Milanovich v. SJK Enterprises, Inc.

• Decision Date: 03 October 1990
• Docket Number: Civ. A. No. 89-866.
• Citation: 747 F. Supp. 1,1991 AMC 44
• Parties: Gregory MILANOVICH, et ux., Plaintiffs, v. SJK ENTERPRISES, INC., et al., Defendants.
• Court: U.S. District Court — District of Columbia

747 F. Supp. 1

1991 AMC 44

Gregory MILANOVICH, et ux., Plaintiffs, v. SJK ENTERPRISES, INC., et al., Defendants.

Civ. A. No. 89-866.

United States District Court, District of Columbia.

August 17, 1990.

Supplemental Memorandum and Order October 3, 1990.

Allen M. Hutter, Washington, D.C., for plaintiffs.

Mitchell H. Stabbe, Washington, D.C., for defendants.

MEMORANDUM AND ORDER

JACKSON, District Judge.

Plaintiffs Gregory and Marjorie Milanovich are residents of the District of Columbia. Defendant Costa Crociere, S.p.A., is an Italian cruise ship owner, and defendant Costa Cruises, Inc., is a Florida-based New York corporation that functions as the general sales agent for cruises on Costa Crociere's vessels.

Mr. and Mrs. Milanovich booked passage, through Costa Cruises, on Costa Crociere's M.V. Carla Costa departing San Juan, Puerto Rico, on February 6, 1988, for a week's cruise in the Caribbean Sea. On the morning of February 7, 1988, while the ship was in international waters, a deck chair on the Carla Costa's lido deck in which Gregory Milanovich was sitting collapsed, allegedly causing him serious injury.

The two defendants remaining in this tort action for that injury have moved for summary judgment on the basis of what they contend is a contractual provision of their agreement with plaintiffs purporting to limit to one year the time within which to bring such an action.¹ The facts pertinent to the motion for summary judgment are not in dispute. The result, unfortunately for the Milanoviches, is dictated as a matter of law by a discrete line of cases, dating from the 19th century, respecting terms and conditions of a shipowner's liability expressed in and imposed by the text of cruise tickets.

I.

Plaintiffs' tickets came in a 13-page booklet, measuring 8½ by 3½ inches, setting out the terms of carriage in very small, but legible, print. See Exhibit D to defendants' memorandum. A legend on the front of the booklet read, in red upper-case letters on a white background:

"IMPORTANT NOTICE

Each passenger should carefully examine this ticket, particularly the conditions on pages 2-10."

One of those conditions, Article 30, established a one-year time limit for bringing personal injury actions. Milanovich was injured on February 7, 1988; he filed this action on March 31, 1989, 51 days out of time, and defendants have thus moved for summary judgment under Article 30. Plaintiffs respond that another provision of the ticket, Article 35, purports to adopt Italian law as the "ruling law of this contract," and they offer proof, in the form of an affidavit of an Italian lawyer, that the one-year limitations period would be unenforceable against plaintiffs under Italian law in the circumstances of this case.

The maritime law of the United States governs disputes arising out of contracts for the transportation of goods or passengers on the high seas. The Moses Taylor, 71 U.S. (4 Wall.) 411, 18 L.Ed. 397 (1867). A cruise for hire is a maritime contract to be enforced in accordance with U.S. maritime law, by reference to which, in the first instance, it must be determined which nation's substantive law shall apply, irrespective of any private understandings to the contrary. Although the federal maritime choice-of-law rules may ultimately remit the parties to foreign substantive law, they do so by identifying the "center of gravity" of the case, not merely by ascertaining the contractual intent of the parties. DeNicola v. Cunard Line Ltd., 642 F.2d 5, 7 n. 2 (1st Cir.1981); McQuillan v. "Italia" Societa Per Azione Di Navigazione, 386 F.Supp. 462, 468 (S.D.N.Y.1974), aff'd, 516 F.2d 896 (2d Cir.1975); see also Hodes v. S.N.C. Achille Lauro, 858 F.2d 905 (3rd Cir.), cert. dismissed, ___ U.S. ___, 109 S.Ct. 1633, 104 L.Ed.2d 149 (1988).²

Under the relevant American conflict-of-laws cases, U.S. substantive law must apply to this contract. Plaintiffs are U.S. citizens; the cruise was advertised in the U.S., and the tickets were purchased through a U.S. travel agent who delivered them to plaintiffs in the District of Columbia; the ship left from and returned to a U.S. port. The only connection the case has with Italy is the nationality of the owner of the vessel and the flag under which she sailed. Every other pertinent factor is American. The "center of gravity" of this case being clearly located in the United States, U.S. law should supply the rules of decision. See McQuillan, supra, 386 F.Supp. at 468; Lubick v. Travel Services, Inc., 573 F.Supp. 904, 906 (D.V.I. 1983); Pisacane v. Italia Societa Per Azioni DiNavigazione, 219 F.Supp. 424 (S.D.N.Y.1963); Mulvihill v. Furness, Withy & Co., 136 F.Supp. 201 (S.D.N.Y. 1955). Compare Jansson v. Swedish American Line, 185 F.2d 212 (1st Cir.1950) (where cruise ticket was bought in Sweden, cruise originated in Sweden, and tort occurred in Swedish waters, Swedish law applied.)

II.

Having concluded that U.S. substantive law must apply, it remains to be decided whether a contract provision in the nature of Article 30 is valid under U.S. maritime law and, if so, whether it has been effectively incorporated into the "contract" between plaintiffs and defendants represented by the cruise ticket. The validity of such a time limitation is implicitly recognized in statutory maritime law. Since 1935, 46 U.S.C.App. § 183b(a) has provided:

It shall be unlawful for the manager, agent, master, or owner of any sea-going vessel ... transporting passengers ... to provide by ... contract ... a shorter period ... for the institution of suits on such claims for loss of life or bodily injury, than one year....

The statute thus declares, albeit negatively, that contractually stipulated limitations periods of a year or longer are lawful, as all the post-1935 cases have held, provided they become a term of the contract which, in turn, depends upon whether the contents of the ticket "reasonably communicated" the presence of the limitation term to the passenger against whom it might be invoked. Marek v. Marpan Two, Inc., 817 F.2d 242, 245 (3rd Cir.1987). That question is, once again, one of law. Id., 817 F.2d at 244; DeNicola, 642 F.2d at 11.³ The cases, all from other jurisdictions, hold that tickets virtually identical to the one at issue here have passed scrutiny as enforceable contracts.

Without going into a detailed comparison of the tickets involved in each case, the general characteristics of those tickets held to be sufficiently communicative have included a boldface or otherwise distinguishing warning to the passenger to read the fine print; placement of this warning on the cover of the ticket booklet; repetition of the warning elsewhere; contrast between the warning and the background on which it is printed; and opportunity afforded the passenger to study the provisions of the ticket by which he is to be bound.

Measured by these criteria, the Court concludes that the tickets given the plaintiffs here reasonably communicated that it contained information of which it was in their interest to be aware. The front cover of the ticket booklet prominently proclaims that an "important notice" follows. It appears in large type in the center of the cover. Directly beneath is a warning, also in large type (in red ink, defendants aver) to "carefully examine this ticket, particularly the conditions on pages 2-10." Although the type inside the booklet is small, it is legible, and the section headings, including that of Article 30, which is entitled "Limitation of Action Against the Company," are in larger type than the text. At the end of the recitation of conditions the booklet states, again in all capitals: "The holder of this passage ticket do (sic) hereby declare ... that he is aware and adheres to all conditions and clauses set forth in this passage contract and that he specifically approves clauses nos. list of clauses, including Article 30." Finally, the last page of the book, the actual ticket, declares, "by accepting or using this ticket the passenger agrees to the terms and conditions appearing on pages 2-10 of Passage Ticket Booklet."

Plaintiffs here were thus alerted to the fact that information of consequence was contained inside the ticket booklet, and that their rights could be affected thereby, particularly after the accident, when a claim for damages had become more than a hypothetical possibility. The warnings were noticeable, repetitive and well-placed, and plaintiffs had the entire year following the mishap to consult the booklet to see if there might be some urgency in filing suit for damages.

For the foregoing reasons, therefore, the Court will enter judgment for defendants, and it is, this 17th day of August, 1990,

ORDERED, that the motion of defendants Costa Cruise, S.p.A., and Costa Cruises, Inc., for summary judgment is granted, and the complaint is dismissed with prejudice.

SUPPLEMENTAL MEMORANDUM AND ORDER

Plaintiffs have moved for reconsideration (and reversal) of this Court's Memorandum and Order of August 17, 1990, granting summary judgment for defendants.¹ In essence they contend that the Court failed to appreciate the significance of the Supreme Court's holding in The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972) with respect to the enforceability of certain provisions in contracts between parties of different nationalities that might formerly have been denied enforcement in U.S. courts as "contrary to public policy." The Bremen, they say, altered the pre-existing decisional law refusing to give effect to any terms of at least international contracts that purport to limit a U.S. court's power to hear and decide...