Annex B-4-2, a component of the Agreement which outlines the location, services and charges pertinent to the contract, was signed for American Airlines by Neil Albrecht, over the name of Warren E. Boin, Jr., "Vice President Marketing and Planning, AMR Services Corporation, Authorized Agent. " Frank Aff., Ex. D at 12; Ex. I, Annex B-4-2 at 8 (emphasis added). Because AMR signed the agreement as the agent of American Airlines, and because AMR and American are separate corporations, it is apparent that AMR was acting as the agent of American.
Moreover, under the Agreement, American remained "responsible to the Carrier [Ecuatoriana] for the proper rendering of such [ground handling] services as if they had been performed by the Handling Company [American] itself." Frank Aff., Ex. I at 4. Again, interpreting the contract literally, American was responsible to Ecuatoriana for all of the services to be performed under the Agreement, regardless of who actually performed them. American acted as Ecuatoriana's agent at JFK. AMR's relationship to Ecuatoriana was more distant. In sum, AMR cannot be Ecuatoriana's agent, because American deliberately and contractually placed itself between AMR and Ecuatoriana. American acted as Ecuatoriana's agent, and AMR acted as American's agent. There was no agency link between AMR and Ecuatoriana.
For many of the same reasons, AMR is not entitled to protection as a servant of Ecuatoriana. A party may be a servant of another if that party's physical conduct in the rendering of the service is subject to the actual control or right of control by the master. See Restatement of the Law of Agency 2d, § 2(2) (1958). AMR acted independently in performing the work delegated to it by American at JFK. Once the freight was placed outside the terminal door, AMR took no instruction from any party regarding the actual physical handling of the freight. Frank Aff., Ex. E at 40-41. Because AMR was neither employed by Ecuatoriana nor under Ecuatoriana's physical control while it performed its services, AMR was not Ecuatoriana's servant.
Finally, AMR was not Ecuatoriana's representative at JFK. Article Four of the Agreement between American and Ecuatoriana provided that Ecuatoriana had the right to appoint its own representative to inspect the facilities and services of the ground handling agent (American). Frank Aff., Ex. I at 4. Ecuatoriana had appointed Burt Leone as its representative at JFK. See Plaintiff's Memorandum of Law in Support of Motion for Partial Summary Judgment at 11. See also Frank Reply Aff., Ex. J. The appointment of Leone precludes AMR from claiming to be Ecuatoriana's representative
The limitations of liability on a waybill or tariff must be clearly expressed, and will be strictly construed against the party who seeks protection under the clause. See Herd, 359 U.S. at 305. Because AMR Services was not a party to the agreement between ETTL and Ecuatoriana, nor an express beneficiary as an agent, servant or representative of Ecuatoriana, AMR may not avail itself of the protection of the liability limitation clauses. Plaintiff's motion for partial summary judgment, striking AMR's partial affirmative defense of limited liability, is granted.
B. AMR's Liability
Because both parties cite New York law to support their arguments, that law will apply as it pertains to the questions of negligence surrounding the loss of the cargo by AMR Services. In the absence of a mutual contract of bailment, an implied bailment arises when a party comes into lawful possession of the personal property of another. See Brown v. Stinson, 821 F. Supp. 910, 916 (S.D.N.Y. 1993), Tremarolina v. Delta Airlines, 117 Misc. 2d 484, 458 N.Y.S.2d 159, 160 (Civ. Ct., Queens Co. 1983). The possessor becomes a constructive bailee. Id. However, it is well-settled that a bailee is not an insurer. See Hogan v. O'Brien, 212 A.D. 193, 208 N.Y.S. 477, 478 (3d Dep't 1925). Nevertheless a bailee may still be liable to the bailor for loss in an action for negligence. Id.; see also Procter & Gamble Distrib. Co. v. Lawrence Am. Field Warehousing Corp., 16 N.Y.2d 344, 359, 266 N.Y.S.2d 785, 213 N.E.2d 873 (1965). When there is an admission or other proof that the property entered into the possession of the bailee and then was not returned, it is the duty of the bailee to explain the loss. See Fidelity & Guaranty Ins. Corp. v. Ballon, 280 A.D. 373, 113 N.Y.S.2d 546, 548 (1st Dep't 1952). Even where the bailee claims that the property was stolen, if the bailor has demonstrated that the theft was due to the bailee's negligence, the bailee has the burden of showing that the theft was not occasioned by its negligence. See Leather's Best, Inc. v. S.S. MORMACLYNX, 451 F.2d 800, 813 (2d Cir. 1971); Hogan, 208 N.Y.S. at 478.
Applying the common law of bailments to the facts in this case, the subject shipment entered the possession of AMR Services after the cargo was placed outside the terminal door by American Airlines. Nieves' handling of a portion of the freight is sufficient proof that AMR had obtained possession of the cargo. AMR has not attempted to explain the loss of ETTL's property beyond its claim that the cargo was stolen. Hartford, on the other hand, has alleged that Nieves failed to check the freight upon its arrival and failed to sign for it. Hartford also alleges that AMR was negligent in not having its security personnel patrol outside of the building, especially since there is a road nearby and freight was routinely left outside the building. Hartford has alleged facts sufficient to warrant a finding that the theft of the cargo was the result of AMR's negligence.
AMR has not called into question nor disputed any of Hartford's allegations. In fact, AMR has not even filed a statement of contested facts pursuant to Local Rule 3(g). Instead, AMR simply states that "fact issues remain as to whether the theft was occasioned by AMR's negligence." Defendant's Memorandum of Law in Opposition to Plaintiff's Motion for Partial Summary Judgment, 14-15. AMR makes no effort to point out what these "fact issues" might be.
In the absence of a 3(g) statement from the non-moving party, the Court may deem as admitted the facts set forth in the movant's 3(g) statement. See Dusanenko, 726 F.2d at 84. But even if this Court does not accept as admitted all of Hartford's factual allegations in its 3(g) statement, there is still nothing in the pleadings, depositions or affidavits which casts doubt upon Hartford's allegations of AMR's negligence. In such a situation, there are no factual issues to be tried. A reasonable jury, based on the facts in this record, could not find for defendant AMR Services.
Plaintiff's motion for partial summary judgment as to AMR's liability is granted.
Having decided that the limitation of liability clauses in Ecuatoriana's air waybill and tariff do not protect defendant AMR, and having decided that AMR was negligent as a matter of law, the Court finds that there are no further issues to be tried. While the pleadings contain a number of claims and cross-claims
, there are no further disputes as to either liability or damages. Therefore, judgment is awarded to Hartford Fire against AMR Services for the sum of $ 164,067, which is the value of the unrecovered cargo less the value of the freight recovered by the police and delivered to ETTL.
AMR's cross-claims against Ecuatoriana are dismissed. Ecuatoriana's cross-claims against AMR are granted to the extent that any judgment is sought by Hartford against Ecuatoriana.
Shira A. Scheindlin
Dated: New York, New York
June 21, 1996