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July 23, 1986


The opinion of the court was delivered by: CONNER



 Plaintiff Republic National Bank of New York ("Republic") brought this suit against Eastern Airlines, Inc. ("Eastern") alleging that Eastern negligently lost a canvas bag containing two million dollars in currency that Republic had checked as baggage on an Eastern flight from New York to Lima, Peru. Eastern has denied all responsibility for the loss, and has impleaded third-party defendant Renzo Baronti ("Baronti"), an employee of Republic who was the bag's courier on the flight to Lima, alleging that he is totally or partially responsible for the loss of the bag.

 This matter is now before the Court on a variety of motions. Eastern has moved for partial summary judgment pursuant to rule 56, Fed. R. Civ. P., arguing that the Warsaw Convention *fn1" substantially limits its liability. Republic, on the other hand, argues that the liability limitations of the Convention are inapplicable to this case, and has cross-moved for summary judgment. Baronti has moved for summary judgment on the ground that he is not a proper third-party defendant under rule 14, Fed. R. Civ. P., and for an award of attorney's fees pursuant to rule 11, Fed. R. Civ. P. For the reasons set forth below, I conclude that the Warsaw Convention limits Eastern's liability to $634.90. Eastern's motion for partial summary judgment is therefore granted and Republic's motion for summary judgment is denied. Baronti's motion for summary judgment is granted, but his motion for attorney's fees is denied.


 Not surprisingly, the parties dispute many of the facts in this case, but at least for purposes of the present motions they appear to agree on this much: Republic National Bank frequently delivers large amounts of currency to foreign countries via international air couriers on commercial airlines. On May 26, 1982, Joseph Barna, then head of Republic's transportation department, met with officials of Eastern Airlines to make arrangements for Republic's couriers to fly Eastern's routes to South America. Barna explained to Frank Griczewicz, Eastern's customer service manager at John F. Kennedy International Airport ("JFK"), that Republic would be transporting large amounts of United States currency in the form of checked baggage. Apparently as a courtesy, Griczewicz arranged for Republic to receive a letter introducing its couriers to Eastern employees and for Republic to deliver its bags directly to the aircraft by armored truck. Griczewicz advised Barna, however, that Eastern would not be liable for loss of currency carried as baggage. Barna admits that Griczewicz gave him that warning, but contends that Griczewicz did not inform him of a tariff Eastern had on file with the Civil Aeronautics Board ("CAB") that provided that "[f]ragile or perishable articles, money, jewelry, silverware, negotiable papers, securities or other valuables will not be accepted as checked baggage." Eastern tariff rule 16A(2), Affidavit of Michael Gillen in Support of Motion for Summary Judgment, exh. G [hereinafter cited as "Gillen Aff."] (emphasis added).

 Notwithstanding Eastern's warning, Republic proceeded to transport currency on Eastern flights as checked baggage. On December 13, 1982, Republic dispatched Renzo Baronti to act as a courier for two bags of currency it was delivering to South America on Eastern Flight 001. One bag contained approximately five million dollars and was to be delivered to Santiago, Chile; the other bag contained two million dollars and was bound for Lima, Peru.

 Baronti presented himself at Eastern's ticket counter at JFK to pick up his prepaid ticket. He did not carry the bags with him; instead, they remained in a Wells Fargo armored truck next to the airplane. According to Baronti, he advised the Eastern ticket agent that he was an international courier with two bags of high value, and that he required two baggage checks. Despite this statement, there appears to be no dispute that Baronti did not make a special declaration of the contents or the value of the bags.

 The ticket agent gave Baronti his ticket and two baggage checks for the bags. The ticket was a standard Eastern ticket, containing a statement that the Warsaw Convention applied to the journey, and that unless a higher value was declared in advance and additional charges were paid, Eastern's liability for loss of checked baggage was $9.07 per pound. It also provided that the carriage of contract was "subject to tariff regulations." See Gillen Aff. exh. B. The claim check for the bag to be delivered to Santiago was also a standard Eastern check, but the check for the bag bound for Lima was not. Rather, it was a "limited release," which Eastern apparently issues when a passenger wishes to check damaged baggage, and Eastern wants to be released from liability for the preexisting damage. See Gillen Aff. exh. C. In this case, however, the ticket agent apparently gave Baronti the limited release because the agent did not have a standard claim check with Lima, Peru printed on its face. The limited release did not state Baronti's ticket number, the weight of the bag, or that the liability limitations of the Warsaw Convention were applicable.

 Although the parties have not expressly said so, apparently both the baggage claim check and the limited release had two parts -- one to be attached to the baggage, and the other to be retained by the passenger and presented to the carrier upon arrival at the passenger's destination in order to reclaim the baggage. After receiving his ticket and baggage tags, Baronti proceeded to the armored truck where he attached one part of the baggage claim check to the bag to be delivered to Santiago, and one part of the limited release to the bag bound for Lima. He watched the Wells Fargo guards deliver the bags to an Eastern baggage handler in the cargo bay of the aircraft, and then boarded the airplane. Flight 001 made stops in Miami and in Lima, Peru. When the airplane arrived in Lima, Baronti attempted to claim the bag containing two million dollars. However, the bag was nowhere to be found, and despite searches in Lima and Miami, Eastern was unable to recover the bag and its contents.

 A few weeks later, several individuals were arrested in Atlantic City, New Jersey with approximately $150,000 of the currency from the missing bag. Republic subsequently filed this suit against Eastern seeking two million dollars in damages.


 A. Eastern's Motion for Partial Summary Judgment

 As noted above, Eastern has moved for partial summary judgment on the ground that the Warsaw Convention limits its liability for the lost bag. Under article 18 of the Convention, an air carrier is presumed liable for loss of or damage to checked baggage while it is under the carrier's control. However, article 22(2) of the Convention limits the carrier's liability to $20 per kilogram or $9.07 per pound unless the passenger makes a special declaration to the carrier before the flight that his baggage has a higher value. Eastern contends that since Baronti did not make such a special declaration, article 22(2) limits its liability to Republic.

 Republic, on the other hand, argues that the Convention's liability limitations are inapplicable here for two reasons. First, it argues that Eastern's failure to record certain information on the limited release as required by article 4 of the Convention precludes the application of article 22(2). Second, it contends that there are issues of fact as to whether Eastern's alleged failure to protect the bag adequately from loss or theft constitutes "wilful misconduct," which, under article 25 of the Convention, would also preclude the application of article 22(2). For the reasons set forth below, I find both of these arguments to be without merit.

 1. The Requirements of Article 4

 Article 4 of the Warsaw Convention sets out the rules applicable to checked baggage. It provides in relevant part:

(1) For the transportation of baggage, other than small personal objects of which the passenger takes charge himself, the ...

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