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Burton v. Airborne Express Inc.

August 8, 2006

STEPHEN J. BURTON, JR., INDIVIDUALLY AND ON BEHALF OF OTHERS SIMILARLY SITUATED, PLAINTIFF-APPELLANT,
v.
AIRBORNE EXPRESS, INC., DEFENDANT-APPELLEE.



Appeal from the Circuit Court of St. Clair County. No. 03-L-275 Honorable Michael J. O'Malley, Judge, presiding.

The opinion of the court was delivered by: Justice Hopkins

Rule 23 order filed July 14, 2006; published as an opinion August 8, 2006.

The plaintiff, Stephen J. Burton, Jr., individually and on behalf of all similarly situated, appeals the circuit court's order dismissing his breach-of-contract action against the defendant, Airborne Express, Inc. (Airborne). On appeal, Burton argues that his breach-of-contract action is not preempted by the Airline Deregulation Act of 1978 (Airline Deregulation Act) (49 U.S.C. §41713(b)(1) (2000)) and that his complaint sufficiently alleged that Airborne breached the parties' contract by failing to procure insurance from a third party. We affirm the circuit court's dismissal on grounds other than the reason relied on by the circuit court.

FACTS

On May 12, 2003, Burton filed a class-action complaint in the circuit court of St. Clair County against Airborne, a courier service that provides package transportation and delivery services. In this complaint, Burton alleged that Airborne was unjustly enriched and violated the Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 2004)). On July 3, 2003, Airborne removed the case to federal court, but on November 18, 2003, the United States District Court for the Southern District of Illinois remanded the cause to the circuit court of St. Clair County.

On April 12, 2004, Burton filed a motion for leave to file a first amended complaint, which the circuit court granted on April 13, 2004. In his first amended class-action complaint, Burton omitted his Consumer Fraud Act and unjust enrichment claims and instead alleged one claim for breach of contract. Burton alleged that Airborne breached its shipping contract when it collected "Asset Protection insurance" premiums from him and the class and then failed to remit the premiums to an insurance company to procure shipment insurance. Burton sought compensation for the insurance premiums that he and the class had paid to Airborne but were never remitted to the third-party insurance company. Burton referenced and attached to his complaint the parties' "Service Conditions" agreement, which read in part as follows:

"H. DECLARED VALUE AND ASSET PROTECTION CHARGES

1. Sender may declare on the face of the airbill the value of the shipment at the time of issuance, for an additional charge. A $2.50 minimum will be charged for all shipments exceeding $100 in value. ***

2. In the absence of a declared value or a purchase of Asset Protection by the sender[,] Airborne Express' [sic] $100 per package and other limit of liability rules will apply ***.

3. Asset Protection is available at an additional charge. A $3.25 minimum will be charged for all shipments having a value up to $500. For shipments exceeding $500 in value[,] each $100 (or fraction thereof) of value in excess of $500 will be charged, in addition to the minimum charge. When the shipment valuation designated by the shipper is $25 or more, Asset Protection is mandatory for the entire shipment value."

Burton also referenced and attached to his complaint a copy of the airbill and register receipt for his shipment on January 21, 2003. The airbill stated:

"ABSENT A HIGHER SHIPMENT VALUATION[,] CARRIER'S LIABILITY IS LIMITED TO $100 PER PACKAGE, OR ACTUAL VALUE, WHICHEVER IS LESS ***."

In the "Declared Value or Asset Protection" section of the airbill, the box under "Asset Protection" was checked, and "$250.00" was written under "Shipment Valuation."

On July 7, 2004, Airborne filed a motion to dismiss Burton's first amended complaint, arguing that the Airline Deregulation Act preempted Burton's breach-of-contract claim and that Airborne's "Asset Protection" provision was merely a warranty of its own service and performance, not a promise to procure insurance, and that therefore Burton's breach-of- contract claim failed as a matter of law. In his response to Airborne's motion to dismiss, Burton argued that the Airline Deregulation Act did not preempt his claim and that he had set forth the necessary elements to establish his cause of action by alleging that the airbill required Airborne to procure shipment insurance from a third-party insurer and that Airborne breached the contract because it did not pay the insurance premium to the third-party insurer. On ...


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