Prejudgment Interest in Family Law & Divorce Cases

In the case of Bufkin vs. Bufkin, the trial court awarded one spouse, “...prejudgment interest, measured from [the Divorce Date] at the rate of 8.25% per annum simple interest, in the sum of One Hundred Twenty Four Thousand Five Hundred Seventy Nine and 12/100 Dollars ($124,579.12).” However, on review by the higher Texas Supreme Court under "abuse of discretion" standards, Wilmer-Hutchins Indep. School Dist v. Smiley, 97 S.W.3d 702, 706 (Tex.App.-Dallas 2003, pet. denied), the Supreme court reasoned that courts do have the equitable power to award prejudgment interest. Perry Roofing Co. v. Olcott, 744 S.W.2d 929 (Tex.1988); Rio Grande Land & Title Co. v. Light, 758 S.W.2d 747 (Tex. 1988) (per curiam). However, where prejudgment interest is sought at common law as an element of the damages, a plaintiff must plead for it. Benavidez, 726 S.W.2d at 25 (citing Republic Nat. Bank v. Northwest Nat. Bank, 578 S.W.2d 109, 117 (Tex. 1978)). A prayer for general relief does not suffice. Id.; Vidor Walgreen Pharm. v. Fisher, 728 S.W.2d 353 (Tex. 1987)(per curiam). In the case of Bufkin, only a general relief prayer was originally sought in the original pleadings, and thus the prejudgment interest was reversed for abuse of discretion by the trial court in awarding prejudgment interest.

There are two separate bases for an award of prejudgment interest: an enabling statute, or general principles of equity. Johnson & Higgins of Texas, Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507 (Tex. 1998); Granite Const. Co. v. Mendoza, 816 S.W.2d 756 (Tex.App.-Dallas 1991, writ denied). If the claimant's or Petitioner's recovery is predicated on a statutory right, he/she is not required to plead a claim for prejudgment interest. City of Houston v. Fletcher, 166 S.W.3d 479, 493 (Tex.App.-Eastland 2005, pet.denied); Olympia Marble & Granite v. Mayes, 17 S.W.3d 437, 441 (Tex.App.-Houston[1 Dist.] 2000, no pet.)(citing Benadividez v. Isles Const. Co., 726 S.W.2d 23, 25 (Tex. 1987)). Until its repeal in 1997, Article 5069-1.06 of the Texas Revised Civil Statutes provided for prejudgment interest in contract cases. Tex. Rev. Civ. Stat. Ann. Art. 5069-1.03 (Vernon 1987 & Supp. 2007). The statute now governing prejudgment interest is the Texas Finance Code. Tex. Fin. Code Ann. §§ 301.001-304.302 (Vernon 2006); de la Garza v. de la Garza, 185 S.W.3d 924, 927-29 (Tex. App.-Dallas 2006, no pet.). The Finance Code provides for the recovery of prejudgment interest in cases involving extensions of credit, wrongful death, personal injury, property damage or condemnation. Tex. Fin. Code Ann. §§ 302.002, 304.101, 304.201 (Vernon 2006).

$75 Million Property Settlement in Madonna's Divorce

The associated press reported Monday that a $75 million property settlement was given to Madonna's Ex, Richie as part of the couple's agreed division of the marital estate. Part of the value of the settlement included the Madonna home estate Aschombe in western England.
( http://news.findlaw.com/ap/e/1403/12-15-2008/20081215102008_62.html )
Although custody and visitation rights were still being worked out. This may be the largest property settlement ever recorded for a marital estate.

Texas follows community property when it comes to property settlements. Generally, properties or marital assets acquired during marriage is considered community property and therefore equally belonging to each spouse at 1/2 each. Although it's fairly common for spouses to divide property by agreement such as the Madonna v. Richie case, but if the issue is contested, Texas courts look to a number of factors in making property division orders.

If you have a divorce case and need legal advise on an amicable property settlement or dispute, visit our web page at http://www.lorenzanalegal.com/practice_areas/family_law.html , or contact our Austin family law attorneys about your case at http://www.lorenzanalegal.com/contact_us/index.html .
We would be glad to review your case and assist you with your family law or divorce matter.