Julius Young Jewelry Mfg. Co., Inc. v. Delta Air Lines

• Decision Date: 20 March 1979
• Citation: 67 A.D.2d 148,414 N.Y.S.2d 528
• Parties: JULIUS YOUNG JEWELRY MANUFACTURING CO., INC. and Bernard Nacht & Co., Inc., Plaintiffs-Appellants, v. DELTA AIR LINES and Eastern Air Lines, Defendants, and Allied Aviation Service Company, Inc., Allied Aviation Service Company of New York, Inc., Allied Aviation Service International Corp. and Allied Maintenance Corp., Defendants-Respondents.
• Court: New York Supreme Court — Appellate Division

Page 528

414 N.Y.S.2d 528

67 A.D.2d 148

JULIUS YOUNG JEWELRY MANUFACTURING CO., INC. and Bernard Nacht & Co., Inc., Plaintiffs-Appellants, v. DELTA AIR LINES and Eastern Air Lines, Defendants and Allied Aviation Service Company, Inc., Allied Aviation Service Company of New York, Inc., Allied Aviation Service International Corp. and Allied Maintenance Corp. Defendants-Respondents.

Supreme Court, Appellate Division, First Department.

March 20, 1979.

C. Raymond Nelson, New York City of counsel (Eugene Wollan, New York City, with him on brief; Rein, Mound & Cotton, New York City, attys.) for plaintiffs-appellants.

R. Scott Daly, New York City of counsel (Matthew J. Corrigan, New York City, with him on brief; Mendes & Mount, New York City, attys.), for defendants-respondents.

Before KUPFERMAN, J. P., and EVANS, SANDLER, LANE and MARKEWICH, JJ.

KUPFERMAN, Justice.

This is an appeal from a partial summary judgment for defendants Allied Aviation Service Company, Inc., Allied Aviation Service Company of New York, Inc. and Allied Maintenance Corp. (hereinafter collectively referred to as defendant "Allied"), limiting plaintiffs' Ad damnum clause to $1338.00 thereby reducing the potential recovery from the $55,000.00 claimed as damages, on the ground that the liability limitations of the Warsaw Convention ¹ ("the Convention", 49 Stat., pt. II, 3000 (1935-36), T.S. 876, 49 U.S.C. § 1502, page 430 et seq.) entitle defendants to that relief.

We are not asked to (and we do not) address ourselves to the sufficiency of the complaint. Rather, the appeal presents a question of seeming first impression for a state appellate court, of whether agents of air carriers are entitled to assert as a defense the liability limitations of the Warsaw Convention. (L. Kreindler, Aviation Accident Law, § 11.05(6), Matthew Bender rev. ed. Supp. 1975). We declare that these agents are entitled so to do and affirm as to that, but the order should be modified to delete the damage limitation inasmuch as plaintiffs may be able to present evidence of wilful misconduct or other default that would avoid the limitations in accordance with Article 25(1) of the Convention.

On April 6, 1977, plaintiffs' representative checked jewelry sample cases owned by plaintiffs and valued at $55,000.00 as regular baggage in connection with international air transportation from Nassau, Bahamas, to Bermuda with an intermediate stop at JFK International Airport in New York City. The baggage was lost sometime during the course of its transfer from a Delta Air Lines flight to an Eastern Air Lines flight. Defendant Allied is an independent contractor engaged by defendant Delta and other air lines to perform inter-line baggage transfer services between connecting airlines at JFK.

The Convention expressly limits the liability of "carriers", Article 22, without defining that term. The Hague Protocol, to which the United States does not yet adhere, specifically includes servants and agents of carriers under the Convention's liability limitations. (For the text of the Protocol, together with the original Convention, See, House Comm. on Science and Astronautics, Air Laws and Treaties of the World, 87th Cong., 1st Sess. 1332-1370 (1961) ).

As an agent for the carriers, Allied contends it is merely an extension of the corporate enterprise and performs an enterprise function, a service each carrier itself would have to provide by its own employees. Allied urges construction of the term "carrier" to include agents for reasons similar to those advanced in the recent case of REED V. WISER , 55 F.2D 1079 (2ND CIR., 1977)² Cert. den., 434 U.S. 922, 98 S.Ct. 399, 54 L.Ed.2d 279 (1977), which held that the Convention's coverage of "carrier" included the carrier's employees. Although that holding only applied to employees or servants, its rationale can readily be extended to agents.

As a treaty, the Warsaw Convention is the supreme law of the land. (U.S.Const. Art. VI, cl. 2). The Convention should be interpreted to effectuate its evident purposes. (Bacardi Corp. v. Domenech, 311 U.S. 150, 163, 61 S.Ct. 219, 85 L.Ed. 98). The fundamental purposes of the Convention are to limit liability so as to fix costs to airlines at a definite level and to establish a uniform body of world-wide liability rules to govern international aviation to aid recovery by users. While it is contended by plaintiffs-appellants that the failure of the United States to sign the Hague Protocol amendment leads to the conclusion that agents are not covered by the original Convention, the Second Circuit in Reed, supra, took the position that the specific inclusion of servants and agents in...