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SCOTX: Postjudgment Interest—All Accrual Dates Are Not Created Equal

Posted in Appellate Practice, Opinions & Judgments, Procedure, Supreme Court Orders, Texas Supreme Court, Trial Courts

Statutes that appear clear are oft fraught with unanswered questions. This is unsurprising, as drafters cannot anticipate every scenario when crafting legislation. Falling into that vein, last week, the Texas Supreme Court decided a previously unaddressed question regarding the accrual date of postjudgment interest under the Texas Finance Code. In Long v. Castle Texas Production Limited Partnership (No. 11-0161), the Court determined the date from which postjudgment interest begins to accrue when remand mandates further evidentiary proceedings. The relevant code subsection, 304.005(a), while not the most elegant prose, adequately conveys its message as follows: “[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.” Read simply, the postjudgment interest meter starts running on the date the trial court renders judgment. But what happens when a trial court issues a second judgment on remand after accepting new evidence? Or, in other words, which judgment is considered the court’s rendered “judgment” under section 304.005(a)?

In examining this very question, the Court disagreed with earlier, intermediate appellate decisions and determined the answer depends on whether the trial court must reopen the record on remand. First, the Court revisited earlier precedent, an exception under the Texas Rule of Appellate Procedure 43.3, the Texas Finance Code, and rules of civil procedure to determine that “judgment” meant final judgment. The Court then applied similar authority to outline different scenarios and decide that the accrual date differed depending on whether the trial court must reopen the record. To illustrate the first scenario, the Court recounted the general rule that postjudgment interest accrues from the date of final judgment. It then discussed a limited exception under Rule 43.3: postjudgment interest accrues from the date of the trial court’s original, erroneous judgment when an appellate court renders (or could have rendered) judgment on appeal. Lastly, as a departure from earlier appellate decisions, the Court held that, under circumstances like these, the accrual date coincides with the judgment issued after the trial court reopens the record on remand. The Court reasoned that, in the last scenario, remand for retrial or introducing more evidence would require a different result because the trial court did not originally possess a sufficient record to issue a final judgment.

As a bonus, the Court provided lower courts with some procedural guidance regarding which court, the trial or appellate, decides whether the record needs reopening on remand, and when that court should determine when the record is reopened. Due to the limited nature of an appellate record, the Court held that the trial court should determine whether the record requires reopening on remand; subject, of course, to review on appeal of the final judgment. It also concluded that the trial court should make that determination at the time the appellate court remanded the proceeding.

In the end, the Texas Supreme Court definitively answered a legal question and helped further elucidate the postjudgment interest statute. It also provided some procedural guidance to lower courts.