Before you file or defend a lawsuit against a licensed or registered professional, be sure to carefully review Chapter 150 of the Texas Civil Practices & Remedies Code, as amended by the Texas Legislature on June 10, 2019, and the Texas Supreme Court’s recent opinion in the case of LaLonde, Jr. et al v. Gosnell, No. 16-0966, 2019 WL 2479172 (Tex. June 14, 2019).
Chapter 150 applies to suits against a licensed or registered professional for damages arising out of the provision of professional services by the licensed or registered professional. For example, in a suit against a licensed or registered professional for breach of contract, negligence, gross negligence, negligent misrepresentation, fraud, or breach of warranty – to name a few – arising from the provision of the professional services, Chapter 150 requires that the claimant (which may include a plaintiff or a third-party plaintiff) file together with the complaint, a “certificate of merit” from a similarly licensed professional attesting to the merits of the complaint. A licensed or registered professional includes the following:
- A licensed architect.
- Licensed professional engineer.
- Registered professional land surveyor.
- Registered landscape architect.
- Any firm in which such licensed or registered professional practices.
The “certificate of merit” from the similarly licensed professional must be in affidavit form, must be based on the person’s knowledge, skill, experience, education, training, and practice, and must set forth “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.” Tex. Civ. Prac. & Rem. Code § 150.002(a) and (b).
The only exception to the contemporaneous filing of the “certificate of merit” with the complaint is when a statute of limitations will expire within 10 days of the date of filing and the claimant alleges they did not have enough time to get the “certificate of merit” prepared. Even under this exception, the claimant must supplement the pleading with the “certificate of merit” within 30 days of the filing of the complaint. Tex. Civ. Prac. & Rem. Code § 150.002(c).
Notably, a claimant’s failure to file the required certificate of merit in accordance with the requirements of Chapter 150, “shall result in dismissal of the complaint against the defendant.” Tex. Civ. Prac. & Rem. Code § 150.002(e) (emphasis added).
This “certificate of merit” requirement is a mandatory and substantive requirement, implemented to help licensed professionals avoid the expense and delays of meritless litigation, by disposing of frivolous claims before litigation commences. In fact, a defendant is not even required to file an answer to the complaint until 30 days after a “certificate of merit” is filed. Tex. Civ. Prac. & Rem. Code § 150.002(d). If a claimant fails to file a “certificate of merit” that meets the requirements of Chapter 150, the defendant may seek a mandatory dismissal of the lawsuit, which “shall” be granted by the trial court and “may” be granted with prejudice.
Whether the dismissal is with or without prejudice is within the trial court’s discretion. While the statute does not provide specific rules or guidance on when a dismissal should be granted with or without prejudice, the Texas Supreme Court has held that the trial court should look to the purpose of the statute – which is “to deter meritless claims and bring them quickly to an end.” Pedernal Energy, LLC v. Bruington Eng’g, Ltd., 536 S.W.3d 487, 494 (Tex. 2017), reh’g denied (June 23, 2017). An order granting or denying a motion for dismissal is immediately appealable as an interlocutory order. Tex. Civ. Prac. & Rem. Code § 150.002(f).
The right to seek dismissal should the claimant fail to file a “certificate of merit” is absolute and the statute does not explicitly reference a deadline by which the defendant must exercise its right to seek dismissal. However, according to a recent 6-3 decision of the Texas Supreme Court issued in LaLonde, Jr. el al. v. Gosnell, a defendant can impliedly waive the “certificate of merit” requirement by litigating inconsistently with claiming the right to absolute dismissal.
Specifically, in LaLonde, the claimants – two homeowners who sued several engineers for foundation problems in their home – failed to file the “certificate of merit.” Rather than promptly seeking dismissal of the lawsuit, the engineers filed an answer, engaged in discovery, produced documents, designated experts, filed motions seeking to shift responsibility to third parties, participated in two mediations, and did not file a motion to dismiss until the eve of trial — 1,219 days after the suit was filed.
The trial court granted the motion to dismiss based on the statute, but the court of appeals reversed. The Texas Supreme Court affirmed the court of appeals’ judgment and found based on the totality of the circumstances, that all of the engineers’ actions demonstrated their intent to litigate the case on the merits and therefore, that they had impliedly waived their right to seek dismissal pursuant to § 150.002(e).
While waiver was found in LaLonde, according to the Texas Supreme Court, “not all litigation conduct is necessarily so inconsistent with a party’s rights under section 150.002 to imply an intent to relinquish those rights.” For example, defensive or responsive conduct to the litigation does not automatically give rise to waiver. So while there is still no deadline, and no bright line rule on how much litigation conduct is necessary before it will be deemed “so inconsistent” with a defendant’s dismissal right, there may be point after which a defendant’s absolute right to seek dismissal under § 150.002(e) may no longer be protected.
Counsel on both sides of the docket should be mindful of the mechanics and requirements of Chapter 150. While the statutory dismissal rights are a shield for defendants, the holding in LaLonde makes it clear that it’s no longer entirely impenetrable. Sarah Santos