Riverside Strategic Capital Fund I v. CLG Investments

FILED IN
BUSINESS COURT OF TEXAS
BEVERLY CRUMLEY, CLERK
ENTERED
8/19/2025

2025 Tex. Bus. 33

The Business Court of Texas,
1st Division

RIVERSIDE STRATEGIC CAPITAL §
FUND I, L.P.; RSCF BLOCKER §
TRUE HEALTH, LLC; and RSCF I-A §
BLOCKER TRUE HEALTH, LLC, §
Plaintiffs, §
v. § Cause No. 25-BC01B-0006
§
CLG INVESTMENTS, LLC; §
CHRISTOPHER §
GROTTENTHALER; COVERT §
INVESTMENT OPERATIONS, LLC; §
TRUE HEALTH DIAGNOSTIC §
MANAGEMENT LLC; L. RICHARD §
COVERT; LCG VENTURES II, LLC; §
FERNANDO DE LEON; TIMOTHY §
TATROWICZ ALBA DURATA, §
LLC; TOM D. WIPPMAN, in his §
capacity as TRUSTEE OF THE TOM §
D. WIPPMAN REVOCABLE §
TRUST; MARK THOMAS SMITH; §
ALEXANDRA NETTESHEIM; §
KYLE NETTESHEIM; ROBERT J. §
OSTERHOFF; RJ INVESTMENTS; §
MATT MILBURN; MICHAEL A. §
CLEMENTS; MICHAEL §
OSTERHOFF; MELINDA L. §
MILBURN; KAREN A. MILLER; §
JACK NOVAK; EDWARD MCCAN; §
DANIEL GROTTENTHALER; §
ANITA GROTTENTHALER; DANA §
M. HOVIND; CHRISTIAN §
RICHARDS; CHRISTOPHER W. §
KLING; in his capacity as TRUSTEE §
OF CHRISTOPHER W. & MARISSA §
M. KLING REV TRUST U/A/D §
5/11/2012; KEVIN M. NELLIS; §
CAROL A. NELLIS; BRUCE §
ZIVIAN; RYAN NELLIS; and §
ANCELMO E. LOPES, Defendants §

═══════════════════════════════════════
MEMORANDUM OPINION
═══════════════════════════════════════

[¶ 1] Defendants Tom Wippman, Mark Thomas Smith, Alexandra

Nettesheim, Kyle Nettesheim, Robert Osterhoff, RJ Investments, Matt

Milburn, Michael Clements, Michael Osterhoff, Karen Miller, Edward

McCann, Daniel Grottenthaler, Anita Grottenthaler, Christian Richards,

Christopher Kling, Kevin Nellis, Carol Nellis, Bruce Zivian, Ryan Nellis, and

Ancelmo E. Lopes 1 filed a special appearance.

1
Referred to herein as “OSDs,” meaning out-of-state defendants.

MEMORANDUM OPINION, Page 2
[¶ 2] Having considered the special appearance, response, pleadings,

materials on file, and counsels’ arguments, the court concluded that it lacked

personal jurisdiction over those defendants, granted their special appearance,

and dismissed without prejudice the claims against them on July 17, 2025.

[¶ 3] The court concluded that the special appearance should be granted

because (i) plaintiffs failed to comply with the pleading requirements stated in

Kelly and (ii) there are no allegations or evidence that any Out-of-State

Defendant purposefully availed itself of Texas by contacting the forum and

those contacts gave rise to this suit. In other words, it is not enough that

defendants invested in a company that may have been headquartered in Texas

and that plaintiffs’ claims are premised on allegations that the company

violated healthcare laws in Texas (and elsewhere) where no alleged fraudulent

misrepresentation occurred in, was purposefully directed at, or was

communicated to individuals in Texas.

[¶ 4] Further, this action arises from plaintiffs’ investment in the

company (and alleged misrepresentations in the investment agreement), not

defendants’ investment. Plaintiffs’ investment agreement was with a

Delaware entity, was governed by Delaware law, and did not require any party

to perform any act in Texas. It is not alleged to have been negotiated in Texas

MEMORANDUM OPINION, Page 3
or particularly contemplate Texas as the nexus of activities. That

representations of the company’s compliance with healthcare laws may have

allegedly been untrue in Texas (and elsewhere) is a fortuitous contact with the

state because the company operated beyond Texas. Accordingly, these

defendants’ contacts with Texas are insufficient to support this court’s

personal jurisdiction over them in this action.

I. BACKGROUND

A. Plaintiffs’ Allegations

[¶ 5] Plaintiffs Riverside Strategic Capital Fund I, L.P.; RSCF Blocker

True Health, LLC; and RSCF I-A Blocker True Health, LLC (Riverside) filed

this lawsuit against over thirty defendants in the 298th Judicial District Court

of Dallas County, Texas.2 A subset of defendants removed to this court. 3

[¶ 6] Riverside alleges that it was defrauded in connection with an

initial $50 million investment in True Health Group LLC (THG) in 2017. 4 As

part of its investment, Riverside entered into a Securities Purchase Agreement

(SPA) with defendants that contained representations concerning THG’s

2
See generally Plaintiffs’ Original Petition (Pet.).
3
See generally Defendants LCG Ventures, LLC, LCG Ventures II, LLC, and Leon Capital
Partners, LLC’s Notice of Removal.
4
Pet. ¶ 1.

MEMORANDUM OPINION, Page 4
compliance with “applicable Healthcare Laws.” 5 Riverside alleges it later

learned that those representations were false, resulting in THG’s bankruptcy

and the loss of more than $84 million due to defendants’ fraud. 6

B. Jurisdictional Facts

[¶ 7] The court considers allegations contained in Riverside’s petition

and related evidence submitted in response to the OSDs’ special appearance.

See Kelly v. General Interior Const., Inc., 301 S.W.3d 653, 658–59 (Tex. 2010).

The court does not consider allegations made outside the petition and only

considers additional evidence to the extent it supports or undermines the

petition’s allegations. Id.

[¶ 8] Below are the allegations and evidence material to this opinion.

The court considered every allegation contained within Riverside’s pleadings,

as well as all the evidence submitted by the parties on these issues framed by

the pleadings.

5
Pet. ¶ 1.
6
Pet. ¶s 3–6.

MEMORANDUM OPINION, Page 5
1. Plaintiffs’ Live Pleading

[¶ 9] Riverside’s petition is devoid of specific jurisdictional allegations

as to any OSD, alleging only that “[t]his Court has personal jurisdiction over

[the defendants] . . . pursuant to [the Texas Long-Arm Statute]” and that

defendants “engaged in business in Texas.”7

[¶ 10] Riverside later relied on allegations that True Health

Diagnostics, LLC (THD), THG’s predecessor, and THG itself had business

operations in Texas with Texas hospitals, and that defendants knew of THG’s

business in Texas when they chose to invest in the company. 8

[¶ 11] Riverside also relied on allegations that defendants designated

CLG Investments, LLC as their agent and attorney-in-fact regarding to the

SPA. 9 Riverside alleged that CLG is a Delaware limited liability company with

its principal place of business in Frisco, Texas and Christopher Grottenthaler

its managing member.10 Grottenthaler in turn was THG’s founder and CEO

7
Pet. ¶s 14–47, 49.
8
See, e.g., Pet. ¶ 57.
9
Pet. ¶ 64.
10
Pet. ¶s 14, 64.

MEMORANDUM OPINION, Page 6
and pled guilty in 2024 to criminal charges for conspiracy to violate certain

healthcare laws.11

[¶ 12] Finally, Riverside admitted that each OSD was the citizen of a

state other than Texas.12

2. Jurisdictional Evidence 13

[¶ 13] As part of their special appearance, each OSD offered a

declaration that they were not a Texas citizen, did not reside in Texas when

the SPA was signed, and made his or her investment 14 from their home states

11
Pet. ¶ 3.
12
Pet. ¶s 25 (Tom Wippman), 26 (Mark Thomas Smith), 27 (Alexandra Nettesheim), 28
(Kyle Nettesheim), 29 (Robert Osterhoff), 30 (RJ Investments), 31 (Matt Milburn), 32
(Michael Clements), 33 (Michael Osterhoff), 35 (Karen Miller), 37 (Edward McCann), 38
(Daniel Grottenthaler), 39 (Anita Grottenthaler), 41 (Christian Richards), 42 (Christopher
Kling), 43 (Kevin Nellis), 44 (Carol Nellis), 45 (Bruce Zivian), 46 (Ryan Nellis), and 47
(Ancelmo E. Lopes).
13
The court draws the following from Defendants’ Special Appearance (Special
Appearance); Riverside’s Response to Special Appearances (Riverside’s Resp.);
Defendants’ Reply in Support of Special Appearance (Defs’ Reply); Riverside’s
Supplement to Response to Special Appearances (Riverside’s Suppl. Resp.); and
Defendants’ Response to Plaintiffs’ Supplement on Defendants’ Special Appearance (Defs’
Suppl. Resp.).
14
The defendants were likely referring to their investment in THG, not THD, as stated in
the declarations. See Special Appearance at Ex. A. The SPA and various LLC agreements
at issue all relate to the parties’ investment in THG. See, e.g., Riverside’s Resp. at Ex. A-1
(THG LLC Agreement), A-13 Jan. 26, 2017, Amended THG LLC Agreement; Defs’ Suppl.
Resp. at Ex. 1 (SPA).

MEMORANDUM OPINION, Page 7
(not Texas).15 Additionally, every OSD besides Carol Nellis, Christian

Richards, and Michael Osterhoff affirmed that they did not conduct business

in Texas during 2017. 16

[¶ 14] Riverside responded by providing THG’s company agreements

and materials from a previous litigation filed by THG’s bankruptcy trustee,

Willow Tree Consulting Grp., LLC v. Grottenthaler, No. DC-21-01060 (Dallas

County Dist. Ct. Jan. 25, 2021) (Trustee Litigation).

[¶ 15] Following jurisdictional discovery, Riverside provided deposition

transcripts for each OSD.17 Riverside summarized this testimony as follows:

(i) all but one defendant admitted that they signed a 2017 LLC Agreement

regarding THG’s recapitalization; (ii) all but three admitted they knew THG

had business in Texas; and (iii) Michael Osterhoff, Carol Nellis, Tom

Wippman, and Christian Richards had additional contacts with Texas in

connection with THG (discussed in more detail below).18

15
See generally Exhibit A to Special Appearance.
16
See generally Exhibit A to Special Appearance.
17
See generally Appendix to Riverside’s Suppl. Resp.
18
Riverside’s Suppl. Resp. at 16–17.

MEMORANDUM OPINION, Page 8
[¶ 16] Finally, defendants provided the SPA and a declaration from

Christian Richards stating they moved to Virginia in January 2016 and worked

at the THG headquarters in Virginia after that time.19

C. Parties’ Arguments

[¶ 17] Riverside’s arguments essentially are that each OSD

(i) knowingly invested in an entity (THG) with substantial Texas-based

business activities; (ii) designated CLG Investments, LLC as their agent in

connection with the SPA; (iii) consented to jurisdiction in Texas by signing the

THG LLC Agreement in connection with the 2017 recapitalization;

(iv) waived their objection to personal jurisdiction by appearing generally in

the Trustee Litigation in Texas; and (v) four OSDs had additional Texas

contacts related to their work with THG.

[¶ 18] The court concludes that (i), (ii), and (v) are rooted in an analysis

of the minimum contacts of the OSDs with Texas and their connection to this

lawsuit (i.e., specific jurisdiction) whereas (iii) and (iv) are not based on OSDs’

pre-suit contacts. The court’s analysis below follows this division.

19
Def’s Suppl. Resp. at Exs. 1 & 3.

MEMORANDUM OPINION, Page 9
[¶ 19] OSDs argued that the petition failed to allege sufficient facts

establishing jurisdiction over any OSD, and that under Kelly and Steward

Health the court cannot consider factual allegations outside the pleadings. 20

They disputed that any of Riverside’s arguments made jurisdiction proper in

this case.21 Accordingly, OSDs needed to prove only that they were non-

residents, which they did.22

[¶ 20] The court agrees with OSDs.

II. APPLICABLE LAW

A. Special Appearances

[¶ 21] “[P]ersonal jurisdiction is a ʻwaivable right’ and [a defendant]

may give ʻexpress or implied consent to the personal jurisdiction of the

court.’” RSR Corp. v. Siegmund, 309 S.W.3d 686, 704 (Tex. App.—Dallas

2010, no pet.). “To the extent a party has consented to jurisdiction in a

particular forum, the trial court’s exercise of personal jurisdiction over it does

not violate due process even in the absence of contacts with Texas.” Id.

20
Defs’ Resp. at 3–4.
21
See generally Defs’ Resp. & Defs’ Suppl. Resp.
22
Special Appearance at 4.

MEMORANDUM OPINION, Page 10
[¶ 22] Rule of Civil Procedure 120a governs special appearances.

TEX. R. CIV. P. 120a(1). A party availing itself of Rule 120a must strictly

comply with its terms because failure to do so results in waiver. PetroSaudi

Oil Servs. Ltd. v. Hartley, 617 S.W.3d 116, 136 (Tex. App.—Houston [1st Dist.]

2020, no pet.).

[¶ 23] A party waives its special appearance when it (i) invokes the

court’s judgment on any question other than the court’s jurisdiction;

(ii) recognizes by its acts that an action is properly pending against it; or

(iii) seeks affirmative action from the court. Exito Elecs. Co. v. Trejo,

142 S.W.3d 302, 304 (Tex. 2004) (per curiam) (citing Dawson-Austin v.

Austin, 968 S.W.2d 319, 322 (Tex. 1998)). But a party does not waive its

jurisdictional challenge by seeking affirmative relief consistent with the

special appearance. Nationwide Distrib. Servs., Inc. v. Jones, 496 S.W.3d 221,

225 (Tex. App.—Houston [1st Dist.] 2016, no pet.).

B. In Personam Jurisdiction

[¶ 24] A nonresident defendant is subject to personal jurisdiction in

Texas if (i) the Texas long-arm statute authorizes the exercise of jurisdiction

and (ii) the exercise of jurisdiction does not violate federal or state

constitutional due process guarantees. Kelly, 301 S.W.3d at 657.

MEMORANDUM OPINION, Page 11
[¶ 25] The long-arm statute permits courts to exercise jurisdiction over

a defendant who “does business in this state,” which the Legislature defines

to include a nonresident defendant who “commits a tort in whole or in part in

this state.” LG Chem Am., Inc. v. Morgan, 670 S.W.3d 341, 346 (Tex. 2023)

(quoting TEX. CIV. PRAC. & REM. CODE § 17.042(2)).

[¶ 26] The statute’s broad “doing business” language (that is,

committing a tort in whole or in part in Texas) allows the trial court’s

jurisdiction to “reach as far as the federal constitutional requirements of due

process will allow.” Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569,

575 (Tex. 2007) (quoting Guardian Royal Exch. Assurance, Ltd. v. English

China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex. 1991)).

[¶ 27] Therefore, courts need “only analyze whether [the defendant]’s

acts would bring [the defendant] within Texas’ jurisdiction consistent with

constitutional due process requirements.” Retamco Operating, Inc. v. Republic

Drilling Co., 278 S.W.3d 333, 337 (Tex. 2009).

[¶ 28] A state’s exercise of jurisdiction comports with federal due

process if (i) the nonresident defendant has “minimum contacts” with the

state and (ii) the exercise of jurisdiction “does not offend traditional notions

of fair play and substantial justice.” M&F Worldwide Corp. v. Pepsi-Cola

MEMORANDUM OPINION, Page 12
Metro. Bottling Co., Inc., 512 S.W.3d 878, 885 (Tex. 2017) (quoting Walden v.

Fiore, 571 U.S. 277, 283 (2014)).

1. Minimum Contacts

[¶ 29] A defendant establishes minimum contacts with a state when it

“purposefully avails itself of the privilege of conducting activities within the

forum state, thus invoking the benefits and protections of its laws.” Retamco,

278 S.W.3d at 338.

[¶ 30] Courts consider three issues in determining whether a defendant

purposefully availed itself of the privilege of conducting activities in Texas:

First, only the defendant’s contacts with the forum are relevant,
not the unilateral activity of another party or a third person.
Second, the contacts relied upon must be purposeful rather than
random, fortuitous, or attenuated. . . . Finally, the defendant
must seek some benefit, advantage or profit by availing itself of
the jurisdiction.

Id. at 339 (quoting Moki Mac, 221 S.W.3d at 575); Michiana Easy Livin’

Country, Inc. v. Holten, 168 S.W.3d 777, 785 (Tex. 2005).

[¶ 31] The minimum-contacts analysis focuses on the “quality and

nature of the defendant’s contacts,” not quantity. Retamco, 278 S.W.3d at

339.

MEMORANDUM OPINION, Page 13
[¶ 32] “The defendant’s activities, whether they consist of direct acts

within Texas or conduct outside Texas, must justify a conclusion that the

defendant could reasonably anticipate being called into a Texas court.” Id. at

338 (quoting Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801,

806 (Tex. 2002)).

a. General Personal Jurisdiction

[¶ 33] A court has general jurisdiction over a nonresident defendant

whose “affiliations with the State are so ʻcontinuous and systematic’ as to

render [it] essentially at home in the forum State.” TV Azteca v. Ruiz, 490

S.W.3d 29, 37 (Tex. 2016) (alteration in original) (quoting Daimler v.

Bauman, 571 U.S. 117, 127 (2014)). This test requires “substantial activities

within the forum” and presents “a more demanding minimum contacts

analysis than for specific jurisdiction.” BMC Software Belgium, N.V. v.

Marchand, 83 S.W.3d 789, 797 (Tex. 2002). When a court has general

jurisdiction over a nonresident, it may exercise jurisdiction “even if the cause

of action did not arise from activities performed in the forum state.” Spir Star

AG v. Kimich, 310 S.W.3d 868, 872 (Tex. 2010).

MEMORANDUM OPINION, Page 14
b. Specific Personal Jurisdiction

[¶ 34] Specific jurisdiction requires that “(1) the defendant

purposefully avails itself of conducting activities in the forum state, and

(2) the cause of action arises from or is related to those contacts or activities.”

Retamco, 278 S.W.3d at 338 (buying Texas real estate) (citing Burger King

Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)). “The ʻarise from or relate to’

requirement lies at the heart of specific jurisdiction by defining the required

nexus between the nonresident defendant, the litigation, and the forum.” Moki

Mac, 221 S.W.3d at 579; Guardian Royal, 815 S.W.2d at 228 (specific

jurisdiction focuses on “the relationship among the defendant, the forum and

the litigation”).

[¶ 35] For a nonresident defendant’s forum contacts to support an

exercise of specific jurisdiction, “there must be a substantial connection

between those contacts and the operative facts of the litigation.” Moki Mac,

221 S.W.3d at 585. The “operative facts” of a litigation are those that “will

be the focus of the trial” and “will consume most if not all of the litigation’s

attention.” Id. at 585.

[¶ 36] Specific jurisdiction requires courts to analyze jurisdictional

contacts on a claim-by-claim basis. Moncrief Oil Int’l Inc. v. OAO Gazprom,

MEMORANDUM OPINION, Page 15
414 S.W.3d 142, 150 (Tex. 2013); see also Seiferth v. Helicopteros Atuneros,

Inc., 472 F.3d 266, 274–75 (5th Cir. 2006) (“If a defendant does not have

enough contacts to justify the exercise of general jurisdiction, the Due Process

Clause prohibits the exercise of jurisdiction over any claim that does not arise

out of or result from the defendant’s forum contacts.”). But a court need not

assess contacts on a claim-by-claim basis if all claims arise from the same

forum contact. Moncrief, 414 S.W.3d at 150–51.

2. Fair Play and Substantial Justice

[¶ 37] If the minimum contacts requirements are met, it is “rare” for

exercising personal jurisdiction to not comply with fair play and substantial

justice. Retamco, 278 S.W.3d at 341. Nonetheless, courts still consider

factors to ensure that exercising jurisdiction does not offend traditional

notions of fair play and substantial justice:

(1) the burden on the defendant; (2) the interests of the forum
state in adjudicating the dispute; (3) the plaintiff’s interest in
obtaining convenient and effective relief; (4) the interstate
judicial system’s interest in obtaining the most efficient
resolution of controversies; and (5) the shared interest of the
several States in furthering fundamental substantive social
policies.

Id. (citing Burger King, 471 U.S. at 477–78).

MEMORANDUM OPINION, Page 16
3. The Parties’ Burdens

[¶ 38] The plaintiff “bears the initial burden to plead sufficient

allegations to bring the nonresident defendant within the reach of Texas’s

long-arm statute.” Kelly, 301 S.W.3d at 658. If the plaintiff fails to plead

facts bringing the defendant within reach of the long-arm statute, to negate

jurisdiction the defendant need only prove that it does not live in Texas. Id. at

658–59. “Once the plaintiff has pleaded sufficient jurisdictional allegations,

the defendant filing a special appearance bears the burden to negate all bases

of personal jurisdiction alleged by the plaintiff.” Id. at 658.

[¶ 39] “Because the plaintiff defines the scope and nature of the

lawsuit, the defendant’s corresponding burden to negate jurisdiction is tied to

the allegations in the plaintiff’s pleading.” Id. Defendant can negate

jurisdiction on either a factual or legal basis. Id. at 659.

[¶ 40] Factually, a defendant can present evidence that it has no

contacts with Texas, effectively disproving the plaintiff’s allegations. Id. The

plaintiff must then respond with its own evidence that affirms its allegations

or else risk dismissal. Id. However, the court considers “additional evidence,”

including, “stipulations made by and between the parties, such affidavits and

attachments as may be filed by the parties, the results of discovery processes,

MEMORANDUM OPINION, Page 17
and any oral testimony,” to the extent it supports or undermines the pleadings’

allegations. Id. at 658 n.4 (citing TEX. R. CIV. P. 120a(3)). If the plaintiff’s

evidence is not within the scope of the pleadings’ factual allegations, the

plaintiff should amend the pleadings for consistency. Id. at 659 n.6; see also

Steward Health Care Sys. LLC v. Saidara, 633 S.W.3d 120, 129 (Tex. App.—

Dallas 2021, no pet.) (en banc).

[¶ 41] The defendant can show that even if the plaintiff’s alleged facts

are true, the evidence is legally insufficient to establish jurisdiction either

(i) because the defendant’s contacts with Texas fall short of purposeful

availment (including that the claims do not arise from the contacts) or (ii) that

traditional notions of fair play and substantial justice are offended by the

exercise of jurisdiction. Id. at 659.

III. DISCUSSION

A. Kelly and Steward Health Care

[¶ 42] As a preliminary matter, the court concludes that plaintiffs’

failure to plead specific, non-conclusory jurisdictional allegations for any OSD

is an independent reason to grant the special appearance.

[¶ 43] As discussed at ¶s 9–12, Riverside’s live pleading’s only

jurisdictional allegations are that “[t]his Court has personal jurisdiction over

MEMORANDUM OPINION, Page 18
[the defendants] . . . pursuant to [the Texas Long-Arm Statute]” and that

defendants “engaged in business in Texas.”23

[¶ 44] These allegations are conclusory and “insufficient to meet

[Riverside’s] burden of establishing jurisdiction” over any OSD. PermiaCare

v. L.R.H., 600 S.W.3d 431, 444 (Tex. App.—El Paso 2020, no pet.) (citing

State v. Lueck, 290 S.W.3d 876, 884–85 (Tex. 2009)). Instead, Riverside had

to allege specific facts that, if true, would affirmatively demonstrate the

court’s jurisdiction over defendants. Id.

[¶ 45] Riverside’s arguments and evidence opposing the special

appearance do not save it. The court considers only allegations in plaintiffs’

petition—not allegations made in its response—and considers additional

evidence only to the extent it supports or undermines those allegations. Kelly,

301 S.W.3d at 658–59; see also id. 658 n.4. As the Dallas Court of Appeals

explained in Steward Health:

Thus, according to Kelly, the allegations on which the plaintiff
bases the exercise of jurisdiction over the defendant must be in
the petition. The plaintiff’s response to the special appearance
may contain evidence supporting the petition’s jurisdictional
allegations, but that evidence must be consistent with the
allegations in the petition.

23
Pet. ¶s 14–47, 49.

MEMORANDUM OPINION, Page 19
633 S.W.3d at 129.

[¶ 46] “When the pleading is wholly devoid of jurisdictional facts, the

plaintiff should amend the pleading to include the necessary factual

allegations, . . . thereby allowing jurisdiction to be decided based on evidence

rather than allegations, as it should be.” Kelly, 301 S.W.3d at 659.

[¶ 47] Because Riverside never amended its pleading, the evidence

submitted in its oppositions does not relate to any non-conclusory allegations

in its pleading. Accordingly, the court need not consider the allegations or

evidence submitted with its briefing. Kelly, 301 S.W.3d at 659 n.6 (“If the

plaintiff’s evidence does not fall within the scope of the factual allegations in

the pleading, then the plaintiff should amend the pleading for consistency”);

Steward Health, 633 S.W.3d at 129 (same).

[¶ 48] Furthermore, Lobell, which Riverside extensively relied on in its

briefing, says the same. See Lobell v. Cap. Transp., LLC, 2015 WL 9436255,

at *4 (Tex. App.—Austin Dec. 15, 2015, no pet.) (“. . . though this additional

evidence merely supports or undermines allegations in pleadings.” (emphasis

added)).

MEMORANDUM OPINION, Page 20
[¶ 49] Riverside was alerted to this issue in the OSDs’ reply brief.24 Yet,

Riverside ignored defendants’ argument. 25

[¶ 50] Therefore, because Riverside did not plead facts or present proper

evidence sufficient to bring the OSDs within the court’s jurisdiction (under the

long-arm statute or based on due process), those defendants needed to show

only that they were not residents of Texas. Kelly, 301 S.W.3d at 658–59. They

did so. 26

[¶ 51] Alternatively, even if the court were to consider the additional

allegations and evidence, they fail to demonstrate that any OSD had sufficient

minimum contacts with Texas to establish the court’s jurisdiction.

B. Riverside’s Contacts-Based Arguments

[¶ 52] Riverside did not argue or allege general jurisdiction applies

here. 27 Accordingly, the court reasonably construes Riverside to argue that

the OSDs are subject to specific jurisdiction because each (i) invested in a

24
Defs’ Reply at 3–4 (citing both Kelly and Steward Health).
25
Riverside’s Suppl. Resp. at 6 n.1 (acknowledging that both cases say the court can
consider evidence attached to the opposition but ignoring Steward’s holding that the
evidence must comport with the allegations in the petition).
26
See, e.g., Special Appearance at Ex. A.
27
See generally Riverside’s Resp. & Riverside’s Suppl. Resp.

MEMORANDUM OPINION, Page 21
Texas-headquartered organization with substantial business operations in the

state and (ii) designated CLG Investment, LLC as their agent in connection

with the SPA.28

[¶ 53] Plaintiffs further argue that four OSDs have additional Texas

contacts to support the court’s jurisdiction. 29

[¶ 54] The court rejects these arguments:

1. All OSDs

a. Argument One: OSDs knowingly invested in a Texas-based
enterprise

[¶ 55] The court begins by clarifying its understanding of Riverside’s

argument. Riverside’s initial response argued that the OSDs had minimum

contacts with Texas because each (i) “knowingly invested in and sought to

profit from True Health—a company headquartered in Texas and with

substantial operations in the state” and (ii) signed a separate LLC agreement

that required disputes be resolved in Texas.30 Riverside’s supplemental

28
Riverside’s Resp. 9–14, 20–23; Riverside’s Suppl. Resp. at 4–5, 18.
29
Riverside’s Resp. 23–26; Riverside’s Suppl. Resp. at 14–16.
30
Riverside Resp. at 20–21.

MEMORANDUM OPINION, Page 22
response argued that these facts mean defendants “consented” to jurisdiction

in Texas. 31

[¶ 56] The court reasonably construes the former to be a contacts-

based, specific jurisdictional argument and the latter to be a true consent-

based, venue provision argument. The court addresses the consent/LLC

agreement argument later in this opinion.

[¶ 57] Riverside cites the Austin Court of Appeals decision of Lobell and

the landmark supreme court Retamco case for the proposition that the OSDs

knew they were creating “continuing relationships with and obligations to

Texas citizens” by choosing to invest in a company headquartered in Texas32

and with Texas-based operations, and therefore they have sufficient minimum

contacts with Texas. 33 Lobell, 2015 WL 9436255, at *6; see also Retamco, 278

S.W.3d at 339.

[¶ 58] In Retamco, the plaintiff alleged that the non-resident defendant

violated the Texas Uniform Fraudulent Transfer Act (TUFTA) by acting as the

31
Riverside Suppl. Resp. at 18–21.
There appears to be a dispute whether THG or THD were headquartered in Texas in 2017
32

when the SPA was signed. Compare Riverside Suppl. Resp. at 4–5, 11–16 with Defs’ Suppl.
Resp. at 3. The distinction is not material to the court’s decision.
33
See Riverside Resp. at 22–23, 25–26; Riverside Suppl. Resp. at 18–19.

MEMORANDUM OPINION, Page 23
transferee of Texas oil and gas interests. 278 S.W.3d at 335. Because oil and

gas interests were real property interests, the supreme court held that the

defendants’ Texas contacts were purposeful, not random, fortuitous, or

attenuated. Id. at 339. Accordingly, the fraudulent transfer claims related

directly to the alleged contacts—defendants’ receipt of Texas oil and gas

interests.

[¶ 59] Likewise, the Lobell plaintiff “alleg[ed] breach of partnership

agreement and various tort claims” when a partnership fell apart. 2015 WL

9436255, at *2 (emphasis added). The plaintiff further alleged and provided

evidence that “the heart of the operations” of said partnership would be in

Texas. Id. at *5. Accordingly, the court held that “the record reflects that

Lobell ʻmost certainly knew that he was affiliating himself with’ a business

based in Texas when he created continuing relationships with and obligations

to Texas citizens Denton and Baker and that the alleged partnership had a

substantial connection with Texas.” Id. at *6 (citing Burger King, 471 U.S. at

473). Again, the claims—breach of partnership agreement—related directly

to the contacts that the court found created a substantial connection with

Texas (i.e., the Texas partnership).

MEMORANDUM OPINION, Page 24
[¶ 60] This case is different because it does not arise out of OSDs’

investment in THG. Instead, Riverside’s claims arise out of their investment

in THG and alleged fraud in the SPA. Thus, there is no substantial connection

between these contacts (defendants’ investment in THG) and the operative

facts of this litigation. See Moki Mac, 221 S.W.3d at 585; see also id. at 579

(“[F]or specific-jurisdiction purposes, purposeful availment has no

jurisdictional relevance unless the defendant’s liability arises from or relates to

the forum contacts.” (emphasis added)).

[¶ 61] Further, there is no evidence that (i) any OSD had direct contact

with any plaintiff in Texas or otherwise, (ii) any OSD was in Texas when they

signed the SPA, or (iii) that the SPA required any party to perform in Texas.

[¶ 62] Finally, regardless of whether THG was headquartered in Texas,

that fact does not support the court’s jurisdiction over its investors because it

is not an operative fact of Riverside’s claims and THG’s contacts cannot be

imputed against its individual owners. See Nikolai v. Strate, 922 S.W.2d 229,

241 (Tex. App.—Fort Worth 1996, writ denied) (“Texas law is clear that a

business’s contacts may not be imputed to its personnel to establish personal

jurisdiction over them.”); Siskind v. Villa Found. for Educ., Inc., 642 S.W.2d

434, 437–38 (Tex. 1982) (“it is the contacts of the defendant himself that are

MEMORANDUM OPINION, Page 25
determinative”). In other words, THG could have been headquartered

anywhere and the result would be the same (i.e., it is fortuitous).

[¶ 63] Accordingly, because whether the OSDs invested in a Texas-

headquartered entity is not an operative fact of this litigation, Riverside’s first

contacts-based argument fails to demonstrate that this court has jurisdiction

over those defendants.

b. Argument Two: OSDs authorized CLG Investments, LLC to act
as its agent during the SPA process

[¶ 64] Riverside argues that CLG Investments, LLC was the agent and

attorney-in-fact for the OSDs in connection with the SPA and that it was

managed by Christopher Grottenthaler. 34 Accordingly, it argues CLG’s

“jurisdictional contacts with respect to the SPA are therefore imputed to the

Specially Appearing Defendants.”35 The petition further states that CLG is a

Delaware LLC with its principal place of business in Frisco, Texas.36

34
Riverside Resp. at 14, 21; see also Pet. ¶s 64, 86.
35
Riverside Resp. at 22. Riverside states in its briefing that “[e]ach of the Specially
Appearing Defendants made affirmative representations about True Health’s Texas-based
business in order to induce plaintiffs to invest in the company, which allowed defendants
to obtain millions of dollars in distributions.” Riverside Resp. at 21. There are no
allegations or evidence anywhere in the record to support this statement that the court is
aware of. The court assumes Riverside means by designating CLG as its agent, alleged
misrepresentations in the SPA made by CLG/Grottenthaler can be imputed to the OSDs.
36
Pet. ¶s 14.

MEMORANDUM OPINION, Page 26
[¶ 65] The court rejects those arguments for two reasons.

[¶ 66] First, regardless of whether CLG was OSDs’ agent, where it

resides (its principal place of business) is irrelevant in a specific-jurisdictional

inquiry concerning OSDs. See Siskind, 642 S.W.2d at 437–38.

[¶ 67] Second, the court agrees with OSDs that Riverside has made no

allegation or presented evidence that CLG took any action in Texas on behalf

of defendants connected to OSDs’ alleged misrepresentations.37 Accordingly,

there are no contacts upon which the court can find specific jurisdiction.

[¶ 68] In requesting time to take jurisdictional discovery, Riverside

stated that relevant discovery would include “the actions taken by CLG

Investments in Texas as agent for defendants under the SPA.”38 However,

Riverside presented no evidence in its supplemental response showing any

action CLG took in Texas or any misrepresentations made there. 39 Neither did

Riverside provide any evidence related to Christopher Grottenthaler’ actions

in Texas CLG’s manager. 40

37
See Defs’ Reply at 7.
38
Riverside Resp. at 31.
39
See generally Riverside’s Supp. Resp.
40
See generally Riverside’s Supp. Resp.

MEMORANDUM OPINION, Page 27
[¶ 69] Accordingly, Riverside’s second contacts-based argument fails

to demonstrate that this court has jurisdiction over the OSDs.

2. Nellis, Osterhoff, Richards, and Wippman

[¶ 70] Plaintiffs argue that “four of the [OSDs] admitted to performing

work for True Health, traveling to Texas in order to conduct True Health

business, and conducting True Health business directed towards Texas.” 41

Michael Osterhoff

[¶ 71] Michael Osterhoff was general counsel for THG and admitted to

(i) travelling to Texas for THG, (ii) giving the company legal advice regarding

healthcare regulations, and (iii) reviewing a specific contract with a Texas

rural hospital that relates to claims in the petition. 42

[¶ 72] OSDs responded with evidence that Osterhoff’s office in 2017

was at THG’s headquarters in Virginia and he did not provide any legal

41
Riverside’s Suppl. Resp. at 7–8; see also id. at 14–16. Riverside also summarily stated
that Daniel and Anita Grottenthaler “[v]isited True Health Texas [c]orporate
[h]eadquarters.” Riverside’s Suppl. Resp. at 17. However, Riverside did not attempt to tie
those visits to the operative facts of this litigation, and the court concludes they do not
demonstrate personal jurisdiction.
42
Riverside Resp. at 11; Riverside Suppl. Resp. at 14–15.

MEMORANDUM OPINION, Page 28
services in connection with the SPA. 43 Riverside provided no controverting

evidence.

Carol Nellis

[¶ 73] Carol Nellis was True Health’s Vice President of National Sales

and Marketing and then a Regional Vice President of Sales and (i) admitted to

traveling weekly to Texas for over a year for THG and (ii) communicating with

physicians in Texas.44

[¶ 74] OSDs responded with evidence that Nellis traveled to Texas on a

weekly basis for THG only in 2014 and 2015 and that her travel stopped once

the THG headquarters moved to Virginia. 45 Further, she was not involved

with the SPA.46 Riverside provided no controverting evidence.

Tom D. Wippman

[¶ 75] Tom Wippman was a THG director and a member of the board’s

compliance subcommittee, and he admitted to attending THG board meetings

in Texas.47

43
Defs’ Suppl. Resp. at 8.
44
Riverside Resp. at 12–13; Riverside Suppl. Resp. at 15.
45
Defs’ Suppl. Resp. at 7.
46
Defs’ Suppl. Resp. at 7–8.
47
Riverside Resp. at 13; Riverside Suppl. Resp. at 15.

MEMORANDUM OPINION, Page 29
[¶ 76] However, Wippman provided evidence that he served as a

director in his personal capacity, but he is present in this lawsuit in his

capacity as trustee of the Tom D. Wippman Trust.48 Accordingly, OSDs argue

that there is no evidence Wippman had any connection to Texas as trustee of

the trust.49 The court agrees.

Christian Richards

[¶ 77] Christian Richards was THG’s CFO and lived in Texas in 2015

while working for THG. 50

[¶ 78] OSDs presented a declaration from Richards testifying that he

moved to Virginia in January 2016 when THG moved its corporate

headquarters and argued that he had no contacts relevant to the alleged

fraudulent statements in the SPA.51

*****

[¶ 79] The court concludes that none of Osterhoff, Nellis, Wippman, or

Christian was a Texas resident when the alleged fraud occurred with the SPA

48
Riverside’s Suppl. Resp. at Ex. D at 4:23–5:5.
49
Defs’ Suppl. Resp. at 9.
50
Riverside Resp. at 11–12; Riverside Suppl. Resp. at 16.
51
Defs’ Suppl. Resp. at Ex. 3; Defs’ Suppl. Resp. at 7.

MEMORANDUM OPINION, Page 30
signing, came to Texas in connection with the SPA, or made personal

misrepresentations concerning the SPA (directed at Texas or otherwise).

[¶ 80] The court further concludes that none of Osterhoff, Nellis,

Wippman, or Christian’s contacts with Texas described above have a

substantial connection to Riverside’s claims concerning fraud in the SPA.

Even Osterhoff is not alleged or shown to have made any personal

representations to Riverside, and Riverside has not shown that he had an

independent duty to report wrongdoings to Riverside regarding the SPA.

[¶ 81] Accordingly, Riverside has not demonstrated personal

jurisdiction over Osterhoff, Nellis, Wippman, or Christian.

*****

[¶ 82] Therefore, the court concludes that none of the OSDs have

minimum contacts with Texas such that the exercise of jurisdiction comports

with due process. Moki Mac, 221 S.W.3d at 575.

C. Riverside’s Non-Contacts-Based Arguments

[¶ 83] Riverside presents two non-contacts-based arguments: (i) the

OSDs consented to jurisdiction in Texas in connection with the 2017 THG

MEMORANDUM OPINION, Page 31
LLC Agreement and (ii) most of the OSDs waived personal jurisdiction in

Texas by appearing generally in the Trustee Lawsuit.52

[¶ 84] The court rejects these arguments:

1. Forum-Selection Clause

[¶ 85] The same day that the SPA was executed the OSDs executed the

2017 THG LLC Agreement, which contained the following “Consent to

Jurisdiction” provision:53

Each of the parties hereto irrevocably agrees that any legal action
or proceeding with respect to this Agreement and the rights and
obligations arising hereunder . . . shall be brought and determined
exclusively in the Federal or State Courts located in Dallas,
Texas[.] . . . Each of the parties hereto hereby irrevocably
submits with regard to any such action or proceeding . . . generally
and unconditionally, to the personal jurisdiction of the aforesaid
courts[.] . . . Each of the parties hereto hereby irrevocably
waives, and agrees not to assert, by way of motion, as a defense,
counterclaim or otherwise, in any action or proceeding with
respect to this Agreement and the rights and obligations hereunder
. . . any claim that it or its property is exempt or immune from
jurisdiction of any such court.54

52
Riverside’s Resp. at 10, 15–18, 21, 28–30; Riverside’s Suppl. Resp. at 19–23.
53
Riverside Resp. at 10, 21; Riverside Suppl. Resp. at 19–20.
54
Riverside Resp. at Ex. A-13, § 10.5(a) (App. 411) (emphasis added).

MEMORANDUM OPINION, Page 32
[¶ 86] Riverside argues this clause amounted to a “consent” of

jurisdiction in Texas generally as well as for claims arising out of the 2017

recapitalization of THG. 55 The court rejects that argument for several reasons.

[¶ 87] For starters, Riverside’s reproduction of the provision excluded

the emphasized portions above.56 Including these phrases shows that this

provision reaches only claims arising under the 2017 THG LLC Agreement.

[¶ 88] This case does not arise out of the 2017 THG LLC Agreement.

All the alleged misrepresentations that Riverside sues on were made in the

SPA. 57 In fact, Riverside’s petition does not mention the THG LLC

Agreement.58

[¶ 89] Furthermore, Riverside’s argument that the THG LLC

Agreement’s mandatory venue provision applies to any claim relating to the

“recapitalization” of THG is contradicted by the SPA’s separate venue

provision. The SPA states:

Each party to this agreement hereby irrevocably agrees that any
legal action or proceeding arising out of or relating to this
agreement . . . may be brought in the courts of the State of

55
Riverside Suppl. Resp. at 19–20.
56
Compare Riverside Suppl. Resp. at 20 with Riverside Resp. at App. 411.
57
See generally Pet.
58
See generally Pet.

MEMORANDUM OPINION, Page 33
Delaware or of the United States of America for the District of
De laware and he re
by e xpressly submits to the pe rsonal
jurisdiction and venue of such courts for the purposes thereof.59

[¶ 90] If the 2017 THG LLC Agreement’s mandatory venue provision

meant that all claims regarding the 2017 “recapitalization” must be brought

in Texas, the SPA’s permissive venue provision would be rendered

meaningless. See U.S. Polyco, Inc. v. Texas Cent. Bus. Lines Corp., 681 S.W.3d

383, 390 (Tex. 2023) (a court must harmonize and give effect to all the

provisions of a contract by analyzing the provisions with reference to the

whole agreement); Malouf v. State ex rels. Ellis, 694 S.W.3d 712, 718 (Tex.

2024) (when possible, courts construe a text in a way that does not render any

of it meaningless).

[¶ 91] Accordingly, the court concludes that Riverside’s claims arise

out of the SPA, not the 2017 THG LLC Agreement, and therefore the OSDs

did not consent to personal jurisdiction for the purposes of this action via the

LLC Agreement.

59
Def. Suppl. Resp. at Ex. 1 (SPA), § 8.9.

MEMORANDUM OPINION, Page 34
2. Waiver

[¶ 92] Finally, citing to the court’s decision in Primexx Energy

Opportunity Fund, LP v. Primexx Energy Corp., 2025 Tex. Bus. 5, 2025 WL

446345, at *1 (1st Div.), Riverside argues that most of the OSDs waived any

challenge to personal jurisdiction by generally appearing in the Trustee

Litigation.60 However, Primexx is distinguishable and therefore does not

control here.

[¶ 93] Primexx involved the same plaintiffs, the same defendants

(except one additional defendant), and the same claims arising out of the same

transaction as an earlier action filed in Texas. Id., ¶ 75. The court accordingly

found that the case before it was “essentially a continuation” of the earlier

proceeding and therefore defendants’ general appearance in that earlier

proceeding waived their ability to contest personal jurisdiction in the second

proceeding. Id., ¶s 74–77.

[¶ 94] However, the court’s holding did not overturn the general

premise “that a foreign defendant [does not] waive[] its right [to] object to

personal jurisdiction, or consent[] to jurisdiction, in Texas by having defended

60
Riverside Resp. at 28–30; Riverside Suppl. Resp. at 22–23.

MEMORANDUM OPINION, Page 35
other lawsuits in Texas.” Megadrill Services Ltd. v. Brighouse, 556 S.W.3d

490, 498 (Tex. App.—Houston [14th Dist.] 2018, no pet.).

[¶ 95] The case at bar is not “essentially a continuation” of the Trustee

Litigation. The plaintiffs are different (Riverside versus the bankruptcy

trustee), defendants are not all the same, and while many of the claims are

based on the same or similar allegations, there is less overlap than Primexx.

For instance, while both Riverside and the trustee allege THG violated

healthcare laws through the use of medical services organizations (MSOs) and

rural hospital billing schemes, the trustee presented far more additional claims

related to the payment of illegal renumerations, billing schemes, etc. 61 And

the claims are different; while Riverside’s claims are rooted primarily in fraud,

the trustee included claims related to breach of fiduciary duties, negligence,

and fraudulent transfers.62

[¶ 96] Finally, the court is persuaded by OSDs’ argument that the

Trustee Litigation arose at least in part out of the THG LLC Agreement.

Unlike this action, that lawsuit involved claims for breach of fiduciary duties

61
Compare Pet. ¶s 57–61 with Defs’ Suppl. Resp. at Ex. 1, ¶s 91, 93–118.
62
Compare Pet. ¶s 83–98 with Defs’ Suppl. Resp. at Ex. 1, ¶s 215–377.

MEMORANDUM OPINION, Page 36
that the LLC Agreement created. So, the THG LLC Agreement’s mandatory

venue provision arguably foreclosed those defendants’ ability to object to

jurisdiction in that case. That consideration weighs against finding waiver

here, where the LLC Agreement does not apply.

IV. CONCLUSION

[¶ 97] For these reasons, the court previously granted the OSDs’ special

appearances on July 17, 2025.

BILL WHITEHILL
Judge of the Texas Business Court,
First Division

SIGNED: August 19, 2025

MEMORANDUM OPINION, Page 37
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