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 v. Castle Texas Production Limited Partnership
IN THE SUPREME COURT OF TEXAS
444444444444
NO. 11-0161
444444444444
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
4444444444444444444444444444444444444444444444444444
ON PETITION FOR REVIEW FROM THE
COURT OF APPEALS FOR THE TWELFTH DISTRICT OF TEXAS
4444444444444444444444444444444444444444444444444444
Argued November 5, 2013
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
2
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.”2 Id.
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
1
Larry T. Long, Sammy Adamson, and Allan Long are the trustees of the Long Trusts and filed suit and pursued
this appeal in their official capacities as trustees. For ease of reference, this opinion refers to the trustees in their official
capacity as the Long Trusts.
2
The court also suggested a remittitur on damages and attorney’s fees and, when Castle filed the remittitur,
affirmed the trial court’s judgment as modified. 134 S.W.3d at 288–89.
3
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.
3
The trial court subsequently entered a nunc pro tunc final judgment that made no substantive change to the
March 2009 final judgment. No party contends the nunc pro tunc judgment has any effect on this proceeding.
4
We previously granted review of this appeal and set the matter for oral argument in December 2012. Shortly
before oral argument, Castle removed this proceeding to federal court because Castle and its parent corporation had filed
for bankruptcy in December 2011. The federal bankruptcy court remanded this proceeding in July 2013, and we again
set the matter for oral argument.
4
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
interest5 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 postjudgment interest 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
5
See TEX. FIN. CODE § 304.003(a) (“A money judgment of a court of this state . . . including court costs
awarded in the judgment and prejudgment interest, if any, earns postjudgment interest at the rate determined under this
section.”).
6
Compare id. § 304.104 (“Prejudgment interest is computed as simple interest and does not compound.”), with
id. § 304.006 (“Postjudgment interest on a judgment of a court in this state compounds annually.”).
7
See Columbia Hosp. Corp. of Houston v. Moore, 92 S.W.3d 470, 474 (Tex. 2002) (holding that prejudgment
interest is subject to the limitation on recovery found in the statutory predecessor to the Medical Liability Act).
5
or contract interest, if any, that is payable to a judgment creditor under a judgment.”8 Id.
§ 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
8
The Finance Code further defines contract interest as “interest that an obligor has paid or agreed to pay to a
creditor under a written contract of the parties.” TEX. FIN. CODE § 301.002(a)(1). Much of the present dispute has
centered on the prejudgment interest set forth in the joint operating agreement between Castle and the Long Trusts, which
is contract interest under the Finance Code.
6
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.”9 Lehmann, 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. See TEX. 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 from the
date of the final judgment (rather than the original, erroneous judgment).
B. The “Can or Does Render” Exception
Texas Rule of Appellate Procedure 43.3 establishes a limited exception to the general rule
that postjudgment interest accrues from the final judgment date. Rule 43.3 provides that, “[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.” TEX. R. APP. P. 43.3. Though our precedents on
postjudgment interest have involved this exception rather than the general postjudgment-interest
accrual rule, such precedents nonetheless offer guidance about the rule’s purpose and contours.
9
As addressed in Part II.B, infra, a trial court may, in appropriate circumstances, sever a rendered claim to make
that ruling an appealable final judgment that accrues postjudgment interest from the date of severance.
10
See also Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 272 (Tex. 1992) (orig. proceeding) (“A final judgment
is one which disposes of all legal issues between all parties.”); West v. Bagby, 12 Tex. 34, 34 (Tex. 1854) (“A final
judgment is there defined to be the award of the judicial consequences which the law attaches to the facts, and determines
the subject-matter of controversy between the parties. . . .”).
7
We first interpreted the predecessor to Rule of Appellate Procedure 43.3 more than a half
century ago. In D.C. Hall Transport, Inc. v. Hard, the jury rendered a verdict for the plaintiff, but
the trial court granted the defendants’ motion for judgment notwithstanding the verdict. 355 S.W.2d
257, 258 (Tex. Civ. App.—Fort Worth) writ ref’d n.r.e. per curiam, 358 S.W.2d 117 (Tex. 1962).
Neither the jury nor the trial court, however, had made a finding concerning the disputed scope of
a contract. Id. Because the existing record created a fact issue concerning the scope of the contract,
we remanded for the trial court to make the omitted finding. Id. The trial court resolved the fact
issue on remand without taking new evidence and entered a new final judgment that awarded interest
from the date of the original, erroneous judgment. Id. The court of appeals affirmed the award of
postjudgment interest from the date of the original judgment, reasoning that, “[i]n effect, the
[remand] judgment was the judgment which should have been rendered . . . when the non obstante
judgment was rendered.” Id. at 260. We approved that decision.11 D.C. Hall, 358 S.W.2d at 117.
Thus, under D.C. Hall, if a remand does not require the trial court to reopen the record, the exception
contained in Rule of Appellate Procedure 43.3 applies, and postjudgment interest will accrue from
the date of the original, erroneous judgment.12
11
The court of appeals had addressed various factual determinations that were beyond our jurisdiction, so we
could not refuse the writ and adopt that opinion as our own. D.C. Hall, 358 S.W.2d at 117. But we did “approve the
decisions of law” of the court of appeals—including the decision regarding postjudgment interest—via per curiam
opinion when refusing the writ due to no reversible error. Id.
12
Similarly to D.C. Hall, we reversed and remanded a take nothing judgment in Vassallo v. Nederl-Amerik
Stoomv Maats Holland and instructed the trial court to enter judgment for the plaintiff. 344 S.W.2d 421, 426 (Tex.
1961). On remand, the trial court entered judgment for the plaintiff with postjudgment interest accruing from the date
of its original judgment, the court of appeals affirmed, and we found no reversible error. Nederland
sch-Amerikaansche-Stoomvaart-Maatschappij; Holland-Am. Line v. Vassallo, 365 S.W.2d 650, 656 (Tex. Civ.
App.—Houston 1963, writ ref’d n.r.e.).
8
We have confirmed the principle of D.C. Hall in several appeals involving simpler
postures—when a court of appeals renders the judgment the trial court should have rendered. In
American Paper, the jury returned a verdict in favor of the plaintiff, but the trial court entered a take-
nothing judgment notwithstanding that verdict. 528 S.W.2d at 576. The court of appeals reversed,
rendered judgment on the verdict, and ordered that postjudgment interest should accrue from the
date of the verdict. Id. at 576–77. We reformed that judgment to provide for postjudgment interest
to accrue from the trial court’s judgment date. Id. at 577. We explained that the predecessor to
Finance Code section 304.005 required postjudgment interest to accrue from the date of the
judgment, which “is the judgment of the trial court.” Id. And citing D.C. Hall, we held that under
the predecessor to Rule of Appellate Procedure 43.3, “the judgment of the court of civil appeals
must take its place and plaintiff is entitled to interest from the date of the erroneous judgment.” Id.
Thus, under American Paper, if an appellate court renders the judgment the trial court should have
rendered, postjudgment interest accrues from the date of the trial court’s original, erroneous
judgment.
We likewise applied the American Paper exception in Thornall v. Cargill, Inc., 587 S.W.2d
384 (Tex. 1975). There, the court of appeals affirmed a judgment in part and reversed and rendered
the remainder of the judgment. Id. at 384. But the court of appeals’ judgment failed to award
postjudgment interest, and we reformed the judgment to award postjudgment interest from the date
of the trial court’s erroneous judgment. Id. at 385.
Most recently, in Bramlett, we summarized American Paper and Thornall as holding that
“when an appellate court reverses a trial court’s judgment and renders judgment on appeal,
9
postjudgment interest begins to run from the date of the trial court’s judgment, not the later date of
the appellate court’s judgment.” 407 S.W.3d at 239. But we viewed the Bramlett fact pattern as
akin to that in D.C. Hall where, instead of rendering the judgment the trial court should have
rendered, we remanded and the trial court made further determinations on the existing record. Id.
at 240. As in D.C. Hall, we held that postjudgment interest accrues from the date of the original trial
court judgment if the appellate court remands for entry of judgment consistent with its opinion and
the trial court is not required to admit new or additional evidence to enter that judgment. Id. at 239.
After discussing the court of appeals’ opinion at issue here, we specifically left open the question
of the date from which postjudgment interest accrues if there is a retrial or new evidence is required
on remand. Id. at 242–43.
Thus, the general rule is that postjudgment interest accrues from the date of the judgment,
which is the final judgment in a case where the trial court issues multiple judgments. TEX. FIN.
CODE § 304.005(a); TEX. R. CIV. P. 301. The exception is when the appellate court renders (or could
have rendered) judgment, in which case postjudgment interest accrues from the date of trial court’s
original, erroneous judgment. TEX. R. APP. P. 43.3. But when an appeal instead results in a retrial
or a remand for further proceedings where new evidence is required, postjudgment interest will
accrue from the trial court’s subsequent judgment.
The purpose behind the long-standing exception under Rule of Appellate Procedure 43.3
confirms the general rule that postjudgment interest should accrue from the subsequent trial court
judgment in cases where the trial court must reopen the record. If the trial court possessed a
sufficient record to render a correct judgment, the Finance Code and the rules of procedure allow
10
postjudgment interest to accrue from the original judgment date. But if the trial court did not
possess a sufficient record to render a correct judgment or the record otherwise must be reopened
(as in a retrial),13 postjudgment interest will only accrue on the final judgment date once the record
is sufficient.
We cannot agree with Castle that postjudgment interest should always accrue from the date
of the trial court’s first judgment. Such an interpretation renders meaningless the Finance Code
provisions and Rule of Civil Procedure 301, which require postjudgment interest to accrue from the
final judgment date. Similarly, if postjudgment interest always accrues from the date of the original,
erroneous trial court judgment, our precedents construing the rules of appellate procedure would
have had no need to address whether the appellate court could or did render the judgment the trial
court should have rendered. We must interpret statutes and rules of procedure to give them effect,
and thus we decline to adopt Castle’s blanket rule that postjudgment interest accrues from the date
of the original, erroneous trial court judgment in every proceeding. See City of Waco v. Lopez, 259
S.W.3d 147, 153 (Tex. 2008) (“[C]ourts are to avoid interpreting a statute in such a way that renders
provisions meaningless.”).
13
We recognize that the cause for a retrial might not be the fault of the claimant, and the record on retrial may
be similar to the record from the initial trial. But even in such circumstances, the Finance Code requires interest to
accrue from the date of the judgment, which is necessarily the final judgment. TEX. FIN. CODE § 304.005(a). And the
exception in Rule of Appellate Procedure 43.3 cannot apply to retrials because, under such circumstances, the appellate
court cannot render the judgment the trial court should have rendered. See TEX. R. APP. P. 43.3. While the Finance
Code’s postjudgment interest accrual rule and the exception under our rules of procedure should achieve fairness in most
circumstances, fairness is not the test mandated by our statutes and rules to be applied to the calculation of postjudgment
interest in a case-by-case fashion. Rather, the parties’ awareness of these principles, and the appropriate use of
severance, offers of proof, and bills of exception as discussed below, should yield fairness in a predictable context to
the greatest extent possible.
11
Having determined the parameters of the postjudgment-interest accrual rule and its
exception, the parties here raise two related procedural questions: (1) which court decides whether
the record must be reopened on remand, and (2) at what point should that decision be based? As a
practical matter, the trial court should determine whether the record must be reopened on remand.
While Rule of Appellate Procedure 43.3 requires a court of appeals to render the judgment the trial
court should have rendered, the limited nature of appellate records can make this task impossible.
Such was the case in Bramlett where we remanded for the trial court to enter judgment consistent
with our opinion, and the trial court did not reopen the record in order to enter judgment. 407
S.W.3d at 233. Thus, the trial court should determine whether it must reopen the record on
remand.14
Likewise, the trial court should make the determination whether to reopen the record as of
the time the court of appeals remanded the proceeding. As explained above, the purpose of the
postjudgment-interest accrual rule and exception indicate that a claimant is entitled to accrue
postjudgment interest from the judgment date following the time the trial court possessed a sufficient
record to render a correct judgment. If, as here, a claimant fails to equip the trial court with a
sufficient record on remand and decides to waive a claim, only at the time of this waiver does the
trial court possess a sufficient record to enter a correct judgment. Thus, if a trial court determines
14
If a party believes the trial court erred in its determination of whether it must reopen the record, such a
decision is necessarily reviewable on appeal of the final judgment the trial court enters. Here, Castle disagreed with the
trial court’s determination that it must reopen the record. As explained in Part II.E, infra, we hold that the trial court did
not abuse its discretion in determining that it needed to reopen the record.
12
that it must reopen the record on remand to comply with a court of appeals decision, it should make
that determination based upon the claims and record as of the time of the remand.
Taken together, the Finance Code, our rules of procedure, and our precedent from D.C. Hall
to Bramlett require the conclusion that postjudgment interest accrues from the date of the final
judgment (rather than the original, erroneous judgment) unless the appellate court can or does render
the judgment the trial court should have rendered. As the parties discussed at oral argument,
however, our precedent and rules of procedure offer some methods through which courts and parties
may affect postjudgment interest with severance, offers of proof, and bills of exception.
Under Texas Rule of Civil Procedure 41, a court may sever and proceed separately with a
claim against a party and may sever different grounds of recovery before submission to the trier of
fact.15 TEX. R. CIV. P. 41; State Dep’t of Highways & Pub. Transp. v. Cotner, 845 S.W.2d 818, 819
(Tex. 1993). And other rules of procedure provide limited exceptions to Rule of Civil Procedure
41, allowing a trial or appellate court to order retrial on only part of a matter affected by error if
doing so will not result in unfairness to the parties. See TEX. R. CIV. P. 32016; TEX. R. APP. P.
15
We have held that a claim is properly severable if: “(1) the controversy involves more than one cause of
action, (2) the severed claim is one that would be the proper subject of a lawsuit if independently asserted, and (3) the
severed claim is not so interwoven with the remaining action that they involve the same facts and issues.” F.F.P.
Operating Partners, L.P. v. Duenez, 237 S.W.3d 680, 693 (Tex. 2007) (quoting Guar. Fed. Sav. Bank v. Horseshoe Op.
Co., 793 S.W.2d 652, 658 (Tex. 1990)). Avoiding prejudice, doing justice, and increasing convenience are the
controlling reasons to sever. Id.
16
Rule of Civil Procedure 320 provides:
When it appears to the court that a new trial should be granted on a point or points that affect only a
part of the matters in controversy and that such part is clearly separable without unfairness to the
parties, the court may grant a new trial as to that part only, provided that a separate trial on
unliquidated damages alone shall not be ordered if liability issues are contested.
TEX. R. CIV. P. 320.
13
44.1(b)17; Cotner, 845 S.W.2d at 819. For example, in Danziger v. San Jacinto Savings Association,
we severed and remanded a claim that had not been (but should have been) submitted to the fact-
finder from other claims on which we rendered judgment. 732 S.W.2d 300, 304 (Tex. 1987). We
specified that the rendered claims would accrue postjudgment interest from the date of the original
trial court judgment.18 Id. Further, we also rendered judgment for damages on a portion of another
claim (with postjudgment interest to accrue from the date of the original trial court judgment) and
severed and remanded the issue of attorney’s fees.19 Id. The trial court found no damages and thus
adduced no evidence for an award of attorney’s fees as the statute provided. Id.20
C. The Courts of Appeals
Before the court of appeals’ decision at issue here, only two court of appeals’ opinions had
substantively addressed the accrual date for postjudgment interest if the trial court must reopen the
record on remand. Both courts of appeals held that postjudgment interest accrues from the date of
the original, erroneous trial court judgment. The court of appeals here had previously addressed the
17
Rule of Appellate Procedure 44.1 provides:
If the error affects part of, but not all, the matter in controversy and that part is separable without
unfairness to the parties, the judgment must be reversed and a new trial ordered only as to the part
affected by the error. The court may not order a separate trial solely on unliquidated damages if
liability is contested.
TEX. R. APP. P. 44.1(b).
18
The severed and remanded claim would necessarily have accrued postjudgment interest from the trial court’s
subsequent judgment date.
19
In addition to Danziger, we also severed the disputed issue of attorney’s fees from the remainder of a claim
on which we rendered judgment in Great American Reserve Insurance Co. v. Britton, 406 S.W.2d 901, 907 (Tex. 1966).
20
Parties may also affect postjudgment interest with offers of proof or bills of exception, which allow parties
to include in the appellate record matters that do not otherwise appear in the record, such as excluded evidence. TEX.
R. EVID. 103(a)(2); TEX. R. APP. P. 33.2; Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 577 (Tex. 2006).
14
issue in State Department of Highways and Public Transportation v. City of Timpson, 795 S.W.2d
24 (Tex. App.—Tyler 1990, writ denied). In Timpson, the trial court erroneously failed to submit
a jury question regarding a settling defendant’s negligence, and the court of appeals remanded for
a retrial only on the comparative negligence of the two defendants. Id. at 25. On retrial, the trial
court awarded postjudgment interest from the date of the subsequent judgment. Id. at 27. The court
of appeals reversed, and—without discussion—stated that “[i]nterest on the revised judgment should
run from the date of the original or erroneous judgment.” Id. As support, the court cited D.C. Hall
and Copper Liquor v. Adolph Coors Co., 701 F.2d 542 (5th Cir. 1985). But as addressed previously,
D.C. Hall involved a remand where the trial court took no new evidence, and thus fell under the
exception in the Rules of Appellate Procedure applicable to cases in which the court of appeals can
or does render the judgment the trial court should have rendered. Bramlett, 407 S.W.3d at 240.
D.C. Hall does not support the conclusion in Timpson.
Likewise, Timpson relied upon Copper Liquor, as support for the conclusion that
postjudgment interest accrues from the date of the original, erroneous trial court judgment. 795
S.W.2d at 27. Federal cases such as Copper Liquor are necessarily predicated on federal rules of
procedure and are of limited value.21 Even so, the general rule regarding postjudgment interest in
21
Following its decision in Briggs v. Pennsylvania Railroad Co., 334 U.S. 304 (1948), the United States
Supreme Court promulgated Federal Rule of Appellate Procedure 37, which now provides:
(a) When the Court Affirms. Unless the law provides otherwise, if a money judgment in a civil case
is affirmed, whatever interest is allowed by law is payable from the date when the district court’s
judgment was entered.
(b) When the Court Reverses. If the court modifies or reverses a judgment with a direction that a
money judgment be entered in the district court, the mandate must contain instructions about the
allowance of interest.
15
the Fifth Circuit appears to be that postjudgment interest accrues from the date of the subsequent
judgment. See Vickers v. Chiles Drilling Co., 882 F.2d 158, 159 (5th Cir. 1989) (“If an appellate
court reverses or modifies a judgment with a direction that a judgment be entered against a party,
the mandate from the appellate court must specifically order that interest run from the date of the
first judgment, else interest runs from the date of the second, modified judgment.” (citing FED. R.
APP. P. 37; Briggs v. Penn. R.R. Co., 334 U.S. 304 (1948))). Accordingly, Copper Liquor does not
support the holding in Timpson that postjudgment interest accrues from the date of the first
judgment.
The other court of appeals to have addressed the question before us was Gamma Group v.
Transatlantic Reinsurance Co., 365 S.W.3d 469 (Tex. App.—Dallas 2012, no pet.). In Gamma
Group, the court of appeals first held that the trial court erroneously awarded reasonable losses of
$1.3 million rather than incurred losses and ordered a retrial on the limited issue of damages. Id.
at 471. After taking new evidence, the trial court awarded more than $2.7 million in incurred-loss
damages, with postjudgment interest accruing from the date of its original, erroneous judgment. Id.
at 471, 475. The court of appeals affirmed that holding, citing to the court of appeals opinion at
issue here and Timpson. Id. at 476. But as explained previously, these opinions do not properly give
effect to the Finance Code and our rules of procedure, under which postjudgment interest accrues
from the final judgment date unless the appellate court can or does render the judgment the trial
court should have rendered. To the extent Timpson and Gamma Group conflict with this opinion,
we overrule them.
FED. R. APP. P. 37.
16
D. Other Jurisdictions
Other jurisdictions often rely on their particular statutes, rules, and interpreting caselaw, so
their relevance here is particularly weak. Nonetheless, we note that California appears to follow this
general approach. See Stockton Theatres, Inc. v. Palermo, 360 P.2d 76, 78 (Cal. 1961) (“When a
judgment is modified upon appeal, whether upward or downward, the new sum draws interest from
the date of entry of the original order, not from the date of the new judgment. On the other hand,
when a judgment is reversed on appeal the new award subsequently entered by the trial court can
bear interest only from the date of entry of such new judgment.” (citations omitted)).22 And
commentators have observed that our principle in American Paper—that postjudgment interest
accrues from the original judgment date if the court of appeals renders the judgment the trial court
should have rendered—is the majority rule.23
E. Application
Having construed the Finance Code and our rules of procedure to require postjudgment
interest to accrue from the final judgment date unless the appellate court can or does render the
judgment the trial court should have rendered, we turn to the facts of the case at hand. Castle
counterclaimed against the Long Trusts for breach of the parties’ joint operating agreement by
22
See also Presbyterian Distrib. Serv. v. Chicago Nat’l Bank, 183 N.E.2d 525, 527 (Ill. App. 1962) (allowing
postjudgment interest to accrue from date of subsequent judgment entered after further proceedings on remand).
23
1 COMMERCIAL DAMAGES: A GUIDE TO REMEDIES IN BUSINESS LITIGATION ¶ 6-49 (Charles L. Knapp ed.
2011) (“The majority rule is that where a money award has been modified on appeal and the only action necessary in
the trial court is compliance with the mandate of the appellate court, interest on the award should accrue from the original
judgment date.”); Annotation, Date from which Interest on Judgment Starts Running, as Affected by Modification of
Amount of Judgment on Appeal, 4 A.L.R.3d 1221, 1223, § 2 (1965) (“In most cases where a money award has been
modified on appeal, and the only action necessary in the trial court has been compliance with the mandate of the
appellate court, the view has been taken that interest on the award as modified should run from the same date as if no
appeal had been taken, that is, ordinarily, from the date of entry of the verdict or judgment.” (citation omitted)).
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failing to pay their share of joint interest billings. The joint operating agreement provided for
interest to accrue on joint interest billings not paid within fifteen days of their receipt. 134 S.W.3d
at 288. In its 2001 judgment, the trial court failed to specify its calculation for $73,998.90 of
prejudgment interest it awarded Castle. The court of appeals reversed and remanded, holding
prejudgment interest should have been calculated pursuant to the joint operating agreement. Id. at
288. On remand, the trial court concluded multiple times that it required evidence indicating when
the Long Trusts received the joint interest billings to adjudicate prejudgment interest under the joint
operating agreement. Castle sought writs of mandamus and prohibition regarding one such ruling,
which the court of appeals denied after concluding “there are issues before the trial court requiring
factual determinations.” In re Castle Tex. Prod. Ltd. P’ship, 189 S.W.3d 400, 405 (Tex.
App.—Tyler 2006, orig. proceeding). Castle eventually waived its prejudgment interest claim, and
on that same day in 2009, the trial court entered a final judgment that awarded Castle postjudgment
interest from the 2001 judgment.
As explained above, postjudgment interest accrues from the final judgment date unless the
appellate court can or does render the judgment the trial court should have rendered. And the
determination of whether the record must be reopened on remand is one for the trial court in the first
instance to be made based upon the time of remand. Here, the trial court determined new evidence
was required at the time of remand—a decision the court of appeals did not overturn. In re Castle,
189 S.W.3d at 405 (“[T]here are issues before the trial court requiring factual determinations.”). We
review the trial court’s decision to admit new evidence for an abuse of discretion. Serv. Corp. Int’l
v. Guerra, 348 S.W.3d 221, 235 (Tex. 2011).
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Castle argues that new evidence was not needed because (1) the record included evidence
of when the Long Trusts received joint interest billings, and (2) even without such evidence, the trial
court had a duty to rule that Castle failed to carry its burden of proving prejudgment interest on the
existing record. The Long Trusts argue that, although evidence existed that Castle was entitled to
prejudgment interest, the remand required reopening the record for evidence of when the Long
Trusts received the billings. We agree with the Long Trusts and hold that the trial court did not
abuse its discretion in concluding that it needed additional evidence.
Castle claimed in the trial court that the existing record could substantiate when the Long
Trusts received certain joint interest billings because the record included a letter from Castle to the
Long Trusts that purportedly enclosed joint interest billings. But the letter Castle filed with the trial
court failed to include the allegedly enclosed joint interest billings, and Castle does not argue that
any other evidence in the record establishes when the Long Trusts received the billings. Thus, we
cannot agree with Castle that the existing record offered sufficient evidence of when the Long Trusts
received the joint interest billings or that the trial court’s decision to reopen the record abused its
discretion.
Neither do we agree with Castle that the trial court had a duty to deny it recovery of
prejudgment interest on the existing record. Castle relies on Texas Rule of Civil Procedure 270,
which provides that a court may permit additional evidence to be offered at any time when it clearly
appears necessary to the due administration of justice, except that “in a jury case no evidence on a
controversial matter shall be received after the verdict of the jury.” TEX. R. CIV. P. 270. But, Rule
270 is not designed to prohibit the trial court from reopening the record when a court of appeals
19
reverses and remands for further proceedings. The ability to remand a portion of a claim is instead
governed by Rule of Appellate Procedure 44.1, and Castle has not challenged the court of appeals’
decision to remand only the issue of prejudgment interest rather than the entirety of its claim. TEX.
R. APP. P. 44.1(b). Moreover, the record in 2001 included some evidence that Castle was entitled
to prejudgment interest because the Long Trusts had not paid certain amounts owed on joint interest
billings by the date of the original judgment. But this was not evidence as to the specific amount
of prejudgment interest the Long Trusts owed under the joint operating agreement. Because
evidence existed that the Long Trusts owed prejudgment interest, the court of appeals remanded for
a recalculation. See Glover v. Tex. Gen. Indem. Co., 619 S.W.2d 400, 402 (Tex. 1981) (providing
that the court of appeals must ordinarily remand for a new trial when, despite some evidence, the
evidence is factually insufficient); see also City of Laredo v. Montano, 414 S.W.3d 731, 737 (Tex.
2013) (remanding for recalculation of attorney’s fees when evidence of work performed existed but
was insufficient to support the amount awarded in the judgment). And Castle does not argue here
that the court of appeals was required to render judgment that Castle take nothing on its prejudgment
interest issue rather than remanding it. Accordingly, we disagree with Castle that the trial court had
a duty to deny its claim for prejudgment interest based upon the existing record, and the trial court
did not abuse its discretion in determining that new evidence was required to properly calculate
prejudgment interest.
Neither waiver nor severance affect our conclusion. After the trial court required additional
evidence on Castle’s prejudgment interest claim, Castle waived the claim. But this waiver of
prejudgment interest does not affect the date on which postjudgment interest accrues. Because the
20
trial court did not possess a sufficient record on which to render a correct judgment on its claims in
2001, Castle is not entitled to postjudgment interest from the 2001 judgment. In 2009, Castle
amended its pleadings to, for the first time, yield a sufficient record for the trial court to render a
correct judgment. Castle is therefore entitled to postjudgment interest from the 2009 judgment.
Finally, the issue of severance does not affect our analysis. The court of appeals did not
sever the portion of Castle’s claim it affirmed from the portion it remanded—as we did in Danziger.
The court of appeals was familiar with severance, a procedure it implemented in severing the Long
Trusts’ claim from Castle’s counterclaim in the first appeal. 134 S.W.3d at 288–89. And Castle
does not claim here that the court of appeals erred by not severing the prejudgment interest issue
from the remainder of its claim. We express no opinion whether the court of appeals could have
severed the prejudgment interest portion of Castle’s counterclaim from the remainder of the claim.
III. Conclusion
In sum, under the Finance Code and our rules of procedure, postjudgment interest accrues
from the final judgment date unless the appellate court can or does render the judgment the trial
court should have rendered. If the trial court determines that it must reopen the record on remand
based upon the record and pleadings as they existed at the time of the remand, postjudgment interest
will accrue from the subsequent judgment. But if the court of appeals can or does render the
judgment the trial court should have rendered, postjudgment interest accrues from the original,
erroneous trial court judgment.
Here, the court of appeals remanded for the trial court to assess prejudgment interest based
upon the date the Long Trusts received joint interest billings. The trial court determined it required
21
additional evidence to decide that issue. Because there was insufficient evidence in the record
establishing when the Long Trusts received the billings and because the trial court had no duty to
deny Castle’s request for prejudgment interest on the existing record, we find no basis to conclude
that the trial court’s ruling to reopen the record was an abuse of discretion. Accordingly,
postjudgment interest must accrue from the trial court’s final judgment in 2009. We reverse the
court of appeals’ judgment and remand for the trial court to render judgment for Castle, with
postjudgment interest to accrue in accordance with this opinion.
____________________________________
Eva M. Guzman
Justice
OPINION DELIVERED: March 28, 2014
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