Riverside Strategic Capital Fund I v. CLG Investments

FILED IN
BUSINESS COURT OF TEXAS
BEVERLY CRUMLEY, CLERK
ENTERED
2025 Tex. Bus. 35 9/17/2025

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 §

═══════════════════════════════════════
OPINION
═══════════════════════════════════════

Syllabus 1

This opinion addresses when statutes of limitations accrue and the application
of the discovery rule and fraudulent concealment principles regarding claims of
fraudulent statements contained in a securities purchase agreement.

1
The syllabus was created by court staff and is provided for the reader’s
convenience. It is not part of the court’s opinion, does not constitute the court’s official
description or statement, and should not be relied upon as legal authority.

OPINION, Page 1
I. OPINION

[¶ 1] This fraud case arises out of a securities purchase agreement.

Plaintiffs invested into a healthcare company that provided laboratory

management and diagnostic services. They allege that the defendants made

false representations regarding the company’s compliance with applicable

laws.

[¶ 2] Plaintiffs sued the defendants for (i) fraud, (ii) money had and

received, and (iii) conspiracy.

[¶ 3] Defendants moved for traditional summary judgment arguing

that statutes of limitations bar plaintiffs’ causes of action. The outcome rests

on when plaintiffs knew, or should have known through the exercise of

reasonable diligence, facts giving rise to their causes of action.

[¶ 4] The summary judgment evidence conclusively establishes that

plaintiffs were aware of facts, conditions, or circumstances more than four

years before filing suit that would cause a reasonably prudent person to make

an inquiry that if pursued would have led them to discover their causes of

action. This inquiry notice is legally equivalent to knowledge of the causes of

action. Thus, plaintiffs’ claims are barred because they failed to sue within the

limitations period. Further, they failed to raise a genuine issue of material fact

OPINION, Page 2
regarding fraudulent concealment.

II. JURISDICTION AND VENUE

[¶ 5] This court has subject matter jurisdiction because this is an

action arising out of a qualified transaction and the amount in controversy

exceeds $10 million. TEX. GOV’T CODE § 25.A.004(d)(1).2 The court also has

jurisdiction under TEX. GOV’T CODE § 25.A.004(b)(2) because this is an action

regarding the internal affairs of an organization and the amount in controversy

exceeds $5 million. TEX. GOV’T CODE § 25.A.004(b)(2).

III. THE SUMMARY JUDGMENT RECORD

[¶ 6] The court considered the pleadings, summary judgment

submissions, and related oral arguments.

IV. FACTS

A. The Parties and Related Entities

[¶ 7] True Health Group LLC provided laboratory management and

diagnostic services for the healthcare industry.3 Plaintiffs invested in True

2
Effective September 1, 2025, the legislature lowered the qualified transaction
monetary threshold from $10 million to $5 million. See Tex. H.B. 40, 89th Leg., R.S.
(2025). However, plaintiffs filed this suit before that change became effective. So, the
$10 million threshold applies to this case.
3
Plaintiffs’ Original Petition (Pet.) ¶ 1.

OPINION, Page 3
Health. Defendants were “significant equityholders” in True Health.4

[¶ 8] Plaintiff Riverside Strategic Capital Fund I L.P. is a Delaware

limited partnership investment fund.5

[¶ 9] Plaintiffs RSCF Blocker True Health, LLC and RSCF I-A Blocker

True Health, LLC are Delaware limited liability companies that Riverside used

to structure its investment in True Health.6

B. Investigations and Proceedings Against THD

[¶ 10] In March of 2014, Christopher Grottenthaler founded True

Health Diagnostics (THD), True Health’s predecessor. 7

[¶ 11] In 2015, THD purchased the assets of another laboratory

company called Health Diagnostics Laboratory, Inc. (HDL). 8 Prior to the

acquisition, HDL was allegedly driven out of business because of pervasive

healthcare fraud. 9

[¶ 12] In November of 2015, THD signed a laboratory processing

4
Pet. ¶ 1. The parties’ agreement defines “significant equity holders” to mean “the
members of the Company set forth on the signature pages” thereto. Securities Purchase
Agreement (SPA) at Preamble (Defs’ 1 App. 0014).
5
Pet. ¶ 11.
6
Pet. ¶s 12–13.
7
Pet. ¶ 57.
8
Geren Declaration ¶ 4 (Defs’ 2 App. 0583).
9
Geren Declaration ¶ 4 (Defs’ 2 App. 0583); Trustee Lawsuit at 21 n.17 (Defs’ 2
App. 665).

OPINION, Page 4
agreement with Little River Healthcare (LRH). 10

[¶ 13] The next year, THD underwent a corporate reorganization and

became True Health’s subsidiary.11

[¶ 14] Prior to Plaintiffs’ (Riverside) investment into True Health, the

company had been accused in online articles of continuing the fraudulent

activities that had resulted in HDL going out of business. 12 Riverside was

aware of these articles.13

[¶ 15] On April 29, 2016, Cigna issued THD with a notice of claims

review and audit. 14

[¶ 16] A few days later, United Healthcare halted laboratory claim

reimbursements to THD due to compliance concerns.15

[¶ 17] Later that year, Medicare investigators visited True Health’s

headquarters, requested documents, placed several referring physicians on

prepayment review, and commenced a billing audit.16

[¶ 18] On January 26, 2017, Riverside invested $50 million into True

10
Pet. ¶ 57.
11
Pet. ¶ 62.
12
See Pls’ 2 App. 255–59.
13
Greenberg Depo. at 282:5–284:23 (Defs’ 2 App. 0548).
14
Trustee Lawsuit ¶ 129 (Defs’ 2 App. 0679).
15
Trustee Lawsuit ¶ 129 (Defs’ 2 App. 0679).
16
Trustee Lawsuit ¶ 128 (Defs’ 2 App. 0679).

OPINION, Page 5
Health in exchange for preferred True Health units and the right to buy more

units on a diluted basis by executing the Securities Purchase Agreement (SPA)

and Exchange Agreement.17 CLG Investment, LLC was appointed as the

“Equityholders’ Representative” for the deal. Christopher Grottenthaler was

at all relevant times CLG Investments, LLC’s managing member. 18 Further,

as part of this deal, Riverside managing director Hal Greenberg became a True

Health board member.19

[¶ 19] On March 2, 2017, the U.S. Department of Justice served True

Health with a Civil Investigative Demand (CID) concerning possible Anti-

Kickback Statute and Stark Law violations and other issues. 20

[¶ 20] Three months later, the Centers for Medicare & Medicaid

Services (CMS) placed True Health on a 100% suspension of Medicare

payments and provided a notice that the suspension was due to “credible

allegations of fraud” regarding billing practices and claim submissions. 21

[¶ 21] However, a month later, CMS reduced the suspension to 35%.22

17
Pet. ¶ 63.
18
Pet. ¶ 64.
19
Greenberg Dep. 110:17–23 (Defs’ 2 App. 0539); Board Minutes (Defs’ 1 App.
0150).
20
CID (Defs’ 1 App. 0363–87).
21
Pet. ¶ 73; CMS Notice of First Suspension (Defs’ 2 App. 0388-91).
22
Pet. ¶ 74; Zucker Declaration ¶ 18 (Defs’ 2 App. 0603).

OPINION, Page 6
[¶ 22] After the first CMS suspension, Riverside invested another

$30 million into True Health to keep the company afloat and subsequently

took control of the board in May of 2018. 23

[¶ 23] On November 19, 2018, a non-Riverside True Health board

member met with the U.S. Department of Justice to discuss the investigations

into True Health, including the kickback allegations. 24

[¶ 24] Between June of 2017 and May of 2019, True Health took

substantial steps to address the CMS’s and Department of Justice’s concerns,

including hiring regulatory counsel and financial advisors.25

[¶ 25] During this time, True Health conducted quarterly board

meetings that discussed the current legal issues facing the company, including

a sealed qui tam lawsuit from 2015 that alleged various kickback schemes. 26

At least one Riverside representative attended each meeting.27

[¶ 26] By June 6, 2019, True Health reached a settlement agreement

with the federal agencies regarding the first suspension. 28 The board of

23
Pet. ¶ 75; Greenberg Dep. 183:12–15, 187:18–19 (Defs’ 2 App. 0545–46).
24
DOJ Meeting Notes (Defs’ 2 App. 0515–23).
25
Zucker Declaration ¶ 19 (Defs’ 2 App. 0603).
26
Qui Tam Lawsuit (Defs’ 2 App. 0393–513).
27
See, e.g., 1Q17 Board Meeting Minutes (Defs’ 1 App. 0138–47).
28
Pet. ¶ 76.

OPINION, Page 7
directors approved this settlement.29

[¶ 27] One week later, CMS placed True Health on a second 100%

Medicare suspension due to further “credible allegations of fraud” for

medically unnecessary service claims.30 These allegations, however, were

distinct from the allegations in the first Medicare suspension. 31

[¶ 28] One month later, True Health sued CMS to stop the suspension

and obtained a temporary restraining order. 32 CMS responded by filing Special

Agent Geren’s declaration that described various wrongdoings by True Health

in detail, including a scheme to use rural hospitals to obtain higher

reimbursement rates and “medical services organizations” (MSOs) to funnel

kickbacks to doctors. 33

[¶ 29] On July 22, 2019, that court denied True Health’s preliminary

injunction request to reinstate the Medicare payments.34 That court also

denied True Health’s motion to seal, making the Geren Declaration publicly

available.35

29
Pet. ¶ 76.
30
Pet. ¶ 76; CMS Notice of Second Suspension (Defs’ 2 App. 0525).
31
CMS Notice of Second Suspension (Defs’ 2 App. 0525).
32
2019 CMS Lawsuit (Defs’ 2 App. 0551–74).
33
Geren Declaration (Defs’ 2 App. 0582–90).
34
Zucker Declaration ¶ 22 (Defs’ 2 App. 0604).
35
Defs’ 2 App. 0591–94.

OPINION, Page 8
[¶ 30] The following week, True Health filed for bankruptcy.36 True

Health’s application for bankruptcy included Clifford A. Zucker’s Declaration

in Support of First Day Relief.37 Mr. Zucker was True Health’s Chief

Restructuring Officer.38 His declaration directly tied True Health’s financial

condition to the CMS suspensions.39

[¶ 31] The bankruptcy court approved True Health’s liquidation plan

on November 26, 2019. The plan was substantially completed by December 6,

2019. 40

[¶ 32] On April 6, 2020, the liquidating trustee sent a claim notice

letter to True Health officers and directors threatening a lawsuit for breach of

fiduciary duties for failing to monitor and control the company’s legal

compliance.41 Riverside’s Hal Greenberg, Jay Reynolds, and George Benson

were included in the list of those threatened by the liquidating trustee

lawsuit.42

36
Pet. ¶ 76; Zucker Declaration (Defs’ 2 App. 0596–638).
37
Zucker Declaration (Defs’ 2 App. 0595–638).
38
Zucker Declaration ¶ 1 (Defs’ 2 App. 0596).
39
Zucker Declaration ¶s 17–22 (Defs’ 2 App. 0603–04).
40
Pet. ¶ 77.
41
Notice of Claim Against True Health Directors and Officers (Defs’ 2 App. 0640–
43).
Notice of Claim Against True Health Directors and Officers at 1–2 (Defs’ 2 App.
42

0640–41).

OPINION, Page 9
[¶ 33] The trustee filed that lawsuit, without Greenberg, Reynolds, and

Benson as defendants, on January 25, 2021. 43 The trustee’s lawsuit described

in detail the same rural hospital and MSO schemes that Special Agent Geren

discussed in his declaration, among other issues.44

[¶ 34] In April 2022, the court unsealed the qui tam lawsuit. 45

[¶ 35] In October 2022, the U.S. District Court for the Eastern District

of Texas unsealed a criminal case that revealed that a grand jury had indicted

Christopher Grottenthaler in part based on the Little River Healthcare (LRH)

kickback scheme. 46

[¶ 36] Finally, on October 7, 2024, Christopher Grottenthaler entered

a guilty plea to one count of conspiracy to commit illegal renumerations in

violation of 18 U.S.C. § 371.47

C. Procedural History

[¶ 37] Plaintiffs (Riverside) filed suit in the 298th Judicial District

Court of Dallas County, Texas on January 23, 2025. 48

43
Trustee Lawsuit (Defs’ 2 App. 0645–726).
44
Trustee Lawsuit (Defs’ 2 App. 0645–726).
45
Pet. ¶ 79.
46
Pet. ¶ 80; Grottenthaler Indictment (Pls’ 2 App. 609–59).
47
Pet. ¶ 81.
48
Pet.

OPINION, Page 10
[¶ 38] Defendants removed the case to this court on March 7, 2025. 49

[¶ 39] Defendants then moved for traditional summary judgment

arguing that each of Riverside’s causes of action are barred by the applicable

statute of limitations. 50

[¶ 40] Riverside alleged that defendants acted jointly and severally to

misrepresent in the SPA that True Health was in material compliance with

applicable healthcare laws. 51 Riverside claims these misrepresentations

induced it to enter the SPA and invest in True Health. Because these

representations were false, Riverside lost millions of dollars. 52 Thus, it sued

defendants for fraud, money had and received, and conspiracy.

[¶ 41] Riverside’s claims are explicitly rooted in the LRH and MSO

schemes discussed in the Geren Declaration. 53

[¶ 42] The parties briefed and the court held arguments on the

summary judgment issues. Subsequently, the court granted summary

judgment, with this opinion following.

49
Defendants’ Notice of Removal.
50
MSJ.
51
Pet. ¶ 84.
52
Pet. ¶ 87, 89.
53
Pet. ¶s 57–61; Geren Declaration (Defs’ 2 App. 0582–90).

OPINION, Page 11
V. APPLICABLE LAW

A. Summary Judgment Standards

[¶ 43] A defendant may move for summary judgment at any point with

or without supporting affidavits but must state the specific grounds within the

motion. TEX. R. CIV. P. 166a(b) and (c).

[¶ 44] A court shall grant summary judgment if the summary judgment

evidence shows that there is no genuine issue as to any material fact and the

movant, as a matter of law, is entitled to summary judgment on the issues

expressly brought forth. Draughon v. Johnson, 631 S.W.3d 81, 87 (Tex. 2021)

(citing TEX. R. CIV. P. 166a(c)).

[¶ 45] All reasonable inferences will be taken in the nonmovant’s

favor, and all evidence favorable to the nonmovant will be taken as true. JLB

Builders, LLC v. Hernandez, 622 S.W.3d 860, 864 (Tex. 2021).

B. Riverside’s Causes of Action

[¶ 46] The elements of fraud are that (i) a material representation was

made, (ii) it was false, (iii) the speaker knew it was false when they made it or

recklessly made it without knowing the truth, (iv) it was made with the intent

that the other party act upon it, (v) the party acted upon it, and (vi) it caused

injury to the party. Formosa Plastics Corp. USA v. Presidio Eng’rs &

OPINION, Page 12
Contractors, 960 S.W.2d 41, 47 (Tex. 1998). Plaintiff’s reliance on the

material representation must be justifiable. JPMorgan Chase Bank, N.A. v.

Orca Assets G.P., L.L.C., 546 S.W.3d 648, 654 (Tex. 2018).

[¶ 47] A claim for money had and received involves the plaintiff

proving the defendant has money belonging to him in equity or good

conscience. Berryman’s South Fork, Inc. v. J. Baxter Brinkmann Int’l Corp.,

418 S.W.3d 172, 189 (Tex. App.—Dallas 2013, pet. denied).

[¶ 48] Civil conspiracy requires (i) two or more persons, (ii) an object

to be accomplished, (iii) a meeting of the minds on the object or a course of

action, (iv) at least one overt, unlawful act, and (v) proximate damages. Agar

Corp., Inc. v. Electro Cirs Int’l, LLC, 580 S.W.3d 136, 141 (Tex. 2019).

C. Statutes of Limitations

[¶ 49] A defendant requesting summary judgment on the statute of

limitations must conclusively establish “(1) when the cause of action accrued,

and (2) that the plaintiff brought its suit later than the applicable number of

years thereafter.” Draughon, 631 S.W.3d at 89 (quoting Provident Life &

Accident Ins. Co. v. Knott, 128 S.W.3d 211, 220 (Tex. 2004)).

1. Applicable Statutes of Limitations

[¶ 50] Fraud is subject to a four-year statute of limitations. Williams v.

OPINION, Page 13
Khalaf, 802 S.W2d 651, 658 (Tex. 1990); see TEX. CIV. PRAC. & REM. CODE §

16.004(a)(4).

[¶ 51] Conspiracy applies the statute of limitations for the underlying

tort; because Riverside’s cause of action is for fraud, the applicable statute of

limitations is four years in this case.54 Agar Corp., 580 S.W.3d at 138;

Williams, 802 S.W2d at 658.

[¶ 52] Money had and received has a two-year statute of limitations.

City of Beaumont v. Moore, 202 S.W.2d 448, 452 (Tex. 1947); TEX. CIV. PRAC.

& REM. CODE § 16.003. Thus, if Riverside’s fraud claim is time barred, then

its money had and received claim is also time barred and does not require a

separate analysis.

2. The Default Accrual Rule

[¶ 53] A cause of action accrues when a legal injury occurs, regardless

of whether the injury has been discovered or all resulting damages have

occurred. Marcus & Millichap Real Est. Inv. Servs. of Nev., Inc. v. Triex Tex.

Holdings, LLC, 659 S.W.3d 456, 461 (Tex. 2023). A legal injury is an invasion

of a plaintiff’s rights that gives rise to a cause of action. Murphy v. Campbell,

54
Pet. ¶s 83–89.

OPINION, Page 14
964 S.W.2d 265, 270 (Tex. 1997).

3. The Discovery Rule

[¶ 54] The discovery rule concerns when accrual occurs and applies

“[w]hen the nature of an injury is inherently undiscoverable, and the evidence

of injury is objectively verifiable.” Est. of Ewers, 695 S.W.3d 603, 620

(Tex. App.—Houston [1st. Dist.] 2024, no pet.). Inherently undiscoverable

means the injury is unlikely to be discovered in the limitations period even

when exercising diligence. Id.

[¶ 55] The discovery rule applies in fraud cases and defers accrual until

the plaintiff knew or should have known of, through the exercise of reasonable

diligence, facts giving rise to the cause of action. Id.; Draughon, 631 S.W.3d

at 89. However, the claimant need not know the exact nature of each

wrongdoing, the actual cause, possible cures, or the exact wrongdoer. Marcus,

659 S.W.3d at 462.

[¶ 56] The discovery rule accrual date has also been expressed in terms

of “inquiry notice.” United Healthcare Servs., Inc. v. First Street Hosp. LP, 570

S.W.3d 323, 336 (Tex. App.—Houston [1st Dist.] 2018, pet. denied). Under

this approach, knowledge of facts that would lead a reasonably prudent person

to inquire and to discover the cause of action within the statute of limitations

OPINION, Page 15
period (critical date) is equivalent to knowledge of the cause of action for

limitations purposes. Id.

[¶ 57] Constructive notice of the alleged harm is presumed when there

is publicly available and readily accessible information that would lead to the

injury being discovered. Hooks v. Samson Lone Star, Ltd. P’ship, 457 S.W.3d

52, 58–59 (Tex. 2015).

[¶ 58] The defendant bears the summary judgment burden to negate

the discovery rule by either “conclusively establishing that (1) the discovery

rule does not apply, or (2) if the rule applies, the summary judgment evidence

negates it.” Draughon, 631 S.W.3d at 90. That is, the evidence conclusively

establishes the discovery rule time period ended and the accrual period began

more than four years before the plaintiff sued (for fraud claims).

4. Fraudulent Concealment

[¶ 59] The fraudulent concealment doctrine has a similar effect as the

discovery rule. Marcus, 659 S.W.3d at 463. However, it tolls the statute of

limitations (based on the defendant’s conduct concealing the injury), instead

of deferring accrual. Ewers, 695 S.W.3d at 620. Also, the burdens are

reversed between the two doctrines.

[¶ 60] Fraudulent concealment is an equitable doctrine under which a

OPINION, Page 16
defendant cannot rely on the limitations defense if it deceitfully concealed the

wrongdoing. Borderlon v. Peck, 661 S.W.2d 907, 909 (Tex. 1983); Hooks, 457

S.W.3d at 60.

[¶ 61] The estoppel effect stops once a party learns of facts or

circumstances that would lead a reasonably prudent person to investigate and,

if pursued, uncover the wrongdoing. Marcus, 659 S.W.3d at 464.

[¶ 62] Once the defendant establishes the statute of limitations

defense, the burden shifts to the plaintiff to raise a fact issue regarding a

fraudulent concealment counter-affirmative defense. Draughon, 631 S.W.3d

at 93.

[¶ 63] As discussed above, the discovery rule (accrual) and fraudulent

concealment (tolling) account for separate, non-overlapping time periods.

VI. DISCUSSION

A. Introduction

[¶ 64] The court concludes that as a matter of law Riverside’s cause of

action accrued no later than April 6, 2020, when the trustee sent the claim

notice letter to True Health’s former directors and officers.

[¶ 65] Several events preceding the letter support that conclusion.

Each alone may have led a reasonably prudent person to make an inquiry that

OPINION, Page 17
would have led to Riverside uncovering its causes of action within the

limitations period. However, the court resolves all reasonable inferences in

Riverside’s favor and takes all evidence favorable to Riverside as true.

JLB Builders, 622 S.W.3d at 864.

[¶ 66] Nevertheless, no reasonable person could have determined after

April 6, 2020, that Riverside lacked sufficient evidence to begin an

investigation into defendants’ misrepresentations and that the investigation

would have uncovered the fraud within the four-year period.

B. Fraud and Conspiracy

1. Legal Injury

[¶ 67] Riverside suffered a legal injury the day it signed the SPA

because the SPA contained the allegedly fraudulent representations. See

Formosa Plastics, 960 S.W.2d at 47. Essentially, Riverside overpaid for a

healthcare services company that was allegedly violating healthcare laws and

would go bankrupt.

[¶ 68] However, because fraud is a type of injury to which the

discovery rule categorically applies, the accrual date of Riverside’s fraud and

conspiracy claims is deferred until the discovery rule is negated. Ewers,

695 S.W.3d at 620.

OPINION, Page 18
2. Defendants conclusively negated the discovery rule.

a. Knew or Should have Known / Inquiry Notice

[¶ 69] Because of the information available, Riverside at least had

inquiry notice, meaning they knew of facts that would lead a reasonably

prudent person to begin investigating by April 6, 2020. United Healthcare,

570 S.W.3d at 336. This inquiry notice is equivalent to knowledge of its cause

of action sufficient to begin the limitations period if that investigation would

have uncovered a good faith basis to sue within the limitation period (critical

date). Id.

[¶ 70] Facts Riverside knew leading up to the trustee claim letter

include:

• True Health acquired the assets and hired personnel from HDL,
which went out of business because of systemic healthcare law
violations.55

• Members of the public accused True Health of continuing the
same medically unnecessary testing that HDL had been shut down
for.56

• Cigna and United Healthcare halted laboratory claim
reimbursements due to compliance issues.57

55
Geren Declaration ¶ 4 (Defs’ 2 App. 0583); Trustee Lawsuit at 21 n.17 (Defs’ 2
App. 665).
56
See Pls’ 2 App. 255–59.
57
Trustee Lawsuit ¶ 129 (Defs’ 2 App. 0679).

OPINION, Page 19
• True Health received a CID and multiple suspensions from
Medicare because of alleged healthcare law violations.58

• The Geren Declaration was made public, detailing the rural
hospital and MSO schemes and providing specific facts that
Riverside could have verified.59

• True Health filed for bankruptcy. The company is liquidated,
wiping out $83 million that Riverside had invested and solidifying
its legal injury. 60 As part of the bankruptcy filings, Clifford A.
Zucker (Chief Restructuring Officer) provides a declaration that
tied the bankruptcy to the CMS suspensions and improper
business practices dating back to 2015. 61

[¶ 71] Throughout all these events, Riverside occupied or controlled

True Health’s board of directors and received regular updates from the legal

team.62

[¶ 72] Finally, on April 6, 2020, Riverside received a claim letter from

the bankruptcy trustee, further tying the improper business practices to the

resulting bankruptcy.63 The notice accused the board and other directors of

58
Pet. ¶s 73–76; Trustee Lawsuit ¶ 128 (Defs’ 2 App. 0679); CMS Notice of First
Suspension (Defs’ 2 App. 0388-91); CMS Notice of Second Suspension (Defs’ 2 App.
0525); Zucker Declaration ¶s 18–19 (Defs’ 2 App. 0603).
59
Geren Declaration (Defs’ 2 App. 0582–90); Defs’ 2 App. 0591–94.
60
Pet. ¶s 76–77; Zucker Declaration (Defs’ 2 App. 0596–638).
61
Zucker Declaration (Defs’ 2 App. 0595–638).
62
Pet. ¶ 75; Greenberg Dep. 110:17–23, 183:12–15, 187:18–19 (Defs’ 2 App. 0539,
0545–46); Board Minutes (Defs’ 1 App. 0150); see also, e.g., 1Q17 Board Meeting Minutes
(Defs’ 1 App. 0138–47).
63
Notice of Claim Against True Health Directors and Officers (Defs’ 2 App. 0640–
43).

OPINION, Page 20
failing to control and monitor the company’s legal compliance, blaming them

for the bankruptcy. At this point, Riverside and its principals had an

overriding personal interest to investigate the allegations, if only to prepare a

defense to the trustee’s allegations.

[¶ 73] Disinterested third parties related many of these facts to

Riverside. Detailed allegations of fraud presented by a disinterested third-

party individual would have led a reasonably prudent individual to investigate.

See United Healthcare, 570 S.W.3d at 336.

[¶ 74] Further, Riverside need not know the exact nature, cause,

possible cures, or person responsible for the wrongdoing. Marcus, 659 S.W.3d

at 462. It needed to know only that it should have investigated.

[¶ 75] Thus, by April 6, 2020, Riverside had notice of (i) a history of

allegations against True Health for illegal business practices and

(ii) investigations engaged in by disinterested third parties tying those

improper business practices to Riverside’s economic loss and even accusing

Riverside’s principals of wrongdoing themselves. The court concludes that as

a matter of law this is sufficient notice to begin the accrual period for

Riverside’s fraud and conspiracy causes of action.

[¶ 76] Finally, Riverside argues throughout its response that True

OPINION, Page 21
Health’s general and outside counsel assured Riverside that True Health was

not violating healthcare laws. 64 However, as a sophisticated entity, the court

holds Riverside responsible for knowing that “[a] lawyer employed or retained

by an organization represents the entity” not the individual shareholders.

TEX. R. PROF. COND. 1.13; see In re Mktg. Invs. Corp., 80 S.W.3d 44, 49 (Tex.

App.—Dallas 1998, orig. proceeding) (“In a corporation’s affairs [] there is but

one client—the corporation.”). Accordingly, the court concludes that

Riverside’s reliance on True Health’s counsel did not absolve it of an

independent duty to investigate.

b. A reasonable investigation would have uncovered the fraud.

[¶ 77] Based on an April 6, 2020, accrual date, the evidence must

conclusively show that Riverside would have discovered its good faith right to

sue by April 6, 2024 (critical date) had it conducted a reasonable investigation.

Ewers, 695 S.W.3d at 620.

[¶ 78] Had Riverside conducted a reasonable investigation into the

SPA’s misrepresentations, it would have discovered the fraudulent scheme.

See Marcus, 659 S.W.3d at 464. Riverside concedes that the agreement with

64
Riverside’s Opp. to MSJ at 15–16, 22, 41–45.

OPINION, Page 22
Little River Healthcare, which facilitated violations of multiple healthcare

laws, existed since 2015. 65 The LRH agreement explicitly outlines the

fraudulent activities, including the MSO and rural hospital schemes, and

establishes that the improper business practices predated the SPA.66

[¶ 79] True Health’s fraudulent schemes involved extensive

transactions and payments, all of which would have been reflected in the

business books and records.67 Riverside makes no argument as to why it could

not have found these records by April 6, 2024.

[¶ 80] Riverside had a statutory right to look at the books and records

or could have instigated an independent investigation to reveal the fraud.

6 Del. C. § 18-305.

[¶ 81] Further, there was readily accessible and publicly available

information sufficient to give Riverside actual or constructive notice which

also begins the limitations period. See Hooks, 457 S.W.3d at 58–59.

[¶ 82] Finally, Riverside’s ability to uncover these schemes is

evidenced by the various individuals who did so prior to April 6, 2020,

65
Pet. ¶s 57–61.
66
Pet. ¶s 58–61.
67
Pet. ¶ 81.

OPINION, Page 23
including members of the public, Special Agent Geren, and CMS.68

[¶ 83] In the four years between April 6, 2020, and April 6, 2024, the

liquidating trustee also uncovered True Health’s fraudulent schemes.69

[¶ 84] Further, two years after the bankruptcy liquidation occurred,

the United States District Court for the Eastern District of Texas released the

indictment against Christopher Grottenthaler. 70 That indictment detailed the

fraud that began before the SPA.

[¶ 85] The qui tam lawsuit was also unsealed during this period.71

[¶ 86] At a minimum, these cumulative third parties’ actions and their

ability to uncover the alleged fraud conclusively shows what Riverside could

have reasonably discovered had it investigated.

3. Riverside failed to raise a genuine issue of material fact regarding
fraudulent concealment.

[¶ 87] Based on an April 6, 2020, accrual date, a four-year limitations

period, and a January 23, 2025, filing date for this lawsuit, Riverside needed

68
See Pls’ 2 App. 255–59; Geren Declaration (Defs’ 2 App. 0582–90); Trustee
Lawsuit at 21 n.17 (Defs’ 2 App. 665); CID (Defs’ 1 App. 0363–87); CMS Notice of First
Suspension (Defs’ 2 App. 0388–91); CMS Notice of Second Suspension (Defs’ 2 App.
0524–27).
69
Trustee Lawsuit (Defs’ 2 App. 0645–726).
70
Grottenthaler Indictment (Pls’ 2 App. 609–59).
71
Pet. ¶ 79; Qui Tam Lawsuit (Defs’ 2 App. 0393–513).

OPINION, Page 24
292 days of tolling to defeat the statute of limitations.

[¶ 88] However, Riverside adduced no evidence that defendants said

anything about the wrongdoing, nor did Riverside argue defendants concealed

anything from them after April 6, 2020. Thus, Riverside provided no evidence

that would create a genuine material fact issue of fraudulent concealment after

April 6, 2020.

[¶ 89] Therefore, as a matter of law, Riverside cannot rely on

fraudulent concealment to defeat defendants’ summary judgment motion.

[¶ 90] Accordingly, because Riverside’s causes of action accrued no

later than April 6, 2020, which is more than four years before it filed suit on

January 23, 2025, and because no tolling applies, its fraud and conspiracy

claims are barred by the statute of limitations.

C. Money Had and Received

[¶ 91] Riverside’s money had and received cause of action has a two-

year limitations period. Because defendants proved the four-year limitations

period bars Riverside’s other causes of actions, the money had and received

limitations cause of action is also barred.

OPINION, Page 25
VII. CONCLUSION

For the above reasons, the court granted defendants’ motion for

summary judgment.

So ORDERED.

BILL WHITEHILL
Judge of the Texas Business Court,
First Division

SIGNED: September 17, 2025

OPINION, Page 26
Automated Certificate of eService
This automated certificate of service was created by the efiling system.
The filer served this document via email generated by the efiling system
on the date and to the persons listed below. The rules governing
certificates of service have not changed. Filers must still provide a
certificate of service that complies with all applicable rules.

Envelope ID: 105709538
Filing Code Description: No Fee Documents
Filing Description: Opinion
Status as of 9/17/2025 1:12 PM CST

Case Contacts

Name BarNumber Email TimestampSubmitted Status

Morgan DMeyer morgan.meyer@wickphillips.com 9/17/2025 1:09:40 PM SENT

Sean Lemoine sean.lemoine@wickphillips.com 9/17/2025 1:09:40 PM SENT

Rashella Widdoes - Paralegal widdoes@RoggeDunnGroup.com 9/17/2025 1:09:40 PM SENT

Camille Youngblood camille.youngblood@wickphillips.com 9/17/2025 1:09:40 PM SENT

Rogge Dunn Dunn@RoggeDunnGroup.com 9/17/2025 1:09:40 PM SENT

Chinar Hassan chinar.hassan@wickphillips.com 9/17/2025 1:09:40 PM SENT

Zachary Farrar Zachary.Farrar@wickphillips.com 9/17/2025 1:09:40 PM SENT

Ashley A.Hutcheson ashley.hutcheson@wickphillips.com 9/17/2025 1:09:40 PM SENT

Adam Gogolak amgogolak@wlrk.com 9/17/2025 1:09:40 PM SENT

William Savitt wdsavitt@wlrk.com 9/17/2025 1:09:40 PM SENT

Michael Avi-Yonah MSAviYonah@wlrk.com 9/17/2025 1:09:40 PM SENT

Business Court 1B BCDivision1B@txcourts.gov 9/17/2025 1:09:40 PM SENT

Ryan Downton ryan@thetexastrialgroup.com 9/17/2025 1:09:40 PM SENT

Karina Enriquez karina.enriquez@wickphillips.com 9/17/2025 1:09:40 PM SENT

Lane Webster webster@RoggeDunnGroup.com 9/17/2025 1:09:40 PM SENT

Harvey Joseph Joseph@roggedunngroup.com 9/17/2025 1:09:40 PM SENT

Barb Morgan barb.morgan@wickphillips.com 9/17/2025 1:09:40 PM SENT