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INTERCARGO INSURANCE COMPANY v. CHINA AIRLINES

February 4, 1999

INTERCARGO INSURANCE COMPANY, A/S/O EXPRESS LINE CORPORATION, PLAINTIFF,
v.
CHINA AIRLINES, LTD., DEFENDANT.



The opinion of the court was delivered by: Berman, District Judge.

ORDER

This is an action by Intercargo Insurance Company ("Intercargo" or "Plaintiff") against China Airlines, Ltd. ("CAL" or "Defendant") seeking damages in the amount of $22,600 for the non-delivery of five cartons of computer parts shipped from Los Angeles to Hong Kong via Taipei, Taiwan, on or about June 29, 1996, and pursuant to CAL Air Waybill No. 297 6300 8595.

The parties agree that the Convention for Unification of Certain Rules Relating to International Transportation by Air, Oct. 12, 1929, 49 Stat. 3000, T.S. 876 (1934), reprinted in the note following 49 U.S.C.A. § 40105 ("Warsaw Convention"), applies to this shipment and to Intercargo's claims.

CAL. asserts that, pursuant to Article 22(2) of the Warsaw Convention, its liability, if any, for the non-delivered goods is limited to the maximum sum of $9.07 per pound of cargo lost by CAL. Thus, based upon the weight of the non-delivered goods, its liability to Intercargo is limited to the maximum sum of $795.69.

Intercargo alleges that the Article 22(2) limitation of liability is not applicable to this claim because CAL's air waybill was defective in that it failed to state the "agreed stopping place" by name (i.e. Taipei) and did not adequately incorporate "agreed stopping place" information by reference in accordance with a line of cases decided by the Court of Appeals for the Second Circuit. The parties have made cross-motions for summary judgment. Oral argument was held on January 27, 1999.

I. Background

The facts of this case are largely undisputed.

The action arises from the partial loss of a shipment of goods carried by CAL from Los Angeles to Hong Kong via Taipei, Taiwan, on or about June 29, 1996, pursuant to CAL Air Waybill No. 297 6300 8595. CAL's waybill was issued by Express Line Corporation ("Express"), the shipper/consignor. Express filled out the information on the waybill and issued its House Air Waybill No. ELC-030338. The shipment contained eleven cartons of computer parts weighing 193 pounds. CAL Air Waybill No. 297 6300 8595 and Express House Air Waybill No. ELC-030338 list Los Angeles and Hong Kong as the cities of departure and destination, respectively. These waybills also list CAL Flight No. CI317 under the caption "Flight/Date." Neither waybill lists Taipei (or any other location) by name as a stopping place.

Paragraph 3 of the Conditions of Contract set forth on the reverse side of CAL's Air Waybill provides, in part, "[t]he agreed stopping places . . . are those places, except the place of departure and the place of destination, set forth on the face hereof or shown in the Carrier's timetables as scheduled stopping places for the route." CAL Flight No. CI317 is listed in CAL's timetables as operating from Los Angeles to Taipei, Taiwan. After CAL Flight No. CI317 arrived in Taipei, the shipment in question was transferred to CAL Flight No. CI607 and carried to Hong Kong. CAL Flight No. CI607 was a nonstop flight from Taipei to Hong Kong. No mention is made, either directly or by reference, to Flight No. CI607 on either waybill.

Intercargo alleges that when the shipment arrived in Hong Kong, five of the eleven cartons were missing. Intercargo further alleges that CAL did not satisfy Articles 8(c) and 9 of the Warsaw Convention which require designation of agreed stopping places. Specifically, Intercargo asserts that because CAL's air waybill makes no direct mention of Taipei; identifies only CAL Flight No. CI317; and does not make reference to transfer CAL Flight No. CI607 which moved the shipment from Taipei to Hong Kong, the waybill is defective and CAL's liability is not limited under the Warsaw Convention.

CAL asserts that, in accordance with its Conditions of Contract and timetables, the agreed stopping place of Taipei was incorporated by reference into the CAL air waybill by the listing of flight CI317. This, according to CAL, fully satisfied the requirements of Articles 8(c) and 9 of the Warsaw Convention. CAL further argues that a reference to transfer Flight No. CI607 is not required by the Convention or by case law.

Thus, the (narrow) issue before the Court is whether or not CAL's air waybill had to include reference to transfer Flight No. CI607. If this question is answered affirmatively, the Court must also decide whether Intercargo's claims are barred by the alleged negligence of its insured/subroger, Express.

II. Discussion

A. Air ...


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