In today’s world most judgments entered are not covered by insurance. If such judgments are to be collected, they have to be enforced – often through further litigation. But if a judgment is incorrectly drafted or incorrectly litigated, it may be voidable, subject to direct or collateral attack, or void and unenforceable. Nearly all of the problems that prevent a judgment from being enforced are the result of malpractice but are easy to avoid. So what makes a judgment sound and enforceable?
- Good service makes for good judgments. Without proper service a judgment is void or voidable. Personal service on an individual is best and, when not possible, a motion for substitute service should be filed and supported by an affidavit that gives one a reasonable belief the person will be notified by serving someone else at the address identified or by post at the address. An order granting substitute is required and must be served with the citation. Corporations sometimes fail to maintain a registered agent. Service on the Secretary of State is required if a registered agent cannot be served – NOT substitute service. An affidavit showing failed efforts in serving the registered agent is required before service on the Secretary of State is appropriate. No motion or order is required.
- Good names make for good judgments. If you cannot identify your defendant you are not ready to sue (unless you sue under Rule 215 to try to discover the identify the correct party). Assumed names and john doe names are to be avoided unless you know where they can be served. Even then, as soon as the defendant answers and discloses his real name the petition should be amended to sue under the correct name. Never take a judgment against an assumed name or john doe or base a judgment on pleadings which identify a party solely under an assumed name or as a john doe.
- Good returns make for good judgments. Even if service is made, if the citation is defective it can be grounds for a new trial or open the judgment to collateral attack. Make sure EVERYTHING in the citation is technically correct. If there are errors, insist they be corrected and the citation re-issued. Spell names and addresses correctly. Check all returns of citation and make sure the correct name is identified, the address for service is complete and legible, and bears a date and time of service.
- Clearly identified parties to judgments make for good judgments. If there are multiple defendants, then a judgment that says judgment is being taken against “Defendant” fails to identify whether it is against a particular defendant or all of the defendants. It is too vague to enforce. State in whose favor the judgment is being taken and against whom it is being taken. If more than one party is responsible for the entire judgment, make sure the judgment identifies all such parties as being jointly and severally liable.
- Good awards make for good judgments.
Pre-judgment Interest. A judgment for “pre-judgment interest as allowed by law” is too vague and, arguably, unenforceable. Here are the general rules for interest: damages in commercial litigation matters are usually liquidated and accrue interest as provided in a contract (not to exceed 18% per annum) or, if not stated, at the statutory rate of 6% per annum thirty days after accrual. Property and personal injury damages accrue interest at the statutory rate of post-judgment interest, currently 5%, as simple interest. Interest begins to accrue either180 days after written notice of damage is given or when a suit is filed, whichever is earlier. State the date interest begins, how it is calculated, and state it as an actual amount: “Plaintiff A is awarded pre-judgment interest of 6% per annum against Defendant B calculated on damages of $50,000.00 beginning April 1, 2018, and continuing until the day before the entry of judgment in the sum of $2,456.02.” The Post-Judgment Interest Rate MUST be stated in a judgment per statute. Post-judgment interest accrues at the contractual rate of interest or, absent such, at the statutory rate set by the Texas Consumer Credit Commissioner, currently 5%. All post-judgment interest compounds annually. “This judgment shall accrue post-judgment interest of 5% per annum from the date of judgment until paid.”
- Finality makes for good judgments. The magic language is: “This judgment disposes of all claims between all parties, is final, and is subject to appeal. Any relief not expressly granted herein is DENIED.” One caveat: all of this must be true. If two parties submit a final judgment but a third party is not a party to the approval of the judgment, that party may not be bound by the judgment and the judgment will not be final notwithstanding such language. If a defending party settles but other defendants remain, sever out the settling defendant and enter final judgment between the settling parties. A judgment is unenforceable if it is not final.