Riverside Stategic Capital Fund I, LP, RSCF Blocker True Health, LLC, RSCF I-A Blocker True Health, LLC v. CLG Investments, LLC

ACCEPTED
15-25-00137-CV
FIFTEENTH COURT OF APPEALS
AUSTIN, TEXAS
12/10/2025 7:14 PM
NO. 15-25-00137-CV CHRISTOPHER A. PRINE
CLERK
IN THE COURT OF APPEALS FILED IN
15th COURT OF APPEALS
FOR THE FIFTEENTH APPELLATE DISTRICT OFAUSTIN,TEXAS TEXAS
12/10/2025 7:14:12 PM
CHRISTOPHER A. PRINE
RIVERSIDE STRATEGIC CAPITAL FUND I, L.P., RSCF BLOCKER
Clerk

TRUE HEALTH, LLC, RSCF I-A BLOCKER TRUE HEALTH, LLC,

Appellants,
v.

CLG INVESTMENTS, LLC, ET AL.,

Appellees.

On Appeal from the Business Court of Texas, First Division (1B)
Trial Court Case No. 25-BC01B-0006
Hon. Bill Whitehill, Presiding

APPELLANTS’ OPENING BRIEF

ORAL ARGUMENT REQUESTED

ROGGE DUNN ROGGE DUNN GROUP, PC
State Bar No. 06249500 500 N. Akard Street, Suite 1900
Dunn@RoggeDunnGroup.com Dallas, Texas 75201
Telephone: (214) 888-5000
HARVEY G. JOSEPH Facsimile: (214) 220-3833
State Bar No. 11027850
Joseph@RoggeDunnGroup.com

LANE M. WEBSTER
State Bar No. 24089042
Webster@RoggeDunnGroup.com

Counsel for Appellants
IDENTITY OF PARTIES AND COUNSEL

Appellants Counsel
Riverside Strategic Capital Rogge Dunn
Fund I, L.P., RSCF Blocker Harvey G. Joseph
True Health, LLC, and RSCF Lane M. Webster
I-A Blocker True Health, LLC Rogge Dunn Group, PC
500 N. Akard Street, Suite 1900
Dallas, Texas 75201
T: (214) 888-5000
F: (214) 220-3833
E: Webster@RoggeDunnGroup.com

William Savitt
Adam M. Gogolak
Michael S. Avi-Yonah
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
T: (212) 403-1000
F: (212) 403-2000
E: AMGogolak@wlrk.com
Appellees Counsel
CLG Investments, LLC, Ryan Downton
Christopher Grottenthaler, The Texas Trial Group
Covert Investment Operations, 875 Carr. 693, Suite 103
LLC, True Health Diagnostic Dorado, Puerto Rico 00646
Management, LLC, Richard T: (512) 680-7947
Covert, Timothy Tatarowicz, E: Ryan@TheTexasTrialGroup.com
Alba Durata, LLC, Melinda
Milburn, Jack Novak, Dana
Hovind, Tom Wippman, as
Trustee of the Tom D.
Wippman Revocable Trust,
Mark Thomas Smith,
Alexandra Nettesheim, Kyle

-i-
Nettesheim, Robert Osterhoff,
RJ Investments, Matt Milburn,
Michael Clements, Michael
Osterhoff, Karen Miller,
Edward McCann, Daniel
Grottenthaler, Anita
Grottenthaler, Christian
Richards, Christopher Kling,
as Trustee of Christopher W. &
Marissa M. Kling Rev Trust
U/A/D 5/11/2012, Kevin Nellis,
Carol Nellis, Bruce Zivian,
Ryan Nellis, and Ancelmo E.
Lopes
LCG Ventures, LLC, LCG J. Sean Lemoine
Ventures II, LLC, Leon Capital LaDawn H. Nandrasy
Partners, LLC, and Fernando Zachary C. Farrar
De Leon Colin P. Benton
Camille L. Youngblood
Morgan D. Meyer
Wick Phillips Gould & Martin, LLP
3131 McKinney Avenue, Suite 500
Dallas, Texas 75204
T: (214) 692-6200
F: (214) 692-6255
E: Colin.Benton@WickPhillips.com

-ii-
TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL ............................................... i

TABLE OF CONTENTS ...........................................................................iii

INDEX OF AUTHORITIES ....................................................................... v

RECORD REFERENCES ......................................................................... ix

STATEMENT OF THE CASE ................................................................... 1

STATEMENT REGARDING ORAL ARGUMENT ................................... 2

ISSUES PRESENTED ............................................................................... 3

INTRODUCTION ....................................................................................... 4

STATEMENT OF FACTS .......................................................................... 7

SUMMARY OF ARGUMENT .................................................................. 31

ARGUMENT ............................................................................................. 34

I. THE TRIAL COURT ERRED IN GRANTING SUMMARY
JUDGMENT ON APPELLEES’ STATUTE OF
LIMITATIONS DEFENSE ............................................................. 34

A. Standard of review ................................................................. 34

B. The statute of limitations on Riverside’s claims began
to run only when it had actual knowledge of Appellees’
fraud or could have discovered the fraud with
reasonable diligence ............................................................... 36

C. The trial court erred in granting summary judgment
because there are at minimum disputed issues of
material fact as to when Riverside’s claims accrued ............ 39

1. Riverside did not obtain actual knowledge of the
True Health fraud until Grottenthaler pled
guilty in 2024 ................................................................ 39

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2. The trial court erred in holding that Riverside
had “inquiry notice” of the fraud as a matter of
law as of April 2020 ...................................................... 41

3. The trial court erred because there are at
minimum disputed issues of material fact as to
whether through a reasonable investigation
Riverside could have uncovered the fraud ................... 54

D. The trial court erred in finding that Riverside failed
to raise a material issue of disputed fact as to
fraudulent concealment ......................................................... 58

E. In the alternative, the trial court should have granted
a continuance pending completion of fact discovery ............ 61

II. THE TRIAL COURT ERRED IN GRANTING THE
SPECIAL APPEARANCES ............................................................ 63

A. Nearly all of the Specially Appearing Appellees
waived their right to contest personal jurisdiction in
this matter by appearing generally in the trustee
litigation ................................................................................. 63

B. The Specially Appearing Appellees had substantial
contacts with Texas ................................................................ 67

C. The trial court erred by failing to consider Appellees’
Texas contacts in their totality and in its analysis of
the contacts’ relatedness to this lawsuit ............................... 73

PRAYER .................................................................................................... 76

CERTIFICATE OF SERVICE.................................................................. 78

CERTIFICATE OF COMPLIANCE ........................................................ 78

-iv-
INDEX OF AUTHORITIES

Page(s)
Cases

Agar Corp. v. Electro Circuits Int’l, LLC,
580 S.W.3d 136 (Tex. 2019) ................................................................. 36

Archer v. Tregellas,
566 S.W.3d 281 (Tex. 2018) ................................................................. 37

BP Am. Prod. Co. v. Marshall,
342 S.W.3d 59 (Tex. 2011) ............................................................. 37, 43

Burger King Corp. v. Rudzewicz,
471 U.S. 462 (1985) .............................................................................. 63

Estate of Ewers,
695 S.W.3d 603 (Tex. App.—Houston
[1st Dist.] 2024, no pet.)............................................... 36, 37, 38, 41, 44

ExxonMobil Corp. v. Lazy R Ranch, LP,
511 S.W.3d 538 (Tex. 2017) ................................................................. 36

Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct.,
592 U.S. 351 (2021) .............................................................................. 75

Goodyear Tire & Rubber Co. v. Mayes,
236 S.W.3d 754 (Tex. 2007) ................................................................. 34

Helix Energy Sols. Grp., Inc. v. Gold,
522 S.W.3d 427 (Tex. 2017) ................................................................. 34

Hooks v. Samson Lone Star, Ltd. P’ship,
457 S.W.3d 52 (Tex. 2015) ....................................... 31, 37-38, 39, 42-43

Kelly v. Gen. Interior Constr., Inc.,
301 S.W.3d 653 (Tex. 2010) ................................................................. 29

KPMG Peat Marwick v. Harrison Cnty. Hous. Fin. Corp.,
988 S.W.2d 746 (Tex. 1999) ................................................................. 35

-v-
Lobell v. Cap. Transp., LLC,
2015 WL 9436255 (Tex. App.—Austin
Dec. 15, 2015, no pet.) (mem. op.) ....................................................... 72

M&F Worldwide Corp. v. Pepsi-Cola Metro. Bottling Co., Inc.,
512 S.W.3d 878 (Tex. 2017) ................................................................. 68

Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,
289 S.W.3d 844 (Tex. 2009) ................................................................. 34

Marcus & Millichap Real Est. Inv. Servs. of Nev., Inc. v.
Triex Tex. Holdings, LLC, 659 S.W.3d 456 (Tex. 2023) ..................... 43
Mass. Bay Ins. Co. v. Adkins,
615 S.W.3d 580 (Tex. App.—Houston
[1st Dist.] 2020, no pet.)................................................................. 64, 66

Megadrill Servs. Ltd. v. Brighouse,
556 S.W.3d 490 (Tex. App.—Houston
[14th Dist.] 2018, no pet.) .................................................... 65, 65 n.154

Moncrief Oil Int’l Inc. v. OAO Gazprom,
414 S.W.3d 142 (Tex. 2013) ................................................................. 71

Patton v. Harris Cnty. Cmty. Supervision & Corr. Dep’t,
2005 WL 3116405 (Tex. App.—Houston
[14th Dist.] Nov. 23, 2005, pet. denied) (mem. op.) .................... 40 n.99

Petrol. Sols. v. Head,
454 S.W.3d 482 (Tex. 2014) ................................................................. 36

Primexx Energy Opportunity Fund, LP v. Primexx Energy Corp.,
2025 Tex. Bus. 5, 2025 WL 446345
(Tex. Bus. Ct. Feb. 10, 2025) .............................................. 63-64, 67-68

Procarsa S.A. de C.V. v. Blue Racer Midstream LLC,
2024 WL 5066084 (Tex. App.—Dallas
Dec. 11, 2024, no pet.) (mem. op.) ....................................................... 73

Retamco Operating, Inc. v. Republic Drilling Co.,
278 S.W.3d 333 (Tex. 2009) ................................................................. 67

-vi-
S.V. v. R.V.,
933 S.W.2d 1 (Tex. 1996) ............................................................... 36, 38

Scott v. Carpenter,
2022 WL 317060 (Tex. App.—Waco
Feb. 2, 2022, no pet.) (mem. op.) ................................................... 40, 61

Shell Oil Co. v. Ross,
356 S.W.3d 924 (Tex. 2011) ................................................................. 43

State v. Volkswagen Aktiengesellschaft,
669 S.W.3d 399 (Tex. 2023) ..................................................... 67, 68, 70

State v. Yelp, Inc.,
2025 WL 2936466 (Tex. App.—15th Dist.
Oct. 16, 2025, no pet. h.) ..................................................... 68 n.158, 75

Sw. Energy Prod. Co. v. Berry-Helfand,
491 S.W.3d 699 (Tex. 2016) ............................................................ 38-39

Univ. of Hou. v. Clark,
38 S.W.3d 578 (Tex. 2000) ................................................................... 35

Valdez v. Hollenbeck,
465 S.W.3d 217 (Tex. 2015) ..................................................... 31, 37, 38

Statutes and Rules

42 C.F.R. § 413.70 ................................................................................. 9 n.7

6 Del. C. § 18-305 ............................................................................ 55 n.139

18 U.S.C. § 371.......................................................................................... 24

42 U.S.C. § 1320a-7b ........................................................................ 7, 7 n.3

Tex. Civ. Prac. & Rem. Code § 16.004 ..................................................... 35

Tex. R. App. P. 39.7 .................................................................................... 2

Tex. R. Civ. P. 166a .................................................................................. 34

-vii-
Other Authorities

Andrew Weissenberg & Dae Y. Lee, Understanding
Management Services Organizations (MSOs): Benefits,
Compliance Risks, and Best Practices, Med. Grp. Mgmt.
Ass’n (Feb. 25, 2025),
https://www.mgma.com/articles/understanding-
management-services-organizations-msos-benefits-
compliance-risks-and-best-practices. .......................................... 17 n.42

David Robbins & Jason Crawford, CIDs Are DOJ’s
Investigatory Tool of Choice, Bloomberg Law (June 2019),
https://www.bloomberglaw.com/external/document/X61SU
CQS000000/corporate-compliance-professional-
perspective-cids-are-doj-s-inv ...................................................... 13 n.24

U.S. Dep’t Health & Hum. Servs., Off. Inspector Gen., About
Corporate Integrity Agreements,
https://oig.hhs.gov/compliance/corporate-integrity-
agreements/about-corporate-integrity-agreements ........................ 8 n.5

U.S. Dep’t Just., Press Release, Justice Department Files
False Claims Act Complaint Against Two Laboratory
CEOs, One Hospital CEO and Others Across Texas, New
York, and Pennsylvania (Apr. 4, 2022),
https://www.justice.gov/archives/opa/pr/justice-
department-files-false-claims-act-complaint-against-two-
laboratory-ceos-one-hospital ........................................................ 23 n.66

-viii-
RECORD REFERENCES

Appellants will rely upon and cite to the Clerk’s Record as “C.R.” A

supplemental record was filed and will be referenced as “Supp. C.R.”

-ix-
STATEMENT OF THE CASE

Plaintiffs-Appellants Riverside Strategic Capital Fund I, L.P.,

RSCF Blocker True Health, LLC, and RSCF I-A Blocker True Health,

LLC (collectively, “Riverside”) are former investors in True Health Group

LLC, a now-defunct blood testing laboratory and services provider.

Riverside acquired its interest in True Health pursuant to a Securities

Purchase Agreement (“SPA”) entered into with Defendants-Appellees,

True Health’s significant equityholders, in January 2017 (C.R. 0032).

Riverside commenced this action for damages on January 23, 2025,

asserting claims for fraud, conspiracy, and money had and received. The

Texas-resident defendants filed their answers to the petition on March 7,

2025 and March 31, 2025 (C.R. 0147, 0152, 0157), and the non-Texas-

resident defendants filed special appearances on March 31, 2025 (C.R.

0165).

The trial court entered final judgment on August 18, 2025 (C.R.

2959), based on an order nunc pro tunc granting summary judgment to

the generally appearing defendants on their statute of limitations

defense on July 10, 2025 (C.R. 2742) and an order granting the special

appearances on July 17, 2025 (C.R. 2935).

-1-
STATEMENT REGARDING ORAL ARGUMENT

Pursuant to Texas Rule of Appellate Procedure 39.7, Appellants

respectfully request oral argument and have noted this request on the

front cover of this brief. Oral argument would assist the Court because

this case is fact-intensive and involves complex legal questions about

summary judgment standards for the accrual of the statute of limitations

and Texas law on specific jurisdiction. Appellants believe that oral

argument will assist the Court in resolving the complex issues presented.

-2-
ISSUES PRESENTED

1. Whether the trial court erred in granting summary judgment for

the generally appearing Appellees on their statute of limitations

defense, months before discovery was due to be completed.

2. Whether the trial court erred in denying a continuance of the

motion for summary judgment, pending completion of discovery.

3. Whether the trial court erred in granting the special appearances.

-3-
INTRODUCTION

Appellant Riverside and its co-purchasers invested $50 million in

True Health pursuant to a Securities Purchase Agreement entered into

with Appellees, on the basis of Appellees’ express representations that

True Health was in material compliance with all relevant healthcare

laws. In 2024, however, True Health’s former CEO, Appellee Christopher

Grottenthaler, admitted as part of a criminal healthcare fraud guilty plea

that, in the period before Riverside’s investment, he and others had

conspired with rural hospitals to provide kickbacks to doctors through

Management Services Organizations (“MSOs”), to induce them to refer

patients.

Seeking to avoid liability for that fraud, Appellees moved for

traditional summary judgment on their statute of limitations defense—

less than one month after filing their original answers and before

discovery had even started in earnest—claiming that Riverside was

aware of its injury by 2019. But under well-established Texas law, in a

fraud case like this one, the statute of limitations accrues only when

Riverside obtained knowledge of the fraud, or could have obtained

knowledge of the fraud with reasonable diligence.

-4-
Riverside didn’t find out about the True Health fraud until 2024,

when Grottenthaler pled guilty. Indeed, prior to that time, Appellees

affirmatively concealed True Health’s wrongful conduct and the falsity of

the representations they used to induce Riverside’s investment.

Riverside’s claims thus did not accrue until years after True Health went

bankrupt—and Riverside lost nearly the entirety of its investment. The

motion at minimum raised material issues of disputed fact on that issue,

warranting discovery and a trial.

The trial court nonetheless granted the motion, finding in its

original summary judgment order that Riverside’s “causes of action

accrued no later than December 6, 2019.” The trial court subsequently

revised that position in its later summary judgment opinion, holding that

Riverside’s claims had accrued no later than April 6, 2020, because

Riverside “had inquiry notice” by that date. That determination was error

and should be reversed. The issue of inquiry notice raises issues of fact

not properly determined on summary judgment—a point underscored by

the trial court’s shifting positions as to when Riverside’s claims actually

accrued. And in any event, none of the facts identified by the trial court,

alone or in the aggregate, triggered a duty to investigate the MSO

-5-
kickback scheme perpetrated by True Health. Nor did the summary

judgment record establish as a matter of law that Riverside could have

uncovered the fraud with reasonable diligence based on the information

available to it. At minimum, the trial court should have ordered a

continuance, allowing Riverside to conduct full discovery, before

resolving the motion. Its failure to do so was further error.

The trial court also erred in finding that the court lacked

jurisdiction over the specially appearing defendants when among other

things those same defendants had substantial contacts with Texas and

had filed general appearances in a Texas action arising out of the same

transactions as this one. That determination too should be reversed.

-6-
STATEMENT OF FACTS

A. True Health

Appellee Christopher Grottenthaler founded True Health in March

2014. 1 True Health was a Frisco, Texas-based company that provided

laboratory blood testing and diagnostic services. 2 Given its business

operations, True Health was subject to a number of federal laws that in

relevant part target the illegal remuneration of healthcare providers in

connection with claims for reimbursement submitted to federal

healthcare programs like Medicare. These laws include the federal Anti-

Kickback Statute, 42 U.S.C. § 1320a-7b(b). 3

In 2015, True Health expanded its laboratory processing capacity

by purchasing the assets of Health Diagnostic Laboratory, Inc. (“HDL”),

1 C.R. 0046 (Original Petition ¶ 57); C.R. 1888. True Health Diagnostics, LLC (“THD”)

later became a subsidiary of True Health Group, LLC (“THG” or “True Health”)
following a corporate reorganization. C.R. 0048 (Original Petition ¶ 62). Except when
necessary to distinguish between THD and THG, Riverside refers to the general
enterprise as “True Health.”
2 C.R. 1888.

3 Subject to certain exceptions, the Anti-Kickback Statute makes it a felony to “offer[]

or pay[] . . . any kickback . . . to induce [a] person . . . to refer an individual to a
person” for services paid by federal healthcare programs like Medicare. 42 U.S.C.
§ 1320a-7b(b)(2)(A).

-7-
another blood testing company that had gone into bankruptcy. 4 As part

of this purchase, True Health agreed to adopt the Corporate Integrity

Agreement (“CIA”) that HDL had previously reached as part of a

settlement of regulatory compliance issues with the U.S. Department of

Health and Human Services’ Office of Inspector General (“HHS OIG”). 5

Under the CIA, True Health agreed among other things to implement a

comprehensive healthcare compliance program overseen by the

company’s chief compliance officer; to engage an Independent Review

Organization to monitor the company’s third-party arrangements; for its

management to certify annually to the HHS OIG the company’s

compliance with the CIA; and to submit annual reports to the HHS OIG

detailing the compliance program implemented by the company under

the CIA. 6

4 C.R. 1723 (Affidavit of Hal Greenberg in Support of Plaintiffs’ Opposition to
Defendants’ Motion for Summary Judgment ¶ 5 (June 25, 2025) (“Greenberg
Affidavit”)).
5 C.R. 2089. HHS OIG generally uses CIAs as part of settlements of healthcare
investigations, and these agreements “aim to strengthen an entity’s compliance
program and promote compliance so that future issues can be prevented or identified,
reported, and corrected.” HHS OIG, About Corporate Integrity Agreements,
https://oig.hhs.gov/compliance/corporate-integrity-agreements/about-corporate-
integrity-agreements.
6 C.R. 1723-1724 (Greenberg Affidavit ¶ 5); C.R. 2142; C.R. 2275-2284; C.R. 2084-

2284.

-8-
Over the ensuing years, True Health developed extensive

operations in Texas, including entering into laboratory processing

arrangements with Texas hospitals—such as Rockdale, Texas-based

Little River Healthcare (“Little River”) 7—and marketing its laboratory

testing services to healthcare providers in the state. 8 Given these

business activities, True Health employees and executives in turn

performed extensive work in Texas. See infra pp. 69-70.

B. Riverside invests $50 million in True Health in reliance on
Appellees’ representations about its business, allowing
Appellees to cash out over $100 million

In 2016, True Health pursued a recapitalization, which allowed

Appellees—True Health’s then-current significant equityholders—to

collectively cash out over $100 million from the company. 9 As part of that

recapitalization, Appellant Riverside and two co-purchasers agreed to

7 “Critical access hospitals,” like Little River, provide healthcare services to
underserved rural communities. To incentivize hospitals to serve such communities,
critical access hospitals are entitled to higher, “cost-plus” reimbursement rates from
Medicare for clinical diagnostic laboratory tests, so long as the patient is an inpatient
or outpatient of the hospital. See 42 C.F.R. § 413.70.
8 E.g., C.R. 0582; C.R. 1391.

9 C.R. 0987.

-9-
invest $50 million 10 in True Health through the SPA dated January 26,

2017, entered into with Appellees. 11

Prior to entering into the SPA, Riverside knew that True Health

operated in a highly regulated industry, and that it was subject to myriad

healthcare rules and regulations, including as a result of its government

reimbursement business. Riverside would not have invested without

express assurance that True Health was in compliance with such laws.

Riverside therefore both conducted months of due diligence on the

company and also expressly negotiated in the SPA for several

representations about the company’s legal and regulatory compliance—

including with regard to its business activities in Texas—to which

Appellees jointly and severally warranted. 12 Appellees warranted that:

• “the Company is, and has been since the Date of First
Operations, in compliance in all material respects with all
applicable Healthcare Laws”; 13

10 Other investors provided $110 million in debt financing. Overall, the
recapitalization raised $160 million from outside investors. C.R. 0051 (Original
Petition ¶ 72).
11 C.R. 1745-1835 (SPA (Jan. 26, 2017)). Appellees appointed CLG Investments,
LLC—a Grottenthaler-controlled and Frisco-based entity—as their agent and
attorney-in-fact under the agreement. C.R. 1782 (SPA § 6.1); C.R. 0035 (Original
Petition ¶ 14).
12 C.R. 1722-1724 (Greenberg Affidavit ¶¶ 4-6).

13 C.R. 1772 (SPA § 4.14(a)).

-10-
• “all material contracts, including those with referral
sources, . . . are in compliance in all material respects with
all applicable Healthcare Laws . . . .”; 14 and

• “all billings and collections by the Company for its
services, . . . have been in compliance in all material respects
with all applicable Healthcare Laws . . . .” 15

Riverside was also aware that True Health had previously

purchased HDL’s assets, and that it had assumed the obligations of the

CIA in connection with that transaction. 16 Riverside therefore obtained

Appellees’ express representation that “[t]he Company is in material

compliance with the terms and requirements of the [CIA].” 17

Based on these representations, Riverside believed that True

Health was in material compliance with all relevant healthcare laws

when it entered into the SPA. Riverside would not have invested in True

Health absent Appellees’ representations. 18

14 C.R. 1773 (SPA § 4.14(a)).

15 C.R. 1773 (SPA § 4.14(b)).

16 C.R. 1723-1724 (Greenberg Affidavit ¶ 5).

17 C.R. 1771 (SPA § 4.10).

18 C.R. 1724 (Greenberg Affidavit ¶ 6).

-11-
C. Following True Health’s recapitalization, True Health faces—
and addresses—regulatory scrutiny from DOJ and CMS

At the time of the Riverside’s investment, True Health was one of

the largest private blood testing labs in the country, with quarterly

revenues of nearly $42 million and quarterly EBITDA of over $10

million. 19 It processed close to 2,000 samples per day. 20

After the recapitalization, Riverside held a minority equity interest

in True Health and one of its principals, Hal Greenberg, joined both the

company’s board and the board’s compliance committee. 21 Riverside and

its representatives, however, had no material involvement in the

company’s day-to-day operations or business strategy, nor a management

role. 22 Greenberg and others at Riverside thus had to rely on company

management to ensure True Health’s compliance with the CIA and

healthcare laws more generally. 23

19 C.R. 0410.

20 C.R. 0412.

21 C.R. 1724-1725 (Greenberg Affidavit ¶ 7).

22 C.R. 1725 (Greenberg Affidavit ¶ 7).

23 E.g., C.R. 1725-1726 (Greenberg Affidavit ¶ 8).

-12-
In March 2017, the U.S. Department of Justice (“DOJ”) issued a

Civil Investigative Demand (“CID”) to True Health. 24 While the demand

stated that it was being made pursuant to a federal False Claims Act

investigation and “concern[ed] allegations of medically unnecessary

laboratory testing,” it did not discuss any particular True Health

business practices or identify any particular instances of improper

conduct. 25 True Health promptly retained outside counsel to respond to

the demand and Greenberg received periodic updates about the

company’s response from management and the company’s counsel. 26

Management and outside counsel never informed Riverside of any

information that was uncovered as a result of the company’s response to

the CID that led Riverside to believe that it had been deceived through

the SPA’s representations about healthcare law compliance. 27

24 C.R. 1837-1860. CIDs are commonplace. DOJ’s Civil Division authorized well over

600 CIDs in 2017 alone. See David Robbins & Jason Crawford, CIDs Are DOJ’s
Investigatory Tool of Choice, Bloomberg Law (June 2019),
https://www.bloomberglaw.com/external/document/X61SUCQS000000/corporate-
compliance-professional-perspective-cids-are-doj-s-inv.
25 C.R. 1837.

26 C.R. 1726-1727 (Greenberg Affidavit ¶ 10).

27 C.R. 1726-1727 (Greenberg Affidavit ¶ 10).

-13-
In May 2017, the Centers for Medicare and Medicaid Services

(“CMS”) sent a letter to True Health identifying eight claims for

reimbursement that allegedly “failed to meet Medicare guidelines” and

suspending Medicare payments to True Health. 28 True Health’s

management hired counsel and subsequently researched the eight

claims, none of which concerned True Health’s rural hospital business.

Management reported to Riverside that the allegations were “frivolous,”

with some of the flagged claims involving mundane administrative

errors. 29 True Health’s counsel sent a rebuttal letter to CMS and CMS

ultimately reduced the suspension to 35% of Medicare payments. 30

During this period and in the ensuing years, True Health’s

management continued to certify in annual reports submitted to the HHS

OIG that True Health was in material compliance with its obligations

under applicable healthcare requirements and under the CIA. 31 In

response, the HHS OIG sent a letter to True Health confirming its

28 C.R. 1862-1864.

29 C.R. 1727-1728 (Greenberg Affidavit ¶ 12); see also C.R. 1866-1868 (Riverside
internal memorandum summarizing management’s findings regarding the eight
cited claims (June 1, 2017)).
30 C.R. 1728-1729 (Greenberg Affidavit ¶ 13).

31 C.R. 1730 (Greenberg Affidavit ¶ 15).

-14-
view that True Health appeared to be compliant with the CIA during

the reporting period. 32

D. True Health’s financial condition deteriorates, and
Riverside invests an additional $30 million in the company

By late 2017, the continued 35% CMS payment suspension had

taken a toll on True Health’s cash position. Riverside and its co-investors

provided over $30 million in additional funding to shore up the company’s

finances. 33 Riverside would not have made that substantial additional

investment in True Health if it had reason to believe that True Health

was violating applicable healthcare laws. 34

From late 2018 into 2019, True Health and the federal agencies

negotiated a proposed settlement agreement that Riverside hoped would

resolve CMS’s ongoing payment suspension. 35 By June 2019, True Health

and its directors—including Greenberg—came to believe that they had

reached an agreement in principle with the government after extensive

negotiations that would have led to CMS lifting its 35% payment

32 C.R. 2293-2294.

33 C.R. 1731 (Greenberg Affidavit ¶ 17).

34 C.R. 1731 (Greenberg Affidavit ¶ 17).

35 C.R. 1734 (Greenberg Affidavit ¶ 21).

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suspension. 36 The True Health board approved a draft settlement

agreement in which the company expressly denied the DOJ’s allegations

of wrongdoing. 37

Before signing the settlement agreement, however, CMS imposed a

new, 100% payment suspension. 38 While the notice claimed to be for

“recent credible allegations of fraud” that were “distinct from” the prior

suspension, True Health’s Chief Financial Officer, Appellee Christian

Richards, informed Greenberg that the five claims identified in the notice

had already been subject to review as part of a 2017 audit related to the

first CMS suspension. 39 Believing the suspension to be unreasonable

government overreach based on representations from Appellees, in July

2019, True Health sued CMS and HHS in the U.S. District Court for the

Eastern District of Texas, seeking a temporary restraining order against

the new suspension. 40

36 C.R. 1734 (Greenberg Affidavit ¶ 21).

37 C.R. 1734-1735 (Greenberg Affidavit ¶ 21).

38 C.R. 1735 (Greenberg Affidavit ¶ 22); C.R. 1952-1954.

39 C.R. 1735 (Greenberg Affidavit ¶ 22); C.R. 1952.

40 C.R. 1735-1736 (Greenberg Affidavit ¶ 23).

-16-
On July 5, 2019, the HHS OIG submitted a declaration by OIG

special agent Jack Geren (“Geren Declaration”) in support of its

opposition to the motion for a temporary restraining order. 41 The Geren

Declaration alleged that True Health had conspired to provide kickbacks

to healthcare providers through purported investments in MSOs to

induce providers to order laboratory testing through rural hospitals,

including Little River. 42 True Health’s management and its outside

counsel, however, had repeatedly and expressly represented to Riverside

that True Health did not have relationships with MSOs or otherwise

involve itself in such practices. 43 Riverside nonetheless promptly

investigated Geren’s allegations and concluded that Geren had

mischaracterized many of the documents relied upon for the

41 C.R. 1956-1964 (Declaration of Jack J. Geren, Jr., True Health Diagnostics, LLC v.

Azar, No. 19-CV-110 (E.D. Tex. July 5, 2019).
42 C.R. 1957-1960 (Geren Declaration ¶¶ 5-18). MSOs are organizations that provide

non-clinical services to healthcare practices, including as to human resources, claim
coding, and billing. See Andrew Weissenberg & Dae Y. Lee, Understanding
Management Services Organizations (MSOs): Benefits, Compliance Risks, and Best
Practices, Med. Grp. Mgmt. Ass’n (Feb. 25, 2025),
https://www.mgma.com/articles/understanding-management-services-organizations-
msos-benefits-compliance-risks-and-best-practices.
43 C.R. 1736 (Greenberg Affidavit ¶ 24); C.R. 1928-1945 (Appellee Michael Osterhoff’s

draft talking points for a meeting with DOJ that Riverside received); C.R. 1948 (“THD
did not do business with MSOs.”).

-17-
allegations. 44 True Health’s general counsel, Appellee Michael Osterhoff,

went so far as to write that the “[c]itation to these docs is total garbage

by the [government].” 45 Based on these communications and the review

of Geren’s cited documents, Riverside came to believe that the declaration

did not credibly support the conduct Geren alleged. 46 True Health’s

management concurred in that assessment. 47

In fact, notwithstanding Geren’s declaration, the court granted

True Health’s motion for a temporary restraining order against the CMS

suspension and the company then moved for a preliminary injunction

against the same. 48 Geren did not appear at the hearing on the

preliminary injunction to provide live testimony to support the

allegations in his declaration. 49

44 C.R. 1736-1737 (Greenberg Affidavit ¶ 25).

45 C.R. 1736-1737 (Greenberg Affidavit ¶ 25).

46 C.R. 1740 (Greenberg Affidavit ¶ 30).

47 C.R. 1740 (Greenberg Affidavit ¶ 30).

48 C.R. 2299-2305.

49 C.R. 1740-1741 (Greenberg Affidavit ¶ 31).

-18-
E. True Health files for bankruptcy and the liquidating trustee
serves a notice of claims on True Health’s former officers and
directors

The district court ultimately dismissed True Health’s lawsuit for

lack of subject matter jurisdiction and the company declared bankruptcy

on July 30, 2019. 50 At the time of its bankruptcy, True Health was one of

the largest privately held labs in the country. 51

The bankruptcy court ultimately lifted the renewed CMS

suspension over the government’s objection, releasing the funds withheld

after the bankruptcy petition was filed to True Health. 52 After True

Health sold certain of its assets to Quest Diagnostics, the bankruptcy

court approved a liquidation plan for the company in November 2019,

which became effective on December 6, 2019.53 Pursuant to the plan, the

court approved payment of certain creditor claims—with True Health’s

senior creditors receiving only a small percentage of amounts owed; True

Health’s remaining assets were transferred to a liquidation trust

(including most litigation claims); True Health’s directors were deemed

50 C.R. 1741 (Greenberg Affidavit ¶ 32).

51 C.R. 0475.

52 C.R. 1741 (Greenberg Affidavit ¶ 32).

53 C.R. 0052 (Original Petition ¶ 77).

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resigned; and True Health’s equity interests were “deemed canceled,

extinguished and discharged and of no further force or effect.” 54 As a

result, Riverside’s relationship with True Health was severed, and it lost

access to its books and records at that time. 55

On April 6, 2020, counsel for True Health’s liquidating trust, who

represented True Health’s creditors, 56 sent a notice of claims to former

officers and directors of the company, including Riverside’s designees as

well as Appellees Grottenthaler, Osterhoff, Richards, and director Tom

D. Wippman. 57 The notice alleged that “[a]t all times on and after May

19, 2018, the [True Health] directors failed to pursue a strategic course

that would maximize and protect the value of True Health and its

stakeholders (including its lenders),” leading to its bankruptcy. 58

54 See Combined Disclosure Statement and Joint Chapter 11 Plan of Liquidation

Proposed by the Debtors, DIP Agent and Official Committee of Unsecured Debtors,
In re THG Holdings LLC, No. 19-11689 (Bankr. D. Del. Nov. 27, 2019), ECF No. 531-
1; Notice of (I) Effective Date of Combined Disclosure Statement and Joint Chapter
11 Plan of Liquidation Proposed by the Debtors, DIP Agent and Official Committee
of Unsecured Creditors and (II) Certain Claims Bar Dates, In re THG Holdings LLC,
No. 19-11689 (Bankr. D. Del. Dec. 6, 2019), ECF No. 552.
55 C.R. 1741 (Greenberg Affidavit ¶ 33).

56 The creditors included those who had provided the $110 million in debt financing

in connection with True Health’s 2017 recapitalization.
57 C.R. 0902-0905.

58 C.R. 0902.

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Specifically, the notice alleged that “[d]uring a period when True Health

was undeniably insolvent, the directors and officers abdicated crucial

decision making for the Company by delegating excessive authority to

the Company’s Chief Executive Officer, whose loyalty and personal

interests were completely at odds with the interests of True Health” and

“failed to adequately monitor decision-making at the Company,

particularly as it related to ongoing legal and regulatory compliance,

remediation and negotiations with the Department of Justice.” 59 The

notice did not include any mention of healthcare fraud or MSOs, or

otherwise identify any specific unlawful or fraudulent business practices

on the part of the company.

F. The liquidating trustee files suit, and DOJ intervenes in a qui
tam action against True Health

In January 2021, after a multi-year investigation with direct access

to True Health’s books and records, True Health’s liquidating trustee

filed suit in Dallas County District Court, naming as defendants certain

of True Health’s former directors, officers, and equityholders, including

all but three of the Appellees who filed special appearances below (the

59 C.R. 0902.

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“Specially Appearing Appellees”). 60 The suit did not name Riverside or

any of its representatives as defendants. 61 The trustee lawsuit alleged

that the former True Health directors and officers breached their

fiduciary duties by enabling a number of improper business practices at

the company, including through True Health’s relationships with rural

hospitals. 62 The trustee also sued for fraud, alleging that True Health’s

creditors had been fraudulently induced to provide the debt financing in

connection with the recapitalization through concealment of True

Health’s non-compliance with healthcare laws. 63 All of the Specially

Appearing Appellees named in the lawsuit filed general appearances

without contesting personal jurisdiction. 64

In December 2021, after a six-year investigation, DOJ intervened

in a qui tam action in the U.S. District Court for the Eastern District of

60 C.R. 0907 (Plaintiff’s Original Petition (“Trustee Petition”), Willow Tree Consulting

Grp., LLC v. Grottenthaler, No. DC-21-01060 (Dallas Cnty. Dist. Ct. Jan. 25, 2021)
(“Trustee Litigation”)). The three Specially Appearing Appellees not named in the
Trustee Litigation are Anita Grottenthaler, Kevin Nellis, and Kyle Nettesheim.
61 C.R. 0907 (Trustee Petition at 1).

62 C.R. 0960-0962 (Trustee Petition ¶¶ 215-223 (breach of fiduciary duty claim)).

63 See C.R. 0976-0977 (Trustee Petition ¶¶ 322-337 (fraud asserted against former

True Health directors and officers)).
64C.R. 1407-1413 (Passive Transferee Defendants’ Answer (Apr. 26, 2021)); C.R.
1418-1429 (Director and Officer Defendants’ Answer (Mar. 22, 2021)).

-22-
Texas that had been filed under seal against True Health in 2015. 65 The

court then unsealed DOJ’s complaint against Christopher Grottenthaler

and others that alleged violations of the federal False Claims Act, arising

out of True Health’s relationship with Little River and other rural

hospitals. 66

G. Grottenthaler pleads guilty to a criminal kickback conspiracy

In September 2022, Grottenthaler and others were indicted by a

grand jury sitting in the Eastern District of Texas; the indictment was

unsealed the following month. 67 The indictment stated that beginning in

2015, two years before the SPA was signed, True Health (i) conspired

with rural hospitals for those hospitals to provide kickbacks to healthcare

providers through MSOs, to induce those providers to send lab tests to

65 C.R. 2321-2323 (U.S. Notice of Intervention, United States ex rel. STF, LLC v. True

Health Diagnostics, LLC, No. 16-CV-547 (E.D. Tex. Dec. 20, 2021)).
66 DOJ, Press Release, Justice Department Files False Claims Act Complaint Against

Two Laboratory CEOs, One Hospital CEO and Others Across Texas, New York, and
Pennsylvania (Apr. 4, 2022), https://www.justice.gov/archives/opa/pr/justice-
department-files-false-claims-act-complaint-against-two-laboratory-ceos-one-
hospital.
67 C.R. 2328-2379 (Indictment, United States v. Grottenthaler, 22-CR-135 (E.D. Tex.

Sept. 22, 2022) (“Criminal Case”) (“Grottenthaler Indictment”)).

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True Health, 68 and (ii) conspired with rural hospitals to receive kickbacks

for processing blood tests on the hospitals’ behalf, which the hospitals

submitted to federal health insurers (among others) as outpatient tests

in order to obtain higher reimbursement rates, all while the hospitals

and True Health knew that these patients were not bona fide

outpatients. 69 Grottenthaler entered a plea of not guilty at his

arraignment held on October 20, 2022. 70

Two years later, on October 7, 2024, Grottenthaler entered a guilty

plea to one count of conspiracy to pay and receive illegal kickbacks in

violation of 18 U.S.C. § 371, as set forth in the indictment. 71 Riverside

learned of Grottenthaler’s guilty plea in late 2024.72

68 C.R. 2347. Specifically, the indictment alleged (C.R. 2344):

Little River, Stamford, and other hospitals utilized networks of MSOs
that purported to offer investment opportunities to health care providers
(HCPs) throughout the State of Texas. In reality, the MSOs were a
means to facilitate payments to HCPs in return for the providers’
laboratory referrals. Pursuant to the kickback scheme, the hospitals
paid a portion of their laboratory profits to recruiters, who in turn kicked
back those funds to the referring providers who ordered THD tests from
the hospitals or from THD directly.
69 C.R. 2344, 2345, 2347, 2350.

70 C.R. 0053 (Original Petition ¶ 80).

71 C.R. 2066-2068 (Criminal Case, Factual Basis (Sept. 24, 2024)).

72 C.R. 1742 (Greenberg Affidavit ¶ 34).

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H. Riverside files suit, seeking compensation for Appellees’ fraud

Three months after Grottenthaler pled guilty, Riverside

commenced this action on January 23, 2025 in the 298th Dallas County

District Court. 73 Riverside asserted claims for fraud, money had and

received, and conspiracy against Appellees for the fraudulent

misrepresentations they made in the SPA regarding True Health’s

compliance with healthcare laws. 74

Appellees LCG Ventures, LLC, LCG Ventures II, LLC, and Leon

Capital Partners, LLC (with Fernando De Leon, the “De Leon Appellees”)

removed the action to the Business Court on March 7, 2025. 75 The

Specially Appearing Appellees filed special appearances on March 31,

2025, contesting the jurisdiction of the Texas courts over them. 76

The De Leon Appellees filed a motion for summary judgment on

their statute of limitations defense on April 4, 2025—less than one month

73 C.R. 0031-0059 (Original Petition (Jan. 23, 2025)).

74 C.R. 0032-0034 (Original Petition ¶¶ 1-6); C.R. 0054-0055 (Original Petition ¶¶ 83-

89 (fraud claim)); C.R. 0055-0056 (Original Petition ¶¶ 90-92 (money had and
received claim)); C.R. 0056-0057 (Original Petition ¶¶ 93-98 (conspiracy claim)).
75 C.R. 0005-0011.

76 C.R. 0165-0198.

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after they filed their answer to the Original Petition and before any

discovery had been exchanged. 77

The trial court entered a scheduling order for the case on April 8,

2025, under which the parties would conduct discovery through late

November 2025, with dispositive motions to be filed in early December. 78

Riverside served requests for production to each group of generally

appearing Appellees and responded to the special appearances on April

28, 2025. 79 While Riverside had requested that the trial court defer

consideration of the summary judgment motion until the post-discovery

dispositive motions period provided in the scheduling order, the court

denied this request and instead set a hearing on the motion for July 3,

2025—nearly five months before the end of fact discovery and nearly half

a year before the scheduling order’s dispositive motions deadline.

Riverside filed its response to the summary judgment motion, and

in the alternative a motion for a continuance, on June 26, 2025.80 On July

77 C.R. 0210-0250. The other generally appearing Appellants joined in the motion.

C.R. 1569.
78 C.R. 1035-1043.

79 C.R. 1615-1631 (Requests for Production to LCG Appellees (Apr. 7, 2025)); C.R.

1633-1649 (Requests for Production to Fernando De Leon (Apr. 30, 2025)); C.R. 1045-
1079 (Appellants’ Response to Special Appearances (Apr. 28, 2025)).
80 C.R. 1665-1713; C.R. 1041 (dispositive motions deadline in Scheduling Order).

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3, 2025, the trial court heard argument on the summary judgment

motion.

I. The trial court grants the motion for summary judgment and
special appearances

Summary Judgment. On July 10, 2025, the trial court issued an

order denying any continuance and granting summary judgment in favor

of the generally appearing Appellees. 81 The court’s order stated that

“Defendants conclusively established that all of plaintiffs’ causes of

action accrued no later than December 6, 2019—when the related

bankruptcy proceedings were substantially consummated” and that

Riverside’s claims were thus time-barred. 82

Two months later, the trial court issued an opinion on the summary

judgment motion. In the opinion, however, the trial court no longer stood

by its prior determination that Riverside’s claims had accrued in

December 2019. Rather, the trial court held that Riverside’s claims

accrued months later, “no later than April 6, 2020, when the trustee sent

81 C.R. 1710-1711 (request for a continuance in Appellants’ Opposition to Summary

Judgment); C.R. 2560-2562 (Order on Summary Judgment (July 10, 2025)); Supp.
C.R. 0003-0029 (Opinion on Summary Judgment (Sept. 17, 2025) (“MSJ Op.”)).
82 C.R. 2744 (Order on Summary Judgment at 3).

-27-
the claim notice letter to True Health’s former directors and officers.” 83

The trial court stated that several events preceding the notice supported

that conclusion, but it did not find that any of these events alone or in

the aggregate triggered a duty on the part of Riverside to investigate the

fraud. 84 The trial court found, however, that by the time of the April 6,

2020 notice, “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.” 85 The trial court concluded that this was

sufficient notice to begin the accrual period for Riverside’s fraud and

conspiracy causes of action as of that date. 86 The court further found that

Riverside could have discovered the fraud within four years had it

conducted a reasonable investigation. 87 Finally, the court concluded that

83 Supp. C.R. 0020 (MSJ Op. at 17).

84 Supp. C.R. 0020-0021 (MSJ Op. at 17-18).

85 Supp. C.R. 0024 (MSJ Op. at 21); see Supp. C.R. 0022-0023 (MSJ Op. at 19-20

(listing various events)).
86 Supp. C.R. 0024 (MSJ Op. at 21).

87 Supp. C.R. 0025-0027.

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Riverside failed to create a genuine issue of material fact as to fraudulent

concealment. 88

Special Appearances. On July 17, 2025, following jurisdictional

discovery and supplemental briefing on the special appearances, 89 the

court issued an order granting the special appearances. 90

On August 19, 2025, the trial court issued a memorandum opinion

explaining its reasoning for granting the special appearances. The court

held that Riverside had failed to plead sufficient facts in its petition to

establish the court’s jurisdiction over the Specially Appearing

Appellees. 91 Relying on the Supreme Court’s decision in Kelly v. General

Interior Construction, Inc., 301 S.W.3d 653 (Tex. 2010), the trial court

held that it did not need to consider the evidence Riverside submitted in

opposition to the special appearances because “the evidence submitted in

88 Supp. C.R. 0028 (MSJ Op. at 25).

89 C.R. 2579-2580 (summarizing the Specially Appearing Appellees’ deposition
testimony).
90 C.R. 2935-2937 (Order on Special Appearances (July 17, 2025)); C.R. 2964-3000

(Memorandum Opinion on Special Appearances (Aug. 19, 2025) (“Special
Appearances Op.”)).
91 C.R. 2981-2984 (Special Appearances Op. at 18-21).

-29-
its oppositions does not relate to any non-conclusory allegations in its

pleading.” 92

The trial court further found that, even considering the evidence

presented by Riverside on the special appearances, it had not established

personal jurisdiction over the Specially Appearing Appellees. The trial

court held that there was an insufficient connection between the

defendants’ contacts with Texas and “the operative facts of this

litigation.” 93 The court also rejected what it deemed a “consent-based”

argument that the forum selection clause in the 2017 True Health LLC

agreement executed the same day as the SPA meant that the Specially

Appearing Appellees consented to the court’s jurisdiction in this case. 94

Finally, the court rejected Riverside’s argument that most of the

Specially Appearing Appellees had waived any objection to jurisdiction

by filing general appearances in the trustee litigation. 95

92 C.R. 2983 (Special Appearances Op. at 20).

93 C.R. 2988 (Special Appearances Op. at 25).

94 C.R. 2986; C.R. 2995-2997 (Special Appearances Op. at 32-34).

95 C.R. 2999 (Special Appearances Op. at 36).

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SUMMARY OF ARGUMENT

The trial court’s grant of summary judgment and of the special

appearances should be reversed.

The trial court granted summary judgment on statute of limitations

grounds nearly half a year before dispositive motions were due to be filed

and in the absence of any substantial merits discovery. This was error.

In a fraudulent inducement action like this one, the statute of

“limitations does not start to run until the fraud with respect to the

contract is discovered or the exercise of reasonable diligence would

discover it.” Hooks v. Samson Lone Star, Ltd. P’ship, 457 S.W.3d 52, 57

(Tex. 2015). That is because “a party will not be permitted to avail himself

of the protection of a limitations statute when by his own fraud he has

prevented the other party from seeking redress within the period of

limitations.” Valdez v. Hollenbeck, 465 S.W.3d 217, 230 (Tex. 2015)

(internal quotation marks omitted). When a plaintiff actually discovered

a fraud or would have upon reasonable diligence ordinarily presents an

issue of fact not properly resolved on summary judgment. See Hooks, 457

S.W.3d at 58.

-31-
Riverside did not obtain actual knowledge of the True Health MSO

fraud until Grottenthaler pled guilty in 2024. The trial court’s

determination that Riverside nonetheless had “inquiry notice” of the

fraud over four years earlier was error. The question as to whether and

when Riverside would have discovered the fraud with additional

diligence presents an issue of fact that was not properly resolved on

summary judgment. And in any event, many of the “facts” that the trial

court relied on to find inquiry notice as a matter of law had nothing to do

with and gave no notice of True Health’s kickback scheme involving rural

hospitals and MSOs. Moreover, True Health’s officers and directors,

including True Health’s general counsel, affirmatively concealed that

kickback scheme from Riverside throughout the relevant time period,

tolling the statute of limitations. At minimum, the trial court should have

continued the summary judgment motion to allow Riverside to complete

full discovery before the motion’s resolution.

The trial court also erred by granting the special appearances. Most

of the Specially Appearing Appellees filed general appearances in the

trustee litigation without contesting the Dallas court’s jurisdiction over

them. They therefore waived the right to contest the trial court’s

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jurisdiction here—a case involving the same transactions and alleged

wrongdoing. In any event, the Specially Appearing Appellees had

substantial contacts with Texas and could reasonably have expected to

be haled into court here through their investment in and employment at

True Health, their agreement to the True Health LLC agreement—with

a Texas jurisdictional consent provision—in connection with the SPA,

and their designation of a Texas-based agent in the SPA.

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ARGUMENT

I. THE TRIAL COURT ERRED IN GRANTING SUMMARY
JUDGMENT ON APPELLEES’ STATUTE OF LIMITATIONS
DEFENSE

A. Standard of review

A court of appeals reviews a trial court’s grant of a summary

judgment motion de novo. Helix Energy Solutions Grp., Inc. v. Gold, 522

S.W.3d 427, 431 (Tex. 2017). Under Texas Rule of Civil Procedure

166a(c), a court may enter summary judgment only if there are no

genuine issues of material fact and the movant is entitled to judgment as

a matter of law. In determining whether a genuine issue of material fact

exists, the court must “review the evidence presented in the motion and

response in the light most favorable to the party against whom the

summary judgment was rendered,” Mann Frankfort Stein & Lipp

Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009), “indulging

every reasonable inference in favor of the nonmovant and resolving any

doubts against the motion,” Goodyear Tire & Rubber Co. v. Mayes, 236

S.W.3d 754, 756 (Tex. 2007). Summary judgment should be denied

whenever “reasonable and fair-minded jurors could differ in their

conclusions in light of all of the evidence presented.” Id. at 755.

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Appellees moved for—and the trial court granted—summary

judgment based on a statute of limitations defense. Appellees therefore

held the burden to conclusively establish that defense as a matter of law.

Univ. of Hou. v. Clark, 38 S.W.3d 578, 580 (Tex. 2000); KPMG Peat

Marwick v. Harrison Cnty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex.

1999). To do so, Appellees were required to “(1) conclusively prove when

the cause of action accrued, and (2) negate the discovery rule, if it applies

and has been pleaded or otherwise raised, by proving as a matter of law

that there is no genuine issue of material fact about when the plaintiff

discovered, or in the exercise of reasonable diligence should have

discovered the nature of its injury.” KPMG Peat Marwick, 988 S.W.2d at

748.

Appellants brought three causes of action in their Original Petition:

fraud, money had and received, and conspiracy. 96 Fraud—and by

extension conspiracy—have four-year statutes of limitations, whereas

money had and received has a two-year statute of limitations. See Tex.

Civ. Prac. & Rem. Code § 16.004(a)(4) (fraud); id. § 16.003 (money had

96C.R. 0054-0055 (Original Petition ¶¶ 83-89 (fraud)); C.R. 0055-0056 (Original
Petition ¶¶ 90-92 (money had and received)); C.R. 0056-0057 (Original Petition
¶¶ 93-98 (conspiracy)).

-35-
and received); Agar Corp. v. Electro Circuits Int’l, LLC, 580 S.W.3d 136,

142 (Tex. 2019) (holding that civil conspiracy shares the statute of

limitations of its underlying tort). Given that Riverside filed its Original

Petition on January 23, 2025, Appellees were required to conclusively

establish that Riverside’s claims for fraud and conspiracy accrued on or

before January 23, 2021, and the claim for money had and received

accrued on or before January 23, 2023.

B. The statute of limitations on Riverside’s claims began to run
only when it had actual knowledge of Appellees’ fraud or could
have discovered the fraud with reasonable diligence

A claim generally accrues “when facts exist that authorize a

claimant to seek judicial relief.” ExxonMobil Corp. v. Lazy R Ranch, LP,

511 S.W.3d 538, 542 (Tex. 2017). Texas law, however, recognizes two

well-established exceptions to this standard: the discovery rule and

fraudulent concealment. Estate of Ewers, 695 S.W.3d 603, 619 (Tex.

App.—Houston [1st Dist.] 2024, no pet.) (citing Petrol. Sols. v. Head, 454

S.W.3d 482, 486 (Tex. 2014)); see also S.V. v. R.V., 933 S.W.2d 1, 4 (Tex.

1996) (discussing discovery rule and fraudulent concealment).

Both exceptions are similar in effect in that they prevent the statute

of limitations from barring claims that were otherwise not brought within

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the limitations period. Ewers, 695 S.W.3d at 619. When the nature of an

injury is inherently undiscoverable and the evidence of injury is

objectively verifiable, the discovery rule defers accrual of a cause of action

until the plaintiff knew or should have known of the facts giving rise to

the cause of action. E.g., Archer v. Tregellas, 566 S.W.3d 281, 290 (Tex.

2018). And where a defendant conceals his wrongdoing, the doctrine of

fraudulent concealment tolls the statutes of limitation even after a cause

of action has accrued. BP Am. Prod. Co. v. Marshall, 342 S.W.3d 59, 67

(Tex. 2011); see also Ewers, 695 S.W.3d at 621 (fraudulent concealment

tolls the statute of limitations where “defendant[s] actually knew a wrong

occurred, had a fixed purpose to conceal the wrong, and did conceal the

wrong”).

The rationale for applying these doctrines to fraud claims like those

asserted here is straightforward and commonsensical: “Texas courts have

long recognized that ‘fraud vitiates whatever it touches,’ and we have

consistently held that ‘a party will not be permitted to avail himself of

the protection of a limitations statute when by his own fraud he has

prevented the other party from seeking redress within the period of

limitations.’” Valdez, 465 S.W.3d at 230 (citation omitted); see also

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Hooks, 457 S.W.3d at 57 (“a person cannot be permitted to avoid liability

for his actions by deceitfully concealing wrongdoing until limitations has

run” (internal quotation marks omitted)). 97 For these reasons, the

Supreme Court has held that in a fraudulent inducement action like this

one, the statute of “limitations does not start to run until the fraud with

respect to the contract is discovered or the exercise of reasonable

diligence would discover it.” Hooks, 457 S.W.3d at 57 (emphasis added);

accord Valdez, 465 S.W.3d at 229; see also S.V., 933 S.W.2d at 4-5

(discussing the discovery rule and fraudulent concealment and noting

“we have deferred accrual of causes of action for limitations

purposes . . . [in] those [actions] involving fraud and fraudulent

concealment”).

Critically, the determination of when a plaintiff actually discovered

a fraud or would have upon reasonable diligence “ordinarily present

questions of fact for the factfinder, rather than matters of law for the

court.” Ewers, 695 S.W.3d at 622 (emphasis added) (citing Sw. Energy

Prod. Co. v. Berry-Helfand, 491 S.W.3d 699, 722 (Tex. 2016) (“reasonable

97 See also Supp. C.R. 21 (MSJ Op. at 18 (“[B]ecause 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.”)).

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diligence is an issue of fact”), and Hooks, 457 S.W.3d at 57-58 (noting that

“reasonable diligence is an issue of fact”)). Accordingly, unless reasonable

minds cannot differ on these issues, they are for the factfinder to resolve

and are not properly decided on summary judgment. See Hooks, 457

S.W.3d at 58 n.7 (collecting cases).

C. The trial court erred in granting summary judgment because
there are at minimum disputed issues of material fact as to
when Riverside’s claims accrued

1. Riverside did not obtain actual knowledge of the True
Health fraud until Grottenthaler pled guilty in 2024

Under these established limitations principles, the trial court’s

grant of summary judgment cannot stand. There can be no serious

dispute that Riverside was defrauded: Appellees represented in the SPA

that True Health was in material compliance with relevant healthcare

laws, and True Health’s former CEO and other company representatives

have now admitted that during the relevant period True Health was

knowingly violating federal kickback laws. 98

Nor can there be any dispute that Appellees concealed this scheme

from Riverside. As Riverside Managing Partner Hal Greenberg explains

98 See supra pp. 23-24.

-39-
in his summary judgment affidavit—which must be credited for these

purposes 99—True Health and its officers repeatedly and explicitly

represented that True Health was in compliance with all relevant

healthcare laws and denied any improper conduct with MSOs

whatsoever. 100 On that basis, Riverside not only made its initial $50

million investment, but continued to invest tens of millions in the

company to keep it afloat—something it obviously would not have done

had it had any concerns about True Health’s compliance with anti-

kickback laws. Riverside obtained actual knowledge of the

misrepresentations in the SPA only when Grottenthaler and other

representatives of True Health pled guilty in 2024—years after True

Health’s bankruptcy. See Scott v. Carpenter, 2022 WL 317060, at *5 (Tex.

App.—Waco Feb. 2, 2022, no pet.) (mem. op.) (reversing granting of

summary judgment on statute of limitations defense where plaintiffs

only obtained knowledge of misrepresentation years after it was made).

99 See Patton v. Harris Cnty. Cmty. Supervision & Corr. Dep’t, 2005 WL 3116405, at

*4 (Tex. App.—Houston [14th Dist.] Nov. 23, 2005, pet. denied) (mem. op.) (“[W]hen
reviewing affidavits filed in opposition to summary judgment motions, the non-
movant’s affidavit should be accepted as true, and every reasonable inference should
be drawn in favor of the non-movant.”).
100 C.R. 1732-1735 (Greenberg Affidavit ¶¶ 18, 20, 21).

-40-
2. The trial court erred in holding that Riverside had
“inquiry notice” of the fraud as a matter of law as of
April 2020

Tellingly, the trial court did not find that Riverside had actual

knowledge of the fraud more than four years before it sued. Rather, the

trial court based its summary judgment ruling on the theory that

Riverside supposedly had “inquiry notice” of the fraud as of April 6,

2020 101—holding that the supposed “history” of allegations of improper

business practices by True Health, and the tying of those practices to

True Health’s economic losses, were sufficient to begin the accrual period

on Riverside’s claims as of April 2020. 102 This was error.

It was most fundamentally error because, as noted above, the

determination as to when a plaintiff should have undertaken additional

diligence—and what would have been discovered upon that diligence—

“ordinarily present questions of fact for the factfinder, rather than

matters of law for the court.” Ewers, 695 S.W.3d at 622; see supra p. 38.

They are therefore issues not properly determined on summary

101 Supp. C.R. 0022-0025 (MSJ Op. at 19-22).

102 Supp. C.R. 0024 (MSJ Op. at 21).

-41-
judgment—where all reasonable inferences must be resolved in the non-

moving party’s favor—because they raise fact issues.

This action presents a quintessential case for application of this

principle. The trial court here did not hold that some singular known

public fact or event put Riverside on notice of the fraud or otherwise

resolved the statute of limitations issue as a matter of law. Rather, the

trial court found the claims here time-barred only after assessing

numerous historical events, and finding that only the accumulation of

those events created a duty to conduct further investigation as of April

2020.103 But that fact-laden assessment is properly the subject of the fact

finder, at trial, on a full record, and with expert testimony on key issues,

not on summary judgment—much less, as here, before any real discovery

has taken place.

This case is nothing like those limited situations where issues of

inquiry notice have been resolved on summary judgment. In those cases,

there was “readily accessible and publicly available” information—like

public real property or court records—that definitively established the

defendant’s wrongful behavior. See, e.g., Hooks, 457 S.W.3d at 58-59

103 See Supp. C.R. 0022-0025 (MSJ Op. at 19-22).

-42-
(internal quotation marks omitted) (discussing, among others, BP Am.

Prod. Co., 342 S.W.3d at 67-69, where two publicly available documents

evidenced “that BP was not conducting good-faith continuous

operations,” and Shell Oil Co. v. Ross, 356 S.W.3d 924 (Tex. 2011), where

publicly available “General Land Office records demonstrat[ed] that

Shell paid higher royalties to the State even though it owed the Rosses

the same royalty”); see also Marcus & Millichap Real Est. Inv. Servs. of

Nev., Inc. v. Triex Tex. Holdings, LLC, 659 S.W.3d 456 (Tex. 2023), cited

at Supp. C.R. 0025 (breach of fiduciary duty action; at time of injury—

i.e., when counterparty defaulted on lease—plaintiff knew or should have

known that broker’s representation that “rent would be coming in every

month without any issues or risk” was false, triggering statute of

limitations). Nothing like those public records exists here evidencing the

True Health fraud. The trial court’s resolving the statute of limitations

issue was improper fact finding pure and simple. It should be reversed

on that basis alone.

In any event, the “facts” identified by the trial court leading up to

and including the trustee notice were plainly insufficient to put Riverside

on inquiry notice as a matter of law of the True Health rural hospital

-43-
fraud for which Grottenthaler pled guilty. A finding of inquiry notice

requires that a plaintiff have knowledge of or access to facts sufficient to

trigger a duty to investigate, and the ability to uncover, the wrongful

conduct that is the subject of the plaintiff’s claims. See Ewers, 695 S.W.3d

at 623-24 (holding that appellants could not establish appellees’

knowledge of injury-causing conduct because “[t]hough the appellees

knew that purported payments from the . . . deal stopped in 2014, they

did not know the payments stopped because [fraudster] had committed

fraud, which was the injury-causing conduct for which they would later

sue”). The wrongful conduct here concerned True Health’s rural hospital

kickback scheme involving the use of MSOs.

But, as set forth below, most of the “facts” relied on by the trial court

had nothing to do with True Health’s rural hospital business, or MSOs,

or any kickback scheme, or any allegation of fraud. They provided

Riverside with no notice whatsoever that True Health may have hidden

from it at the time of the SPA improper kickbacks through the use of

MSOs. And even where such a scheme was alleged, Riverside conducted

appropriate diligence under the circumstances, but True Health’s

management, including Appellees, continued to affirmatively conceal the

-44-
fraud from it. At minimum, there are substantial issues of fact as to

whether these circumstances were sufficient to put Riverside on inquiry

notice of True Health’s rural hospital fraud.

Purchase of HDL Assets. Prior to entering the SPA, Riverside knew

that True Health had acquired the assets of HDL—a lab that had gone

out of business as a result of healthcare violations. 104 True Health

acquired those assets with the knowledge and authorization of the

bankruptcy court, and it had expressly agreed to adopt the CIA that HDL

had entered into with HHS OIG. Contrary to the trial court’s suggestion,

there was thus nothing nefarious about True Health’s acquisition of those

assets. And all evidence suggested that True Health remained in

compliance with the CIA. Riverside thus had no reason to suspect that

True Health’s acquisition of HDL’s assets had led to any improper

business practices. 105 The trial court offered no basis to suggest

otherwise.

104 See Supp. C.R. 0022 (MSJ Op. at 19).

105 The trial court noted that “the public accused True Health of continuing the same

medically unnecessary testing that HDL had been shut down for.” Supp. C.R. 0022
(MSJ Op. at 19). But the only “public accusation” cited by the trial court was a blog
post from 2016. C.R. 1970-1974. HHS OIG thereafter raised no issues with True
Health’s continued certifications under the CIA. See supra pp. 14-15.

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Cigna and UnitedHealthcare Reimbursement Issues. The trial

court noted that, in 2016, both Cigna and UnitedHealthcare raised

reimbursement issues with True Health. 106 These issues, however, had

nothing to do with government reimbursements or True Health’s rural

hospital business, nor did the carriers raise any issue of fraud. Rather,

United complained that True Health sought reimbursement for

“‘experimental’ or ‘unproven’ healthcare procedures.” 107 And True Health

was able to quickly resolve the issues and entered into a new contract

with United. 108 As to Cigna, the trial court noted only that “Cigna issued

THD with a notice of claims review and audit.” 109 It cited no evidence as

to the reason for that review or its results—much less any evidence that

Cigna had accused True Health of any illegal practices. It is thus not

surprising that the trial court offered no reasoned basis why the United

and Cigna reimbursement issues would have suggested to Riverside that

106 Supp. C.R. 0008, 0022 (MSJ Op. at 5, 19).

107 C.R. 2393 (Trustee Litigation, Defendant Larry R. Covert’s Amended Traditional

Motion for Partial Summary Judgment on Plaintiff’s Breach-of-Fiduciary-Duty Claim
at 7 (Sept. 6, 2022) (“Covert MSJ”)).
108 C.R. 2393-2394 (Covert MSJ at 7-8).

109 Supp. C.R. 0008 (MSJ Op. at 5).

-46-
it needed to investigate any rural hospital kickback scheme involving

MSOs.

CMS Suspensions and DOJ CID. The trial court also relied upon

True Health’s receipt of the DOJ CID and multiple suspensions from

CMS. But the first CMS suspension notice identified only eight allegedly

improper claims, out of the hundreds of thousands of lab tests True

Health performed each year 110—none of which concerned rural hospitals

or any alleged relationships with MSOs. And the company fully

investigated the relevant claims, told Riverside they were “frivolous,” and

rebutted them to CMS—with CMS later reducing the suspension from

100% to 35%. See supra p. 14. A later internal investigation by consulting

firm Navigant showed a 0% error rate as to the medical necessity of the

reviewed claims. 111 And at the same time, the HHS OIG had blessed True

Health’s compliance with the CIA. None of this suggests that Riverside

was put on notice of illegal kickbacks by True Health or that Riverside

was required as a matter of law to undertake additional diligence in

response.

110 C.R. 0439.

111 C.R. 1897.

-47-
The trial court’s reliance on the DOJ CID fails for similar reasons.

Like CMS’s suspension letter, the CID did not itself offer any evidence of

fraud or other wrongful conduct on the part of True Health. While it made

general reference to a False Claims Act investigation, 112 the CID did not

specifically mention MSOs or True Health’s rural hospital relationships

(other than to ask whether True Health was located in or part of a rural

hospital), 113 much less allege that True Health carried out any illegal

conduct in connection with those relationships.

And in any event, True Health promptly hired outside counsel to

respond to the CID, including by producing voluminous documents in

response to the DOJ’s requests. At no point did True Health or its counsel

identify any documents or information uncovered during this response—

either uncovered internally or provided by DOJ—suggesting that True

Health was in material violation of healthcare laws. To the contrary, in

early 2018, management expressly told the board that True Health did

not undertake the activities focused on by DOJ. 114

112 C.R. 1837-1838.

113 C.R. 1860.

114 C.R. 1898; C.R. 1942-1943.

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* * *

It bears noting that in the trustee litigation, the trustee pointed to

nearly all of the same facts relied on by the trial court—the purchase of

the HDL assets, the public blog posts, the CMS suspension, and the DOJ

CID—and alleged that those facts reflected “red flags” that put True

Health’s officers and directors on notice of the True Health fraud. 115

Appellees here, who were defendants in that litigation, vehemently

denied that any of those events constituted such red flags in that

litigation. 116 For example, Appellee Richard Covert, joined by Appellee

De Leon, argued that the CID could not possibly constitute a “red flag”

regarding potential wrongdoing at True Health, because, given the non-

specific nature of the CID, “no reasonable board member could possibly

discern what activities were being investigated” and therefore “it would

have been impossible for him to determine whether, in fact, there might

115 See C.R. 0929-0930 (Trustee Petition ¶¶ 82-85 (fallout of HDL purchase)); C.R.

0941 (Trustee Petition ¶ 129 (Cigna and UnitedHealth issues)); C.R. 0955 (Trustee
Petition ¶ 189 (CID)); C.R. 0955-0956 (Trustee Petition ¶ 192 (CMS suspension));
C.R. 0961 (Trustee Petition ¶ 219 (pointing to “the many red flags indicating the D&O
Defendants knew or should have known that violations of the law were occurring”));
C.R. 2408-2409 (Covert MSJ at 22-23 (refuting trustee’s use of the blog posts)).
116 C.R. 2407-2413.

-49-
be ongoing improper or illegal activity.” 117 The same reasoning applies to

Riverside.

Geren Declaration. The trial court pointed to the Geren Declaration

as “detailing the rural hospital and MSO schemes and providing specific

facts that Riverside could have verified.” 118 Unlike many of the other

facts relied on by the trial court, the Geren Declaration did include

allegations about a kickback scheme using MSOs. But Riverside

diligently assessed the allegations, believed the declaration’s supporting

documentation to be taken entirely out of context, and determined the

declaration to be, from Riverside’s perspective, totally unreliable. 119

Appellee Osterhoff, True Health’s general counsel, went so far as to call

the information relied on by Geren “total garbage.” 120 And both Osterhoff

and True Health’s outside counsel had previously represented to

117 C.R. 2411-2412 (Covert MSJ at 25-26).

118 Supp. C.R. 0023 (MSJ Op. at 20).

119 C.R. 1736-1737 (Greenberg Affidavit ¶ 25).

120 C.R. 1966.

-50-
Riverside that True Heath had never had any arrangements with

MSOs. 121

Indeed, while the government submitted the Geren Declaration in

connection with its opposition to a temporary restraining order, the court

ultimately granted the TRO. The government chose not to have Geren

testify live at the later injunction hearing. And the bankruptcy court

ultimately refused to order a stay of CMS’s payments to True Health,

finding that the Geren Declaration did not provide support of any ongoing

fraudulent activity at True Health. 122 And the company continued to

otherwise affirmatively deny that it was involved with MSOs or any of

the other activity alleged by Geren. 123 Riverside thus reasonably

concluded that the declaration did not provide a basis to think that True

121 C.R. 1736 (Greenberg Affidavit ¶ 24); C.R. 1942 (“We also confirmed that True

Health has no contracts, agreements or other arrangements with any MSO’s [sic].”);
C.R. 1948 (“THD did not do business with MSOs.”).
122 C.R. 2493 (Hearing Transcript at 39:21-24, In re THG Holdings, LLC, No. 19-

11689 (Bankr. D. Del. Sept. 20, 2019) (“Even if I did accept that declaration I don’t
believe there is anything in there that Agent Garon [sic] said that would convince me
that there is anything that has happened post-petition in terms of overpayment or
fraud.”)).
123 C.R. 1740 (Greenberg Affidavit ¶ 30); C.R. 1943-1944.

-51-
Health had participated in illegal conduct prior to the SPA or that

otherwise Riverside had been defrauded. 124

True Health’s Bankruptcy. The trial court also pointed to True

Health’s bankruptcy, in which Riverside lost nearly the entirety of its

investment, suggesting that True Health’s Chief Restructuring Officer,

Clifford A. Zucker, “tied the bankruptcy to the CMS suspensions and

improper business practices dating back to 2015.” 125 But Zucker’s

declaration focused only on the CMS suspensions and the liquidity issues

they created for True Health. 126 He did not identify any specific “improper

business practices” by True Health, much less say anything about rural

hospitals or MSOs, or even kickbacks more generally. 127

2020 Trustee Notice. While the trial court cited the foregoing facts

as giving Riverside notice of allegations of wrongdoing at True Heath, it

did not hold that any of these events and circumstances on their own or

even in the aggregate triggered a duty to investigate on the part of

124 C.R. 1740 (Greenberg Affidavit ¶ 30).

125 Supp. C.R. 0023 (MSJ Op. 20).

126 C.R. 0865-0866.

127 C.R. 0865-0867.

-52-
Riverside as a matter of law. 128 In the trial court’s view, that time arose

only when the liquidating trustee sent its notice of claim for damages to

True Health’s former officers and directors in April 2020. 129 But nothing

about the trustee’s notice of claim can reasonably be viewed as triggering

a duty to investigate on the part of Riverside.

That is because nothing about the one-and-a-half-page trustee

letter put Riverside on notice of the True Heath fraud, even when viewed

in the context of the events that preceded it. 130 The letter did not mention

True Health’s rural hospitals business, or MSOs, or even kickbacks more

generally. 131 It did not identify any particular improper business

practices whatsoever. 132 The trustee simply alleged, in broad-brush

fashion, that True Health’s directors failed to properly oversee

Grottenthaler’s running of the business and to pursue a strategic course

that would maximize True Health’s value, resulting in its liquidation. 133

128 Supp. C.R. 0020-0021 (MSJ Op. 17-18).

129 Supp. C.R. 0024 (MSJ Op. at 21).

130 C.R. 0902-0903 (Notice of Claim at 1-2).

131 C.R. 0902-0903.

132 C.R. 0903 (making general reference to “legal entanglements with the United

States Department of Justice and the Centers for Medicare and Medicaid Services”).
133 C.R. 0902-0903.

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The trial court had no reasonable basis to find that the letter triggered

some duty to investigate on the part of Riverside, when it made no

mention of the schemes or practices that Riverside purportedly had a

duty to look into. 134

For these reasons, the trial court’s determination that defendants

established as a matter of law that on or before April 6, 2020, Riverside

had a duty to further investigate the rural hospital fraud at True Health

was error. Its granting of summary judgment on that basis should be

reversed.

3. The trial court erred because there are at minimum
disputed issues of material fact as to whether through a
reasonable investigation Riverside could have
uncovered the fraud

As the trial court acknowledged, even assuming Riverside had an

obligation to make some investigation by April 6, 2020, defendants were

still required to establish as a matter of law that a reasonable

investigation by Riverside would have uncovered the fraud within four

134 The trial court suggests that the notice letter gave Riverside particular reason to

investigate any wrongdoing, because Riverside had “an overriding personal interest
to investigate the allegations, if only to prepare a defense to the trustee’s allegations.”
Supp. C.R. 0024 (MSJ Op. at 21). But this ignores that the trustee’s “allegations”
against True Health’s directors—including the representatives of Riverside—
concerned their oversight duties, not True Health’s underlying business practices. It
thus gave Riverside no reason to investigate True Health’s rural hospital business.

-54-
years of that date.135 The trial court found that defendants had done so, 136

based on the premise that the transactions and payments underlying the

MSO fraud would have been reflected in True Health’s business records

and that Riverside had a right to investigate those records as of April 6,

2020. 137 But neither of those contentions was supported by the summary

judgment record, much less as a matter of law.

As to Riverside’s access to True Health’s records, by April 2020 True

Health had been liquidated and Riverside’s equity interest in the

company had been extinguished. As a result, and as set forth in the

affidavit of Hal Greenberg, 138 it had no access to True Health’s

management or its books and records; those were in the control of the

liquidating trust. Riverside thus had no ability to pore through True

Health’s records, including its payments, contracts, and communications,

to try to uncover the fraud. Appellees offered no contrary evidence. 139

135 Supp. C.R. 0025 (MSJ Op. at 22).

136 Supp. C.R. 0025 (MSJ Op. at 22).

137 Supp. C.R. 0025-0026.

138 The trial court was thus plainly wrong when it asserted that “Riverside makes no

argument as to why it could not have found these records by April 6, 2024.” Supp.
C.R. 0026 (MSJ Op. at 23).
139 The trial court suggests that Riverside could have accessed the records pursuant

to 6 Del. C. § 18-305, a Delaware provision that allows LLC members to inspect
certain LLC books and records under certain conditions. Supp. C.R. 0026 (MSJ Op.

-55-
The trial court’s finding that “True Health’s fraudulent schemes

involved extensive transactions and payments, all of which would have

been reflected in the business books and records” is similarly

unsupported. 140 The summary judgment record includes no evidence as

to what contemporaneous True Health documents and communications

evidenced the MSO relationships and payments or other aspects of the

fraud, much less how Riverside would have been able to obtain them.

Indeed, in support of their motion, Appellees cited not a single

contemporaneous record from True Health’s files showing the MSO

fraud. They relied entirely on after-the-fact allegations.

Not surprisingly, the trial court’s opinion cited no such

contemporaneous records either. It instead cited only the petition’s

recitation of Grottenthaler’s guilty plea.141 But Grottenthaler’s plea said

nothing as to how the transactions and payments were documented,

much less that those transactions and payments would have been readily

identifiable in True Health’s records. Indeed, as set forth in the

at 23). But the trial court does not explain how it could have done so, given True
Health’s liquidation, nor does it explain how Riverside would have uncovered the
fraud through the corporate records available through § 18-305.
140 Supp. C.R. 0026 (MSJ Op. at 23).

141 Supp. C.R. 0026 (MSJ Op. at 23 (citing Original Petition ¶ 81)).

-56-
Grottenthaler indictment, it was the third-party hospitals, through

recruiters they hired, that funded the MSOs to make the kickback

payments to providers, not True Health. See supra pp. 23-24. The trial

court thus had no basis to find that the fraud could have been uncovered

by a review solely of True Health’s records—even assuming

(counterfactually) that Riverside had access to them. 142

Similarly unsupported is the trial court’s suggestion that because

the liquidating trust and DOJ were able to bring suit in 2021 and 2022,

respectively, Riverside too could have uncovered the fraud by that

time. 143 The trial court ignores that those third parties had access to far

more information and to far more methods of investigation than True

142 The trial court went so far as to suggest that the Little River agreement itself

outlines the fraudulent activities. Supp. C.R. 0025-0026 (MSJ Op. at 22-23 (“LRH
agreement explicitly outlines the fraudulent activities, including the MSO and rural
hospital schemes, and establishes that the improper business practices predated the
SPA.”)). That contention is baseless, and the trial court offered no evidence for it. The
Little River contract was not even in the summary judgment record. The court
instead just cited the petition, which did not remotely suggest that the Little River
agreement itself outlined the rural hospital fraud. The petition alleged only that
“[p]er the agreement, LRH would pay THD for performing tests on specimens sent to
it by LRH, while THD would allow Little River to bill the tests to any public or private
insurer” and that only as Riverside would learn later, the agreement facilitated fraud.
C.R. 0046-0047 (Original Petition ¶¶ 57-58). The petition did not allege that the
agreement referenced using MSOs to pay kickbacks to providers or allowed Little
River to fraudulently submit claims as “outpatient” services. Indeed, the Little River
contract did not even identify how Little River would bill for its claims. C.R. 1942.
143 Supp. C.R. 0026-0027 (MSJ Op. at 23-24).

-57-
Health. The liquidating trust controlled True Health and its books and

records and it had access to third-party discovery through the bankruptcy

process. DOJ’s investigatory powers and resources are vast, including the

power to issue CIDs to any party of its choosing to compel information

about the rural hospital kickback scheme. Even with its powers and

expertise, the DOJ took six years to investigate True Health after the

2015 qui tam complaint before the DOJ intervened in the suit.

Riverside in contrast had none of these powers and no ability to

conduct on its own remotely similar investigations. And even with these

powers, it took the liquidation trust and DOJ years before they had

sufficient information to bring suit. None of this remotely suggests that

there exist no issues of material fact as to whether Riverside could have

uncovered the fraud with the limited documents and information

available to it. Again, the trial court’s finding to the contrary as a matter

of law was error.

D. The trial court erred in finding that Riverside failed to raise
a material issue of disputed fact as to fraudulent concealment

As the trial court acknowledges, under the doctrine of fraudulent

concealment, even if the statute of limitations had accrued as of April

2020, the statute of limitations would be further tolled for the period

-58-
when defendants affirmatively concealed their wrongdoing. 144 This

rightly prevents defendants from benefitting from their own fraud. See

supra pp. 37-38.

The trial court held the doctrine inapplicable here, because

Riverside supposedly did not “argue defendants concealed anything from

them after April 6, 2020.” 145 This too was error.

The trial court erroneously focused its fraudulent concealment

analysis on the period on or after April 2020. It therefore ignored that

prior to that time, Appellees and their representatives had affirmatively

concealed from Riverside that True Health was involved with MSOs or

otherwise participated in any of the practices alleged by DOJ. 146 Those

misrepresentations continued to conceal the fraud from Riverside well

after April 2020.

For example, in early 2018, in a legal update to the board, Appellee

Osterhoff, True Health’s general counsel, expressly represented that

144 Supp. C.R. 0019-0020 (MSJ Op. at 16-17).

145 Supp. C.R. 0028 (MSJ Op. at 25).

146 See, e.g., C.R. 1732 (Greenberg Affidavit ¶ 18); C.R. 1943-1944; C.R. 1948 (noting

after True Health was able to review the qui tam complaint that “[u]pon review of the
allegations in the complaint, THD is of the view that those claims lack merit, and
that some are improperly or fraudulently alleged”).

-59-
True Health did not undertake the activities focused on by DOJ:

kickbacks to referring physicians. 147 And later in 2018, when DOJ raised

questions about True Health’s relationships with MSOs and rural

hospitals, Riverside received a detailed analysis expressly denying that

True Health used MSOs or was aware of any improper billing by rural

hospitals to CMS. That analysis went so far as to represent that Appellee

Grottenthaler and other True Health employees would be willing to

confirm those facts via sworn certifications. 148 And when Geren

submitted his declaration in connection with True Health’s action

against CMS, Osterhoff and others continued to deny that True Health

undertook any of the practices being alleged. See supra pp. 17-18.

Riverside reasonably relied on these representations, 149 and

Appellees never retracted them. The rural hospital fraud thus remained

hidden from Riverside up to and after April 2020 as a result of Appellees’

147 C.R. 1898.

148 C.R. 1935.

149 The trial court dismisses these representations on the grounds that Osterhoff and

True Health’s outside counsel represented the company, not Riverside. Supp. C.R.
0024-0025 (MSJ Op. at 21-22). This misses the point. Greenberg and other Riverside
representatives were directors of True Health and had a right to rely on the
representations of the company’s counsel. C.R. 1724-1726 (Greenberg Affidavit ¶¶ 7-
8).

-60-
specific acts of concealment. As noted in the affidavit of Hal Greenberg,

Riverside did not obtain knowledge of the fraud until Grottenthaler

entered his guilty plea—in 2024. 150 There are thus plainly disputed

issues of material fact as to whether tolling under fraudulent

concealment applies. Summary judgment was improper for this further

reason.

E. In the alternative, the trial court should have granted a
continuance pending completion of fact discovery

For the reasons stated above, the motion should have been denied.

At minimum, however, the motion should have been continued until the

end of fact discovery. It is well-established that “[r]aising a limitations

defense through a traditional motion for summary judgment requires

more effort and allows more risk of procedural problems.” Scott, 2022 WL

317060, at *2. Such is the case here: as detailed above, much of the

fraudulent conduct was perpetrated by defendants in this matter who

neither provided document discovery nor were deposed. And fact

discovery on these issues is deeply intertwined with Riverside’s

underlying claims, in that both involve highly fact-intensive inquiries

150 C.R. 1742 (Greenberg Affidavit ¶ 34).

-61-
into True Health’s violations of healthcare laws and Appellees’

concealment of that wrongful conduct. The trial court should have at

minimum allowed the matter to proceed through fact discovery, at which

point the parties could have presented the issues raised on the motion on

a complete record.

-62-
II. THE TRIAL COURT ERRED IN GRANTING THE SPECIAL
APPEARANCES

A. Nearly all of the Specially Appearing Appellees waived their
right to contest personal jurisdiction in this matter by
appearing generally in the trustee litigation

All but three of the Specially Appearing Appellees were sued in the

trustee litigation and filed general appearances in that case. Because the

trustee litigation and this case both arise from the same transaction—

namely, True Health’s illegal business practices and the false

representations True Health affiliates made about those practices in the

recapitalization—these Specially Appearing Appellees waived their right

to contest personal jurisdiction below through their prior general

appearances, and the trial court erred in holding otherwise.

“[T]he personal jurisdiction requirement is a waivable right [and]

there are a variety of legal arrangements by which a litigant may give

express or implied consent to the personal jurisdiction of the court.”

Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 n.14 (1985) (internal

quotation marks omitted). Such a waiver can occur when a defendant

“voluntarily appear[s] and ch[ooses] to litigate claims arising from . . . [a]

transaction” in Texas. Primexx Energy Opportunity Fund, LP v. Primexx

Energy Corp., 2025 Tex. Bus. 5, 2025 WL 446345, at *9 (Tex. Bus. Ct.

-63-
Feb. 10, 2025); see also Mass. Bay Ins. Co. v. Adkins, 615 S.W.3d 580,

600 (Tex. App.—Houston [1st Dist.] 2020, no pet.) (holding where a

defendant filed a general appearance in a case that had been transferred

to a different court, “[w]hat is relevant is that, by filing its answer,

unconditioned by a special appearance, [the defendant] acknowledged

that the case was properly pending before a Texas court”).

Here, there can be little doubt that this action and the trustee

litigation arise out of the same transactions. 151 Like Riverside in this

action, the liquidating trustee alleged that True Health’s creditors had

been fraudulently induced to invest in the recapitalization through false

representations “that True Health’s business and the sales of tests by its

employees were conducted in accordance with the [Anti-Kickback

Statute] and other healthcare laws (when in fact they were not).” 152 Like

Riverside, the trustee grounded this fraud claim in True Health’s

improper kickback schemes involving rural hospitals and MSOs. 153 By

151 Notably, in their summary judgment motion, the De Leon Appellees acknowledged

that the trustee litigation was “based on the same underlying theory [as this case—
]the failure to disclose health care violations in conjunction with the loans associated
with the execution of the [SPA].” C.R. 0216-0217.
152C.R. 0933 (Trustee Petition ¶ 92); see also C.R. 0976-0977 (Trustee Petition
¶¶ 322-337 (relevant fraud by omission claim)).
153 C.R. 0931-0932 (Trustee Petition ¶ 91).

-64-
filing general appearances in the trustee litigation, the relevant Specially

Appearing Appellees thus conceded that claims relating to the

recapitalization and True Health’s historical MSO fraud are properly

litigated in Texas courts.

The trial court nonetheless found that the Specially Appearing

Appellees had not waived jurisdiction, on the “premise ‘that a foreign

defendant [does not] waive[] its right [to] object to personal jurisdiction,

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

in Texas.’” 154 But that general principle of law has no application here.

The Specially Appearing Appellees did not previously choose to appear in

some “other lawsuit” in Texas. Rather, they agreed to the jurisdiction of

the Texas courts over a case involving the very same subject company,

recapitalization transaction, business practices, and allegations of fraud

as this one. The case cited by the trial court is thus entirely inapposite.

See Megadrill, 556 S.W.3d at 498 (rejecting an argument for personal

jurisdiction by consent based on prior lawsuits where the prior claims

asserted were “entirely unrelated to [that] lawsuit”).

154 C.R. 2998-2999 (Special Appearances Op. at 35-36 (quoting Megadrill Servs. Ltd.

v. Brighouse, 556 S.W.3d 490, 498 (Tex. App.—Houston [14th Dist.] 2018, no pet.))).

-65-
The trial court nonetheless rejected the waiver argument because

the trustee litigation involved additional subject matters and claims. It

is true that the liquidating trustee brought claims for breach of fiduciary

duty and fraudulent transfer (among others), not just for fraud. And it is

true that the trustee’s allegations concerned improper business practices

beyond those alleged in the petition. 155 But that is irrelevant for purposes

of the waiver analysis. The critical fact as to waiver is that, as the trial

court concedes, “many of the claims [in the trustee litigation] are based

on the same or similar allegations” as here—namely, fraud claims arising

out of True Health’s rural hospital business. 156 The Specially Appearing

Appellees agreed that the Texas courts were the proper jurisdiction to

hear those claims in the trustee litigation. Cf. Mass. Bay Ins. Co., 615

S.W.3d at 599-600 (“The purpose of a special appearance, however, is to

contest the ability of all courts in the forum state—not a particular

district court—to exercise personal jurisdiction over a defendant.”

(emphasis added)). They cannot now be heard to contest the jurisdiction

of the Texas courts over nearly identical claims in this case. Those

155 C.R. 2999 (Special Appearances Op. at 36).

156 C.R. 2999 (Special Appearances Op. at 36).

-66-
arguments have been waived. The trial court’s contrary finding was

error. 157

B. The Specially Appearing Appellees had substantial contacts
with Texas

Even putting aside waiver, each of the Specially Appearing

Appellees also had substantial contacts with Texas such that exercising

personal jurisdiction over them here comports with due process.

Because Texas’s long-arm statute “reaches as far as the federal

constitutional requirements for due process will allow,” State v.

Volkswagen Aktiengesellschaft, 669 S.W.3d 399, 412 (Tex. 2023), to

assess whether they have jurisdiction over a nonresident defendant,

courts need “only analyze whether [the defendant]’s acts would bring [the

defendant] within Texas’ jurisdiction consistent with constitutional due

process,” Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d

333, 337 (Tex. 2009). “A state’s exercise of jurisdiction comports with

157 The trial court also credited the Specially Appearing Appellees’ “argument that

the Trustee Litigation arose at least in part out of the THG LLC Agreement” and thus
that the agreement’s “mandatory venue provision arguably foreclosed those
defendants’ ability to object to jurisdiction in that case . . . [which] weighs against
finding waiver here, where the LLC Agreement does not apply.” C.R. 2999-3000
(Special Appearances Op. at 36-37). But the Specially Appearing Appellees offered no
evidence showing that they appeared in the trustee litigation only because of the LLC
agreement, and the trial court cited no record evidence for that proposition.

-67-
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.’” Primexx Energy

Opportunity Fund, LP, 2025 Tex. Bus. 5, 2025 WL 446345, at *5 (quoting

M&F Worldwide Corp. v. Pepsi-Cola Metro. Bottling Co., 512 S.W.3d 878,

885 (Tex. 2017)).

A nonresident defendant has minimum contacts with Texas “when

(1) the defendant engages in some act by which it purposefully avails

itself of the privilege of conducting activities within the . . . state and (2)

the plaintiff’s claims arise out of or relate to those forum contacts.”

Volkswagen Aktiengesellschaft, 669 S.W.3d at 412-13 (cleaned up). The

Specially Appearing Appellees’ contacts with Texas plainly meet this

standard. 158

The Specially Appearing Appellees knowingly invested in an

enterprise with Texas headquarters and substantial Texas operations,

158 The trial court concluded that it did not need to consider jurisdictional allegations

made in Riverside’s response to the special appearances under its reading of Kelly v.
General Interior Construction, Inc. C.R. 2981-2984. This Court adopted the same
reading of Kelly in State v. Yelp, Inc., while noting that Texas appellate courts have
split on this issue. 2025 WL 2936466, at *3-6 & n.2 (Tex. App.—15th Dist. Oct. 16,
2025, no pet. h.). Riverside is prepared to amend its petition on remand to allege the
jurisdictional contacts discussed herein.

-68-
including the very operations that formed the core of the fraudulent

scheme Riverside alleged in its petition, i.e., True Health’s relationships

with Texas rural hospitals. All but three of the Specially Appearing

Appellees admitted in jurisdictional discovery that they knew about True

Health’s business in the state. 159

Four of those Appellees had even stronger connections to the

company’s Texas operations. Appellee Carol Nellis was a True Health

Vice President who traveled weekly to Texas for company business, listed

the company’s Frisco, Texas address in her email signature line around

the time the SPA was executed, and spoke regularly to individuals

located in Texas, including physicians. 160 Appellee Wippman was a True

Health director who traveled to Texas for board meetings and provided

the company with legal advice. 161 Appellee Richards was True Health’s

Chief Financial Officer who worked out of the company’s Texas

headquarters for most of 2015, including during the period for which

Grottenthaler admitted that the kickback conspiracy was underway as

159 C.R. 2579-2580 (Appellants’ Supplement to Response to Special Appearances at

16-17 (“Supplemental Response”)).
160 C.R. 1395; C.R. 2616-2617.

161 C.R. 2623.

-69-
part of his guilty plea. 162 And, as noted, Appellee Osterhoff was True

Health’s general counsel who oversaw the company’s legal compliance—

including as to its Texas operations—communicated with Riverside

about those in-state operations, and traveled to Texas for this work. 163

And the Specially Appearing Appellees also profited handsomely

from the Company’s Texas operations, earning tens of millions of dollars

in total through the recapitalization after having defrauded Riverside

with their representations about True Health’s in-state operations in the

SPA. 164 The Specially Appearing Appellees’ contacts were thus far from

“random, isolated, or fortuitous,” but were rather the result of a conscious

decision each of them made to invest in a company with substantial Texas

operations and to then make representations about those operations to

Riverside to cash out on that investment. Volkswagen

Aktiengesellschaft, 669 S.W.3d at 420 (internal quotation marks

omitted).

162 C.R. 2066-2067; C.R. 2632.

163 C.R. 2600; C.R. 2603.

164 C.R. 0033 (Original Petition ¶ 2).

-70-
Appellees’ contacts with Texas are only reinforced by their conduct

in the recapitalization. “At its core, the purposeful availment analysis

seeks to determine whether a nonresident’s conduct and connection to a

forum are such that it could reasonably anticipate being haled into court

there.” Moncrief Oil Int’l Inc. v. OAO Gazprom, 414 S.W.3d 142, 152 (Tex.

2013).

Here, the Specially Appearing Appellees designated a Texas-based

entity managed by Appellee Grottenthaler, Appellee CLG Investments,

LLC, as their agent and attorney-in-fact under the SPA. 165 And in

connection with the recapitalization these Appellees signed a True

Health LLC agreement the same day as the SPA in which each signatory

broadly waived the right to contest personal jurisdiction in Dallas courts

for actions arising out of that agreement. 166 The SPA references that 2017

LLC agreement on its very first page and includes the contract as an

exhibit to the agreement. 167 The Specially Appearing Appellees’

agreement to the 2017 LLC agreement’s jurisdictional provision in

165 C.R. 1782 (SPA § 6.1).

166 C.R. 1492 (2017 True Health Group, LLC Limited Liability Company
Agreement § 10.5(a)).
167 C.R. 1750 (SPA at 1).

-71-
connection with the recapitalization illustrates that it would have been

patently reasonable for them to anticipate being haled into a Texas court

for claims regarding the recapitalization.

Even were each of these contacts insufficient on their own to

establish jurisdiction, in the aggregate they show that the Specially

Appearing Appellees had purposeful and substantial contacts with Texas

as True Health investors that bore directly on the fraud they perpetrated

on Riverside. See Lobell v. Cap. Transp., LLC, 2015 WL 9436255, at *6

(Tex. App.—Austin Dec. 15, 2015, no pet.) (mem. op.) (affirming the

denial of a special appearance where the “pleadings and evidence show

that [the defendant]’s contacts with Texas . . . were taken in an effort by

[the defendant] to avail himself of the privilege of conducting business in

Texas by establishing an ongoing relationship with and obligations to

Texas residents in order to profit from a business operated out of Texas”).

And, as discussed above, nearly all of them then decided to file general

appearances in the trustee litigation, thereby admitting that Texas is a

proper forum for litigation over the recapitalization.

-72-
C. The trial court erred by failing to consider Appellees’ Texas
contacts in their totality and in its analysis of the contacts’
relatedness to this lawsuit

The trial court nonetheless found that the Specially Appearing

Appellees lacked minimum contacts with Texas. That determination does

not withstand scrutiny. First, the trial court erred by analyzing the

proffered contacts in isolation, assessing individually whether the

Appellees’ contacts with Texas were sufficient to establish jurisdiction. 168

But “[i]n deciding a special appearance, [a court] must avoid a divide and

conquer approach to minimum contacts and should instead consider

contacts in their totality.” Procarsa S.A. de C.V. v. Blue Racer Midstream

LLC, 2024 WL 5066084, at *5 (Tex. App.—Dallas Dec. 11, 2024, no pet.)

(mem. op.) (internal quotation marks omitted) (collecting cases). The trial

court failed to do so here. That alone warrants a remand.

Second, the trial court incorrectly framed Riverside’s argument as

to the 2017 LLC agreement as being solely about application of the

agreement’s forum-selection clause. 169 Relying on that framing, the trial

168 See C.R. 2989 (Special Appearances Op. at 26); C.R. 2991 (Special Appearances

Op. at 28); C.R. 2994 (Special Appearances Op. at 31).
169 C.R. 2986 (Special Appearances Op. at 23); see C.R. 1065 (Appellants’ Response to

Special Appearances at 21 & n.43 (Apr. 28, 2025) (listing the 2017 LLC agreement as
a contact with Texas)).

-73-
court found that “[t]his case does not arise out of the 2017 THG LLC

Agreement” and thus that contract’s forum provision clause did not

apply. 170 But that analysis misses Riverside’s broader point about the

relevance of the LLC agreement.

As part of the LLC agreement, the Specially Appearing Appellees

consented to the jurisdiction of Dallas courts for claims arising out of that

agreement 171—confirming the connection between the Texas forum and

their investment in True Health. That LLC agreement was an exhibit to,

and was signed the same day as, the SPA. Not surprisingly, nearly all of

the Specially Appearing Appellees admitted that they signed the LLC

agreement and its jurisdictional provision in connection with the

recapitalization. 172 The LLC agreement and SPA are thus inextricably

linked. Accordingly, irrespective of whether the agreement’s forum

selection and jurisdiction provisions apply as a matter of contract to the

claims asserted here, the Specially Appearing Appellees’ consenting to

jurisdiction as part of the LLC agreement in connection with the SPA and

170 C.R. 2995-29976 (Special Appearances Op. at 32-33).

171 C.R. 1492.

172 C.R. 2579-2580 (Supplemental Response at 16-17 (July 10, 2025) (chart reflecting

that all but one of the Specially Appearing Appellees admitted to having signed the
2017 LLC agreement in connection with the recapitalization)).

-74-
broader recapitalization is a further indication that they could

reasonably anticipate answering a case in a Texas court concerning those

transactions. There is thus nothing unfair about requiring the Specially

Appearing Appellees to defend their conduct in the recapitalization in a

Texas court.

Third, the trial court erred in concluding that “there is no

substantial connection between . . . defendants’ investment in

THG . . . and the operative facts of this litigation” because “Riverside’s

claims arise out of their investment in THG and alleged fraud in the

SPA.” 173 The “relatedness inquiry requires only that the suit arise out of

or relate to the defendant’s contact with the forum.” Yelp, Inc., 2025 WL

2936466, at *10 (citing Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 592

U.S. 351, 362 (2021)). Here, Riverside’s suit plainly relates to Appellees

contacts with the forum, including their investment in True Health.

Appellees signed the SPA expressly because they were True Health’s

significant equityholders—that is, by virtue of their investments in the

company. The Appellees’ investments in True Health and Riverside’s

claims arising out of the SPA go hand in hand. And Appellees chose to

173 C.R. 2988 (Special Appearances Op. at 25).

-75-
make extensive representations in that contract about True Health’s

business operations in Texas, including the very representations about

healthcare law compliance through which Riverside was defrauded, to

obtain distributions on their equity. That is plainly sufficient to create a

nexus between Appellees’ Texas contacts and this action.

For the foregoing reasons, the trial court’s grant of the Specially

Appearing Appellees’ special appearances should be reversed.

PRAYER

For the reasons set forth herein, Appellants respectfully request

that the Court reverse the trial court’s granting of summary judgment in

favor of Appellees and granting of the special appearances, and award

Appellants their costs and expenses of this appeal.

-76-
Dated: December 10, 2025 Respectfully submitted,

_______________________________
ROGGE DUNN
State Bar No. 06249500
Email: Dunn@RoggeDunnGroup.com

HARVEY G. JOSEPH
State Bar No. 11027850
Email: Joseph@RoggeDunnGroup.com

LANE M. WEBSTER
State Bar No. 24089042
Email: Webster@RoggeDunnGroup.com

ROGGE DUNN GROUP, PC
500 N. Akard Street, Suite 1900
Dallas, Texas 75201
Telephone: (214) 888-5000
Facsimile: (214) 220-3833

WILLIAM SAVITT
Email: WDSavitt@wlrk.com

ADAM M. GOGOLAK
Email: AMGogolak@wlrk.com

MICHAEL S. AVI-YONAH
Email: MSAviYonah@wlrk.com

WACHTELL, LIPTON, ROSEN & KATZ
51 West 52nd Street
New York, New York 10019
Telephone: (212) 403-1000
Facsimile: (212) 403-2000

ATTORNEYS FOR APPELLANTS

-77-
CERTIFICATE OF SERVICE

This certifies that a true and correct copy of the above and foregoing

instrument was served on the Parties’ counsel of record pursuant to the

Rules on this 10th day of December, 2025.

ROGGE DUNN
HARVEY G. JOSEPH
LANE M. WEBSTER

CERTIFICATE OF COMPLIANCE

Based on a word count, Appellants’ brief contains 14,172 words,

excluding the portions of the document exempt from the word count

under Rule 9.4(i)(1).

ROGGE DUNN
HARVEY G. JOSEPH
LANE M. WEBSTER

-78-
NO. 15-25-00137-CV

IN THE COURT OF APPEALS

FOR THE FIFTEENTH APPELLATE DISTRICT OF TEXAS

RIVERSIDE STRATEGIC CAPITAL FUND I, L.P., RSCF
BLOCKER TRUE HEALTH, LLC, RSCF I-A BLOCKER TRUE
HEALTH, LLC,

Appellants,

v.

CLG INVESTMENTS, LLC, ET AL.,

Appellees.

On Appeal from the Business Court of Texas, First Division (1B)
Trial Court Case No. 25-BC01B-0006
Hon. Bill Whitehill, Presiding

APPENDIX

EX. DESCRIPTION

Order Nunc Pro Tunc on Summary Judgment (July 10,
1.
2025) (C.R. 2742-2744)

Order on Special Appearances (July 17, 2025) (C.R. 2935-
2.
2937)

3. Final Judgment (Aug. 18, 2025) (C.R. 2959-2962)
Memorandum Opinion on Special Appearances (Aug. 19,
4.
2025) (C.R. 2964-3000)

Opinion on Summary Judgment (Sept. 17, 2025) (Supp. C.R.
5.
0003-0029)

-2-
EXHIBIT 1
FILED IN
BUSINESS COURT OF TEXAS
BEVERLY CRUMLEY, CLERK
ENTERED
7/10/2025

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; §

2742
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 §

═══════════════════════════════════════
ORDER NUNC PRO TUNC
═══════════════════════════════════════

Before the court is the April 4, 2025, Motion for Summary Judgment by

Fernando De Leon, LCG Ventures, LLC, LCG Ventures II, LLC, and Leon

Capital Partners, LLC and the May 27, 2025, joinder in that motion by CLG

Investments, LLC, Christopher Grottenthaler, Covert Investment Operations,

LLC, True Health Diagnostic Management, LLC, Richard Covert, Timothy

Tatarowicz, Alba Durata, LLC, Melinda Milburn, Jack Novak, and Dana

Hovind. Having considered the pleadings, plaintiffs’ response and their

motion for continuance, the summary judgment evidence, and the parties’

briefing and oral argument heard on July 3, 2025, the court concludes as

follows:

2743
Defendants conclusively established that all of plaintiffs’ causes of

action accrued no later than December 6, 2019—when the related bankruptcy

proceedings were substantially consummated (Pet. ¶ 77)—more than for years

before the filing of this action. Therefore, all of plaintiffs’ claims against the

above-listed defendants are barred under the applicable statutes of limitations.

Further, plaintiffs did not raise a genuine issue of material fact

concerning fraudulent concealment after that date. Therefore, the statutes of

limitations were not tolled between that date and the filing of this action.

Additionally, plaintiffs did not carry their burden of establishing

grounds supporting their motion for continuance.

Accordingly, because December 6, 2019, is more than four years before

this lawsuit was filed on January 23, 2025, causes of action against the above-

listed defendants are barred by the applicable statutes of limitations and are

dismissed with prejudice.

So ORDERED.

BILL WHITEHILL
Judge of the Texas Business Court,
First Division

SIGNED: July 10, 2025

2744
EXHIBIT 2
FILED IN
BUSINESS COURT OF TEXAS
BEVERLY CRUMLEY, CLERK
ENTERED
7/17/2025

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; §

2935
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 §

═══════════════════════════════════════
ORDER
═══════════════════════════════════════

Before the court is the March 31, 2025, Special Appearance of

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

(Out-of-State Defendants). The court considered the pleadings, the briefing,

the evidence on file, and oral argument heard on July 15, 2025.

Based on the above, the court grants the Out-of-State Defendants’

Special Appearance and dismisses the claims against them.

So ORDERED.
2

2936
Opinion to follow.

BILL WHITEHILL
Judge of the Texas Business Court,
First Division

SIGNED: July 17, 2025

3

2937
EXHIBIT 3
FILED IN
BUSINESS COURT OF TEXAS
BEVERLY CRUMLEY, CLERK
ENTERED
8/18/2025

2959
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, §
§ Cause No. 25-BC01B-0006
v. §
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

═══════════════════════════════════════
FINAL JUDGMENT
═══════════════════════════════════════

The court issued a July 10, 2025, Order Nunc Pro Tunc granting

defendants Fernando De Leon, LCG Ventures, LLC, LCG Ventures II, LLC,

and Leon Capital Partners, LLC’s Motion for Summary Judgment. 1

On July 17, 2025, the court granted 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,

1
Defendants CLG Investments, LLC, Christopher Grottenthaler, Covert Investment Operations,
LLC, True Health Diagnostic Management, LLC, Richard Covert, Timothy Tatarowicz, Alba Durata, LLC,
Melinda Milburn, Jack Novak, and Dana Hovind joined in that motion before it was decided.

2
2960
Ryan Nellis, and Ancelmo E. Lopes’s (Out-of-State Defendants) Special

Appearance.

Those two orders disposed of all parties and all causes of action.

It is, therefore, ORDERED, Adjudged, and Decreed that this court lacks

personal jurisdiction over the Out-of-State Defendants for the reasons to be

stated in the court’s forthcoming opinion. Thus, the court dismisses

plaintiffs’ causes of action against the Out-of-State Defendants without

prejudice.

It is further ORDERED, Adjudged, and Decreed that the court dismisses

with prejudice all causes of action against the remaining defendants.

This Final Judgment finally disposes of all claims, causes of action, and

parties before the court.

To the extent not addressed herein or in a prior order of the court, all

relief requested by plaintiffs is denied.

Costs are taxed against the party that incurred them.

This judgment is final and appealable.

3
2961
So ORDERED.

(ate {

BILL WHITEHILL
Judge of the Texas Business Court,
First Division

SIGNED: August 18, 2025

4
2962
EXHIBIT 4
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 §

2964
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
2965
[¶ 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
2966
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
2967
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
2968
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
2969
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
2970
(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
2971
[¶ 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
2972
[¶ 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
2973
[¶ 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
2974
[¶ 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
2975
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
2976
[¶ 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
2977
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
2978
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
2979
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
2980
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
2981
[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
2982
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
2983
[¶ 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
2984
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
2985
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
2986
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
2987
[¶ 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
2988
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
2989
[¶ 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
2990
[¶ 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
2991
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
2992
[¶ 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
2993
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
2994
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
2995
[¶ 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
2996
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
2997
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
2998
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
2999
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
3000
EXHIBIT 5
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.

0003
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
0004
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
0005
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
0006
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
0007
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
0008
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
0009
[¶ 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
0010
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
0011
[¶ 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
0012
[¶ 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
0013
[¶ 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
0014
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
0015
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
0016
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
0017
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
0018
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
0019
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
0020
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
0021
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
0022
• 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
0023
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
0024
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
0025
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
0026
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
0027
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
0028
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
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