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Albin Yates Balius Roach, Attorneys at Law

Advancing Integrity. Preserving Truth.

Here for you, here to help.

214-423-5100

Professional Services: Opinions vs. Labor

Posted by on under Business Transactions.

If you are in a service industry, you should be aware of a developing area of law which may have a significant impact on your exposure when issuing advice or rendering opinions to your customers. Recently, I tried a case to a jury in Houston where I defended a termite inspection company in a DTPA suit over a termite inspection report (or WDIR for those in the biz).  In a nutshell, the Deceptive Trade Practices Act (DTPA), Tex. Bus. & Com. Code Ch. 17, is designed to protect consumers against false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty and to provide efficient and economical procedures to secure such protection. Tex. Bus. & Com. Code Ann. § 17.44(a). However, the DTPA provides an exemption from liability to those who render professional services when the essence of that service is based on providing advice, judgment, or opinion. Tex. Bus. & Com. Code Ann. § 17.49(c). A professional service is one that arises out of acts particular to the individual’s specialized vocation. An act is not a professional service merely because it is performed by a professional; rather, it must be necessary for the professional to use his specialized knowledge or training.

The professions included in the professional services exemption under the DTPA are not statutorily defined. Generally, lawyers (of course!), accountants, and doctors have qualified for this exemption as long as the conduct at issue involves the giving of advice, judgments, or opinions. What other professionals are included has not been established with any degree of certainty and rarely has been addressed, much less squarely decided, by the appellate courts. When the professional services exemption was enacted, the Texas Legislature could not agree on a definition and therefore, did not include one and left the language vague.   At this point, home inspectors have been included in the definition of a “professional” but termite inspectors have not, but not for want of me arguing this point to the judge in the case I just tried.  Fortunately it all worked out in my client’s favor and we won the case on all issues, but if we had not we would have asked the court of appeals to extend “professional” to include termite inspectors.

The upshot is that the courts seem to agree that a “professional”: (1) engages in work involving mental or intellectual rather than physical labor; (2) requires special education to be used on behalf of others; and (3) earns profits dependent mainly on these considerations.  The courts have refused to permit the exemption where advice was given but physical labor was also performed.  So, if your training and background permit you to provide “educated opinions” then you qualify as a “professional” for the purposes of the DTPA.