Pennsylvania Upholds Carmack's Application to Packing And Loading Activities For Household Goods Carrier, And Holds That Claim With No Monetary Damage Amount Fails To Meet Minimum Filing Requirements
August, 2007
The Middle District of Pennsylvania recently granted a Defendant household goods carrier’s Motion for Reconsideration, holding that the Court made a clear error of law in its prior holding that the Carmack Amendment did not apply to the Carrier’s packing and loading activities. The Court then applied Carmack and found that Plaintiffs failed to make a proper, timely claim against the Carrier. Lewis v. Atlas Van Lines, Inc., 2007 WL 1576452 (M.D.Pa. May 30, 2007).
Plaintiffs entered into a contract to sell their home in Pennsylvania. Id. at *1. Pursuant to the sales agreement, Plaintiffs were required to deliver “a vacant building” at the time of the closing, on August 27, 2004. Id. Plaintiffs entered into a contract with Warners Moving and Storage (“Warners”), an agent of Defendant, to pack, load and transport their household goods from Pennsylvania to their new home in New York. Id. A letter memorializing the agreement was issued and executed by Warners. Id. at *2.
Pursuant to the schedule set forth in the parties’ letter agreement, Warners arrived at the Pennsylvania residence and packed Plaintiffs’ goods. Id Warners also partially loaded goods into a moving van. Id. Warners, thereafter, failed to finish loading the goods prior to the August 27, 2004 closing. Id. Because Plaintiffs were unable to comply with the terms of their sale agreement, the purchasers terminated the transaction on August 27, 2004. Id.
On August 28, 2004, Warners returned to Plaintiff’s residence and completed the loading. Id. The shipment of household goods was thereafter moved pursuant to Atlas’ Household Goods Bill of Lading and Freight Bill Number C64174. Id.
On October 26, 2004, an attorney on behalf of Plaintiffs sent a letter to Defendant making a claim for the “loss of profit on the sale of their residence, additional mortgage payments and that [Plaintiffs] have had to pay on two mortgages on their Pennsylvania residence which otherwise would have been paid off at closing, and various other miscellaneous expenses they would not have otherwise incurred.” The letter further explained that an exact number for the loss could not be provided “until they are able to sell their Pennsylvania residence.” Id. at *3.
On November 4, 2004, Warners’ counsel acknowledged receipt of the October 26, 2004 letter and requested additional information and documentation from Plaintiffs in an effort to evaluate the claim. Id. Over one year later, on November 9, 2005, Plaintiffs sent a letter to Defendant fully explaining the damages. Id.
In its motion, Defendant argued that Plaintiffs’ claims relating to the packing and loading of the goods and failure to move the goods are within the scope of the Carmack Amendment and that the Court’s prior ruling to the contrary was a clear error of law. Id.
The Carmack Amendment governs an interstate carrier’s liability for damages arising from the interstate transportation of goods. Id.; see 49 U.S.C. 14706. Carmack provides the exclusive remedy against an interstate common carrier for breach of a carriage contract. Id. Under Carmack, carriers are fully liable for actual loss or injury to property. Id. To establish a prima facie case under Carmack, a shipper must prove: (1) delivery of goods to the initial carrier in good condition; (2) damage of the goods before delivery to their final destination; and (3) the amount of damages. Id.
49 U.S.C. 13102 specifically provides that “handling, packing [and] unpacking” are services included within the definition of “transportation” for purposes of Carmack. Id. at *4. Additionally, 49 U.S.C. 13102(12) provides that a “household goods motor carrier” offers within its scope of services “protective packing and unpacking of individual items at personal residences” and “loading and unloading at personal residences.” Id.
In its motion, Defendant argued that once it began the “transportation” services of packing and loading Plaintiffs’ household goods, any controversy arising thereafter fell exclusively within the scope of the Carmack Amendment. Id. Defendant further argued that the letter agreement did not affect whether Carmack applied. Id. The Court held that the Carmack Amendment is “comprehensive” and specifically applies to “packing and loading” of household goods, therefore, its prior holding that Carmack did not apply, was an error of law. Id. The Court then evaluated whether Plaintiffs’ claims against Defendant should be dismissed. Id.
The Carmack Amendment does not set a time limit for a notice of claim against a carrier, however, it provides that a “carrier may not provide by rule, contract or otherwise a period of less than nine months for filing a claim against it . . . .” Id. at *5; see 49 U.S.C. 14706(e). Federal regulations govern the filing and processing of claims for delay in the delivery of household goods. Id.; 49 C.F.R. 370. These regulations are incorporated into Defendant’s tariffs, which were incorporated into its Bill of Lading. 49 C.F.R. 370 sets forth the following requirements for filing a delay claim: (a) A written or electronic communication filed within the time limits specified in the bill of lading; (b) The communication must contain facts sufficient to identify the baggage or shipment at issue; (c) The communication must assert liability for the loss, damage or delay against the carrier; and (d) The communication must assert a claim for the payment of a specified or determinable amount of money. Id.
Plaintiffs argued that they made a timely and proper notice of claim to Defendant. Id. Plaintiffs asserted that their attorney’s letter, dated October 26, 2004, met the filing requirements because it contained facts sufficient to identify the shipment, asserted liability and made a claim for the payment of a determinable amount of money. Id. Defendant argued that Plaintiffs failed to provide timely and proper notice of claim because the claim did not contain a specified or determinable amount of money within the nine month time period prescribed by its Bill of Lading. Id. Defendant argued that Plaintiffs became aware of the amount of their damages when they sold their Pennsylvania residence on March 14, 2005. Id. Instead, Plaintiffs waited until November 9, 2005, to send a letter with a specified damages amount. Id.
In evaluating whether Plaintiffs’ October 26, 2004 letter met the requirements for filing a claim, the Court acknowledged that currently there is a split in the federal circuit courts concerning the standard to be used in determining whether a claim is sufficient -- “strict compliance” or “substantial performance.” Id. The Court noted that the parties seem to concede that the October 26, 2004 letter would not be considered sufficient notice under the “strict compliance” standard, because no firm dollar amount was included. Id. at *6. The Court determined, however, that even if it applied the “substantial performance” standard, no case has been identified where the claim contained no dollar amount whatsoever. Id. The Court found that Plaintiffs failed to provide Defendant with any additional information regarding the amount of their alleged claims until November 9, 2005, which was well over the nine month deadline contained in Defendant’s Bill of Lading. Id. The Court, therefore, held that because Plaintiffs’ notice was insufficient as a matter of law, their claim was time-barred and should be dismissed. Id.
Learning Point:
The Carmack Amendment governs a carriers’ liability for claims arising out of interstate transport, unless the parties expressly opt out of Carmack. Where the carrier is a household goods carrier, Carmack’s scope extends to packing and loading. Although the Third Circuit has not yet clearly determined whether it will apply the “substantial performance” or “strict compliance” standard when evaluating a claim, two things appear clear in Pennsylvania: if a carrier’s bill of lading contains a time limit for filing a notice, it will likely be enforced, and the claim cannot simply seek “damages,” it should contain at least a best estimate of the anticipated specified or determinable amount of money.
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