Crosstex Energy Servs., L.P. v. Pro Plus, Inc.

• Decision Date: 06 June 2014
• Docket Number: No. 12–0251.,12–0251.
• Parties: CROSSTEX ENERGY SERVICES, L.P., Petitioner, v. PRO PLUS, INC., Respondent.
• Court: Texas Supreme Court

430 S.W.3d 384

57 Tex. Sup. Ct. J. 398

CROSSTEX ENERGY SERVICES, L.P., Petitioner,

v.PRO PLUS, INC., Respondent.

No. 12–0251.

Supreme Court of Texas.

Argued Sept. 10, 2013.

Decided March 28, 2014.

Rehearing Denied June 6, 2014.

Brook F. Minx, Clifton J. McAdams, Donato, Minx Brown & Pool, P.C., Collyn A. Peddie, Law Offices of Collyn Peddie, Houston, TX, for Petitioner.

Bennett James Reaves, IV, Dale Jefferson, Levon G. Hovnatanian, Martin, Disiere, Jefferson & Wisdom, L.L.P., Houston, TX, for Respondent.

Randy L. Fairless, Johanson & Fairless, LLP, Sugar Land, TX, for Other interested party.'

Justice GREEN delivered the opinion of the Court.

This interlocutory appeal arises out of property damage that resulted from an explosion at a natural gas compression station. The station owner, Crosstex Energy Services, L.P., sued the lead construction contractor, Pro Plus, Inc. The parties then entered a Rule 11 agreement to move expert designation dates beyond the limitations period. After limitations ran, Pro Plus moved to dismiss because Crosstex had not filed a certificate of merit with its original petition as required by section 150.002 of the Texas Civil Practice and Remedies Code. SeeTex. Civ. Prac. & Rem.Code § 150.002. In a single order, the trial court denied the motion and granted Crosstex an extension to file the certificate. The court of appeals reversed the trial court's ruling and remanded the case. We must decide: (1) whether the court of appeals had jurisdiction to hear Pro Plus's interlocutory appeal of the extension order; (2) whether section 150.002's “good cause” extension is available only when a party filed suit within ten days of the end of the limitations period; (3) whether a defendant's conduct can waive the plaintiff's certificate of merit requirement; and (4) if waiver is possible, whether Pro Plus's conduct constituted waiver. Because we answer yes to the first three questions but hold that Pro Plus did not waive Crosstex's certificate of merit requirement, we affirm the judgment of the court of appeals.

I. Jurisdiction

This Court has limited jurisdiction over interlocutory appeals. SeeTex. Gov't Code § 22.225(b)(3). We always have jurisdiction, however, to consider whether a court of appeals appropriately exercised jurisdiction. E.g., Austin State Hosp. v. Graham, 347 S.W.3d 298, 300 (Tex.2011). Further, we have jurisdiction over an interlocutory appeal where, as here, justices of a court of appeals disagree on a question of law material to the decision. Tex. Gov't Code § 22.001(a)(1); see Gonzalez v. Avalos, 907 S.W.2d 443, 444 (Tex.1995) (per curiam). We therefore conclude that we have jurisdiction to hear this case.

II. Facts and Procedural Background

Crosstex provides natural gas gathering and transmission services. Crosstex uses compression stations to increase the pressure of gas from the field and discharge the gas through pipelines to downstream stations. Crosstex hired Pro Plus, a registered professional engineering firm, as the principal contractor to construct the Godley Compression Station. On November 15, 2008, a control valve gasket at the station failed. The resulting gas leak, once ignited, created a massive fire causing $10 million in property damage. Crosstex filed suit on April 14, 2010, asserting causes of action for general and specific negligence, negligent misrepresentation, breach of implied and express warranty, and breach of contract. Pro Plus's answer generally denied each allegation, raised affirmative defenses, and included requests for disclosure under Texas Rule of Civil Procedure 194.2. Notably, Pro Plus's answer did not raise the issue of a certificate of merit under Texas Civil Practice and Remedies Code section 150.002.

The trial court entered a docket control order setting the dates for the parties to designate experts pursuant to Rule 194.2. Pro Plus joined Crosstex's motion for continuance, which the court granted just before the two-year statute of limitations ran on the negligence claims. The parties signed a Rule 11 agreement extending Crosstex's expert designation deadline to April 8, 2011, beyond the limitations period. On December 2, 2010, after limitations had run, Pro Plus moved to dismiss Crosstex's claims for failure to attach a certificate of merit to its original petition as required by section 150.002. Tex. Civ. Prac. & Rem. CodeE § 150.002(e). Crosstex responded by arguing that Pro Plus waived its right to dismissal through its conduct, and that this conduct was sufficient “good cause” for an extension under section 150.002(c). Id. § 150.002(c), (e). The trial court denied the motion to dismiss and granted an extension in the same order.

Pro Plus appealed the interlocutory order. The court of appeals held: (1) it had jurisdiction to hear the interlocutory appeal; (2) the trial court abused its discretion by granting the extension without good cause; and (3) Pro Plus did not waive its right to dismissal. 388 S.W.3d 689, 698, 702, 706 (Tex.App.-Houston [1st Dist.] 2012, pet. granted). We granted Crosstex's petition for review. 56 Tex.Sup.Ct.J. 492 (Apr. 19, 2013).

III. Court of Appeals' Interlocutory Appeal Jurisdiction

The certificate of merit statute applies to actions for damages arising out of “the provision of professional services by a licensed or registered professional,” such as Pro Plus. SeeTex. Civ. Prac. & Rem.Code § 150.002(a). A plaintiff “shall” file an affidavit of a qualified third party in the same profession; the affidavit must substantiate the plaintiff's claim on each theory of recovery. See id. § 150.002(a), (b). Failure to file this affidavit (hereafter “certificate of merit”) results in dismissal. Id. § 150.002(e). This dismissal may be with or without prejudice. See id.

The threshold question is the court of appeals' jurisdiction to hear this interlocutory appeal. As a general rule, appellate courts may consider appeals from interlocutoryorders only when such power is conferred expressly by statute. See Tex. A & M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 840 (Tex.2007). Here, section 150.002(f) provides: “An order granting or denying a motion for dismissal is immediately appealable as an interlocutory order.” Tex. Civ. Prac. & Rem.Code § 150.002(f). The trial court order simultaneously granted Crosstex an extension to file a certificate of merit and denied Pro Plus's motion to dismiss.¹ Because the statute does not mention interlocutory review of extensions—instead mentioning only motions to dismiss—Crosstex argues the court of appeals erred in exercising jurisdiction over Pro Plus's appeal of the extension for Crosstex to file a certificate of merit. Citing Ogletree v. Matthews, 262 S.W.3d 316 (Tex.2007), a medical expert report case, Crosstex asserts that the motions are inextricably intertwined; thus, it argues, a court may not review the denial of a motion to dismiss without also impermissibly reviewing the granting of an extension. Pro Plus argues Ogletree and its progeny compel the opposite result, and that section 150.002 provides the necessary statutory authority for jurisdiction.

This is a question of first impression. As Crosstex points out, however, the expert report requirements in the Medical Liability Act, Tex. Civ. Prac. & Rem.Code §§ 74.001–.507, provide a useful, if imperfect, analogue. The Act requires the plaintiff, within 120 days of suit, to serve expert reports identifying the basis for liability against each health care provider. Id. § 74.351(a), (r)(6). Failure to serve the report mandates dismissal, id. § 74.351(b)(2), but if a deficient report is timely served, a trial court may grant a thirty-day extension. Id. § 74.351(c). Section 51.014(a)(9) of the Civil Practice and Remedies Code expressly authorizes interlocutory appeals from dismissals pursuant to section 74.351(b), but also expressly bars interlocutory appeals from a grant of extension of time under section 74.351(c). Id. § 51.014(a)(9).

To summarize, both the certificate of merit statute and the Medical Liability Act allow interlocutory appeals of dismissals for failure to meet a threshold filing requirement. Only under the Medical Liability Act, however, has the Legislature expressly forbidden interlocutory appeals of extensions of time to meet the filing requirement. See id. The certificate of merit statute does not address the appealability of extensions of time; therefore, such interlocutory appeals, presumably, are not permissible as the statute does not expressly confer authority for the courts of appeals to consider them. See Koseoglu, 233 S.W.3d at 840.

In Ogletree, the defendant timely objected to the sufficiency of an expert report and filed a motion to dismiss. 262 S.W.3d at 318. The trial court denied the motion to dismiss and granted a section 74.351(c) extension for the plaintiff to remedy the deficiency. Id. We held that when the denial of a motion to dismiss and the grant of an extension are inseparable (such that review of one necessarily involves review of the other), courts of appeals have no jurisdiction to review the motion to dismiss. Id. at 321. If we allowed separation of the two, and a court reviewed only the denial of the motion to dismiss, it would render meaningless the Legislature's bar on interlocutory appeals of extensions. Id. We recognized that the Legislature intended to provide trial courts with discretion to grant extensions to remedy deficient, but curable, reports. See id. at 320–21.

We clarified the scope of Ogletree in Badiga v. Lopez, 274 S.W.3d 681 (Tex.2009). In Badiga, where no report was served within 120 days of the original petition, we concluded that the Legislature's concerns for curing deficient reports were inapplicable. Id. at 684. Unlike Ogletree, the denial of the motion to dismiss and the grant of an extension were not inseparable; rather, the appeal of the trial court's ruling on the motion to dismiss did not have to address the ruling on extension. Id. at...