Carrier’s Contract Limited Liability for Late Package Deliveries to Another Free Delivery Justify Trial Court Order Granting Defense Motion for Summary Judgment in Putative Class Action
Plaintiff filed a putative class action against Airborne Express for failing to deliver packages on time, and sought as damages the difference between the value of the service he requested and the value of the service he received. Hicks v. Airborne Express, Inc., ___ N.E.2d ___, 2006 WL 2105657 (Ill.App. July 25, 2006). The defense moved for summary judgment on the grounds that the contract limited the customers’ damages for the carrier’s breach of its promise to deliver a package on time to another delivery free of charge, and that Airborne had provided plaintiff with that remedy. Slip Opn., at 2-3. The trial court agreed with the defense, “finding that the parties had agreed to an exclusive remedy, i.e., another Flight-Ready envelope, for Airborne’s breach of the contract to deliver [plaintiff’s] package by noon the next day.” Id., at 3. The appellate court affirmed.
Preliminarily, the Illinois appellate court rejected the defense argument that Airline Deregulation Act of 1978 preempted plaintiff’s breach of contract claim. Slip Opn., at 3-7. The Court held that the claim was not preempted “because the court’s concern is restricted to the parties’ bargain” and that “Airborne’s self-imposed obligation to deliver packages by a specified time . . . does not involve external state policy.” Id., at 7. The Appellate Court then rejected plaintiff’s argument that the contract did not establish the “exclusive remedy” for the carrier’s failure to deliver a package by the promised time. The Court recognized public policy concerns surrounding limitations on damages, but found that the contract was explicit – despite its failure to use the phrase “exclusive remedy”: “The contract precluded a broad range of potential damages and provided that no one could alter or modify its terms.” Id., at 10. The Court’s conclusion, at page 12, succinctly summarizes the holding of the Court:
Hicks and Airborne voluntarily chose to distribute the risks in a manner represented by the contract language. We find no public policy to bar the contract’s exclusive remedy provision [citation], and nothing in the record justifies altering the contractual allocation adopted by the parties [citation].
NOTE: As a purely practical matter, it is difficult to imagine how the courts could have reached a contrary conclusion. Delivery services may encounter any number of delays beyond their control – such as terrorist activities that delay or cancel flights, mechanical problems, traffic jams, etc. – and the individual damages customers may suffer range from negligible (the gift didn’t get there on the day I wanted) to substantial (the company lost a profitable contract because its bid was not timely received).