UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term 2001
(Argued November 2, 2001 Decided: December
Docket No. 01-7502
- v. -
CROSS SOUND FERRY,
B e f o r e : WALKER, Chief Judge, POOLER
and KATZMANN, Circuit Judges.
Plaintiff-appellant Debra Ward appeals from
the March 29, 2001 judgment of the United States District Court for the
Eastern District of New York (Denis R. Hurley, District Judge) granting
summary judgment to defendant-appellee Cross Sound Ferry and dismissing
Ward's complaint as time-barred.
Reversed and remanded.
BRIAN W. McELHENNY, Esq., Curtis,
Vasile, Devine & McElhenny, Merrick, NY, for Plaintiff-Appellant.
ALFRED J. WILL, Esq., Badiak Will & Ruddy,
LLP, New York, NY, for Defendant- Appellee.
JOHN M. WALKER, JR., Chief Judge:
Plaintiff-appellant Debra Ward, a resident
of New York, appeals from the March 29, 2001 judgment of the United States
District Court for the Eastern District of New York (Denis R. Hurley, District
Judge) granting summary judgment to defendant-appellee Cross Sound
Ferry ("CSF"), a Connecticut company, and dismissing Ward's complaint as
On June 23, 1997, Ward fell and injured herself
on a gangway while boarding a CSF ferry in New London, Conn., bound for
Orient Point, N.Y. Although Ward's counsel sent a claim letter to CSF within
a month of the injuries, no suit was filed until November 1999, some two-and-a-half
years after the accident.
After removing the case from state court to
federal court on the basis of diversity and admiralty jurisdiction, CSF
moved in the district court for summary judgment on the ground that the
suit was time-barred. Although a statutory limitations period of three
years would otherwise apply to the case, see 46 U.S.C. § 763a,
CSF sought to enforce a contractual time limitation appearing on the back
of the passage ticket that required suits to be filed within one year of
an injury. A ticket identical to the one received by plaintiff was submitted
with CSF's motion. The front of that ticket, which measures about two inches
by three-and-a-half inches, reads as follows:
Cross Sound Ferry
Ticket Good on Date of Issue Only
Contract: Subject to Terms on Reverse Side
"Cross Sound Ferry" at the top appears to
be in fifteen-point bold Times New Roman type and "Ticket Good on Date
of Issue Only / Contract: Subject to Terms on Reverse Side" on the bottom
appears to be in twelve-point bold Times New Roman type. The writing on
the reverse side of the ticket appears to be in seven-point Arial type
and reads as follows:
Terms of Passage Contract Between
the Ferry, its Owners and their Employees and Concessionaires ("The Carrier")
and passenger: (1) By accepting this contract passenger agrees to its terms.
(2) Contract not transferable and valid and refundable only on day issued.
(3) Carrier's liability for loss or damage to vehicles or personalty is
limited to $500. (4) Carrier is not liable for loss of or damage to vehicles
or personalty, or for personal injuries, illnesses or death, unless written
notice is given to Owners within six months of the date of the occurrence,
and suits on all such claims shall not be maintainable unless commenced
within 1 year after the occurrence. (5) All disputes in any way connected
with this contract must be litigated in a State Court of New London County,
or in the U.S. District Court of Connecticut, Ticketed Vehicles must remain
in staging area until boarding. Ferry passage may be denied at the discretion
of the "Carrier".
It is undisputed that plaintiff's husband obtained
both her ticket and his just two to three minutes before boarding the ferry.
Plaintiff, after falling on the gangway, was carried on board by her husband,
who simultaneously handed the tickets for both husband and wife to the
ticket collector. CSF does not dispute that it typically issues tickets
just prior to boarding and collects them upon boarding, and that plaintiff's
possession of the tickets for a total of only two to three minutes is not
Following oral argument on the motion, the
district court issued its decision from the bench. Relying on various cases,
the district court reasoned that plaintiff had ample time to read the ticket's
terms before handing it to the ticket collector while boarding, and that
she had ample opportunity to obtain a duplicate ticket after the injury
if she had not read the ticket or could not remember its contractual terms.
Concluding that Ward's attorney "presumably dropped the ball" in failing
to get a duplicate copy of the ticket, the district court upheld the contractual
limitation, granted summary judgment for CSF, and dismissed plaintiff's
complaint. This appeal followed.
We review the district court's grant of summary
judgment de novo, including the issue of whether a passage ticket
"reasonably communicated" contractual limitations imposed by the sea carrier,
which is a question of law for the court. See Effron v. Sun Line
Cruises, Inc., 67 F.3d 7, 9 (2d Cir. 1995). Jurisdiction in the district
court was properly based on admiralty. See Kenward v. The Admiral
Peoples, 295 U.S. 649, 651-52 (1935) (holding that admiralty jurisdiction
applied to injury that occurred on gangplank leading to ship).
The issue of whether time limitations appearing
on a passenger ticket are enforceable is one that arises with surprising
regularity, although the particular facts of this case -- namely, possession
of the ticket for only a few minutes -- are seemingly unique. Title 46
U.S.C. § 183b(a) permits a sea carrier to contractually limit the
time period in which a suit for injuries may be filed by passengers, provided
that time period is at least one year. See 46 U.S.C. § 183b(a).
The only restriction to enforcement of such limitations is that the carrier
"reasonably communicate" the existence and importance of the limitation
to the passenger. See Spataro v. Kloster Cruise, Ltd., 894
F.2d 44, 45-46 (2d Cir. 1990) (per curiam). The "reasonably communicate"
standard devolved from Judge Friendly's seminal opinion in Silvestri
v. Italia Societa Per Azioni Di Navigazione, 388 F.2d 11, 17 (2d Cir.
1968), in which he found, based on his review of the case law, that a contractual
limitation would not be enforceable unless the carrier satisfied its burden
of showing that it "had done all it reasonably could to warn the passenger
that the terms and conditions were important matters of contract affecting
his legal rights." Most circuits, including ours, have since construed
Silvestri as requiring that "sea carriers reasonably communicate
any limitations period to their passengers." Spataro, 894 F.2d at
In applying this standard, several circuits
have adopted a two-part test: (1) whether the physical characteristics
of the ticket itself "reasonably communicate[d] to the passenger the existence
therein of important terms and conditions" that affected the passenger's
legal rights, and (2) whether "the circumstances surrounding the passenger's
purchase and subsequent retention of the ticket/contract" permitted the
passenger "to become meaningfully informed of the contractual terms at
stake." Shankles v. Costa Armatori, S.P.A., 722 F.2d 861, 864-66
(1st Cir. 1983); see also Dillon v. Admiral Cruises, Inc.,
960 F.2d 743, 744-45 (8th Cir. 1992). As the court in Shankles noted,
given the likelihood that a passenger will not read the fine print upon
purchase or during a pleasure cruise, the surrounding circumstances examined
in the second part of the test "may be of equal importance as the prominence
of warnings and clarity of conditions [examined in the first part] in deciding
whether a provision should be held to bind a particular passenger," since
"the same passenger might very well be expected to consult the multifarious
terms and conditions of the ticket/contract in the event of an accident
resulting in a loss or injury." 722 F.2d at 865.
The Second Circuit has never discussed, much
less adopted, the two-part test, perhaps because the second part has never
been at issue. See, e.g., Effron, 67 F.3d at 8 (noting
that plaintiff purchased ticket one month before cruise); Spataro,
894 F.2d at 46 (omitting discussion of when plaintiff received ticket or
whether plaintiff retained possession, but language of ticket indicated
that plaintiff received tickets in advance of arrival for the cruise).
In the instant case, however, plaintiff conceded that there was no dispute
with respect to the first part of the test because the physical characteristics
of the passenger ticket reasonably communicated the existence and importance
of the contractual terms of passage. Thus, plaintiff's success depends
entirely on whether we adopt the second part of the test and apply it in
Several district courts in this circuit have
employed the two-part test, reasoning that it is used widely among other
circuits and is not inconsistent with our circuit's approach. See,
e.g., Ames v. Celebrity Cruises, Inc., Dkt. No. 97 Civ. 0065(LAP),
1998 WL 427694, at *4 & n.7 (S.D.N.Y. July 29, 1998) (applying two-part
test and noting its widespread use); Boyles v. Cunard Line Ltd.,
Dkt. No. 93 Civ. 5472(CES), 1994 WL 449251, at *2 & n.6 (S.D.N.Y. Jan.
11, 1994) (applying two-part test on reasoning that, although not explicitly
adopted by Second Circuit, test is not inconsistent with this circuit's
decisions); Lieb v. Royal Caribbean Cruise Line, Inc., 645 F. Supp.
232, 234 (S.D.N.Y. 1986). The district court below also applied the two-part
test, finding that it could be "harmonized" with the test applied by the
Second Circuit. We believe the two-part test to be useful in analyzing
the reasonably communicated standard and to be a satisfactory refinement
of Judge Friendly's holding in Silvestri, and therefore, take this
opportunity to expressly adopt it.
Applying the test's second part to the facts
of this case, we must decide whether a carrier gives reasonable notice
of contractual limitations when it issues a ticket bearing the terms of
the limitations to the passenger just minutes before she boards the ship
and then collects the entire ticket at boarding, thereby leaving her with
no written notice of the terms or even that such terms exist.
As the district court below noted, in the
majority of cases in which a time limitation contained on a passenger ticket
has been upheld, the court's decision rested in part on the fact that the
passenger or the passenger's agent received the ticket several days in
advance of the trip and was allowed to retain the ticket (or at least that
portion of the ticket containing the contract terms and conditions) either
permanently or for a substantial period of time after boarding the ship.
See, e.g., Dillon, 960 F.2d at 744-45 (upholding limitation
where plaintiff purchased ticket at least one week before trip and her
attorney retained ticket after injury); Marek v. Marpan Two, Inc.,
817 F.2d 242, 243-44 (3d Cir. 1987) (upholding limitation where plaintiff
received ticket just before boarding and one page of ticket collected upon
boarding, but analyzing only portions of ticket retained by the passenger
to determine reasonable communicativeness); Shankles, 722 F.2d at
866 (upholding limitation in part because plaintiff had ticket before boarding
and retained it after the fire that caused her losses).
In some cases it is unclear whether the passenger
was allowed to retain the ticket, while in others the passenger specifically
sought to avoid the terms because the ticket was collected upon boarding.
In each of these cases, however, enforcement of the ticket's terms was
upheld in part because the passenger had received the ticket several days
in advance of boarding and thus had ample time to read it. See,
e.g., Effron, 67 F.3d at 8 (upholding forum selection clause
where plaintiff purchased ticket one month in advance); Foster v. Cunard
White Star, 121 F.2d 12, 13 (2d Cir. 1941) (per curiam) ("Plaintiff
is charged with notice [of time limitation] . . . since her brother . .
. [had ticket] for some seventeen days before the voyage."); Colby v.
Norwegian Cruise Lines, Inc., 921 F. Supp. 86, 88 (D. Conn. 1996) (holding
that even though ticket was surrendered upon boarding, plaintiff was deemed
to have reasonable notice of forum selection clause because plaintiff had
ticket "for a period of time"); Murray v. Cunard S.S. Co., 235 N.Y.
162, 166 (1923) (Cardozo, J.) (holding that fact that ticket was collected
upon boarding did not help plaintiff in fighting time limitation because
he "held [the ticket] several days with ample time to read it"). Notably,
in each of these cases, the amount of time the passenger had to examine
the ticket was critical to the decision to uphold the contractual limitation.
No case cited by the parties or the district
court involved the rare situation presented in this case: one in which
the passenger's possession of the ticket is limited to two to three minutes
as a result of the carrier's own practices. The district court, nevertheless,
held that the clause here was enforceable because it took less than a minute
to read and, therefore, Ward -- or her husband acting as her agent -- had
adequate time to read it before boarding the ferry. The district court
went on to state that, even if Ward had not read the ticket before boarding,
she had ample opportunity to obtain a duplicate ticket after the accident
and her attorney "presumably dropped the ball" by failing to do so.
In our view, the district court's reasoning
is flawed because it confuses the significant question of whether CSF reasonably
communicated to passengers that the ticket contained important terms and
conditions, given the amount of time CSF allowed passengers to possess
the tickets, with the less important question of whether it was possible
to read the ticket in the amount of time provided. See Silvestri,
388 F.2d at 17.
We find that possession of the ticket for
such a short period of time was insufficient to give Ward reasonable notice
that the ticket contained important contractual limitations. Indeed, the
fact that CSF collected the tickets so quickly after providing them to
the passenger tended to negate the idea that the tickets were important
contractual documents. See Silvestri, 388 F.2d at 17 (holding
that for notice to be reasonable, it must "warn the passenger that the
terms and conditions were important matters of contract affecting [the
passenger's] legal rights"); Carpenter v. Klosters Rederi A/S, 604
F.2d 11, 13 (5th Cir. 1979) (holding that a ticket is not binding unless
it is given to the passenger "within such a time as to give him an ample
opportunity to examine its contents" and "it is shown that he knew or had
reason to know of [the contract terms'] existence" (internal quotation
As the district court in Ames stated,
moreover, the second part of the test "focuses on the subjective circumstances
attending a particular plaintiff's opportunity to review the ticket terms
before embarkation. Such factors include `the passenger's familiarity with
the ticket, the time and incentive under the circumstances to study the
provisions of the ticket, and any other notice the passenger received outside
of the ticket.'" Ames, 1998 WL 427694, at *5 (quoting Boyles,
1994 WL 449251, at *3) (internal citation omitted). In this case, the circumstances
surrounding Ward's purchase and subsequent retention of the ticket are
that her husband entered the terminal building and purchased the ticket
two to three minutes prior to boarding, then proceeded across the parking
lot to board the ferry with Ward. Ward fell on the gangway while boarding
and had to be carried on board by her husband, who handed the tickets to
the ticket collector in the process. Under these circumstances, even if
Ward or her husband might otherwise have had ample opportunity and incentive
to inspect the tickets, both she and her husband would certainly have been
distracted from studying the ticket's provisions. See Shankles,
722 F.2d at 864 (noting that test requires a "case-by-case determination,"
and that "[d]iffering circumstances may render the same ticket binding
on one passenger . . . , yet invalid as against another passenger").
The district court relied on several cases
for the proposition that Ward had ample opportunity to obtain a duplicate
ticket after the trip. We find those cases to be distinguishable because
in each of them the passengers had received their original tickets well
in advance of the trip, and thus the carrier had satisfied its burden of
providing reasonable notice. In Ames, for example, the district
court found that as a matter of law the carrier had given reasonable notice
because plaintiffs' possession of the tickets for "two or three days [before
the trip] provided plaintiffs with a reasonable amount of time to peruse
and familiarize themselves with the time limitations affecting their right
to sue." Ames, 1998 WL 427694, at *5; see also id.
at *5 n.10. Although the district court then went on to state that the
plaintiffs "had a duty at [the] time [of injury] to consult their tickets
or to contact [the Defendant] in order to learn of any limitations affecting
their right to sue," id. at *5, we read this statement as implicitly
holding that plaintiff's duty to contact the defendant did not arise until
defendant had satisfied its obligation to give reasonable notice.
Similarly in Murray, also relied upon
by the district court here, Judge Cardozo stated that where the ticket
was collected upon boarding, plaintiff could have obtained a copy of his
ticket after the accident. Murray, 235 N.Y. at 166. But, as with
Ames, the court in Murray had already held that reasonable
notice had been satisfied because the plaintiff "held [the ticket] several
days with ample time to read it." Id.
Other cases in which a court stated that plaintiff
could have contacted the carrier after the injury to learn if any limitations
applied did not involve a situation where the carrier collected the ticket
at boarding. In those cases, the plaintiff had either discarded or lost
the ticket, or had not retained all pages of the ticket after boarding.
For example, in Kendall v. Am. Haw. Cruises, 704 F. Supp. 1010,
1016-18 (D. Haw. 1989), plaintiffs had received the ticket before boarding
and retained it afterward. The time limitations, however, were contained
on page eight of the ticket, which plaintiffs alleged was missing from
their copy. Id. at 1017. The district court noted that while this
fact "clearly is significant," reasonable notice had nevertheless been
established because two pages that plaintiffs admittedly received and retained
alerted them that time limitations existed and that they were located on
page eight. Id. at 1016-17. Thus, plaintiff was held to be on notice
to obtain another copy of that page. Id.
In light of the rationale employed in these
other cases, we do not think that giving a passenger a ticket that is collected
two to three minutes later sufficiently notifies the passenger that the
ticket contains important contractual terms such that the passenger, or
her lawyer, would be expected to obtain a duplicate ticket in the event
of an injury. The district court's reasoning that the lawyer "presumably
dropped the ball" improperly shifted the burden to Ward to learn if notice
had been given, rather than determining whether CSF had given reasonable
notice in the first place.
As a practical matter, moreover, denying enforcement
of the contractual limitation here does not place an unreasonable burden
on CSF. No reason has been advanced why, for example, CSF could not give
passengers a two-part ticket and then collect only the part that does not
contain the contract terms.
Accordingly, we reverse the district court's
grant of summary judgment for defendants and remand for further proceedings
not inconsistent with this opinion.