PrevMED, Inc. et al v. First Continental Life & Accident Insurance Co. et al
Filing
101
MEMORANDUM OPINION AND ORDER denying in part and mooting in part 71 MOTION to Strike Expert Designations as Untimely, denying 79 MOTION to Exclude Expert Testimony and Report of Richard J. Ostiller, denying 81 MOTION to Exclude Expert Testimony of Jeffrey A. Compton and Brief in Support, mooting 97 MOTION to Substitute Affidavit of Keith Walls, granting in part and denying in part 80 MOTION for Summary Judgment , granting 82 MOTION to Exclude Expert T estimony of Jose Daniel Saenz and Brief in Support, denying as moot 83 MOTION for Trial Setting (Motions in Limine due by 3/10/2017. Responses due by 3/24/2017. Joint Pretrial Order due by 4/7/2017. Docket Call set for 4/14/2017 at 03:00 PM in Courtroom 9B before Judge Sim Lake.) (Signed by Judge Sim Lake) Parties notified. (aboyd, 4)
United States District Court
Southern District of Texas
ENTERED
February 28, 2017
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
PREVMED, INC.; MID-AMERICA
HEALTH, INC.; and MID-AMERICA
PROFESSIONAL GROUP, P.C.,
§
§
§
§
§
§
§
§
Plaintiffs,
v.
MNM-1997, INC. d/b/a ORAQUEST
DENTAL PLANS; FIRST CONTINENTAL
LIFE & ACCIDENT INSURANCE CO.
d/b/a FCL DENTAL; JAMES AMOS
TAYLOR; and SEUNG YOP "PAUL"
KWAUK,
Defendants.
David J. Bradley, Clerk
CIVIL ACTION NO. H-15-2856
§
§
§
§
§
§
§
§
MEMORANDUM OPINION AND ORDER
Plaintiffs,
Inc.
PrevMED,
Inc.
("PrevMED"),
Mid-America Health,
( "MAH") , and Mid-America Professional Group,
P. C.
( "MAPG") ,
have brought suit against defendants, MNM-1997, Inc. d/b/a Oraquest
Dental
Plans
Insurance
Co.
("Taylor") ,
("OraQuest"),
d/b/a
FCL
and Seung Yop
First
Dental
"Paul"
Continental
("FCL"),
Kwauk
Life
James
( "Kwauk") ,
& Accident
Amos
Taylor
arising from
termination of a contract for the provision of dental services to
patients at skilled nursing facilities
("SNFs").
Pending before
the court are Plaintiffs' Motion to Strike Expert Designations as
Untimely (Docket Entry No. 71), Defendants' Motion to Exclude the
Expert Testimony and Report of Richard J. Ostiller (Docket Entry
No.
79) ,
Defendants'
Motion for Summary Judgment
(Docket Entry
No.
80),
Plaintiffs'
Jeffrey A.
Exclude
Motion
to
Exclude
Compton (Docket Entry No.
Expert
Testimony
of
Jose
81),
Daniel
Expert
Testimony
of
Plaintiffs' Motion to
Saenz
(Docket
Entry
No. 82), Plaintiffs' Motion Requesting a Trial Date (Docket Entry
No.
8 3) ,
Defendants'
Objections to and Motion to Strike Keith
Walls' Affidavit (Docket Entry No. 95), and Plaintiffs' Motion for
Leave of Court to Substitute Affidavit of Keith Walls (Docket Entry
No. 97).
For the reasons explained below, Defendants' Motion for
Summary Judgment will
be granted in part
and denied
in part.
Except for Plaintiff's Motion to Exclude Expert Testimony of Jose
Daniel Saenz,
which will be granted,
all the other evidentiary
motions will be denied or declared moot.
I.
A.
Factual and Procedural Background
Undisputed Facts 1
Plaintiff PrevMED markets and sells dental services to SNFs
and their residents.
Texas
SNFs
to
access
PrevMED entered into agreements with various
their
facilities.
2
The
agreements
that
PrevMED entered with various SNFs state:
The Facility hereby agrees to have PrevMED as a nonexclusive
independent
contractor
arrange
for
the
1
See Defendants' Motion for Summary Judgment ("Defendants'
MSJ"), Docket Entry No. 80, pp. 9-11, and Plaintiffs' Response in
Opposition to Defendants' Motion for Summary Judgment ("Plaintiffs'
Response"), Docket Entry No. 88, pp. 9-13.
2
See Exhibit 2 to Defendants' MSJ, Docket Entry No. 80-3
(FACILITY AGREEMENT TEXAS,
SUMMARY of DENTAL SERVICES and
RESPONSIBILITIES that PrevMED entered with various Texas SNFs) .
-2-
provision of onsite dental and oral hygiene services to
the residents of "Facility" who purchase or whose
responsible
parties
purchase
dental/oral
hygiene
insurance from "OraQuest."
These services will be
provided by dentists whose practices PrevMED manages.
These services will be provided in accordance with the
terms and conditions of this Summary.
The dentist and
the resident will establish a doctor /patient relationship
which is independent of this summary and which is
governed by the law of the state of Texas. 3
Plaintiff MAH is a
dental practice management
group,
and
plaintiff MAPG is a clinician-owned professional group that employs
the dentists and dental hygienists who provide dental services to
residents
at
PrevMed-contracted
SNFs. 4
Each
MAPG-employed
clinician signed a Memorandum of Understanding that provided in
pertinent part that "your employment with MAPG is at will." 5
The
Memorandum of Understanding that each MAPG clinician signed also
contains a Non-Interference with Contractual Relations paragraph
that states:
MAPG
and
its
affiliate,
PrevMED,
have
invested
substantial money, time, goodwill and effort in the
promotion and enhancement of their reputation and
business with the institutions and facilities within
which you will be working, pursuant to and during your
employment. In addition, MAPG and its affiliate, PrevMED
have entrusted you with significant proprietary and
confidential information about the PrevMED Oral Health
Maintenance Program and its operation.
It is further
understood that by accepting this employment and the
3
4
Id. at 8.
Plaintiffs'
p. 5 ~ 11.
First Amended Complaint,
5
Docket Entry No.
14,
Memorandum of Understanding, Exhibit 4 to Defendant's MSJ,
Docket Entry No. 80-5. See also Exhibit M to Plaintiffs' Response,
Docket Entry No. 88-13.
-3-
ii
II
compensation for said employment you have accepted a
position of trust in the nature of fiduciary obligation
to promote the best interests of MAPG and PrevMED. You
accept the duty to avoid actions which would prejudice,
inhibit,
or
interfere
with
the
continuance
and
maintenance of any contractual relationships, or which
would result in conversion and usurpation of MAPG's and
PrevMED's investment to your own benefit or the benefit
of others. Upon termination of the employment with MAPG
(by either party) I agree not to provide dental or oral
hygiene services or to assist anyone in providing dental
or oral hygiene services within any PrevMED contracted
facilities or institutions for a period of one year from
the date of termination. 6
Some of the Memoranda of Understanding also contain the following
sentence and some do not:
"This covenant is intended for the
benefit of both MAPG and PrevMED and may be enforced by either." 7
In March of
("Contract")
2011
with
PrevMED entered into a
defendant
OraQuest,
a
Letter Agreement
Health
Maintenance
Organization ("HMO") registered in the State of Texas. 8
Under the
Contract OraQuest agreed to develop a health plan policy ("PrevMED
Policy") for sale to SNF residents in Texas to cover the costs of
certain
6
dental
and
oral
hygiene
services
and
products
to
be
Id.
7
Id.
(Memoranda signed by Hardev A. Patel, Ginger Bras
Horuath, Teresa Washington-Bellow, Tammy Creech, Richardeen S.
Bowden, Nicole W. Ray, Deria L. DeZern, Christina Clark, Chung-Lei
Kao, Ira S. Mims, Duyen Tran, and Deanna Chaney all contain this
sentence while those signed by the following employees do not:
Deanna Duckworth, Dr. Timothy Bradbury, Cindy Hines, Sueginn Cha,
and Ghias Jabbour) .
8
March 12, 2011, Letter Agreement, Exhibit 1 to Defendants'
MSJ, Docket Entry No. 80-2.
See also Exhibit B to Plaintiffs'
Response, Docket Entry No. 88-2.
-4-
delivered on site. 9
PrevMED agreed to introduce OraQuest to a
broker, Senior Dental Solutions ("SDIS"), to sell PrevMED Policies,
to assist OraQuest in contracting with a third-party administrator,
Group Benefit Services,
Inc.
( "GBS") ,
Policies and service to policyholders,
to administer the PrevMED
to arrange with SNFs to
provide for sale of PrevMED Policies to their residents,
and to
provide monthly dental and oral hygiene services or products to all
policyholders. 10
provider
of
OraQuest agreed to make PrevMED the exclusive
dental
and
oral
hygiene
services
and products
to
holders of PrevMED policies in Texas, to instruct GBS to sell the
PrevMED Policy only through SDIS, and to instruct GBS to instruct
SDIS to sell the PrevMED Policy at such times and to such SNFs as
PrevMED shall specify. 11
The Contract provided that SNF residents
who purchased the PrevMED Policy would enter into a contract with
OraQuest and pay monthly premiums that would be distributed amongst
OraQuest, SDIS, GBS, and PrevMED in accordance with a compensation
schedule. 12
The Contract also contained a termination provision
that stated:
This Agreement shall be effective as of March 15, 2011
and shall continue in full force and effect for a period
of one year from such date.
This Agreement shall
9
Id.
~~
1
(a) ,
2.
10
Id.
~~
1(b)-(d), 5.
11
Id.
~~
2-4.
-5-
thereafter be automatically renewed for succeeding terms
of one (1) year except as either party gives written
notice sixty (60) days in advance of the date when the
Agreement would otherwise expire that such party desires
to terminate the Agreement. 13
Each clinician performing services under the Contract was both
employed by MAPG and separately contracted with OraQuest as an innetwork provider. 14
In May of 2013 OraQuest initiated an audit of GBS's records
and requested a broad range of information. 15
GBS' s Chief Executive
Officer, Kathy Simmons, questioned the breadth of the information
requested and asked,
"[I]s it your intention to receive all this
information and just render our termination notice?" 16
Paul Kwauk,
the Executive Vice-President and Chief Operating Officer of FCL,
responded that the information was needed to conduct the audit. 17
13
Id.
~
8.
14
See OraQuest Dental Plans Dental Provider Agreements,
Exhibit 5 to Defendants' MSJ, Docket Entry No. 80-6.
See also
Texas
Insurance
Code
§
843.101 (b)
("A health maintenance
organization may provide or arrange for health care services only
through .
(2) providers or groups of providers who are under
contract with or are
employed by the
health maintenance
organization.
. ")
15
May 2, 2013, email from Paul Kwauk to Shelly Rapski and
others at GBS, Exhibit K to Plaintiffs' Response, Docket Entry
No. 88-11, pp. 2-3.
16
May 6, 2013, email from Kathy Simmons at GBS to Paul Kwauk
at OraQuest, Exhibit L to Plaintiffs' Response, Docket Entry
No. 88-12, p. 3.
17
May 6, 2013, email from Paul Kwauk to Kathy Simmons and Jim
Taylor, Exhibit L to Plaintiffs' Response, Docket Entry No. 88-12,
p. 2.
-6-
Plaintiffs allege but fail to provide evidence showing that "24
days after Ms. Simmons' email, OraQuest terminated its relationship
with GBS. " 18
PrevMED and OraQuest operated under the Contract for over
three
years .
During
this
time OraQuest paid PrevMED
for
its
services according to the Contract's compensation schedule.
On September 17, 2014, an OraQuest employee, Rhonda Johnson,
sent
an
email
to
an
MAH
employee,
Karen
Myrick,
asking
for
marketing and scheduling information:
Would it be possible for me to get a copy of the
marketing information that you provide the facilities.
I want to be speaking the same language and be on the
same page when giving information about the coverage we
provide.
Also, you are responsible for scheduling the
hygienist and the dentist. When does the schedule go out
and [] can I get a copy of it? 19
On September 29,
2014, defendant James Taylor,
President of
defendant FCL and Chief Executive Officer of defendant OraQuest,
informed PrevMED's president, G. Ellsworth Harris by telephone that
as of October 1, 2014, OraQuest would no longer pay for PrevMED's
services. 20
18
Plaintiffs'
p. 5 ~ 13.
First Amended Complaint,
19
Docket Entry No.
Emails re Royal Manor Resident, Exhibit J
Response, Docket Entry No. 88-10, p. 2.
20
14,
to Plaintiffs'
Video Deposition of G. Ellsworth Harris ("Harris Deposition")
at pp. 228:25-229:19, Exhibit A to Plaintiffs' Response, Docket
Entry No. 88-1, pp. 3-4.
-7-
On October 1, 2014, PrevMED ceased all Texas operations, and
all the clinicians working for MAPG in Texas were discharged. 21
Following discharge of MAPG's Texas employees, MAPG ceased doing
business or trying to do business in Texas. 22
OraQuest sent letters to PrevMed-contracted SNFs stating that
"effective October 1,
longer
continue
"PrevMEDm
Oral
its
2014,
OraQuest Dental Plans,
partnership
Health
with
Maintenance®
PrevMED,
Plan
will
Inc. will no
Inc."
and
no
longer
that
be
associated with the OraQuest Policy." 23
Plaintiffs acknowledge that "OraQuest merged with Defendant
[FCL]
and,
as a result,
[FCL]
assumed the d/b/a OraQuest Dental
Plans. " 24
B.
Procedural Background
On November 7,
2014,
plaintiffs
filed suit
in the Dallas
Division of the Northern District of Texas against OraQuest for
breach of contract, and against all the defendants for aiding and
21
Video Deposition of Luis Garabis, DDS ( "Garabis Deposition")
at p. 54:3-13, Exhibit 8 to Defendants' MSJ, Docket Entry No. 80-9,
p. 6.
See also October 7, 2014, Letter to Dr. Hardev A. Patel,
Exhibit 7 to Defendants' MSJ, Docket Entry No. 80-8
("RE:
Termination of Employment This Letter confirms that your employment
with Mid America Professional Group, PC ( "MAPG") was terminated
effective October 1, 2014.").
22
Garabis Deposition at p. 53:3-25, Exhibit 8 to Defendants'
MSJ, Docket Entry No. 80-9, p. 5.
23
Letter from OraQuest to SNFs, Exhibit 6 to Defendants' MSJ,
Docket Entry No. 80-7.
24
Plaintiffs' Response, Docket Entry No. 88, p. 9 n.2.
-8-
abetting breach of fiduciary duty, violation of the Lanham Act, 15
u.s.c.
1125, tortious interference with existing and prospective
§
contractual relations, violation of Texas common law of "passing
off,"
misappropriation,
civil
conspiracy,
violation
Racketeer Influenced and Corrupt Organizations Act
U.S.C.
1962 (c),
§
and unjust enrichment
of
the
("RICO"),
(Docket Entry No.
18
1).
Plaintiffs sought monetary and injunctive relief from all of the
defendants.
On
January
30,
defendants
2015,
filed
Defendants'
Rule 12(b) (6) Motion to Dismiss (Docket Entry No. 10).
On
February
20,
2015,
plaintiffs
filed
Plaintiffs'
First
Amended Complaint (Docket Entry No. 14), reasserting all the causes
of action alleged in their original complaint, but asserting RICO
claims
only against
the
two
individual
defendants,
Taylor and
Kwauk, and adding a cause of action against all the defendants for
violation of the Texas Insurance Code
On March 12,
2015,
defendants
§
541 (Docket Entry No. 14).
filed Defendants'
Motion to Extend Time to Respond to Plaintiffs'
Complaint
(Docket Entry No.
17) ,
Unopposed
First Amended
in which defendants urged the
court to deem as timely filed a motion to dismiss attached thereto.
On March 16,
2015,
the court entered an Order denying without
prejudice defendants' initial January 30, 2015, motion to dismiss
(Docket Entry No. 18), and an Order Granting Defendants' Unopposed
Motion to Extend Time to Respond to
Plaintiffs'
First Amended
Complaint (Docket Entry No. 19), and directing the clerk of court
-9-
to docket Defendants' Rule 12(b) (6) Motion to Dismiss Plaintiffs'
First Amended Complaint and Brief in Support.
Defendants' newly
filed motion sought dismissal of the RICO claims asserted against
Taylor and Kwauk and the Texas
Insurance Code claims asserted
against all of the defendants (Docket Entry No. 20).
On July 10,
2015,
the court granted defendants'
motion to
dismiss the RICO claims asserted against Taylor and Kwauk and the
Texas Insurance Code claims asserted against all of the defendants
(Docket Entry No. 35).
On July 24, 2015, defendants filed a motion to transfer this
action from the Dallas Division of the Northern District of Texas
to the Houston Division of the Southern District of Texas (Docket
Entry No.
36).
Defendants also filed an Answer to Plaintiffs'
First Amended Complaint on the same day (Docket Entry No. 38).
On September 30, 2015, the court granted defendants' motion to
transfer (Docket Entry No. 43), and on October 1, 2015, the action
was assigned to this court (Docket Entry No. 46).
On February 16,
2016,
the parties filed a Joint Motion to
Amend Scheduling Order (Docket Entry No. 55), asking the court to
extend
the
deadlines
as
follows:
( 1)
designation
witnesses from March 11, 2016, to April 22, 2016;
of
expert
(2) designation
of rebuttal expert witnesses from April 15, 2016, to May 27, 2016;
(3) completion of discovery from May 20,
2016, to June 10, 2016.
The court granted the motion the same day (Docket Entry No. 56).
-10-
On April 26, 2016, FCL filed Defendant First Continental Life
Accident
Insurance
Co.'s
Motion
for
Leave
Counterclaim and Amend Scheduling Order
to
File
Original
(Docket Entry No.
58),
seeking to assert original counterclaims for fraudulent inducement,
fraudulent
misrepresentation,
breach of
interference with existing contracts.
May 17,
2016,
Defendants'
by filing
Plaintiffs'
contract,
and tortious
Plaintiffs responded on
Response
in Opposition to
Motion for Leave to File Original Counterclaim and
Amend Scheduling Order (Docket Entry No. 61).
On May 16,
2016,
defendants
filed an Unopposed Motion to
Modify Scheduling Order to Extend Deadline to Designate Rebuttal
Experts (Docket Entry No. 59) from May 27, 2016, to June 24, 2016,
which the court granted the next day (Docket Entry No. 60).
On June 10,
completed -
2016 -
the date by which discovery was to be
FCL filed Defendant First Continental Life Accident
Insurance Co.'s Amended and Supplemental Motion for Leave to File
Original Counterclaim and Amend Scheduling Order
No.
64),
fraudulent
seeking
leave
inducement,
to
file
fraudulent
original
(Docket Entry
counterclaims
misrepresentation,
for
breach of
contract, and tortious interference with existing contracts, and
asking
the
discovery
court
from
to
June
extend
10
to
the
deadlines
August
10,
for
2016,
dispositive motions and challenges to experts
September 29, 2016.
-11-
completion
and
for
of
filing
from July 29 to
On July 8, 2016,
Order
the court entered a Memorandum Opinion and
(Docket Entry No.
67)
denying Defendant First Continental
Life Accident Insurance Co.'s Amended and Supplemental Motion for
Leave to File Original Counterclaim (Docket Entry No. 64).
II.
Defendants' Motion for Summary Judgment
The live claims in this action are plaintiffs' claims against
OraQuest for breach of contract, and against all of the defendants
for tortious interference with existing and prospective contractual
relations, aiding and abetting breach of fiduciary duty, violation
of
the
Lanham
Act,
15
U.S.C.
§
1125,
civil
conspiracy,
and
violations of Texas common law of "passing off," misappropriation,
and unjust enrichment (Docket Entry No. 14).
Plaintiffs seek both
monetary
of
and
injunctive
relief
from
all
the
defendants.
Defendants do not seek summary judgment on PrevMed' s
contract claim against Oraquest or plaintiffs'
breach of
unjust enrichment
claims, but seek summary judgment on all of the other live claims
asserted in this action.
A.
Standard of Review
Summary judgment is authorized if the movant establishes that
there is no genuine dispute about any material fact and the law
entitles it to judgment.
material
facts
are
Fed. R. Civ. P. 56(c)
"genuine"
if
the
evidence
Disputes about
is
such
that
a
reasonable jury could return a verdict for the nonmoving party.
-12-
Anderson v. Liberty Lobby, Inc., 106 S. Ct. 2505, 2511 (1986).
The
Supreme Court has interpreted the plain language of Rule 56(c) to
mandate the entry of summary judgment "after adequate time for
discovery and upon motion,
showing
sufficient
to
against a party who fails to make a
establish
the
existence
of
an
element
essential to that party's case, and on which that party will bear
the
burden
of
proof
at
trial."
106 S. Ct. 2548, 2552 (1986).
"must
Celotex
Corp.
v.
Catrett,
A party moving for summary judgment
'demonstrate the absence of a
genuine issue of material
fact,' but need not negate the elements of the nonmovant's case."
Little v.
Liquid Air Corp.,
(en bane) .
37 F.3d 1069,
1075
(5th Cir.
If the moving party meets this burden,
1994)
Rule 56 (c)
requires the nonmovant to go beyond the pleadings and show by
admissible evidence that specific facts exist over which there is
a genuine issue for trial.
Id.
Factual controversies are to be
resolved in favor of the nonmovant,
"but only when
.
. both
parties have submitted evidence of contradictory facts."
B.
Id.
Analysis
1.
Breach of Contract Claims
Plaintiffs allege that they had an agreement and contract with
OraQuest,
that
they
and
OraQuest
agreed
that
neither
would
terminate the agreement except upon notice 60 days in advance of
the yearly renewal date, March 15, and that OraQuest breached its
obligation
to
provide
notice
under
-13-
its
contract
by
informing
PrevMED
of
its
network
termination took effect.
termination
only
two
days
before
the
Plaintiffs allege that this notice period
was inadequate by 165 days under the requirements of the parties'
contract, that OraQuest intended its breach to interrupt PrevMED's
services
in Texas so that OraQuest could appropriate PrevMED' s
relationships with Texas SNFs and practitioners, that OraQuest owes
PrevMED an outstanding balance of $409,100.00 under the parties'
contract,
and
that
OraQuest
has
wrongfully
refused
PrevMED's
demands to pay the amount due. 25
Asserting that "[a]ll plaintiffs alleged that they
'had an
agreement and contract with OraQuest' . . . , but that is not true," 26
defendants argue that they are entitled to summary judgment on the
breach of contract claims that MAH and MAPG have asserted because
neither of these two plaintiffs had a contractual relationship with
any of the defendants. 27
Without disputing that neither MAH nor
MAPG had a contract with any of the defendants, plaintiffs respond
that
"PrevMED' s
claim
for
breach of
PrevMED only, not MAH or MAPG. " 28
contract
is
on behalf
of
Accordingly, the court concludes
that defendants are entitled to summary judgment on the breach of
contract claims asserted by MAH and MAPG.
25
Plaintiff' s First Amended Complaint,
pp. 29-30 ~~ 57-64.
26
Docket Entry No.
Defendants' MSJ, Docket Entry No. 80, p. 14.
27Id.
28
Plaintiffs' Response, Docket Entry No. 88, p. 14.
-14-
14,
2.
Tortious Interference with Contracts
Plaintiffs
allege
that
they
had
valid
and
enforceable
contracts with at least 103 Texas SNFs and an unidentified number
of Texas clinicians employed by MAPG; that they had a reasonable
probability of entering into new contractual relationships with
additional SNFs and clinicians at a rate consistent with PrevMED's
historical
60%
annual
growth;
that
defendants
intentionally,
willfully, and maliciously interfered with both their existing and
prospective contracts; that defendants' conduct was independently
tortious,
unlawful,
and
without
justification,
excuse,
or
privilege; and that defendants' conduct caused plaintiffs to suffer
damages in an amount that exceeds the jurisdictional requirements
of this court. 29
(a)
Applicable Law
Texas law recognizes claims for tortious interference with
both existing and prospective contracts.
interference
with an existing contract
contract subject to interference exists;
A party alleging tortious
must
prove
(1)
that
a
(2)
that the alleged act
of interference was willful and intentional;
(3) that the willful
and intentional act proximately caused damage; and (4) that actual
damage or loss occurred.
Financial Review Services,
Prudential Insurance Co. of America v.
Inc.,
29
29
S.W.3d 74,
Plaintiff' s First Amended Complaint,
pp. 33-34 ,, 85-97.
-15-
77
(Tex.
2000)
Docket Entry No.
14,
(citing ACS Investors,
( Tex . 19 9 7 ) )
of
Inc.
v.
McLaughlin,
943 S.W.2d 426,
430
While Texas law formerly required proof that the act
interference
was
subsequent
unjustified,
authority
has
established that justification for interference is an affirmative
defense.
See Sterner v.
Marathon Oil Co.,
Inc. v. Steck,
690
I
(Tex. 1989)
I
107 (Tex. 1984), to the extent that it placed the burden of proving
I
(overruling Sakowitz,
767 S.W.2d 686,
669 S.W.2d 105,
justification on the party asserting the claim) .
A party alleging tortious
contract must prove:
interference with a
prospective
(1) a reasonable probability that the parties
would have entered into a contract;
(2) an independently tortious
or unlawful act by the defendant that prevented the contractual
relationship;
(3) the defendant committed the act with a conscious
desire to prevent the contract or knew that such interference was
substantially certain to occur as a result of his conduct;
and
(4) the plaintiff suffered actual harm or damage as a result of the
interference.
Faucette v. Chantos, 322 S.W.3d 901, 914 (Tex. App.
-Houston [14th Dist.] 2010, no pet.)
v.
Sturges,
52
S.W.3d
711,
726
(citing Wal-Mart Stores, Inc.
(Tex.
2001)).
Independently
tortious conduct means "conduct [that] would be actionable under a
recognized tort," such as threats of physical harm or fraudulent
statement.
Wal-Mart,
52 S.W.3d at 726.
See also Advanced Nano
Coatings, Inc. v. Hanafin, 478 F. App'x 838,
(setting
forth
the
same
elements
of
interference with prospective contract)
-16-
a
845
claim
(5th Cir. 2012)
for
tortious
(b)
Application of the Law to the Facts
(1)
Plaintiffs' Contracts with SNFs
(i)
Asserting
defendants
that
argue
MAPG's
only
that
and
PrevMED
MAPG's
MAH's
had
and
MAH's
Contracts
contracts
claims
with
with
for
SNFs
SNFs,
tortious
interference with SNF contracts - existing and prospective -
fail
as a matter of law because plaintiffs are unable to show that
either
of
these
two
plaintiffs
contracts with any SNFs
subject
had
to
existing
or
prospective
interference. 30
Plaintiffs
acknowledge that PrevMED had contracts with SNFs, but fail either
to argue or to cite any evidence that MAPG or MAH had existing or
prospective contracts with SNFs.
Any claim that MAPG or MAH is
asserting or attempting to assert for tortious interference with
existing or prospective contracts with SNFs therefore fails because
a cause of action for tortious interference will not lie in the
absence of an existing contract or a reasonable probability that a
contract would be entered.
See Texas Disposal System Landfill,
Inc. v. Waste Management Holdings, Inc., 219 S.W.3d 563, 588 (Tex.
App. -Austin 2007, pet. denied)
("A cause of action for tortious
interference
the
will
not
lie
in
absence
of
a
contract.").
Accordingly, defendants are entitled to summary judgment on claims
30
Defendants' MSJ, Docket Entry No. 80, p. 17.
-17-
that MAPG and MAH are asserting for tortious interference with
existing and prospective SNF contracts. 31
(ii)
PrevMED's Contracts with SNFs
(A)
Defendants
argue
Existing Contracts
PrevMED's
that
claims
for
tortious
interference with existing SNF contracts fail as a matter of law
because "there is no evidence that OraQuest induced the SNFs to
breach
their
agreements
PrevMED. " 32
with
Citing All
American
Telephone, Inc. v. USLD Communications, Inc., 291 S.W.3d 518, 532
(Tex. App. - Fort Worth 2009, pet. denied), defendants argue that
"[f]or a plaintiff to maintain a tortious interference claim, it
must produce some evidence that the defendant knowingly induced one
of
the
contracting parties
contract. " 33
to
breach
its
obligations
under
a
Defendants argue that they are entitled to summary
judgment because plaintiffs cite no evidence that any SNF breached
31
Citing Astoria Industries of Iowa, Inc. v. SNF, Inc., 223
S.W.3d 616, 633 (Tex. App. - Fort Worth 2007, pet. denied),
plaintiffs argue that "[w]ith regard toMAH and MAPG, irrespective
of whether they had written contracts with the SNFs, their
relationships with the SNFs are protected against interference as
continuous business relationships." Plaintiffs' Response, Docket
Entry No. 88, p. 22. While Texas law does protect against interference with continuous business relationships, plaintiffs not only
failed to allege such claims, but have also failed to cite any
evidence showing that MAH or MAPG had business relationships with
any Texas SNF.
32
Defendants' MSJ, Docket Entry No. 80, p. 18.
33Id.
-18-
a contract with PrevMED, or that OraQuest intended to induce any
SNF to do so . 34
Plaintiffs respond that PrevMED had existing contracts with
103 SNFs throughout Texas,
actions,
SNFs.
and that as a result of defendants'
PrevMED was forced to cease doing business with those
Citing Khan v. GBAK Properties, Inc., 371 S.W.3d 347, 359-60
(Tex. App. -Houston [1st Dist.] 2012, no pet.), plaintiffs argue
that "[t]o establish tortious interference with existing contract,
a plaintiff is not limited to showing the contract was actually
breached.
or
Any interference that makes performance more burdensome
difficult
or
of
less
or
performance is actionable. " 35
no
value
to
the
one
entitled
Plaintiffs explain that PrevMED
could not afford to continue operations at the SNFs
because, without OraQuest's payments, the only source of
compensation for services was directly from SNF patients,
who would be required to pay out-of-pocket.
(Ex. R,
Deposition of PrevMED 30(b) (6) Representative, Patrick
Murphy,
. 15:4-20:4). In addition, PrevMED was not
able to negotiate and contract with another HMO with the
unlawful termination-notice of only two days provided to
it by OraQuest, as the Defendants intended. Id. Indeed,
the Defendants contend that PrevMED could not have
successfully continued operating in the Texas market with
a notice of 60 days [Dkt. No. 79, p. 11] - OraQuest's
contention (as well as common sense) evidences OraQuest' s
intention to eliminate PrevMED from the Texas market by
providing notice of only two days.
Therefore, the
Defendants are liable for tortious interference with
existing contracts. 36
34Id.
35
Plaintiffs' Response, Docket Entry No. 88, p. 19.
36
Id. at 18-19.
-19-
to
Plaintiffs have alleged a
PrevMED's SNF contracts:
single act of
interference with
OraQuest's intentional cancellation of
its Contract with PrevMED with only two days' notice.
Defendants
have
OraQuest' s
not
presented
any
legal
arguments
as
to
why
cancellation of its contract with PrevMED and alleged breach of
contract
with
PrevMED
cannot
interference with PrevMED' s
support
a
SNF contracts.
claim
for
tortious
In their briefing,
defendants assume, without explanation, that plaintiffs' tortious
interference claim must be based on evidence that the defendants
induced the SNFs to breach their contracts with PrevMED.
In Khan,
however, the court recognized that a defendant may be held liable
for interference by actions that do not necessarily induce a breach
of contract but which injure a plaintiff by making plaintiff's
performance of a contract "more burdensome or difficult or of less
or no value."
371 S.W.3d at 360
(quoting Tippett v.
Hart,
497
S.W.2d 606, 610 (Tex. Civ. App. -Amarillo 1973), writ ref'd n.r.e.
per curiam, 501 S.W.2d 874 (Tex. 1973)).
Likewise, the Restatement (Second) of Torts
§
766A, entitled
"Intentional Interference with Another's Performance of His Own
Contract" provides as follows:
One who intentionally and improperly interferes with the
performance of a contract .
. between another and a
third person, by preventing the other from performing the
contract or causing his performance to be more expensive
or burdensome, is subject to liability to the other for
the pecuniary loss resulting to him.
Restatement (Second) of Torts
§
766A (1979) .
Comment a to
§
766A
explains that this section "is concerned only with the actor's
-20-
intentional interference with the plaintiff's performance of his
own contract, either by preventing that performance or making it
more expensive or burdensome."
that
§
Id. cmt. a.
766A "is to be contrasted with
§
Comment a also states
766, which states the rule
for the actor's intentional interference with a
performance of
his
existing contract
third person's
with the plaintiff,"
and
section 766B, which concerns "the actor's intentional interference
with the plaintiff's prospective contractual relations."
Id.
See
also Faucette, 322 S.W.3d at 916-17 (citing these sections of the
Restatement
the
various
conflated).
existing
(Second) of Torts in support of its observation that
theories
of
tortious
should
not
be
Thus "[t]o establish tortious interference with [an]
contract,
a
plaintiff
contract was actually breached."
Ltd., LLP, 421 S.W.3d 198, 216
pet.)
interference
is
not
limited
to
showing
the
Lamont v. Vaquillas Energy Lopeno
(Tex. App.- San Antonio 2013, no
(quoting Khan/ 371 S.W.3d at 359-60).
Accordingly/ the court
is not persuaded that defendants are entitled to summary judgment
on PrevMED's claims for tortious interference with its existing
contracts with Texas SNFs merely because there is no evidence that
defendants induced the SNFs to breach their contracts with PrevMED.
Generally, the failure to perform the terms of a contract is
a
breach of
Stewart,
contract,
not
967 S.W.2d 419,
1998, pet. denied).
a
tort.
447
(Tex.
Bank One,
App.
-
Texas,
Houston
N. A.
v.
[14th Dist.]
A knowing and intentional breach of one's own
-21-
contract,
however,
may be a
interference with a
purpose and effect
willful
constituting tortious
third-party contract if the breach has the
of preventing another
third-party contract.
from performing
See American National
Transcontinental Gas Pipe Line Corp.,
1990) .
act
App.- San Antonio 1999, no pet.)
Petroleum Co.
798 S.W.2d 274,
See also Rodriguez v. NBC Bank,
that
5 S. W. 3d 756,
v.
279
(Tex.
766
(Tex.
("Assuming without deciding that
an action for tortious interference would lie in addition to a
breach of contract claim.
• 11 )
Moreover,
•
the general rule in
Texas is that corporate agents may be held individually liable for
tortious acts committed while in the service of their corporation.
See Miller v. Keyser, 90 S.W.3d 712, 717 (Tex. 2002)
agent
is personally liable
acts")
("a corporate
for his own fraudulent
See also Pension Advisory Group,
Ltd.
v.
or tortious
Country Life
Insurance Co., 771 F. Supp. 2d 680, 706 (S.D. Tex. 2011)
Cass v.
Stephens,
156 S.W.3d 38,
("[a] corporate officer .
62
(Tex. App. -
(citing
El Paso 2004)
is always primarily liable for his
own torts, even though the principal is also vicariously liable.
An employee may be held individually liable
for an employer's
tortious acts if he knowingly participates in the conduct or has
knowledge
of
the
tortious
conduct,
either
actual
or
constructive."))
As evidence that defendants cancelled the PrevMED Contract
intentionally
plaintiffs
to
cite
eliminate
the
PrevMED
deposition
from
testimony
-22-
the
of
Texas
defendant
market,
Taylor
acknowledging
providing
that
proper
OraQuest
notice, 37
cancelled
and
the
the
Contract
deposition
without
testimony
of
Dr. Timothy Bradbury who stated that he was summoned to a meeting
with defendants Taylor and Kwauk in August of 2014, during which he
was told that OraQuest was "eliminating the middleman," and he was
asked "to keep it confidential." 38
This evidence is sufficient to
raise a genuine issue of material fact as to whether the alleged
act of interference was willful and intentional.
Since defendants
do not argue that the summary judgment record lacks evidence from
which a reasonable fact-finder could conclude that cancellation of
OraQuest's Contract with PrevMED caused PrevMED to suffer damages
and actual loss, the court concludes that neither the corporate nor
the
individual
defendants
are
entitled to
summary
judgment on
PrevMED's claims for tortious interference with existing contracts
with Texas SNFs.
(B)
Prospective Contracts
Defendants argue that they are entitled to summary judgment on
PrevMED's
claims
for
tortious
interference
with
prospective
contracts with SNFs because "there is no evidence OraQuest engaged
Id. at 11 ~ 9 (citing Exhibit E to Plaintiffs' Response, Oral
and Videotaped Deposition of James Amos Taylor at pp. 179:20-180:2,
Docket Entry No. 88-5, pp. 11-12).
37
Id. ~ 10 (citing Exhibit F to Plaintiffs' Response, Oral
Deposition of Timothy Allen Bradbury ("Bradbury Deposition") at
pp. 30:25-31:7, Docket Entry No. 88-6, pp. 11-12).
38
-23-
in
independently
relationship." 39
tortious
conduct
that
prevented
any
future
Defendants argue that
there is no evidence that OraQuest has ever interfered
with PrevMED's prospective relationship with any SNF by
engaging in independently tortious conduct.
What
prevented PrevMED from entering into access agreements
with new SNFs was the termination of the agreement with
OraQuest, not some independently tortious conduct. That,
at most, is a breach of contract that no matter how
willful does not amount to an independent tort. 40
Independently
tortious
conduct
means
"conduct
[that]
would be
actionable under a recognized tort," such as threats of physical
harm or fraudulent
statement.
Wal-Mart,
Willful breach of contract is not a
52
S. W. 3d at
726-27.
tort on which a claim for
tortious interference with a prospective contract can be based.
See McConnell v.
Action No.
Coventry Health Care National Network,
05-13-01365-CV,
2015 WL 4572431,
Dallas July 30, 2015, pet. denied)
at *6
(Tex.
Civil
App. -
("[E]ven if Coventry breached
the contract, it's conduct would not be independently tortious.").
Because
plaintiffs
offer
no
summary
judgment
evidence
of
independently tortious conduct by defendants that prevented PrevMED
from having future contractual relationships with Texas SNFs, the
court concludes that defendants are entitled to summary judgment on
PrevMED's
claims
for
tortious
interference
with
contracts with Texas SNFs.
39
Defendants' MSJ, Docket Entry No. 80, p. 19.
4oid.
-24-
prospective
(2)
Plaintiff's Contracts with Clinicians
(i)
MAH and PrevMED
Plaintiffs allege that defendants intentionally,
and
willfully,
maliciously
with
clinicians.
interfered
with
their
contracts
MAPG
MAPG is the only plaintiff who had contracts and/or
prospective contracts with clinicians providing dental services to
SNF residents.
Any claim that MAH or PrevMED is asserting or
attempting to assert for tortious interference with existing or
prospective contracts with MAPG clinicians therefore fails because
a cause of action for tortious interference with contract will not
lie
in
the
absence
of
an
existing
contract
probability that a contract would be entered.
or
a
reasonable
See Texas Disposal
System Landfill, 219 S.W.3d at 588 ("A cause of action for tortious
interference
Accordingly,
will
not
lie
in
the
absence
of
a
contract.").
the court concludes that defendants are entitled to
summary judgment on claims that MAH and PrevMED are asserting for
tortious interference with existing and prospective contracts with
MAPG clinicians.
(ii)
MAPG
Quoting Lazer Spot, Inc. v. Hiring Partners, Inc., 387 S.W.3d
40, 51 (Tex. App. -Texarkana 2012, pet. denied), defendants argue
that they are entitled to summary judgment on MAPG's claims for
tortious
interference
contracts
with
with
clinicians
its
because
-25-
existing
and/or
"merely
inducing
prospective
a
contract
obligor
to
do
what
interference." 41
it
has
a
right
to
do
is
not
actionable
Asserting that the clinicians were all at-will
employees defendants argue that they did not interfere with MAPG's
employment relationship with the clinicians.
Id.
(holding that
at-will employees may be lawfully induced to do what they have a
Alternatively,
right to do)
defendants argue that OraQuest's
actions with respect to MAPG's employees were justified because
OraQuest
had
independent
required by Texas law.
Citing Sterner,
contracts
with
MAPG's
See Texas Insurance Code
767
S.W.2d at
689,
§
dentists,
as
843.10l(b).
plaintiffs
argue
that
"[e]ven though the agreements [that MAPG had with the clinicians]
were terminable-at-will, the Defendants are nevertheless subject to
a cause of action for tortious interference." 42
S. W. 2d at
689,
held
that
"the
While Sterner, 767
terminable-at-will
status
of
a
contract is no defense to an action for tortious interference with
its performance," more recent Texas Supreme Court authority has
held otherwise.
See ACS Investors, 943 S.W.2d at 430 ("Ordinarily,
merely inducing a contract obligor to do what it has a right to do
is not actionable interference.").
Courts have limited Sterner to
cases involving interference alleged either to have been defamatory
or to have breached an independent contract obligation.
As the
court observed in Lazer Spot, 387 S.W.3d at 51, although Sterner's
41
Id. at 20.
42
Plaintiffs' Response, Docket Entry No. 88, p. 19.
-26-
holding seems
to contradict
the holding
in ACS
Investors,
943
S.W.2d 426, it might be distinguishable by the fact that
Marathon's contract with Sterner's employer specifically
yielded all managerial decisions to the employer.
Marathon induced the employer to do what it had a right
to do (i.e., terminate at will). In this case, however,
Marathon breached its contract with Sterner's employer by
making a demand that violated the terms of the Marathonemployer
agreement.
Marathon's
acts
violated
its
agreement with Sterner's employer and thus exceeded its
right to interfere with the contract between Sterner and
his employer.
Id.
at
51
(quoting
and
removing
footnotes
from
Sean
Farrell,
"Applying Tortious Interference Claims to At-Will Contracts," 39
Tex. J. Bus. L. 527, 532 (2004)).
See also id. at 53 ("Outside of
the realm of allegedly defamatory statements made by third parties
that result in termination of at-will employment (where inducement
is apparently tortious because it is accomplished via defamation),
other actionable interference appears to hinge on violation of a
contractual
provision,
other
than
the
at-will
provision.").
Defendants are correct that they could not have interfered
with the clinicians' continued employment by merely hiring them.
Lazer Spot, 387 S.W.3d at 53 ("[A) claim of tortious interference
cannot be premised merely on the hiring of an at-will employee,
without more.").
Plaintiffs argue, however,
that defendants did
more than merely hire MAPG's at-will employees.
Plaintiffs cite
evidence showing that MAPG clinicians all signed a Memorandum of
Understanding that contained a paragraph titled "Non-Interference
with Contractual Relations" that stated:
-27-
Upon termination of the employment with MAPG (by either
party) I agree not to provide dental or oral hygiene
services or to assist anyone in providing dental or oral
hygiene services within any PrevMED contracted facilities
or institutions for a period of one year from the date of
termination. 43
Plaintiffs also cite evidence showing that defendants approached
several MAPG clinicians and urged them to violate this written
agreement by providing dental services to PrevMED-contracted SNFs
as part of a new OraQuest provider team, which the clinicians, in
proceeded to do. 44
fact,
For example,
dentist Dr.
Nicole Ray
testified that defendant Kwauk spoke to her about leaving MAPG and
moving to a new provider group while she was still employed by
MAPG, 45
told her that
the
new group would
take
over providing
services in the SNFs in which MAPG was operating,
Memorandum
of
Understanding
October 1, 2014,
with
her,
told
46
discussed the
her
that
PrevMED would no longer be contracted at any of
the facilities in which she would be working in Texas,
her
to
reach
after
out
to
the
hygienist
she
worked
47
and asked
with,
i.e.,
Deanna Duckworth Moore, about going to work for the new provider
43
Memorandum of Understanding,
Exhibit M to Plaintiffs'
Response, Docket Entry No. 88-13, p. 3.
See also Exhibit 4 to
Defendant's MSJ, Docket Entry No. 80-5.
44
Plaintiffs' Response,
nn.3-4, pp. 15-16, and 19.
Docket
Entry
No.
88,
pp.
11-12
45
&
Deposition of Nicole W. Ray, D.D.S. ("Ray Deposition") at
p. 38:1-8, Exhibit H to Plaintiffs' Response, Docket Entry
No. 8 8- 8 , p . 3 .
46
Id. at 39:3-11, Docket Entry No. 88-8, p. 4.
47
Id. at 42:1-24 and 44:2-7, Docket Entry No. 88-8, pp. 5-6.
-28-
group. 48
Ray also testified that she and Duckworth went to work for
the
provider
new
group.
49
Timothy
Bradbury,
D.D.S.,
similarly
testified that in August of 2014 he met with defendants Kwauk and
Taylor who asked him if he would "do a professional corporation and
come on board with them in this
endeavor. " 50
This
evidence
is
sufficient to raise genuine issues of material fact as to whether
defendants
interfered
with
MAPG's
existing
contracts
with
its
clinicians, and whether the defendants engaged in conduct that was
independently
tortious
or
unlawful
in
order
to
prevent
the
continuation of MAPG' s contractual relationship with its clinicians.
The
entitled
court
to
interference
concludes
summary
with
that
judgment
its
the
on
clinicians'
defendants
MAPG's
are
claims
existing
nevertheless
for
and
tortious
prospective
contracts because plaintiffs have failed to cite any evidence from
which a
reasonable
fact- finder
interference caused MAPG to
result of the interference.
could conclude
that
defendants'
suffer actual harm or damage as
See Faucette, 322 S.W.3d at 914.
a
With
respect to MAPG's damages plaintiffs state:
As for MAPG' s damages, it is a captive professional
corporation formed in order to comply with various
states'
corporate practice of dentistry laws that
prohibit the employment of dental professionals by nondentists.
MAPG employees are solely responsible for
clinical decisions for and treatment of patients assigned
to them by MAH and its clients.
MAH manages all human
48
Id. at 48:11-17, Docket Entry No. 88-8, p. 7.
49
Id. at 48:1-24, Docket Entry No. 88-8, p. 7.
50
Bradbury Deposition at p. 31:14-21, Exhibit F to Plaintiffs'
Response, Docket Entry No. 88-6, p. 4.
-29-
resource, accounting, financial, tax, and management
processes for MAPG.
Since MAPG was formed to provide
clinical services for MAH clients, all MAPG costs are
charged toMAH on a monthly basis. Since all costs are
charged through to MAH, MAPG reports zero or near zero
profit or loss. 51
Although plaintiffs contend that MAPG 1
MAH 1
damages,
S
support
of
its
S
damages are reflected in
plaintiffs have not cited any legal authority in
contention
that
damages
suffered
by
sufficient to establish the damage element of MAPG, s
MAH
are
claim for
tortious interference with existing or prospective contracts with
its clinicians.
Moreover, MAPG,s corporate representative testi-
fied unequivocally that MAPG had not suffered and was not seeking
to
recover damages
concludes
MAPG, s
that
in
this
defendants
lawsuit. 52
are
Accordingly,
entitled to
summary
the
court
judgment on
claims for tortious interference with both existing and
prospective contracts with its clinicians because plaintiffs have
failed to cite any evidence from which a reasonable jury could
conclude that defendants, actions caused MAPG to suffer actual harm
or damage as a result of the interference.
3.
Aiding and Abetting Breach of Fiduciary Duty
Plaintiffs allege that MAPG employees owed fiduciary duties to
MAPG and its affiliates, MAH and PrevMED, and that MAPG employees
breached their fiduciary duties to MAPG and its affiliates, MAH and
51
Plaintiffs, Response, Docket Entry No. 88, p. 23.
52
Garabis Deposition at p. 37:16-18, Exhibit 8 to Defendants,
MSJ, Docket Entry No. 80-9, p. 4.
-30-
PrevMED,
by
engaging
in
a
plan
opportunities and by failing
to
usurp
PrevMED's
business
to inform MAPG and/or PrevMED of
defendants' intentions to terminate PrevMED' s network participation
and
take
over provision and management
PrevMED-contracted SNFs.
of
dental
services
in
Plaintiffs allege that defendants are
liable for aiding and abetting breach of fiduciary duty because
defendants knowingly participated and offered material assistance
and encouragement to MAPG employees'
breach of their fiduciary
duties by asking them not to disclose OraQuest's plans to terminate
PrevMED's network participation and plans to take over the management and provision of dental services in PrevMED-contracted SNFs. 53
Defendants argue that they are entitled to summary judgment on
plaintiffs'
claims
that
they
aided
and
abetted
breaches
of
fiduciary duty committed by MAPG employees because there is no
evidence that MAPG employees owed a fiduciary duty to MAH or to
PrevMED,
and no evidence that MAPG employees breached fiduciary
duties owed to MAPG. 54
Citing Abetter Trucking Co. v. Arizpe, 113
S.W.3d 503, 510 (Tex. App.- Houston [1st Dist. 2003, no pet.), and
asserting
that
MAPG's
employees
were
all
at-will
employees,
defendants argue that MAPG' s employees "had no duty to disclose
their plans (or OraQuest' s plans) to PrevMED or MAPG. " 55
53
Plaintiff' s
p. 31 ~~ 68-71.
54
55
Defendants
1
First Amended Complaint
MSJ
1
Docket Entry No. 80
Id. at 17.
-31-
1
Docket Entry No.
1
pp. 16-17.
14 1
(a)
Applicable Law
Plaintiffs'
defendants
aiding and abetting claims require proof that
acted
with
unlawful
intent
to
give
assistance and encouragement to a wrongdoer in a
West Fork Advisors,
L.L.C. v.
substantial
tortious act.
SunGard Consulting Services,
437 S.W.3d 917, 921 (Tex. App. -Dallas 2014, pet. denied)
Juhl v. Airington,
936 S.W.2d 640,
644
(Tex. 1996)).
LLC,
(citing
The Texas
Supreme Court has specifically dealt with aiding and abetting as a
dependent
claim premised on an underlying
tort.
Id.
Ernst & Young, L.L.P. v. Pacific Mutual Life Ins. Co.,
573, 582-83 (Tex. 2001)).
672,
681
(Tex.
1996)
(citing
51 S.W.3d
See also Tilton v. Marshall, 925 S.W.2d
(recognizing
that
in order to
show that
defendants are liable for aiding and abetting plaintiffs must first
prove an underlying tort) .
their
aiding
and
abetting
Acknowledging the derivative nature of
claims,
plaintiffs
argue
that
MAPG
clinicians breached fiduciary duties owed to their employer, MAPG,
and its affiliates, MAH and PrevMED, by engaging in a plan to usurp
PrevMED's business opportunities,
and/or PrevMED of defendants'
and by failing to inform MAPG
intentions to terminate PrevMED's
network participation and to take over provision and management of
dental services in PrevMED-contracted SNFs. 56
56
Plaintiffs' Response, Docket Entry No. 88, p. 14 (stating,
"obviously, '[p]roof of a breach of fiduciary duty is required to
maintain a claim of aiding and abetting a breach of fiduciary
duty • I II) •
-32-
Texas law recognizes the existence of fiduciary duty "where a
special confidence is reposed in another who in equity and good
conscience is bound to act in good faith and with due regard to the
Texas Bank and Trust
interests of the one reposing confidence."
Co.
v.
Moore/
595 S.W.2d 502
507
1
(Tex.
Fiduciary duty
1980).
flows from the relationship between the parties/ rather than from
the terms of any contract between them.
Cambridge Oil Co.
v.
Huggins/ 765 S.W.2d 540 1 544 (Tex. Civ. App. -Corpus Christi 1989 1
writ denied)
1984)) .
(citing Manges v. Guerra
See
also
Crim
1
673 S.W.2d 180 1 183
& Tractor
Truck
International Transportation Corp.
1
Corp.
823 S.W.2d 591
v.
(Tex.
Navistar
595 (Tex. 1992)
1
("Every contract includes an element of confidence and trust that
each
party
contract.
cordial
will
faithfully
perform
his
obligation
under
the
Neither is the fact that the relationship has been a
one/
of
relationship.").
long
duration/
Certain
formal
evidence
of
a
relationships/
confidential
such
as
that
between attorney and client/ entail fiduciary duty as a matter of
law.
Texas Bank and Trust/
S.W.2d at 595.
595 S.W.2d at 507;
Crim Truck/
By contrast/ the element of confidence and trust
inherent in every arms-length business arrangement does not.
Truck/ 823 S.W.2d at 594-95.
emerges.
823
Crim
Between these poles/ no clear rule
Texas Bank and Trust/ 595 S.W.2d at 508.
Texas courts have long recognized/ however/ that an employee
has
a
fiduciary duty to act primarily for
employer
in
matters
connected
with
-33-
his
the benefit of his
employment.
Abetter
Trucking,
113 S. W. 3d at 510
("When a
fiduciary relationship of
agency exists between employee and employer,
the employee has a
duty to act primarily for the benefit of the employer in matters
connected with his agency.")
73
P.C.,
S.W.3d
193,
(citing Johnson v. Brewer & Pritchard,
201
(Tex.
2002)).
employee
An
may
not
(1) appropriate the company's trade secrets; (2) solicit the former
employer's
customers
while
still
working
for
his
employer;
(3) solicit the departure of other employees while still working
for his employer; or (4) carry away confidential information.
at 512.
is,
The basis for liability for breach of an employee's duty
however,
interest
limited as it is "tempered by society's legitimate
in
encouraging
International,
App.
-Houston
Johnson,
Id.
73
competition."
Wooters
v.
Unitech
S.W.3d ____ , 2017 WL 372165,· *7
Inc.,
[1st Dist.]
January 26,
s. W. 3d at 201)) .
Thus,
2017,
no pet.)
(Tex.
(citing
"[a] n at-will employee may
properly plan to go into competition with his employer and may take
active steps to do so while still employed and may secretly do so
with
other
employer."
employees,
Id.
without
disclosing
his
plans
to
his
See also Abetter Trucking, 113 S.W.3d at 511.
"An
employee also may use his general skills and knowledge obtained
through employment
to compete with the
former employer."
Id.
(citing Sharma v. Vinmar International, Ltd., 231 S.W.3d 405, 424
(Tex.
App.
Houston
[14th Dist.]
2007,
no pet.)) .
Thus,
an
employee's duty to his employer does not require an employee to
disclose his plans to compete;
he may secretly join with other
-34-
employees to plan a competing company without violating any duty to
his employer.
(b)
Abetter Trucking, 113 S.W.3d at 511.
Application of the Law to the Facts
As evidence that MAPG employees breached fiduciary duties to
their
employer,
plaintiffs
cite
MAPG,
the
clinicians signed,
and
its
affiliates,
Memorandum of
MAH
Understanding
and
that
PrevMED,
all
MAGP
in which they acknowledged that by accepting
employment with MAPG, the clinician owed fiduciary duties to MAPG,
including the obligation to promote the best interests of MAPG and
its affiliates, MAH and PrevMED, and agreed not to provide dental
or oral hygiene services or to assist anyone in providing dental or
oral hygiene services to any PrevMED-contracted SNF for a period of
one year following separation from MAPG. 57
Plaintiffs cite the
deposition testimony of Drs. Ray and Bradbury as evidence that the
dentists failed to disclose OraQuest's intent to form a competing
clinical service provider, terminate MAPG from OraQuest's provider
network,
provider,
hire MAPG clinicians to work for the competing service
and service MAPG' s
patients. 58
Plaintiffs cite Ray's
statement that Kwauk asked her to reach out to the hygienist with
57
Plaintiffs' Response, Docket Entry No. 88, p. 15 (citing
Clinician contracts with MAPG, Exhibit M to Plaintiffs' Response,
Docket Entry No. 88-13).
58
Id. (citing Exhibit F to Plaintiffs' Response, Bradbury
Deposition at pp. 30:1-32:8, Docket Entry No. 88-6, pp. 3-5; and
Exhibit H to Plaintiffs' Response, Ray Deposition at pp. 38:339:11, Docket Entry No. 88-8, pp. 3-4).
-35-
whom she was working, that she did, and that she and her hygienist
did go to work for the new provider as evidence that Ray breached
her fiduciary duty to MAPG by persuading other clinicians to join
the competing service provider. 59
While
Ray and Bradbury's
formulation
of
plans
to
join a
competing service provider may have violated contractual duties
that they had assumed by signing the Memorandum of Understanding,
neither
Bradbury
nor
Ray
formulating plans to compete.
violated
their
fiduciary
duty
by
Plaintiffs fail to cite any evidence
from which a reasonable fact-finder could conclude that Bradbury,
Ray,
or any other MAPG clinician engaged in actions that would
constitute breach of a
fiduciary duty to their employer,
i.e.,
evidence that any MAPG clinician appropriated MAPG' s trade secrets,
solicited MAPG's customers while still working for MAPG, solicited
the departure of other employees while still working for MAPG, or
carried away confidential information.
Although plaintiffs cite Ray's statement that Kwauk asked her
to reach out to the hygienist with whom she was working, that she
did reach out to her hygienist, and that she and her hygienist did
go to work for
the new provider,
plaintiffs
fail
to cite any
evidence showing that Ray solicited her hygienist to work for the
new
service
provider
while
she
59
was
still
working
for
MAPG.
Id. at 16 (citing Exhibit H to Plaintiffs' Response,
Deposition at p. 48:11-24, Docket Entry No. 88-8, p. 7).
-36-
Ray
Ameristar Jet Charter,
App.
-
Dallas
fiduciary
duty
Inc. v.
Cobbs,
184 S.W.3d 369,
374
(Tex.
2006,
no pet.)
(holding there was no breach of
when
employee
formed
competing
business
while
employed but did not compete with employer until he resigned);
Abetter Trucking,
113
S. W. 3d at
510
(explaining
that
employee
secretly joined with other employees to make plans for forming
competing business without violating any duty to employer) .
Because
a
defendant's
liability
for
aiding
and
abetting
depends on participation in some underlying tort for which the
plaintiff
seeks
to hold at
least one of
the named defendants
liable, West Fork, 437 S.W.3d at 921, because plaintiffs' aiding
and abetting claim is based on allegations that defendants aided
and abetted breaches of fiduciary duties owed by MAPG employees to
MAPG and its affiliates, MAR and PrevMED, and because plaintiffs
have failed to cite evidence from which a reasonable fact-finder
could conclude that MAPG employees breached fiduciary duties owed
to MAPG or its affiliates, the court concludes that defendants are
entitled to summary judgment on plaintiffs' claims for aiding and
abetting breach of fiduciary duty.
4.
Civil Conspiracy
Plaintiffs
allege
that
defendants
combined
and
knowingly
participated in the breaches of the fiduciary duties committed by
MAPG' s
clinicians;
that
defendants
knowingly participated with
others to terminate PrevMED without adequate notice,
-37-
to retain
monies
owed
to
representations
PrevMED,
of
fact
and
to
likely
make
to
false
cause
and
confusion
misleading
regarding
defendants' affiliation with PrevMED; that all defendants committed
overt
acts
in
furtherance
of
the
unlawful
objective
of
their
conspiracy; and as a result plaintiffs have suffered damages. 60
Defendants argue that plaintiffs' conspiracy claims fail because
plaintiffs have failed to present evidence capable of proving that
any MAPG employee breached fiduciary duties owed to MAPG or its
affiliates,
MAH and PrevMED,
and because
conspiracy to
commit
breach of contract is not a viable claim. 61
(a)
Applicable Law
\\An actionable civil conspiracy is a combination by two or
more persons to accomplish an unlawful purpose or to accomplish a
lawful purpose by unlawful means . "
S.W.2d 932, 934 (Tex. 1983).
(citing Tilton,
persons;
See also West Fork, 437 S.W.3d at 920
925 S.W.2d at 681).
civil conspiracy claim are:
Massey v. Armco Steel Co., 652
\\ ( 1)
The essential elements of a
a combination of two or more
(2) an object to be accomplished (an unlawful purpose or
a lawful purpose by unlawful means);
object or course of action;
(3) a meeting of minds on the
(4) one or more unlawful, overt acts;
and (5) damages as the proximate result."
60
Plaintiff' s First Amended Complaint,
p. 36 ~~ 108-112.
61
M-I LLC v. Stelly, 733
Docket Entry No.
Defendants' MSJ, Docket Entry No. 80, pp. 15-17.
-38-
14,
F.
Supp.
2d 759,
791
(S.D.
Tex.
2010)
(citing Insurance Co.
North America v. Morris,
981 S.W.2d 667, 675
defendants'
for
liability
[civil]
(Tex. 1998)).
conspiracy
of
"[A]
depends
on
participation in some underlying tort for which the plaintiff seeks
to hold at least one of the named defendants liable."
Thus,
S.W.2d at 681.
derivative tort.
like aiding and abetting,
Homoki v.
Tilton, 925
conspiracy is a
Conversion Services,
Inc.,
717 F.3d
388, 402 (5th Cir. 2013).
(b)
Application of the Law to the Facts
Recognizing that "[r]ecovery for civil conspiracy is not based
on the conspiracy but on the underlying tort," 62 plaintiffs argue
that
defendants
plaintiffs
have
are
not
entitled
presented evidence
to
summary
sufficient
judgment
to
issues of material fact as to "the Defendants'
raise
because
genuine
and certain MAPG
clinicians' united goal of 'cutting out the middle man,' and seizing
Plaintiffs'
business
in
Texas. " 63
As
evidence
of
the
alleged
conspiracy, plaintiffs point to the deposition of Dr. Bradbury who
testified that Kwauk and Taylor asked him to meet with them in
August of 2014 and at the meeting announced to him "that they were,
quote/unquote, eliminating the middleman and that they .
[him]
to keep it confidential." 64
asked
Plaintiffs also point to the
62
Plaintiffs' Response, Docket Entry No. 88, p. 17.
63
Id. at 18.
64
Id. at 17 (citing Exhibit F to Plaintiffs' Response, Bradbury
Deposition at pp. 30:25-31:7, Docket Entry No. 88-6, pp. 3-4).
-39-
deposition of Dr. Ray who testified that she, too, had conversations
with Kwauk about creation of a new service provider that Kwauk asked
her to keep confidential. 65
Citing a September 30, 2014, email from
SNF administrator Georgia Lee, plaintiffs argue that
the
Defendants
and
Dr.
Patel
made
misleading
representations to the SNFs to secure their business
The Defendants successfully scheduled a meeting
with an SNF representative by representing that they were
the same company as PrevMED[,] (Ex. P.) [, but w]hen the
representative learned that the Defendants were not
PrevMED,
the administrator attempted to cancel the
meeting. 66
Missing from plaintiffs' briefing is any explanation for how or why
this evidence is sufficient to raise genuine issues of fact for
trial regarding their claim for conspiracy.
In order to plead and prove a claim for civil conspiracy, a
plaintiff
must
adequately plead and prove
an underlying
tort.
Homoki, 717 F.3d at 402 (citing Meadows v. Hartford Life Ins. Co.,
492 F.3d 634, 640 (5th Cir. 2007)
("If a plaintiff fails to state
a separate claim on which the court may grant relief,
claim for civil conspiracy necessarily fails.").
then the
See also Amazon
Tours, Inc. v. Quest Global Angling Adventures L.L.C., Civil Action
No. 3:03cv2551-M, 2004 WL 1788078 at *4,
(N.D. Tex. June 30, 2004)
(holding that catch-all "incorporation by reference" statement in
the civil conspiracy section of a complaint did not give defendants
65
Id. (citing Exhibit H to Plaintiffs' Response, Ray Deposition
at p. 38:3-22, Docket Entry No. 88-8, p. 3).
66
Id. (citing Exhibit P to Plaintiffs' Response, Docket Entry
No. 88-16).
-40-
fair notice that any of the other torts listed in the complaint
were the underlying tort).
In Plaintiffs' First Amended Complaint
they allege that "Defendants combined and knowingly participated
with Patel and others in the breach of the fiduciary duties by
Patel
others," 67
and
and
that
"Defendants
also
combined
and
knowingly participated with Patel and others to terminate PrevMED
without adequate notice, to retain monies owed to PrevMED, and to
make false and misleading representations of fact likely to cause
confusion regarding Defendants' affiliation with PrevMED. " 68
These
allegations indicate that plaintiffs' conspiracy claims are based
on an alleged breach of fiduciary duty by Patel and others,
on
defendants' decision to terminate PrevMED without adequate notice,
and on allegedly false and misleading representations of fact.
Neither these allegations nor the proof that plaintiffs cite is
sufficient to support a claim for civil conspiracy.
Plaintiffs have neither alleged a claim for breach of fiduciary
duty against Dr. Patel or any other MAPG clinician, nor cited any
evidence capable of proving that Dr.
Patel or any MAPG clinician
breached a fiduciary duty owed to MAPG or its affiliates.
The only
evidence that plaintiffs have submitted regarding Dr. Patel is an
August 28, 2014, email from Kwauk to Taylor stating, "Dr. Patel is
on board.
67
He understands the risk and he's been consulting his
Plaintiffs'
First Amended Complaint,
~ 108.
p. 36
68
Id.
~ 109.
-41-
Docket Entry No.
14,
attorney.
He is going to set up a PC and enter into a management
services agreement with us. " 69
duty claim under Texas
existed between
breached
its
The elements of a breach of fiduciary
law are:
(1)
a
fiduciary
the plaintiff and defendant;
fiduciary
duty
to
the
(2)
plaintiff;
relationship
the defendant
and
(3)
the
defendant's breach resulted in injury to the plaintiff or benefit to
the defendant.
Homoki, 717 F.3d at 402-03.
The August 28, 2014,
email does not show that Dr. Patel had a fiduciary relationship with
any
plaintiff,
that
he
breached
fiduciary
duties
owed
to
the
plaintiffs, or that his breach injured the plaintiffs or benefitted
any defendant.
Moreover, for the reasons stated in§ II.B.3, above,
the court has already concluded that plaintiffs have failed to cite
evidence
capable of
establishing
that
any other MAPG clinician
breached fiduciary duties owed to MAPG or its affiliates.
Plaintiffs' allegations that defendants conspired with Patel
and others to terminate PrevMED without adequate notice are based
on PrevMED's breach of contract claim that arises from OraQuest's
alleged cancellation of its Contract with PrevMED in violation of
the Contract's termination provision, which required writ ten notice
sixty ( 60) days in advance. 70
"Texas law does not recognize a claim
for conspiracy to breach a contract."
Exxon Mobil Corp. v. Starr
Indemnity & Liability Insurance Co., 181 F. Supp. 3d 347, 363 (S.D.
Tex. 2015)
(citing Grizzle v. Texas Commerce Bank, N.A., 38 S.W.3d
69
August 28, 2014, Email from Paul Kwauk to Jim Taylor,
Exhibit G to Plaintiffs' Response, Docket Entry No. 88-7.
70
Plaintiffs'
First Amended Complaint,
p. 4 ~ 8.
-42-
Docket Entry No.
14,
265, 285 (Tex. App. -Dallas 2001, pet. granted), rev'd in part on
other grounds by Texas Commerce Bank, N.A. v. Grizzle,
96 S.W.3d
2 4 0 ( Tex . 2 0 0 2 ) )
Plaintiffs' reference to false and misleading facts as a basis
on which to support a conspiracy claim fails because the claims
that plaintiffs assert based on defendants' alleged use of false
and misleading
statements,
i.e. ,
claims
for
violations
of
the
Lanham Act, misappropriation, and passing off, are all subject to
dismissal for failure to cite evidence capable of raising genuine
issues of material fact.
See
§§
II.B.5-7, below.
Accordingly, the court concludes that defendants are entitled
to summary judgment on plaintiffs' claims for civil conspiracy.
5.
Violation of the Lanham Act, 15 U.S.C.
§
1125
Plaintiffs allege that all defendants violated the Lanham Act,
15 U.S.C.
1125, by making false and misleading descriptions and
§
representations of fact, which were intended to, likely to, and did
in fact
cause confusion,
affiliation,
defendants
qualities
connection,
cause mistake,
their
to the
and association between plaintiffs and
by misrepresenting
of
and deceive as
services
the
and
nature,
commercial
characteristics,
activities,
and
and by
making unauthorized use of the PrevMED and Mid America names with
intent
to
influence
purchasing
decisions
responsible parties of SNF patients. 71
71
Id. at 32-33
~~
74-83.
-43-
by
SNFs
and
the
Defendants argue that they are entitled to summary judgment on
plaintiffs' Lanham Act claims because plaintiffs are not able to
cite evidence capable of establishing any element of such a claim. 72
Plaintiffs respond by asserting that
[i] n an email that went out to all administrators of
PrevMED-contracted SNFs prior to the termination of the
Contract,
the
Defendants
informed
the
SNFs
that
"everything is going to stay the same except that from
now on, you will have to deal with only one company for
all of your dental needs" and that" [y]our residents will
continue to receive their dental care from the same
providers." (Ex. U.) When told by an administrator that
a SNF wanted to cancel all of the policies due to the
split with PrevMED, the Defendants responded by stating
that it wanted to "provide clarification" and "assure you
that there is going to be no disruption in providing
services to your residents .
"
( Id.)
Another SNF
administrator responded stating, "I did not understand
that your company is a completely different company than
PrevMED," and OraQuest replied stating that "I'm sorry if
there was a misunderstanding . . . [t]he discontinuing of
the partnership does not change the services and service
providers that your residents have."
(Ex. P.) 73
Citing Reed Construction Data Inc. v. McGraw-Hill Companies, Inc.,
49
F.
Supp.
3d 385,
416
(S.D.N.Y.
2014),
plaintiffs argue that
"[u] nder the Lanham Act, there is not a hard-and-fast rule governing
the number of individuals whom must be misled to support a cause of
Here, it is clear that several SNFs were misled." 74
action.
(a)
Applicable Law
Section 43(a) of the Lanham Act, codified at 15 U.S.C.
§
provides in relevant part:
72
Defendants' MSJ, Docket Entry No. 80, p. 22.
73
Plaintiffs' Response, Docket Entry No. 88, pp. 24-25.
74
Id. at 25.
-44-
1125,
Any person who
in commercial advertising or
promotion, misrepresents the nature, characteristics,
qualities, or geographic origin of his or her or another
person's goods, services, or commercial activities, shall
be liable in a civil action by any person who believes
that he or she is likely to be damaged by such act.
15 U.S.C.
1125(a) (1) (B)
§
(West 1999).
The Fifth Circuit has
interpreted this section of the Lanham Act as providing "protection
against a
'myriad of deceptive commercial practices,'
false advertising or promotion."
International,
Inc.,
227
F. 3d 489,
denied, 121 S. Ct. 1355 (2001)
86
Co.,
F. 3d 1379,
intended
to
1387
protect
unfair competition.
Corp.,
123 S.
Ct.
Pizza Hut,
495
including
Inc. v. Papa John's
(5th Cir.
2000),
cert.
(citing Seven-Up Co. v. Coca-Cola
(5th Cir.
persons
1996)).
participating
The Lanham Act was
in
commerce
against
See Dastar Corp. v. Twentieth Century Fox Film
2041
[29]
(2003)
(recognizing that while the
Lanham Act primarily focuses on the registration and infringement
of trademarks,
Section 43(a)
unfair competition).
also provides protections against
As such,
Section 43(a)
provides a remedy
against those who use in commerce a "false designation of origin,
false or misleading description of fact,
representation of
fact."
15
U.S.C.
§
or false or misleading
1125
Circuit, along with many others, holds that
is
broad
enough
to
encompass
passing
§
(1999).
The
Fifth
43 of the Lanham Act
off.
See
Bangor
Punta
Operations, Inc. v. Universal Marine Co., Ltd., 543 F.2d 1107, 1109
(5th Cir. 1976).
See also Dastar,
123 S. Ct.
2041
[30]
(noting
that the Fifth Circuit, among many others, recognizes a claim of
passing off) .
McArdle v. Mattel Inc.,
-45-
456 F. Supp.
2d 769,
783
(E.D.
Tex.
2006).
Unfair
competition
is
almost
universally
regarded as a question of whether the defendant is passing off his
goods
or
services
as
those
of
the
plaintiff
by
virtue
of
substantial similarity between the two, leading to confusion on the
part of potential customers.
Volkswagenwerk Aktiengesellschaft v.
Rickard, 492 F.2d 474, 478 (5th Cir. 1974).
In Pizza Hut, the case cited by both plaintiffs and defendants
for its statement of the elements of a Lanham Act claim, the Fifth
Circuit
held
that
establishing
a
prima
facie
case
required
plaintiffs to show:
(1) A false
product;
or misleading statement of
fact
about a
(2) Such statement either deceived, or had the capacity
to deceive a substantial segment of potential consumers;
(3) The deception is material, in that it is likely to
influence the consumer's purchasing decision;
(4) The product is in interstate commerce; and
(5) The plaintiff has been or is likely to be injured as
a result of the statement at issue.
227 F.3d at 495
(citing Taquino v.
F.2d 1488, 1500 (5th Cir. 1990)).
Teledyne Monarch Rubber,
893
The failure to present evidence
capable of establishing the existence of any element of the prima
facie case is fatal to the plaintiffs' claim.
(b)
Id.
Application of the Law to the Facts
Defendants argue that plaintiffs have failed to satisfy the
first element of their Lanham Act claim because
-46-
there was no false statement or actual deception. Rather
than trying to pass of[f] the services performed under
the
OraQuest
policy
as
PrevMED' s
following
the
termination, OraQuest actually tried to distance itself
as far as possible from the PrevMED brand (because
PrevMED had been misrepresenting the policy) .
When
OraQuest terminated PrevMED, OraQuest sent a letter to
each SNF and insured, expressly stating that it had
"discontinued its partnership with PrevMED, Inc." and
assured them that the "PrevMED™ Oral Health Maintenance"'
Plan will no longer be associated with the OraQuest
Policy. " 75
The only evidence of false and/or misleading statements of
fact
that
plaintiffs
plaintiffs
assert
was
cite
is
the
"in
an
email
following
that
statement
went
out
that
to
all
administrators of PrevMED-contracted SNFs prior to the termination
of the Contract: " 76
"'
[E] verything is going to stay the same except
that from now on, you will have to deal with only one company for
all of your dental needs' and that '[y]our residents will continue
to receive their dental care from the same providers.'" 77
Although
plaintiffs assert that these statements are evidenced by Exhibit U
to their brief in opposition, which is a chain of emails between
OraQuest' s Andrea Suarez and Ginger Whitley, administrator at Texan
Nursing
&
Rehab of
Gonzales,
Texas,
dating
from October 2
to
October 15, 2014, these statements are actually found in Exhibit 0,
a draft email that defendant Kwauk sent to two other OraQuest
75
Defendants' MSJ, Docket Entry No. 80, p. 22 (citing Exhibit 6
thereto, Docket Entry No. 80-7).
76
Plaintiffs' Response, Docket Entry No. 88, pp. 24-25.
77Id.
-47-
employees, Danielle Geuvara and Andrea Suarez.
Plaintiffs have not
cited any evidence showing that either the draft email or the
statements
therein
misleading
were,
that
in
plaintiffs
fact,
sent
contend
to
or
were
false
received
by
and/or
any
SNF
administrator.
As
evidence
that
OraQuest
deceived
SNF
administrators,
OraQuest
and
two
Whitley. 78
SNF
made
statements
plaintiffs
administrators,
cite
Georgia
of
fact
emails
Lee
and
that
between
Ginger
Plaintiffs' evidence shows that on September 30, 2014,
Georgia Lee, LMSW, wrote to Guevara at OraQuest stating:
"I did
not understand that your company is a completely different company
than PrevMED.
her.
I am happy with our hygienist and would hate to lose
At this time I would like to cancel our meeting." 79
Guevara
replied:
I'm sorry
clarify:
if
there
was
a
misunderstanding.
Let
me
While we are different than PrevMED the dentist and
hygienist that was working under PrevMed will now be
working for us.
The discontinuing of the partnership does not change the
services and service providers that your residents have.
78
Id. at 25 (citing September 30, 2014, email from Danielle
Guevara to Georgia Lee, Exhibit P to Plaintiffs' Response, Docket
Entry No. 88-16, and October 15, 2014, email from Andrea Suarez to
Ginger Whitley, Exhibit U to Plaintiffs' Response, Docket Entry
No. 88-21) .
79
Lee,
September 30, 2014, email from Danielle Guevara to Georgia
Exhibit P to Plaintiffs' Response, Docket Entry No. 88-16,
p. 3.
-48-
Please reconsider our meeting as you will NOT be losing
your hygienist.
The hygienist is just working for us now.
:)
80
The emails exchanged by Lee and Guevara show that -
while Lee
initially misunderstood that OraQuest and PrevMED were separate
companies- Guevara's email clarified that fact.
support plaintiffs'
fact
that were
deceived.
to make
The emails do not
contention that OraQuest made statements of
false
or misleading or that Lee was,
in fact,
On the contrary, these emails show that OraQuest worked
sure
that
SNF administrators understood not only that
OraQuest and PrevMED were wholly separate companies, but also that
the partnership between OraQuest and PrevMED was ending.
Plaintiffs'
evidence also
shows
that
on October 2,
2 014,
Whitley, an SNF administrator at Texan Nursing & Rehab in Gonzales,
Texas, wrote to Rhonda Johnson at OraQuest stating:
"This is to
inform you that Texan Nursing and Rehab of Gonzales is cancelling
OraQuest
responded
Dental
to
Plans,
Whitley
starting
that
her
October
1,
termination
2014." 81
request
Johnson
was
not
acceptable to terminate individual policies that OraQuest had with
SNF residents. 82
Whitley replied to Johnson by asking for copies
of the individual policies. 83
80
Id.
On October 15,
2014,
Johnson sent
at 2.
81
0ctober 15, 2014, email from Andrea Suarez to Ginger Whitley,
Exhibit U to Plaintiffs' Response, Docket Entry No. 88-21, p. 4.
82
Id.
at 3.
83Id.
-49-
Whitley a list of all the residents who were then enrolled in the
OraQuest Dental Insurance Plan. 84
stating,
Whitley wrote back the same day
"[A] s per my original email,
all residents
from Texan
Nursing and Rehab are cancelling policies effective October 1.
Due
to short notice of your cancellation with PrevMed, the facility has
had no other choice but to seek an alternate dental provider." 85
Later that day, OraQuest's Andrea Suarez wrote to Whitley stating:
I would like to provide clarification regarding the
letter that you received from PrevMED. Yes, we discontinued our partnership with PrevMED primarily for the
benefit of your residents.
Through this change, your
residents will be receiving dental care according to the
benefits they are entitled to under our policy. There is
going to be a new dental service provider (NuhDent) who
is committed to excellent and high quality dental care.
Furthermore, Dr. Bradbury, who has been the treating
dentist in your facility previously, is planning to visit
Texan Nursing & Rhab later this month.
I would like to
assure you that there is going to be no disruption in
providing services to your residents unlike what PrevMED
represented in its letter. I am available to answer any
of your questions or concerns regarding the transition
and/or any questions regarding our policy. 86
These
emails
between
OraQuest' s
Suarez
and
SNF
administrator
Whitley show that OraQuest worked to make sure Whitley understood
not only that OraQuest and PrevMED were wholly separate companies,
but also that the partnership between OraQuest and PrevMED was
ending.
Moreover, plaintiffs have not cited any evidence capable
of establishing that OraQuest's statements that the same providers
84
Id. at 2-3.
85
Id. at 2.
s6Id.
-50-
would be servicing these SNFs were not true.
Accordingly,
the
court concludes that plaintiffs have failed to cite any evidence
capable of proving either the first or second elements of their
Lanham Act claim, i.e., that defendants made a false or misleading
statement of fact about a product, or that such statement either
deceived or had the capacity to deceive a substantial segment of
potential consumers.
Nor have plaintiffs presented any evidence
capable of establishing any of the other elements of their Lanham
Act claims, i.e., that any deception was material in that it was
likely to influence the consumer's purchasing decision; that the
product at issue was in interstate commerce; or that plaintiffs
have
been
injured
Accordingly,
as
a
result
of
the
statement{s)
at
issue.
the court concludes that defendants are entitled to
summary judgment on plaintiffs' Lanham Act claims.
6.
Common Law "Passing Off" Claims
Plaintiffs allege that defendants passed off their services as
those of
the plaintiffs by virtue of a
substantial
similarity
between the two, leading to confusion on the part of consumers and
potential consumers. 87 Asserting that plaintiffs' common law claims
of "passing off" require proof of effectively the same elements as
their Lanham Act claims, defendants argue that they are entitled to
summary judgment on these claims for essentially the same reasons
87
Plaintiff' s First Amended Complaint,
p. 35 ~~ 99-100.
-51-
Docket Entry No.
14,
that they are entitled to summary judgment on plaintiffs' Lanham
Act claim. 88
(a)
Applicable Law
"To establish 'passing off' under Texas common law, a plaintiff
must allege:
services
as
1)
that the defendant is passing off his goods or
those
of
the plaintiff by virtue of
similarity between the two; and 2)
Supp.
2d
730,
748-49
(W.D.
Tex.
Enterprises, Inc. v. Webbworld, Inc.,
Tex. 1997)).
492
F. 2d
at
substantial
that this will likely lead to
confusion on the part of potential customers.
F.
a
Sefton v. Jew, 201
2001)
(citing
Playboy
991 F. Supp. 543, 557
(N.D.
See also Volkswagenwerk Aktiengesellschaft v. Rickard,
478;
Line
Enterprises,
Inc.
v.
Hooks
&
Matteson
Enterprise, Inc., 659 S.W.2d 113, 117 (Tex. App.- Amarillo 1983, no
writ).
Under
Texas
law
"[t] he
plaintiff
need
not
prove
the
defendant intended to deceive customers or that customers were in
fact deceived. . . Instead, it is sufficient to show that deception
will naturally and probably result from the operation or that the
public
is
likely to be deceived or confused."
Webbworld,
991
F. Supp. at 557 (citing Line Enterprises, 659 S.W.2d at 117).
(b)
Application of the Law to the Facts
Plaintiffs argue that defendants are not entitled to summary
judgment on their common law passing off claim because
88
Defendants' MSJ, Docket Entry No. 80, p. 21.
-52-
[i]n its communications with SNFs, the Defendants made
numerous statements purporting to pass off Plaintiffs'
services as their own.
(Ex. U.) "The whole basis of the
law of 'unfair competition'
. is that no one shall
sell his goods in such a way as to make it appear that
they come from some other source." Chevron Chemical Co.
v. Voluntary Purchasing Groups, Inc., 659 F.2d 695, 701
(5th Cir. 1981) .
In an email that went out to all
administrators of PrevMED-contracted SNFs prior to the
termination of the Contract, the Defendants informed the
SNFs that "everything is going to stay the same except
that from now on, you will have to deal with only on[e]
company for all of your dental needs" and that "[y]our
residents will continue to receive their dental care from
the same providers . "
(Ex. 0. ) 89
Exhibit 0 is a September 26,
2014,
email from Kwauk to OraQuest
employees, Danielle Guevara and Andrea Suarez, with a subject line
stating,
"Draft Email." 90
Plaintiffs have not cited any evidence
from which a reasonable fact-finder could conclude that this draft
email was
actually sent to or received by SNF administrators.
Moreover, for the reasons stated in
§
II.B.5, above, the court has
already concluded that the communications that OraQuest did send to
SNF administrators do not constitute evidence from which reasonable
jurors
could conclude
either
that
defendants
were passing off
OraQuest's goods or services as those of the plaintiffs, or that
OraQuest's communications to SNF administrators were likely to lead
to confusion on the part of potential customers as required to
establish a claim for passing off under Texas law.
See Sefton, 201
89
Plaintiffs' Response, Docket Entry No. 88, pp. 26-27 (citing
Exhibit 0, Docket Entry No. 88-15)
90
September 26, 2014, email from Paul Kwauk to Danielle
Guevara, Exhibit 0 to Plaintiffs' Response, Docket Entry No. 88-15.
-53-
F.
Supp.
2d at
748-49.
Accordingly,
for
essentially the
same
reasons that the court has already concluded that defendants are
entitled to summary judgment on plaintiffs' claims for violation of
the Lanham Act, the court concludes that defendants are entitled to
summary judgment on plaintiffs' Texas law claims for passing off.
7.
Misappropriation
Plaintiffs allege that
they developed the
PrevMED and Mid
America names, the MAPG service system, and the PrevMED marketing
materials through extensive time,
labor,
skill,
and money;
that
defendants used the PrevMED and Mid America names, the MAPG service
system,
and the PrevMED marketing materials in order to compete
with or eliminate plaintiffs from the Texas market, thereby gaining
a special advantage in competition; and that defendants bore none
of
the
expense
valuable assets.
incurred by
the plaintiffs
in developing
these
91
Defendants argue that plaintiffs' common law misappropriation
claims
fail
because
while
Texas
theories of misappropriationname or likeness,
law
recognizes
claims
for
two
misappropriation of an individual's
which amounts
to an invasion of privacy,
and
misappropriation of a product created through extensive time, labor,
skill, and money either theory.
plaintiffs' misappropriation claims fail under
Citing Express One International v. Steinbeck,
91
Plaintiff' s First Amended Complaint,
pp. 35-36 ~~ 103-104.
-54-
Docket Entry No.
53
14,
S.W.3d 895, 900 (Tex. App.- Dallas 2001, no pet.), defendants argue
that plaintiffs'
and
Mid
claims that defendants misappropriated PrevMED's
America's
names
fail
because
"[t]his
misappropriation does not apply to corporations. " 92
Sporting Products
S.W.2d 214, 219
I
Inc.
v.
Johnny Stewart Game Calls
type
Citing U.S.
Inc.,
I
(Tex. App. - Waco 1993, writ denied).
argue that plaintiffs'
of
865
Defendants
claims that they misappropriated the MAPG
service system fail because the MAPG service system is not a work
product in which plaintiffs have a protectable property interest.
Plaintiffs do not dispute defendants' contention that they are
unable to establish claims
for alleged misappropriation of the
PrevMED and Mid America names.
Instead,
citing U.S.
Sporting
Products, 865 S.W.2d at 219, plaintiffs argue that the defendants
misappropriated
their
"way of
practicing dentistry
in SNFs. " 93
Plaintiffs explain that
on June 17, 2014, the Defendants contacted PrevMED and
requested all clinical data and all customer services
statistics.
(Ex. V.)
In July 2014, the Defendants
arranged a meeting with Dr. Timothy Bradbury in order to
"check out [his] portable dental unite [sic]."
(Ex. W.)
Around that same time, on July 16, 2014, the Defendants
requested detailed information regarding all locations
that the clinicians were servicing.
Kwauk requested a
list of which dentist was assigned to each facility.
(Ex. X.)
On August 5, 2014, Kwauk requested a list of
MAPG' s hygienists by region.
(Ex. Y)
On August 13,
2014, Kwauk requested that his assistant, Andrew Suarez,
obtain for him some of PrevMED's marketing materials.
92
Defendants' MSJ, Docket Entry No. 80, p. 23.
93
Plaintiffs' Response, Docket Entry No. 88, p. 28.
-55-
(Ex. Z.)
Finally, on September 26, 2014, three days
prior to OraQuest' s notification that it intended to
terminate the Contract, Kwauk asked his assistant to "get
as much info as possible and as early as possible."
(Ex. AA.) 94
Missing from plaintiffs'
briefing is any evidence that PrevMED
provided any of the information that OraQuest requested in June,
July, or August of 2014, or that any the requested information was
confidential.
Nevertheless, plaintiffs argue that "MAH lost its
Texas business and has not been able to provide services in Texas
since then.
As
such,
MAH,
and by extension MAPG,
experienced
commercial damage as a result of OraQuest' s misappropriation." 95
The objective of the tort of misappropriation in this context,
i.e., the context of unfair competition, is to "protect the labor
-the so-called 'sweat equity' -that goes into creating a work" or
product.
Alcatel USA,
772, 788 (5th Cir. 1999)
216,
a
business
Inc. v. DGI Technologies,
Inc.,
166 F.3d
In U.S. Sporting Products, 865 S.W.2d at
sold recordings
of
animal
sounds
that
it
had
obtained either by venturing into the animals' natural habitats or
by capturing
the
animals -
a
"labor
intensive"
process.
defendant then purchased and copied the recordings,
The
selling its
"new" product in direct competition with the plaintiff.
Id.
The
court of appeals held the defendant liable for misappropriation,
based on the following elements of the tort:
-56-
( i) the creation of plaintiff's product through extensive
time, labor, skill and money, (ii) the defendant's use of
that product in competition with the plaintiff, thereby
gaining a special advantage in that competition (i.e., a
"free ride") because defendant is burdened with little or
none of the expense incurred by the plaintiff, and
(iii) commercial damage to the plaintiff.
Id. at 218.
See also Alcatel USA, 166 F.3d at 788.
"The first element requires the expenditure of extensive time,
labor, skill, and money to manufacture a product, which need not be
tangible, but must provide some commercial advantage."
In re TXCO
Resources, Inc., 475 B.R. 781, 836 (W.D. Tex. 2012).
Thus, Texas
courts
variety
have
upheld
misappropriation
claims
in
a
of
situations where the plaintiff invested significant time and energy
into the development of an intangible product.
See U.S. Sporting
Products, 865 S.W.2d at 217-18 (animal sound recordings); Gilmore
v. Sammons, 269 S.W. 861, 863 (Tex. App. -Dallas 1925, writ ref'd)
(news
items) .
authority
in
Plaintiffs
support
of
have
their
neither
alleged
contention
that
nor
cited any
their
"way
of
practicing dentistry in SNFs" constitutes either a saleable product
or
a
product
that
provides
some
commercial
advantage.
The
undisputed summary judgment evidence establishes that plaintiffs'
actual product is not their "way of practicing dentistry in SNFs"
but,
instead, the provision of dental services to SNF residents.
Nor have plaintiffs cited any evidence capable of establishing that
defendants used plaintiffs' way of practicing dentistry in SNFs in
competition with the plaintiffs.
Because plaintiffs have failed to
-57-
cite any evidence capable of establishing either the first or the
second element of their misappropriation claims,
defendants are
entitled to summary judgment on their claims.
C.
Defendants' Objections to and Motion to Strike Keith Walls'
Affidavit and Plaintiffs' Motion to Substitute Keith Walls'
Affidavit
Defendants' Objections to and Motion to Strike Keith Walls'
Affidavit (Docket Entry No. 95) and Plaintiffs' Motion for Leave of
Court to Substitute Affidavit of Keith Walls (Docket Entry No. 97)
are
both
moot
because
the
court
has
been
able
to
resolve
defendants' motion for summary judgment without referencing Walls'
affidavit.
III.
Evidentiary Motions
Pending before the court are Plaintiffs'
Motion to Strike
Expert Designations as Untimely (Docket Entry No. 71), Defendants'
Motion to Exclude the Expert Testimony and Report of Richard J.
Ostiller
(Docket
Entry No.
79) ,
Plaintiffs'
Motion
to
Exclude
Expert Testimony of Jeffrey A. Compton (Docket Entry No. 81), and
Plaintiffs' Motion to Exclude Expert Testimony of Jose Daniel Saenz
(Docket Entry No. 82)
A.
Plaintiffs' Motion to Strike Expert Designations as Untimely
Plaintiffs' Motion to Strike Expert Designations as Untimely
(Docket Entry No.
Taylor as
a
71)
seeks to strike the designation of James
non- retained expert witness by defendants,
-58-
and to
strike that portion of the testimony of Daniel Saenz intended to
support defendants' affirmative defenses.
Plaintiffs' motion to
strike portions of the testimony of Daniel Saenz is moot because
subsequent
to
filing
the
pending
motion,
plaintiffs
filed
Plaintiffs' Motion to Exclude Expert Testimony of Jose Daniel Saenz
(Docket
Entry No.
82) ,
to
which defendants
have
responded by
stating that they do not oppose the relief requested. 96
Asserting
that
Taylor's
testimony
relates
to
defendants'
affirmative defenses, plaintiffs move the court to strike Taylor's
designation as an expert witness because defendants designated him
on June 24,
2016,
the amended deadline for designating rebuttal
expert witnesses, which was over two months after the April 22,
2016, deadline for designating experts testifying as to a claim or
defense for which defendants bear the burden of proof.
argue
that
defendants'
late
designation of
Plaintiffs
Taylor caused them
prejudice by precluding them from designating their own rebuttal
experts,
97
and that the court should,
designation as an expert.
therefore,
strike Taylor's
Defendants respond that Taylor's expert
opinions are proper rebuttal opinions that were timely designated,
that good causes exist to allow Taylor's designation,
and that
Taylor's late designation as an expert could not have prejudiced
the plaintiffs because on July 8,
2016,
the court extended the
96
Defendants' Response to Plaintiffs' Motion to Exclude the
Testimony of Jose Daniel Saenz, Docket Entry No. 89.
97
Plaintiffs' Motion to Strike Expert Designations as Untimely,
Docket Entry No. 71, p. 6.
-59-
deadline for the designation of rebuttal experts to August 24,
2016. 98
Assuming without deciding that Taylor's testimony relates to
defendants' affirmative defenses,
and that defendants improperly
designated Taylor as an expert on June 24,
2016,
the date for
designating rebuttal experts instead of on April 22, 2016, the date
for designating experts testifying as to a claim or defense for
which defendants bear the burden of proof, the court concludes that
plaintiffs' motion to strike should be denied because plaintiffs
have failed to establish that Taylor's late designation prejudiced
them.
Plaintiffs argue that defendants' late designation of Taylor
precluded them from designating their own rebuttal experts, but as
an explanation plaintiffs
state only that
they
"would have
to
reevaluate their own expert report and incur additional costs in
responding to Defendants' expert designation." 99
Because on July 8,
2016, the court extended the deadline for designation of experts
from
June
"prejudice"
24,
2016,
to
August
24,
2016;
because
the
only
that plaintiffs argue they suffered due to Taylor's
98
Defendants'
Response to Plaintiffs'
Motion to Strike
Designations as Untimely, Docket Entry No. 76, pp. 7-10. See
Memorandum Opinion and Order, Docket Entry No. 67, p. 31 (extending
deadline for designation of rebuttal expert witnesses) .
99
Plaintiffs' Motion to Strike Expert Designations as Untimely,
Docket Entry No. 71, p. 6.
See also Plaintiffs' Reply in Support
of Motion to Strike Expert Designations as Untimely, Docket Entry
No. 78, p. 7 (restating that they "are prejudiced insofar as they
must reevaluate their own expert report and incur additional costs
in responding to Defendants' expert designations").
-60-
late designation,
i.e.,
the need to reevaluate their own expert
report and incur additional costs
expert
designation,
is
not
in responding to defendant's
prejudice
but
simply
work
that
plaintiffs need to do to designate an expert to rebut Taylor;
because
plaintiffs
have
not
argued
that
the
extension of
the
deadline for designating experts was not sufficient; and because a
trial date has yet to be set,
the court is not persuaded that
Taylor's late designation prejudiced the plaintiffs.
the court concludes
Accordingly,
that plaintiff's motion to strike Taylor's
expert designation should be denied.
See Continental Casualty Co.
v. St. Paul Fire & Marine Insurance Co., Civil Action No. 3:04-cv1866-D, 2006 WL 2506957,
that
*1
(N.D. Tex. August 15, 2006)
(holding
"defendant should have designated the expert based on his
opinions concerning the affirmative defense of comparative fault,
but that the prejudice to plaintiff and intervenor can be cured by
allowing them to designate rebuttal experts on this affirmative
defense and continuing the trial of the case
B.
.").
Motions to Exclude Expert Testimony
Plaintiffs' Motion to Exclude Expert Testimony of Jose Daniel
Saenz (Docket Entry No. 82) will be granted since defendants have
filed
a
response
stating
that
they
"do not
oppose
the
relief
requested." 100
100
Defendants' Response to Plaintiffs' Motion to Exclude the
Testimony of Jose Daniel Saenz, Docket Entry No. 89.
-61-
Also
pending
before
the
court
are
Defendants'
Motion
Exclude the Expert Testimony and Report of Richard J.
to
Ostiller
(Docket Entry No. 79}, to which plaintiffs have responded by filing
Plaintiffs' Response in Opposition to Defendants' Motion to Exclude
Expert Testimony and Report of Richard J. Ostiller (Docket Entry
No.
87),
and Plaintiffs'
Motion to Exclude Expert Testimony of
Jeffrey A. Compton (Docket Entry No. 81), to which defendants have
responded by filing Defendants' Response to Plaintiffs' Motion to
Exclude the Testimony of Jeffrey A. Compton (Docket Entry No. 91).
Having carefully considered the motions and the responses thereto,
the court is not persuaded that either motion should be granted.
The court will listen to these experts' testimony at trial; and if
the court concludes that the expert is not qualified to give an
opinion or that his opinion is not supported by the evidence, the
court will sustain an appropriate objection.
IV.
For
the
reasons
Conclusions and Order
stated
in
§
II. B,
above,
defendants
are
entitled to summary judgment on the claims for breach of contract
asserted by MAH and MAPG, on the claims for tortious interference
with existing contracts asserted by MAH and MAPG, and on the claims
asserted by all
prospective
the
plaintiffs
contracts,
for
tortious
interference with
aiding and abetting breach of
fiduciary
duty, civil conspiracy, violations of the Lanham Act,
passing off,
and misappropriation,
entitled to
summary
judgment
on
but
that
PrevMED' s
defendants
claims
-62-
for
are
not
breach
of
contract
asserted against OraQuest and tortious interference with existing
contracts
asserted
against
all
Accordingly,
defendants.
Defendants' Motion for Summary Judgment (Docket Entry No. 80)
is
GRANTED IN PART and DENIED IN PART.
For
the
reasons
stated
in
§
II.C,
above,
Objections and Motion to Strike Keith Walls'
Defendants'
Affidavit
(Docket
Entry No. 95) is MOOT, and Plaintiffs' Motion for Leave of Court to
Substitute Affidavit of Keith Walls (Docket Entry No. 97) is MOOT.
For the reasons stated in
§
III.A, above, Plaintiffs' Motion
to Strike Expert Designations as Untimely (Docket Entry No. 71) is
DENIED with respect to James Taylor and MOOT with respect to Daniel
Saenz.
For the reasons stated in
§
III.B, above, Defendants' Motion
to Exclude the Expert Testimony and Report of Richard J. Ostiller
(Docket Entry No.
79)
is DENIEDi
Expert Testimony of Jeffrey A.
DENIED i
and Plaintiffs'
Plaintiffs'
Compton
Motion to
Motion to Exclude
(Docket Entry No.
Exclude
Expert
81)
is
Testimony of
Jose Daniel Saenz (Docket Entry No. 82) is GRANTED . 101
101
The court has allowed the parties extraordinary leeway in
submitting lengthy briefs and other written materials in connection
with the pending motions. As the length of this Memorandum Opinion
and Order indicates, the court has expended considerable time
reading these papers and performing a significant amount of
independent research to be as fully informed as possible when
addressing the parties' arguments.
While, because of the sheer
volume of information presented, it is not impossible that some
arguments were overlooked, the parties should assume that failure
to expressly address a particular argument in this Memorandum
(continued ... )
-63-
The live claims remaining in this action are the claims that
PrevMED has asserted against OraQuest,
now FCL,
for breach of
contract, and the claims that PrevMED has asserted against all of
the defendants for tortious interference with existing contracts
that PrevMED had with Texas SNFs.
Since defendants have not sought
summary judgment on claims that plaintiffs have asserted against
all defendants for unjust enrichment, those claims are also live.
Adjudication of the live claims shall proceed according to the
following schedule:
•
Motions in Limine shall be filed by March 10, 2017;
•
Responses to Motions in Limine shall be filed by
March 24, 2017;
•
The Joint Pretrial Order shall be filed by April 7,
2017;
•
Docket Call will be held on April
3:00p.m.
A trial
date
will
be
set
at
Docket
14,
Call.
2017,
at
Accordingly,
Plaintiffs' Motion Requesting a Trial Date (Docket Entry No. 83) is
DENIED AS MOOT.
SIGNED at Houston, Texas, on
2017.
UNITED STATES DISTRICT JUDGE
101
( • . • continued)
Opinion and Order reflects the court's judgment that the argument
lacked sufficient merit to warrant discussion.
Accordingly, the
court strongly discourages the parties from seeking reconsideration
based on arguments they have previously raised or that they could
have raised.
-64-
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