Supreme Court, New York County, New York.

MAXINE COMPANY, INC., Plaintiff,

v.

BRINKS GLOBAL SERVICES U.S.A., INC., Defendant.

No. 602233/05.

 

April 21, 2010.

 

EILEEN BRANSTEN, J.

 

In this breach of contract action, defendant Brinks Global Services U.S.A., Inc. (“Brinks”) moves, pursuant to CPLR 3212, for an order granting summary judgment and dismissing this action in its entirety, or, in the alternative, granting partial summary judgment and capping Brinks’s maximum potential liability.

 

By Airbill No. 1000-1531993, dated November 16, 2004 (the “Airbill”), plaintiff Maxine Company, Inc. (“Maxine”), a high-end wholesale and retail jeweler, hired Brinks, a security service, to pick-up, transport, and deliver 157 items of fine jewelry having a declared aggregate value of $2 million from New York City to a department store in McClean, Virginia. In accordance with the Airbill’s terms, Maxine, rather than Brinks, packed the jewelry in leather cases, bubble wrap and a soft-sided wheeled suitcase.

 

 

Maxine alleges that, on November 17, 2004, 49 pieces of ornate gold jewelry set with precious stones were damaged while in Brinks’s possession. Maxine further alleges that it appeared from the condition of the Brinks shipping bag containing the suitcase, and the suitcase itself, that the package had been subjected to an extraordinary external trauma that had crushed and deformed the jewelry.

 

Maxine advised Brinks of the damage by e-mail and forwarded photographs of the damage within one week after the loss. Maxine also arranged for Brinks to hand-carry a second, similar shipment to Virginia.

 

In June 2005, following Brinks’s refusal to reimburse Maxine for the alleged loss due to damage, Maxine commenced this action. Maxine seeks to recover from Brinks $731,900 in compensatory damages plus lost profits and reasonable attorneys’ fees. Maxine asserts causes of action for negligence and breach of contract.

 

Brinks served an answer with affirmative defenses and a counterclaim. Brinks denies all wrongdoing and alleges that Maxine failed to pack the jewelry in a safe manner, failed to declare the true value of the jewelry being shipped, failed to disclose the existence of fragile items in the shipment, failed to pay the extra shipping charges required for the handling of fragile items and failed to timely notify Brinks of the alleged damage on the shipment delivery document. On these allegations, Brinks counterclaims for breach of warranty for Maxine’s failure to pack the jewelry in accordance with industry standards. Brinks seeks to recover costs incurred in defending this action, including reasonable attorneys’ fees, pursuant to an indemnification and hold harmless clause set forth in the Airbill.

 

In November 2007, Maxine commenced a second action in this court against Brinks, arising out of the same loss (see Maxine Co., Inc. v. Brinks Global Services USA, Inc., Sup Ct, N.Y. County, index No. 603828/07). The second action is identical to the action at bar, with one exception: Maxine commenced the second action was commenced with a second plaintiff-RCM, s.r.l., an Italian jewelry manufacturer and the owner of the jewelry. By order dated March 24, 2008, the Honorable Helen E. Freedman granted a motion by Brinks and dismissed the second action. Justice Freedman found the second action duplicative of the action at bar, as Maxine was RCM’s agent for purposes of the dispute (see CPLR 3211[a]), and further found the second action time-barred, as Maxine and RCM had, in breach of the Airbill’s limitations clause (see Airbill, § XI), failed to commence the action within one year after the date that the shipment had been received by Brinks.

 

Brinks now seeks summary judgment in its favor dismissing the complaint in its entirety, or, in the alternative, granting Brinks partial summary judgment on the issue of damages. Brinks moves on the ground that the evidentiary record conclusively demonstrates that Maxine did not comply with the Airbill’s various conditions precedent to Brinks liability for items damaged during transit.

 

In opposition, Maxine contends that the Airbill is not enforceable and that the provisions upon which Brinks relies are not conditions precedent to Brinks’s recovery.

 

Analysis

 

I. Carmack Amendment

 

Initially, the parties dispute whether the various contract issues they raise must be decided pursuant to the Carmack Amendment (49 USC § 14706) to the federal Interstate Commerce Act (49 USC § 101, et seq.). The Carmack Amendment governs the liability of common carriers for loss or damage to goods shipped through interstate commerce, or pursuant to federal common law, Connecticut law, or New York law.

 

The Carmack Amendment is the exclusive remedy available to shippers for lost or damaged goods shipped by ground transportation through interstate commerce. The Carmack Amendment preempts all state and federal common-law claims ( Project Hope v. M/V IBN SINA, 250 F3d 67, 74 [2d Cir2001]; Stein Jewelry Co. v. United Parcel Serv., Inc., 228 F Supp 2d 304, 307 [SD N.Y.2002] ), unless the contracting parties agree in writing to waive the protections afforded by the amendment ( Great American Ins. Co. of New York v TA Operating Corp., 2008 WL 5335317, *4, 2008 U.S. Dist LEXIS 101758 [SD N.Y.2008]; see 49 USC § 14101[b]).

 

The Carmack Amendment is not applicable to the instant dispute for two reasons. First, Maxine shipped the jewelry by air, rather than by ground, transportation (see 49 USC § 13102[16] ). Second, the Airbill includes an express waiver of the amendment. The Airbill provides that Maxine agrees that “none of the provisions of the Carmack Amendment (a U.S. law relating to motor carriers transporting freight between States of the United States as well as the U.S. overland portion of international moves) apply to any obligation of Brink’s under this Contract and that this Contract governs the rights and responsibilities of [Maxine] and of Brink’s” (Airbill, § III).

 

When, as here, a shipper contests the validity of a contractual clause that limits an air carrier’s liability, federal common law applies to that issue ( Kemper Ins. Companies v. Federal Express Corp., 252 F3d 509, 512 [1st Cir], cert denied 534 U.S. 1020 [2001] [applying federal doctrine of released value to bill of lading provision limiting carrier’s liability for its own negligence] ). “Federal common law controls the validity of limitations on liability for interstate shipments by any type of common carrier” ( Great American Ins. Co. of New York v. TA Operating Corp., 2008 WL 5335317, *4, citing Nippon Fire & Marine Ins. Co. Ltd. v. Skyway Freight Sys. Inc., 235 F3d 53, 60 [2d Cir2000] ).

 

II.Connecticut Law Applies

 

However, the law of the state of Connecticut, the law chosen by the parties and the location of Brinks’s principal place of business, applies to the remaining disputes. It is the policy of the courts of this state to enforce the contracting parties’ choice of law and forum selection provisions ( Union Bancaire Privee v. Nasser, 300 A.D.2d 49, 50 [1st Dept 2002]; see Zenon v. R.E. Yeagher Mgt. Corp., 57 Conn App 316, 321, 748 A.2d 900, 903 [Conn App 2000]; Maxine Co., Inc. v. Brinks Global Services USA, Inc., Sup Ct, N.Y. County, Mar. 24, 2008, Freedman, J., index No. 603828/07). The Airbill includes a choice of law provision that specifies, in relevant part, that “[c]laims relating [to] Shipments solely within the United States shall be governed by Connecticut law” (Airbill, § XI).

 

III.Contract of Adhesion

 

Contrary to Maxine’s contention, the Airbill is not a contract of adhesion, and its terms are valid and enforceable.

 

A contract of adhesion is a contract formed as a product of gross inequality of bargaining power between parties. A court will find adhesion only when the party seeking to rescind the contract establishes that the other party used high pressure tactics, or deceptive language, or that the contract is unconscionable.

 

Typical contracts of adhesion are standard-form contracts offered by large, economically powerful corporations to unrepresented, uneducated, and needy individuals on a take-it-or-leave-it basis, with no opportunity to change the contract’s terms…. It may not be invoked to trump the clear language of the agreement unless there is a disturbing showing of unfairness, undue oppression, or unconscionability ( Klos v. Polskie Linie Lotnicze, 133 F3d 164, 168, 169 [2d Cir1997] [applying New York law] [internal citations and quotation marks omitted]; Post Road Furniture Group, Inc. v. Landmark Merchant Solutions, LLC, 2004 WL 2943302, *4, 204 Conn Super LEXIS 3406 [Conn Super 2004] ).

 

The record is wholly devoid of evidence that Brinks employed high-pressure tactics or deceptive or unconscionable language, or that grossly unequal bargaining power or fraud existed. The undisputed record demonstrates that Maxine is a sophisticated business, employing sophisticated business people and that it has shipped goods with Brinks many times over a period of years. For example, from 2003 to 2005, Maxine admittedly shipped more than $51 million worth of jewelry using Brinks’s service, and had a practice of retaining copies of each airbill Maxine completed for the shipments (see Maxine by Sheila Papaleo, Jan. 18, 2007, Dep. Tr. at 57:10-18; Maxine Nov. 22, 2005 Handwritten Brinks Shipments List). The record also demonstrates that, over the years, Maxine routinely used carriers other than Brinks to ship jewelry (see Ferrari Express Inc. June 28, 2004 Shipping Documents).

 

IV.Contract Terms

 

The Airbill clearly provides that, in shipping with Brinks, Maxine agreed to all terms and conditions set forth in the Airbill and that Maxine is bound by those terms. The Airbill provides that “Brink’s liability to [Maxine] for loss or delay of or damage to [Maxine’s] Property is agreed to be only as set forth in this contract and [Maxine] agree[s] to look only to the provisions of this Contract for any claim against Brink’s relating to [Maxine’s] Shipment” (Airbill, § III). A contracting party who signs or accepts a written contract is bound to read and understand its contents, and knowledge of the contract terms will be imputed to the party, even where the party fails to read the contract ( Post Road Furniture Group, Inc. v Landmark Merchant Solutions, LLC, 2004 WL 2943302, *4, 2004 Conn Super LEXIS 3406). Maxine Rose, Maxine’s principal, admits that Maxine has often shipped jewelry using Brinks, and that she is familiar with the terms and conditions of the Airbill form contract (see Maxine by Maxine Rose Sept. 7, 2006, Dep. Tr., at 62:23 to 63:2-7; see Rose Feb. 6, 2006 Aff., ¶¶ 15, 23).

 

The court notes that, while Maxine attempts to shed doubt on the authenticity of the Airbill produced by Brinks, the record amply demonstrates that Brinks has produced the actual Airbill, completed by Maxine, in its entirety and even with its original size and form.

 

The Airbill consists of an original and four copies of a shipping form to be completed by the shipper (here, Maxine). The Airbill has a unique identifying number in the upper right-hand corner beneath a bar code. The Airbill also includes three pages of terms and conditions. On the top form, to be retained by the shipper, the form includes the following language: “[a]ll shipments are subject to the Conditions of Contract contained on the reverse side of this document.” In bold capital letters, the top form advises, “see ply 1 and ply 2 for conditions of contract.” Ply 1 is the reverse side of the shipper’s copy of the form, and sets forth sections I through IV of the Airbill’s terms and conditions. Ply 2 is the double-sided second page of the shipper’s copy, and sets forth sections V through XII, the remaining sections.

 

The parties next dispute whether the obligations imposed upon Maxine by the Airbill constitute conditions precedent to any obligation by Brinks to reimburse Maxine for the loss, and whether Maxine properly performed its contractual obligations regarding the packing of the shipment and the identification of fragile items.

 

Pursuant to Connecticut law,

 

[w]here rights, duties and obligations are fully stated in a written contract between the parties, the court is obligated to determine the intention of the parties from the language used interpreted in the light of the situation of the parties and the circumstances connected with the transaction. The question is not what intention existed in the minds of the parties but what intention is expressed in the language used. It is not within the power of the court to make a new and different agreement. Contracts voluntarily and fairly made should be held valid and enforced by the courts. It is axiomatic that a party is entitled to rely upon its written contract as the final integration of its rights and duties

 

(On Site Energy Corp. v. Sperry Rand Corp., 5 Conn App 326, 330, 498 A.2d 121, 123, cert denied 197 Conn 818, 501 A.2d 388 [1985] [internal citations and quotation marks omitted] ). “If contract language is definitive of the parties’ intent, then the interpretation of the language becomes a question of law for the court” ( Best Friends Pet Care, Inc. v. Design Learned, Inc., 77 Conn App 167, 176, 823 A.2d 329, 335 [2003] [internal citations omitted] ).The Airbill provides that Maxine represents and warrants that it is “responsible for packaging the Property properly and in accordance with the custom of the trade in a manner that the Property is not susceptible to damage during transit by land, sea or air. [Maxine] agree[s] to identify any fragile items included in the Shipment and pay additional charges relating to such fragile items” (Airbill, § IV). Maxine also represented and warranted that it has “properly and accurately described the Property in the Shipment and declared its full value both for customs purposes and for carriage purposes. The Shipment is properly … packed to ensure safe transportation during ordinary handling in transit” (id., § II).

 

While the parties vigorously dispute whether Maxine properly packed the jewelry in accordance with these provisions, there is no real dispute that Maxine did not declare the full value of the shipment and did not identify any of the jewelry as fragile.

 

 

On the Airbill, Maxine declared the value of the shipped jewelry to be $2 million. However, Maxine admits that its internal invoices for the jewelry demonstrate that the shipment’s aggregate retail selling price was $6,627,868, and that the aggregate wholesale price was half the retail amount (see Maxine by Rose Sept. 7, 2006, Dep. Tr., at 173:9 to 176:21; Maxine Nov. 16, 2004, Internal Memos). Either value far exceeds the declared amount, and, indeed, Maxine admits that the declared amount was less than the shipment’s value (see Maxine by Rose Sept. 7, 2006, Dep. Tr., at 47:21-23, Maxine by Rose Sept. 15, 2008, Dep. Tr., at 580:5 to 581:13). Maxine states that it was its customary practice to undervalue shipments when the jewelry shipped was covered by a separate insurance policy (see Maxine by Sara Thomeier Jan. 19, 2007, Dep. Tr., at 31:15-21, 37:3 to 39:13).

 

With regard to Brinks’s liability for damage to fragile items occurring while a shipment was in Brinks’s possession, the Airbill provides, in relevant part, that “Brink’s will pay to [Maxine] the actual monetary value of the Property which is lost or damaged (to the extent of such damage) on the date of loss, up to the value declared for carriage, subject to the terms and limitations contained in this Contract” (id., § X). The Airbill also provides that “Brink’s is not an insurer of your shipment” (id., § VIII [capitalization omitted] ) and that, “[n]otwithstanding the foregoing, should [Maxine] fail to identify a fragile item and pay additional charges if required by Brink’s, Brink’s Liability shall be limited to loss only, and not for damage” (id., § X). The Airbill further provides that Maxine understands and agrees “that Brink’s will not be liable for loss of or damage to [Maxine’s] Property directly or indirectly caused or occasioned by, happening through, resulting from or in consequence of any of the following: … BREAKAGE of statuary, marble, glassware, bric-a-brac’, porcelain, decorative items including jewelry and similar fragile items,” except in certain circumstances not alleged to exist here (Airbill, § X).

 

Pursuant to these unequivocal terms in the Airbill, Maxine agreed to identify any fragile items in the shipment, to pay additional charges for shipment of those items and that jewelry was to be considered fragile. The Airbill lists jewelry with other fragile items, as follows: “statuary, marble, glassware, bric-a-brac’, porcelain, decorative items including jewelry and similar fragile items” (Airbill, § X). However, Maxine did not advise Brinks that the jewelry it shipped was fragile.

 

Brinks’s liability under the Airbill’s terms would be here limited to damage to fragile items that Maxine has identified. Contractual conditions precedent that are clearly intended to be conditions precedent, such as the provision at issue here, are valid and enforced by the courts of Connecticut.

 

A condition precedent is a fact or event which the parties intend must exist or take place before there is a right to performance. Whether the performance of a certain act by a party to a contract is a condition precedent to the duty of the other party to act depends on the intent of the parties as expressed in the contract and read in light of the circumstances surrounding the execution of the instrument

 

( Christophersen v. Blount, 216 Conn 509, 512, 582 A.2d 460, 462-463 [1990] [internal citations and quotation marks omitted] ).

 

Because Maxine was contractually required to declare the jewelry as fragile, and did not, Brinks is not liable for the damage to the jewelry. Therefore, that branch of the motion for summary judgment and dismissal of the breach of contract cause of action is granted.

 

That branch of the motion to dismiss the negligence claim is granted. “It is settled that a claim arising out of an alleged breach of contract, [such as a] shipping agreement, may not be converted into a tort action absent the violation of a legal duty independent of that created in the contract” ( Givoldi, Inc. v. United Parcel Serv., 286 A.D.2d 220, 221 [1st Dept 2001] ). Maxine does not allege that existence of such a separate duty.

 

V.Brinks’s Alternative Requests

 

Having granted summary judgment in Brinks’s favor on both causes of action, this court need not reach Brinks’s alternative request for an order capping its maximum potential liability and dismissing Maxine’s demands for consequential damages, including lost profits. However, the court notes that the Airbill unequivocally limits Brinks’s liability where the shipper under-declares the value of the shipment: “If [Maxine] declare[s] an amount less than the full actual value of the Shipment for carriage, [Maxine] understand[s] and agree[s] that Brink’s is only responsible for loss up to, but not more than, the declared value for carriage in the same proportion that declared value bears to the full actual value of the shipment” (Airbill, § X). The Airbill also clearly provides that “Brink’s liability shall not, under any circumstances, include consequential losses or damages” (Airbill, § X).

 

The branch of the motion for summary judgment and dismissal of Maxine’s demand for attorneys’ fees is granted. “[A]ttorney’s fees and ordinary expenses and burdens of litigation are not allowed to the successful party absent a contractual or statutory exception” ( Town of New Hartford v. Connecticut Resources Recovery Auth., 291 Conn 511, 517, 970 A.2d 583, 588 [2009]; A.G. Ship Maintenance Corp. v. Lezak, 69 N.Y.2d 1, 5 [1986] ). The Airbill does not authorize Maxine to recover attorneys’ fees.

 

Accordingly, it is

 

ORDERED that defendant’s motion for summary judgment is granted and the complaint is dismissed in its entirety; and it is further

 

ORDERED that the Clerk is directed to enter judgment accordingly.