Opinion ID: 18796
Heading Depth: 2
Heading Rank: 4

Heading: Quantum of Damages

Text: We now address Nationwide’s concern with the amount of the judgment rendered against it. First, Nationwide contends that we should apply Louisiana law (which does not permit stacking) and cap its liability at $100,000, the limit of UM coverage under one 35 “A busy district court need not allow itself to be imposed upon by the presentation of theories seriatim.” Freeman v. Continental Gin Co., 381 F.2d 459, 469 (5th Cir. 1967) (disallowing untimely amended pleading); see also Union Planters Nat’l Leasing Inc., 687 F.2d 117, 121 (5th Cir. 1982) (denying request to amend answer and noting that “concerns of finality in litigation become more compelling [when] the litigant has had the benefit of a day in court”). 17 policy.36 Planet counters that the district court was correct in applying Mississippi law, under which “stacking” of policies is allowed. Second, Nationwide argues under Constans that, as Planet is a subrogee to the rights of the Woodfields, it cannot recover more than the amount of the settlement, or $400,000. Planet counters by asking us to uphold the full amount of the judgment even though, as adjusted by the court, it exceeds the settlement amount by $22,365.86. We affirm the district court’s decision on both points. We have already determined that under Louisiana’s choice of law statutes, Mississippi law, not Louisiana’s, governs the interpretation and application of policy terms.37 In a case decided after the magistrate judge comprehensively addressed the stacking question in the instant lawsuit, the Mississippi Supreme Court explicitly held that courts may stack the UM limits of separate policies, irrespective of the number and amount of premiums paid for the policies.38 Nationwide issued two policies with UM coverage to the Woodfields, one policy covering four vehicles and another 36 See La. Rev. Stat. § 22:1406(D)(1)(c)(i) (anti-stacking statute). 37 La. Civ. Code arts. 3515, 3537. 38 United States Fidelity & Guar. Co. v. Ferguson, 698 So.2d 77, 79 (Miss. 1997) (“We now affirmatively declare that the public policy of this State mandates stacking of UM coverage for every vehicle covered under a policy....”). Ferguson was decided July 31, 1997. The magistrate court issued its order regarding stacking on December 20, 1996. 18 covering a fifth. When stacked, the aggregate UM limit for all five vehicles is $500,000, well above the final judgment ($422,365.86 gross; $351,129.56 net). As we conclude that there is no merit in Nationwide’s argument against applying Mississippi law, there is no basis for capping the damages at $100,000, the UM limit of one policy. In addition, we are satisfied that the district court did not err in entering a judgment for an amount, prior to offset, higher than the $400,000 settlement price that the Woodfields received from Planet in consideration for assigning Planet their rights in the lawsuit against Nationwide. Under the Louisiana law that governs the sale of litigious rights and conventional subrogation, the assignee/subrogee (Planet) may recover the full amount of the debt, even if it is greater than the amount paid to the original obligee (the Woodfields) unless the obligor timely acknowledges the debt and requests to purchase those rights from the assignee for the same price.39 Nationwide did neither here. A review of the salient facts confirms that Nationwide is not entitled to limit Planet’s judgment to the amount paid for the assignment: The jury returned a verdict of $589,973.86, and the court rendered a judgment in that amount; at the request of both 39 See La. Civ. Code art. 2652 (allowing debtor to extinguish obligation by “redeeming” the lawsuit for the same amount the assignee paid for it); Clement v. Sneed Bros., 116 So.2d 269 (La. 1959) (discussing exceptions to debtor’s right to redeem if debtor is untimely in its request or continues to defend the suit). 19 parties, the court reconsidered the judgment and capped it at $400,000, the amount of the settlement, then subtracted an offset to Nationwide; the parties again sought modification, with Planet repeating its objection to the amount of the judgment and moving to reinstate the jury award; the court granted Planet’s motion but reduced the judgment, first, by deducting the $50,000 awarded to Mr. Woodfield for loss of consortium and, second, by deducting the $117,608 awarded to Mrs. Woodfield for lost wages. The adjusted amount, prior to offset, was $422,365.86. The offset to Nationwide, which is not disputed, was $48,870.44,40 resulting in a net judgment of $373,495.24. The magistrate judge reasoned that as the amount of the judgment, after remittitur and offset, was below the $400,000 settlement amount, no further adjustment was required. Nationwide argues, however, that the starting point, before offset, should be $400,000 and asks us to reduce the judgment by $22,365.86. Importantly, Nationwide never attempted to redeem the litigious right from Planet and never ceased defending against the UM claim. Under these conditions, the law affords the obligor no “cap.” We affirm the magistrate judge’s final ruling on the amount of the judgment, albeit for different reasons. We have already decided that in regards to the Woodfields’ assignment of rights to Planet under the settlement agreement, (1) assignment-related issues are governed by the law of the forum 40 See supra note 1 (itemizing offset). 20 state (Louisiana), and (2) the comprehensive settlement agreement includes a valid assignment of the Woodfields’ rights in the existing lawsuit and a conventional subrogation to Planet. Therefore, under Louisiana Civil Code article 1827 (“Conventional subrogation by obligee”), the district court was not prohibited from rendering a judgment in an amount greater than the gross settlement amount. Revision comment (d) to article 1827 specifies that under conventional subrogation, the subrogee “is entitled to recover the full amount of the debt from the obligor.”41 In contrast, Louisiana law limits recovery under legal subrogation and unjust enrichment —— theories of recovery we do not reach in this appeal —— to the amount actually paid.42 The correctness of this result is buttressed by the Louisiana doctrine of sale of litigious rights:43 When, in a pending lawsuit, the original plaintiff transfers his position to another for a specific sum of money, a defendant (such as Nationwide) has a right either (1) to pay the transferee the same amount that the transferee paid the obligee, thus extinguishing all claims and cutting any future losses, or (2) to continue to defend the action and gamble on doing better (or risk doing worse) than the 41 La. Civ. Code art. 1827, cmt. d. 42 Id. arts. 1830, 2298. And, as noted above, under article 2652, recovery is likewise limited but only if the obligor timely acknowledges the obligations and offers to purchase the litigious right for the same price as the assignee paid for it. 43 Id. art. 2652. 21 transferee’s valuation of the suit. Here, Nationwide continued to defend and took the gamble of incurring a judgment in excess of $400,000 —— and lost. We agree with the district court’s ultimate refusal to limit Planet’s recovery to the settlement amount. Nationwide nevertheless asks us to rely on Constans,44 this time for the proposition that a subrogee is “limited to the lesser of the amount paid in settlement or the virile portion of what is determined actually to be owed.”45 We again decline to follow Constans, not because its holding on this issue conflicts with our own precedent but because the quoted language, read in context, refers to legal, not conventional subrogation. Accordingly, while that portion of Constans is a correct statement of the law in general, its holding is inapplicable to the instant situation. The final judgment, after offset, of $373,495.24, is affirmed.