54277353 1 No. 03

- 15

- 00025

- CV



### In The Court of Appeals **For The Third Court of Appeals District Austin, Texas** 

A PPELLANTS , L AKEWAY R EGIONAL M EDICAL C ENTER , LLC AND S URGICAL D EVELOPMENT P ARTNERS , LLC// C ROSS -A PPELLANT , L AKE T RAVIS T RANSITIONAL LTCH, LLC N / K / A L AKE T RAVIS S PECIALTY H OSPITAL , LLC

v. A PPELLEES , L AKE T RAVIS T RANSITIONAL LTCH, LLC N / K / A L AKE T RAVIS S PECIALTY H OSPITAL , LLC// C ROSS -A PPELLEES , L AKEWAY R EGIONAL M EDICAL C ENTER , LLC, S URGICAL D EVELOPMENT P ARTNERS , LLC, B RENNAN , M ANNA , & D IAMOND , LLC AND F RANK T. S OSSI

O N A PPEAL F ROM T HE 345 TH J UDICIAL D ISTRICT C OURT , T RAVIS C OUNTY , T EXAS C AUSE N O

. D-1- GN -12-000983

APPELLANTS LAKEWAY R EGIONAL MEDICAL CENTER, LLC’S AND

SURGICAL DEVELOPMENT PART NERS, LLC’S OPPOSED (IN PART) MOTION TO FILE REPLY BRIEF CONTAINING 7,5 00 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

(“LRM C”) 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

CLERK54277353 2 RELIEF REQUESTED

LRMC’s and SDP’s Re ply 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 R eply 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 market54277353 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 err ors. 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

rai sed 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 Cross

Appellees’ 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 1 4,370 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. H owever, given the amount of the

judgment and number of issues that have been raised, and to facilitate this Court’s54277353 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 c ontaining 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 m ore 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 word s, or

collectively 54,000 words. By this Motion, they are asking for the right to file54277353 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 join t Reply Brief containing 7,500 words.54277353 6 Respectfully submitted,

NORTON ROSE FULBRIGH T 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 FULBRIGH T US LLP Joy M. Soloway State Bar No. 18 838700 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

and54277353 7 WRIGHT & CLOSE, LLP Jessica Z. B arger 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 CONFE RENCE
I hereby certify that I have conferred with counsel for Appellee/Cross

Appellant Lake Travis Transitional LTCH, LLC, who indicates that Appellee/Cross

- Appellant is oppose d 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. SOLOWAY54277353 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 (akuc zaj@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, L LC

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, L LC and Frank T. Sossi

/s/ Joy M. Soloway JOY M. SOLOWAY

# TAB ANo. 03-15-00025-CV



### Texas Court of Appeals **Third District Austin, Texas** 

A PPELLANTS , L AKEWAY R EGIONAL M EDICAL C ENTER , LLC AND S URGICAL D EVELOPMENT P ARTNERS , LLC// C ROSS -A PPELLANT , L AKE T RAVIS T RANSITIONAL LTCH, LLC N / K / A L AKE T RAVIS S PECIALTY H OSPITAL , LLC

v. A PPELLEES , L AKE T RAVIS T RANSITIONAL LTCH, LLC N / K / A L AKE T RAVIS S PECIALTY H OSPITAL , LLC// C ROSS -A PPELLEES , L AKEWAY R EGIONAL M EDICAL C ENTER , LLC, S URGICAL D EVELOPMENT P ARTNERS , LLC, B RENNAN , M ANNA , & D IAMOND , LLC AND F RANK T. S OSSI

F ROM THE 345 TH J UDICIAL D ISTRICT C OURT , T RAVIS C OUNTY , T EXAS C AUSE N O

. 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 FULBRIGH T 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

CLERK53883200 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 caus ation 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 consid ered 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 evid ence 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 recov er 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 dam ages 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 breachin g 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 worth less 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 a ward 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 leg ally 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

- for m 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 co urt, 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 L etter of Intent and not53883200 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 contr actually 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 re fusing 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 BNo. 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// CROS S- 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 TRAVI S SPECIALTY HOSPITAL, LLC// CROSS

- APPELLEES, LAKEWAY REGIONAL MEDICAL CENTER, LLC, SURGICAL D EVELOPMENT 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

CLERKISSUES 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

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