Varkonyi v. S. A. Empresa De Viacao Airea Rio Grandense (Varig)

• Decision Date: 15 September 1972
• Citation: 71 Misc.2d 607,336 N.Y.S.2d 193
• Parties: Livia VARKONYI, Individually and as Parent of Laszlo Varkonyi and Judith Varkonyi, infants, Plaintiff, v. S. A. EMPRESA DE VIACAO AIREA RIO GRANDENSE (VARIG) et al., Defendants. Nancy Mona FAULKNER, and Leonard John Metcalfe, as Administrators of the Estate of Edward Bazil Faulkner, deceased, Nancy Mona Faulkner, individually and as parent and guardian of Frank Edward Faulkner, Joan Helen Faulkner and John Charles Faulkner, infants, Plaintiffs, v. S. A. EMPRESA DE VIACAO AIREA RIO GRANDENSE (VARIG) et al., Defendants.
• Court: New York Supreme Court

Page 193

336 N.Y.S.2d 193

71 Misc.2d 607

Livia VARKONYI, Individually and as Parent of Laszlo

Varkonyi and Judith Varkonyi, infants, Plaintiff, v. S. A. EMPRESA DE VIACAO AIREA RIO GRANDENSE (VARIG) et al.,

Defendants.

Nancy Mona FAULKNER, and Leonard John Metcalfe, as

Administrators of the Estate of Edward Bazil Faulkner, deceased, Nancy Mona Faulkner, individually and as parent and guardian of Frank Edward Faulkner, Joan Helen Faulkner and John Charles Faulkner, infants, Plaintiffs, v. S. A. EMPRESA DE VIACAO AIREA RIO GRANDENSE (VARIG) et al.,

Defendants.

Supreme Court, Special Term, New York County, Part I.

Sept. 15, 1972.

Reynolds, Wolcott & Flack, New York City (Theodore E. Wolcott, New York City, of counsel), for plaintiffs.

Condon & Forsyth, New York City (George N. Tompkins, Jr., and Thomas J. Whalen, New York City, of counsel), for defendant S. A. Empresa de Viacao and Varig Airlines.

Mendes & Mount, New York City (James M. FitzSimons, New York City, of counsel), for defendant Boeing.

PAUL A. FINO, Justice:

In these consolidated actions for wrongful death stemming from an airline crash, the defendant S. A. Empresa De Viacao Airea Rio Grandense (Varig) moves to dismiss the complaint for lack of jurisdiction of the subject matter. All the parties are non-residents suing upon an out-of-state tort. The motion turns essentially upon certain terms of the Warsaw Convention (49 U.S.Stat. 3000) and their geographic application.

On November 27, 1962, an aircraft manufactured by defendant Boeing Company and operated by defendant Varig, crashed while attempting a landing at Lima, Peru. The flight originated in Porto Alegre, Brazil and was to terminate in Los Angeles, California. All the passengers, including the plaintiffs' decedents (Zoltan Varkonyi and Edward B. Faulkner) were killed. Varkonyi was a national of Hungary, residing in Brazil at the time of his death. He purchased his airline ticket in Rio de Janeiro which indicated Rio as the place of departure, Bogota, Colombia, as an intermediate stopping place, and return to Rio as the ultimate destination. Faulkner was a national and resident of Great Britain who purchased his ticket in Buenos Aires, Argentina. The copy of his ticket indicates transportation from Porto Alegre, Brazil, where Faulkner boarded, to Lima, Peru, then to Bogota, Colombia, as part of an overall routing to and from Buenos Aires. The moving defendant, S. A. Varig is a Brazilian corporation doing business in New York, (the codefendant Varig Airlines, Inc. is its New York subsidiary), operating regularly scheduled flights into and out of New York City and the defendant, Boeing Company, is a Delaware corporation doing business in New York.

These actions were commenced in September, 1964. Special Term denied a motion to dismiss the complaints upon the defense of forum non conveniens, finding that, although general policy militates against suits between non-residents for out-of-state torts, such as here (Bata v. Bata, 304 N.Y. 51, 105 N.E.2d 623) special circumstances were presented which warranted the retention of jurisdiction. The Appellate Division reversed in the exercise of its discretion and dismissed the complaints with leave to renew in a proper jurisdiction. It found that there were absent such special circumstances as would warrant retention of the action. It concluded that the sole reason for maintenance of the action in New York was based upon convenience of the plaintiffs, when the convenience of the court should be the determinative factor. The Court of Appeals reversed unanimously with one justice dissenting in part (Varkonyi v. Varig, 22 N.Y.2d 333, 292 N.Y.S.2d 670, 239 N.E.2d 542) and directed remission to the Appellate Division to consider and weigh on the one hand the burden on the New York courts and the extent of any hardship to the defendant that prosecution of the suit would entail, and on the other hand, such matters as the unavailability elsewhere of a forum in which the plaintiffs' interests may otherwise be properly served, as special and unusual circumstances. The justice who dissented in part did so to the extent that he felt the finding of Special Term should be reinstated.

Thereafter, the defendant brought the instant motion to dismiss on the ground that the court lacks jurisdiction of the subject matter of the action. Concededly, this argument was never raised before, and it clearly may be raised at any stage of the action. (CPLR 3211(a)(2)(e)). The defendants now contend that since the transportation was international, the plaintiffs' claims are governed by the terms of the Warsaw Convention, 49 Stat. 3000. They rely upon Article 28 thereof which defines subject matter jurisdiction, and provides that an action for damages may only be brought either at the (a) place of the domicile of the carrier; (b) principal place of business of the carrier, (c) the place where the contract of transportation was made, or (d) the place of destination. They contend that under the circumstances herein the United States, including New York State, is not one of the designated places.

Until recently the authorities have been more or less evenly divided on the issue as to whether Article 28 of the Warsaw Convention relates to venue or subject matter jurisdiction. This question is, of course, crucial in this case.

In early cases, where the notion of venue was first interjected, the question of jurisdiction had already been resolved. One of the places specified by Article 28 had already been found in the United States and the issue then to be determined was the proper court within the United States, as a matter of venue. See, Brown v. Compagnie Nationale Air France, 8 Av.Cas. 17, 272 (S.D.N.Y.1962); Spencer v. Northwest Orient Airlines, Inc., 201 F.Supp. 504 (S.D.N.Y.1962); Mason v. British Overseas Airways Corp., 5 Av.Cas. 17, 121 (S.D.N.Y.1956); Scarf v. Trans World Airlines, Inc., 4 Av.Cas. 17, 795 (S.D.N.Y.1955); Eck v. United Arab Airlines, Inc., 15 N.Y.2d 53, 255 N.Y.S.2d 249, 203 N.E.2d 640 (1964). Thus, the question of proper venue within the United States only arose in these cases after it had first been determined that the United States was one of the jurisdictions designated in Article 28(1) of the Warsaw Convention where the action could be brought.

However, where none of the places required by Article 28(1) was in the United States, courts uniformly have found that they have no jurisdiction to entertain the action. Biggs v. Alitalia-Linee Aeree Italiane, S. p. A., 10 Av.Cas. 18, 354 (E.D.N.Y.1969); Khan v. Compagnie Nationale Air France, 9 Av.Cas. 17, 107 (S.D.N.Y.1964); Nudo v. Societe Anonyme Belge D'Exploitation de la Navigation Aerienne, 207 F.Supp. 191 (E.D.Pa.1962); Bowen v. Port of New York Authority, 8 Av.Cas. 18, 043 (Sup.Ct.N.Y.1964); Galli v. Re-Al Brazilian International Airlines, 29 Misc.2d 499, 211 N.Y.S.2d 208 (Sup.Ct.N.Y.1961).

Even where the courts have found that one of the places required by Article 28(1) was in the United States, they nevertheless recognized that 28(1) pertained to subject matter jurisdiction rather than venue. Eck v. United Arab Airlines, Inc., 360 F.2d 804 (2d Cir. 1966); Mertens v. Flying Tiger Line, Inc., 341 F.2d 851 (2d Cir.) cert. denied, 382 U.S. 816, 86 S.Ct. 38, 15 L.Ed.2d 64 (1965).

In a well reasoned article, Judicial Jurisdiction Under The Warsaw Convention, 29 J.Air L.Com. 205 (1963), Carl E. B. McKenry, Jr., stated:

'Uniform interpretation of Article 28 by the federal courts is imperative. Actually, it is not the ultimate ruling in any of the federal cases which creates an impression of doubt and uncertainty, but rather the obiter dictum which some jurists have felt compelled to include in handing down opinions on this subject.' 29 J.Air L.Com. at 226.

After reviewing the authorities, the author concluded that the provisions of Article 28(1) of the Warsaw Convention are jurisdictional as to the nation in which suits must be brought. In recent decisions since this article, the courts have uniformly found that Article 28(1) requires, as a matter of jurisdiction, that one of the designated places must be in the United States. See, Eck v. United Arab Airlines, Inc., 360 F.2d 804 (2d Cir. 1966) supra; Mertens v. Flying Tiger Line, Inc., 341 F.2d 851 (2d Cir.), cert. denied 382 U.S. 816, 86 S.Ct. 38, 15 L.Ed.2d 64 (1965) supra; Biggs v. Alitalia-Linee Aeree Italiane, S. p. A., 10 Av.Cas. 18, 354 (E.D.N.Y.1969); Khan v. Compagnie Nationale Air France, 9 Av.Cas. 17, 107 (S.D.N.Y.1964).

Recognizing that Article 28 is jurisdictional and that under some circumstances United States citizens are denied access to their own courts by reason of Article 28 of the Warsaw Convention, the United States Government recently proposed an amendment to Article 28 which would add, as an additional jurisdiction, the domicile of the passenger if the carrier does business in that jurisdiction. In proposing this amendment, the United States Government said:

'Article 28 of the Warsaw Convention provides that suit may be brought by a plaintiff only in the fllowing States:

(1) the domicile of the defendant carrier,

(2) the principal place of business of the carrier (3) the place where the ticket was purchased, Or

(4) the place of destination.

'However, in the event a U.S. citizen temporarily residing abroad purchases a Rome to New York to Rome ticket on a foreign air carrier which is generally subject to jurisdiction in the courts of the United States, Article 28 would prevent that person from suing the carrier in the United States in a 'Warsaw case' Even though such a suit could be brought in the absence of the Convention.

'In other words, in this and certain other cases, the Convention denies citizens and residents of the United States the right to bring suits in the United States courts in cases where actions can be brought under our general laws.

'As indicated in paragraph 6 of WD 30, the United States proposed an...