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CAUSE NO. 2009-77474
PREXUS HEALTH CONSULTANTS, § IN THE DISTRICT COURT
LLC and PREXUS HEALTH, LLC,
a
Plaintiffs,
v 270th JUDICIAL DISTRICT A =<
26
ee S
gO ES
UNIVERSITY GENERAL HOSPITAL
SYSTEMS, LLP f/k/a UNIVERSITY wos£ea (
GENERAL HOSPITAL, LP, 06
ASCENSION PHYSICIAN SOLUTIONS,
LLC, DEVYN WOLENS,
INDIVIDUALLY, LUXXUS HEALTH
TEMS, LLC, HASSAN CHAHADEH,
INDIVIDUALLY, AND MIKE GRIFFIN,
INDIVIDUALLY,
Defendants. § HARRIS COUNTY, TEXAS
PLAINTIFFS’ RESPONSE TO DEFENDANTS’ MOTION IN LIMINE NO. 9
Plaintiffs Prexus Health Consultants, LLC (~Prexus Health Consultants”) and Prexus
Health, LLC (“Prexus Health”) (collectively, ~Plaintiffs”) hereby file their response to
Defendants University General Hospital. LP°s ("UGH"). Ascension Physician Solutions. LLC,
(“Ascension”). Luxxus Health Systems, I.LC (“Luxxus™), Hassan Chahadeh (*“Chadadeh™) and
Mike Griffin (“Griffin”). (collectively “Defendants”) Motion in Limine Regarding Plaintiffs’
Failure to Timely Disclose Damages Model (“Motion in Limine No. 9”) and show as follows:
I. Introduction
While Plaintiffs concede that their Plaintiffs‘Counter-Defendants’ Third Amended
Omnibus Response to Defendant Ascension Physician Solutions, LLC's Requests for Disclosure
(“Third Response’) was filed within thirty days of the April 4, 2011 trial setting. Defendants are
not unfairly prejudiced by the damage model within the Third Response because Plaintiffs
actually seck fess in damages than they did in their Plaintiffs/Counter-Defendants’ Second
PLAINTIFFS” RESPONSE TO DEFENDANTS’ MOTION IN LIMINE NO.9
64166 2
Amended Omnibus Response to Defendant Ascension Physician Solutions, LLC's Request for
Disclosure (“Second Response”). The likelihood of unfair surprise or unfair prejudice is further
reduced since the trial did not commence until April 11, 2011. Therefore. Defendants had this
information within their possession over twenty-five days prior to trial.
Furthermore, Defendants are not unfairly surprised by Plaintiffs’ damages calculations
because Defendants knew that certain of Plaintiffs’ damages would be based upon UGH’s net
revenue figures. These are figures that UGH has had within its possession since the
commencement of this case, but that were not disclosed to Plaintiffs until afier March 4, 2011.
In addition. Plaintiffs have “good cause™ for filing their Third Response when they did.
Of the 465 Bates-numbered documents produced by UGH in response to Plaintifts’ discovery
requests, only 77 of those 465 were produced prior to March 4, 2011. (See Exhibit “A-1.7
Exhibit “A-2.° “Exhibit “B™). Furthermore, UGH did not provide certain requested financial
data until March 21.2011. (Exhibit "C). Accordingly. it is inequitable for Defendants to assert
a timeliness-based claim against Plaintiffs when Defendants were themselves untimely in
producing almost all of their documents to Plaintiffs.
Finally, Defendants’ claim regarding the alleged un-timeliness of Plaintiffs Second
Response is wholly without merit. Plaintiffs served their Sccond Response via hand delivery, at
4:40 p.m., on March 4, 2011. (Exhibit “A-3"). Since UGII was served with Plaintiffs’ Second
Response more than thirty days prior to the April 4, 2011 trial setting, UGH"s claim regarding
Plaintiffs’ Second Response should be rejected. Any chance of unfair surprise or prejudice is
further reduced because the trial did not commence until April 11.2011. ‘Therefore. Defendants
have had this information within their possession over thirty days prior to trial.
PLAINTIFFS* RESPONSE TO DEFENDANTS’ MOTION IN LIMINE NO.9
64166 2
In sum. Plaintiffs have established that Defendants will suffer no undue prejudice or
surprise due to the timing of the filing of Plaintiffs’ Third Response. Plaintiffs have further
established that “good cause™ exists for the timing of the filing of Plaintiffs’ Third Response.
For these reasons. Defendants’ Motion in Limine No. 9 should be denied in full.
II. Arguments and Authorities
Under TEX. R. Clv. P. 193.5(b), amended or supplemental responses to written discovery
should be made prior to thirty days before trial. Amendments or supplements to responses may
be made within thirty days of trial if the court finds:
qd) there was good cause for the failure to timely make, amend. or supplement
the discovery response: or
(2) the failure to timely make, amend. or supplement the discovery response
will not unfairly surprise or unfairly prejudice the opposing party.
TEX. R. Civ. P. 193.6(a)(1)-(2).
Tex. R. Civ. P. 193.6 provides an alternative to the “draconian sanctions” of automatic
exclusion for failure to show good cause (under the old Tex. R. Civ. P. 215(5)). by providing the
moving party with the added choice of showing that the proposed amendment or supplement
does not unfairly surprise or unfairly prejudice the opposing party. Elliott v. Elliott, 21 S.W.3d
913. 922 n.7 (Tex. App.—Fort Worth 2000, pet. denied) (holding that the trial court abused its
diseretion under TEX. R. Civ. P. 193.6 in excluding certain expert opinions). TEX. R. Civ. P.
193.6 therefore “reduced the burden™ of the party seeking to amend or supplement its written
discovery within thirty days of trial. Jd.
The burden of establishing good cause, or the lack of unfair surprise or unfair prejudice.
is on the party secking to amend or supplement its written discovery within thirty days of trial.
PLAINTIFFS” RESPONSE TO DEFENDANTS’ MOTION IN LIMINE NO.9
64166_2
Tex. R. Civ. P. 193.6(b). However, even if the party secking to introduce the evidence fails to
carry its burden under TEX. R. Civ. P. 193.6(b), the court may grant a continuance or temporarily
postpone the trial to allow a response to be amended or supplemented, and to allow the opposing
party to conduct additional discovery regarding any new information presented by the response.
Tex. R. Civ. P. 193.6(c). Thus, relicf under rule 193.6(c) is available if the burden of rule
193.6(a) and (b) is not met. Finally. if the opposing party declines a court's offer to continue the
proceedings under 193.6(c), that party cannot later plausibly argue that it was unfairly prejudiced
by the untimely-filed supplementation. Santos v. Comm'n for Lawyer Discipline. 140 S.W.3d
397. 4040 (Tex. App.—Houston [14th Dist.] 2004. no pet.)
As shown below. Plaintiffs can demonstrate “good cause” for allowing in their damage
calculations in their Third Response. Plaintiffs can further show that Defendants would not be
unfairly surprised or prejudiced if the damage calculations were allowed within thirty days of
trial. If this Court so desires, Plaintiffs would respectfully ask the Court for leave in order to
supplement their Second Response with the damage calculations currently found within their
Third Response. Finally, should the Court find that Plaintiffs have not met their burdens under
either 193.6(a) or (b), Plaintiffs would respectfully ask the Court to temporarily postpone the trial
so that Plaintiffs may supplement with the damage calculation information found within their
Third Response.
a. Plaintiffs have shown “good cause.”
A party can demonstrate “good cause” for amending or supplementing its damage
calculations within thirty days of trial when such delay is attributable to the opposing partys
failure to provide requested information prior to thirty days before trial. See Tri-Flo Int'l, Inc. v.
Jackson, No. 13-01-472-CV, 2002 Tex. App. LEXIS 7630, at *6-*7 (Tex. App.—Corpus Christi
PLAINTIFFS° RESPONSE TO DEFENDANTS’ MOTION IN LIMINE NO.9
64166_2
October 24, 2002. no pet.) In 7ri-Flo. the opposing party claimed the trial court abused its
discretion in allowing the amending party to “introduce a new method of calculating damages
and amount of damages” within thirty days of trial. Id. at *3. The amending party had
incomplete financial information from the opposing party thirty days prior to trial. Jd. at *4. For
this reason, it was not until “the Friday before trial” that the amending party first supplemented
his damage calculations. /d. at *5. Prior to amending his damage calculations on the eve of trial.
the amending party had only outlined a method of calculating damages, and was not able to
provide a specific amount of damages. /d. at *6. Ilowever. the trial court found that “good
cause” for leave to amend both the damage amount, as well as damage calculations, was
established because of “the lack of complete data to calculate his damages” until thirteen days
prior to trial. Jd. at *7.
In sum, the amending party in /7i-F/o demonstrated good cause where its delay in
providing damage calculations was caused by the opposing party's failure to provide requested
data thirty days prior to trial. A similar situation exists in the present case. Though Plaintiffs
made timely discovery requests, Plaintiffs had to wait until March 11. 2011 and March 21, 2011
respectively to receive the vast majority of the documents produced by Defendants. As stated
above, of the 465 Bates-numbered documents produced thus far in this case. only 77 of those
were produced to Plaintiffs prior to March 4, 2011. (Exhibit “A-1.~ Exhibit "B™).
Simply put. Defendants failed to provide the data requested via Plaintiffs” discovery
requests in a timely manner. Because Defendants’ own tardiness was a primary cause of
Plaintiffs’ delay. Plaintiffs have established “good cause” for allowing the damage calculations
described in their Third Response.
PLAINTIFFS’ RESPONSE TO DEFENDANTS’ MOTION IN LIMINE NO.9
64166 2
Finally, Plaintiffs do not need to establish good cause (or lack of unfair surprise or
prejudice) regarding Plaintiffs” Second Response. Defendants’ claim regarding the alleged un-
timeliness of Plaintiffs Second Response is meritless because Plaintiffs served their Second
Response via hand delivery. at 4:40 p.m., on March 4, 2011. (Exhibit “A-3").
b. Defendants are not unfairly prejudiced or surprised _by Plaintiffs’ Third
Response
L Plaintiffs seek a lesser amount of damages than in their Second
Response.
Plaintiffs do not increase the overall amount of damage sought in their Third Response.
Plaintiffs’ Third Response simply refines Plaintiffs’ damages calculations. In their Second
Response, Plaintiffs sought losses of revenue totaling $13,000,000.00 based upon various
Defendants’, including UGII"s, tortious interference with Plaintiffs’ contracts with Humble
Surgical Hospital (“HSIHI"). In Plaintiffs’ Third Response, Plaintiffs refine their damages model
to include information reccived from Defendants alter March 4, 2011.
In particular, Plaintiffs updated their damages model to include “total management
revenue lost” due to the loss of the PSA and CSA over the remaining term of those contracts.
This amount totaled $7.830.000.00. Once this number was ascertained. Plaintiffs then provided
a forecast of damages under three methodologies: (1) Contribution Lost Methodology: (2)
Multiple of Annual Revenue Lost Valuation Methodology, and (3) EBITDA Multiple Valuation
Methodology. Each of these methodologies were then applicd to the “total management revenue
lost” from both the HSH contracts ($13.000.000.00) and the PSA and CSA ($7.830,000.00).
Once the valuation methodologies were applicd to the “total management revenue lost” totals.
the following damage totals were arrived at (for damages arising for tortious interference with
both the HSH contracts, as well as the PSA and CSA):
PLAINTIFFS” RESPONSE TO DEFENDANTS* MOTION IN LIMINE NO.9
64166_2
Contribution Margin Lost Methodology: $6,665,600.00
Multiple of Annual Revenue Lost Valuation Methodology: $6,943.333.30
EBITDA Multiple Valuation Methodology: $8.887,466.40
(Third Response at 21).
Regardless of which methodology is used, the total amount of damages sought for
tortious interference with HSH contracts. as well as the PSA and CSA, comes out to substantially
less than what Plaintiffs sought for the only the HSH contracts in their Second Response. In
sum, UGII is not unfairly prejudiced by Plaintiffs” reduced damage calculations.
2? Defendants are not unfair surprised because Defendants have
known all along that Plaint damages would be based in part on
UGH's net revenues.
Defendants cannot plausibly claim unfair “surprise” due to Plaintiffs’ damages model. In
their Second Response, Plaintiffs specifically mentioned that that they sought damages arising
trom UGIT's tortious interference with both the PSA and CSA:
Plaintiffs are also entitled to damages on their tortious interference claims with
respect to the PSA and CSA, and also their breach of contract, Section 9 of the PSA, non-
solicitation, in the amount of the ill gotten gains obtained from Defendants. This includes
the amounts paid by UGH and/or Ascension to Luxxus, Griffin, Chahadeh, UGH, and/or
Ascension for services performed to UGH and/or Ascension, including the net proceeds
and profits derived by UGH, Ascension, Luxxus, Griffin, and/or Chahadeh, as well as the
costs saved by wrongfully interfering and soliciting, including training costs, finder’s
search fees, and education costs.
(Plaintiffs* Second Response at 19).
Accordingly. Defendants generally. and UGH specifically, were properly apprised that
Plaintiffs were secking damages as a result of the tortious interference with the PSA and CSA
based upon “the net proceeds of profits derived by UGH.” Plaintiffs intended to supplement
with additional information. Ilowever. Plaintiffs were precluded from timely doing so duc to
UGII's failure to provide its requested documentation to Plaintills.
PLAINTIFFS* RESPONSE TO DEFENDANTS* MOTION IN LIMINE NO.9
64166_2
Since UGH has had its own net revenue numbers all along. it can hardly now claim unfair
surprise when Plaintiffs’ produce a damage figure based in part upon those same net revenues.
For this reason, UGH is not “unfairly surprised” by the damage model included within the Third
Response.
fi. Conclusion
Plaintiffs have shown that good cause exists for allowing them to amend their damages
model within thirty days prior to trial. Plaintiffs have further shown that allowing them to do so
would not unfairly surprise or unfairly prejudice Defendants. For these reasons. Defendants”
Motion in Limine No. 9 should be denied in full.
If however. the Court finds that Plaintiffs have not met their burden, Plaintiffs
respectfully request leave in order to amend their damages model so that justice may be done,
and, if needed, Plaintiffs would respectfully request a brief continuance in order to do so.
Iv. Praye
WHEREFORE, PREMISES CONSIDERED, Plaintiffs Prexus Iealth Consultants. LLC
and Prexus Health, LLC respectfully request the Court: (1) to deny Defendants’ Motion in
Limine Regarding Plaintiffs’ Failure to Timely Disclose Damages Model in its entirety; and (2)
for any and all further relief. both at law and in equity. to which Plaintiffs may be justly entitled.
PLAINTIFFS’ RESPONSE TO DEFENDANTS’ MOTION IN LIMINE NO.9
64166_2
Respectfully submitted.
GRUBER HURST JOHANSEN & HAIL,
By
MICMAEL K. HURST
State Bar No. 10316310
JONATHAN R. CHILDERS
State Bar No. 24050411
STEVEN W. HOPKINS
State Bar No. 24045078
1445 Ross Avenue, Suite 2500
Dallas, Texas 75202
Telephone No. (214) 855-6800
Facsimile No. (214) 855-6808
ATTORNEYS FOR PLAINTIFFS
CERTIFICATE OF SERVICE
The undersigned certifies that on this {jth day of April 2011. a truc and correct copy of the
foregoing document was served on the following counsel of record via Facsimile:
John H. McFarland Laurence E, Stuart
Karen C. Brisch Tonja K. King
Joyce, MCFARLAND + MCFARLAND I_LP. STUART AND ASSOCIATES P.C.
712 Main, Suite 1500 909 Fannin, Suite 3250
Houston, Texas 77002 Ho ton. IX 77010
i) C
Steven W. Ilopkins
PLAINTIFFS” RESPONSE TO DEFENDANTS, MOTION IN LIMINE NO.9
64166_2
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Ae p4 CAUSE NO. 2009-77474 PREXUS HEALTH CONSULTANTS, § IN THE DISTRICT COURT LLC and PREXUS HEALTH, LLC, a Plaintiffs, v 270th JUDICIAL DISTRICT A =< 26 ee S gO ES UNIVERSITY GENERAL HOSPITAL SYSTEMS, LLP f/k/a UNIVERSITY wos£ea ( GENERAL HOSPITAL, LP, 06 ASCENSION PHYSICIAN SOLUTIONS, LLC, DEVYN WOLENS, INDIVIDUALLY, LUXXUS HEALTH TEMS, LLC, HASSAN CHAHADEH, INDIVIDUALLY, AND MIKE GRIFFIN, INDIVIDUALLY, Defendants. § HARRIS COUNTY, TEXAS PLAINTIFFS’ RESPONSE TO DEFENDANTS’ MOTION IN LIMINE NO. 9 Plaintiffs Prexus Health Consultants, LLC (~Prexus Health Consultants”) and Prexus Health, LLC (“Prexus Health”) (collectively, ~Plaintiffs”) hereby file their response to Defendants University General Hospital. LP°s ("UGH"). Ascension Physician Solutions. LLC, (“Ascension”). Luxxus Health Systems, I.LC (“Luxxus™), Hassan Chahadeh (*“Chadadeh™) and Mike Griffin (“Griffin”). (collectively “Defendants”) Motion in Limine Regarding Plaintiffs’ Failure to Timely Disclose Damages Model (“Motion in Limine No. 9”) and show as follows: I. Introduction While Plaintiffs concede that their Plaintiffs‘Counter-Defendants’ Third Amended Omnibus Response to Defendant Ascension Physician Solutions, LLC's Requests for Disclosure (“Third Response’) was filed within thirty days of the April 4, 2011 trial setting. Defendants are not unfairly prejudiced by the damage model within the Third Response because Plaintiffs actually seck fess in damages than they did in their Plaintiffs/Counter-Defendants’ Second PLAINTIFFS” RESPONSE TO DEFENDANTS’ MOTION IN LIMINE NO.9 64166 2 Amended Omnibus Response to Defendant Ascension Physician Solutions, LLC's Request for Disclosure (“Second Response”). The likelihood of unfair surprise or unfair prejudice is further reduced since the trial did not commence until April 11, 2011. Therefore. Defendants had this information within their possession over twenty-five days prior to trial. Furthermore, Defendants are not unfairly surprised by Plaintiffs’ damages calculations because Defendants knew that certain of Plaintiffs’ damages would be based upon UGH’s net revenue figures. These are figures that UGH has had within its possession since the commencement of this case, but that were not disclosed to Plaintiffs until afier March 4, 2011. In addition. Plaintiffs have “good cause™ for filing their Third Response when they did. Of the 465 Bates-numbered documents produced by UGH in response to Plaintifts’ discovery requests, only 77 of those 465 were produced prior to March 4, 2011. (See Exhibit “A-1.7 Exhibit “A-2.° “Exhibit “B™). Furthermore, UGH did not provide certain requested financial data until March 21.2011. (Exhibit "C). Accordingly. it is inequitable for Defendants to assert a timeliness-based claim against Plaintiffs when Defendants were themselves untimely in producing almost all of their documents to Plaintiffs. Finally, Defendants’ claim regarding the alleged un-timeliness of Plaintiffs Second Response is wholly without merit. Plaintiffs served their Sccond Response via hand delivery, at 4:40 p.m., on March 4, 2011. (Exhibit “A-3"). Since UGII was served with Plaintiffs’ Second Response more than thirty days prior to the April 4, 2011 trial setting, UGH"s claim regarding Plaintiffs’ Second Response should be rejected. Any chance of unfair surprise or prejudice is further reduced because the trial did not commence until April 11.2011. ‘Therefore. Defendants have had this information within their possession over thirty days prior to trial. PLAINTIFFS* RESPONSE TO DEFENDANTS’ MOTION IN LIMINE NO.9 64166 2 In sum. Plaintiffs have established that Defendants will suffer no undue prejudice or surprise due to the timing of the filing of Plaintiffs’ Third Response. Plaintiffs have further established that “good cause™ exists for the timing of the filing of Plaintiffs’ Third Response. For these reasons. Defendants’ Motion in Limine No. 9 should be denied in full. II. Arguments and Authorities Under TEX. R. Clv. P. 193.5(b), amended or supplemental responses to written discovery should be made prior to thirty days before trial. Amendments or supplements to responses may be made within thirty days of trial if the court finds: qd) there was good cause for the failure to timely make, amend. or supplement the discovery response: or (2) the failure to timely make, amend. or supplement the discovery response will not unfairly surprise or unfairly prejudice the opposing party. TEX. R. Civ. P. 193.6(a)(1)-(2). Tex. R. Civ. P. 193.6 provides an alternative to the “draconian sanctions” of automatic exclusion for failure to show good cause (under the old Tex. R. Civ. P. 215(5)). by providing the moving party with the added choice of showing that the proposed amendment or supplement does not unfairly surprise or unfairly prejudice the opposing party. Elliott v. Elliott, 21 S.W.3d 913. 922 n.7 (Tex. App.—Fort Worth 2000, pet. denied) (holding that the trial court abused its diseretion under TEX. R. Civ. P. 193.6 in excluding certain expert opinions). TEX. R. Civ. P. 193.6 therefore “reduced the burden™ of the party seeking to amend or supplement its written discovery within thirty days of trial. Jd. The burden of establishing good cause, or the lack of unfair surprise or unfair prejudice. is on the party secking to amend or supplement its written discovery within thirty days of trial. PLAINTIFFS” RESPONSE TO DEFENDANTS’ MOTION IN LIMINE NO.9 64166_2 Tex. R. Civ. P. 193.6(b). However, even if the party secking to introduce the evidence fails to carry its burden under TEX. R. Civ. P. 193.6(b), the court may grant a continuance or temporarily postpone the trial to allow a response to be amended or supplemented, and to allow the opposing party to conduct additional discovery regarding any new information presented by the response. Tex. R. Civ. P. 193.6(c). Thus, relicf under rule 193.6(c) is available if the burden of rule 193.6(a) and (b) is not met. Finally. if the opposing party declines a court's offer to continue the proceedings under 193.6(c), that party cannot later plausibly argue that it was unfairly prejudiced by the untimely-filed supplementation. Santos v. Comm'n for Lawyer Discipline. 140 S.W.3d 397. 4040 (Tex. App.—Houston [14th Dist.] 2004. no pet.) As shown below. Plaintiffs can demonstrate “good cause” for allowing in their damage calculations in their Third Response. Plaintiffs can further show that Defendants would not be unfairly surprised or prejudiced if the damage calculations were allowed within thirty days of trial. If this Court so desires, Plaintiffs would respectfully ask the Court for leave in order to supplement their Second Response with the damage calculations currently found within their Third Response. Finally, should the Court find that Plaintiffs have not met their burdens under either 193.6(a) or (b), Plaintiffs would respectfully ask the Court to temporarily postpone the trial so that Plaintiffs may supplement with the damage calculation information found within their Third Response. a. Plaintiffs have shown “good cause.” A party can demonstrate “good cause” for amending or supplementing its damage calculations within thirty days of trial when such delay is attributable to the opposing partys failure to provide requested information prior to thirty days before trial. See Tri-Flo Int'l, Inc. v. Jackson, No. 13-01-472-CV, 2002 Tex. App. LEXIS 7630, at *6-*7 (Tex. App.—Corpus Christi PLAINTIFFS° RESPONSE TO DEFENDANTS’ MOTION IN LIMINE NO.9 64166_2 October 24, 2002. no pet.) In 7ri-Flo. the opposing party claimed the trial court abused its discretion in allowing the amending party to “introduce a new method of calculating damages and amount of damages” within thirty days of trial. Id. at *3. The amending party had incomplete financial information from the opposing party thirty days prior to trial. Jd. at *4. For this reason, it was not until “the Friday before trial” that the amending party first supplemented his damage calculations. /d. at *5. Prior to amending his damage calculations on the eve of trial. the amending party had only outlined a method of calculating damages, and was not able to provide a specific amount of damages. /d. at *6. Ilowever. the trial court found that “good cause” for leave to amend both the damage amount, as well as damage calculations, was established because of “the lack of complete data to calculate his damages” until thirteen days prior to trial. Jd. at *7. In sum, the amending party in /7i-F/o demonstrated good cause where its delay in providing damage calculations was caused by the opposing party's failure to provide requested data thirty days prior to trial. A similar situation exists in the present case. Though Plaintiffs made timely discovery requests, Plaintiffs had to wait until March 11. 2011 and March 21, 2011 respectively to receive the vast majority of the documents produced by Defendants. As stated above, of the 465 Bates-numbered documents produced thus far in this case. only 77 of those were produced to Plaintiffs prior to March 4, 2011. (Exhibit “A-1.~ Exhibit "B™). Simply put. Defendants failed to provide the data requested via Plaintiffs” discovery requests in a timely manner. Because Defendants’ own tardiness was a primary cause of Plaintiffs’ delay. Plaintiffs have established “good cause” for allowing the damage calculations described in their Third Response. PLAINTIFFS’ RESPONSE TO DEFENDANTS’ MOTION IN LIMINE NO.9 64166 2 Finally, Plaintiffs do not need to establish good cause (or lack of unfair surprise or prejudice) regarding Plaintiffs” Second Response. Defendants’ claim regarding the alleged un- timeliness of Plaintiffs Second Response is meritless because Plaintiffs served their Second Response via hand delivery. at 4:40 p.m., on March 4, 2011. (Exhibit “A-3"). b. Defendants are not unfairly prejudiced or surprised _by Plaintiffs’ Third Response L Plaintiffs seek a lesser amount of damages than in their Second Response. Plaintiffs do not increase the overall amount of damage sought in their Third Response. Plaintiffs’ Third Response simply refines Plaintiffs’ damages calculations. In their Second Response, Plaintiffs sought losses of revenue totaling $13,000,000.00 based upon various Defendants’, including UGII"s, tortious interference with Plaintiffs’ contracts with Humble Surgical Hospital (“HSIHI"). In Plaintiffs’ Third Response, Plaintiffs refine their damages model to include information reccived from Defendants alter March 4, 2011. In particular, Plaintiffs updated their damages model to include “total management revenue lost” due to the loss of the PSA and CSA over the remaining term of those contracts. This amount totaled $7.830.000.00. Once this number was ascertained. Plaintiffs then provided a forecast of damages under three methodologies: (1) Contribution Lost Methodology: (2) Multiple of Annual Revenue Lost Valuation Methodology, and (3) EBITDA Multiple Valuation Methodology. Each of these methodologies were then applicd to the “total management revenue lost” from both the HSH contracts ($13.000.000.00) and the PSA and CSA ($7.830,000.00). Once the valuation methodologies were applicd to the “total management revenue lost” totals. the following damage totals were arrived at (for damages arising for tortious interference with both the HSH contracts, as well as the PSA and CSA): PLAINTIFFS” RESPONSE TO DEFENDANTS* MOTION IN LIMINE NO.9 64166_2 Contribution Margin Lost Methodology: $6,665,600.00 Multiple of Annual Revenue Lost Valuation Methodology: $6,943.333.30 EBITDA Multiple Valuation Methodology: $8.887,466.40 (Third Response at 21). Regardless of which methodology is used, the total amount of damages sought for tortious interference with HSH contracts. as well as the PSA and CSA, comes out to substantially less than what Plaintiffs sought for the only the HSH contracts in their Second Response. In sum, UGII is not unfairly prejudiced by Plaintiffs” reduced damage calculations. 2? Defendants are not unfair surprised because Defendants have known all along that Plaint damages would be based in part on UGH's net revenues. Defendants cannot plausibly claim unfair “surprise” due to Plaintiffs’ damages model. In their Second Response, Plaintiffs specifically mentioned that that they sought damages arising trom UGIT's tortious interference with both the PSA and CSA: Plaintiffs are also entitled to damages on their tortious interference claims with respect to the PSA and CSA, and also their breach of contract, Section 9 of the PSA, non- solicitation, in the amount of the ill gotten gains obtained from Defendants. This includes the amounts paid by UGH and/or Ascension to Luxxus, Griffin, Chahadeh, UGH, and/or Ascension for services performed to UGH and/or Ascension, including the net proceeds and profits derived by UGH, Ascension, Luxxus, Griffin, and/or Chahadeh, as well as the costs saved by wrongfully interfering and soliciting, including training costs, finder’s search fees, and education costs. (Plaintiffs* Second Response at 19). Accordingly. Defendants generally. and UGH specifically, were properly apprised that Plaintiffs were secking damages as a result of the tortious interference with the PSA and CSA based upon “the net proceeds of profits derived by UGH.” Plaintiffs intended to supplement with additional information. Ilowever. Plaintiffs were precluded from timely doing so duc to UGII's failure to provide its requested documentation to Plaintills. PLAINTIFFS* RESPONSE TO DEFENDANTS* MOTION IN LIMINE NO.9 64166_2 Since UGH has had its own net revenue numbers all along. it can hardly now claim unfair surprise when Plaintiffs’ produce a damage figure based in part upon those same net revenues. For this reason, UGH is not “unfairly surprised” by the damage model included within the Third Response. fi. Conclusion Plaintiffs have shown that good cause exists for allowing them to amend their damages model within thirty days prior to trial. Plaintiffs have further shown that allowing them to do so would not unfairly surprise or unfairly prejudice Defendants. For these reasons. Defendants” Motion in Limine No. 9 should be denied in full. If however. the Court finds that Plaintiffs have not met their burden, Plaintiffs respectfully request leave in order to amend their damages model so that justice may be done, and, if needed, Plaintiffs would respectfully request a brief continuance in order to do so. Iv. Praye WHEREFORE, PREMISES CONSIDERED, Plaintiffs Prexus Iealth Consultants. LLC and Prexus Health, LLC respectfully request the Court: (1) to deny Defendants’ Motion in Limine Regarding Plaintiffs’ Failure to Timely Disclose Damages Model in its entirety; and (2) for any and all further relief. both at law and in equity. to which Plaintiffs may be justly entitled. PLAINTIFFS’ RESPONSE TO DEFENDANTS’ MOTION IN LIMINE NO.9 64166_2 Respectfully submitted. GRUBER HURST JOHANSEN & HAIL, By MICMAEL K. HURST State Bar No. 10316310 JONATHAN R. CHILDERS State Bar No. 24050411 STEVEN W. HOPKINS State Bar No. 24045078 1445 Ross Avenue, Suite 2500 Dallas, Texas 75202 Telephone No. (214) 855-6800 Facsimile No. (214) 855-6808 ATTORNEYS FOR PLAINTIFFS CERTIFICATE OF SERVICE The undersigned certifies that on this {jth day of April 2011. a truc and correct copy of the foregoing document was served on the following counsel of record via Facsimile: John H. McFarland Laurence E, Stuart Karen C. Brisch Tonja K. King Joyce, MCFARLAND + MCFARLAND I_LP. STUART AND ASSOCIATES P.C. 712 Main, Suite 1500 909 Fannin, Suite 3250 Houston, Texas 77002 Ho ton. IX 77010 i) C Steven W. Ilopkins PLAINTIFFS” RESPONSE TO DEFENDANTS, MOTION IN LIMINE NO.9 64166_2