Opinion ID: 1811133
Heading Depth: 1
Heading Rank: 7

Heading: The Chancery Court erred in refusing to apply Louisiana law to the counterclaim for punitive damages.

Text: The chancellor applied Mississippi law to the counterclaim, relying on the public policy exception to our normal most significant relationship choice of law rule. The protection of minors was the policy concern that was purportedly offended by application of Louisiana law. Valley Forge disputes the applicability of the public policy exception, and asserts that Louisiana law should apply to the counterclaim. Apparently Louisiana law would not provide for punitive damages in this case. After careful consideration of the record, we conclude that there was no requirement that the lower court choose between Mississippi and Louisiana law for purposes of assessing punitive damages. The law applicable to the underlying tort is also applicable on the issue of punitive damages. Restatement (Second) of Conflicts of Law § 171. The chancellor based his award of punitive damages on Valley Forge's assertions of subrogation rights and its failure to obtain court approval of the original settlement payment. We are of the opinion that only the assertion of the subrogation right rises to the level of tortious conduct. While the failure to obtain court approval of the initial payment was an oversight, requiring a second, court supervised payment, it cannot be said to have been in callous disregard to the rights of another. Consequently, it cannot support an award of punitive damages. As for the assertion of subrogation rights under Mississippi statutory law, the chancellor correctly found that this conduct occurred in Mississippi. As he stated in his opinion: Valley Forge considered Tina's claim worth more than $205,000. Valley Forge knew, or should have known, that the subrogation agreement signed for Valley Forge by the Stricklands was void, or at least subordinate to Tina's being made whole. Valley Forge knew Louisiana law did not permit subrogation or offset until after the insured is made whole. Valley Forge knew it did not obtain court approval of the settlement of Tina's claim. Valley Forge knew Tina was seeking recovery of the $25,000 from Aull-Nationwide, and $10,000 from Cromwell-Automotive. Armed with all this information, Valley Forge's subrogation/offset contention is without merit and frivolous. Armed with such information, Valley Forge has engaged in a bad faith effort to assert in Mississippi a contention Valley Forge knows it cannot successfully assert in Louisiana, the state where the contract was made. (emphasis added). We will address whether this conduct warrants punitive damages below. For now it is important to note that the only tortious conduct to be found in the record occurred in Mississippi. It follows, a fortiori, that the only law to consider in assessing punitive damages is Mississippi law. The conflict of punitive damages law perceived by the chancellor was a false one. However, he cured his mistake by torturing the choice of law rules to yield the same result. Where a lower court reaches the proper result, albeit through no fault of its own, we will not reverse. See Monroe County Bd. of Educ. v. Rye, 521 So.2d 900 (Miss. 1988). Thus, this assignment of error is without merit.