Motion for Prejudgment Interest in Texas

What Is a Motion for Prejudgment Interest?

Background

Prejudgment interest is compensation for the loss of the use of money due as damages during the lapse of time between the accrual of the claim and the date of judgment. (Johnson & Higgins of Tx v. Kenneco Energy, 962 S.W.2d 507, 528 (Tex. 1998); Rep. Nat. Bank v. Northwest Nat. Bank, 578 S.W.2d 109, 116 (Tex. 1979); U.S. Restaurant Props. v. Motel Enterprises, 104 S.W.3d 284, 293–294 (Tex. 2003).) Prejudgment interest may be recovered in most contract actions under enabling statutes or by common law. (Preston Farm & Ranch Supply v. Bio-Zyme Ent., 625 S.W.2d 295, 297 (Tex. 1981).) Prejudgment interest is not recoverable for an award of attorney’s fees. (City of Dallas v. Lowenberg, 187 S.W.3d 777, 782 (Tex. App. 2006).)

Prejudgment interest is provided by contract when the contract provides for a specific rate of interest, then that interest may be awarded as a prejudgment interest. (Moody v. Main Bank of Houston, 667 S.W.2d 613, 619 (Tex. App. 1984).) Texas Finance Code Section 302.002 says that if a creditor has not agreed to charge the debtor any interest, the creditor may charge and receive legal interest from the debtor at the rate of 6 percent a year on the principal amount. (Tex. Fin. Code § 302.002.) The Texas Supreme Court has ruled that, prejudgment interest on contract damages can be assessed in the same manner when the parties have not agreed to interest charges. (Great American Ins. v. N. Austin Utility, 950 S.W.2d 371, 373 (Tex. 1997).)

When the prejudgment interest statute cannot be met, interest as damages may be awarded under common law principles. (Great American Ins. v. N. Austin Utility, 950 S.W.2d 371, 372–373 (Tex. 1997); Perry Roofing Co. v. Olcott, 744 S.W.2d 929, 930 (Tex. 1988).) The Texas Supreme Court allows prejudgment interest based on equity as an element of common-law damages. (Perry Roofing Co. v. Olcott, 744 S.W.2d 929, 930 (Tex. 1988).) However, a 2003 revision to the Finance Code provides that statutory prejudgment interest may not be assessed or recovered on an award of future damages (Tex. Fin. Code § 304.1045.)

How to Structure the Motion

A request for prejudgment interest should be in the prayer section of a petition and should be a sufficient pleading basis for the assessment of prejudgment interest on the damages awarded.

When prejudgment interest is provided by contract or by statute the pleading does more than is necessary in that the interest provided by either of those grounds is awardable under a prayer for general relief without expressly using the phrase “prejudgment interest”. (Rep. Nat. Bank v. Northwest Nat. Bank, 578 S.W.2d 109, 116–117 (Tex. 1978).)

Prejudgment interest as common-law damages requires a more specific request so as to put the opposing party on notice of the demand for additional recovery of prejudgment interest. (Benavides v. Isles Construction Co., 726 S.W.2d 23, 25 (Tex. 1987); Texas Commer. Bank v. Lebco Constructors, Inc., 865 S.W.2d 68, 81–82 (Tex. App.—Corpus Christi 1993.) The pleader should set out in the body of the pleading the date that written notice of the claim was given to the opposing party if the pleader intends to seek prejudgment interest from that date rather than from the date suit was filed. (Johnson & Higgins of Tx v. Kenneco Energy, 962 S.W.2d 507, 531 (Tex. 1998).)

When Finance Code Section 302.002 applies prejudgment interest can be calculated as follows:

At the rate of 6 percent per year on the amount due under the contract and awarded as damages (City of Austin v. Foster, 623 S.W.2d 672, 675 (Tex. Civ. App.—Austin 1981).)
Beginning on the 30th day after the date on which the amounts awarded became due

(Tex. Fin. Code § 302.002)

Prejudgment interest as damages begins to accrue on the earlier of the following two dates (Johnson & Higgins of Tx v. Kenneco Energy, 962 S.W.2d 507, 531 (Tex. 1998):

The day suit is filed.
The 180th day after the defendant receives written notice of a claim.

Documents for Motion for Prejudgment Interest in Texas

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LAMONT ALDRIDGE vs. MONA LISA JONES document preview

NOTICE OF HEARING RE: MTN FOR MSJ - Motion - Summary Judgment

2 pages

FILED 5/3/2024 7:40 PM FELICIA PITRE DISTRICT CLERK D…

Motion for Prejudgment Interest in Texas

What Is a Motion for Prejudgment Interest?

Background

How to Structure the Motion

Documents for Motion for Prejudgment Interest in Texas

Related Legal Topics for Motion for Prejudgment Interest in Texas

Useful Examples of Post-trial for Motion for Prejudgment Interest and Related Documents Filed in Court Cases/Dockets