certificate of participationCo-author Chance Decker

You are a service company and you’ve been sued for a defective frac job. It looks scary but there’s no detail in the petition and no certificate of merit is attached. What is your response:

  1. “Such a pity; my fifth-grader got one for finishing next-to-last at the track meet”;
  2. He should borrow one from the scarecrow;
  3. Panic, offer a nice settlement to the plaintiff if, for the love of Jesus, Mary and Joseph and your non-exempt ranch in West Texas, he’ll just go away;
  4. Ponder the difference between “shall” and “may”.

Perdenal Energy LLC v. Bruington Engineering, Ltd. asked whether a court must dismiss an engineering defect lawsuit filed without a certificate of merit with prejudice (never to file suit again) or may dismiss without prejudice (to refile once they obtain a certificate).

The point

Texas law requires a plaintiff to file a “certificate of merit” with its original petition for claims arising out of work by licensed or registered engineers. The certificate must be from a qualified engineer and must detail the manner in which the professional services were faulty.

The trial court shall dismiss the lawsuit when the plaintiff doesn’t file a certificate of merit with the original petition. The dismissal may be with or without prejudice.  The dismissal decision will be reviewed under the extremely lenient, “abuse of discretion” standard.  The statute is silent on when the court should dismiss with or without prejudice.

The facts

Pedernal sued Bruington for damages resulting from a fracking operation on a gas well, alleging shoddy engineering work. Because no certificate of merit accompanied the petition the trial court dismissed Pedernal’s claims “without prejudice,” allowing Pedernal to re-file with a certificate of merit.  On appeal the question was whether the case should have been dismissed with prejudice.

The Texas Supreme Court found that the trial court properly dismissed Pedernal’s claim without prejudice.

The standard

A court should dismiss a plaintiff’s claims with prejudice if the plaintiff’s failure to file a certificate of merit demonstrates the plaintiff’s claims lack merit. Dismissal with prejudice is a harsh remedy.  In fact, a dismissal is based solely upon the failure to follow procedural rules could face due process challenges by adjudicating a plaintiff’s claim on procedural formalities. The purpose of the certificate of merit is to weed out clearly unmeritorious claims. That goal would be severely handicapped if a plaintiff could always re-file a claim with a certificate of merit.

The strategy – patience.

If you are a defendant who was sued without a certificate of merit, what’s your move?

If you can, wait to move for dismissal until after the statute of limitations has run.  That way, whether the claim is dismissed with or without prejudice, they can’t sue you again. The plaintiff could claim you waived the right to insist on a certificate, so don’t wait too long.  But if you play your cards right it’s case closed.

Include as much information in your motion as possible to demonstrate the claims lack merit.  The statute is designed to quickly dispose of unmeritorious claims.  If you think the plaintiff’s claims are bogus, prove it at the dismissal hearing.

But I’m the plaintiff!

Don’t think you can intimidate the defendant with a vague, unsupported petition, purple prose and all. Just do your homework beforehand.

Musical interlude

A song for Mom. And another one if you prefer your Mothers Day seriously countrified.