Ronald R. Wagner & Co., LP v. Apex Geoscience, Inc. and Braun Intertec Corporation

560 S.W.3d 407

• Court: Court of Appeals of Texas
• Decided: September 11, 2018
• Docket: 07-18-00068-CV
• Status: Published

Opinion

In The Court of Appeals Seventh District of Texas at Amarillo ________________________

No. 07-18-00068-CV ________________________

RONALD R. WAGNER & CO., LP, APPELLANT

V.

APEX GEOSCIENCE, INC. AND BRAUN INTERTEC CORPORATION, APPELLEES

On Appeal from the 181st District Court Potter County, Texas Trial Court No. 106,760-B; Honorable John B. Board, Presiding

September 11, 2018

OPINION Before QUINN, C.J., and PIRTLE and PARKER, JJ.

By this interlocutory appeal,1 we must determine whether Appellant, Ronald R.

Wagner and Company, LP, was required to file a Certificate of Merit as required by section

150.002(a) of the Texas Civil Practice and Remedies Code in its suit for damages against

1 TEX. CIV. PRAC. & REM. CODE ANN. § 150.002(f) (West 2011). Appellees, Apex Geoscience, Inc. and Braun Intertec Corporation,2 or whether it was

exempt from doing so under the provisions of the Texas Engineering Practice Act.3

Wagner sued Apex Geoscience, Inc. and Braun Intertec Corporation for breach of

contract, fraudulent inducement, negligence, negligent misrepresentation, gross

negligence, and breach of implied warranty. When Wagner’s pleadings failed to include

a Certificate of Merit, Apex and Braun moved to dismiss the suit under section 150.002(e)

of the Texas Civil Practice and Remedies Code, which mandates dismissal. The trial

court granted the motion to dismiss without prejudice prompting Wagner to file this appeal

seeking to overturn the dismissal order. By a sole issue, Wagner alleges abuse of

discretion by the trial court in dismissing its cause of action claiming it was exempt from

filing a Certificate of Merit. We affirm.

BACKGROUND

Wagner is a highway contractor specializing in application of pavement sealer and

pavement surface treatment to Texas roadways and is an authorized bidder for projects

of the Texas Department of Transportation (TXDOT). Apex, an engineering firm

registered in Texas, was acquired by Braun, which was also a registered geotechnical

engineering firm, in September 2015.

According to its pleadings, Wagner received an unsolicited quote for materials for

a TXDOT project from Advantage Asphalt of Lubbock, LLC, and Advanced Pavement

Maintenance, LTD, (two defendants in the underlying suit who are not parties to this

2 Suit was also filed against other defendants who are not parties to this interlocutory appeal.

3 See TEX. OCC. CODE ANN. § 1001.001 -.552 (West 2012 & Supp. 2017).

2 appeal).4 Their quote provided they would supply Wagner with B-4 Aggregate from the

Wilson Pit. Advanced Pavement Maintenance, LTD, entered into a contract (Sampling

and Evaluation Agreement) with Apex and Braun for analysis of the aggregate. Shane

E. Nance, P.E., a senior engineer employed by Apex and Braun, issued a report on

October 1, 2015, finding that the aggregate met TXDOT’s specifications for the project.

Wagner relied on the analysis and accepted the quote from Advantage Asphalt of

Lubbock, LLC, and Advanced Pavement Maintenance, LTD. It incorporated the quote

into its cost projection and its bid to TXDOT. Wagner was notified by TXDOT that its bid

had been accepted and it was authorized to begin the project.5

Due to a cash flow problem, Advantage Asphalt of Lubbock, LLC, and Advanced

Pavement Maintenance, LTD, requested that Wagner advance funds to begin producing

the aggregate. They produced only a fraction of the number of tons of aggregate originally

agreed upon when the State of Texas, using its own engineers, independently analyzed

the aggregate and found that only one of four batches of the aggregate met TXDOT’s

specifications. Advantage Asphalt of Lubbock, LLC, and Advanced Pavement

Maintenance, LTD, had also failed to coat the aggregate and deliver it to the center of the

job site as required by the quote provided to Wagner. They notified Wagner they could

not produce any more qualified aggregate and Wagner was forced to obtain aggregate

from other suppliers in excess of its bid, which resulted in the underlying lawsuit.

4 Authorized bidders for TXDOT projects are a matter of public record and are published to suppliers

of materials who may unilaterally contact authorized bidders to provide them quotes for materials on projects. 5 The project was for repairing US Highway 84 in Lamb County, Texas.

3 At the hearing on the motion to dismiss, Wagner argued it did not believe a

Certificate of Merit was required to be filed with its lawsuit based on the exemption

provided in section 1001.062 of the Occupation Code. See TEX. OCC. CODE ANN. §

1001.062(a) (West 2012).

At the hearing on the motion to dismiss, Wagner claimed that Nance, the senior

engineer who signed the report on the aggregate analysis and who was Apex and Braun’s

employee, was not engaged in the “practice of engineering,” exempting Wagner from

having to file a Certificate of Merit contemporaneously with its suit. Apex and Braun

argued that Wagner misconstrued the exemption. They interpreted the statute as

exempting non-engineering employees in the field, who might otherwise be considered

as engaging in the practice of engineering for performing services in accordance with an

engineer’s plans or specifications, from being subjected to the requirements of the Texas

Engineering Practice Act and the Board of Professional Engineers for the unlawful

practice of engineering.

APPLICABLE LAW

Section 150.002(a) of the Texas Civil Practice and Remedies Code provides that

in an action 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 . . . .” TEX. CIV. PRAC. &

REM. CODE ANN. § 150.002(a) (West 2011). The plaintiff’s failure to file an affidavit as

required by section 150.002(a) shall result in the dismissal of the complaint against the

defendant. The purpose of the affidavit, referred to as a Certificate of Merit, is to require

4 a plaintiff to make a threshold showing that its claims have merit. See Melden & Hunt,

Inc. v. E. Rio Hondo Water Supply Corp., 520 S.W.3d 887, 897 (Tex. 2017). See also §

150.002(b). Ultimately, a Certificate of Merit provides a basis for the trial court to

determine if the plaintiff’s claims have merit. Murphy v. Gutierrez, 374 S.W.3d 627, 632

(Tex. App.—Fort Worth 2012, pet. denied).

While the “practice of engineering” is not defined in the Civil Practice and

Remedies Code, section 150.001(3) ascribes the meaning assigned by section 1001.003

of the Occupation Code. TEX. CIV. PRAC. & REM. CODE ANN. § 150.001(3) (West 2011).

In that regard, section 1001.003(b) defines the “practice of engineering” as “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.” TEX. OCC. CODE ANN. §

1001.003(b). Paragraph (c) of the statute then lists twelve examples of “the practice of

engineering.” Two of those examples describe “analysis”; TEX. OCC. CODE ANN. §

1001.003(c)(1), and “analysis” in connection with a geotechnical nature as performing the

“practice of engineering.” TEX. OCC. CODE ANN. § 1001.003(c)(10).

Section 1001.062(a) of the Occupation Code provides an exemption from the

requirements of chapter 1001 of the Code as follows: “[a] regular or full-time employee

of a private business entity who is engaged in erecting, constructing, enlarging, altering,

repairing, rehabilitating, or maintaining an improvement to real property in accordance

with plans or specifications that have an engineer’s seal is exempt from this chapter.”

TEX. OCC. CODE ANN. § 1001.062(a). Chapter 1001 is entitled “Engineers” and is

5 contained in Subtitle A which is entitled “REGULATION OF ENGINEERING AND

RELATED PRACTICES.”

STANDARD OF REVIEW

Generally, we review a trial court’s order granting a motion to dismiss under section

150.002 of the Texas Civil Practice and Remedies Code for abuse of discretion. Eng’g &

Terminal Servs., L.P. v. Tarsco, Inc., 525 S.W.3d 394, 397 (Tex. App.—Houston [14th

Dist.] 2017, pet. denied) (citing Epco Holdings, Inc. v. Chicago Bridge & Iron Co., 352

S.W.3d 265, 269 (Tex. App.—Houston [14th Dist.] 2011 pet. dism’d)). A court abuses its

discretion if it fails to analyze or apply the law correctly. Sharp Eng’g v. Luis, 321 S.W.3d

748, 752 (Tex. App.—Houston [14th Dist.] 2010, no pet.). If resolution of the issue

requires us to construe statutory language, we review the trial court’s ruling de novo. See

Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 437 (Tex. 2009); Epco Holdings,

Inc., 352 S.W.3d at 269.

ANALYSIS

Wagner maintains the trial court abused its discretion in dismissing its suit for

failing to file a Certificate of Merit with its pleadings arguing that Apex and Braun’s

engineer was not engaged “in the practice of engineering.” We disagree.

The Occupation Code provides seventeen exemptions from the regulatory scheme

of the Texas Engineering Practice Act. See TEX. OCC. CODE ANN. § 1001.052-.068. The

6 parties do not reference any caselaw analyzing section 1001.062, pertaining to “Certain

Employees Working from Engineer’s Plans,” and this court has found none.6

The legislative intent of the Act specifies the purpose of the Act is to protect public

health, safety, and welfare. TEX. OCC. CODE ANN. § 1001.004(b)(1). Although the

Legislature intended for the Texas Engineering Practice Act to be liberally construed; §

1001.004(d), it also intended to strictly regulate the practice of engineering. TEX. OCC.

CODE ANN. § 1001.004(c)(3). It enacted legislation providing that the practice of

engineering is to be entrusted only to a person licensed and practicing under the Texas

Engineering Practice Act. TEX. OCC. CODE ANN. § 1001.004(c)(1). To exempt an

engineer, as Wagner seeks to do, by characterizing him as a “regular full-time employee

of a private business entity” under section 1001.062 and by asserting he was not engaged

in the practice of engineering, renders the Legislature’s intent meaningless.

The Legislature is not presumed to have done a useless or meaningless act.

Dugger v. Arredondo, 408 S.W.3d 825, 836 (Tex. 2013). A plain reading of the exemption

reflects the Legislature’s intent to shield employees who are not engineers, but who are

engaged in specific tasks related to improvement of real property in accordance with

plans and specifications that have an engineer’s seal, from having to comply with the

Texas Engineering Practice Act.

6 At the time of this publication, caselaw exists on two of the seventeen exemptions: (1) section 1001.063 exempting architects, landscape architects, and interior designers; Tex. Soc’y of Prof’l Eng’rs v. Tex. Bd. of Architectural Examiners, No. 03-08-00288-CV, 2008 Tex. App. LEXIS 8142, at *12-13 (Tex. App.—Austin Oct. 24, 2008, no pet.) (mem. op.) (noting that whether an exemption applies is a fact- intensive inquiry to be done on a case-by-case basis), and (2) section 1001.066 exempting certain NASA related activities, Jacobs Eng’g Grp., Inc. v. Elsey, 502 S.W.3d 460, 464-67 (Tex. App.—Houston [14th Dist.] 2016, no pet.) (finding that a certificate of merit would not necessarily be required in a work-place safety suit against a professional engineering firm).

7 The statutes at issue are not ambiguous. Section 150.002(a) of the Civil Practice

and Remedies Code provides that a suit for damages arising out of the provision of

professional services by a licensed professional engineer requires a contemporaneous

filing of a Certificate of Merit. Section 1001.003(c)(1) and (10) of the Occupation Code

specifically describe two examples of the “practice of engineering” which both include an

“analysis” performed by an engineer. Section 1001.004 clearly expresses the

Legislature’s intent to protect public health, safety, and welfare, to entrust the “practice of

engineering” to a licensed person, and to require strict compliance and enforcement of

the Texas Engineering Practice Act. TEX. OCC. CODE ANN. § 1001.004(b)(1), (c)(1), (3).

Nance, Apex and Braun’s senior engineer, performed a service, i.e., an analysis

of B-4 Aggregate, which required engineering education, training, and experience in

applying special knowledge or judgment of the mathematical, physical, or engineering

sciences to that service. He signed a report confirming that the aggregate met TXDOT’s

specifications for a sealcoating project.

Wagner relied on Nance’s results in preparing its bid for the project. After TXDOT

accepted Wagner’s bid and its own engineers later disputed the quality of the aggregate,

Wagner was left to acquire satisfactory aggregate from another supplier in excess of its

bid. Thus, Wagner’s suit for damages arose out of professional services rendered by

Nance, a licensed professional engineer working for a registered engineering firm.

Admittedly, as emphasized by Wagner, Nance was Apex and Braun’s “employee”;

however, he was still an engineer engaged in the practice of engineering. He was not an

employee involved in “erecting, constructing, enlarging, altering, repairing, rehabilitating,

or maintaining an improvement to real property in accordance with” another engineer’s

8 plans,7 which is required to trigger application of the exemption provided in section

1001.062 of the Occupation Code; he was the very engineer who performed the analysis

relied upon by the parties. The Legislature did not intend to exempt engineers from the

regulatory scheme imposed by the Texas Engineering Practicing Act and enforced by the

Texas Board of Professional Engineers simply by virtue of the fact that they were

employees of an engineering firm. Finding the applicable statutes to be unambiguous,

we need not resort to the rules of statutory construction to resolve the issue before us.

Based on a plain reading of the applicable statutes, we hold that the exemption

provided by section 1001.062 of the Occupation Code does not apply under the facts of

the underlying case and Wagner was required to file a Certificate of Merit in compliance

with section 150.002(b) with its complaint. We find that Wagner’s failure to do so

authorized the trial court to dismiss the suit pursuant to section 150.002(e) of the Texas

Civil Practice and Remedies Code. Accordingly, the trial court did not abuse its discretion

in doing so. Wagner’s sole issue is overruled.

CONCLUSION

The trial court’s order dismissing the suit filed by Robert R. Wagner and Company,

LP, without prejudice is affirmed.

Patrick A. Pirtle Justice

7 These are the types of services generally performed by employees following plans or specifications that have an engineer’s seal.