Resort Torts Case Law (Part 2)

Statute of Limitations:

There are several litigation roadblocks that frequently occur early on in a claim against a cruise carrier. Federal maritime law imposes time constraints on an aggrieved cruise ship passenger. For physical injuries occurring on cruise vessels that touch U.S. ports, passengers may be required to file a claim within six months and commence a lawsuit within one year.

Occasionally, courts may not enforce such restrictive limitations based on lack of notice, tolling for a minor passenger, equitable estoppel, contractual overreaching, accidents on shore, and settlement fraud. For nonphysical injury claims, cruise lines may impose a shorter limitation period. Most cruise lines require that written claims be filed within days as opposed to months after the accident. Courts may decide not to enforce these limitations if they were unreasonable under the circumstances, or contrary to a state statute of limitations. See Miles v. Apex Marine, 498 U.S. 19 (1990); Hughes v. Carnival Cruise Lines, Inc., 2003 WL 1740460, at *1 (S.D.N.Y. Mar. 31, 2003) (one-year time limitation period enforced); Angel v. Royal Caribbean Cruises, Ltd., 2002 WL 31553524, at *1, *5 (S.D. Fla. Oct. 22, 2002) (passenger fell overboard; one-year time limitation enforced); Stone v. Norwegian Cruise Line, 2001 WL 877580, at *1-*2 (E.D. Pa. May 15, 2001) (slip and fall in bathroom; time limitations period enforced); Tateosian v. Celebrity Cruise Servs., Ltd., 768 A.2d 1248, 1252 (R.I. 2001) (food poisoning; one year time limitation period enforced); Levick v. Steiner Transocean Limited, 2005 U.S. Dist. LEXIS 14770 (S.D. Fla. July 13, 2005) (one year passenger ticket limitation to file suit applied to claims against independent contractor who ran the spa on the ship, and filing suit in state court did not toll the time period to file suit in federal court); Gibbs v. Carnival Cruise Lines, 314 F.3d 125 (3d Cir. 2002) (minor burned feet on hot deck surface; one-year time limitations period tolled for minor until after parent began to serve as guardian ad litem after filing of lawsuit); Dillon v. Admiral Cruises, Inc., 960 F.2d 743, 746 (8th Cir. 1992) (trip and fall in ship’s lounge; cruise line may be estopped from relying on one-year time limitation).

Forum Selection Clauses:

One of the foremost difficulties lies with forum selection clauses. Through forum selection clauses, the cruise lines have limited the locations where claims may be brought to just a few cities where the large cruise ports are located, such as Miami, Seattle, and Los Angeles.

All cruise lines operating out of Florida cruise ports have forum selection and choice of law clauses in the passenger Ticket Contracts. A typical clause reads as follows: It is agreed by and between the Guest and [cruise line] that all disputes and matters whatsoever arising under, in connection with or incident to this Contract or the Guest’s cruise, including travel to and from the vessel, shall be litigated, if at all, before the United States District Court for the Southern District of Florida in Miami, or as to those lawsuits to which the Federal Courts of the United States lack subject matter jurisdiction, before a court located in Miami-Dade County, Florida, U.S.A. to the exclusion of the Courts of any other county, state or country. A Florida Third District Court of Appeal recently upheld the federal court forum clause in the Carnival Cruise Line ticket contract. Leslie v. Carnival Corp., 2008 WL 34793 (Fla. 3d DCA Jan. 2, 2008).

To be enforceable, forum selection clauses in cruise tickets or brochures must be fundamentally fair. Carnival Cruise, Inc. v. Shute, 499 U.S. 585 (1991). Fundamental fairness means: (1) that the forum was not selected to discourage pursuit of legitimate claims, (2) there was no fraud or overreaching, (3) the notice of the forum selected was adequate, and (4) the consumer had a reasonable opportunity to reject the cruise contract without penalty.

Many courts have upheld the forum selection clauses in cruise line ticket contracts. See e.g., Vega-Perez v. Carnival Cruise Lines, 361 F. Supp.2d 1 (D. Puerto Rico 2005); Pratt v. Silversea Cruises, Ltd., 2005 WL 1656891 (N.D. Cal. 2005); Wiggins v. Carnival Corp., 2005 WL 2086043 (W.D. Texas Aug 25, 2005); Powell v. Carnival Cruise Lines, 2005 WL 3080928 (E.D. Cal. Nov. 17, 2005); Elliott v. Carnival Cruise Lines, 231 F. Supp.2d 555 (S.D. Texas 2002); Lauri v. Cunard Line, Ltd., 2000 WL 791771 (E.D. Mich. May 15, 2000).

Cases have been successful especially when the plaintiffs allege that they did not receive the cruise contract early enough to be able to cancel without being subject to a cancellation fee, and where a cruise line ticket was delivered 13 days before the cruise, and therefore adequate notice of the forum selection clause was not provided and would not be enforced. See Carnival Cruise, Inc. v. Shute, 499 U.S. 585 (1991); Ward v. Cross Sound Ferry, 273 F.3d 520, 525 (2d Cir. 2001); Cismaru v. Radisson Seven Seas Cruises, Inc., 2001 WL 6546 (Tex. App. Jan. 2, 2001); Stobaugh v. Norwegian Cruise Lines, Ltd., 5 S.W. 3d 232, 235 (Tex. App. 1999).

When arguing that a forum selection clause in a passenger cruise line ticket is unenforceable, the primary issue is notice. If the passenger did not have adequate notice of the clause, and cancellation would result in forfeiture of the ticket price, there is a strong argument that the clause is fundamentally unfair under the circumstances and therefore should be stricken. Casavant v. Norwegian Cruise Line, Ltd., 63 Mass. App. Ct. 785 (2005).

Choice of Law Clauses:

The law applied to a claim may have a dramatic influence on the likelihood of recovering adequate damages. Courts may consider several factors in determining whether choice of law clauses should be enforced such as (1) the place of the wrongful act, (2) the law of the flag, (3) the allegiance or domicile of the injured passenger, (4) the allegiance of the ship owner, (5) the place of the contract, (6) the inaccessibility of the foreign forum, and (7) the law of the forum. Milanovich v. Costa Crociere, SPA, 954 F.2d 763, 768 (D.C. Cir. 1992). A practitioner should not automatically assume that United States law always favors the plaintiff. There may be cases where foreign law provides more favorable remedies than United States law. See Klinghoffer v. S.N.C. Achille Lauro, 795 F. Supp. 112, 115-16 (S.D.N.Y. 1992).

Many of the previously mentioned situations concerning cruise ship liability are riddled with complexity. Cruise ships are common carriers and are held to a reasonable standard of care under the circumstances. Kermarec v. Compagnie Generale Transatlantique, 358 U.S. 625, 630 (1958). Importantly, cruise ships that touch U.S. shores may not disclaim liability for loss, death, damage or delay caused or contributed to by the vessel’s negligence. Although a passenger ticket may contain clauses which seek to disclaim liability for a variety of problems, instances of gross negligence and intentional misconduct may not be disclaimed by common carriers. Royal Ins. Co. Of Am. v. Southwest Marine, 194 F.3d 1009, 1016 (9th Cir. 1999).

In addition, many courts, including several cases that our firm has successfully handled, have held that disclaimers of simple negligence, particularly regarding the health and safety of the passengers, such as ingress and egress from the cruise ship, will not be enforced. Provisions that try and disclaim liability for either gross or simple negligence are usually held to be void under common law and against public policy.

In Kornberg v. Carnival Cruise Lines, 741 F.2d 1332(11th Cir. 1984), a case involving malfunctioning toilets, the court held that 46 U.S.C.A. §183c expressly invalidates any contract provision purporting to limit a ship’s liability for negligence to its passengers. The federal statute provides that: It shall be unlawful for the manager, agent, master, or owner of any vessel transporting passengers between ports of the United States or between any such port and a foreign port to insert in any rule, regulation, contract, or agreement any provision or limitation (1) purporting, in the event of loss of life or bodily injury arising from the negligence or fault of such owner or his servants, to relieve such owner, master, or agent from liability.

Unfortunately, the courts have been willing to enforce disclaimers of liability regarding accidents that occur during shore excursions. See Henderson v. Carnival Corp., 125 F. Supp. 2d 1375, 1377 (S.D. Fla. 2000) (passenger injured on catamaran trip while on excursion from cruise; notwithstanding Carnival logo on catamaran and crew member shirts, cruise ship disclaimer of ownership or control of catamaran company enforced); Mashburn v. Royal Caribbean Cruises, Ltd., 55 F. Supp. 2d 1367, 1370 (S.D. Fla. 1999) (day trip to Coco Cay Island owned by cruise line; passengers rented Sea-Doo, signed waiver and were injured in accident; no negligence found); Dubret v. Holland Am. Line Westours, Inc., 25 F. Supp. 2d 1151, 1153 (W.D. Wash. 1998) (bus accident during shore excursion; disclaimer of liability enforced).

Some courts have held that a disclaimer for an on-shore excursion may not be enforceable if the passenger relied upon representations or warranties regarding the safety, competence, and reliability of on-shore suppliers of travel services. See e.g. Berzonzine v. Maui Classic Charters, 1995 AMC 2628 (D. Haw. 1995)(350-pound handicapped passenger broke ankle because of inattention and lack of assistance by crew; misrepresentations in brochure that cruses were “suitable for handicapped individuals). Lastly, while disclaimers such as these might be enforceable against the cruise carrier, many courts have held that the ground service providers are not immune from liability.

Yet another pitfall awaiting the plaintiff in a maritime action was imposed by the United States Congress in 1851 through the Limitation of Liability Act, 46 U.S.C. Appx. § 181-189. This Act was passed to encourage ship building, to induce capitalists to invest money in this industry, and to protect the commercial interests of the United States. This article merely touches upon the most pertinent aspect of the Act for most tort plaintiffs and is not meant to be a comprehensive treatise on the many particularities of the Act.

The first two sections of the Act provide for exoneration from liability under certain conditions for certain enumerated types of cargo and for damages related to fire. It is the third section of the Act which most affects tort plaintiffs. Section 183 provides:

The liability of the owner of any vessel, whether American or foreign, for any embezzlement, loss, or destruction by any person or any property, goods, or merchandise shipped or put on board of such vessel, or for any loss damage, or injury by collision, or for any act, matter, or thing, loss, damage, or forfeiture, done, occasioned, or incurred, without the privity or knowledge of such owner or owners, shall not, except in the cases provided for in subsection (b) of this section, exceed the amount or value of the interest of such owner in such vessel, and her freight then pending.

Federal courts have exclusive admiralty jurisdiction to determine whether a vessel owners is entitled to exoneration or to limited liability under the Act. Ex Parte, Green, 286U.S. 437 (1932). In limitation of liability actions, as in all admiralty cases, there is no right to a jury trial. Newton v. Shipman, 718 F.2d 959 (9th Cir. 1983). The procedure which must be strictly followed by a vessel owner to bring an action for exoneration or limitation of liability is found in Rule F, Supplemental Rules for Certain Admiralty and Maritime Claims, Federal Rules of Civil Procedure.

The determination of whether a shipowner is entitled to limit liability involves a two-step analysis. First, the court must determine what acts of negligence or conditions of unseaworthiness caused the accident. Second, the court must determine whether the shipowner had knowledge or privity of those same acts of negligence or conditions of unseaworthiness. See e. g. American Dredging Co. v. Lambert, 81 F.3d 127 (11th Cir. 1996).

Only if the owner is without privity or knowledge may he limit liability. Otherwise, the owner retains personal liability. For an excellent discussion of some of the things which may constitute privity and knowledge, see Joyce v. Joyce, 975 F.2d 379 (7th Cir. 1992); see also In re Hercules Carriers, Inc., 768 F.2d 1558 (11th Cir. 1985); Avena v. Florida Towing Corp., 322 F.2d 155 (5th Cir. 1963); Self v. Great Lakes Dredge & Dock Co., 832 F.2d 1540 (11th Cir. 1988). Significantly, the Joyce court held that the tort of negligent entrustment defeats a claim for limitation of liability.

It is estimated that more than nine million North Americans vacationed aboard cruise ships in 2005. With the number of passengers increasing significantly in just the past five years, the safety aboard these ships has not correspondingly increased. These vessels are not merely common carriers, they are virtual floating cities and thus should be governed by the same laws as a land based entity. Despite so many litigation hurdles, our firm has been quite successful in garnering more than adequate settlement recoveries for our clients, especially in the area of on-board cruise ship negligence.

A few examples of cases in which Leesfield & Partners has represented clients involved in cruise ship and/or boating cases are:

Rental car companies reap millions, if not billions of dollars, every year from Florida tourists. Persons injured by rental cars are protected under Florida dangerous instrumentality doctrine which imposes strict vicarious liability upon motor vehicle owners when a non-owner, who is driving the vehicle with the owner’s permission, negligently causes injury. Lewis v. Enterprise Leasing Co., 2005 WL 2447873 (Fla. 3d DCA 2005); Hertz Corp v. Jackson, 617 So. 2d 1051 (Fla. 1993). Lamb v. Matetzschk, 906 So. 2d 1037 (Fla. 2005). Thus, the rental car company owner of a motor vehicle is liable to third persons for injuries caused by the negligent operation or use of the motor vehicle by the person to whom the owner entrusted the vehicle. Ryder TRS, Inc. v. Hirsch, 900 So. 2d 608 (Fla. 4th DCA 2005).

The rental car company owner is liable even where the vehicle has been rented to another and the renter permits someone else to drive the vehicle who then causes the injury, against the terms of the rental contract. Susco Car Rental Sys. Of Florida v. Leonard, 112 So. 2d 832 (Fla. 1959); Stupak v. Winter Park Leasing, Inc., 585 So. 2d 283 (Fla. 1991).

The doctrine is premised on the theory that one who originates the danger by entrusting the vehicle to another is in the best position to make certain that there will be adequate resources with which to pay the damages caused by its negligent operation. Southern Cotton Oil Co. v. Anderson, 86 So. 629 (Fla. 1920). This principle has been consistently followed and reaffirmed by Florida courts to the present day. See e.g., Ady v. American Honda Finance Corp., 675 So. 2d 577 (Fla. 1996). The doctrine has been applied to automobiles as well as to golf carts. Meister v. Fisher, 462 So. 2d 1071 (Fla. 1984).

Car rental agencies also have a duty to warn renters of foreseeable criminal conduct particularly in light of the superior knowledge of the car rental company. Shurben v. Dollar Rent-A-Car, 676 So.2d 467 (Fla. 3d DCA 1996)(renter was British tourist).

Under pressure from the rental car industry, Florida’s Legislature amended its Financial Responsibility statute, Fla. Stat.§ 324.021, to limit the amount of damages a rental car company could be liable for based upon the negligence of a rental car driver to a maximum of $500,000. That was still too much for the rental car companies.

Effective August 10, 2005, a federal statute was enacted which purports to eliminate altogether all vicarious liability for rental car companies where there is no direct negligence or criminal wrongdoing on the part of the rental car company. 49 U.S.C. § 30106. This statute, commonly referred to as the Graves Amendment, does not supercede any state laws which impose financial responsibility or insurance standards on the owner of a motor vehicle for the privilege of registering or operating a motor vehicle.

Since August 10, 2005, car rental company defendants have challenged every tort lawsuit in Florida based upon 49 U.S.C. § 30106, contending that Fla. Stat. § 324.021(b)(2) is not a financial responsibility law and that the federal statute supercedes it.

Most Florida trial courts have ruled in favor of the Plaintiffs, finding that Fla. Stat. § 324.021(b)(2) is a Financial Responsibility statute which is expressly exempted from 49 U.S.C. § 30106. See for example, All State v. Hertz, Miami-Dade County; Bechina v. Enterprise Leasing Co., Miami Dade County; Datilma v. Progressive and U-Haul, Orange County; Garrison v. Enterprise, Volusia County; Gates v Rhoades and Enterprise, Seminole County; Gonzalez v.Pena Diaz, U-Save Auto Rental, Orange County; Hammond v. Enterprise, Brevard County; Hernandez v. U-Haul, Orange County; Lawson v. Enterprise, Duval County; Mumford v. Dollary Thrifty, Charlotte County; Poole v. Enterprise, 2006 WL 1388442 (Brevard County); Quiles v. Hertz, Orange County; Rivera v. Garcia, Rental Car Finance Group, Miami Dade County; Rogers-Hutson v. Meoli, Hertz, Sarasota County; Rosado v. La Mondue Law firm, et al, Polk County; Trivess v. Alamo Financing, Orange County; Vega v. Penske, Miami Dade County.

The only Florida Appellate Court in Florida to have ruled on the Graves Amendment has held that vicariously liability claims against the rental car companies are barred. See Kumarsingh v. PV Holding Corp, (Avis Rent A Car), 2007 WL 2847956 (Fla. 3d DCA, Oct. 3, 2007); Bechina v. Enterprise Leasing Co., 2007 WL 4322303 (Fla. 3d DCA Dec. 12. 2007). A motion for rehearing is currently pending in the Kumarsingh case.

Several federal District Courts have ruled in favor of the rental car companies. See Garcia v. Vanguard Car Rental, 510 F. Supp.2d 821 (M.D. Fla. 2007); Dupuis v. Vanguard Car Rental USA, 510 F. Supp.2d980 (M.D. Fla. 2007); Seymour v. Pense Truck Leasing Co., L.P., 2007 WL 2212609 (S.D. Ga. July 30, 2007); Liberty Mut. Ins. Co. v. TCF Equipment Finance, Inc., 2007 WL 4557204 (M.D. Fla. Dec. 20, 2007).

The good news on the federal front is that an opinion out of the Southern District of Florida in a case brought by Leesfield & Partners attorneys has held that the Graves Amendment is unconstitutional — in direct conflict with Garcia. See Vanguard v. Huchon, 2007 WL 2875388 (S.D. Fla. Sept. 14, 2007). The Huchon case was followed by the same Judge in Vanguard Car Rental USA v. Drouin, 2007 WL 2915903 (S.D. Fla. Oct. 5, 2007). Both Garcia and Druoin are currently on appeal to the Eleventh Circuit Court of Appeal.

Please contact Partner Patricia Kennedy for more information.