ORAL ARGUMENT REQUESTED NO CV IN THE COURT OF APPEALS FOR THE FIFTH DISTRICT OF TEXAS AT DALLAS

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1 ORAL ARGUMENT REQUESTED ACCEPTED 225EFJ FIFTH COURT OF APPEALS DALLAS, TEXAS 11 July 28 P12:48 Lisa Matz CLERK NO CV IN THE COURT OF APPEALS FOR THE FIFTH DISTRICT OF TEXAS AT DALLAS JJW DEVELOPMENT, L.L.C. AND JOHN J. WINGFIELD, JR., APPELLANTS, V. STRAND SYSTEMS ENGINEERING, INC., APPELLEE. On Appeal from the 219 th District Court of Collin County, Texas, Cause No BRIEF OF APPELLEE Respectfully submitted, COOPER & SCULLY, P.C. Michelle E. Robberson Texas Bar No John A. Scully Texas Bar No Jack A. Walters, III Texas Bar No Jackson Street, Suite 100 Dallas, Texas (214) /(214) (fax) ATTORNEYS FOR APPELLEE

2 NO CV IN THE COURT OF APPEALS FOR THE FIFTH DISTRICT OF TEXAS AT DALLAS JJW DEVELOPMENT, L.L.C. AND JOHN J. WINGFIELD, JR., APPELLANTS, V. STRAND SYSTEMS ENGINEERING, INC., APPELLEE. On Appeal from the 219 th District Court of Collin County, Texas, Cause No IDENTITY OF PARTIES AND COUNSEL Per rule 38.1(a) of the Texas Rules of Appellate Procedure, the following is a list of all parties to the trial court s final Order and the names and addresses of all counsel: Appellants: JJW Development, L.L.C. and John J. Wingfield, Jr. Appellant s Trial and Appeal Counsel: Daniel R. McCabe (trial and appeal) Russell H. Daniels (trial and appeal) Carl J. Wilkerson (appeal) The Bush Firm, P.C Woodland Park Blvd., Suite 190 Arlington, TX i

3 Appellee: Strand Systems Engineering, Inc. Appellee s Trial and Appeal Counsel: John A. Scully (trial and appeal) Katherine M. McClelland 1 (trial) Jack A. Walters, III (trial and appeal) Michelle E. Robberson (appeal) Cooper & Scully, P.C. 900 Jackson St., Suite 100 Dallas, TX Co-Defendant settled prior to final Order Ramer Concrete, Inc. Co-Defendant s Trial Counsel: Alan L. Busch Christopher Albert Busch & Myers, L.L.P. 100 Crescent Court, Suite 250 Dallas, TX Ms. McClelland is no longer employed by Cooper & Scully, P.C. ii

4 NO CV IN THE COURT OF APPEALS FOR THE FIFTH DISTRICT OF TEXAS AT DALLAS JJW DEVELOPMENT, L.L.C. AND JOHN J. WINGFIELD, JR., APPELLANTS, V. STRAND SYSTEMS ENGINEERING, INC., APPELLEE. On Appeal from the 219 th District Court of Collin County, Texas, Cause No STATEMENT REGARDING ORAL ARGUMENT Appellants did not request oral argument. However, because this case involves an issue of first impression for this Court with respect to interpretation and application of Chapter 150 of the Texas Civil Practice & Remedies Code, Appellee respectfully requests oral argument. TEX. R. APP. P Although Appellee believes its Brief thoroughly covers the relevant facts and law and fully supports an affirmance, oral argument would allow the Court to raise any questions regarding the novel issues in the case and, thus, may aid the Court s decisional process. TEX. R. APP. P S iii

5 TABLE OF CONTENTS Page IDENTITY OF PARTIES AND COUNSEL... i STATEMENT REGARDING ORAL ARGUMENT...iii TABLE OF CONTENTS... iv TABLE OF AUTHORITIES...vii I. STATEMENT OF THE CASE... xi II. RESPONSE TO ISSUES PRESENTED...xiii III. STATEMENT OF FACTS... 1 A. Allegations Regarding Wingfield Residence... 1 B. JJW s Construction Defect Lawsuit... 1 C. Strand s Motion to Dismiss... 2 D. Hearing on Strand s Motion to Dismiss... 3 E. JJW s Motion to Reconsider and/or Motion for New Trial... 4 IV. SUMMARY OF THE ARGUMENT... 5 V. ARGUMENT... 7 A. Standards of Review... 7 B. Principles for Construing Statutes... 8 C. The Trial Court Properly Construed the Statute and Did Not Abuse its Discretion in Dismissing JJW s Claims in the Second Amended Petition The 2005 Version of the Statute Applies Here The Statute Applies to the First-Filed Complaint JJW Did Not Comply with the Statute with its First-Filed Complaint Against Strand JJW s Claims Against Strand Fell Within Section (a) iv

6 a. Plaintiffs May Not Recast Negligence Claims as Other Causes of Action to Avoid Section (a) Requirements b. Allegations in JJW s Second Amended Petition Assert Only Tort Claims Arising Out of the Provision of Professional Engineering Services c. JJW s Case is Distinguishable D. Alternatively, Even Considering the Third Amended Petition, Texas Law Supports the Trial Court s Interpretation of the Statute and the Dismissal The Allegations in the Third Amended Petition Also Triggered the Certificate of Merit Requirements In Addition, Developments in Texas Law Support the Trial Court s Interpretation of the Statute and its Application to this Case a. En Banc Opinion from Austin Court of Appeals b. The Prior Opinion in Consolidated, Other Cases c. The Legislative Intent Behind the Amendments to Chapter 150, as Evidenced by Bill Analyses d. S&P s Criticisms of the Prior Opinions Construing the Statute e. Holdings of the En Banc Court of Appeals in S&P f. The Impact of S&P on the Case at Bar g. JJW is Not Entitled to a Remand in the Interests of Justice E. The Trial Court Did Not Dismiss JJW s Claims On the Pleadings JJW Has Not Preserved These Arguments for Appeal Even if Preserved, the Second Issue Presents No Reversible Error v

7 3. Alternatively, Any Veiled Constitutional Challenges Lack Merit VI. CONCLUSION AND PRAYER CERTIFICATE OF SERVICE vi

8 TABLE OF AUTHORITIES CASES Page(s) Ashkar Eng'g Corp. v Gulf Chem. & Metallurgical Corp., 2010 WL (Tex. App. Houston [1st Dist.] 2010, no pet.) (mem. op.) , 21, 22, 26, 34 In re B.L.D., 113 S.W.3d 340 (Tex. 2003) Barshop v. Medina Cty. Underground Water Conserv. Dist., 925 S.W.2d 618 (Tex. 1996) Belvedere Condominiums at State Thomas, Inc. v. Meeks Design Group, Inc., 329 S.W.3d 219 (Tex. App. Dallas 2010, no pet.)... 7, 8, 34 Boothe v. Dixon, 180 S.W.3d 915 (Tex. App. Dallas 2005, no pet.) Buckholts Indep. Sch. Dist. v. Glaser, 632 S.W.2d 146 (Tex. 1982) CH2M Hill Trigon, Inc. v. J7 Contractors, Inc., 2010 WL (Tex. App. Waco 2010, no pet.) (mem. op.) Capital One, N.A. v. Carter & Burgess, Inc., S.W.3d, 2011 WL (Tex. App. Fort Worth 2011, no pet. h.) Consolidated Reinforcement v. Carothers Exec. Homes, Ltd., 271 S.W.3d 887 (Tex. App. Austin 2008, no pet.),... 14, 27, 28, 29 Criterium-Farrell Eng'rs v. Owens, 248 S.W.3d 395 (Tex. App. Beaumont 2008, no pet.) Curtis & Windham Architects, Inc. v. Williams, 315 S.W.3d 102 (Tex. App. Houston [1st Dist.] 2010, no pet.)... 27, 28, 29 DLB Architects, P.C. v. Weaver, 305 S.W.3d 407 (Tex. App. Dallas 2010, pet. denied)... 7, 8 vii

9 Duerr v. Brown, 262 S.W.3d 63 (Tex. App. Houston [14th Dist.] 2008, no pet.) Formosa Plastics Corp. USA v. Presidio Engineers & Contractors, Inc., 960 S.W.2d 41 (Tex. 1998) Franco v. Lopez, 307 S.W.3d 551 (Tex. App. Dallas 2010, no pet.) Gomez v. STFG, Inc., 2007 WL (Tex. App. San Antonio 2007, no pet.) (mem. op.)... 14, 28 Greenstein v. Baggett, 2010 WL (Tex. App. Dallas 2010, no pet.) (mem. op.) Howell v. Tex. Worker's Comp. Comm'n, 143 S.W.3d 416 (Tex. App. Austin 2004, pet. denied) JNY, L.P. v. Raba-Kistner Consultants, Inc., 311 S.W.3d 584 (Tex. App. El Paso 2010, no pet.)... 8 Kniestedt v. Southwest Sound & Elecs., Inc., 281 S.W.3d 452 (Tex. App. San Antonio 2007, no pet.)... 27, 28, 29 Landreth v. Las Brisas Council of Co-Owners, Inc., 285 S.W.3d 492 (Tex. App. Corpus Christi 2009, no pet.)... 27, 28, 42 Martin v. Commercial Metals Co., 138 S.W.3d 619 (Tex. App. Dallas 2004, no pet.) McGlothlin v. Cullington, 989 S.W.2d 449 (Tex. App.-Austin 1999, pet. denied) Natex Corp. v. Paris Indep. Sch. Dist., 326 S.W.3d 728 (Tex. App. Texarkana 2010, pet. filed) Pakal Enters., Inc. v. Lesak Enters., L.L.C., S.W.3d, 2011 WL (Tex. App. Houston [1st Dist.] 2011, no pet. h.)... 10, 11, 13 Palladian Bldg. Co. v. Nortex Found. Designs, Inc., 165 S.W.3d 430 (Tex. App. Fort Worth 2005, no pet.)... 7, 8 viii

10 Parker County Veterinary Clinic, Inc. v. GSBS Batenhorst, Inc., 2009 WL (Tex. App. Fort Worth 2009, no pet.) (mem. op.)...22, 23, S&P Consulting Eng'rs, P.L.L.C. v. Baker, 334 S.W.3d 390 (Tex. App. Austin 2011, no pet.) (en banc) , 27-36, 42 Saleh v. Hollinger, 335 S.W.3d 368 (Tex. App. Dallas 2011, pet. filed) Schorp v. Baptist Mem'l Health Sys., 5 S.W.3d 727 (Tex. App. San Antonio 1999, no pet.) Sharp Eng'g v. Luis, 321 S.W.3d 748 (Tex. App. Houston [14th Dist.] 2010, no pet.) , 42 Southwestern Bell Telephone Co. v. DeLanney, 809 S.W.2d 493 (Tex. 1991) Stockton v. Offenbach, 336 S.W.3d 610 (Tex. 2011) Texas Cypress Creek Hosp., L.P. v. Hickman, 329 S.W.3d 209 (Tex. App. Houston [14th Dist.] 2010, pet. denied) Texas Mun. Power Agency v. Pub. Util. Comm'n of Tex., 253 S.W.3d 184 (Tex. 2007) Univ. of Tex. Sw. Med. Ctr. at Dallas v. Vasquez-Arancibia, 324 S.W.3d 544 (Tex. 2010) Ustanik v. Nortex Found. Designs, Inc., 320 S.W.3d 409 (Tex. App. Waco 2010, pet. denied)... 8, 14, 15, 17, 18, 21, 22 Walker v. Gutierrez, 111 S.W.3d 56 (Tex. 2003)... 38, 40, 42 Winfield v. Renfro, 821 S.W.2d 640 (Tex. App. Houston [1st Dist.] 1991, writ denied) Woods v. Woods, 193 S.W.3d 720 (Tex. App.--Beaumont 2006, pet. denied) ix

11 Wooten v. Dallas Hunting & Fishing Club, Inc., 427 S.W.2d 344 (Tex. Civ. App.-Dallas 1968, no writ) Zurich Am. Ins. Co. v. Nokia, Inc., 268 S.W.3d 487 (Tex. 2008) Statutes and Rules Act of June 2, 2003, 78th Leg., R.S., ch. 204, 20.01, 2003 Tex. Gen. Laws Act of May 27, 2005, 79th Leg., R.S., ch. 208, 2, 2005 Tex. Gen. Laws TEX. CIV. PRAC. & REM. CODE ANN , 5, 6, 8, 10, 12, 14, 23,... 24, 26, 30, 31, 36, 39 TEX. CIV. PRAC. & REM. CODE ANN (a)...xii, xiii, 5, 6, 9-13, 22, 26-28, , 38, 39, 42, 43 TEX. CIV. PRAC. & REM. CODE ANN (b)... 10, 11 TEX. CIV. PRAC. & REM. CODE ANN (c) TEX. CIV. PRAC. & REM. CODE ANN (d)...xii, xiii, 10, 12, 21, 24, 38 TEX. GOV'T CODE ANN TEX. R. APP. P. 38.1(a)... i TEX. R. APP. P iii, 37, 40 TEX. R. CIV. P Other Sources House Comm. on Judiciary & Civil Jurisprudence, Bill Analysis, Tex. S.B. 1201, 81st Leg., R.S. (2009) Senate Comm. on Bus. & Commerce, Bill Analysis, Tex. H.B. 1573, 79th Leg., R.S. (2005)... 9, 29 x

12 NO CV IN THE COURT OF APPEALS FOR THE FIFTH DISTRICT OF TEXAS AT DALLAS JJW DEVELOPMENT, L.L.C. AND JOHN J. WINGFIELD, JR., APPELLANTS, V. STRAND SYSTEMS ENGINEERING, INC., APPELLEE. On Appeal from the 219 th District Court of Collin County, Texas, Cause No BRIEF OF APPELLEE TO THE HONORABLE JUSTICES OF THE DALLAS COURT OF APPEALS: Appellee Strand Systems Engineering, Inc. ( Appellee or Strand ) respectfully submits this Brief of Appellee, pursuant to rule 38 of the Texas Rules of Appellate Procedure and all local rules of this Court. In opposition to the appeal of Appellants JJW Development, L.L.C. and John J. Wingfield, Jr. ( Appellants or JJW, collectively), Appellee respectfully asks the Court to overrule Appellants issues presented and to affirm the trial court s final Order of dismissal. I. STATEMENT OF THE CASE This is a construction defect lawsuit arising out of construction of a residence by JJW Development, L.L.C. for John J. Wingfield, Jr. at 5402 Kara Lane, in Parker, Collin xi

13 County, Texas (the residence ). (E.g., CR 11). 2 JJW filed the lawsuit on February 17, 2009, initially against only Ramer Concrete, Inc., the contractor hired to pour the concrete foundation for the residence. 3 (CR 10). JJW added Strand as a defendant in the Second Amended Petition filed on May 20, 2010, asserting claims for negligence and breach of contract. (CR 23, 26-27). The Second Amended Petition did not have a certificate of merit attached, and JJW did not contemporaneously file any certificate of merit with the Petition, as required by the applicable 2005 version of section of the Texas Civil Practice & Remedies Code. (See CR 23-32). Instead, in the Second Amended Petition, JJW cited to the statute and alleged it would file the required Certificate of Merit within thirty (30) days. (CR 25). JJW did not file a certificate of merit within thirty days, and, thus, on June 23, 2010, Strand filed a motion to dismiss JJW s claims, pursuant to section (d). (CR 37). After a hearing on September 9, 2010, the trial court, the Hon. John R. Roach, Jr., Judge of the 296 th District Court of Collin County, sitting for the Hon. Curt Henderson of the 219 th District Court of Collin County, granted the motion to dismiss and dismissed with prejudice JJW s claims against Strand. (RR 2:4-25; CR 64). JJW filed a motion to reconsider and/or for new trial, which the trial court, then the Hon. Scott J. Becker 4 (new 2 References to the one-volume Clerk s Record will be CR followed by the page number. References to the three-volume Reporter s Record will be RR followed by the volume and page number, separated by a colon (e.g., RR 2:4). 3 4 JJW settled with Ramer Concrete and dismissed Ramer from the suit. (See CR 53). According to Judge Henderson s website, Judge Henderson semi-retired in October See Governor Rick Perry appointed the Hon. Scott Becker to the 219 th District Court of Collin County, Texas, effective October 5, See xii

14 Judge of the 219 th District Court), heard on October 21, 2010 and denied by written Order signed November 9, (RR 3:4-22; CR 83). This appeal followed. (CR 81). II. RESPONSE TO ISSUES PRESENTED 1. The trial court properly dismissed JJW s claims against Strand based on JJW s failure to timely comply with the statutory certificate of merit requirements in connection with its Second Amended Petition, which was the first pleading to add Strand as a defendant and to assert claims titled negligence and breach of contract. The trial court correctly interpreted and applied section (a) of the Texas Civil Practice & Remedies Code and correctly determined that JJW s failure to file a certificate of merit on the claims in the Second Amended Petition required dismissal of those claims, with prejudice, under section (d). JJW has not established any abuse of discretion by the trial court in interpreting or applying the statute and, thus, this Court should overrule this issue. 2. JJW never raised in the trial court any of the arguments in this section of its Appellants Amended Brief. JJW never asked the trial court to rule on these arguments and, thus, JJW has waived the right to raise these arguments on appeal. Alternatively, the trial court did not dismiss JJW s claims on the pleadings that is, for failure to state a claim but rather dismissed JJW s claims based on JJW s admitted failure to file a certificate of merit as required by statute. The trial court s dismissal should be affirmed. xiii

15 III. STATEMENT OF FACTS Strand does not acquiesce in Appellants Statement of Facts. A. Allegations Regarding Wingfield Residence In the Original Petition in the underlying suit, JJW alleged that John J. Wingfield, Jr. engaged JJW to build a residence for him at 5402 Kara Lane, Parker, Collin County, Texas (the residence ). 5 (E.g., CR 11). JJW hired Ramer Concrete, Inc. to pour a turnkey concrete foundation for the residence. (Id.). The concrete was to serve as both the foundation and as the finished veneer flooring for the residence. (Id.). JJW alleged that Strand was responsible for the design of the foundation and for conducting a prepour inspection. (Id. at 24). JJW alleged that Ramer supplied deficient concrete, that the concrete began cracking on the day Ramer poured it (May 20, 2008), and that the condition of the concrete continued to deteriorate. (Id. at 11, 17). JJW also alleged that Ramer failed to pour the concrete according to its design specifications, including failure to comply with tendon locations and slab thickness. (Id. at 17). JJW alleged the cracks in the foundation have allowed water infiltration, which, in turn, allegedly damaged the floor, the plumbing, the master bedroom and bath, the fireplace, the exterior walls, and landscaping. (Id. at 17-18). B. JJW s Construction Defect Lawsuit JJW sued Ramer on February 17, (CR 10). The Original Petition and First Amended Petition (filed January 8, 2010) contained claims only against Ramer, including 5 The statements in this section are from JJW s pleadings in the trial court, and Strand does not admit or concede the truth of the allegations. BRIEF OF APPELLEE Page 1

16 negligence, breach of contract, and violations of the Texas Deceptive Trade Practices Consumer Protection Act ( DTPA ). (Id. at 10, 16). Neither the Original Petition nor First Amended Petition included a certificate of merit regarding the claims against Ramer, as required by the applicable 2005 version of section of the Texas Civil Practice & Remedies Code. (See id. at 10-14, 16-21). JJW added Strand as a defendant in the Second Amended Petition filed on May 20, 2010, asserting claims for negligence and breach of contract. (Id. at 23, 26-27). The Second Amended Petition did not include a Chapter 150 certificate of merit regarding the claims against Strand. (See id. at 23-30). Instead, in the Second Amended Petition, under the heading Conditions Precedent/Certificate of Merit, JJW alleged it would file the required Certificate of Merit within thirty (30) days. (Id. at 25, citing to section (b) of the Texas Civil Practice & Remedies Code). JJW did not file a certificate of merit regarding its claims against Strand within thirty days. C. Strand s Motion to Dismiss Because JJW did not file any certificate of merit, Strand filed on June 23, 2010 a motion to dismiss JJW s claims, pursuant to section (d). (CR 37). Strand urged that JJW s failure to file the certificate of merit required dismissal of all claims, that JJW did not show itself entitled to any extension of the deadline under section (b), that the statute was mandatory (using the word shall ), and that the dismissal should be with prejudice. (See id. at 37-42). Six days later, on June 29, 2010, JJW filed a Third Amended Petition. (Id. at 45). This Petition still did not contain a certificate of merit regarding claims against Strand, BRIEF OF APPELLEE Page 2

17 and it omitted the section called Conditions Precedent/Certificate of Merit. (Id. at 45-52). This Petition alleged negligence, breach of contract, and DTPA claims against Ramer and a claim against Strand entitled breach of contract. (Id.). D. Hearing on Strand s Motion to Dismiss JJW filed a response to Strand s motion to dismiss two days before the hearing, September 7, (CR 54). In this Response, JJW argued that the motion to dismiss based on the Second Amended Petition was moot because of the Third Amended Petition, which allegedly dropped any negligence claim against Strand, and that Chapter 150 did not apply to JJW s remaining breach of contract claim against Strand in the Third Amended Petition. 6 (Id. at 54-59). On September 9, 2010, the trial court heard Strand s motion to dismiss. (See RR 2:4-25). The Hon. John R. Roach, Jr., Judge of the 296 th District Court of Collin County, conducted the hearing in place of the Hon. Curt Henderson, sitting Judge of the 219 th District Court of Collin County. Judge Roach heard the arguments of counsel and told the parties he would take the motion under advisement and read the cases. (RR 2:19). He invited the parties to send additional case authority to him by letter. (Id. at 25). Judge Roach sent the parties a Memorandum on September 14, 2010 in which he stated he granted Strand s motion to dismiss. (Id. at 63). On September 22, 2010, Judge 6 At the hearing on Strand s Motion to Dismiss, JJW argued that its breach of contract claim as alleged in the Third Amended Petition was just a failure to do the pre-pour inspection, which allegedly required no certificate of merit. (See RR 2:20-21). However, JJW later provided the trial court with the signed Pre-Pour Inspection Report prepared by Strand. (RR 2:20-21; CR 70). Thus, the evidence conclusively showed Strand performed the pre-pour inspection; the real issue was the content and adequacy of the pre-pour inspection, issues that must be addressed by an expert in a certificate of merit. BRIEF OF APPELLEE Page 3

18 Roach signed a written Order dismissing with prejudice JJW s claims against Strand. (CR 64). E. JJW s Motion to Reconsider and/or Motion for New Trial JJW filed on October 7, 2010 a Motion to Reconsider and/or Motion for New Trial, in which it argued that the services provided by Strand were not professional services and that the services that were performed were not performed by a licensed or registered professional, such that JJW s claims were not subject to the Chapter 150 certificate of merit requirements. (CR 65-69). JJW attached to this Motion a copy of the actual pre-pour Inspection Report prepared by Strand (which conflicted with JJW s earlier argument that its only claim was for Strand s failure to perform the inspection at all). (RR 2:20-21; CR 70). Strand filed a Response to the Motion, arguing the reasons why the statute applied and why Judge Roach did not abuse his discretion in dismissing JJW s claims. (Id. at 71-78). The Hon. Scott J. Becker, newly appointed Judge of the 219 th District Court, heard JJW s motion on October 21, (RR 3:4-22). After hearing arguments of counsel, Judge Becker told the parties he would take the motion under advisement and read the cases. (Id. at 21-22). On October 22, 2010, Judge Becker issued a Memorandum denying JJW s motion. (CR 80). Judge Becker signed a written Order denying the motion on November 9, (Id. at 83). In the meantime, JJW had filed its Notice of Appeal on October 26, (Id. at 81). BRIEF OF APPELLEE Page 4

19 IV. SUMMARY OF THE ARGUMENT Although this case potentially presents issues of first impression for this Court, such as whether the 2005 version of section (a) of the Texas Civil Practice & Remedies Code applies only to negligence claims, or whether plaintiffs can recast negligence claims as other causes of action to avoid the certificate of merit requirements in the 2005 version of section , the key fact here is that JJW never filed any certificate of merit to support its claims, which indisputably arose out of Strand s provision of professional engineering services and, thus, were subject to the statute. JJW s Second Amended Petition the first pleading to assert claims against Strand, entitled negligence and breach of contract, arising out of Strand s provision of professional engineering services in connection with the foundation of Wingfield s residence triggered JJW s obligation under section (a) to file a certificate of merit from a duly qualified expert establishing the threshold validity of those claims. It is undisputed that JJW never filed a certificate of merit to support the allegations in the Second Amended Petition. Instead, JJW tried to circumvent the certificate of merit requirements by filing a Third Amended Petition, in which it purported to drop the negligence claim and assert only a breach of contract claim. The factual allegations and the claims asserted in the Second Amended Petition showed that the nature of JJW s claim against Strand was alleged negligence in the provision of professional engineering services, and that its breach of contract claim (for which no written contract existed) was really just a recast negligence claim seeking tort damages for repairs and remediation of the allegedly faulty foundation. Thus, section BRIEF OF APPELLEE Page 5

20 (a) applied to both causes of action asserted in JJW s Second Amended Petition, and, because JJW filed no certificate of merit to support those claims, the trial court correctly applied the mandatory dismissal provision in the statute. JJW has not established in this Court any reversible error by the trial court, and its ruling should be affirmed. Alternatively, if the Court considers the allegations in JJW s Third Amended Petition (which is not relevant because it was not the first-filed complaint), the allegations in that pleading also asserted the type of claim that required a section (a) certificate of merit to establish its threshold validity. The only claim against Strand in the Third Amended Petition was entitled breach of contract, which JJW argued would not be subject to the 2005 version of section (a). The allegations, however, involved only an alleged oral contract to perform a pre-pour inspection and the claimed obligations imposed by that alleged oral contract, coupled with the same claim for tort damages for repairs and remediation of the allegedly faulty foundation. The trial court correctly interpreted the statute and correctly held it applied it to this claim, thus requiring a certificate of merit to establish the claim s threshold validity. Because JJW did not file a certificate of merit with its Third Amended Petition either, the trial court correctly applied the mandatory dismissal provision in the statute. JJW has not established any reversible error by the trial court, and its ruling should be affirmed. As for JJW s argument that the trial court misused section to dismiss its claims on the pleadings, JJW never presented this argument to the trial court and, thus, it has not been preserved for appeal. In the alternative, this argument lacks merit. Strand BRIEF OF APPELLEE Page 6

21 never moved to dismiss on the pleadings, and the trial court did not dismiss JJW s claims against Strand on the pleadings that is, for failure to state a claim. The trial court dismissed JJW s claims against Strand because JJW failed to support them with a certificate of merit, as required by statute. The trial court carefully analyzed the statute and the interpretive law provided by the parties, and it did not act arbitrarily or capriciously in making its ruling. The trial court s interpretation and application of the statute were well-supported by Texas case law, and its ruling should be affirmed in all respects. V. ARGUMENT A. Standards of Review This Court reviews an order granting a motion to dismiss under Chapter 150 for abuse of discretion. E.g., Belvedere Condominiums at State Thomas, Inc. v. Meeks Design Group, Inc., 329 S.W.3d 219, 220 (Tex. App. Dallas 2010, no pet.). A trial court abuses its discretion when it acts in an unreasonable and arbitrary manner or without reference to any guiding rules or principles. Id. Merely because a trial court may decide a matter within its discretion in a different manner than an appellate court does not demonstrate an abuse of discretion. Id. Statutory construction is a question of law. E.g., Palladian Bldg. Co. v. Nortex Found. Designs, Inc., 165 S.W.3d 430, 436 (Tex. App. Fort Worth 2005, no pet.). Thus, this Court reviews de novo a trial court s construction and application of a statute. Belvedere, 329 S.W.3d at 220; see also DLB Architects, P.C. v. Weaver, 305 S.W.3d 407, 409 (Tex. App. Dallas 2010, pet. denied). Courts in other Chapter 150 cases have held BRIEF OF APPELLEE Page 7

22 that, to determine whether any reversible error exists, the reviewing court first determines the proper construction of the statute, and then reviews whether the trial court abused its discretion in the manner in which it applied the statute to the facts of the particular case. E.g., Ustanik v. Nortex Found. Designs, Inc., 320 S.W.3d 409, 412 (Tex. App. Waco 2010, pet. denied); JNY, L.P. v. Raba-Kistner Consultants, Inc., 311 S.W.3d 584, 585 (Tex. App. El Paso 2010, no pet.); Palladian, 165 S.W.3d at 436. B. Principles for Construing Statutes When construing a statute, this Court attempts to give effect to the Legislature s intent. Belvedere, 329 S.W.3d at 220. Courts presume that the Legislature intended the entire statute to be effective and intended a just and reasonable result. S&P Consulting Eng rs, P.L.L.C. v. Baker, 334 S.W.3d 390, 396 (Tex. App. Austin 2011, no pet.) (en banc) (citing TEX. GOV T CODE ANN (2), (3) (West 2005)). Construing courts consider the statute as a whole, not just isolated portions. JNY, L.P., 311 S.W.3d at 585. A court construing a statute looks to the plain and common meaning of the words the Legislature used unless a contrary intention appears from the context. Belvedere, 329 S.W.3d at 220. The court presumes the Legislature used every word in a statute for a purpose and excluded every word for a purpose. DLB, 305 S.W.3d at 409. C. The Trial Court Properly Construed the Statute and Did Not Abuse its Discretion in Dismissing JJW s Claims in the Second Amended Petition 1. The 2005 Version of the Statute Applies Here In this case, the parties did not dispute that the 2005 version of section applies to JJW s claims. (RR 2:5; 3:14; Appellants Amended Brief at 5-6). The 2005 BRIEF OF APPELLEE Page 8

23 version amended the original version of the statute passed in 2003 as part of the House Bill 4 tort reform. The original version of section (a) required plaintiffs filing claims against licensed engineers to file an affidavit, called a certificate of merit, from a third party licensed or registered in the same area of practice as the defendant in any action for damages alleging professional negligence by a design professional in cases alleging negligence. See S&P, 334 S.W.3d at 394 (citing Act of June 2, 2003, 78 th Leg., R.S., ch. 204, 20.01, 2003 Tex. Gen. Laws 847, ). The affidavit had to set forth specifically at least one negligent act, error, or omission claimed to exist and the factual basis for such claim. Id. In 2005, the Legislature amended section (a) and changed its language to read, in pertinent part: (a) In any action or arbitration proceeding for damages arising out of the provision of professional services by a design professional, the plaintiff shall be required to file with the complaint an affidavit of a third-party registered architect or licensed professional engineer competent to testify, holding the same professional license as, and practicing in the same area of practice as the defendant, which affidavit shall set forth specifically at least one negligent act, error, or omission claimed to exist and the factual basis for each such claim. Act of May 27, 2005, 79 th Leg., R.S., ch. 208, 2, 2005 Tex. Gen. Laws 369, 370. This amendment eliminated the language that limited the certificate of merit requirement to claims alleging professional negligence and broadened the type of cases in which a certificate of merit is required. S&P, 334 S.W.3d at 394. This amendment applied to causes of action that accrued on or after the effective date of the 2005 Act, which was September 1, Id. at 395 (citing Act of May 27, 2005 at 4, 5). BRIEF OF APPELLEE Page 9

24 Other provisions of the 2005 version of the statute address exceptions to section (a), the defendant s answer deadline, and the penalty for non-compliance. The exception provision provides: (b) The contemporaneous filing requirement of Subsection (a) shall not apply to any case in which the period of limitation will expire within 10 days of the date of filing and, because of such time constraints, the plaintiff has alleged that an affidavit of a third-party licensed architect, registered professional land surveyor, or professional engineer could not be prepared. In such cases, the plaintiff shall have 30 days after the filing of the complaint to supplement the pleadings with the affidavit. The trial court may, on motion, after hearing and for good cause, extend such time as it shall determine justice requires. Act of May 27, 2005 at 2 (codified at section (b)). The defendant is not required to answer the complaint and affidavit until 30 days after the filing of the affidavit. Id. (codified at section (c)). Lastly, the plaintiff s failure to file the affidavit in accordance with section (a) or (b) shall result in dismissal of the complaint against the defendant, and the dismissal may be with prejudice. Id. (codified at section (d)). 2. The Statute Applies to the First-Filed Complaint Courts interpreting the 2005 version of section hold that the certificate of merit requirement applies to the first-filed complaint asserting a negligence claim against a professional. E.g., Sharp Eng g v. Luis, 321 S.W.3d 748, (Tex. App. Houston [14 th Dist.] 2010, no pet.); see also Pakal Enters., Inc. v. Lesak Enters., L.L.C., S.W.3d, 2011 WL at *3 (Tex. App. Houston [1 st Dist.] 2011, no pet. h.). This interpretation of the statute is appropriate in light of section (b), which BRIEF OF APPELLEE Page 10

25 labels the obligation under section (a) as the contemporaneous filing requirement. See Act of May 27, 2005 at 2; see also Sharp, 321 S.W.3d at 751. In Sharp, the plaintiff did not serve a certificate of merit with its original petition but did file one with the first amended petition. See, e.g., Sharp, 321 S.W.3d at 752. The original petition asserted a claim for negligence in the provision of professional services (engineering), and the plaintiff did not invoke the exception in section (b) to obtain additional time to file a certificate of merit based on the running of limitations. Id. Thus, the court of appeals held that the plaintiff s failure to file a certificate of merit with the first-filed petition against the engineering defendants (in compliance with either section (a) or (b)) mandated dismissal of the claims, pursuant to sections (a) and (d). Id.; see also Pakal Enters., 2011 WL at *3-4 (original petition filed against professional surveyor asserted claims for negligence and breach of contract; failing to file certificate of merit with original petition required trial court to dismiss claims); Ashkar Eng g Corp. v Gulf Chem. & Metallurgical Corp., 2010 WL at *3 (Tex. App. Houston [1 st Dist.] 2010, no pet.) (mem. op.) (where plaintiff did not file certificate of merit until third amended petition, trial court required to dismiss claims). 3. JJW Did Not Comply with the Statute with its First-Filed Complaint Against Strand Here, the first-filed petition (or complaint, as the statute terms it) against Strand was JJW s Second Amended Petition, filed May 20, (See CR 23). In this pleading, BRIEF OF APPELLEE Page 11

26 JJW asserted claims against Strand labeled negligence and breach of contract. 7 (See id. at 26-27). JJW attempted to avoid the application of section by amending this petition to purportedly drop the negligence claim against Strand and assert only a breach of contract claim. (See CR 50, 55). The Second Amended Petition, however, was the first pleading in this case asserting claims against Strand for damages arising out of the provision of professional engineering services, and, thus, the Second Amended Petition (not the Third Amended Petition) triggered the obligation for JJW to file a certificate of merit. See Sharp, 321 S.W.3d at JJW did not expressly plead that the statute of limitations would run within 10 days of the filing of the Second Amended Petition or that it could not obtain an affidavit by the deadline to file the petition. (See CR 25). Instead, JJW just stated it would file the certificate of merit within 30 days and cited to section (b) (the extension provision). (Id.). Even if this was sufficient to invoke the exception to section (a) (which Strand does not concede), JJW did not file a certificate of merit within 30 days of filing the Second Amended Petition 8 and, in fact, has never filed a certificate of merit on its claim against Strand. Therefore, because JJW did not file a certificate of merit with its first-filed petition against Strand, as required by section (a), and did not otherwise comply with section (b), the trial court had no discretion but to dismiss JJW s claims against Strand under the mandatory language of section (d). See Sharp, 321 S.W.3d at 7 The heading of the claim against Strand for breach of contract is mislabeled Breach of Contract Ramer. (CR 27). 8 JJW concedes as much in Appellants Amended Brief at page 6. BRIEF OF APPELLEE Page 12

27 Strand s attempt to circumvent section (a) and to moot Strand s motion to dismiss by filing a Third Amended Petition that allegedly dropped the negligence claim (CR 55) did not defeat the application of the statute. Accordingly, the trial court did not abuse its discretion in applying the statute to the established facts of this case. This Court should overrule JJW s issues and affirm the dismissal. 4. JJW s Claims Against Strand Fell Within Section (a) JJW quotes its Third Amended Petition at length in its Appellants Amended Brief; however, the Third Amended Petition is irrelevant to this appeal for the reasons discussed in the previous section. 9 The petition that triggered the operation of section (a) was JJW s Second Amended Petition, the first-filed pleading to assert claims against Strand. (CR 23-29). See Sharp, 321 S.W.3d at At the hearing, JJW s counsel admitted the Second Amended Petition was the first to name Strand and the first to assert negligence with regard to the professional services that were to be rendered by Strand. (RR 2:7-8). Accordingly, because JJW failed to comply with the certificate of merit requirements for the negligence claim asserted in the Second Amended Petition, the trial court properly dismissed the negligence claim. See, e.g., Sharp, 321 S.W.3d at 752; Ashkar, 2010 WL at *3; see also Pakal Enters., 2011 WL at *3-4. As to whether the trial court erred in also dismissing JJW s alternatively pleaded breach of 9 In an abundance of caution, however, Strand will address the arguments relating to the Third Amended Petition later in this Brief, showing that even under this pleading the trial court did not abuse its discretion in dismissing JJW s claims. BRIEF OF APPELLEE Page 13

28 contract claim, Texas law fully supported the trial court s ruling, and JJW has not established any abuse of discretion by the trial court in also dismissing this claim. a. Plaintiffs May Not Recast Negligence Claims as Other Causes of Action to Avoid Section (a) Requirements Some Texas courts interpreting section have held they are not bound by labels of claims used by the plaintiff and may look to a plaintiff s pleadings to determine whether claims asserted in addition to a negligence claim were, in fact, non-negligence claims. E.g., Ustanik v. Nortex Found. Designs, Inc., 320 S.W.3d 409, 415 (Tex. App. Waco 2010, pet. denied) (citing, inter alia, Zurich Am. Ins. Co. v. Nokia, Inc., 268 S.W.3d 487, 495 (Tex. 2008)); Ashkar, 2010 WL at *8. 10 Some courts, on the other hand, looked only to the label attached to the claim to decide whether it was a nonnegligence claim that allegedly fell outside the statute. See Consolidated Reinforcement v. Carothers Exec. Homes, Ltd., 271 S.W.3d 887, 894 (Tex. App. Austin 2008, no pet.), overruled by S&P, 334 S.W.3d at 403; Gomez v. STFG, Inc., 2007 WL at *2-3 (Tex. App. San Antonio 2007, no pet.) (mem. op.). The Ustanik court declined to follow these two cases using this latter approach, stating: We see no reason in these types of cases to be bound by the labels attached to the claims so as to keep us from looking at the pleadings to determine whether the claims asserted are actually non-negligence claims. Thus, we will not follow the methods used by Consol. Reinforcement and Gomez which looked only to the label used by the party for a claim. 10 The determination of whether allegations labeled as other causes of action are actually claims for negligence or something else is a question of law for the court. E.g.., Duerr v. Brown, 262 S.W.3d 63, 70 (Tex. App. Houston [14 th Dist.] 2008, no pet.). BRIEF OF APPELLEE Page 14

29 Ustanik, 320 S.W.3d at ; see also Ashkar, 2010 WL at *7-8. Strand urges this Court to follow the reasoning and principles from Ustanik and Ashkar. The court in Ashkar discussed the traditional principles used to determine whether the plaintiff s claims were tort claims or contract claims. Citing to Formosa Plastics Corp. USA v. Presidio Engineers & Contractors, Inc., 960 S.W.2d 41, 45 (Tex. 1998), and Southwestern Bell Telephone Co. v. DeLanney, 809 S.W.2d 493, (Tex. 1991), the court recognized that, to distinguish between tort and contract claims, the reviewing court considers the source of the duty owed and the nature of the remedy sought. Ashkar, 2010 WL at *7. When the plaintiff s claim arises only from a violation of a duty imposed by law, the claim sounds in tort. Id. When the claim arises only from a duty imposed by a contract, the claim is for breach of contract. Id. A contract between the parties, however, may create both tort and contract duties may result in breach of one or the other or both simultaneously. Id. As for the remedy sought, when the only injury is the economic loss to the subject matter of the contract, the plaintiff s action is ordinarily sounds in contract alone. Id. In Ashkar, the court of appeals analyzed, under these principles, the three claims pleaded against the defendant: negligence, breach of contract, and breach of implied warranty. As to negligence, the petition alleged that the defendant owed a duty to design, supervise, and test construction of an expansion joint as a reasonable professional engineer engaged in the construction business. Id. at *8. The defendant allegedly breached this duty by improperly designing the expansion joint, providing lax oversight BRIEF OF APPELLEE Page 15

30 of construction of the expansion joint, and conducting less-than-thorough testing of the expansion joint. Id. On the breach of contract claim, the petition alleged the defendant breached the contract by failing to deliver an expansion joint that would not leak potentially hazardous substances into the environment, failing to monitor or supervise the work of the subcontractor, and failing to properly test the expansion joint (although the parties did not have a written contract and the plaintiff did not present any specific provisions of a contract imposing any specific duties on the defendant). Id. at *8. On the breach of implied warranty claim, the petition alleged the defendant held itself out as having the knowledge and skill needed to design and manufacture industrial and chemical storage buildings (including the expansion joints), that the plaintiff relied on the defendant s skill and judgment in designing, engineering, and supervising construction of the expansion joint, and that all products and services provided by defendant were impliedly warranted to be fit for their intended purposes. Id. at 9. Comparing the allegations for the three asserted claims, the Ashkar court found the breach of contract and breach of implied warranty claims mirrored the allegations of negligence. Id. Through each claim, the court said, the plaintiff alleged the defendant failed to adequately design, test, and oversee the construction of the expansion joint. Id. These were precisely the types of professional services provided by engineers under the practice of engineering, as defined in section of the Texas Occupations Code. Id. Therefore, the plaintiff s claims implicated the quality of the professional services provided by the defendant. Id. at *10. BRIEF OF APPELLEE Page 16

31 Also, the damages sought by the plaintiff were for repairs and remediation, not for economic loss to the alleged contract itself. Id. Therefore, the court held the essence of the plaintiff s claims was that it was injured by the defendant s lapses in professional judgment, and that a breach of this duty gives rise to a tort action. Id. As a result, all the claims were subject to the Chapter 150 requirements, and the failure of the plaintiff to provide a certificate of merit required the claims to be dismissed. Id. In Ustanik, the court reached a similar conclusion about negligence and breach of contract claims asserted against an engineer for, coincidentally, failing to perform a proper pre-pour inspection of a foundation for a residence. Ustanik, 320 S.W.3d at 416. The plaintiffs negligence claim contended, among other things, that the defendants owed them a duty to perform a pre-pour inspection and to have the inspection done by an engineer. Id. Defendants allegedly breached this duty by having a non-engineer perform the pre-pour inspection, and the failure to perform a proper pre-pour inspection allegedly contributed to cause the foundation failure. Id. On the breach of contract claim, plaintiffs alleged defendants breached their contract by designing foundation plans that were inadequate for the geographic location of the home and by failing to perform a proper pre-pour inspection. Id. at 417. Plaintiffs alleged these breaches caused the foundation to fail. Id. Comparing the factual allegations and the pleaded claims, the Ustanik court concluded the plaintiffs underlying complaint was that they were injured by [defendants ] breach of the duty owed to the [plaintiffs] as a result of their engagement as professional engineers by failing to design a proper foundation and in not properly BRIEF OF APPELLEE Page 17

32 conducting a pre-pour foundation inspection. Id. Therefore, like the court in Ashkar, the Ustanik court held the additional claim of breach of contract (and other pleaded theories) constituted a claim for professional negligence and, thus, required plaintiffs to file a certificate of merit. Id. Because the plaintiffs did not comply with the statute, the trial court did not err in dismissing all the plaintiffs claims. Id.; see also generally CH2M Hill Trigon, Inc. v. J7 Contractors, Inc., 2010 WL at *7-9 (Tex. App. Waco 2010, no pet.) (mem. op.) (finding multiple alleged claims were essentially claims for professional negligence that required filing of certificate of merit). 11 b. Allegations in JJW s Second Amended Petition Assert Only Tort Claims Arising Out of the Provision of Professional Engineering Services Here, applying the principles for determining whether claims are tort claims or contract claims, the allegations by JJW in its Second Amended Petition are all negligence claims, despite the breach of contract label assigned by JJW. Consequently, the trial court did not abuse its discretion in dismissing the breach of contract claim, as well as the negligence claim, for JJW s failure to comply with the statutory requirements. In the Second Amended Petition, under the Negligence cause of action, JJW alleged that SSE [Strand] was responsible for the design of the foundation and for conducting a pre-pour inspection. (CR 24). The petition further alleged that SSE s 11 In the analogous medical malpractice context, in which Chapter 74 of the Civil Practice & Remedies Code requires a plaintiff to serve a report from a qualified medical expert within 120 days of filing the original petition, Texas courts (including this Court) also hold that a plaintiff may not recast a health care liability claim under another liability theory to avoid the statutory expert report requirements. E.g., Saleh v. Hollinger, 335 S.W.3d 368, 374 (Tex. App. Dallas 2011, pet. filed) (claims for misrepresentation and theft were just recast health care liability claims and subject to expert report requirements); Boothe v. Dixon, 180 S.W.3d 915, 920 (Tex. App. Dallas 2005, no pet.) (fraud claims were just recast health care liability claims and subject to expert report requirements); see also generally Texas Cypress Creek Hosp., L.P. v. Hickman, 329 S.W.3d 209, 214 (Tex. App. Houston [14 th Dist.] 2010, pet. denied) (plaintiff may not recast health care liability claim to avoid expert report requirements). BRIEF OF APPELLEE Page 18

33 pre-pour inspection occurred prior to any concrete being placed by Ramer. (Id.). JJW then asserted that the work performed by Ramer and SSE was deficient. SSE failed to perform any type of meaningful or adequate pre-pour inspection. (Id.). JJW claimed that, [d]ue to Ramer s and SSE s defective work related to the foundation, slab cracking has developed on the majority of the slab. (Id.). JJW also alleged that the foundation has suffered water infiltration due to Ramer s and SSE s negligence. (Id. at 24-25). In addition, JJW claimed that, by improperly conducting a pre-pour inspection, SSE caused damage to other exterior and interior components of the home. (Id. at 25). Lastly, JJW asserted that, [b]ecause of SSE s failure to conduct a meaningful or adequate pre-pour inspection, extensive repairs will be required, including repairing the cracks, the fireplace, the stain finish, trim work, and landscaping. (Id.). In the Causes of Action section of the Second Amended Petition, JJW alleged: 17. Negligence SSE SSE undertook the obligation as engineers to conduct a pre-pour inspection of the pad and SSE owed a legal duty to the Plaintiffs to conduct a proper and meaningful pre-pour inspection. SSE engineer Tamara Spicer sealed an engineering Pre-Pour Inspection report certifying that [t]he grading, beam excavations, and reinforcing were found to be as per [SSE s] plans and specifications. The work [by Ramer] was done according to industry standards and procedures. Nothing could be farther from accurate. In fact, the opposite is true: the turn key foundation preparation work done by Ramer was not done according to industry standards and the pad was not prepared by Ramer according to the SSE plans and specifications. SSE breached the standard of care applicable to engineers. Through its conduct described above, SSE breached the duty it owed to Plaintiffs. SSE s breach proximately caused Plaintiffs to suffer damages.... BRIEF OF APPELLEE Page 19