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Wave Electronics v. United Parcel Service

Decided: April 9, 1991.

WAVE ELECTRONICS, PLAINTIFF,
v.
UNITED PARCEL SERVICE, DEFENDANT



Hamlin, J.s.c.

Hamlin

HAMLIN, J.S.C.

This is a decision following a plenary bench trial. Plaintiff, Wave Electronics, Inc. brought an action in negligence and breach of contract against defendant, United Parcel Service, Inc. (UPS), who asserted a counterclaim on a book account against Wave.

The facts are as follows. On November 21, 1988, Wave, a purchaser and seller of computer chips, gave two packages to UPS for a C.O.D. delivery to "Advanced Systems", a purchaser located at 129 South Iidalgo, Alhambra, California. Wave had no prior dealings with "Advanced Systems". The C.O.D. amounts were $20,575.40 and $14,171.00 respectively. Plaintiff instructed UPS to accept payment only by cashier's check.

UPS delivered the packages to "Advanced Systems" on November 22, 1988. The purchaser gave the UPS driver one cashier's check for $34,746.40 representing payment for both packages. The driver examined the cashier's check and accepted it. The check bore the imprint of the drawing bank, the California State Bank, and in the lower left corner, "Cashier's Check" was printed. The check was made out to Wave. Subsequently, an UPS representative informed Seymour Lieberman, the Vice President of Wave, that the cashier's check was invalid. However, at the request of counsel and an F.B.I. agent, plaintiff endorsed the check and deposited it into its bank account. The bank did not honor the check which concededly was counterfeit.

Wave contends that UPS was at fault for not recognizing the invalidity of the check, thus breaching its contract with Wave, causing it to suffer an economic loss in the amount of $34,746.40. UPS asserts that it followed its standard procedure as to C.O.D. deliveries, and that the check it received was facially valid, bearing all the required indicia of a cashier's check. Defendant contends that the transaction between Wave and UPS was governed by the tariff published by UPS which expressly states that any risk of non payment in C.O.D. shipments

due to forgery or fraud is to be borne by the Shipper -- Wave.

In addition, UPS has asserted a counterclaim demanding payment by plaintiff for $33,228.42 on an open current account. Wave had admitted that it owes $32,371.91, for which UPS seeks an Order entering judgment.

As an interstate carrier, UPS, and this transaction are governed by the Interstate Commerce Act, 49 U.S.C.A. ยง 10101, et seq. Therefore, Federal law applies. See Semi Metals, Inc. v. Pinter Bros., 135 N.J. Super. 464, 343 A.2d 757 (App.Div.), aff'd. 70 N.J. 437, 360 A.2d 385 (1976); Silvers v. Pennsylvania Railroad, 89 N.J. Super. 475, 215 A.2d 556 (App.Div.1963).

That act permits a carrier to provide transportation services only in accordance with the duly published tariff, to which the parties are bound. UPS had tariffs approved and published. The tariff operates as law which all parties are deemed to have knowledge of. Essex County Welfare Board v. N.J. Bell Telephone Co, 126 N.J. Super. 417, 315 A.2d 40 (App.Div.1974). The current tariff, UPSN 201-E, effective since November 25, 1987, governs the transaction at issue. Item 480 provides in pertinent part:

"All checks (including cashier's checks and certified checks) and money orders tendered in payment of C.O.D.s, will be accepted by the carrier at shipper's risk including, but not limited to risk of non payment and forgery, and carrier shall not be liable under any such instrument." (emphasis added)

The specific terms of Item 480 of the tariff also appear in the UPS Next Day Air/2nd Day Air Service Explanation, 'ROUNDUPS", a UPS Circular and the UPS Air Service Guide. It is UPS' customary ...


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