United States District Court, S.D. New York
October 1, 2004.
THE WATKINS SYNDICATE AT LLOYD'S OF LONDON, Plaintiff,
TAMPA AIRLINES, S.A., Defendant. TAMPA AIRLINES, S.A., Third-Party Plaintiff, v. DYNAMIC EXPRESS, INC., Third-Party Defendant.
The opinion of the court was delivered by: MICHAEL MUKASEY, Chief Judge, District
OPINION & ORDER
Plaintiff, the Watkins Syndicate of Lloyd's of London
("Watkins"), sues defendant Tampa Airlines under the Warsaw
Convention*fn1 for damage to a shipment owned by Watkins's
subrogor, Apparel Contractors Association ("Apparel"). Tampa in
turn sues third-party defendant Dynamic Express for damages.
Watkins moves for partial summary judgment under Fed.R. Civ. P.
56(c), and Tampa cross-moves for summary judgment on the same
grounds. For the reasons discussed below, both motions are
The facts in this case are as follows, and are undisputed
except as otherwise noted. Defendant Tampa shipped 123 cartons of
garment cutwork and trim owned by Apparel from Cali, Colombia to
Miami, Florida. When the shipment arrived in Miami, Allen
Klinger, president and principal owner of Apparel, contracted
Dynamic to transport the cargo by truck to Dynamic's warehouse in
New Jersey. Klinger had been told that the cargo had been
"sitting outside" at the airport. (Klinger Dep. at 9) Because he
feared the boxes might have been damaged by the elements while
sitting outside, Klinger instructed Dynamic to "make sure everything [was] okay" when shipment was picked
up.*fn2 (Klinger Dep. at 9, 33) On September 6, 2002,
Dynamic sent one of its drivers, Carlos Hernandez, to pick up the
shipment at Miami International Airport.
At the airport, Hernandez met Benjie Rios, who was responsible
for signing over the Apparel shipment from Tampa to Dynamic.
(Rios Dep. at 17) Rios was an employee of Worldwide Flight
Service,*fn3 a company that breaks down and distributes
cargo for Tampa and other airlines. (Rios Dep. at 6) When he saw
the shipment, Hernandez noted that the boxes were "swollen up and
. . . wet with spots." (Hernandez Dep. at 11) Rios and Hernandez,
both native Spanish speakers, conversed in Spanish and agreed
that the shipment was damaged. Rios later testified that the
boxes looked as if "there was too much weight inside" and that
they were "exploding [open] inside" (Rios Dep. at
20-21).*fn4 Hernandez radioed his supervisor Levine to tell him about the
damage, and Levine instructed Hernandez "to make the proper
notations." (Levine Dep. at 30)
Rios signed the pickup form under the notation "cargo came with
improper package," (Hernandez Dep. Exh. 1), although Rios and
Hernandez dispute who wrote the notation itself.*fn5
(Hernandez Dep. at 14; Rios Dep. at 25) Hernandez testified that
Rios told him that the notation on the pickup form was
"complete," and that Hernandez could not make any exceptions to
the shipment "other than what was obvious." (Hernandez Dep. at
24; Levine Dep. at 38)
After the damage notation was made and Rios had signed the
form, Hernandez took the top copy of the pickup form with him and
left Rios with the bottom two copies. Rios's copies did not have
any notation of damage on them, because the notation had been
made only on the top copy, and the pickup order did not have
carbon paper between its sheets. Both Hernandez and Rios knew
that Hernandez had the only annotated copy of the form.
(Hernandez Dep. at 29-30; Rios Dep. at 29-30) Hernandez and Rios
agreed that Hernandez needed the notation of damage to show the trucking company he worked for, Dynamic, and that the annotated
pickup form was for Dynamic, not for Rios's company, Worldwide.
(Hernandez Dep. at 29; Rios Dep. at 25, 29, 32)
Hernandez drove the damaged cargo to the Dynamic facility in
Miami. (Hernandez Dep. at 19) At that point, Dynamic employee
Jeffry Levine told Klinger about the poor condition of the boxes,
and Klinger instructed Levine to transport the shipment to the
Dynamic warehouse in New Jersey so that he could examine it.
(Klinger Dep. at 10-11) When Klinger inspected the shipment upon
its arrival in New Jersey, he determined it to be a "disaster;"
the boxes were "broken open, smelly, [and] wet." (Id. at 13;
see also plaintiff's Exh. 6, (survey report describing
extensive damage to the shipment)) Klinger and his insurers
independently determined that the goods were unsalvageable.
Apparel then shipped all 123 boxes to Mexico, where the cutwork
and trim was either "given away or put in the garbage." (Klinger
Dep. at 53; see also id. at 27)
On October 1, 2002, Apparel sent Tampa a letter noting the
damage and stating that it would hold Tampa fully responsible for
its monetary losses. (Furman Decl., Exh. C) In February 2003,
plaintiff insurers paid Apparel $96,286.11 as compensation for
its losses (plaintiff's Exh. 7), and subsequently brought this
action for damages against Tampa.
When two parties in a case have cross-moved for summary judgment, both asserting an absence of a genuine issue of
material fact, a court must examine each motion separately, and
in each instance, draw all inferences against the moving party;
the reviewing court need not enter a judgment for either party.
Morales v. Quintel Entm't, Inc., 249 F.3d 115, 121 (2d Cir.
2001); Heublein, Inc. v. United States, 996 F.2d 1455, 1461
(2d Cir. 1993); Padberg v. McGrath-McKechnie,
203 F. Supp. 2d 261, 274 (E.D.N.Y. 2002).
The court has subject matter jurisdiction over this case
pursuant to the Warsaw Convention, which provides an exclusive
federal remedy for all claims brought against international air
carriers for damaged goods. If the Convention applies, it
preempts all state law claims arising out of international air
transportation. El Al Isr. Airlines, Ltd. v. Tsui Yuan Tseng,
525 U.S. 155, 174-75 (1999); Lokken v. Fed. Express Corp.,
No. 99-0585, 2000 WL 193121, at *3 (S.D.N.Y. Feb. 16, 2000).
Therefore, this court will not consider any supplemental state
law claims arising from this incident.
The Warsaw Convention governs claims arising from "all
international transportation of persons, baggage, or goods
performed by aircraft for hire." Warsaw Convention, art. 1(1).
Article 26 of the Convention provides that receipt of goods
without complaint is "prima facie evidence that the same have
been delivered in good condition. . . ." Id. art. 26(1). If
goods have been damaged in transit, "the person entitled to
delivery must complain to the carrier forthwith after the discovery of the damage, and, at the latest, . . . within 14 days
from the date on which the baggage or goods have been placed at
his disposal." Id. art. 26(2). The Convention further provides
that "[e]very complaint must be made in writing upon the document
of transportation or by separate notice in writing dispatched
within the times aforesaid." Id. art. 26(3). If the above
requirements are not followed, "no action shall lie against the
carrier, save in the case of fraud on his part." Id. art.
Plaintiff Watkins moves for partial summary judgment on the
ground that the notation "cargo came with improper package" on
the Apparel shipment pickup form constituted adequate written
notice for the purposes of the Warsaw Convention. Plaintiff
alternatively claims that if notice was not adequate, defendant's
conduct was sufficiently fraudulent to convince plaintiff that
sufficient notice had been provided. Defendant Tampa cross-moves
for summary judgment, arguing that notice was not sufficient and
that no fraud occurred, requiring dismissal of the entire claim.
The Warsaw Convention requirement of formal written notice for
complaints is "strictly construed." Denby v. Seaboard World
Airlines, 575 F. Supp. 1134, 1144 (E.D.N.Y. 1983), rev'd on
other grounds, 737 F.2d 172 (1984); see also Onyeanusi v.
Pan Am. World Airways, Inc., No. 88-6967, 1990 U.S. Dist. LEXIS
7368, at *13 (E.D. Pa. June 14, 1990) ("Noncompliance with the
written notice requirement produces a harsh result."). Such written
notice is important, because "[f]ormal written notice provides
the carrier not merely with an indication that a shipment has
been damaged, but with an express and definite statement of the
shipper's intention to hold the carrier liable. Actual notice
gives the carrier nothing to indicate that he, rather than
another party, is the object of the shipper's claim." Denby,
575 F. Supp. at 1144 (citations omitted).
The required notice is "not intended to burden the party
bearing the risk of loss with onerous hyper-technical hurdles in
order to make a claim for damages," Sony Corp. v. BDP Int'l,
Inc., No. 96-8934, 1999 WL 681497, at *9 (S.D.N.Y. Sept. 1,
1999), but "actual notice of the damage may not substitute for
formal written notice." Moses v. Air Afrique, No. 99-541,
2000 WL 306853, at *7 (E.D.N.Y. Mar. 21, 2000); see also Stud
v. Trans Int'l Airlines, 727 F.2d 880, 883 (9th Cir. 1984) ("If
written notice of a consignee's complaint is necessary to
preserve the right of recovery, a carrier's actual knowledge of
the loss, gleaned from a source other than a written notice of
complaint, is necessarily insufficient."); Lokken, 2000 WL
193121, at *6 ("`The clear dictates of Article 26(3) require
written notification even if an agent of the air carrier has made
some affirmative representation that [he or] she is aware of the
damage or delay.'") (citation omitted) (alteration in original).
Plaintiff Watkins, the insurer, claims that the notation "cargo
came with improper package" on Dynamic's copy of the pickup form was sufficient written notice to Tampa. Watkins
argues that it was Rios's decision not to make a copy of
Hernandez's notation, and that it should not suffer as a result
of Tampa's failure to properly instruct its agents about the
importance of retaining these types of documents. Defendant Tampa
counters that this is not a question of retention of notice, but
rather of dispatch of notice; Tampa argues that Hernandez never
gave written notice to Rios at all. According to defendant, that
Rios was aware of the damage and signed off on Hernandez's form
constitutes actual notice, but not the required written notice.
The Warsaw Convention's written notice requirement is applied
stringently, and the court cannot accept plaintiff's contention
that the communication between Hernandez and Rios constituted
adequate notice in this case. Hernandez and Rios discussed the
damage to the shipment, and a notation was made on a form that
Hernandez took back to his own company. Hernandez testified that
it was not his job to give Rios notice of the damage, and that
the annotated pickup order was for his employer Dynamic, not for
Tampa. (Hernandez Dep. at 29) Rios's actual notice of the damage
is insufficient to meet the Convention and the Denby standard,
and there is no affirmative duty for a carrier with actual notice
of damage to request formal written notice from the complaining
party. Thus Rios's failure to make a copy of the pickup order
that Hernandez took with him is immaterial, as is the dispute
over who made the damage notation on that order. Plaintiff did not proffer written notice of its
complaint to defendant until October 1 more than a week after
the Convention's 14-day notice period had expired. There is at
least a material issue of fact as to whether plaintiff provided
adequate written notice in this case; therefore, plaintiff's
motion for partial summary judgment on this ground is denied.
As previously stated, fraud by the carrier can excuse a
claimant from the Warsaw Convention's requirement of timely
notice. Warsaw Convention, art. 26(4). The Second Circuit has
ruled that the fraud exception includes "any intentional acts by
the carrier or its agents which significantly decrease the
likelihood of the shipper's giving notice during the brief period
allowed." Denby v. Seaboard World Airlines, Inc.,
737 F.2d 172, 183 (2d Cir. 1984). Courts have interpreted this standard
with considerable flexibility, permitting further inquiry even
where fraud seems unlikely. See, e.g., Dillon v. United Air
Lines, Inc., 162 F. Supp. 2d 380, 386 (E.D. Pa. 2001) (excusing
untimely written notice where carrier told plaintiff verbal
notice would be sufficient); Tseng v. El Al Isr. Airlines,
919 F. Supp. 155, 159-60 (S.D.N.Y. 1996), rev'd in part on other
grounds, 122 F.3d 99 (2d Cir. 1997) (excusing untimely written
notice where carrier told plaintiff to raise her claim when she
returned to the United States); Locks v. British Airways, 759 F. Supp. 1137, 1140
(E.D. Pa. 1991) (Pollak, J.) (excusing untimely written notice
where carrier promised it would respond to oral complaint).
In Denby, the Court held that "if a preponderance of the
evidence were to show that a carrier discouraged a consignee's
truckman from making an appropriate entry on a copy of the air
waybill retained by the carrier or informed him that written
notice was unnecessary because the carrier knew of the damage,
the fraud exception would be made out." 737 F.2d at 183.
Plaintiff has alleged a very similar situation in its pleadings,
and the testimony of both Carlos Hernandez and Jeffry Levine
provides further evidence of conduct that might have discouraged
Apparel from providing written notice. As detailed above,
Hernandez testified that Rios told him that the notation on the
pickup form was "complete," and that Hernandez could not make any
exceptions to the shipment "other than what was obvious."
(Hernandez Dep. at 24) Additionally, on September 18, 2002 Levine
wrote Klinger a letter noting that "Tampa Airlines would not
allow us to make exception, other than what is obvious;" Levine
testified that he had based this statement on his conversation
with Hernandez on the date of pickup. (Hernandez Dep. Exh. 2;
Levine Dep. at 38) Defendant neither confirms nor denies that
Rios made these representations to Hernandez. However, if Rios
did indeed prevent Hernandez from making more detailed notations,
or if he told him that his notations were "complete," there is a
possibility that Apparel was thereby discouraged from giving further written notice.
At the very least, material issues of fact remain as to exactly
what statements Rios made to Hernandez, and what effect they
might have had on the conduct of plaintiff's subrogor. Because a
jury might determine that Rios's statements satisfy the Denby
standard for fraud excusing timely written notice, defendant's
summary judgment motion is denied. Plaintiff's motion for partial
summary judgment on the issue of notice is also denied, because a
jury could likewise decide that Rios's statements are not
sufficient to constitute fraud.
* * *
For the reasons set forth above, both motions for summary
judgment are denied.