Court Opinion

ID: 9863434
Source: CourtListenerOpinion
Date Created: 2023-09-25 05:16:49.195712+00
Date Added: 2024-06-11T11:52:00.484100
License: Public Domain

MARTHA HILL JAMISON, Justice,
concurrence to order.
This ease, unique on its facts, brings to light an interesting question of statutory construction concerning section 52.006 of the Texas Civil Practice and Remedies Code. I join the disposition and analysis set forth in the order, concluding that the *630statutory construction quandary need not be resolved in this case; however, I write separately to urge the legislature to clarify its intent under section 52.006.
1. The statute setting the amounts necessary to supersede a judgment states that it includes “interest for the estimated duration of the appeal.”
In 2008, the Texas Legislature decided that the amount of security necessary to supersede a judgment would no longer include punitive damages. Specifically, it changed the amount of security required from “at least the amount of the judgment, interest for the estimated duration of the appeal, and costs” to “the sum of compensatory damages awarded in the judgment, interest for the estimated duration of the appeal, and costs awarded in the judgment.” Compare former Tex.R.App. P. 24.2(a)(1) (eff. Sept. 1, 1997) (amended Aug. 29, 2003 and Sept. 10, 2003, eff. Sept. 1, 2003; amended Mar. 10, 2008 and Aug. 20, 2008, eff. Sept. 1, 2008), with Tex.R.App. P. 24.2(a)(1) (implementing Tex. Civ. Prac. & Rem.Code § 52.006) (emphases added). Thus, the current version of the statute requires the following security amounts to supersede a judgment: “(1) the amount of compensatory damages awarded in the judgment; (2) interest for the estimated duration of the appeal; and (3) costs awarded in the judgment.” Tex. Civ. Prac. & Rem.Code § 52.006(a).1 This court has previously described the language of section 52.006 as “plain.” Ramco Oil & Gas, Ltd. v. Anglo Dutch (Tenge) L.L.C., 171 S.W.3d 905, 913 (Tex.App.Houston [14th Dist.] 2005, published order) (“We must not engage in forced or strained construction; instead, we must yield to the plain sense of the words the Legislature chose”).
Movants suggest that a reading of subsection 52.006(a)(2) without implying the following extra words would be unreasonable: “interest [on the amount of compensatory damages awarded in the judgment] for the estimated duration of the appeal.” See id. § 52.006(a)(2). This position is contrary to the holding of our sister court, in Shook v. Walden, that “Section 52.006, subsection (a)(2) requires [a judgment debtor] to secure the post-judgment interest that is estimated to accrue during the pendency of the appeal, not merely the estimated post-judgment interest on the contract damages or compensatory damages.” 304 S.W.3d 910, 929 (Tex.App.-Austin 2010, no pet.).
The legislature easily could have included additional language restricting the sums on which post-judgment interest was to be calculated for security purposes, if that were its intention, but it did not do so. By specifically referencing only “compensatory damages” in subsection 52.006(a)(1), the legislature clearly expressed an intent to omit punitive damages themselves from the total to be secured, but it did not express the same intent with regard to interest on punitive damages.
2. Post-judgment interest — even on punitive damages — is compensatory.
The purpose of post-judgment interest is compensatory. It compensates a plaintiff for the time-value of money as of the date of judgment: it is not punitive. See Long v. Castle Tex. Prod. Ltd. P’ship, 330 S.W.3d 749, 751 (Tex.App.-Tyler 2010, pet. filed) (“Postjudgment interest is compensation allowed by law for the use or detention of money, computed from the date of rendition of judgment until the date of satisfaction.”); Sisters of Charity of the *631Incarnate Word v. Dunsmoor, 832 S.W.2d 112, 119 (Tex.App.-Austin 1992, writ denied) (same); see also State v. Public Utility Com’n of Texas, 344 S.W.3d 349, 377 (Tex.2011) (“[A] full recovery ... must include interest to reflect the time value of money”); Miga v. Jensen, 96 S.W.3d 207, 212 (Tex.2002) (“Post-judgment interest is not a punishment inflicted on a judgment debtor for exercising the right to appeal. Instead, like pre-judgment interest, post-judgment interest is simply compensation for a judgment creditor’s lost opportunity to invest the money awarded as damages at trial.”).
Post-judgment interest for the lost use of a punitive damages award, calculated from the date of judgment until payment of the award, compensates the judgment creditor in the same way as post-judgment interest on a compensatory damages award does.2 By not expressly excluding punitive damages from the calculation of post-judgment interest under section 52.006(a), the legislature manifested its intent that interest on such damages was to be included in the amount for which security was required.
“The early common law viewed any interest as usurious and illegal.” Anthony E. Rothschild, Prejudgment Interest: Survey and Suggestion, 77 Nw. U.L. Rev. 192, 195 (1982). Ultimately, however, the rise in commercial activity led courts to view interest as proper consideration for the use of money. See id. at 195-96 (citing C. Mccormick, Damages § 5 (1935)) (“It could by then be seen that the real evil was not the taking of payment for the lending of money, but taking such payment in an extortionate or unconscionable amount”). Courts began to see that it was necessary for awards to include interest for the primary goal of damages — full compensation — to be achieved. Id. at 196; see also Newburgh Land & Dock Co. v. Tex. Co., 227 F.2d 732, 734 (2d Cir.1955) (explaining that “interest is awarded on the theory that it is indemnity for the delay in paying for the loss.”).3
Post-judgment interest in Texas is governed by the Finance Code and other statutes. See Phillips Petroleum Co. v. Riverview Gas Compression Co., 409 F.Supp. 486, 496 (N.D.Tex.1976) (“In Texas, the right to post-judgment interest is provided by Statute.”); Jarrin v. Sam White Oldsmobile Co., 929 S.W.2d 21, 25 (Tex.App.Houston [1st Dist.] 1996, writ denied) (“Post-judgment interest is ... mandated by statute”). Thus, whether it should be limited on certain types of damages or should not be considered in the calculation of a supersedeas bond is a matter left entirely to the legislature and not within the purview of this court: it is a matter of pure statutory construction rather than a common law issue.4 The legislature, as set *632forth below, has otherwise regulated post-judgment interest by setting the interest rate and subsequently lowering it. It has also, in a straightforward manner, prohibited prejudgment interest on punitive damages, see Texas Civil Practice & Remedies Code § 41.007 (“Prejudgment interest may not be assessed or recovered on an award of exemplary damages.”), and it easily could have done the same in § 52.006(a) if that were its intention.
3. The legislature left a gray area in rebalancing interests between judgment creditors and judgment debtors.
Section 52.006 was enacted as part of the seminal 2003 legislation commonly referred to as House Bill Four (H.B.4). See Act of June 2, 2003, 78th Leg., R.S., ch. 204, § 52.006(a), 2003 Tex. Gen. Laws 847, 863, codified at Tex. Civ. Prac. & Rem. Code Ann. § 52.006(a); see also Tex. R.App. P. 24.2(a)(1) (implementing Section 52.006); Shook, 304 S.W.3d at 918. The changes made in H.B. 4 were intended to provide a measure of relief to judgment debtors seeking to appeal by making it less costly to bond the judgment. See Jonathan Yedor & Regina M. Uhl, Superseding Attorney’s Fees and Pre-judgment Interest After House Bill A 36 St. Mary’s L.J. 657, 658 (2005). Historically, however, the purpose of a supersedeas bond had been to protect the judgment creditor from incurring damages that result from delay in enforcing the judgment pending appeal. Elaine A. Carlson, Reshuffling the Deck: Enforcing and Superseding Civil Judgments on Appeal After House Bill 4, 46 S. Tex. L. Rev. 1035, 1083 (2005). Full protection of the judgment creditor requires the inclusion of post-judgment interest. Id. at 1083-84 (citing Kennesaw Life & Accident Ins. Co. v. Streetman, 644 S.W.2d 915, 917 (Tex.App.-Austin 1983, writ ref'd n.r.e.); Cooper v. Bowser, 583 S.W.2d 805, 807 (Tex.Civ.App.-San Antonio 1979, no writ) (“A super-sedeas bond that does not include interest is ‘patently insufficient.’ ”)).
H.B.4 attempted to strike a balance between the interests of judgment creditors and judgment debtors. Instead of being required to provide security in the full amount of the judgment, interest, and costs (as judgment debtors seeking to appeal formerly were required to do), the judgment debtor may now more easily suspend enforcement of money judgments by posting security only on “compensatory damages,” “interest for the duration of appeal,” and “costs awarded in the judgment.” Id. at 1038 (citing section 52.006). Additionally, section 52.006 places a cap of the lesser of $25 million or 50% of the debtor’s net worth on the amount of security to be provided. Id. Further under H.B.4, the legislature decreased the prejudgment and post-judgment interest rates. Id. at 1038, 1084-85. Under Finance Code section 304.003(c), the post-judgment interest rate was lowered from a minimum of 10% to a minimum of 5% tied to the prime rate. Id. at 1084-85 (citing Tex. Fin.Code Ann. § 304.003(c) (Vernon Supp.2004)). In making these amendments, the legislature further served the purpose behind H.B.4 of lessening the financial burden to a judgment debtor seeking appellate review. Id. at 1038.
This rebalancing effort did not, however, wholly discard the original interest in protecting judgment creditors from suffering the harms of unsecured and unpaid judgments. See id. at 1038, 1084. Indeed, just *633how far the rebalancing was intended to go is not entirely clear; section 52.006 does not indicate that post-judgment interest on punitive damages is to be excluded in calculating the amount of security.5 Id. The language of section 52.006(a)(2) did not change at all. Neither H.B.4 nor section 52.006 expressly indicates that the treatment of post-judgment interest was to change after 2008, with the exception of situations when the judgment cap has been met. See Act of June 2, 2003, 78th Leg., R.S., ch. 204, §§ 7.02, 52.006(a), 2003 Tex. Gen. Laws 847, codified at Tex. Civ. Prac. & Rem.Code Ann. § 52.006(a).
I would find that reducing the superse-deas bond in the instant case from over four million dollars to $300,628.12, as the trial court did here, is a rebalancing in accordance with the legislature’s intent and thus not an abuse of the trial court’s discretion. To the extent that there is doubt regarding whether the award of post-judgment interest on punitive damages should be included in the amount of security required to supersede a judgment, I urge the legislature to provide additional guidance to the courts on this issue.

. Pursuant to subsection 52.006(b), the security amounts required under subsection 52.006(a) may not exceed “(1) 50 percent of the judgment debtor's net worth; or (2) $25 million.” Tex. Civ. Prac. & Rem.Code § 52.006.

. See Arete Partners, L.P. v. Gunnerman, 643 F.3d 410, 413, n. 3 (5th Cir.2011) ("In addition to compensating a plaintiff for the lost use of funds, a potential award of prejudgment interest is intended to: (1) encourage settlement; and (2) expedite both settlements and trials by removing incentives for defendants to delay without creating such incentives for plaintiffs.” [internal quotation marks omitted]).

. Accord Robert J. Sergesketter, Interesting Inequities: Bringing Symmetry and Certainty to Prejudgment Interest Law in Texas, 32 HOUS. L. REV. 231, 235 (1995) (noting that courts began to see interest as legitimate basis for awarding additional damages in civil actions).

.Indeed, as the Legislature has defined "exemplary damages,” they would never include post-judgment interest: " ‘Exemplary damages' means any damages awarded as a penalty or by way of punishment but not for compensatory purposes.” Tex. Civ. Prac. & Rem.Code Ann. § 41.001(5) (Vernon 2008) (emphasis added). Compensatory damages, on the other hand, include economic damages *632("compensatory damages intended to compensate a claimant for actual economic or pecuniary loss”) and noneconomic damages. Id. § 41.001(4), (8). Compensatory damages may include "future damages,” which are defined as “damages that are incurred after the date of judgment” not including "exemplary damages.” Id. § 41.001(9).

. Certainly, if the amount of security meets the cap for money judgments, then the inclusion of additional interest, post-judgment or otherwise, is not necessary. Carlson, supra, at 1084. If an amount is not posted at the cap, however, the bond, deposit or security should cover the interest for the duration of the appeal. Id. at 1099. "If the security becomes inadequate because it does not sufficiently cover post-judgment interest, the judgment creditor may seek trial court modification of the security amount.” Id.