Towne International Forwarding, Inc.

B-260768 Dec 28, 1995 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights A carrier requested reconsideration of its claim for an Army offset for freight damages, contending that the Army improperly: (1) held it liable for damage to a member's carpet; and (2) calculated the refund that was due. GAO held that the Army: (1) reasonably held the carrier liable for damage to a member's carpet, since the carrier failed to examine the carpet before assuming custody; and (2) erroneously calculated the carrier's refund. Accordingly, the settlement was affirmed, but GAO referred the calculation of the carrier's refund to the Army Claims Service. View Decision Matter of: Towne International Forwarding, Inc. File: B-260768 Date: December 28, 1995 A carrier failed to unroll and inspect a service member's carpet when it obtained it from a nontemporary storage (NTS) contractor; therefore, it missed the opportunity to issue a rider noting any dry rot, mildew, or insect damage that may have existed at that time. Without such a rider, the carrier does not meet its burden to prove that these damages occurred during storage, and not during transit, when the carrier's remaining evidence consists only of: an appraiser's opinion (stated several months after delivery) that the carpet had become wet during storage; the comparative amount of time that carrier had custody of the carpet (11 days) versus the amount of time that NTS contractor had custody of it (more than 3 years); and water damage to another box in the shipment as noted on the rider. DECISION Towne International Forwarding, Inc. requests our review of this Office's settlement in which we affirmed the Army's offset of amounts it owed to Towne to recover for transit damages to a service member's household goods. [1] Towne claims that the Army owes it $1,500 because it was not liable for damage to item 120, an oriental carpet, and it seeks an additional $27 because of an error in the calculation of a refund on an eight-piece sectional. We affirm our prior settlement with respect to item 120, but remand this matter to the United States Army Claims Service to resolve an ambiguity concerning the amount of the refund on the sectional. In April 1987, a nontemporary storage (NTS) contractor packed and stored the service member's household goods. On August 10, 1990, Towne obtained the household goods from the NTS contractor in Indiana, and on August 21, 1990, it delivered them to the service member in Ohio. Towne's rider to the NTS contractor's inventory did not note any damage with respect to the carpet, but, following delivery, the service member reported dry rot damage. Several months after delivery, an appraiser found that the carpet was infested with live moths and active moth larva, and moth damage pervaded the entire carpet. The carpet also had extensive areas of mildew and dry rot, and in some areas the carpet had disintegrated from dry rot damage. It is undisputed that an undamaged carpet of this type was worth about $1,500. Towne argues that there is no prima facie liability against it for any of this damage because the damage was an inherent vice. The company directs us to the Department of Defense (DOD) Personal Property Traffic Management Regulation, DOD Reg. 4500.34-R and cites specifically item 5 of the Domestic Personal Property Rate Solicitation D-1. Item 5,2,d(6) of the Domestic Personal Property Rate Solicitation D-1 stated that a carrier is not responsible for loss or damage caused by the "inherent vice of the article or infestations by mollusks, arachnids, crustaceans, parasites, or other types of pests; fumigations or decontamination when not the fault of the carrier." Finally, Towne directs our attention to the finding of the appraiser that the carpet became wet during storage and that it had noted on its rider that some boxes in the shipment had exhibited indications of having been wet. The preliminary issue is whether the shipper established a prima facie case of carrier liability. To do so, the shipper must show tender of the goods to the carrier, delivery in a more damaged condition, and the amount of damages. See Missouri Pacific Railroad Co. v. Elmore & Stahl, 377 U.S. 134, 138 (1964). Moreover, when goods pass through the custody of more than one bailee, it is a presumption of the common law that the damage occurred in the hands of the last one. See Stevens Transportation Co., Inc., B-243750, Aug. 28, 1991. The carrier then bears the burden of proving either that the damage did not occur while in its custody or that the damage can be attributed to one of five exceptions. See McNamara-Lunz Vans and Warehouses, Inc., 57 Comp.Gen. 415, 418 (1978).