54277353 1 

No. 03-15-00025-CV

In The Court of Appeals

For The Third Court of Appeals 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

ON APPEAL 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 OPPOSED (IN PART) 

MOTION TO FILE REPLY BRIEF CONTAINING 7,500 WORDS

TO THE HONORABLE COURT OF APPEALS: 

Pursuant to Texas Rules of Appellate Procedure 9.4(i)(4) and 10.1, 

Appellants and Cross-Appellees Lakeway Regional Medical Center, LLC 

(“LRMC”) and Surgical Development Partners, LLC (“SDP”) file this Motion to 

File a Reply Brief containing 7,500 words (“Motion”), and would show the 

following:

ACCEPTED

03-15-00025-CV

8055222

THIRD COURT OF APPEALS

AUSTIN, TEXAS

12/2/2015 2:30:42 PM

JEFFREY D. KYLE

CLERK

 FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 12/2/2015 2:30:42 PM JEFFREY D. KYLE Clerk
54277353 2

RELIEF REQUESTED

LRMC’s and SDP’s Reply Brief is currently due on Monday, January 11, 

2016. LRMC and SDP seek to file a Reply Brief containing 7,500 words, which is 

the amount of words generally allowed for a reply brief. Tex. R. App. P. 

9.4(i)(2)(C). A reply brief containing 7,500 words will put LRMC and SDP in 

excess of the 27,000-word limitation contained in Texas Rule of Appellate 

Procedure 9.4(i)(2)(B). Thus, pursuant to Texas Rule of Appellate Procedure 

9.4(i)(4), LRMC and SDP request a word extension allowing them to file a 

joint Reply Brief containing 7,500 words. This Motion is opposed in part. 

REASONS FOR REQUEST 

In support of this request, LRMC and SDP show the following:

1. The judgment in favor of Lake Travis Transitional LTCH, LLC n/k/a 

Lake Travis Specialty Hospital, LLC (“LTT”) exceeds $11 million. LRMC, SDP 

and LTT each appealed the trial court’s judgment. 

2. On September 21, 2015, LRMC and SDP filed a joint Opening 

Appellants’ Brief, which raised the following errors, among others: (A) neither 

legally nor factually sufficient evidence supported the jury’s findings that (i) the 

actions of either LRMC or SDP caused the damages awarded by the jury, (ii) $7.9 

million was the loss in LTT’s value as a consequence of LRMC’s and/or SDP’s 

failure to comply with the letter of intent, (iii) $790,000 was the loss in fair market 
54277353 3

value of LTT’s confidential information as a consequence of LRMC’s and/or 

SDP’s failure to comply with the letter of intent; and (iv) SDP breached the letter 

of intent; and (B) Casteel and other charge errors. See Opening Appellants’ Brief 

at xv-xvii (Issues Presented by Appellants) (courtesy copy appended at Tab A). 

LRMC’s and SDP’s Opening Appellants’ Brief contained 14,898 words.

3. On September 21, 2015, LTT filed its Cross-Appellant’s Brief and 

raised three issues. LTT complained of the trial court’s orders granting summary 

judgment to LRMC and SDP and sustaining objections to LTT’s summary 

judgment evidence. See Tab B. LTT’s Cross-Appellants’ Brief contained 12,736 

words.

4. On November 20, 2015, LRMC and SDP filed a joint CrossAppellees’ Brief, responding to LTT’s Cross-Appellant’s brief. LRMC’s and 

SDP’s Cross-Appellees’ Brief contained 11,742 words. 

5. On November 20, 2015, LTT filed its Appellee’s Brief. LTT’s 

Appellee’s Brief contains 14,370 words.

6. The total number of words used by LRMC and SDP in their two briefs 

is 26,640. (LTT’s two briefs total 27,106 words.) 

7. Texas Rule of Appellate Procedure 9.4(i)(2)(B) provides that the total 

briefing by a party not exceed 27,000 words. However, given the amount of the 

judgment and number of issues that have been raised, and to facilitate this Court’s 
54277353 4

review of the issues raised in their appeal, LRMC and SDP respectfully request 

that they be granted permission to file a joint Reply Brief containing 7,500 words.

8. Because Lakeway and SDP each had the right, under the Texas Rules 

of Appellate Procedure, to file separate briefs, it would only be fair and just to 

grant them this relief. Otherwise, they would be unfairly penalized for filing a 

joint brief, which is contrary to the rules. Id. (“In a civil case in the court of 

appeals, the aggregate of all briefs filed by a party must not exceed 27,000 words 

if computer-generated . . . .”) (emphasis added). Thus, the relief requested herein

is consistent with the Rules. 

RESPONSE TO LTT’S PARTIAL OPPOSITION

This Motion is opposed in part. By separate motion, LTT will be asking the 

Court for permission to file a reply brief containing 5,000 words and stating that it 

is agreeable to LRMC and SDP filing a joint reply brief that also contains 5,000 

words. However, limiting LRMC and SDP to 5,000 words for their joint Reply 

Brief would not be fair or just for the following two reasons. First, LRMC’s and 

SDP’s Reply Brief will necessarily cover more ground than LTT’s reply brief 

because LRMC’s and SDP’s Opening Appellants’ Brief raised many more issues 

than did LTT’s Cross-Appellants’ brief. (Compare Tab A with Tab B.) Second, 

LRMC and SDP each had the right to file briefs containing 27,000 words, or 

collectively 54,000 words. By this Motion, they are asking for the right to file 
54277353 5

briefs totaling less than 34,500 words. They should not be penalized for filing 

joint briefs. If this Motion were denied, the Court would in effect be penalizing 

them for filing joint briefs, which is contrary to the rules. 

All facts recited in this Motion are within the personal knowledge of the 

counsel signing this Motion, so that no verification is necessary under Texas Rule 

of Appellate Procedure 10.2.

CONCLUSION

Pursuant to Rule 9.4(i)(2)(B) of the Texas Rules of Appellate Procedure, 

Appellants/Cross-Appellees Lakeway Regional Medical Center, LLC and Surgical 

Development Partners, LLC ask that this Court grant this Motion and grant them 

permission to file a joint Reply Brief containing 7,500 words.
54277353 6

Respectfully submitted,

NORTON ROSE FULBRIGHT US LLP

By: /s/ Joy M. Soloway

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, TX 77010 

Telephone: (713) 651-5151

Telecopier: (713) 651-5246

Counsel for Appellant/Cross-Appellee 

Lakeway Regional Medical Center, LLC

and
54277353 7

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 CONFERENCE

I hereby certify that I have conferred with counsel for Appellee/CrossAppellant Lake Travis Transitional LTCH, LLC, who indicates that 

Appellee/Cross-Appellant is opposed in part to this Motion. I have also conferred 

with counsel for Attorney Appellees Brennan, Manna & Diamond LLC and 

Frank T. Sossi, who indicates that Attorney Appellees are unopposed to this 

Motion. 

/s/ Joy M. Soloway

JOY M. SOLOWAY
54277353 8

CERTIFICATE OF SERVICE

I hereby certify that on the 2nd day of December 2015, Appellants served a 

copy of this motion by electronic service (via FileTime) upon the following 

counsel of record: 

Ms. Jane M.N. 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, LLP

303 Colorado, Suite 2400

Austin, TX 78701

Counsel for Appellee/Cross-Appellant Lake Travis Transitional LTCH, 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
TAB A
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 

LAKEWAY REGIONAL MEDICAL CENTER, LLC’S AND SURGICAL 

DEVELOPMENT PARTNERS, LLC’S 

OPENING APPELLANTS’ 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

7017794

THIRD COURT OF APPEALS

AUSTIN, TEXAS

9/21/2015 2:41:41 PM

JEFFREY D. KYLE

CLERK

 FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 9/21/2015 2:41:41 PM JEFFREY D. KYLE Clerk
53883200 xv

ISSUES PRESENTED BY APPELLANTS

1. Legal and factual sufficiency challenges. Should the trial court’s judgment 

against Lakeway Regional and SDP be reversed because there is not legally 

or factually sufficient evidence to support this judgment on at least one of 

the following grounds?

(a) LTT argued that Appellants’ communications to HUD about LTT 

caused HUD’s decision to insure Lakeway Regional’s loan and later 

defend that decision, thus permitting Lakeway Regional to beat LTT 

to market. When a causation theory hinges on a third party’s decision, 

the Texas Supreme Court requires evidence of why the decision was 

made. No witness testified and no exhibits support why HUD decided 

to insure the loan or defend that decision or what information HUD 

considered when making those decisions. Was there legally or 

factually insufficient evidence that Appellants caused, under that or 

any other theory or basis, the damages claimed by LTT or awarded by 

the jury in answers to Questions 6(1) and 6(3)? 

(b) Was the evidence legally or factually insufficient to support the jury’s 

damages awards of $790,000 and $7.9 million in answer to Questions 

6(1) and (3), and are the awards excessive?

(i) LTT is an assignee of rights under the Letter of Intent. An 

assignee can only recover damages sustained by the assignor. 

LTT only put on evidence of its own damages, however. No 

witness testified about and no exhibit addresses the damages 

sustained by the assignors. Was the evidence legally or 

factually insufficient to support the damages awards to LTT, 

the assignee?

(ii) LTT was awarded $7.9 million for its loss in fair market value. 

The law requires that the damages award be linked to evidence, 

that loss in value be proven with reasonable certainty, and that 

the evidence of the amount of the loss not be conclusory or 

speculative. LTT’s damages evidence failed on all counts. For 

example, no witness testified and no exhibit supports that LTT 

sustained a loss in value of $7.9 million, however, and the only 

evidence of its lost value was a $13.8 million loss, which was 

not fully explained to the jury. Was the evidence legally or 

factually insufficient to support the $7.9 million award?
53883200 xvi

(iii) To recover the loss in fair market value of LTT, that loss had to 

be a foreseeable consequence of breaching the Letter of Intent. 

The Letter of Intent does not describe what consequential 

damages were foreseeable, and no witness testified that anyone 

contemplated that the value of LTT (a non-party to the Letter of 

Intent) would be diminished or rendered worthless by a breach. 

Was the evidence legally or factually insufficient to establish 

that the loss in the fair market value of LTT was foreseeable?

(iv) The jury awarded LTT $790,000 in loss in fair market value of 

its confidential information. Again, a damage award must be 

linked to the evidence. No witness testified that the fair market 

value of LTT’s confidential information was diminished by 

$790,000, and no exhibit supports this figure. The only 

evidence of this loss was $7.9 million. Was the evidence 

legally or factually insufficient to support the jury’s $790,000 

award? 

2. Charge error. Should this judgment be reversed and remanded for a new 

trial because of one of the following errors in the charge?

(a) Under Casteel, a liability question cannot commingle valid with 

invalid liability theories. Appellants obtained summary judgment on 

LTT’s claim for breach of Section 2 of the Letter of Intent. The trial 

court, over Appellants’ objection, submitted LTT’s breach of contract 

claim to the jury using broad-form submission, which encompassed a 

breach of Section 2. Did the trial court err by submitting a broad-form 

liability question in Question 1? 

(b) Under Casteel, a damages question cannot be predicated on a finding 

of an invalid liability theory. The trial court, over Appellants’ 

objection, submitted the damages question without asking the jury to 

award damages connected to breaches of specific provisions of the 

Letter of Intent. Did the trial court err in how it submitted the 

damages question in Question 6?

(c) Similarly, the trial court refused to instruct the jury that in deciding 

liability, the jury had to find (among other things) a valid, enforceable 

agreement between the parties. This instruction would have limited 

the jury to the enforceable sections of Letter of Intent and not 
53883200 xvii

encompassed Section 2, which was unenforceable. Did the trial court 

err in refusing this instruction?

3. Matter of law, legal sufficiency, and factual sufficiency challenges by SDP 

only. 

(a) As a matter of law, an agent is not contractually liable for the acts of 

its disclosed principal. SDP owed no duty under the Letter of Intent. 

The Letter of Intent expressly identified SDP as the agent of Lakeway 

Regional, but the judgment imposes liability on SDP. Should the 

judgment against SDP be reversed because LTT’s breach of contract 

claim against SDP fails as a matter of law, rendering the jury’s answer 

to Question 1(b) immaterial? 

(b) LTT argued that Appellants’ communications about LTT to HUD 

caused LTT’s injuries. The only HUD witness testified that he 

understood that the communications about LTT were sent on behalf of 

Lakeway Regional. No witness testified that SDP sent any 

communication to HUD about LTT that caused HUD to insure 

Lakeway Regional’s loan or later defend that decision. Was there 

legally or factually insufficient evidence that SDP breached any 

alleged duty that caused injury to LTT?

4. Charge error challenges by SDP only. The parties offered conflicting 

testimony about whether SDP was a party to the Letter of Intent. The trial 

court refused to submit a question asking whether SDP was a party or to 

instruct the jury that it had to find that SDP was a party to the Letter of 

Intent before it could find that SDP breached the Letter of Intent. Did the 

trial court err in refusing this question and instruction?

5. Attorneys’ fees. The parties stipulated, subject to their right to appeal, to the 

amount of reasonable attorneys’ fees to award against Appellants, which the 

trial court awarded. Because the jury’s liability and damages findings are 

not supported by legally or factually sufficient evidence, should the award of 

attorneys’ fees be vacated?
TAB B
No. 03-15-00025-CV 

______________________________________________ 

IN THE COURT OF APPEALS

FOR THE THIRD DISTRICT OF TEXAS

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

___________________________________________

BRIEF OF CROSS-APPELLANT

LAKE TRAVIS TRANSITIONAL LTCH, LLC N/K/A 

LAKE TRAVIS SPECIALTY HOSPITAL, LLC (“LTT”)

___________________________________________

Jane M.N. Webre

S. Abraham Kuczaj, III

Robyn B. Hargrove

SCOTT DOUGLASS 

& MCCONNICO LLP

 303 Colorado Street, 24th Floor

 Austin, TX 78701

 (512) 495-6300

 (512) 495-6399 Fax

 COUNSEL FOR LTT

ORAL ARGUMENT REQUESTED

1226029

ACCEPTED

03-15-00025-CV

7016623

THIRD COURT OF APPEALS

AUSTIN, TEXAS

9/21/2015 2:13:08 PM

JEFFREY D. KYLE

CLERK

 FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 9/21/2015 2:13:08 PM JEFFREY D. KYLE Clerk
ISSUES ON CROSS-APPEAL

1. Did the trial court err in granting summary judgment as to LTT’s claims for 

misappropriation of trade secrets? 

2. Did the trial court err in granting summary judgment as to LTT’s claim 

against the Hospital Defendants for breach of section 2 of the Letter of Intent? 

3. Did the trial court abuse its discretion in excluding some of LTT’s summary 

judgment evidence? 

xiv

1245899