Damaged Goods

Damaged Goods

Q: Is there a time limit between the filing of a claim and the carrier wanting to pick up damaged material? I filed a claim seven months ago, and the carrier is only now asking if the damaged material is available for pickup.

A: Talk about being a day late and a dollar short, not to mention making assumptions about things that simply aren’t true!

This carrier seems to believe it has some sort of right to take possession of damaged goods in exchange for paying a claim. It doesn’t. If the goods still retain some economic value, the carrier may (and should) deduct that value from its claim payment. But the carrier is not your customer, and can’t arrogate that role to itself by “buying” the goods from you for its claim payment.

The goods remain yours, and you’re free to dispose of them as you choose. For a variety of reasons, many shippers won’t allow salvage of damaged merchandise, or prefer to manage this process themselves, and that’s their right. It doesn’t affect the carrier’s liability, which is for the original value of the goods less their fair market value in damaged condition.

Further, carriers can’t expect injured shippers to aggravate that injury by being compelled to act as gratuitous warehousemen for goods to be retained indefinitely awaiting the carriers’ convenience to pick them up.

If the goods were totaled, tell the carrier so and that they’ve long since been dumped. If you did salvage them (or could have done so), be honest about it. Give it your own inspection reports documenting this, which it’s obliged to accept as its own. And insist on getting that claim paid now in whatever amount is proper. The carrier is way out of bounds.

Refund Policy Takes a Wrong Turn

Q: You’ve previously written that invoices billed and paid in error aren’t subject to rules regarding overcharge claims but are subject to state statutes.

I’ve run into a situation where it appears a carrier is negating the state law by publishing in its rules tariff an item it uses to deny these types of claims.

In my case, the carrier billed in error and the shipper paid. It says its rules tariff allows only 180 days to file a claim. What’s your opinion of this carrier’s rule?

A: Well, I’m not crazy about certain aspects of the rule, but I’m afraid they don’t apply to your situation.

The rule purports to treat, among other things, duplicate payments and other such erroneous remittances as overcharges. Well, nice try, I guess, but if you give me money by mistake, I can’t try to dodge the fact that I owe you that money back by trying to make you jump through hoops of my own devising to collect it. So in that regard, the rule is simply ineffective.

Your problem, however, is otherwise. In your case, the carrier merely misdirected its billing; you told me the bill of lading said freight collect, but the carrier nevertheless billed the shipper, and the shipper paid. Now you want the money back and for it to belatedly rebill the proper party, the consignee. The carrier, however, is calling this overcharges, and says you’re too late to recover them.

You’re both wrong. It’s not overcharges, and it’s not a duplicate payment except in the unlikely event the carrier double-billed the shipper and consignee and both of them paid. It’s merely a mutual mistake — the carrier’s for billing the wrong party and the shipper’s for paying the misdirected bill.

As a matter of law, mutual mistakes are ordinarily a wash, courts generally won’t intervene, and it’s up to the parties to sort them out unassisted. That’s the case here. The shipper has no claim of any sort, so the carrier’s fancy claims rules don’t come into play; neither do federal or state statutes of limitation.

In fact, in the prior column you reference, I said pretty much the same thing in connection with a similar problem, but you misread it. In that case, the billing was supposed to go to a third party and went instead to the shipper; but the same principle applies. If it’s the same shipper (both questions came from you), I’d say it needs to tighten its payment procedures. Paying bills you don’t owe isn’t the path to prosperity.

Consultant, author and educator Colin Barrett is president of Barrett Transportation Consultants. Send your questions to him at 5201 Whippoorwill Lane, Johns Island, S.C. 29455; phone, 843- 559-1277; e-mail, BarrettTrn@aol.com. Contact him to order the most recent 351-page compiled edition of past Q&A columns, published in 2010.