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August 2019

Additional Protections Added to Texas’ Certificate of Merit Statute

The Texas Legislature recently amended the certificate-of-merit statute, chapter 150 of the Civil Practice & Remedies Code, to add more protections for architects, engineers, land surveyors, landscape architects, or any firm in which such licensed or registered professional practices, in lawsuits against them arising out of their provision of professional services. Under the revised statute, a certificate of merit must be filed with any complaint which, for the first time, raises such a claim. The third-party professional that prepares the certificate of merit must now practice in the same area of practice as the licensed or registered professional that is being sued.

Currently, the certificate-of-merit statute provides, in relevant part, the following:

CPRC § 150.002. CERTIFICATE OF MERIT

…the plaintiff shall be required to file with the complaint an affidavit of a third-party licensed architect, licensed professional engineer, registered landscape architect, or registered professional land surveyor who:

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(3) is knowledgeable in the area of practice of the defendant…

(emphasis added). This version of the statute, which applies to all such claims filed before September 1, 2019, limits the certificate of merit requirement to claims brought by a plaintiff in his/her complaint. The terms “plaintiff” and “complaint” are not defined in this version of the statute, but are strictly construed by Texas courts to mean the original plaintiff that initiates the lawsuit and his/her original petition, or any amendment or supplement thereto, wherein the plaintiff asserts causes of action for damages. The certificate of merit requirement does not apply to third-party petitions, cross-claims, or counter-claims. The third-party professional that prepares the certificate of merit merely has to be “knowledgeable” in the area of practice as the licensed or registered professional that is being sued.

Effective September 1, 2019, those same provisions of the certificate-of-merit statute are amended to provide as follows:

CPRC § 150.002. CERTIFICATE OF MERIT

…a claimant shall be required to file with the complaint an affidavit of a third-party licensed architect, licensed professional engineer, registered landscape architect, or registered professional land surveyor who:

***

(3) practices in the area of practice of the defendant…

(emphasis added). This amended version of the statute defines the term “claimant” to mean “a party, including a plaintiff or third-party plaintiff seeking recovery for damages, contribution, or indemnification.” Civ. Prac. & Rem. Code § 150.002(1-a). The term “complaint” is also provided with a definition in the revised statute, and it is defined as “any petition or other pleading which, for the first time, raises a claim against a licensed or registered professional for damages arising out of the provision of professional services by the licensed or registered professional.” The third-party professional that prepares the certificate of merit now must “practice” in the area of practice as the licensed or registered professional that is being sued.

The amendments to certificate-of-merit statute are the Texas Legislature’s response to the Supreme Court of Texas’ decision in Jaster and the Fourteenth Court of Appeals decision in Engineering. Jaster v. Comet II Construction, Inc., 438 S.W.3d 556, 571 (Tex. 2014); Engineering and Terminal Services, L.P. v. TARSCO, Inc. and Orcus Fire Protection, LLC., 525 S.W. 3d 394 (Tex. App.—Houston [14th Dist.] 2017, pet. denied). In Engineering, Engineering & Terminal Services, L.P. (“ETS”), an engineering firm, brought claims against Buckeye Partners, LP (“Buckeye”) for unpaid fees related to engineering services provided by ETS. Id. at 396. In response, Buckeye filed counterclaims against ETS, alleging that ETS’s engineering designs contained deficiencies that caused Buckeye substantial damages. Id. Some of the engineering designs about which Buckeye complained were subcontracted by ETS to TARSCO, Inc. (“TARSCO”) and Orcus Fire Protection, LLC (“Orcus”). Id. ETS, as a third-party plaintiff, filed a third-party petition against TARSCO and Orcus based on the allegedly defective engineering and design services that formed the basis of Buckeye’s counterclaim. Id. Specifically, ETS sought contribution damages from TARSCO and Orcus to the extent that ETS was liable to Buckeye. Id. ETS did not file a certificate of merit with its third-party petition against TARSCO and Orcus, both of whom filed motions to dismiss against ETS based on the lack of a certificate of merit. Id. at 397. Reversing the trial court’s grant of the dismissals, the court of appeals explained that the statute does not apply to third-party petitions, cross-claims, or counter-claims. Id. at 400. The Engineering court reasoned that had the Texas Legislature intended the certificate of merit requirement to apply to a party filing a third-party claim it could have used the “broader term ‘claimant’ instead of the using language that ties the requirement solely to the pleading that initiates the lawsuit. Id. Additionally, the Engineering court cited to an earlier Supreme Court of Texas decision in Jaster that noted that “section 150.002 does not apply to third-party plaintiffs seeking indemnity and contribution because the affidavit requirement is limited to actions ‘for damages.’” Id. at 399 (citing Jaster, 438 S.W.3d at 571).

The amendments to the certificate-of-merit statute could have a chilling effect on third-party litigation in Texas because of the new requirements. Gone are the days when contribution and indemnity claims could be brought against the design professional with minimal allegations of wrongdoing. Now, a third-party plaintiff seeking to assert contribution and indemnity claims will be required to provide an affidavit setting forth with specificity the negligent act or omission of the design professional. Additionally, the third-party professional that prepares the certificate of merit must “practice” in the area of practice as the licensed or registered professional that is being sued, which seems to eliminate retired third-party professionals from engaging in this type of expert work. These changes will provide additional protections to design professionals.

Construction

Christopher S. Norcross



Construction