United States District Court, N.D. New York
July 12, 2005.
ARIEH GILDOR, Plaintiff,
UNITED STATES POSTAL SERVICE, Cobleskill, NY; DAVID DEGEORGE, of the Post Office in Cobleskill, NY; MARK HAREISON, of the Post Office in Cobleskill, NY; I.P. MINGO, Supervisor Postal Service, 4218th Avenue, Room 2029A, NY, NY., Defendants.
The opinion of the court was delivered by: LAWRENCE KAHN, District Judge
MEMORANDUM-DECISION and ORDER*fn1
Plaintiff Arieh Gildor commenced the instant action against
Defendants asserting claims for breach of contract and negligence
arising out of the Postal Service's loss of a package containing
gold rings. Presently before the Court are: (1) Defendants'
motion to dismiss the Complaint pursuant to FED. R. CIV. P.
12(b)(6) or, in the alternative, for summary judgment pursuant to
FED. R. CIV. P. 56; and (2) Plaintiff's cross-motion for leave to
file an amended complaint asserting a cause of action for fraud.
On March 20, 2004, Plaintiff went to the United States Post
Office at Cobleskill, New York to mail a package to an individual
in France via international Express Mail. (Def.'s Stmnt. of Mat.
Facts at ¶ 1.) In furtherance of this transaction, Plaintiff
completed a mailing label and completed the PS Form 2976-A
Customs Declaration and Dispatch Notice. (Compl. at Ex. 2; Def.'s
Stmnt. of Mat. Facts at ¶¶ 3-5.) Plaintiff handed the package to
United States Postal Service employee Edward DeMagistris. (Def.'s
Stmnt. of Mat. Facts at ¶ 6.) Plaintiff inquired whether the
package could be insured. (Id. at ¶ 8.) DeMagistris advised
that the package could be insured up to $5,000. (Id. at ¶ 9.)
In addition to shipping charges, Plaintiff paid an insurance
fee of $49.00 to provide insurance coverage up to $5,000. (Id.
¶ 5). This was indicated on the face of the mailing label. The
Postal Service accepted the package for delivery. Plaintiff was
given the customer copy of the mailing label. (Id. at ¶ 3.)
Ultimately, the package was returned to Plaintiff empty. (Id. at ¶ 15). Plaintiff filed a claim for
indemnity with the Postal Service. (Id. at ¶¶ 18-19.) The
International Claims and Inquiries Office denied the claim on the
ground that the contents of the package were prohibited items for
Express Mail to France for which there could be no indemnity.
(Id. at ¶ 25.) Plaintiff appealed this decision. (Id. at ¶
26.) Upon review, the denial was upheld. (Id. at ¶ 27.) Further
appeal was taken to International Indemnity Claims, International
Business at the United States Postal Service headquarters in
Washington, D.C. (Id. at ¶¶ 28-29.) The denial was again
upheld. (Id. at ¶ 29.).
Plaintiff then filed a claim with the Postal Service pursuant
to the Federal Tort Claims Act. This claim was denied based on
the exception found at 28 U.S.C. § 2680(b). (Id. at ¶ 31.)
Plaintiff then commenced the instant lawsuit claiming that the
Postal Service is in breach of contract and was otherwise
a. Summary Judgment Standard
The Court will treat Defendants' motion as made pursuant to
Federal Rule of Civil Procedure 56 because Defendants submitted
materials outside of the pleadings, Plaintiff has been given
notice of Defendants' intention to seek summary judgment,
Plaintiff has been given notice of the consequences of failing to
properly respond to a motion for summary judgment, and Plaintiff
also has submitted materials outside of the pleadings and
otherwise responded to the motion for summary judgment.
Federal Rule of Civil Procedure 56 provides that summary
judgment is proper when "the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment
as a matter of law." FED. R. CIV. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In applying this
standard, courts must "`resolve all ambiguities, and credit all
factual inferences that could rationally be drawn, in favor of
the party opposing summary judgment.'" Brown v. Henderson,
257 F.3d 246, 251 (2d Cir. 2001) (quoting Cifra v. Gen. Elec. Co.,
252 F.3d 205, 216 (2d Cir. 2001)). Once the moving party meets
its initial burden by demonstrating that no material fact exists
for trial, the nonmovant "must do more than simply show that
there is some metaphysical doubt as to the material facts."
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586 (1986) (citations omitted). Rather, the nonmovant "must
come forth with evidence sufficient to allow a reasonable jury to
find in her favor." Brown, 257 F.3d at 251 (citation omitted).
Bald assertions or conjecture unsupported by evidence are
insufficient to overcome a motion for summary judgment. Carey v.
Crescenzi, 923 F.2d 18, 21 (2d Cir. 1991); Western World Ins.
Co. v. Stack Oil, Inc., 922 F.2d 118, 121 (2d Cir. 1990).
b. Sovereign Immunity
As a general rule, the United States enjoys sovereign immunity.
Dotson v. Griesa, 398 F.3d 156, 177 (2d Cir. 2005), petition
for cert. filed, 73 U.S.L.W. 3570 (U.S. Mar. 22, 2005). This
immunity extends to federal agencies and officers acting in their
official capacities. Id. The Federal Tort Claims Act ("FTCA")
waives sovereign immunity for certain types of actions. See
generally 28 U.S.C. § 1346(b); see also Syms v. Olin
Corp., 408 F.3d 95, 107 (2d Cir. 2005). The FTCA also contains
provisions expressly retaining sovereign immunity for certain
claims against the government. See 28 U.S.C. § 2680. The Court
will now address the applicability of the FTCA to the claims
asserted in this case. 1. Misdelivery of the Package
Defendants move to dismiss the claim for misdelivery and/or
negligence on the ground that the Postal Service is entitled to
sovereign immunity. The FTCA expressly retains sovereign immunity
for "[a]ny claim arising out of the loss, miscarriage, or
negligent transmission of letters or postal matter."
28 U.S.C. § 2680(b); see Dolan v. United States Postal Serv., 377 F.3d.
285 (3d Cir. 2004), cert. granted, 125 S. Ct. 1928 (2005);
Raila v. United States, 355 F.3d 118, 120-21 (2d Cir. 2004);
Marine Ins. Co., Ltd. v. United States, 378 F.2d 812 (2d Cir.
1967). To the extent Plaintiff's damages (direct and
consequential) are attributed to the loss, miscarriage, or
negligent transmission of the package, the Court lacks
jurisdiction and the Complaint must be dismissed. Raila,
355 F.3d at 121 (noting that there is sovereign immunity for claims
for "the postal material itself and consequential damages
2. The Insurance Provision
The evidence in the record is that Defendants informed
Plaintiff that his package could be insured up to $5,000. As a
general matter, insurance up to $5,000 is available. However, the
International Mail Manual ("IMM")*fn2 provides that there
will be no indemnity on claims concerning Global Express Mail
shipments where the contents are prohibited. (IMM at 935.2,
Def.'s Ex. J.) The IMM expressly provides that jewels and jewelry
are "not mailable in Global Express Mail (EMS) shipments." (IMM
at 134.1, Def.'s Ex. J; see also IMM at 221.2 ("The following
items are prohibited in all EMS shipments: coins; banknotes;
currency notes (paper money); securities of any kind payable to
bearer; traveler's checks; platinum, gold, and silver (manufactured or not); precious stones; jewelry; and
other valuable articles."). Moreover, the back of the mailing
label provided to Plaintiff at the time of shipment read
Insurance is provided only in accordance with postal
regulations in the . . . International Mail Manual.
The . . . IMM set[s] forth the specific types of
losses that are covered [and] the limitations on
coverage. . . . The . . . IMM consist[s] of federal
regulations, and USPS personnel are NOT authorized to
change or waive these regulations or grant
exceptions. . . . Indemnity is not paid for items
containing . . . gold, . . . jewelry, and other
valuable or prohibited items.
(Def.'s Stmnt. of Mat. Facts at ¶ 13.) Accordingly, pursuant to
the IMM and the shipping label provided to Plaintiff, he cannot
be indemnified for his package because it constituted a
prohibited item for which indemnity was not available.*fn3
Plaintiff contends that Defendants wrongfully sold insurance
for the package. In short, Plaintiff asserts that Defendants told
him that insurance was available for his package and charged him
$49.00 for such insurance when, in fact, jewelry is a prohibited
item for express mail to France and insurance will not pay on
prohibited items. According to Plaintiff, this is a breach of
contract. This also is the basis of Plaintiff's application to
file an amended complaint sounding in fraud.
Plaintiff's claims that Defendants misrepresented the
insurability of the package are barred. The FTCA expressly
retains sovereign immunity for claims of intentional or negligent
misrepresentation.*fn4 28 U.S.C. § 2680(h); see United
States v. Neustadt, 366 U.S. 696, 702 (1961) (holding that
28 U.S.C. § 2680(h) "comprehends claims arising out of negligent, as
well as willful, misrepresentation."); Ingham v. E. Airlines,
Inc., 373 F.2d 227, 239 (2d Cir. 1967). This similarly applies
to any claims of fraud. See Edelman v. Fed. Hous. Admin.,
382 F.2d 594, 597 (2d Cir. 1967); see also Beneficial Consumer
Disc. Co. v. Poltonowicz, 47 F.3d 91, 96 (3d Cir. 1995) (and
cases cited therein); Owyhee Grazing Ass'n, Inc. v. Field,
637 F.2d 694, 697 (9th Cir. 1981) ("[C]laims against the United
States for fraud . . . are absolutely barred by
28 U.S.C. § 2680(h)."). Thus, any claims sounding in misrepresentation or
fraud must be dismissed and Plaintiff's motion for leave to file
an amended complaint asserting a claim of fraud must be denied as
futile. c. Breach of Contract Equitable Estoppel
Plaintiff contends that the failure to indemnify him
constitutes a breach of contract. There is no evidence upon which
a reasonable trier of fact could conclude that Defendants
breached any contract. As previously noted, the form provided to
Plaintiff at the time of mailing stated, in part, that:
Insurance is provided only in accordance with postal
regulations in the . . . International Mail Manual.
The . . . IMM set[s] forth the specific types of
losses that are covered, the limitations on coverage,
terms of insurance, conditions of payment, and
adjudication procedures. Copies of the . . . IMM are
available for inspection at any post office and
online at pe.usps.gov. . . . The . . . IMM consist[s]
of federal regulations, and USPS personnel are NOT
authorized to change or waive these regulations or
grant exceptions. . . .
For international Express Mail shipments,
international coverage may vary by country and may
not be available to some countries. Indemnity is not
paid for items containing coins, banknotes, current
notes (paper money); securities of any kind payable
to the bearer; traveler's checks; platinum, gold, and
silver (manufactured or not); precious stones;
jewelry, and other valuable or prohibited articles.
Thus, Plaintiff was provided with information that there would be
no indemnity for the types of articles he wished to send.
Defendants' refusal to pay on Plaintiff's claim is in accordance
with the terms provided to Plaintiff upon mailing and, therefore,
is not a breach of contract.
Plaintiff also claims that the government should be equitably
estopped from denying coverage because the postal employees
represented that insurance was available for his package and the
customer label provided to him at the time of mailing (that
contained the notices set forth above) were "partly glued
together" and, therefore, he did not see the notices.
The Second Circuit recently explained the doctrine of equitable
estoppel as follows: Estoppel is an equitable doctrine invoked to avoid
injustice in particular cases. . . . [T]he party
claiming the estoppel must have relied on its
adversary's conduct in such a manner as to change his
position for the worse, and that reliance must have
been reasonable in that the party claiming the
estoppel did not know nor should it have known that
its adversary's conduct was misleading. . . .
Further, the truth concerning these material facts
must be unknown to the other party claiming the
benefit of the estoppel, not only at the time of the
conduct which amounts to a representation or
concealment, but also at the time when that conduct
is acted upon by him. If, at the time when he acted,
such party had knowledge of the truth, or had the
means by which with reasonable diligence he could
acquire the knowledge so that it would be negligence
on his part to remain ignorant by not using those
means, he cannot claim to have been misled by relying
upon the representation or concealment. . . .
In re Becker, 407 F.3d 89, 98-99 (2d Cir. 2005) (internal
quotations, citations, and alterations omitted). Moreover, the
doctrine is applied differently to the government than private
parties. As the Second Circuit continued to explain:
Insofar as concerns an assertion of estoppel against
the government, the Supreme Court has thus far
declined to adopt a rule that the United States or
its agencies may never in any circumstances be
estopped; but it has made clear that "the Government
may not be estopped on the same terms as any other
litigant," because "[w]hen the Government is unable
to enforce the law because the conduct of its agents
has given rise to an estoppel, the interest of the
citizenry as a whole in obedience to the rule of law
is undermined." [Heckler v. Comm. Health Servs. of
Crawford County, Inc., 467 U.S. 51, 60 (1984)];
see, e.g., United States v. Boccanfuso,
882 F.2d 666, 669 (2d Cir. 1989) ("The principle of
equitable estoppel is not applied to the Government
on the same terms as it is to private citizens. . . .
The different standard for estoppel of the Government
springs from the tenet that estoppel would frustrate
the Government's ability to enforce the law and, in
turn, undermine the public interest in full
enforcement of the law."). "Thus, assuming estoppel
can ever be appropriately applied against the
Government," Community Health Services,
467 U.S. at 66, a "private party surely cannot prevail" on such
an estoppel claim "without at least demonstrating
that the traditional elements of an estoppel are
present," id. at 61. A party must therefore show
that the Government made a misrepresentation on which
the party reasonably relied to its detriment. We will
not find an estoppel where the claimant "could not
have reasonably relied on any Government
misrepresentation." United States v. Boccanfuso,
882 F.2d at 670. In re Becker, 407 F.3d at 99. Further, it has been noted that
"[t]he doctrine of equitable estoppel is not available against
the government except in the most serious of circumstances, and
is applied with the utmost caution and restraint. Specifically,
estoppel will only be applied upon a showing of affirmative
misconduct by the government." Rojas-Reyes v. I.N.S.,
235 F.3d 115, 126 (2d Cir. 2000) (internal quotations and citations
omitted); see also City of New York v. Shalala,
34 F.3d 1161, 1168 (2d Cir. 1994) (requiring showing of affirmative
misconduct on the part of the government).
Here, no reasonable trier of fact could conclude that Plaintiff
reasonably relied on any representations by Defendants. This is
primarily because Plaintiff had the means by which, with
reasonable diligence, he could have learned the restrictions on
insurability. Had Plaintiff read the reverse side of the Express
Mail label, he would have learned that indemnity was not
available for gold and jewelry notwithstanding any statements by
Postal Service employees. In a somewhat similar case, the First
Circuit held that it was not reasonable to rely upon statements
by postal clerks that are contrary to the writings on a written
receipt given to the customer. A.E. Alie & Sons, Inc. v. U.S.
Postal Serv., 897 F.2d 591, 592-93 (1st Cir. 1990); see also
Rider v. United States Postal Serv., 842 F.2d 239 (9th Cir.
1988); Moody v. United States, 783 F.2d 1244 (5th Cir. 1986).
Even assuming Plaintiff did reasonably rely on representations
by Defendants, there is insufficient evidence in the record upon
which a reasonable trier of fact could conclude that the
government engaged in affirmative misconduct. At most, the
statements by the Postal Service employees and the failure of
Postal Service computers to alert Postal Service employees of the
indemnity restrictions constitute negligence. See Moody,
783 F.2d at 241 ("A simple misstatement is not affirmative
misconduct. The fact that the incorrect information is given orally makes it even less likely to rise to
the level of affirmative misconduct."). The undisputed evidence
in the record is that the Postal Service employees at issue here
were unaware that gold and jewelry were prohibited items. This
lack of knowledge undercuts any claim of affirmative misconduct
and is suggestive only of negligence.
d. Individual Defendants
The claims against the individual defendants also must be
dismissed. There is no evidence in the record that the individual
defendants acted outside the scope of their authority as
employees of the United States Postal Service. As such, any
actions by them in this case were actions by the United States
Postal Service; not the individuals in their individual
capacities. 28 U.S.C. § 2679(b)(1). The absence of evidence from
which a reasonable jury could conclude that any of the individual
defendants acted intentionally to mislead Plaintiff belies a
finding that they acted outside the scope of their employment.
Although the Court sympathizes with Plaintiff's frustration
with the United States Postal Service, unfortunately, relief is
not available in this case.
For the foregoing reasons, it is hereby:
ORDERED, that Defendants' motion for summary judgment is
GRANTED; and it is further,
ORDERED, that Plaintiff's motion for leave to file an amended
complaint is DENIED; and it is further ORDERED, that the Complaint is hereby DISMISSED and the Clerk
of the Court is directed to close the file in this matter.
IT IS SO ORDERED.