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Preferred Risk Mutual Insurance Co. v. Johnson

December 10, 1998

PREFERRED RISK MUTUAL INSURANCE COMPANY, A/K/A PREFERRED RISK AUTOMOBILE INSURANCE COMPANY
v.
RONALD GLEN JOHNSON AND SARA BALLARD JOHNSON



The opinion of the court was delivered by: Waller, Justice

DATE OF JUDGMENT: 05/09/97

TRIAL JUDGE: HON. THOMAS J. GARDNER, III

COURT FROM WHICH APPEALED: LEE COUNTY CIRCUIT COURT

NATURE OF THE CASE: CIVIL - INSURANCE

DISPOSITION: AFFIRMED - 12/10/98

EN BANC.

INTRODUCTION

¶1. Ronald and Sara Johnson, Appellees, sued Preferred Risk Mutual, Appellant, to recover uninsured motorist benefits for injuries sustained in an automobile accident. The Lee County Circuit Court entered a Judgment of Dismissal Granting Summary Judgment for Preferred Risk Mutual holding that the Johnsons were not residents of their parents' households and were not covered as insureds under the policy. The Johnsons appealed the circuit court's entry of summary judgment. This Court reversed and remanded the order granting summary judgment to Preferred Risk Mutual, finding that the Johnsons were members of their respective parents' households, and therefore eligible for uninsured motorist benefits under the policies issued to their parents.

¶2. On remand, the Johnsons filed a Motion for Summary Judgment demanding the policy limits, a combined $51,000, from Preferred Risk Mutual and prejudgment interest from the date of the accident. Preferred Risk Mutual conceded that it owed the policy limits, but denied that the Johnsons were entitled to prejudgment interest. Subsequently, the Lee County Circuit Court entered an order granting the Johnsons' request for prejudgment interest. Preferred Risk Mutual appeals from this order assigning the following as error:

I. WHETHER THE TRIAL COURT ERRED IN AWARDING THE PLAINTIFFS PREJUDGMENT INTEREST.

II. WHETHER THE TRIAL COURT ERRED IN AWARDING THE PLAINTIFFS POST- JUDGMENT INTEREST ON ITS AWARD OF PREJUDGMENT INTEREST.

STATEMENT OF THE FACTS AND PROCEDURAL HISTORY

¶3. On June 10, 1988, Ronald Johnson ("Ron") and his wife Sara Ballard Johnson ("Dee") were injured in an accident in Lee County, Mississippi, with an uninsured motorist. The Johnsons' pickup truck was uninsured. At the time of the accident, Ron was temporarily staying with his parents in Columbus, Mississippi, and Dee was temporarily staying with her parents in Plantersville, Mississippi.

¶4. At the time of the accident, both sets of parents had vehicles insured by Preferred Risk Mutual Insurance Company ("Preferred"). The Charles Johnson family, Ron's family, had one policy providing UM coverage of $10,000 per person, $20,000 per accident. The Ballards, Dee's family, had two policies, each providing coverage of $10,000 per person, $20,000 per accident.

¶5. On October 20, 1989, Ron and Dee filed suit against Preferred in Lee County Circuit Court, seeking a declaratory judgment that they were covered by their parents' policies, and to obtain the UM coverage under each policy. Preferred defended on the grounds that Ron and Dee were not "residents" of their respective parents' households as required under the policy. On June 3, 1994, the Lee County Circuit Court entered a Judgment of Dismissal Granting Summary Judgment for Preferred, finding that the Johnsons were not members of their parents' households and were not covered under their policies. Ron and Dee filed an appeal with this Court.

¶6. On appeal, this Court held that Ron and Dee were members of their respective parents' households and thus were entitled to coverage under their policies. In doing so, this Court expressly overruled its prior decision in Goens v. Arinder, 248 Miss. 806, 161 So.2d 509 (1964). Goens had excluded relatives making "transient visits" from policy coverage.

¶7. On February 5, 1996, the Johnsons filed a Motion for Summary Judgment demanding the policy limits ($51,000) and prejudgment interest at an eight percent rate from the date of the original accident. Preferred conceded liability of $51,000, but denied the prejudgment interest requested. Preferred alleged that the Johnsons had failed to demand prejudgment interest in their complaint and that the claims were for unliquidated damages. Subsequently, the Johnsons filed a Motion to File a Second Amended Complaint to request prejudgment interest. *fn1 On April 1, 1996, the Lee County Circuit Court entered a Partial Judgment of Dismissal, noting that Preferred had ...


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