Nevada Department of Transportation (NDOT) is Not a Design Professional for Certificate of Merit Purposes

Like many states, Nevada has heightened requirements for actions against design professionals for professional negligence. Commonly known in other jurisdictions as a “certificate of merit”, NRS 11.256 – NRS 11.259 require that a complaint filed against a design professional in the nonresidential construction context be accompanied by an attorney affidavit and an expert report which must include, among other information, a statement from the expert that there is a reasonable basis for filing the action against the design professional. NRS 11.258(3). An initial pleading in an action involving the construction of a non-residential building against a design professional served without the attorney affidavit and expert report required by NRS 11.258 is void ab initio, and the district court does not have discretionary authority to allow the party to amend its pleadings to cure its failure to comply with NRS 11.258. Otak Nev., LLC v. Eighth Judicial Dist. Court of Nev., 260 P.3d 408, 409 (Nev. 2011); Converse Prof’l Grp. v. Eighth Judicial Dist. Court of Nev., 310 P.3d 574, 581 (Nev. 2013).

Typically, the question of whether a party is a design professional and therefore protected by certificate of merit requirements is relatively straightforward as the term is defined in the statutory scheme. “Design professional” means a person who holds a professional license or certificate issued pursuant to chapter 623, 623A or 625 of NRS or a person primarily engaged in the practice of professional engineering, land surveying, architecture or landscape architecture. NRS 11.2565(2)(b).

The Nevada Supreme Court recently issued an opinion in which it was asked to determine whether the Nevada Department of Transportation (“NDOT”) was a design professional under this definition. In State DOT v. Eighth Judicial Dist. Court, 368 P.3d 385, 386 (Nev. 2016), a commercial property tenant sued the property owner, NDOT and the City when water entered the leased property and caused damage. The suit alleged that NDOT was negligent for failure to properly design, construct, maintain and or repair a state highway located adjacent to the flooded property. The property owner cross-claimed against NDOT and the City, asserting claims for negligence and equitable indemnity and implied indemnity. Despite including allegations of design defects, neither the complaint nor the cross-claim were accompanied by an attorney affidavit and expert report pursuant to NRS 11.258.

NDOT moved to dismiss the complaint and cross-claim for failure to comply with NRS 11.258. In its Motion, NDOT argued that it is a design professional because its employees hold professional engineering licenses and it primarily engages in professional engineering. The trial court disagreed and denied NDOT’s Motion. Thereafter, NDOT sought writ relief in which it asked the Supreme Court to decide whether NDOT was a design professional as contemplated by NRS 11.2565(2)(b).

The Nevada Supreme Court held that NDOT was not a design professional for two reasons. First, it found that its employees are not statutorily required to be licensed professional engineers and that it was not “…primarily engaged in the practice of professional engineering….” as contemplated by NRS 11.2565(2)(b). Second, under Nevada law, the term “person” “…does not include a government, governmental agency or political subdivision of a government.” NRS 0.039.

The opinion does not delve into what services NDOT actually provided in this particular situation. However, it is clear from this case that there are circumstances in which an entity that employees design professionals can be sued for design defects that fall outside the protections set forth in NRS 11.256 – NRS 11.259. This issue will undoubtedly be refined as the Nevada Supreme Court is faced with the question of whether a firm is “primarily engaged in the practice of professional engineering” under different circumstances in the future.