IN THE TERRITORIAL COURT OF THE VIRGIN ISLANDS 25



DIVISION OF ST. CROIX: CHRISTIANSTED JURISDICTION



BARBARA GIBBS,



CIVIL NO. 482/1979

Plaintiff,



ACTION FOR PERSONAL

AND PROPERTY DAMAGES



vs.



PRINAIR OF PUERTO RICO,



Defendant.



eee et Ne See i epee? ee Se Senet Set et Se? Mee Smee Set



G. LUZ A. JAMES, ESQUIRE

P.O. Box 3279

Christiansted, St. Croix

U.S. Virgin Islands 00820

(809) 773-0801



(Attorney for Plaintiff)



MICHAEL STEWART McLAURIN, ESQUIRE -

P.O. Box 1410



Kingshill St. Croix



U.S. Virgin Islands 00850



(809) 773-2091



{Attorney for Defendant)



PETERSEN, Judge



MEMORANDUM OPINION

July 72+ 1982



The Court here decides what damages are properly awarded

to an airline passenger whose luggage is never delivered to

the destination indicated on her ticket and whose property is

i wholly lost. Ms. Barbara Gibbs, the Plaintiff, seeks

compensation for the purchase of replacement goods

necessitated by such loss as well as for the consequential

damages based on loss of business opportunity directly

resultant therefrom. The Court finds that Ms. Gibbs is

entitled to adequate compensation for the replacement of her

property, and conversely, that she is not entitled to

consequential damages for any loss of business opportunity due

to Defendant's negligence in the transportation of her



baggage and its contents.



pe A

GIBBS vs. PRINAIR OF PUERTO RICO



CIVIL NO. 482/1979



ACTION FOR PERSONAL PROPERTY & DAMAGES

Page 2



I. FACTUAL BACKGROUND



On September 19, 1978, Plaintiff was a passenger on

Defendant's regularly scheduled flight, Prinair #404 (PQ404)

from San Juan, Puerto Rico to St. Croix, Virgin Islands, and

accordingly delivered to Defendant ' one large parcel,

containing beauty supplies and a facial machine for

transportation, as baggage. Defendant accepted said baggage

for such purpose and issued claim check #08-19-69 as evidence

of ownership. Plaintiff paid Fifty ($50.00) Dollars for the

excess weight of the baggage, but did not pay any additional

amount to insure the extra value of the contents. Plaintiff's

parcel failed to arrive in St. Croix and was never located by

Prinair. Efforts to settle Ms. Gibbs subsequent claim were

unsuccessful, and on the 2lst day of June, 1979, Ms. Gibbs

filed the instant action in the Territorial Court seeking

Ten Thousand ($10,000.00) Dollars in compensatory = and

consequential damages.



Prinair defended on the grounds that the applicable

tariff limitation was set at One Hundred ($100.00) Dollars per

passenger and that Ms. Gibbs failed to declare and pay for the

value of that portion of her baggage which was in excess of

One Hundred ($100.00) Dollars.



A bench trial on the merits was held on March 10, 1981,

during which Plaintiff asserted that Prinair failed to

continuously display a statement of limitation of liability in

a conspicuous public place at the Prinair station in the San

Juan Airport, as required by C.A.B. Tariff, 14 CFR Section

221-17b (a).1/



AL /; 14 CFR Section 221 176(a), NOTICE OF LIMITED

LIABILITY for BAGGAGE, provides in pertinent part:



Each air carrier and foreign air carrier which, to

any extent, avails itself of limitations on liability for loss

of, damage to, or delay in deliver of baggage shall cause to

be displayed continuously in a conspicuous public place at

each desk, station and position in the United States which is

GIBBS vs. PRINAIR OF PUERTO RICO

CIVIL NO. 482/1979



ACTION FOR PERSONAL PROPERTY & DAMAGES

Page 3



Plaintiff's assertion went unchallenged by Defendant at

trial. In addition, Plaintiff asserted that the baggage claim

stub, which has a limitation of liability statement printed on

the reverse of the baggage claim number, was attached to the

airline ticket by a staple and in such a manner as to display

the claim number and to obscure the limitation of liability

statement. This assertion also went unchallenged by

Defendant.



According to the applicable regulations 14 CFR Section

221 175(a)(b), there is a requirement that in order to

effectively limit liability for negligent losses by the

carrier, the limitation of liability statement must be clearly

indicated at both the airline station and upon each ticket

and/or stub issued in the United States or in a foreign



country by any foreign or domestic air carrier which, to any



extent, avails itself of limitations of liability for loss of,



damage to, or delay in delivery of baggage to its destination



14 CFR Section 22] 176(b)(d). (Emphasis Supplied).

In light of Defendant's failure to offer in evidence

testimony to establish that a sign limiting liability for loss



of baggage was posted at the Prinair airport station, as well



‘li/my cont" dt in the charge of a person employed

exclusively by it or by it jointly with another person, or by

any agent employed by such air carrier or foreign air carrier

to sell tickets to passengers or accept baggage for checking,

a sign which shall have printed thereon the following

statement:



NOTICE OF LIMITED LIABILITY FOR BAGGAGE



Liability for loss, delay, or damage to baggage



is limited as follows unless a higher value is



declared and an extra charge is paid: (1) For



most international travel (including domestic



portions of international journeys) to



approximately $9.07 per pound for checked baggage



and $400.00 per passenger for unchecked baggage;



(2) for travel wholly between U.S. points, to



$750.00 per passenger on most carriers.



(modified, effective August 7, 1978 by Correction No. 1086

issued by the C.A.B. on June 23, 1978, Rule 370(A) (1) which

reduces the limited liability from $750.00 to $100.00 for each

fare paying passenger on Prinair (unless passenger elects to

pay for higher liability as above mentioned).

GIBBS vs. PRINAIR OF PUERTO RICO

CIVIL NO. 482/1979



ACTION FOR PERSONAL PROPERTY & DAMAGES

Page 4



as Ms. Gibbs uncontested assertions that she neither saw such

a sign nor was her attention called to any such sign and/or

regulation, it cannot be said that Prinair complied with the

requirements delineated in 14 CRF Section 221 176 and thus has

voided its option to invoke the limitation of liability

pursuant thereto.



In attempting to establish the binding nature of the

limitation of liability as per the tariffs submitted by

Prinair pursuant to the Federal Aviation Act of 1958, 49 USCS



Section 1301 et.seq., Defendant relies upon Tishman and Lipp,



Inc. v. Delta Airlines, nc., (1969 CA 2 NY ) 413 F2d 1401 and



Vogelsang v. Delta Airlines, Ine. (1962 CA 2 NY) 302 F2d- 709



cert. den. 371 U.S. 829, 83 S.Ct. 46 and asserts that these

cases are controlling on the issue that the limitation of

liability statement is binding regardless of passengers and

shippers knowledge thereof. These cases can be distinguished

from cases where adequate notice was not posted in violation

of the applicable Federal Regulations.



A provision of limited liability is enforceable only if

adequate notice thereof has been given to the passenger so

that he may protect himself by declaring full value and paying



a higher rate for his baggage. Lisi v. Alitalia Linee Aeree



Italiane Sp.A. 370 F.2d 508 (1966) @204. Nonwithstanding the



tariff, a carrier may not exclude or exonerate itself from

liability in this fashion without bringing home knowledge by,

or serving proper notice to, the passengers of the provision

to that effect when the contract for transportation was made.



Robert v. Pan Am World Airways 337 N.Y.S. 2d 891; The



Majestic 166 U.S. 375, 384-386, 17 S.Ct. 597, 41 L.Ed. 1039,



Maibrunn v. Hamburg S.S. Co., DCNY, 117 F.Supp 344.



The applicable Federal Regulations and the relevant

case law indicate that notice must be made conspicuously,



unambiguously and concisely, and must state that carrier would

GIBBS vs. PRINAIR OF PUERTO RICO

CIVIL NO. 482/1979



ACTION FOR PERSONAL PROPERTY & DAMAGES

Page 5



not be responsible for loss, delay or damage, employing

language that directs a passengers' attention to the

importance of making a declaration of value. Plaintiffs

uncontested assertions that there was no adequate notice

clearly indicates that the regulations approving a limitation

of liability were not complied with by the Defendant when

Plaintiff checked her baggage at the airport station. As was



stated in Flying Tiger Line, Inc. v. U.S. 170 F.Supp. 422 @424



",..(W)e think that the shipper is entitled...to have his

attention called, in understandable language, to this

important waiver of what would, at least in this country, be

his rights in the absence of a waiver..." Based on. the

foregoing analysis, it is the determination of this Court that

the limitation of liability claimed in the instant action by



Defendant/Airline is without force or effect.



II. COMPENSATORY AND CONSEQUENTIAL DAMAGES



In order to establish a measure of damages in this case,

the Court is guided by the Restatement of the Law of Contracts

2d Section 347 Comment (a) which states in relevant part:



a. Expectation Damages Contract Damages



are ordinarily based on the injured party's

expectation interest and are intended to give

(her) the benefit of the bargain by awarding

(her) a sum of money that will, to the extent

possible, put (her) in as good a position as

(she) would have been in had the contract been

performed.



Based on this prescription, the Court finds that the

correct measure of damages in this case is the replacement

value of the chattels in question as established by

Plaintiff's Exhibit #4, which estimates the cost to repurchase

the goods which has been misplaced due to Defendant's breach.



Accordingly, the sum of Fifty Five Hundred Seventy Nine



Dollars ($5,579.95) Dollars and Ninety Five Cents constitutes

GIBBS vs. PRINAIR OF PUERTO RICO z mA

CIVIL NO. 482/1979



ACTION FOR PERSONAL PROPERTY & DAMAGES



Page 6



the correct measure of damages to be applied given the

circumstances as heretofore established.



Conversely, Plaintiff's claim for damages that arose as a

result of lost profits based on the duration of the

unavailability of her business-related equipment must be

denied due to the uncertainty of the measure of damages

arising as a direct result’ therefrom. Restatement of

Contracts 2d. Section 348 Comment (B) indicates that:



b. Breach that delays the use of property.



If the breach is one that prevents for a period



of time the use of property from which profits

would have been made, the loss in value to the

injured party is based on the profits that he



would have made during that period. If those

profits cannot be proved with reasonable certainty 2

(Section 352), two other bases for recovery are

possible. One is the fair rental value of the

property during the period of delay. Damages based

on fair rental value include an element of profit

since the fair rental value of property depends on

what it would command on the market and this turns

on the profit that would be derived from its use.

For this reason, uncertainty as to profits may

result in uncertainty in fair rental value.



Another possible basis for recovery, as a last

resort, is the interest on the value of the property

that has been made unproductive by the breach, if

that value can be shown with reasonable certainty.

Although these two other bases will ordinarily



give a smaller recovery than loss in value, it



is always open to the party in breach to show that

this is not so and to hold the injured party to a

smaller recovery based on loss in value to him.



It has not been established either at the trial or in the

related documents and court papers that there is an accurate

Measure of lost profits, rental value or interest in the value

of the property subject to the breach, thus damages based on



these alternative remedies must be denied.



- PETERSEN

Judge



EILEEN