Justice Rebeccca Huddle
Plaintiff hired an architectural firm to work on developing its property in McAllen in early 2006. In June 2010, plaintiff sued the firm for negligent design but failed to include a certificate of merit, as required by § 150.002(a), CPRC. The firm moved to dismiss. Plaintiff nonsuited its claims and, a few months later, refiled the suit with a certificate of merit. The firm again moved to dismiss for failure to file a compliant certificate. The trial court denied the motion, but the firm won prevailed on appeal. In 2015 the Corpus Christi Court of Appeals ruled that plaintiff’s certificate was compliant as to plaintiff’s negligence claim. On appeal, SCOTX reversed the that decision in Levinson Alcoser Assocs., L.P. v. El Pistolon II, Ltd, 513 S.W.3d 487, 495 (Tex. 2017). The Court remanded to the trial court for a determination of whether plaintiff’s case should be dismissed with or without prejudice, as the statute permits. Prior to the trial court’s dismissal of the case without prejudice on remand, plaintiff once again refiled its suit, alleging the same facts and causes of action as the 2010 suit and attaching a new certificate of merit. Recognizing that defendant would move to dismiss based on limitations, plaintiff asserted that “it diligently prosecuted its previous suit and that its ‘ignorance of the expansion of the certificate of merit requirements that [SCOTX] would eventually articulate was reasonable.” The trial court rejected the argument and dismissed the suit. The Corpus Christi Court of appeals reversed, holding that the running of limitations while the 2010 suit was on appeal was tolled by the “legal impediment rule.” SCOTX granted review.
These are the basic facts of Levinson Alcoser Associates, L.P. and Levinson Associates, Inc. v. El Pistolón II, Ltd. (No. 21-0797; delivered June 16, 2023). In an opinion by Justice Huddle, SCOTX reversed and rendered judgment for defendant. The primary issue in the case involved whether the Court should extend the limited circumstances it has previously ruled justified equitable tolling of limitations. In the first instance, Justice Huddle noted, equitable tolling can never apply when “it is ‘inconsistent with the text of [a] relevant statute’” (citations omitted). Here the court of appeals failed to consider whether the certificate of merit statute itself “foreclosed consideration of equitable tolling.” Though it disapproved of the court of appeals’ failure to do so, the Court declined to take up the statutory issue because it was “not advanced as a ground for summary judgment.”
Moving to whether the circumstances of this case justified equitable tolling, the Court examined the two instances in which it has allowed it: (1) “misnomer” (as opposed to “misidentification,” where the plaintiff sues the wrong defendant) where a “petition merely misnames the correct defendant” and “a subsequent amendment of the petition relates back to the date of the original petition” (citation omitted); and (2) in a case for legal malpractice until “all appeals on the underlying claim are exhausted or the litigation is otherwise finally concluded” (Hughes v. Mahaney & Higgins, 821 S.W.2d 154 (Tex. 1991)). In Hughes the Court made it clear that its decision applied solely to the circumstances of that case and should not be read to extend to anything else (which the court of appeals did anyway). The court of appeals attempted to reframe Hughes as “but one incarnation of a broader ‘legal impediment rule,” which is based on a treatise written at the turn of the 20th century and cites a single Texas case in support. The Court rejected application of the “broader rule” and held that there was no legal impediment to plaintiff refiling its 2018 suit at an earlier date.
The Court likewise rejected plaintiff’s invitation to apply a five-factor test used by the Dallas Court of Appeals in Hand v. Stevens Transport, Inc. Employee Benefit Plan, 83 S.W.3d 286, 293 (Tex. App.—Dallas 2002, no pet.), which involved a limitations defense to an ERISA claim. In that case the court analyzed (and ultimately rejected) plaintiff’s equitable tolling argument based on five factors borrowed from a federal appellate decision. The Court brushed this approach aside as so meaningless as to undercut the policy supporting “bright-line” rules on when limitations periods should be tolled. And just because in this case plaintiff “diligently” pursued its 2010 suit all the way up and down the process did not justify equitable tolling because the suit was ultimately dismissed—in other words, as if it had never been filed at all. Such a rule makes no sense and would lead to an unending stream of satellite litigation over whether the “legal impediment rule” should apply to any number of fact situations. Bright-line rules, to the maximum possible extent, avoid this result.
In this decision the Court sent an unmistakable message to litigants not to get bogged down in limitations disputes in hopes that their case will be the next one the Court carves out. It’s not likely to happen, no matter how “diligent” a party might be in pursuing an action that eventually ends up being dismissed.
