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Court Of Appeals Of Texas Holds The Certificate Of Merit Requirement Does Not Apply To Third Party Contribution Claims

In Engineering and Terminal Services, L.P. v. TARSCO and Orcus Fire Protection, LLC, 525 S.W. 3d 394 (TX 2018), the Court of Appeals of Texas held the statutory requirement to file a Certificate of Merit along with a lawsuit based on professional negligence of an engineer does not apply to third party claims for contribution.

Engineering and Terminal Services, LP (“ETS”) contracted with Buckeye Partners, LP (“Buckeye”) to provide engineering design and support services for a petroleum processing facility.  ETS subcontracted with TARSCO to provide on-site engineering and design services and Orcus Fire Protection, LLC (“Orcus”) to provide fire-protection engineering consulting services.  ETS sued Buckeye for breach of contract based on its alleged failure to pay for ETS’s services.  Buckeye counterclaimed against ETS, alleging ETS’s errors and omissions caused Buckeye to incur damages.  Buckeye’s complaints related to work that ETS subcontracted to TARSCO and Orcus.

ETS denied liability and denied Buckeye’s allegations that the engineering and design services were defective. ETS filed a Third-Party Complaint against TARSCO and Orcus, alleging to the extent ETS was liable to Buckeye, ETS sought contribution from TARSCO and Orcus.  ETS did not file a Certificate of Merit with its Third-Party Complaint against TARSCO and Orcus.

TARSCO and Orcus filed Motions to Dismiss ETS’s Third-Party Complaint under the Texas Civil Practice and Remedies Code, § 150.002, arguing ETS failed to file a Certificate of Merit in support of the Third-Party Complaint.  In relevant part, §150.002 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 and surveyor. . . .”

Tex. Civ. Prac. & Rem. Code § 150.002. 

ETS responded to the Motions to Dismiss and argued Third-Party Plaintiffs are exempt from the Certificate of Merit requirement.  ETS relied on the Supreme Court of Texas’s decision in Jaster v. Comet II Construction, Inc., 438 S.W.3d 554 (     ), which held that counterclaim-defendants are not required to file Certificates of Merit in support of counterclaims.   ETS argued the Certificate of Merit requirement applies only to the original plaintiff when it initiates an action arising out of the provision of professional services, and ETS’s complaint did not assert an original claim arising out of the provision of professional services, rather, ETS just sought contribution.  The trial court disagreed with ETS and granted TARSCO’s and Orcus’s Motions, dismissing ETS’s claims against them with prejudice.

ETS appealed and the Court of Appeals reversed the ruling.  The Court held that Jaster was binding law and the facts of this case were not distinguishable from Jaster. The Court held the principles identified in Jaster apply equally to plaintiffs, defendants, and counterclaim-defendants acting as third-party plaintiffs.  Under Jaster, Buckeye, as a Counterclaim Plaintiff, was not required to file a Certificate of Merit and TARSCO and Orcus could not impose that burden on ETS when it sought contribution for Buckeye’s claims.

The Court’s ruling affirms the principle that § 150.002, requiring a Certificate of Merit, applies only to an underlying plaintiff who initiates an action for damages arising out of the provision of professional services by a licensed or registered professional.  A third-party plaintiff asserting a claim for contribution based on the provision of professional services is not required to comply with the provision of § 150.002.