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SABENA BELGIAN WORLD AIRLINES v. UNITED AIRLINES

August 26, 1991

SABENA BELGIAN WORLD AIRLINES, Plaintiff,
v.
UNITED AIRLINES, INC., Defendant


Suzanne B. Conlon, United States District Judge.


The opinion of the court was delivered by: CONLON

SUZANNE B. CONLON, UNITED STATES DISTRICT JUDGE

 In this diversity action, plaintiff Sabena Belgian World Airlines ("Sabena") sues defendant United Airlines, Inc. ("United") for breach of contract and implied indemnification. Pursuant to Fed.R.Civ.P. 12(b)(6), United moves to dismiss the amended complaint on the grounds that (1) Sabena's claims are time-barred; (2) Sabena's claims are preempted by the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 11707; and (3) the amended complaint fails to state a claim for relief. United also moves to strike a portion of Sabena's prayer for relief.

 BACKGROUND

 On a motion to dismiss, the court accepts as true all the well-pleaded factual allegations in the amended complaint and views those allegations in the light most favorable to the plaintiff. Gillman v. Burlington Northern R. Co., 878 F.2d 1020, 1022 (7th Cir. 1989). Sabena is a Belgium corporation with its principal place of business in Brussels, Belgium. Amended Complaint, Count I, para. 1. United is a Delaware corporation with its principal place of business in Illinois. Id. para. 2. On October 12, 1982, Sabena and United entered into an Airport Ground Services Agreement ("the contract"). Id. para. 4. Under the contract, United agreed to act as Sabena's agent in processing and handling all of Sabena's airfreight that was shipped to or passing through New York, New York. Id. paras. 4, 5. Before allowing a person to pick up a shipment, United was required to demand and inspect proper identification and documentation from the claimant. Id. para. 8. Sabena agreed to indemnify United for any claim or liability resulting from United's cargo handling services, unless the claim or liability was caused by United's gross negligence or willful misconduct. See Contract para. 9, attached as Ex. A to Amended Complaint.

 Sabena claims that on three separate occasions in 1984, United received shipments of goods from Sabena and improperly delivered these shipments to unauthorized claimants without demanding the required documentation or identification. Id. paras. 6, 9. As a result, the owners of the three shipments sued Sabena in a German court and obtained a judgment for $ 171,404.10, an amount equal to the full value of the three shipments, plus prejudgment interest and litigation costs. Id. paras. 13-14. Having paid this judgment, Sabena seeks reimbursement from United for its alleged gross negligence and willful misconduct in handling the three shipments. Id. paras. 15-17. Count I alleges that United breached the contract by mishandling the shipments. Count II states a claim for implied indemnification.

 DISCUSSION

 Generally, the federal system of notice pleading does not favor dismissal for failure to state a claim. Gray v. Dane County, 854 F.2d 179, 182 (7th Cir. 1988). However, dismissal is proper if it appears beyond doubt that the plaintiff can prove no set of facts in support of her claim that would entitle her to the relief requested. Illinois Health Care Ass'n v. Illinois Dep't of Public Health, 879 F.2d 286, 288 (7th Cir. 1989), citing Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). The defendant bears the burden of establishing the legal insufficiency of the complaint. Yeksigian v. Nappi, 900 F.2d 101, 104-05 (7th Cir. 1990).

 I. Warsaw Convention

 United asserts that Sabena's claims are barred by the two-year limitation period set forth in Article 29 of the Warsaw Convention, 49 U.S.C. App. § 1502. The Warsaw Convention governs "all international transportation of persons, baggage, or goods performed by aircraft for hire." Id., Article 1(1). Article 29(1) of the Warsaw Convention states:

 
The right to damages shall be extinguished if an action is not brought within 2 years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the transportation stopped.

 Sabena filed this action against United on February 6, 1991. The alleged mishandling of cargo occurred in 1984. See Amended Complaint, Count I, para. 6. The German court judgment against Sabena was entered on July 29, 1988. Id. paras. 13-16. Using either the date the cargo was allegedly mishandled or the date of the German court judgment as the critical date, the two-year limitation period of the Warsaw Convention would bar Sabena's action against United.

 Sabena disputes the applicability of the Warsaw Convention's limitation period to its claims. The parties agree that the terms of the Warsaw Convention apply to ground handling of baggage, as well as actual air transportation. Magnus Electronics, Inc. v. Royal Bank of Canada, 611 F. Supp. 436, 439-40 (N.D.Ill. 1985). In addition, it is clear that the Warsaw Convention applies to claims by a passenger or shipper against an agent or employee of an air carrier. Mitchell, Shackleton & Co. v. Air Express Intern'l, 704 F. Supp. 524, 525 (S.D.N.Y. 1989), citing Reed v. Wiser, 555 F.2d 1079 (2d Cir.), cert. denied, 434 U.S. 922, 54 L. Ed. 2d 279, 98 S. Ct. 399 (1977); Baker v. Lansdell Protective Agency, Inc., 590 F. Supp. 165 (S.D.N.Y. 1984); Julius Young Jewelry Mfg. Co., Inc. v. Delta Air Lines, 67 A.D.2d 148, 414 N.Y.S.2d 528 (1979).

 Sabena concedes the validity of these cases, and acknowledges that the Warsaw Convention applied to the original action in the German court in which Sabena was held accountable for the mishandled cargo ("the main action"). However, Sabena contests the applicability of the Warsaw Convention to the present action against United because Sabena is not a passenger or shipper suing to recover for lost or stolen cargo. Instead, Sabena is an air carrier, suing its agent, United, for reimbursement due to United's alleged gross negligence in mishandling cargo belonging to passengers or shippers. Thus, the court must determine whether the Warsaw Convention's two-year limitation period governs actions ...


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