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SM Architects, PLLC v. AMX Veteran Specialty Servs., LLC, 2018 Tex. App. LEXIS 9203 (November 8, 2018)
AMX Veteran Specialty Services, LLC (“AMX”) filed a demand for arbitration alleging professional negligence against SM Architects, PLLC (“SMA”). A Texas statute requires a plaintiff in an action or arbitration involving architectural services to file a certificate of merit affidavit by a third-party licensed architect in support of its claims. AMX attempted to meet this requirement by attaching an unsigned letter by an architect to its demand.
AMX twice amended its demand. It attached to its second amended demand a signed certificate of merit affidavit by the same architect. The affidavit was substantially similar to the original unsigned letter, but with added information regarding SMA’s alleged negligence.
SMA moved to dismiss AMX’s claims for failure to comply with the certificate of merit requirement. SMA argued that the unsigned letter submitted with AMX’s first demand for arbitration was not an affidavit, and that the affidavit filed with its second amended demand was ineffective because its failure to file an affidavit contemporaneously with the first-filed complaint could not be cured by amendment. The arbitration panel denied SMA’s motion.
SMA appealed to a Texas district court, relying on the Texas statute which provides that “[a]n order granting or denying a motion for dismissal” for failure to meet the certificate of merit requirement is “immediately appealable.” AMX moved to dismiss the appeal for lack of jurisdiction. The district court refused to vacate the arbitration panel’s order. SMA appealed.
The appellate court considered whether, by enacting the certificate of merit statute, the legislature intended to confer jurisdiction on the district courts to review an interlocutory order issued by an arbitration panel. The court explained that because Texas law favors arbitration, judicial review of arbitration proceedings is extraordinarily narrow: The Texas Arbitration Act (“TAA”) limits a court’s jurisdiction over an arbitration proceeding to enforcing the agreement to arbitrate and rendering judgment on a panel’s award.
The court found that an interlocutory order under the certificate of merit statute is not an “award.” Although the TAA does not define the term “award,” both its common and technical meanings contemplate finality. Given that the TAA otherwise seeks to limit the role of the courts, the term “award” could not be read so broadly as to encompass interlocutory orders, even those that are otherwise immediately appealable. To allow a party to appeal an interlocutory arbitration panel order in the same manner as an arbitration award would conflict with the TAA’s goal of providing an efficient, economical system for resolving disputes and limiting judicial review with its accompanying expense and delay.
The court recognized that the goal of the certificate of merit statute, like the TAA, is to increase efficiency in conflict resolution by providing a means to quickly eliminate patently unmeritorious claims against architects. But it found that the legislature’s application of the certificate requirement to arbitration proceedings did not show a parallel intent to expand the courts’ jurisdiction over those proceedings. It noted that even without the right to interlocutory appeal, a defendant in an arbitration proceeding maintains the benefits of the certificate of merit requirement, which allows both him and the arbitration panel to assess the merits of the plaintiff’s allegations early in the process.
The court thus vacated the trial court’s order as void and dismissed the action for lack of jurisdiction.
To view the full text of the court’s decision, courtesy of Lexis®, click here.