Zachry Engineering Corporation v. Encina Development Group, LLC

Affirmed and Opinion filed May 18, 2023.
In The
Fourteenth Court of Appeals
NO. 14-22-00265-CV
ZACHRY ENGINEERING CORPORATION, Appellant
V.
ENCINA DEVELOPMENT GROUP, LLC, Appellee
On Appeal from the 125th District Court
Harris County, Texas
Trial Court Cause No. 2021-02701
OPINION
This interlocutory appeal concerns a question of first impression involving
the exception to the certificate-of-merit requirement applicable in actions against a
licensed or registered professional. See Tex. Civ. Prac. & Rem. Code Ann.
§ 150.002(a), (h). Appellant Zachry Engineering Corporation (“Zachry”) appeals
the denial of its motion to dismiss the counterclaim asserted by appellee Encina
Development Group, LLC (“Encina”). See id. § 150.002(f). In one issue, Zachry
argues the trial court erred when it denied its motion to dismiss because Encina did
not file a certificate of merit in support of its counterclaim for damages against
Zachry, which arose out of Zachry’s provision of professional engineering
services, as required by Texas Civil Practice and Remedies Code § 150.002. See id.
§ 150.002(a). We affirm.
I. BACKGROUND
On March 8, 2017, Zachry and Encina executed a contract for Zachry to
provide engineering services in Encina’s project. On January 15, 2021, Zachry
filed suit against Encina; Encina Solutions, LLC; Encina Chemicals, LLC; and
Charles Costenbader. In its live pleading, Zachry asserted claims for suit on a
sworn account, breach of contract, and declaratory judgment and sought actual
damages of at least $773,255.98. Zachry alleged that Encina terminated the
relationship on June 28, 2018, about one month before Zachry would have
completed the work on Task Order 2, and that Encina subsequently refused to pay
three of Zachry’s invoices.
On April 5, 2021, Encina filed a counterclaim against Zachry for breach of
contract, seeking damages, including out-of-pocket costs. Encina alleged that
Zachry failed to complete Task Order 2 by December 2017 as agreed by the parties
and that Encina terminated the relationship and hired others to perform re-working
and re-design efforts that were Zachry’s responsibility under the parties’ agreement
and Task Order 2.
Zachry filed a motion to dismiss Encina’s counterclaim, arguing that Encina
failed to attach a certificate of merit to its counterclaim. See id. In response, Encina
argued the requirement in § 150.002(a) was inapplicable to its counterclaim
because Zachry initiated the lawsuit and sought to recover fees arising out of the
provision of professional services. See id. § 150.002(h) (“This statute does not
apply to any suit or action for the payment of fees arising out of the provision of
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professional services.”).
On March 22, 2022, the trial court denied Zachry’s motion to dismiss. This
interlocutory appeal followed. See id. § 150.002(f) (“An order granting or denying
a motion for dismissal is immediately appealable as an interlocutory order.”).
II. DISCUSSION
In its sole issue, Zachry argues the trial court erred when it denied Zachary’s
motion to dismiss because Encina did not file a certificate of merit in support of its
counterclaim.
A. STANDARD OF REVIEW
We review a trial court’s order on a motion to dismiss under § 150.002 for
an abuse of discretion. CBM Eng’rs, Inc. v. Tellepsen Builders, L.P., 403 S.W.3d
339, 342 (Tex. App.—Houston [1st Dist.] 2013, pet. denied). A trial court abuses
its discretion when it acts arbitrarily or unreasonably, without reference to guiding
rules and principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238,
241–42 (Tex. 1985).
We review questions of statutory interpretation de novo. Pedernal Energy,
LLC. v. Bruington Eng’g, Ltd., 536 S.W.3d 487, 491 (Tex. 2017); Molinet v.
Kimbrell, 356 S.W.3d 407, 411 (Tex. 2011). Our primary objective in construing
statutes is to give effect to the Legislature’s intent. Molinet, 356 S.W.3d at 411.
The plain meaning of the text is the best expression of legislative intent. Id. When
a statute is not ambiguous on its face, it is inappropriate to use extrinsic aids to
construe the unambiguous statutory language, Fort Worth Transp. Auth. v.
Rodriguez, 547 S.W.3d 830, 838 (Tex. 2018), and “‘we adopt the interpretation
supported by its plain language unless such an interpretation would lead to absurd
results.’” In re Panchakarla, 602 S.W.3d 536, 540 (Tex. 2020) (orig. proceeding)
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(per curiam) (quoting TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432,
439 (Tex. 2011)); see also Molinet, 356 S.W.3d at 414 (“Construing clear and
unambiguous statutes according to the language actually enacted and published as
law—instead of according to statements that did not pass through the law-making
processes, were not enacted, and are not published as law—ensures that ordinary
citizens are able to rely on the language of a statute to mean what it says.”).1 A
statute is ambiguous if its words are susceptible to two or more reasonable
interpretations and we cannot discern legislative intent from the language alone.
Rodriguez, 547 S.W.3d at 838; Tex. State Bd. of Exam’rs of Marriage & Fam.
Therapists v. Tex. Med. Ass’n., 511 S.W.3d 28, 41 (Tex. 2017).
We read statutes contextually to give effect to every word, clause, and
sentence because every word or phrase is presumed to have been intentionally used
with a meaning and a purpose. Rodriguez, 547 S.W.3d at 838; see Lippincott v.
Whisenhunt, 462 S.W.3d 507, 509 (Tex. 2015) (per curiam) (“We presume the
Legislature included each word in the statute for a purpose and that words not
included were purposefully omitted.”). We use definitions prescribed by the
Legislature and any technical or particular meaning the words have acquired. See
Tex. Gov’t Code Ann. § 311.011(b); Rodriguez, 547 S.W.3d at 838; City of
Rockwall v. Hughes, 246 S.W.3d 621, 625 (Tex. 2008). Otherwise, we construe the
statute’s words according to their plain and common meaning unless a more
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Section 311.023 of the Code Construction Act permits courts to consider a statute’s
legislative history “whether or not the statute is considered ambiguous on its face.” See Tex.
Gov’t Code Ann. § 311.023(3). However, the Supreme Court has held that even though this
section may grant us legal permission, “not all that is lawful is beneficial.” Tex. Health
Presbyterian Hosp. of Denton v. D.A., 569 S.W.3d 126, 136 (Tex. 2018). “Constitutionally, it is
the courts’ responsibility to construe statutes, not the legislature’s.” Id. “In fulfilling that duty,
we do not consider legislative history or other extrinsic aides to interpret an unambiguous statute
because the statute’s plain language most reliably reveals the legislature’s intent.” Id. “We have
therefore ‘repeatedly branded’ reliance on extrinsic aids as ‘improper’ and ‘inappropriate’ when
statutory language is clear.’” Id.4
precise definition is apparent from the statutory context or the plain meaning yields
an absurd result. Tex. Gov’t Code Ann. § 311.011(a); City of Rockwall, 246
S.W.3d at 625–26. To determine a term’s common, ordinary meaning, we typically
look first to dictionary definitions. Rodriguez, 547 S.W.3d at 838.
B. APPLICABLE LAW
Texas Civil Practice and Remedies Code § 150.002, titled “Certificate of
Merit,” provides in relevant part:
(a) In any action or arbitration proceeding for damages arising out of
the provision of professional services by a licensed or registered
professional, a claimant 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) practices 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.
(b) The affidavit shall 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 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. The third-party licensed architect, licensed professional
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engineer, registered landscape architect, or registered professional
land surveyor shall be licensed or registered in this state and actively
engaged in the practice of architecture, engineering, or surveying.
....
(e) A claimant’s failure to file the affidavit in accordance with this
section shall result in dismissal of the complaint against the defendant.
This dismissal may be with prejudice.
Tex. Civ. Prac. & Rem. Code Ann. § 150.002(a)–(b), (e); see also LaLonde v.
Gosnell, 593 S.W.3d 212, 216 (Tex. 2019) (“The certificate-of-merit requirement
is a substantive hurdle that helps ensure frivolous claims are expeditiously
discharged.”). Section 150.002 includes an exemption for the certificate-of-merit
requirement, which provides that the statute “does not apply to any suit or action
for the payment of fees arising out of the provision of professional services.” Tex.
Civ. Prac. & Rem. Code Ann. § 150.002(h).
C. ANALYSIS
Zachry argues that the exemption in § 150.002(h) does not apply to Encina’s
counterclaim, and thus, Encina was required to file a certificate of merit along with
its counterclaim. See id. § 150.002(a), (h). This is a question of first impression for
this Court.
The plain language of the statute states “[t]his statute does not apply to any
suit or action for the payment of fees arising out of the provision of professional
services.” See id. § 150.002(h). Chapter 150 does not define “suit” or “action.”
Jaster v. Comet II, Const., Inc., 438 S.W.3d 556, 563 (Tex. 2014) (plurality op.);
see Tex. Civ. Prac. & Rem. Code Ann. § 150.001. Thus, we will give these terms
their ordinary meaning. Jaster, 438 S.W.3d at 563; see City of Rockwall, 246
S.W.3d at 625–26.
The common meaning of the term “action” refers to an entire lawsuit or
cause or proceeding, not to discrete “claims” or “causes of action” asserted within
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a suit, cause, or proceeding. Jaster, 438 S.W.3d at 563–64; Black’s Law
Dictionary (11th ed. 2019) (defining “action” as “[a] civil or criminal judicial
proceeding”). “The term ‘action’ is generally synonymous with ‘suit,’ which is a
demand of one’s rights in court.” Jaster, 438 S.W.3d at 564 (quoting Thomas v.
Oldham, 895 S.W.2d 352, 356 (Tex. 1995)). A suit, in turn, is “any proceeding in a
court of justice by which an individual pursues that remedy in a court of justice
which the law affords him.” Id. (quoting H.H. Watson Co. v. Cobb Grain Co., 292
S.W. 174, 176 (Tex. 1927)). Although the word “suit” can be “more general in its
comprehension than the word ‘action,’” both terms refer to a judicial proceeding in
which parties assert claims for relief. Id. Thus, under the common definition, “[a]n
action is a judicial proceeding, either in law or in equity, to obtain certain relief at
the hands of the court.” Id. Historically, “action” referred to a judicial proceeding
in a court of law, while “suit” referred to a proceeding in a court of equity. Id.(citing Black’s Law Dictionary).
Both “suit” and “action” are broad terms that encompass a counterclaim, as a
counterclaim is asserted as part of an action or suit. See id. at 563–64.
Additionally, the statute is not ambiguous, as it is not subject to two reasonable
interpretations. See Rodriguez, 547 S.W.3d at 838. Instead, the plain text of the
statute indicates that the language used—“action” and “suit”—are interchangeable
and broad terms covering an entire legal proceeding, including a defendant’s
counterclaims against a provider of professional services. See Jaster, 438 S.W.3d
at 563–64 (“By using the terms ‘action’ and ‘arbitration proceeding’ together with
the conjunction ‘or,’ the statute treats the two terms as having a similar meaning.”);
see also id. at 566 (“The meaning of individual words ‘may be ascertained by
reference to words associated with them in the statute’ and . . . when two or more
words of analogous meaning are employed together in a statute, they are
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understood to be used in their cognate sense, to express the same relations and give
color and expression to each other.” (quoting Harris County v. Eaton, 573 S.W.2d
177, 181 (Tex. 1978))).
Zachry argues that this interpretation of the statute would lead to absurd
results because the purpose of the statute is to protect providers of professional
services from meritless lawsuits. However, while the purpose of the statute is to
ensure frivolous claims against providers of professional services are expeditiously
discharged, the Legislature has included a clear and unambiguous exception in
§ 150.002(h). The purpose of § 152.002(a) is not defeated by exempting the
certificate-of-merit requirement for counterclaims in suits or actions for the
payment of fees arising out of the provision of professional services because the
provider’s claim for the recovery of fees may put into question the quality of
services, the performance of the services, and the fees owed. We cannot conclude
that our interpretation of the statute leads to an absurd result, and thus reject
Zachry’s argument. See Jaster, 438 S.W.3d at 569 (“The ‘bar for reworking the
words our Legislature passed into law is high, and should be. The absurdity safety
valve is reserved for truly exceptional cases, and mere oddity does not equal
absurdity.” (quoting Combs v. Health Care Serv. Corp., 401 S.W.3d 623, 630
(Tex. 2013))); Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 493 (Tex. 2001)
(noting that we construe statutes and related provisions as a whole, not in
isolation); see also, e.g., Stillwater Capital v. HKS, Inc., No. 05-20-00749-CV,
2021 WL 2154617, at *3–4 (Tex. App.—Dallas May 27, 2021, pet. dism’d) (mem.
op.) (concluding that § 152.002(h) applied to defendant’s counterclaim).
Finally, we note that our interpretation is supported by the Legislature’s
amendments to the statute in 2019, wherein the Legislature amended
§ 150.002(a)’s language to state that the certificate-of-merit requirement applied to
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any “claimant,” instead of the previous language that it applied to any “plaintiff”;
indicating an intent that counterclaims for damages arising out of the provision of
professional services were required to be accompanied by a certificate of merit.
Act of June 10, 2019, 86th Leg., R.S., ch. 661 (S.B. 1928) § 2, 2019 Tex. Sess.
Law Serv. Ch. 661; see Thompson Hancock Witte & Assocs., Inc. v. Stanley
Spurling & Hamilton, Inc., 650 S.W.3d 741, 746–47 (Tex. App.—Houston [14th
Dist.] 2022, no pet.) (“We conclude that when the Legislature amended the . . .
statute to change ‘plaintiff’ to ‘claimant’ it intended to impose the certificate of
merit filing requirement on any party asserting a claim against a licensed
professional covered by the statute.”). The Legislature, however, left intact the
language in § 150.002(h) providing that the certificate-of-merit requirement was
exempted in any action or suit for the payment of fees arising out of the provision
of professional services. See Traxler v. Entergy Gulf States, Inc., 376 S.W.3d 742,
748 (Tex. 2012) (“We presume the Legislature was aware of relevant caselaw
when it enacts or amends statutes.”); see also Jaster, 438 S.W.3d at 571 (stating
that cross-claimants and third-party plaintiffs are not the same as a “plaintiff” who
initiates a lawsuit and therefore were not required to file a certificate of merit under
prior version of § 152.002(a)).
We hold that the plain text of the statute provides that a certificate of merit is
not required to be filed by a counterclaimant in any “suit or action” for payment of
fees arising out of the provision of professional services. See Tex. Civ. Prac. &
Rem. Code Ann. § 150.002(h). We overrule Zachry’s sole issue.
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III. CONCLUSION
We affirm the trial court’s order.
/s/ Margaret “Meg” Poissant
Justice
Panel consists of Justices Wise, Jewell, and Poissant.
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