Lakeway Regional Medical Center, LLC and Surgical Development Partners, LLC// Lake Travis Transitional LTCH, LLC N/K/A Lake Travis Specialty Hospital, LLC v. Lake Travis Transitional LTCH, LLC N/K/A Lake Travis Specialty Hospital, LLC// Lakeway Regional Medical Center, LLC Surgical Development Partners, LLC Brennan, Manna, & Diamond, LLC And Frank T. Sossi

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