Long v. Castle Tex. Prod. Ltd.

• Citation: 426 S.W.3d 73,57 Tex. Sup. Ct. J. 364
• Decision Date: 28 March 2014
• Docket Number: No. 11–0161.,11–0161.
• Parties: Larry T. LONG, L. Allan Long, and B. Virginia Long, In Their Capacities as Trustees of The Lawrence Allan Long Trust, The Charles Edward Long Trust, The Larry Thomas Long Trust and The John Stephen Long Trust d/b/a The Long Trusts, Petitioners, v. CASTLE TEXAS PRODUCTION LIMITED PARTNERSHIP, Respondent.
• Court: Supreme Court of Texas

426 S.W.3d 73

57 Tex. Sup. Ct. J. 364

Larry T. LONG, L. Allan Long, and B. Virginia Long, In Their Capacities as Trustees of The Lawrence Allan Long Trust, The Charles Edward Long Trust, The Larry Thomas Long Trust and The John Stephen Long Trust d/b/a The Long Trusts, Petitioners,

v.CASTLE TEXAS PRODUCTION LIMITED PARTNERSHIP, Respondent.

No. 11–0161.

Supreme Court of Texas.

Argued Nov. 5, 2013.

Decided March 28, 2014.

F. Franklin Honea, The Law Offices of F. Franklin Honea, Dallas, Mike A. Hatchell, Thomas F. Loose, Locke Lord LLP, Austin, Ronny Lee Adkison, The Adkison Law Firm, Henderson, TX, for Petitioners.

E. Glenn Thames Jr., Michael E. Jones, Ronald D. Stutes, Potter Minton P.C., Tyler, Jeffrey L. Oldham, Warren W. Harris, Bracewell & Guiliani LLP, Houston, for Respondent.

Justice GUZMAN delivered the opinion of the Court.

In this appeal from an oil and gas billing dispute, we determine the accrual date for postjudgment interest when a remand for further proceedings requires new evidence. To resolve this question, we assess the Texas Finance Code, our rules of procedure, and our precedent. The Finance Code provides that postjudgment interest accrues from a money judgment's date. But importantly, remanded cases such as this one involve multiple money judgments. Our Rules of Civil Procedure specify that only one final judgment exists in any case, and historically we have allowed postjudgment interest to accrue only upon a final judgment. But we have often addressed an exception to this accrual rule where a court of appeals can or does render the judgment the trial court should have rendered. In such circumstances, our Rules of Appellate Procedure operate to substitute the subsequent final judgment in the place of the trial court's original, erroneous judgment—such that postjudgment interest accrues from original judgment date. The rationale behind the postjudgment—interest accrual rule and exception 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.

Here, the court of appeals remanded the case to the trial court so that it could assess the prejudgment interest based upon when the defendant received certain billings from the plaintiff. The trial court determined that such evidence was not in the record and that the record had to be reopened. Rather than obtain the additional evidence, the claimant instead waived its claim for prejudgment interest. The trial court then awarded postjudgment interest from the date of its original, erroneous judgment, and the court of appeals affirmed. We find no abuse of discretion in the trial court's determination that new evidence was needed. But because the remand necessitated reopening the record for additional evidence, the Finance Code and our rules of procedure require that postjudgment interest accrue from the final judgment date rather than the original, erroneous judgment. Accordingly, we reverse the court of appeals' judgment and remand for the trial court to enter judgment in accordance with this opinion.

I. Background

Castle Texas Production Limited Partnership (Castle) operates gas wells in which the Lawrence Allan Long Trust, the Charles Edward Long Trust, the Larry Thomas Long Trust, and the John Stephen Long Trust (collectively “the Long Trusts” ¹) have an interest. The Long Trusts sued Castle for breach of a joint operating agreement and the conversion of gas. Castle counterclaimed for amounts owed on joint interest billings and prevailed on its counterclaim. In its first judgment, entered in 2001, the trial court awarded Castle prejudgment interest of $73,998.90 without specifying its calculation. On appeal, the court of appeals held that prejudgment interest should have been calculated pursuant to the parties' joint operating agreement for joint interest billings not paid within fifteen days of receipt. 134 S.W.3d 267, 288. The court remanded to the trial court to recalculate prejudgment interest because “[i]t [was] apparent that the amount of prejudgment interest was not so calculated.” ²Id.

On remand, Castle made various motions beginning in March 2005, arguing that no new evidence was required for the trial court to recalculate prejudgment interest. When the trial court disagreed and set the matter on its trial docket, Castle sought writs of mandamus and prohibition, which the court of appeals denied in April 2006. In February 2009, Castle again moved for judgment on the existing record. At a hearing in March 2009, the trial court denied Castle's motion and once again set the matter on its trial docket. After obtaining this ruling, Castle waived its prejudgment-interest claim. The trial court entered a final judgment that same day awarding Castle postjudgment interest from the original judgment date in 2001.³ The court of appeals affirmed, holding that “a party that ultimately prevails is entitled to postjudgment interest from the date the original judgment was rendered, irrespective of whether the original judgment was erroneous, because that is the date upon which the trial court should have rendered a correct judgment.” 330 S.W.3d 749, 753. We granted the Long Trusts' petition for review.⁴

II. Discussion

This appeal requires us to determine the date from which postjudgment interest begins to accrue when a remand requires further evidentiary proceedings. Prejudgment interest and postjudgment interest both compensate a judgment creditor for her lost use of the money due her as damages. Phillips v. Bramlett, 407 S.W.3d 229, 238 (Tex.2013). Prejudgment interest 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, and until the day before the judgment. Tex. Fin.Code § 304.104; Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 531 (Tex.1998). Postjudgment interest accrues from the judgment date through the date the judgment is satisfied. Bramlett, 407 S.W.3d at 238. We have not previously addressed the accrual date for postjudgment interest if a trial court determines it must reopen the record for new evidence on remand and thus renders multiple judgments during the course of the suit.

A claimant would prefer postjudgment interest to accrue from the date of the original, erroneous judgment for several reasons. First, postjudgment interest accrues on prejudgment interest ⁵ and, unlike prejudgment interest, postjudgment interest compounds annually.⁶ Additionally, statutory limits such as the one on health care liability claims may prohibit recovery that includes prejudgment interest,⁷ but we have never held that postjudgmentinterest is subject to that limitation. Bramlett, 407 S.W.3d at 239. Here, Castle waived its claim for prejudgment interest. Thus, resolving this issue determines whether Castle can recover postjudgment interest from the trial court's original judgment in 2001 or the final judgment after remand in 2009.

A. The Final Judgment Rule

To determine when postjudgment interest begins to accrue, we must interpret relevant statutes and our rules of procedure, which are issues we review de novo. Morris v. Aguilar, 369 S.W.3d 168, 171 n. 4 (Tex.2012). Under the Texas Finance Code, “postjudgment 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). The Finance Code defines a money judgment as “a judgment for money” which “includes legal interest or contract interest, if any, that is payable to a judgment creditor under a judgment.” ⁸Id. § 301.002(a)(12). But this appeal hinges on the term “judgment,” which the Finance Code fails to define. We observed in American Paper Stock Co. v. Howard that this statutory reference to “judgment” is to “the judgment of the trial court.” 528 S.W.2d 576, 577 (Tex.1975). Texas Rule of Civil Procedure 301 further instructs that “[o]nly one final judgment shall be rendered in any cause except where it is otherwise specially provided by law.” Tex.R. Civ. P. 301; see also Logan v. Mullis, 686 S.W.2d 605, 609 (Tex.1985) (“ Tex.R. Civ. P. 301 provides that there will be only one final judgment.”). A judgment that accrues postjudgment interest must necessarily be a final judgment because a partial summary judgment that grants relief on only one of several claims will not accrue postjudgment interest on the rendered claim until a final judgment resolves all issues among all parties. We therefore assess what constitutes a final judgment when a remand results in multiple trial court judgments.

We assess a judgment's finality differently, depending upon the context. For example, the finality test for the purpose of appeal differs from the finality test for when a court's power to alter a judgment ends or when the judgment becomes final for the purpose of claim and issue preclusion. Street v. Honorable Second Court of Appeals, 756 S.W.2d 299, 301 (Tex.1988) (orig.proceeding); see also Lehmann v. Har–Con Corp., 39 S.W.3d 191, 195 (Tex.2001). As explained below, finality for the purpose of appeal bears the closest resemblance to finality for the purpose of accruing postjudgment interest. A judgment is final for the purpose of appeal “if it disposes of all pending parties and claims in the record, except as necessary to carry out the decree.” ⁹Lehmann, 39 S.W.3d at 195.¹⁰ A judgment that disposes of all parties and claims begins appellate deadlines and generally triggers the accrual of postjudgment interest. SeeTex. Fin.Code § 304.005(a). But if an appellate court reverses that final judgment and remands for further proceedings, the original, erroneous trial court judgment is no longer final because it no longer disposes of all parties and claims. Generally then, if a remand results in multiple trial court judgments, postjudgment interest accrues...