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Engineer sued its client for unpaid fee. The client counterclaimed, alleging that engineering designs contained errors, omissions, and other deficiencies that caused the owner to sustain damages. The Engineer, while denying that there were any defects in the engineering services, filed a third-party contribution petitions against its engineering subconsultant and sub-subconsultant, alleging that if the Engineer was found liable to the owner it would be because of defective engineering and design services of the subconsultants. It did not file a certificate of merit with its third part claims. The subconsultants moved to dismiss the third party complaint for failure to file a certificate of merit, and the trial court granted their motions. This was reversed on appeal, with the appellate court explaining that the Texas statute does not apply to third-party petitions, cross-claims, or counter-claims, and holding here that a certificate of merit is not required to be filed with a third-party claim. Engineering and Terminal Services, L.P. v. Tarsco and Orcus Fire Protection, LLC, 525 S.W. 3d 394 (TX 2017).

The Texas Code, at section § 150.002, Tex. Civ. Prac. & Rem., entitled “Certificate of Merit,” provides:

In any action or arbitration proceeding for damages arising out of the provision of professional services by a licensed or registered professional, 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….

The Engineer asserted that it was not required to file a certificate of merit with its third-party petition against the subconsultants because the certificate mandate applies only to the original plaintiff when it initiates an action against a licensed or registered professional arising out of the provision of professional services. ETS’s original petition initiating the present lawsuit did not assert a claim against a licensed or registered professional arising out of the provision of professional services. Rather, ETS sought payment for services it provided to the project owner.

A key court precedent that was relied upon in the current appellate decision was Jaster v. Comet II Construction, Inc., 438 S.W.3d 554, which held that counter-defendants are not required to file certificates of merit. The court here explained that:

“[W]e believe that ETS’s status as the original plaintiff, who subsequently filed a third-party petition against new third-party defendants, is not a fact that distinguishes the present case from Jaster in a legally meaningful way. First, as noted above, ETS filed its original petition against Buckeye for breach of contract based solely on Buckeye’s alleged failure to pay for services. Thus, while ETS was certainly a “plaintiff”, it did not initiate an action for damages arising out of professional services by a licensed or registered professional at the time it filed its original petition.”
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[Had] the Legislature intended the certificate of merit requirement to apply to a party filing a third-party claim in response to a counterclaim, it could have used the broader term “claimant” instead of using language that ties the requirement solely to the pleading that initiates the lawsuit.
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Indeed, as a counter-defendant, ETS is situated similarly to the defendants in Jaster. Buckeye’s counterclaim was the first assertion of a professional-negligence claim by any party in this suit. If the Jaster defendants were not required to file a certificate of merit, then ETS, as a counter-defendant here, is not required to file a certificate of merit either.
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In short, the principle identified in Jaster applies equally to plaintiffs, defendants, or counter-defendants acting as third-party plaintiffs. Under Jaster, Buckeye was not required to file a certificate of merit. Yet, TARSCO and Orcus would impose that burden on ETS when ETS’s third-party petition asserted merely that appellees owed contribution to ETS if, in fact, Buckeye proved its allegations that their work was faulty or defective and proximately caused damages. ETS did not assert fault with TARSCO’s and Orcus’s work separately from the defects alleged by Buckeye, and ETS did not allege damages greater than those alleged by Buckeye.

About the author: Article written by J. Kent Holland, Jr., a construction lawyer located in Tysons Corner, Virginia, with a national practice (formerly with Wickwire Gavin, P.C. and now with Construction Risk Counsel, PLLC) representing design professionals, contractors and project owners. He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects. He is publisher of ConstructionRisk.com Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932. This article is published in ConstructionRisk.com Report, Vol. 20, No. 5 (May 2018). Copyright 2018, ConstructionRisk, LLC