Reliant Hospital Partners, LLC v. Cornerstone Healthcare Group Holdings, Inc.

374 S.W.3d 488, 2012 WL 2086986, 2012 Tex. App. LEXIS 4539
CourtCourt of Appeals of Texas
DecidedJune 8, 2012
DocketNo. 05-11-00952-CV
StatusPublished
Cited by21 cases

This text of 374 S.W.3d 488 (Reliant Hospital Partners, LLC v. Cornerstone Healthcare Group Holdings, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Reliant Hospital Partners, LLC v. Cornerstone Healthcare Group Holdings, Inc., 374 S.W.3d 488, 2012 WL 2086986, 2012 Tex. App. LEXIS 4539 (Tex. Ct. App. 2012).

Opinion

OPINION

Opinion By

Justice O’NEILL.

Reliant Hospital Partners, LLC, Nautic Partners, LLC, Michael Brohm, Patrick Ryan, Kenneth McGee, Jerry Huggler, Chad Deardorff, Addison Resolution, LLC f/k/a Reliant Hospital Partners, LLC, Scott Hilinski, James Beakey, Chester Crouch, and Emmett Moore (“appellants”) appeal the temporary injunction issued against them. We reverse and render as to appellant Moore and dissolve the temporary injunction against him. We modify the order of the trial court granting a temporary injunction against appellants Reliant Hospital Partners, LLC, Nautic Partners, LLC, Hilinski, Brohm, McGee, and Ryan, and affirm the order as modified.

Background

This case involves numerous parties and entities involved in different segments of the health care industry. Appellee Cornerstone owns and operates long-term acute care hospitals (“LTACHs”). These facilities treat patients who have been released from acute care facilities, but are still seriously ill and require care by doctors and nurses for a longer time than can be accommodated by an acute care hospital. Appellants Brohm, McGee, Ryan, Huggler, and Deardorff held executive po[493]*493sitions at Cornerstone.1

In 2010, Brohm and McGee were dissatisfied with Cornerstone and started exploring other options. One opportunity presented itself through appellant Crouch, who served as appellant Reliant Hospital Partners, LLC’s (“Reliant”) chief operating officer.2 Brohm was familiar with Reliant because Crouch and McGee were long-time friends. Unlike Cornerstone, Reliant owned and operated inpatient rehabilitation facilities (“IRFs”), which make up a different market within the health care industry. IRFs do not typically treat seriously ill patients that require lengthy stays.

Brohm and McGee contacted Reliant’s primary owner, appellant Moore, through an unsolicited email to see if he would be interested in selling Reliant. At the time, Moore was seeking new funding for Reliant and spoke with three hundred potential investors. Moore was familiar with Cornerstone and knew it operated LTACHs rather than IRFs; however, Brohm made it clear that he was not seeking to purchase Reliant on behalf of Cornerstone but rather was seeking to purchase it on his own behalf.

Brohm contacted appellant Nautic Partners, LLC (“Nautic”) in November 2010 and proposed Nautic acquire Reliant and hire Brohm, McGee, and Ryan to run the company. Brohm’s specific contacts with Nautic were appellants Hilinski and Bea-key. After Nautic conducted its own due diligence regarding the potential acquisition of Reliant, Nautic moved forward with the acquisition.

Brohm informed Moore he had a potential buyer for Reliant. Brohm introduced Moore to Nautic, and Moore later negotiated the sale of Reliant to Nautic. After the sale, Reliant hired Brohm, McGee, Ryan, Huggler, and Deardorff, who had all resigned from Cornerstone.

Cornerstone later filed suit and an application for temporary injunction against all appellants. Cornerstone claimed appellants took its confidential and proprietary data when leaving the company and used the information to benefit themselves and Reliant. Cornerstone alleged the following causes of actions: (1) misappropriation of trade secrets, (2) breach of fiduciary duties, (3) harmful acts by computer in violation of Texas Civil Practice and Remedies Code section 143.001 and Texas Penal Code section 33.02, (4) Texas Theft Liability Act violations, (5) tortious interference, (6) conspiracy, (7) aiding and abetting, (8) conversion, and (9) business disparagement.

The trial court held a temporary injunction hearing during portions of six days from June 7, 2011 to July 1, 2011. The trial court signed an order against appellants. As to Nautic, Hilinski, Reliant, Brohm, McGee, and Ryan, the injunction prohibited the following conduct:

(1) retaining any electronic documents, originals, or hard copies of materials, property, documents, data and any other information obtained by any of Defendants Brohm, Ryan, McGee, Huggler, or Deardorff during their employment with Cornerstone, and such documents must be immediately returned to Plaintiff Cornerstone;
[494]*494(2) using or disclosing Plaintiff Cornerstone’s confidential and/or proprietary information, including, but not limited to, marketing materials and strategic planning information developed by any of Defendants Brohm, Ryan, McGee, Huggler, or Deardorff during their respective periods of employment with Cornerstone; and
(3) engaging in, or attempting to engage in, the development, acquisition, merger, partnership, or joint or shared service with any post-acute care facility, information about which was presented or disclosed to Defendants Brohm, Ryan, McGee, Huggler, or Deardorff while employed at Cornerstone (see Exhibit A).

With regards to Beakey and Crouch, the temporary injunction prohibited the following:

(1) retaining any electronic documents, originals, or hard copies of materials, property, documents, data and any other information obtained by any of Defendants Brohm, Ryan, McGee, Huggler, or Deardorff during their employment with Cornerstone, and such documents must be immediately returned to Plaintiff Cornerstone; and
(2) using or disclosing Plaintiff Cornerstone’s confidential and/or proprietary information, including, but not limited to, marketing materials and strategic planning information developed by any of Defendants Brohm, Ryan, McGee, Huggler, or Deardorff during their respective periods of employment with Cornerstone.

Huggler was prohibited from the following:

(1) retaining any electronic documents, originals, or hard copies of materials, property, documents, data and any other information obtained by any of Defendants Brohm, Ryan, McGee, Huggler, or Deardorff during their employment with Cornerstone, and such documents must be immediately returned to Plaintiff Cornerstone.

Deardorff was prohibited from the following:

(1) retaining any electronic documents, originals, or hard copies of materials, property, documents, data and any other information obtained by any of Defendants Brohm, Ryan, McGee, Huggler, or Deardorff during their employment with Cornerstone, and such documents must be immediately returned to Plaintiff Cornerstone; and
(2) using or disclosing Plaintiff Cornerstone’s proprietary software.

And finally, the temporary injunction prohibited Moore from the following conduct:

(1) retaining any electronic documents, originals, or hard copies of materials, property, documents, data and any other information obtained by any of Defendants Brohm, Ryan, McGee, Huggler, or Deardorff during their employment with Cornerstone, and such documents must be immediately returned to Plaintiff Cornerstone, if any; and
(2) using or disclosing Plaintiff Cornerstone’s confidential information, limited to marketing materials and strategic planning information developed by Defendants Brohm, Ryan, or McGee during their respective periods of employment with Cornerstone.

Appellants filed accelerated notices of appeal.

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Cite This Page — Counsel Stack

Bluebook (online)
374 S.W.3d 488, 2012 WL 2086986, 2012 Tex. App. LEXIS 4539, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reliant-hospital-partners-llc-v-cornerstone-healthcare-group-holdings-texapp-2012.