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NIPPON FIRE & MARINE INS. v. SKYWAY FREIGHT

April 1, 1999

NIPPON FIRE & MARINE INSURANCE CO., LTD., PLAINTIFF,
v.
SKYWAY FREIGHT SYSTEMS, INC. AND AMERICAN INTERNATIONAL AIRWAYS, INC., DEFENDANTS.



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

OPINION AND ORDER

The issue presented here is whether a shipper may recover from its common carrier or its common carrier's sub-contractor the amount of its loss beyond that covered by the limitation of liability in its carrier's airbill. The answer is no.

Plaintiff Nippon Fire & Marine Ins. Co., Ltd. ("Nippon") was the insurer of two shipments of laptop computers made by Toshiba America Information Systems, Inc. ("Toshiba"). Defendant Skyway Freight Systems, Inc. ("Skyway"), an air and ground carrier, agreed to ship the laptops and then contracted with defendant American International Airways, Inc. ("AIA"), another air carrier, for their transportation. Most of the first and all of the second shipments were lost and never delivered. Prior to any formal discovery, plaintiff and both defendants now move for summary judgment.

BACKGROUND

The following facts are undisputed. Toshiba is a manufacturer and distributor of laptop computers and other electronic equipment. Defendant Skyway is a domestic air and ground common carrier that entered into a contract with Toshiba to ship Toshiba's goods. Under this contract, Skyway agreed to carry a shipment of 50 Toshiba laptops on September 8, 1997, and a second shipment of 157 Toshiba laptops on September 9, 1997. Both shipments were shipped on "3S" or three-day air terms, requiring delivery on the third business day following pickup. 3S is Skyway's slowest method of air service. The laptops were to be shipped from Toshiba's facilities in Irvine, California and delivered to Toshiba's consignee, Inacom Corporation, in New Jersey.

The backside of the airbills indicates that the shipments are governed by Skyway's Air Freight and Express Truck Rules and Regulations Tariff No. 1. The tariff states that "Skyway's liability shall, in no event, exceed the declared value of the shipment . . ." The tariff defines declared value as follows:

  Declared Value — Air A shipment will have a
  declared value of 50 cents per pound or $50.00,
  whichever is higher, unless a higher value is declared
  on the Airbill at the time of receipt.

(Emphasis supplied.) The airbills issued by Skyway contain boxes that permit Toshiba to declare the value of the goods. If it had declared a value, the fee for shipping the goods would have been increased at a rate dependent on the value declared. The tariff provides:

  An additional charge of 75 cents shall be assessed for
  each $100.00 (or fraction thereof) by which the value
  declared on the Airbill, at the time of receipt of the
  shipment from the shipper, exceeds 50 cents per pound or
  $50.00, whichever is higher.

Choosing instead to insure the shipment of the laptops through Nippon, Toshiba left the boxes for a declared value blank. Toshiba declared a weight of 600 pounds on the bill of lading for the first shipment and 1, 606 pounds on the bill of lading for the second shipment.

Rather than transport the goods itself, Skyway shipped the goods from California to Pennsylvania through AIA. AIA issued two airway bills for the shipments, and "NVD" or no value declared was written in the box entitled "Declared Value for Carriage" on that bill. Each airway bill states on its face that the goods are

  subject to the conditions of contract on the reverse
  hereof, the shipper's attention is drawn to the notice
  concerning carrier's limitation of liability. Shipper
  may incease such limitation of liability by declaring a
  higher value for carriage and by paying a supplemental
  charge subject to conditions of contract on reverse side.

(Emphasis supplied.) The reverse side contains the following limitation of liability provision:

  [the] carrier's liability is limited to damages which
  occur while the shipment is in the custody of carrier
  or its duly authorized agent and shall in no event
  exceed (1) 50 ¢ per pound; multiplied by the number
  of pounds (or fraction thereof) of each piece(s) of the
  shipment which may have been delayed, lost, damaged,
  or destroyed (but not less than $50 per shipment), unless
  a higher value is declared herein and applicable charges
  are paid thereon, plus the amount of any transportation
  charges for which the carrier may be liable, or (2) the
  amount of any damages actually sustained; whichever is less;
  and that carrier's liability excludes all special and consequential
  damages for which the shipper has not given the carrier
  advance written notice on the airbill of the circumstances
  which will result in the occurrence of such damages, as
  provided in carrier's Official Freight Tariff Manual.

The AIA tariff manual contains similar limitations.

Skyway delivered both shipments to AIA's facility at the Los Angeles International Airport in California. Both shipments arrived in Philadelphia at 8:40 a.m. on Thursday, September 11, 1997 (the third business day following the September 8, 1997 shipment; the second business day following the September 9, 1997 shipment), and AIA held them for Skyway's pick-up at its Philadelphia airport warehouse. Skyway did not retrieve the shipments in a timely manner, and neither shipment was delivered on time. With respect to the first shipment, 20 of the 50 laptops, with a value of $51,306, were eventually reported missing by Skyway. The remaining laptops were delivered late.*fn1 With ...


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