Opinion ID: 1709421
Heading Depth: 2
Heading Rank: 8

Heading: whether greenwood met the legal prerequisites to be entitled to an award of prejudgment interest.

Text: ¶ 41. This Court recently discussed the issue of prejudgment interest in Microtek Med., Inc. v. 3M Co., 942 So.2d 122, 132 (Miss.2006), in which we stated that [t]he trial judge no doubt has discretion to award prejudgment interest if (1) the amount of damages is fixed and (2) liability is undisputed. 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 therefor. Id. (quoting Grace v. Lititz Mut. Ins. Co., 257 So.2d 217, 225 (Miss. 1972)). 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. Id. ; see also Simpson v. State Farm Fire & Cas. Co., 564 So.2d 1374, 1380 (Miss.1990). ¶ 42. Upon reflection, it is readily apparent to us that in today's case, we must clarify our holding in Microtek, which relied on this Court's decision in Grace. A study of Grace reveals that the primary issue was whether an insurer was responsible to its insureds under the applicable insurance policy, which provided coverage for an office building damaged in the wake of Hurricane Camille. [9] In addressing the prejudgment interest issue in Grace, this Court succinctly disposed of this issue by stating, inter alia, that the plaintiffs/appellants were not entitled to interest because in this instance there is a bona fide dispute as to the amount of damages as well as the responsibility for the liability therefor. Grace, 257 So.2d at 225. [10] ¶ 43. We seized upon this language from Grace in Simpson v. State Farm Fire & Cas. Co., 564 So.2d 1374, 1380 (Miss.1990), and again in Thompson Machinery Commerce v. Wallace, 687 So.2d 149, 152 (Miss.1997). The appropriate criteria for determining when an award of prejudgment interest is proper is found in our recent opinion in Stockstill v. Gammill, 943 So.2d 35, 50 (Miss.2006), where we stated: It is well settled that in Mississippi a [trial judge] is afforded discretion in deciding whether to award prejudgment interest. An award of prejudgment interest rests in the discretion of the awarding judge. Under Mississippi law, prejudgment interest may be allowed in cases where the amount due is liquidated when the claim is originally made or where the denial of a claim is frivolous or in bad faith. No award of prejudgment interest may rationally be made where the principal amount has not been fixed prior to judgment. Coho Res. v. McCarthy, 829 So.2d 1, 19-20 (Miss.2002) (quoting Warwick v. Matheney, 603 So.2d 330, 342 (Miss. 1992)). See also Tupelo Redev. Agency v. Abernathy, 913 So.2d 278, 286 (Miss. 2005). Id. at 50. Thus, in sum, we today clarify this issue as discussed in Grace and its progeny, including Microtek, by stating that when considering the issue of prejudgment interest, the trial court, and the appellate court upon review, should remember that prejudgment interest may be allowed in those cases where the amount due is liquidated when the claim is originally made or where the denial of a claim is frivolous or in bad faith. ¶ 44. The motion for rehearing likewise asserts error by this Court in awarding prejudgment interest because the complaint does not contain a specified date on which prejudgment interest allegedly became due. To address this issue we feel compelled briefly to review this Court's judicial enactment of the Mississippi Rules of Civil Procedure, which became applicable to all civil actions filed on or after January 1, 1982. As of the effective date of our civil procedure rules, Mississippi became a notice pleadings state. See Miss. R. Civ. P. 8 and Comment thereunder. No doubt, prior to the Mississippi Rules of Civil Procedure, technical pleading requirements existed. This Court's cases prior to the enactment of our civil procedure rules required a plaintiff to specifically demand prejudgment interest in the complaint and to also specify the date from which the prejudgment interest was due. See, e.g., Md. Cas. Co. v. Legg, 247 So.2d 812, 814 (Miss.1971). ¶ 45. Miss. R. Civ. P. 8(a) provides: (a) Claims for Relief. A pleading which sets forth a claim for relief, whether an original claim, counter-claim, cross-claim, or third-party claim, shall contain (1) a short and plain statement of the claim showing that the pleader is entitled to relief, and, (2) a demand for judgment for the relief to which he deems himself entitled. Relief in the alternative or of several different types may be demanded. See also Miss. R. Civ. P. 8(e). In applying this rule, we stated in Church v. Massey, 697 So.2d 407, 412 (Miss.1997) that the comment to that rule states that `[t]he purpose of Rule 8 is to give notice, not to state facts and narrow the issues as was the purpose of pleadings in prior Mississippi practice.' Id. However, as recently as our decision in Preferred Risk Mut. Ins. Co. v. Johnson, 730 So.2d 574, 578 (Miss. 1998), this Court stated: A 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] at 785 [(Miss.1991)]; Thompson Mach. Commerce Corp. v. Wallace, 687 So.2d 149, 152 (Miss.1997); Simpson, 564 So.2d at 1380. Id. at 578. (Emphasis added). Accordingly, insofar as Preferred Risk can be interpreted to stand for the proposition that a pleader's failure to allege in the complaint the specific date on which prejudgment interest is due is fatal to a claim for prejudgment interest, Preferred Risk (and any other case so holding) is overruled to this limited extent. We wish to make clear today that while Miss. R. Civ. P. 8 does require that a party assert a demand for prejudgment interest in the appropriate pleading; on the other hand, Rule 8 does not require that a party seeking prejudgment interest must plead the specific date on which the prejudgment interest allegedly is due. ¶ 46. With all this having been said, we now return to today's case. First, Triconex argues that Greenwood's damages claim was not for a liquidated amount, because the trial court found that Greenwood failed to mitigate its damages; that GE was not entitled to some of the charges for additional repair work; and that Greenwood could not recover for the costs to purchase additional capacity or lost revenue due to reduced capacity. However, Greenwood argues that the amount obviously became liquidated when the money was paid by Greenwood, and the trial court used those dates in its calculations. Greenwood further argues that this Court requires only that amounts must be liquidated prior to judgment. Preferred Risk Mut. Ins. Co. v. Johnson, 730 So.2d 574, 577 (Miss.1998). ¶ 47. The amounts were liquidated when paid and certainly prior to judgment, as Greenwood received bills for the amounts required to repair the damage to the turbine. Accordingly, there can be no bona fide dispute as to the amount of damages, as these bills came due prior to the judgment entered by Judge Hines. Thus, the damages were fixed when Greenwood received the bills. ¶ 48. Next, Triconex argues that Greenwood simply demanded prejudgment interest in its complaint without stating an amount or the date from which it was allegedly due. As we have clarified the law on this issue supra, Greenwood was required only to make a demand for prejudgment interest, and Greenwood's failure to state a specific date in its complaint does not relieve Triconex from being responsible for prejudgment interest. ¶ 49. Triconex directs this Court to its decision in Theobald v. Nosser, 784 So.2d 142, 145 (Miss.2001), and argues that Theobald stands for the proposition that a plaintiff must state a specific date from which prejudgment interest is allegedly due in the pleadings. However, this Court stated in Theobald: The Nossers assert that the Theobalds did not request prejudgment interest until the hearing before the chancery court after this Court had issued its opinion. That assertion is supported by the chancery court, which found that the Theobalds did not make a proper demand for prejudgment interest, and by the Theobalds' own complaint, which specifically asked for legal interest after date of judgment. In light of all these factors, we conclude that the chancery court did not abuse its discretion in denying the Theobalds prejudgment interest. Id. (emphasis in original). Thus, this Court specifically emphasized that the Theobalds demanded interest after the date of judgment, which is distinguishable from this case. Greenwood clearly asked for prejudgment interest in its complaint. Greenwood's failure to state a specific date in its complaint does not relieve Triconex from being responsible for prejudgment interest. ¶ 50. Finally, Triconex argues that prejudgment interest is not authorized by statute. Triconex argues that Miss.Code Ann. § 75-17-1(1) (Rev.2000) allows trial judges to award prejudgment interest only where expressly provided in the contract. Miss.Code Ann. § 75-17-1(1) states: The legal rate of interest on all notes, accounts and contracts shall be eight percent (8%) per annum, calculated according to the actuarial method, but contracts may be made, in writing, for payment of a finance charge as otherwise provided by this section or as otherwise authorized by law. Id. However, Greenwood argues that Miss. Code Ann. § 75-17-7 (Rev.2000) is the applicable statute and allows trial judges the discretion to award prejudgment interest. Miss.Code Ann. § 75-17-7 states: All judgments or decrees founded on any sale or contract shall bear interest at the same rate as the contract evidencing the debt on which the judgment or decree was rendered. All other judgments or decrees shall bear interest at a per annum rate set by the judge hearing the complaint from a date determined by such judge to be fair but in no event prior to the filing of the complaint. Id. We find that Miss.Code Ann. § 75-17-7 is the applicable statute. The trial judge relied on Miss.Code Ann. § 75-17-7 in his Finding of Facts and Conclusions of Law. Thus, the trial judge acted well within his authority by awarding prejudgment interest. For these reasons, and finding no abuse of discretion on the part of the trial judge, we find this issue to be without merit.