Arcadia Farms Partnership v. Audubon Ins. Co.


<- Return to Search Results


Docket Number: 2009-CA-00903-COA
Linked Case(s): 2009-CA-00903-COA ; 2009-CT-00903-SCT ; 2009-CT-00903-SCT

Court of Appeals: Opinion Link
Opinion Date: 04-05-2011
Opinion Author: Barnes, J.
Holding: Reversed and remanded.

Additional Case Information: Topic: Insurance - Breach of contract - Prejudgment interest - Section 75-17-7 - Amendment of complaint - M.R.C.P. 8(a)
Judge(s) Concurring: Lee, C.J., Irving and Griffis, P.JJ., Myers, Ishee, Roberts, Carlton and Maxwell, JJ.
Procedural History: Summary Judgment
Nature of the Case: CIVIL - INSURANCE

Trial Court: Date of Trial Judgment: 04-30-2009
Appealed from: Coahoma County Circuit Court
Judge: Kenneth L. Thomas
Disposition: Summary Judgment Granted in Favor of Audubon Insurance
Case Number: 14-CI-02-0062

  Party Name: Attorney Name:   Brief(s) Available:
Appellant: Arcadia Farms Partnership




DAVID D. O’DONNELL, SIDNEY RAY HILL III



 
  • Appellant #1 Brief
  • Appellant #1 Reply Brief

  • Appellee: Audubon Insurance Company MICHAEL O. GWIN, LOUIS B. LANOUX  

    Synopsis provided by:

    If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals
    hand downs please contact Tammy Upton in the MLI Press office.

    Topic: Insurance - Breach of contract - Prejudgment interest - Section 75-17-7 - Amendment of complaint - M.R.C.P. 8(a)

    Summary of the Facts: After a fire destroyed a cotton picker newly purchased by Arcadia Farms Partnership, Arcadia submitted a claim for the loss under its policy with Audubon Insurance Company. Although the coverage initially was denied by Arcadia’s insurance agent, The Mitchell Company, Inc., Audubon later paid Arcadia $100,000 for the loss. Arcadia filed a complaint against The Mitchell Company for negligence due to its failure to procure insurance for the cotton pickers in a timely manner. Arcadia subsequently amended its complaint, adding Audubon as a defendant and claiming that the $100,000 reimbursement was not sufficient under the policy, and it alleged that Audubon’s failure to submit prompt payment was a “bad faith breach of the policy terms.” Audubon filed a motion for summary judgment. The trial court granted the motion for summary judgment and entered a final judgment for Audubon. Arcadia appeals.

    Summary of Opinion Analysis: Issue 1: Prejudgment interest At the hearing on Arcadia’s motion to reconsider or amend the judgment, the circuit judge stated that “in view of the existing authority . . . prejudgment interest is inappropriate.” This holding is in accord with Audubon’s position that section 75-17-7 states prejudgment interest should not be calculated prior to the filing of the complaint. Since the complaint was filed after Arcadia had been compensated for the loss, Audubon argues that Arcadia is not entitled to prejudgment interest. However, Arcadia interprets section 75-17-7 to mean that Arcadia is entitled to prejudgment interest calculated from October 19, 2001, the date it alleges that Audubon breached the insurance contract. Mississippi recognizes judicial authority to award prejudgment interest to a prevailing party in a breach of contract suit. If when the claim is made, the amount due is liquidated, or when the denial of a claim is frivolous or in bad faith, prejudgment interest may be allowed. Prejudgment interest compensates for the time value of money, and thus is often necessary for full compensation. Arcadia’s argument that prejudgment interest on a breach of contract case may be awarded from the date of the breach is well-supported by Mississippi case law. The decision to award prejudgment interest is based on whether compensation is warranted for the detention of money overdue. It is appropriate in certain circumstances, such as those pleaded by Arcadia, to award prejudgment interest from the date of the breach of contract. Therefore, the circuit court erred in granting summary judgment in favor of Audubon, and the case is remanded for further proceedings. Issue 2: Amendment of complaint Arcadia argues that its amended complaint included a claim for “interest” and, in the alternative, that the circuit court should not have denied its motion for leave to amend the complaint to include a specific claim for prejudgment interest. M.R.C.P. 8(a) requires that a party assert a demand for prejudgment interest in the appropriate pleading. However, the rule does not require that a party seeking prejudgment interest must plead the specific date on which the prejudgment interest allegedly is due. In Arcadia’s amended complaint filed in 2004, it requested “an award of compensatory and punitive damages against Audubon Insurance Company in the amount of $3.5 million, together with an award of costs, interest and attorneys’ fees.” Arcadia did not specifically request prejudgment interest in its pleadings. However, the purpose of Rule 8 is to put the opposing party on sufficient notice of the claims and grounds upon which relief is sought. Arcadia’s request in its amended complaint for compensatory damages, including interest, was sufficient to put Audubon on notice of the damages sought. Further, Arcadia’s supplemental discovery responses, while not utilizing the specific term “prejudgment interest,” gave Audubon notice that prejudgment interest was sought by Arcadia. To the extent Arcadia’s amended complaint did not specifically request prejudgment interest, the circuit court abused its discretion by not allowing Arcadia to amend its complaint to include a specific demand. Audubon would not have suffered any potential prejudice as a result of granting Arcadia’s motion to amend.


    Home | Terms of Use | About the JDP | Feedback | Using JDP | MC Law Library | Mississippi Supreme Court