COHEN v. VARIG AIRLINES

SULLIVAN, J.

The only issue presented on this appeal is the amount of damages to which plaintiffs are entitled. Plaintiffs, airline passengers, sued for and recovered the full value of luggage checked with and subsequently lost by the defendant, Varig airlines, as well as consequential damages for the mental and emotional suffering, physical discomfort and inconvenience resulting therefrom. Both parties concede that inasmuch as an international flight was involved the Warsaw Convention is applicable. Varig asserts the limitation of liability provisions of the convention, which, if applicable, would limit plaintiffs' recovery to $700. Plaintiffs contend that the limitation of liability provisions of the convention are inapplicable because of Varig's willful misconduct in the handling of their luggage.

In July of 1974, plaintiffs, Charles and Hermaine Cohen, husband and wife, were on a 28-day tour of South America. They had departed from New York on their itinerary which included Bogota, Lima, Asuncion, Iguassu Falls, Rio de Janeiro, Manaus, Belem, Paramaribo, Georgetown, and the return flight to New York. On July 18, they boarded Varig flight No. 601 at Iguassu Falls, bound for Galeao Airport in Rio de Janeiro. Later, after takeoff, they learned that their flight would terminate in Sao Paulo, Brazil, and that they would be transferred to another flight which was scheduled to land at Dumont Airport in Rio de Janeiro.

Upon their arrival at Sao Paulo, plaintiffs spoke to a Varig sales representative about the possibility of obtaining passage on a flight to Galeao Airport in Rio de Janeiro, since they were scheduled to depart from Galeao Airport early the next morning for Manaus, Brazil. The sales representative, a Mr. Bernsmuller, was able to accommodate plaintiffs and had them transferred to flight No. 854 on an Electra, scheduled to land at Galeao Airport in Rio de Janeiro. While they were still at the airport at Sao Paulo plaintiffs expressed concern that their luggage might not be loaded on flight No. 854. To assure plaintiffs that matters were being properly taken care of Bernsmuller had their luggage brought to them and issued two new baggage tickets for flight No. 854. He further assured plaintiffs that he would personally see that their luggage was placed aboard flight No. 854. This conversation took place in an area known as "the shed". There was no other baggage in the immediate vicinity. As further assurance Bernsmuller went out to the airfield to check on the luggage. On his return he stated that he "personally had seen to it that plaintiffs' luggage was actually placed on flight #854." He further stated that he "saw (the luggage) on the plane."

When flight No. 854 was called, plaintiffs realized that the flight was bound for New York with a stopover at Rio de Janeiro. They boarded with about 30 other passengers. On the arrival of flight No. 854 at Galeao Airport on the evening of July 18, an announcement was made that the passengers were to disembark, since the flight was continuing its journey to New York on another aircraft, a Boeing 707. It was nighttime. The passengers boarded a waiting bus which drove them to the 707. When it came time to get off the bus to board the 707, plaintiffs protested to the Varig representative in charge that they were not continuing on the flight to New York. They were told to stay on the bus. Plaintiffs were then driven to the terminal building. When they inquired about their luggage they were directed to the baggage receiving area. After a time when it became apparent that their luggage was not being delivered, plaintiffs complained to various Varig personnel, including Celestino Pazinatto, Varig's lost and found agent; who twice checked with the ramp supervisor in charge of unloading the Electra and loading the 707. Efforts to locate plaintiffs' luggage were unavailing.

By this time Mr. Cohen was becoming indignant. He kept insisting to Varig's personnel that he had gotten off flight No. 854, that he had not received his luggage, and that it was being taken to New York on the Boeing 707. When the announcement was made for the passengers of flight No. 854 to board, Mr. Cohen demanded that his luggage be removed from the New York bound plane. Varig's personnel refused and told him that they "would not go to the expense of unloading the plane" for him. Pazinatto told plaintiffs that the flight would be returning from New York City in two days and that they could get their luggage back at that time. Mr. Cohen explained that they were leaving the next morning for Manaus, Brazil. He showed Pazinatto his flight tickets and informed him that he and his wife had no clothes other than what was on their backs, that they had 18 days left on their tour which was taking them to the Amazon jungle and to Georgetown, Guiana, where they had friends and expected to be entertained. When Pazinatto was asked again to go out to the plane to get the luggage he refused, stating: "we will not do it. You will get it back on Saturday morning." When the loading of the 707 was completed the plane departed.

The interval of time between plaintiffs' arrival at Galeao Airport and the departure of flight No. 854 for New York was estimated at one-half hour. During this time Varig's personnel steadfastly refused to look for plaintiffs' luggage on the Boeing 707. Testimony adduced at trial reveals that it would have taken one hour to unload the Boeing 707, check the baggage, and reload. After the flight's departure plaintiffs were given $60 by a Varig representative to tide them over until the luggage came back on Saturday, July 20.

Varig sent tracers to every destination to which its airplanes flew from Galeao Airport and radiogrammed New York City prior to the arrival time of flight No. 854. None of these attempts to locate plaintiffs' luggage was successful.

The next morning, July 19, according to schedule, plaintiffs flew to Manaus. There they made several visits to the Varig office, as instructed, to inquire about their luggage, but without any success. They were unable to purchase ready-made clothes in Manaus and after two days they left, again in accordance with their itinerary, for the journey by ship down the Amazon River and the completion of their tour.

At trial plaintiffs testified to the physical discomfort of being without their clothing and personal effects. They also claimed mental distress in the nature of humiliation and embarrassment from being inappropriately attired, either in the same clothing or in ill-fitting hastily purchased apparel, at social affairs which had been prearranged with dignitaries and friends of high social levels in the countries being visited. For instance, in Georgetown, a dinner at which the Chief Justice and other State officials were guests was given in honor of Mr. Cohen. He was compelled to wear the same dishevelled suit that he had been traveling in. His wife's predicament was no better. For 18 days of their tour, plaintiffs were without their water purification implements. They spent needless hours shopping, without success, for suitable clothing. In a humid, tropical climate they had no second set of clothing into which to change. As a consequence, plaintiffs contend that their trip was ruined.

On their return to New York Varig's regional general manager offered plaintiffs an additional $640 in reimbursement for their lost luggage. When Mr. Cohen remonstrated with him, the general manager stated: "Do you expect us to unload a whole plane just for the two of you? We don't do that."

Thereafter, plaintiffs commenced this action in the Civil Court for damages for Varig's willful failure to deliver their luggage. Varig interposed a general denial and asserted, inter alia, the affirmative defenses of its tariff provisions and the Warsaw Convention.

After a trial without jury the court held that the Warsaw Convention controlled, inasmuch as plaintiffs were traveling on an international flight. The court found that the provisions of the convention limiting claims for lost baggage to $20 per kilogram, or $700 in the present case, were not applicable since Varig's refusal to unload plaintiffs' luggage constituted "wilful misconduct" within the meaning of subdivision (1) of article 25 of the convention ( 49 US Stat 3014, 3020). Plaintiffs were awarded $6,440.65, including $3,250 for their physical inconvenience, discomfort and mental suffering. The court rejected Varig's contention that the terms of its tariff barred a recovery for consequential damages.

On appeal, Appellate Term, by a divided court, modified the judgment by decreasing the award of damages to $700, holding that there was "insufficient evidence in the record to support the trial court's finding that the act of defendant * * * constituted `wilful misconduct' within the purview of subdivision (1) of article 25 of the Warsaw Convention". ( 88 Misc.2d 998.) Appellate Term granted leave to appeal to this court.

Subdivision (2) of article 22 of the Warsaw Convention ( 49 US Stat 3019) which generally applies to international air transportation, limits a carrier's liability to $20 per kilogram (i.e., $700 in the instant case) of checked baggage. Subdivision (1) of article 25 of the convention, however, eliminates the limitation of liability where there is willful misconduct by the carrier. Subdivision (1) of article 25 provides as follows: "The carrier shall not be entitled to avail himself of the provisions of this convention which exclude or limit his liability, if the damage is caused by his 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."

In Grey v American Airlines ( 227 F.2d 282, 285, cert den 350 U.S. 989) the Court of Appeals for the Second Circuit spoke of "wilful misconduct" as "a conscious intent to do or omit doing an act from which harm results to another, or an intentional omission of a manifest duty. There must be a realization of the probability of injury from the conduct, and a disregard of the probable consequences of such conduct."

In Goepp v American Overseas Airlines ( 281 App. Div. 105, 111, affd 305 N.Y. 830, cert den 346 U.S. 874) this court construed "wilful misconduct", as it applies to the Warsaw Convention, as follows: "Wilful misconduct * * * depends upon the facts of a particular case, but in order that an act may be characterized as wilful there must be on the part of the person or persons sought to be charged, a conscious intent to do or to omit doing the act from which harm results to another * * *. The burden of establishing wilful misconduct rests upon plaintiff."

In Berner v British Commonwealth Pacific Airlines ( 346 F.2d 532, 536-537) the Court of Appeals (2d Cir) restated the accepted charge on "wilful misconduct", as it applies to the Warsaw Convention, in the following language: "wilful misconduct is the intentional performance of an act with knowledge that the performance of that act will probably result in injury or damage, or it may be the intentional performance of an act in such a manner as to imply reckless disregard of the probable consequences * * *, [or] the intentional omission of some act, with knowledge that such omission will probably result in damage or injury, or the intentional omission of some act in a manner from which could be implied reckless disregard of the probable consequences of the omission."

In our view the facts support the trial court's finding of willful misconduct. As flight No. 854 readied for departure, plaintiffs' luggage had to be at Galeao Airport in one of three locations, that is, in either the baggage receiving area, where it was not to be found, in the Electra or in the Boeing 707. On the evidence it is not a fair inference to conclude that plaintiffs' luggage had not been placed on the Electra at Sao Paulo. However, even were we so to conclude, then Bernsmuller's actions in assuring plaintiffs that he had seen their luggage on the Electra would constitute willful misconduct.

The Electra had been unloaded in the darkness of the runway. When plaintiffs' luggage was not delivered to the receiving area, it should have been obvious that it had to have been loaded on the 707 along with all the other passengers' baggage. Pazinatto's advice to wait for the return flight confirms the fact that he full well realized that the luggage had to be on the 707. Although the ramp supervisor was asked to check the baggage being transferred from the Electra to the Boeing 707, it is not clear from the record whether the supervisor even made such a check. He did not testify at trial. The only witness to testify for Varig was Pazinatto. He testified that he personally inspected the Electra but only after the departure of the Boeing 707. No luggage was found.

While, concededly, this is not the case of ordinary negligence, we must not lose sight of the fact that the standard of proof imposed on a plaintiff who claims willful misconduct by a carrier is to prove his contentions by a fair preponderance of the credible evidence, and no more. In our view, that burden has been met. We are not persuaded otherwise by the fact that plaintiffs' luggage was never recovered in New York, a circumstance as innocuous as the fact that their luggage was never located at Galeao Airport or any of the other airports to which tracers were sent.

The decision not to unload the 707 was motivated by a desire to avoid the expense of unloading and not by any doubt as to the whereabouts of the luggage. The options available to Varig were either to satisfy its contractual obligations to plaintiffs, thereby incurring expense and perhaps delaying the flight, or insisting that plaintiffs take the loss. It chose the latter. The determination was purely a business one.

Furthermore, Varig had a full appreciation of what its decision meant to plaintiffs. Pazinatto had been told that plaintiffs had 18 more days remaining in their tour of South America. He knew that they could not await the flight's return from New York, that they were leaving for Manaus the next morning. He knew that all of their clothing and necessaries for the trip were inside the missing luggage.

In these circumstances, we conclude that plaintiffs have shown an intentional omission on Varig's part to perform a manifest duty which it owed plaintiffs under the terms of the contract of carriage, with a realization and disregard of the probable consequences of its conduct. (Grey v American Airlines, 227 F.2d 282, supra; Berner v British Commonwealth Pacific Airlines, 346 F.2d 532, supra; Goepp v American Overseas Airlines, 281 App. Div. 105, affd 305 N.Y. 830, cert den 346 U.S. 874, supra; Pekelis v Transcontinental Western Air, 187 F.2d 122.) Consequently, and in accordance with subdivision (1) of article 25 of the Warsaw Convention, defendant's liability for the loss of the luggage is not limited by the provisions of subdivision (2) of article 22 to $20 per kilogram. Hence, the trial court's award of $2,679 for the actual value of the lost luggage and their contents should be reinstated.

Varig claims that the portion of the baggage loss award that compensates plaintiffs for loss of jewelry cannot stand because its own tariff bars recovery for jewelry loss. Varig's tariff cannot limit any recovery for jewelry loss since rule 2 (A)(1) of the tariff and article 23 of the Warsaw Convention both provide that any provision of the tariff attempting to fix a lower limit for the liability of the carrier which is inconsistent with the terms of the convention is invalid. There is no limitation on jewelry loss in the provisions of the convention other then the limitation contained in subdivision (2) of article 22, which, for reasons already stated, we hold to be inapplicable.

This leaves one final element of the damage award for our consideration. The trial court awarded the sum of $3,250 for both plaintiffs for physical inconvenience, discomfort and mental suffering. Varig asserts that even if the Warsaw Convention does not limit its liability, rule 16 (C)(15) of its own tariff bars recovery for consequential damages. Rule 16 (C)(15) provides as follows: "carrier shall not be liable in any event for any consequential or special damage arising from carriage subject to this tariff, whether or not carrier had knowledge that such damages might be incurred."

This court has upheld tariff provisions similar to the case at bar. In Bruce Glen, Inc. v Emery Air Frgt. Corp. ( 24 A.D.2d 145) we upheld a provision limiting a carrier's liability to the value declared on the air bill. However, rule 2 (A)(1) of Varig's tariff, which has already been alluded to is, by its terms, subordinate to the provisions of the convention. Rule 2 (A)(1) of the tariff provides: "such carriage shall be subject to the provisions of such Convention and to this tariff to the extent that this tariff is not inconsistent with the provisions of the Convention."

In this connection article 19 of the convention provides that "[t]he carrier shall be liable for damage occasioned by delay in the transportation by air of passengers, baggage, or goods." The trial court properly held that rule 16 (C)(15) of the tariff barring the recovery of consequential damages was inconsistent with article 19 of the convention. Damage caused by delay, quite obviously, contemplates consequential loss. Neither law nor logic suggests any reason why plaintiffs' damages should be any the less because their luggage was lost, rather than delayed. We do, however, conclude that this is not the appropriate case for the award of special damages for physical inconvenience, discomfort, and mental anguish.

Damages here should be awarded in accordance with the laws of New York. (Cf. Mertens v Flying Tiger Line, 341 F.2d 851, 858, cert den 382 U.S. 816; Husserl v Swiss Air Transp. Co., 351 F. Supp. 702, affd 485 F.2d 1240.) Whether liability is fastened on a theory of contract or tort, New York is the jurisdiction with the greatest or dominant interest in the matter and its law ought to apply. (Babcock v Jackson, 12 N.Y.2d 473; Auten v Auten, 308 N.Y. 155.) Plaintiffs are New York residents. They purchased their tickets from Varig at its New York office. Their trip began in New York. New York was the destination of the flight on which their luggage was lost.

The law has been traditionally reluctant to extend its protection against the infliction of mental distress, even for intentionally inflicted wrongs. This has been equally true in New York. Until it was overruled in 1961 Mitchell v Rochester Ry. Co. ( 151 N.Y. 107), which barred a recovery for injuries occasioned by fright where there was no impact or immediate personal injury, represented the law of this State. In that case the plaintiff claimed fright and excitement and a resultant miscarriage caused by the approach of a team of horses which just managed to stop without striking her.

Courts, however, have been willing to allow damages where the mental anguish accompanies a slight physical injury (Ferrara v Galluchio, 5 N.Y.2d 16) or some impact upon the person of the plaintiff attends the wrong (Comstock v Wilson, 257 N.Y. 231). In New York, the impact requirement in a cause of action based on negligence was eliminated when the Court of Appeals in Battalla v State of New York ( 10 N.Y.2d 237) overruled Mitchell v Rochester Ry. Co. (supra). The impact rule was stripped of any vestige of vitality in negligence cases by the Court of Appeals' decision in Johnson v State of New York ( 37 N.Y.2d 378) which extended the Battalla rationale to a situation where there was not even an apprehension of actual physical harm or threat. In that case, the daughter of a hospital patient was erroneously notified of her mother's death when in fact her mother was alive and well. Damages for emotional harm and mental distress were allowed.

In cases other than negligence, the rule always was that if some independent traditional tort could be asserted, then that cause of action could serve as the vehicle to allege mental damages and a recovery therefor was allowed. Thus, a recovery for mental damages was allowed by our courts in such traditional actions as those for assault (Williams v Underhill, 63 App. Div. 223), false imprisonment (Tierney v State of New York, 266 App. Div. 434), willful conversion (Cauverien v De Metz, 20 Misc.2d 144), and malicious prosecution (Black v Canadian Pacific Ry., 218 F 239). It has also been allowed in cases of extreme outrage where the tort-feasor's conduct exceeds all bounds of decency usually tolerated by society and is calculated to and does cause mental distress of a serious nature. The following are examples of the type of wrong where recovery has been allowed: threats of harm, racially motivated against plaintiffs and their children to prevent them from moving into a certain neighborhood (Ruiz v Bertolotti, 37 Misc.2d 1067); hounding a plaintiff on the streets and in public places (Flamm v Van Nierop, 56 Misc.2d 1059) ; an invitation, prolonged or repeated, to a woman to sexual intercourse accompanied by the forwarding to her of indecent pictures (Mitran v Williamson, 21 Misc.2d 106); the case of a former suitor who, having jilted a woman, wrote her jeering verses and taunting letters (Halio v Lurie, 15 A.D.2d 62) and, finally, those cases involving the mishandling of dead bodies (Finley v Atlantic Transp. Co., 220 N.Y. 249) where recovery is allowed on the theory of a "property right" to the body, usually in the next of kin (Gostkowski v Roman Catholic Church of Sacred Hearts of Jesus and Mary, 262 N.Y. 320).

One area where New York courts have long recognized a separate cause of action for the intentional infliction of mental suffering, even though the mental disturbance was not attended by any illness or physical injury, is in those cases holding a common carrier liable for insulting a passenger (see, e.g., Gillespie v Brooklyn Hgts. R.R. Co., 178 N.Y. 347; Hamilton v Third Ave. R.R. Co., 53 N.Y. 25; Busch v Interborough R.T. Co., 110 App. Div. 705, affd 187 N.Y. 388) and the innkeeper or hotelkeeper liable for the insult to his guest (cf. Boyce v Greeley Sq. Hotel Co., 228 N.Y. 106; De Wolf v Ford, 193 N.Y. 397).

Although courts are, at long last, moving in the direction of recognizing one's interest to mental and emotional tranquility as an area entitled to legal protection, we know of no authority which sanctions a recovery against a carrier for mental distress and physical inconvenience where the gravamen of the wrongdoing is either the loss or mishandling of luggage. Although Varig's callous disregard for plaintiffs' plight and willful renunciation of its contractual obligation to its passengers was motivated by selfish economic interest and justifies a finding of willful misconduct under the provisions of the Warsaw Convention, we are reluctant to extend the rationale of the insult cases to the circumstances presented here and allow damages for mental suffering. (Cf. Fischer v Maloney, 43 N.Y.2d 553. ) Moreover, in Rosman v Trans World Airlines ( 34 N.Y.2d 385) the Court of Appeals, in construing the term "bodily injury" as it appears in article 17 of the Warsaw Convention, held that psychic trauma alone or even psychic trauma causing bodily injury is not compensable. In our view, plaintiffs are adequately compensated for their loss to the extent the law allows by the recovery of the actual value of their lost luggage and its contents.

Accordingly, the order of Appellate Term, entered November 26, 1976, which modified a judgment, Civil Court of the City of New York, New York County (DANZIG, J.), entered December 15, 1975, should be modified on the law and on the facts, without costs, to the extent of reinstating the damage award of $2,679, and otherwise affirmed.