DeNicola v. Cunard Line Ltd.

Decision Date30 March 1981
Docket NumberNo. 80-1215,80-1215
PartiesClaire DeNICOLA, Plaintiff, Appellant, v. CUNARD LINE LIMITED, Defendant, Appellee.
CourtU.S. Court of Appeals — First Circuit

Leo M. Goldberg, Providence, R. I., and Joseph R. Palumbo, Jr., Newport, R. I., with whom Goldberg & Goldberg, Providence, R. I., and Moore, Virgadamo & Lynch, Ltd., Newport, R. I., on brief for plaintiff, appellant.

Robert D. Parrillo, Providence, R. I., with whom A. Lauriston Parks, and Hanson, Curran & Parks, Providence, R. I., on brief, for defendant, appellee.

Before CAMPBELL and BOWNES, Circuit Judges, NELSON, * District Judge.

NELSON, District Judge.

At issue in this appeal is the enforceability of a condition in an ocean voyage ticket limiting the time in which a passenger can bring an action against the carrier for personal injury. On November 22, 1975, while sailing from France to Boston aboard the Queen Elizabeth II, the plaintiff sustained an injury when the ship lurched in heavy seas. Almost twenty-two months later, on September 12, 1977, she brought suit against the shipowner, alleging that the vessel had been travelling through a heavy storm at an excessive rate of speed in order to make up for a delay in departure. The defendant sought to rely on a provision in the "passage contract ticket" requiring that any suit "for loss of life or bodily injury to any passenger" be commenced "within one year from the day when the death or injury occurred." 1 In a comprehensive opinion, the district court ruled that this condition was binding upon the plaintiff and therefore granted the defendant's motion for summary judgment and dismissed the suit as time-barred.

The plaintiff's travel arrangements were part of a package deal whereby she flew to Europe by plane and returned by ship. She purchased the passage ticket on November 7, 1975 from a travel agent in Providence, Rhode Island and had it in her possession when she commenced her travels one week later. On November 20, she boarded the Queen Elizabeth II for the seven-day voyage to Boston, three of which she spent confined to her cabin following her injury. The plaintiff retained possession of the ticket, minus several detachable coupons, not only during her trip but for some four years thereafter.

After carefully examining the layout of the ticket, the district court concluded as a matter of law that the notice provided therein concerning the existence and importance of the terms and conditions of contract was sufficient to make them "a formal part of the contract." It followed that the limitation on time for filing suit was binding on the plaintiff notwithstanding her alleged lack of knowledge thereof an allegation that the court accepted as true for purposes of the motion. On appeal, the plaintiff argues in the alternative that (1) the court's ruling was legally erroneous in particular, that the limitation was not a part of the contract because she did not "deliberately accept" it and (2) whether the limitation was a part of the contract was a disputed question of fact, rendering disposition by summary judgment inappropriate.

The issue of when conditions appearing in a steamship ticket are incorporated into the contract of passage and therefore binding on a passenger is one that this court has never had occasion to examine. 2 But other courts, primarily those in the Second Circuit, have charted these shoals extensively. See generally Annot., 5 A.L.R.Fed. 394 (1970). The Supreme Court defined the general parameters of this inquiry in The Majestic, 166 U.S. 375, 17 S.Ct. 597, 41 L.Ed. 1039 (1897). There, in defense of a suit brought by three passengers whose luggage had been damaged by sea water, the carrier sought to invoke a ticket provision limiting its liability "for loss of or injury to or delay in delivery of luggage." Id. at 378, 17 S.Ct. at 599. The front of the ticket contained a "box" bearing the passengers' names, alongside which was an agreement of carriage signed by an agent of the shipowner. Id. at 377, 17 S.Ct. 598. At the bottom of the ticket face, underneath several notices to passengers, was the instruction "See Back" in bold face type. On the back, beneath the heading "Notice to Passengers," appeared the statement "This contract is made subject to the following conditions," after which were listed in fine type seven conditions including the one limiting liability for damage to luggage. Id. 166 U.S. at 378, 17 S.Ct. at 599. The Court ruled that the provisions on the back of the ticket "were not included in the contract proper, in terms or by reference." Id. at 385, 17 S.Ct. at 601. As a result, they would be binding on the passengers only if they had been "distinctly declared and deliberately accepted." Id. at 386, 17 S.Ct. at 601, quoting Henderson v. Stevenson, L.R. 2 S. & D.App. 470 (1875). Since none of the passengers had read or otherwise become aware of the limitation on liability, that provision was deemed inapplicable.

Following in The Majestic's wake, courts for many years have approached the incorporation issue by means of a two-step analysis: examining the passage ticket before them to identify the contract proper, and then determining whether the particular condition in question was contained or referred to in that contract. For purposes of the first inquiry, the place of the carrier's signature 3 in the ticket typically has been decisive. "(O)nly the contract proper charges the passenger, and the contract is taken as those words which the carrier in some way authenticates by its own signature ...." Maibrunn v. Hamburg-American S.S. Co., 77 F.2d 304, 306 (2d Cir. 1935). Under this approach, the case law has developed along three distinct lines depending on the layout of the ticket involved. In one group of cases, the carrier's signature appeared at the very end of the ticket. Based on this fact, the entire contents of the ticket including all enumerated conditions were considered within the actual text of the contract and thus binding on the passenger despite his lack of knowledge thereof. 4 A second category has involved tickets similar to that in The Majestic, in which a "box" on the ticket face bore the passenger's name and other travel information above the carrier's signature, alongside or beneath which was a notice referring to various conditions appearing elsewhere in the document. In this situation, enforcement of a limiting condition has been denied on the ground that "there is nothing above the carrier's signature to incorporate (it) expressly or by reference" into the contract proper. The Kungsholm, 86 F.2d 703, 704 (2d Cir. 1936). 5 Finally, in cases where limiting conditions appeared in the margin or on the back of a ticket but a direct reference to them preceded the carrier's signature, the conditions have been deemed incorporated by reference into the contract and therefore enforceable. See, e. g., Geller v. Holland-America Line, 298 F.2d 618, 619 (2d Cir.) (per curiam), cert. denied, 370 U.S. 909, 82 S.Ct. 1256, 8 L.Ed.2d 403 (1962); Foster v. Cunard White Star, Ltd., 121 F.2d 12, 13 (2d Cir. 1941) (per curiam). 6

Silvestri v. Italia Societa Per Azione Di Navigazione, 388 F.2d 11 (2d Cir. 1968), placed this last category of cases on a slightly different tack. There, in the "box" on the ticket face, beneath the caption "Passage Contract" and above the validating stamp of the issuing travel agent, appeared the statement "Subject to the conditions printed on the cover of this ticket which form part of this contract." Id. at 14. Despite this apparent incorporation by reference, the court refused to enforce a one-year limitation on filing suit on the ground that the contractual "warning" was not sufficiently "eye-catching." Id. at 18. Following a careful survey of the case law, Judge Friendly concluded that "the thread that runs implicitly through the cases sustaining incorporation is that the steamship line had done all it reasonably could to warn the passenger that the terms and conditions were important matters of contract affecting his legal rights." Id. at 17. By contrast, the Italian line had done "(n)othing whatever ... to impress the importance of the terms and conditions upon the passenger." Id. Not only did the reference to the subsequent conditions unlike almost all the other captions in the box appear in "ordinary lower-case one-eighteenth inch type," but the "inconspicuousness of (this statement) was increased by the fact that (it was) squeezed immediately below a caption in bold face and to the left of one in capital letters." Id. at 14.

The specific holding in Silvestri that a notice appearing in the contract proper must meet a standard of "reasonable communicativeness," Lipton v. National Hellenic American Lines, 294 F.Supp. 308, 311 (E.D.N.Y.1968), in order to incorporate into the contract those conditions to which it makes reference is a narrow one pertaining only to the incorporation-by-reference category of cases. See Miller v. Lykes Bros. S. S. Co., 467 F.2d 464, 466 (5th Cir. 1972). Subsequent decisions, however, have taken a more expansive view, suggesting that the Silvestri approach should govern the analysis in most if not all steamship ticket cases. Specifically, the courts appear to have deemphasized such traditionally significant factors as the placement of the carrier's signature and the contents of the contract proper and focused instead on the adequacy of notice appearing anywhere in the ticket documents. The decision in McQuillan v. "Italia" Societa Per Azione Di Navigazione, 386 F.Supp. 462 (S.D.N.Y.1974), aff'd, 516 F.2d 896 (2d Cir. 1975), 7 is illustrative. At issue there was the revised passage contract of the same steamship line involved in Silvestri. The court noted that the "ticket" portion of the contract had remained "substantially the same" but was now enclosed in a booklet and preceded by six pages of numbered...

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