Opinion
No. 05-08-00856-CV
Opinion Filed July 27, 2010.
On Appeal from the 160th Judicial District Court, Dallas County, Texas, Trial Court Cause No. 08-03866-H.
Before Justices O'NEILL, FRANCIS, and MURPHY.
MEMORANDUM OPINION
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 postjudgment injunction. For the following reasons, we dismiss this appeal for want of jurisdiction.
Appellant Milton M. Smith is the majority shareholder 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 modification agreement and release in which RPL reduced the purchase price and BABS "for itself and on behalf of [Smith]" released RPL from all claims and defenses pertaining to the purchase agreement transaction.
BABS subsequently defaulted on the note. RPL sued BABS on the note 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 fees for trial. The order did not award postjudgment interest, specifically crossing out any such award. The order contained no language suggesting finality. The parties subsequently stipulated to reasonable and necessary attorney's fees and the trial court signed an "Agreed Order Approving Attorneys' Fee Claim and Amending Partial Summary Judgment" and contained no language suggesting finality. In that order, the trial court awarded RPL its attorney's fees. This order again did not expressly award postjudgment interest. Smith then filed 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 severance and assigned a separate cause number to the claims between RPL and Smith. The appeal before us concerns the severed claims.
The parties subsequently filed a joint motion 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 parties and key overlapping factual and legal issues." Notably, severance is proper only if the severed claim is not so interwoven with the remaining action that they involve the same facts and issues. Guar. Fed. Sav. Bank v. Horseshoe Operating Co., 793 S.W.2d 652, 658 (Tex. 1990). Further, it is improper to use a severance order to obtain an advisory opinion from this Court. Jones v. Am. Flood Research Inc,, 153 S.W.3d 718, 723 (Tex. App.-Dallas 2005), rev'd on other grounds, 192 S.W.3d 581 (Tex. 2006). However, because we conclude we do not have jurisdiction over this appeal, we do not reach Smith's complaint about the severance.
Smith filed a "conditional" notice of appeal asserting no final judgment existed, but in the event he was incorrect, seeking 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 interest 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, Ltd., 233 S.W.3d 548, 553 (Tex. App.-Dallas 2007, pet. stricken); H.E. 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 553. The Texas Finance Code requires a money judgment to specify the postjudgment interest rate applicable to the judgment. See Tex. Fin. Code Ann. § 304.001 (Vernon 2006). A money judgment "on a contract that provides for interest or time price differential" earns 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. Tex. Fin. Code Ann. § 304.002 (Vernon 2006). If a money judgment is on a contract that does not provide for interest or time price differential, the consumer credit commissioner determines the postjudgment interest rate as provided by statute. See Tex. Fin. Code Ann. § 304.003(c) (Vernon 2006). This statutory rate is published in the Texas Register. See Tex. 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 postjudgment interest rate. Consequently, RPL filed a motion for judgment nunc pro tunc. In the motion, it asserted the trial court's failure to award postjudgment interest and specify the applicable postjudgment interest rate was a clerical error that could be corrected nunc pro tunc. 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 rate 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 and 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 ministerial. See City of Lancaster, 883 S.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. Ziemian Ltd., 233 S.W.3d at 553 (prejudgment interest case). The pertinent question is whether the applicable rate of interest can be determined by ministerial officers. See id. According to Smith, the postjudgment rate cannot be determined ministerially in this case because there is a genuine dispute regarding the proper postjudgment 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 nunc pro tunc, RPL admitted it was seeking 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 interest 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.