Claim by Carrier for Air Force Setoff

B-199156: Mar 5, 1981

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A claim was presented by a firm which resulted from a setoff of that amount by the Air Force from monies otherwise due the firm. The Air Force made the setoff as subrogee to the rights of a member who had a claim against the firm for damage allegedly sustained by his house trailer during transportation. Subrogation occurred through the Air Force's payment to the member on his claim against the Air Force under the Military Personnel and Civilian Employee's Claims Act. The basis for the amount of the setoff action, which supported the member's claim, was a repairman's estimate of costs of repair. To present a prima facie case against the firm, the Air Force had to show that the trailer was delivered to the carrier in good condition, that it arrived at the destination in damaged condition, and the amount of damages. If these elements are shown, the carrier, to relieve itself of liability, must establish: (1) that damage was due to an excepted cause such as the inherent vice of the shipment or the act of the shipper, and (2) absence of carrier negligence. The Air Force contended that the evidence of record established a prima facie case of liability against the firm, that the firm failed to show the existence of an excepted cause or that it was free from negligence, that the record contained affirmative evidence of the firm's negligence, and that the evidence established damages to support its setoff. The firm asserted that some of the damage was caused by tire failure which constituted an inherent defect. It contended that there was no showing that the damage existed upon delivery by the carrier and that there was no evidence of its negligence. The bill of lading showed that the trailer was received by the firm in good order and condition. The firm accepted a letter from the recipient as evidence of damage. GAO found no merit in the firm's contention that tire failure, which caused the damage, was the result of an inherent defect. GAO believed that there was sufficient evidence to show that the damage occurred while the trailer was in the firm's possession and occurred reasonably contemporaneously with delivery. The record indicated that the damages were discovered and notice was given without significant delay. There was evidence of violent handling. As the record contained substantial evidence of the firm's liability for the damages, its claim was disallowed.