Calculating Supersedeas Security

Calculating Supersedeas Security

If a party to a lawsuit wants to appeal the trial court’s judgment, it has to post security in the form of a supersedeas bond to suspend enforcement of the judgment during the appeal.  In Top Cat Ready Mix, LLC v. Alliance Trucking, LP, et al., the Texas Fifth District Court of Appeals recently addressed the proper calculation of the amount of the supersedeas bond.

Instructions for calculating the amount of the supersedeas bond are set forth in Chapter 52 of the Texas Civil Practice & Remedies Code.  Pursuant to the statute, “the amount of the security must equal the sum of:  1) the amount of compensatory damages awarded in the judgment; 2) interest for the estimated duration of the appeal; and 3) costs awarded in the judgment.”  Tex. Civ. Prac. & Rem. Code §52.006(a).  Unfortunately, the phrase “compensatory damages” is undefined.  In Top Cat Ready Mix, the court was tasked with interpreting the phrase “compensatory damages.”

The issue addressed in Top Cat Ready Mix is whether an award of contractual pre-judgment interest should be included as “compensatory damages” for purposes of calculating the amount of a supersedeas bond under Chapter 52.  The trial court’s judgment awarded the plaintiff $315,087.21 in “actual damages,” $198,739.63 in “contractual pre-judgment interest,” $70,000 in attorneys’ fees, and post-judgment interest.  The defendant superseded the judgment pending its appeal by posting a cash deposit in the amount of $371,802.90, reflecting the “actual damages” award, but not taking into account the “contractual pre-judgment interest.”  The plaintiff filed a Motion to Review Supersedeas Security with the appellate court seeking to increase the amount of the bond to include the “contractual pre-judgment interest.”

In its opinion dated December 27, 2018, the Texas Fifth District Court of Appeals concluded that the phrase “compensatory damages” includes contractual pre-judgment interest.  The court turned to the Black’s Law Dictionary, the Texas Finance Code, and the Texas Supreme Court’s opinion in In re Nalle Plastics Family Limited Partnership, 406 S.W.3d 168 (Tex. 2013) to reach its conclusion.  While pre-judgment interest is “compensatory,” it is not considered an element of damage.  However, in its opinion, the court drew a distinction between pre-judgment interest and contractual interest.  “’Contract interest’ means interest that an obligor has promised or agreed to pay to a creditor under a written contract of the parties.  The term does not include judgment interest.”  Tex. Fin. Code §301.002(a)(1).  The court held, “While pre-judgment interest might not be compensatory damages, ‘contractual interest’ is ‘a part of the debt, as much so as the principal.’”  (citing First Nat’l Bank v. J.I. Campbell Co., 114 S.W. 887, 890 (Tex. Civ. App. – San Antonio 1908, no writ).  Therefore, “contractual interest” is a “compensatory damage” for the purpose of calculating the amount of a supersedeas bond, while statutory “pre-judgment interest” is not.

The court’s opinion in Top Cat Ready Mix, LLC v. Alliance Trucking, LP, et al. provides guidance in both the drafting of judgments and the posting of security for an appeal.  When the amount of “pre-judgment interest” to be awarded is based upon the parties’ contract, it should be noted in the judgment as “contractual interest” and not as “pre-judgment interest.”  If the award recites the nature of the interest clearly, there should be less argument over the proper security needed to suspend enforcement of a judgment during appeal.

Contact Saunders, Walsh & Beard at 214-919-3555 for help with complex litigation matters by one of our AV-Rated attorneys in McKinney, TX.

Two requirements every contractor must be aware of before beginning work on their next home remodel project

residential contractor requirements

Texas Property Code 41.007 includes two important requirements for contractors who perform work on existing residential property, (i.e., repairs and remodels):
1. If you the contractor want to require a homestead property owner arbitrate their dispute with you, that requirement must be in 10 point bold font.
2. A residential renovation/remodeling contract must also contain the following provision, also in 10 point bold font: “IMPORTANT NOTICE: You and your contractor are responsible for meeting the terms and conditions of this contract. If you sign this contract and you fail to meet the terms and conditions of this contract, you may lose your legal ownership rights in your home. KNOW YOUR RIGHTS AND DUTIES UNDER THE LAW.”

Not sure if these provisions apply to you or whether you need to incorporate them in your own contract? Check with your attorney or reach out to one of the construction lawyers here at Saunders Walsh & Beard for help with this or any other construction-related questions you may have.

Hugs Cafe: Creating Purpose for Those with Special Needs

Find out more about Saunders, Walsh and Beard’s support for Hugs Cafe in McKinney
Hugs Cafe: Creating purpose for those with special needs

“They just want a purpose.”

Established in 2013, “Hugs Cafe” is a tangible manifestation of founder Ruth Thompson’s passion for helping people with special needs. While serving as the executive director of “New Day In-Home and Respite Care” in Parker, Colorado, Thompson saw a desperate need for opportunities for adults with special needs. There is a community that provides structure and things to do for children with special needs, but once they reach adulthood, they are often isolated at home with nothing to do.

Knowing that, Thompson combined her passion for food and helping others by teaching cooking classes to special needs adults twice a week at Market Street in McKinney, Texas. That, along with two vivid dreams, led her to create Hugs Cafe, a non-profit whose mission is to enhance the lives of adults with special needs through training an employment.

Each year, the Saunders, Walsh and Beard team supports Hugs Cafe’s initiatives such as the annual gala and other fundraisers. This year’s gala will be held on February 9th. Tickets and information are available here.

Through four key objectives of creating jobs, teaching skills, developing respect and changing lives, Hugs Cafe gives its employees (called “teammates”) a daily purpose and something to strive for in life. They look forward to coming in, and they take pride in knowing what they are supposed to do and executing it.

While many enjoy having a job at the cafe, there are some that are eager to transition their learned skills into job opportunities at other restaurants or even owning their own.

In addition to your tax-deductible donations, you can support Hugs Cafe by having lunch at its McKinney, Texas location on 224 E. Virginia between the hours of 11:00 AM and 3:00 PM Tuesday through Sunday.

Tax donation link

Boot Scootin For Hugs Gala

Don’t miss the Boot Scootin for Hugs Gala, supporting Hugs Cafe in McKinney

Show your support for a great cause!

Join us for the 2019 Hugs Cafe Gala, Boot Scootin’ for Hugs on February 9, as we raise funds to continue providing meaningful employment for adults with special needs. We are thrilled to have Coach Gene Stallings as our guest speaker and look forward to celebrating the future success of Hugs and the work we continue to do in this very special community.

The goal for 2019 is to raise $200,000, and it is only possible through your help. Visit our website to purchase tickets, and if you are unable to attend but would still like to donate, you can do that as well.

Tax donation link