Court Opinion

ID: 3093375
Source: CourtListenerOpinion
Date Created: 2015-10-16 04:15:40.251627+00
Date Added: 2024-06-11T09:52:42.178093
License: Public Domain

COURT OF APPEALS
                          SECOND DISTRICT OF TEXAS
                               FORT WORTH

                             NO. 02-13-00166-CV

FOUNDATION ASSESSMENT,                                                APPELLANTS
INC., D/B/A ENGINEERING
DESIGN & ASSESSMENT, AND
SURAJ K. CHOUDHURY

                                        V.

SUZANNE O’CONNOR                                                           APPELLEE

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       FROM COUNTY COURT AT LAW NO. 2 OF TARRANT COUNTY

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                                 OPINION

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                               I. INTRODUCTION

      The primary issue we address in this interlocutory appeal is whether

appellants   Foundation   Assessment,        Inc.,   d/b/a   Engineering   Design   &

Assessment, and Suraj K. Choudhury waived their right to dismissal of the suit

brought against them by appellee Suzanne O’Connor by waiting almost two
years to move for dismissal. See Tex. Civ. Prac. & Rem. Code Ann. § 150.002(f)

(West 2011). Because we hold that they did not, we will reverse the trial court’s

order denying appellants’ motion to dismiss.

                  II. FACTUAL AND PROCEDURAL BACKGROUND

      The facts giving rise to this case concern a rental property located in Fort

Worth and owned by O’Connor. She contracted with Perma Pier Foundation

Company to perform certain foundation repairs to the property.         Under the

contract, Perma Pier agreed that initial and final engineering reports would be

performed on the property.    O’Connor received the engineering reports from

Foundation Assessment’s owner and engineer, Choudhury.              Both reports

indicated that someone with Foundation Assessment had personally visited and

evaluated O’Connor’s property. The initial report indicated that at Perma Pier’s

request, Foundation Assessment had performed an assessment of the

foundation of the property, including “site observations” and verification of the

plan of repair and procedure to be employed.        The final report stated that

Foundation Assessment had “checked the works performed and [had] checked

the jacking.”

      In April 2011, O’Connor sued Perma Pier and appellants, among others,

alleging breach of contract, negligence and gross negligence, fraud, breach of

express warranty, breach of implied warranty, violations of the deceptive trade

practices act, civil conspiracy, and violations of the occupations code. The bulk

of O’Connor’s claims do not allege actions by appellants although she names all

                                        2
“Defendants” generally in all but one of her claims.        Regarding appellants,

O’Connor specifically alleged claims for fraud and civil conspiracy based on their

allegedly making false statements in the engineering reports.1

       Appellants timely filed an answer, and over the next twenty-two months,

the parties litigated the case. In February 2013, appellants moved to dismiss the

suit against them under civil practice and remedies code section 150.002

because O’Connor did not file a certificate of merit along with her original

petition.2   O’Connor filed a response and objections to the motion and,

alternatively, a motion for additional time to file a certificate of merit.     After

conducting a hearing and receiving supplemental briefs from the parties, the trial

court denied appellants’ motion to dismiss.

       1
       O’Connor asserted that appellants could not have personally inspected
the property and Perma Pier’s work at the property, contrary to statements made
by appellants in their engineering reports. O’Connor alleged,

       It is believed that all inspection reports by Choudhury related to the
       Home are not based upon any personal inspection of the Home by
       Choudhury, and thus cannot possibly be believed and do not meet
       the requirements of any reputable engineer performing an
       assessment and preparing an engineering report related to
       foundation repairs. Additionally, the Engineering Reports cannot
       reasonably be relied upon for any purpose. It is O’Connor’s belief
       that all of the reports provided by Choudhury are fraudulent and
       contain information that cannot possibly be based upon any
       personal site review by Choudhury.
       2
        See Tex. Civ. Prac. & Rem. Code Ann. § 150.002.

                                         3
                               III. STANDARD OF REVIEW

      We review the trial court’s order denying a motion to dismiss under an

abuse of discretion standard. Murphy v. Gutierrez, 374 S.W.3d 627, 629–30

(Tex. App.—Fort Worth 2012, pet. filed) (citing Palladian Bldg. Co. v. Nortex

Found. Designs, Inc., 165 S.W.3d 430, 433 (Tex. App.—Fort Worth 2005, no

pet.)). To determine whether a trial court abused its discretion, we must decide

whether it acted without reference to any guiding rules or principles; in other

words, we must decide whether its act was arbitrary or unreasonable. Cire v.

Cummings, 134 S.W.3d 835, 838–39 (Tex. 2004). “Merely because a trial court

may decide a matter within its discretion in a different manner than an appellate

court would in a similar circumstance does not demonstrate that an abuse of

discretion has occurred.” Palladian Bldg. Co., 165 S.W.3d at 433.

              IV. DISMISSAL UNDER SECTION 150.002 WAS REQUIRED

      In their sole issue, appellants argue that the trial court abused its discretion

by denying their motion to dismiss. They contend that because O’Connor never

filed a certificate of merit, the trial court was statutorily required to dismiss the suit

against them. O’Connor responds that appellants waived their right to dismissal

by litigating the case for almost two years before filing their motion to dismiss,

that section 150.002 does not require a certificate of merit to be filed in this case,

and that appellants are barred from seeking dismissal based on the doctrine of

laches.

                                            4
      A. The Certificate of Merit Statute; No Waiver of Dismissal Right

      Section 150.002, entitled “Certificate of Merit,” 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
      land surveyor who:

          (1) is competent to testify;

          (2) holds the same professional license or registration as the
          defendant; and

          (3) is knowledgeable in the area of practice of the defendant and
          offers testimony based on the person’s:

                (A) knowledge;

                (B) skill;

                (C) experience;

                (D) education;

                (E) training; and

                (F) practice.

Tex. Civ. Prac. & Rem. Code Ann. § 150.002(a). By requiring a plaintiff to file a

certificate of merit with her original petition,3 section 150.002 deters meritless

claims and brings them quickly to an end. CTL Thompson Tex., LLC v. Starwood

Homeowner’s Ass’n, 390 S.W.3d 299, 301 (Tex. 2013); Criterium-Farrell Eng’rs

      3
       The statute requires a plaintiff to file a certificate of merit along with the
“complaint,” but we read this to mean the plaintiff’s petition. See Palladian Bldg.
Co., 165 S.W.3d at 431 n.2.

                                         5
v. Owens, 248 S.W.3d 395, 399 (Tex. App.—Beaumont 2008, 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.”); see also House Comm. on Civil

Practices, Bill Analysis, Tex. H.B. 4, 78th Leg., C.S. (2003) (“In summary, [House

Bill 4, including section 150.002] provides for a various corrective measure that

will help . . . reduce the costs of litigation . . . [and] addresses many of the root

causes of the current situation: non-meritorious lawsuits.”).

      If a certificate of merit does not accompany the petition, a trial court must

grant dismissal on a defendant’s motion. Tex. Civ. Prac. & Rem. Code Ann.

§ 150.002(e). The statute does not impose a deadline by which a defendant

must file its motion to dismiss.      See id. § 150.002.        Several intermediate

appellate courts have held that a defendant’s delay in moving for dismissal does

not, alone, strip the defendant of the right to dismissal. See Pro Plus, Inc. v.

Crosstex Energy Servs., L.P., 388 S.W.3d 689, 703 (Tex. App.—Houston [1st

Dist.] 2012, pet. granted); Ustanik v. Nortex Found. Designs, Inc., 320 S.W.3d
409, 414 (Tex. App.—Waco 2010, pet. denied); DLB Architects, P.C. v. Weaver,

305 S.W.3d 407, 411 (Tex. App.—Dallas 2010, pet. denied). But courts have

recognized that a defendant can waive its right to dismissal in some instances.

Murphy, 374 S.W.3d at 631 (discussing cases that indicate a defendant’s

dismissal right can be waived).

      Waiver is “an intentional relinquishment of a known right or intentional

conduct inconsistent with claiming that right.”     See Jernigan v. Langley, 111

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S.W.3d 153, 156 (Tex. 2003) (quoting Sun Exploration & Prod. Co. v. Benton,

728 S.W.2d 35, 37 (Tex. 1987)); Palladian Bldg. Co., 165 S.W.3d at 434. Waiver

is ordinarily a question of fact but becomes a question of law when the facts are

admitted or clearly established. See Jernigan, 111 S.W.3d at 156–57; Palladian

Bldg. Co., 165 S.W.3d at 434. Because waiver is largely based on intent, there

can be no waiver of a right unless a litigant says or does something inconsistent

with an intent to rely on such right. See Jernigan, 111 S.W.3d at 156; Palladian

Bldg. Co., 165 S.W.3d at 434. Thus, silence by a litigant traditionally does not

constitute waiver, but waiver can be established if “the defendant’s silence or

inaction shows an intent to yield the right to dismissal.” Jernigan, 111 S.W.3d at

157.

       This court first addressed the issue of waiver in relation to section

150.002’s dismissal right in Palladian Bldg. Co., where we held that the

defendant did not waive its right to dismissal by filing an original and amended

answer before moving to dismiss. See 165 S.W.3d at 434–35. Since Palladian

Bldg. Co., only five intermediate appellate courts have directly addressed the

issue. See Pro Plus, Inc., 388 S.W.3d at 703–06; Murphy, 374 S.W.3d at 633–

36; Ustanik, 320 S.W.3d at 413–14; DLB Architects, P.C., 305 S.W.3d at 411;

Landreth v. Las Brisas Council of Co-Owners, Inc., 285 S.W.3d 492, 501 (Tex.

App.—Corpus Christi 2009, no pet.).4        In Murphy, this court held that the

       4
       The Texas Supreme Court granted review in the most recent intermediate
appellate court decision, Pro Plus, Inc., on April 19, 2013. See 388 S.W.3d at

                                        7
defendant waived his right to dismissal by substantially invoking the judicial

process; the defendant participated extensively in discovery, sought affirmative

relief in the form of traditional and no-evidence summary judgment motions,

participated in court-ordered mediation after obtaining partial summary judgment

in his favor, and did not assert his dismissal right for three and one-half years

before seeking it just five days before trial was scheduled. See 374 S.W.3d at

633–36.    In the remaining four cases, the appellate courts held that the

defendants did not waive their dismissal right. See Pro Plus, Inc., 388 S.W.3d at

703–06 (finding no waiver where defendant participated in discovery, agreed to

extend discovery and expert-designation deadlines, and delayed in filing motion

to dismiss until after two-year statute of limitations ran on plaintiff’s negligence

claim); Ustanik, 320 S.W.3d at 413–14 (finding no waiver where defendants

participated in discovery, filed motions for summary judgment, and waited more

than two years before filing motion to dismiss); DLB Architects, P.C., 305 S.W.3d

at 411 (holding that defendants did not waive dismissal right by waiting fifteen

months before filing motion to dismiss when no evidence showed intent to waive

right); Landreth, 285 S.W.3d at 501 (holding that defendant did not waive

dismissal right by participating in discovery, taking depositions, and filing motion

for summary judgment because statute does not contain filing deadline and no

evidence showed defendant intended to waive dismissal right).

689. And a petition for review is currently pending at the supreme court in
Murphy. See 374 S.W.3d at 627.

                                         8
        Here, O’Connor filed her original petition in April 2011. In her petition, she

alleged that appellants provided fraudulent engineering reports. In response,

appellants filed an answer in which they generally denied the allegations. In

February 2012, O’Connor filed an amended petition, which did not include any

substantive changes. Appellants responded by filing an answer in which they

generally denied the claims and asserted affirmative defenses.

       During the next twenty-two months, appellants conducted little to no

affirmative discovery; they responded to requests for disclosure that O’Connor

included with her original petition, participated in a deposition of O’Connor

noticed by Perma Pier,5 and amended their responses to O’Connor’s requests for

disclosure to add information regarding a potential testifying expert. Appellants

also agreed to a scheduling order, to extend the deadline to designate expert

witnesses, and to reset the trial date. Appellants moved to dismiss the case

against them almost two years after O’Connor brought suit, one month before the

first trial setting.

       The present case is more like those cases in which waiver was not found

than Murphy. Appellants did not extensively participate in discovery, they did not

seek affirmative relief in the trial court, and they did not participate in court-

       5
       The deposition was hosted at the office of appellants’ counsel. Appellants
note that the deposition was taken at their offices in Dallas as a professional
courtesy because counsel for Perma Pier is from San Antonio. The record does
not contain the deposition transcript, but the index to the deposition shows that
counsel for Perma Pier conducted the majority of the questioning and that
appellants cross-examined O’Connor.

                                          9
ordered mediation. Cf. Murphy, 374 S.W.3d at 635. Appellants took no actions

inconsistent with an intent to rely on their dismissal right, other than waiting

almost two years to file a motion to dismiss. See Jernigan, 111 S.W.3d at 156–

157; Palladian Bldg. Co., 165 S.W.3d at 434; DLB Architects, P.C., 305 S.W.3d

at 411.

      Appellants’ twenty-two-month delay in filing the motion to dismiss does not,

without more, strip them of their dismissal right under section 150.002. See Pro

Plus, Inc., 388 S.W.3d at 703; Ustanik, 320 S.W.3d at 414; DLB Architects, P.C.,
305 S.W.3d at 411.       Although this appears contrary to the purpose of the

certificate of merit statute—which is to deter and quickly end non-meritorious

claims—when interpreting statutory construction, we must “first and foremost”

look to the words of the statute to give effect to the legislature’s intent. See CTL

Thompson Tex., 390 S.W.3d at 301; Lexington Ins. Co. v. Strayhorn, 209 S.W.3d
83, 85 (Tex. 2006); see also State v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006)

(explaining that our primary objective in statutory construction is to give effect to

the legislature’s intent). We presume that every word of a statute was used for a

purpose and that every omitted word was purposefully not chosen. TGS-NOPEC

Geophysical Co. v. Combs, 340 S.W.3d 432, 439 (Tex. 2011). The legislature

has imposed deadlines on some statutory dismissal rights, but it did not provide a

deadline for filing a motion to dismiss under section 150.002. Compare Tex. Civ.

Prac. & Rem. Code Ann. § 150.002, with id. § 27.003(b) (West Supp. 2013)

(providing a statutory sixty-day deadline to file a motion to dismiss in an anti-

                                         10
SLAPP case), and id. § 74.351(a) (West Supp. 2013) (requiring that a health-

care-liability-claims defendant file objections to the sufficiency of a plaintiff’s

expert report within twenty-one days after service).            Applying the rules of

statutory construction to the certificate of merit statute, we must presume that the

legislature meant what it said, and we cannot imply waiver based only on delay

when the legislature did not provide a deadline for filing a motion to dismiss

under section 150.002. See TGS-NOPEC Geophysical Co., 340 S.W.3d at 439.

      Given the state of the law at this point in time and applying strict statutory

construction to section 150.002, we are constrained to hold based on the facts

presented here that appellants did not waive their right to seek dismissal based

on O’Connor’s failure to file a certificate of merit in this case.

   B. Section 150.002 Applies to O’Connor’s Claims Against Appellants

      O’Connor also asserts, as an alternative basis to uphold the trial court’s

order denying appellants’ motion to dismiss, that section 150.002 does not

require a certificate of merit to be filed in her suit against appellants. According

to O’Connor, because section 150.002 applies only to actions “arising out of the

provision of professional services,” Tex. Civ. Prac. & Rem. Code Ann.

§ 150.002(a), it does not apply to her claims alleging that appellants “did not

perform the actions they claim to have performed [a personal site inspection of

the property] via their purported inspection reports.”

      Section 150.002 requires a certificate of merit in any action for damages

arising out of the provision of professional services by a licensed professional

                                           11
engineer.   Id. § 150.001(1) (West 2011), § 150.002(a).         When determining

whether an action arises out of the provision of professional services, the issue is

not whether the alleged tortious acts constituted the provision of professional

services, but rather whether the tort claims arise out of the provision of

professional services. Dunham Eng’g, Inc. v. Sherwin-Williams Co., 404 S.W.3d
785, 793 (Tex. App.—Houston [14th Dist.] 2013, no pet.) (citing Pelco Constr.,

Inc. v. Dannenbaum Eng’g Corp., 404 S.W.3d 48, 54–55 (Tex. App.—Houston

[1st Dist.] 2013, no pet.)). In other words, section 150.002 “does not require the

specific acts creating the claim for the tort also constitute the provision of

professional services” but instead “the acts creating the claim must ‘aris[e] out of

the provision of professional services.’” Pelco Constr., Inc., 404 S.W.3d at 54–

55. And the statute requires that the certificate of merit

      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 [professional engineer] 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 Ann. § 150.002(b) (emphasis added). Thus, the

certificate of merit must state any action or omission in providing the professional

service.

      Here, appellants provided initial and final engineering reports. The parties

do not dispute that appellants qualify as “licensed professional engineer[s]” under

the certificate of merit statute.   See id. § 150.001(1) (defining a “licensed or

                                         12
registered professional” to include a licensed professional engineer and any firm

in which the licensed professional practices as a licensed professional). Nor do

the parties dispute that the services appellants agreed to provide in this case—

providing initial and final engineering reports—constitute the provision of

professional services.    See id. § 150.002(a); Tex. Occ. Code Ann. §

1001.003(b)–(c) (West 2012) (defining the practice of engineering). O’Connor

alleged that appellants falsely claimed in their reports that they had personally

inspected the house and alleged that the reports “are not based upon any

personal inspection of the Home by Choudhury, and thus cannot possibly be

believed and do not meet the requirements of any reputable engineer performing

an assessment and preparing an engineering report related to foundation

repairs.”

      To determine whether section 150.002 applies to require a certificate of

merit, the question is not whether the alleged acts and omissions of appellants—

fraudulently stating in the engineering reports that the foundation assessments

were based, in part, on an inspection of the site—constitute the provision of the

professional services.   The question is whether appellants’ act of providing

engineering reports constituted the provision of professional services.       The

alleged acts, omissions, and misrepresentations of appellants were made as part

of their providing initial and final engineering reports and, consequently, arose

out of the provision of professional services.    See Dunham Eng’g, Inc., 404
S.W.3d at 793; see also Pelco Constr., Inc., 404 S.W.3d at 56 (holding certificate

                                       13
of merit required where plaintiff alleged that engineer defendant made

misrepresentations at pre-bid conference while explaining project to plaintiff and

during oversight of construction); Capital One v. Carter & Burgess, Inc., 344
S.W.3d 477, 480–81 (Tex. App.—Fort Worth 2011, no pet.) (holding that alleged

false misrepresentations regarding procurement of easement were made as part

of defendant’s performance of professional services).        Thus, section 150.002

applies to O’Connor’s claims against appellants.6

                            C. Laches Does Not Apply

      O’Connor also asserts that the trial court did not abuse its discretion by

denying appellants’ motion to dismiss because the doctrine of laches precludes

appellants’ right to seek dismissal under the certificate of merit statute.

      Laches is an affirmative defense akin to estoppel. City of Fort Worth v.

Johnson, 388 S.W.2d 400, 403 (Tex. 1964); see Tex. R. Civ. P. 94. The two

essential elements of laches are (1) an unreasonable delay by one having legal

or equitable rights in asserting those rights, and (2) a good faith change of

position by another to her detriment because of the delay. Johnson, 388 S.W.2d

at 403; see also Caldwell v. Barnes, 975 S.W.2d 535, 538 (Tex. 1998); Ustanik,
320 S.W.3d at 414.

      6
        O’Connor also alleges in her brief that section 150.002 does not apply
because she did not seek damages from appellants. But O’Connor’s amended
petition asserts multiple causes of action against all “Defendants,” including
appellees, and specifically names appellees in her causes of action for fraud and
civil conspiracy; she sought damages for all causes of action and generally
prayed for damages from all “Defendants.”

                                          14
      We will assume, without deciding, that O’Connor may use the affirmative

defense of laches to prevent the dismissal of her suit. She had the burden to

prove unreasonable delay by appellants in asserting their dismissal right and also

that her position had, in good faith, been changed because of the delay. See

Johnson, 388 S.W.2d at 403. O’Connor made arguments in her response to the

motion to dismiss alleging that she had suffered prejudice, but she did not show

that she detrimentally changed her position in reliance on appellants’ delay in

asserting their dismissal right.7 See Culver v. Pickens, 142 Tex. 87, 91, 176
S.W.2d 167, 170–71 (1943); Trammel’s Lubbock Bail Bonds v. Lubbock Cnty.,

60 S.W.3d 145, 150 (Tex. App.—Amarillo 2001) (“[O]ne invoking laches must

demonstrate that his ability to pursue a right or defense has been impaired

because of the delay.”), rev’d in part on other grounds, 80 S.W.3d 580 (Tex.

2002). Thus, O’Connor has not satisfied her burden to prove laches. See Tex.

R. Civ. P. 94; Am. Petrofina, Inc. v. Allen, 887 S.W.2d 829, 830 (Tex. 1994)

(requiring that party present evidence to support affirmative defense).

      7
        For example, O’Connor alleged generally that because the discovery
period ended prior to appellants’ moving to dismiss, she was prevented from
conducting additional discovery “necessitated by the position of Appellants
relative to § 150.002,” and that she “would have made other decisions and
pursued other avenues had Appellants timely exercised whatever right to
dismissal they now claim.” She did not elaborate on or provide any evidence of
what discovery she was prevented from conducting or what “other decisions” and
“other avenues” she would have made and pursued.

                                        15
         D. Denial of Motion to Dismiss Was an Abuse of Discretion

      Having held that appellants did not waive their right to dismissal under

section 150.002, that section 150.002 requires a certificate of merit to be filed in

this case, and that the doctrine of laches does not bar appellants’ right to

dismissal, we hold that the trial court abused its discretion by denying appellants’

motion to dismiss. We sustain appellants’ sole issue.

                                 V. CONCLUSION

      Having sustained appellants’ sole issue, we reverse the trial court’s order

denying appellants’ motion to dismiss and remand the case to the trial court for

entry of an order granting appellants’ motion after it determines whether the

dismissal should be with or without prejudice. See Tex. Civ. Prac. & Rem. Code

Ann. § 150.002(e).

                                                   /s/ Sue Walker
                                                   SUE WALKER
                                                   JUSTICE

PANEL: DAUPHINOT, WALKER, and MCCOY, JJ.

DELIVERED: March 6, 2014

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