delivered the opinion of the Court.
To suspend enforcement of a money judgment pending appeal, a judgment debtor must post security equaling the sum of compensatory damages awarded in the judgment, interest for the estimated duration of the appeal, and costs awarded in the judgment.
I. Background
Porter, Rogers, Dahlman, & Gordon, P.C., a law firm, sued Nalle Plastics Family Limited Partnership for breach of contract, alleging that Nalle failed to pay its legal fees. A jury found that Nalle breached the agreement, resulting in $132,661 in damages. The jury also awarded Porter $150,000 as a reasonable fee for the necessary services of its attorneys in collecting the amount Nalle owed. The trial court signed a judgment awarding Porter “actual damages ... in the amount of ... $132,661.00,” “attorney’s fees ... in the amount of ... $150,000,” pre- and post-judgment interest, and “costs of court.”
To suspend enforcement of the judgment pending appeal, Nalle deposited a cashier’s check with the trial court. Nalle’s deposit included $132,661 for the breach of contract damages, as well as pre- and post-judgment interest, and court costs.
Nalle sought appellate relief. See Tex. R.App. P. 24.4(a). The court of appeals denied Nalle’s motion, reasoning that attorney’s fees should be included in super-sedeas bonds, deposits, and securities for two main reasons. First, the Legislature intended that judgment creditors be protected during the pendency of an appeal.
Nalle deposited the additional amount and sought mandamus relief from this Court. See Tex.R.App. P. 24.4(a). We set the case for argument, 55 Tex. Sup.Ct. J. 757, - S.W.3d -(June 8, 2012), and now conditionally grant relief.
II. The Statute
As part of House Bill 4, a 2003 comprehensive tort reform measure, the Legislature enacted Civil Practice and Remedies Code section 52.006. Before then, appeal
House Bill 4 “reflect[ed] a new balance between the judgment creditor’s right in the judgment and the dissipation of the judgment debtor’s assets during the appeal against the judgment debtor’s right to meaningful and easier access to appellate review.” Elaine A. Carlson, Reshuffling the Deck: Enforcing and Superseding Civil Judgments on Appeal after House Bill f 46 S. Tex. L.Rev. 1035, 1038 (2005). Judgment debtors must now post appeal bonds “equal [to] the sum of ... the amount of compensatory damages awarded in the judgments ... interest for the estimated duration of the appeal[,] and ... costs awarded in the judgment.” Tex. Civ. Prao. & Rem.Code § 52.006(a). The amendment also capped security at the lesser of fifty percent of the judgment debtor’s net worth, or $25 million. Id. § 52.006(b)(2). A trial court must reduce the amount of security if a judgment debt- or shows he is likely to suffer substantial economic harm — a less onerous burden than the previous standard, which required a showing both of irreparable harm to the debtor and that a lesser amount would not substantially impair a judgment creditor’s ability to recover under the judgment after appellate remedies were exhausted. Compare id. §§ 52.006(b)(1), (c), with former Tex.R.App. P. 24.2(b). We amended the procedural rules to conform to the new law. See Tex.R.App. P. 24, amended Aug. 29, 2003, eff. Sept. 1, 2003.
III. Conflict Among the Courts of Appeals
We have not yet addressed whether attorney’s fees should be considered either compensatory damages or costs when calculating supersedeas amounts. The courts of appeals are divided on the issue.
In Fairways Offshore Exploration, Inc. v. Patterson Services, Inc.,
Likewise, in Corral-Lerma v. Border Demolition & Environmental, Inc., No.
In Clearview Properties, L.P. v. Property Texas SC One Corp.,
Conversely, other courts of appeals have found that attorney’s fees should not be included in the amount required to suspend enforcement 'of a judgment. In Shook v. Walden,
Finally, in PopCap Games, Inc. v. MumboJumbo, LLC,
IV. Are attorney’s fees compensatory damages?
A. Attorney’s fees incurred in the prosecution or defense of a claim are not compensatory damages.
The court of appeals held that Porter’s attorney’s fees were “compensatory damages” because the fees “ ‘represented] ... out-of-pocket losses that [the plaintiffs] incurred in prosecuting their breach of contract claims.’ ”
Courts have long distinguished attorney’s fees from damages. See, e.g., Landa v. Obert,
The Legislature also separates attorney’s fees from damages. Texas follows the American Rule, which provides that there can be no recovery of attorney’s fees unless authorized by contract or statute. Tony Gullo Motors I, L.P. v. Chapa,
These cases demonstrate the difference between compensation owed for an underlying harm and fees that may be awarded for counsel’s services. See, e.g., Huff v. Fid. Union Life Ins. Co.,
While attorney’s fees for the prosecution or defense of a claim may be compensatory in that they help make a claimant whole, they are not, and have never been, damages. Not every amount, even if compensatory, can be considered damages. Like attorney’s fees, court costs make a claimant whole, as does pre-judgment interest. Yet it is clear that neither costs nor interest qualify as compensatory damages. Otherwise, there would be no need to list those amounts separately in the superse-deas bond statute. See Tex. Civ. Prac. & Rem.Code § 52.006(a) (security must be “equal [to] the sum of ... the amount of compensatory damages awarded in the judgment^] ... interest for the estimated duration of the appeal[,] and ... costs awarded in the judgment”); see also Spradlin v. Jim Walter Homes, Inc.,
While chapter 52 does not define “compensatory damages,” chapter 41 does. As the court of appeals noted, that definition does not explicitly include attorney’s fees. See
Our courts of appeals disagree about whether chapter 41’s compensatory damages definition governs here. Some note that the definitions explicitly apply only “[i]n this chapter,” and that chapter 41 is itself inapplicable to certain statutory claims.
Other courts note that chapter 41’s provisions apply to “any action in which a claimant seeks damages relating to a cause of action.” Tex. Civ. Prac. & Rem.Code § 41.002(a). Like the changes to the su-persedeas requirements, the Legislature enacted chapter 41’s compensatory damages definition as part of House Bill 4, reflecting an intent that the same definition apply to both provisions. See, e.g., Shook,
We need not conclude that chapter 41’s “compensatory damages” definition explicitly governs here. At the very least, it is consistent with our own conclusion based on the phrase’s ordinary meaning and our precedent — that attorney’s fees incurred in the prosecution or defense of a claim are not compensatory damages. Cf. Tex. Dep’t of Transp. v. Needham,
B. Some attorney’s fees qualify as compensatory damages.
Nonetheless, we reject the idea that attorney’s fees can never be considered compensatory damages. In this case, for example, Porter’s underlying breach of contract suit against Nalle involved allega
V. Attorney’s fees are not costs.
We must also consider whether attorney’s fees are “costs,” a term undefined by chapter 52. Both the old and new statutes require a judgment debtor to secure costs, although the new statute uses the slightly more- specific phrase “costs awarded in the judgment.” Tex. Civ. Prac. & Rem.Code § 52.006(a). The court of appeals held that the word was ambiguous, because it could refer either to “court costs,” defined by Black’s Law Dictionary to include “ ‘[t]he charges or fees taxed by the court, such as filing fees, jury fees, courthouse fees, and reporter fees,’ ” or to “litigation costs,” like “ ‘[t]he expenses of litigation, prosecution, or other legal transaction, especially] those allowéd in favor of one party against the other.’ ”
We disagree that “costs awarded in the judgment” includes anything other than what it ordinarily means: court costs. See Guitar Holding Co., L.P. v. Hudspeth Cnty. Underground Water Conservation Dist. No. 1,
This usage is buttressed by the way “costs” is used elsewhere in the Code. Civil Practice and Remedies Code chapter 38 differentiates between attorney’s fees and costs. See Tex. Civ. Prac. & Rem.Code § 38.001 (providing that “[a] person may
Some courts of appeals have relied on cases holding that attorney’s fees are “in the nature of costs” to conclude that they must be superseded. See, e.g., Clearview,
Finally, the court of appeals’ conclusion that “costs” might include “litigation costs” is inconsistent with the Legislature’s use of the term “litigation costs” elsewhere in the Code. Chapter 42 defines litigation costs in the context of settlement procedures related to claims for monetary relief. Id. §§ 42.001-.002. The Code provides that litigation costs include reasonable attorney’s fees and court costs. Id. § 42.001(5). This definition again demonstrates the Legislature’s distinction between attorney’s fees and court costs. Not only that, but the Legislature uses the defined term “litigation costs” when it refers to expenses that include both. See also id. §§ 42.004(e), (f) (distinguishing between litigation costs and fees and costs recoverable under another law). And chapter 42 also demonstrates that while “costs” and “court costs” are used interchangeably in other sections of the Code and in common usage, the same is not true for “costs” and “litigation costs.”
VI. Conclusion
Because attorney’s fees are neither compensatory damages nor costs for purposes of suspending enforcement of a money judgment, we conditionally grant the writ and direct the trial court to vacate its order and refund any monies overpaid by Nalle. We are confident the trial court will comply, and our writ will issue only if it does not.
Notes
. See Tex. Civ. Prac. & Rem.Code § 52.006(a); Tex.R.App P. 24.2(a)(1).
. Nalle’s original deposit also included damages awarded to The Lee Firm, another law firm that was a party in the underlying suit. Nalle and The Lee Firm reached a settlement following the initial deposit.
. The same court affirmed its reasoning in Imagine Automotive Group, Inc. v. Boardwalk Motor Cars, LLC,
. See, e.g., Haden v. David J. Sacks, P.C., 222 S.W.3d 580, 597 (Tex.App.-Houston [1st Dist.] 2007) ("Attorney’s fees are ordinarily not recoverable, therefore, as actual damages in and of themselves.”) (emphasis in original), rev'd on other grounds,
. See Northfield Ins. Co. v. Nabors Corp. Servs., No. 13-07-093-CV,
. See, e.g., Ashford Partners, Ltd. v. ECO Res., Inc.,
. Chapter 41 does not apply to the Texas Free Enterprise and Antitrust Act of 1983, the Human Resources Code chapter 36, the Insurance Code chapter 21, or to actions brought under the Deceptive Trade Practices-Consumer Protection Act (except as specifically provided in Section 17.50 of that Act). Tex Civ Prac. & Rem.Code § 41.002(d).
. See also Roadway Express, Inc. v. Piper,
. See also, e.g., Tex. Civ. Prac. & Rem.Code § 6.002 (using "costs” and "court costs” interchangeably).
. See also Williams v. Compressor Eng'g Corp.,
