Theobald v. Nosser

• Decision Date: 29 March 2001
• Docket Number: No. 2000-CA-00781-SCT.,2000-CA-00781-SCT.
• Citation: 784 So.2d 142
• Parties: Robert P. THEOBALD and Karleen D. Theobald v. Rusty NOSSER and Karen L. Nosser.
• Court: Mississippi Supreme Court

784 So.2d 142

Robert P. THEOBALD and Karleen D. Theobald v. Rusty NOSSER and Karen L. Nosser.

No. 2000-CA-00781-SCT.

Supreme Court of Mississippi.

March 29, 2001.

Rehearing Denied May 17, 2001.

David M. Sessums, Vicksburg, Attorney for Appellants.

W. Briggs Hopson, III, Vicksburg, Attorney for Appellees.

BEFORE PITTMAN, C.J., MILLS and COBB, JJ.

COBB, Justice, for the Court:

¶ 1. This dispute arises from an improperly executed promissory note offered by Karen L. and Rusty Nosser in exchange for a grocery store owned by Robert P. and Karleen D. Theobald. This Court has previously heard this case, and details of the underlying facts are contained in the prior opinion found at Theobald v. Nosser, 752 So.2d 1036 (Miss.1999). Finding no reversible error in the chancery court's judgment on remand from our prior decision, we affirm, but modify the judgment to reduce it by fifteen percent pursuant to Miss.Code Ann. § 11-3-23 (1991).

FACTS AND PROCEEDINGS BELOW

¶ 2. The Theobalds agreed to sell their grocery store to the Nossers for the sum of $175,000. Mr. Theobald provided a promissory note which was signed by Mr. and Mrs. Theobald and Mr. and Mrs. Nosser on February 28, 1997. Id. at 1038. This note described the store by title and physical address, stated that $175,000 was due the Theobalds on March 31, 1997, and stated that "[i]f this Note is not paid promptly in accordance with its terms, the Undersigned agrees to pay all costs of collection, including reasonable attorney fees." The Nossers made a number of improvements to the store and operated it until April, 1997, when they ceased their operations and instructed an employee to deliver the key to the store to Mr. Theobald. The Theobalds eventually sold the store to a third party for $160,000. Id. at 1038-39.

¶ 3. The Theobalds filed suit in the Warren County Chancery Court seeking specific performance or, alternatively, money damages for the Nossers's breach of the terms of the promissory note. Id. at 1039. The chancery court held that a valid contract was formed, but that the Theobalds' damages were offset by improvements made to the store by the Nossers. Id. at 1038-39.

¶ 4. On appeal, this Court affirmed the ruling that a contract had been formed, but reversed on the issue of damages, holding that the Theobalds should have been awarded a total of $16,425.10. This sum included damages for the breach and for incidental damages, as well as attorney's fees (as provided for by the terms of the note). Id. at 1043-44. Later, this Court awarded $2000 in additional attorney's fees to the Theobalds on appeal.

¶ 5. On remand, the Theobalds argued before the chancery court that they were entitled to interest on their damages award dating back to the time of the contract breach rather than the time of the Supreme Court judgment. The chancery court awarded the Theobalds $198 in postjudgment interest, $400 as attorney's fees on the remand and $1,804 on the costs of the appeal, but denied the Theobalds' request for pre-judgment interest. The Theobalds appeal, raising the following issues:

I. THE LOWER COURT ERRED IN ONLY AWARDING POST JUDGMENT INTEREST FROM AND AFTER THE DATE OF THE SUPREME COURT'S REVERSAL ON DECEMBER 16, 1999, REVERSING THE DECISION OF THE LOWER COURT DATED JULY 31, 1998.

II. THE LOWER COURT ERRED IN DENYING INTEREST ON THE $2000.00 ATTORNEY'S FEES AWARDED ON APPEAL BY THE MISSISSIPPI SUPREME COURT.

III. THE LOWER COURT ERRED IN AWARDING $400.00 AS REASONABLE ATTORNEY'S FEES ON THE THEOBALDS' POST-REVERSAL EFFORTS AT COLLECTING THE AMOUNTS OWED TO THEM.

¶ 6. The Nossers, on cross-appeal, raise three issues, two of which are simply restatements of Issues I and II, and the other being as follows:

IV. THE APPELLANTS FAILED TO REQUEST A MOTION FOR REHEARING IN ACCORDANCE WITH RULES 40 AND 41 OF THE MISSISSIPPI RULES OF APPELLATE PROCEDURE AND CONSEQUENTLY THE LOWER COURT EXCEEDED ITS AUTHORITY IN AWARDING THE APPELLANTS ATTORNEY FEES.

ANALYSIS

I. SHOULD THE CHANCERY COURT HAVE ASSESSED PREJUDGMENT INTEREST AGAINST THE NOSSERS?

¶ 7. An award of prejudgment interest is reviewed for abuse of discretion. Aetna Cas. & Sur. Co. v. Doleac Elec. Co., 471 So.2d 325, 331 (Miss.1985). This Court has stated:

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.

Preferred Risk Mut. Ins. Co. v. Johnson, 730 So.2d 574, 577 (Miss.1998)(internal citations omitted)(permitting prejudgment interest where damages could not be reasonably disputed). The Theobalds reason that their damages were in fact liquidated since the damages could have been easily computed but for the trial court's error in initially holding that they were not entitled to damages at all. Needless to say, this novel interpretation flies in the face of the generally accepted definition of liquidated damages, i.e., damages for breach of contract set by the terms of the contract itself. Black's Law Dictionary 941 (7th ed.1999). Since there was a legitimate dispute about how much was owed by each party and there was no specific liquidated damages clause in the note, the damages must be viewed as unliquidated.

¶ 8. 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.

II. SHOULD THE LOWER COURT HAVE ASSESSED INTEREST ON THE $2000.00 ATTORNEY'S FEES AWARDED ON APPEAL BY THE MISSISSIPPI SUPREME COURT?

¶ 9. The chancery court's findings of fact reiterated that this Court awarded $16,425.10 in damages and $118 in initial court costs to the Theobalds. On January 14, 2000, this Court further awarded the Theobalds $2000 in attorney's fees. On February 9, 2000, the Nossers paid the Theobalds $18,543.10, the sum of these figures. Still unsatisfied, the Theobalds assert that they are also entitled to interest on the $2000 in attorney's fees for the 55 days between January 14 and February 9.

¶ 10. In support of their argument, the Theobalds cite Johnson v. Summer, 488 F.Supp. 83 (N.D.Miss.1980), which the chancery court had previously rejected as not being on point. In Johnson, a federal court judge, interpreting 42 U.S.C. § 1988, concluded that the legislative history of § 1988 supported the awarding of interest on attorney's fees where doing so was necessary to enhance the civil rights purpose of the statute. Johnson, 488 F.Supp. at 86. The Theobalds offer no other authority or rationale for awarding interest on attorney's fees in a case based on common law contract principles. We agree that the chancery court was correct in finding that Johnson is not on point. The chancery court did not err in denying the Theobalds' interest on the post-judgment attorney's fees.

III. WHAT ATTORNEY'S FEES, IF ANY, SHOULD THE LOWER COURT HAVE ASSESSED AGAINST THE NOSSERS FOR THE THEOBALDS' POST-REVERSAL EFFORTS AT COLLECTING THE AMOUNTS OWED TO THEM?

IV. DID THE LOWER COURT EXCEED ITS AUTHORITY IN AWARDING ATTORNEY FEES TO THE THEOBALDS, SINCE THEY DID NOT REQUEST A MOTION FOR REHEARING BEFORE THE SUPREME COURT?

¶ 11. The Theobalds argue that the lower court erred in limiting its award of attorney's fees on remand since they provided evidence that they had actually incurred $781.25 in attorney's fees and the Nossers did not challenge that figure as being unreasonable. The Nossers, on the other hand, assert that the chancery court should not have awarded attorney's fees at all on the theory that the Theobalds should have sought a rehearing from this Court rather than pursuing new theories in chancery court.

¶ 12. The chancery court did not err in holding a hearing to establish definitively the amount the Nossers owed. Indeed, this Court specifically chose to remand the case rather than simply render it. The Nossers' assertion that the Theobalds could only pursue interest by a motion for rehearing is incorrect. See...