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B-185283, JUN 22, 1978

B-185283 Jun 22, 1978
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CLEAR DELIVERY RECEIPT IS NOT CONCLUSIVE ON CARRIER'S LIABILITY FOR DAMAGE TO AIRCRAFT ENGINE WHICH WAS DISCOVERED 1 1/2 HOURS AFTER DELIVERY SINCE PROOF OF DAMAGE CAN BE MADE BY OTHER MEANS. 2. PRIMA FACIE CASE OF COMMON CARRIER LIABILITY IS ESTABLISHED WHEN SHIPPER SHOWS DELIVERY TO CARRIER IN GOOD CONDITION. ONCE PRIMA FACIE CASE IS ESTABLISHED BURDEN OF PROOF SHIFTS TO CARRIER AND REMAINS THERE. TO ESCAPE LIABILITY CARRIER MUST SHOW THAT LOSS OR DAMAGE WAS DUE TO ONE OF THE EXCEPTED CAUSES AND THAT IT WAS FREE OF NEGLIGENCE. 3. IS VALID SINCE SUCH CORRECTION IS INTENDED TO REMEDY A DISCREPANCY IN FACT RATHER THAN TO CREATE A FACT. 4. IF RELEASED VALUATION PROVISION WERE APPLICABLE IN PRESENT CASE.

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B-185283, JUN 22, 1978

DIGEST: 1. CLEAR DELIVERY RECEIPT IS NOT CONCLUSIVE ON CARRIER'S LIABILITY FOR DAMAGE TO AIRCRAFT ENGINE WHICH WAS DISCOVERED 1 1/2 HOURS AFTER DELIVERY SINCE PROOF OF DAMAGE CAN BE MADE BY OTHER MEANS. 2. PRIMA FACIE CASE OF COMMON CARRIER LIABILITY IS ESTABLISHED WHEN SHIPPER SHOWS DELIVERY TO CARRIER IN GOOD CONDITION, DELIVERY BY CARRIER AT DESTINATION IN DAMAGED CONDITION, AND AMOUNT OF DAMAGES. ONCE PRIMA FACIE CASE IS ESTABLISHED BURDEN OF PROOF SHIFTS TO CARRIER AND REMAINS THERE. TO ESCAPE LIABILITY CARRIER MUST SHOW THAT LOSS OR DAMAGE WAS DUE TO ONE OF THE EXCEPTED CAUSES AND THAT IT WAS FREE OF NEGLIGENCE. 3. CORRECTION OF BILL OF LADING TO PROPERLY CLASSIFY AIRCRAFT ENGINE, RESULTING IN ELIMINATION OF RELEASED VALUATION PROVISION SO THAT CARRIER BECAME LIABLE FOR ACTUAL COST OF REPAIR, IS VALID SINCE SUCH CORRECTION IS INTENDED TO REMEDY A DISCREPANCY IN FACT RATHER THAN TO CREATE A FACT. 4. IF RELEASED VALUATION PROVISION WERE APPLICABLE IN PRESENT CASE, CARRIER WOULD NONETHELESS BE LIABLE FOR DAMAGED ENGINE'S ACTUAL COST OF REPAIR SINCE RELEASED VALUE MUST BE APPLIED TO WEIGHT OF COMPLETE ARTICLE SHIPPED, THE ENGINE, AND NOT MERELY TO THE WEIGHT OF THE ENGINE PART ACTUALLY DAMAGED.

LEE WAY MOTOR FREIGHT, INC.:

THIS DECISION IS IN RESPONSE TO A LETTER FROM LEE WAY MOTOR FREIGHT, INC. (LEE WAY) REQUESTING A REVIEW OF OUR CLAIMS DIVISION'S DISALLOWANCE OF LEE WAY'S CLAIM FOR $3,679.20, CLAIMS DIVISION FILE NO. Z-1172539(4). THE CLAIM REPRESENTS THE AMOUNT COLLECTED BY THE GOVERNMENT BY SETOFF FROM MONIES OTHERWISE DUE LEE WAY TO SATISFY THE GOVERNMENT'S CLAIM FOR DAMAGE AGAINST THE CARRIER.

LEE WAY'S CLAIM ARISES FROM DAMAGES SUSTAINED TO AN AIRCRAFT ENGINE WHILE IN TRANSPORT FROM LITTLE ROCK AIR FORCE BASE, JACKSONVILLE, ARKANSAS, TO DAVIS-MONTHAN AIR FORCE BASE, ARIZONA, ON GOVERNMENT BILL OF LADING NO. H- 1448244, DATED JULY 28, 1972. OUR CLAIMS DIVISION FOUND THAT EVEN THOUGH THE DELIVERY RECEIPT HAD BEEN SIGNED WITHOUT EXCEPTION, IT WAS NOT CONCLUSIVE AND DID NOT PREVENT PROOF OF DAMAGE BY OTHER MEANS. DETERMINED THAT THIS PROOF HAD BEEN SUPPLIED THROUGH EVIDENCE THAT ENGINE SHOP PERSONNEL HAD DISCOVERED THE DAMAGE WHEN THEY REMOVED THE ENGINE'S PROTECTIVE PLASTIC WRAPPING ONLY ONE AND ONE HALF HOURS AFTER DELIVERY, THAT A CLOSER EXAMINATION OF THE PLASTIC WRAPPING HAD REVEALED THAT THE WRAPPER HAD BEEN BRUISED AND PUNCTURED, AND THAT IT WAS NOT PROBABLE FOR THE DAMAGE TO HAVE OCCURRED UNDER THE TOWING PROCEDURES THE AIR FORCE USED TO TRANSPORT THE ENGINE FROM THE DELIVERY POINT. BASED ON THIS EVIDENCE, THE CLAIMS DIVISION DETERMINED THAT A PRIMA FACIE CASE OF CARRIER LIABILITY HAD BEEN ESTABLISHED SO THAT THE BURDEN OF PROOF SHIFTED TO LEE WAY TO EXPPLAIN THE DAMAGE. THE CLAIMS DIVISION THEN CONCLUDED THAT SINCE LEE WAY HAD NOT PRESENTED ANY EVIDENCE TO OVERCOME THE PRIMA FACIE CASE OF CARRIER LIABILITY, ITS CLAIM COULD NOT BE AUTHORIZED FOR PAYMENT.

IN ITS REQUEST FOR REVIEW, LEE WAY CONTENDS THAT CARRIER LIABILITY HAS NOT BEEN ESTABLISHED, AND THAT THE GOVERNMENT HAS THE BURDEN OF OVERCOMING A PRESUMPTION OF DELIVERY WITHOUT DAMAGE AS EVIDENCED BY LEE WAY'S CLEAR DELIVERY RECEIPT. IN THE ALTERNATIVE, LEE WAY MAINTAINS THAT THE SHIPMENT HAD BEEN MOVED AT A RELEASED VALUE OF $2.50 PER POUND SO THAT ITS MAXIMUM LIABILITY SHOULD BE ONLY $2.50 TIMES THE WEIGHT OF THE DAMAGED REAR TURBINE SUPPORT - ESTIMATED BY LEE WAY TO WEIGHT BETWEEN 175 AND 200 POUNDS. FINALLY, LEE WAY ALSO QUESTIONS THE TWO YEAR DELAY BETWEEN THE DISCOVERY OF THE DAMAGE AND THE REPAIRING OF THE ENGINE.

THE RULE IS WELL SETTLED THAT A CLEAR DELIVERY RECEIPT IS NOT CONCLUSIVE AND DOES NOT PREVENT PROOF OF DAMAGE BY OTHER MEANS. RHOADES, INC. V. UNITED AIR LINES, INC., 340 F.2D 481, 486, 487 (3RD CIR. 1965); RED ARROW FREIGHT LINES, INC. V. HOWE, 480 S.W.2D 281, 287 (TEX. CIV. APP. 1972); 54 COMP.GEN. 742, 745 (1975). THEREFORE, AS NOTED ABOVE, DESPITE THE FACT THAT LEE WAY'S DELIVERY RECEIPT WAS SIGNED WITHOUT EXCEPTION, OTHER EVIDENCE HAS BEEN INTRODUCED TO PROVE THAT LEE WAY DELIVERED THE ENGINE IN A DAMAGED CONDITION.

SINCE THE RECORD SHOWS THAT LEE WAY RECEIVED THE ENGINE IN GOOD ORDER, THAT IT WAS DELIVERED IN DAMAGED CONDITION, AND THAT THE DAMAGES WERE $3,679.20, A PRIMA FACIE CASE OF CARRIER LIABILITY HAS BEEN ESTABLISHED. MISSOURI PACIFIC R.R. V. ELMORE & STAHL, 377 U.S. 134 (1964). THIS THEN SHIFTS THE BURDEN OF PROOF TO LEE WAY WHO, TO RELIEVE ITSELF OF LIABILITY, MUST SHOW BOTH THAT IT WAS FREE FROM NEGLIGENCE AND THAT THE DAMAGE TO THE ENGINE WAS DUE TO ONE OF THE EXCEPTED CAUSES WHICH RELIEVE IT OF LIABILITY. MISSOURI PACIFIC R.R. V. ELMORE & STAHL, SUPRA; SUPER SERVICE MOTOR FREIGHT CO. V. UNITED STATES, 350 F.2D 541 (6TH CIR. 1965); L. E. WHITLOCK TRUCK SERVICE, INC. V. REGAL DRILLING CO., 333 F.2D 488 (10TH CIR. 1964).

YET, LEE WAY HAS NOT PRESENTED ANY EVIDENCE TO OVERCOME THIS PRIMA FACIE CASE, BUT HAS IN FACT MERELY ALLEGED THAT THE DAMAGE IS DUE TO THE FAULT OF THE SHIPPER. MERE ALLEGATIONS, HOWEVER, ARE NOT SUFFICIENT TO OVERCOME THE GOVERNMENT'S CASE. IN ORDER TO REBUT THE FACTS PRESENTED IN SUPPORT OF THE GOVERNMENT'S CLAIM, LEE WAY MUST PRODUCE PLAIN AND CONVINCING PROOF THAT THE ADMINISTRATIVE REPORT IS IN ERROR. 48 COMP.GEN. 638, 644 (1969); B-181871, FEBRUARY 11, 1977. HAVING FAILED TO PRESENT SUCH PROOF, LEE WAY HAS ALSO FAILED TO PRESENT SUCH PROOF, LEE WAY HAS ALSO FAILED TO OVERCOME THE PRIMA FACIE CASE OF CARRIER LIABILITY.

IN THE ALTERNATIVE, LEE WAY HAS ARGUED THAT SINCE THE SHIPMENT WAS MOVED AT A RELEASED VALUE OF $2.50 PER POUND, ITS MAXIMUM LIABILITY SHOULD BE LIMITED TO $2.50 TIMES THE WEIGHT OF THE REAR TURBINE SUPPORT. THUS, SINCE THE RECORD INDICATES THAT THE WEIGHT OF THE TURBINE SUPPORT IS ONLY 170 POUNDS OUT OF THE TOTAL SHIPMENT WEIGHT OF 4,090 POUNDS, LEE WAY'S MAXIMUM LIABILITY UNDER THIS ARGUMENT WOULD BE $425.

HOWEVER, IT ALSO APPEARS FROM THE RECORD THAT THE AIR FORCE ISSUED A GOVERNMENT BILL OF LADING CORRECTION NOTICE (DD FORM 1352), DATED MARCH 4, 1974, WHICH PURPORTED TO CHANGE THE ENGINE'S BILL OF LADING DESCRIPTION (BASED ON THE NATIONAL MOTOR FREIGHT CLASSIFICATION (NMFC) A-12, MF-ICC 14) FROM NMFC ITEM 120820, SUB 2, "ENGINE, INTERNAL COMBUSTION, NOI," TO NMFC ITEM 12240, "AIRCRAFT POWER PACK (QUICK ENGINE - CHANGE UNIT AND ENGINE COMBINED)." A COPY OF THIS NOTICE WAS SENT TO JONES TRUCK LINES, INC., THE ORIGIN CARRIER. SUCH A CHANGE, IF PROPER, WOULD HAVE THE EFFECT OF ELIMINATING THE MAXIMUM RELEASED VALUE OF $2.50 PER POUND THAT LEE WAY RELIES ON TO LIMIT ITS LIABILITY SINCE, UNLIKE NMFC ITEM 120820, NMFC ITEM 12240 MAKES NO PROVISION FOR RELEASED VALUATION.

THE CORRECTION OF A BILL OF LADING BY A DD FORM 1352 IS NOT VALID IF SUCH CORRECTION IS MORE OF AN ATTEMPT TO CREATE A FACT RATHER THAN TO REMEDY SOME DISCREPANCY IN FACT. SEE B-177326, AUGUST 29, 1973. HERE, THE AIR FORCE ISSUED THE DD FORM 1352 ALMOST 22 MONTHS AFTER THE BILL OF LADING ITSELF HAD BEEN ISSUED APPARENTLY ON THE BELIEF THAT THE AIRCRAFT ENGINE HAD BEEN MISCLASSIFIED ON THE ORIGINAL BILL OF LADING.

SINCE THE GENERAL RULE IS THAT THE TEST FOR CLASSIFICATION PURPOSES IS THE CHARACTER OF THE ARTICLE SHIPPED RATHER THAN THE DESCRIPTION ON THE BILL OF LADING, THE CORRECTION IN THE ENGINE'S NMFC ITEM NUMBER IS ESSENTIALLY AN ATTEMPT TO REMEDY A DISCREPANCY IN FACT RATHER THAN TO CREATE A FACT. SEE BUCH EXPRESS, INC. V. UNITED STATES, 132 CT.CL. 772, 132 F. SUPP. 473 (1955), CERT. DENIED, 351 U.S. 940 (1956); 52 COMP.GEN. 924 (1973). THEREFORE, SUCH A CORRECTION IS VALID AND WOULD THUS HAVE THE EFFECT OF ELIMINATING THE RELEASED VALUATION WHICH LEE WAY RELYS ON TO LIMIT ITS LIABILITY.

ON THE OTHER HAND, THE LONG DELAY BETWEEN THE ISSUANCE OF THE BILL OF LADING AND THAT OF THE DD FORM 1352 RAISES SOME QUESTIONS AS TO THE TRUE PURPOSE OF THIS CORRECTION NOTICE. YET, ASSUMING WITHOUT DECIDING THAT THE SUBJECT DD FORM 1352 IS INVALID, LEE WAY'S LIABILITY FOR DAMAGE, EVEN UNDER THE RELEASED VALUATION OF $2.50 PER POUND, WOULD STILL BE FOR THE ACTUAL COST OF REPAIRS. THIS RESULT IS REACHED BECAUSE THE SIGNIFICANT WEIGHT FOR FIXING THE AMOUNT OF LIABILITY IS NOT THE WEIGHT OF THE REAR TURBINE SUPPORT, WHICH THE RECORD SHOWS TO BE 170 POUNDS, BUT THE WEIGHT OF THE ENTIRE ENGINE, WHICH THE BILL OF LADING SHOWS TO BE 4,090 POUNDS.

THE GENERAL RULE IS THAT WHERE LIABILITY IS LIMITED BY A RELEASED VALUATION, THE CARRIER'S LIABILITY FOR DAMAGES DEPENDS ON THE PARTICULAR LANGUAGE OF THE VALUATION CONDITIONS SET FORTH IN THE CONTRACT OF CARRIAGE, INCLUDING THE APPLICABLE TARIFF. THE ANSALDO SAN GIORGIO I V. RHEINSTROM BROTHERS CO., 294 U.S. 494, 496 (1935). IN ADDITION, ITEM 424 OF NMFC A-12 PROVIDES THAT WHEN THE PARTS AND PIECES OF A COMPLETE ARTICLE ARE RECEIVED ON ONE BILL OF LADING, THE ARTICLE WILL BE CHARGED FOR THE CLASS PROVIDED FOR THE COMPLETE ARTICLE.

HERE, THE PARTICULAR LANGUAGE OF THE RELEASED VALUATION PROVISION IS "RELEASED VALUE NOT TO EXCEED $2.50 PER POUND," AND THE COMPLETE ARTICLE UNDER NMFC ITEM 120820, SUB 2, IS ONE INTERNAL COMBUSTION ENGINE, NOI, NOT THE SEPARATE PARTS OF THAT ENGINE. THEREFORE, LEE WAY'S LIABILITY FOR THE DAMAGE, DISREGARDING THE DD FORM 1352, SHOULD BE THE ACTUAL COST OF REPAIRS ($3,679.20) SINCE THAT COST DOES NOT EXCEED THE LIMITATION OF $2.50 PER POUND ON THE TOTAL WEIGHT OF THE ENGINE - THE "ARTICLE" SUBJECT TO THE RELEASED VALUATION UNDER THE BILL OF LADING.

LEE WAY HAS ALSO QUESTIONED THE TWO-YEAR DELAY BETWEEN THE DISCOVERY OF THE DAMAGE AND THE REPAIRING OF THE ENGINE. HOWEVER, WE DO NOT SEE HOW THIS DELAY HAS PREJUDICED LEE WAY IN ANY WAY SO AS TO AFFECT OUR DECISION ON ITS LIABILITY.

IN RESPONSE TO LEE WAY'S INQUIRY ON FURTHER APPEAL RIGHTS, IT IS ADVISED THAT A REQUEST FOR RECONSIDERATION OF THIS DECISION MAY BE FILED WITH OUR OFFICE; HOWEVER, SUCH REQUEST SHOULD CONTAIN A DETAILED STATEMENT OF THE FACTUAL AND LEGAL GROUNDS UPON WHICH REVERSAL OR MODIFICATION OF THIS DECISION IS DEEMED WARRANTED, SPECIFYING ANY ERRORS OF LAW MADE OR INFORMATION NOT PREVIOUSLY CONSIDERED.

THE ACTION OF OUR CLAIMS DIVISION IN DISALLOWING LEE WAY'S CLAIM IS THEREFORE SUSTAINED.

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