The opinion of the court was delivered by: Dora L. Irizarry, United States District Judge
Plaintiffs, Assitalia Le Assicurazioni D'Italia S.p.A. ("Assitalia") and Assicurazioni Generali S.p.A. ("Generali") as subrogees of Alitalia Linee Aeree Italiane S.p.A. ("Alitalia"), AAR Parts Trading, Inc., and Norlease, Inc., have brought this insurance subrogation claim for property damage against defendants, Nippon Cargo Airlines Co., Ltd. ("NCA") and World Wide Flight Services, Inc. ("WFS"). Plaintiffs allege that defendants damaged an aircraft engine leased by Alitalia while moving it in a warehouse at John F. Kennedy Airport ("JFK") on October 26, 2004. Defendants have moved for summary judgment under Fed. R. of Civ. P. 56, claiming that the parties' IATA Standard Ground Handling Agreement ("SGHA") precludes liability. Plaintiffs contend that the SGHA does not apply to the incident at hand. Alternatively, plaintiffs assert their right to arbitration under the SGHA if the court finds that the SGHA applies. For the reasons set forth below, the court finds that the SGHA applies, and plaintiffs have properly asserted their right to arbitrate. As such, these proceedings are stayed pending the outcome of arbitration.
This insurance subrogation action arises out of the damage to an aircraft engine leased by Alitalia. The damage occurred while WFS was moving the engine in NCA's warehouse at JFK on October 26, 2004. Alitalia is an Italian International Airline with operations at JFK. NCA provides ground handling services at JFK, which includes the loading and off-loading of aircraft cargo as well as providing temporary storage for the cargo. In October 2004, NCA provided such ground handling services to Alitalia pursuant to the SGHA, which was "effective from: August 01, 2002." (Defs.' Ex. A at § 1.1 of Annex B.) On September 17, 2004, Alitalia and NCA agreed that the SGHA "shall continue in force from August 1, 2004 until July 31, 2007...." (Defs.' Ex. A at § 11.1 of Annex B.) NCA entered into a separate contract with WFS to perform those services for Alitalia at JFK. (Compl. at ¶ 9; Defs.' 56.1 Statement at ¶ 9.)
The SGHA sets forth the services to be provided, such as providing or arranging: (1) suitable warehouse and handling facilities for general cargo, specialized shipments, and specialized cargo products; (2) storage of cargo for a period to be mutually agreed; and (3) handling services for general cargo, specialized shipments, and specialized cargo products. (Defs.' Ex. A at §§ 5.1.1, 5.1.3 of Annex A; § 1.1.1 of Annex B.) Additionally, the SGHA provides that it will cover services not specifically listed in the SGHA. (Defs.' Ex. A at § 1.1 of the Main Agreement ("It is not considered necessary or possible to specify every detail of the services it being generally understood what such services comprise and the standards to be attained in their performance.").) With respect to such services, the SGHA states: "As far as possible, [NCA] will, upon request, provide to [Alitalia] any additional services. Such services may be governed by special conditions to be agreed between the Parties." (Defs.' Ex. A at § 1.7 of the Main Agreement.; see also Defs.' Ex. A at § 2.1 of Annex B ("All services not included in Paragraph 1 of this Annex shall be charged for at current local rates as mutually agreed and payable to [NCA].").)
The SGHA includes an arbitration provision, which requires that "[a]ny dispute or claim concerning the scope, meaning, construction or effect of [the SGHA] or arising therefrom shall be referred to and finally settled by arbitration...." (Defs.' Ex. A at § 9.1 of the Main Agreement.)
At about the end of 2002 or beginning of 2003, Erminio Amanzi, Alitalia's maintenance department supervisor at JFK, asked Robert Caton, NCA's manager of customer airlines at JFK, to temporarily store Alitalia's engines in the NCA warehouse that housed other Alitalia cargo. (Amanzi Dep. at 38:13-40:13, Pls.' 56.1 Statement at ¶ 5.) Amanzi and Caton agreed that NCA would store each engine for one thousand dollars per month. (Amanzi Dep. at 40:3-7; Pls.' 56.1 Statement at ¶ 8.)
On the weekend of October 23, 2004, Alitalia's maintenance department delivered three aircraft engines to store at NCA's warehouse. (Pls.' 56.1 Statement at ¶ 23.) It delivered two of the engines on air transportation stands and one engine on a warehouse storage stand. (Defs.' 56.1 Statement at ¶ 24.) The warehouse storage stand is approximately ten inches higher than the air transportation stand. (Defs.' 56.1 Statement at ¶ 27.) On October 26, 2004, WFS damaged the engine that Assitalia delivered on the warehouse storage stand. (Defs.' 56.1 Statement at ¶ 16.) The damage occurred when WFS attempted to move it on the stand into the Elevated Traversing Vehicle ("ETV") storage system. (Defs.' 56.1 Statement at ¶ 19.) The height of the warehouse storage stand caused a pipe that was on top of the engine to strike the ETV system. (Id.)
Alitalia's insurance policy with plaintiffs covered the damage. (Compl. at ¶¶ 12-13.) Pursuant to that policy, plaintiffs paid Alitalia $190,747.75, the cost of the damage to the engine. (Compl. at ¶¶ 15-16.) Plaintiff then filed this action to recover that amount from defendants. (Compl. at ¶¶ 18.) Plaintiffs seek recovery under claims for negligence, breach of contract, and bailment. In moving for summary judgment, defendants argue that the "Liability and Indemnity" provisions of the SGHA preclude such claims. Under those provisions, plaintiffs may only recover for damages "arising from an act or omission of [NCA] in the performance of this Agreement... done with intent to cause damage... or recklessly and with the knowledge that damage... will probably result." (Defs.' Ex. A at § 8.1 of the Main Agreement.) According to defendants, the damage was, at most, the result of ordinary negligence.
Plaintiffs contend that the "Liability and Indemnity" provisions do not apply because defendant did not handle the damaged engine under the SGHA. Instead, plaintiffs argue that Amanzi and Caton formed a separate verbal agreement to handle that engine. If the court finds that the SGHA does apply, plaintiffs argue that the court should allow the parties to arbitrate the claims pursuant to the arbitration clause of the SGHA.
II. Discussion a. Legal Standards
Summary judgment is appropriate where "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The court must view all facts in the light most favorable to the nonmoving party, but "only if there is a 'genuine' dispute as to those facts." Scott v. Harris, 127 S.Ct. 1769, 1776 (2007). The nonmoving party may not rely on "[c]onclusory allegations, conjecture, and speculation," Kerzer v. Kingly Mfg., 156 F.3d 396, 400 (2d Cir. 1998), but must affirmatively "set out specific facts showing a genuine issue for trial," Fed. R. Civ. P. 56(e).
A genuine issue of material fact exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "When opposing parties tell two different stories, one of which is blatantly contradicted by the record, so that no reasonable jury could believe it, a court should not adopt that version of the facts for purposes of ruling on a motion for summary judgment." Scott, 127 S.Ct. at 1776. "When no rational jury could find in favor of the nonmoving party because the evidence to support its case is so slight, there is no genuine issue of material fact and a grant of summary judgment is ...