Preview
3/30/2015 3:27:32 PM
Velva L. Price
District Clerk
Travis County
CAUSE NO. D-1-GN-14-005444 D-1-GN-14-005444
345™ JUDICIAL DISTRICT COURT
SCHRAM MCDONNELL, LLC dba AUSTIN _ ) IN THE DISTRICT COURT OF
ORTHOPEDIC SPECIALISTS; et al, )
)
Plaintiffs, )
) TRAVIS COUNTY, TEXAS
v. )
VENTAS, INC.; et al. }
Defendants. }
)
DEFENDANTS’ RESPONSE TO PLAINTIFFS’ MOTION FOR PROTECTION
Each of the twelve plaintiffs in this lawsuit sued each of the ten defendants for allegedly
committing various frauds, crimes and breaching contracts. The issue before this Court is
whether the Texas Rules of Civil Procedure should be departed from to allow the plaintiffs to
escape having to answer each set of interrogatories served by each defendant, which basically
ask each plaintiff to identify the fraudulent statements allegedly made by that defendant and to
identify the contract allegedly breached.
The motion should be denied. The Texas Rules of Civil Procedure expressly provide each
defendant the right to serve their own interrogatories on each plaintiff. Further, the sole case
cited by the plaintiffs in their Motion for Protection defeats their own argument. Finally,
requiring the plaintiffs to follow the rules and answer each set of interrogatories will streamline
the case because it will uncover what evidence, if any, the plaintiffs have in support of their
claims against each defendant.
I. The Plaintiffs’ Petition Makes Only General Allegations Accusing Each of the Ten
Defendants of Committing Various Frauds Against Each of the Twelve Plaintiffs
In this case, twelve separate plaintiffs assert causes of action for breach of contract, commonlaw fraud, statutory fraud, securities fraud, and other serious claims, against 10 separate
defendants. Their Petition, however, fails to allege how each defendant committed these various
frauds and other wrongful acts against each plaintiff, and instead collectively makes general and
vague allegations against defendants Dan Metevier and “Lillibridge,” which the Petition defines
as the nine defendants other than Dan Metevier.
Despite explicit requests from the Defendants to narrow the litigation, the plaintiffs have
refused to either amend their Petition to remove the defendants having nothing to do with this
case or instead specifically allege what each defendant supposedly did to make them liable to
each plaintiff and identify which contracts were breached despite. (See February 17, 2015
correspondence attached as Exhibit A). Accordingly, each defendant did the only thing that
could be done to get to the bottom of the allegations against them and served each plaintiff with a
set of interrogatories asking what fraudulent statements were supposedly made by that defendant
to that plaintiff and what contract between them was breached.
The defendants only undertook the extra effort to draft and serve separate interrogatories
because it is necessary to do so to get the information they need. For their requests for production
and requests for disclosure each defendant served a single, consolidated set on each plaintiff.
Il. The Plaintiffs’ Motion For Protection Requests Permission to Not Answer Each Set
of Defendant’s Interrogatories and Instead Consolidate Answers, And Also Asserts
A New Theory Of Liability Against Each Defendant, Thereby Making It Even More
Necessary For The Plaintiffs To Answer Each Set of Interrogatories
In response to straightforward interrogatories, the plaintiffs filed a Motion for Protection. The
plaintiffs argue that each plaintiff should not have to answer separate sets of interrogatories that
were served by each of the defendants in accordance with the Texas Rules of Civil Procedure
(“TRCP”). Instead, the defendants seek to consolidate their responses in one answer, and will
“distinguish amongst the defendants” when they think it is “necessary.” (Motion at 2). Aside
DEFENDANTS’ RESPONSE TO PLAINTIFFS’
MOTION FOR PROTECTION Page 2from the fact that nothing in the TRCP allows parties to consolidate answers to interrogatories, it
is a similar grouping of allegations in the plaintiffs’ Petition that caused the problem in the first
place, and doing the same in their answers to interrogatories only continues the problem of each
defendant not knowing what they allegedly did to make them a defendant in this lawsuit. The
defendants already explained all of this to the plaintiffs. (See March 16, 2015 correspondence
attached as Exhibit B).
Moreover, the plaintiffs’ Motion for Protective Order only further muddles their causes of
action by stating that “Plaintiffs rely on principles of agency and successor liability and will
distinguish amongst the Defendants when necessary.” (Motion at 2). Not only are these legal
theories not mentioned in the Petition, they contradict the plaintiffs’ allegations in their Petition
that each defendant named in the lawsuit is directly liable for each of the causes of action
pleaded. The plaintiffs’ contradictory claims and arguments make it even more necessary that
their request to depart from the TRCP be denied and they be required to answer each defendant’s
interrogatories separately as served upon them.
Six days after they filed their Motion for Protection, the plaintiffs filed a Supplement to their
Motion for Protection containing affidavits and declarations by counsel for the plaintiffs and
several of the defendants. The affidavit and declarations all make the same two points: first,
neither plaintiffs nor their lawyer want to have to answer discovery because they think it is a
burden to do so and disruptive to their jobs as doctors; and second, the sets of interrogatories are
identical except for the defendant serving it and the plaintiff each is directed to. Neither is a good
reason to allow them to depart from the TRCP and avoid answering discovery. Plaintiffs should
not be surprised that a consequence of launching a lawsuit involving 22 separate parties based on
vague, general claims of fraud leads to a lot of written discovery. Moreover, the easy solution to
DEFENDANTS’ RESPONSE TO PLAINTIFFS’
MOTION FOR PROTECTION Page 3their problem is for them to decide which defendants they actually intend to assert fraud and
other claims directly against and withdraw their claims against the defendants for which they are
not. The Supplement to their Motion for Protection repeats their argument that they are only
asserting successor liability and agency theories against some of the defendants (which, as noted
above, contradicts the causes of action in their Petition), but noticeably missing from this
argument is an explanation of which defendants they purportedly seek to hold liable for other
defendants’ actions based on agency or successor liability theories, and which defendants they
are seeking to hold directly liable.
IlI.The Plaintiffs Have No Authority To Support Their Argument, And In Fact The
Sole Case Cited By Plaintiffs Supports Defendants’ Position
The plaintiffs argue that having to answer interrogatories served by each defendant that they
have accused of committing fraud and various crimes is “harassing, unnecessarily duplicative,
and unduly burdensome” because of the “burden and expense of drafting, organizing, and
ensuring the accuracy of so many written responses.” (Motion at 2). Without belaboring the
obvious, the defendants’ position simply is that asking each plaintiff to answer each defendant
regarding what fraudulent statements were made and what contract was breached is not
harassment. Indeed, if any party should complain about harassment, it would be the defendants,
some of which have never had any communication with any of the plaintiffs, let alone committed
fraud against each of them, and now find themselves the subject of a publicly filed lawsuit
claiming exactly that.
The fact that the plaintiffs voice concern about “ensuring the accuracy” of their answers to
interrogatories regarding the basis for their fraud claims and identification of the contracts
allegedly being breached only underscores the defendants’ need for the plaintiffs to answer these
interrogatories. Presumably, prior to filing the lawsuit, counsel conducted a reasonable inquiry so
DEFENDANTS’ RESPONSE TO PLAINTIFFS’
MOTION FOR PROTECTION Page 4that based on their knowledge, information and belief they concluded that the allegations in the
Original Petition were not groundless in accordance with Rule 13 of the TRCP. Each Defendant
simply wants to know the basis of the allegations made by each Plaintiff against that Defendant.
Accordingly, the interrogatories are not unnecessarily duplicative. Yes, the same interrogatories
are being propounded, but each set is from a different defendant to a different plaintiff. The
plaintiffs have chosen to sue the defendants and should not now complain that having to answer
interrogatories from them is unduly burdensome. If the plaintiffs do not want to participate in
discovery and identify what alleged fraud was committed and which contract was allegedly
breached by answering interrogatories expressly allowed by the rules of procedure, then they can
dismiss their lawsuit.
Finally, the sole case cited by the plaintiffs in support of their motion actually supports the
defendants’ position. In /n re Alford Chevrolet-Geo, 997 S.W.2d 173 (Tex. 1999), the plaintiffs
filed a class action against 636 Texas auto dealerships, alleging the dealerships misleadingly
charged to their customers a tax actually owed by dealerships. Before class certification, the lead
plaintiff served the 636 defendant dealers with document requests and interrogatories seeking a
broad range of information, including the identification of every transaction in which the tax was
charged and every written communication with customers regarding the tax. Jd. at 179. The
defendants in the case argued such discovery was unduly burdensome and unnecessary and
sought a protective order from the trial court, and when the trial court denied the defendants’
motion for protection the defendants sought mandamus relief from the Texas Supreme Court.
The Texas Supreme Court rejected the defendants’ request to have discovery bifurcated and
stayed until the trial court issued a ruling on class certification, and ruled the trial court did not
abuse its discretion when it denied the defendants’ motion for protection. /d. at 185. Like the
DEFENDANTS’ RESPONSE TO PLAINTIFFS’
MOTION FOR PROTECTION Page 5court in /n re Alford Chevrolet-Geo, this Court should deny the plaintiffs’ Motion for Protection.
Especially where discovery is being requested of only twelve plaintiffs, not more than 600
different parties, and where answers to the interrogatories are necessary to nail down the
plaintiffs’ vague and ever-shifting legal theories and causes of action.
PRAYER
For the foregoing reasons, the defendants ask the Court to deny the plaintiffs’ request to
depart from the Texas Rules of Civil Procedure and deny their Motion for Protection.
DEFENDANTS’ RESPONSE TO PLAINTIFFS’
MOTION FOR PROTECTION
Respectfully submitted,
/s/ Lloyd E. Ferguson
LLOYD E. FERGUSON
STATE BAR NO. 06918150
Buddy.Ferguson@strasburger.com
STRASBURGER & PRICE, LLP
720 BRAZOS STREET, SUITE 700
AUSTIN, TEXAS 78701-2974
(512) 499-3600
(512) 499-3660 Fax
ROGER H. STETSON (admitted pro hac vice)
roger.stetson@bfkn.com
BARACK FERRAZZANO KIRSCHBAUM &
NAGELBERG LLP
200 W. MADISON ST., SUITE 3900
CHICAGO, ILLINOIS 60606
(312) 984-3100
(312) 984-3150 Fax
ATTORNEYS FOR DEFENDANTS
Page 6CERTIFICATE OF SERVICE
I hereby certify that on this the 30th day of March, 2015, the above and foregoing has
been served on the following via electronic service pursuant to the Texas Rules of Civil
Procedure:
Donald R. Taylor dtaylor@taylordunham.com
Isabelle M. Antongiorgi ima@taylordunham.com
TAYLOR DUNHAM AND RODRIGUEZ LLP
301 Congress Avenue
Suite 1050
Austin, Texas 78701
ATTORNEYS FOR PLAINTIFFS
{s/ Lloyd E. Ferguson
Lloyd E. Ferguson
DEFENDANTS’ RESPONSE TO PLAINTIFFS’
MOTION FOR PROTECTION Page 7BARACK FERRAZZANO
Barack Ferrazzano Kirschbaum & Nagelberg LLP
Matthew F. Singer | 7.312.629.7414 | matthew.singer@bfkn com
February 17, 2015
VIA EMAIL
Isabelle M. Antongiorgi, Esq.
TAYLOR DUNHAM AND RODRIGUEZ LLP
301 Congress Avenue
Suite 1050
Austin, Texas 78701
Re: Schram McDonnell, LLC, et al. v. Ventas, Inc., et al.;
Case No. D-1-GN-14-005444 (District Court of Travis County, Texas)
Dear Ms. Antongiorgi:
Thank you for taking the time to discuss the above captioned matter on February 10, 2015. As
we discussed, certain claims, including breach of contract claims, against the following
defendants should be voluntarily dismissed because they are not parties to the relevant
agreements: Ventas, Inc., Lillibridge Healthcare Services, Inc., and Dan Metevier (collectively,
“Non-Contract Defendants”). I write to you now to request the voluntary dismissal of these
parties and/or claims.!
Plaintiffs’ Original Petition is predicated upon alleged breaches of two separate lease
agreements: (1) a lease executed on August 21, 2007 between LHRET Ascension Austin, L.P.
and Richard Schram, M.D., P.A. (“Schram, P.A. Lease”); and (2) a lease executed on October 6,
2008 between LHRET Ascension Austin II, L.P. and South Oaks Family Medicine, PA (“South
Oaks PA Lease”). In Count I, which is a claim for breach of contract, Plaintiffs allege that they
“had valid and enforceable contracts with Defendants.” (See Original Petition, at 31.)
Despite the allegation in the Original Petition, there is no contract between the Plaintiffs and the
Non-Contract Defendants, nor do their names appear anywhere within, the Schram, P.A. Lease
or the South Oaks PA Lease. (See, e.g., Schram, P.A. Lease, attached as Exhibit A to Original
' Similarly, the following Plaintiffs have no standing to bring their claims because they are not parties to the lease
agreements cited in the Original Petition: Schram McDonnell, LLC dba Austin Orthopedic Specialists; Richard
Schram, individually; George Mundanthanam, MD, PA; George Mundanthanam, MD, individually; Josh Crum,
MD, PA; Josh Crum MD, individually; Mark McDonnell, DPM, PA; Mark McDonnell DPM, individually; Geoffrey
Cox MD, individually; and Ashely Steigler MD, individually (collectively, “Non-Contract Plaintiffs”). If there are
additional lease agreements that Plaintiffs are relying on for the breach of contract claims, please produce a copy of
the leases by February 20, 2015.
200 West Madison Street, Suite 3900 | Chicago, Illinois 60606 | T.312.984.3100 | F.312.984.3150 | bfkn.com
EXHIBIT ABARACK FERRAZZANO
Barack Ferrazzano Kirschbaum & Nagelberg LLP
Isabelle M. Antongiorgi, Esq.
February 16, 2015
Page 2
Petition.) Accordingly, under Texas law, they cannot be held liable for breach of contract.”
Furthermore, the additional claims against the Non-Contract Defendants, which are breach of
contract claims repackaged as tort claims, fail as a matter of law. (See id., at {] 33-63.)
Because there is no cognizable claim against the Non-Contract Defendants, we request
confirmation, by February 20, that you will voluntarily dismiss all claims against the Non-
Contract Defendants. Further, because the Non-Contract Plaintiffs have no standing to bring
claims regarding the lease agreements, we request confirmation by that same day that you will
amend the Original Petition to remove the Non-Contract Plaintiffs as parties to the lawsuit.*
If Plaintiffs do not dismiss the parties, the Non-Contract Defendants will file a motion to dismiss
pursuant to Tex. R. Civ. P. 91a addressing these deficiencies. As you know, that rule, which
was adopted in 2013, provides the following:
[A] party may move to dismiss a cause of action on the grounds that it has no
basis in law or fact. A cause of action has no basis in law if the allegations, taken
as true, together with inferences reasonably drawn from them, do not entitle the
claimant to the relief sought. A cause of action has no basis in fact if no
reasonable person could believe the facts pleaded.
Tex. R. Civ. P. 91a.1 (2015). Further, Rule 91a.7 mandates that the award of attorneys’ fees to a
successful movant. See Tex. R. Civ. P. 91a.7.
We would prefer to avoid the motion practice and the associated fees which we will seek from
Plaintiffs regarding this issue, but it is necessary to narrow the pleading at this juncture because
the inclusion of so many improper parties at this early stage of the litigation will have a real
impact on litigating the case by causing the unnecessary expenditure of time and expense by the
parties. For example, if all of the currently named parties are kept in the case, Plaintiffs will
have to complete 120 Rule 194 disclosures (i.e., one from each defendant to each plaintiff).
2 The existence of a contract between parties is an essential clement of a breach of contract claim. See
Brown y. U.S. Bank, N.A., 2014 U.S. Dist. LEXIS 104299, No. 3:14-CV-89-L, at *26 (N.D. Tex. Jul. 31, 2014)
(describing elements for breach of contract claim). Further, under Texas law, lease agreements for terms a year or
longer may only be enforced against a person or entity if “signed by the person to be charged with the promise or
agreement or by someone lawfully authorized to sign for him.” Tex. Bus. & Com. Code § 26.01(a)(2) (2014); see
also Virani v. Cunningham, 2012 Tex. App. LEXIS 865, No. 14-11-00331-CV, at #13 (Tex. App.—Houston Feb. 2,
2012) (applying the Statute of Frauds and holding that since the defendant “did not sign any agreement binding him
individually, the trial court correctly granted summary judgment”).
3 Again, if there is no contract between the Defendants and the Non-Contract Plaintiffs, they may not
pursue a claim against any Defendant relating to the Schram, P.A. Lease or the South Oaks PA Lease.
EXHIBIT ABARACK FERRAZZANO
Barack Ferrazzana Kirschbaum & Nagelberg LLP
Isabelle M. Antongiorgi, Esq.
February 16, 2015
Page 3
Because a significant number of the parties are not proper, this is not a necessary exercise if
Plaintiffs voluntarily narrow the Original Petition as requested and required by law.
Sincerely,
Matthew Sy
ce: Donald R. Taylor, Esq. (via email)
Roger H. Stetson, Esq. (via email)
EXHIBIT ABARACK FERRAZZANO
Barack Ferrazzano Kirschbaum & Nagelberg LLP
MatthewF. Singer | T. 312.629.7414 | matthew.singer@bfkn.com
March 16, 2015
VIA ELECTRONIC MAIL
Isabelle M. Antongiorgi
TAYLOR DUNHAM AND RODRIGUEZ LLP
301 Congress Avenue, Suite 1050
Austin, Texas 78701
iantongiorgi@taylordunham.com
Re: Cause No. D-1-GN-14-005444, Schram McDonnell, LLC v. Ventas, Inc., in the
345" Judicial District Court, Travis County, Texas.
Dear Ms. Antongiorgi,
Please consider this a response to your March 12, 2015 letter.
The 12 Plaintiffs have filed a lawsuit asserting 14 separate counts, including multiple
fraud claims, against 10 Defendants, On February 17, 2015, we sent you a letter requesting the
voluntary dismissal of certain parties and claims to narrow the lawsuit in an effort to avoid
unnecessary discovery related to baseless claims and parties inappropriately named in the
Original Petition. A copy of the February 17, 2015 letter is attached hereto as Exhibit A. On
February 27, 2015, the Plaintiffs declined to voluntarily dismiss any of the 10 defendants. In
response, we requested, based on a representation that you intended to amend the Original
Petition, an extension of time to file an answer so that we would not have to needlessly file a
pleading that would require amendment. On March 2, 2015, you declined our request for an
extension of time because you stated that “[w]e’d like to get going with discovery.” A copy of
the March 2, 2015 email is attached hereto as Exhibit B.
Based on Plaintiffs’ insistence on pressing forward with the claims and discovery against
each of the 10 Defendants, the Defendants filed a timely answer to the Original Petition and each
Defendant served discovery on the Plaintiffs to flush out the evidence, if any exists, to support
the accusations against each of them in the lawsuit.
In your March 12, 2015 letter, you describe Defendants’ discovery requests as
“unnecessarily duplicative and unduly burdensome” and as an attempt to “abus[e] the discovery
process” and “harass” your clients.
The accusations are baseless. The circulation of discovery on behalf of each defendant is
not only appropriate for the reasons discussed herein, it is the right of each defendant in a lawsuit
to serve their own discovery to test the allegations asserted by the Plaintiffs. Therefore, the
200 West Madison Street, Suite 3900 | Chicago, IIlinois 60606 | T. 312.984.3100 | F.312.984.3150 | bfkn.com
EXHIBIT BBARACK FERRAZZANO
Barack Ferrazzano Kirschbaum & Nagelberg LLP
Isabelle M. Antongiorgi
March 16, 2015
Page 2
Defendants do not agree to the Plaintiffs’ proposal to consolidate their answers to the discovery
in the same fashion as the Plaintiffs consolidated their allegations in the Original Petition.
Contrary to the characterization of the discovery as placing an undue burden on the
Plaintiffs, the Defendants’ discovery is targeted to the disclosure of the facts and evidence the
Plaintiffs’ are relying on to assert the causes of action against each Defendant. Presumably, the
Plaintiffs conducted a pre-filing investigation for each cause of action against each Defendant so
there is no burden associated with providing the information requested in the discovery.
Furthermore, the Defendants’ discovery is not an attempt to abuse the discovery process,
but instead, the extensive discovery is a necessary tool to decipher Plaintiffs’ generic pleading.
The Plaintiffs affirmatively elected to collectively plead in a general fashion rather than allege
specific acts by each Defendant. As such, the interrogatories and requests to admit served by
each Defendant are required to reveal whether Plaintiffs have any factual basis to group the
defendants together in each of the 12 counts of the lawsuit.
To provide context to Defendants’ position, a review of the Plaintiffs’ generalized fraud
allegations illustrate why the Plaintiffs are required to respond to each discovery request. To
assert a fraud claim, a party must allege that it relied upon to its detriment specific factual
misrepresentations or other specific acts by another party. But in the Petition, Plaintiffs
generally assert allegations against Dan Metevier and “Lillibridge,” which is defined as every
Defendant other than Dan Metevier. As such, it is impossible to discern what specific factual act
each Plaintiff is alleging against each Defendant.
For example, Plaintiffs allege in paragraph 25 that “[i]Jn response to several inquiries, Mr.
Metevier and Lillibridge assured the Plaintiffs that the time to exercise the option would soon
come.” In other words, Plaintiffs have alleged that all Defendants assured all Plaintiffs “that the
time to exercise the option would soon come.” We do not believe there is any evidentiary basis
that all Defendants assured all Plaintiffs “that the time to exercise the option would soon come”
and, therefore, each of the Defendants are entitled to discover the facts regarding each
“assurance,” given by each Defendant to each Plaintiff. This is why each Defendant served an
interrogatory (No. 15) requesting a specific Plaintiff to identify “each Communication that you
had in which [Insert Defendant’s name] ‘assured the Plaintiffs that the time to exercise the option
would soon come’ as stated in Paragraph 25 of the Petition.”
Another example, Plaintiffs allege in paragraph 35 that “Defendants made the false
representations and promises with the intent that the Plaintiffs act on them or refrain from action,
and the Plaintiffs did rely on them to their detriment.” Again, we do not believe that Plaintiffs are
in possession of any evidence to justify accusing all Defendants of this conduct and, therefore,
each Defendant is entitled to know what “false representations and promises” each particular
Defendant made to each particular Plaintiff.
EXHIBIT BBARACK FERRAZZANO
Barack Ferrazzano Kirschbaum && Nagelberg LLP
Isabelle M. Antongiorgi
March 16, 2015
Page 3
And in paragraph 56, Plaintiffs allege that “Defendants offered and sold securities to the
Plaintiffs by means of untrue statements of material facts or omissions of material facts
necessary in order to make the statements made, in light of the circumstances under which they
were made, not misleading.” We do not believe that Plaintiffs are in possession of any evidence
to justify accusing any defendant of selling securities and, therefore, each particular Defendant
is entitled to know each fact being alleged by each particular Plaintiff regarding the alleged
securities fraud.
These are only a few examples of the generalized pleading of the Original Petition that
demonstrate why consolidated responses are not appropriate. While we will not agree to
Plaintiffs proposal to group the responses to the Defendants’ discovery, we do not object to your
request for additional time to respond to the written discovery and the staggered discovery
response schedule. We assume you are seeking an extension regarding all pending discovery
requests, rather than just interrogatories.
We hope that the Plaintiffs elect to respond to the discovery, but if Plaintiffs file a motion
for protection, we are not available on two of the dates identified in your letter and request that
the hearing be set on any of the following dates: March 26 or April 1, 2 or 3.
Please do not hesitate to call me to discuss this matter.
Sincerely,
a
ve, aye
ce: Don Taylor (via email: DTaylor@taylordunham.com)
Roger H. Stetson (via email: roger.stetson@bfkn.com)
Buddy Ferguson (via email: Buddy.Ferguson@strasburger.com)
EXHIBIT BExhibit A
EXHIBIT BBARACK FERRAZZANO
Barack Ferrazzano Kirschhaum & Nagelberg LLP
Matthew F. Singer | 1.312.629.7414 | matthewsinger@bfkn com
February 17, 2015
VIA EMAIL
Isabelle M. Antongiorgi, Esq.
TAYLOR DUNHAM AND RODRIGUEZ LLP
301 Congress Avenue
Suite 1050
Austin, Texas 78701.
iantongiorgi@taylordunham.com
Re: Sehram McDonnell, LLC, et al. v. Ventas, Inc., et als
Case No, D-1-GN-14-005444 (District Court of Travis County, Texas)
Dear Ms. Antongiorgi:
Thank you for taking the time to discuss the above captioned matter on February 10, 2015. As
we discussed, certain claims, including breach of contract claims, against the following
defendants should be voluntarily dismissed because they are not parties to the relevant
agreements: Ventas, Inc., Lillibridge Healthcare Services, Inc., and Dan Metevier (collectively,
“Non-Contract Defendants”). I write to you now to request the voluntary dismissal of these
parties and/or claims.’
Plaintiffs’ Original Petition is predicated upon alleged breaches of two separate lease
agreements: (1) a lease executed on August 21, 2007 between LHRET Ascension Austin, L.P.
and Richard Schram, M.D., P.A. (“Schram, P.A. Lease”); and (2) a lease executed on October 6,
2008 between LHRET Ascension Austin II, L.P. and South Oaks Family Medicine, PA (“South
Oaks PA Lease”). In Count I, which is a claim for breach of contract, Plaintiffs allege that they
“had valid and enforceable contracts with Defendants.” (See Original Petition, at { 31.)
Despite the allegation in the Original Petition, there is no contract between the Plaintiffs and the
Non-Contract Defendants, nor do their names appear anywhere within, the Schram, P.A. Lease
or the South Oaks PA Lease, (See, ¢.g., Schram, P.A. Lease, attached as Exhibit A to Original
Similarly, the following Plaintiffs have no standing to bring their claims because they are not parties to the lease
agreements cited in the Original Petition: Schram McDonnell, LLC dba Austin Orthopedic Specialists; Richard
Schram, individually; George Mundanthanam, MD, PA; George Mundanthanam, MD, individually; Josh Crum,
MD, PA; Josh Crum MD, individually, Mark McDonnell, DPM, PA; Mark McDonnell DPM, individually; Geoffrey
Cox MD, individually; and Ashely Steigler MD, individually (collectively, “Non-Contract Plaintiffs”), If there are
additional lease agreements that Plaintiffs are relying on for the breach of contract claims, please produce a copy of
the leases by February 20, 2015.
200 West Madison Street, Suite 3900 | Chicago, IliInois 60606 { 7.312.984.3100 | F. 312.984.3150 | bfkn.com
EXHIBIT BBARACK FERRAZZANO
Barack Ferraszano Kirschbaum & Na Nagelberg L LP
Isabelle M. Antongiorgi, Esq.
February 16, 2015
Page 2
Petition.) Accordingly, under Texas law, they cannot be held liable for breach of contract.”
Furthermore, the additional claims against the Non-Contract Defendants, which are breach of
contract claims repackaged as tort claims, fail as a matter of law. (See id., at {ff 33-63.)
Because there is no cognizable claim against the Non-Contract Defendants, we request
confirmation, by February 20, that you will voluntarily dismiss all claims against the Non-
Contract Defendants. Further, because the Non-Contract Plaintiffs have no standing to bring
claims regarding the lease agreements, we request confirmation by that same day that you will
amend the Original Petition to remove the Non-Contract Plaintiffs as parties to the lawsuit?
If Plaintiffs do not dismiss the parties, the Non-Contract Defendants will file a motion to dismiss
pursuant to Tex. R. Civ, P. 91a addressing these deficiencies, As you know, that rule, which
was adopted in 2013, provides the following:
[A] party may move to dismiss a cause of action on the grounds that it has no
basis in law or fact. A cause of action has no basis in law if the allegations, taken
as true, together with inferences reasonably drawn from them, do not entitle the
claimant to the relief sought. A cause of action has no basis in fact if no
reasonable person could believe the facts pleaded.
Tex. R. Civ. P, 91a.1 (2015). Further, Rule 91a.7 mandates that the award of attorneys’ fees to a
successful movant. See Tex. R. Civ. P. 91a,7.
We would prefer to avoid the motion practice and the associated fees which we will seek from
Plaintiffs regarding this issue, but it is necessary to narrow the pleading at this juncture because
the inclusion of so many improper parties at this early stage of the litigation will have a real
impact on litigating the case by causing the unnecessary expenditure of time and expense by the
parties. For example, if all of the currently named parties are kept in the case, Plaintiffs will
have to complete 120 Rule 194 disclosures (i.c., one from each defendant to each plaintiff).
2 The existence of a contract between parties is an essential element of a breach of contract claim. See
Brown v. U.S. Bank, N.A., 2014 U.S, Dist, LEXIS 104299, No. 3:14-CV-89-L, at *26 (N.D. Tex. Jul. 31, 2014)
(describing elements for breach of contract claim). Further, under Texas law, lease agreements for terms a year or
longer may only be enforced against a person or entity if “signed by the person to be charged with the promise or
agreement or by someone lawfully authorized to sign for him.” Tex, Bus. & Com. Code § 26.01(a)(2) (2014); see
also Virani v. Cunningham, 2012 Tex. App. LEXIS 865, No. 14-11-00331-CV, at *13 (Tex. App.—Houston Feb. 2,
2012) (applying the Statute of Frauds and holding that since the defendant “did not sign any agreement binding him
individually, the trial court correctly granted summary judgment”).
3 Again, if there is no contract between the Defendants and the Non-Contract Plaintiffs, they may not
pursue a claim against any Defendant relating to the Schram, P.A. Lease or the South Oaks PA Lease.
EXHIBIT B}
Isabelle M, Antongiorgi, Esq.
February 16, 2015
Page 3
Because a significant number of the parties are not proper, this is not a necessary exercise if
Plaintiffs voluntarily narrow the Original Petition as requested and required by law.
Sincerely,
“ a
Matthew “aye
cel Donald R. Taylor, Esq. (via email)
Roger H. Stetson, Esq. (via email)
EXHIBIT BExhibit B
EXHIBIT BMATTHEW SINGER
From: Isabelle Antongiorgi
Sent: Monday, March 02, 2015 5:42 PM
To: MATTHEW SINGER; Tamara Boston
Ce: Don Taylor; Janet Yastic; ROGER STETSON; Buddy.Ferguson@strasburger.com
Subject: RE: Cause No, D-1-GN-14-005444; Schram McDonnell, LLC, et al. v. Ventas, Inc, et al.
Hi Matt,
I'm sorry for not getting back to you sooner, today, I’m have an appellate bricf that is consuming my time at the
moment,
I’m not inclined to extend the answer deadline again. We'd like to get going with discovery, 1 will attempt to
amend as soon as possible but it likely will not be until next week,
Isabelle M. Antongiorgi, sq.
Taylor Dunham and Rodriguez LLP
301 Congress Avenue
Suite 1050
Austin, Te 7
512
S70}
2257 telephone
409 facsimile
ima@taylordunham.com
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YOVICE
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reader of this message is not the intended recipient, or an employee or agent responsible for delivery of this message
to the intended recipient, you are hereby notified that any dissemination, distribution, or copying of this
communication is strictly prohibited, [f you have received this communication in error, please notify us
immediately by replying to the message and deleting it from your computer.
Thank you,
‘Taylor Dunbam and Rodriguez LLP
From: MATTHEW SINGER [mailto: MATTHEW. SINGER @bfkn.com.
Sent: Monday, March 02, 2015 1:34 PM
To: Tamara Boston; Isabelle Antongiorgi
Ce: Don Taylor; Janet Yastic; ROGER STETSON; Buddy.Ferquson@strasburger.com
Subject: RE: Cause No. D-1-GN-14-005444; Schram McDonnell, LLC, et al. v. Ventas, Inc., et al.
Hi Isabelle,
Thank for your February 27, 2015 letter. | am writing to address your statements in that letter regarding an amended
Petition. Specifically, you state that you intend to amend the “Petition to specify the Defendants against which certain
1
EXHIBIT BPlaintiffs allege breach of the lease agreements,” that the “[b]reach of the lease agreements will not be asserted against
Defendants Ventas Inc., Lillibridge Healthcare Services Inc., or Dan Metevier,” and that the “amended pleading will
clarify that the Plaintiffs which are not signatories to the lease agreements at issue are not bringing claims for breach of
the lease agreements.”
Per my voice message this morning, | would like to discuss the timing of the amended Petition. | propose the following:
* Plaintiffs’ file their Amended Petition within the next 7 — 14 days;
* Defendants file their responses within 14 days of the filing of the Amended Petition.
Please advise as to whether this proposal is acceptable. | can prepare a Rule 11 letter memorializing the same. Best,
Matt
Matthew F. Singer | Associate | T. 312.629.7414 | matthew.singer@bfkn.com
Barack Ferrazzano Kirschbaum & Nagelberg LLP | 200 West Madison Street, Suite 3900 | Chicago, Illinois
60606 | bfkn.com
From: Tamara Boston [mailto:Tamara@taylordunham.com]
Sent; Friday, February 27, 2015 5:08 PM
To: MATTHEW SINGER
Cec: Isabelle Antongiorgi; Don Taylor; Janet Yastic
Subject: Cause No. D-1-GN-14-005444; Schram McDonnell, LLC, et al. v. Ventas, Inc., et al.
Dear Mr. Singer:
Attached please find correspondence of today’s date from Isabelle Antongiorgi regarding the above-referenced
matter. Thank you.
Sincerely,
Tamara Boston
Legal Assistant
Taylor Dunham and Rodriguez LLP
301 Congress Avenue, Suite 1050
Austin, TX 78701
512-473-2257 (Telephone)
512-478-4409 (Facsimile)
tboston@taylordunham.com
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deleting it from your computer.
Thank you,
Taylor Dunham and Rodriguez LLP
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EXHIBIT B
Preview
3/30/2015 3:27:32 PM Velva L. Price District Clerk Travis County CAUSE NO. D-1-GN-14-005444 D-1-GN-14-005444 345™ JUDICIAL DISTRICT COURT SCHRAM MCDONNELL, LLC dba AUSTIN _ ) IN THE DISTRICT COURT OF ORTHOPEDIC SPECIALISTS; et al, ) ) Plaintiffs, ) ) TRAVIS COUNTY, TEXAS v. ) VENTAS, INC.; et al. } Defendants. } ) DEFENDANTS’ RESPONSE TO PLAINTIFFS’ MOTION FOR PROTECTION Each of the twelve plaintiffs in this lawsuit sued each of the ten defendants for allegedly committing various frauds, crimes and breaching contracts. The issue before this Court is whether the Texas Rules of Civil Procedure should be departed from to allow the plaintiffs to escape having to answer each set of interrogatories served by each defendant, which basically ask each plaintiff to identify the fraudulent statements allegedly made by that defendant and to identify the contract allegedly breached. The motion should be denied. The Texas Rules of Civil Procedure expressly provide each defendant the right to serve their own interrogatories on each plaintiff. Further, the sole case cited by the plaintiffs in their Motion for Protection defeats their own argument. Finally, requiring the plaintiffs to follow the rules and answer each set of interrogatories will streamline the case because it will uncover what evidence, if any, the plaintiffs have in support of their claims against each defendant. I. The Plaintiffs’ Petition Makes Only General Allegations Accusing Each of the Ten Defendants of Committing Various Frauds Against Each of the Twelve Plaintiffs In this case, twelve separate plaintiffs assert causes of action for breach of contract, commonlaw fraud, statutory fraud, securities fraud, and other serious claims, against 10 separate defendants. Their Petition, however, fails to allege how each defendant committed these various frauds and other wrongful acts against each plaintiff, and instead collectively makes general and vague allegations against defendants Dan Metevier and “Lillibridge,” which the Petition defines as the nine defendants other than Dan Metevier. Despite explicit requests from the Defendants to narrow the litigation, the plaintiffs have refused to either amend their Petition to remove the defendants having nothing to do with this case or instead specifically allege what each defendant supposedly did to make them liable to each plaintiff and identify which contracts were breached despite. (See February 17, 2015 correspondence attached as Exhibit A). Accordingly, each defendant did the only thing that could be done to get to the bottom of the allegations against them and served each plaintiff with a set of interrogatories asking what fraudulent statements were supposedly made by that defendant to that plaintiff and what contract between them was breached. The defendants only undertook the extra effort to draft and serve separate interrogatories because it is necessary to do so to get the information they need. For their requests for production and requests for disclosure each defendant served a single, consolidated set on each plaintiff. Il. The Plaintiffs’ Motion For Protection Requests Permission to Not Answer Each Set of Defendant’s Interrogatories and Instead Consolidate Answers, And Also Asserts A New Theory Of Liability Against Each Defendant, Thereby Making It Even More Necessary For The Plaintiffs To Answer Each Set of Interrogatories In response to straightforward interrogatories, the plaintiffs filed a Motion for Protection. The plaintiffs argue that each plaintiff should not have to answer separate sets of interrogatories that were served by each of the defendants in accordance with the Texas Rules of Civil Procedure (“TRCP”). Instead, the defendants seek to consolidate their responses in one answer, and will “distinguish amongst the defendants” when they think it is “necessary.” (Motion at 2). Aside DEFENDANTS’ RESPONSE TO PLAINTIFFS’ MOTION FOR PROTECTION Page 2from the fact that nothing in the TRCP allows parties to consolidate answers to interrogatories, it is a similar grouping of allegations in the plaintiffs’ Petition that caused the problem in the first place, and doing the same in their answers to interrogatories only continues the problem of each defendant not knowing what they allegedly did to make them a defendant in this lawsuit. The defendants already explained all of this to the plaintiffs. (See March 16, 2015 correspondence attached as Exhibit B). Moreover, the plaintiffs’ Motion for Protective Order only further muddles their causes of action by stating that “Plaintiffs rely on principles of agency and successor liability and will distinguish amongst the Defendants when necessary.” (Motion at 2). Not only are these legal theories not mentioned in the Petition, they contradict the plaintiffs’ allegations in their Petition that each defendant named in the lawsuit is directly liable for each of the causes of action pleaded. The plaintiffs’ contradictory claims and arguments make it even more necessary that their request to depart from the TRCP be denied and they be required to answer each defendant’s interrogatories separately as served upon them. Six days after they filed their Motion for Protection, the plaintiffs filed a Supplement to their Motion for Protection containing affidavits and declarations by counsel for the plaintiffs and several of the defendants. The affidavit and declarations all make the same two points: first, neither plaintiffs nor their lawyer want to have to answer discovery because they think it is a burden to do so and disruptive to their jobs as doctors; and second, the sets of interrogatories are identical except for the defendant serving it and the plaintiff each is directed to. Neither is a good reason to allow them to depart from the TRCP and avoid answering discovery. Plaintiffs should not be surprised that a consequence of launching a lawsuit involving 22 separate parties based on vague, general claims of fraud leads to a lot of written discovery. Moreover, the easy solution to DEFENDANTS’ RESPONSE TO PLAINTIFFS’ MOTION FOR PROTECTION Page 3their problem is for them to decide which defendants they actually intend to assert fraud and other claims directly against and withdraw their claims against the defendants for which they are not. The Supplement to their Motion for Protection repeats their argument that they are only asserting successor liability and agency theories against some of the defendants (which, as noted above, contradicts the causes of action in their Petition), but noticeably missing from this argument is an explanation of which defendants they purportedly seek to hold liable for other defendants’ actions based on agency or successor liability theories, and which defendants they are seeking to hold directly liable. IlI.The Plaintiffs Have No Authority To Support Their Argument, And In Fact The Sole Case Cited By Plaintiffs Supports Defendants’ Position The plaintiffs argue that having to answer interrogatories served by each defendant that they have accused of committing fraud and various crimes is “harassing, unnecessarily duplicative, and unduly burdensome” because of the “burden and expense of drafting, organizing, and ensuring the accuracy of so many written responses.” (Motion at 2). Without belaboring the obvious, the defendants’ position simply is that asking each plaintiff to answer each defendant regarding what fraudulent statements were made and what contract was breached is not harassment. Indeed, if any party should complain about harassment, it would be the defendants, some of which have never had any communication with any of the plaintiffs, let alone committed fraud against each of them, and now find themselves the subject of a publicly filed lawsuit claiming exactly that. The fact that the plaintiffs voice concern about “ensuring the accuracy” of their answers to interrogatories regarding the basis for their fraud claims and identification of the contracts allegedly being breached only underscores the defendants’ need for the plaintiffs to answer these interrogatories. Presumably, prior to filing the lawsuit, counsel conducted a reasonable inquiry so DEFENDANTS’ RESPONSE TO PLAINTIFFS’ MOTION FOR PROTECTION Page 4that based on their knowledge, information and belief they concluded that the allegations in the Original Petition were not groundless in accordance with Rule 13 of the TRCP. Each Defendant simply wants to know the basis of the allegations made by each Plaintiff against that Defendant. Accordingly, the interrogatories are not unnecessarily duplicative. Yes, the same interrogatories are being propounded, but each set is from a different defendant to a different plaintiff. The plaintiffs have chosen to sue the defendants and should not now complain that having to answer interrogatories from them is unduly burdensome. If the plaintiffs do not want to participate in discovery and identify what alleged fraud was committed and which contract was allegedly breached by answering interrogatories expressly allowed by the rules of procedure, then they can dismiss their lawsuit. Finally, the sole case cited by the plaintiffs in support of their motion actually supports the defendants’ position. In /n re Alford Chevrolet-Geo, 997 S.W.2d 173 (Tex. 1999), the plaintiffs filed a class action against 636 Texas auto dealerships, alleging the dealerships misleadingly charged to their customers a tax actually owed by dealerships. Before class certification, the lead plaintiff served the 636 defendant dealers with document requests and interrogatories seeking a broad range of information, including the identification of every transaction in which the tax was charged and every written communication with customers regarding the tax. Jd. at 179. The defendants in the case argued such discovery was unduly burdensome and unnecessary and sought a protective order from the trial court, and when the trial court denied the defendants’ motion for protection the defendants sought mandamus relief from the Texas Supreme Court. The Texas Supreme Court rejected the defendants’ request to have discovery bifurcated and stayed until the trial court issued a ruling on class certification, and ruled the trial court did not abuse its discretion when it denied the defendants’ motion for protection. /d. at 185. Like the DEFENDANTS’ RESPONSE TO PLAINTIFFS’ MOTION FOR PROTECTION Page 5court in /n re Alford Chevrolet-Geo, this Court should deny the plaintiffs’ Motion for Protection. Especially where discovery is being requested of only twelve plaintiffs, not more than 600 different parties, and where answers to the interrogatories are necessary to nail down the plaintiffs’ vague and ever-shifting legal theories and causes of action. PRAYER For the foregoing reasons, the defendants ask the Court to deny the plaintiffs’ request to depart from the Texas Rules of Civil Procedure and deny their Motion for Protection. DEFENDANTS’ RESPONSE TO PLAINTIFFS’ MOTION FOR PROTECTION Respectfully submitted, /s/ Lloyd E. Ferguson LLOYD E. FERGUSON STATE BAR NO. 06918150 Buddy.Ferguson@strasburger.com STRASBURGER & PRICE, LLP 720 BRAZOS STREET, SUITE 700 AUSTIN, TEXAS 78701-2974 (512) 499-3600 (512) 499-3660 Fax ROGER H. STETSON (admitted pro hac vice) roger.stetson@bfkn.com BARACK FERRAZZANO KIRSCHBAUM & NAGELBERG LLP 200 W. MADISON ST., SUITE 3900 CHICAGO, ILLINOIS 60606 (312) 984-3100 (312) 984-3150 Fax ATTORNEYS FOR DEFENDANTS Page 6CERTIFICATE OF SERVICE I hereby certify that on this the 30th day of March, 2015, the above and foregoing has been served on the following via electronic service pursuant to the Texas Rules of Civil Procedure: Donald R. Taylor dtaylor@taylordunham.com Isabelle M. Antongiorgi ima@taylordunham.com TAYLOR DUNHAM AND RODRIGUEZ LLP 301 Congress Avenue Suite 1050 Austin, Texas 78701 ATTORNEYS FOR PLAINTIFFS {s/ Lloyd E. Ferguson Lloyd E. Ferguson DEFENDANTS’ RESPONSE TO PLAINTIFFS’ MOTION FOR PROTECTION Page 7BARACK FERRAZZANO Barack Ferrazzano Kirschbaum & Nagelberg LLP Matthew F. Singer | 7.312.629.7414 | matthew.singer@bfkn com February 17, 2015 VIA EMAIL Isabelle M. Antongiorgi, Esq. TAYLOR DUNHAM AND RODRIGUEZ LLP 301 Congress Avenue Suite 1050 Austin, Texas 78701 Re: Schram McDonnell, LLC, et al. v. Ventas, Inc., et al.; Case No. D-1-GN-14-005444 (District Court of Travis County, Texas) Dear Ms. Antongiorgi: Thank you for taking the time to discuss the above captioned matter on February 10, 2015. As we discussed, certain claims, including breach of contract claims, against the following defendants should be voluntarily dismissed because they are not parties to the relevant agreements: Ventas, Inc., Lillibridge Healthcare Services, Inc., and Dan Metevier (collectively, “Non-Contract Defendants”). I write to you now to request the voluntary dismissal of these parties and/or claims.! Plaintiffs’ Original Petition is predicated upon alleged breaches of two separate lease agreements: (1) a lease executed on August 21, 2007 between LHRET Ascension Austin, L.P. and Richard Schram, M.D., P.A. (“Schram, P.A. Lease”); and (2) a lease executed on October 6, 2008 between LHRET Ascension Austin II, L.P. and South Oaks Family Medicine, PA (“South Oaks PA Lease”). In Count I, which is a claim for breach of contract, Plaintiffs allege that they “had valid and enforceable contracts with Defendants.” (See Original Petition, at 31.) Despite the allegation in the Original Petition, there is no contract between the Plaintiffs and the Non-Contract Defendants, nor do their names appear anywhere within, the Schram, P.A. Lease or the South Oaks PA Lease. (See, e.g., Schram, P.A. Lease, attached as Exhibit A to Original ' Similarly, the following Plaintiffs have no standing to bring their claims because they are not parties to the lease agreements cited in the Original Petition: Schram McDonnell, LLC dba Austin Orthopedic Specialists; Richard Schram, individually; George Mundanthanam, MD, PA; George Mundanthanam, MD, individually; Josh Crum, MD, PA; Josh Crum MD, individually; Mark McDonnell, DPM, PA; Mark McDonnell DPM, individually; Geoffrey Cox MD, individually; and Ashely Steigler MD, individually (collectively, “Non-Contract Plaintiffs”). If there are additional lease agreements that Plaintiffs are relying on for the breach of contract claims, please produce a copy of the leases by February 20, 2015. 200 West Madison Street, Suite 3900 | Chicago, Illinois 60606 | T.312.984.3100 | F.312.984.3150 | bfkn.com EXHIBIT ABARACK FERRAZZANO Barack Ferrazzano Kirschbaum & Nagelberg LLP Isabelle M. Antongiorgi, Esq. February 16, 2015 Page 2 Petition.) Accordingly, under Texas law, they cannot be held liable for breach of contract.” Furthermore, the additional claims against the Non-Contract Defendants, which are breach of contract claims repackaged as tort claims, fail as a matter of law. (See id., at {] 33-63.) Because there is no cognizable claim against the Non-Contract Defendants, we request confirmation, by February 20, that you will voluntarily dismiss all claims against the Non- Contract Defendants. Further, because the Non-Contract Plaintiffs have no standing to bring claims regarding the lease agreements, we request confirmation by that same day that you will amend the Original Petition to remove the Non-Contract Plaintiffs as parties to the lawsuit.* If Plaintiffs do not dismiss the parties, the Non-Contract Defendants will file a motion to dismiss pursuant to Tex. R. Civ. P. 91a addressing these deficiencies. As you know, that rule, which was adopted in 2013, provides the following: [A] party may move to dismiss a cause of action on the grounds that it has no basis in law or fact. A cause of action has no basis in law if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought. A cause of action has no basis in fact if no reasonable person could believe the facts pleaded. Tex. R. Civ. P. 91a.1 (2015). Further, Rule 91a.7 mandates that the award of attorneys’ fees to a successful movant. See Tex. R. Civ. P. 91a.7. We would prefer to avoid the motion practice and the associated fees which we will seek from Plaintiffs regarding this issue, but it is necessary to narrow the pleading at this juncture because the inclusion of so many improper parties at this early stage of the litigation will have a real impact on litigating the case by causing the unnecessary expenditure of time and expense by the parties. For example, if all of the currently named parties are kept in the case, Plaintiffs will have to complete 120 Rule 194 disclosures (i.e., one from each defendant to each plaintiff). 2 The existence of a contract between parties is an essential clement of a breach of contract claim. See Brown y. U.S. Bank, N.A., 2014 U.S. Dist. LEXIS 104299, No. 3:14-CV-89-L, at *26 (N.D. Tex. Jul. 31, 2014) (describing elements for breach of contract claim). Further, under Texas law, lease agreements for terms a year or longer may only be enforced against a person or entity if “signed by the person to be charged with the promise or agreement or by someone lawfully authorized to sign for him.” Tex. Bus. & Com. Code § 26.01(a)(2) (2014); see also Virani v. Cunningham, 2012 Tex. App. LEXIS 865, No. 14-11-00331-CV, at #13 (Tex. App.—Houston Feb. 2, 2012) (applying the Statute of Frauds and holding that since the defendant “did not sign any agreement binding him individually, the trial court correctly granted summary judgment”). 3 Again, if there is no contract between the Defendants and the Non-Contract Plaintiffs, they may not pursue a claim against any Defendant relating to the Schram, P.A. Lease or the South Oaks PA Lease. EXHIBIT ABARACK FERRAZZANO Barack Ferrazzana Kirschbaum & Nagelberg LLP Isabelle M. Antongiorgi, Esq. February 16, 2015 Page 3 Because a significant number of the parties are not proper, this is not a necessary exercise if Plaintiffs voluntarily narrow the Original Petition as requested and required by law. Sincerely, Matthew Sy ce: Donald R. Taylor, Esq. (via email) Roger H. Stetson, Esq. (via email) EXHIBIT ABARACK FERRAZZANO Barack Ferrazzano Kirschbaum & Nagelberg LLP MatthewF. Singer | T. 312.629.7414 | matthew.singer@bfkn.com March 16, 2015 VIA ELECTRONIC MAIL Isabelle M. Antongiorgi TAYLOR DUNHAM AND RODRIGUEZ LLP 301 Congress Avenue, Suite 1050 Austin, Texas 78701 iantongiorgi@taylordunham.com Re: Cause No. D-1-GN-14-005444, Schram McDonnell, LLC v. Ventas, Inc., in the 345" Judicial District Court, Travis County, Texas. Dear Ms. Antongiorgi, Please consider this a response to your March 12, 2015 letter. The 12 Plaintiffs have filed a lawsuit asserting 14 separate counts, including multiple fraud claims, against 10 Defendants, On February 17, 2015, we sent you a letter requesting the voluntary dismissal of certain parties and claims to narrow the lawsuit in an effort to avoid unnecessary discovery related to baseless claims and parties inappropriately named in the Original Petition. A copy of the February 17, 2015 letter is attached hereto as Exhibit A. On February 27, 2015, the Plaintiffs declined to voluntarily dismiss any of the 10 defendants. In response, we requested, based on a representation that you intended to amend the Original Petition, an extension of time to file an answer so that we would not have to needlessly file a pleading that would require amendment. On March 2, 2015, you declined our request for an extension of time because you stated that “[w]e’d like to get going with discovery.” A copy of the March 2, 2015 email is attached hereto as Exhibit B. Based on Plaintiffs’ insistence on pressing forward with the claims and discovery against each of the 10 Defendants, the Defendants filed a timely answer to the Original Petition and each Defendant served discovery on the Plaintiffs to flush out the evidence, if any exists, to support the accusations against each of them in the lawsuit. In your March 12, 2015 letter, you describe Defendants’ discovery requests as “unnecessarily duplicative and unduly burdensome” and as an attempt to “abus[e] the discovery process” and “harass” your clients. The accusations are baseless. The circulation of discovery on behalf of each defendant is not only appropriate for the reasons discussed herein, it is the right of each defendant in a lawsuit to serve their own discovery to test the allegations asserted by the Plaintiffs. Therefore, the 200 West Madison Street, Suite 3900 | Chicago, IIlinois 60606 | T. 312.984.3100 | F.312.984.3150 | bfkn.com EXHIBIT BBARACK FERRAZZANO Barack Ferrazzano Kirschbaum & Nagelberg LLP Isabelle M. Antongiorgi March 16, 2015 Page 2 Defendants do not agree to the Plaintiffs’ proposal to consolidate their answers to the discovery in the same fashion as the Plaintiffs consolidated their allegations in the Original Petition. Contrary to the characterization of the discovery as placing an undue burden on the Plaintiffs, the Defendants’ discovery is targeted to the disclosure of the facts and evidence the Plaintiffs’ are relying on to assert the causes of action against each Defendant. Presumably, the Plaintiffs conducted a pre-filing investigation for each cause of action against each Defendant so there is no burden associated with providing the information requested in the discovery. Furthermore, the Defendants’ discovery is not an attempt to abuse the discovery process, but instead, the extensive discovery is a necessary tool to decipher Plaintiffs’ generic pleading. The Plaintiffs affirmatively elected to collectively plead in a general fashion rather than allege specific acts by each Defendant. As such, the interrogatories and requests to admit served by each Defendant are required to reveal whether Plaintiffs have any factual basis to group the defendants together in each of the 12 counts of the lawsuit. To provide context to Defendants’ position, a review of the Plaintiffs’ generalized fraud allegations illustrate why the Plaintiffs are required to respond to each discovery request. To assert a fraud claim, a party must allege that it relied upon to its detriment specific factual misrepresentations or other specific acts by another party. But in the Petition, Plaintiffs generally assert allegations against Dan Metevier and “Lillibridge,” which is defined as every Defendant other than Dan Metevier. As such, it is impossible to discern what specific factual act each Plaintiff is alleging against each Defendant. For example, Plaintiffs allege in paragraph 25 that “[i]Jn response to several inquiries, Mr. Metevier and Lillibridge assured the Plaintiffs that the time to exercise the option would soon come.” In other words, Plaintiffs have alleged that all Defendants assured all Plaintiffs “that the time to exercise the option would soon come.” We do not believe there is any evidentiary basis that all Defendants assured all Plaintiffs “that the time to exercise the option would soon come” and, therefore, each of the Defendants are entitled to discover the facts regarding each “assurance,” given by each Defendant to each Plaintiff. This is why each Defendant served an interrogatory (No. 15) requesting a specific Plaintiff to identify “each Communication that you had in which [Insert Defendant’s name] ‘assured the Plaintiffs that the time to exercise the option would soon come’ as stated in Paragraph 25 of the Petition.” Another example, Plaintiffs allege in paragraph 35 that “Defendants made the false representations and promises with the intent that the Plaintiffs act on them or refrain from action, and the Plaintiffs did rely on them to their detriment.” Again, we do not believe that Plaintiffs are in possession of any evidence to justify accusing all Defendants of this conduct and, therefore, each Defendant is entitled to know what “false representations and promises” each particular Defendant made to each particular Plaintiff. EXHIBIT BBARACK FERRAZZANO Barack Ferrazzano Kirschbaum && Nagelberg LLP Isabelle M. Antongiorgi March 16, 2015 Page 3 And in paragraph 56, Plaintiffs allege that “Defendants offered and sold securities to the Plaintiffs by means of untrue statements of material facts or omissions of material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.” We do not believe that Plaintiffs are in possession of any evidence to justify accusing any defendant of selling securities and, therefore, each particular Defendant is entitled to know each fact being alleged by each particular Plaintiff regarding the alleged securities fraud. These are only a few examples of the generalized pleading of the Original Petition that demonstrate why consolidated responses are not appropriate. While we will not agree to Plaintiffs proposal to group the responses to the Defendants’ discovery, we do not object to your request for additional time to respond to the written discovery and the staggered discovery response schedule. We assume you are seeking an extension regarding all pending discovery requests, rather than just interrogatories. We hope that the Plaintiffs elect to respond to the discovery, but if Plaintiffs file a motion for protection, we are not available on two of the dates identified in your letter and request that the hearing be set on any of the following dates: March 26 or April 1, 2 or 3. Please do not hesitate to call me to discuss this matter. Sincerely, a ve, aye ce: Don Taylor (via email: DTaylor@taylordunham.com) Roger H. Stetson (via email: roger.stetson@bfkn.com) Buddy Ferguson (via email: Buddy.Ferguson@strasburger.com) EXHIBIT BExhibit A EXHIBIT BBARACK FERRAZZANO Barack Ferrazzano Kirschhaum & Nagelberg LLP Matthew F. Singer | 1.312.629.7414 | matthewsinger@bfkn com February 17, 2015 VIA EMAIL Isabelle M. Antongiorgi, Esq. TAYLOR DUNHAM AND RODRIGUEZ LLP 301 Congress Avenue Suite 1050 Austin, Texas 78701. iantongiorgi@taylordunham.com Re: Sehram McDonnell, LLC, et al. v. Ventas, Inc., et als Case No, D-1-GN-14-005444 (District Court of Travis County, Texas) Dear Ms. Antongiorgi: Thank you for taking the time to discuss the above captioned matter on February 10, 2015. As we discussed, certain claims, including breach of contract claims, against the following defendants should be voluntarily dismissed because they are not parties to the relevant agreements: Ventas, Inc., Lillibridge Healthcare Services, Inc., and Dan Metevier (collectively, “Non-Contract Defendants”). I write to you now to request the voluntary dismissal of these parties and/or claims.’ Plaintiffs’ Original Petition is predicated upon alleged breaches of two separate lease agreements: (1) a lease executed on August 21, 2007 between LHRET Ascension Austin, L.P. and Richard Schram, M.D., P.A. (“Schram, P.A. Lease”); and (2) a lease executed on October 6, 2008 between LHRET Ascension Austin II, L.P. and South Oaks Family Medicine, PA (“South Oaks PA Lease”). In Count I, which is a claim for breach of contract, Plaintiffs allege that they “had valid and enforceable contracts with Defendants.” (See Original Petition, at { 31.) Despite the allegation in the Original Petition, there is no contract between the Plaintiffs and the Non-Contract Defendants, nor do their names appear anywhere within, the Schram, P.A. Lease or the South Oaks PA Lease, (See, ¢.g., Schram, P.A. Lease, attached as Exhibit A to Original Similarly, the following Plaintiffs have no standing to bring their claims because they are not parties to the lease agreements cited in the Original Petition: Schram McDonnell, LLC dba Austin Orthopedic Specialists; Richard Schram, individually; George Mundanthanam, MD, PA; George Mundanthanam, MD, individually; Josh Crum, MD, PA; Josh Crum MD, individually, Mark McDonnell, DPM, PA; Mark McDonnell DPM, individually; Geoffrey Cox MD, individually; and Ashely Steigler MD, individually (collectively, “Non-Contract Plaintiffs”), If there are additional lease agreements that Plaintiffs are relying on for the breach of contract claims, please produce a copy of the leases by February 20, 2015. 200 West Madison Street, Suite 3900 | Chicago, IliInois 60606 { 7.312.984.3100 | F. 312.984.3150 | bfkn.com EXHIBIT BBARACK FERRAZZANO Barack Ferraszano Kirschbaum & Na Nagelberg L LP Isabelle M. Antongiorgi, Esq. February 16, 2015 Page 2 Petition.) Accordingly, under Texas law, they cannot be held liable for breach of contract.” Furthermore, the additional claims against the Non-Contract Defendants, which are breach of contract claims repackaged as tort claims, fail as a matter of law. (See id., at {ff 33-63.) Because there is no cognizable claim against the Non-Contract Defendants, we request confirmation, by February 20, that you will voluntarily dismiss all claims against the Non- Contract Defendants. Further, because the Non-Contract Plaintiffs have no standing to bring claims regarding the lease agreements, we request confirmation by that same day that you will amend the Original Petition to remove the Non-Contract Plaintiffs as parties to the lawsuit? If Plaintiffs do not dismiss the parties, the Non-Contract Defendants will file a motion to dismiss pursuant to Tex. R. Civ, P. 91a addressing these deficiencies, As you know, that rule, which was adopted in 2013, provides the following: [A] party may move to dismiss a cause of action on the grounds that it has no basis in law or fact. A cause of action has no basis in law if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought. A cause of action has no basis in fact if no reasonable person could believe the facts pleaded. Tex. R. Civ. P, 91a.1 (2015). Further, Rule 91a.7 mandates that the award of attorneys’ fees to a successful movant. See Tex. R. Civ. P. 91a,7. We would prefer to avoid the motion practice and the associated fees which we will seek from Plaintiffs regarding this issue, but it is necessary to narrow the pleading at this juncture because the inclusion of so many improper parties at this early stage of the litigation will have a real impact on litigating the case by causing the unnecessary expenditure of time and expense by the parties. For example, if all of the currently named parties are kept in the case, Plaintiffs will have to complete 120 Rule 194 disclosures (i.c., one from each defendant to each plaintiff). 2 The existence of a contract between parties is an essential element of a breach of contract claim. See Brown v. U.S. Bank, N.A., 2014 U.S, Dist, LEXIS 104299, No. 3:14-CV-89-L, at *26 (N.D. Tex. Jul. 31, 2014) (describing elements for breach of contract claim). Further, under Texas law, lease agreements for terms a year or longer may only be enforced against a person or entity if “signed by the person to be charged with the promise or agreement or by someone lawfully authorized to sign for him.” Tex, Bus. & Com. Code § 26.01(a)(2) (2014); see also Virani v. Cunningham, 2012 Tex. App. LEXIS 865, No. 14-11-00331-CV, at *13 (Tex. App.—Houston Feb. 2, 2012) (applying the Statute of Frauds and holding that since the defendant “did not sign any agreement binding him individually, the trial court correctly granted summary judgment”). 3 Again, if there is no contract between the Defendants and the Non-Contract Plaintiffs, they may not pursue a claim against any Defendant relating to the Schram, P.A. Lease or the South Oaks PA Lease. EXHIBIT B} Isabelle M, Antongiorgi, Esq. February 16, 2015 Page 3 Because a significant number of the parties are not proper, this is not a necessary exercise if Plaintiffs voluntarily narrow the Original Petition as requested and required by law. Sincerely, “ a Matthew “aye cel Donald R. Taylor, Esq. (via email) Roger H. Stetson, Esq. (via email) EXHIBIT BExhibit B EXHIBIT BMATTHEW SINGER From: Isabelle Antongiorgi Sent: Monday, March 02, 2015 5:42 PM To: MATTHEW SINGER; Tamara Boston Ce: Don Taylor; Janet Yastic; ROGER STETSON; Buddy.Ferguson@strasburger.com Subject: RE: Cause No, D-1-GN-14-005444; Schram McDonnell, LLC, et al. v. Ventas, Inc, et al. Hi Matt, I'm sorry for not getting back to you sooner, today, I’m have an appellate bricf that is consuming my time at the moment, I’m not inclined to extend the answer deadline again. We'd like to get going with discovery, 1 will attempt to amend as soon as possible but it likely will not be until next week, Isabelle M. Antongiorgi, sq. Taylor Dunham and Rodriguez LLP 301 Congress Avenue Suite 1050 Austin, Te 7 512 S70} 2257 telephone 409 facsimile ima@taylordunham.com CONFIDENTIALITY YOVICE ‘The information contained in this message may be privileged and confidential and protected from disclosure. If the reader of this message is not the intended recipient, or an employee or agent responsible for delivery of this message to the intended recipient, you are hereby notified that any dissemination, distribution, or copying of this communication is strictly prohibited, [f you have received this communication in error, please notify us immediately by replying to the message and deleting it from your computer. Thank you, ‘Taylor Dunbam and Rodriguez LLP From: MATTHEW SINGER [mailto: MATTHEW. SINGER @bfkn.com. Sent: Monday, March 02, 2015 1:34 PM To: Tamara Boston; Isabelle Antongiorgi Ce: Don Taylor; Janet Yastic; ROGER STETSON; Buddy.Ferquson@strasburger.com Subject: RE: Cause No. D-1-GN-14-005444; Schram McDonnell, LLC, et al. v. Ventas, Inc., et al. Hi Isabelle, Thank for your February 27, 2015 letter. | am writing to address your statements in that letter regarding an amended Petition. Specifically, you state that you intend to amend the “Petition to specify the Defendants against which certain 1 EXHIBIT BPlaintiffs allege breach of the lease agreements,” that the “[b]reach of the lease agreements will not be asserted against Defendants Ventas Inc., Lillibridge Healthcare Services Inc., or Dan Metevier,” and that the “amended pleading will clarify that the Plaintiffs which are not signatories to the lease agreements at issue are not bringing claims for breach of the lease agreements.” Per my voice message this morning, | would like to discuss the timing of the amended Petition. | propose the following: * Plaintiffs’ file their Amended Petition within the next 7 — 14 days; * Defendants file their responses within 14 days of the filing of the Amended Petition. Please advise as to whether this proposal is acceptable. | can prepare a Rule 11 letter memorializing the same. Best, Matt Matthew F. Singer | Associate | T. 312.629.7414 | matthew.singer@bfkn.com Barack Ferrazzano Kirschbaum & Nagelberg LLP | 200 West Madison Street, Suite 3900 | Chicago, Illinois 60606 | bfkn.com From: Tamara Boston [mailto:Tamara@taylordunham.com] Sent; Friday, February 27, 2015 5:08 PM To: MATTHEW SINGER Cec: Isabelle Antongiorgi; Don Taylor; Janet Yastic Subject: Cause No. D-1-GN-14-005444; Schram McDonnell, LLC, et al. v. Ventas, Inc., et al. Dear Mr. Singer: Attached please find correspondence of today’s date from Isabelle Antongiorgi regarding the above-referenced matter. Thank you. Sincerely, Tamara Boston Legal Assistant Taylor Dunham and Rodriguez LLP 301 Congress Avenue, Suite 1050 Austin, TX 78701 512-473-2257 (Telephone) 512-478-4409 (Facsimile) tboston@taylordunham.com CONFIDENTIALITY NOTICE The information contained in this message may be privileged and confidential and protected from disclosure. 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