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Howe v. Allied Van Lines Inc.

decided: May 9, 1980.

HOWE, DONALD D., APPELLANT
v.
ALLIED VAN LINES, INC.; HILL, JERRY P., APPELLANT V. TRANS-AMERICAN VAN SERVICE, INC.; FARIS, JAMES R. V. AERO MAYFLOWER TRANSIT CO., INC. V. UNITED STATES OF AMERICA, 3RD PARTY DEFENDANT, UNITED SERVICES AUTOMOBILE ASSOCIATION, APPELLANT ; BILLITER, JAMES H., UNITED SERVICES AUTOMOBILE ASSOCIATION V. WHEATON VAN LINES, INC., UNITED SERVICES AUTOMOBILE ASSOCIATION, APPELLANT ; DEFRANK, DALE V. PYRAMID VAN LINES, INC., DALE A. DEFRANK, APPELLANT ; FOLEY, NORMAN R., APPELLANT V. AMERICAN RED BALL TRANSIT CO., INC.; CEVALLOS, HENRY, APPELLANT V. VANPAC CARRIERS, INC. V. CLEMMER MOVING & STORAGE, INC. V. CLEMMER MOVING & STORAGE, INC.; BLASE, WILLIAM E. AND UNITED SERVICES AUTOMOBILE ASSOCIATION, APPELLANTS V. NATIONAL VAN LINES, INC., DEFT. AND THIRD PARTY PLAINTIFF V. UNITED STATES OF AMERICA, THIRD PARTY DEFENDANT ; MADONNA. DONALD E., APPELLANT V. RICHARDSON TRANSFER AND STORAGE CO., INC.; WILKERSON, GLENN D., APPELLANT V. ENGEL VAN LINES, INC. V. UNITED STATES OF AMERICA; JAMES R. ACREBACK, UNITED SERVICES AUTOMOBILE ASSOCIATION V. ROCKY FORD MOVING VANS, INC. UNITED SERVICE AUTOMOBILE ASSOCIATION, APPELLANT ; MERKLER, GEORGE J. AND MERKLER, JUNE D., APPELLANTS V. AERO MAYFLOWER TRANSIT CO., INC. V. UNITED STATES OF AMERICA (D.C. CIVIL NO. 78-0914)



ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

Before Aldisert and Gibbons, Circuit Judges, and Gerry, District Judge.*fn*

Author: Gibbons

Opinion OF THE COURT

This litigation presents us with twelve related cases which have been consolidated for this appeal. In each case, the nominal appellant is a present or former member of the United States armed forces, and the suit is against a motor van common carrier of household goods for damage to the goods during transit. Although the record in each case does not establish the fact, it is apparent that in each case, the appeal is pressed by the casualty insurer which insured the military plaintiff against such damage. The insurer asserts a right of subrogation. All the shipments were arranged by the Department of Defense (DOD), and the carrier received the goods on a government bill of lading issued pursuant to Military Rate Tender No. 1-H, ICC No. 35 (MRT 1-H). At least 1500 common carriers of household goods have made a continuous offer under that tender to the DOD Military Traffic Management Command (MTMC) to carry household goods of service personnel at rates lower than those offered to the general public under tariffs on file with the Interstate Commerce Commission. By the terms of MRT 1-H, and the government and carrier bills of lading issued under its authority, the liability of the common carrier for loss or damage is limited to an amount equal to 60 cents per pound per article. In each case, the serviceman, whose household goods suffered damage while in transit (or his casualty insurer), contends that he should recover the actual value of the destroyed goods instead of 60 cents per pound. That contention depends, in each case, upon the applicability of the Carmack and Cummins Amendments of the Interstate Commerce Act to the carriage of these goods. See 49 U.S.C. § 20(11) (1976).*fn1 After cross-motions for summary judgment, the district court concluded that the provision relied upon was not controlling, and that the limitation of liability contracted for by the MTMC protected the carriers. We affirm.

I. FACTUAL BACKGROUND

Although the fact patterns in each of the cases are not identical, for the purposes of our disposition, any such differences are immaterial. For these reasons, we will confine our discussion of the relevant facts to the Howe case, which is typical.

Donald Howe, a Lieutenant Commander in the United States Navy, made arrangements for the shipment of his household goods through a representative of MTMC. Under these types of arrangements, the government offers shipment at its expense. Howe, as a member of the armed services, is entitled to this transportation benefit by virtue of federal legislation.*fn2 He applied for the benefit on DOD Form 1299, and signed an acknowledgment on DOD Form 1797 that he had been briefed concerning the carrier and its liability. Howe was informed that the carrier's liability would be limited to 60 cents per pound per article, and that the goods would be released by the government on a government bill of lading at that valuation. He was also advised that under a federal statute,*fn3 he could claim from the United States an amount up to $15,000 for any uninsured loss,*fn4 and that, if he desired, he could also purchase additional insurance. Howe did purchase additional insurance in the amount of $25,000 from United Services Automobile Association, a private insurance company that specializes in insurance for military personnel.

Allied Van Lines, on April 26, 1977, accepted Howe's household goods under a government bill of lading which designated the United States Naval Academy as the shipper and Howe as the consignee. On July 5, 1977, Allied's van overturned and 10,730 pounds of Howe's belongings were destroyed. Allied contends that under the bill of lading its liability is limited to $6,438.22, while Howe and the insurer contend that Allied is liable for the actual value of the goods, which is estimated to be about $35,000. Howe has received payment from the insurer, and presumably has received or can receive payment from the United States for any difference between the amount received from the insurer and the $6,438 owed by Allied. Thus, it is clear that the major portion of any recovery sought from Allied in excess of $6,438, would be for reimbursement of the insurer. The United States acknowledges that it is bound by the limitation of liability in the government bill of lading, and has no subrogation claim. It contends, as well, that the limitation of liability binds Howe, the consignee, and those in privity with him. The fact pattern of all the cases is similar, although in some of the cases it is possible that the serviceman, as well as the insurer, has an interest in any possible recovery.

II. THE THEORY OF LIABILITY FOR FULL VALUE

The theory of recovery is that the 60 cent per pound limitation of liability in the government bill of lading is illegal and void under section 20(11) of the Interstate Commerce Act, which in relevant part provides:

Any common carrier . . . receiving property for transportation . . . shall issue a receipt or bill of lading therefor, and (1) shall be liable to the lawful holder thereof for any loss, damage, or injury to such property . . . and no contract, receipt, rule, regulation, or other limitation of any character whatsoever shall exempt such common carrier . . . from the liability imposed; and any such common carrier . . . shall be liable to the lawful holder of said receipt or bill of lading or to any party entitled to recover thereon . . . (2) for the full actual loss, damage, or injury to such property . . . (3) notwithstanding any limitation of liability or limitation of the amount of recovery or representation or agreement as to value in any such receipt or bill of lading . . . or in any tariff filed with the Interstate Commerce Commission; and any such limitation, without respect to the manner or form in which it is sought to be made is declared to be unlawful and void: . . . Provided, however, (4) That the provisions hereof respecting liability for full actual loss, . . . notwithstanding any limitation of liability or recovery or representation or agreement or release as to value, and declaring any such limitation to be unlawful and void, shall not apply, . . . to property . . . received for transportation concerning which the carrier shall have been or shall be expressly authorized or required by order of the Interstate Commerce Commission to establish and maintain rates dependent upon the value declared in writing by the shipper or agreed upon in writing as the released value of the property . . .; (5) and any tariff schedule which may be filed with the commission pursuant to such order shall contain specific reference thereto and may establish rates varying with the value so declared and agreed upon; and the commission is empowered to make such order in cases where rates dependent upon and varying with declared or agreed values would, in its opinion, be just and reasonable under the circumstances and conditions surrounding the transportation.

49 U.S.C. § 20(11).

Plaintiff reads section 20(11) as a plain prohibition ((3)) against a limitation of liability for less than full value ((2)) unless the ICC has approved a released value order ((4)) and the carrier has filed an approved tariff schedule reflecting a reduced rate approved by the ICC. It contends that there was no ICC released value order ((4)) approving the 60 cent per pound limitation in MRT 1-H 9, and that there was no filed approved tariff schedule ((5)) establishing a rate for such reduced liability. Since Howe and the other servicemen are lawful holders of the government bills of lading, they and their insurer contend that, under section 20(11), the limitation of value is unlawful and void. If section 20(11) governs, and has not been complied with, the logic of the plaintiff's position seems inescapable.

With respect to the rates charged to the general public, the motor carriers do not contend that they are free to contract for a limited liability based upon an agreed reduced value of goods received. The carriers agree that under section 20(11) they must obtain a released value order, and file an approved tariff schedule reflecting any rate that is different from that charged to other shippers. They do urge, however, that they substantially complied with section 20(11) because their tender to the government, MRT 1-H, was filed with the ICC. But their primary contention, with which the United States as amicus agrees, is that section 20(11) does not govern their dealings with the government-as-shipper. In support of their argument, both the motor carriers and the United States point to section 22 of the Interstate Commerce Act, which in relevant part provides:

Nothing in this chapter shall prevent the carriage . . . of property free or at reduced rates for the United States, State or municipal governments, or for charitable purposes, or to or from fairs and expositions for exhibition thereat . . .

49 U.S.C. § 22 (1976).

The motor carriers and the government contend that section 22 authorizes the United States to enter into agreements with carriers, which are otherwise subject to the Interstate Commerce Act, at reduced transportation rates with concomitant limitations of liability. They urge that the freedom of contract which the United States enjoys by virtue of section 22 is an exception to the general antidiscrimination thrust of the Act. And, therefore, since section ...


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