Court Opinion

ID: 3140850
Source: CourtListenerOpinion
Date Created: 2015-10-22 17:52:26.231281+00
Date Added: 2024-06-11T11:54:41.919176
License: Public Domain

Rule 23 order filed                   NO. 5-05-0519
September 13, 2006;
Motion to publish granted                 IN THE
October 19, 2006.
                            APPELLATE COURT OF ILLINOIS
                             FIFTH DISTRICT
________________________________________________________________________
ERIN MOODY, Individually and as the    ) Appeal from the
Representative of a Class of Similarly ) Circuit Court of
Situated Persons,                      ) Madison County.
                                       )
   Plaintiff-Appellant,                )
                                       )
v.                                     ) No. 02-L-601
                                       )
FEDERAL EXPRESS CORPORATION,) Honorable
                                       ) Nicholas G. Byron,
   Defendant-Appellee.                 ) Judge, presiding,
________________________________________________________________________

       JUSTICE McGLYNN delivered the opinion of the court:

       The plaintiff, Erin Moody (Moody), individually and on behalf of all those similarly

situated, appeals the decision of the circuit court granting a summary judgment in favor of

the defendant, Federal Express Corp. (FedEx). On appeal, Moody argues the circuit court
erred in finding her claim preempted by the Airline Deregulation Act of 1978 (Airline

Deregulation Act) (49 U.S.C. '41713(b)(1) (2000)). We affirm.
                                          FACTS

       Moody filed a one-count breach-of-contract class action complaint against FedEx, a

courier service that provides package transportation and delivery services. In her complaint,
Moody alleged that FedEx breached its shipping contract by charging customers higher rates
for express delivery and failing to deliver the packages by the agreed delivery time. Moody

sought compensation for the difference in value between the services customers requested
and the services they received.

        On January 22, 2002, Moody completed a "Fed Ex USA Airbill" and chose to send a

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package "FedEx Priority Overnight, Next Business Morning." The airbill incorporated by
reference FedEx's service guide and the terms and conditions contained therein. Thus, in

exchange for $41.31, FedEx agreed to deliver Moody's package by 8 a.m. the next morning.
Moody alleges that the package did not arrive at its destination until 9 a.m. two days after it
was sent. Moody seeks damages in the amount of money she paid for the priority shipment

less the amount she could have paid for the service she actually received. She also seeks the
certification of a national class of litigants who experienced a similar plight in their dealings
with FedEx. She offers herself as the representative of that class.

        The contract between Moody and FedEx lists two remedies for a delayed shipment:

(1) actual damages to the shipment as a result of the delay, measured by the least among (a)
the shipment's repair cost, (b) its replacement cost, (c) its depreciated value, or (d) a preset

value declared by Moody at the time she shipped or (2) a full refund of her shipping charges

under the FedEx money-back guarantee. To seek damages under alternative (1), the

customer was required to give notice to FedEx within 15 days after the delivery of the
shipment. To seek a refund for a delayed shipment, a request was required to be made within

30 days. Moody does not allege any damages to the package, nor did she seek a refund of

her money; instead, she seeks a partial refund of her shipping charges for the delayed
shipment.

       FedEx moved for a judgment on the pleadings pursuant to section 2-615 of the Code
of Civil Procedure (Code) (735 ILCS 5/2-615 (West 2002)) on April 29, 2005. In its motion,
FedEx argued, inter alia, that Moody's breach-of-contract claim was preempted by the

Airline Deregulation Act. FedEx argued that Moody's breach-of-contract claim violated the
Airline Deregulation Act because it sought a remedy outside the four corners of the contract.
In response, Moody argued that her breach-of-contract claim was not preempted by the

Airline Deregulation Act because the price-difference remedy she sought was a common law

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remedy permitted by her contract with FedEx and that she could seek this remedy because
FedEx's contractual remedies for delayed shipment were not exclusive. FedEx replied that

Moody's sought-after remedy was not even allowed at common law and that a reasonable
construction established that the contractual remedies were exclusive.
       The trial court heard FedEx's motion for a judgment on the pleadings on August 12,

2005. The trial court agreed with FedEx and held that Moody's breach-of-contract claim was
preempted by the Airline Deregulation Act because it was not based on the actual terms of
Moody's contract. The court did not grant FedEx's motion pursuant to section 2-615(e) of the

Code (735 ILCS 5/2-615(e) (West 2002)). Instead, it dismissed Moody's action pursuant to

section 2-619 of the Code (735 ILCS 5/2-619 (West 2002)). No class of litigants was
certified. We affirm the lower court on the basis that the contract between Moody and FedEx

lists exclusive remedies different from the remedy sought by Moody.

                                        ANALYSIS

       The trial court dismissed the plaintiff's claim pursuant to section 2-619 of the Code,
finding the claim preempted by the Airline Deregulation Act. Section 2-619(a)(9) permits

the dismissal of a claim when "the claim asserted *** is barred by other affirmative matter

avoiding the legal effect of or defeating the claim." 735 ILCS 5/2-619(a)(9) (West 2002);
Glisson v. City of Marion, 188 Ill. 2d 211, 220 (1999). "The phrase 'affirmative matter' refers

to something in the nature of a defense that negates the cause of action completely or refutes
crucial conclusions of law or conclusions of material fact contained in or inferred from the
complaint." Glisson, 188 Ill. 2d at 220. The standard of review for an order granting a

motion to dismiss pursuant to section 2-619(a)(9) is de novo. Glisson, 188 Ill. 2d at 220. We
may, however, affirm the lower court on any basis in the record, regardless of whether the
trial court considered that basis or whether its decision is actually supported by the bases it

did consider. Bell v. Louisville & Nashville R.R. Co., 106 Ill. 2d 135, 148 (1985).

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       We need not reach the issue of preemption even if Moody's calculation of damages is
consistent with Illinois common law for the breach of a shipping contract. A reasonable

construction of the contract at issue establishes that the listed remedies were intended to be
exclusive, and we may therefore limit our analysis to the parties' bargain. In American
Airlines, Inc. v. Wolens, 513 U.S. 219, 222, 130 L. Ed. 2d 715, 721, 115 S. Ct. 817, 820

(1995), the United States Supreme Court held that the Airline Deregulation Act's preemption
prescription bars state-imposed regulation of air carriers but allows room for the court
enforcement of contract terms set by the parties themselves.

       Illinois courts presume that a contract sets forth the entire agreement between the

parties. Veath v. Specialty Grains, Inc., 190 Ill. App. 3d 787, 797 (1989). The parties' rights
under a contract are limited by the terms expressed therein (O'Shield v. Lakeside Bank, 335

Ill. App. 3d 834, 839 (2002)), and a contract must be read in its entirety and effect given to

each of its provisions (Kimball Hill Management Co. v. Roper, 314 Ill. App. 3d 975, 980

(2000)). Illinois courts have recognized and enforced exclusive remedy provisions, even
when the contract omits the word "exclusive," when the contract as a whole warrants that

construction. O'Shield, 335 Ill. App. 3d at 839; Ominitrus Merging Corp. v. Illinois Tool

Works, Inc., 256 Ill. App. 3d 31, 34 (1993); Veath, 190 Ill. App. 3d at 797. An exclusive
remedy clause will be enforced unless it violates public policy or something in the social

relationship of the parties works against upholding the clause. W.E. Erickson Construction,
Inc. v. Chicago Title Insurance Co., 266 Ill. App. 3d 905, 910 (1994).
       Moody's contract with FedEx consisted of the airbill for her shipment and the June 1,

2000, FedEx service guide incorporated by reference in the airbill. The front of Moody's
airbill contained the following sentence:
       "By using this Airbill you agree to the service conditions on the back of this Airbill

       and in our current Service Guide, including terms that limit our liability."

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The "Terms and Conditions" section of the airbill provided as follows:
             "Limitations on Our Liability and Liabilities Not Assumed

             Our liability in connection with this shipment is the lesser of your actual
      damages or $100 ***.
             In any event, we will not be liable for any damage, whether direct, incidental,

      special, or consequential in excess of the declared value of a shipment, whether or not
      Federal Express had knowledge that such damages might be incurred including but
      not limited to loss of income or profits.

                                           ***

             Filing a Claim
             YOU MUST MAKE ALL CLAIMS IN WRITING and notify us of your claim

      within strict time limits set out in the current Service Guide.

                                           ***

             Money-Back Guarantee
             In the event of untimely delivery, Federal Express will, at your request and

      with some limitations, refund or credit all transportation charges. See current Service

      Guide for more information."
The "Money-Back Guarantee Policy" section of the service guide provides as follows:

             "A. Service FailureBAt our option, we will either refund or credit your
      transportation charges upon request if we deliver your shipment 60 seconds or more
      after our published delivery commitment.

             In order to qualify for a refund or credit due to service failure, the following
      limitations apply:
             1.     For invoiced shipments and for shipments by shippers using customer

      automation, we must receive your notification (in writing or by telephone) of a service

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      failure within 30 calendar days from the original invoice date. ***
             2.     For shipments that we don't invoice because paid by cash, check, money

      order, or credit card, you must notify us, in writing or by telephone, of a service
      failure within 30 calendar days from the date of shipment."
The service guide also required claims for delay to be made within 15 days of delivery:

      "We must receive notice of claim due to damage, delay[,] or shortage, including
      perishable and spoilage damage claims due to late or delayed delivery ***, within 15
      days after delivery of shipment. (See Money-Back Guarantee Policy for the time

      period to request a refund or credit of transportation charges due to untimely

      delivery.)"
Finally, the FedEx service guide contained the following integration language:

             "This Guide and any Addendums or supplements supersede all previous

      Service Guides and other prior statements concerning the rates and conditions of

      FedEx service to which it applies. *** All modifications, amendments[,] or
      supplements may only be authorized by an officer in the Legal Department of FedEx

      Corporation ***, but no other agent or employee of FedEx, nor any other person or

      party, is authorized to do so. ***
             ***

             The following pages contain the FedEx Express Terms and Conditions
      applicable to the transportation of any package ***.
             ***

             Any conflict or inconsistency between this Guide and other written or oral
      statements concerning the rates, features of service, and terms and conditions
      applicable to FedEx service will be controlled by this Guide ***."

Moody does not allege any damages to the package, nor did she seek a refund of her

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moneyBinstead she seeks a partial refund of her shipping charges for the delayed shipment,
claiming this to be her common law remedy for the alleged breach of contract.

       The clear intent of the parties' contract was to limit Moody's remedies to those
expressly provided for therein. If Moody were allowed to pursue her retroactive partial
refund four years after the delivery, the contractual provisions expressing and relating to

FedEx's limit of liability and money-back guarantee would be rendered meaningless. The
contract expressly limited FedEx's liability for a delayed shipment to the actual damages to
the item shipped resulting from the delay and required that Moody file a claim for actual

damages within 15 days of shipment. The contract then provided an additional remedy for

late deliveryBa full refund of shipping charges under the money-back guarantee. To recover
this remedy, Moody's contract required that she provide a request for a full refund within 30

days of the shipment. Finally, the contract included integration language providing that the

service guide and airbill contain the entire agreement between Moody and FedEx. The

contract, therefore, effectively precluded Moody from seeking any other remedy except
actual damages as defined in the contract and a full refund of her shipping charges under the

money-back guarantee. To allow a partial refund so long after notice-of-claim deadlines

have lapsed would be to render the limitation of liability and notice requirements
meaningless. The remedy sought by Moody is therefore excluded under the contract.

       In finding the remedy sought by Moody excluded under the terms of the contract, we
need not address whether that remedy is the proper measure of common law damages for a
delayed shipment, nor do we need to address whether her claim is preempted by the Airline

Deregulation Act.
       The trial court initially dismissed the plaintiff's claim without prejudice with leave to
amend, presumably to amend the remedy sought to be one afforded by the contract. The

plaintiff elected to stand on her original complaint, and the court dismissed the claim with

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prejudice. Because the plaintiff elected to stand on the claim seeking a remedy not afforded
for a breach of the FedEx contract, we affirm the circuit court's order dismissing the claim

with prejudice.

       Affirmed.

       SPOMER, P.J., concurs.

       JUSTICE DONOVAN, specially concurring:

       I concur in the majority's decision, but I believe that this court must initially address

the preemption issue. I would find that the plaintiff's cause of action is not preempted based
on the reasoning set forth in Hicks v. Airborne Express, Inc., No. 5-04-0793 (July 25, 2006).