CONTRACTUAL “LATE-PAYMENT INTEREST” = “COMPENSATORY DAMAGES” FOR SUPERSEDEAS PURPOSES

Top Cat Ready Mix, LLC v. Alliance Trucking, L.P.
Dallas Court of Appeals, No. 05-18-00175-CV (December 27, 2018)
Chief Justice Wright and Justices Evans (Opinion, linked here) and Brown

Ken Carroll

Under Civil Practice & Remedies Code § 52.006(a) and Appellate Rule 24.2(a)(1), an appellant can supersede a money judgment pending appeal by filing security in an amount equal to the “compensatory damages” and costs awarded in that judgment, plus interest on that amount for the anticipated duration of the appeal. Like attorney’s fees, pre-judgment interest commonly is understood not to be part of the “compensatory damages” amount that must be superseded. See In re Xerox Corp., No. 16-0671, 2018 WL 3077704, at *8 and n. 66 (Tex. June 22, 2018) (orig. proceeding). But what about interest for late payments that is prescribed by the contract upon which the contested judgment is based—“late-payment interest” that, like the principal of the debt, hasn’t been paid and has therefore been awarded to the plaintiff in the judgment? In that case, says the Dallas Court of Appeals, such “contractual interest” is to be treated as part of the “compensatory damages” amount to be superseded in order to stave off execution pending appeal. That “contractual interest” is “a part of the debt, as much so as the principal.” On motion of the appellee Alliance Trucking, therefore, the Court of Appeals increased the supersedeas amount on this appeal to include the “contractual pre-judgment interest” awarded in the judgment, plus interest on that added amount for the estimated duration of the appeal.