Texas Courts Split On Certificate Of Merit

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1 Portfolio Media. Inc. 860 Broadway, 6th Floor New York, NY Phone: Fax: Texas Courts Split On Certificate Of Merit Law360, New York (October 18, 2013, 5:36 PM ET) -- Aided by multiple revisions, the Texas Certificate of Merit Statute has accumulated a rich jurisprudence since its first version was enacted in Tex. Civ. Prac. & Rem. Code Ch Courts now decide most cases in terms of the 2009 version of the statute. But many cases decided on basis of the prior 2005 statute remain good law. Conflicting case law has developed regarding the question of whether the statute requires the certificate of merit to state a standard of care.[1] The Austin appeals court recently noted that its sister courts in Houston and Dallas declined to follow the Beaumont appeals court, which held that the certificate of merit must necessarily address the applicable standard of care and the defendant s failure to meet the standard. [2] But a close review of the cases suggests that the split might not be what it seems. The Certificate of Merit The certificate of merit is an affidavit by a qualified third-party professional. See generally, Tex. Civ. Prac. & Rem. Code. at , 002. No legislative history sheds light on the legislature s intent when it enacted Chapter 150. Palladian Bldg. Co. Inc. v. Nortex Found. Designs Inc., 165 S.W.3d 430, 436 (Tex. App. Fort Worth 2005, no pet.). But courts have adopted the proposition that the purpose of the certificate of merit is to provide a basis for the trial court to conclude that the plaintiff s claims have merit in cases arising from the provision of professional services. See, e.g., Criterium-Farrell, 248 S.W.3d at 399 (2005 statute); Morrison Seifert, 384 S.W.3d at 425 (2009 statute) (citing Criterium-Farrell). The plaintiff must file the affidavit with the first-filed petition unless faced with a looming statute of limitation deadline. Id. at (a), (c) (2009 statute). It is important to get it right. The plaintiff s failure to file the affidavit in accordance with this section shall result in dismissal of the complaint against the defendant. This dismissal may be with prejudice. Id. at (e) (emphasis added). The 2005 and 2009 statutes have different affidavit requirements. The 2005 statute requires that the affidavit set forth specifically at least one negligent act, error or omission claimed to exist and the factual basis for each such claim. Id. at (a) (2005 statute). The broader 2009 statute states that: The affidavit shall set forth specifically for each theory of recovery for which damages are sought, the negligence, if any, or other action, error or omission of the licensed or registered professional in providing the professional service, including any error or omission in providing advice, judgment, opinion or a similar professional skill claimed to exist and the factual basis for each such claim.

2 Id. at (b) (2009 statute). One of the main changes introduced with the 2009 statute is the requirement that the affidavit address each theory of recovery for which damages are sought, as opposed to just negligence claims under the 2005 statute. Neither version of the statute requires the affidavit to state a standard of care. Certain professions are held to a higher standard of care because they hold themselves out as having superior knowledge, training and skill. Pasquinelli Portrait Homes-Durango Ridge LP v. Securlock at Bedford Ltd., No CV, at *8 (Tex. App. Fort Worth, March 28, 2013, no pet. hist.) (mem. op.). The proper standard of care is established via expert testimony. Id. The standard of care for a licensed engineer is that which an engineer of ordinary prudence in the exercise of ordinary care would not have done under the same or similar circumstances or failing to do that which an engineer of ordinary prudence in the exercise of ordinary care would have done under the same or similar circumstances. Id. (citations omitted). The Beaumont Appeals Court Held in Criterium-Farrell That the Certificate of Merit Must Necessarily Address the Applicable Standard of Care The Beaumont appeals court decided the first case ever to address the standard-of-care issue. The plaintiff, a homebuyer, sued the inspector who had failed to detect the home s structural defects until after the buyer moved in. Criterium-Farrell, 248 S.W.3d at 396. The defendant moved to dismiss on the basis that the affidavit failed to comply with the 2005 statute s (a). The trial court denied the motion and the defendant immediately appealed. See Tex. Civ. Prac. & Rem. Code (e) (2005) and (f) (2009) (allowing interlocutory appeals of orders granting or denying dismissals under Chapter 150). The court noted that the 2005 statute required only that the certificate of merit set out at least one negligent act, error or omission claimed to exist and the factual basis for each such claim. Noting that [n]egligence is conduct that falls below the applicable standard of care, the court held that the certificate of merit must necessarily address the applicable standard of care and the defendant s failure to meet the standard. Criterium-Farrell, 248 S.W.3d at 400. The affidavit stated that (1) the inspector inaccurately surveyed the home s first-floor elevation differentials; (2) an accurate survey would have detected the foundation problems; (3) the engineer should have surveyed the home s second floor (but did not) and (4) a cursory second-floor survey would have revealed the excessive elevation differentials. In fact, a competent inspector would have noticed the differentials by simply walking across the second floor. Finding that the affidavit complied with the 2005 statute, the appeals court affirmed the trial court s denial of the motion to dismiss. The court was satisfied that the affidavit had set forth at least one negligent act in compliance with the 2005 statute. The ruling does not state that the affidavit s assertion that the inspector should have surveyed the home s second floor satisfied the court s standard-of-care requirement. The ruling also offers no guidance on what an affidavit should contain to satisfy this requirement. As noted, Criterium-Farrell was decided on the basis of the 2005 statute. Because the 2009 statute also requires the affidavit to set forth the professional s negligence,... error or omission, Criterum- Farrell s holding should still be good law, at least until the Beaumont appeals court decides to revisit the

3 issue. The Corpus Christi Appeals Court Cited Criterium-Farrell But Did Not Expressly Hold That the Certificate of Merit had to State the Applicable Standard of Care In Durivage v. La Alhambra Condominium Association, the affidavit stated that the affiant was familiar with the [applicable] standard of care, and explained how the professional engineer (a roof inspector) had breached that standard by failing to ensure that the roofs in dispute complied with certain building codes. No CV, (Tex. App. Corpus Christi Dec. 21, 2011, pet. dism d) (mem. op.) (2009 statute). The defendant inspector appealed the trial court s denial of his motion to dismiss. On appeal, the inspector suggested (the court s term) that the affidavit had to state precisely how the roof was insufficient and to specify which code provisions it violated. The appeals court held that the 2009 statute did not explicitly require such details. The court then held that the certificate-of-merit requirements under Chapter 150 were less onerous than expert report requirements under the Texas Medical Liability statute, which expressly requires a standard of care. See Tex. Civ. Prac. & Rem. Code (r)(6). The court held that the plaintiff s affidavit explains that [the affiant] is familiar with the applicable standard of care and how [the inspector] allegedly breached that standard. The court cited Criterium- Farrell for its holding that the certificate of merit must necessarily address the applicable standard of care and the defendant s failure to meet the standard. The court then held that the affidavit provided the statutory factual basis for plaintiff s negligence claim and affirmed that part of the trial court s decision. Durivage is not without ambiguity. The court cited Criterium-Farrell for its standard-of-care holding, but also held that the certificate-of-merit statute is less onerous than the medical liability statute, which requires a standard of care. The decision also does not expressly state that ensuring compliance with the applicable building codes constituted the applicable standard of care. The next certificate-of-merit case from the Corpus Christi appeals court that raised the standard-of-care issue did not find it necessary to resolve it. Garza v. Carmona, 390 S.W.3d 391, 398 (Tex. App. Corpus Christi 2012, no pet.) (applying the 2009 statute). Garza, therefore, sheds no additional light on the issue. The Houston and Dallas Appeals Courts Declined to Require a Certificate of Merit Standard of Care Five cases from the Houston and Dallas appeals courts hold that affidavits do not need to specify a standard of care. Three of these cases (all from Houston) are based on the 2005 statute. The other two cases are based on the 2009 statute. In Benchmark, the defendant argued, in part, that the affidavit was deficient because it did not include or explain the applicable standard of care... and describe how [the defendant] deviated from that standard. Analyzing the language of the 2005 statute, the court rejected the defendant s plea for a standard of care. The court noted that the statute did not expressly require that the affiant state the applicable standard of care. The court also observed that the Legislature had amended the statute three times since it was enacted in 2003, without ever introducing a standard-of-care requirement. Finally, the court invoked the presumption that every word excluded from a statute must also be presumed to have been excluded for a purpose. Benchmark, 316 S.W.3d at 44 (citing Cameron v. Terrell & Garrett Inc., 618 S.W.2d 535, 540 (Tex. 1981)).

4 The Houston appeals court upheld Benchmark in three subsequent decisions based on both the 2005 and 2009 statutes. See CBM Engineers Inc. v. Tellepsen Builders LP, No CV (Tex. App. Houston [1st Dist.] Aug. 30, 2012, pet. denied) (not released for publication) (2005 statute); Gartrell v. Wren, No CV (Tex. App. Houston [1st Dist.] Dec. 8, 2011, pet. denied) (mem. op.) (2009 statute); Sharp Engineering v. Luis, 321 S.W.3d 748 (Tex. App. Houston [14th Dist.] 2010, no pet.) (2005 statute). In Morrison, the Dallas appeals court noted the split between its Houston and Beaumont sister courts and sided with the first in holding that an affidavit need not state the applicable standard of care. 384 S.W.3d at (citing Benchmark and Criterium-Ferrell) (2009 statute). The Austin Appeals Court Also Declined to Impose a Standard-of-Care Requirement In Elness Swenson Graham Architects Inc. v. RLJ II-C Austin Air LP, the defendant also argued, among other issues, that the affidavit was deficient because it did not expressly state the applicable standard of care. No CV, 2011, at *4 (Tex. App. Austin Apr. 20, 2011, pet. denied) (mem. op.) (2009 statute). The court rejected the defendant s plea based on the Benchmars and Gartrell opinions. But the court added that: negligence is, by definition, conduct that falls below the applicable standard of care. By averring that the licensed or registered professional s conduct is negligent, the affiant is necessarily opining that the complained-of conduct did not meet the applicable standard of care. Such an opinion suffices to fulfill the certificate s purpose of providing a basis for the trial court to conclude whether the plaintiff s claims have merit. See Criterium-Farrell Engineers, 248 S.W.3d at (certificate of merit that identifies negligent conduct necessarily addresses applicable standard of care and defendant s failure to meet that standard). Elness, at *4 (emphasis added). But Criterium-Farrell holds that [n]egligence is conduct that falls below the applicable standard of care. Therefore, the certificate of merit must necessarily address the applicable standard of care and the defendant's failure to meet the standard. This last sentence and Elness s parenthetical do not necessarily mean the same thing. Did the Elness Court construe Criterium-Farrell s holding that the certificate of merit must necessarily address the applicable standard of care to mean that a certificate of merit that identifies negligent conduct necessarily addresses applicable standard of care?" The courts might not be split over the standard-of-care requirement if the Austin appeals court construed Criterium-Farrell in this manner, and did so correctly. The Austin appeals court recently revisited the standard-of-care issue in Sylva. The defendant, Sylva Engineering, appealed the trial court s denial of its motion to dismiss for failure to state the applicable standard of care. The plaintiff was permanently disabled in an accident that occurred after his car hit a pool of water that had accumulated on a poorly drained highway. Sylva unsuccessfully urged the court to adopt Criterium-Ferrell s holding that the certificate of merit must necessarily address the applicable standard of care. Under the defendant s statutory construction, the court explained, the affidavit would have had to specify where Sylva should have installed drainage inlets on the highway. The court held that Criterium-Ferrell did not support Sylva s argument. It noted that Criterium-Ferrell s affidavit did not use the phrase standard of care and that the Beaumont appeals court

5 held that the [Criterium-Farrell] affidavit satisfied the requirements of the then-applicable version of Section because the affidavit, taken as a whole, listed several specific omissions and averred that had it not been for those omissions, the plaintiff would not have suffered harm. Nothing in Criterium-Farrell can be read to suggest that in addition to stating what actions or omissions by the defendant constituted negligence an affiant must state what additional actions the defendant should have taken and how those proposed actions would have complied with the applicable standard of care. Sylva, at *4. This language suggests that the Austin appeals court does not construe Criterium-Farrell to hold that an affidavit must state the applicable standard of care. If the Austin appeals court correctly interpreted Criterium-Farrell, the Texas appeals courts might not be split on this issue. Seen in this light, Durivage might also agree with Elness and Sylva. --By Pierre Grosdidier, Haynes and Boone LLP Pierre Grosdidier is an associate in Haynes and Boone s Houston office. The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice. [1] There is also a conflict regarding the factual basis of claims asserted. See Pierre Grosdidier, Courts of Appeals split over the Texas Certificate of Merit Statute s theory of recovery requirement, TCP&R Code (b). [2] Sylva Engineering Corp. v. Kaya, No CV, at *3 (Tex. App. Austin Apr. 18, 2013, no pet. h.) (mem. op.) (emphasis added in Sylva) (citing Benchmark Engineering Corp. v. Sam Houston Race Park, 316 S.W.3d 41 (Tex. App. Houston [14th Dist.] 2010, pet. granted, judgm t vacated w.r.m.) (2005 statute); Morrison Seifert Murphy Inc. v. Zion, 384 S.W.3d 421, 425 (Tex. App. Dallas 2012, no pet.) (2009 statute); and Criterium-Farrell engineers v. Owens, 248 S.W.3d 395, 399 (Tex. App. Beaumont 2008, no pet.) (2005 statute)). All Content , Portfolio Media, Inc.

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