Stephenson, Jr., Cecil B. v. Leboeuf, Diann--Appeal from 189th District Court of Harris County

Affirmed in Part and Reversed and Remanded in Part and Memorandum Opinion filed September 11, 2003

Affirmed in Part and Reversed and Remanded in Part and Memorandum Opinion filed September 11, 2003.

In The

Fourteenth Court of Appeals

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NO. 14-02-00130-CV

NO. 14-02-00134-CV

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CECIL B. STEPHENSON, JR., Appellant

V.

DIANN LEBOEUF, Appellee

On Appeal from the 189th District Court

Harris County, Texas

Trial Court Cause Nos. 94-39354, 85-66435-A

M E M O R A N D U M O P I N I O N

This case involves not only an interpretation of a judgment issued by this Court, but the judgment of a trial court. It also involves a separate garnishment/interpleader action. Appellant, Cecil B. Stephenson, Jr., brings this appeal from two separate, but related, judgments below, one of which was appealed to this Court several years ago. The other action the post-judgment garnishment/interpleader, was the subject of a writ of injunction this Court issued. We find the trial court did not err in (1) interpreting our judgment and awarding certain amounts to Stephenson and LeBoeuf from an escrow account that was the subject of the first lawsuit, (2) denying Stephenson=s turnover motion, or (3) granting Diann LeBoeuf=s motion for summary judgment. However, we find the trial court erred in failing to grant Stephenson post judgment interest. Consequently, we affirm in part, and we reverse and remand in part.

DISCUSSION

Stephenson raises four issues on appeal. First, he argues that the trial court erroneously interpreted this Court=s previous judgment. Second, Stephenson complains that the trial court erred in denying his motion for a turnover regarding an escrow account. Third, Stephenson contends that even if the trial court correctly interpreted this Court=s judgment, he still should have received post judgment interest on the entire judgment. Finally, he alleges that the trial court erred by granting summary judgment and only awarding him $6,530 of the escrow account. The facts of this appeal are well known to the parties, so we do not recite them in full here.

I. Correctly Interpreting the Judgment

First, Stephenson complains the trial court incorrectly interpreted the judgment of this Court. He argues the trial court should have held that both his $6,530 in damages and $44,400 in attorney=s fees must be paid from the escrow account. We disagree. To explain why we disagree, we must look briefly at what happened in the trial court before the first appeal.

In the first trial, the jury determined that Stephenson should receive $6,530 from the escrow account. When that same jury calculated attorney=s fees, it awarded Stephenson $34,400 for trial and an additional $10,000 for an appeal. The trial court disregarded the jury=s findings and granted LeBoeuf=s judgment notwithstanding the verdict that Stephenson take nothing. Stephenson appealed to this Court. When we interpreted the jury=s findings and reviewed the trial court=s decision, we reversed the trial judge=s holding that Stephenson should not recover anything. We stated the following in our opinion:

Therefore, we reverse the portion of the judgment that Stephenson take nothing on his claim for the funds in the escrow account and render judgment that Stephenson recover $6,530.00 of the funds in the escrow account and modify the judgment so that LeBoeuf recovers the remaining amount of the funds in the escrow account. . . . Finally, we reverse the judgment awarding Stephenson no attorneys fees and render that Stephenson recover attorney=s fees in the amount of $34,400.00 for trial, $10,000 in the event of an appeal to the court of appeals, and $10,000 for appeal to the Texas Supreme Court.

Stephenson v. LeBoeuf, 16 S.W.3d 829, 845 (Tex. App.CHouston [14th Dist.] 2000, pet. denied). Our judgment Areiterated@the directions we gave in our opinion:

We therefore order the judgment of the court below REVERSED and RENDER judgment that appellee take nothing against appellant, Cecil B. Stephenson, on her claims for breach of fiduciary duty, mental anguish, exemplary damages, and attorney=s fees. We further reverse and render judgment that appellant recover $6,530 of the funds in the escrow account and $34,400 in attorney=s fees for trial, $10,000 for appeal to the court of appeals, and $10,000 for appeal to the Texas Supreme Court.

We did not order payment of attorney=s fees from the escrow account. We overrule Stephenson=s first issue on appeal.

II. Motion to Turnover Escrow Funds

Second, Stephenson complains that if the trial court correctly interpreted our judgment, and we hold that it did, then the trial court erred by not granting his motion for turnover. We disagree.

When a trial court grants or denies a turnover order we review the decision under an abuse-of-discretion standard. Tex. Civ. Prac. & Rem. Code Ann. '31.002(b); Beaumont Bank v. Buller, 806 S.W.2d 223, 226 (Tex. 1991). We may reverse a trial court=s denial of an order only after finding the order clearly arbitrary and unreasonable. Simon v. York Crane & Rigging Co., 739 S.W.2d 793, 795 (Tex. 1987). And, appellant bears the burden of showing the trial court abused its discretion. See Clade v. Larsen, 838 S.W.2d 277, 280 (Tex. App.CDallas 1992, writ denied). To find the trial court abused its discretion, we must conclude that the facts and law permit the trial court to make but one decision. Brink v. Ayre, 855 S.W.2d 44, 46 (Tex. App.CHouston [14th Dist.] 1993, no writ).

A turnover order is a discretionary remedy that, if granted by the trial court, allows a judgment creditor access to the debtor=s property to satisfy the judgment. Tex. Civ. Prac. & Rem. Code Ann. '31.002. According to section 31.002, a judgment creditor can reach non exempt property to satisfy a judgment if the property cannot be readily attached by the legal process. The creditor must show the trial court that (1) the debtor owns the property, (2) the property cannot be readily attached, and (3) the property is not exempt. Tex. Civ. Prac. & Rem. Code Ann. '31.002(a); Childre v. Great Southwest Life Ins. Co., 700 S.W.2d 284, 288 (Tex. App.CDallas 1985, no writ). Under this statute, the creditor has the burden of proof. Sloan v. Douglass, 713 S.W.2d 436, 441 (Tex. App.CFort Worth 1986, writ ref=d n.r.e.). Even if the creditor establishes the three elements, a turnover order is a discretionary remedy by a trial courtCnot mandatory relief. See Brink, 855 S.W.2d at 46; Barlow v. Lane, 745 S.W.2d 451, 453B54 (Tex. App.CWaco 1988, writ denied).

For a judgment creditor to prove these three elements, he must introduce more evidence than just a motion for turnover. The statute requires a factual showing that the judgment debtor has non exempt property that is not readily subject to ordinary execution. Schultz v. Fifth Judicial Dist. Court of Appeals at Dallas, 810 S.W.2d 738, 740 (Tex. 1991). In Bergman, the El Paso court interpreted Schultz to require that the trial court have a hearing, determine what specific assets are exempt and what assets are subject to the court=s order, and then to direct the payment as the court determines is proper. Bergman v. Bergman, 828 S.W.2d 555, 557 (Tex. App.CEl Paso 1992, no writ). Similarly, the Beaumont court has held that one factor the trial court should consider is whether evidence exists to support a turnover. Roebuck v. Horn, 74 S.W.3d 160, 163 (Tex. App.CBeaumont 2002, no pet.). And, the Dallas appellate court went so far as to find that when a trial court enters a turnover order without hearing evidence, the trial court abuses its discretion. Williams v. Nat=l Mortgage Co., No. 05 94 01529 CV, 1995 WL 519445 (Tex. App.CDallas Aug. 31, 1995, no pet.) (not designated for publication).

Here, Stephenson did not present any evidence to the trial court regarding the second prong, namely that the property could not be attached. He did not request a hearing, and the trial court did not conduct one. Although the jury clearly awarded the money in the escrow account to LeBoeuf, nothing in the record reflects that these assets were not subject to a post-judgment garnishment. As a result, it was not an abuse of discretion for the trial court to deny his motion for turnover.

III. Post Judgment Interest

Third, Stephenson argues, even if the trial court correctly interpreted the judgment, and we hold that it did, then he still should receive post judgment interest on that judgment. On the other hand, LeBoeuf argues that since Stephenson did not specifically plead post judgment relief, he should not receive it. We disagree and award Stephenson post judgment interest.

Previously, the Legislature stated in the Revised Civil Statutes that A[a]ll judgments of the courts of this state based on a contract . . . earn interest.@ Tex. Rev. Civ. Stat. Ann. art. 5069 1.05, ' 1 (Vernon 1987). Texas then codified the civil statutes and placed this provision in the Finance Code. See generally Tex. Fin. Code Ann. ' 304.001; see also Act of May 24, 1997, 75th Leg., R.S., ch. 1008 '1, 1997 Tex. Sess. Law Serv. 3435. The legislative history proposed that the old civil statute should be codified in the Finance Code with no substantive change in the law. Tex. Fin. Code Ann. '1.001(a); Act of May 24, 1997, 75th Leg., R.S., ch. 1008, '7 & preamble, 1997 Tex. Sess. Law Serv. 3091, 3603. However, the new codified statute lost the mandatory language that all judgments would earn interest. Instead, the statute instructs the trial court to include the interest rate applicable to a judgment, and then provides the formula in determining the correct interest rate. Tex. Fin. Code Ann. '' 304.001, 304.002, 304.003. Even though the precise language is not present, we find the intent of the legislature was for all judgments to earn interest.

As the Texas Supreme Court recently articulated, the purpose of post judgment interest is not to punish a debtor for exercising his right to appeal. Miga v. Jenson, 96 S.W.3d 207, 212 (Tex. 2002). Instead, the interest is to compensate for a judgment creditor=s lost opportunity to invest the money awarded as damages at trial. Id. Many courts have held that post judgment interest is so fundamental that the interest is recoverable even if the trial court=s judgment does not reference the interest. Jarrin v. Sam White Oldsmobile Co., 929 S.W.2d 21, 25 (Tex. App.CHouston [1st Dist.] 1996, writ denied); El Universal, Compania Periodistica Nacional, S.A. de C.V. v. Phoenician Imports, Inc., 802 S.W.2d 799, 804 (Tex. App.CCorpus Christi 1990, writ denied); Crenshaw v. Swenson, 611 S.W.2d 886, 892B93 (Tex. Civ. App.CAustin 1980, writ ref=d n.r.e.). In fact, in reference to the previous statute, the Texas Supreme Court stated that interest accrues automatically once a court renders its judgment. Office of the Attorney Gen. of Tex. v. Lee, 92 S.W.3d 526, 528 (Tex. 2002) (emphasis added).

A general prayer for relief will support an award of statutorily-authorized interest. See, e.g., Olympia Marble & Granite v. Mayes, 17 S.W.3d 437, 441 (Tex. App.CHouston [1st Dist.] 2000, no pet.). In Olympia, the court discussed this principle in a prejudgment interest case. The First Court of Appeals held that even if a personal injury plaintiff does not specifically plead prejudgment interest, if the plaintiff=s claim falls within the scope of a statute authorizing prejudgment interest, then the plaintiff is entitled to prejudgment interest based on a claim for general relief alone. Id. Accordingly, if the statute authorizes post judgment interest, then a plea for general relief will suffice. See id. Because post judgment relief is statutorily authorized, a prayer for general relief will entitle Stephenson to post judgment interest. See id. Here, Stephenson concluded his second amended answer with the general prayer for any and all relief at law and in equity to which he may show himself justly entitled. Therefore, Stephenson should have received post judgment interest on his escrow award of $6,530 and his monetary award of $44,400.

We grant Stephenson=s third issue in requesting post judgment interest. We remand this issue to the trial court to calculate interest and render judgment accordingly.

IV. Interpleader and Homestead Proceeds

Finally, Stephenson argues the trial court erred in entering a summary judgment on LeBoeuf=s motion for summary judgment in the garnishment/interpleader action. The garnishment/interpleader action involved the same escrow funds that we discussed under the first issue. These funds were also the subject of the opinion and judgment out of this Court. The bank holding the escrow funds simply interpleaded them into the court=s registry.

Stephenson claimed in that proceeding that he was entitled to recover a total of $50,930 (the $6,530 the jury awarded from the escrow account plus his $44,000 in attorney=s fees) from the escrow account. LeBoeuf moved for summary judgment[1] because Stephenson=s claims had already been adjudicated in the main suit and resolved by this Court on appeal, and thus were barred by res judicata and/or issue preclusion. The trial court granted the motion on this basis and we agree with the conclusion.

Res judicata prevents the relitigation of a finally adjudicated claim and related matters that were, or should have been, litigated in a prior suit. Lopez v. Sulak, 76 S.W.3d 597, 606 (Tex. App.CCorpus Christi 2002, no pet.). The elements of res judicata include the following: (1) a prior final judgment on the merits; (2) identity of parties; and (3) a second action based on the same claims that could have been raised in the first action. Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996). Here, these three elements have been met: the trial court issued an amended final judgment on the merits incorporating this Court=s opinion and stating how much each party would receive from the escrow account, the parties are identical in both claims, and this issue was raised in the trial court below. Both of the parties attempt to relitigate whether the funds in the escrow account are from the sale of LeBoeuf=s homestead. At this point in the case, that question is moot. The jury in the first case decided what amount of money Stephenson would receive from the escrow account. This Court issued an opinion confirming precisely what amount of funds Stephenson could take from the escrow account. The trial court entered a AFinal Judgment Reformed by the Mandate of the Fourteenth Court of Appeals,@ in which it specifically stated how much of the escrow funds would go to Stephenson and how much to LeBoeuf. If Stephenson thought he should have been able to reach more of the escrow funds because of a prior judgment, he could have and should have litigated this issue in the first trial. He did not. His argument is now barred by res judicata. See id.

CONCLUSION

For these reasons, we overrule Stephenson=s first, second, and fourth issues. We sustain Stephenson=s third issue, and find that the trial court erred by not awarding post-judgment interest on Stephenson=s judgment. We remand that issue to the trial court to calculate post judgment interest and render a judgment accordingly.

/s/ Wanda McKee Fowler

Justice

Judgment rendered and Memorandum Opinion filed September 11, 2003

Panel consists of Chief Justice Brister, Justices Fowler and Edelman.

[1] There were two motions for summary judgment by LeBoeuf; this appeal concerns the second one.