Opinion ID: 2831499
Heading Depth: 1
Heading Rank: 2

Heading: Interest Analysis

Text: Prejudgment interest and postjudgment interest compensate a judgment creditor for the lost use of money due as damages. Long v. Castle Tex. Prod. Ltd. P’ship, 426 S.W.3d 73, 77 (Tex. 2014) (citing Phillips, 407 S.W.3d at 238). Prejudgment interest, which accrues from the earlier of (1) 180 days after the date a defendant receives written notice of a claim or (2) the date suit is filed, 9 Johnson did not file a petition for review in this Court and does not challenge the portions of the court of appeals’ judgment affirming the trial court as to past attorney’s fees and court costs. 8 is computed as simple interest and runs until the day before the judgment. TEX . FIN . CODE § 304.104. Postjudgment interest, which begins accruing on the date the judgment is rendered, not only compounds annually but also accrues on prejudgment interest. Id. §§ 304.003(a), .005(a), .006; see also Long, 426 S.W.3d at 77. Accordingly, the date of the judgment can significantly affect the amount ultimately recovered.

“[P]ostjudgment interest on a money judgment of a court in this state accrues during the period beginning on the date the judgment is rendered and ending on the date the judgment is satisfied.” TEX . FIN . CODE § 304.005(a). We have consistently held that section 304.005’s reference to a “judgment” is to the trial court’s judgment. E.g., Long, 426 S.W.3d at 78; Phillips, 407 S.W.3d at 239; Danziger v. San Jacinto Sav. Ass’n, 732 S.W.2d 300, 305 (Tex. 1987). We have also explained that “[a] judgment that accrues postjudgment interest must necessarily be a final judgment.” Long, 426 S.W.3d at 78. Except as specifically otherwise provided by law, there may be only one final judgment. TEX . R. CIV . P. 301; see also Long, 426 S.W.3d at 78. When an appellate court’s remand results in multiple trial court judgments, the question becomes: which judgment controls for the purpose of postjudgment-interest accrual? The answer, we have recently clarified, depends on whether additional evidence is required on remand. In Phillips, we held that when an appellate court remands a case to the trial court for entry of judgment consistent with the appellate court’s opinion, and the trial court is not required to admit new or additional evidence to enter that judgment, . . . the date the trial court 9 entered the original judgment is the “date the judgment is rendered,” and postjudgment interest begins to accrue . . . as of that date. 407 S.W.3d at 239. In Long, we addressed the issue left open in Phillips: whether postjudgment interest accrues from the date of the original judgment even when the trial court must reopen the record in order to render judgment on remand. 426 S.W.3d at 77. We answered this question in the negative, confirming that postjudgment interest accrues from the date of the trial court’s original, erroneous judgment only when the appellate court renders, or could have rendered, judgment. Id. at 80.10 Thus, if on remand the trial court determines that it must reopen the record, postjudgment interest will begin to accrue on the date the subsequent judgment is rendered. Id. at 81. The rationale behind this rule, we explained, is that “a claimant is entitled to postjudgment interest from the judgment date once the trial court possesses a sufficient record to render an accurate judgment.” Id. at 76. Finally, in Long we discussed the various mechanisms that parties and courts have at their disposal to affect the accrual of postjudgment interest, including severance, offers of proof, and bills of exception. Id. at 82 & 83 n.20. A court may sever claims and different grounds of recovery before submission to the trier of fact, and both trial and appellate courts may order retrial on only the part of a matter affected by error unless doing so would result in unfairness to the parties. Id. (citing TEX . R. CIV . P. 41, 320, and TEX . R. APP . P. 44.1(b)). We elaborated on these procedures by discussing prior cases in which we exercised our power to partially render and to remand severable 10 In discussing this exception, we cited Texas Rule of Appellate Procedure 43.3, which states: “[w]hen reversing a trial court’s judgment, the court must render the judgment that the trial court should have rendered, except when: (a) a remand is necessary for further proceedings; or (b) the interests of justice require a remand for another trial.” 10 claims and issues. Id. at 82–83. For example, in Great American Reserve Insurance Co. v. Britton, we affirmed the court of appeals’ judgment except for the issue of attorney’s fees, which we severed and remanded to the trial court for a new trial. 406 S.W.2d 901, 907 (Tex. 1966). Later, in Danziger, we reversed the trial court’s judgment and rendered judgment in part, specifying that postjudgment interest would accrue from the date of the trial court’s original judgment on the rendered amount, but we severed another claim and the related issue of attorney’s fees and remanded them to the trial court for further proceedings. 732 S.W.2d at 305.
Ventling argues that, because the trial court admitted additional evidence following the court of appeals’ remand in Johnson II, the final judgment in this case was rendered on March 21, 2012, and postjudgment interest can accrue only from that date. Along the same lines, he asserts that the court of appeals erred in awarding postjudgment interest accruing from different judgment dates because, unlike the cases we discussed in Long, no claim has been severed in this case. Johnson responds that the trial court’s 2012 judgment granting her enforcement motion resulted in a final judgment for postjudgment-interest purposes on the date the trial court initially denied the motion—January 9, 1998—because on that date the trial court could have, and should have, rendered judgment for $142,500 in damages without the need for additional evidence. She asserts that a different accrual date should apply to the trial court’s award of attorney’s fees, which required the court to hear new evidence. We first examine Johnson’s contention that postjudgment interest on the award of alimony began to accrue on January 9, 1998, the date the trial court originally denied the enforcement motion. 11 In agreeing with Johnson, the court of appeals correctly noted that when an appellate court reverses and renders or could have rendered, “the accrual of postjudgment interest . . . relates back to the date of the original erroneous trial court judgment.” Johnson III, ___ S.W.3d at ___. The court went on to hold that, because the trial court “could have, and should have, rendered judgment awarding Johnson $142,500 in damages on January 9, 1998, based on the evidence adduced as of that date,” Phillips mandates postjudgment-interest accrual from that date. Id. at ___ & n.8. We disagree. As noted above, when an appellate court reverses and renders or could render judgment, postjudgment interest accrues from the date of the original, erroneous judgment. Phillips, 407 S.W.3d at 239. The January 9, 1998 order awarded Johnson no relief, and the court of appeals could not have taken any action on the order because, even assuming it was a final judgment for appeal purposes, Johnson did not appeal it. Instead, the parties continued to litigate the enforcement motion following the order’s issuance. In any event, Johnson concedes that the 1998 order was interlocutory and thus was not a final, appealable judgment.11 See Long, 426 S.W.3d at 78 (noting that a judgment’s finality for postjudgment-interest purposes is similar to a judgment’s finality for the purpose of appeal). An interlocutory order is not a “judgment” that may accrue postjudgment interest within the meaning of section 304.005 of the Texas Finance Code. Alternatively, Johnson argues that the trial court’s July 2001 judgment—which Johnson did appeal and which led to the court of appeals’ opinion in Johnson I—is the final judgment for the purpose of postjudgment-interest accrual on the alimony award. Again, we disagree because there 11 During the 2008 trial court hearings on the enforcement motion, Johnson’s trial counsel admitted that the 1998 order was not a final judgment: “we’re basically in a situation there [sic] has never been a final judgment on the original Motion to Enforce.” 12 was no judgment from which postjudgment interest could accrue. In Johnson I, the court of appeals held that the trial court had no jurisdiction to render the 2001 judgment purporting to vacate the divorce decree, declared the judgment void, and accordingly dismissed Johnson’s appeal for want of jurisdiction. 132 S.W.3d at 179. Notably, Johnson did not petition this Court to review the court of appeals’ holding that the judgment was void and that court’s corresponding refusal to address the merits of the denial of her enforcement motion. Accordingly, the void 2001 judgment was a nullity and “cannot under any circumstances be a final judgment.” Oil Field Haulers Ass’n v. R.R. Comm’n, 381 S.W.2d 183, 188 (Tex. 1964) (emphasis omitted); see also Figueroa v. Davis, 318 S.W.3d 53, 67–68 (Tex. App.—Houston [1st Dist.] 2010, no pet.) (holding that a judgment that had been vacated when a new trial was granted could not be considered for the purpose of calculating prejudgment interest because such judgment became a nullity). We turn next to the trial court’s June 16, 2009 judgment, which was rendered in Ventling’s favor and which the court of appeals reversed and remanded in Johnson II. On remand, the trial court received additional testimony and exhibits solely on Johnson’s claims for attorney’s fees and costs before rendering judgment in 2012. Johnson relies on Danziger to argue that, because this evidence was irrelevant to the merits of her alimony claim, postjudgment interest on the damages awarded for that claim began accruing even though the parties continued to litigate attorney’s fees. Ventling does not dispute that the additional evidence was limited to attorney’s fees and costs. He argues that, applying the severance principles discussed in Long, the trial court’s admission of any additional evidence on remand without a formal severance requires the conclusion that postjudgment interest may not accrue before the trial court’s final judgment on remand in 2012. 13 We agree with Johnson. In Johnson II, the court of appeals remanded the case with instructions to the trial court to enter judgment granting Johnson’s enforcement motion and awarding her $142,500 in unpaid contractual alimony. 2010 WL 4156459, at , . The trial court’s only task on remand with respect to the merits of Johnson’s alimony claim was the ministerial act of entering the judgment as instructed. Thus, the court of appeals effectively rendered the judgment the trial court should have rendered on June 16, 2009, and it did so because no further proceedings or evidence was necessary as to Johnson’s only substantive claim. Under Long’s rationale—that “a claimant is entitled to postjudgment interest from the judgment date once the trial court possesses a sufficient record to render an accurate judgment”—Johnson is entitled to postjudgment interest on the alimony award from June 16, 2009. 426 S.W.3d at 76. That the court of appeals also remanded the issue of attorney’s fees for further proceedings, which did require the record to be reopened, does not foreclose this holding. We have held that a claim for attorney’s fees is a severable claim. Britton, 406 S.W.2d at 907 (affirming the trial court’s judgment in part, but severing and remanding the claim for attorney’s fees). While the court of appeals did not use the term “sever,” for all practical purposes that is what the court did in remanding Johnson’s claims for attorney’s fees and costs separately from the alimony claim. Accordingly, we hold that postjudgment interest on Johnson’s $142,500 alimony award accrues from June 16, 2009, and postjudgment interest on Johnson’s award of $70,275 in past attorney’s fees and $20 in costs 14 accrues from March 21, 2012, the date the trial court entered its final judgment following the presentation of additional evidence on these issues.12 Long, 426 S.W.3d at 80.
The trial court’s March 2012 judgment—the one currently on appeal—awarded Johnson $3,435.62 in prejudgment interest on the alimony award covering the period from September 23, 1997 to December 19, 1997,13 and postjudgment interest accruing from March 21, 2012, resulting in an interest gap of over fourteen years. Ventling asserts that Johnson waived her right to seek additional prejudgment interest because she stipulated that amount to be $3,435.62. Johnson responds that she specified that amount because it comported with her argument that postjudgment interest began to accrue as early as December 1997. “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) (internal quotation marks and citation omitted). As noted above, “prejudgment interest accrues . . . ending on the day preceding the date judgment is rendered.” TEX . FIN . CODE § 304.104; see also Brainard v. Trinity Universal Ins. Co., 216 S.W.3d 809, 816 (Tex. 2006) (“Because the trial 12 The trial court’s February 21, 2012 judgment cannot be a final judgment because it was amended on M arch 21, and the amended judgment was the basis of the underlying appeal. See Long, 426 S.W .3d at 78 (“Finality for the purpose of appeal bears the closest resemblance to finality for the purpose of accruing postjudgment interest.”); Black v. Shor, 443 S.W .3d 170, 176 (Tex. App.— Corpus Christi 2013, pet. denied) (“W hen the trial court signs an amended order, the original order becomes ‘a nullity.’ As the original judgment ceases to have legal effect, only the amended judgment can support an appeal.”). 13 These were the dates pleaded by Johnson. 15 court signed its judgment on January 15, 2003, the [prejudgment interest] period ended on January 14.”).14 The court of appeals addressed Ventling’s waiver argument as follows: [W]e disagree with Ventling that the trial court could not have awarded any more than . . . the amount of prejudgment interest Johnson requested in her motion. Johnson’s motion specifically stated that she believed she was entitled to judgment as of December 19, 1997, and that the pre- and postjudgment interest amounts she requested therein were calculated as of that date. If the postjudgment interest began accruing, as Ventling asserted, on the date the judgment on appeal was rendered—March 21, 2012—then prejudgment interest must have accrued until that date. ___ S.W.3d at ___ (citing Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (“A trial court has no ‘discretion’ in determining what the law is or applying the law to the facts.”)). We agree with this rationale. Johnson has consistently argued that she is entitled to prejudgment interest on the alimony award until the date of judgment; the parties have simply disputed what that date is. Accordingly, we hold that the trial court abused its discretion by denying Johnson prejudgment interest for the years leading up to the June 16, 2009 final judgment and that the award of prejudgment interest must be adjusted accordingly.