A lawsuit on behalf of the Tyler Rose and his partner NFL alum Gary Baxter alleges they haven’t been paid “a red cent” for their work creating the Project Rose Research Institute for Sports Science.
Their lawsuit came in response to a suit filed by Texas Spine and Joint Hospital over a rent and consultation agreement dispute. TSJH’s lawsuit claims Baxter and Earl Campbell did “little to actually build a sports science and medicine facility.” The document alleges the institute hosted a few programs, put up a website, got some equipment and made occasional press statements about its “purported charitable endeavors.”
An attorney for Campbell and Baxter said their organizations were fraudulently misled and used to promote and bolster the reputation of the hospital, but enjoyed no share of the profits when it was sold.
The counter lawsuit stated that, “’When TSJH sucked everything it could from the relationship with the counter plaintiffs, and used Baxter and Campbell, to sell 50.25% of the hospital for in excess of $81,000,000, Tony Wahl told Mr. Baxter that ‘the hospital is giving notice to terminate the Project Rose license agreement as well as the consulting and lease agreement. Sometimes, despite everyone’s best efforts, agreements like this do not work out,’ and attempted to end the relationship without paying counter plaintiffs and Mr. Campbell and Mr. Baxter a red cent for all of their trade secrets, expertise, service and effort.”
The Tyler Morning Telegraph has obtained court documents in which Texas Spine and Joint Hospital claims ProjectRose did not pay $200,000 in rent, and attempted to terminate the lease in August 2019. The hospital alleges that after paying the back rent, Project Rose attempted to invoice the hospital more than $4 million for 349 hours of consulting services per month dating from August 2017 through August 2019, which the hospital said are untrue, excessive and presented in contravention of their contractual obligations. The lawsuit states that these consulting invoices constituted a contract-violating demand.
When the hospital refused to pay Project Rose’s demand, TSJH claims Baxter threatened to have a news conference announcing a lawsuit against TSJH but he never followed through.
The Project Rose Research Institute for Sports Science is a sports science institute located on the second floor of the Tyler hospital, unveiled in 2017 as a partnership between Campbell, Baxter and Texas Spine and Joint Hospital before the hospital sold a majority stake to Baylor, Scott and White. Three contracts were entered — the first was a lease agreement between TSJH and Project Rose, the second a license agreement between PR Goal Line, owned by Baxter and Campbell, and TSJH and the third a consultant agreement between Project Rose and TSJH, at an hourly rate of $500.
The goal of the facility was to provide sports medicine research to create safer playing environments for athletes from grade school to professional sports.
That lawsuit was filed by the hospital on Feb. 24. A counter suit was filed on behalf of Project Rose and Touchdown Interception on April 17, adding Baylor, Scott and White as third party defendants. Baylor Scott and White Health is handling its filings separately from TSJH.
The counter suit states Project Rose MSO was persuaded to make a verbal agreement to postpone invoices and TSJH would postpone the rental obligations, at the request of TSJH CEO Tony Wahl. The document states that upon notification of the alleged unpaid rent, Project Rose paid the full $197,000 within 30 days and remains current on its rental obligations, even though TSJH removed their signage from the facility.
Parties named as defendants by TSJH include Project Rose, 62 Roses MSO and Touchdown Interception, LLC, which are run by Baxter and Campbell.
In the counter-claim, Project Rose’s attorney Wade McClure states that Campbell and Baxter passed on other offers to partner with other hospitals, and leveraged their sports experience, trade secrets, intellectual property and time and effort to create a state of the art athlete focused sports medicine facility, but TSJH attempted to continually change the terms of their agreement, without paying Campbell and Baxter “a red cent.” McClure and co-counsel Jennifer Ainsworth, of the Tyler based Wilson Robertson & Cornelius firm, represent the various companies headed by Baxter and Campbell.
The countersuit states that under the agreement with TSJH, Touchdown Interception was entitled to 50% of the profits from the facility after TSJH recouped its capital contribution up to the amount of $1.3 million.
McClure states that his clients repeatedly tried to ascertain whether the facility was profitable and were not given a full disclosure.
McClure said they have requested a full accounting of the facility to determine its profits and what his clients are owed. He said the legal actions include a cause for consulting fees for Project Rose MSO and a separate cause for the profit sharing agreement for the sports clinic.
Wesley Hill, one of Texas Spine and Joint Hospital’s attorneys, supported the claims made in the original lawsuit filing.
“We dispute Project Rose’s claims and our position is made clear in the lawsuit, which is why we brought it to the court,” Hill said.
The countersuit states that TSJH used the product and concept of Project Rose in competition without paying for the product and concepts, allowing the hospital to benefit from a special advantage.
“We are just seeking to receive compensation for the substantial work, services and commitment to the facility,” McClure said. “And basically the hospital has chosen not to pay anything for all the services, all the efforts, all the good will my clients have put in to building the facility.”
The countersuit accuses Baylor, Scott and White of theft of trade secrets and intellectual property, fraudulent inducement and fraud, tortious interference with existing contract, unfair competition, common law misappropriation, promissory estoppel and detrimental reliance, quantum meruit (a legal term for recovering value of services), unjust enrichment, civil conspiracy, aiding and abetting and knowingly participating in TSJH’s breaches of fiduciary duties and other wrongful conduct.
On June 26, the Baylor Scott and White Hospital system filed a motion to dismiss under the Texas anti-SLAAP statute, denying all claims. McClure said the motion has effectively put the lawsuit in a stay until that is resolved, which can take up to 120 days. Anti-SLAPP, or anti-Strategic Lawsuit Against Public Participation, laws are designed to provide for early dismissal of meritless lawsuits filed against people for the exercise of First Amendment rights, according to medialaw.org.
The Tyler Paper has reached out to the hospital system’s attorney for comment.
This story will be updated.