B-170663, JAN 21, 1971

B-170663: Jan 21, 1971

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WHERE A GOVERNMENT BILL OF LADING WAS ISSUED TO AUTHORIZE THE INTERSTATE SHIPMENT OF HOUSEHOLD GOODS OWNED BY A FOREST SERVICE EMPLOYEE. THE CARRIER'S ACTION IN FILING THE EMPLOYEE'S DAMAGE CLAIM WITH THE CARRIER'S INSURER DOES NOT RELEASE THE CARRIER FROM FURTHER LIABILITY AND WHERE THE RECORD INDICATES THE CARRIER'S EMPLOYEES WERE UNCOOPERATIVE AND FAILED TO HAVE THE DAMAGED GOODS INSPECTED AND THE CARRIER HAS BEEN SLOW TO RESPOND OR TO COOPERATE FULLY IN SETTLING THE CLAIM. THERE IS NO REASON WHY THE ALLOWANCE OF A CLAIM UNDER THIS ACT CANNOT BE CONSIDERED TO OPERATE AS AN ASSIGNMENT TO THE U.S. THE ESSENTIAL FACTS SUPPORTING THE CLAIM ARE THAT A GOVERNMENT BILL OF LADING WAS ISSUED TO FAR-GO VAN LINES.

B-170663, JAN 21, 1971

TRANSPORTATION - HOUSEHOLD EFFECTS - LOSS OR DAMAGE IN TRANSIT - ASSIGNMENT OF CLAIM TO GOVERNMENT CONCERNING CLAIM BY FAR-GO LINES, INC., AGAINST THE FOREST SERVICE FOR $1,196.50, REPRESENTING AMOUNT WITHHELD BECAUSE OF AN EMPLOYEE'S HOUSEHOLD GOODS LOSS AND DAMAGE CLAIM AGAINST THE CARRIER. WHERE A GOVERNMENT BILL OF LADING WAS ISSUED TO AUTHORIZE THE INTERSTATE SHIPMENT OF HOUSEHOLD GOODS OWNED BY A FOREST SERVICE EMPLOYEE, THE EMPLOYEE'S DECLARATION OF EXCESS VALUATION ON THE SHIPMENT LATER FOUND TO BE DAMAGED, AND THE CARRIER'S ACTION IN FILING THE EMPLOYEE'S DAMAGE CLAIM WITH THE CARRIER'S INSURER DOES NOT RELEASE THE CARRIER FROM FURTHER LIABILITY AND WHERE THE RECORD INDICATES THE CARRIER'S EMPLOYEES WERE UNCOOPERATIVE AND FAILED TO HAVE THE DAMAGED GOODS INSPECTED AND THE CARRIER HAS BEEN SLOW TO RESPOND OR TO COOPERATE FULLY IN SETTLING THE CLAIM, THE EMPLOYEE SHOULD BE ENCOURAGED TO PRESENT HIS CLAIM UNDER FOREST SERVICE REGULATIONS IMPLEMENTING THE MILITARY PERSONNEL AND CIVILIAN EMPLOYEES CLAIM ACT OF 1964, AND THERE IS NO REASON WHY THE ALLOWANCE OF A CLAIM UNDER THIS ACT CANNOT BE CONSIDERED TO OPERATE AS AN ASSIGNMENT TO THE U.S. OF ANY RIGHTS THE EMPLOYEE HAS AGAINST THE CARRIER. THE CLAIM OF THE CARRIER THEN MAY BE DENIED, TO THE EXTENT OF THE AMOUNT PAID BY THE GOVERNMENT TO THE EMPLOYEE.

TO MR. KARL J. KELLNER:

WE REFER TO YOUR LETTER OF AUGUST 14, 1970, FILE 6540, WITH WHICH YOU ENCLOSED A CLAIM BY FAR-GO LINES, INC., NORFOLK, VIRGINIA, FOR $1,196.50.

THE ESSENTIAL FACTS SUPPORTING THE CLAIM ARE THAT A GOVERNMENT BILL OF LADING WAS ISSUED TO FAR-GO VAN LINES, A MOTOR COMMON CARRIER, BY THE U.S. FOREST SERVICE TO AUTHORIZE THE INTERSTATE SHIPMENT OF HOUSEHOLD GOODS OWNED BY A FOREST SERVICE EMPLOYEE. THE EMPLOYEE RELEASED THE GOODS AT ACTUAL VALUE AND INCURRED AN EXCESS VALUATION CHARGE. AT DESTINATION THE EMPLOYEE NOTED EXTENSIVE DAMAGE TO HIS HOUSEHOLD GOODS AND FILED A CLAIM IN EXCESS OF $4,000 WITH THE CARRIER. THE CARRIER OFFERED TO SETTLE FOR $436, WHICH WAS REFUSED BY THE EMPLOYEE.

THE CARRIER'S BILL FOR $2,755.82, THE FREIGHT CHARGES ON THE SHIPMENT, WAS RECEIVED BY THE FOREST SERVICE BUT WAS PAID IN THE REDUCED AMOUNT OF $1,559.32, THE BALANCE OF $1,196.50 BEING WITHHELD BECAUSE OF THE EMPLOYEE'S LOSS AND DAMAGE CLAIM AGAINST THE CARRIER.

THE CARRIER, IN CLAIMING THE AMOUNT WITHHELD, CONTENDS THAT THE EMPLOYEE'S DECLARATION OF EXCESS VALUATION ON THE SHIPMENT LATER FOUND TO BE DAMAGED AND THE CARRIER'S ACTION IN FILING SUCH EMPLOYEE'S DAMAGE CLAIM WITH THE CARRIER'S INSURER RELEASES THE CARRIER FROM FURTHER LIABILITY.

YOU ASK WHETHER THE CARRIER'S ASSERTION IS TRUE, WHETHER IF TRUE, YOU HAVE AUTHORITY TO CONTINUE WITHHOLDING PART OF THE FREIGHT CHARGES PENDING SETTLEMENT OF THE EMPLOYEE'S CLAIM WITH THE CARRIER'S INSURER, AND WHETHER, IF THE CARRIER IS LIABLE AND TAKES NO SETTLEMENT ACTION, THE WITHHELD AMOUNT CAN BE PAID TO THE EMPLOYEE.

THE CARRIER'S ASSERTION IS NOT TRUE. A MOTOR COMMON CARRIER OF AN INTERSTATE SHIPMENT IS LIABLE FOR ANY LOSS OF OR DAMAGE TO THE SHIPMENT WHILE IT IS IN THE CARRIER'S POSSESSION. SEE SECTION 20(11) OF THE INTERSTATE COMMERCE ACT, AS AMENDED, 49 U.S.C. 20(11), MADE APPLICABLE TO MOTOR CARRIERS BY SECTION 219 OF THE ACT, 49 U.S.C. 319. AND UNDER SECTION 215 OF THE ACT, 49 U.S.C. 315, THE INTERSTATE COMMERCE COMMISSION HAS REQUIRED MOTOR CARRIERS TO CARRY A MINIMUM OF $2,500 IN CARGO INSURANCE. SEE 49 CFR 1043.2(B). THE LAWFUL HOLDER OF THE BILL OF LADING HAS THE OPTION OF PROCEEDING AGAINST EITHER THE CARRIER OR ITS INSURER AND THE DECLARATION OF EXCESS VALUATION AND THE CARRIER'S ACTION IN FILING THE OWNER'S DAMAGE CLAIM WITH THE CARRIER'S INSURER DOES NOT RELEASE THE CARRIER FROM LIABILITY.

HOWEVER, WHERE THE GOVERNMENT CONTRACTS FOR THE TRANSPORTATION OF THE PRIVATE PROPERTY OF ITS EMPLOYEES WE HAVE NOT GENERALLY CONSIDERED THAT THE GOVERNMENT IS UNDER ANY OBLIGATION TO PROSECUTE THE LOSS AND DAMAGE CLAIM OF THE OWNER OF THE PROPERTY AGAINST THE CARRIER. 21 COMP. GEN. 894 (1942); 38 COMP. GEN. 314 (1958); COMPARE 18 COMP. GEN. 164 (1938).

FURTHER, THE ENACTMENT OF THE MILITARY PERSONNEL AND CIVILIAN EMPLOYEES' CLAIMS ACT OF 1964, PUB. L. 88-558, APPROVED AUGUST 31, 1964, 78 STAT. 768, AS AMENDED, 31 U.S.C. 240-243, APPARENTLY DOES NOT REQUIRE ANY CHANGE IN THAT VIEW. UNDER THAT ACT, AN AGENCY MAY SETTLE CLAIMS OF EMPLOYEES FOR DAMAGE TO OR LOSS OF PROPERTY INCIDENT TO THEIR SERVICE. HOWEVER, UNTIL AN AGENCY SETTLES AN EMPLOYEE'S CLAIM UNDER THE ACT, AND THUS BECOMES SUBROGATED TO THE EXTENT OF THE PAYMENT TO HIS RIGHTS, THE EMPLOYEE'S CLAIM GENERALLY HAS BEEN CONSIDERED AS REMAINING ONE FOR ADJUSTMENT BETWEEN HIM AND THE CARRIER.

BUT HERE THE RECORD INDICATES THAT AT DESTINATION THE CARRIER'S EMPLOYEES WERE UNCOOPERATIVE AND FAILED TO HAVE THE DAMAGED HOUSEHOLD GOODS INSPECTED AND THE DAMAGE APPRAISED; IT ALSO INDICATES THAT THE CARRIER HAS BEEN SLOW TO RESPOND OR TO COOPERATE FULLY IN SETTLING THE CLAIM, AND THAT THE FOREST SERVICE DILIGENTLY HAS PURSUED THE EMPLOYEE'S CLAIM AGAINST THE CARRIER AND HAS ESTIMATED THAT THE VALUE OF THE CLAIM IS $1,196.50.

BECAUSE OF THESE FACTS AND BECAUSE NEARLY 18 MONTHS HAS ELAPSED SINCE THE DAMAGE OCCURRED, WE SUGGEST THAT THE EMPLOYEE BE ENCOURAGED TO EXPEDITIOUSLY PRESENT UNDER FOREST SERVICE REGULATIONS IMPLEMENTING THE CLAIMS ACT OF 1964 HIS CLAIM FOR DAMAGE TO OR LOSS OF HIS PERSONAL PROPERTY INCIDENT TO HIS GOVERNMENT SERVICE. AND WHILE THE FOREST SERVICE REGULATIONS DO NOT PRESENTLY SO PROVIDE, WE SEE NO REASON WHY THE ALLOWANCE OF A CLAIM UNDER THE CLAIMS ACT OF 1964 CANNOT BE CONSIDERED TO OPERATE AS AN ASSIGNMENT TO THE UNITED STATES, TO THE EXTENT SUCH CLAIM IS ALLOWED, OF ANY RIGHTS THE EMPLOYEE HAS AGAINST FAR-GO LINES. AND SINCE THE LAW LOOKS WITH DISFAVOR UPON CIRCUITY OF ACTION, THE CLAIM OF THE CARRIER THEN MAY BE DENIED, TO THE EXTENT OF THE AMOUNT PAID BY THE GOVERNMENT TO THE EMPLOYEE, AND THE CARRIER INFORMED OF THE ASSIGNMENT TO THE UNITED STATES OF THE EMPLOYEE'S CLAIM AGAINST THE CARRIER, WHICH - ASSUMING THE ALLOWANCE OF THE EMPLOYEE'S CLAIM IS EQUAL IN AMOUNT TO THE AMOUNT WITHHELD - IS CONSIDERED TO HAVE BEEN SATISFIED BY THE AMOUNT ALREADY WITHHELD FROM THE CARRIER'S FREIGHT BILL.

TO AVOID COMPLICATING APPROPRIATION PROBLEMS, ANY AMOUNT FOUND DUE THE EMPLOYEE UNDER THE CLAIMS ACT OF 1964 SHOULD BE PAID FROM THE APPROPRIATION ESTABLISHED FOR THE PAYMENT OF THOSE CLAIMS AND THE AMOUNT WITHHELD FROM THE CARRIER (OR, IF APPROPRIATE, ANY ADDITIONAL AMOUNT FOUND DUE) SHOULD BE DEPOSITED TO MISCELLANEOUS RECEIPTS.

WE NOTE THAT OTHER AGENCIES, PARTICULARLY THOSE IN THE DEPARTMENT OF DEFENSE, HAVE ISSUED COMPREHENSIVE REGULATIONS IMPLEMENTING THE CLAIMS ACT OF 1964, CITED ABOVE, WHICH ENCOMPASS SITUATIONS LIKE THE ONE INVOLVED HERE. THEY PROVIDE GENERALLY THAT IF THE EMPLOYEE IS UNSUCCESSFUL AFTER DILIGENTLY PURSUING HIS LOSS OR DAMAGE CLAIM WITH THE CARRIER, OR OTHER THIRD PARTY, THE EMPLOYEE MAY PRESENT A CLAIM TO THE AGENCY. SEE ARMY REGULATION 27-20, EFFECTIVE OCTOBER 1, 1969.

WE NOTE ALSO THAT YOUR LETTER INDICATES THE EMPLOYEE HAS BEEN BILLED FOR THE EXCESS WEIGHT OF THE HOUSEHOLD EFFECTS SHIPPED AND ASSUME AN APPROPRIATE ADJUSTMENT HAS BEEN OR WILL BE EFFECTED WITH HIM BECAUSE OF HIS ELECTION TO RELEASE THE GOODS AT A VALUATION IN EXCESS OF THAT AT WHICH THE LOWEST FREIGHT RATES WILL APPLY. SEE FSM 6543.5-46F.

THE PAPERS, WHICH WERE FORWARDED WITH YOUR LETTER, ARE RETURNED.