Delta Air Lines was sued when pricey Savannah kitten landed with a broken hip.
The plaintiff in this case purchased an exotic Savannah kitten from a breeder in Florida for $2,300. The buyer, a woman in New York, planned to exhibit the animal, a cross between a domestic cat and an African serval, in cat shows.
The breeder delivered the kitten to Delta Air Lines for transport to New York’s LaGuardia Airport.
The buyer said that the day after the cat arrived, she noticed it was in distress. She took it to a veterinarian, who diagnosed it with a broken hip. Veterinary bills amounted to more than $7,000.
The plaintiff sued Delta in New York Supreme Court, Queens County. (In New York state’s judiciary, Supreme courts are trial courts for civil matters, the appellate divisions of the Supreme courts hear appeals and the state’s highest court is called the Court of Appeals.)
Attorney Kenneth Nankin of the New York law firm Nankin & Verma noted in his firm’s blog that the plaintiff alleged causes of action “for negligence/recklessness, trespass to chattels/conversion, bailment and economic damages.”
Delta moved for partial summary judgment, arguing that as a matter of federal common law, any liability it may have be limited to $50 pursuant the air waybill’s conditions of contra, and Nankin noted, “Delta contended that the liability limit applied even though the plaintiff was the consignee, not the shipper.
“The trial court refused to enforce the liability limit and denied Delta’s motion. The court ruled that the limit was not enforceable because the cargo was not ‘an inanimate object’ and thus should be treated differently from ‘ordinary bulk objects,’ concluding that Delta had a ‘heightened duty of care,’” Nankin said.
The trial judge stated, “The defendant airline wants it both ways: ‘We will be paid to take care of your kitten as long as we transport it, but we are absolving ourselves from any negligence in doing so.’”
The trial court’s decision was reversed on appeal. (Lentini v. Delta Air Lines Inc. NY App. Div. 2nd Dept. No. 17-00759. March 14.)
The appellate division explained that both before and after the Airline Deregulation Act of 1978 (ADA), “actions against interstate carriers for lost or damaged shipments have been governed by federal common law.” It said the ADA contains both a “pre-emption clause” and “saving clause,” which when read together, prohibit states from imposing their own substantive standards with respect to rates, routes or services.
As a result, “actions for loss or damage to interstate air shipments are governed by federal common law.
“The air waybill forms the basic contract between a shipper and an air carrier,” the court said. “In order to enforce a limited-liability provision contained in an air waybill, a carrier must demonstrate that its contract satisfies the released-valuation doctrine.
“Under the released-valuation doctrine, the shipper ‘is deemed to have released the carrier from liability beyond a stated amount’ in exchange for a low shipping rate,” it said.
A shipper is bound by the limited-liability provision if it has reasonable notice of the rate structure and is given a fair opportunity to pay a higher rate in order to obtain greater protection.
In this instance, the air waybill signed by the plaintiff’s shipper demonstrated that the shipper did not declare a value for the kitten and no additional coverage was purchased. The plaintiff “failed to raise a triable issue of fact as to whether she was not given the opportunity to purchase additional coverage.”
René Myatt, the attorney for the plaintiff, said her client decided not to further appeal the decision, but noted small shippers are unlikely to be aware of the limitation, which may appear on the back of a waybill, or know that they could pay a higher rate for increased coverage.
From a legal point of view, “there is no question that animals are property. They are treated as cargo,” said John Stoesser, director of Wichert Insurance’s IDEAL Agriculture & Marine program.
While standard liability limits for domestic shipments appear on the air waybill, he noted that international air shipments are covered by the Montreal Convention, which limits claims to 19 “special drawing rights” (between $26 and $27) per kilo.
However, shippers can purchase mortality insurance to protect themselves if an animal dies or must be destroyed.
The market for insuring animals is well developed, he said, and he has insured everything from research animals at universities to the giant pandas at Zoo Atlanta. He also has insured dogs trained for security, to sniff for bombs or explosives or for search and rescue. The dog may be a mutt, but it might have $10,000 or $20,000 worth of training.
But Stoesser said the biggest market for animal insurance overall is “in commercial animal agriculture. Pigs and cows are everybody’s bread and butter, with some poultry thrown in.”
The value of a single shipment can be substantial, he explained. “The landed value of a pig shipped by air, good breeding stock to China, is a couple thousand dollars a head. You can get 1,000 of them onto an airplane, on a 747, so that’s $2 million.”
Generally speaking, he said animal insurance is mortality insurance and does not cover an animal that is injured. For example, he recently insured a bull that was shipped to Thailand for herd improvement. The bull had a severe leg injury and was not able to mount, but because the animal was still alive, not suffering and destroyed, there was no claim.
This is even true of most racehorse insurance policies, he said. Over his 49 years in the business, Stoesser said he has seen specialty insurers try to offer policies for injured animals, but pointed out that companies have not figured out how to make money from such products.
An exception is equine insurance. Stoesser said major equine insurers will include some coverage for emergency colic surgery, although he said it may not pay for the full cost of the horse if it becomes ill.
For export animals, he said there are extensions to policies that will cover the value of an animal if it fails a particular disease test, is put into quarantine and still fails upon retesting and must be euthanized.
Shippers’ Law: When the cargo is a cat
