Deiro v. American Airlines, Inc.

Decision Date08 May 1987
Docket NumberNo. 85-4259,85-4259
Citation816 F.2d 1360
PartiesThomas DEIRO, Plaintiff-Appellant, v. AMERICAN AIRLINES, INC., Defendant-Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

Nancy S. Tauman, Oregon City, Or., for plaintiff-appellant.

William B. Crow and James F. Dulcich, Portland, Or., for defendant-appellee.

Appeal from the United States District Court for the District of Oregon.

Before GOODWIN and THOMPSON, Circuit Judges, and LYNCH, * District Judge.

EUGENE F.LYNCH, District Judge:

Plaintiff-appellant Deiro appeals from a district court order granting partial summary judgment for defendant-appellee American Airlines, Inc. ("American"). The district court held that American Airlines' liability for the death of seven greyhound racing dogs and injuries to two others, caused by heat exposure while the dogs were being transported in the cargo area of a jet on which plaintiff was a passenger, was limited to a total of $750 pursuant to a liability limitation provision in Deiro's passenger ticket. For the reasons expressed below, we affirm.

I. FACTUAL BACKGROUND

Thomas Deiro filed this action against American for breach of contract, negligence, and willful and wanton behavior alleging damages of approximately $900,000 for the death of seven greyhound racing dogs and injuries to two others. The deaths and injuries occurred on August 31, 1983, while Deiro and his dogs were being transported on a flight between Portland, Oregon and Boston, with a stop and change of aircraft in Dallas/Fort Worth. Deiro's complaint alleged that during the layover in Dallas/Fort Worth, the dogs were placed in their shipping cages on a baggage cart exposed unshaded to the sun in approximately 97-99 degree temperatures, without proper ventilation or water. The complaint also alleged that, despite Deiro's warnings at that time to American personnel, the dogs were never attended to by the airline and that he was refused permission to care for the dogs himself. When Deiro's flight arrived in Boston, seven of the dogs were dead and two were in serious condition. An autopsy determined that the first seven dogs died from heat exposure.

Deiro contends on appeal that the district court erred in granting partial judgment because of its holding that American's liability for the injuries to the dogs is limited to $750 as expressly set forth in his passenger ticket. 1 Our review of this holding requires analysis of three issues: 1) whether the contract of carriage between Deiro and American included the $750 baggage liability provision, contractually binding Deiro to this limitation; 2) whether American, as required under the released valuation doctrine, gave Deiro reasonable notice and a full and fair opportunity to declare a higher value for his baggage and obtain protection in an amount greater than $750; and 3) whether a common carrier can limit contractually its own liability for gross negligence.

Our analysis of the first two issues requires a detailed review of the factual circumstances surrounding Deiro's purchase of his ticket, including the location and content of the notice of the baggage liability limitation in the ticket booklet. Consequently, before surveying the applicable case law, we must set forth the physical characteristics of the ticket booklet and the exact content of the notice of the limitation.

Deiro purchased his ticket from a travel agent nine days before the departure of the flight from Portland. It is undisputed that at this time Deiro received a several-page ticket coupon comprised of the following: 2 1) printed on the face of the ticket, along with a list of Deiro's flights, was the following line in the upper left-hand corner printed in very small type: "PASSENGER TICKET AND BAGGAGE CHECK [--] SUBJECT TO CONDITIONS CONTAINED IN THIS TICKET"; 2) attached to the ticket was a page with the heading "CONDITIONS OF CONTRACT," under which paragraph three stated that the "services performed by each carrier are subject to: (i) provisions contained in this ticket, (ii) applicable tariffs, (iii) carrier's condition of carriage and related regulations which are made part hereof (and are available on application at the offices of carrier) ..."; and 3) printed on another page in significantly larger type were two notices; the first with a heading "ADVICE TO INTERNATIONAL PASSENGERS ON LIMITATION OF LIABILITY," and the second with the heading "NOTICE OF BAGGAGE LIABILITY LIMITATIONS." The second heading was for a paragraph that stated:

Liability for loss, delay, or damage to baggage is limited as follows unless a higher value is declared in advance and additional charges are paid: ... (2) For travel wholly between U.S. points, to $750 per passenger on most carriers (a few have lower limits). Excess valuation may not be declared on certain types of valuable articles. Carriers assume no liability for fragile or perishable articles.

Further information may be obtained from the carrier.

The district court was presented with conflicting evidence on whether Deiro read the above notices. First, in his affidavit Deiro stated that "[t]o my knowledge, all of the tickets and coupons I received from Walker Travel related to me and my luggage, but not to the shipment of my dogs.... I did receive 'ADVICE TO INTERNATIONAL PASSENGERS ON LIMITATION OF LIABILITY'.... I was not an international traveler, and concluded the information on this coupon did not apply to me." At his deposition, however, Deiro stated: "You know, there's a whole bunch of stuff printed on the back of the ticket and I don't read all of that. All I know is the ticket is going to take me from A to B, where I want to go and back."

The booklet containing American's "Conditions of Carriage," referred to above in the ticket coupon as "available at the offices of the carrier," is available at all American ticket counters. The third page of the conditions of carriage explains that passengers can claim excess valuation for their baggage at an additional charge of $.50 per $100, up to $25,000 of protection.

Finally, a notice entitled "NOTICE OF BAGGAGE LIABILITY LIMITATIONS" was posted at American's Portland International Airport ticket counter at all times material to this dispute. The wording of this sign is nearly identical to that in the paragraph in the ticket coupon under the same heading, which was discussed above.

Deiro never declared a higher value for his dogs. Two days prior to his scheduled flight, he went to the Portland International Airport to arrange for the shipment of the nine dogs on his flight and for eight dogs on the following day (the latter group of dogs is not at issue in this action). At that time, Deiro paid an excess baggage charge of $408 because the number of individual pieces of baggage he was shipping was above the minimum allowed without an extra charge. He did not ask about declaring a higher value for the dogs of over a total of $750 and was not informed of this option by any airline personnel. The face of the baggage ticket plaintiff received at that time stated in small print: "BAGGAGE CHECKED SUBJECT TO TARIFFS, INCLUDING LIMITATIONS OF LIABILITY THEREIN CONTAINED."

II. DISCUSSION
A. Standard of Review

A district court's granting of a motion for summary judgment is reviewed by this Court de novo. Lew v. Kona Hospital, 754 F.2d 1420, 1423 (9th Cir.1985). Summary judgment is appropriate only if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Culver v. Boat Transit, Inc., 782 F.2d 1467, 1469 (9th Cir.1986).

B. When is the Passenger of a Common Carrier Contractually Bound to the Fine-Print Liability Limitations in the Passenger Ticket?

The district court did not expressly address the issue of whether Deiro is contractually bound to the limitation of liability. The precise wording of the issue was aptly stated by the First Circuit in a recent case involving a steamship passenger, but which is equally applicable to passengers of air carriers. The First Circuit stated:

Beginning almost a century ago with the case of The Majestic, 166 U.S. 375 [17 S.Ct. 597, 41 L.Ed. 1039] (1897), courts have struggled to divine standards by which to determine whether steamship passengers are to be held bound by "boilerplate" conditions located in the fine print of adhesion contracts of passage. Although some discernible standards have begun to emerge in the past two decades, this is still largely a case-by-case determination. Differing circumstances may render the same ticket binding on one passenger in one case, yet invalid as against another passenger in another case. The basic inquiry is whether, and to what extent, a passenger, who in almost all cases does not actually bargain for a particular term or condition of a contract of passage, but who nevertheless accepts or signs the ticket before embarkation, is bound by the fine print of the ticket.

Recent cases reflect that courts examine the entire ticket to answer the question: Does the contract reasonably communicate to the passenger the existence therein of important terms and conditions which affect legal rights? [citations omitted].

Shankles v. Costa Armatori, S.P.A., 722 F.2d 861, 863-64 (1st Cir.1983).

The Second, Fifth, and Sixth Circuits have also adopted this "reasonable communicativeness" test to determine when the passenger of a common carrier is contractually bound by the fine print of a passenger ticket. See, e.g., Barbachym v. Costa Line, Inc., 713 F.2d 216, 219 (6th Cir.1983) (referring to test as "reasonable notice" standard); Carpenter v. Klosters Rederi A/S, 604 F.2d 11, 12-13 (5th Cir.1979); Silvestri v. Italia Societa Per Azione di Navigazione, 388 F.2d 11, 14-17 (2d Cir.1968) (the Second Circuit was the first circuit to adopt the rule, in an opinion written by Judge Friendly). The "reasonableness" of notice under this test is a question of law to be determined by...

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