32 C.F.R. § 751.31 Common reasons for denial by carrier or contractor.
Title 32 - National Defense
The following are common reasons given for denial of an entire claim, or for individual items on a claim. Each reason for denial is followed by a short discussion of the validity of such a denial. (a) The carrier alleges that valid exceptions were made at the time of pickup from the NTS facility. When a carrier provides an exception sheet it contends was made at time of transfer, this exception sheet must bear the signature of a representative of the NTS facility. Without a signed exception sheet there is no evidence that the NTS facility was made aware of these exceptions and given the opportunity to confirm or deny the alleged condition of the items in question. The burden of proof is on the carrier to provide the valid exception sheet and establish its freedom from liability. (b) The carrier denies liability for missing or damaged item packed in cartons because it did not pack the shipment and the cartons did not show outside damage. When a carrier accepts a shipment in apparent good order, it is responsible for damage to packed items, unless it can prove that the packing was improper and was the sole cause of the damage. (c) The carrier contends that the mildew damage occurred in NTS and not during its transport of the shipment. Mildew formation is more likely to occur in NTS than in transport. Unsupported by evidence, however, an allegation that mildew formation occurred during NTS does not rebut the established prima facie case of a carrier liability. A carrier must prepare an exception sheet and note any mold or mildew damage when the items were picked up from the NTS facility. The burden of proof is on the carrier to show that it was free from negligence and that the damage was due solely to the formation of mildew or mold during the NTS storage. (d) The carrier claims that damage is due to “inherent vice.” Although the carrier may allege that damage was due to “inherent vice,” the mere allegation of “inherent vice” is insufficient to relieve the carrier of liability. The burden of proof is on the carrier to establish that an “inherent vice” existed and that it was the sole cause of the damage claimed. Since the carrier can rarely establish this burden of proof, denial due to “inherent vice” is seldom acceptable. (e) The carrier contends that it was denied the right to inspect. Often a carrier will state that it made several attempts to make an inspection, but the shipper failed to keep the appointment. If such a case exists, the proper procedure for the carrier to follow is to contact the claims office for assistance in accomplishing the inspection within a timely manner. A carrier's efforts to obtain the inspection should be documented in the file by claims personnel. Lack of an inspection alone, however, does not relieve the carrier of liability and is insufficient to rebut a well-established prima facie case of liability. (f) The carrier denies liability on missing items because the items do not appear on the new inventory made at pickup from the NTS facility. When a carrier picks up a shipment from NTS and chooses to prepare a new inventory, it must use identical or cross-referenced numbers. If an article such as a chair or a lawnmower is missing, it must be indicated as “missing” on the new inventory. Whether or not a new inventory is made, an exception sheet must be prepared and the missing articles must be noted thereon. To relieve the carrier of liability, both the new inventory and the exception sheet must be signed by representatives of the NTS facility and the carrier. (g) The carrier denies liability due to “act of God.” An act of God is an event that could not have been prevented by human prudence. It is generally seen as an occurrence in which human skill or watchfulness could not have foreseen the disaster. The burden of proof is on the carrier to establish that an “act of God” existed and that it was the sole cause of the damage claimed. Since the carrier can rarely establish this burden of proof, denial due to an “act of God” is generally not acceptable. The carrier cannot avoid liability if it has been negligent in exposing the goods to potential danger or if it failed to take reasonable steps to reduce the extent of the injury once the danger was discovered. (h) The carrier contends that the claimant's repair estimate is excessive and that its own repair firm can do the job cheaper. A claimant has the right to select a repair firm provided the cost is reasonable and not in excess of the item's value. The carrier is liable for the reasonable cost of repairing damaged merchandise that includes labor, material, overhead, and other incidental expenses incurred in reconditioning or putting the goods in salable condition. If the carrier did not provide the claims office with an acceptable, lower estimate to use in adjudicating the claim, and if the claimant's estimate is reasonable, then the carrier is liable for the amount paid the claimant. (i) The carrier contends that liability should have been predicated on the agreed weight of a sofa and not a hide-a-bed. This argument only applies when carrier liability is based on weight. At the time the inventory is prepared, the carrier's driver must establish whether a sofa is merely a sofa, or one that converts into a bed. Failure to properly identify the item on the inventory does not relieve the carrier of liability for the greater weight of a sofa bed. (j) The carrier argues that it is not responsible for warpage, rust, etc., due to climatic changes. This argument does not relieve a carrier of liability unless the carrier offers substantial evidence to show that the damages resulted solely from unusual circumstances beyond its control, as with an “act of God,” or that it occurred while the property was in the hands of another contractor, as reflected upon a valid NTS exception sheet. The burden of proof is on the carrier to establish that the damage was not due to its negligence and that circumstances beyond its control were the sole cause of the loss. Because the carrier can rarely establish this, denial due to “climatic changes” is rarely acceptable.
Title 32: National Defense
PART 751—PERSONNEL CLAIMS REGULATIONS
Subpart B—Demand On Carrier, Contractor, or Insurer
§ 751.31 Common reasons for denial by carrier or contractor.
