B-155961, MAR. 4, 1966

B-155961, MAR. 4, 1966

TO MR. KALMAN S. SCHINDEL:

PLEASE REFER TO YOUR LETTER OF FEBRUARY 17, 1966, FOR CONSIDERATION IN CONNECTION WITH THE C AND H TRANSPORTATION CO., INC., MATTER.

THE FORM OF BOND SUBMITTED WITH YOUR LETTER IS PROPOSED AS A BASIS FOR REFUND OF CERTAIN DEDUCTIONS, SAID TO TOTAL $109,552.32, MADE BY THE ARMY FINANCE CENTER IN NOVEMBER 1965. THESE DEDUCTIONS WERE APPLIED IN PARTIAL LIQUIDATION OF A GOVERNMENT CLAIM IN THE AMOUNT OF $224,038.90 FOR DAMAGE TO A SHIPMENT OF CERTAIN GOVERNMENT PROPERTY WHILE BEING TRANSPORTED BY THE C AND H TRANSPORTATION CO., INC.

A SIMILAR CLAIM IN THE AMOUNT OF $7,557.87 WAS COLLECTED BY THE ARMY FINANCE CENTER FOR DAMAGE TO RADIO OUTFITS MOUNTED ON TRAILER VEHICLES WITHOUT GENERATING UNITS TRANSPORTED UNDER BILL OF LADING B-4059954. YOU KNOW, THE CARRIER HAS FILED SUIT IN THE COURT OF CLAIMS, NO. 373-65, TO RECOVER $6,375.37 THE AMOUNT IN EXCESS OF $1,182.50 TO WHICH THE CARRIER SAYS ITS LIABILITY IS LIMITED BECAUSE THE PROPERTY WAS TENDERED FOR SHIPMENT AT A RELEASED VALUE NOT EXCEEDING $250 PER 100 POUNDS.

WE HAVE TODAY WRITTEN COLONEL J. W. BRADEN, CHIEF, TRANSPORTATION DIVISION, ARMY FINANCE CENTER, INDIANAPOLIS, INDIANA, TO THE EFFECT THAT WE WOULD HAVE NO OBJECTION TO THE REFUND OF THE MONEY ($109,552.32) UPON THE SUBMISSION OF A SUITABLE BOND TO GUARANTEE RECOVERY FROM THE SURETY OF $76,162.24 (IF NOT IN EXCESS OF THE AGREED VALUE OF THE GOVERNMENT'S CLAIM IN CONNECTION WITH BILL OF LADING NO. B-8701711) IN THE EVENT OF A LEGAL DETERMINATION ON THE ISSUE FAVORABLE TO THE UNITED STATES IN CT. CL. NO. 373-65.

WE FEEL THAT SOME CHANGES WOULD BE APPROPRIATE IN THE FORM OF BOND WHICH YOU HAVE SUBMITTED TO US. THESE CHANGES WHICH COULD BE MADE ON PAGE 3OF YOUR DRAFT WOULD BE DESIGNED TO ENABLE DISPOSITION OF THE LARGER CLAIM BASED ON THE OUTCOME OF THE SUIT IN THE COURT OF CLAIMS FOR RECOVERY OF THE SMALLER AMOUNT. THUS, WE WOULD SUGGEST THAT PARAGRAPH 2 ON PAGE 3 READ AS FOLLOWS:

"THE OBLIGEE AGREES TO RELEASE ALL MONEYS NOW WITHHELD BY IT, DUE AS FREIGHT CHARGES EARNED BY THE PRINCIPAL, WHICH FREIGHT CHARGES WERE WITHHELD TO INSURE THE COLLECTIBILITY OF THE DAMAGE TO THE SHIPMENT IN QUESTION AND AGREES THAT NO FURTHER SUMS WILL BE WITHHELD ON ACCOUNT THEREOF UNTIL TEN (10) DAYS AFTER AGREEMENT BETWEEN THE PARTIES OR NOTICE BY ANY OF THE PARTIES TO DISCONTINUE THE BOND ARRANGEMENT, OR AFTER THE FINAL LEGAL DETERMINATION (IN A CASE PENDING IN THE UNITED STATES COURT OF CLAIMS, STYLED C AND H TRANSPORTATION CO., INC. V. UNITED STATES OF AMERICA, CT.CL. NO. 373-65) AS TO WHETHER THE LIABILITY FOR THE DAMAGE TO A SHIPMENT SIMILAR TO THE ONE IN QUESTION IS LIMITED TO THE AMOUNT CLAIMED BY THE PRINCIPAL OR TO THE AMOUNT CLAIMED BY THE OBLIGEE.'

WE ALSO SUGGEST THAT PARAGRAPH 3 ON PAGE 3 BE AMENDED TO READ AS FOLLOWS:

"3. THE SURETY HEREBY GUARANTEES THE FULL AND PROMPT PAYMENT OF THE BALANCE BETWEEN THE SUM ALREADY PAID IN THE AMOUNT OF TWENTY THREE THOUSAND EIGHT HUNDRED AND THIRTY-SEVEN AND 76/100 ($23,837.76) DOLLARS AND ONE HUNDRED THOUSAND ($100,000.) DOLLARS (EQUALLING THE SUM OF SEVENTY-SIX THOUSAND ONE HUNDRED AND SIXTY-TWO AND 24/100 ($76,162.24) DOLLARS) WHICH IS THE LIMITATION OF COVERAGE PROVIDED BY THE PRIMARY INSURANCE COMPANY, UNLESS THERE IS AN AGREEMENT BETWEEN THE PARTIES FOR THE PAYMENT OF A LESSER SUM, OR UNLESS THERE IS A FINAL DETERMINATION OF THE LEGAL ISSUE IN THE SUIT BROUGHT BY THE PRINCIPAL, CT.CL. NO. 373 65, AS MENTIONED HEREINABOVE IN PARAGRAPH 2, IN WHICH CASE THE SURETY WILL PAY THE DIFFERENCE, IF ANY, BETWEEN SUCH AGREED OR DETERMINED SUM AND THE AMOUNT OF TWENTY-THREE THOUSAND EIGHT HUNDRED AND THIRTY-SEVEN AND 76/100 ($23,837.76) DOLLARS, BUT IN NO EVENT MORE THAN SEVENTY-SIX THOUSAND ONE HUNDRED AND SIXTY-TWO AND 24/100 ($76,162.24) DOLLARS. THE PRINCIPAL AND SURETY RESERVE ALL RIGHTS WITH RESPECT TO AN APPROPRIATE DETERMINATION AS TO THE MAXIMUM AMOUNT OF PECUNIARY LIABILITY ARISING BY REASON OF THE DAMAGE TO THE PROPERTY MOVING UNDER GOVERNMENT BILL OF LADING NO. B- 8701711 UNDER THE PRINCIPLE OF THE FINAL LEGAL DETERMINATION IN CT.CL. NO. 373-65, WHICH SHALL BE WITHOUT PREJUDICE TO FURTHER NEGOTIATION OR ADJUDICATION FOR THE PURPOSE OF FIXING THE MAXIMUM VALUE OF THE DAMAGE UNDER SUCH PRINCIPLE.'

UPON SUBMISSION OF A BOND IN THE FORM SUBMITTED BY YOU WITH THE SUGGESTED OR ACCEPTABLE SUBSTITUTE MODIFICATIONS, THE ARMY FINANCE CENTER WILL GIVE CONSIDERATION TO THE CARRIER'S REQUEST FOR REFUND OF THE MONEY DEDUCTED IN NOVEMBER 1965. WE ENCLOSE A COPY OF OUR LETTER OF TODAY TO MR. CARL L. PHINNEY, COUNSEL FOR THE CARRIER.