Court Opinion

ID: 6765985
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:36:59.30534+00
Date Added: 2024-06-11T16:02:41.256038
License: Public Domain

Bryant, J.,
concurring in part and dissenting in part. I concur in Part IV of the majority opinion which affirms the judgment of the trial court granting a directed verdict in favor of defendants-appellees Robert Maldeis, Intermodal Technical Services, GAB Business Services and Sea Insurance Company on The Limited’s claim against them based on the theory of promissory estoppel.
I dissent from Parts I and II of the majority opinion and concur with the conclusion reached in Part III, but disagree with the majority’s reasoning in reaching that conclusion.
*76I
I agree with so much of Part I of the majority opinion as holds that the Warsaw Convention applies to the dispute between The Limited and Pan Am. I further agree that the Convention limits the amount which may be recovered by The Limited in this case. I also agree that the Convention preempts state common law with respect to the issues within its purview, but the Convention does not address all issues involved in the dispute between The Limited and Pan Am. I agree with the majority’s conclusion that Ohio law applies to the dispute between The Limited and the insurers and agents.
I disagree with so much of Part I of the majority opinion as holds that federal common law is the substantive law to be applied to the dispute between Pan Am and The Limited in this case. I do not agree that a state court can apply federal common law to a case brought pursuant to the Warsaw Convention while ignoring its own law. The majority recognizes that this court is free to consider the law of New York and Ohio concerning interpretation of certain terms not defined in the Convention, but then holds that it is not bound to do so. I believe that this court is so bound.
In the case of Erie Railroad Co. v. Tompkins (1938), 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188, 1194, the Supreme Court held:
“Except in matters governed by the Federal Constitution or by Acts of Congress, the law to be applied in any case is the law of the State. * * * There is no federal general common law.”
A careful reading of the Convention reveals several issues to which state law is applicable. Article 25(1) provides that the Convention’s limitation of liability does not apply “if the damage is caused by his [the carrier’s] wilful misconduct or by such default on his part as, in accordance with the law of the court to which the case is submitted, is considered to be equivalent to wilful misconduct.” Article 28(2) states that procedural matters are to be governed by the law of the court in which the action is pending. Article 29(2) states that “[t]he method of calculating the period of limitation [two years pursuant to Article 29(1) ] shall be determined by the law of the court to which the case is submitted.” As noted by the majority, Article 21 provides that contributory or comparative negligence principles may be applied in accordance with the court’s own law.
In addition to the language contained in the Convention, the “Order of the Civil Aeronautics Board Approving Increases in Liability Limitations of Warsaw Convention and Hague Protocal [sic],” adopted May 13, 1966, as part of the Montreal Agreement, provides that the damage limitation for wrongful death and personal injury is “$75,000 inclusive of legal fees, and, in case of a *77claim brought in a State where provision is made for separate award of legal fees and costs, a limit of $58,000 exclusive of legal fees and costs.” Order reprinted in Section 1502 note, Title 49, U.S.Code (1976 and Supp.1992). This language together with the above-cited language contained in the Convention indicates that the law of the forum state is to be applied to certain issues.
The court of appeals correctly held that the substantive law of New York applies to the facts of this case, but it erred in relying on Section 146 of 1 Restatement of the Law 2d, Conflict of Laws (1971) 430. Section 146 applies to actions for personal injury and this is clearly not such an action.
For purposes of the choice of law issue in this case, we should rely on Section 145 of the Restatement of Conflicts 2d, which states that “the local law of the state which * * * has the most significant relationship to the occurrence and the parties * * * ” should be applied. Section 145(1) of the Restatement of the Law 2d, Conflict of Laws, supra, at 414. Section 145(2) provides several factors to be considered in determining which state has the most significant relationship:
“(a) the place where the injury occurred,
“(b) the place where the conduct causing the injury occurred,
“(c) the domicil, residence, nationality, place of incorporation and place of business of the parties, and
“(d) the place where the relationship, if any, between the parties is centered.”
In this case, both the injury and the conduct causing the injury occurred in New York. Pan Am is a New York corporation with its principal place of business in New York. The Limited is a Delaware corporation with its principal place of business in Ohio. A review of the record fails to disclose any evidence as to where the relationship between The Limited and Pan Am was centered. It appears that the only connection Ohio has with Pan Am’s portion of this transaction is the fact that The Limited’s principal place of business is located here and the garments were ultimately transported to this state, although by an entity other than Pan Am.
Following the guidelines set forth in Section 145 of the Restatement of Conflicts 2d, it is apparent that New York has the most significant relationship to the occurrence and parties. Accordingly, New York law should apply to this case.
II
I dissent from Part II of the majority decision reversing and remanding this cause to the trial court for new trial on the issue of The Limited’s damages. *78As stated previously, I would hold that the law of New York applies to the issues as between The Limited and Pan Am. The parties cite both New York and Ohio law in their briefs, and the law of both states is essentially the same with respect to the damages issues presented for review.
Under New York law, the general rule for awarding damages for cargo is the difference between fair market value of the goods as received and fair market value of the goods in the condition they would have been in had they not been damaged. Pacol (Canada) Ltd. v. M/V Minerva (S.D.N.Y.1981), 523 F.Supp. 579, 581-582; and C. Itoh & Co. (America), Inc. v. Hellenic Lines, Ltd. (S.D.N.Y.1979), 470 F.Supp. 594, 598.
In this respect, New York and Ohio law are identical. I believe the damages instruction given to the jury by the trial court correctly set forth this measure of damages.
The Limited’s argument that it should be entitled to receive the retail value of the damaged garments simply because it is a retailer is, in my opinion, without merit. In the Pacol case, supra, the plaintiff sought to recover lost profits because it had already contracted for the sale of the entire shipment of cocoa beans that were damaged by the carrier. The court disallowed recovery for lost profits because the plaintiff was able to fulfill its contractual obligations through the sale of cocoa beans from other sources. Pacol, 523 F.Supp. at 582. The court further noted that the plaintiff was unable to accurately forecast its lost profits. Id. There is evidence in the record of the trial of the case sub judice which indicates that The Limited might have made sales of substitute merchandise to customers who otherwise were prospective buyers of the garments at issue here.
I would hold that the evidence presented by The Limited is insufficient to find, as it urges this court to do, that it would have sold all of the garments at full retail price. Damages for lost profits may be recovered only if proven with “reasonable certainty.” Kenford Co., Inc. v. County of Erie (1986), 67 N.Y.2d 257, 502 N.Y.S.2d 131, 493 N.E.2d 234. The Limited not having proven its lost profits with reasonable certainty, I would affirm the judgment of the trial court.
Ill
I concur in that portion of Part III of the majority opinion which affirms the jury’s finding that Pan Am did not engage in willful misconduct. I would have made this finding upon different grounds, however. As discussed in Parts I and II, above, I would hold that New York law applies to the damages issue and the question of whether Pan Am engaged in willful misconduct.
*79The Limited contends that the trial court should have instructed the jury that a finding of intent on the part of Pan Am was unnecessary to determine that Pan Am had acted willfully. Neither the parties nor the court of appeals mentioned New York law concerning the elements of willful misconduct. Instead, they relied on Ohio law, which does not require a finding of intent.
New York law differs from Ohio law concerning the elements of willful misconduct. The law of New York as it relates to willful misconduct within the terms of the Warsaw Convention clearly requires “a conscious intent to do or to omit doing the act from which harm results to another * * Goepp v. American Overseas Airlines, Inc. (1952), 281 A.D. 105, 111, 117 N.Y.S.2d 276, 281. See, also, Rymanowski v. Pan American World Airways, Inc. (1979), 70 A.D.2d 738, 739, 416 N.Y.S.2d 1018, 1020; and Grey v. American Airlines, Inc. (C.A.2, 1955), 227 F.2d 282, 285, certiorari denied (1956), 350 U.S. 989, 76 S.Ct. 476, 100 L.Ed. 855.
Because the jury instruction concerning willful misconduct should have been based upon New York law, I would hold that the trial court’s failure to instruct the jury that it need not find intent on the part of Pan Am was not error.
IV
As to the cross-appeal, I concur that The Limited had proper standing to sue Pan Am, but find no basis to justify an award of prejudgment interest.
The trial court cited R.C. 1343.03(C) and Essex House v. St. Paul Fire & Marine Ins. Co. (S.D.Ohio 1975), 404 F.Supp. 978, as its authority under the circumstances for granting prejudgment interest.
If this be deemed an Ohio tort action to which R.C. 1343.03(C) might apply, the motion for prejudgment interest alleged neither the movant’s good faith efforts nor the judgment debtor’s failure to make a good faith effort to settle the claims in suit. The trial court held no hearing on motion and made no finding of Pan Am’s willful misconduct. Thus, the requirements of R.C. 1343.03(C) were not met. Kalain v. Smith (1986), 25 Ohio St.3d 157, 25 OBR 201, 495 N.E.2d 572; Villella v. Waikem Motors, Inc. (1989), 45 Ohio St.3d 36, 543 N.E.2d 464.
In Essex House, the district court found an award of prejudgment interest justified by the need for adequate compensation to make the injured party whole. Essex House concerned an insurance contract claim calling for resort to equitable considerations, not as here a claim subject to limitation of damages by treaty.
*80Although Ohio common-law principles permit compensation for the value of the lost use of money by an award for prejudgment interest, such considerations are properly included only in the jury’s assessment and award of compensatory damages. See Hogg v. Zanesville Canal & Mfg. Co. (1832), 5 Ohio 410; and Lawrence R.R. Co. v. Cobb (1878), 35 Ohio St. 94.
Assuming arguendo that New York law applies, the procedural requirements of the applicable statute were not followed.
New York’s CPLR, Section 5001, states in pertinent part:
“(a) Actions in which recoverable. Interest shall be recovered upon a sum awarded because of a breach of performance of a contract, or because of an act ,:r omission depriving or otherwise interfering with title to, or possession or enjoyment of, property, except that in an action of an equitable nature, interest and the rate and date from which it shall be computed shall be in the court’s discretion.
“(b) Date from which computed. Interest shall be computed from the earliest ascertainable date the cause of action existed, except that interest upon damages incurred thereafter shall be computed from the date incurred. Where such damages were incurred at various times, interest shall be computed upon each item from the date it was incurred or upon all of the damages from a single reasonable intermediate date.
“(c) Specifying date; computing interest. The date from which interest is to be computed shall be specified in the verdict, report or decision. If a jury is discharged without specifying the date, the court upon motion shall fix the date, except that where the date is certain and not in dispute, the date may be fixed by the clerk of the court upon affidavit. The amount of interest shall be computed by the clerk of the court, to the date the verdict was rendered or the report or decision was made, and included in the total sum awarded.”
The court of appeals, in considering the federal law issue, recognized the split of authority between the Second and Fifth United States Circuit Courts of Appeals concerning the award of prejudgment interest under the Warsaw Convention, and believing the better view and result to be found in Domangue v. Eastern Air Lines, Inc. (C.A.5, 1984), 722 F.2d 256, rather than that in O’Rourke v. Eastern Air Lines, Inc. (C.A.2, 1984), 730 F.2d 842, affirmed the award by the trial court. I would hold the appellate court’s reliance on Domangue as authority for the award of prejudgment interest under the Warsaw Convention to be misplaced.
Domangue was a wrongful death case subject to the provisions of the Montreal Agreement modifying the Warsaw Convention and expressly providing for prejudgment interest in cases to which the modification applies. The *81cargo case before us, on the other hand, is not subject to the modifications of the Montreal Agreement.
In Deere & Co. v. Deutsche Lufthansa Aktiengesellschaft (C.A.7, 1988), 855 F.2d 385, 391-392, a cargo case, the court observed that the Warsaw Convention’s primary goal is to fix the air carriers’ limit of liability on a per pound basis of the damaged cargo, not to fully compensate an aggrieved party absent an express contract provision for prejudgment interest. A reasonable construction of the Warsaw Convention prohibits an award of prejudgment interest unless willful misconduct by the carrier can be found.
I would hold that prejudgment interest may be awarded only as expressly provided by the treaty or by contract of the parties and accordingly would reverse the award entered by the trial court.
Holmes, J., concurs in the foregoing opinion.