RGA Industries, Inc. v. Jomas Express, Inc.

OPINION OF THE COURT Per Curiam. Order entered March 6, 1985 unanimously modified to the extent of striking the affirmative defense of limitation of liability and, as modified, affirmed, with $10 costs to the plaintiff-respondent. This is an action' against a common carrier for breach of contract, negligence, and conversion in connection with a shipment of goods which was never delivered to the intended consignees or returned to the plaintiff. The failure to deliver is conceded, and Special Term’s grant of partial summary judg [1067] ment in plaintiff’s favor on liability is not contested. At issue is defendant’s attempt to enforce a limitation of liability provision contained in the delivery documents covering the transaction. That provision limits recovery in the event of nondelivery to $50, "unless a greater value is declared”. Plaintiff, which seeks damages of $3,787.20, did not declare a greater value. Special Term found a triable issue of fact as to the application of the limitation of liability clause. We disagree. Under the holding of the Court of Appeals in I.C.C. Metals v Municipal Warehouse Co. (50 NY2d 657), a prima facie case of negligence or conversion is made out where a bailee fails to provide an adequate explanation for its failure to return bailed goods. Once a conversion has been established, public policy bars enforcement by the bailee of the liability limitation (supra, p 663). Other than a casual reference to the effect that the goods in question were stolen, defendant’s submission below was woefully insufficient to raise a question of fact in support of the claimed explanation of theft; such a record suffices to sustain plaintiff’s action in conversion, thereby rendering inapplicable the contractual limitation upon defendant’s liability (supra, pp 664-665). While I.C.C. Metals v Municipal Warehouse Co. (supra) is a case which focuses upon a warehouse’s liability, the legal principles expressed therein may reasonably be applied to common carriers such as the defendant (see, Iselin & Co. v Milton Feinberg, Inc., 92 AD2d 495). Hughes, J. P., Riccobono and Parness, JJ., concur.