Davis v. Smith
| Docket Number: | 2009-CA-01838-SCT Linked Case(s): 2009-CA-01838-SCT |
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| Supreme Court: | Opinion Link Opinion Date: 06-16-2011 Opinion Author: Chandler, J. Holding: Affirmed |
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| Additional Case Information: |
Topic: Wills & estates - Prejudgment interest - Improper exclusion - Doctrine of quantum meruit Judge(s) Concurring: Waller, C.J., Carlson and Dickinson, P.JJ., Randolph, Kitchens, Pierce and King, JJ. Non Participating Judge(s): Lamar, J. Procedural History: Bench Trial Nature of the Case: CIVIL - WILLS, TRUSTS AND ESTATES |
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| Trial Court: |
Date of Trial Judgment: 08-29-2009 Appealed from: DeSoto County Chancery Court Judge: Percy L. Lynchard, Jr. Disposition: The chancellor issued an order holding that Raymond and Ruth were responsible for their portions of tax liability owed to the Estate and any interest accrued after the judgment, but were not responsible to pay the Estate any interest accrued prior to the chancellor's judgment. The chancellor further held that Raymond was entitled to twenty-four months of rent for the time he was excluded from the farm. Case Number: 01-10-1447(PL) |
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| Party Name: | Attorney Name: | Brief(s) Available: | ||
| Appellant: | W. E. Davis, Administrator |
JOHN THOMAS LAMAR, III
JOHN THOMAS LAMAR, JR. |
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| Appellee: | Raymond Smith | JOHN BARNETT TURNER, JR. BILLY C. CAMPBELL, JR. | ||
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. |
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| Topic: | Wills & estates - Prejudgment interest - Improper exclusion - Doctrine of quantum meruit |
| Summary of the Facts: | In Davis v. Smith, 922 So. 2d 814 (Miss. Ct. App. 2005), the Mississippi Court of Appeals considered whether Raymond Smith held a life estate in the Tate County Farm on which he resided. In In re Estate of Smith, 891 So. 2d 811 (Miss. 2005), the Mississippi Supreme Court held that tax liability should be based on the taxable estate rather than the gross estate, and remanded the case to the chancery court to determine the amount of tax liability each party owed. After the case was remanded, Anthony Walker Smith's estate filed two motions demanding that Raymond and Ruth Smith reimburse the Estate for taxes paid, plus interest. Raymond filed a motion demanding that the Estate pay him rent for the time he was excluded from the farm in which he held a life-estate interest. The chancellor held that Raymond and Ruth were responsible for their portions of tax liability owed to the Estate and any interest accrued after the judgment, but were not responsible to pay the Estate any interest accrued prior to the chancellor's judgment. The chancellor further held that Raymond was entitled to twenty-four months of rent for the time he was excluded from the farm. The Estate appeals. |
| Summary of Opinion Analysis: | Issue 1: Prejudgment interest An honest dispute existed over how to apportion tax liability, and the amount originally demanded by the Estate was excessive and ultimately proven to be wrong. Because of the dispute and confusion concerning the proper amount of tax liability, the chancellor refused to award prejudgment interest to the Estate. Prejudgment interest may be allowed in cases in which the amount due is liquidated when the claim is originally made or when the denial of a claim is frivolous or in bad faith. Liquidated damages are set or determined by contract, while unliquidated damages cannot be determined by a fixed formula, and are instead established through verdict or award. As 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. It has been well established that disputed damages are unliquidated, and thus no prejudgment interest is warranted. Pursuant to its ruling as to the proper method by which to calculate the respective parties’ tax liability, the Supreme Court remanded this case to the chancery court to make the final determination of money owed by each party. On remand, both parties submitted expert opinions, to support their valuation of the 493.7 acres. The damages were “in dispute,” and thus unliquidated until the final judgment and order by the chancellor. Therefore, prejudgment interest was not warranted. If the damages are unliquidated, prejudgment interest may still be warranted if there is evidence of bad faith. The Estate argues that Raymond and Ruth willfully, wrongfully, and repeatedly withheld money rightfully belonging to the Estate for over seven years. However, bad faith implies a dishonest purpose or moral obliquity. Raymond and Ruth were not acting in bad faith, as there was a legitimate disagreement among the parties regarding each one’s tax liability. Issue 2: Improper exclusion From October 30, 2001, until May 22, 2006, the administrator of the Estate locked Raymond out of two buildings located on the farm in which Raymond held a life estate. The Estate argues that the administrator’s duty is to act in good faith and employ such vigilance, sagacity, diligence, and prudence when controlling assets. While this is true, the Estate’s right solely to control the farm was extinguished on September 15, 2003, when the chancellor determined that Raymond held a life estate on the property. After September 15, 2003, Raymond had every right to enter and use the property, but the administrator continued to keep the buildings locked, and Raymond was unable to access his property until he acquired the assistance of a locksmith on May 22, 2006. The doctrine of quantum meruit applies to situations where there is no legal contract but where the person sought to be charged is in possession of money or property which in good conscience and justice he should not retain but should deliver to another, the courts imposing a duty to refund the money or the use value of the property to the person to whom in good conscience it ought to belong. The administrator’s obligation to protect the buildings and assets of the farm expired when it was determined that Raymond had a life estate in the property. The administrator then had a new obligation to relinquish the property to Raymond. Raymond was improperly excluded from his property, and the chancellor acted within his discretion in awarding twenty-four months of the property’s rental value. |
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