The opinion of the court was delivered by: NEAHER
The Long Island Rail Road Company ("LIRR") commenced this action to recover underpayments of transportation fees incurred by the Commodity Credit Corporation ("CCC"), an agency of the United States Department of Agriculture. By answer and counterclaim, CCC asserted that its reduced payment resulted from a set-off of losses it suffered on other shipments performed by the LIRR. CCC has now moved for summary judgment, asserting that the LIRR improperly denied CCC's claims for lost and damaged goods on the earlier shipments, and that set-off was an appropriate action. The LIRR has cross-moved for summary judgment, claiming that the documentation provided by CCC of its losses on the earlier shipments was inadequate to justify payment. For the reasons that follow, the court concludes that CCC's claim to the LIRR clearly has established its losses, and that CCC is entitled to partial summary judgment in its favor. The LIRR has, however, raised factual questions concerning one damage claim which can only be resolved by trial.
The first disputed shipment commenced on or about December 13, 1977. The "Report of Shipment Received Over, Short and/or Damaged" Form (hereinafter referred to as "Shortage and/or Damage Form"), signed and submitted by the consignee, claimed that 1,200 cases of peanut butter were reported as shipped, but only 1,184 were received. The form further noted that the shortage was discovered "during unloading" by "physical recount". The LIRR subsequently requested additional documentation, including the consignee's certification that the missing cases had not been received from another source and the consignee's unloading tallies for any stop-off and final destinations. CCC supplied the certification, and further certified through the consignee that unloading tallies were unavailable. CCC claimed $315.20 damages for the missing sixteen cases of peanut butter. The LIRR denied the claim, citing the absence of unloading tallies.
On or about February 28, 1978, CCC shipped 1,720 cartons of processed cheese to two separate destinations. According to the Shortage and/or Damage Form submitted by the consignee at one destination, of the 1,120 cartons reported shipped, 1,113 were received. The consignee's signed form added that the shortage was discovered "after unloading" by "physical recount". By similar form, the consignee at the second location indicated receipt of 597 cartons of 600 reported sent. Again in response to the LIRR's inquiry, CCC supplied both consignees' certifications that the goods were not received from other sources and that stop-off and final unloading tallies were unavailable. CCC's claim, amounting to $308.10, was denied, and the lack of unloading tallies was cited.
The final shipment in issue commenced on or about October 31, 1978. The consignee's signed Shortage and/or Damage Form declared that 2,865 cartons of processed cheese were reported shipped. Of these, the consignee reported a shortage of 42 cartons, and damage to an additional 57 cartons. The form indicated that the shortage was discovered "after unloading" by "unloading tally" and "physical recount", and that the damage was discovered "during unloading". After the LIRR's subsequent inquiry, however, only the unloading tally for the stop-off was supplied, and it showed no shortage. Again, the consignee did submit a certification that the missing goods had not been received from another source, and that no additional unloading tallies existed. Again, the LIRR denied the claim for want of unloading tallies. The Shortage and/or Damage Form further noted that the damage consisted of "water damage and disintegration of cartons" discovered "during unloading" and that the mechanical refrigeration equipment was in operation. This claim was also denied by the LIRR.
CCC asserted that its shortage and damage claims were supported by "notices of loss; claims identifying the shipments, their contents and value, the dates of arrival and amount of shortage and/or damage, and demanding payment; bills of lading; inbound and outbound seal numbers, where available; verifications of loss; and certified statements and reports from the consignee that the shortages had not been received from any other source," as well as by each consignee's certification that the requested unloading tallies had never been made. By affidavit, Anthony A. Pontorno, the Assistant Manager of Freight Claims and Damage Prevention for the LIRR, defined an unloading or stroke tally as "an informal document created by the consignee who unloads the freight [providing] a notation of each and every piece that comes off the car." He stated that the consignees generally create these tallies to protect against overcharges. Offered as his opinion, he added that "an unloading tally is the only reliable document with which to prove a claim of shortage."
Both parties have moved for summary judgment on the claims for the lost goods, and both assert that no genuine issue of material facts remain. The only issue on these claims is thus a legal one -- whether the documentation submitted by CCC to the LIRR is sufficient to support a finding that CCC is entitled to recover its claimed losses. Disposition of this issue by summary judgment is accordingly appropriate. See S.E.C. v. Research Automation Corp., 585 F.2d 31, 33-34 (2d Cir. 1978).
Carriers are liable for losses or damages during shipment unless the carrier can demonstrate that it was not negligent and that one of five recognized carrier defenses applies. 49 U.S.C. §§ 20(11), 11707. To recover, however, the shipper must initially prove delivery of the goods to the carrier, receipt by the consignee of the goods in diminished quantity or quality after transportation, and damages. Missouri Pacific Railroad Co. v. Elmore & Stahl, 377 U.S. 134, 138, 12 L. Ed. 2d 194, 84 S. Ct. 1142 (1964).
Detailed regulations have been promulgated concerning the voluntary disposition of carrier loss and damage claims. See 49 C.F.R. Part 1005. These regulations have been further supplemented by a release from the Interstate Commerce Commission entitled "22 Questions and Answers". Defendant's Memo in Support of Motion for Summary Judgment at Appendix. Section 1005.2 establishes prerequisites for filing a claim, and § 1005.4 requires prompt investigation of a claim through supporting documents. Section 1005.2(b) sets forth the minimum filing requirements:
A. . . communication . . . from a claimant, filed with a proper carrier within the time limits specified in the bill of lading or contract of carriage or transportation and: (1) Containing facts sufficient to identify the baggage or shipment (or shipments) of property, (2) asserting liability for alleged loss, damage, injury, or delay, and (3) making claim for the payment of a specified or determinable amount of money, shall be considered as sufficient compliance with the provisions for filing claims embraced in the bill of lading or other contract of carriage.
Section 1005.4(c) specifically adds:
When an asserted claim for loss of an entire package or an entire shipment cannot be otherwise authenticated upon investigation, the carrier shall obtain from the consignee of the shipment involved a certified statement in writing that the property for ...