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HARTFORD FIRE INS. CO. v. EMPRESA ECUATORIANA DE A

June 21, 1996

HARTFORD FIRE INSURANCE COMPANY as subrogee of E.T. TRADING, LTD., Plaintiff, against EMPRESA ECUATORIANA DE AVIACION d/b/a ECUATORIANA AIRLINES, and AMR SERVICES, INC., Defendants.


The opinion of the court was delivered by: SCHEINDLIN

 SHIRA A. SCHEINDLIN, U.S.D.J.

 Plaintiff Hartford Fire Insurance Company ("Hartford") as subrogee of E.T. Trading, Ltd. ("ETTL"), has moved for partial summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Hartford seeks to strike the partial affirmative defense of limited liability pleaded by defendant AMR Services, Inc. ("AMR"), and also seeks judgment against AMR on the issue of liability. For the reasons set forth below, the motion is granted.

 I. Factual Background

 The subject of this action is the loss of a shipment of air freight transported from Panama to the United States. On or about June 5, 1991, defendant Empresa Ecuatoriana de Aviacion ("Ecuatoriana") received cargo containing 11 packages of photographic goods, for shipment to John F. Kennedy International Airport ("JFK") in New York City. Affidavit of Stephen A. Frank, Attorney for Plaintiff ("Frank Aff."), Ex. G. The shipment was transported pursuant to the terms and conditions of Ecuatoriana's international air waybill and tariff filed with the U.S. Department of Transportation. Plaintiff's Statement of Uncontested Facts ("Pl. Stmt.") P 4. The goods were consigned to ETTL, who paid the shipper $ 184,814 via wire transfer. Frank Aff., Ex. F at 7-8. According to the air waybill, the shipment weighed 565 kilograms. Id., Ex. G. The shipper did not declare the value of the goods on the Ecuatoriana air waybill, and did not pay any additional fee in connection with it. Id.

 The shipment arrived at JFK aboard an Ecuatoriana flight around 9 p.m. on June 6, 1991. Pl. Stmt. P 10. The freight was off-loaded from the aircraft and moved on dollies by American Airlines ("American") to a location outside the ramp door of AMR's terminal building No. 78. Id. P 11. Typically, the party arriving with freight would enter the warehouse and notify AMR personnel of the arrival. An AMR employee would then prepare a form, indicating the time and date of arrival, the amount of freight that had arrived, and which airline had delivered the freight. Frank Aff., Ex. E at 19-20. The cargo would be left outside the warehouse and AMR was responsible to take it inside and prepare it for eventual delivery to customers. Id. at 20-21. This procedure was AMR's standard procedure for arriving freight. Id. at 19-20.

 However, on June 6, 1991, Julio Nieves, an AMR employee responsible for unloading and processing incoming freight, moved some of the cargo inside, but left the portion belonging to ETTL outside while he removed the freight from the dollies. Frank Aff., Ex. E at 16-17, 24-26. The portion of the cargo which had been left outside was stolen from its location while Nieves was inside the terminal. Pl. Stmt. P 13.

 Though AMR's terminal faces a road at JFK, and though freight was routinely left outside the terminal doors, AMR's security personnel worked only inside the building. Frank Aff., Ex. E at 30; Ex. D at 15. An internal AMR memorandum, prepared in conjunction with AMR's investigation of the theft, points out that Nieves admitted he failed to check the Ecuatoriana freight upon its arrival, failed to sign for the cargo, and failed to notify a member of AMR management that freight was missing. Frank Reply Aff., Ex. J. The memo was signed by Ronald Mancuso, AMR's terminal manager at the time of the theft. Id.

 Ultimately a small portion of the stolen shipment was recovered and delivered to ETTL. Frank Aff., Ex. F at 22. ETTL filed a claim for loss with Hartford, and was compensated for the loss of the unrecovered cargo. Pl. Stmt. P 24. The invoice value of the unrecovered freight is $ 164,067. Frank Aff., Ex. F at 33.

 Prior to the transportation of the stolen shipment, Ecuatoriana had entered into a contract with American, whereby American would act as Ecuatoriana's ground handling agent. Frank Aff., Ex. I. Among the duties American agreed to perform for Ecuatoriana were off-loading incoming cargo from aircraft, transporting it to a terminal, breaking down the freight, processing it through Customs, and delivering it to the consignee. Id., Annex A. Under Article 3 of the Ground Handling Agreement ("Agreement"), American was permitted to sub-contract the performance of certain ground handling services. Frank Aff., Ex. I at 4. Under that provision of the Agreement, AMR began providing services for Ecuatoriana freight about two years prior to the date of the subject shipment, even though there was no formal agreement between AMR and American to perform those services. Frank Aff., Ex. D at 19. AMR billed Ecuatoriana for the services it rendered, based upon the rate which American had negotiated with Ecuatoriana. Id. at 20.

 However, American did not relinquish all of its duties to AMR. American retained for itself the task of off-loading cargo from aircraft and moving the freight on dollies to the terminal. Id. at 18-19, 21. AMR had no formal agreement with either Ecuatoriana or American for the ground handling of Ecuatoriana freight at JFK. Id. at 11, 13-14.

 Under the terms of the air waybill, Ecuatoriana's liability is limited to $ 20 per kilogram of goods lost, damaged or delayed. *fn1" Frank Aff., Ex. G. The rights of the parties are governed solely by the terms of the air waybill and tariff filed by Ecuatoriana. Frank Aff. P 3. See also Tishman & Lipp v. Delta Air Lines, 413 F.2d 1401, 1403 (2d Cir. 1969).

 Ecuatoriana's air waybill provides that

 
Except as otherwise provided in Carrier's tariffs or conditions of carriage, in carriage to which the Warsaw Convention does not apply Carrier's liability shall not exceed US $ 20.00 or the equivalent per kilogramme of goods lost, damaged or delayed, unless a ...

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