Johnson v. Ventling

• Decision Date: 27 June 2013
• Docket Number: NUMBER 13-12-00398-CV
• Parties: PATSY JEAN JOHNSON A/K/A Appellant, PATRICIA M. JOHNSON, v. WAYNE VENTLING, Appellee.
• Court: Texas Court of Appeals

PATSY JEAN JOHNSON A/K/A Appellant, PATRICIA M. JOHNSON, v. WAYNE VENTLING, Appellee.

NUMBER 13-12-00398-CV

COURT OF APPEALS THIRTEENTH DISTRICT OF TEXAS CORPUS CHRISTI - EDINBURG

Dated: June 27, 2013

On appeal from the 94th District Court

of Nueces County, Texas.

MEMORANDUM OPINION

Before Justices Rodriguez, Garza and Perkes

Memorandum Opinion by Justice Garza

We issued our original memorandum opinion in this cause on March 7, 2013. Both parties to the appeal have filed motions for rehearing and appellee has filed a motion for en banc reconsideration. We deny the motions for rehearing and reconsideration but withdraw our previous memorandum opinion and judgment andsubstitute the following memorandum opinion and accompanying judgment in their place.

For the third time in nine years, appellant Patricia M. Johnson¹ seeks this Court's assistance in her ongoing efforts to enforce contractual alimony obligations agreed to by her purported ex-husband, appellee Wayne Ventling. In this proceeding, Johnson contends that the trial court erred in its award of interest, attorney's fees, and court costs. We affirm in part, reverse and render in part, and reverse and remand in part.

I. BACKGROUND

Johnson and Ventling cohabited from 1982 to 1995. In 1995, upon being advised by his attorney that a common-law marriage existed, Ventling filed for divorce. The parties agreed on the terms of a final decree, including a provision that Ventling pay Johnson alimony of $2,500 per month for 84 months. The agreed divorce decree was rendered on April 13, 1995.

Two years after the decree was entered, Ventling stopped making the monthly alimony payments. Johnson moved for enforcement, and Ventling responded by alleging that the contractual alimony obligation was void because the parties had, in fact, never been married. Ventling contended that he had been duped by Johnson into believing that a marriage had existed; he further claimed that the trial court retained plenary jurisdiction to vacate the divorce decree because, since there was never any marriage to dissolve, the April 13, 1995 judgment was interlocutory in nature. The trial court agreed with Ventling and vacated the divorce decree, but we held that the trial court's ruling was void. Johnson v. Ventling, 132 S.W.3d 173, 179 (Tex. App.—Corpus Christi 2004, no pet.) (Johnson I). We concluded that the divorce decree was "regularon its face" and not void, and that Ventling's challenge to the enforceability of the decree therefore amounted to an impermissible collateral attack. Id. at 178-79.

On remand, the trial court rendered summary judgment denying Johnson's motion for enforcement of the alimony obligations. The trial court, noting that Johnson had by then stipulated to the fact that the parties had never been married,² concluded that the alimony provisions in the 1995 decree were unenforceable "because alimony, as defined in 26 United States Code [section] 71, requires the existence of a marriage." Again, we reversed. Johnson v. Ventling, No. 13-09-00563-CV, 2010 Tex. App. LEXIS 8437, at *19-25 (Tex. App.—Corpus Christi Oct. 21, 2010, no pet.) (mem. op. on reh'g) (Johnson II). We held that our conclusion in Johnson I—i.e., that the 1995 decree was not void—was the law of the case and contradicted the judgment on appeal. Id. at *19-20. We noted that we could locate no persuasive authority indicating that contractual alimony is unenforceable for lack of consideration if the parties were never married. Id. at *22. We further held that the parties' stipulation as to the lack of a marital estate was immaterial because "contractual alimony, if awarded, is not part of the 'just and right' division of the marital estate in a divorce proceeding." Id. at *23. Additionally, we noted that Ventling's affirmative defenses to enforcement of the alimony provision—including his claim that he was defrauded by Johnson into agreeing to a divorce—were unavailable to him because such defenses may only be raised by petition for bill of review. Id. at *22-23 n.9 (citing TEX. R. CIV. P. 329b(f)). In conclusion, we directed the trial court to

grant Johnson's motion for enforcement and to award her: (1) $ 142,500 in unpaid contractual alimony; (2) appropriate prejudgment interest, see Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 528 (Tex. 1998) (permitting the award of prejudgment interest based on general principles of equity); (3) reasonable attorney's fees; and (4) costs of court.

Id. at *25.

On remand, Johnson filed a motion asking the trial court to enforce our ruling in Johnson II.³ In the motion, Johnson contended that she was "entitled to judgment on December 19, 1997" and that, therefore, the pre- and postjudgment interest amounts should be calculated as of that date. Accordingly, she requested that the trial court award her the total sum of $769,746.80, representing: (1) $142,500 in damages; (2) $3,435.62 in prejudgment interest; (3) $366,438.48 in postjudgment interest, at 10% compounded annually, see TEX. FIN. CODE ANN. § 304.006 (West 2006); (4) $250,402.09 in attorney's fees incurred since 1997, including fees for two trials and two appeals to this Court⁴; and (5) $6,970.61 in court costs. In response, Ventling argued that postjudgment interest was unavailable to Johnson because our opinion in Johnson II permitted only the recovery of prejudgment interest. Ventling further contended that the amount of reasonable and necessary attorney's fees that should be awarded to Johnson is $15,000.

The trial court, after a hearing, awarded Johnson: (1) $142,500 in contractualalimony; (2) $3,435.62 in prejudgment interest; (3) $70,275 in attorney's fees; and (4) $20 in court costs. The judgment provided that "[p]ostjudgment interest at the rate of 5% will accrue on the total amount awarded in this Judgment, from the date of its entry." Johnson filed motions for reconsideration, to modify the judgment, and for findings of fact and conclusions of law, none of which the trial court ruled upon. See TEX. R. CIV. P. 329b(c) (providing that a motion for new trial or to correct or modify a judgment is overruled by operation of law after 75 days). This appeal followed.

II. DISCUSSION

By three issues on appeal, Johnson contends that the trial court's judgment was erroneous in its award of (1) interest on the damages award, (2) attorney's fees, and (3) court costs. We will address each element of the judgment in turn.

A. Judgment Interest

1. Standard of Review

We review a trial court's award of prejudgment interest under an abuse of discretion standard. Morales v. Morales, 98 S.W.3d 343, 348 (Tex. App.—Corpus Christi 2003, pet. denied); see Sw. Grain Co. v. Pilgrim's Pride S.A. de C.V., No. 13-07-00557-CV, 2010 Tex. App. LEXIS 5014, at *16 (Tex. App.—Corpus Christi June 28, 2010, pet. denied) (mem. op.). To determine if there was an abuse of discretion, we must decide if the lower court acted arbitrarily, unreasonably, or without reference to any guiding rules or principles. See Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985); Sw. Grain Co., 2010 Tex. App. LEXIS 5014, at *16.

On the other hand, postjudgment interest is regulated by statute, and as such, its application is a question of law that we review de novo. Advanced Messaging Wireless,Inc. v. Campus Design, Inc., 190 S.W.3d 66, 71 (Tex. App.—Amarillo 2005, no pet.) (citing Columbia Med. Ctr. v. Bush ex rel. Bush, 122 S.W.3d 835, 865 (Tex. App.—Fort Worth 2003, pet. denied)).

2. Applicable Law

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, 962 S.W.2d at 528 (citing Cavnar v. Quality Control Parking, Inc., 696 S.W.2d 549, 552 (Tex. 1985)). An award of prejudgment interest may be based on either an enabling statute or general principles of equity. Id. (citing Cavnar, 696 S.W.2d at 552; Phillips Petroleum Co. v. Stahl Petroleum Co., 569 S.W.2d 480-85 (Tex. 1978)). There is no statute enabling the recovery of prejudgment interest on a contract claim such as Johnson's. Cf. TEX. FIN. CODE ANN. § 304.102 (West 2006) ("A judgment in a wrongful death, personal injury, or property damage case earns prejudgment interest."). Accordingly, the common law forms the legal basis for the award of prejudgment interest in this case.

Under the common law, prejudgment interest begins to accrue on the earlier of (1) 180 days after the date a defendant receives written notice of a claim or (2) the date suit is filed. Johnson & Higgins, 962 S.W.2d at 531. Common law prejudgment interest is computed as simple interest and it accrues at the rate set by statute for postjudgment interest. Id. at 532.⁵ The postjudgment interest rate, in cases where no interest rate isspecified by contract, is "the prime rate as published by the Board of Governors of the Federal Reserve System on the date of computation," except that the rate can be no lower than 5% nor higher than 15%. TEX. FIN. CODE ANN. § 304.003 (West 2006).

3. Analysis

It is undisputed by the parties that Ventling stopped making the contractual alimony payments in 1997, and—given our 2010 ruling that the contractual alimony obligations are enforceable—that Ventling owed Johnson $142,500 under a provision in the original divorce decree that provided for acceleration of alimony payments in the event of Ventling's default. See Johnson II, 2010 Tex. App. LEXIS 8437, at *3. In Johnson II, we directed the trial court to award the $142,500 as well as "appropriate prejudgment interest." Id. at *25. Johnson contended that she is entitled to $3,435.62 in prejudgment interest as well as $366,438.48 in postjudgment interest accrued from December 19, 1997 (the date that the trial court initially heard Johnson's original motion for enforcement) to March 21, 2012 (the date the judgment on appeal was rendered).

Ventling's argument...