Opinion ID: 1791065
Heading Depth: 2
Heading Rank: 2

Heading: is fuselier entitled to prejudgment interest?

Text: ¶ 11. Fuselier claims to be entitled to an award of prejudgment interest because of this Court's decision in Moeller v. American Guarantee and Liability Insurance, 707 So.2d 1062, 1068 (Miss.1996). This Court has stated the following regarding the award of prejudgment interest: Mississippi recognizes judicial authority to award prejudgment interest to a prevailing party in a breach of contract suit. Prejudgment interest may be allowed in cases where the amount due is liquidated when the claim is originally made or when the denial of a claim is frivolous or in bad faith. No award of prejudgment interest is allowed where the principal amount has not been fixed prior to judgment. Prejudgment interest is not imposed as a penalty for wrong doing; it is allowed as compensation for the detention of money overdue. 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. [T]o be entitled to prejudgment interest, they must meet several requirements. First, the claim for damages must be liquidated or the denial of the claim ... must have been frivolous or in bad faith. Second, the pleadings must reflect a request for prejudgment interest. Preferred Risk Mut. Ins. Co. v. Johnson, 730 So.2d 574, 577 (Miss.1998) (citations omitted). An award of prejudgment interest is reviewed for abuse of discretion. Theobald v. Nosser, 784 So.2d 142, 145 (Miss.2001)(citing Aetna Cas. & Sur. Co. v. Doleac Elec. Co., 471 So.2d 325, 331 (Miss. 1985)).
¶ 12. American Guarantee claims that Fuselier's cause of action accrued prior to the enactment of Miss.Code Ann. § 75-17-7 (Supp.1989) and that Fuselier is not entitled to prejudgment interest. American Guarantee contends that the cause of action giving rise to American Guarantee's duty to pay for Fuselier's independent counsel arose in 1982 when American Guarantee chose to defend Fuselier under a reservation of rights. ¶ 13. Fuselier agrees that legal fees began to accrue in 1982. Fuselier does not respond to this assertion by American Guarantee in its reply brief, although they do assert in their original brief that they are due an award of prejudgment interest of 8% of the principal compounded monthly until June 30, 1989, in the amount of $51,433.24 (in accordance with § 75-17-7); and an award of prejudgment interest from July 1, 1989, until the present with interest due and owing calculated up to the date of judgment (in accordance with § 75-17-7 (2000)). ¶ 14. At the time this action accrued in 1982 § 75-17-7 appeared as enacted by the Mississippi Legislature in 1975: All judgments and decrees founded on any 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 and decrees shall bear interest at the rate of eight percentum (8%) per annum. This act shall apply only to judgments and decrees rendered on or after the effective date of this act. Judgments or decrees rendered prior to the effective date of this act shall continue to bear interest at the same rate as was applicable at the time the judgment or decree was rendered. 1975 Miss. Laws, ch. 336, § 1. ¶ 15. This statute was amended in 1989 to state: 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. Miss.Code Ann. § 75-17-7 (2000). At the time of the adoption of this amendment the Mississippi Legislature stated, [t]he provisions of this act shall apply only to causes of action accruing on or after July 1, 1989. 1989 Miss. Laws, ch. 311, § 7. ¶ 16. Because this action accrued in 1982, any prejudgment interest awarded would be at an interest rate of eight percentum (8%) per annum as was set out in § 75-17-7 and § 75-17-1(1) at the time this action arose.
¶ 17. Fuselier, in their motion for enforcement of mandate filed September 15, 1998, claimed that they were entitled to $95,244.26 for attorney's fees and expenses and prejudgment interest. American Guarantee, in its response filed September 24, 1998, denied each count and asserted that Fuselier was not entitled to prejudgment interest because the amount due was unliquidated. A special chancellor concluded that American Guarantee was liable for the costs of the original claim and the counterclaim resulting in a reimbursement by American Guarantee of the full $95,244.26. The special chancellor also ordered American Guarantee to pay postjudgment interest at a rate of 8%, compounded until paid, as well as the cost of the remand action. What remains to be determined is if the remaining fees and expenses Fuselier claims they are due are amounts that have been liquidated, and thereby eligible for prejudgment interest, or if it was even necessary for these amounts to be liquidated for recovery to occur since liquidation may have occurred when this Court rendered its decision in the previous case. ¶ 18. Damages being liquidated refers to damages that are set or determined by a contract when a breach occurs. Black's Law Dictionary 395 (7th ed.1999). Unliquidated damages are [d]amages that have been established by a verdict or award but cannot be determined by a fixed formula, so they are left to the discretion of the judge or jury. Id. at 397. ¶ 19. Fuselier claims that the attorney's fees and expenses damages were liquidated. Fuselier relies on a stipulation made by American Guarantee's attorney where it was agreed that the attorney's fees paid to Charles Brocato and the C.P.A. firm were fair, reasonable and necessary, and the only issue presented was as to what percentage of the legal fees should be attributed to American Guarantee's required defense and what amount was used for the counterclaims filed by the law firm. This distinction proved unnecessary as Brocato testified that the allegations of the counterclaims were directed toward the welfare of both the firm and insurance company and that any recovery ... could have reduced what American Guarantee had to pay. Fuselier contends that since Brocato's fee was stipulated as being reasonable then whatever amount the court recognized that the law firm paid would be deemed as liquidated prior to judgment. Fuselier also asserts that the amounts paid to Haddox, Reed, Burkes and Calhoun PLLC, Certified Public Accountants, were also stipulated as being fair and reasonable and were thereby liquidated amounts as well. Additionally, Fuselier argues that American Guarantee's refusal to pay the legal expenses on remand of this action constitutes bad faith, which, if true, would independently justify an award of prejudgment interest. ¶ 20. American Guarantee asserts that Brocato's fees generated in relation to Fuselier's defense and counterclaim were unliquidated until final judgment was entered following remand of Moeller and restates its contention that this Court's mandate dealt only with the payment of attorney's fees and not prejudgment interest. ¶ 21. This Court has stated [a]s to whether a claim is liquidated, 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.' Simpson v. State Farm Fire & Cas. Co., 564 So.2d 1374, 1380 (Miss.1990) (quoting Grace v. Lititz Mut. Ins. Co., 257 So.2d 217, 225 (Miss.1972)). In the present case, prior litigation established that there was no bona fide dispute as to American Guarantee's responsibility to pay the attorney's fees incurred by Fuselier. ¶ 22. The mandate of this Court in the prior litigation falls under the law of the case doctrine. This doctrine has been explained as follows: The doctrine of the law of the case is similar to that of former adjudication, relates entirely to questions of law, and is confined in its operation to subsequent proceedings in the case. Whatever is once established as the controlling legal rule of decision, between the same parties in the same case, continues to be the law of the case, so long as there is a similarity of facts. This principle expresses the practice of courts generally to refuse to reopen what has previously been decided. It is founded on public policy and the interests of orderly and consistent judicial procedure. Simpson, 564 So.2d at 1376 (citing Mississippi College v. May, 241 Miss. 359, 366, 128 So.2d 557, 558 (1961)). This doctrine dictates that a mandate issued by this Court is binding on the trial court on remand, unless the case comes under one of the exceptions to the law of the case doctrine. Simpson, 564 So.2d at 1377. Exceptions such as material changes in evidence, pleadings or findings as outlined in Continental Turpentine & Rosin Co. v. Gulf Naval Stores Co., 244 Miss. 465, 480, 142 So.2d 200, 207 (1962), or the need for the Court to depart from its former decision after mature consideration so that unjust results will not occur as described in Brewer v. Browning, 115 Miss. 358, 364, 76 So. 267, 269 (1917), do not exist in the present case. ¶ 23. The law of the case doctrine dictates that the attorney's fees were a liquidated amount eligible to be considered in making a prejudgment interest calculation.