Schwartz v. S.S. Nassau , 345 F.2d 465 ( 1965 )

HAYS, Circuit Judge:

The only issue presented by this appeal is whether a clause in the contract of passage between passenger and shipowner requiring that an action for wrongful death be “commenced and process served * * * within one (1) year from the date when the death * * occurred” is invalid under Section 4283A of the Revised Statutes which makes unlawful maritime contract provisions which provide for “a shorter period * * * for the institution of suits on * * * claims [for loss of life or bodily injury] than one year” from the date of injury, or in the case of death, from the appointment of decedent’s legal representative.¹ The libelant argues that

Article 13 of the contract quoted above provides a period of limitations for “institution” of suit shorter than one year (1) because of the inclusion of the words “and process served” and (2) because the time is to run from the date of death rather than from the date of appointment of decedent’s legal representative. This second claim was not raised in the district court and cannot be raised for the first time here. Safeway Stores, Inc. v. Oklahoma Retail Grocers Ass’n, 360 U.S. 334, 342, 79 S.Ct. 1196, 3 L.Ed.2d 1280 n. 7 (1959); Scott v. Central Commercial Co., 272 F.2d 781 (2d Cir. 1959), cert. denied, 363 U.S. 806, 80 S.Ct. 1241, 4 L.Ed.2d 1149 (1960); Patent & Licensing Corp. v. Olsen, 188 F.2d 522, 525 (2d Cir. 1951); Wiper v. Great Lakes Eng’r Works, 340 F.2d 727, 731 (6th Cir. 1965).

As to the first claim libelant asserts that since suit is commenced in the federal admiralty courts by the mere filing of a libel, Admiralty Rule 1, the contractual requirement that suit be commenced “and process served” within one year has the effect of shortening the limitation period to less than the one year permitted by statute. The district court rejected this argument, denied libelant’s motion to strike respondent’s defense based on the contractual period of limitation, and granted respondent’s cross-motion for summary judgment dismissing the libel. 223 F.Supp. 374 (1963). We affirm.

The facts of the case are undisputed. Libelant Mary A. Schwartz is the widow and executrix of Dr. Samuel H. Schwartz. She and her husband purchased a first-class passage for a cruise aboard respondent’s S.S. Nassau from New York to Bermuda and return. On the face of the ticket reference was made to “the contract terms and conditions * * * set forth on this page and the over-page, to which passenger expressly agrees and which are to apply and govern the relations whatever they may be between passenger and the carrier * * * ” Article 13, printed on the back of the ticket, reads in pertinent part as follows:

“Suit to recover on any claim shall not be maintainable unless commenced and process served as follows:

(1) Within one (1) year from the date when the death or injury occurred in respect of any claim for loss of life or bodily injury in any case where said Section 4283A [of the Revised Statutes] shall apply * * ”

Article 15 of the contract states that:

“The terms of this passage contract shall be separable and the illegality or invalidity of any article, paragraph, clause, or provision of this passage contract, in whole or in part, shall not affect or invalidate any other article, paragraph, clause or provision thereof.”

While on board the vessel Dr. Schwartz became ill. The ship’s physician was consulted and that same day Dr. Schwartz was removed by helicopter to a hospital in North Carolina, where he died about 2:00 A.M., the following day, May 8, 1960.

Mrs. Schwartz was appointed executrix under Dr. Schwartz’s will on May 20, 1960. She originally brought suit against respondent for wrongful death in a New York court by service of summons on August 8, 1961, more than fourteen months after her appointment as executrix, and fifteen months from the date of Dr. Schwartz’s death.

She filed a libel against respondent in the United States District Court on May 3, 1962, five days less than two years from her husband’s death

Section 4283A applies generally to all personal injury and wrongful death cases in which “the manager, agent, master, or owner of any sea-going vessel * * * transporting passengers or merchandise or property from or between ports of the United States and foreign ports” has provided “by rule, contract, regulation, or otherwise” a time period within which a claimant must give notice or bring suit. The statute is one “of general import, enacted for the purpose of regulating the relationship between a common carrier * * * and passengers with reference to duties, obligations and restrictions of the carrier in connection with its issuance of tickets and its liability to passengers for safe passage thereunder,” Moore v. American Scantic Line, Inc., 30 F.Supp. 843, 845 (S.D.N.Y.1939), aff’d, 121 F.2d 767 (2d Cir. 1941); accord, Scheibel v. Agwilines, Inc., 156 F.2d 636, 638 (2d Cir. 1946), and is applicable in state as well as federal courts, see Ayoub v. MooreMcCormack Lines, Inc., 17 Misc.2d 519, 191 N.Y.S.2d 411 (App.T.1958); Glusman v. United States Lines Co., 39 Misc. 2d 845, 241 N.Y.S.2d 960 (Sup.Ct.1963).

The purpose of the statute of which Section 4283A is a part, “was to encourage shipbuilding and [its provisions] * * * should be liberally construed in the ship-owner’s favor.” Section 4283A “is not * * * an isolated enactment whose negative language should be narrowly construed, but is a declaration of Congressional policy as to lawful contractual time limitations * * Scheibel v. Agwilines, Inc., supra, 156 F.2d at 638.

Appellant’s argument rests on the premise that the statute is to be interpreted in the light of the federal rules for tolling a statutory period of limitations. Admiralty Rule 1; see Bomar v. Keyes, 162 F.2d 136 (2d Cir.), cert. denied, 332 U.S. 825, 68 S.Ct. 166, 92 L.Ed. 400 (1947). But see Sauerzopf v. North Am. Cement Corp., 301 N.Y. 158, 93 N.E.2d 617 (1950) (applying state statute of limitations rule in tolling a federal statute). It follows, says the plaintiff, that a contract that requires more than the federal admiralty rules require, i. e., that process also be served within a year, is invalid. However, under New York procedure an action is commenced for the purpose of tolling the statute of limitations, not as under the federal rule by the filing of a complaint, but by the service of process. New York Civil Practice Act § 218, now Civil Practice Law and Rules §§ 203(b), 304.

The problem of accommodating variant forms of federal and state procedure to federal substantive law is fraught with difficulty when a case arises in which a litigant may find himself time-barred by application of state procedural rules but not time-barred if federal procedural rules are applied. See Ragan v. Merchants Transfer & Warehouse Co., 337 U.S. 530, 69 S.Ct. 1233, 94 L.Ed. 513 (1949); Sauerzopf v. North Am. Cement Corp., supra; Irons v. Michigan-Atl. Corp., 279 App.Div. 32, 35, 108 N.Y.S.2d 824, 827 (4th Dep’t 1957).² The draftsman of a contractual clause providing for limitation periods, such as the clause in question here, will find it difficult to devise a provision which will meet the requirements of a statutory rule regulating such clauses and which will, at the same time, be fully operative in state, federal and foreign courts.

Doubtless these drafting difficulties led to the inclusion of the separability provision of Article 15. Under that provision the reference to service of process in Article 13 is severable. Thus the defense of limitation is based on libelant’s failure to comply with other clearly legal provisions of the contract without regard to the severable, supposedly illegal, provision.

Moreover the express reference in Article 13 of the contract to Section 4283A cannot be disregarded. The conditions, exceptions and provisos of the statute are to be read into the contract. Thus the phrase “and process served” is to be construed in the light of the incorporation of the statute by reference. The phrase would then read “and process served where suit must be instituted by service of process.”

It does not follow from our holding the contractual limitation provision valid and enforceable in the present case that the provision would be enforceable in every conceivable fact situation. Our brother Kaufman, when a district judge, suggested in Barrette v. Home Lines, Inc., 168 F.Supp. 141, 143 (S.D.N.Y. 1958), that “a litigant believing the provisions of commencement and service to be so interwoven as to require both conditions to be met within one year may be forced to abandon rights which he has in the belief that while he could commence his action within one year he could not both commence and serve within that period.” No such situation is presented by the case we are now considering. Libelant here has no excuse, based either on the literal language of the provision or on any equity arising out of reliance on it, for the delay in instituting suit. It would be extremely technical to hold that she can take advantage of an abstract “illegality” of the limitation clause.

Affirmed.

1 . 49 Stat. 960 (1935), 46 U.S.C. § 183b (1958):

“Sec. 4283A. Stipulations limiting time for filing claims and commencing suit.—

“(a) It shall be unlawful for the manager, agent, master, or owner of any sea-going vessel (other than tugs, barges, fishing vessels and their tenders) transporting passengers or merchandise or property from or between ports of the United States and foreign ports to provide by rule, contract, regulation, or otherwise a shorter period for giving notice of, or filing claims for loss of life or bodily injury, than six months, and for tlie institution of suits on such claims, than one year, such period for institution of suits to be computed from the day when the death or injury occurred.”

♦i» **• V

“(c) * * * [I]f the action is one for wrongful death, any lawful limitation of time prescribed in such contract shall not be applicable so long as no legal representative has been appointed for such * * * decedent’s estate, but shall be applicable from the date of the appointment of such legal representative * *

2 . An analogous situation was presented to the Supreme Court in its second opinion in Herb v. Pitcairn, 325 U.S. 77, 65 S.Ct. 954, 89 L.Ed. 1483 (1945). There an injured workman had brought suit under the Federal Employers’ Liability Act in an inferior state court that, as it appeared, did not have jurisdiction. The issue presented to the Court was whether the plaintiff had “commenced” the action within the meaning of Section 6 of the Federal Employers’ Liability Act so as to toll the statute of limitations. The Court stated that:

“An action is ‘commenced’ for these purposes as a matter of federal law when instituted by service of process issued out of a state court, even if one which itself is unable to proceed to judgment, if the state law or practice directs or permits the transfer through change of venue or otherwise to a court which does have jurisdiction to hear, try, and otherwise determine that cause. * * * Clearly, * * * when process has been adequate to bring in the parties and to start the case on a course of judicial handling which may lead to final judgment without issuance of new initial process, it is enough to commence the action within the federal statute.” Id. at 78-79, 65 S.Ct. at 955. See Burnett v. New York Cent. R. R., 380 U.S. 424, 426, 431, 433-434, 85 S.Ct. 1050, 1053-1054, 1056, 1057, 13 L.Ed.2d 941 (1965).