decided: September 2, 1980.
PATHWAY BELLOWS, INC., PLAINTIFF-APPELLEE,
ROBERT W. BLANCHETTE, RICHARD C. BOND AND JOHN H. MCARTHUR, TRUSTEES OF THE PENN CENTRAL TRANSPORTATION CO., DEFENDANT-APPELLANTS
Appeal from a judgment of the United States District Court for the Southern District of New York, LEONARD B. SAND, District Judge, entered upon cross-motions for summary judgment, granting the motion of plaintiff-appellee on its freight damage claim and denying that of the defendant-appellants. Reversed and remanded for entry of judgment in favor of defendant-appellants.
Before Waterman, Mansfield and Timbers, Circuit Judges.
Defendant-appellants, Trustees of the Penn Central Transportation Co. (Penn Central), appeal from a judgment entered in the United States District Court for the Southern District of New York (Sand, District Judge), which granted the motion of plaintiff-appellee Pathway Bellows for summary judgment. For the reasons stated below, we reverse the judgment of the district court.
The parties agreed upon all the relevant facts, and the case was submitted to the court below on cross-motions for summary judgment. We briefly summarize those facts before our review of the reasoning and decision of the district court.
On September 24, 1974 Pathway Bellows contracted with the receiving carrier, the San Diego & Arizona Eastern Railway Co. (SD & A) to transport a shipment of metal expansion joints from El Cajon, California to the Gouverneur Iron Works in Oswego, New York. The shipment arrived at its destination on October 22, 1974, where it was delivered by Penn Central, the delivering carrier, in a damaged condition. Pursuant to a telephone request, a Penn Central agent examined the shipment and prepared a Freight Inspection Report dated October 22, 1974, which noted damage, damage which the parties later stipulated totaled $40,000.
One of the provisions of the bill of lading issued by SD & A for this shipment required Pathway Bellows to submit any damage claims in writing, and to file them with an appropriate carrier within 9 months of the date of delivery of the damaged property.*fn1 The parties have agreed that this 9 month period began on October 22, 1974, and expired on July 22, 1975.
On May 12, 1975, Pathway Bellows sent to Penn Central the following letter:
Although we have contacted your company earlier, the purpose of this letter is to state, in writing, that we are in the process of filing a claim for freight damage of a shipment to Gouverneur Iron Works, Oswego, New York.
This letter also made reference by caption to the Freight Inspection Report, the Way Bill covering the shipment and the railroad car in which the shipment was transported.
On July 22, 1975, Pathway Bellows sent to SD & A a more detailed letter, which SD & A received the following day. This letter asserted the claim of Pathway Bellows for damages to the shipment of expansion joints, and advanced a specific dollar amount for the alleged liability.*fn2
In the district court the sole question for resolution was whether Pathway Bellows had complied with the contractually imposed condition precedent to maintain an action to recover its damages, i. e., whether Pathway Bellows had timely filed with an appropriate carrier a proper written claim. With reference to Pathway Bellows's letter of May 12, 1975, the court below held that, although timely filed, the letter was formally deficient in several important respects, and therefore could not qualify as a proper written claim. We shall defer further discussion of this ruling until we have addressed the district court's treatment of the July 22, 1975 letter.
Penn Central conceded that Pathway Bellows's July 22, 1975 letter contained all elements necessary to classify it as a proper written claim, but maintained that the letter was not timely filed, because although mailed by Pathway Bellows on the final day of the 9 month claim period, it was not received by SD & A until the day after the claim period had expired. Because "filed" was not defined in the bill of lading or in the applicable statute and regulations, the court below regarded the term as somewhat ambiguous. Although recognizing that the word "filed" had a well-established technical meaning in other areas of the law, and that such meaning implicitly equated a filing with the date of receipt of the item to be filed, the court concluded that such a technical construction was inappropriate to a situation involving only private parties. The court noted that, as between private parties, papers are "served" rather than "filed," and the date of service is equated with the date of mailing. Applying this construction of the term "filed" to the facts of this particular case,*fn3 the court below held that, because Pathway Bellows had mailed a proper written claim on the final day of the 9 month claim period, the claim had been timely filed and the terms of the bill of lading had been timely complied with. Accordingly, the district court denied Penn Central's motion for summary judgment and granted Pathway Bellows's motion, from which grant the defendant-Trustees appeal.
As an initial matter, we agree with the defendant-Trustees that the district court's construction of the word "filed" finds neither support nor precedent in case law. Indeed, relevant authority is uniformly to the effect that a paper will not be considered "filed" until it has been delivered to and received by the party with whom it is to be filed. See United States v. Lombardo, 241 U.S. 73, 36 S. Ct. 508, 60 L. Ed. 897 (1916); Laser Grain Co. v. United States, 250 F. 826 (8th Cir. 1918); In re Imperial Sheet Metal, Inc., 352 F. Supp. 1149 (M.D.La.1973); President & Dirs. of Manhattan Co. v. Laimbeer, 108 N.Y. 578, 15 N.E. 712, 71 N.Y.S.App. 656 (1888); Schaffer v. Pennsylvania R.R., 127 N.Y.S.2d 466 (Mun.Ct.1950), aff'd, 127 N.Y.S.2d 468 (Sup.Ct. App. Term 1952).
We do not believe the present case is sufficiently distinguishable from prior case law to warrant a different construction of the word "filed," and we find that the court below erred in holding that the claim of Pathway Bellows was filed when the letter of July 22, 1975 was deposited in the mail. Instead, we hold that, because SD & A did not receive this letter until the day after the 9 month claim period had expired, the claim was not timely filed as required by the terms of the bill of lading.
We now return to the district court's treatment of the May 12, 1975 letter. In addressing this issue, the court below first determined that the requisite characteristics of a proper written claim had been codified in certain regulations issued by the Interstate Commerce Commission.*fn4 The district court then examined the May 12, 1975 letter and found that it lacked two of the three minimum claim filing requirements established by the regulations, for it failed to assert that Penn Central was liable for any loss, and it failed to claim a specified or ascertainable amount of money as damages. Thus the court ruled that the Pathway Bellows letter of May 12, 1975 was not a proper written claim within the meaning of the regulations.
Although we do not agree with Pathway Bellows's argument that the facts do not support the district court's findings relative to the May 12, 1975 letter and that its ruling thereto should be reversed as clearly erroneous, a case recently decided by the U.S. Court of Appeals for the Seventh Circuit appears to suggest that the regulations relied on in the court below do not provide the proper standard for assessing the sufficiency of contested claims.
In that case, Wisconsin Packing Co. v. Indiana Refrigerator Lines, 618 F.2d 441 (7th Cir. 1980) (en banc), cert., denied, 449 U.S. 837, 101 S. Ct. 112, 66 L. Ed. 2d 44 (1980), the court declared that the subject regulations were intended to apply to voluntary dispositions of claims by carriers so as to insure that the process of claims settlement by carriers would be more expeditious and less subject to discriminatory manipulation, Id. at 445. Where, however, the mechanisms of voluntary claims settlement were not employed, i. e., where a carrier disputed its liability and a judicial determination of the validity of the disputed claim was sought, the Wisconsin Packing court concluded that the subject regulations did not dictate the form a claim must take. Rather, the sufficiency of a claim in such a situation was to be assessed under the case law in existence prior to the regulations issued by the I.C.C.*fn5
From our examination of the regulations and the relevant source material,*fn6 we do not believe that the dual standards for assessing the sufficiency of claims, depending upon whether the carrier voluntarily decides to settle a claim or to contest its liability, were either intended or mandated.*fn7 Although we agree with the Wisconsin Packing court that the ICC's principal aim in promulgating these regulations was to encourage parties to settle claims instead of resorting to costly time-consuming litigation, and although we recognize that the ICC lacks the adjudicative authority to pass on the merits of claims,*fn8 we point out that there is a vast difference between prescribing the form a properly constituted claim must take and that of determining the substantive merits of that claim.
Furthermore, the regulations impose numerous obligations upon carriers, which are triggered by the receipt of a "claim."*fn9 Having thus required a carrier to take certain actions once a claim is received, we think it is neither inappropriate nor beyond the authority of the ICC at the same time to provide a carrier with some guidance as to what constitutes a claim, so that a carrier may know one when it sees one. Therefore, we agree with the court below that the regulations provide the appropriate standard for assessing the sufficiency of all claims irrespective of the way they may subsequently be resolved or adjudicated.
In summary, we agree with the ruling of the district court that the Pathway Bellows letter of May 12, 1975 was inadequate in form to constitute a written claim. However, we conclude that the district court erred in finding that the Pathway Bellows letter of July 22, 1975 was timely filed when mailed, for we hold that, because this letter was received after the 9 month claim period had expired, it cannot qualify as a timely filed claim. We, therefore, hold that as Pathway Bellows failed to comply with the contractually imposed condition precedent to maintain an action to recover its damages, the defendant-Trustees were entitled to prevail on their motion for summary judgment. Although it may appear Draconian to require that Pathway Bellows lose a $40,000 recovery because its claim letter was received one day late, Pathway Bellows has identified no special circumstances that would entitle it to be relieved of the admittedly severe consequences of its own procrastination.*fn10
The judgment of the district court is reversed, and the cause is remanded for entry of judgment in favor of the defendant-Trustees.