In 2025, the Texas Supreme Court issued its decision in Pitts v. Rivas, setting off a firestorm across the state of Texas about whether contracts no longer matter for professionals, particularly design professionals. If the “gist” of a complaint against an architect or engineer is that its services did not meet the applicable standard of care, can the design professional rely on waivers of consequential damages or limitations of liability or even scope exclusions written into their services agreements?

Key Findings of Pitts v. Rivas:

– If the “gist of a client’s complaint” or “the real issue” is that the professional failed to exercise the degree of care, skill, or diligence that professionals of ordinary skill and knowledge would exercise, the anti-fracturing rule requires the claim to be litigated as one for professional negligence, not fraud or some other cause of action.

– Not all claims are barred by the anti-fracturing rule. If evidence supports additional claims, then the “gist” of the claim may extend beyond professional negligence.

– For parties to a business relationship to owe each other informal “fiduciary duties arising from a special relationship of trust and confidence”, the special relationship must have existed prior to, and apart from, the agreement made the basis of the suit.

What is the gist or ”gravamen” of the claim?

In Pitts v. Rivas, 709 S.W.3d 517 (Tex. 2025), Rivas, a homebuilder and real estate developer, hired Pitts as to provide accounting services for his company. The relationship lasted from 2007 to 2016, with the parties signing engagement letters for only the last two years. In those letters, Pitts stated it would perform “a compilation engagement with respect to the consolidated financial statements of Rivas’s company”. The letters also contained limitation of responsibility and liability provisions.

The financial statements Rivas supplied to lenders contained errors.  In September 2016, Rivas discovered multiple errors that caused the inflated figure for shareholder equity.  Rivas alleged that these errors required a restatement that lowered the figure for shareholder equity, which in turn caused lenders to demand additional deposits and refuse to provide further credit to Rivas.  Rivas also alleged that the errors caused him to overpay taxes,  draining his accounts and forcing his company into bankruptcy.  In August 2020, Rivas sued Pitts for negligence, gross negligence, professional malpractice, intentional misrepresentations, fraud, breach of fiduciary duty, and breach of contract.

At the trial court level, Pitts filed a motion for summary judgment, arguing among other grounds that the negligence claims, which accrued in 2016 at the latest, were barred by the two-year statute of limitations, and the breach of fiduciary duty, breach of contract, and fraud claims were barred by the anti-fracturing rule because they should be classified as professional negligence claims. The trial court granted summary judgment and the Dallas Court of Appeals affirmed the trial court’s order as to the negligence and breach of contract claims, but reversed as to the fraud and breach of fiduciary claims. Significantly, the only claims Rivas asked the Texas Supreme Court to review were the fraud and breach of fiduciary duty claims. The Court was not asked and did not review the breach of contract claim.

The Texas Supreme Court, in affirming the trial court’s dismissal of the fraud and breach of fiduciary duty claim, applied the anti-fracturing rule. The essence of the rule is that a single claim, in this case a claim for professional negligence, cannot be split into multiple claims to gain some sort of litigation or tactical advantage. As the Court held,

The logic underlying the anti-fracturing rule is straightforward.  It may often be possible to artfully recast a professional negligence allegation as something more—such as fraud or breach of fiduciary duty—to avoid a litigation hurdle such as the statute of limitations.  Courts, however, must look not merely to the labels chosen by the plaintiff but instead to the gravamen of the facts alleged to determine how to treat the claim.

In further explaining what the “gravamen” o the complaint is and how to find it, the Court held that if the crux of the claim is a complaint about the quality of professional services provided, “then the claim will be treated as one for professional negligence even if the petition also attempts to repackage the allegations under the banner of additional claims”.  If the “gist” or “the real issue” is, “that the professional failed to exercise the degree of care, skill, or diligence that professionals of ordinary skill and knowledge would exercise, the anti-fracturing rule requires the claim to be litigated as one for professional negligence, and the plaintiff may not re-label the allegations under a different claim to obtain a litigation advantage.”

According to the Court, the gist of all of Rivas’ fraud claims was professional negligence. Rivas alleged were that Pitts misrepresented that its staff were proficient with the QuickBooks computer program, resulting in duplicated assets, overstatement of shareholder equity in the financial statements, overpayment of taxes, and a large overstatement of the Rivas’s company’s net worth. As the Court reasoned,

The crux of the claim—indeed the entirety of the claim and supporting evidence—is that the Accountants [Pitts] made accounting errors that, when revealed to lenders, led to a loss of credit, which in turn was fatal to the business.  This is a straightforward professional malpractice allegation.

Are all claims barred by the anti-fracturing rule?

Not all claims arising from the same facts or transaction are barred by the anti-fracturing rule. The Pitts v. Rivas Court expressly carved out claims that are supported by additional evidence that would “extend” the gravamen of the claim beyond the traditional characteristics of professional] malpractice.  As relating specifically to Rivas’s fraud claims, the Court held that Rivas did not present such additional facts and evidence, instead finding, that Rivas’s,

fraud claim boils down to the allegation that [Pitts] misrepresented [its] proficiency with QuickBooks and the allegation that [Pitts] did not disclose [its] errors to Rivas or to the banks as soon as [it] should have.  Overstating one’s professional competence is a classic example of malpractice. Likewise, [Pitts’] alleged failure to timely disclose [its] errors [did] not extend “beyond what traditionally has been characterized as professional malpractice.

The Court’s concern, as repeated throughout the Pitts v. Rivas decision, is the use of  clever pleading of, “professional negligence allegations as something more in order to gain a litigation advantage”. Or, stated another way, “guarding against efforts to artfully evade the procedural and substantive rules applicable to allegations of professional malpractice”.

Of some significance, Rivas did not preserve on appeal to the Texas Supreme Court the issue of whether his breach of contract claim against Pitts was also barred by the anti-fracturing rule. Pitts, too, did not seek to have the Court address whether the limitations of responsibility or liability in the engagement letters were enforceable, perhaps because it believed its limitations and anti-fracturing arguments were stronger and preclusive.

Does an informal business relationship exist in professional services agreements?

The Court also considered whether the relationship between Rivas and Pitts gave rise to a fiduciary relationship. The Court initially considered whether the accounting relationship gave rise to one of the highest duties in law, a fiduciary one. In holding that no fiduciary duty existed, the Court discounted that an accountant always owes a fiduciary duty to its client. It also noted that “informal fiduciary relationships” can arise in a business relationship, but the special relationship of trust and confidence must have existed, “prior to, and apart from, the agreement made the basis of the suit.”  A party’s subjective belief that his business associate is a fiduciary is “always” insufficient to create such a relationship.

Citing to its 1992 decision in Crim Truck & Tractor Co. v. Navistar Int’l Transp. Corp., 823 S.W.2d 591, 594–95 (Tex. 1992), the Court reiterated that,

The fact that one businessman trusts another, and relies upon his promise to perform a contract, does not rise to a confidential relationship.  Every contract includes an element of confidence and trust that each party will faithfully perform his obligation under the contract.  Neither is the fact that the relationship has been a cordial one, of long duration, evidence of a confidential relationship.

What does Pitts v. Rivas mean for architects and engineers who have limitation of liability of clauses in their professional services contracts?

Pitts v. Rivas may be interpreted, and is being interpreted by some attorneys, as a signal that the Texas Supreme Court no longer places legal significance on professional design contracts when the “gist” of the dispute is an architect’s or engineer’s or design professional’s  failure to meet the standard of care. Taken to its logical extreme, Pitts v. Rivas would render meaningless waivers of consequential damages, limitations of liability, and even written lists of excluded services in design professional agreements if the crux of the dispute is errors or omissions in providing professional services.

A different interpretation would limit Pitts v. Rivas to statute of limitations cases in which attorneys try to split one claim in many to avoid all the claims from being time-barred. And yet another interpretation of the case is that had Rivas simply alleged facts independent of professional negligence to support his fraud claims, the result would have been different.

While the trial courts now confront a tidal wave of motions for summary judgment filed by every stripe of design professional seeking to enforce the Pitts v. Rivas decision in their favor, only one thing is certain: The fate of limitation of liability clauses for design professionals, already suspect under Texas law, will face further assault in the years to come.

If you would like to consult with an attorney on issues presented in this article and/or how it may relate to your business needs, the attorneys in our Austin and Dallas offices are available to answer any questions you may have. Please contact us at info@gstexlaw.com.

Legal Disclaimers

This blog is made available by Gerstle Snelson, LLP for educational purposes and to provide general information about the law, only.  Neither this document nor the information contained in it is intended to constitute legal advice on any specific matter or of a general nature.  Use of the blog does not create an attorney-client relationship with Gerstle Snelson, LLP where one does not already exist with the firm.  This blog should not be used as a substitute for competent legal advice from a licensed attorney.   

©Gerstle Snelson, LLP 2026.  All rights reserved.  Any unauthorized reprint or use of this material is prohibited.  No part of this blog may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage or retrieval system without the express written permission of Gerstle Snelson, LLP.