Opinion ID: 1918759
Heading Depth: 2
Heading Rank: 1

Heading: whether the trial court erred in awarding the plaintiffs prejudgment interest.

Text: ¶ 11. The grant or denial of a motion for leave to amend is within the sound discretion of the trial court. MBF Corp. v. Century Bus. Communications, 663 So.2d 595, 600 (Miss.1995)( citing McDonald v. Holmes, 595 So.2d 434, 436 (Miss.1992); Bourn v. Tomlinson Interest, Inc., 456 So.2d 747, 749 (Miss. 1984)). An award of prejudgment interest is normally left to the discretion of the trial judge. Warwick v. Matheney, 603 So.2d 330, 342 (Miss.1992); Aetna Cas. & Sur. Co. v. Doleac Elec. Co., 471 So.2d 325, 331 (Miss. 1985). ¶ 12. Mississippi recognizes judicial authority to award prejudgment interest to a prevailing party in a breach of contract suit. City of Mound Bayou v. Roy Collins Constr. Co., 499 So.2d 1354, 1361 (Miss.1986); Stockett v. Exxon Corp. 312 So.2d 709, 712 (Miss. 1975). Prejudgment interest may be allowed in cases where the amount due is liquidated when the claim is originally made or when the denial of a claim is frivolous or in bad faith. Aetna Cas. & Sur., 471 So.2d at 331. No award of prejudgment interest is allowed where the principal amount has not been fixed prior to judgment. Warwick v. Matheney, 603 So.2d 330, 342 (Miss.1992); Stanton & Assoc., Inc. v. Bryant Constr. Co., 464 So.2d 499, 504 (Miss.1985); American Fire Protection, Inc. v. Lewis, 653 So.2d 1387, 1391 (Miss.1995). Prejudgment interest `is not imposed as a penalty for wrong doing; it is allowed as compensation for the detention of money overdue.' Sunburst Bank v. Keith, 648 So.2d 1147, 1153 (Miss.1995)( quoting 221 Miss. 848, 75 So.2d 59, 69 (1954)). 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. Wirtz v. Switzer, 586 So.2d 775, 785 (Miss.1991)( citing Simpson v. State Farm Fire & Cas. Co., 564 So.2d 1374, 1381 (Miss.1990)). ¶ 13. In order for the Johnsons to be entitled to prejudgment interest, they must meet several requirements. First, the claim for damages must be liquidated or the denial of the claim by Preferred must have been frivolous or in bad faith. Second, the pleadings must reflect that the Johnsons made a request for prejudgment interest. ¶ 14. Preferred did not act in bad faith when it denied the Johnsons' request for UM coverage under their parents' policies. Preferred denied the Johnsons' claim primarily because it concluded that the Johnsons were not residents of their respective parents' households. Preferred's position on this point was consistent with this Court's prior interpretation of the meaning of resident in the context of insurance policies. See Goens v. Arinder, 248 Miss. 806, 161 So.2d 509 (1964). In fact, the trial court granted Preferred's Motion for Summary Judgment based on the Goens definition of the term resident. Subsequently, this Court overruled Goens the first time that the case sub judice was on appeal. Johnson v. Preferred Risk Auto. Ins. Co., 659 So.2d 866 (Miss.1995). Based on the applicable law at the time Preferred denied the Johnsons' claim, this Court finds that the denial of said claim was not in bad faith. ¶ 15. To recover prejudgment interest, in the absence of bad faith, the Johnsons' claim for UM benefits under the policy issued by Preferred to their parents must be a liquidated claim. Prejudgment interest has been denied where `there is a bona fide dispute as to the amount of damages as well as the responsibility for the liability therefore.' Simpson, 564 So.2d at 1380 ( quoting Grace v. Lititz Mut. Ins. Co., 257 So.2d 217, 225 (Miss.1972)). Prejudgment interest is not awarded where the principal amount has not been fixed prior to judgment. Warwick, 603 So.2d at 342. Prejudgment interest may be allowed where the amount of loss is in dispute. Commercial Union Ins. Co. v. Byrne, 248 So.2d 777, 783 (Miss.1971). In Byrne, the Court stated: We are of the opinion that where as in this case there is a justifiable dispute as to the amount of the loss, the insured is not entitled to interest until the amount of the claim has been made certain or liquidated. However, we can envision cases where, in the discretion of the trial court interest should be allowed although the amount of the loss is in dispute and for this reason we do not foreclose the allowance of interest in every case where the claim is unliquidated. Id. at 783. ¶ 16. The extent of Preferred's liability under both policies was $51,000.00 in UM coverage and medical payments. Under his parents' policy, coverage existed for Ron in the amount of $30,000.00 for UM benefits. Under her parents' policy, coverage existed for Dee in the amount of $20,000 for UM benefits. Additionally, Dee was entitled to $1,000.00 in medical payments coverage. On March 4, 1996, Preferred tendered payment of $30,000.00 to Ron and $21,000.00 to Dee for their contractual benefits. ¶ 17. The Johnsons argue that since Ron's and Dee's damages clearly exceeded the policy limits, a determination of coverage required payment of the policy limits. Therefore, the damages being the policy limits were liquidated. A claim has been held as liquidated where it was undisputed that the house and its contents were a total loss. See Allstate Ins. Co. v. McGory, 697 So.2d 1171 (Miss.1997). The Johnsons argue, by analogy, that McGory is applicable on the facts before this Court. The trial court found that the Johnsons' damages clearly exceeded the amount of coverage. We find that the amount of damages due the Johnsons was liquidated because their damages were clearly over the policy limits. ¶ 18. Preferred notes the general rule that claims for personal injuries are claims for unliquidated damages which are incapable of exact determination. See Blair v. Kansas City, Memphis & Birmingham R.R., 76 Miss. 478, 24 So. 879 (1899). Preferred asserts that there was a dispute as to the amount of damages. Since the parties disputed the damages, they were unliquidated or could not be calculated. M.T. Reed Constr. Co. v. Nicholas Acoustics & Specialty Co., 379 So.2d 308, 313 (Miss.1980), disapproved on other grounds by Tideway Oil Programs, Inc. v. Serio, 431 So.2d 454 (Miss. 1983). ¶ 19. This Court finds that the damages suffered by Ron and Dee were liquidated because the extent of their injuries clearly exceeded the policy limits. Thus, the amount of damages could be calculated or determined, and the trial judge did not abuse his discretion in finding that the claim for damages was liquidated. ¶ 20. To recover prejudgment interest, the pleadings must reflect that the Johnsons made a proper demand for prejudgment interest. Preferred argues that the Johnsons failed to make a demand for prejudgment interest in their pleadings. The Johnsons claim that, despite their failure to formally plead for prejudgment interest, the pleadings were effectively amended when the trial court granted their motion to amend and found that Preferred would suffer no prejudice from the amendment. ¶ 21. A party must make a proper demand for the interest in the pleadings, including the date that it was allegedly due. Wirtz, 586 So.2d at 785; Thompson Mach. Commerce Corp. v. Wallace, 687 So.2d 149, 152 (Miss.1997); Simpson, 564 So.2d at 1380. A general prayer for relief is insufficient to allow an award of prejudgment interest. West Ctr. Apartments Ltd. v. Keyes, 371 So.2d 854, 858 (Miss.1979); See also M.T. Reed Constr. Co., 379 So.2d at 313 (following Keyes ). Where a party freely admits that he failed to include a demand for prejudgment interest in his original complaint, it is error for a trial court to award such interest. Century 21 Deep S. Properties, Ltd. v. Keys, 652 So.2d 707, 719 (Miss. 1995). Preferred asserts that the award of prejudgment interest should be reversed because the Johnsons never made a specific demand in their complaint or their amended complaint. Preferred also argues that it is unfairly prejudiced by the awarding of prejudgment interest to the Johnsons based on a motion filed six years after the original complaint was served. It is Preferred's position that settlement was reached because it believed that the extent of its liability was only $51,000.00, a figure which did not include prejudgment interest. Preferred alleges that it was entitled to rely on the policy limits as the extent of its liability because the Johnsons had not made a specific demand for prejudgment interest. ¶ 22. The Johnsons admit that they failed to include a demand for prejudgment interest in either their original complaint or their amended complaint. They rely on the premise that the pleadings were effectively amended when the lower court granted their Motion to Amend. The Johnsons did file a Motion to File Second Amended Complaint on February 23, 1996. The proposed Second Amended Complaint was supposed to be attached to the motion. However, the record does not contain a Second Amended Complaint and the Johnsons do not submit on appeal that the amendment was filed. ¶ 23. Additionally, the Johnsons rely on the liberal interpretation afforded Mississippi's Rules of Civil Procedure. Specifically, the Johnsons rely on M.R.C.P. 54(c) which states in relevant part: every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled by the proof and which is within the jurisdiction of the court to grant, even if the party had not demanded such relief in his pleadings ... M.R.C. P. 54(c). The comment to 54(c) states that the rule is to be read in conjunction with M.R.C.P. 8, which states that a pleading shall contain a demand for judgment for the relief to which he deems himself entitled. M.R.C.P. 8(a)(2). ¶ 24. Motions for leave to amend complaint are left to the sound discretion of trial court; the Supreme Court reviews such determinations under an abuse of discretion standard; and, unless convinced that trial judge abused discretion, the Supreme Court is without authority to reverse. Church v. Massey, 697 So.2d 407, 413 (Miss.1997). Grant or denial of motion for leave to amend is within sound discretion of trial court. MBF Corp. v. Century Bus. Communications, Inc., 663 So.2d 595, 600 (Miss.1995); Frank v. Dore, 635 So.2d 1369, 1375 (Miss. 1994). Amendments to the pleadings are properly addressed to the discretion of the lower court. Red Enters., Inc. v. Peashooter, Inc., 455 So.2d 793, 796 (Miss.1984); Mc-Donald v. Holmes, 595 So.2d 434, 436 (Miss. 1992). Where the plaintiff filed his motion for amendment of declaration setting out its exact terms, and such terms were incorporated into an order which quoted text of motion and which was filed in cause and entered upon minutes of court, amendment was sufficient, as against defendant's contention that original declaration should have been manually amended by interlineation or otherwise. International Order v. Barnes, 204 Miss. 333, 341, 37 So.2d 487 (1948), overruled on other grounds by Mississippi Baptist Hosp. v. Holmes, 214 Miss. 906, 55 So.2d 142 (1951). While the trial court has discretion to allow an amendment and should do so freely under the proper circumstances, an amendment should not occur when to do so would prejudice defendant. Hester v. Bandy, 627 So.2d 833, 839 (Miss.1993). ¶ 25. In the case sub judice, the Johnsons raised the issue of prejudgment interest in their Motion for Summary Judgment. Preferred objected to an award of prejudgment interest in its response. As noted above, the Johnsons filed a Motion to Amend in order to include a demand for prejudgment interest. However, a formal amendment was never filed. The trial judge, in the Final Judgment, granted the Johnsons' motion and found that Preferred would not be prejudiced by the granting of the amendment. ¶ 26. This Court finds that the pleadings were effectively amended by the trial judge's order, and that Preferred suffered no prejudice from the award of prejudgment interest to the Johnsons. Under our rules of civil procedure, courts are to be liberal in allowing amendments to the pleadings. M.R.C.P. 15(b). Our decision follows the general rule that amendments to pleadings are to be freely allowed. Our case law, cited above, provides that the decision to allow amendments rests firmly within the discretion of the trial judge. ¶ 27. Under the facts of this case, the trial judge did not abuse his discretion in awarding the Johnsons prejudgment interest. The trial judge had before him briefs from both parties regarding the issues raised on Summary Judgments and outlining their arguments and authorities in support thereof. [2] Thus, the trial court had before it all of the evidence and case law to make an informed decision, and we find that the trial judge did not abuse his discretion in allowing the amendment to the pleading.