Luna v. Am. Airlines

• Citation: 769 F.Supp.2d 231
• Decision Date: 06 January 2011
• Docket Number: No. 04 Civ. 1803(MHD).,04 Civ. 1803(MHD).
• Parties: Monserrate LUNA, Plaintiff,v.AMERICAN AIRLINES and LSG Sky Chefs, Defendants.American Airlines and LSG Sky Chefs, Third–Party Plaintiffs,v.Overhill Farms, Inc., Third–Party Defendant.
• Court: U.S. District Court — Southern District of New York

769 F.Supp.2d 231

Monserrate LUNA, Plaintiff,

v.AMERICAN AIRLINES and LSG Sky Chefs, Defendants.American Airlines and LSG Sky Chefs, Third–Party Plaintiffs,

v.Overhill Farms, Inc., Third–Party Defendant.

No. 04 Civ. 1803(MHD).

United States District Court, S.D. New York.

Jan. 6, 2011.

Satish K. Bhatia, Satish Kumar Bhatia, Bhatia & Associates, PC, New York, NY, for Plaintiff.Kenneth Joseph Gormley, Shelowitz & Associates, PLLC, Kimberly Marie Jagodzinski, Wilson, Elser, Moskowitz, Edelman & Dicker LLP, New York, NY, for Defendants and Third–Party Plaintiff.Robert Joseph Soffientini, Cohen, Kuhn & Associates, New York, NY, for Counter Claimant.

MEMORANDUM & ORDER

MICHAEL H. DOLINGER, United States Magistrate Judge.

Plaintiff Monserrate Luna, a one-time passenger on an American Airlines flight, commenced this lawsuit to seek compensation for injuries that she allegedly suffered when she consumed a meal containing some foreign matter, variously identified as a piece of a lizard or insects. She sued both American Airlines, which had served her the meal, and the airline's caterer, LSG Sky Chefs, which had handled the receipt, storage and delivery to the plane of the passenger meals. Ultimately, we read her complaint as encompassing claims for both negligence and implied warranty. Both defendants in turn impleaded third-party defendant Overhill Farms, Inc., which had allegedly supplied the meals for Ms. Luna's flight. In their third-party complaint they asserted claims against Overhill Farms for contractual and common-law indemnification.

At the conclusion of a jury trial, we dismissed as a matter of law plaintiff's negligence claim against both American Airlines and Sky Chefs, and the jury then found that the meal was not unfit for human consumption, thus disposing of her claim of implied warranty. With the consent of the defendants and third-party defendant, the third-party indemnification claims of the defendants—now limited to the expenses (including attorney's fees) engendered by Ms. Luna's suit—were left for the court to determine.

We have received post-trial briefing by both defendants and the third-party defendant.¹ Defendants assert principally that they are entitled to common-law indemnification for the litigation expenses that they incurred, that American Airlines is entitled to contractual indemnification, and that even if the airline's litigation expenses have already been paid by Sky Chefs, that entity has become the “real party in interest,” acquiring the airline's contractual rights under the indemnification agreement with Overhill. Overhill argues principally that it did not supply the meal in question and hence cannot be responsible for any form of indemnification, that under the indemnification theories as pled in the third-party complaint it has no responsibility for defendants' expenses, that neither defendant is entitled to common-law indemnification in view of the jury's verdict, that its indemnification agreement with the airline does not cover attorney's fees, and that the airline—the only party to the indemnification agreement—cannot recover if its expenses were already paid by Sky Chefs.

Having reviewed the trial record and the briefing of the parties, we now conclude (1) that the defendants' common-law claims for indemnification must be dismissed, (2) that judgment should enter in favor of American Airlines on its contractual-indemnification claim, (3) that the airline is entitled to indemnification of fees as well as other expenses, (4) that the equivalent claim of Sky Chefs (as articulated in defendants' post-trial briefing, though not in their third-party complaint) must be dismissed, (5) that Overhill is entitled to a setoff for any litigation expenses of the airline that have been paid by Sky Chefs, and (6) that the amount of American Airlines' recovery must be proven either by affidavit or at an evidentiary hearing, in accordance with a schedule that we establish below.

The Claims As Pled

Defendants asserted two third-party claims against Overhill. One was on behalf of American Airlines and, although not drafted with precision, plainly asserted at least a claim for contractual indemnification as well as contribution. As pled, it premised the airline's entitlement to recovery on the pre-condition that the trier of fact find that the meal supplied by Overhill was defective and had caused plaintiff to be injured. Thus it recited:

That in the event that plaintiff Monserrate Luna sustained any injuries or damages as a result of allegedly ingesting the chicken entree while on board American Airlines flight 1639 on July 20, 2003, that said damages were caused solely by the negligence, carelessness and recklessness of third-party defendant Overhill Farms, Inc. in their performance of their duties and responsibilities under its contract with American Airlines, Inc.

That as a result of third-party defendant Overhill Farms, Inc.'s negligence, carelessness and recklessness, defendant/third-party plaintiff American Airlines has been damaged and continues to accrue damages ....

That third-party defendant Overhill Farms, Inc. is contractually obligated to indemnify, defend and hold harmless defendant/third-party plaintiff American Airlines consistent with the language of its contract with American Airlines for damages alleged to have been sustained by plaintiff Monserrate Luna.

That third-party defendant Overhill Farms, Inc. is required to indemnify, defend and hold harmless defendant/third-party plaintiff American Airlines consistent with the language of its contract with American Airlines for any damages alleged to have been sustained by the plaintiff Monserrate Luna.

By reason of the foregoing, in the event that any judgment or verdict is recovered against the defendant/third-party plaintiff American Airlines, the defendant/third-party plaintiff is entitled to contribution and indemnification from, over and against third-party defendant Overhill Farms, Inc.

(Third–Party Compl. at ¶¶ 10–14).

The second claim, also inartfully pled, sought, on behalf of Sky Chefs, both common-law contribution and indemnification.² As worded, it too was explicitly premised on a finding by the trier of fact that the meal in question was defective and had caused injury to plaintiff. It recited:

That in the event that the plaintiff Monserrate Luna sustained any injuries or damages as a result of allegedly ingesting the chicken entree ... that said damages were caused solely by the negligence, carelessness and recklessness of third-party defendant Overhill Farms, Inc. in their performance of their duties and responsibilities under its contract with American Airlines, Inc.

That as a result of third-party defendant Overhill Farms, Inc.'s negligence, carelessness and recklessness, defendant/third-party plaintiff LSG Sky Chefs has been damaged and continues to accrue damages ....

That third-party defendant Overhill Farms, Inc. is obligated to indemnify, defend and hold harmless defendant/third-party plaintiff LSG Sky Chefs consistent with the principles of contractual common law indemnification and contribution for any damages alleged to have been sustained by the plaintiff Monserrate Luna.

By reason of the foregoing, in the event that any judgment or verdict is recovered against the defendant/third-party plaintiff LSG Sky Chefs, the defendant/third-party plaintiff is entitled to contribution and indemnification from, over and against third-party defendant Overhill Farms, Inc.

(Third–Party Compl. ¶¶ 16–19)

As we have noted, no judgment or verdict was returned in favor of Ms. Luna; rather, both of her claims were dismissed and judgment entered in favor of defendants. Nonetheless, defendants pursue indemnification from Overhill for their litigation expenses.

AnalysisA. The Factual Issue: the Source of the Meal

We first address the factual question, disputed by the parties, as to whether defendants have established by a preponderance of the evidence that the meal in question was supplied by Overhill Farms. If not, defendants' indemnification claims, whatever their other merits or demerits, could not prevail. See Niagara Frontier Transp. Auth. v. Tri–Delta Const. Corp., 107 A.D.2d 450, 452–53, 487 N.Y.S.2d 428 (4th Dep't) (indemnification clause did not encompass the actions of an entity not a party to the contract), aff'd, 65 N.Y.2d 1038, 494 N.Y.S.2d 695, 484 N.E.2d 1047 (1985).

We find, contrary to the contention of the third-party defendant, that the record amply supports the proposition that the meal in question originated with Overhill. The undisputed testimony by James Rudis, the President and CEO of Overhill, confirmed the existence of a Master Contract between American Airlines and Overhill, providing for the third-party defendant to supply a range of pre-cooked frozen meals to the airline for use on its flights. (Tr. at 218–19, 222–25, 227–30; Defs.' Ex. H). The documentary record and testimony of both Mr. Rudis and Brian Farinha, formerly Global Quality Manager of Sky Chefs (Tr. at 158–60), confirmed as well that among the meals covered by the contract and a contract supplement was a meal designated by the code 73EN189 and described in the contract documents as “chicken breast adobo”. (Tr. at 180–83, 231–33, 235–36; Defs.' Ex. I). Furthermore, the “Air Serv” documents received in evidence and described by Mr. Farinha confirm that, consistent with the directives of the airline, Sky Chefs delivered 235 coach class meals to the aircraft used for Ms. Luna's flight. (Tr. at 168–69, 192–94; Defs.' Ex. G). Of those meals, sixty percent consisted of the chicken breast adobo meal and the balance were a penne pasta meal, also from Overhill Farms. (Tr. at 179, 183–84, 194; Defs.' Ex. B, C, D, G, N). Ms. Luna testified that she ordered the chicken meal and suffered injuries as a result of her encounter with a piece of a lizard. (Tr. at 85–88, 91, 94–98).

In seeking to disclaim any responsibility for...