Court Opinion

ID: 8872214
Source: CourtListenerOpinion
Date Created: 2022-11-26 18:33:43.771833+00
Date Added: 2024-06-11T17:06:13.003319
License: Public Domain

KAUFMAN, Circuit Judge
(dissenting):
In this case Mrs. Schwartz, a widow, is deprived of her day in court by a holding that, at one and the same time, language in a contract of adhesion — drafted by the steamship company and accepted by the passenger on a take-it-or-leave-it basis — should sometimes be deleted, should sometime be augmented, and at other times is void under federal law. Believing that such a holding is inconsistent with basic notions of contract interpretation and fundamental fairness, I respectfully dissent.
At the outset, it is helpful to set out the essence of the contract clause and statute we must interpret. Article 13 of the contract sought to require any action for the wrongful death of Mr. Schwartz to be “commenced and process served * * within one (1) year from the date when the death * * * occurred.” The question is whether that requirement is proscribed by Section 4283A of the Revised Statutes, 46 U.S.C. § 183b, which makes unlawful maritime contract clauses providing for “a shorter period * * * for the institution of suits on * * * claims [for loss of life or bodily injury] than one year” from the date of injury, or in the case of death, from the appointment of decedent’s legal representative.
There can be no doubt that Article 13, as written, provides for a shorter period than one year in which to institute suit. Suppose, for example, that the contract provided that any action for wrongful death be commenced and pretrial discovery completed within one year from the date of death. Such a clause manifestly would be invalid because in order to comply with the dual requirements before the 365th day it would be necessary to institute an action in less than a year. Similar reasoning leads to rejection of Article 13, which seeks to require both commencement of the action and service of process within a year. The contractual clause is invalid because in most instances a suit will have to be instituted in less than a year in order to give the plaintiff time to complete service of process within the 365-day period.
I do not believe, as the majority suggests, that the “or process served” phrase can be excused by “drafting difficulties” that arise because an action is deemed instituted, for limitations purposes, at different times in different situations. The opinion of my brothers in the majority is hinged on the argument that in the New York state courts an action is commenced by the service of process; in the federal courts an action based upon federal question or admiralty jurisdiction is commenced when the complaint or libel is filed; and in a federal court diversity suit, where the applicable limitation provision is geared to service of process, the mere commencment of the action by filing a complaint does not toll the time period. But a draftsman who wanted to take account of these variations would not have to insert the “and process served” language [if he was really trying to avoid the proscriptions of Sect. 4283A] and one who did would, as the District Court aptly recognized, be inartistic.
It is reasonable to assume that a Congress, enacting legislation to outlaw any contractual provisions which would in any way curtail the period for the “institution of suits” to less than a year, was well aware that an action in some state courts is commenced by the service of process and that a federal admiralty suit is begun by filing a libel. Congress, by using the term of art “institution” of a suit, automatically incorporated the state rules making service of process a prerequisite to the tolling of a state limitations period where that is required. Similarly, in a diversity action the one-year minimum period for “instituting” a suit would include, where applicable, the requirement that process be served in order to toll the governing limitations period. Therefore, the phrase “and process served” is sheer surplusage in these two instances. But, on the other hand, in a federal admiralty action, such as the one before us, the suit would be “instituted” and the limitations period tolled once the libel was filed. Article *47013 of the contract, by seeking to impose the additional burden of service of process in this admiralty action, flies in the face of the federal policy articulated in Section 4283A.
Nor do I believe that the severability provision of Article 15 can be invoked to excise the “and process served” language in order to resuscitate Article 13. This case is readily distinguishable from Foster v. Cunard White Star, Ltd., 121 F.2d 12 (2 Cir. 1941), where two separate provisions in a contract, one governing notice and the other institution of suit, were held severable. Here, the restrictions on the institution of suit and service of process are an interwoven condition in one clause too closely related to be severed. See Barrette v. Home Lines, Inc., 168 F.Supp. 141 (S.D.N.Y.1958). To sever some of the words used in describing a unitary time concept amounts, in practical effect, to a redefinition of the time period. In other words, if it were valid to “save” illegality by a mere excision of an invalid phrase or word, then it would follow, for example, that a contract providing for commencement of suit in “one year less ten days” could be resurrected in litigation by a savings clause similar to Article 15.
Obviously, the purpose in enacting Section 4283A is important in judging whether a contract clause meets the requirements fixed by Congress. I cannot agree with my brothers that because the section is an integral part of a comprehensive body of regulations declaratory of a federal policy to encourage shipbuilding, all contractual provisions referring to the section should be liberally construed in the shipowner’s favor. The case cited for this proposition, Scheibel v. Agwilines, Inc., 156 F.2d 636 (2 Cir. 1946), is not really determinative because it simply held that a contract limitation clause valid under 4283A is, because of considerations of uniformity, controlling despite state legislation which seeks to prescribe a longer period. Indeed, when the scope of 4283A was first considered, a shipowner’s contention that the section was narrowly confined to limitation-of-liability proceedings was definitively rejected. Moore v. American Scantic Line, Inc., 30 F.Supp. 843 (S.D.N.Y.1939), aff’d, 121 F.2d 767 (2 Cir. 1941). In reaching that conclusion the court noted that the statute was designed “ ‘to remedy abuses which had arisen through the efforts of shipowners engaged in common carriage to limit unreasonably their obligations as carriers of’ * * * ‘living’ cargoes.” 30 F.Supp. at 845.
I agree that statutory provisions protecting shipowners against losses due to fire not caused by their neglect, 46 U.S.C. § 182, and setting limits to the extent of their liability, 46 U.S.C. § 183, were designed to help the maritime industry and should be so construed. But surely the statute of limitations provision, permitting the carrier to require the institution of suits for death or bodily injury within one year, was not designed to subsidize the shipping industry. Rather, Section 4283A sought to eradicate the evil of shipowners dictating unreasonably restrictive terms to passengers who, as a practical matter, lack any real power to negotiate. It was, in fact, intended by Congress to prevent shipowners from imposing unreasonably short periods of limitation on actions for personal injuries or death. The statute, as I view it, sets out what Congress deemed to be the shortest reasonable period of limitation— an absolute standard, any breach of which is invalid. See Moore v. American Scantic Line, Inc., supra. This interpretation is supported by Section 4283B, enacted less than a year after 4283A, which expressly declares any contract purporting “to lessen, weaken, or avoid the right” of any claimant to a trial of a claim for loss of life or bodily injury to be against public policy and void.
As between the shipowner — however financially oppressed he may have been during the great depression when 4283A was enacted — and the passenger, any rule of construction that favors the shipowner ignores not only Congressional intention but practical realities as well. The maxim that a fixed, printed-form con-
*471tract is to be construed most strongly against the drafter, 4 Williston, Contracts § 621 (3d ed. 1961); 3 Corbin, Contracts § 559 (1960); Restatement of Contracts, § 236(d), is particularly applicable in a case such as this where the “adhesion” agreement1 is presented on a take-it-or-leave-it basis to one in a disadvantageous bargaining position. Here we do not have a legal transaction resulting from the give-and-take of those on an equal bargaining plane. Rather, “the weaker party’s contractual intention is but a subjection more or less voluntary to terms dictated by the stronger party, terms whose consequences are often understood only in a vague way, if at all.” Kessler, Contracts of Adhesion — Some Thoughts About Freedom of Contract, 43 Colum.L.Rev. 629, 632 (1943). As Judge Frank recognized, in a contract of adhesion
“with one-sided control of its terms, when the one party has no real bargaining power, the usual contract rules, based on the idea of ‘freedom of contract,’ cannot be applied rationally. For such a contract is ‘sold not bought.’ The one party dictates its provisions; the other has no more choice in fixing those terms than he has about the weather.” Siegelmari v. Cunard White Star Ltd., 221 F.2d 189, 204 (2 Cir. 1955) (dissenting opinion).
At the same time, I believe it is really begging the question to urge that because the draftsman specifically referred to Section 4283A, Article 13 should be construed to go only as far as the statute permits. Who is not aware that the typical passenger (including judges) reads the fine-print terms of such contracts superficially, if at all. In any event, the voyager should not be put to the task of reconciling the contract language with the statute or running to the nearest law library to read the statute and the cases interpreting it.
Finally, some comment is in order concerning my brothers’ concession that Article 13 may not be enforceable in every conceivable fact situation. I assume, by their vote to affirm, that they agree with the District Court that if this action had been instituted within, one year, but the marshal had not affected service until after the expiration of the year, the defense of the limitation clause would fall. See 223 F.Supp. 374, 376 (S.D.N.Y.1963). And from their allusion to the relevance of equities based on reliance and their quotation from my opinion in Barrette v. Home Lines, Inc., supra, I gather that the contract clause would not defeat one who failed to institute suit because he thought he could not serve process within the limitation year. With all respect, I do not believe that this functional approach is proper in interpreting contractual language which, at least theoretically, is written to govern the parties’ actions. The validity of the clause must be judged as of the time it was entered into and not on the basis of subsequent conduct or events occurring long after the contract was signed, sealed and delivered. If, as my brothers apparently concede, Article 13 would have limited Mrs. Schwartz’s freedom of action in certain conceivable fact situations, then she was entitled, by virtue of Section 4283A, to regard the provision as invalid. But a pragmatic test, opening the door to vague and uncertain inquiries about reliance, forces the courts into an area in which precisely such inquiries are to be avoided by looking to the specific language of the contract alone.
If Incres wanted to take advantage of the one-year rule of Section 4283A, its draftsman should have done no more than the statute permits. But having done more, whether through inartistry or imposition, the carrier should be remitted *472to the normally operative two-year statute of limitations of the Death on the High Seas Act, 46 U.S.C. § 763, with which Mrs. Schwartz clearly complied.
In any event, even were I to accept my brothers’ notion that the illegality of Article 13 should not be determined in the “abstract,” I believe they are in error in affirming the lower court for its ruling was on a motion for summary judgment and, at the very minimum, the question of reliance vel non presented triable issues of fact. Indeed, the affidavits presented to the District Court did not discuss the reliance issue, although it appears that Mrs. Schwartz did move with dispatch and retained an attorney prior to the expiration of the one-year period, who in fact sent a claim letter to the carrier before that period had expired. It seems harsh to deprive the libelant in this summary fashion of at least an opportunity to show that, even on the majority’s approach, Article 13 did not foreclose her right to seek recovery for the wrongful death of her husband.

. Raymond Saleilles, a French legal authority, coined the phrase “contrats d’adhésion,” using it to describe contracts “in which one predominant unilateral will dictates its law to an undetermined multiple [e. g., all passengers using Incres vessels] rather than to an individual * * *, as in all contracts which, as the Romans said, resemble much more a law than a meeting of minds.” Saleilles, De la Declaration de volunté 229 (1901).