 10 email to convince HUD that Lake Travis Hospital was not a 

competitive facility. Cross-App. Br. 24-25. This argument fails. 

First, LTT never says what trade secrets were used in the May 10 email and 

which specific portion of the email purportedly used them.6

 The two-page May 10 

email contains many statements that relate to LTT’s Lake Travis Hospital, 

including its location, its size, and bed count. CR5716-17. Rather than identify 

how this email “used” a trade secret, LTT’s entire argument on use is one sentence: 

“To convince HUD that LTT was not a competitive facility, and thereby fund 

LRMC’s $166.9 mortgage, Defendants used LTT’s trade secrets in the May 10th 

Email and subsequent correspondence with HUD.” Cross-App. Br. 25. This 

conclusory statement is not legally sufficient evidence of “use” of some alleged 

trade secret. See Ryland, 924 S.W.2d at 122. Likewise, the unspecified 

“subsequent correspondence with HUD” cannot support “use” of any alleged trade 

secret. Id.

 6

 LTT’s misappropriation argument section spans 23 pages. Only five and one-half of those 

pages address the elements of use/disclosure. Cross-App. Br. 22-27. Nowhere in those five and 

one-half pages does LTT clearly state what or how a trade secret was used or disclosed. 
54151498 21

Second, LTT speculates that because it provided Lakeway Regional and 

SDP with site- and building-related information, they, in turn, must have used that 

exact (allegedly secret) information to determine that it would be very costly to 

convert LTT’s facility from a long-term health care facility to a general acute care 

facility, as Sossi stated in the May 10 email. Cross-App. Br. 24-25. But an equally 

likely inference is that Sossi reached that conclusion based on information obtained 

from Heath Care REIT or publically-available information. CR5886, 6013-14, 

6435-36. LTT’s speculation that Lakeway Regional’s determination of conversion 

costs was based on use of LTT’s trade secrets rather than other information 

independently available to Lakeway Regional is not probative evidence. Leal v. 

McDonald’s Corp., No. 03-05-00500-CV, 2009 Tex. App. LEXIS 6151, at *8-9 

(Tex. App.—Austin Aug. 5, 2009, no pet.) (mem. op.) (affirming no evidence 

summary judgment based on equal inference rule).

Third, LTT’s inability to identify how its purported trade secrets were used 

is compounded by its admission that the information conveyed in the May 10 email 

was false. Berry testified that many of Sossi’s statements in the May 10 email 

were in fact false. In particular, Berry admitted that the following statements from 

the May 10 email were not true:

• LTT missed the deadline to qualify as an LTAC;

• The Lake Travis facility, in the fall of ’09 and the spring of ’10, had 

numerous code violations;
54151498 22

• Conversion of Lake Travis Hospital to a true general acute care hospital 

would cost a great deal of money;

• It would be difficult to expand Lake Travis Hospital in the future;

• LTT had no physician support;

• The lease was structured as a 100% interest-only lease;

• Lake Travis Hospital would not open in the summer of 2010;

• Lake Travis Hospital did not have an operator;

• Lake Travis Hospital did not have an operational staff;

• Lake Travis Hospital did not have a medical staff;

• Lake Travis Hospital did not have a list of interested physicians; and

• The City of Lakeway would need to approve any physical conversion 

changes from an LTCH to a general acute care hospital.

CR5809-12, 6231-34. 

LTT is left to argue that evidence that a defendant conveyed false

information to a third party that relates to or is similar to the plaintiff’s purported 

trade secrets raises a fact issue of use. Cross-App. Br. 22-25. But none of LTT’s 

cases support its unrecognized argument. 

For example, in Cudd Pressure Control, Inc. v. Roles, 328 F. App’x 961 (5th 

Cir. 2009), the defendants, who were former employees of the plaintiff and the 

company that they joined to compete with the plaintiff, “showed” the plaintiff’s 

confidential financial data to their investors to validate that what they were telling 

the investors about the opportunity “was true.” Id. at 962-63, 966 (emphasis 

added). The Fifth Circuit found that such evidence raised a fact issue on the 

element of commercial use and reversed a summary judgment in defendants’ favor. 
54151498 23

Id. at 966. Had Lakeway Regional and SDP shown LTT’s confidential financial 

information to HUD, Cudd might be relevant.

In Wellogix, Inc. v. Accenture, L.L.P., 716 F.3d 867 (5th Cir. 2013), the 

court found that where a defendant’s document stated, “[u]se Wellogix content,” a 

jury could find that the defendant relied on the plaintiff’s software developed for 

oil and gas companies to develop its own software. Id. at 877. And in Bishop, the 

evidence showed that the defendant’s operating plan incorporated 15 of the 

plaintiff’s 21 component parts. 412 S.W.3d at 774. LTT has not presented facts 

here that evidence use and instead offers its speculation that use occurred. Stated 

differently, in a typical trade secret misappropriation case, as LTT points out in its 

brief at page 12, the defendant is alleged to have used the plaintiff’s information 

either by copying it or taking advantage of it to achieve a competitive advantage of 

some kind. E.g., Trilogy (use of plaintiff’s software); Serv-Tech (use of plaintiff’s 

bid forms, business plans, job cost control and progress tracking methods); Bishop 

(use of plaintiff’s potash mining process for acreage in Utah). There is no 

evidence here of use in that way, which by itself was dispositive of LTT’s trade 

secret claim, as the trial court found. CR12252 (“Nothing that could qualify as a 

trade secret was ‘used’ as that word is defined in the case law.”).
54151498 24

2. The evidence conclusively establishes that there was no use 

of a trade secret.

Lakeway Regional’s and SDP’s summary judgment evidence conclusively 

established that Sossi did not use any LTT trade secret in drafting the May 10 

email. CR6013-14, 6435-36. Sossi confirmed that “[a]ny information conveyed to 

HUD about LTT or Lake Travis Hospital on May 10, 2010, and afterward resulted 

from information obtained from Health Care REIT and from publicly available 

sources.” Id. at 6014, 6436. Sossi had been communicating with Health Care 

REIT since March 2008 about LTT and Lake Travis Hospital (id.), well before the 

Letter of Intent was signed in September 2009. This evidence is uncontroverted. 

3. There is no evidence of disclosure of a trade secret. 

To establish disclosure, LTT must show that Lakeway Regional and SDP 

made an LTT trade secret known to the public. See, e.g., Precision Plating & 

Metal Finishing, Inc. v. Martin-Marietta Corp., 435 F.2d 1262, 1263 (5th Cir. 

1970) (per curiam) (noting that plaintiff had developed a “secret process” and that 

defendant “made such public disclosure of the process” so as to destroy the value 

of the process); see also Restatement of Torts § 757 cmt. c (discussing difference 

between “mere disclosure” and use); Black’s Law Dictionary 562 (10th ed.) 

(defining “disclosure” as “[t]he act or process of making known something that 

was previously unknown”).
54151498 25

Nowhere in LTT’s page-and-a-half discussion of disclosure (Cross-App. 

Br. 26-27) does LTT identify a specific alleged trade secret that Lakeway Regional 

or SDP actually disclosed. For example, LTT recounts that Sossi shepherded 

Lakeway Regional’s application through the HUD process. Id. But this is not 

evidence that Sossi disclosed LTT’s trade secrets during that process. 

LTT next points to the June 21 letter where Sossi (i) stated that he discussed 

LTT’s facility in detail with HUD, (ii) referenced a prior discussion he had with 

HUD’s client service team about LTT’s facility, and (iii) stated his expectation that 

HUD would defend its loan commitment. But nothing in the June 21 letter 

(CR8108-10) suggests that non-public information concerning Lake Travis 

Hospital was part of that discussion, and no specific trade secret has been 

identified in this letter either. As with the May 10 email and the use claim, LTT 

never identifies a “trade secret” disclosed in the June 21 letter.7

 

Speculation that Sossi might have disclosed an LTT trade secret to HUD 

during any discussion is no evidence. Ford Motor Co. v. Ridgway, 135 S.W.3d 

598, 601 (Tex. 2004) (evidence must transcend mere suspicion); Gillis v. Provost 

& Umphrey Law Firm, LLP, No. 05-13-00892-CV, 2015 WL 170240, at *14 (Tex. 

App.—Dallas Jan. 14, 2015, no pet.) (applying rule on facts analogous to those 

here). 

 7 LTT also includes an obligatory mention of the May 10 email in its disclosure argument but 

points to no particular statement in the email that discloses a trade secret. Cross-App. Br. 26-27.
54151498 26

LTT’s reliance on Lamont v. Vaquillas Energy Lopeno Ltd., LLP, 421 

S.W.3d 198 (Tex. App.—San Antonio 2013, pet. denied) is, therefore, misplaced. 

In Lamont, it was unnecessary for the jury to speculate whether the defendant used 

the plaintiff’s seismic data in deciding to acquire a gas prospect because the only

seismic data that existed concerning the prospect had been developed by the 

plaintiff. Id. at 213-16. Here, LTT wants this Court to reverse the trial court’s 

judgment by speculating that Sossi disclosed LTT’s alleged trade secrets during 

discussions with HUD, even though there were several sources of his information 

about LTT’s Lake Travis Hospital, as noted above. That would be improper. Ford 

Motor Co., 135 S.W.3d at 601.

4. The evidence conclusively establishes that there was no 

disclosure of a trade secret.

Lakeway Regional and SDP conclusively established that neither disclosed 

trade secrets to HUD. CR6013-14, 6435-36. That evidence stands uncontroverted 

and serves as an independent basis for affirming the summary judgment. StarTelegram, 915 S.W.2d at 473; see also supra at Section I.B.2-3.

C. There is no evidence that a purported disclosure or use caused 

LTT any damages, and the evidence conclusively negates 

causation.

To recover any type of damages, there must be “a direct causal link between 

the damages awarded, the actions of the defendant and the injury suffered.” 

Houston Mercantile Exch. Corp. v. Dailey Petroleum, Corp., 930 S.W.2d 242, 248 
54151498 27

(Tex. App.—Houston [14th Dist.] 1996, no writ) (applying rule of law in 

misappropriation case); see also Hunter Bldgs. & Mfg., L.P. v. MBI Global, L.L.C., 

436 S.W.3d 9, 20-22 (Tex. App.—Houston [14th Dist.] 2014, pet. denied) (same);

Rusty’s Weigh Scales & Serv., Inc. v. N. Tex. Scales, Inc., 314 S.W.3d 105, 111 

(Tex. App.—El Paso 2010, no pet.) (same). 

1. There is no evidence of causation.8

Lakeway Regional and SDP moved for summary judgment on the basis that 

LTT had no evidence that it sustained damages resulting from the alleged 

misappropriation of its trade secrets. CR5629-31, 6050-52. Specifically, Lakeway 

Regional and SDP pointed out that LTT had no evidence that HUD’s decision to 

amend, close, or fund was based upon any information HUD had obtained in 

connection with LTT’s proposed facility. Id. 

LTT failed to raise legally sufficient evidence of causation. Instead, Berry 

generally testified that as “a result of Defendants’ misconduct,” LTT lost nearly all 

of its market value. CR7614-15. But Berry never connected LTT’s alleged loss in 

value to misappropriation, as distinct from other alleged misconduct. 

LTT attempts to avoid the element of causation by arguing that it was not 

required to show reliance by HUD. The sole basis for this argument is that LTT 

 8 This argument also runs through Lakeway Regional’s and SDP’s Appellants’ Brief and upon 

examination, the summary judgment evidentiary and trial records are virtually identical. 

Meaning, there is no evidence of causation to support any of LTT’s causes of action.
54151498 28

claims to seek reasonable royalty damages that are “not dependent upon proof that 

HUD relied on” any improper disclosure or use of its trade secrets. Cross-App. 

Br. 31. This argument fails on many accounts. 

First, the decisions made by HUD were to issue the commitment, to agree to 

the amendment of terms requested by Lakeway Regional, and to close. HUD

issued the commitment on March 17, 2010. CR5884, 6306. Prior to that time, 

HUD’s representative testified that no “person associated with Lakeway Regional 

or SDP disclose[d] any information to HUD regarding LTT.” Id. Thus, Lakeway 

Regional could not have provided HUD with any of LTT’s trade secret information 

as of that date, and HUD could not have relied upon any such information in 

issuing the commitment. HUD agreed to the amendment on May 20, 2010, and the 

closing occurred the following day. CR5886, 6308. Because there is no evidence 

that HUD’s decision to amend or close was based upon or influenced in any way 

by any of the information provided by Sossi or what information was relied on, noevidence summary judgment was proper. See Hancock v. Variyam, 400 S.W.3d 

59, 70-71 (Tex. 2013) (holding there was no evidence of why a particular decision 

was made when there are multiple possible inferences for why the decision was 

made). 
54151498 29

Second, LTT presented no evidence of the amount of a reasonable royalty, 

and the idea of a reasonable royalty is found nowhere in Berry’s declaration. 

CR7604-17.

Third, the concept of a reasonable royalty is absent from LTT’s evidence 

because it never disclosed that measure of damages in its disclosure responses. 

CR5958. LTT amended or supplemented its disclosures numerous times9 and 

disclosed three damage models for its misappropriation claim.10 Yet there was no 

mention of a reasonable royalty, barring that measure from being considered. Tex. 

R. Civ. P. 193.6. 

2. The evidence conclusively negates causation.

Lakeway Regional and SDP also moved for summary judgment on the basis 

that any communication with HUD did not cause LTT injury as a matter of law. 

CR5602, 5609, 5629-31, 6020, 6046, 6051-52. Their argument was twofold.

First, the sole HUD witness deposed in this matter testified that prior to the 

issuance of the commitment on March 17, 2010, no “person associated with 

 9 The version in effect was served two months before the summary judgment responses. 

CR5950-63. 

10 The three separate damages models for its misappropriation claim were as follows: (1) its lost 

value to itself and to its trade secrets; (2) Lakeway Regional’s savings and profits; and (3) the 

monies LTT would have been paid had the deal closed. CR5958. This last measure is 

necessarily irrelevant to LTT’s misappropriation claim because (1) Lakeway Regional decided in 

March 2010 not to acquire the Lease (CR5709, 6131), two months before Sossi sent the May 10 

email and (2) there was no claim, and no evidence, that Lakeway Regional made that decision as 

a result of any alleged misappropriation of LTT’s alleged trade secrets. 
54151498 30

LRMC or SDP disclose[d] any information to HUD regarding LTT.” CR5884, 

6306. Therefore, neither Lakeway Regional nor SDP could have provided HUD 

with any LTT alleged trade secret information before that date. 

Second, HUD has stated that even if it had considered Lake Travis Hospital, 

it still would have recommended insuring Lakeway Regional. CR5980, 6403. 

Accordingly, even if some alleged trade secret was used or disclosed, it would not 

have mattered given this evidence. Rusty’s, 314 S.W.3d at 111 (requiring 

causative link).11

* * *

The bottom line is that LTT’s argument—both below and now on appeal—

amounts to nothing more than, “We have some trade secrets (though we have not 

specifically identified them), and we gave a bunch of information to Lakeway 

Regional and SDP, so they must have improperly used our trade secrets when 

obtaining HUD insurance, thus causing LTT harm.” That kind of vague claim, 

following two years of discovery, was properly found wanting. Summary 

judgment was properly granted.

 11 LTT’s expert’s opinion that HUD would have been negligent not to consider Lake Travis 

Hospital (Cross-App. Br. 31-32) is not relevant in light of the HUD representative’s 

unchallenged statement. 
54151498 31

II. The Trial Court Correctly Granted Summary Judgment in Lakeway 

Regional’s and SDP’s Favor on LTT’s Claim for Breach of Section 2 of 

the Letter of Intent.

Lakeway Regional moved for summary judgment on LTT’s Section 2 claim 

for two independent reasons: (1) Section 2 is an unenforceable agreement to agree, 

and (2) two of the five conditions precedent to Lakeway Regional’s obligations 

under Section 2 (which conditions are set forth in Section 3) were not satisfied. 

CR5608-09, 5618, 5622. SDP moved for summary judgment on the same grounds 

and on the additional ground that, as a non-party to the Letter of Intent, it could not 

be liable for its breach. CR6020, 6035-45. Both motions were properly granted. 

CR12266. 

A. Section 2 of the Letter of Intent is an unenforceable agreement to 

agree, foreclosing a claim for its breach.

An agreement which leaves material or essential terms open for future 

adjustment and agreement is unenforceable. Fort Worth Indep. Sch. Dist. v. City of 

Fort Worth, 22 S.W.3d 831, 846 (Tex. 2000). Failure to agree on even one 

essential term is fatal. T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 

221 (Tex. 1992). 

This Court recently enforced these bedrock principles and held that a letter 

agreement providing that the plaintiff would be the general contractor on the 

defendant’s project, a commercial development, lacked essential terms, thus 

rendering it an unenforceable agreement to agree as a matter of law. Martin v. 
54151498 32

Beitler, No. 03-13-00605, 2015 Tex. App. LEXIS 6894, at *24-28 (Tex. App.—

Austin July 7, 2015, no pet.) (mem. op.) (whether agreement “has all the essential 

terms to be legally enforceable is a question of law”); see also DKH Homes, LP v. 

Kilgo, 03-10-00656-CV, 2011 WL 1811435, at *3 (Tex. App.—Austin May 11, 

2011, no pet.) (mem. op.) (“To be enforceable, an agreement to enter into a future 

contract must specify all its material and essential terms, leaving none to be agreed 

on as the result of future negotiations.”). 

These same foundational principles apply here.

1. The Letter of Intent contains several provisions showing 

that Section 2 is an unenforceable agreement to agree.

First, the Letter of Intent’s opening paragraph demonstrates that the purpose 

of the agreement was to set forth a process for evaluating a possible transaction, 

but there was not yet an agreement to the actual transaction outlined in Section 2 

and there might never be. See CR5697 (“The objective of this Binding Letter of 

Intent is to indicate SDP’s interest in the Project and to establish the ground rules 

for the ongoing exchange of information between the Parties to facilitate the 

development of the Project and the exchange of information required for such a 

process to succeed.”). 

Second, other portions of the Letter of Intent confirm that the assignment of 

the Lease as outlined in Section 2 may never occur. Section 1, for example, 

identifies a 45-day period during which the parties would have discussions and 
54151498 33

negotiations “with regards to evaluating and implementing the proposed

Project,”—i.e., whether the parties would proceed forward under the outline of 

terms in Section 2. Id. (emphasis added). Section 3 addresses a “reasonable due 

diligence process,” which would precede any decision by Lakeway Regional 

whether to acquire the Lease under Section 2. What would be the purpose of a 

negotiation period or a reasonable due diligence process if the parties were already 

obligated to close under Section 2? 

Sections 3 and 4 further provide that if the negotiations were successful, then 

“definitive” agreements would be executed. LTT nonetheless claims that 

references to a definitive agreement is no problem because the parties also agreed 

that the definitive documents would “fully reflect the intention of the Parties 

expressed in this Letter of Intent.” Cross-App. Br. 35. LTT’s argument might 

have force if the Letter of Intent actually contained all essential terms, but it did 

not. The concept that a later agreement would reflect the intent of the Letter of 

Intent is simply a means of saying that any terms in the Letter of Intent would be 

reflected in the final agreement, not that the terms in the Letter of Intent were a 

complete and final expression of all material and essential terms. 

Section 5 alone topples LTT’s argument. Section 5 provides that “this Letter 

of Intent may be terminated by either Party, for any reason, with written notice to 

the other Party.” The Letter of Intent cannot have both required LTT and Lakeway 
54151498 34

Regional to proceed with the Lease assignment as outlined in Section 2 but have 

allowed either to terminate the Letter of Intent for any reason. Indeed, the only 

reasonable construction of the Letter of Intent, when each of its provisions is 

considered (not just those on which LTT now focuses) is that, up until the time at 

which the Lease would be assigned, either side could terminate the Letter of Intent, 

with certain obligations (e.g., confidentiality) surviving the termination. See

Sections 5, 10.7. Violating settled rules of contract construction, LTT would have 

this Court delete both Sections 5 and 10.7. Indeed, a basic rule of contract 

construction is that a court determines the parties’ intentions by considering the 

entire contract as a whole, harmonizing and giving effect to all the contract 

provisions so that none will be rendered meaningless. Moayedi v. Interstate 

35/Chisam Rd., L.P., 438 S.W.3d 1, 7 (Tex. 2014); see also Kachina Pipeline Co. 

v. Lillis, No. 13-0596, 2015 Tex. LEXIS 914, at *9 (Tex. Oct. 9, 2015) (courts 

must give effect to each contract provision).

Further evidencing the parties’ intent that Lakeway Regional would not be 

obligated to close is the standstill provision in Section 6. That Section preserves 

Berry’s and McDonald’s rights to continue working on their plans for operating the 

facility, and continue recruiting investors for equity positions in Lake Travis 

Hospital or other operational matters. If Lakeway Regional was committed to the 
54151498 35

Lease assignment under Section 2, then why would Berry and McDonald need 

those rights?

Multiple sections of the Letter of Intent thus establish that there was no 

enforceable agreement, only an agreement to agree. The Letter of Intent makes 

clear that there was merely a possible transaction with no obligation to close, that 

definitive agreements would still need to be drafted, and that the parties could back 

out at any time.

2. Essential terms are lacking. 

And then there is the insurmountable problem of missing essential terms 

from the Letter of Intent, including the following:

• Scope of Development of the Project. The stated objective of the 

Letter of Intent was “to indicate SDP’s interest in the Project and to 

establish the ground rules for the ongoing exchange of information 

between the Parties to facilitate the development of the Project 

[defined as Lake Travis Hospital serving as the initial campus for 

Lakeway Regional and later as a satellite campus] and the exchange 

of information required for such a process to succeed.” CR5697. The 

Letter of Intent contains no terms concerning the “development” of 

either facility at issue—Lake Travis Hospital and Lakeway Regional. 

Nor does it contain terms related to the “process” for such 

development.

• Compensation or Severance Costs. Section 2.2 refers to offering 

compensation or severance to certain executives affiliated with Lake 

Travis Hospital. The Letter of Intent contains no amounts for either 

the compensation or the severance. 

• Reimbursement Amount. The Letter of Intent refers to a 

reimbursement of “reasonable and documented costs” incurred by 

LTT’s principals, “including, without limitation” three types of 
54151498 36

expenses (employee benefits, planning/construction expenses, and 

interest expenses). The Letter of Intent does not name all the costs, 

list the amounts of any costs, or provide guidelines for determining 

what is a “reasonable” cost.12

• Appropriate Funding. A condition precedent under the Letter of 

Intent is Lakeway Regional being able to “obtain appropriate funding 

to allow for this expansion of the operation plans for LRMC.” The 

Letter of Intent does not define what amount of funding would be 

considered appropriate. Nor does it describe, in any way, the type of 

funding to be obtained. For example, if the transaction was to be 

owner-financed, there are no terms describing the financing to be 

provided by LTT.

Without these essential terms, there is no enforceable agreement. See Martin; 

DKH Homes.

LTT’s authorities are inapposite. McCalla v. Baker’s Campground, Inc., 

416 S.W.3d 416 (Tex. 2013) (per curiam) stands for the unremarkable proposition 

that “[a]greements to enter into future contracts are enforceable if they contain all 

material terms.” Id. at 418. Applying that principle, McCalla held that the parties’ 

post-verdict settlement agreement did in fact contain all the essential terms. 

McCalla put it like this: “[i]f a court was trying to enforce the settlement 

agreement, it could find all the terms necessary for its enforcement” in the 

agreement. Id. 

 12 LTT’s reliance on Fuqua v. Fuqua, 750 S.W.2d 238 (Tex. App.—Dallas 1988, writ denied), 

for the proposition that an agreement is enforceable even if a specific dollar amount is missing is 

misplaced. Id. at 245-46. Here, it was not just the amount of the costs that was uncertain, but 

also the types of costs that would be recoverable.
54151498 37

That hurdle is one LTT cannot clear. Unlike the settlement agreement in 

McCalla, a court here could not find all necessary terms in Section 2 for its 

enforcement. For example, it cannot be determined—from the face of the 

document—how much to order Lakeway Regional to refund to Berry and 

McDonald at the closing, or to whom Lakeway Regional was to offer employment. 

McCalla is also distinguishable because it did not contain a mutual termination 

provision as Section 5 does here. 

Nor does Karns v. Jalapeno Tree Holdings, L.L.C., 459 S.W.3d 683 (Tex. 

App.—El Paso 2015, pet. denied) advance LTT’s argument. As LTT notes, Karns

held that “if the LOI contains all essential terms as contemplated by the parties and 

the only remaining issue is formalization of the agreement or negotiation of 

ancillary terms, then the LOI may be an enforceable contract if the parties intended 

to be bound.’” Id. at 692. LTT again misses the issue. The issue is not what is 

required for an enforceable contract. Everyone agrees that a contract must contain 

all essential terms to be enforceable. The issue is whether the Letter of Intent 

contains all the essential terms. As explained above, it does not.

Notably, LTT does not expand on its discussion of Karns beyond reciting its 

holding, and with good reason: Karns reinforces that summary judgment against 

LTT on its Section 2 claim was required. Karns entered into a letter of intent to 

purchase the defendant’s Mexican restaurant chain. The Karns letter of intent had 
54151498 38

many of the same provisions as does the one here, including a provision indicating 

the mechanics and structure of the proposed transaction, an outline of the due 

diligence procedure, a remedies provision in the event of a breach, and a 

termination provision. Id. at 687-88. After the defendant terminated, Karns filed 

suit for breach of contract. Id. at 688. 

The trial court’s determination that the letter of intent’s term for sale was not 

legally enforceable was affirmed on appeal. Id. at 694. The appellate court began 

by noting that the letter of intent contained two types of covenants: those relating 

to the negotiation process and those relating to the anticipated sale. Id. at 692. It 

then held that the agreement contained an enforceable set of rules pertaining to the 

negotiation process, but not as to sale. Id. at 693-94. This is consistent with the 

order granting summary judgment on LTT’s Section 2 claim as the trial court held 

some terms enforceable (those that survived termination as set forth in Section 

10.7, concerning the negotiation process, and were the subject of the jury trial), and 

others unenforceable (those that outlined the terms for the potential Lease 

acquisition).13

 13 Karns also rejected LTT’s argument (Cross-App. Br. 36) that a remedies provision renders 

every term of a letter of intent enforceable. 459 S.W.3d at 692.
54151498 39

3. Section 2 is unenforceable for the separate reason that 

Section 3’s best efforts provision is prohibitively vague.

Yet another reason that Section 2 is unenforceable is found in Section 3, 

which contains a vague and unenforceable “best efforts” provision for satisfying 

the conditions precedent. The “best efforts” provision contains no guidelines by 

which to measure best efforts (nor is there evidence by which to measure the 

quality of any efforts). As courts have recognized, a “best efforts” provision is a 

“nebulous standard,” and to be enforceable, the provision must set a guideline 

against which best efforts can be measured. CKB & Assocs., Inc. v. Moore 

McCormack Petroleum, Inc., 809 S.W.2d 577, 581 (Tex. App.—Dallas 1991, writ 

denied) (a best efforts provision untethered to guidelines is unenforceable); see 

also Kevin M. Ehringer Enters., Inc. v. McData Servs. Corp., 646 F.3d 321, 327 

(5th Cir. 2011) (holding best efforts provision unenforceable for lack of 

guidelines); York Grp., Inc. v. York S., Inc., No. H-06-0262, 2006 WL 2883363, at 

*3 (S.D. Tex. Oct. 10, 2006) (holding best efforts provision unenforceable because 

there were no guidelines to satisfy the CKB standard).

LTT touches on best efforts (Cross-App. Br. 33), but only to recite the 

divide between enforceable and unenforceable best efforts provisions and then to 

conclude with the non-sequitur that Lakeway Regional and SDP have 

acknowledged that the noncircumvision and confidentiality sections of the Letter 
54151498 40

of Intent are binding. Id. at n.9. But nothing in either Section 6 or 9 provides 

guidelines for measuring compliance with a best efforts provision.

4. LTT’s remaining appellate arguments do not withstand 

scrutiny.

Equally unavailing is LTT’s effort to show that Section 2 is enforceable by 

identifying those terms that set forth Lakeway Regional’s obligations. Cross-App. 

Br. 35 n.10, 37-38 (collecting the terms regarding Lakeway Regional’s obligations 

to assume the Lease and to make certain payments). The inquiry is not whether the 

writing contains some terms or even some material terms but is instead whether the 

writing contains “all . . . material terms.” DKH Homes, at *2 (emphasis added). 

This principle is a corollary to the settled rule that courts are not in the contractwriting business. Bryant v. Clark, 358 S.W.2d 614, 616 (Tex. 1962) (affirming 

order denying request for specific performance where contract lacked essential 

terms). 

Similarly, LTT’s contention that the Letter of Intent reflects the parties’ 

intent to be bound (Cross-App. Br. 35) begs the question: bound to what? The 

answer, found in the Letter of Intent itself, is that the parties intended to be bound 

only to the agreed-to ground rules for negotiating a possible assignment of the 

Lease that would protect their respective interests during and after the Negotiation 

Period (i.e., certain confidential and standstill covenants). Sections 6, 9, 10.7. 

Those terms are binding. Karns, 459 S.W.3d at 692-93. 
54151498 41

But the Letter of Intent contains no binding agreement requiring Lakeway 

Regional to become the tenant under the Lease. Stating that it is binding does not 

make it so. Fid. Fin. Servs. of the Sw., Inc. v. Corilant Fin., L.P., 376 S.W.3d 253, 

255-58 (Tex. App.—Dallas 2012, pet. denied) (holding unenforceable a letter of 

intent even though it stated: “THIS LETTER OF INTENT IS A LEGALLY 

BINDING AND ENFORCEABLE AGREEMENT.”).

B. Unfulfilled conditions precedent foreclosed LTT’s Section 2 claim.

Section 3 of the Letter of Intent, titled Required Approvals for the Project, 

lists five separate conditions precedent to Lakeway Regional’s Section 2 obligation 

to acquire the Lease. Lakeway Regional and SDP moved for summary judgment 

on the basis that the evidence conclusively established that two conditions 

precedent were not satisfied and that LTT had no evidence to the contrary. 

CR5622-24, 6043-45. 

Lakeway Regional’s Board of Managers disapproved of the project. A 

condition precedent to Section 2 was “full and formal approval by the Board of 

Managers of LRMC.” CR5699. The summary judgment evidence conclusively 

established that a majority of Lakeway Regional’s Board of Managers disfavored 

the transaction. CR5840-42, 7721. LTT does not dispute that the required number 

of votes for “full and formal approval” were not there. Cross-App. Br. 41. 

Instead, LTT argues that the absence of required favorable votes does not matter 
54151498 42

because Lakeway Regional did not hold a formal vote on the transaction, or that 

there was at least a fact issue on whether defendants prevented the condition from 

occurring. Id. In so arguing, LTT attempts to transform a condition precedent that 

required Board approval into a provision that required a Board vote. That is 

simply not what the contract says.

LTT’s case, Clear Lake City Water Authority v. Friendswood Development 

Co., 344 S.W.3d 514 (Tex. App.—Houston [14th Dist.] 2011, pet. denied), does 

not advance its position. In Clear Lake, the defendant governmental entity agreed 

to buy water and sewer facilities from the plaintiff residential developer if voters 

approved a bond measure and the government agreed to include the bond measure 

on every bond election held subsequent to the parties’ agreement. Id. at 517. 

However, the government did not include the bond measure in each subsequent 

election. When the developer sued for breach of contract, the government 

defended on the basis that its obligation to buy the facilities was conditioned on 

voter approval, which had not occurred and alternatively, there was no breach 

because it could prove that the voters would have rejected the bonds. Id. at 518. 

The appellate court held that the government “cannot rely on a projected failure of

voter approval, which it prevented or made impossible by breaching its agreement 

to include the bond measure on every bond election held subsequent to the 
54151498 43

agreements, to escape its liability to purchase the Developers’ facilities.” Id. at 

520 (emphasis added). 

Clear Lake is not analogous to this case. First, in Clear Lake, the agreement 

required placing the bond measure on the ballot for an actual vote, whereas the 

Letter of Intent does not require a formal vote. Second, here, unlike Clear Lake, 

there was no projected voter disapproval but instead actual voter disapproval. 

CR5840-42, 6262-65.

The evidence conclusively proved the absence of HCN’s approval. 

Another condition precedent to Section 2 was “approval of HCN as landlord under 

the Lease to the assignment thereof.” CR5698. The summary judgment evidence 

conclusively established that HCN did not agree to the assignment of the Lease 

(and LTT presented no evidence that it had), a separate condition precedent to 

Lakeway Regional’s obligation under Section 2. CR5623, 5821, 5876-77, 6044.

LTT’s argument that Lakeway Regional and SDP “made no effort” to obtain 

HCN’s approval for the assignment of the existing Lease (Cross-App. Br. 40) is 

factually incorrect and beside the point. HCN’s representative testified that 

Lakeway Regional attempted to negotiate in good faith the replacement lease but 

the parties were nonetheless unable to come to an agreement. CR5874, 6296. 

HCN’s representative also testified that the LTT lease “would have been replaced 

by a new lease” between the landlord and Lakeway Regional. Id. 
54151498 44

LTT also relies on Sharifi v. Steen Automotive, L.L.C., 370 S.W.3d 126, 146 

(Tex. App.—Dallas 2012, no pet.) and II Deerfield Limited Partnership v. Henry 

Building, Inc., 41 S.W.3d 259, 265 (Tex. App.—San Antonio 2001, pet. denied), 

which hold that where a defendant makes a choice that prevents the condition 

precedent from being satisfied or interferes with performance of a condition 

precedent, it cannot avail itself of its own nonperformance. These cases do not 

apply here. It was not because of Lakeway Regional’s “choice” that HCN did not 

agree to the new lease and it did not interfere. As noted above, HCN’s testimony 

stands uncontroverted that Lakeway Regional acted in good faith in attempting to 

reach an agreement on terms of a new lease. CR5623, 5821, 5876-77, 6044.

Simply put, summary judgment was proper because LTT failed to satisfy 

these conditions precedent, and further failed to present probative evidence that 

these conditions were satisfied or that it was excused from satisfying them. 

C. SDP cannot be liable under Section 2 because it was not a party to 

the Letter of Intent.

In addition to moving for summary judgment on the same grounds as 

Lakeway Regional, SDP also moved for summary judgment on LTT’s Section 2 

claim on the basis that, as a non-party to the Letter of Intent, it could not be held 

liable for breach. CR6027, 6035-38.14

 14 This argument was styled as, “The Court should grant summary judgment on LTT’s claim for 

breach of the LOI because as a disclosed agent, SDP has no liability under the LOI.” CR6035.
54151498 45

The trial court granted summary judgment for SDP on LTT’s Section 2 

claim, stating simply, “The Court hereby GRANTS the Motions only with respect 

to Plaintiff’s claim that LRMC and SDP breached Section 2 of the Letter of 

Intent.” CR12266. Because the trial court’s order did not identify a particular 

basis, to defeat the summary judgment on appeal, LTT must overcome each 

independent basis supporting the granting of summary judgment. FM Props. 

Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000); Star-Telegram, 

915 S.W.2d at 473; see also Ramco Oil & Gas Ltd. v. Anglo-Dutch (Tenge) L.L.C., 

207 S.W.3d 801, 826-27 (Tex. App.—Houston [14th Dist.] 2006, pet. denied). 

However, in its brief, LTT did not address the independent basis for summary 

judgment in SDP’s favor—that SDP is not a party to the Letter of Intent. Because 

LTT did not address this independent basis, the summary judgment as to SDP on 

LTT’s Section 2 claim must be affirmed. Star-Telegram, 915 S.W.2d at 473.

Summary judgment on LTT’s Section 2 claim should be affirmed.

III. The Trial Court Correctly Sustained Lakeway Regional’s and SDP’s 

Objections to LTT’s Summary Judgment Evidence.

The trial court did not abuse its discretion in sustaining certain objections to 

LTT’s summary judgment evidence. But even if the Court were to find otherwise, 

the reintroduction of the excluded evidence would not impact the arguments raised 

above.
54151498 46

A. The trial court did not abuse its discretion in sustaining 

Objection 2.

Lakeway Regional and SDP objected to LTT’s summary judgment evidence 

on the basis that LTT cited only 189 pages of the 2,033-page Project File among

numerous other general references to the entire Project File, which is improper 

when responding to a no-evidence summary judgment motion. CR11487 

(objecting on the basis that “[g]eneral references to voluminous records are not 

proper responses to a no-evidence motion for summary judgment”). The trial court 

properly exercised its discretion when it sustained this objection. CR12261; HK 

Partners, Inc. v. Power Computing Corp., No. 03-98-00124-CV, 1999 Tex. App. 

LEXIS 3981, at *6 (Tex. App.—Austin May 27, 1999, no pet.) (non-movant failed 

to raise a fact issue where it attached over 900 pages of material to its responses 

but failed to direct the trial court to specific evidence); see also Nguyen, 404 

S.W.3d at 776-77.

LTT claims that the trial court erred because its amended summary judgment 

responses cited about 775 individual pages within the Project File, but again, those 

references directed the trial court to where it might find evidence of “confidential, 

proprietary and trade secret information” (CR11813-14, 11919-20 (emphasis 

added)), requiring the trial court to sift through those pages to see which, if any, of 
54151498 47

those pages contained information about a trade secret as distinct from information 

that qualified as confidential or proprietary under the terms of the Letter of Intent.15 

LTT next claims that the trial court could have looked to Berry’s declaration 

because he “provided detailed testimony on the contents of the Project File.” But 

as noted above, Berry referenced the entire Bates range of the Project File, 

CR7606, so he too failed to direct the trial court to specific portions in the Project 

File that constituted a trade secret. (As noted supra, Berry did not supplement his 

declaration in support of LTT’s amended summary judgment responses.) Thus, 

even assuming the trial court was required to look to one exhibit to find its way to 

another exhibit, which it was not required to do, the trial court would still not have 

gotten to the evidence that would have created a fact issue that a trade secret exists 

(even assuming it exists). See supra at Section I.16

 15 Because Lakeway Regional and SDP moved for summary judgment on LTT’s claim that they 

had breached the Letter of Intent by disclosing confidential and proprietary information as 

defined in the Letter of Intent and LTT’s separate misappropriation claim, it was incumbent upon 

LTT to identify which documents and information were confidential and proprietary under the 

Letter of Intent as distinct from a trade secret under the common law. CR171-72, 5608, 6027.

16 LTT’s reliance on Hinojosa v. Columbia/St. David’s Healthcare Sys., L.P., 106 S.W.3d 380 

(Tex. App.—Austin 2003, no pet.), is misplaced as that case did not involve voluminous 

exhibits, a distinction courts have found important. E.g., Ramirez v. Colonial Freight 

Warehouse Co., 434 S.W.3d 244, 250-51 (Tex. App.—Houston [1st Dist.] 2014, pet. denied); 

Nguyen, 404 S.W.3d 777 n.4; HK Partners, 1999 Tex. App. LEXIS 3981, at *6.
54151498 48

B. The trial court did not abuse its discretion in sustaining 

Objection 4.

Lakeway Regional and SDP objected to two sentences in paragraph 5 of 

Berry’s Declaration on the basis that they were conclusory. The two sentences 

were that LTT “owned the confidential, proprietary and trade secret information 

contained in the Project File” and that he and McDonald “had an ownership 

interest in the information as well, and were authorized to disclose it pursuant to 

the [Letter of Intent] on behalf of LTT.” CR11488. Lakeway Regional and SDP 

complained that Berry did not provide any facts regarding LTT’s “purported 

acquisition, development, or ownership of any of the particular documents

contained in the Project File.” Id. (emphasis added). They further objected that 

Berry’s statement of ownership was necessarily conclusory as many of the 

documents in the Project File were not trade secrets but were documents created by 

Lakeway Regional and SDP or correspondence between them and third parties. 

CR11488-49. As noted above, the third document in the Project File (CR8682) is 

an email from a third party to Alexander (SDP’s CEO) and Sossi that was sent 

before SDP and Lakeway Regional signed any confidentiality agreement, and that 

email contains no information that could possibly be construed as a trade secret. 

Thus, Berry could not have truthfully stated under oath that LTT owned documents 

that were created by third parties. The trial court properly exercised its discretion 

in sustaining this objection. CR12261.
54151498 49

LTT argues that Berry’s statement of ownership was not conclusory because 

he detailed the time, effort, and expense that went into developing the trade secrets 

and how it was that he came to have personal knowledge. But this is not the point. 

When responding to the no-evidence motions, LTT was required to show the trial 

court particular evidence of a “trade secret.” It is improper to refer to hundreds of 

pages of documents and discuss broad categories of information allegedly 

qualifying as a trade secret, but never match a document to the information 

description. Game Sys., Inc. v. Forbes Hutton Leasing, Inc., 02-09-00051-CV, 

2011 WL 2119672, at *23 (Tex. App.—Fort Worth May 26, 2011, no pet.) (mem. 

op.) (holding that a statement that certain information “constitutes a trade secret” is 

not competent summary judgment evidence). Yet that is precisely what happened 

here.

Because Berry never identified specific portions of the Project File that were 

owned by LTT, the trial court properly concluded that his statements of ownership 

were necessarily high level and conclusory.

PRAYER

Cross-Appellees Lakeway Regional Medical Center LLC and Surgical 

Development Partners, LLC request that the Court affirm the trial court’s (1) order 

granting summary judgment and (2) order sustaining their objections to LTT’s 
54151498 50

summary judgment evidence. They ask for all other relief to which they may be 

justly entitled. 

Respectfully submitted,

NORTON ROSE FULBRIGHT US LLP

By: /s/ Jeff Cody

Jeff Cody

State Bar No. 04468960

jeff.cody@nortonrosefulbright.com

Barton W. Cox

State Bar No. 2406508

beau.cox@nortonrosefulbright.com

James V. Leito IV

State Bar No. 24054950

james.leito@nortonrosefulbright.com

2200 Ross Avenue, Suite 3600

Dallas, TX 75201-7932

Telephone: (214) 855-8000

Telecopier: (214) 855-8200

and

NORTON ROSE FULBRIGHT US LLP

Joy M. Soloway

State Bar No. 18838700

joy.soloway@nortonrosefulbright.com

1301 McKinney, Suite 5100 

Houston, Texas 77010 

Telephone: (713) 651-5151

Telecopier: (713) 651-5246

Counsel for Appellant/Cross-Appellee, 

Lakeway Regional Medical Center, LLC

and
54151498 51

WRIGHT & CLOSE, LLP

Jessica Z. Barger 

barger@wrightclose.com

State Bar No. 24032706

Raffi O. Melkonian

melkonian@wrightclose.com

State Bar No. 24090587

One Riverway, Suite 2200

Houston, TX 77056

Telephone: (713) 572-4321

Telecopier: (713) 572-4320

Counsel for Appellant/Cross-Appellee 

Surgical Development Partners, LLC

CERTIFICATE OF WORD COMPLIANCE

Pursuant to Texas Rule of Appellate Procedure 9.4(i)(3), the undersigned 

counsel – in reliance upon the word count of the computer program used to prepare 

this document – certifies that this brief contains 11,742 words, excluding the words 

that need not be counted under Texas Rule of Appellate Procedure 9.4(i)(1). 

/s/ Joy M. Soloway 

JOY M. SOLOWAY
54151498 52

CERTIFICATE OF SERVICE

I hereby certify that on the 20th day of November 2015, Appellants/CrossAppellees served a copy of this Cross-Appellees’ Brief by electronic service (via 

FileTime) and email upon the following counsel of record: 

Ms. Jane Webre (jwebre@scottdoug.com)

Mr. S. Abraham Kuczaj III (akuczaj@scottdoug.com)

Ms. Paige A. Amstutz (pamstutz@scottdoug.com)

Mr. Steven J. Wingard (swingard@scottdoug.com)

SCOTT, DOUGLASS & MCCONNICO, L.L.P.

One American Center

303 Colorado Street, Suite 2400

Austin, TX 78701

Counsel for Appellee/Cross-Appellant, 

Lake Travis Transitional LTCH, LLC

n/k/a Lake Travis Specialty Hospital, LLC

Mr. Robert Bragalone (bbragalone@gordonrees.com)

Mr. B. Ryan Fellman (rfellman@gordonrees.com)

Mr. Steven Lawson (slawson@gordonrees.com)

GORDON & REES LLP

2100 Ross Avenue, Suite 2800

Dallas, TX 75201

Counsel for Appellees Brennan, Manna & 

Diamond, LLC and Frank T. Sossi

/s/ Joy M. Soloway

JOY M. SOLOWAY