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I.L.T.A., INC. v. UNITED AIR LINES

January 6, 1983

I.L.T.A., INC., Plaintiff,
v.
UNITED AIR LINES, INC., Defendant



The opinion of the court was delivered by: TELESCA

MEMORANDUM DECISION and ORDER

 TELESCA, District Judge.

 Plaintiff, ILTA moves this Court for partial summary judgment as to liability on the first, third and fourth counts of the complaint. The defendant has cross-moved for partial summary judgment on the first, second, third and fourth causes of action in the complaint.

 The parties entered into a contract which called for a series of 64 jet charter flights to be supplied by United (they would provide the planes and crew), and paid for by ILTA (they would provide the passengers), during the year of 1979. Under the original contract, ILTA was to provide United with payment for each flight seven (7) days in advance of the flight. The basic contract was entered into in August of 1978, with various amendments the last of which was made on January 4, 1979.

 On January 23, 1979, United notified ILTA by letter that it had filed with the Civil Aeronautics Board a petition to "amend its charter tariff to require payment in full for each charter eleven (11) days prior to departure versus seven (7) days currently in effect. All other facets of the payment schedule remain unchanged". United Airlines letter to James Vreeland, President of ILTA of January 23, 1979. On the same day, United did in fact file its petition to change the tariff relating to the time of payment. United's explanation for seeking this change was:

 
The Public Charter regulation passed last August states in part that a tour operator may not cancel a charter tour less than ten (10) days prior to departure for any reason including insufficient participation. That provision conflicts with United's tariff which requires cancellation of a charter flight if full payment is not received seven (7) days prior to departure.

 The CAB granted United permission to change its tariff on January 29, 1979, and United filed the new tariff on February 14, 1979. By its January 23rd letter to ILTA, United informed them that on flights departing on or after March 1, the payment had to be received eleven (11) days in advance. This notice of United's intention was apparently premature, but not of any effect since by March 1, 1979, the tariff had been filed and was in effect.

 On February 12, 1979, ILTA sent a letter to United stating that they would "be happy to either continue paying seven (7) days prior to departure as stated in our current agreement or alternatively to renegotiate our charter contracts with United Airlines for the balance of 1979". In short, ILTA told United that it would not follow the new eleven (11) day payment schedule.

 ILTA then proceeded to do just that with the following results. Eleven (11) days prior to the scheduled departure of a charter flight, United would notify ILTA that the flight was cancelled because United had not received payment. On the seventh (7th) day before the flight, ILTA would remit the payment due and United would then reinstate the flight. This occurred on three (3) occasions. Finally, on March 14, 1979, United wrote to the plaintiff and informed them that the fact that the trips were reinstated did not operate as an acceptance "of your practice of paying less than eleven (11) days before departure". United continued, saying:

 
We are hopeful that this matter can be resolved amicably and that we will be able to anticipate receipt of your charter payments on or before the 11th day prior to departure as now required by our tariff. We certainly do not wish to cancel charter flights. However, our tariff was amended in order to provide us with that option in order to protect against non-payment. Of course, the CAB will have the opportunity to rule on your protest of our rule. In the meantime, however, we expect compliance with the tariff rule.

 (United's letter of March 14.)

 ILTA's response to this letter came on March 26, 1979. The key language of that letter was as follows:

 
Be advised that effective with the planned departure of charter flight # 5490 on May 7, 1979, and every subsequent flight scheduled for the remainder of 1979, International Leisure Time, Inc. will not remit payment nor be held liable for any penalties subsequently alleged by United Airlines. This action is taken consistent with the fact we do not have a contract ...

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