Opinion issued November 25, 2014

In The

Court of Appeals 

For The 

First District of Texas 

————————————

NO. 01-13-00898-CV

———————————

MARK H. HENRY, M.D., Appellant

V.

MARCOS V. MASSON, M.D., Appellee

On Appeal from the 295th District Court

Harris County, Texas

Trial Court Case No. 2003-40678

O P I N I O N

This Court has issued two previous opinions in this case involving claims 

arising out of the winding up of a medical practice. Our judgment and mandate in 

the second opinion awarded appellant, Mark. H. Henry, M.D., a $50,000 judgment 
2

against appellee, Marcos V. Masson, M.D., “plus such other further relief to which 

[Henry] is entitled.” On remand, Henry sought the award of pre-judgment interest, 

court costs, and a contribution judgment against Masson. The trial court denied 

this relief. In four issues, Henry argues that (1) this Court’s mandate in the second 

opinion does not limit the trial court from granting him relief beyond the $50,000 

judgment; (2) he is entitled to a $59,500 contribution judgment against Masson, 

plus pre- and post-judgment interest on that amount; (3) he is entitled to 

prejudgment interest on the $50,000 judgment; and (4) he is entitled to court costs.

We affirm.

Background

Henry and Masson formed a partnership to conduct an orthopedic surgery 

practice, Houston Hand and Upper Extremity L.L.P. (“Houston Hand”). In 2003, 

after ongoing disputes, Masson sued Henry for, among other things, breach of 

contract, and Henry filed several counterclaims. The parties agreed to wind up 

Houston Hand and ultimately entered into a settlement agreement, which included 

agreed-upon steps necessary to winding up Houston Hand and provided that Henry 

and Masson would form new entities to continue their medical practices, Hand and 

Wrist Center of Houston, P.A., and ROC Houston, P.A., respectively. Both Henry 

and Masson later amended their claims to assert various breaches of the settlement 

agreement. In November 2004, a jury found that both Henry and Masson had 
3

materially breached the settlement agreement but that Henry breached the 

agreement first, which excused Masson’s material breach. The trial court 

subsequently issued several summary judgment rulings and orders concerning 

other claims in the case and the winding up of Houston Hand.

The trial court signed a final judgment in 2007. In this judgment, the trial 

court awarded Masson $75,000 in damages on his breach of the settlement 

agreement claim plus $25,000 in attorney’s fees. The judgment also included the 

following two paragraphs:

[It is] ORDERED that Houston Hand and Upper Extremity Center, 

L.L.P. (“Houston Hand”) is granted judgment for capital contribution 

under Article 4.2 of the Agreement of Partnership of Houston Hand 

for sums owed to Hand and Wrist Center of Houston, P.A. for the sum 

of $148,000.00; 50% ($74,000.00) of which Mark H. Henry is 

required to contribute to Houston Hand and 50% ($74,000.00) of 

which Marcos V. Masson is required to contribute to Houston Hand. 

It is further

ORDERED that Houston Hand is granted judgment for capital 

contribution under Article 4.2 of the Agreement of Partnership of 

Houston Hand for sums owed to ROC Houston, P.A. for the sum of 

$29,000.00; 50% ($14,500.00) of which Mark H. Henry is required to 

contribute to Houston Hand and 50% ($14,500.00) of which Marcos 

V. Masson is required to contributed to Houston Hand.

In 2010, this Court issued an opinion holding that, because the parties 

treated the settlement agreement as continuing after Henry’s material breach, 

Masson’s material breach, which involved failing to pay Henry $150,000 after 

Henry transferred title to a property to him, was not excused. See Henry v. 
4

Masson, 333 S.W.3d 825, 841–42 (Tex. App.—Houston [1st Dist.] 2010, no pet.) 

(“Henry I”). This Court held that the portion of the judgment referencing Houston 

Hand, Hand and Wrist, and ROC Houston, referenced “specific debts owed by 

[Houston Hand]” and did not grant any specific relief to Henry’s and Masson’s 

new practices. Id. at 847. Instead, the trial court awarded judgment to Houston 

Hand, not to the new entities. Id. This Court also affirmed the $100,000 judgment

in favor of Masson relating to Henry’s breach of the settlement agreement and 

remanded the case to the trial court for further proceedings. See id. at 839, 850.

On remand, Henry moved the trial court to amend its final judgment to 

reflect his entitlement to a $150,000 credit for his transfer of property to Masson. 

In response, Masson moved the trial court to grant him a new trial on the $150,000 

credit and sever his judgment for Henry’s breach of the settlement agreement from 

Henry’s claim for $150,000. The trial court granted the new trial, granted 

Masson’s motion to sever, and severed Henry’s claim into a separate cause 

number.

Henry then filed a petition for writ of mandamus and a direct appeal in this 

Court challenging the severance order. See In re Henry, 388 S.W.3d 719, 725 

(Tex. App.—Houston [1st Dist.] 2012, pet. denied) (“Henry II”). This Court noted 

that, in Henry I, the panel determined that Henry was entitled to $150,000 for the 

transferred property as a matter of law, and, therefore, there were no fact questions 
5

to consider on remand concerning Masson’s obligation to pay this amount to 

Henry. Id. at 728. This Court, therefore, held that the trial court erred in granting 

Masson’s motion to sever. Id. We rendered judgment that Henry was entitled to 

$150,000 on his breach of the settlement agreement claim, offset by the $100,000 

award to Masson on Masson’s breach of the settlement agreement claim. Id. at 

729. This Court ordered the trial court to enter final judgment for Henry in the 

amount of $50,000, “plus such other further relief to which he is entitled.” Id.

On remand following Henry II, Henry moved the trial court to enter 

judgment against Masson in conformity with the appellate mandate. Henry argued 

that the trial court should enter judgment against Masson for $50,000, plus other 

relief to which Henry was entitled, specifically: (1) prejudgment interest on the 

$50,000; (2) a judgment for $59,500, reflecting the net amount Masson was 

required to contribute to Houston Hand pursuant to the trial court’s 2007 judgment; 

(3) prejudgment interest on the $59,500; and (4) court costs. Henry, therefore,

requested that the trial court enter judgment against Masson in the amount of 

$165,240, plus post-judgment interest and court costs.

In response, Masson argued that the mandate from this Court awarded Henry 

$50,000 and that this was the “only relief available” to Henry. He argued that this 

Court’s mandate did not specifically award prejudgment interest. Masson also 

argued that Henry was not entitled to any portion of the contribution judgment 
6

awarded to Houston Hand in the trial court’s original 2007 judgment. He pointed 

out that Houston Hand had been wound up and terminated, and thus it had no 

capacity to recover a judgment, and that Henry, as a former individual partner of 

Houston Hand, could not recover funds awarded to the partnership itself.

The trial court stated the following in its supplemental final judgment:

IT IS THEREFORE ORDERED, ADJUDGED, and DECREED that 

Defendant, Mark H. Henry, M.D., have and recover from Plaintiff, 

Marcos V. Masson, M.D., actual damages in the amount of 

$50,000.00, plus postjudgment interest thereon at the rate of 7.25 

percent per annum from the date of this judgment until paid.

The portion of the Final Judgment granted to Plaintiff, Marcos V. 

Masson, M.D. against Defendant, Mark H. Henry, M.D., is offset 

against the damages awarded to Mark H. Henry, M.D. resulting in the 

net of $50,000 referenced above. The portion of the Final Judgment 

where Defendant, Mark H. Henry, M.D. takes nothing for his claims 

and counterclaims against Plaintiff, Marcos V. Masson, M.D., is 

vacated.

The supplemental final judgment did not award prejudgment interest, a 

contribution judgment, or court costs to Henry. This appeal followed.

Limitation of Henry’s Recovery to $50,000

In his first issue, Henry contends that the trial court erred in concluding that 

it could not award further relief to Henry beyond the $50,000 specified in this 

Court’s mandate in Henry II. Henry argues that the language of this Court’s 

mandate allowed him to recover additional relief if he demonstrated that he was 

entitled to such relief. We agree.
7

When an appellate court reverses a trial court’s decision and remands the 

case to the trial court, the trial court is authorized to “take all actions that are 

necessary to give full effect to the appellate court’s judgment and mandate.” 

Phillips v. Bramlett, 407 S.W.3d 229, 234 (Tex. 2013). The trial court has no 

authority to take an action that is inconsistent with or “beyond the scope of that 

which is necessary to give full effect to the appellate court’s judgment and 

mandate.” Id.

Here, this Court’s mandate in Henry II stated: “The Court remands the case 

to the trial court with instructions that it enter final judgment for [Henry] in the 

amount of $50,000, plus such other further relief to which [Henry] is entitled.” 

The plain language of our mandate thus required the trial court to enter final 

judgment for Henry in the amount of $50,000 plus any other amounts Henry could 

demonstrate his right to receive.

We sustain Henry’s first issue and now determine whether Henry 

demonstrated that he is entitled to a contribution judgment, prejudgment interest, 

and court costs.

Contribution Judgment

In his second issue, Henry contends that he is entitled to a contribution 

judgment of $59,500 as part of the amount originally awarded to Houston Hand in 
8

the trial court’s 2007 judgment, plus pre- and post-judgment interest on this 

amount from Masson.

In its 2007 judgment, the trial court awarded a judgment to Houston Hand,

requiring both Henry and Masson to contribute sums which were then to be used to 

pay debts to Henry’s and Masson’s new entities, Hand and Wrist and ROC 

Houston. Neither Henry nor Masson made the capital contributions to Houston 

Hand required by the 2007 judgment, and Houston Hand was wound up and 

terminated without the capital contributions having been made. Henry now

contends that, in his individual capacity, he is entitled to a portion of this unpaid 

award to the terminated partnership as a contribution judgment. Masson argues 

that because Houston Hand is a terminated entity, it cannot enforce the judgment in 

its favor and that Henry, as a former partner in Houston Hand and a current 

member in Hand and Wrist, cannot recover a portion of the award made to 

Houston Hand. We agree with Masson.

A partnership, such as Houston Hand, and a professional association, such as 

Hand and Wrist, are entities distinct from their partners and members.

1

 See Act of 

 1 Because the events that form the basis of this dispute occurred before the Business 

Organizations Code became effective in 2006 and the parties did not elect to be 

governed by the Business Organizations Code, we cite to the relevant sections of 

the Texas Revised Partnership Act, the law in effect at the time the parties’ causes 

of action accrued. We note that the Business Organizations Code contains an 

identical provision. See TEX. BUS. ORGS. CODE ANN. § 152.056 (Vernon 2012) 

(“A partnership is an entity distinct from its partners.”).
9

May 31, 1993, 73d Leg., R.S., ch. 917, § 2.01, 1993 Tex. Gen. Laws 3887, 3890 

(expired Jan. 1, 2010); Act of May 28, 1969, 61st Leg., R.S., ch. 840, § 8(B)(1), 

1969 Tex. Gen. Laws 2513, 2514 (expired Jan. 1, 2010) (providing, in Texas 

Professional Associations Act, that articles of association may provide that 

professional association “shall continue as separate entity independent of [its] 

members”); see also In re Allcat Claims Serv., L.P., 356 S.W.3d 455, 464 (Tex. 

2011) (stating that, in Texas Revised Partnership Act, Texas Legislature explicitly 

adopted “entity theory” of partnership, which provides that partnerships are distinct 

entities from partners). Furthermore, partnership property “is not property of the 

partners.” See Act of May 31, 1993, 73d Leg., R.S., ch. 917, § 2.04, at 3891; see 

also In re Allcat Claims Serv., 356 S.W.3d at 464 (noting that Revised Partnership 

Act provides that “[a] partner is not a co-owner of partnership property”); Fleming 

& Assocs., L.L.P. v. Barton, 425 S.W.3d 560, 571 (Tex. App.—Houston [14th 

Dist.] 2014, pet. filed) (“Partnership property is not property of the partners. A 

partner does not have an interest in partnership property.”) (internal citations 

omitted).

The trial court’s 2007 judgment ordered both Henry and Masson to make 

capital contributions to Houston Hand, an entity separate from both of them, and it 

then wound up Houston Hand, which no longer continues as an entity. Neither 

Henry nor Masson made the required capital contributions to Houston Hand prior 
10

to its termination. On appeal in Henry I, neither Henry nor Masson challenged the 

award of capital contributions to Houston Hand, an entity that has now been 

terminated and cannot enforce the judgment in its favor against either of them or in 

favor of either of them. Furthermore, Houston Hand, the defunct partnership, and 

Hand and Wrist, the entity created by Henry that was a third-party beneficiary of 

the 2007 judgment, are both separate and distinct entities from Henry himself. 

Henry, as a partner of the now-defunct Houston Hand, did not have an ownership 

interest in the unpaid judgment in favor of Houston Hand, and no one is obligated 

to pay him any portion of the judgment awarded specifically to Houston Hand.

We overrule Henry’s second issue.

Prejudgment Interest

In his third issue, Henry contends that he is entitled to prejudgment interest 

on the $50,000 judgment.

Prejudgment interest is “compensation allowed by law as additional 

damages for lost use of the money due as damages during the lapse of time 

between the accrual of the claim and the date of judgment.” Johnson & Higgins of 

Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 528 (Tex. 1998). A trial court 

may award prejudgment interest based on an enabling statute or general principles 

of equity. See id.; see e.g., TEX. FIN. CODE ANN. § 304.102 (Vernon 2006) (“A 

judgment in a wrongful death, personal injury, or property damage case earns 
11

prejudgment interest.”). Awarding prejudgment interest serves two policy 

purposes: encouraging settlements and discouraging delay. See Perry Roofing Co. 

v. Olcott, 744 S.W.2d 929, 930 (Tex. 1988) (citing Cavnar v. Quality Control 

Parking, Inc., 696 S.W.2d 549 (Tex. 1985)). When, as here, no statute controls the 

award of prejudgment interest, the decision to award prejudgment interest is left to 

the sound discretion of the trial court, which should rely upon equitable principles 

and public policy in making its decision. Citizens Nat’l Bank v. Allen Rae Invs., 

Inc., 142 S.W.3d 459, 487 (Tex. App.—Fort Worth 2004, no pet.); Purcell Constr., 

Inc. v. Welch, 17 S.W.3d 398, 402 (Tex. App.—Houston [1st Dist.] 2000, no pet.) 

(stating that we review challenge to trial court’s award of prejudgment interest 

using abuse of discretion standard). A trial court abuses its discretion when it acts 

without reference to any guiding rules or principles or when it clearly fails to apply 

the law correctly. Purcell Constr., 17 S.W.3d at 402; see also Joe v. Two Thirty 

Nine Joint Venture, 145 S.W.3d 150, 161 (Tex. 2004) (stating that trial court

abuses its discretion when it reaches decision so arbitrary and unreasonable as to 

amount to clear and prejudicial error of law).

Here, “a serious and genuine dispute regarding ultimate liability” existed;

both Henry and Masson contested their own liability for breach of the settlement 

agreement in good faith; and the ultimate amount of the damages award was not 

determined until Henry I. See Pickens v. Alsup, 568 S.W.2d 742, 744 (Tex. Civ. 
12

App.—Austin 1978, writ ref’d n.r.e.) (holding that trial court properly denied 

award of prejudgment interest because, under facts of case, “there remained a 

serious and genuine dispute regarding ultimate liability, which was contested in 

good faith by the parties, and the amount of damages could not be ascertained until 

final judgment”). We cannot conclude on the basis of the record in this case that 

the trial court’s decision not to award Henry prejudgment interest was so arbitrary 

or unreasonable as to amount to a clear error of law. See Two Thirty Nine Joint 

Venture, 145 S.W.3d at 161; see also Hoelscher v. Kilman, No. 03-04-00440-CV, 

2006 WL 358238, at *6 (Tex. App.—Austin Feb. 16, 2006, no pet.) (mem. op.) 

(reviewing record in breach of contract case and holding that trial court did not 

abuse its discretion when it failed to award prejudgment interest); City of Port 

Isabel v. Shiba, 976 S.W.2d 856, 861 (Tex. App.—Corpus Christi 1998, pet. 

denied) (holding same).

We overrule Henry’s third issue.

Court Costs

Finally, in his fourth issue, Henry contends that he is entitled to court costs 

as a matter of law.

Texas Rule of Civil Procedure 131 provides that “[t]he successful party to a 

suit shall recover of his adversary all costs incurred therein, except where 

otherwise provided.” TEX. R. CIV. P. 131. The trial court may, for good cause 
13

stated on the record, award costs in a manner other than what is provided for by 

law or the rules of civil procedure. TEX. R. CIV. P. 141; see also Furr’s 

Supermarkets, Inc. v. Bethune, 53 S.W.3d 375, 376 (Tex. 2001) (“Rule 131 

requires the trial court to order that the winning party recover its costs from the 

losing party, allowing a trial court to order otherwise only ‘for good cause, to be 

stated on the record.’”). The trial court may state good cause in a written order or 

judgment, or orally in a hearing. Marion v. Davis, 106 S.W.3d 860, 868 (Tex. 

App.—Dallas 2003, pet. denied). Failure to state on the record a finding of good 

cause to deviate from Rule 131 constitutes an abuse of discretion. See id. at 869; 

Finlay v. Olive, 77 S.W.3d 520, 528 (Tex. App.—Houston [1st Dist.] 2002, no 

pet.).

“When determining whether court costs are appropriate, a court should 

consider the judgment rather than the verdict.” May v. Ticor Title Ins., 422 S.W.3d 

93, 102 (Tex. App.—Houston [14th Dist.] 2014, no pet. h.). A “successful party” 

is “one who obtains judgment of a competent court vindicating a civil right or 

claim.” City of Houston v. Woods, 138 S.W.3d 574, 581 (Tex. App.—Houston 

[14th Dist.] 2004, no pet.). We review a trial court’s decision regarding whether to 

award court costs for an abuse of discretion. May, 422 S.W.3d at 102; Westergren 

v. Nat’l Prop. Holdings, L.P., 409 S.W.3d 110, 140 (Tex. App.—Houston [14th 

Dist.] 2013, pet. filed).
14

Texas Rule of Civil Procedure 303 provides:

When a counterclaim is pleaded, the party in whose favor final 

judgment is rendered shall also recover the costs, unless it be made to 

appear on the trial that the counterclaim of the defendant was acquired 

after the commencement of the suit, in which case, if the plaintiff 

establishes a claim existing at the commencement of the suit, he shall 

recover his costs.

TEX. R. CIV. P. 303. Several of our sister courts have held that when a party 

alleges a counterclaim if neither party is wholly successful on its claims, it is 

within the trial court’s discretion to order each party to bear its own costs.2

 See 

Niemeyer v. Tana Oil & Gas Corp., 39 S.W.3d 380, 390 (Tex. App.—Austin 2001, 

pet. denied); see also Bayer Corp. v. DX Terminals, Ltd., 214 S.W.3d 586, 612 

(Tex. App.—Houston [14th Dist.] 2006, pet. denied) (affirming trial court’s refusal 

to award court costs when both parties prevailed on their claims); Mobil Producing 

Tex. & N.M., Inc. v. Cantor, 93 S.W.3d 916, 920 (Tex. App.—Corpus Christi 

2002, no pet.) (holding that trial court did not abuse its discretion in taxing costs 

against both sides “where neither party was wholly successful in that one expected 

 2 We also note that several of our sister courts have held that, when both parties 

recover on their claims, the party that received the larger award is entitled to court 

costs. See Chilton Ins. Co. v. Pate & Pate Enters., Inc., 930 S.W.2d 877, 895 

(Tex. App.—San Antonio 1996, writ denied); see also Brender v. Sanders 

Plumbing, Inc., No. 2-05-067-CV, 2006 WL 2034244, at *7 (Tex. App.—Fort 

Worth July 20, 2006, pet. denied) (mem. op.) (holding same); Plaza at Turtle 

Creek Ltd. v. Henry Building, Inc., No. 08-00-00416-CV, 2002 WL 59603, at *7 

(Tex. App.—El Paso 2002, no pet.) (mem. op.) (holding same). We decline to 

follow these cases and instead follow our sister courts that have held that if neither 

party is wholly successful on its claims, the trial court does not abuse its discretion 

when it fails to award court costs.
15

to receive more while the other expected to pay less”); Building Concepts, Inc. v. 

Duncan, 667 S.W.2d 897, 905–06 (Tex. App.—Houston [14th Dist.] 1984, writ 

ref’d n.r.e.) (holding that trial court did not abuse its discretion in awarding portion 

of costs to each party when both parties successfully prosecuted their claims).

Here, neither party was wholly successful on its claims for breach of the 

settlement agreement. The jury found in favor of Masson on his breach of the 

settlement agreement claim, awarding him a total of $100,000 in damages and 

attorney’s fees, but then this Court held in Henry I that Henry was entitled, as a 

matter of law, to $150,000 from Masson with respect to certain property. See 

Henry I, 333 S.W.3d at 841–42. This Court, therefore, ordered the awards to be 

offset against each other, resulting in a net recovery of $50,000 in favor of Henry. 

See Henry II, 388 S.W.3d at 729. Masson ultimately did not recover anything on 

his breach of the settlement agreement claims, while, due to the offset, Henry 

recovered $100,000 less than what he originally sought. Under these facts, as

neither Henry nor Masson was entirely successful on his claims, we conclude that 

the trial court did not abuse its discretion when it did not assess court costs against 

either party. See Bayer Corp., 214 S.W.3d at 612; Cantor, 93 S.W.3d at 920; 

Niemeyer, 39 S.W.3d at 390.

We overrule Henry’s fourth issue.
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Conclusion

We affirm the judgment of the trial court.

Evelyn V. Keyes

Justice 

Panel consists of Justices Keyes, Sharp, and Huddle.