The Fort Worth Court of Appeals, in a matter of first impression, determined that Prompt Pay interest under Chapter 28 of the Texas Property Code, the Prompt Pay Act, and common law pre-judgment interest cannot both be recovered in the case of AMX Enterprises, LLP v. Master Realty Corp., ___S.W.3d___, 2009 WL 51036 (Tex. App.—Fort Worth Jan. 8, 2009, no pet. h.). Master Realty Corp. ("MRC") hired AMX Enterprisers, LLP ("AMX") to remediate flood damage in one of its hotels but failed to pay AMX its contract balance at the completion of the project. AMX sued MRC for breach of contract, violation of the Prompt Pay Act, foreclosure of its mechanics lien and for the recovery of its attorneys’ fees. The case was tried to a jury which award AMX its contract balance. AMX then moved for entry of the judgment and the trial court entered judgment in favor or AMX but reduced AMX’s Prompt Pay interest and denied the award of common law interest. The trial court reduced the Prompt Pay interest because it found that AMX had caused 745 days of delay in the litigation. AMX appealed the trial court’s award.

      The court of appeals reviewed Chapter 28 of the Texas Property Code and noted that the Act did not contain a provision for tolling the accrual of interest during periods of litigation delay. The court also noted that no Texas court has held that a trial court may toll interest accruing under the Act. Therefore, the court held that the trial court erred by not awarding AMX the full amount of interest as provided under the Act.

      Next, the court determined a matter of first impression: whether or not a contractor may recover Prompt Pay interest under the Act and common law interest. The court stated that prejudgment interest serves two purposes. The first is to compensate the claimant for the lost use of the money due as damages during the lapse of time between the accrual of the claim and the judgment. The second purpose is to encourage settlement and remove incentives for delay. The court of appeals determined that the Prompt Pay Act does fulfill both the purposes of prejudgment interest. Therefore, the court held that a contractor cannot recover interest under the Prompt Pay Act and common law interest in a single award.