Opinion ID: 1874238
Heading Depth: 1
Heading Rank: 7

Heading: did the trial court err in denying plaintiffs' right to move for an award of part of a certain $1159.70 interest payment made to the irs as damages, and in denying the plaintiffs' motion for an award of prejudgment interest on the $4,173.40 damages awarded at trial?

Text: Because Switzer filed the Estate's fiduciary tax return late, the IRS charged a penalty and interest for four months, in the amount of $5,530.00. Switzer wrote a letter to the IRS recalculating the penalty and interest for three months since the check had been received by the IRS before the fourth month started. Switzer's calculations showed that the penalty at 5% was $4,373.40 and the interest at 16% was $1,159.70. Because of an overpayment which had been made to the IRS earlier, the Executrix sent a check to the IRS for only $3,870.00. During the trial, Charlena testified that she received a notice from the IRS that the Estate owed $5,530.00, $4,400.00 in penalty and $1,130.00 in interest. The defendant objected to the testimony because the plaintiffs' Complaint asked for only $3,870.00 in damages. The plaintiffs offered to amend the complaint. When Switzer testified, he was asked about the interest that the $29,156.00 used to pay the late taxes was earning during those three months. Switzer said he calculated that the money earned $590.00 in interest. The judge, in granting a directed verdict on the issue of the late filing of the fiduciary return, told the two attorneys to come up with a figure on the penalty. The plaintiffs said they would amend the complaint to show that the full penalty was $4,373.40, as reflected by the proof, rather than the $3,870.00 they had asked for in the Complaint. The judge said it was too late to amend. However, the defendant agreed to let that amount be the one that was used by the court in determining liability. The court refused to include the interest which had been charged by the IRS because the Estate earned interest on the money during the three months. The appellants contend that the interest of $590.00 earned on the money should have been deducted from the interest of $1,159.70 charged by the IRS, and the resulting sum of $569.70 should have been included in the award. Whether to allow prejudgment interest is within the discretion of the court. LaBarre v. Gold, 520 So.2d 1327, 1331 (Miss. 1987). Under Mississippi law, one is entitled to interest from the date that money is due if the amount is liquidated and there is no legitimate dispute that the money is owed. Estate of Van Ryan v. McMurtray, 505 So.2d 1015, 1019 (Miss. 1987). For prejudgment interest to be awarded, the party must make a proper demand for the interest in the pleadings, including the date that it was allegedly due. Simpson v. State Farm Fire and Casualty Co., 564 So.2d 1374, 1381 (Miss. 1990). The judge denied prejudgment interest on the award of $4,173.40 because he felt that there was a dispute between the parties that needed to be decided in court. The appellants contend that there was no dispute about the money. However, Switzer's testimony indicated that he blamed the Executrix for the late filing of the fiduciary return. Because there was a dispute between the parties as to whose fault it was that the return was filed late, the court did not abuse its discretion in refusing prejudgment interest.