Carrier Request for Refund of Setoff Charges by Department of Navy

B-193195: May 7, 1979

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A mobile home transported for a member of the Navy was delivered by the carrier in damaged condition, and the Navy collected $6,000 from the carrier for the damage. The carrier requested a review of the setoff action. Liability for a small part of the damages, caused by the mobile home's collision with a telephone pole, was admitted by the carrier. For the major portion of the damages, however, the carrier asserted that previous repair of the spring hangers on the mobile home had caused a weakened undercarriage and that this condition constituted an inherent vice exception to common carrier liability. By definition, an inherent vice must be caused entirely by internal decomposition or some quality in the property which brings about its own injury or destruction. The mobile home's collision with a telephone pole constituted an outside influence and, therefore, the carrier failed to prove that the damage was due to an inherent vice. The Navy's determination of the amount of damages, however, was in error. The Navy estimated the mobile home's salvage value of $1,500 and deducted this amount from the amount of damages estimated at $7,500. The general rule for measuring damages for freight shipments is the difference between the market value of the property at destination had damages not occurred and its value in damaged condition. An appraisal guide showed the market value of this mobile home was $4,695. Thus, the correct computation would be $4,695 minus the Navy's estimated salvage value of $1,500, or $3,195. This would allow the carrier $2,805 of its claim for $6,000 ($6,000 less $3,195).

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