Court Opinion

ID: 4075735
Source: CourtListenerOpinion
Date Created: 2016-09-30 06:26:50.286348+00
Date Added: 2024-06-11T14:05:37.730167
License: Public Domain

ACCEPTED
                                                                                               03-15-00025-CV
                                                                                                       8055222
                                                                                    THIRD COURT OF APPEALS
                                                                                               AUSTIN, TEXAS
                                                                                          12/2/2015 2:30:42 PM
                                                                                             JEFFREY D. KYLE
                                                                                                        CLERK
                                   No. 03-15-00025-CV

                                                                         FILED IN
                               In The Court of Appeals            3rd COURT OF APPEALS
                                                                      AUSTIN, TEXAS
                      For The Third Court of Appeals        District
                                                                  12/2/2015 2:30:42 PM
                                                                     JEFFREY D. KYLE
                                     Austin, Texas                        Clerk

 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:

54277353                                     1
                                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                                   2
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 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 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                                    3
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                                    4
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                                   5
           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     6
                                     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/Cross-
Appellant 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                               7
                            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

54277353                                   8
TAB A
                                                                                                    ACCEPTED
                                                                                                03-15-00025-CV
                                                                                                        7017794
                                                                                     THIRD COURT OF APPEALS
                                                                                                AUSTIN, TEXAS
                                                                                           9/21/2015 2:41:41 PM
                                                                                              JEFFREY D. KYLE
                                                                                                         CLERK
                                   No. 03-15-00025-CV

                               Texas Court of Appeals                       FILED IN
                                                                     3rd COURT OF APPEALS
                                   Third District                        AUSTIN, TEXAS

                                  Austin, Texas                      9/21/2015 2:41:41 PM
                                                                       JEFFREY D. KYLE
                                                                             Clerk

 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                   NORTON ROSE FULBRIGHT US LLP
                     Jeff Cody                                  Joy M. Soloway
             State Bar No. 04468960                         State Bar No. 18838700
       jeff.cody@nortonrosefulbright.com             joy.soloway@nortonrosefulbright.com
                  Barton W. Cox                           1301 McKinney, Suite 5100
              State Bar No. 2406508                         Houston, TX 77010-3095
       beau.cox@nortonrosefulbright.com                 Telephone:      (713) 651-5151
                James V. Leito IV                       Telecopier:     (713) 651-5246
             State Bar No. 24054950
      james.leito@nortonrosefulbright.com                 WRIGHT & CLOSE, LLP
          2200 Ross Avenue, Suite 3600                         Jessica Z. Barger
              Dallas, TX 75201-7932                         State Bar No. 24032706
         Telephone:        (214) 855-8000                  barger@wrightclose.com
         Telecopier:       (214) 855-8200                     Raffi O. Melkonian
                                                            State Bar No. 24090587
                                                         melkonian@wrightclose.com
                                                          One Riverway, Suite 2200
                                                              Houston, TX 77056
Counsel for Appellants/Cross Appellees                  Telephone:      (713) 572-4321
ORAL ARGUMENT REQUESTED                                 Telecopier:     (713) 572-4320
                        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                                     xv
                 (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                                      xvi
                 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?

53883200                                      xvii
TAB B
                                                                                       ACCEPTED
                                                                                   03-15-00025-CV
                                                                                           7016623
                                                                        THIRD COURT OF APPEALS
                                                                                   AUSTIN, TEXAS
                                                                              9/21/2015 2:13:08 PM
                                                                                 JEFFREY D. KYLE
                                                                                            CLERK
                        No. 03-15-00025-CV
          ______________________________________________
                                                        FILED IN
                                                  3rd COURT OF APPEALS
                    IN THE COURT OF APPEALS           AUSTIN, TEXAS
                FOR THE THIRD DISTRICT OF TEXAS 9/21/2015 2:13:08 PM
                          AUSTIN, TEXAS             JEFFREY D. KYLE
          ______________________________________________Clerk

    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
                             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