An owner’s belief that there is a defect in the contractor’s work is a common source of construction disputes throughout the country. When such disputes arise, general contractors or subcontractors who have been sued may allege that any defects in the work are the result of inadequate or faulty plans and specifications provided by the owner’s design professionals. To this end, contractors often file claims against the project’s design professionals seeking contribution or indemnity—i.e., a ruling that the design professional be held responsible for any judgment awarded against the contractor as a result of the defect.
Many jurisdictions require a party who asserts a claim against a design professional to file a certificate of merit along with the claim. A certificate of merit is simply a sworn statement from a neutral, independent party who practices within the same design profession and confirms that the claim against the design professional is legitimate. The idea is to provide licensed registered professionals with early protection against meritless claims. However, securing such a certificate can be costly and time-consuming, and it is particularly burdensome when you are a defendant who did not initiate the original lawsuit (and who is likely asserting the incompatible defense that there is no defect in the first place).
A recent case decided by the Texas Supreme Court directly addressed the question of whether defendants who seek contribution against a design professional must also file a certificate of merit. Such a defendant is known as a “third-party plaintiff,” which is simply a procedural term describing a defendant who did not initiate a lawsuit but is nonetheless asserting its own claim. Texas courts were previously in disagreement whether a third-party plaintiff must file a certificate of merit, and the Texas Supreme Court’s resolution of the disagreement may be instructive for all jurisdictions.
In Jaster v. Comet II Const., Inc. No. 12-0804 (Tex. July 3, 2014), Gary Wayne Jaster, a licensed professional engineer who prepared foundation plans for the plaintiff, asserted that third-party claimants who had asserted claims against him for contribution did not include a certificate of merit in their third-party claim and accordingly sought to have their claims against him dismissed pursuant to Texas Civil Practice and Remedies Code § 150.002. Both the trial court and appellate court denied Jaster’s motion to dismiss the claims, and the Texas Supreme Court heard the case on October 9, 2013.
The Court exhaustively analyzed the Texas legislature’s use of the term “plaintiff” and sought to extrapolate the legislature’s intent from its specific choice of language. If only the “plaintiff” is required to file a certificate of merit under the statute, does the requirement apply to an ongoing lawsuit where the defendants are seeking to hold someone else responsible for the claims against them? The Court decided that since the legislature used the term “plaintiff” (a term reserved for parties who initiate a lawsuit) rather than the broader term “claimant,” only the party who initiates a lawsuit against a design professional (i.e., the plaintiff) is required to file a certificate of merit. The Court further held that third-party plaintiffs and cross-plaintiffs who are seeking contribution from design professionals are not required to include a certificate of merit in their third-party claims or cross-claims.
This is consistent with the reality that many defendants often deny the existence of any design defect or defect in the project but alternatively assert third-party claims against a design professional, seeking contribution and indemnity in the event that the plaintiff prevails. The Texas Supreme Court opined that it would be odd to require such defendants to file an expert certificate supporting the merits of the plaintiff’s claim, thus requiring the defendants to abandon their denial of the merits of any damages asserted by the plaintiff. As the Court concluded, it appears that the Texas legislature decided the best course was to impose a simple requirement that applies only to a plaintiff who initiates a lawsuit.
Along with Texas, ten other states have enacted statutes requiring a certificate of merit in advance of claims against design professionals—including California, Georgia, and Minnesota. Additionally, three states—Hawaii, Kansas, and Wyoming—require plaintiffs to file professional negligence claims with a screening panel made up of laypersons and professionals before filing suit against a licensed professional. Each state employs different standards for enforcement of its statute, and treatment of third-party claims will not uniformly adhere to the Texas standard. However, the Texas ruling in Jaster (along with similar decisions in other jurisdictions, such as New Jersey) provides a glimpse at how some courts might limit the reach of statutes directed solely at the “plaintiff.”
Because third-party plaintiffs are in a different procedural position than the plaintiff who initiated the original lawsuit, and because requiring such third-party plaintiffs to secure a certificate of merit could have detrimental impacts on their defense in the primary cause of action, the Jaster decision is a good candidate for adoption in other jurisdictions. In jurisdictions where similar decisions are reached, third-parties who wish to initiate claims for contribution and indemnity can rest assured that they will not have to secure a certificate of merit from a licensed professional prior to filing such claims. This represents a substantial boon to such defendants, particularly in terms of the financial costs of asserting their claims. ■
About the Author Joseph L. Mira is a Ford Nassen & Baldwin shareholder and resident in the firm’s Dallas office. His practice is focused in commercial and construction litigation. He has a broad range of litigation experience in both state and federal courts representing clients in various disputes including: construction defect, contract disputes, products liability, and insurance coverage matters. He may be contacted at email@example.com.
Modern Contractor Solutions, August 2014
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