Atlas Van Lines--Claim for Reimbursement of Amounts

B-261348 Feb 16, 1996 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Although a carrier is generally liable for all damage to property in its control. The carrier will not be held liable if it shows that the damage was caused by an act of God as long as there is no intervening fault on the part of the carrier. The carrier is liable for the damage which results. The carrier has the burden of proving that it was not negligent. DECISION This is in response to an appeal of a Claims Group settlement which denied the claim of Atlas Van Lines for reimbursement of amounts collected by setoff for loss of household goods in storage during the Great Midwest Flood of 1993. [1] We affirm the Claims Group's settlement. Were in storage under government bill of lading No. Sergeant Anderson's household goods were destroyed. View Decision Matter of: Atlas Van Lines--Claim for Reimbursement of Amounts Collected by Setoff for Loss of Household Goods File: B-261348 Date: February 16, 1996 Although a carrier is generally liable for all damage to property in its control, the carrier will not be held liable if it shows that the damage was caused by an act of God as long as there is no intervening fault on the part of the carrier. When the carrier has adequate notice of severe flooding and fails to move property in its control, that failure constitutes the intervening fault of negligence, and the carrier is liable for the damage which results. The carrier has the burden of proving that it was not negligent. DECISION This is in response to an appeal of a Claims Group settlement which denied the claim of Atlas Van Lines for reimbursement of amounts collected by setoff for loss of household goods in storage during the Great Midwest Flood of 1993. [1] We affirm the Claims Group's settlement. At the time of the Great Midwest Flood of 1993, the household goods of Staff Sergeant Nick Anderson, USAF, were in storage under government bill of lading No. SP-011,693 at ABC Moving and Storage, an agent of Atlas Van Lines, in Chesterfield, Missouri. On July 31, 1993, the Monarch Chesterfield levee on the Missouri River failed. In the flooding that followed, Sergeant Anderson's household goods were destroyed. The Air Force paid Sergeant Anderson $19,373.95, and then collected $3,400.00 from Atlas by offset. The Claims Group denied Atlas's claim for reimbursement of the $3,400.00, on the grounds that Atlas should have taken steps to protect the household goods in its warehouse and was negligent for not doing so. Atlas argues that its warehouse was not in the Chesterfield flood plain and that it had very little notice that the levee which protected the warehouse would fail. Although a carrier is generally liable for all damage to property in its control, the carrier will not be held liable if it shows that the damage was caused by certain events beyond its control and there is no intervening fault attributable to the carrier. Missouri Pacific R.R. Co. v. Elmore & Stahl, 377 U.S. 134 (1964); Mamiye Bros. v. Barber S.S. Lines, Inc., 241 F. Supp. 99 (1965); Richard R. Sigmon, Miller's Law of Freight Loss and Damage Claims, 83 (4th ed. 1974). A flood can constitute an act of God sufficient to relieve a carrier if it is extraordinary as long as there is no intervening fault attributable to the carrier. 1 Am. Jur. 2d Act of God Sec. 5 (1994). In the present situation, there is no question that the flooding which occurred in the Midwest in 1993 was extraordinary and was sufficient to constitute an act of God. However, the Air Force determined that Atlas's agent had adequate notice of the approaching flood and should have moved Sergeant Anderson's household goods out of the path of the flood. [2] Therefore, in the Air Force's view, Atlas was liable because of the intervening fault of negligence. The burden is on Atlas to prove that it was not negligent for its failure to move the household goods. See 377 U.S. at 134. Because Atlas disputed the Air Force's characterization of its agent's location, we contacted Missouri officials who informed us that its agent is located in zone B on the flood plain map. Zone A is the primary flood plain area, but flooding can occur in zone B under certain circumstances. The area around the warehouse in question was in zone B because it was protected by a levee, but that levee was only expected to prevent flooding completely if the flood were less than a 100-year flood. From the beginning, the 1993 flood was significantly more severe than a 100-year flood and was eventually determined to be a 300-year flood. The climax of the flood for Chesterfield was the structural failure of the Monarch Chesterfield levee.