Court Opinion

ID: 3095974
Source: CourtListenerOpinion
Date Created: 2015-10-16 04:34:46.002221+00
Date Added: 2024-06-11T11:20:19.169573
License: Public Domain

COURT OF APPEALS
                         SECOND DISTRICT OF TEXAS
                              FORT WORTH

                              NO. 02-12-00233-CV

RCS ENTERPRISES, LP AND                                            APPELLANTS
JAMES MARTIN MONTGOMERY

                                        V.

DARRELL G. HILTON AND DEBBIE                                        APPELLEES
L. HILTON

                                     ----------

          FROM THE 43RD DISTRICT COURT OF PARKER COUNTY

                                     ----------

                        MEMORANDUM OPINION 1

                                     ----------

      Appellants RCS Enterprises, LP (RCS) and James Martin Montgomery

filed a motion to dismiss the lawsuit brought against them by Appellees Darrell G.

Hilton and Debbie L. Hilton. The trial court denied that motion, and RCS and

Montgomery now appeal. They alternately seek a writ of mandamus ordering the

trial court to not consider the Hiltons’ supplemental expert affidavit. Because we

      1
       See Tex. R. App. P. 47.4.
hold that the Hiltons were not required to file a certificate of merit with their claim,

we affirm the trial court’s order and deny the mandamus petition.

                                    Background

      On June 17, 2011, the Hiltons filed a petition to compel arbitration against

Nationwide Housing Systems LP and Oak Creek Homes LP (collectively Oak

Creek). The Hiltons alleged that they had entered into a purchase and sales

agreement with Oak Creek for a modular home to be constructed by Oak Creek

and that Oak Creek had, among other things, failed to remedy numerous

construction defects in the home.           The Hiltons demanded arbitration in

accordance with the arbitration addendum to the sales contract.

      Oak Creek filed a motion to designate Americo Housing, Inc. as a

responsible third party. The Hiltons then amended their petition to add Americo,

RCS, and Montgomery as defendants. 2 The Hiltons alleged that Oak Creek had

contracted with Americo to assume Oak Creek’s duties under the contract and

that Oak Creek had contracted with RCS to prepare the engineered foundation

plan for the home.      The Hiltons alleged that RCS and Montgomery (RCS’s

president) had also acted as the third party inspection agency and third party

inspector (TPI) for the home and that they had breached their duties that they

owed to the Hiltons in that capacity.

      2
       Oak Creek and Americo are not involved in this appeal.

                                           2
       The Hiltons’ first amended petition did not include a certificate of merit.

The Hiltons filed their second amended petition a week later, attaching the

affidavit of engineer Tim Hogue.

       Montgomery and RCS filed an original answer and a motion to dismiss

based on civil practice and remedies code section 150.002. 3 The Hiltons filed a

combined response and a motion for leave to file a supplemental affidavit. The

trial court signed an order denying the motion to dismiss and granting leave to file

a supporting affidavit. The Hiltons then filed a third amended petition along with

Hogue’s supporting affidavit. Montgomery and RCS now appeal the trial court’s

denial of their motion to dismiss and the court’s granting of leave for the Hiltons

to file a supporting affidavit.

                                  Standard of Review

       We review a trial court’s ruling on a motion to dismiss for an abuse of

discretion. 4 To determine whether a trial court abused its discretion, we must

decide whether the trial court acted without reference to any guiding rules or

principles; in other words, we must decide whether the act was arbitrary or

unreasonable. 5

       3
Tex. Civ. Prac. & Rem. Code Ann. § 150.002 (West 2011).
       4
       Jernigan v. Langley, 195 S.W.3d 91, 93 (Tex. 2006); Palladian Bldg. Co.
v. Nortex Found. Designs, Inc., 165 S.W.3d 430, 433 (Tex. App.—Fort Worth
2005, no pet.).
       5
       Cire v. Cummings, 134 S.W.3d 835, 838–39 (Tex. 2004).

                                          3
      Statutory construction is a question of law, which we review de novo. 6

Once we determine the proper construction of a statute, we determine whether

the trial court abused its discretion in the manner in which it applied the statute to

the instant case. 7

                                       Analysis

      In their first issue, Montgomery and RCS argue that the trial court abused

its discretion when it denied their motion to dismiss because dismissal was

mandatory based on the Hiltons’ failure to timely file a certificate of merit.

Certificate of Merit Statute

      In suits “for damages arising out of the provision of professional services

by a licensed or registered professional,” the civil practice and remedies code

requires the plaintiff to provide an affidavit—called a “certificate of merit”—made

by a professional who holds the same professional license as the defendant. 8

For each theory of recovery on which the plaintiff is basing a claim for damages,

the affidavit “shall set forth specifically . . . the negligence, if any, or other action,

error, or omission of the . . . professional in providing the professional service.” 9

With respect to a claim against an engineer, if the statute applies, the plaintiff

      6
       Palladian Bldg., 165 S.W.3d at 436.
      7
       Id.
      8
       Tex. Civ. Prac. & Rem. Code Ann. § 150.002(a).
      9
       Id. § 150.002(b).

                                            4
must file with the trial court the affidavit of a third-party registered licensed

professional engineer. 10 If the plaintiff does not file the affidavit in compliance

with the statute, the trial court must dismiss the claims against the defendant. 11

RCS and Montgomery argued below and assert on appeal that the Hiltons’

claims against them required the Hiltons to provide a certificate of merit and that

the Hiltons failed to file a certificate by the statutory deadline.

To What Professional Services Does Section 150.002 Apply?

      Courts have held that the specific acts on which the claim is based do not

themselves have to constitute the provision of professional services in order for

the statute to apply. All that is required to make the statute applicable is that the

claim arose out of the provision of professional services. 12 If, in the course of

providing a professional service to which the statute is applicable, the defendant

committed some act that gave rise to the claim, the statute applies. 13

      In their brief, RCS and Montgomery stated that the Hiltons had to file a

certificate of merit “because professional services were involved.” They argue

that the statute does not explicitly state that the defendant must be providing

engineering services for the statute to apply, but instead only requires that the

      10
        Id. at § 150.002(a).
      11
        Id. § 150.002(e).
      12
       See Dunham Eng’g, Inc. v. Sherwin-Williams Co., 404 S.W.3d 785, 793
(Tex. App.—Houston [14th Dist.] 2013, no pet.).
      13
        See id.

                                            5
defendant be providing “professional services.” “Thus,” RCS and Montgomery

argue, “it is the providing of ‘professional services’ by the defendant that is the

focus of the . . . statute, not necessarily whether the defendant was engaged in

the ‘practice of engineering.’”

      RCS and Montgomery then spend several pages of their brief discussing

the definition of “professional services” in other contexts, including in the context

of insurance policies covering the rendering of professional services 14 and in

various Texas statutory codes. 15 RCS and Montgomery acknowledge that cases

involving section 150.002 have looked at the definition of the practice of

engineering in the occupations code, but they contend that those cases “were

caught up in the debate about whether the [c]ertificate of [m]erit statute applied to

claims other than for negligence, and thus are limited by that discussion.”

      We do not agree with RCS and Montgomery, however, that the

occupations code does not provide us with guidance as to what constitutes the

professional services to which the statute applies. We believe that to determine

what constitutes professional engineering services, the legislature’s decision

about what constitutes the practice of engineering provides the best guide.

      14
       See Utica Lloyd’s of Tex. v. Sitech Eng’g Corp., 38 S.W.3d 260, 263
(Tex. App.—Texarkana 2001, no pet.); Atlantic Lloyd’s Ins. Co. v. Susman
Godfrey, L.L.P., 982 S.W.2d 472, 477 (Tex. App.—Dallas 1998, pet. denied).
      15
       See Tex. Bus. Orgs. Code Ann. § 301.003(8) (West 2012); Tex. Health &
Safety Code Ann. § 12.0121(a) (West 2010); Tex. Gov’t Code Ann.
§ 2254.002(2)(A)–(B) (West 2008).

                                         6
Referencing the occupations code ties the requirement of providing an affidavit of

a person with the same professional license as the defendant to the purpose of

the statute—to provide a basis for the trial court to determine whether the

plaintiff’s claim has any merit. 16 A third-party engineer would have no better

knowledge than the trial court about what was required for services that do not

fall within the practice of engineering, and an affidavit from an engineer in that

case would not help the trial court to determine whether the plaintiff’s claim has

any merit.

      For that same reason, and construing the statute as a whole, section

150.002 does not apply generally to all claims of any kind against a defendant

holding one of the professional licenses included within section 150.002. If a

defendant happens to be a licensed engineer and provided some sort of service

to the plaintiff, but not a professional engineering service, then a claim that arises

out of the defendant’s performance of that service does not fall within the

statute’s application. 17 For example, an engineer who has a side business of

      16
         See Morrison Seifert Murphy, Inc. v. Zion, 384 S.W.3d 421, 425         (Tex.
App.—Dallas 2012, no pet.) (“[T]he purpose of the certificate of merit          is to
provide a basis for the trial court to conclude that the plaintiff’s claims     have
merit.”) (quoting Criterium–Farrell Eng’rs v. Owens, 248 S.W.3d 395, 399        (Tex.
App.—Beaumont 2008, no pet.).
      17
        See, e.g., Carter & Burgess, Inc. v. Sardari, 355 S.W.3d 804, 809 (Tex.
App.—Houston [1st Dist.] 2011, no pet.) (deferring to the legislature’s definition of
the practice of architecture in the occupations code “to define the scope of
professional services provided by an architectural firm for purposes of
determining whether a certificate of merit is required”); TDIndustries, Inc. v.
Rivera, 339 S.W.3d 749, 755–56 (Tex. App.—Houston [1st Dist.] 2011, no pet.)

                                          7
mowing lawns could be sued for an act done in the course of providing those

lawn care services, and no certificate of merit would need to be provided. In this

case, if the Hiltons’ claim against RCS and Montgomery did not arise out of RCS

and Montgomery’s provision of engineering services, then the statute does not

apply. But if RCS and Montgomery acted as a TPI in the course of providing

professional engineering services, the statute does apply, even if acting as a TPI

would not, in and of itself, constitute the practice of engineering. We therefore

determine whether work as a TPI constitutes the practice of engineering, and, if

not, whether it was in this case done as part of the provision of engineering

services.

Do the Services Allegedly Provided Fall Within Section 150.002?

      RCS and Montgomery argue that their alleged activities fall within

application of section 150.002. In their live pleadings at the time that the trial

court overruled the motion to dismiss and RCS and Montgomery filed their notice

of appeal, the Hiltons alleged that RCS was a TPI agency, that Montgomery was

a TPI employed by RCS, and that RCS and Montgomery owed duties to the

Hiltons by virtue of Montgomery’s role as the TPI. They alleged that RCS and

Montgomery assumed duties under rules promulgated by the Texas Department

(holding that claims against an engineering firm did not require a certificate of
merit because they did not implicate an engineer’s specialized knowledge or
judgment).

                                        8
of Licensing and Regulation (TDLR), which regulates the construction and

installation of modular homes like the one purchased by the Hiltons.

         The Hiltons asserted that at the times relevant to this case, the TDLR rules

required inspections of modular homes constructed outside of a municipality to

be made by a TPI. The rules required the TPI (1) to inspect the foundation

construction and verify if the foundation was being constructed in accordance

with the foundation plans for the home and (2) to post a deviation notice if the

TPI discovered that construction did not conform to the plans. The rules further

required the TPI to file original reports for its inspections with the TDLR. The

Hiltons alleged that RCS and Montgomery breached their duties in that they

failed to inspect, verify, and report that the construction did not conform to the

plans.     They further allegedly breached their duties by failing to post any

deviation notice, failing to make any TPI site inspection report, and failing to file

any written report with the TDLR for any site inspection of the foundation.

         The Hiltons also alleged that Montgomery made false representations to

Americo about an alternative plan for the foundation’s footings that it could use

while still satisfying the foundation plan’s requirements. They alleged that RCS’s

and Montgomery’s conduct constituted fraud and fraudulent concealment or

alternatively negligence or gross negligence.

         In their response to the motion to dismiss, the Hiltons asserted that they

alleged claims against Montgomery for acts done in his capacity as a TPI in

February 2009, and against RCS for vicarious liability for Montgomery’s acts.

                                           9
They again asserted that TDLR rules do not require a TPI to be a licensed

engineer or require any education, training, or experience in engineering

sciences. They contended that “due to concerns of limitations defenses,” they

“promptly joined [RCS and Montgomery] . . . shortly after discovering their being

the TPI. Though [the Hiltons] believed no certificate of merit was necessary, out

of precaution [they] obtained the supporting affidavit of Tim Hogue, P.E.” and

attached it to the second amended petition.

      No party disputed in the pleadings and motions filed in the trial court that

RCS was retained to provide a foundation plan for the Hiltons’ home, that

Montgomery created the foundation plan on behalf of RCS, or that the act of

creating an engineered foundation plan falls within the practice of engineering.

The parties do dispute, however, whether Montgomery’s work as the TPI for the

Hiltons’ home was done in the context of providing a professional engineering

service.

      The Hiltons are correct that under Texas regulations, a TPI does not need

to be an engineer. In fact, a TPI does not need a college degree of any kind. 18 A

TPI agency must be managed by a licensed professional, but that professional

may be either an engineer or an architect. 19 Yet the TPI, who need not have an

      18
       See 16 Tex. Admin. Code § 70.23(c)(3); cf. Tex. Occ. Code Ann.
§ 1001.302 (West 2012) (requiring an applicant for an engineering license to
have graduated from an approved engineering curriculum or approved related
science curriculum at an institution of higher learning).
      19
           16 Tex. Admin. Code § 70.23(c).

                                        10
engineering degree and does not need to be supervised by an engineer and can

work for an agency that is not managed by an engineer, is responsible for

inspecting the structure to determine if it meets the engineered foundation

plans. 20

       Occupations code section 1001.003(c) includes a list of activities that are

included within the practice of engineering. 21 Professional engineering services

are being provided when they implicate a professional engineer’s education,

training, and experience in applying special knowledge or judgment. 22

Specifically, the statute provides:

             (b) In this chapter, “practice of engineering” means the
       performance of or an offer or attempt to perform any public or private
       service or creative work, the adequate performance of which
       requires engineering education, training, and experience in applying
       special knowledge or judgment of the mathematical, physical, or
       engineering sciences to that service or creative work.

                (c) The practice of engineering includes:

                ....

                              (9) engineering for review of the construction or
                       installation of engineered works to monitor compliance
                       with drawings or specifications;

                       . . . . [or]

       20
            16 Tex. Admin. Code § 70.73.
       21
            Tex. Occ. Code Ann. § 1001.003(c) (West 2012).
       22
       See Bruington Eng’g Ltd. v. Pedernal Energy L.L.C., 403 S.W.3d 523,
529 (Tex. App.—San Antonio 2013, no pet.); Rivera, 339 S.W.3d at 754.

                                           11
                         (12) any other professional service necessary for
                   the planning, progress, or completion of an engineering
                   service. 23

      RCS and Montgomery argue that their actions fit within the types of

activities included in subsection (c)(9) and (c)(12). Specifically, they argue that

the Hiltons’ allegations that Montgomery failed to report whether construction of

the foundation complied with the foundation plans fits within the “monitor

compliance with drawings or specifications” language in (c)(9). But RCS and

Montgomery ignore the rest of (c)(9), which begins with the word “engineering”:

“engineering for review of the construction or installation of engineered works to

monitor compliance with drawings or specifications.” 24 We have already stated

that a TPI, who need not be an engineer or supervised by an engineer, inspects

foundations for compliance with foundation plans. If inspecting a foundation to

see if it complies with a foundation plan necessarily implicated an engineer’s

training, education, and experience, TPI regulations would require TPIs to be

engineers. They do not. Thus, merely inspecting a foundation does not involve

an engineer’s specialized education, training, and experience, and is therefore

not the practice of engineering. To constitute engineering, it must involve the use

of an engineer’s education, training, and experience in applying special

knowledge or judgment.

      23
        Tex. Occ. Code Ann. § 1001.003(b), (c) (emphasis added).
      24
        Id. § 1001.003(c)(9) (emphasis added).

                                        12
      RCS and Montgomery also argue that the acts alleged by the Hiltons fall

within (c)(12) because they involve the provision of professional services. But

what kind of professional services?      Subsection (c)(12) includes within the

practice of engineering any professional service necessary for the completion of

an engineering service. 25     Thus, the application of (c)(12) presupposes the

provision an engineering service—a service that implicates an engineer’s

education, training, or experience. The application of (c)(12) is not limited to

those activities that need an engineer to perform them, but to be included, an

activity has to be one that is necessary for the planning, progress, or completion

of a service that involves the practice of engineering—in other words, one for

which an engineer is required. If there is no engineering service being provided,

then (c)(12) does not apply.

      Given that work as TPI does not require any of the specialized knowledge

of an engineer, the acts alleged by the Hiltons do not fall within the practice of

engineering because they do not implicate an engineer’s specialized education,

training, and experience. And there was no allegation that Montgomery acted as

the TPI as part of the provision of engineering services.        Inspection of a

foundation can be done as part of the provision of an engineering service, in

which case the act would fall within the practice of engineering. But the Hiltons

did not allege that RCS acting as the TPI was done in the course of RCS

      25
       Id. § 1001.003(c)(12).

                                        13
providing engineering services. The only allegations on the matter were that

after the home was constructed, Oak Creek caused RCS to act as the TPI. The

petition does not contain allegations of facts related to the performance of

services by RCS and Montgomery that implicate an engineer’s education,

training, and experience in applying special knowledge or judgment. From this

record, we cannot conclude that the trial court abused its discretion by

concluding that Montgomery did not inspect the foundation while performing

professional engineering services.

      This case is distinguishable from Capital One v. Carter & Burgess, Inc. 26

In that case, the defendant firm was hired to provide professional engineering

services, and the claims were based on the plaintiff’s reliance on allegedly false

representations made as part of the defendant’s performance of the professional

engineering services for which the firm had been hired. 27 The claim therefore

arose from that firm’s provision of professional engineering services. 28

      This case is also distinguishable from TDIndustries, Inc. v. Citicorp North

America, Inc. 29 In that case, we determined that the acts by TDI alleged in the

      26
        344 S.W.3d 477, 480 (Tex. App.—Fort Worth 2011, no pet.).
      27
        Id. at 481.
      28
        Id.
      29
        378 S.W.3d 1 (Tex. App.—Fort Worth 2011, no pet.).

                                         14
petition fit within the definition of the practice of engineering. 30 We also stated

(as we do in this case) that “a claim for damages asserted against a professional

engineer arises out of the provision of professional services (and thus requires a

certificate of merit) if the claim implicates the engineer’s education, training, and

experience in applying special knowledge or judgment” and that “if a plaintiff’s

claim for damages does not implicate the special knowledge and training of the

subject professional, it cannot be a claim for damages arising out of the provision

of professional services.” 31 And in that case, the plaintiff alleged that TDI had

installed complex machinery and equipment and then failed to properly test it. 32

We held that the “negligence claim implicated TDI’s engineering education,

training, and experience because it was premised on TDI’s knowledge of the

installation and testing of complex machinery and equipment.” 33 Here, the claims

alleged do not implicate Montgomery’s engineering education, training, or

experience.

      This case is more like Rivera. 34 In that case, an engineering firm was hired

to provide management services for the convention center at which the plaintiff

      30
        Id. at 6.
      31
        Id. at 5.
      32
        Id. at 2.
      33
        Id. at 6.
      34
339 S.W.3d at 749.

                                         15
was injured. 35 The plaintiff was injured by a freight elevator operated by one of

the firm’s employees, who did not hold an engineering license. The fact that the

defendant was an engineering firm and was providing services of some kind was

not dispositive. The court of appeals concluded that the claims alleged did not

implicate an engineer’s specialized knowledge or judgment so as to arise out of

the provision of professional engineering services. 36

      Likewise, we conclude that the fact that Montgomery is an engineer and

was hired to provide a service is not dispositive to the issue. Montgomery was

not hired to provide an engineering service out of which the claims against him

and RCS arose. Accordingly, the Hiltons did not need to provide a certificate of

merit. We overrule RCS and Montgomery’s first issue. We therefore need not

reach their second issue challenging the adequacy of the certificate of merit.

                                   Conclusion

      Having overruled RCS and Montgomery’s first issue, which is dispositive,

we affirm the trial court’s order denying the motion to dismiss.

      35
        Id. at 751.
      36
        Id. at 755–56.

                                         16
                                        LEE ANN DAUPHINOT
                                        JUSTICE

PANEL: LIVINGSTON, C.J.; DAUPHINOT and GARDNER, JJ.

DELIVERED: December 19, 2013

                               17