Opinion issued December 20, 2012

In The

Court of Appeals 

For The 

First District of Texas 

————————————

NO. 01-11-01038-CV

———————————

CHELSEA OAKS, INC., Appellant

V.

CATHERINE A. SWEENEY, Appellee

On Appeal from County Civil Court at Law No. 1

Harris County, Texas

Trial Court Case No. 990728

MEMORANDUM OPINION

Chelsea Oaks, Inc. (“Chelsea”) was granted a default judgment against

Catherine A. Sweeney (“Sweeney”) in a breach-of-contract case for unpaid legal 

services and expenses. In two issues on appeal, Chelsea contends that the trial 
2

court erred by awarding them pre- and post-judgment interest at the rate of five 

percent per annum rather that at the contract rate of eighteen percent per annum. 

We reverse and render.

Background1

Sweeney retained The Mendel Law Firm, LP (the “Firm”) which performed 

legal services and invoiced Sweeney per their contract. Sweeney never paid the 

invoices. The Firm subsequently assigned its rights under the contract to Chelsea,

who sued Sweeney for breach of contract and attorney’s fees. 

After perfecting service on Sweeney, Chelsea filed a motion for default 

judgment seeking, inter alia, pre- and post-judgment interest at the rate stipulated 

in the contract—eighteen percent per annum. The trial court granted Chelsea’s 

motion for default judgment, but instead of awarding Chelsea pre- and postjudgment interest at the contracted rate of eighteen percent per annum, the trial 

court set the rate at five percent per annum. Chelsea appealed. 

Discussion

In a breach-of-contract case, the pre-judgment interest rate is the same as the 

post-judgment interest rate. See Johnson & Higgins of Tex., Inc. v. Kenneco 

Energy, Inc., 962 S.W.2d 507, 532 (Tex. 1998). Post-judgment interest—and 

 

1 Because Sweeney has not filed a brief in this appeal, we accept as true the facts 

stated in Chelsea’s statement of facts. See TEX. R. APP. P. 38.1(g) (“In a civil 

case, the court will accept as true the facts stated unless another party contradicts 

them.”)
3

therefore pre-judgment interest—in a contract case where the contract provides for 

interest is the lesser of the interest rate specified in the contract or eighteen percent 

a year. See TEX. FIN. CODE ANN. § 304.002 (West 2006). If the contract does not 

provide for a rate of interest, then the pre- and post-judgment interest rate is

calculated based on the statutory rate provided in the Finance Code. See TEX. FIN.

CODE ANN. § 304.003 (West 2006) (providing judgment interest rate when interest 

rate or time price differential is not in contract); see also ExxonMobil Corp. v. 

Valence Operating Co., 174 S.W.3d 303, 319 (Tex. App.—Houston [1st Dist.] 

2005, pet. denied) (holding pre-judgment interest rate in breach-of-contract case is 

determined by section 304.003 if contract does not specify rate of interest).

The contract at issue states, in pertinent part, that invoices “accrue interest at 

the rate of 1.5% per month if not paid within thirty (30) days from the date of 

invoice.” An interest rate of one and a half percent per month equates to eighteen 

percent per annum. As such, the applicable pre- and post-judgment interest rate is 

eighteen percent per annum—as specified in the contract. See TEX. FIN. CODE 

ANN. § 304.002; Johnson & Higgins, 962 S.W.2d at 532. The trial court had no 

discretion to deviate from the interest rate proscribed by the Finance Code, and as 

such, the trial court erred by awarding Chelsea pre- and post-judgment interest at 

the rate of five percent per annum rather that at the contract rate of eighteen 

percent per annum, as required under section 304.002 of the Finance Code.
4

We sustain Chelsea’s first and second issues.

Conclusion

We reverse the portions of the trial court’s judgment awarding Chelsea preand post-judgment interest at the rate of five percent per annum and render 

judgment awarding Chelsea pre- and post-judgment interest at the rate of eighteen 

percent per annum.

Jim Sharp

Justice 

Panel consists of Justices Jennings, Higley, and Sharp.