B-238982.2, Jun 3, 1991, 91-1 CPD ***

B-238982.2: Jun 3, 1991

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The carrier is liable for loss unless the record establishes delivery. Was correct in setting off for a bicycle the member did not report as missing until after delivery. Depreciation normally is not charged against items for time in storage. If that amount is less than the amount paid by the Army. So that if depreciation is not charged against items for time in storage for purposes of reimbursing the member. National argues that it should be responsible for delivering items in the same condition they were in when National received them. Not the condition they were in when given to the carrier that originally put them in storage. The regulation provides that the carrier is liable for any item's depreciated value.

B-238982.2, Jun 3, 1991, 91-1 CPD ***

PROCUREMENT - Payment/Discharge - Shipment - Carrier liability - Amount determination DIGEST: 1. Under Army claims regulations, both in compensating a member for an item lost in connection with a change of station move, and in computing the carrier's liability for the loss, the agency should not charge depreciation against the item for a storage period. PROCUREMENT - Payment/Discharge - Shipment - Carrier liability - Burden of proof PROCUREMENT - Payment/Discharge - Shipment - Losses - Common carriers - Notification 2. When a shipper provides timely notice of loss of an item, the carrier is liable for loss unless the record establishes delivery.

National Forwarding Co., Inc. - Reconsideration:

National Forwarding Co., Inc., asks that we reconsider a decision by our Office concerning an Army set-off against funds due National in connection with the loss of an Army member's household goods during shipment. In the decision, National Forwarding Co., Inc., B-238982, June 22, 1990, we reversed our Claims Group's disallowance of the set off, in response to an appeal by the U.S. Army Claims Service. Specifically, we found that the Army properly had not depreciated a lost and a damaged item in calculating the set-off, and was correct in setting off for a bicycle the member did not report as missing until after delivery.

We deny National's request for reconsideration.

The first issue on appeal concerns the lost and damaged items.

The member's shipment had been in storage from August 1986 until the carrier picked it up on December 31, 1987, for delivery 1 month later. The Army did not depreciate a lost post-hole digger and a fishing rod in its set-off against the carrier based on paragraph 11-13 of Army Regulation 27-20, which provides that in compensating a member for loss or damage, depreciation normally is not charged against items for time in storage. The Claims Group agreed with the carrier that the cited regulation applies to the Army/member relationship, and has no effect on the carrier's liability. We noted in our decision that another section of the same Army regulation addressed a carrier's liability, generally limiting it to the depreciated value of an item if the carrier bases a settlement offer on the Joint Military/Industry Depreciation Guide, and if that amount is less than the amount paid by the Army. We held that the measure of depreciated value should be consistent throughout the regulation, so that if depreciation is not charged against items for time in storage for purposes of reimbursing the member, it should not be for purposes of the carrier's liability.

In appealing our decision, National reiterates the view that the Army regulation only defines the agency's payment responsibility to the member. National argues that it should be responsible for delivering items in the same condition they were in when National received them, not the condition they were in when given to the carrier that originally put them in storage. National objects to being held liable due to the application of any Army regulation, as opposed to an industry-military agreement.

We see no reason to change our view. As we stated in our decision, Army Regulation 27-20 must be read as a whole in order to understand the full scheme applicable to the resolution of loss or damage claims. The regulation provides that the carrier is liable for any item's depreciated value, and directs that the computation of depreciation not include a charge against goods during storage. /1/

Moreover, the paragraph in the Army regulation that addresses carrier liability applies to settlement offers based on the Depreciation Guide, which prescribes rates of depreciation that generally apply for purposes of settling loss or damage claims. The Depreciation Guide is an adjunct to the Military/Industry Memorandum of Understanding that sets out loss and damage rules for the movement of service members' household goods. its face, the regulation is not inconsistent with the military-industry arrangement, or otherwise improper.

National delivered the fishing rod broken, and lost the post-hole digger. In these circumstances, we see no unfairness or impropriety in calculating liability according to the Army regulation.

The second issue involves National's liability for the lost bicycle. The Army held the carrier liable because the member furnished, and the carrier was provided, notice of the loss within 75 days after delivery, as allowed by the Memorandum of Understanding. The Claims Group disagreed because on the standard loss or damage form the member signed at delivery, Form 1840, the bicycle was checked off as having been delivered.

We held that in view of the 75-day notice rule, the fact that the bicycle was not reported as missing at delivery was not dispositive of liability for the item. Also, there was nothing in the record establishing that it was, in fact, the member (as opposed to the driver, for example), who checked the space next to the bicycle listing on the Form 1840 to represent that the item had been delivered.

National has furnished with its reconsideration request a signed statement by the driver that the service member checked off the bicycle. National suggests that unless we accept that statement as establishing delivery, we essentially would be holding that so long as the 75-day notice is properly sent the carrier never can prove delivery of an item claimed lost.

It is well-settled that the burden is on the carrier to prove that it was not liable for loss of a tendered item. See Missouri Pacific Railroad Co. v. Elmore Stahl, 377 U.S. 134 (1965). Our decision was clear that the 75- day notice, pursuant to industry-government agreement, simply means that the carrier cannot meet that burden by relying on the delivery receipt. The decision does not mean that other factors surrounding the tender and the alleged delivery cannot be considered in determining liability and, indeed, we have numerous decision on just that issue. See, e.g., Aalmode Transportation Corp., B-240350, Dec. 18, 1990; see also, ABF Freight System, Inc., B-203529.2, July 18, 1990.

In this case, the driver's statement that National now provides is undated, although it evidently was prepared almost 3 years after the shipment in issue, and shows delivery of bicycle parts instead of the full bicycle. In our view, such evidence does not establish delivery.

National's request for reconsideration is denied.

/1/ The regulation does, however, permit deductions "for other reasons, such as a reduction in the market value of an item because of changes in style or obsolescence." Paragraph 11-27.