Preview
DISMISS and Opinion Filed July 27, 2010
In The
Court of Appeals
Fifth District of Gexas at Dallas
No. 05-08-00856-CV
MILTON M. SMITH, Appellant
v.
RHODES PROPERTIES, LTD., Appellee
On Appeal from the 160th Judicial District Court
Dallas County, Texas
Triai Court Cause No. 08-03866-H
MEMORANDUM OPINION
Before Justices O'Neill, Francis, and Murphy
Opinion By Justice O'Neill
Appellant Milton M. Smith appeals a judgment in favor or Rhodes Properties, Ltd. (RPL)
on a personal guaranty. Smith raises four issues. In his first issue, Smith contends the judgment
from which he appeals is not final. In his remaining three issues, Smith complains of the trial
court's summary judgment, a severance order, and a posyudgment injunction. For the following
reasons, we dismiss this appeal for want of jurisdiction. ‘
Appellant Milton M. Smith is the majority sharcholder of BABS Holdings. Appellee RPL
loaned BABS $4,000.000.00 in connection with an asset purchase agreement in which BABS
acquired the assets of RPL. According to RPL, Smith personally guaranteed the note. A dispute
subsequently arose regarding RPL*s financial statements. The parties entered into a moditicationsigreement and release m which RPL reduced the purchase price and BABS “for itselPand on behalf
of {Smith]” released RPL trom all claims and dete ining to the purchase agreement
transaction.
BABS subsequently defiulted on the note. RPL. sucd BABS on the vote and Smith on the
guaranty. Smith answered with a general denial and raised several defenses to the guaranty
including negligent misrepresentation, fraud, estoppel, and unclean hands. Smith also filed
counterclaims against RPL. and a third-party petition against its owners, Ronald E. Rhodes and
Brenda Rhodes.
The trial court ultimately granted a summary judgment in favor of RPL against Smith on the
guaranty and against Smith on Smith’s affirmative claims. The trial court also granted summary
Judgment in favor of RPL on its claim against BABS on the note. The summary judgment reserved
the issue of attorney's Ives for trial. The order did not award postjudgment interest, specifically
crossing out any such award. The order contained no language suggesting finality. The partics
subsequently stipulated to reasonable and necessary attorney's fecs and the trial court signed an
“Agreed Order Approving Attomeys’ Fee Claim and Amending Partial Summary Judgment” and
contained no language suggesting finality. In that order, the trial court awarded RPL its altomey’s
fees. This order again did nol expressly award postjudgment interest. Smith then tiled a First
Amended Counterclaim and First Amended Third Party petition against RPL and the Rhodeses
purporting to raise new defenses to the guaranty as well as a new claim against R. Rhodes.
RPL then filed a motion to sever all claims and counterclaims between RPL and Smith from
the underlying suit. “The trial court granted the s
verance and assigned a separate cause number tothe claims between RPL and Sauth, The appeal before us concerns the severed claims.!
Smith led a “conditional” notice of appeal asserting no tinal judgment ted, but in the
event he was incorrect, secking to appeal the summary judgment. According to Smith, no final
Judgment existed because the trial court did not resolve RPL’s claim against him for postjudgment
intercst or costs of court. He asserted, under the facts of this case, the award of postjudgment
interest had to be judicially resolved and was not a ministerial determination. Consequently, the
judgment could not be executed upon and is not final.
A judgment that finally disposes of all parties and all claims is final. Lehmann v. Har-Con
Corp., 39 S.W.3d 191, 200 (Tex. 2001). A final judgment must also be certain so that it can be
enforced by writ of execution. Ziemian v. TX Arlington Oaks Apartments, Lid., 233 $.W.3d 548,
553 (Tex. App.-Dallas 2007, pet. stricken ); HE. Butt Grocery Co. v. Bay, Inc., 808 S.W.2d 678,
680 (Tex. App.-Corpus Christi 1991, writ denied). Ministerial officers must be able to carry the
Judgment into execution without ascertainment of additional facts. Ziemian, 233 S.W.3d at $53.
The Texas Finance Code requires a money judgment to specify the postjudyment interest rate
applicable to the judgment. Sce TEX. FIN. CODE ANN. § 304.001 (Vernon 2006). A money judgment
“on a contract that provides for interest or time price differential” carns postjudgment interest at a
rate equal to the lesser of: (1) the rate specified in the contract, which may be a variable rate; or (2)
18 percent a year. TEN. FIN. CODE ANN. § 304.002 (Vernon 2006). Ifa money judgment is on a
contract that does not provide for interest or time price differential, the consumer credit
' The parties subsequently fled a joint moon to abate seeking abatement of the original action pending a resolution
by this Court of this appeal. ‘The joint motion sought abatement because “the Original Case and Severed Case involve
common partes and key overlapping factual and legal issues.” Notably, severance 1s proper only the severed claim
Is Hot so interwoven with the remaining action that they involve the same facts and issues. Guar. Led Sav. Bank v
Horseshoe Operating Co, 793 S.W.2d 652. 658 (Tex. 1990), Further. 11 is improper to use a severance onder to obtain
an advisory opinion tron this Court, Jones v cin Flood Research Ine, V33S W.3d 718. 223(Tex. App.- Dallas 2005),
rev dan other grounds, 192 SW Ad S81 (Tex, 2006), Hower ause we conclude we de not have jurisdiction aver
this appeal. we do neticach Smith's. complaint about the sevCODE
commissioner determines the postudgment interest rate as provided by statute. Seo TEX. Ft
ANN. § 304,003{c) (Vernon 2006), This statutory rate is published in the Texis Revister. See TEN,
Fin. CODE ANN. § 304.004 (Vernon 2006).
In this case, the trial court's judgment did not expressly include an award of postjudgment
interest and more importantly did not specify the postjudyment interest rate. Consequently, RPL
filed a motion for judgment nunc pro tunc. In the motion, it asserted the trial court’s failure to award
postjudyment interest and specify the applicable postjudyment interest rate was a clerical error that
could be corrected nunc pro tune. In the motion, RPL relied upon summary judgment evidence and
the terms of the guaranty to establish the proper interest rate was 14 percent, the same rate that was
awarded as prejudgment interest. Smith responded that the instant suit is a suit on the guaranty, not
on the note. The note provided for an interest rate, but the guaranty did not itself specify any rate
of interest. According to Smith, whether the interest rite provided for in the note applies to the
guarantee is not a clerical determination. The trial court denied the motion.
On appeal, Smith asserts the trial court's failure to specify the postjudgment interest rate in
the judgment makes the judgment so uncertain that it is not final. The issue is whether
determination of the postjudgment interest rate is. a ministerial act. A ministerial act is one that the
law prescribes and defines with such precision und certainty as to leave nothing to the exercise of
discretion or judgment. See City of Lancaster v, Chambers, 883 S.W.2d 650, 654 (Tex. 1994) (citing
Rains v. Simpson, 50 Tex. 495, 501 (1987). If an action involves personal deliberation, decision,
and judgment, it is not mi
sterial. See City of Lancaster, 883 §.W.3d at 654.
A judgment that fails to specify the amount of postjudgment interest does not necessarily
make the judgment uncertain or indefinite. Cf Zieman Ltd, 233 S.W3d at 553 (prejudgment
interest case), The pertinent question is whether the applicable rate of interest can be determinedby ministerial officers. See id. According to Smith, the posyudgment rate cannot be determined
ministerially in this case because there ts a genuine dispute regarding the Proper posyudgment rate.
We agree.
The judgment against Smith is on a guaranty that did not itself provide for a rate of interest.
The note on which that guaranty was based recites two interest rates, a“contract rate” and a “default
rate.” At the hearing on RPL's motion for judgment nune pro tunc, RPL admitted it was sevking
a judgment nunc pro tunc to resolve any uncertainty as to the postjudgment interest rate. Moreover,
while RPL asserted the default contract rate with respect to the note (and the rate awarded as
prejudgment interest on the guaranty) was the proper rate of postjudgment interest on the guaranty,
the trial court suggested the five-percent statutory rate was the proper rate. We conclude a
ministerial officer could not determine the appropriate postjudgment intcrest rate applicable to the
Judgment in this case without personal deliberation, decision, or judgment. Thus, we conclude the
judgment is not sufficiently certain to be enforced by writ of execution and, as a result, is not final.
Consequently, we dismiss this appeal for want of jurisdiction.
JUSTICE
080856F.P05
Preview
DISMISS and Opinion Filed July 27, 2010 In The Court of Appeals Fifth District of Gexas at Dallas No. 05-08-00856-CV MILTON M. SMITH, Appellant v. RHODES PROPERTIES, LTD., Appellee On Appeal from the 160th Judicial District Court Dallas County, Texas Triai Court Cause No. 08-03866-H MEMORANDUM OPINION Before Justices O'Neill, Francis, and Murphy Opinion By Justice O'Neill Appellant Milton M. Smith appeals a judgment in favor or Rhodes Properties, Ltd. (RPL) on a personal guaranty. Smith raises four issues. In his first issue, Smith contends the judgment from which he appeals is not final. In his remaining three issues, Smith complains of the trial court's summary judgment, a severance order, and a posyudgment injunction. For the following reasons, we dismiss this appeal for want of jurisdiction. ‘ Appellant Milton M. Smith is the majority sharcholder of BABS Holdings. Appellee RPL loaned BABS $4,000.000.00 in connection with an asset purchase agreement in which BABS acquired the assets of RPL. According to RPL, Smith personally guaranteed the note. A dispute subsequently arose regarding RPL*s financial statements. The parties entered into a moditicationsigreement and release m which RPL reduced the purchase price and BABS “for itselPand on behalf of {Smith]” released RPL trom all claims and dete ining to the purchase agreement transaction. BABS subsequently defiulted on the note. RPL. sucd BABS on the vote and Smith on the guaranty. Smith answered with a general denial and raised several defenses to the guaranty including negligent misrepresentation, fraud, estoppel, and unclean hands. Smith also filed counterclaims against RPL. and a third-party petition against its owners, Ronald E. Rhodes and Brenda Rhodes. The trial court ultimately granted a summary judgment in favor of RPL against Smith on the guaranty and against Smith on Smith’s affirmative claims. The trial court also granted summary Judgment in favor of RPL on its claim against BABS on the note. The summary judgment reserved the issue of attorney's Ives for trial. The order did not award postjudgment interest, specifically crossing out any such award. The order contained no language suggesting finality. The partics subsequently stipulated to reasonable and necessary attorney's fecs and the trial court signed an “Agreed Order Approving Attomeys’ Fee Claim and Amending Partial Summary Judgment” and contained no language suggesting finality. In that order, the trial court awarded RPL its altomey’s fees. This order again did nol expressly award postjudgment interest. Smith then tiled a First Amended Counterclaim and First Amended Third Party petition against RPL and the Rhodeses purporting to raise new defenses to the guaranty as well as a new claim against R. Rhodes. RPL then filed a motion to sever all claims and counterclaims between RPL and Smith from the underlying suit. “The trial court granted the s verance and assigned a separate cause number tothe claims between RPL and Sauth, The appeal before us concerns the severed claims.! Smith led a “conditional” notice of appeal asserting no tinal judgment ted, but in the event he was incorrect, secking to appeal the summary judgment. According to Smith, no final Judgment existed because the trial court did not resolve RPL’s claim against him for postjudgment intercst or costs of court. He asserted, under the facts of this case, the award of postjudgment interest had to be judicially resolved and was not a ministerial determination. Consequently, the judgment could not be executed upon and is not final. A judgment that finally disposes of all parties and all claims is final. Lehmann v. Har-Con Corp., 39 S.W.3d 191, 200 (Tex. 2001). A final judgment must also be certain so that it can be enforced by writ of execution. Ziemian v. TX Arlington Oaks Apartments, Lid., 233 $.W.3d 548, 553 (Tex. App.-Dallas 2007, pet. stricken ); HE. Butt Grocery Co. v. Bay, Inc., 808 S.W.2d 678, 680 (Tex. App.-Corpus Christi 1991, writ denied). Ministerial officers must be able to carry the Judgment into execution without ascertainment of additional facts. Ziemian, 233 S.W.3d at $53. The Texas Finance Code requires a money judgment to specify the postjudyment interest rate applicable to the judgment. Sce TEX. FIN. CODE ANN. § 304.001 (Vernon 2006). A money judgment “on a contract that provides for interest or time price differential” carns postjudgment interest at a rate equal to the lesser of: (1) the rate specified in the contract, which may be a variable rate; or (2) 18 percent a year. TEN. FIN. CODE ANN. § 304.002 (Vernon 2006). Ifa money judgment is on a contract that does not provide for interest or time price differential, the consumer credit ' The parties subsequently fled a joint moon to abate seeking abatement of the original action pending a resolution by this Court of this appeal. ‘The joint motion sought abatement because “the Original Case and Severed Case involve common partes and key overlapping factual and legal issues.” Notably, severance 1s proper only the severed claim Is Hot so interwoven with the remaining action that they involve the same facts and issues. Guar. Led Sav. Bank v Horseshoe Operating Co, 793 S.W.2d 652. 658 (Tex. 1990), Further. 11 is improper to use a severance onder to obtain an advisory opinion tron this Court, Jones v cin Flood Research Ine, V33S W.3d 718. 223(Tex. App.- Dallas 2005), rev dan other grounds, 192 SW Ad S81 (Tex, 2006), Hower ause we conclude we de not have jurisdiction aver this appeal. we do neticach Smith's. complaint about the sevCODE commissioner determines the postudgment interest rate as provided by statute. Seo TEX. Ft ANN. § 304,003{c) (Vernon 2006), This statutory rate is published in the Texis Revister. See TEN, Fin. CODE ANN. § 304.004 (Vernon 2006). In this case, the trial court's judgment did not expressly include an award of postjudgment interest and more importantly did not specify the postjudyment interest rate. Consequently, RPL filed a motion for judgment nunc pro tunc. In the motion, it asserted the trial court’s failure to award postjudyment interest and specify the applicable postjudyment interest rate was a clerical error that could be corrected nunc pro tune. In the motion, RPL relied upon summary judgment evidence and the terms of the guaranty to establish the proper interest rate was 14 percent, the same rate that was awarded as prejudgment interest. Smith responded that the instant suit is a suit on the guaranty, not on the note. The note provided for an interest rate, but the guaranty did not itself specify any rate of interest. According to Smith, whether the interest rite provided for in the note applies to the guarantee is not a clerical determination. The trial court denied the motion. On appeal, Smith asserts the trial court's failure to specify the postjudgment interest rate in the judgment makes the judgment so uncertain that it is not final. The issue is whether determination of the postjudgment interest rate is. a ministerial act. A ministerial act is one that the law prescribes and defines with such precision und certainty as to leave nothing to the exercise of discretion or judgment. See City of Lancaster v, Chambers, 883 S.W.2d 650, 654 (Tex. 1994) (citing Rains v. Simpson, 50 Tex. 495, 501 (1987). If an action involves personal deliberation, decision, and judgment, it is not mi sterial. See City of Lancaster, 883 §.W.3d at 654. A judgment that fails to specify the amount of postjudgment interest does not necessarily make the judgment uncertain or indefinite. Cf Zieman Ltd, 233 S.W3d at 553 (prejudgment interest case), The pertinent question is whether the applicable rate of interest can be determinedby ministerial officers. See id. According to Smith, the posyudgment rate cannot be determined ministerially in this case because there ts a genuine dispute regarding the Proper posyudgment rate. We agree. The judgment against Smith is on a guaranty that did not itself provide for a rate of interest. The note on which that guaranty was based recites two interest rates, a“contract rate” and a “default rate.” At the hearing on RPL's motion for judgment nune pro tunc, RPL admitted it was sevking a judgment nunc pro tunc to resolve any uncertainty as to the postjudgment interest rate. Moreover, while RPL asserted the default contract rate with respect to the note (and the rate awarded as prejudgment interest on the guaranty) was the proper rate of postjudgment interest on the guaranty, the trial court suggested the five-percent statutory rate was the proper rate. We conclude a ministerial officer could not determine the appropriate postjudgment intcrest rate applicable to the Judgment in this case without personal deliberation, decision, or judgment. Thus, we conclude the judgment is not sufficiently certain to be enforced by writ of execution and, as a result, is not final. Consequently, we dismiss this appeal for want of jurisdiction. JUSTICE 080856F.P05