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April 1, 2014 - The Supreme Court of Texas ruled Friday in favor of Locke Lord client The Long Trusts in the case The Long Trusts v. Castle Texas Production LP. The Court’s opinion resolves unsettled questions regarding the accrual of postjudgment interest when a judgment is remanded after an appeal – specifically, whether postjudgment interest accrues from the trial court’s original, erroneous judgment or from the judgment rendered on remand after reopening the record.
Locke Lord Partner Tom Loose provided appellate representation for The Long Trusts.
“This case has been in litigation for more than a decade,” said Loose, who argued the appeal before the Court. “The Supreme Court held that postjudgment interest would not begin to accrue until judgment was rendered in 2009 following remand from an earlier appeal, rather than from the date of the original, erroneous judgment rendered in 2001.”
In the original suit, Castle successfully counterclaimed for amounts owed on joint interest billings. In the first appeal, the court of appeals held that prejudgment interest had been calculated erroneously and remanded the case to the trial court to recalculate prejudgment interest.
To perform this calculation in accordance with the parties’ agreement, the trial court determined additional evidence was needed. For years, Castle refused to tender the additional evidence. Ultimately, in 2009, Castle waived its prejudgment interest claim and, with that claim resolved, the trial court rendered judgment. The judgment on remand, however, awarded postjudgment interest accruing from 2001 – the date of the earlier, reversed judgment.
The Supreme Court held that that postjudgment interest must accrue from the final judgment. 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.
On the other hand, “[i]f 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, post-judgment interest will accrue from the subsequent judgment,” the Texas Supreme Court said.
In explaining the case’s significance, Loose said, “Parties are entitled to postjudgment interest in any case awarding a money judgment. This case resolves an important question regarding when that interest begins to accrue. The Supreme Court’s opinion thoroughly covers the issue and will provide needed guidance for practitioners in a variety of circumstances.”
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