Sub-Zero Freezer Co., Inc. v. Cunard Line Limited

2002 U.S. Dist. LEXIS 27142 (2002)

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Nature of the Case

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Facts

P signed a Space Allotment Agreement with D. The agreement provided for a seven-night cruise in the Eastern Mediterranean. The trip was scheduled to depart on October 2, 2001, from Piraeus, Greece, and to disembark in Istanbul, Turkey on October 9, 2001, with intermediate ports of call in Santorini, Rhodes, Bodrum, and Kusadasi. The agreement was for the entire vessel with a per-night hire price of $120,000, with a base price for the cruise of $840,000. The total price of the cruise was $892,000. P prepaid the entire cruise price of $892,000. It made the last installment payment of the prepayment to defendant on July 2, 2001. Under Clause 9 the entire cruise hire price becomes payable to if P cancels the agreement. Clause 10 was the Force Majeure clause of the agreement and relieves d of any liability for failure to perform in the event of acts of God, war, fire, acts or threats of terrorism, or order or restraint by government authorities, among other things. The integration clause incorporates into the agreement 'all prior understandings and agreements heretofore entered into between P and D whether written or oral.' It also provides that 'no course of dealing between the parties shall operate as a waiver by either party . . . of any right of such party.' Before entering into the agreement, P asked the agent how D would treat P in regard to refunds or rescheduling if there was an outbreak of terrorism or war at the time of the cruise. D's director of charter sales told P that D would never put its vessels or guests in danger and would work with P to reschedule the location or dates of the cruise as necessary to assure safety and to satisfy the safety concerns of P's guests. Alternatively, D would give P a refund. On April 29, 1999, D a letter to P memorializing his response to Ps inquiries. On May 3, 1999, P signed the agreement. Prior to the cruise, 9-11 occurred. Several days after the attacks, the United States declared a 'war on terrorism.' The United States mobilized substantial resources in and around the eastern Mediterranean and Middle East and elsewhere, and placed its military units on a high state of alert and battle readiness. During the scheduled time of the cruise, the United States launched a major military action against Afghanistan. The Department of State issued formal warnings to Americans abroad and to those who were considering traveling abroad, instructing them to exercise heightened caution and vigilance while traveling abroad and urging that Americans avoid such travel. The United States did not issue any orders requiring D to cancel its October 2, 2001 cruise. Many of P's employees, guests, and their spouses informed P that they would not go on the cruise because they believed it would be unsafe. P and his agent made repeated efforts to persuade D to work with P or refund some or all of the prepayment. D refused. D informed P that it would retain the entire amount of the prepayment whether or not the cruise took place. P sued and D moved to dismiss.