AMX Enterprises, L.L.P. v. Master Realty Corp.
283 S.W.3d 506 | Court of Appeals of Texas | 2009
What This Case Means for Subcontractors
AMX Enterprises sued Master Realty Corp. for unpaid contract work on a hotel flood remediation project, claiming violations of Texas's Prompt Payment to Contractors Act. The court ruled that trial courts cannot delay statutory interest payments due to litigation delays, contractors cannot collect both statutory 18% interest and common law interest simultaneously, and attorney fees for in-house counsel must be calculated at market rates. This decision protects contractors' right to timely interest payments under state law.
Key Takeaways
- •You are entitled to the full 18% statutory interest under the Prompt Payment Act—courts cannot reduce or delay it because of litigation. Document all unpaid invoices immediately to start the interest clock.
- •Do not accept settlement offers that include both statutory interest and common law prejudgment interest. You can only recover one type, so negotiate carefully.
- •If you use in-house counsel for disputes, demand they calculate fees at market rates for similar outside counsel, not at cost-plus rates. This typically results in higher recoverable fees.
Trial court erred by failing to award AMX the full amount of interest mandated by property code section 28.004.
Frequently Asked Question
Can a court delay my statutory interest payment under the Prompt Payment Act because of litigation?
No. Texas courts cannot toll (delay) statutory interest under the Prompt Payment to Contractors Act, even if litigation causes delays. You are entitled to the full 18% interest from the invoice date. This protects contractors from losing interest money due to court backlogs or settlement negotiations.
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