March 24, 2008
PATSY RICCARDELLO AND FANNIE RICCARDELLO, PLAINTIFFS-RESPONDENTS,
CARNIVAL CRUISE LINES, DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-4700-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted March 4, 2008
Before Judges Coburn and Grall.
Defendant Carnival Cruise Lines (Carnival), by leave granted, appeals from an interlocutory order denying its motion to dismiss this personal injury action for lack of subject matter jurisdiction. Carnival's motion to dismiss was based on a forum-selection clause in the passenger ticket contract. The trial judge denied the motion because Carnival "deliberately" delayed its assertion of the defense until the limitations period stated in the contract had run. Because the forum-selection clause is valid and enforceable and because any delay by Carnival is relevant to the propriety of enforcing the contract limitations period, not the forum-selection clause, we reverse.
The pertinent facts are as follows. Plaintiffs Patsy and Fannie Riccardello purchased tickets for a cruise on a Carnival ship. They received their tickets before they boarded the ship in New York.
The cover of the ticket includes the following:
IMPORTANT NOTICE TO OUR GUESTS: THE GUEST TICKET CONTRACT IN THIS BOOKLET CONTAINS CONDITIONS ON NUMBERED PAGES 1 THROUGH 11 IN THE REAR PORTION OF THIS BOOKLET. YOUR ATTENTION IS DIRECTED TO THESE CONDITIONS, CERTAIN OF WHICH CONTAIN IMPORTANT LIMITATIONS ON RIGHTS OF GUESTS TO ASSERT CLAIMS AGAINST THE CRUISE LINE, VESSEL, OR THEIR AGENTS OR EMPLOYEES. PLEASE READ THE CONTRACT AND THESE TERMS AND RETAIN THE CONTRACT FOR FUTURE REFERENCE.
The "Cruise Ticket - Guest COPY" also includes an "IMPORTANT NOTICE TO GUESTS." Beneath that underlined heading, the following information is provided:
NOTICE: THE ATTENTION OF GUEST IS ESPECIALLY DIRECTED TO CLAUSES 1, 4, AND 10 THROUGH 13, WHICH CONTAIN IMPORTANT LIMITATIONS ON THE RIGHTS OF GUESTS TO ASSERT CLAIMS AGAINST CARNIVAL CRUISE LINES, THE VESSEL, THEIR AGENTS AND EMPLOYEES, AND OTHERS, INCLUDING FORUM SELECTION, ARBITRATION AND WAIVER OF JURY TRIAL FOR CERTAIN CLAIMS.
Clause twelve of the document is entitled "JURISDICTION, VENUE AND TIME LIMITS FOR CLAIMS." Subparagraph (a) of that clause states that a suit to recover on any claim of injury must be filed within one year of the injury. Subparagraph (c) is the forum-selection clause. It provides:
. . . [I]t is agreed by and between the Guest and Carnival 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.
On July 23, 2006, Patsy Riccardello was injured while on the ship. On October 5, 2006, plaintiffs' attorney wrote Carnival asserting that his client tripped and fell on a railing and injured his right knee, wrist and shoulder. By letter dated November 20, 2006, Daniel J. Blanco, a Senior Claims Representative for Carnival, responded. In that letter Blanco asked plaintiffs' lawyer to provide additional information. In the final sentences of the letter, Blanco advised: "All rights in equity, law and those contained within the passenger ticket are reserved. Should you have any questions, please feel free to contact [me]." Blanco did not refer expressly to the forum-selection clause or the limitations period in the passenger ticket contract.
Plaintiffs filed their complaint on June 8, 2007, and it was sent to Carnival on June 27, 2007, by certified mail. The limitations period imposed by the contract expired on July 23, 2007. On August 1, 2007, Carnival filed its answer, which included an affirmative defense of lack of jurisdiction based on the terms and conditions of the passenger ticket contract. On August 29, 2007, Carnival filed its motion to dismiss.
The question of enforceability of this forum-selection clause is one of federal law. Carnival Cruise Lines v. Shute, 499 U.S. 585, 588, 590, 111 S.Ct. 1522, 1524, 1525, 113 L.Ed. 2d 622, 626, 629 (1991) (characterizing the passenger's claim for injury sustained on a Carnival ship as "a case in admiralty, [in which] federal law governs the enforceability of the forum-selection clause"); see Beegal v. Park West Gallery, 394 N.J. Super. 98, 118 (App. Div. 2007). The forum-selection clause the Court considered in Shute is nearly identical to the one at issue here. The clause at issue in Shute provides: "It is agreed by and between the passenger and [Carnival] that all disputes and matters whatsoever arising under, in connection with or incident to this Contract shall be litigated, if at all, in and before a Court located in the State of Florida, U. S. A., to the exclusion of the Courts of any other state or country." Id. at 587-88, 111 S.Ct. at 1524, 113 L.Ed. 2d at 628.
In Shute, the Court concluded that the clause was enforceable. Id. at 595, 111 S.Ct. at 1528, 113 L.Ed. 2d at 633. The Court considered the reasonableness and fundamental fairness of the clause in light of the respective interests and conduct of Carnival and its passengers and the validity of the clause under federal statutory law governing contracts of passage. Id. at 595-96, 111 S.Ct. at 1528-29, 113 L.Ed. 2d at 633-34; see Kubis & Perszyk Associates, Inc. v. Sun Microsystems, Inc., 146 N.J. 176, 188 (1996) (discussing Shute and the Court's treatment of the forum-selection clause).
Although the federal statute considered by the United States Supreme Court in Shute has been amended, the amendment does not change the law relevant to forum-selection clauses in passenger ticket contracts. Compare 46 U.S.C.A. App. § 183c (considered in Shute) with 46 U.S.C.A. § 30509 (current version). The pertinent section of current law prohibits and voids a contract provision that limits "the right of a claimant for personal injury or death to a trial by court of competent jurisdiction." 46 U.S.C.A. § 30509 (a)(1)(B), (a)(2). The law considered by the Supreme Court in Shute prohibited any provision or limitation "purporting . . . to lessen, weaken, or avoid the right of any claimant to a trial by court of competent jurisdiction on the question of liability . . . or the measure of damages . . . ." 46 U.S.C.A. App. § 183c. The Court found the forum-selection clause in Shute permissible, because the clause "does not take away [Shute's] right to 'a trial by [a] court of competent jurisdiction' . . . ." Shute, supra, 499 U.S. at 596, 111 S.Ct. at 1528, 113 L.Ed. 2d at 633. As the Court explained, "the clause states specifically that actions arising out of the passage contract shall be brought 'if at all,' in a court 'located in the State of Florida,' which, plainly, is a 'court of competent jurisdiction' within the meaning of the statute." Ibid. The minor differences in the language of the prior and current statutes do not support a reading of the prohibition that would invalidate the forum-selection clause at issue here.
The Court found the forum-selection clause in Shute "reasonable" despite the fact that it was not the subject of bargaining. The Court gave the following reasons for its conclusion that the forum-selection clause in a non-negotiated passenger ticket contract is reasonable: the clause serves Carnival's "special interest in limiting the fora in which it potentially could be subject to suit"; the clause "has the salutary effect of dispelling any confusion about where suits arising from the contract must be brought and defended," the clause spares "litigants the time and expense of pretrial motions to determine the correct forum"; the clause "conserve[s] judicial resources that otherwise would be devoted to deciding those motions"; and the clause benefits passengers by providing "reduced fares reflecting the savings that the cruise line enjoys by limiting the fora . . . ." Shute, supra, 499 U.S. at 593-94, 111 S.Ct. at 1527, 113 L.Ed. 2d at 632.
Nothing in this record suggests a basis for this court to reach a different conclusion about the "reasonableness" of the forum-selection clause in this case. The clause at issue here is substantively identical to the one at issue in Shute, and there is no evidence that the circumstances under which the clause was included in the contract and brought to plaintiffs' attention are materially different than the circumstances in Shute.
In Shute, the Supreme Court stressed that forum-selection clauses contained in form passenger ticket contracts, even those that comply with the federal statute and are reasonable, remain "subject to judicial scrutiny for fundamental fairness." Shute, supra, 499 U.S. at 595, 111 S.Ct. at 1528, 113 L.Ed. 2d at 633. In discussing the facts relevant to "fundamental fairness," the Court focused on the purpose of the clause, the means by which Carnival included the clause in the contract and the passenger's notice of the clause. The Court considered whether Carnival selected the forum "as a means of discouraging cruise passengers from pursuing legitimate claims," whether Carnival "obtained [the passenger's] accession to the forum clause by fraud or overreaching"; and whether the passenger was "given notice of the forum provision and, therefore, presumably retained the option of rejecting the contract with impunity." Ibid. In this case, as in Shute, there is no evidence of bad faith, improper motive, fraud or overreaching related to the formation of this provision. Similarly, the notice given to plaintiffs was equally clear.
In denying Carnival's motion to enforce the forum-selection clause, the trial judge relied on the letter Carnival's claims adjuster sent to plaintiffs' attorney in November 2006. That letter does not refer to either the limitations period or the forum-selection clause. The trial judge also relied on Carnival's conduct after plaintiffs filed the complaint. The complaint was filed on June 8, 2007, and sent to Carnival later that month. The one-year limitations period stated in the contract expired on July 23, 2007. Carnival filed a timely answer on August 1, 2007, R. 4:6-1(a). Carnival also filed a timely motion to dismiss on the basis of the forum-selection clause on August 29, 2007, R. 4:6-3. Although the answer and motion were timely filed, the trial judge concluded that because the letter of November 2006 did not warn plaintiffs' New Jersey attorney about the forum-selection clause or the limitations period, Carnival "deliberately" "orchestrated" the time periods "to the detriment of the plaintiffs." The judge further relied on Carnival's attorney's unwillingness to consent to a dismissal without prejudice conditioned upon plaintiffs' filing the case in Florida within thirty days.
We cannot conclude that the conduct upon which the trial judge relied provides a ground for a court of this State to refuse to enforce this forum-selection clause on considerations of fundamental fairness. The conduct is not at all relevant to the fundamental fairness in the formation of the forum-selection clause. There is no nexus between Carnival's delay and the fairness of conducting this litigation in Florida. At best, Carnival's post-accident conduct is relevant to the fairness of giving effect to the limitations period specified in the passenger ticket contract, not the forum-selection clause.*fn1
The question of potential unfairness that concerned the trial judge in this case is related to the fairness of enforcing the limitations period. There is no reason to doubt that the courts of Florida are in a position to determine the equities relevant to enforcement of the limitations period under the circumstances of this case if Carnival attempts to raise that defense in Florida. See 46 U.S.C.A. § 30508 (authorizing contracts of passage that include one-year limitations period); Irwin v. Department of Veterans Affairs, 498 U.S. 89, 96, 111 S.Ct. 453, 457-58, 112 L.Ed. 2d 435, 444 (1990) (discussing principles of equitable tolling applied by federal courts in cases involving defective pleadings, including pleadings filed in the wrong court, or conduct by the defendant that induces plaintiff to file late); McQuillan v. "Italia" Societa Per Azione di Navigazione, 386 F. Supp. 462, 468 (D.N.Y. 1974) (applying federal maritime law and considering conduct alleged to estop the carrier's assertion of the limitations period in the contract as a defense); Major League Baseball v. Morsani, 790 So. 2d 1071, 1076-78 & nn. 11 & 12 (Fla. 2001) (discussing equitable estoppel, equitable tolling and waiver under Florida law).