A recent Texas appellate court opinion has given greater protections to licensed engineers working in the oil patch. In 2003, at the behest of lobbyists for architects and engineers, the Texas Legislature enacted special legislation to insulate certain professionals from “meritless” lawsuits. Basically the legislation requires anyone suing a licensed or registered architect, engineer, land surveyor, or landscape (i.e., a “licensed registered professional” or “LRP”) to obtain a “Certificate of Merit” from a like professional. This Certificate of Merit must filed with the Court at the time of the filing of any lawsuit against the LRP. This legislation did not get a lot of press. Many lawyers and litigants are unaware of it. If suit is filed without a Certificate of Merit, LRP may file a Motion to Dismiss the lawsuit which the trial court is required to grant. The Court may even dismiss the case with prejudice; meaning that the party filing the lawsuit cannot belatedly get a Certificate of Merit and refile the claim. Similarly, the LRP may wait for the statute of limitations to run and then file a Motion to Dismiss. Then, it does not matter whether the Court dismissed with prejudice or without prejudice. Either way, upon dismissal of the lawsuit, the claim is time-barred. If the Court declines to grant the dismissal, he LRP may appeal immediately. The appellate courts addressing these issues have been favorably disposed toward the architects, engineers, and other LRPs, ordering the trial court to grant the dismissals.
A recent Texas appellate court opinion has arguably expanded those rights and protections. As is common in the oil patch, a party drilling or operating a well will hire a contract operator or consultant to oversee the operations. Many of the companies providing this service are owned by licensed professionals. In the case of Cimarron Engineering, LLC v. Miramar Petroleum, Inc., [2014 WL 2937012, Texas Court of Appeals, Corpus Christi-Edinburg, June 26, 2014] the well owner hired one such service company. The owner then claimed that the consultant failed to adequately supervise and direct operations resulting in a well blowout. Even though the company admitted that its owner – the licensed professional engineer – performed no professional engineering consulting services, the Court of Appeals held that a Certificate of Merit was required anyway. The Court held that the entity “… is a licensed or registered professional because it is the business entity in which its owner, a licensed professional engineer, practices.” Citing the Texas Occupations Code, the Court defined the practice of engineering to mean “… 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.” The Court found that supervising of the drilling and completion of the well would necessarily include the monitoring of pressures in the well, the monitoring of drilling, the calculating of the weights of mud necessary to maintain the stability of the well and similar conduct. The Court gave a very broad definition of the practice of engineering in order to bring the type of work being performed within the definition of the provision of “engineering services” or the “engineering sciences.” The Court held that since the damages “implicate the special knowledge and training of an engineer” then any claim for damages necessarily arises out of the provision of such professional services. This is true even when – as here – the professional engineer admits he did not perform any professional engineering services!
As a result of this claim, companies that are owned by or have licensed professionals in their employ should tailor their agreements to include references to the provision of such services. This will require any dissatisfied client to find someone within the same discipline willing essentially to provide an affidavit and testify that the services performed fell below the appropriate standard. Conversely, companies hiring service companies should be careful and do their due diligence in selecting firms or individuals who may be licensed professionals. If you hire such firms or individuals, and you become dissatisfied with the quality of the services performed – even if those services have nothing to do with their professional licensing – you will likely have to find a comparably licensed professional willing to testify against them and have him prepare a Certificate of Merit to be filed with any lawsuit.
The statute involved is very expansive. An “LRP” includes a licensed architect, a licensed professional engineer, a registered professional land surveyor, a registered landscape architect, or any firm in which the LRP practices. Based upon this recent opinion, anything that involves applying “special knowledge or judgment of the mathematical, physical, or engineering sciences to the service or creative work” arguably falls within the protections of the statute. According to the Court, so would “… a service, design, analysis or other work performed for a public or private entity in connection with a utility, structure, building, machine, equipment, process, system, work, project or industrial or consumer product or equipment of a mechanical, electrical, electronic, chemical, hydraulic, pneumatic, geotechnical, or thermal nature … any other professional service necessary for the planning, progress or completion of an engineering service.” Any and all of the above fall within the purview of providing engineering services and are subject to the Certificate of Merit requirement. It is hard to envision any step in the drilling or completion of a well that would not involve services falling within this extremely broad definition.
Shortly after the foregoing Texas appellate court opinion was handed down, the Texas Supreme Court handed down another opinion in this area [Jaster v. Comet II Construction, Inc., 2014 WL 2994503, Texas Supreme Court, July 3, 2014] In that case, the Court determined that a Certificate of Merit did not need to be filed if the claim was being filed by a defendant in a lawsuit against a co-defendant or against a non-party. In other words, if the plaintiff sued defendants A and B and defendant B was a licensed professional engineer, defendant A could file a cross-action against defendant B without having to file a Certificate of Merit. Similarly, if the plaintiff simply sued defendant A, defendant A could file a third party action against the licensed professional B and not have to file a Certificate of Merit. It is only the plaintiff who actually institutes the lawsuit that is required to file the Certificate of Merit against a licensed professional. Other parties joined to the lawsuit who are not the plaintiff initially filing the lawsuit do not have to comply.
Of course, this is not an exhaustive discussion of the law applicable to these issues. For more information on this topic, please email Jim Robichaux, trial lawyer with BRANSCOMB |PC. His contact information is email@example.com or (361) 886-3800.