B-234430.3, October 8, 1991

B-234430.3: Oct 8, 1991

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A Government Freight Loss/Damage Claim was prepared on January 18. The basis for that finding was the view that the regulations governing freight transportation services furnished for the government's account generally exempt the government from the time limitations in commercial bills of lading. The Claims Group further suggested that Roadway knew that the consignee was the government and. Roadway was estopped from asserting it because the government provided the carrier written notice of its claim by notation of damages on the delivery receipt at the time of delivery. When a commercial bill of lading unavoidably is used in unauthorized circumstances. Where that is done. A vehicle was transported from New York to a government consignee in Rio de Janeiro under a commercial ocean bill of lading with charges prepaid. in the case before us.

B-234430.3, October 8, 1991

PRECIS-UNAVAILABLE

Roadway Express, Inc.:

Roadway Express, Inc., requests review of our Claims Group' s settlement denying its claim for a refund of $495, which the Navy set off from other revenues due the carrier, for damage to a desk transported in March 1989. We reverse the Claims Group's settlement.

Roadway received the desk from a vendor in Muscatine, Iowa, on March 10, 1989, and delivered it to a government consignee at the Naval Air Station in Pensacola, Florida, on March 23. The shipment moved under a commercial bill of lading, f.o.b. origin with charges prepaid. Upon delivery, the consignee noted damages by annotating the delivery receipt; a Government Freight Loss/Damage Claim was prepared on January 18, 1990. Roadway denies liability because the government did not file the claim for damages within 9 months of delivery as required in the commercial bill of lading.

The Claims Group decided that the 9-month limitation did not apply. The basis for that finding was the view that the regulations governing freight transportation services furnished for the government's account generally exempt the government from the time limitations in commercial bills of lading. The Claims Group further suggested that Roadway knew that the consignee was the government and, as a carrier participating in government traffic, that the government's regulations nullified the commercial bill's 9-month limitation on presenting claims. Even if the 9-month limitation applied, the Claims Group found, Roadway was estopped from asserting it because the government provided the carrier written notice of its claim by notation of damages on the delivery receipt at the time of delivery.

We do not agree with the Claims Group.

The specific regulation in issue, 41 C.F.R. Sec. 101-41.303-1, requires that Government Bill of Lading (GBL) procedures be followed to preclude a commercial bill from being used on government shipments, except as otherwise authorized. But, when a commercial bill of lading unavoidably is used in unauthorized circumstances, "the words 'TO BE CONVERTED TO A U.S. GOVERNMENT BILL OF LADING' must be conspicuously inscribed on the original and all copies of the commercial document." Where that is done, the terms and conditions of the commercial bill of lading generally do not apply to the shipment.

In U.S. v. S.S. Mormacteal, 213 F.Supp. 149 (S.D.N.Y. 1962), the court had the opportunity to consider the effect of a similarly-worded predecessor to 41 C.F.R. Sec. 101-41.303-1, 4 C.F.R. Sec. 52.19. There, a vehicle was transported from New York to a government consignee in Rio de Janeiro under a commercial ocean bill of lading with charges prepaid. in the case before us, the inscription required by the regulation was not placed on the ocean bill. The government argued that 4 C.F.R. Sec. 52.19 converted the commercial ocean bill of lading into a GBL by operation of law, and that the 1 year limitation for bringing action contained in the commercial bill therefore was inapplicable.

The court held that 4 C.F.R. Sec. 52.19 did not in itself convert a commercial bill of lading into a GBL, and that evidence must exist to show that both parties contemplated conversion. The court stated that the regulation "was not intended to be anything more than a direction to Government agencies with respect to transportation contracts," and that nothing in the regulation suggested that if it were disregarded a commercial bill of lading would still be converted. U.S. v. S.S. Mormacteal, at 151. The court therefore applied the 1-year limitation against the government.

We adopted the court's rationale in an analogous situation in Trans Country Van Lines, Inc., B-176289, Oct. 23, 1973, aff'd, 53 Comp.Gen. 866 (1974). Therefore, where the intent to convert to a GBL is not evident from the commercial documentation, we will not assume that both parties intended to convert, and the commercial bill's terms and conditions will apply to the transportation contract. The 9-month filing limit in the commercial bill of lading consequently applies to this shipment.

Moreover, we do not consider the consignee's notations of damage on the delivery receipt to be the equivalent of a claim, or that, in any event, Roadway is estopped from asserting that the government's claim for damages was untimely. Minimum filing requirements for a loss or damage claim include claiming payment of a specified or determinable amount of money. 49 C.F.R. Sec. 1005.2(b). Notations of damage on freight bills or delivery receipts standing alone are not sufficient to comply with minimum filing requirements. 49 C.F.R. Sec. 1005.2(c).

Also, the invocation of estoppel depends on the facts of the particular case involved. For example, in South Carolina Steel Corp. v. Southern Railway Co., 206 S.E. 2d 828 (S.C. 1974), a case cited by the Claims Group in its settlement certificate, the carrier had written notice of the damage 6 months before the shipper did, and the shipper then followed the carrier's instructions on completing the claim and submitting statements showing the cost of repairs. The court, for these reasons, found the carrier estopped for asserting that the claim was untimely because it was filed more than 9 months after delivery.

Here, by contrast, there is no indication of active carrier participation in the claim process until almost a month after the notification period expired. The government has offered no explanation for its delay in filing a claim with the carrier. In these circumstances, estoppel against the carrier is inappropriate.

The Claims Group's settlement is reversed.