[Title 32 CFR E]
[Code of Federal Regulations (annual edition) - July 1, 2002 Edition]
[Title 32 - NATIONAL DEFENSE]
[Subtitle A - Department of Defense (Continued)]
[Chapter Vi - DEPARTMENT OF THE NAVY]
[Subchapter E - CLAIMS]
[From the U.S. Government Printing Office]
32NATIONAL DEFENSE52002-07-012002-07-01falseCLAIMSESUBCHAPTER ENATIONAL DEFENSEDepartment of Defense (Continued)DEPARTMENT OF THE NAVY
SUBCHAPTER E--CLAIMS
PART 750--GENERAL CLAIMS REGULATIONS--Table of Contents
Subpart A--General Provisions for Claims
Sec.
750.1 Scope of subpart A.
750.2 Investigations: In general.
750.3 Investigations: The report.
750.4 Claims: In general.
750.5 Claims: Proper claimants.
750.6 Claims: Presentment.
750.7 Claims: Action by receiving command.
750.8 Claims: Responsibility of the adjudicating authority.
750.9 Claims: Payments.
750.10 Claims: Settlement and release.
750.11 Claims: Denial.
750.12 Claims: Action when suit filed.
750.13 Claims: Single service responsibility.
750.14-750.20 [Reserved]
Subpart B--Federal Tort Claims Act
750.21 Scope of subpart B.
750.22 Exclusiveness of remedy.
750.23 Definitions.
[[Page 383]]
750.24 Statutory/regulatory authority.
750.25 Scope of liability.
750.26 The administrative claim.
750.27 Information and supporting documentation.
750.28 Amendment of the claim.
750.29 Investigation and examination.
750.30 Denial of the claim.
750.31 Reconsideration.
750.32 Suits under the Federal Tort Claims Act (FTCA).
750.33 Damages.
750.34 Settlement and payment.
750.35 Attorney's fees.
750.36 Time limitations.
750.37-750.40 [Reserved]
Subpart C--Military Claims Act
750.41 Scope of subpart C.
750.42 Statutory authority.
750.43 Claims payable.
750.44 Claims not payable.
750.45 Filing claim.
750.46 Applicable law.
750.47 Measure of damages for property claims.
750.48 Measure of damages in injury or death cases.
750.49 Delegations of adjudicating authority.
750.50 Advance payments.
750.51 Final disposition.
750.52 Appeal.
750.53 Cross-servicing.
750.54 Payment of costs, settlements, and judgments related to certain
medical or legal malpractice claims.
750.55 Attorney's fees.
750.56-750.60 [Reserved]
Subpart D--Claims Not Cognizable Under Any Other Provision of Law
750.61 Scope of subpart D.
750.62 Statutory authority.
750.63 Definitions.
750.64 Claim procedures.
750.65 Statute of limitations.
750.66 Officials with authority to settle.
750.67 Scope of liability.
750.68 Claims not payable.
750.69 Measure of damages.
Authority: 5 U.S.C. 301; 10 U.S.C. 939, 5013, and 5148; E.O. 11476,
3 CFR, 1969 Comp., p. 132; 32 CFR 700.206 and 700.1202.
Source: 57 FR 4722, Feb. 7, 1992, unless otherwise noted.
Subpart A--General Provisions for Claims
Sec. 750.1 Scope of subpart A.
(a) General. (1) The Judge Advocate General is responsible for the
administration and supervision of the resolution of claims arising under
the Federal Tort Claims Act (subpart B of this part), the Military
Claims Act (subpart C of this part), the Nonscope Claims Act (subpart D
of this part), the Personnel Claims Act (part 751 of this chapter), the
Foreign Claims Act, the International Agreements Claims Act pertaining
to cost sharing of claims pursuant to international agreements, the
Federal Claims Collection Act of 1966 (subpart A of part 757 of this
chapter), the Medical Care Recovery Act (subpart B of part 757 of this
chapter), and postal claims.
(2) The Deputy Assistant Judge Advocate General (Claims and Tort
Litigation) is the functional manager of the Navy claims system
established to evaluate, adjudicate, and provide litigation support for
claims arising under the acts listed above and is responsible to the
Judge Advocate General for the management of that system. The claims
system consists of field activities delegated claims processing and
adjudicating authority and the attorneys and support personnel assigned
to the Claims and Tort Litigation Division of the Office of the Judge
Advocate General. For economy of language, Naval Legal Service Offices
and Naval Legal Service Office Detachments are referred to as Naval
Legal Service Command Activities.
(3) Commanding officers of commands receiving claims are responsible
for complying with the guidance on investigations in Secs. 750.2 and
750.3 and the guidance on handling and forwarding claims found in
Sec. 750.5.
(b) This subpart A delineates general investigative and claims-
processing requirements to be followed in the handling of all incidents
and claims within the provisions of this part. Where the general
provisions of this subpart A conflict with the specific provisions of
any subsequent subpart of this part, the specific provisions govern.
Sec. 750.2 Investigations: In general.
(a) Conducting the investigation. The command where the incident
giving rise to the claim is alleged to have happened is responsible for
conducting an investigation in accordance with this part.
[[Page 384]]
(b) Thorough investigation. Every incident that may result in a
claim against or in favor of the United States shall be promptly and
thoroughly investigated under this part. Investigations convened for
claims purposes are sufficiently complex that they should be performed
with the assistance and under the supervision of a judge advocate or
other attorney. Where the command has an attorney assigned, he shall be
involved in every aspect of the proceedings. When an attorney is not
assigned to the investigating command, consultation shall be sought from
the appropriate Naval Legal Service Command activity.
(c) Recovery barred. Even when recovery may be barred by statute or
case law, all deaths, serious injuries, and substantial losses to
property that are likely to give rise to claims must be investigated
while the evidence is available. Claims against persons in the naval
service arising from the performance of their official duties shall be
investigated as though they were claims against the United States. When
an incident involves an actual or potential claim against the United
States for property damage only and the total amount likely to be paid
does not exceed $5,000.00, an abbreviated investigative report may be
submitted. Where this monetary figure may be exceeded, but the
circumstances indicate an abbreviated report may be adequate to preserve
the facts and protect the Government's claims interests, approval to
submit a limited investigative report may be sought from the nearest
Naval Legal Service Command activity.
(d) Developing the facts. Any investigation convened for claims
purposes must focus on developing the facts of the incident, i.e., the
who, what, where, when, why, and how of the matter. Opinions on the
possible liability of the United States under any of the claims statutes
listed above shall not be expressed. Early and continuous consultation
with claims attorneys at Naval Legal Service Command activities is
essential to ensure the timely development of all necessary facts, the
identification and preservation of relevant evidence, and to void the
need for supplemental inquiries.
(e) Attorney work product. (1) The convening order and the
preliminary statement of an investigative report prepared to inquire
into the facts of an incident giving or likely to give rise to a claim
against the United States shall include the following:
This investigation has been convened and conducted, and this report
prepared, in contemplation of claims adjudication and litigation and for
the express purpose of assisting attorneys representing the interests of
the United States.
(2) When an investigation is prepared by or at the direction of an
attorney representing the Department of the Navy and is prepared in
reasonable anticipation of litigation, it is exempt from mandatory
disclosure under the Freedom of Information Act exemption (b)(5) and is
normally privileged from discovery in litigation under the attorney work
product privilege. 5 U.S.C. 552(b)(5). Unless an attorney prepares the
report or personally directs its preparation, the investigation may not
be privileged, even if it was prepared in reasonable anticipation of
litigation.
(f) Advance copy. An advance copy of any investigation conducted
because a claim has been, or is likely to be, submitted shall be
forwarded to the Naval Legal Service Command activity claims office
responsible for the area where the incident giving rise to the claim
occurred.
Sec. 750.3 Investigations: The report.
(a) Purpose. The purpose of investigations into claims incidents is
to gather all relevant information about the incident so adjudicating
officers can either pay or deny the claim. The essential task of the
investigating officer is to answer the questions of who, what, where,
when, why and how? The Navy's best interests are served when the
investigation is thorough and is performed in a timely manner so the
claimant can be advised promptly of the action on the claim.
(b) Duties of the investigating officer. It is the investigating
officer's responsibility:
(1) To interview all witnesses to the incident and prepare summaries
of their comments. Obtaining signed statements of Government witnesses
is
[[Page 385]]
not necessary. Summaries of the witnesses' remarks prepared by the
investigating officer are quite sufficient and generally expedite the
gathering of information. On the other hand, written signed statements
should be obtained from the claimant, wherever possible;
(2) To inspect the property alleged to have been damaged by the
action of Government personnel;
(3) To determine the nature, extent, and amount of any damage, and
to obtain pertinent repair bills or estimates and medical, hospital, and
associated bills necessary to permit an evaluation of the claimant's
loss;
(4) To obtain maintenance records of the Navy motor vehicle, plane,
or other piece of equipment involved in the claim;
(5) To reduce to writing and incorporate into an appropriate
investigative report all pertinent statements, summaries, exhibits, and
other evidence considered by the investigator in arriving at his
conclusions; and,
(6) To furnish claim forms to any person expressing an interest in
filing a claim and to advise such personnel where they should file their
claim.
(c) Content of the report. The written report of investigation shall
contain information answering the questions mentioned in Sec. 750.3(a)
and, depending on the nature of the incident, will include the
following:
(1) Date, time, and exact place the accident or incident occurred,
specifying the highway, street, or road;
(2) A concise but complete statement of the incident with reference
to physical facts observed and any statements by the personnel involved;
(3) Names, grades, organizations, and addresses of military
personnel and civilian witnesses;
(4) Opinions as to whether military or civilian employees involved
in the incident were acting within the scope of their duties at the
time;
(5) Description of the Government property involved in the incident
and the nature of any damage it sustained; and,
(6) Descriptions of all private property involved.
(d) Immediate report of certain events. The Navy or Marine Corps
activity most directly involved in the incident shall notify the Judge
Advocate General and the appropriate adjudicating authority immediately
by message, electronic mail, or telephone in any of the following
circumstances:
(1) Claims or possible claims arising out of a major disaster or out
of an incident giving rise to five or more possible death or serious
injury claims.
(2) Upon filing of a claim that could result in litigation that
would involve a new precedent or point of law.
(3) Claims or possible claims that involve or are likely to involve
an agency other than the Department of the Navy.
(e) Request for assistance. When an incident occurs at a place where
the naval service does not have an installation or a unit conveniently
located for conducting an investigation, the commanding officer or
officer in charge with responsibility for performing the investigation
may request assistance from the commanding officer or officer in charge
of any other organization of the Department of Defense. Likewise, if a
commanding officer or officer in charge of any other organization of the
Department of Defense requests such assistance from a naval commanding
officer or officer in charge, the latter should normally comply. If a
complete investigation is requested it will be performed in compliance
with the regulations of the requested service. These investigations are
normally conducted without reimbursement for per diem, mileage, or other
expenses incurred by the investigating unit or installation.
(f) Report of Motor Vehicle Accident, Standard Form 91. RCS OPNAV
5100-6. The operator of any Government motor vehicle involved in an
accident of any sort shall be responsible for making an immediate report
on the Operator's Report of Motor Vehicle Accident, Standard Form 91.
This operator's report shall be made even though the operator of the
other vehicle, or any other person involved, states that no claim will
be filed, or the only vehicles involved are Government owned. An
accident shall be reported by the operator regardless of who was
injured, what property was damaged, or who was responsible. The
operator's report shall be referred to the investigating officer, who
shall be responsible for examining it
[[Page 386]]
for completeness and accuracy and who shall file it for future reference
or for attachment to any subsequent investigative report of the
accident.
(g) Priority of the investigation. To ensure prompt investigation of
every incident while witnesses are available and before damage has been
repaired, the duties of an investigating officer shall ordinarily have
priority over any other assignments he may have.
(h) Contents of the report of investigation. The report should
include the following items in addition to the requirements in
Sec. 750.3(c):
(1) If pertinent to the investigation, the investigating officer
should obtain a statement from claimant's employer showing claimant's
occupation, wage or salary, and time lost from work as a result of the
incident. In case of personal injury, the investigating officer should
ask claimant to submit a written statement from the attending physician
setting forth the nature and extent of injury and treatment, the
duration and extent of any disability, the prognosis, and the period of
hospitalization or incapacity.
(2) A Privacy Act statement for each person who was asked to furnish
personal information shall be provided. Social Security numbers of
military personnel and civilian employees of the U.S. Government should
be included in the report but should be obtained from available records,
not from the individual.
(3) Names, addresses, and ages of all civilians or military
personnel injured or killed; names of insurance companies; information
on the nature and extent of injuries, degree of permanent disability,
prognosis, period of hospitalization, name and address of attending
physician and hospital, and amount of medical, hospital, and burial
expenses actually incurred; occupation and wage or salary of civilians
injured or killed; and names, addresses, ages, relationship, and extent
of dependency of survivors of any such person fatally injured should be
included.
(4) If straying animals are involved, a statement as to whether the
jurisdiction has an ``open range law'' and, if so, reference to such
statute.
(5) A statement as to whether any person involved violated any State
or Federal statute, local ordinance, or installation regulation and, if
so, in what respect. The statute, ordinance, or regulation should be set
out in full.
(6) A statement on whether a police investigation was made. A copy
of the police report of investigation should be included if available.
(7) A statement on whether arrests were made or charges preferred,
and the result of any trial or hearing in civil or military courts.
(i) Expert opinions. In appropriate cases the opinion of an expert
may be required to evaluate the extent of damage to a potential
claimant's property. In such cases the investigating officer should
consult Navy-employed experts, experts employed by other departments of
the U.S. Government, or civilian experts to obtain a competent
assessment of claimant's damages or otherwise to protect the
Government's interest. Any cost involved with obtaining the opinion of
an expert not employed by the Navy shall be borne by the command
conducting the investigation. Any cost involved in obtaining the opinion
of a Navy-employed expert shall be borne by the command to which the
expert is attached. Medical experts shall be employed only after
consultation with the Chief, Bureau of Medicine and Surgery.
(j) Action by command initiating the investigation and subsequent
reviewing authorities. (1) The command initiating the investigation in
accordance with Sec. 750.3 or Sec. 750.5 shall review the report of
investigation. If additional investigation is required or omissions or
other deficiencies are noted, the investigation should be promptly
returned with an endorsement indicating that a supplemental
investigative report will be submitted. If the original or supplemental
report is in order, it shall be forwarded by endorsement, with any
pertinent comments and recommendations. An advance copy of the
investigation shall be forwarded to the Naval Legal Service Command
activity having territorial responsibility for the area where the
incident giving rise to the claim occurred as indicated in
Sec. 750.34(c)(2)(ii).
(2) A reviewing authority may direct that additional investigation
be conducted, if considered necessary. The
[[Page 387]]
initial investigation should not be returned for such additional
investigation, but should be forwarded by an endorsement indicating that
the supplemental material will be submitted. The report shall be
endorsed and forwarded to the next-level authority with appropriate
recommendations including an assessment of the responsibility for the
incident and a recommendation as to the disposition of any claim that
may subsequently be filed. If a reviewing authority may be an
adjudicating authority for a claim subsequently filed, one copy of the
report shall be retained by such authority for at least 2 years after
the incident.
(3) It is essential that each investigative report reflect that a
good faith effort was made to comply with the Privacy Act of 1974 (5
U.S.C. 552a) as implemented by 32 CFR part 701, subpart F. Any
indication of noncompliance shall be explained either in the preliminary
statement or the forwarding endorsements and, when required, corrected.
The adjudicating Naval Legal Service Command activity listed in
Sec. 750.34(c)(2)(ii) has the responsibility to ensure that remedial
action is taken to rectify noncompliance indicated in the investigative
report prior to forwarding the report to the Judge Advocate General.
Sec. 750.4 Claims: In general.
(a) Claims against the United States. Claims against the United
States shall receive prompt and professional disposition. Every effort
will be made to ensure an investigation is thoroughly and accurately
completed, the claimant's allegations evaluated promptly, and where
liability is established, a check issued as quickly as possible to
prevent further harm to a meritorious claimant. Similarly, claims not
payble will be processed promptly and the claimant advised of the
reasons for the denial.
(b) Claims in favor of the United States. Potential claims in favor
of the United States will be critically evaluated and, where
appropriate, promptly asserted and aggressively pursued.
(c) Assistance to Claimants. Claimants or potential claimants who
inquire about their rights or the procedures to be followed in the
resolution of their claims will be referred to a claims officer. The
officer will provide claim forms, advise where the forms should be
filed, and inform the requester of the type of subtantiating information
required. Claims officers may provide advice on the claims process but
shall not provide advice or opinions about the merits or the wisdom of
filing a particular claim. While claims officers have a responsiblity to
provide general information about claims, they must consider 18 U.S.C.
205 which makes it a crime for an officer or employee of the United
States to act as an agent or an attorney in the prosecution of any claim
against the United States.
Sec. 750.5 Claims: Proper claimants.
(a) Damage to property cases. A claim for damage to, or destruction
or loss of, property shall be presented by the owner of the property or
a duly authorized agent or legal representative. ``Owner'' includes a
bailee, lessee, or mortgagor, but does not include a mortgagee,
conditional vendor, or other person having title for security purposes
only.
(b) Personal injury and death cases. A claim for personal injury
shall be presented by the person injured or a duly authorized agent or
legal representative, or, in the case of death, by the properly
appointed legal representative of the deceased's estate or survivor
where authorized by State law.
(c) Subrogation. A subrogor and a subrogee may file claims jointly
or separately. When separate claims are filed and each claim
individually is within local adjudicating authority limits, they may be
processed locally, even if the aggregate of such claims exceeds local
monetary jurisdiction, if they do not exceed the sum for which approval
of the Department of Justice is required (currently, $100,000.00) under
the Federal Tort Claims Act. Where they exceed this amount, they shall
be referred to the Claims and Tort Litigation Division.
(d) Limitation on transfers and assignment. All transfers and
assignments made of any claim upon the United States, and all powers of
attorney, orders, or other authorities for receiving payment of any such
claim, are absolutely null and void unless they are
[[Page 388]]
made after the allowance of such a claim, the ascertainment of the
amount due, and the issuing of a warrant for the payment thereof. 31
U.S.C. 203. This statutory provision does not apply to the assignment of
a claim by operation of law, as in the case of a receiver or trustee in
bankruptcy appointed for an individual, firm, or corporation, or the
case of an administrator or executor of the estate of a person deceased,
or an insurer subrogated to the rights of the insured.
Sec. 750.6 Claims: Presentment.
(a) Written demand and Standard Form 95. A claim shall be submitted
by presenting a written statement with the amount of the claim expressed
in a sum certain, and, as far as possible, describing the detailed facts
and circumstances surrounding the incident from which the claim arose.
The Claim for Damage or Injury, Standard Form 95, shall be used whenever
practical for claims under the Federal Tort and Military Claims Acts.
Claims under the Personnel Claims Act shall be submitted on DD Form
1842. The claim and all other papers requiring the signature of the
claimant shall be signed by the claimant personally or by a duly
authorized agent. If signed by an agent or legal representative, the
claim shall indicate the title or capacity of the person signing and be
accompanied by evidence of appointment. When more than one person has a
claim arising from the same incident, each person shall file a claim
separately. A subrogor and a subrogee may file a claim jointly or
separately.
(b) To whom submitted. Claims under the Federal Tort and Military
Claims Acts shall be submitted to the commanding officer of the Navy or
Marine Corps activity involved, if known. Otherwise, they shall be
submitted to the commanding officer of any Navy or Marine Corps
activity, preferably the one nearest to where the accident occurred, the
local Naval Legal Service Command activity, or to the Judge Advocate
General, 200 Stovall Street, Alexandria, VA 22332-2400.
Sec. 750.7 Claims: Action by receiving command.
(a) Record date of receipt. The first command receiving a claim
shall stamp or mark the date of recipt on the letter or claim form. The
envelope in which the claim was received shall be preserved.
(b) Determine the military activity involved. The receiving command
shall determine the Navy or Marine Corps activity most directly involved
with the claim--usually the command where the incident is alleged to
have occurred--and forward a copy of the claim to that activity. The
original claim (and the transmittal letter, if a copy is forwarded to a
more appropriate activity) should immediately be sent to the servicing
Naval Legal Service Command activity claims office.
(c) Initiate an investigation. An investigation under this part
shall be commenced immediately by the command most directly involved
with the claim. Once the investigation has been completed, an advance
copy shall be forwarded by the convening authority to the Naval Legal
Service Command activity providing claims support. Waiting until
endorsements have been obtained before providing a copy of the
investigation to the cognizant claims adjudicating authority is neither
required nor desirable. The facts of the incident must be made known to
cognizant claims personnel as soon as possible.
Sec. 750.8 Claims: Responsibility of the adjudicating authority.
(a) Reviewing prior actions. The adjudicating authority determines
whether an adequate investigation has been conducted, whether the
initial receipt date is recorded on the face of the claim, and whether
all holders of the investigation, if completed, are advised of the
receipt of the claim.
(b) Determining sufficiency of the claim. The claim should be
reviewed and a determination of its sufficiency made. If the claim is
not sufficient as received, it shall be returned to the party who
submitted it along with an explanation of the insufficiency. This does
not constitute denial of the claim. The claim
[[Page 389]]
shall not be considered ``presented'' until it is received in proper
form.
(c) Adjudicating the claim. (1) The adjudicating authority shall
evaluate and either approve or disapprove all claims within its
authority, except where the payment of multiple Federal Torts Claims Act
claims arising from the same incident will exceed $100,000.00 in the
aggregate and thereby require approval of the Department of Justice. In
this latter instance, the claims and the investigative report shall be
forwarded to the Judge Advocate General for action.
(2) The adjudicating authority shall evaluate and, where liability
is established, attempt to settle claims for amounts within its
adjudicating authority. Permission of higher authority to conduct
settlement negotiations to effect such settlements is not necessary.
Negotiation at settlement figures above the adjudicating authority's
payment limits may be attempted if the claimant is informed that the
final decision on the claim will be made at a higher level.
(3) If a claim cannot be approved, settled, compromised, or denied
within the adjudicating authority limits established in this
instruction, the claim shall be referred promptly to the Judge Advocate
General. The following materials shall be forwarded with the claim:
(i) An official endorsement or letter of transmittal containing a
recommendation on resolution of the claim.
(ii) A memorandum of law containing a review of applicable law, an
evaluation of liability, and recommendation on the settlement value of
the case. This memorandum should concentrate on the unusual aspects of
applicable law, chronicle the attempts to resolve the claim at the local
level, provide information about the availability of witnesses, and
outline any other information material to a resolution of the claim,
i.e. prior dealings with the claimant's attorney, local procedural
rules, or peculiarities that may make trial difficult. The memorandum
should not repeat information readily obtained from the investigative
report and should be tailored to the complexity of the issues presented.
An abbreviated memorandum should be submitted if the claim is
statutorily barred because of the statute of limitations or Federal
Employees' Compensation Act or otherwise barred because of the Feres
doctrine.
(iii) The original investigative report and all allied papers.
(iv) The original claim filed by the claimant (and the envelope in
which it arrived, if preserved). The adjudicating authority shall retain
at least one copy of all papers forwarded to the Judge Advocate General
under this section.
(d) Preparing litigation reports. A litigation report is prepared
when a lawsuit is filed and a complaint received. The report is
addressed to the Department of Justice official or the U.S. Attorney
having cognizance of the matter. The report is a narrative summary of
the facts upon which the suit is based and has as enclosures the claims
file and a memorandum of law on the issues presented.
(1) When the claim has been forwarded to the Judge Advocate General
prior to the initiation of a suit, litigation reports originate in the
Claims and Tort Litigation Division of the Office of the Judge Advocate
General.
(2) When, however, the claim has not been forwarded and is still
under the cognizance of the Naval Legal Service Command claims office,
that command will ordinarily be required to prepare and forward the
litigation report to the requesting organization. In this instance, the
litigation report should be sent directly to the cognizant Department of
Justice official or U.S. Attorney with a copy of the report and all
enclosures to the Judge Advocate General.
Sec. 750.9 Claims: Payments.
Claims approved for payment shall be expeditiously forwarded to the
disbursing office or the General Accounting Office depending on the
claims act involved and the amount of the requested payment. Generally,
payment of a Federal tort claim above $2,500.00 requires submission of
the payment voucher to the General Accounting Office. All other field
authorized payment vouchers are submitted directly to the servicing
disbursing office for payment.
[[Page 390]]
Sec. 750.10 Claims: Settlement and release.
(a) Fully and partially approved claims. When a claim is approved
for payment in the amount claimed, no settlement agreement is necessary.
When a federal tort, military, or non-scope claim is approved for
payment in a lesser amount than that claimed, the claimant must indicate
in writing a willingness to accept the offered amount in full settlement
and final satisfaction of the claim. In the latter instance, no payment
will be made until a signed settlement agreement has been received.
(b) Release. (1) Acceptance by the claimant of an award or
settlement made by the Secretary of the Navy or designees, or the
Attorney General or designees, is final upon acceptance by the claimant.
Acceptance is a complete release by claimant of any claim against the
United States by reason of the same subject manner. Claimant's
acceptance of an advance payment does not have the same effect.
(2) The claimant's acceptance of an award or settlement made under
the provisions governing the administrative settlement of Federal tort
claims or the civil action provisions of 28 U.S.C. 1346(b) also
constitutes a complete release of any claim against any employee of the
Government whose act or omission gave rise to the claim.
Sec. 750.11 Claims: Denial.
A final denial of any claim within this chapter shall be in writing
and sent to the claimant, his attorney, or legal representative by
certified or registered mail with return receipt requested. The denial
notification shall include a statement of the reason or reasons for the
denial. The notification shall include a statement that the claimant
may:
(a) If the claim is cognizable under the Federal Tort Claims Act,
file suit in the appropriate United States District Court within 6
months of the date of the denial notification.
(b) If the claim is cognizable under the Military Claims Act, appeal
in writing to the Secretary of the Navy within 30 days of the receipt of
the denial notification. The notice of denial shall inform the claimant
or his representative that suit is not possible under the Act.
Sec. 750.12 Claims: Action when suit filed.
(a) Action required of any Navy official receiving notice of suit.
The commencement, under the civil action provisions of the Federal Tort
Claims Act (28 U.S.C. 1346(b)), of any action against the United States
and involving the Navy, that comes to the attention of any official in
connection with his official duties, shall be reported immediately to
the commanding officer of the servicing Naval Legal Service Command
activity who shall take any necessary action and provide prompt
notification to the Judge Advocate General. The commencement of a civil
action against an employee of the Navy for actions arising from the
performance of official duties shall be reported in the same manner.
(b) Steps upon commencement of civil action. Upon receipt by the
Judge Advocate General of notice from the Department of Justice or other
source that a civil action involving the Navy has been initiated under
the civil action provisions of the Federal Tort Claims Act, and there
being no investigative report available at the headquarters, a request
shall be made to the commanding officer of the appropriate Naval Legal
Service Command activity for an investigative report into the incident.
If there is not a completed investigation, the request shall be
forwarded to the appropriate naval activity to convene and complete such
a report. The commanding officer of the Naval Legal Service Command
activity shall determine whether an administrative claim had been filed
and, if available information indicates none had, advise the Office of
the Judge Advocate General (Claims and Tort Litigation Division)
immediately.
Sec. 750.13 Claims: Single service responsibility.
(a) The Department of Defense has assigned single-service
responsibility for processing claims in foreign countries under the
following acts. The
[[Page 391]]
service and country assignments are in DODDIR 5515.8 of 9 June 1990.\1\
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\1\ Copies may be obtained if needed, from Commanding Officer, U.S.
Naval Publications and Forms Center, 5801 Tabor Avenue, Philadelphia, PA
19120.
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(1) Foreign Claims Act (10 U.S.C. 2734);
(2) Military Claims Act (10 U.S.C. 2733);
(3) International Agreements Claims Act (10 U.S.C. 2734a and b), on
the pro-rata cost sharing of claims pursuant to international agreement;
(4) NATO Status of Forces Agreement (4 UST 1792, TIAS 2846) and
other similar agreements;
(5) Medical Care Recovery Act (42 U.S.C. 2651-2653) claims for
reimbursement for medical care furnished by the United States;
(6) Nonscope Claims Act (10 U.S.C. 2737), claims not cognizable
under any other provision of law;
(7) Federal Claims Collection Act of 1966 (31 U.S.C. 3701); the Act
of June 1921 (31 U.S.C. 3702), claims and demands by the U.S.
Government; and
(8) Public Law 87-212 (10 U.S.C. 2736), advance or emergency
payments.
(b) Single service assignments for processing claims mentioned above
are as follows:
(1) Department of the Army: Austria, Belgium, El Salvador, France,
the Federal Republic of Germany, Grenada, Honduras, Korea, the Marshall
Islands, and Switzerland and as the Receiving State Office in the United
States under 10 U.S.C. 2734a and 2734b and the NATO Status of Forces
Agreement, and other Status of Forces Agreements with countries not
covered by the NATO agreement.
(2) Department of the Navy: Bahrain, Iceland, Israel, Italy,
Portugal, and Tunisia.
(3) Department of the Air Force: Australia, Azores, Canada, Cyprus,
Denmark, Greece, India, Japan, Luxembourg, Morocco, Nepal, Netherlands,
Norway, Pakistan, Saudi Arabia, Spain, Turkey, the United Kingdom,
Egypt, Oman, and claims involving, or generated by, the U.S. Central
Command (CENTCOM) and the U.S. Special Operations Command (USSOC), that
arise in countries not specifically assigned to the Departments of the
Army and the Navy.
(c) U.S. forces afloat cases under $2,500.00. Notwithstanding the
single service assignments above, the Navy may settle claims under
$2,500.00 caused by personnel not acting within the scope of employment
and arising in foreign ports visited by U.S. forces afloat and may,
subject to the concurrence of the authorities of the receiving state
concerned, process such claims.
Secs. 750.14-750.20 [Reserved]
Subpart B--Federal Tort Claims Act
Sec. 750.21 Scope of subpart B.
This subpart provides information regarding the administrative
processing and consideration of claims against the United States under
the FTCA. The FTCA is a limited waiver of sovereign immunity. Under the
FTCA, an individual can seek money damages for personal injury, death,
or property damage caused by the negligent or wrongful act or omission
of a Federal employee acting within the scope of employment. The FTCA
also provides for compensation for injuries caused by certain
intentional, wrongful conduct. The liability of the United States is
determined in accordance with the law of the State where the act or
omission occured.
Sec. 750.22 Exclusiveness of remedy.
(a) The Federal Employees Liability Reform and Tort Compensation Act
of 1988, Public Law 100-694 (amending 28 U.S.C. 2679(b) and 2679(d)),
provides that the exclusive remedy for damage or loss of property, or
personal injury or death arising from the negligent or wrongful acts or
omissions of all Federal employees, acting within the scope of their
employment, will be against the United States. This immunity from
personal liability does not extend to allegations of constitutional
torts, nor to allegations of violations of statutes specifically
authorizing suits against individuals.
(b) Other statutory provisions create immunity from personal
liability for
[[Page 392]]
specific categories of Federal employees whose conduct, within the scope
of their employment, gives rise to claims against the Government.
Department of Defense health care providers are specifically protected
by 10 U.S.C. 1089, the Gonzalez Act. DOD attorneys are specifically
protected by 10 U.S.C. 1054.
Sec. 750.23 Definitions.
(a) Negligent conduct. Generally, negligence is the failure to
exercise that degree of care, skill, or diligence a reasonable person
would exercise under similar circumstances. Negligent conduct can result
from either an act or a failure to act. The law of the place where the
conduct occurred will determine whether a cause of action lies against
the Government. 28 U.S.C. 1346(b) and 2674.
(b) Intentional torts. Although any employee who commits an
intentional tort is normally considered to be acting outside the scope
of employment, the FTCA does allow claimants to seek compensation for
injuries arising out of the intentional torts of assault, battery, false
imprisonment, false arrest, abuse of process, and malicious prosecution,
if committed by a Federal investigative or law enforcement officer. An
``investigative or law enforcement officer'' is any officer of the
United States empowered by law to execute searches, to seize evidence,
or to make arrests for violations of Federal law. 28 U.S.C. 2680(h).
(c) Government employees--(1) General. ``Employee of the
Government,'' defined at 28 U.S.C. 2671, includes officers or employees
of any Federal agency, members of the U.S. military or naval forces, and
persons acting on behalf of a Federal agency in an official capacity.
(2) Government contractors. Government (also referred to as
independent) contractors, are those individuals or businesses who enter
into contracts with the United States to provide goods or services.
Because the definition of ``Federal agency,'' found at 28 U.S.C. 2671,
specifically excludes ``any contractor with the United States,'' the
United States is generally not liable for the negligence of Government
contractors. There are, however, three limited exceptions to the general
rule, under which a cause of action against the United States has been
found to exist in some jurisdictions. They are:
(i) Where the thing or service contracted for is deemed to be an
``inherently dangerous activity'';
(ii) where a nondelegable duty in the employer has been created by
law; or,
(iii) where the employer retains control over certain aspects of the
contract and fails to discharge that control in a reasonable manner.
(3) Employees of nonappropriated-fund activities. Nonappropriated-
fund activities are entities established and operated for the benefit of
military members and their dependents, and have been judicially
determined to be ``arms'' of the Federal government. These entities
operate from self-generated funds, rather than from funds appropriated
by Congress. Examples include Navy and Marine Corps Exchanges, officer
or enlisted clubs, and recreational services activities. A claim arising
out of the act or omission of an employee of a nonappropriated-fund
activity not located in a foreign country, acting within the scope of
employment, is an act or omission committed by a Federal employee and
will be handled in accordance with the FTCA.
(d) Scope of employment. ``Scope of employment'' is defined by the
law of respondeat superior (master and servant) of the place where the
act or omission occurred. Although 28 U.S.C. 2671 states that acting
within the scope of employment means acting in the line of duty, the
converse is not always true. For administrative purposes, a Government
employee may be found ``in the line of duty,'' yet not meet the criteria
for a finding of ``within the scope of employment'' under the law of the
place where the act or omission occurred.
Sec. 750.24 Statutory/regulatory authority.
The statutory provisions of the Federal Tort Claims Act (FTCA) are
at 28 U.S.C. 1346(b), 2671-2672, and 2674-2680. The Attorney General of
the United States has issued regulations on administrative claims filed
under the FTCA at 28 CFR part 14. If the provisions of this section and
the Attorney
[[Page 393]]
General's regulations conflict, the Attorney General's regulations
prevail.
Sec. 750.25 Scope of liability.
(a) Territorial limitations. The FTCA does not apply to any claim
arising in a foreign country. 28 U.S.C. 2680(k) and Beattie v. United
States, 756 F.2d 91 (D.C. Cir. 1984).
(b) Exclusions from liability. Statutes and case law have
established categories of exclusions from FTCA liability.
(1) Statutory exclusions. Section 2680 of Title 28 lists claims not
cognizable under the FTCA. They include:
(i) Claims based on the exercise or performance of, or the failure
to exercise or perform, a discretionary Government function;
(ii) Admiralty claims under 46 U.S.C. 741-752 or 781-790. Claims
under the Death on the High Seas Act (46 U.S.C. 761), however, are
cognizable under the FTCA. All admiralty claims will be referred to the
Judge Advocate General for adjudication. Admiralty claims against the
Navy shall be processed under part 752 of this Chapter;
(iii) Claims arising from intentional torts, except those referred
to in Sec. 750.23(b);
(iv) Claims arising from the combat activities of the military or
naval forces, or the Coast Guard, during time of war.
(2) Additional claims not payable. Although not expressly
statutorily excepted, the following types of claims shall not be paid
under the FTCA:
(i) A claim for personal injury or death of a member of the armed
forces of the United States incurred incident to military service or
duty. Compare United States v. Johnson, 481 U.S. 681 (1987); Feres v.
United States, 340 U.S. 135 (1950) with Brooks v. United States, 337
U.S. 49 (1949);
(ii) Any claim by military personnel or civilian employees of the
Navy, paid from appropriated funds, for personal property damage
occurring incident to service or Federal employment, cognizable under 31
U.S.C. 3721 and the applicable Personnel Claims Regulations, 32 CFR part
751;
(iii) Any claim by employees of nonappropriated-fund activities for
personal property damage occurring incident to Federal employment. These
claims will be processed as indicated in 32 CFR part 756;
(iv) Any claim for personal injury or death covered by the Federal
Employees' Compensation Act (5 U.S.C. 8116c);
(v) Any claim for personal injury or death covered by the Longshore
and Harbor Workers' Compensation Act (33 U.S.C. 905 and 5 U.S.C. 8171);
(vi) That portion of any claim for personal injury or property
damage, caused by the negligence or fault of a Government contractor, to
the extent such contractor may have assumed liability under the terms of
the contract (see United States v. Seckinger, 397 U.S. 203 (1969) and
Sec. 750.23(c)(2);
(vii) Any claim against the Department of the Navy by another
Federal agency. Property belonging to the Government is not owned by any
one department of the Government. The Government does not reimburse
itself for the loss of its own property except where specifically
provided for by law; and
(viii) Any claim for damage to a vehicle rented pursuant to travel
orders.
Sec. 750.26 The administrative claim.
(a) Proper claimant. See Sec. 750.5 of this part.
(b) Claim presented by agent or legal representative. A claim filed
by an agent or legal representative will be filed in the name of the
claimant; be signed by the agent or legal representative; show the title
or legal capacity of the person signing; and be accompanied by evidence
of the individual's authority to file a claim on behalf of the claimant.
(c) Proper claim. A claim is a notice in writing to the appropriate
Federal agency of an incident giving rise to Government liability under
the FTCA. It must include a demand for money damages in a definite sum
for property damage, personal injury, or death alleged to have occurred
by reason of the incident. The Attorney General's regulations specify
that the claim be filed on a Standard Form 95 or other written
notification of the incident. If a letter or other written notification
is used, it is essential that it set forth the same basic information
required by Standard Form 95. Failure to do so may result in
[[Page 394]]
a determination that the administrative claim is incomplete. A suit may
be dismissed on the ground of lack of subject matter jurisdiction based
on claimant's failure to present a proper claim as required by 28 U.S.C.
2675(a).
(d) Presentment. A claim is deemed presented when received by the
Navy in proper form. A claim against another agency, mistakenly
addressed to or filed with the Navy shall be transferred to the
appropriate agency, if ascertainable, or returned to the claimant. A
claimant presenting identical claims with more than one agency should
identify every agency to which the claim is submitted on every claim
form presented. Claims officers shall coordinate with all other affected
agencies and ensure a lead agency is designated. 28 CFR 14.2.
Sec. 750.27 Information and supporting documentation.
(a) Proper documentation. Depending on the type of claim, claimants
may be required to submit information, as follows:
(1) Death. (i) An authenticated death certificate or other competent
evidence showing cause of death, date of death, and age of the decedent;
(ii) Decedent's employment or occupation at time of death, including
monthly or yearly earnings and the duration of last employment;
(iii) Full names, addresses, birth dates, relationship, and marital
status of the decedent's survivors, including identification of
survivors dependent for support upon decedent at the time of death;
(iv) Degree of support provided by decedent to each survivor at time
of death;
(v) Decedent's general physical and mental condition before death;
(vi) Itemized bills for medical and burial expenses;
(vii) If damages for pain and suffering are claimed, a physician's
detailed statement specifying the injuries suffered, duration of pain
and suffering, any drugs administered for pain, and the decedent's
physical condition during the interval between injury and death; and,
(viii) Any other evidence or information which may affect the
liability of the United States.
(2) Personal injury. (i) A written report by attending physician or
dentist on the nature and extent of the injury, nature and extent of
treatment, any degree of temporary or permanent disability, the
prognosis, period of hospitalization, any any diminished earning
capacity. In addition, the claimant may be required to submit to a
physical or mental examination by a physician employed by any Federal
agency. Upon written request, a copy of the report of the examining
physician shall be provided;
(ii) Itemized bills for medical, dental, and hospital expenses
incurred, or itemized receipts of payments of such expenses;
(iii) A statement of expected expenses for future treatment;
(iv) If a claim is made for lost wages, a written statement from the
employer itemizing actual time and wages lost;
(v) If a claim is made for lost self-employed income, documentary
evidence showing the amount of earnings actually lost; and
(vi) Any other evidence or information which may affect the
liability of the United States for the personal injury or the damages
claimed.
(3) Property damage. (i) Proof of ownership;
(ii) A detailed statement of the amount claimed for each item of
property;
(iii) An itemized receipt of payment for necessary repairs or
itemized written estimates of the cost of repairs;
(iv) A statement listing date of purchase, purchase price, and
salvage value where repair is not economical; and
(v) Any other evidence or information which may affect the liability
of the United States for the property damage claimed.
(b) Failure to submit necessary documentation. If claimant fails to
provide sufficient supporting documentation, claimant should be notified
of the deficiency. If after notice of the deficiency, including
reference to 28 CFR 14.4, the information is still not supplied, two
follow-up requests should be sent by
[[Page 395]]
certified mail, return receipt requested. If after a reasonable period
of time the information is still not provided, the appropriate
adjudicating authority should deny the claim.
Sec. 750.28 Amendment of the claim.
A proper claim may be amended at any time prior to settlement,
denial, or the filing of suit. An amendment must be submitted in writing
and must be signed by the claimant or duly authorized agent or legal
representative. No finally denied claim for which reconsideration has
not been requested under Sec. 750.31 may be amended.
Sec. 750.29 Investigation and examination.
Subpart A of this part requires an investigation for every incident
that may result in a claim against or in favor of the United States.
Where a previously unanticipated claim is filed against the Government
and an investigation has not already been conducted, the appropriate
claims officer shall immediately request an investigation. See subpart A
of this part for specific action required by an adjudicating authority.
Sec. 750.30 Denial of the claim.
Final denial of an administrative claim shall be in writing and
shall be sent to the claimant, his duly authorized agent or legal
representative by certified or registered mail, with return receipt
requested. The notification of final denial shall include the reasons
for the denial. The notification shall include a statement informing the
claimant of his right to file suit in the appropriate Federal district
court not later than 6 months after the date of the mailing of the
notification. 28 CFR 14.9(a).
Sec. 750.31 Reconsideration.
(a) Request. Prior to the commencement of suit and prior to the
expiration of the 6-month period for filing suit, a claimant or his duly
authorized agent or legal representative may present a request for
reconsideration to the authority who denied the claim. The request shall
be in writing and shall state the reasons for the requested
reconsideration. A request for reconsideration is presented on the date
it is received by the DON. 28 CFR 14.9(b).
(b) Proper basis. A request for reconsideration shall set forth
claimant's reasons for the request, and shall include any supplemental
supporting evidence or information. Any writing communicating a desire
for reconsideration that reasonably appears to have been presented
solely for the purpose of extending the statutory period for filing
suit, shall not be treated as a request for reconsideration. Claimant or
claimant's authorized representative shall be notified promptly that the
writing is not considered a proper request for reconsideration.
(c) Effect of presentment of request. The presentment of a proper
request for reconsideration starts a new 6-month period for the DON to
act on the request to reconsider. The claimant may not file suit until
the expiration of the new 6-month period, or until after the date of
mailing of the final denial of the request. Final denial of a request
for reconsideration shall be accomplished in the manner prescribed in
Sec. 750.30. 28 CFR 14.9(b).
Sec. 750.32 Suits under the Federal Tort Claims Act (FTCA).
(a) Venue. Venue is proper only in the judicial district where the
plaintiff resides or where the act or omission complained of occurred.
28 U.S.C. 1402.
(b) Jury trial. There is no right to trial by jury in suits brought
under the FTCA. 28 U.S.C. 2402.
(c) Settlement. The Attorney General of the United States, or
designee, may arbitrate, compromise, or settle any action filed under
the FTCA. 28 U.S.C. 2677.
(d) Litigation support--(1) Who provides. The adjudicating authority
holding a claim at the time suit is filed shall be responsible for
providing necessary assistance to the Department of Justice official or
U.S. Attorney responsible for defending the Government's interests.
(2) Litigation report. A litigation report, including a legal
memorandum emphasizing anticipated issues during litigation, shall be
furnished to the appropriate Department of Justice official or U.S.
Attorney.
[[Page 396]]
(3) Pretrial discovery. Complete and timely responses to discovery
requests are vital to the effective defense of tort litigation. Subject
to existing personnel and resources available, appropriate assistance
shall be provided. The Judge Advocate General should be notified
promptly when special problems are encountered in providing the
requested assistance.
(4) Preservation of evidence. Tort litigation is often accomplished
over an extended period of time. Every effort shall be made to preserve
files, documents, and other tangible evidence that may bear on
litigation. Destruction of such evidence, even in accordance with
routine operating procedures, undermines defense of a case.
Sec. 750.33 Damages.
(a) Generally. The measure of damages is determined by the law of
the place where the act or omission occurred. When there is a conflict
between local and applicable Federal law, the latter governs. 28 U.S.C.
1346(b).
(b) Limitations on liability. The United States is not liable for
interest prior to judgment or for punitive damages. In a death case, if
the place where the act or omission complained of occurred provides for
only punitive damages, the United States will be liable in lieu thereof,
for actual or compensatory damages. 28 U.S.C. 2674.
(c) Setoff. The United States is not obligated to pay twice for the
same injury. Claimants under the FTCA may have received Government
benefits or services as the result of the alleged tort. The cost of
these services or benefits shall be considered in arriving at any award
of damages. For example, the cost of medical or hospital services
furnished at Government expense, including CHAMPUS payments, shall be
considered. Additionally, benefits or services received under the
Veterans Act (38 U.S.C. 101-800) must be considered. Brooks v. United
States, 337 U.S. 49 (1949).
(d) Suit. Any damage award in a suit brought under the FTCA is
limited to the amount claimed administratively unless based on newly
discovered evidence. 28 U.S.C. 2675(b). Plaintiff must prove the
increased demand is based on facts not reasonably discoverable at the
time of the presentment of the claim or on intervening facts relating to
the amount of the claim.
Sec. 750.34 Settlement and payment.
(a) Settlement agreement--(1) When required. A settlement agreement,
signed by the claimant, must be received prior to payment in every case
in which the claim is either:
(i) Settled for less than the full amount claimed, or
(ii) The claim was not presented on a Standard Form 95.
(2) Contents. Every settlement agreement must contain language
indicating payment is in full and final settlement of the applicable
claim. Each settlement agreement shall contain language indicating
acceptance of the settlement amount by the claimant, or his agent or
legal representative, shall be final and conclusive on the claimant, or
his agent or legal representative, and any other person on whose behalf
or for whose benefit the claim has been presented, and shall constitute
a complete release of any claim against the United States and against
any employee of the Government whose conduct gave rise to the claim, by
reason of the same subject matter. 28 CFR 14.10(b). In cases where
partial payment will benefit both claimant and the Government, such as
payment for property damage to an automobile, the settlement agreement
shall be tailored to reflect the terms of the partial settlement. All
settlement agreements shall contain a recitation of the applicable
statutory limitation of attorneys fees. 28 U.S.C. 2678.
(b) DON role in settlement negotiations involving the U.S. Attorney
or DOJ. Agency concurrence is generally sought by the Department of
Justice or U.S. Attorney's office prior to settlement of suits involving
the DON. Requests for concurrence in settlement proposals shall be
referred to the appropriate DON adjudicating authority with primary
responsibility for monitoring the claim. Adjudicating authorities shall
consult with the Judge Advocate General concerning proposed settlements
beyond their adjudicating authority.
(c) Payment of the claim--(1) Statutory authority. Pursuant to 28
U.S.C. 2672
[[Page 397]]
and in accordance with 28 CFR 14.6(a), the Secretary of the Navy or
designee, acting on behalf of the United States, may compromise or
settle any claim filed against the Navy under the FTCA, provided any
award, compromise, or settlement by the Navy in excess of $100,000.00
may be effected only with the prior written approval of the Attorney
General or designee. Title 28 CFR 14.6 requires consultation with the
Department of Justice prior to compromise or settlement of a claim in
any amount when:
(i) A new precedent or a new point of law is involved;
(ii) A question of policy is or may be involved;
(iii) The United States is or may be entitled to indemnity or
contribution from a third party and the agency is unable to adjust the
third party claim;
(iv) The compromise of a particular claim, as a practical matter,
will or may control the disposition of a related claim in which the
amount to be paid may exceed $100,000.00; or
(v) The DON is informed or is otherwise aware that the United States
or an employee, agent, or cost-plus contractor of the United States is
involved in litigation based on a claim arising out of the same incident
or transaction.
(2) Specific delegation and designation--(i) Payment authority.
------------------------------------------------------------------------
Delegated and designated authority Federal Tort Claims Act
------------------------------------------------------------------------
Judge Advocate General................... Unlimited.
Deputy Judge Advocate General............ Unlimited.
Assistant Judge Advocate General (General Unlimited.
Law).
Deputy Assistant Judge Advocate General $100,000.00.
(Claims and Tort Litigation) and Deputy
Division Director.
Head, Federal Tort Claims Branch, Claims $50,000.00.
and Tort Division, OJAG.
Commanding Officers of Naval Legal $25,000.00.
Service Offices; Officers in Charge of
Naval Legal Service Office Detachments
when Specifically Designated by
Cognizant Commanding Officers of Naval
Legal Service Offices.
------------------------------------------------------------------------
Any payment of over $100,000.00 must be approved by the Department
of Justice. In addition, the authority to deny Federal Tort Claims is
double the Federal Tort Claims Act approval authority shown above. The
Judge Advocate General, the Deputy Judge Advocate General, the Assistant
Judge Advocate General (General Law), and the Deputy Assistant Judge
Advocate General (Claims and Tort Litigation) may deny Federal Tort
Claims in any amount.
(ii) Territorial responsibility.
------------------------------------------------------------------------
Responsible command Territory
------------------------------------------------------------------------
NAVLEGSVCOFF Newport...................... Maine, Vermont, New
Hampshire, Massachusetts,
Rhode Island, and
Connecticut.
NAVLEGSVCOFF Philadelphia................. Pennsylvania, New Jersey,
Ohio, and New York.
NAVLEGSVCOFF Washington, DC............... Maryland, the District of
Columbia, and Northern
Virginia area (zip 220-
223).
NAVLEGSVCOFF Norfolk...................... Virginia (less Northern
Virginia area--zip 220-
223), and West Virginia,
North Carolina (counties of
Currituck, Camden,
Pasquotonk, Gates,
Perquimans, Chowan, Dare,
Tyrrell, Washington, Hyde,
Beaufort, Pamlico, Craven,
Jones, Carteret, and Onslow
only), Bermuda, Iceland,
Greenland, Azores, The
Caribbean, The Republics of
Guatemala, El Salvador,
Honduras, Nicaragua, Costa
Rica, and Panama, Belize,
Colombia, Venezuela,
Guyana, French Guiana,
Surinam, Brazil, Bolivia,
Paraguay, Uruguay,
Argentina, and all Atlantic
and Arctic Ocean areas and
islands not otherwise
assigned.
NAVLEGSVCOFF Charleston................... North Carolina (less
counties of Currituck,
Camden, Pasquotonk, Gates,
Perquimans, Chowan, Dare,
Tyrrell, Washington, Hyde,
Beaufort, Pamlico, Craven,
Jones, Carteret, Onslow),
and Georgia (less Counties
of Charlton, Camden, and
Glynn).
NAVLEGSVCOFF Jacksonville................. That portion of Florida east
of the western boundaries
of Gadsen, Liberty, and
Franklin Counties and
Georgia (counties of
Charlton, Camden, and
Glynn).
NAVLEGSVCOFF Pensacola.................... Florida [Pensacola/Panama
City area (zip 324-325)],
Alabama, Louisiana and
Mississippi (that portion
south of Washington,
Humphreys, Holmes, Attala,
Winston, and Noxubee
Counties, and that portion
of the Gulf of Mexico East
of longitude 90 W).
NAVLEGSVCOFF Memphis...................... Missouri, Tennessee,
Kentucky, Arkansas, and
that portion of Mississippi
north of the southern
boundaries of Washington,
Humphreys, Holmes, Attala,
Winston, and Noxubee
Counties.
NAVLEGSVCOFF Great Lakes.................. North Dakota, South Dakota,
Nebraska, Minnesota,
Michigan, Iowa, Wisconsin,
Illinois, and Indiana.
NAVLEGSVCOFF Corpus Christi............... Texas.
NAVLEGSVCOFF San Diego.................... California (Imperial County,
San Diego County, and that
area included in Marine
Corps Base, Camp Pendleton
extending into Orange
County, only), that portion
of Mexico including and
West of the States of
Chihuahua, Durango,
Nayarit, Jalisoc, and
Colima, Pacific Ocean areas
and islands South of
Latitude 45N and East of
Longitude 135W, Ecuador,
Peru, Chile, Arizona, New
Mexico, Oklahoma, and
Nevada (Clark County only).
[[Page 398]]
NAVLEGSVCOFF Long Beach................... That portion of California
in Kern, Santa Barbara,
Ventura, Los Angeles and
Orange Counties (excluding
Marine Corps Base, Camp
Pendleton), Riverside, San
Bernadino, and the China
Lake Naval Weapons Station
Center.
NAVLEGSVCOFF San Francisco................ Northern California
(Counties of San Luis
Obispo, Kings, Tulare,
Inyo, and all counties
North thereof), Colorado,
Nevada (less Clark County),
Utah, and Kansas.
NAVLEGSVCOFF Puget Sound.................. Washington, Oregon, Idaho,
Montanta, Wyoming, and
Alaska.
NAVLEGSVCOFF Pearl Harbor................. Hawaii, including Midway and
Pacific Island possessions
serviced from Hawaii.
NAVLEGSVCOFF Mayport...................... Claims involving commands
located at Naval Station,
Mayport, Florida.
NAVLEGSVCOFF Guam......................... Guam, The Trust Territory of
The Pacific Islands, The
Republic of The Marshall
Island, The Federated
States of Micronesia and
The Commonwealth of The
Northern Marianas.
NAVLEGSVCOFF Yokosuka..................... Japan, Okinawa, Korea, that
portion of the Eurasian
Continent North of latitude
30N and East of longitude
60E, and those Pacific and
Arctic Ocean areas and
islands North of latitude
30N that are East of
longitude 60E and West of
longitude 170w.
NAVLEGSVCOFF Naples....................... Europe, the African
Continent (excluding that
portion thereof assigned to
NLSO Subic Bay), the
Eurasian Continent
(excluding that portion
thereof assigned to NLSO
Yokosuka and NLSO Subic
Bay), and the
Mediterranean.
NAVLEGSVCOFF Subic Bay.................... Philippines, Hong Kong,
Singapore, Diego Garcia,
and unless otherwise
specified, all Pacific and
Indian Ocean areas and
islands located between
longitude 135E and
longitude 15E; Ethiopia,
Somalia, Kenya, Tanzania,
Mozambique, Swaziland,
Lesotho, and South Africa;
that portion of the
Eurasian Continent South of
latitude 30N and East of
longitude 60E.
------------------------------------------------------------------------
(3) Funding. Claims approved for $2,500.00 or less are paid from DON
appropriations. Claims approved in excess of $2,500.00 are paid from the
judgment fund and must be forwarded to the United States General
Accounting Office (GAO) for payment. 28 CFR 14.10(a). Claims arising out
of the operation of nonappropriated-fund activities and approved for
payment shall be forwarded to the appropriate nonappropriated-fund
activity for payment.
Sec. 750.35 Attorney's fees.
Attorney's fees are limited to 20 percent of any compromise or
settlement of an administrative claim, and are limited to 25 percent of
any judgment rendered in favor of a plaintiff, or of any settlement
accomplished after suit is filed. These amounts are to be paid out of
the amount awarded and not in addition to the award. 28 U.S.C. 2678.
Sec. 750.36 Time limitations.
(a) Administrative claim. Every claim filed against the United
States under the FTCA must be presented in writing within 2 years after
the claim accrues. 28 U.S.C. 2401(b). Federal law determines the date of
accrual. A claim accrues when the claimant discovers or reasonably
should have discovered the existence of the act giving rise to the
claim. In computing the statutory time period, the day of the incident
is excluded and the day the claim was presented included.
(b) Amendments. Upon timely filing of an amendment to a pending
claim, the DON shall have 6 months to make a final disposition of the
claim as amended, and the claimant's option to file suit under 28 U.S.C.
2675(a) shall not accrue until 6 months after the presentment of an
amendment. 28 CFR 14.2(c).
(c) Suits. A civil action is barred unless suit is filed against the
United States not later than 6 months after the date of mailing of
notice of final denial of the claim. 28 U.S.C. 2401(b). The failure of
the DON to make final disposition of a claim within 6 months after it is
presented shall, at the option of the claimant any time thereafter, be
deemed a final denial of the claim. 28 U.S.C. 2675(a).
Secs. 750.37-750.40 [Reserved]
Subpart C--Military Claims Act
Sec. 750.41 Scope of subpart C.
This section prescribes the substantive bases and special procedural
requirements for the settlement of claims against the United States for
death, personal injury, or damage, loss, or destruction of property:
(a) Caused by military personnel or civilian employees of the
Department of the Navy (DON) (hereinafter DON personnel). For the
purposes of this section, DON
[[Page 399]]
personnel include all military personnel of the Navy and Marine Corps,
volunteer workers, and others serving as employees of the DON with or
without compensation, and members of the National Oceanic and
Atmospheric Administration or of the Public Health Service when serving
with the DON. DON personnel does not include DON contractors or their
employees.
(b) Incident to noncombat activities of the DON. Claims for personal
injury or death of a member of the Armed Forces or Coast Guard, or
civilian officer or employee of the U.S. Government whose injury or
death is incident to service, however, are not payable.
(c) Territorial limitation. There is no geographical limitation on
the application of the MCA, but if a claim arising in a foreign country
is cognizable under the Foreign Claims Act (10 U.S.C. 2734), the claim
shall be processed under that statute. See 10 U.S.C. 2733(b)(2).
(d) Suit. The MCA authorizes the administrative settlement and
payment of certain claims. The United States has not consented to be
sued.
Sec. 750.42 Statutory authority.
10 U.S.C. 2733, as amended, commonly referred to as the Military
Claims Act (MCA).
Sec. 750.43 Claims payable.
(a) General. Unless otherwise prescribed, a claim for personal
injury, death, or damage or loss of real or personal property is payable
under this provision when:
(1) Caused by an act or omission determined to be negligent,
wrongful, or otherwise involving fault of DON personnel acting within
the scope of their employment; or
(2) Incident to noncombat activities of the DON. A claim may be
settled under this provision if it arises from authorized activities
essentially military in nature, having little parallel in civilian
pursuits, and in which the U.S. Government has historically assumed a
broad liability, even if not shown to have been caused by any particular
act or omission by DON personnel while acting within the scope of their
employment. Examples include practice firing of missiles and weapons,
sonic booms, training and field exercises, and maneuvers that include
operation of aircraft and vehicles, use and occupancy of real estate,
and movement of combat or other vehicles designed especially for
military use. Activities incident to combat, whether or not in time of
war, and use of DON personnel during civil disturbances are excluded.
(b) Specific claims payable. Claims payable by the DON under
Sec. 750.43(a) (1) and (2) shall include, but not be limited to:
(1) Registered or insured mail. Claims for damage to, loss, or
destruction, even if by criminal acts, of registered or insured mail
while in the possession of DON authorities are payable under the MCA.
This provision is an exception to the general requirement that
compensable damage, loss, or destruction of personal property be caused
by DON personnel while acting within the scope of their employment or
otherwise incident to noncombat activities of the DON. The maximum award
to a claimant under this section is limited to that to which the
claimant would be entitled from the Postal Service under the registry or
insurance fee paid. The award shall not exceed the cost of the item to
the claimant regardless of the fees paid. Claimant may be reimbursed for
the postage and registry or insurance fees.
(2) Property bailed to the DON. Claims for damage to or loss of
personal property bailed to the DON, under an express or implied
agreement are payable under the MCA, even though legally enforceable
against the U.S. Government as contract claims, unless by express
agreement the bailor has assumed the risk of damage, loss, or
destruction. Claims filed under this paragraph may, if in the best
interest of the U.S. Government, be referred to and processed by the
Office of the General Counsel, DON, as contract claims.
(3) Real property. Claims for damage to real property incident to
the use and occupancy by the DON, whether under an express or implied
lease or otherwise, are payable under the MCA even though legally
enforceable against the DON as contract claims. Claims filed under this
paragraph may, if in the best interest of the U.S. Government,
[[Page 400]]
be referred to and processed by the Office of the General Counsel, DON,
as contract claims.
(4) Property of U.S. military personnel. Claims of U.S. military
personnel for property lost, damaged, or destroyed under conditions in
Sec. 750.43(a) (1) and (2) occurring on a military installation, not
payable under the Military Personnel and Civilian Employees' Claims Act,
are payable under the MCA.
(5) Health care and Legal Assistance Providers. Claims arising from
the personal liability of DON health care and legal assistance personnel
for costs, settlements, or judgments for negligent acts or omissions
while acting within the scope of assigned duties or employment are
payable under the MCA. See Sec. 750.54.
Sec. 750.44 Claims not payable.
(a) Any claim for damage, loss, destruction, injury, or death which
was proximately caused, in whole or in part, by any negligence or
wrongful act on the part of the claimant, or his agent or employee,
unless the law of the place where the act or omission complained of
occurred would permit recovery from a private individual under like
circumstances, and then only to the extent permitted by the law.
(b) Any claim resulting from action by the enemy or resulting
directly or indirectly from any act by armed forces engaged in combat.
(c) Any claim for reimbursement of medical, hospital, or burial
expenses to the extent already paid by the U.S. Government.
(d) Any claim cognizable under:
(1) Military Personnel and Civilian Employees' Claims Act, as
amended. 31 U.S.C. 3721.
(2) Foreign Claims Act. 10 U.S.C. 2734.
(3) 10 U.S.C. 7622, relating to admiralty claims. See part 752 of
this Chapter.
(4) Federal Tort Claims Act. 28 U.S.C. 2671, 2672, and 2674-2680.
(5) International Agreements Claims Act. 10 U.S.C. 2734a and 2734b.
(6) Federal Employees' Compensation Act. 5 U.S.C. 8101-8150.
(7) Longshore and Harbor Workers' Compensation Act. 33 U.S.C. 901-
950.
(e) Any claim for damage to or loss or destruction of real or
personal property founded in written contract [except as provided in
Sec. 750.43(b) (2) and (3)].
(f) Any claim for rent of real or personal property [except as
provided in Sec. 750.43(b) (2) and (3)].
(g) Any claim involving infringement of patents.
(h) Any claim for damage, loss, or destruction of mail prior to
delivery by the Postal Service to authorized DON personnel or occurring
due to the fault of, or while in the hands of, bonded personnel.
(i) Any claim by a national, or corporation controlled by a
national, of a country in armed conflict with the United States, or an
ally of such country, unless the claimant is determined to be friendly
to the United States.
(j) Any claim for personal injury or death of a member of the Armed
Forces or civilian employee incident to his service. 10 U.S.C.
2733(b)(3).
(k) Any claim for damage to or loss of bailed property when bailor
specifically assumes such risk.
(l) Any claim for taking private real property by a continuing
trespass or by technical trespass such as overflights of aircraft.
(m) Any claim based solely on compassionate grounds.
Sec. 750.45 Filing claim.
(a) Who may file. Under the MCA, specifically, the following are
proper claimants:
(1) U.S. citizens and inhabitants.
(2) U.S. military personnel and civilian employees, except not for
personal injury or death incident to service.
(3) Persons in foreign countries who are not inhabitants.
(4) States and their political subdivisions (including agencies).
(5) Prisoners of war for personal property, but not personal injury.
(6) Subrogees, to the extent they paid the claim.
(b) Who may not file. (1) Inhabitants of foreign nations for loss or
injury occurring in the country they inhabit.
(2) U.S. Government agencies and departments.
[[Page 401]]
(c) When to file/statute of limitations. Claims against the DON must
be presented in writing within 2 years after they accrue. In computing
the 2 year period, the day the claim accrues is excluded and the day the
claim is presented is included. If the incident occurs in time of war or
armed conflict, however, or if war or armed conflict intervenes within 2
years after its occurrence, an MCA claim, on good cause shown, may be
presented within 2 years after the war or armed conflict is terminated.
For the purposes of the MCA, the date of termination of the war or armed
conflict is the date established by concurrent resolution of Congress or
by the President. See 10 U.S.C. 2733(b)(1).
(d) Where to file. The claim shall be submitted by the claimant to
the commanding officer of the naval activity involved, if it is known.
Otherwise, it shall be submitted to the commanding officer of any naval
activity, preferably the one within which, or nearest to which, the
incident occurred, or to the Judge Advocate General of the Navy, 200
Stovall Street, Alexandria, VA 22332-2400.
(e) Claim form. A claim is correct in form if it constitutes written
notification of an incident, signed by the claimant or a duly authorized
agent or legal representative, with a claim for money damages in a sum
certain. A Standard Form 95 is preferred. A claim should be
substantiated as discussed in section 750.27 of this part. A claim must
be substantiated as required by this Part in order to be paid. See 10
U.S.C. 2733(b)(5).
(f) Amendment of claim. A proper claim may be amended by the
claimant at any time prior to final denial or payment of the claim. An
amendment shall be submitted in writing and signed by the claimant or a
duly authorized agent or legal representative.
(g) Payment. Claims approved for payment shall be forwarded to such
disbursing officer as may be designated by the Comptroller of the Navy
for payment from appropriations designated for that purpose. If the
Secretary of the Navy considers that a claim in excess of $100,000.00 is
meritorious and would otherwise be covered by 10 U.S.C. 2733 and
Sec. 750.43, he may make a partial payment of $100,000.00 and refer the
excess to the General Accounting Office for payment from appropriations
provided therefore.
Sec. 750.46 Applicable law.
(a) Claims arising within the United States, Territories,
Commonwealth, and Possessions. The law of the place where the act or
omission occurred will be applied in determining liability and the
effect of contributory or comparative negligence on claimant's right of
recovery.
(b) Claims within foreign countries. (1) Where the claim is for
personal injury, death, or damage to or loss or destruction of real or
personal property caused by an act or omission determined to be
negligent, wrongful, or otherwise involving fault of DON personnel
acting within the scope of their employment, liability of the United
States will be assessed under general principles of tort law common to
the majority of American jurisdictions.
(2) Apply the law of the foreign country governing the legal effect
of contributory or comparative negligence by the claimant to determine
the relative merits of the claim. If there is no foreign law on
contributory or comparative negligence, apply traditional rules of
contributory negligence. Apply foreign rules and regulations on
operation of motor vehicles (rules of the road) to the extent those
rules are not specifically superseded or preempted by U.S. Armed Forces
traffic regulations.
(c) Clarification of terms. The principles of absolute liability and
punitive damages do not apply to claims under the MCA. Federal law
determines the meaning and construction of the MCA.
Sec. 750.47 Measure of damages for property claims.
Determine the measure of damages in property claims arising in the
United States or its territories, commonwealth, or possessions under the
law of the place where the incident occurred. Determine the measure of
damages in property claims arising overseas under general principles of
American tort law, stated as follows:
(a) If the property has been or can be economically repaired, the
measure of
[[Page 402]]
damages shall be the actual or estimated net cost of the repairs
necessary to substantially restore the property to the condition that
existed immediately prior to the incident. Damages shall not exceed the
value of the property immediately prior to the incident less the value
thereof immediately after the incident. To determine the actual or
estimated net cost of repairs, the value of any salvaged parts or
materials and the amount of any net appreciation in value effected
through the repair shall be deducted from the actual or estimated gross
cost of repairs. The amount of any net depreciation in the value of the
property shall be added to such gross cost of repairs, if such
adjustments are sufficiently substantial in amount to warrant
consideration. Estimates of the cost of repairs shall be based upon the
lower or lowest of two or more competitive bids, or upon statements or
estimates by one or more competent and disinterested persons, preferably
reputable dealers or officials familiar with the type of property
damaged, lost, or destroyed.
(b) If the property cannot be economically repaired, the measure of
damages shall be the value of the property immediately prior to the
incident less the value immediately after the incident. Estimates of
value shall be made, if possible, by one or more competent and
disinterested persons, preferably reputable dealers or officials
familiar with the type of property damaged, lost, or destroyed.
(c) Loss of use of damaged property which is economically repairable
may, if claimed, be included as an additional element of damage to the
extent of the reasonable expense actually incurred for appropriate
substitute property, for such period reasonably necessary for repairs,
as long as idle property of the claimant was not employed as a
substitute. When substitute property is not obtainable, other competent
evidence such as rental value, if not speculative or remote, may be
considered. When substitute property is reasonably available but not
obtained and used by the claimant, loss of use is normally not payable.
Sec. 750.48 Measure of damages in injury or death cases.
(a) Where an injury or death arises within the United States or its
territories, commonwealth, or possessions, determine the measure of
damages under the law of the location where the injury arises.
(b) Where an injury or death arises in a foreign country and is
otherwise cognizable and meritorious under this provision, damages will
be determined in accordance with general principles of American tort
law. The following is provided as guidance.
(1) Measure of Damages for Overseas Personal Injury Claims.
Allowable compensation includes reasonable medical and hospital expenses
necessarily incurred, compensation for lost earnings and services,
diminution of earning capacity, anticipated medical expenses, physical
disfigurement, and pain and suffering.
(2) Wrongful Death Claims Arising in Foreign Countries. (i)
Allowable compensation includes that in paragraph (b)(1) of this
section, burial expenses, loss of support and services, loss of
companionship, comfort, society, protection, and consortium, and loss of
training, guidance, education, and nurturing, as applicable.
(ii) The claim may be presented by or on behalf of the decedent's
spouse, parent, child, or dependent relative. Claims may be consolidated
for joint presentation by a representative of some or all of the
beneficiaries or may be filed by a proper beneficiary individually.
Sec. 750.49 Delegations of adjudicating authority.
(a) Settlement Authority. (1) The Secretary of the Navy may settle
claims in any amount. The Secretary may pay the first $100,000.00 and
report the excess to the Comptroller General for payment under 31 U.S.C.
1304. See 10 U.S.C. 2733(d).
(2) The Judge Advocate General has delegated authority to settle
claims for $100,000.00 or less.
(3) The Deputy Judge Advocate General, the Assistant Judge Advocate
General (General Law), and the Deputy Assistant Judge Advocate General
[[Page 403]]
(Claims and Tort Litigation) have delegated authority to settle claims
for $25,000.00 or less.
(4) Naval Legal Service Office commanding officers and the Officer
in Charge, U.S. Sending State Office for Italy have delegated authority
to settle claims for $15,000.00 or less.
(5) Officers in charge of Naval Legal Service Office Detachments,
when specifically designated by cognizant commanding officers of Naval
Legal Service Offices; and the Claims Officer at the U.S. Naval Station,
Panama Canal have delegated authority to settle claims for $10,000.00 or
less.
(6) Overseas commands with a Judge Advocate General's Corps officer
or a judge advocate of the Marine Corps attached, have delegated
authority to settle claims for $5,000.00 or less.
(b) Denial Authority. (1) The Secretary of the Navy may deny a claim
in any amount.
(2) The Judge Advocate General, the Deputy Judge Advocate General,
the Assistant Judge Advocate General (General Law), and the Deputy
Assistant Judge Advocate General (Claims and Tort Litigation) have
delegated authority to deny claims in any amount.
(3) All other adjudicating authorities have delegated authority to
deny claims only to the amount of their settlement authority.
(c) Appellate Authority. Adjudicating authorities have the same
authority as delegated in paragraph b above to act upon appeals. No
appellate authority below the Secretary of the Navy may deny an appeal
of a claim it had previously denied.
Sec. 750.50 Advance payments.
(a) Scope. This paragraph applies exclusively to the payment of
amounts not to exceed $100,000.00 under 10 U.S.C. 2736 in advance of
submission of a claim.
(b) Statutory authority. Title 10 U.S.C. 2736 authorizes the
Secretary of the Navy or designee to pay an amount not in excess of
$100,000.00 in advance of the submission of a claim to or for any
person, or the legal representative of any person, who was injured or
killed, or whose property was damaged or lost, as the result of an
accident for which allowance of a claim is authorized by law. Payment
under this law is limited to that which would be payable under the MCA
(10 U.S.C. 2733). Payment of an amount under this law is not an
admission by the United States of liability for the accident concerned.
Any amount so paid shall be deducted from any amount that may be allowed
under any other provision of law to the person or his legal
representative for injury, death, damage, or loss attributable to the
accident concerned.
(c) Officials with Authority to make Advance Payments. (1) The
Secretary of the Navy has authority to make advance payments up to
$100,000.00
(2) The Judge Advocate General has delegated authority to make
advance payments up to $100,000.00.
(3) The Deputy Assistant Judge Advocate General (Claims and Tort
Litigation) has delegated authority to make advance payments up to
$25,000.00.
(4) Naval Legal Service Office commanding officers and the Officer
in Charge, U.S. Sending State Office for Italy have delegated authority
to make advance payments up to $5,000.00.
(5) Officers in Charge of Naval Legal Service Office Detachments,
when specifically designated by cognizant Commanding Officers of Naval
Legal Service Offices; and the Staff Judge Advocate at the U.S. Naval
Station, Panama Canal have delegated authority to make advance payments
up to $3,000.00.
(6) Overseas commands with a Judge Advocate General's Corps officer
or a judge advocate of the Marine Corps attached, have delegated
authority to make advance payments up to $3,000.00.
(d) Conditions for Advance Payments. Prior to making an advance
payment under 10 U.S.C. 2736, the adjudicating authority shall ascertain
that:
(1) The injury, death, damage, or loss would be payable under the
MCA (10 U.S.C. 2733);
(2) The payee, insofar as can be determined, would be a proper
claimant, or is the spouse or next of kin of a proper claimant who is
incapacitated;
(3) The provable damages are estimated to exceed the amount to be
paid;
(4) There exists an immediate need of the person who suffered the
injury, damage, or loss, or of his family, or of the family of a person
who was killed,
[[Page 404]]
for food, clothing, shelter, medical, or burial expenses, or other
necessities, and other resources for such expenses are not reasonably
available;
(5) The prospective payee has signed a statement that it is
understood that payment is not an admission by the Navy or the United
States of liability for the accident concerned, and that the amount paid
is not a gratuity but shall constitute an advance against and shall be
deducted from any amount that may be allowed under any other provision
of law to the person or his legal representative for injury, death,
damage, or loss attributable to the accident concerned; and
(6) No payment under 10 U.S.C. 2736 may be made if the accident
occurred in a foreign country in which the NATO Status of Forces
Agreement (4 U.S.T. 1792, TIAS 2846) or other similar agreement is in
effect and the injury, death, damage, or loss
(i) Was caused by a member or employee of the DON acting within the
scope of employment or
(ii) Occurred ``incident to noncombat activities'' of the DON as
defined in Sec. 750.43.
Sec. 750.51 Final disposition.
(a) Claimant to be notified. The adjudicating authority shall notify
the claimant, in writing, of the action taken on the claim.
(b) Final denial. A final denial, in whole or in part, of any MCA
claim shall be in writing and sent to the claimant, or his attorney or
legal representative, by certified or registered mail, return receipt
requested. The notification of denial shall include a statement of the
reason or reasons for denial and that the claimant may appeal. The
notification shall also inform the claimant:
(1) The title of the appellate authority who will act on the appeal
and that the appeal will be addressed to the adjudicating authority who
last acted on the claim.
(2) No form is prescribed for the appeal, but the grounds for appeal
should be set forth fully.
(3) The appeal must be submitted within 30 days of receipt by the
claimant of notice of action on the claim.
Sec. 750.52 Appeal.
(a) A claim which is disapproved in whole or in part may be appealed
by the claimant at any time within 30 days after receipt of notification
of disapproval. An appeal shall be in writing and state the grounds
relied upon. An appeal is not an adversary proceeding and a hearing is
not authorized; however, the claimant may obtain and submit any
additional evidence or written argument for consideration by the
appellate authority.
(b) Upon receipt, the adjudicating authority examines the appeal,
determines whether the appeal complies with this regulation, and reviews
the claims investigative file to ensure it is complete. The claim, with
the complete investigative file and a memorandum of law, will be
forwarded to the appellate authority for action. If the evidence in the
file, including information submitted by the claimant with the appeal,
indicates the appeal should be approved, the adjudicating authority may
treat the appeal as a request for reconsideration.
(c) Processing of the appeal may be delayed pending further efforts
by the adjudicating authority to settle the claim. Where the
adjudicating authority does not reach a final agreement on an appealed
claim, it shall send the entire claim file to the next higher settlement
authority, who is the appellate authority for that claim.
(d) The appellate authority shall notify the claimant in writing of
the determination on appeal; that such determination constitutes the
final administrative action on the claim; and there is no right to sue
under the MCA.
Sec. 750.53 Cross-servicing.
(a) See Sec. 750.13 or information about single-service claims
responsibility under DODDIR 5515.8 of 9 June 1990.
(b) Claims Settlement Procedures. Where a single service has been
assigned a country or area claims responsibility, that service will
settle claims cognizable under the MCA under the regulations of that
service. The forwarding command shall afford any assistance necessary to
the appropriate service in the investigation and adjudication of such
claims.
[[Page 405]]
Sec. 750.54 Payment of costs, settlements, and judgments related to certain medical or legal malpractice claims.
(a) General. Requests for reimbursement/indemnification of costs,
settlements, and judgments cognizable under 10 U.S.C. 1089(f) [for
personal injury or death caused by any physician, dentist, nurse,
pharmacist, paramedic, or other supporting personnel (including medical
and dental technicians, nurse assistants, and therapists)] or 10 U.S.C.
1054(f) (for damages for injury or loss of property caused by any
attorney, paralegal, or other member of a legal staff) while acting as
DON personnel will be paid if:
(1) The alleged negligent or wrongful actions or omissions arose in
connection with either providing health care functions or legal services
and within the scope of employment; and
(2) Such personnel furnish prompt notification and delivery of all
process served or received, and other documents, information, and
assistance as requested; and cooperate in defending the action on the
merits.
(b) Requests for Indemnification. All requests for indemnification
for personal liability of DON personnel for acts or omissions arising
out of assigned duties shall be forwarded to the Judge Advocate General
for action.
Sec. 750.55 Attorney's fees.
Attorney's fees not in excess of 20 percent of any settlement may be
allowed. Attorney's fees so determined are to be paid out of the amount
awarded and not in addition to the award. These fee limitations shall be
incorporated in any settlement agreement secured from a claimant.
Secs. 750.56-750.60 [Reserved]
Subpart D--Claims Not Cognizable Under Any Other Provision of Law
Sec. 750.61 Scope of subpart D.
This section provides information on payment of claims against the
United States, not payable under any other statute, caused by the act or
omission, negligent, wrongful, or otherwise involving fault, of
Department of the Navy (DON) military and civilian personnel
(hereinafter DON personnel) acting outside the scope of their
employment.
Sec. 750.62 Statutory authority.
Section 2737 of title 10, United States Code, provides authority for
the administrative settlement in an amount not to exceed $1,000.00 of
any claim against the United States not cognizable under any other
provision of law for damage, loss, or destruction of property or for
personal injury or death caused by military personnel or a civilian
official or employee of a military department incident to the use of a
vehicle of the United States at any place, or any other property of the
United States on a Government installation. There is no right to sue.
There are no territorial limitations and the Act has worldwide
application.
Sec. 750.63 Definitions.
(a) Civilian official or employee. Any civilian employee of the DON
paid from appropriated funds at the time of the incident.
(b) Vehicle. Includes every description of carriage or other
artificial contrivance used, or capable of being used, as a means of
transportation on land. See 1 U.S.C. 4.
(c) Government installation. Any Federal facility having fixed
boundaries and owned or controlled by the U.S. Government. It includes
both military bases and nonmilitary installations.
Sec. 750.64 Claim procedures.
(a) The general provisions of subpart A of this part shall apply in
determining what is a proper claim, who is a proper claimant, and how a
claim is to be investigated and processed under 10 U.S.C. 2737 and this
section.
(b) A claim is presented when the DON receives from a claimant or
the claimant's duly authorized agent, written notification of a nonscope
claim incident accompanied by a demand for money damages in a sum
certain.
(c) A claimant may amend a claim at any time prior to final action.
Amendments will be submitted in writing and signed by the claimant or
the claimant's duly authorized agent.
(d) Claims submitted under the provisions of the Federal Tort Claims
Act
[[Page 406]]
(FTCA) or Military Claims Act (MCA) shall be considered automatically
for an award under this section when payment would otherwise be barred
because the DON personnel were not in the scope of their employment at
the time of the incident. If a tender of payment under this section is
not accepted by the claimant in full satisfaction of the claim, no award
will be made, and the claim will be denied pursuant to the rules
applicable to the statute under which it was submitted.
(e) Damages caused by latent defects of ordinary, commercial type,
Government equipment that were not payable under the MCA, Foreign Claims
Act, or FTCA are payable under this section.
(f) Nonscope claims for damages caused by local national DON
employees overseas are also payable under this section if the injury was
caused by the use of Government equipment.
(g) Payment may not be made on a nonscope claim unless the claimant
accepts the amount offered in full satisfaction of the claim and signs a
settlement agreement.
(h) Payment for nonscope claims adjudicated by field commands will
be affected through their local disbursing office by use of funds
obtained from the Judge Advocate General.
(i) Claims submitted solely under 10 U.S.C. 2737 shall be promptly
considered. If a nonscope claim is denied, the claimant shall be
informed of reasons in writing and advised he may appeal in writing to
the Secretary of the Navy (Judge Advocate General) provided the appeal
is received within 30 days of the notice of denial. The provisions of
Sec. 750.51(b) of subpart C also apply to denials of nonscope claims.
Sec. 750.65 Statute of limitations.
(a) A claim must be presented in writing within 2 years after it
accrues. It accrues at the time the claimant discovers, or in the
exercise of reasonable care should have discovered, the existence of the
act or omission for which the claim is filed.
(b) In computing time to determine whether the period of limitation
has expired, exclude the incident date and include the date the claim
was presented.
Sec. 750.66 Officials with authority to settle.
Judge Advocate General; Deputy Judge Advocate General; Assistant
Judge Advocate General (General Law); Deputy Assistant Judge Advocate
General (Claims and Tort Litigation Division); Head, Federal Tort Claims
Branch (Claims and Tort Litigation Division); Head, Military Claims
Branch (Claims and Tort Litigation Division), and commanding officers of
Naval Legal Service Offices may settle a nonscope claim.
Sec. 750.67 Scope of liability.
(a) Subject to the exceptions in Sec. 750.68 of specific claims not
payable, the United States shall not pay more than $1,000.00 for a claim
against the United States, not cognizable under any other provision of
law, except Article 139, UCMJ.
(b) Article 139, UCMJ, 10 U.S.C. 939, is not preemptive. The
prohibition in 10 U.S.C. 2737 on paying claims ``not cognizable under
any other provisions of law'' applies only to law authorizing claims
against the United States. Article 139 authorizes claims against
servicemembers. See part 755 of this chapter.
Sec. 750.68 Claims not payable.
(a) A claim for damage, loss, or destruction of property or the
personal injury or death caused wholly or partly by a negligent or
wrongful act of the claimant or his agent or employee.
(b) A claim, or any part thereof, that is legally recoverable by the
claimant under an indemnifying law or indemnity contract.
(c) A subrogated claim.
Sec. 750.69 Measure of damages.
Generally, the measure-of-damage provisions under the MCA are used
to determine the extent of recovery for nonscope claims. Compensation is
computed in accordance with Secs. 750.47 and 750.48 of subpart C, except
damages for personal injury or death under this section shall not be for
more than the cost of reasonable medical, hospital, and burial expenses
actually incurred and not otherwise furnished or paid for by the United
States.
[[Page 407]]
PART 751--PERSONNEL CLAIMS REGULATIONS--Table of Contents
Subpart A--Claims Against the United States
Sec.
751.1 Scope of subpart A.
751.2 Claims against the United States: In general.
751.3 Authority.
751.4 Construction.
751.5 Definitions.
751.6 Claims payable.
751.7 Claims not payable.
751.8 Adjudicating authorities.
751.9 Presentment of claim.
751.10 Form of claim.
751.11 Investigation of claim.
751.12 Computation of award.
751.13 Payments and collections.
751.14 Partial payments.
751.15 Reconsideration and appeal.
751.16-751.20 [Reserved]
Subpart B--Demand On Carrier, Contractor, or Insurer
751.21 Scope of subpart B.
751.22 Carrier recovery: In general.
751.23 Responsibilities.
751.24 Notice of loss or damage.
751.25 Types of shipments and liability involved.
751.26 Demand on carrier, contractor, or insurer.
751.27 Preparation and dispatch of demand packets.
751.28 Assignment of claimants rights to the government.
751.29 Recoveries from carrier, contractor, or insurer.
751.30 Settlement procedures and third party responses.
751.31 Common reasons for denial by carrier or contractor.
751.32 Forwarding claims files for offset action.
751.33 Unearned freight packet.
751.34 GAO appeals.
751.35 Forms and instructions.
Authority: 5 U.S.C 301; 10 U.S.C. 939, 5013, and 5148; E.O. 11476, 3
CFR, 1969 Comp., p. 132; 32 CFR 700.206 and 700.1202.
Source: 57 FR 5055, Feb. 12, 1992, unless otherwise noted.
Subpart A--Claims Against the United States
Sec. 751.1 Scope of subpart A.
Subpart A of this part prescribes procedures and substantive bases
for administrative settlement of claims against the United States
submitted by Department of the Navy (DON) personnel and civilian
employees of the naval establishment.
Sec. 751.2 Claims against the United States: In general.
(a) Maximum amount payable. The Military and Civilian Employees'
Personnel Claims Act (Personnel Claims Act), 31 U.S.C. 3701, 3702, and
3721, provides that the maximum amount payable for any loss or damage
arising from a single incident is limited to $40,000.00. Claims for
losses occurring prior to 31 October 1988 are limited to $25,000.00.
(b) Additional instructions. The Judge Advocate General of the Navy
may issue additional instructions or guidance as necessary to give full
force and effect to this section.
(c) Preemption. The provisions of this section and the Personnel
Claims Act are preemptive of other claims regulations. Claims not
allowable under the Personnel Claims Act may, however, be allowable
under another claims act.
(d) Other claims. Claims arising from the operation of a ship's
store, laundry, dry cleaning facility, tailor shop, or cobbler shop
should be processed in accordance with NAVSUP P487.
Sec. 751.3 Authority.
The Personnel Claims Act provides the authority for maximum payment
up to $40,000.00 for loss, damage, or destruction of personal property
of military personnel or civilian employees incident to their service.
The Act provides for the recovery from carriers, warehouse firms, and
other third parties responsible for such loss, damage, or destruction.
No claim may be paid unless it is presented in writing within 2 years of
the incident giving rise to the claim.
Sec. 751.4 Construction.
The provisions of this section and the Personnel Claims Act provide
limited compensation to service members and civilian employees of the
DON for loss and damage to personal property incurred incident to
service. This limited compensation is not a substitute for private
insurance. Although not every loss may be compensated under the
[[Page 408]]
Personnel Claims Act, its provisions shall be broadly construed to
provide reasonable compensation on meritorious claims. Adjudications
must be based on common sense and the reasoned judgment of the claims
examiner giving the benefit of realistic doubt to the claimant.
Sec. 751.5 Definitions.
(a) Proper claimants--(1) Members of the DON. All Navy and Marine
Corps active duty members and reservists on active duty for training
under Federal law whether commissioned, enrolled, appointed, or
enlisted. A retired member may only claim under this Act if loss or
damage occurred while the claimant was on active duty or in connection
with the claimant's last movement of personal property incident to
service.
(2) Civilian employees of the Navy. Federal employees of the naval
establishment paid from appropriated funds. This term does not include
Red Cross employees, USO personnel, and employees of Government
contractors (including technical representatives).
(3) Claims by nonappropriated-fund employees. Claims by employees of
Navy and Marine Corps nonappropriated-fund activities for loss, damage,
or destruction of personal property incident to their employment will be
processed and adjudicated in accordance with this enclosure and
forwarded to the appropriate local nonappropriated-fund activity which
employs the claimant for payment from nonappropriated-funds.
(4) Separation from service. Separation from the service or
termination of employment shall not bar former military personnel or
civilian employees from filing claims or bar designated officers from
considering, ascertaining, adjusting, determining, and authorizing
payment of claims otherwise falling within the provision of these
regulations when such claim accrued prior to separation or termination.
(b) Improper claimants. Insurers, assignees, subrogees, vendors,
lienholders, contractors, subcontractors and their employees, and other
persons not specifically mentioned as proper claimants.
(c) Unusual occurrence. Serious events and natural disasters not
expected to take place in the normal course of events. Two different
types of incidents may be considered unusual occurrences: those of an
unusual nature and those of a common nature that occur to an unexpected
degree of severity. Examples of unusual occurrences include structural
defects in quarters, faulty plumbing maintenance, termite or rodent
damage, unusually large size hail, and hazardous health conditions due
to Government use of toxic chemicals. Examples of occurrences that are
not unusual include potholes or foreign objects in the road, ice and
snow sliding off a roof onto a vehicle, and tears, rips, snags, or
stains on clothing. Claims that electrical or electronic devices were
damaged by a power surge may be paid when lightning has actually struck
the claimant's residence or objects outside the residence, such as a
transformer box, or when power company records or similar evidence shows
that a particular residence or group of residences was subjected to a
power surge of unusual intensity. In areas subject to frequent
thunderstorms or power fluctuations, claimants are expected to use surge
suppressors, if available, to protect delicate items such as computers
or videocassette recorders.
(d) Personal property. Property including but not limited to
household goods, unaccompanied baggage, privately owned vehicles
(POV's), mobile homes, and boats.
(e) Intangible property. Property that has no intrinsic marketable
value such as bankbooks, checks, promissory notes, non-negotiable stock
certificates, bonds, baggage checks, insurance policies, money orders,
and travelers checks.
(f) Vehicles. Includes automobiles, motorcycles, mopeds, utility
trailers, camping trailers, trucks, mounted camper bodies, motor homes,
boats, boat trailers, bicycles, and aircraft. Mobile homes and other
property used as dwelling places are not considered vehicles.
Sec. 751.6 Claims payable.
Claims for loss, damage, or destruction of property may be
considered as
[[Page 409]]
set out below if possession of the property was reasonable and useful
under the circumstances and the loss did not result from the negligence
of the claimant.
(a) Transportation and storage losses. (1) Incurred during
transportation under orders, whether in possession of the Government,
carrier, storage warehouse, or other Government contractor.
(2) Incurred during travel under orders, including temporary duty.
(3) Incurred during travel on a space available basis on a military
aircraft, vessel, or vehicle.
(4) Do-it-yourself (DITY) moves. In certain circumstances, loss of
or damage to property during a DITY move is compensable. Claimants,
however, are required to substantiate the fact of loss or damage in
shipment. Claimants who do not prepare inventories have difficulty
substantiating thefts. In addition, unless evidence shows that something
outside the claimant's control caused the damage, breakage is presumed
to be the result of improper packing by the claimant. For example, if a
claimant's truck is rear-ended by a drunk driver during a DITY move, it
is out of claimant's control. If the claimant can substantiate that he
was free from negligence, he can file a claim for damages to his
household goods.
(5) Shipment or storage at the claimant's expense. The shipment or
storage is considered Government-sponsored if the Government later
reimburses the claimant for it. The Government, however, will not
compensate a claimant for loss or damage that occurs while property is
being shipped or stored at the claimant's expense, even if the
Government reimburses the claimant for the shipment or storage fees. The
reason for this is that there is no contract, called a Government Bill
of Lading (GBL), between Government and the carrier. In such cases the
claimant must claim against the carrier.
(b) Losses at assigned quarters or other authorized places. Damage
or loss caused by fire, explosion, theft, vandalism, lightning, flood,
earthquake, and unusual occurrences. Losses due to theft may only be
paid if the claimant took reasonable measures to safeguard the property
and the theft occurred as a result of a forced entry. Claimants are
expected to secure windows and doors of their barracks, quarters, wall
lockers, and other storage areas. Claimants are expected to store
valuables in a secure area within their barracks, quarters, and storage
areas. Claimants are also expected to take extra measures to protect
cash, valuable jewelry, and similar small, easily pilferable items.
Normally, such items should be kept in a locked container within a
secured room. It is also advisable that the locked container be large
enough that it is not convenient for a thief to carry off. Bicycles
located at quarters or on base must be secured to a fixed object.
Overseas housing is considered assigned quarters for claimants who are
not local inhabitants.
(c) Vehicle losses. (1) Incurred while a vehicle is used in the
performance of military duty, if such use was authorized or directed for
the convenience of the Government, provided the travel did not include
commuting to or from the permanent place of duty, and did not arise from
mechanical or structural defect of the vehicle. There is no requirement
that the loss be due to fire, flood, hurricane, or other unusual
occurrence, or to theft or vandalism. As a general rule, however, travel
is not considered to be for the convenience of the Government unless it
was pursuant to written orders authorizing use for which the claimant is
entitled to reimbursement. The claimant must be free from negligence in
order to be paid for a collision loss. Travel by the claimant to other
buildings on the installation is not considered to be under orders for
the convenience of the Government. Travel off the installation without
written orders may only be deemed to be for the convenience of the
Government if the claimant was expressly directed by his superior to use
POV to accomplish the mission. The issuance of written orders after the
fact raises the presumption that travel was not for the convenience of
the Government. The maximum payment of $2,000.00 authorized by the
Allowance List-Depreciation Guide still applies to loss of or damage to
vehicles and contents. This maximum does not apply to DITY moves.
[[Page 410]]
(2) Incurred while a vehicle is shipped at Government expense,
provided the loss or damage did not arise from mechanical or structural
defect of the vehicle during such shipment. Damage caused during
shipment at the claimant's expense or while the vehicle is being moved
to or from the port by an agent of the claimant is not compensable.
(3) Incurred while a vehicle is located at quarters or other
authorized place of lodging, including garages, carports, driveways,
assigned parking spaces, if the loss or damage is caused by fire, flood,
hurricane, theft, or vandalism, or other unusual occurrence. Vandalism
is damage intentionally caused. Stray marks caused by children playing,
falling branches, gravel thrown by other vehicles, or similar
occurrences are not vandalism. The amount payable on vandalism claims is
limited to $2,000.00.
(4) Incurred while a vehicle is located at places other than
quarters but on a military installation, if the loss or damage is caused
by fire, flood, hurricane, theft, or vandalism, or other unusual
occurrence. ``Military installation'' is used broadly to describe any
fixed land area, wherever situated, controlled, and used by military
activities or the Department of Defense (DOD). A vehicle properly on the
installation should be presumed to be used incident to the claimant's
service. A vehicle that is not properly insured or registered in
accordance with local regulations is not properly on the installation. A
vehicle left in a remote area of the installation that is not a
designated long-term parking area for an undue length of time is
presumed not to be on the installation incident to service.
(5) Theft of property stored inside a vehicle. Claimants are
expected to lock doors and windows. Neither the passenger compartment
nor the trunk of a vehicle is a proper place for the long-term storage
of property unconnected with the use of the vehicle. The passenger
compartment of a vehicle does not provide adequate security, except for
very short periods of time for articles that are not of high value or
easily pilferable. Car covers and bras are payable if bolted or secured
to the vehicle with a wire locking device.
(6) Rental vehicles. Damage to rental vehicles is considered under
paragraphs of the Joint Federal Travel Regulations (JFTR), rather than
as a loss incident to service.
(d) Mobile homes and contents in shipment. Claims for damage to
mobile homes and contents in shipment are payable unless the damage was
caused by structural or mechanical defects (see Sec. 751.12(g) below on
mobile homes).
(e) Borrowed property (including vehicles). Loss or damage to
borrowed property is compensable if it was borrowed for claimant's or
dependent's own use. A statement will be provided by the owner of the
property attesting to the use of the property by the claimant.
(f) Clothing and articles being worn. Repairs/replacement of
clothing and articles being worn while on a military installation or in
the performance of official duty may be paid if loss is caused by fire,
flood, hurricane, theft, or vandalism, or other unusual occurrence. This
paragraph shall be broadly construed in favor of compensation, but see
Sec. 751.5(c) for the definition of unusual occurrence. Articles being
worn include hearing aids, eyeglasses, and items the claimant is
carrying, such as a briefcase.
(g) Personal property held as evidence or confiscated property. If
property belonging to the victim of a crime is to be held as evidence
for an extended period of time (in excess of 2 months) and the temporary
loss of the property will work a grave hardship on the claimant, a claim
for the loss may be considered for payment. This provision will not be
used unless every effort has been made to determine whether secondary
evidence, such as photographs, may be substituted for the item. No
compensation is allowed to a person suspected of an offense for property
seized from that same person in the investigation of that offense. This
also applies to property a foreign government unjustly confiscates or an
unjust change in a foreign law that forces surrender or abandonment of
property.
(h) Theft from possession of claimant. Theft from the person of the
claimant is reimbursable if the theft occurred by use of force,
violence, or threat to do
[[Page 411]]
bodily harm, or by snatching or pickpocketing, and at the time of theft
the claimant was either on a military installation, utilizing a
recreation facility operated or sponsored by the Department of Defense
or any agency thereof, or in the performance of official duty. The theft
must have been reported to appropriate police authorities as soon as
practicable, and it must have been reasonable for the claimant to have
had on his person the quality and the quantity of the property allegedly
stolen.
(i) Property used for the benefit of the Government. Compensation is
authorized where property is damaged or lost while being used in the
performance of Government business at the direction or request of
superior authority or by reason of military necessity.
(j) Money deposited for safekeeping, transmittal, or other
authorized disposition. Compensation is authorized for personal funds
delivered to and accepted by military and civilian personnel authorized
by the commanding officer to receive these funds for safekeeping,
deposit, transmittal, or other authorized disposition, if the funds were
neither applied as directed by the owner nor returned to the owner.
(k) Fees--(1) For obtaining certain documents. The fees for
replacing birth certificates, marriage certificates, college diplomas,
passports, or similar documents may be allowed if the original or a
certified copy is lost or destroyed incident to service. In general,
compensation will only be allowed for replacing documents with a raised
seal that are official in nature. No compensation will be allowed for
documents that are representative of value, such as stock certificates,
or for personal letters or records.
(2) Estimate fees. An estimate fee is a fixed cost charged by a
person in the business of repairing property to provide an estimate of
what it would cost to repair property. An estimate fee in excess of
$50.00 should be examined with great care to determine whether it is
reasonable. A person becomes obligated to pay an estimate fee when the
estimate is prepared. An estimate fee should not be confused with an
appraisal fee, which is not compensable (see Sec. 751.7). A reasonable
estimate fee is compensable if it is not going to be credited toward the
cost of repair. If it is to be credited toward the cost of repair, it is
not compensable regardless of whether the claimant chooses to have the
work done. When an estimate fee is claimed, the file must reflect
whether the fee is to be credited.
Sec. 751.7 Claims not payable.
(a) Losses in unassigned quarters in the United States. Claims for
property damaged or lost at quarters occupied by the claimant within the
United States that are not assigned or otherwise provided by the
Government.
(b) Currency or jewelry shipped or stored in baggage. Claims for
lost money, currency, or jewelry shipped or stored in baggage are not
payable. Coin or paper money included in collections is payable only if
listed on an inventory prepared at origin.
(c) Enemy property or war trophies. This includes only property that
was originally enemy property or a war trophy that passed into the hands
of a collector and was then purchased by a claimant.
(d) Unserviceable or Worn-Out Property.
(e) Loss or Damage to Property to the Extent of any Available
Insurance Coverage as Set Forth in Sec. 751.26 of this part.
(f) Inconvenience or loss of use. Expenses arising from late
delivery of personal property, including but not limited to the expenses
for food, lodging, and furniture rental, loss of use, interest, carrying
charges, attorney's fees, telephone calls, additional costs of
transporting claimant or family members, time spent in preparation of
claim, or cost of insurance are not compensable. While such claims do
not lie against the Government, members should be referred to the
Personal Property Office for assistance in filing their inconvenience
claims against the commercial carriers (NAVSUP Publication 490,
Transportation of Personal Property).
(g) Items of speculative value. Theses, manuscripts, unsold
paintings, or a similar creative or artistic work done by the claimant,
friend, or a relative is limited to the cost of materials only. The
value of such items is speculative.
[[Page 412]]
Compensation for a utilitarian object made by the claimant, such as a
quilt or bookcase, is limited to the value of an item of similar
quality.
(h) Loss or damage to property due to negligence of the claimant.
Negligence is a failure to exercise the degree of care expected under
the circumstances that is the proximate cause of the loss. Losses due,
in whole or in part, to the negligence of the claimant, the claimant's
spouse, child, houseguest, employee, or agent are not compensable.
(i) Business property. Losses of items acquired for resale or use in
a private business are not compensable. If property is acquired for both
business and personal use, compensation will not be allowed if business
use is substantial, or is the primary purpose for which the item was
purchased, or if the item is designed for professional use and is not
normally intended for personal use.
(j) Motor vehicles. Collision damage is not payable unless it meets
the criteria for payment as property used for the benefit of the
Government as established in Sec. 751.6(c)(1).
(k) Violation of law or directives. Property acquired, possessed, or
transported unlawfully or in violation of competent regulations or
directives. This includes vehicles, weapons, or property shipped to
accommodate another person, as well as property used to transport
contraband.
(l) Sales tax. Sales taxes associated with repair or replacement
costs will not be considered unless the claimant provides proof that the
sales tax was actually paid.
(m) Appraisal fees. An appraisal, as distinguished from an estimate
of replacement or repair, is defined as a valuation of an item provided
by a person who is not in the business of selling or repairing that type
of property. Normally, claimants are expected to obtain appraisals on
expensive items at their own expense.
(n) Quantities of property not reasonable or useful under the
circumstances are not compensable. Factors to be considered are
claimant's living conditions, family size, social obligations, and any
particular need to have more than average quantities, as well as the
actual circumstances surrounding the acquisition and loss.
(o) Intangible Property, such as Bankbooks, Checks, Promissory
Notes, Stock Certificates, Bonds, Bills of Lading, Warehouse Receipts,
Baggage Checks, Insurance Policies, Money Orders, and Traveler's Checks
are not Compensable.
(p) Property Owned by the United States, Except where the Claimant
is Responsible to an Agency of the Government other than the DON.
(q) Contractual coverage. Losses, or any portion thereof, that have
been recovered or are recoverable pursuant to contract are not
compensable.
Sec. 751.8 Adjudicating authorities.
(a) Claims by Navy personnel. (1) The following are authorized to
adjudicate and authorize payment of personnel claims up to $40,000.00:
(1) The Judge Advocate General;
(ii) Deputy Judge Advocate General;
(iii) Any Assistant Judge Advocate General;
(iv) The Deputy Assistant Judge Advocate General (Claims and Tort
Litigation); and
(v) Commanding officers of Naval Legal Service Offices.
(2) The Staff Judge Advocate attached to Naval Supply Center,
Oakland is authorized to adjudicate and pay claims up to $25,000.00.
(3) The Staff Judge Advocate attached to Naval Station, Panama Canal
is authorized to adjudicate and pay claims up to $10,000.00.
(4) The following are authorized to adjudicate and authorize payment
of personnel claims up to $5,000.00:
(i) Officers in charge of Naval Legal Service Office Detachments;
(ii) The Staff Judge Advocate attached to Naval Station, Keflavik;
and
(iii) Any personnel attached to a Naval Legal Service Office when
specifically designated by the commanding officer of that Naval Legal
Service Office.
(5) Any individual, when personally designated by the Judge Advocate
General, may be authorized to adjudicate and authorize payment of
personnel claims up to any delegated amount, not to exceed $40,000.00.
(b) Claims by Marine Corps personnel. (1) The following individuals
are authorized to adjudicate and authorize
[[Page 413]]
payment of personnel claims up to $40,000.00:
(i) Commandant of the Marine Corps;
(ii) Deputy Chief of Staff, Manpower and Reserve Affairs Department;
(iii) Director, Human Resources Division;
(iv) Head, Personal Affairs Branch;
(v) Deputy Head, Personal Affairs Branch;
(vi) Head, Personnel Claims Section; and
(vii) Any individual, when personally designated by the Commandant
of the Marine Corps, may be authorized to adjudicate and authorize
payment of personnel claims up to any delegated amount, and not to
exceed $40,000.00.
(2) The following individuals are authorized to adjudicate and
authorize payment of personnel claims up to $25,000.00:
(i) Head, Adjudication Unit;
(ii) Head, Carrier Recovery Unit; and
(iii) Head, Administration Unit.
Sec. 751.9 Presentment of claim.
(a) General. A claim shall be submitted in writing and, if
practicable, be presented to the claims office or personal property
office serving the installation where the claimant is stationed, or
nearest to the point where the loss or damage occurred. If submission in
accordance with the foregoing is impractical under the circumstances,
the claim may be submitted in writing to any installation or
establishment of the Armed Forces which will forward the claim to the
appropriate Navy or Marine Corps claims office for processing. To
constitute a filing under this regulation, a claim must be presented in
writing to one of the military departments. Claims that are incomplete
will not be refused and shall be logged in as received. Claimants
submitting such claims, however, shall be informed in writing that
properly completed forms or necessary substantiation must be received
within a fixed period of time (normally 30 days), otherwise the claim
will be denied or paid only in the amount substantiated.
(b) Statute of limitations. A claim must be presented in writing to
a military installation within 2 years after it accrues. This
requirement is statutory and may only be waived if a claim accrues
during armed conflict, or armed conflict intervenes before the 2 years
have run, and good cause is shown. In this situation, a claim may be
presented not later than 2 years after the end of the armed conflict. A
claim accrues on the day the claimant knows or should know of the loss.
For losses that occur in shipment of personal property, normally the day
of delivery or the day the claimant loses entitlement to storage at
Government expense (whichever occurs first) is the day the claim
accrues. If a claimant's entitlement to Government storage terminates,
but the property is later delivered at Government expense, the claim
accrues on delivery. In computing the 2 years, exclude the first day
(day of delivery or incident) and include the last day. If the last day
falls on a non-workday, extend the 2 years to the next workday.
(c) Substantiation. The claimant is responsible for substantiating
ownership or possession, the fact of loss or damage, and the value of
property. Claimants are expected to report losses promptly. The greater
the delay in reporting a loss, the more substantiation the claimant is
expected to provide.
(1) Obviously damaged or missing inventory items that are not
reported at delivery. Claimants are expected to list missing inventory
items and obvious damage at time of delivery. Claimants who do not
should be questioned. Obviously some claimants will simply not notice
readily apparent damage. If, however, the claimant cannot provide an
explanation or lacks credibility, payment should be denied based on lack
of evidence that the item was lost or damaged in shipment.
(2) Later-discovered shipment loss or damage. A claimant has 70 days
to unpack, discover, and report loss and damage that is not obvious at
delivery. In most cases, loss and damage that is discovered later and
reported in a timely manner should be deemed to have been incurred in
shipment.
(3) Damage to POV's in shipment. Persons shipping POV's are expected
to list damage on DD Form 788 (Private Vehicle Shipping Document for
Automobile) when they pick up the vehicle. Obvious external damage that
is not listed is not payable. Damage the claimant could reasonably be
expected
[[Page 414]]
not to notice at the pickup point should be considered if the claimant
reports the damage to claims personnel within a short time, normally a
few days, after arriving at the installation.
(4) Credibility. Most claimants are honest. Most claimants
objectively attempt to claim only what is due them. These persons are
entitled to the presumption that what they list is honest, although it
may not be correct. Some claimants lack credibility and their claims
require careful scrutiny. Factors that indicate a claimant's credibility
is questionable include amounts claimed that are exaggerated in
comparison with the cost of similar items, insignificant or almost
undetectable damage, very recent purchase dates for most items claimed,
and statements that appear incredible. Such claimants should be required
to provide more evidence than is normally expected.
(5) Inspections. Whenever a question arises about damage to
property, the best way to determine a proper award is to examine the
item closely to determine that nature of the damage. For furniture,
undersurfaces and the edges of drawers and doors should be examined to
determine whether the material is solid hardwood, fine quality veneer
over hardwood, veneer over pressed wood, or other types of material. If
the inspection is conducted at the claimant's quarters, the general
quality of property should be determined. Claimants should routinely be
directed to bring in vehicles and small broken items of value such as
figurines for inspection, and inspections should be conducted on all
large claims. Observations by repairmen and transportation inspectors
are very valuable, but on occasion, claims personnel must go out of the
office and inspect items themselves. Such inspections are necessary to
reduce the number of reconsiderations and fraudulent claims and are
invaluable in enabling claims personnel to understand the facts in many
situations.
Sec. 751.10 Form of claim.
The claim should be submitted on DD Form 1842 (Claim for Personal
Property) accompanied by DD Form 1844 (List of Property). If DD Forms
1842 and 1844 \1\ are not available, any writing will be accepted and
considered if it asserts a demand for a specific sum and substantially
describes the facts necessary to support a claim cognizable under these
regulations. The claim must be signed by a proper claimant (see
Sec. 751.5) or by a person with a power of attorney for a proper
claimant. A copy of the power of attorney must be included with the
claim.
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\1\ Copies of these forms may be obtained by contacting the claims
office or personal property office serving the installation where the
claimant is stationed, or nearest to the point where the loss or damage
occurred.
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Sec. 751.11 Investigation of claim.
Upon receipt of a claim filed under the Personnel Claims Act, the
claim shall be stamped with the date and receiving office, and be
referred to a claims investigating officer. The investigating officer
shall consider all information and evidence submitted with the claim and
shall conduct such further investigation as may be necessary and
appropriate.
Sec. 751.12 Computation of award.
The Judge Advocate General will periodically publish an Allowance
List-Depreciation Guide specifying rates of depreciation and maximum
payments applicable to categories of property. The Allowance List-
Depreciation Guide will be binding on all DON claims personnel. The
value of the loss is determined and adjusted to reflect payments,
repairs, or replacement by carriers or insurers, or lost potential
insurance or carrier recoveries.
(a) Repair of items. For items that can be economically repaired,
the cost of repair or an appropriate loss in value is the measure of the
loss. The cost of repair may be the actual cost, as demonstrated by a
paid bill, or reasonable estimated costs, as demonstrated by an estimate
of repair prepared by a person in the business of repairing that type of
property.
(1) Loss of value (LOV)--(i) Minor damage not worth repairing. An
LOV, rather than replacement cost, should be awarded when an item
suffers minor
[[Page 415]]
damage that is not economical to repair but the item remains useful for
its intended purpose. An LOV is particularly appropriate when the item
is not of great value and has preexisting damage (PED). An LOV is also
appropriate to compensate claimants for minor damage, such as a chip or
surface crack to a figure or knickknack. For example, if an inexpensive,
fiberboard coffee table with extensive PED is scratched, repair of the
scratch would exceed the value of the table. Under the circumstances,
LOV is appropriate.
(ii) Damage to upholstered furniture. If damage can be repaired
imperceptibly by cleaning or reweaving, the claimant is only entitled to
repair cost. If repairs would be somewhat noticeable but the damage is
to an area not normally seen, repair costs plus an LOV would be
appropriate. Alternatively, if repairs would be somewhat noticeable but
the item is of no great value and has already suffered PED, repair costs
and LOV would be appropriate even if the damage is in an obvious area.
If, however, repairs would be so noticeable as to destroy the usefulness
of the item, the item should be reupholstered or replaced. What is
noticeable will depend on the nature and value of the item, and the
nature of the damage, and claims personnel should exercise sound
judgment to avoid being too lenient or too harsh.
(iii) Cosmetic damage to nondecorative items. LOV should also be
awarded to compensate claimants for cosmetic damage to items that were
not purchased for purposes of display or decoration. For example, the
casing of a washing machine is dented. The washing machine is not
decorative in nature and still functions perfectly. An LOV, rather than
replacement of the washing machine or the casing, is the appropriate
measure of the claimant's loss.
(2) PED to repairable items. PED is damage to an item that predates
the incident giving rise to a claim. PED is most commonly identified by
the use of symbols on household goods shipment inventories. Whenever PED
is listed on an inventory, claims personnel must determine whether the
PED did in fact exist and whether the cost of repairing the item
includes repairing PED. The fact that a claimant signed the inventory
that listed PED is conclusive evidence that PED did exist unless the
member has taken written exceptions on the inventory to the carrier's
description of PED. These findings are essential for recovery purposes.
Often inspecting the item or calling the repairman who prepared the
estimate is the only way to make an effective determination.
(i) Estimates that do not include repair of PED. If the estimate
does not include repair of PED, even if PED is listed on the inventory,
no deduction should be made. This fact should be recorded on the
chronology sheet and on carrier recovery documents.
(ii) Estimates that include repair of PED. If repair of PED is
included in the estimate, the percentage attributable to repair of PED
is deducted.
(3) Mechanical defects. The Personnel Claims Act only provides
compensation for losses incurred incident to service. Damage resulting
from a manufacturer's defect or from normal wear and tear is not
compensable. Damage to the engine or transmission of an old vehicle
during shipment is probably due to a mechanical defect. Internal damage
to appliances, such as old televisions, is also often due to a
mechanical defect, particularly when their is no external damage to the
item. Claims for internal damage to small appliances that are not
normally repaired, such as toasters or hair dryers, should be assessed
based on damage to other items in the carton and the shipment, the age
of the item, the honesty of the claimant, and whether there are loose
parts inside. If the evidence suggests rough handling caused the damage,
a claim for the item should be paid. Internal damage to larger items
such as televisions or stereos should be evaluated by a repairman.
Evidence that suggests rough handling, such as smashed boards, provides
a basis for payment. Evidence that suggests a fault in the item, such as
burned-out circuits, does not. Deterioration because an item in storage
was not used for a long time, rather than because the item was
mishandled or the conditions of storage were improper, is also
considered due to a mechanical defect.
[[Page 416]]
(4) Wrinkled clothing. Clothing wrinkled in shipment presents
special problems. Normally, unless the wrinkling is so severe as to
amount to actual damage, the cost to press wrinkles out of clothing
after a move is not compensable. The mere fact that clothing was
``wadded up'' or ``used as packing material'' is not in itself
sufficient. The wrinkling must be such that professional pressing is
necessary to make the clothing usable. This determination will depend on
the wrinkling and the nature of the material.
(5) Wet and mildewed items. A claimant has a duty to mitigate
damages by drying wet items to prevent further deterioration. Items that
have been wet are not necessarily damaged and claimants who throw them
away have difficulty substantiating that a loss has occurred. Although a
deeply seated mildew infestation is almost impossible to remove
completely, items lightly infested can often be cleaned.
(b) Replacement of items. A claimant is entitled to the value of
missing and destroyed items. An item that has sustained damage is
considered destroyed if it is no longer useful for its intended purpose
and the cost of repairing it exceeds its value. Value is measured in the
following ways:
(1) Similar used items. If there is a regular market for used items
of that particular type, the loss may be measured by the cost of a
similar item of similar age. Prices obtained from industry guides or
estimates from dealers in this type of property are acceptable to
establish value. There is a regular market on used cars and the value of
a used automobile is always measured according to the N.A.D.A. Official
Car Guide rather than the depreciated replacement cost. Similarly, the
Mobile Home Manufactured Housing Replacement Guide may be used to value
a destroyed mobile home. Where there is no regular market in a
particular type of used item, however, estimates from dealers in
``collector's items'' should be avoided.
(2) Depreciated replacement cost. This is the normal measure of a
claimant's loss. A catalog or store price for a new item similar in size
and quality is depreciated using the Allowance List-Depreciation Guide
to reflect wear and tear on the missing or destroyed item. The
replacement cost for identical items--particularly decorative items--
should be used whenever the item is readily available in the local area,
but a claimant who is eligible to use the Navy Exchange (NEX) and the
NEX Mail Order Catalog should not be allowed a higher replacement cost
of an item, such as a television, from a specialty store when the NEX
carries an item comparable in size, quality, and features from another
manufacturer.
(3) ``Fair and reasonable'' (F&R) awards. A fair and reasonable
award should be used sparingly when other measures would compensate the
claimant appropriately. Overuse of such awards impedes carrier recovery
and ``F&R'' should never be used when a more precise measure of damages
is available. An F&R award for a missing or destroyed item should
reflect the value of an item similar in quality, description, age,
condition, and function to the greatest extent possible. An F&R award
for a damaged item should reflect either the amount a firm would charge
for repair or the reduced value to the greatest extent possible.
Whenever such an award is made, the basis for the award should be
explained on the chronology sheet, in the comments block of DD Form 1844
(List of Property), or in a separate memorandum. A fair and reasonable
award may be considered in the following instances:
(i) The item is obsolete and a simple deduction of a percentage for
obsolescence is not appropriate.
(ii) The claimant cannot replace the item in the local area.
(iii) The claimant cannot replace the item at any cost.
(iv) Repair costs or replacement costs are excessive for the item
and an LOV is not appropriate.
(v) The claimant has substantiated a loss in some amount but has
failed to substantiate a loss in the amount claimed.
(c) Depreciation. The Personnel Claims Act is only intended to
compensate claimants for the fair market value of their loss. Except in
unusual cases, a used item that has been lost or destroyed is worth less
than a new item of the same type. The price of a
[[Page 417]]
new replacement item must be depreciated to award the claimant the value
of the lost or destroyed item. Average yearly and flat rates of
depreciation have been established to determine the fair value of used
property in various categories. These rates are listed in the Allowance-
List Depreciation Guide. The listed depreciation rate should be adjusted
if an item has been subjected to greater or lesser wear and tear than
normal or if the replacement cost the claimant provides is for a used
item rather than a new one. Yearly depreciation is not taken during
periods of storage and normally no depreciation is taken on repair costs
or on replacement cost for items less than 6 months old, excluding the
month of purchase and the month the claim accrued (but see
Sec. 751.12(c)(3)).
(1) Depreciating replacement parts. No depreciation should be taken
on replacement parts for damaged items unless these are parts separately
purchased or normally replaced during the useful life of these items.
The replacement cost for these latter items should be depreciated. For
example, the glass top to a table is not normally replaced during the
useful life of the table and should not be depreciated.
(2) Depreciating fabric for reupholstery. Fabric is normally
replaced during the useful life of upholstered furniture. When
upholstered furniture is reupholstered because the damage is too severe
to be repaired and an LOV is not appropriate, the cost of new fabric is
depreciated at a rate of 5 percent per year. If the item has been
reupholstered since it was purchased, depreciation is measured from the
date the item was last reupholstered, rather than from the date the item
was originally purchased. Labor costs are allowed as claimed. If the
estimate does not list separate costs for fabric and labor, the labor
costs may be assumed to be 50 percent of the total bill.
(3) Rapidly depreciating items. Tires, most clothing items, and most
toys rapidly lose their value, as the high depreciation rate for these
items reflects. Depreciation should be taken on such items even when
they are less than 6 months old. As a rule of thumb, half of the normal
yearly or flat rate depreciation should be taken on such items when they
are between 3 and 6 months old at the time of loss.
(4) Obsolescence. Even though depreciation is not taken during
periods of storage, obsolescence should be claimed on those items that
have lost value because of changes in style or technological
innovations.
(5) Military uniforms. Normally, no depreciation should be taken on
military uniforms. Depreciation, however, should be taken on military
uniform items that are being phased out or that belong to persons
separating from the service. Socks and underwear are not considered
military uniform items.
(d) Salvage value. Whenever a claimant has been fully compensated
for a destroyed item that still has some value, the claimant has the
option of either retaining the item and having the claims office deduct
an amount for the salvage value, or turning the item over to the
Government or to the carrier if the carrier will fully reimburse the
Government.
(1) Turn-in to the Government. On all claims, except CONUS domestic
shipments, if the claimant does not choose to retain the items and
accepts a reduction in the amount paid on the claim for salvage value,
the claims office will require the claimant to turn them into a disposal
unit designated by the Personal Property Office. Normally, the amount
that the Government may obtain from selling such items is very low. If
the claims office determines that the salvage value is less than $25.00,
the claimant may be advised to dispose of the items by other means,
either by throwing the item away or by turning it over to a charitable
organization. Claimants may also be directed to make alternative
disposition of items that have been refused by the designated disposal
unit. This alternate disposition must be noted on the chronology sheet
that is kept as part of the claims file. Claims personnel will not
divert such items to personal use or use them to furnish Government
offices. In determining whether an item has salvage value, the size of
the item and the distance the claimant must travel to turn it in should
be considered. A claimant must
[[Page 418]]
make his own arrangements to transport salvageable items prior to
payment. Claims personnel should ask the claimant's command to make
transportation available to assist the claimant in appropriate cases,
particularly when the item is large or bulky. Sound discretion prohibits
requiring a claimant living far from a designated disposal unit to turn
in an item of relatively slight value.
(2) Turn-in to the carrier. On CONUS domestic shipments, the carrier
may choose to pick up items for which it will fully reimburse the
Government. Pursuant to a Joint Military-Industry Memorandum on Salvage,
items that are hazardous to keep around, such as mildewed items or
broken glass (except items such as figurines and crystal with a per item
value of more than $50.00), may be disposed of as the claimant chooses.
Claimants must retain other items for a maximum of 120 days from the
date of delivery to allow the carrier to pick them up. Pursuant to this
memorandum of understanding, the carrier has until the end of the
inspection period or 30 days after receipt of the demand, whichever is
greater, to identify such items. Claims offices must identify files in
which the carrier is entitled to salvage and must process these claims
for recovery action within 30 days so that the claimant does not dispose
of salvageable items before the end of the period allotted for carrier
pick-up.
(3) Maximum allowances. If the claimant will not be fully
compensated for an item because a maximum allowance is applied, he will
not be required to turn in the item.
(e) Standard abbreviations. The claims examiner's intent should be
clear and unmistakable to anyone reviewing the remarks section of DD
Form 1844. The following standardized abbreviations are used in
completing the remarks section. Other abbreviations should not be used.
Whenever one or more of these abbreviations will not adequately explain
how the claimant has been compensated, a brief explanation should be
inserted in the remarks section, in the comments section on the bottom
of DD Form 1844, or on the chronology sheet that is kept in each claims
file.
(1) AC: Amount claimed. The amount claimed was awarded to the
claimant. This abbreviation is not used if the claimant has presented an
estimate of repair.
(2) AGC: Agreed cost of repairs. The claimant did not present an
estimate but instead, after discussing the matter with claims personnel,
entered an amount that represents the claimant's guess as to how much it
would cost to repair the damaged item. The claims office may accept this
amount as a fair estimation of the cost of repair based on the amount of
damage, the value of the item, and the cost of similar repairs in the
area. A claimant may be allowed up to $50.00 as an AGC without an
inspection and between $50.00 and $100.00 if claims personnel have
inspected the item. The use of AGC is an integral part of small claims
procedures.
(3) CR: Carrier recovery. The claimant was paid this amount by the
carrier for the item. The payment is recorded in the remarks column, and
the total carrier payment is deducted at the bottom of DD Form 1844 in
the same manner as insurance recovery.
(4) D: Depreciation. Yearly depreciation was taken on the destroyed
or missing item in accordance with the appropriate depreciation guide in
effect at the time of the loss. Deviations from standard rates must be
explained.
(5) DV: Depreciated value. A claimant's repair costs exceeded the
value of the item, so the depreciated value was awarded instead.
Whenever a claimant claims a repair cost that is very high, relative to
the age and probable replacement cost, the replacement cost should be
obtained and the depreciated value determined.
(6) ER: Estimate of repair. The claimant provided an estimate of
repair that was used to value the loss. If multiple estimates were
provided, they should be numbered and referred to as exhibits.
(7) EX: Exhibit. When numerous documents have been provided to
substantiate a claim, they should be numbered and referred to as
exhibits.
(8) FR: Flat rate depreciation. Flat rate depreciation was taken on
an item in accordance with the Depreciation Guide in effect at the time
of the loss.
[[Page 419]]
Deviations from the normal rate must be explained.
(9) F&R: Fair and reasonable. A fair and reasonable award was made
(see Sec. 751.12(b)(3)).
(10) LOV: Loss of value. An LOV was awarded (see Sec. 751.5(a)(1)).
(11) MA: Maximum allowance. The adjudicated value, listed in the
``Amount Allowed'' column, exceeds a maximum allowance. The amount in
excess of the maximum allowance is subtracted at the bottom of the DD
Form 1844.
(12) N/P: Not payable. The item is not payable. The reason for this
comment should be noted (i.e., ``not substantiated'').
(13) OBS: Obsolescence. A percentage was deducted for obsolescence.
(14) PCR: Lost potential carrier recovery. A deduction was made for
lost PCR.
(15) PED: Preexisting damage. A deduction was made for PED.
(16) PP: Purchase price. The purchase price was used to value the
loss. Normally, the purchase price is not an adequate measure of the
claimant's loss. If, however, the claimant used the replacement cost of
a dissimilar item or otherwise failed to substantiate the replacement
cost, a recent purchase price may be used at the discretion of claims
personnel, if a true replacement cost is not available.
(17) NEX: Navy Exchange replacement cost. A replacement from the NEX
was used.
(18) RC: Replacement cost. A replacement cost was used. The store or
catalog from which the replacement cost was taken should be listed.
(19) SV/N: Item has no salvage value. A destroyed item was
determined to have no salvage value.
(20) SV/R: Salvage value, item retained. A destroyed item was
determined to have salvage value and the claimant chose to keep the
item. Accordingly, a deduction was made for the salvage value.
(21) SV/T: Salvage value, item turned in. A destroyed item was
determined to have salvage value and the claimant chose not to keep the
item. If the item is part of a CONUS domestic shipment, the claimant
must keep it for the carrier to pick up. Otherwise, the claimant must
turn the item in prior to payment on the claim.
(f) Sets. Normally, when component parts of a set are missing or
destroyed, the claimant is only entitled to the replacement cost of the
missing or destroyed components. In some instances, however, a claimant
would be entitled to replacement of the entire set or to an additional
LOV. Some claimants will assert that all of the items in a room are part
of a set. Pieces sold separately, however, are ordinarily not considered
parts of a set, and pieces that merely complement other items, such as a
loveseat purchased to complement a particular hutch, are never
considered part of a set. When a component part of a set is missing or
destroyed and cannot be replaced with a matching item, or has to be
repaired so that it no longer matches other component parts of the set,
the following rules apply:
(1) The set is no longer useful for its intended purpose. When a set
is no longer useful for its intended purpose because component parts are
missing or destroyed the entire set may be replaced. Note that several
firms will match discontinued sets of china and crystal and that
replacement of the set is not authorized if replacement items can be
thus obtained. Generally, with china and crystal the value of the set as
a whole is not destroyed unless more than 25 percent of the place
settings are unusable. Exceptions may be made if the claimant can
demonstrate a particular need for a certain number of place settings
because of family size or social obligations. In those rare instances
when an entire set is replaced, the claimant will be required to turn in
undamaged pieces.
(2) The set is still useful for its intended purpose. When missing
pieces cannot be matched and there is measurable decrease in the value
of the set, but the set is still useful for its intended purpose, the
claimant is awarded the value of the missing pieces plus an amount for
the diminution in value of the set as a whole. The amount awarded as an
LOV will vary depending on the exact circumstances.
(3) Mattresses and upholstered furniture are recovered. A mattress
and box spring set is covered during normal
[[Page 420]]
use. Such sets are still useful for their intended purpose if one piece
of the set has to be recovered in a different fabric. No award will be
made for the undamaged piece. When one piece of a set of upholstered
furniture suffers damage that cannot be repaired or recovered in
matching fabric, recovering the entire set or recovering the damaged
piece plus LOV should be considered. Factors to take into account
include the value of the set, PED to the set, the nature of the current
damage, and the extent to which the claimant's furniture is already
mismatched.
(g) Mobile homes. Mobile homes present special problems. Most mobile
homes, particularly larger ones, are not built to withstand the stress
of multiple long moves. While the Mobile Home One-Time Only rate
solicitation program, effective 1 November 1987, may have reduced the
incidence of loss and damage by encouraging carriers to use extra axles
when necessary, mobile home shipments can result in enormous,
uncompensated losses for servicemembers and present unusual difficulties
for claims adjudicators. Because the risk is so great, claims offices
must coordinate with their servicing transportation offices to ensure
both that servicemembers shipping mobile homes are advised of the risk
and of their responsibilities, and that the transportation office does
not authorize shipment of a mobile home that has not been placed in a
fit condition to be shipped.
(1) Transportation counseling prior to shipment. Servicemembers
should be advised of the following:
(i) They are responsible for placing the mobile home and its tires,
tubes, frames, and other parts in fit condition to ship and for loading
the mobile home to withstand the stresses of normal transportation. They
will not be compensated for any damage that results either from a latent
defect in the construction of the mobile home (except when the carrier
is aware of the defect and the servicemember is not) or from their
failure to place the mobile home in fit condition to ship.
(ii) They are responsible for paying for necessary repairs en route.
Such repairs can amount to several hundred or even several thousand
dollars, and some mobile homes have been left in storage at the
servicemember's expense hundreds of miles from destination because the
owner could not pay for necessary repairs.
(iii) They are responsible for resealing the roof and
weatherproofing the mobile home after delivery. The cost of this is not
compensable, nor is any damage caused by the servicemember's failure to
have it done.
(iv) They are responsible for removing obstructions, grading the
roadway, or otherwise preparing the site to make it accessible for the
carrier's equipment at both origin and destination.
(v) Because of the risk that damage will result for which they
cannot be compensated, servicemembers should strongly consider
purchasing private insurance coverage. A claimant usually must purchase
separate insurance for property shipped inside the mobile home and most
mobile home carriers will sell some sort of insurance coverage for
damage to the mobile home itself. Often, when a mobile home has been
moved repeatedly, the risk of uncompensated loss is so high that the
servicemember should consider selling the home rather than attempting to
ship it.
(2) Inspection Prior to Shipment. Transportation personnel should
inspect the home prior to shipment in all instances. All defects should
be recorded. In particular:
(i) A mobile home should not be shipped with a servicemember's
furniture and other household goods inside. The maximum safe weight of
appliances and additional property is very low. An overweight mobile
home tends to blow tires and break apart during shipment. Servicemembers
should be advised long before shipment that they will have to make other
arrangements for shipping such items at their own expense.
(ii) A mobile home should never be shipped with defects in the steel
frame or tow hitch.
(iii) The condition of all tires should be checked and recorded.
Some carriers submit huge bills for ``blown'' tires during shipment.
(iv) Structural changes to the interior of the home, particularly
those
[[Page 421]]
that involve cutting through beams, should be examined closely and a
civil engineer should be called in to render an opinion. Frequently, it
is not safe to ship mobile homes in which the claimant has altered the
interior framing.
(3) Latent Defects. Many carriers will attempt to escape liability
by attributing all damage to latent manufacturing defects. A loss due to
such a defect, like a loss due to any other mechanical defect, is not
considered incident to service. When an engineer's report or other
evidence shows that damage was indeed caused by a defect rather than by
the carrier's failure to take the necessary care, the following rules
apply:
(i) If both the carrier and the claimant knew or should have known
of the defect, and if the claimant took no corrective action and had the
mobile home shipped anyway, the claim is not payable.
(ii) If the carrier knew or should have known of the defect, and the
claimant could not reasonably have been expected to know of it, the
claim is payable and liability should be pursued against the carrier.
(iii) If neither the claimant nor the carrier could reasonably be
expected to know of the defect, the claim is not payable.
(4) Substantiation of a claim. Prior to adjudication of such claims,
the mobile home should be inspected and the following evidence obtained,
if possible:
(i) DD Form 1800 (Mobile Home Shipment Inspection at Destination).
This document shows the condition of the home at origin prior to
shipment. This document is prepared by the Transportation Office (TO)
and is signed by the servicemember, the carrier's representative, and
the Government inspector. It is vital and a claim should not be paid
without it. At destination, damages noted at delivery should be
annotated and the form dated and signed by the driver and the
servicemember. Damages may be listed on this form or on the DD Form 1840
(Joint Statement of Loss or Damage at Delivery).
(ii) DD Form 1863 (Accessorial Services-Mobile Home). For shipments
after 1 November 1987, DD Form 1863 lists all services the carrier is
required to provide, including line-haul, payment of tolls,
overdimension charges, permits and licenses, provision of anti-sway
devices, axles with wheels and tires, temporary lights, and escort
services. All costs and services may not appear on the GBL. For
shipments prior to 1 November 1987, damages may also be listed on this
form.
(iii) DD Form 1840/1840R. Beginning 1 November 1987, later-
discovered damages must be listed on DD Form 1840R and dispatched to the
carrier within 75 days of delivery. Timely notice on mobile home
shipments differs slightly from such notice on other shipments. Item 306
of the carrier's rate solicitation provides that ``upon delivery by the
carrier, all loss of or damage to the mobile home shall be noted on the
delivery document, the inventory form, the DD Form 1800, and/or the DD
Form 1840. Late discovered loss or damage, including personal property
within the mobile home, will be noted on the DD Form 1840R not later
than 75 days following delivery and shall be accepted by the carrier as
overcoming the presumption of correctness of delivery receipt.''
(iv) DD Form 1412 (Inventory of Items Shipped in Housetrailer).
Prior to 1 November 1987, the servicemember prepared DD Form 1412. After
1 November 1987, the carrier is required to prepare this in coordination
with the servicemember.
(v) DD Form 1841. If a Government representative does not inspect
the mobile home at delivery, an inspection should be requested.
(vi) Driver's statement. The mobile home carrier should be requested
to provide (within 14 days) a statement from the driver of the towing
vehicle explaining the circumstances surrounding the damage as well as
detailed travel particulars. If the mobile home carrier does not
respond, the file should be so annotated. Such statements are often
self-serving and should be reviewed critically to determine whether the
carrier is attributing damage to a latent defect.
(vii) Owner's statement. The claimant should provide a statement
concerning the age of the mobile home, the date and place purchased, any
prior damage or repairs, all prior moves, and prior claims.
[[Page 422]]
(viii) Estimates of repair. When possible, the claimant should
obtain two estimates of repair from firms in the business of repairing,
rather than selling, mobile homes. Such estimates should list the
approximate value of the home before and after damage, a detailed
breakdown of the repairs needed and their cost, and the cause of damage.
(ix) Engineer's statement. Where the facts indicate the possibility
of a latent defect, the claimant should be assisted in obtaining a
statement from a qualified engineer or vehicle maintenance professional
with expertise in mobile homes explaining the cause of damage. The
claims office should coordinate in advance with facilities engineers or
with local reserve units with engineering expertise to provide such
inspection where possible.
(5) Compensable damage. In adjudicating the claim, the claimant may
be paid for loss of or damage to the mobile home except when the damage
is due to a latent defect, to the servicemember's failure to place the
home in fit condition to ship, or to the servicemember's failure to have
the roof resealed. The servicemember may also be compensated for the
reasonable cost of repair estimates provided by firms in the business of
mobile home repair and of opinions prepared by qualified engineers. The
claimant may not be compensated for services the carrier failed to
perform or performed improperly or for other incidental expenses. The
claimant should be referred to the transportation office for these. Such
services (listed on DD Form 1843 and the GBL correction notice) include:
(i) Escort or pilot services, ferry fees, tolls, permits,
overdimension charges, or taxes.
(ii) Storage costs or parking fees en route.
(iii) Expand charges and charges for anti-sway devices, brakes and
brake repairs, or adding or replacing axles, tubes, or tires.
(iv) Wrecker service.
(v)Connecting or disconnecting utilities.
(vi) Blocking, unblocking, or removing or installing skirting.
(vii) The cost of separating or reassembling and resealing a double-
wide mobile home.
(6) Carrier liability and attempted waivers. In the absence of
additional coverage, the carrier's maximum liability for personal
property shipped with the mobile home is $250.00. The carrier is fully
liable for damages to the mobile home itself. Carriers are also liable
for damage caused by third parties with whom they contract, such as
wrecker services. Some carriers may still try to obtain waivers, from
the servicemember. A waiver signed by the servicemember, however, is not
binding on the United States. The Navy is the contracting party and the
owner has not authority to sign a waiver agreement or any other document
purporting to exempt the carrier from the liability imposed under the
GBL.
Sec. 751.13 Payments and collections.
Payment of approved personnel claims and deposit of checks received
from carriers, contractors, insurers, or members will be made by the
Navy or Marine Corps disbursing officer serving the adjudicating
authority. Payments will be charged to funds made available to the
adjudicating authority for this purpose. Credit for collections will be
to the accounting data specified in Navy Comptroller Manual section
046370, paragraph 2 or in superseding messages, if applicable.
Sec. 751.14 Partial payments.
(a) Partial payments when hardship exists. When claimants need funds
to feed, clothe, or house themselves and/or their families as a result
of sustaining a compensable loss, the adjudicating authority may
authorize a partial payment of an appropriate amount, normally one-half
of the estimated total payment. When a partial payment is made, a copy
of the payment voucher and all other information related to the partial
payment shall be placed in the claim file. Action shall be taken to
ensure the amount of the partial payment is deducted from the
adjudicated value of the claim when final payment is made.
(b) Marine hardship payments. The Marine claimant's Transportation
Management Office (TMO) shall ensure
[[Page 423]]
compliance with all requirements of Sec. 751.14(a), and may request
authority for payment by message from the Commandant of the Marine Corps
(MHP-40).
(c) Effect of partial payment. Partial payments are to be subtracted
from the adjudicated value of the claim before payment of the balance
due. Overpayments are to be promptly recouped.
Sec. 751.15 Reconsideration and appeal.
(a) General. When a claim is denied either in whole or in part, the
claimant shall be given written notification of a the initial
adjudication and of the right to submit a written request for
reconsideration to the original adjudicating authority within 6 months
from the date the claimant receives notice of the initial adjudication
of the claim. If a claimant requests reconsideration and if it is
determined that the original action was erroneous or incorrect, it shall
be modified and, when appropriate, a supplemental payment shall be
approved. If full additional payment is not granted, the file shall be
forwarded for reconsideration to the next higher adjudicating authority.
The next higher adjudicating authority may be the commanding officer of
the Naval Legal Service Office if a properly delegated subordinate has
acted initially on the claim. For claims originally adjudicated by the
commanding offer, the files will be forwarded to the Judge Advocate
General for final action. The claimant shall be notified of this action
either by letter or by copy of the letter forwarding the file to higher
adjudicating authority. The forwarding letter shall include a synopsis
of action taken on the file and reasons for the action or denial, as
well as a recommendation of further action or denial.
(b) Files forwarded to JAG. For files forwarded to JAG in accordance
with Sec. 751.15(a), the forwarding endorsement shall include the
specific reasons why the requested relief was not granted and shall
address the specific points or complaints raised by the clamant's
request for reconsideration.
(c) Appeals procedure for claims submitted by Marine Corps
personnel. Where any of the Marine Corps adjudication authorities listed
in Sec. 751.8(b) fail to grant the relief requested, or otherwise
resolve the claim the satisfaction of the claimant, the request for
reconsideration shall be forwarded together with the entire original
file and the adjudicating authority's recommendation, to the Judge
Advocate General.
Secs. 751.16-751.20 [Reserved]
Subpart B--Demand On Carrier, Contractor, or Insurer
Sec. 751.21 Scope of subpart B.
Subpart B addresses the recovery process for loss or damage
occurring during the storage or transport of household goods and other
personal property for which military personnel and civilian employees
were paid under the provisions of 31 U.S.C. 3721. The authority for
pursuing recovery action is found at 31 U.S.C. 3711.
Sec. 751.22 Carrier recovery: In general.
(a) Responsibility. Recovery of amounts due for personal property
lost or damaged while in transit or in storage at Government expense is
a joint Personal Property Office/Naval Legal Service Office
responsibility. In order to establish liability and to effectively
pursue a recovery claim against a carrier, warehouseman, or other third
party, it is essential that all required action be accomplished in an
expeditious manner. Failure of the property owner or any Government
agent to exercise diligence in the performance of duties may render
collection of the claim impossible and thereby deprive the Government of
rightful revenue. Claims approving and settlement authorities will
ensure that all actions required of the property owner and naval
personnel are accomplished promptly.
(b) Elements of collection. There are four elements in the
successful assertion and collection of a recovery claim. They are:
(1) Proving that a transit loss occurred;
(2) Determining who had responsibility for the goods at the time of
the transit loss;
(3) Calculating the amount of damages; and
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(4) Pursuing the responsible party or parties vigorously.
Sec. 751.23 Responsibilities.
(a) Notice of loss. Claims office personnel must ensure that Notice
of Loss or Damage, DD Form 1840R, is properly completed and dispatched
to the liable third party or parties within 75 days of delivery of the
property.
(b) Counseling of claimant. Claims office personnel should
coordinate with the local personal property office to ensure proper
counseling regarding potential claim procedures.
(c) Documents. Claims office personnel must obtain from the claimant
or from the transportation office the following documents needed to
process recovery actions:
(1) A copy of the GBL or other document used for shipment or
storage.
(2) A copy of the inventory.
(3) A copy of the DD Form 1840 and DD Form 1840R.
(4) Where storage in transit was extended from 180 days to 270 days,
a copy of the authorization from the transportation office allowing this
extension at Government expense.
(5) Where storage converted from Government paid storage to storage
at owner's expense, a copy of the claimant's contract with the
warehouse.
(6) When necessary, a copy of DD Form 1164, Service Order for
Personal Property, from the transportation office.
(7) When necessary, DD Form 619-1, Statement of Accessorial Services
Performed, from the transportation office.
(d) Carrier inspection. Claims office personnel should inform
claimants that the carrier has the right to inspect damaged goods within
75 days of delivery, or 45 days of dispatch of DD Form 1840R, whichever
is later, and that damaged items must be held out for carrier inspection
during that period. Essential items such as washer, dryer, television
etc., may be repaired prior to that time if necessary.
(e) Repair estimates. Claims personnel must ensure that repair
estimates describe the specific location and damage claimed and that the
same damage is claimed on DD Form 1844, Schedule of Property and Claims
Analysis Chart. Repair estimates that merely note ``refinished'' or
``repaired'' are not acceptable.
(f) DD Form 1844. Claims personnel must ensure that DD Form 1844 is
properly completed with the nature and extent of the loss or damage to
each item fully described, the correct inventory numbers supplied, and
correct item weights utilized from the Military-Industry Table of
Weights (when these weights are required for the code of service
involved).
(g) Demands on third parties. Claims personnel must ensure that
written demands against appropriate third parties are prepared as
described in Sec. 751.26 and Sec. 751.27. No demand will be made where
it conclusively appears that the loss or damage was caused solely by
Government employees or where a demand would otherwise be clearly
improper under the circumstances. If it is determined that a demand is
not required, a brief written statement setting forth the basis for this
determination will be included on the chronology sheet. Pursuant to the
Joint Military-Industry Agreement on Claims of $25.00 or Less, claims of
$25.00 or less will not be pursued because administrative costs outweigh
recovery proceeds.
Sec. 751.24 Notice of loss or damage.
(a) Exceptions. The claimant is required to take exceptions and note
any loss of damage at the time of delivery on the DD Form 1840 (Joint
Statement of Loss or Damage at Delivery). Later discovered damage must
be noted on the DD Form 1840R (Notice of Loss or Damage) and delivered
to the claims office or Personal Property Office within 70 days of
delivery. Failure to take exceptions at delivery and note and report
later discovered damage will result in deduction on any lost potential
carrier recovery from payment of the claim. Failure to note on the DD
Form 1840 items missing at the time of delivery may result in denial of
claims for those items.
(b) DD Form 1840/1840R. The DD Form 1840/1840R is printed in carbon
sets of five with DD Form 1840 on the front side and DD Form 1840R on
the reverse side. DD Form 1840/1840R is provided by the carrier to the
member at delivery. Carriers were required to use this revised DD Form
1840/1840R beginning 15
[[Page 425]]
August 1988 for international shipments and 15 September 1988 for
domestic shipments. This is the only document the carriers will accept
for reporting loss and damage to household goods. The requirement to
list all know loss and damage at the time of delivery on the DD Form
1840 is a joint responsibility of the claimant and the carrier. If the
carrier fails to give the claimant a DD Form 1840 at the time of the
delivery, the carrier is liable for all damage and does not have to be
notified in the 75-day timeframe
(c) Military-Industry Memorandum of Understanding on Loss and Damage
Rules. The Military-Industry Memorandum of Understanding on Loss and
Damage Rules became effective in 1985 with the implementation of the new
DD Form 1840/1840R. This document should be thoroughly studied and
completely understood.
Sec. 751.25 Types of shipments and liability involved.
(a) Codes 1 and 2 (domestic including Alaska). Increased released
valuation, also referred to as ``Basic Coverage,'' became effective
within CONUS and Alaska on 1 April 1987 for intrastate shipments
(shipments within a single State), and on 1 May 1987 for interstate
shipments (shipments from one State to another). For Codes 1 and 2
shipments picked up after these dates, the carrier's released valuation
(the carrier's maximum liability for loss and damage) increased from
$.60 per pound per article to $1.25 multiplied by the net weight of the
shipment ($2.50 for shipments to and from Alaska). For Codes 1 and 2
shipments picked up prior to these dates, carrier liability remains at
$.60 per pound per article and is calculated the same as for Code 4
shipments. There are also two higher levels of coverage available in
which the owner pays the difference between the basic coverage and the
higher level requested: High or higher increased released valuation
(Option 1) and full replacement protection (Option 2). These higher
carrier released valuation rates only apply to Codes 1 and 2 shipments
and they do not affect the liability of a non-temporary storage (NTS)
warehouse which remains at $50.00 per line item.
(1) Increased Released Valuation (IRV). IRV is the basic valuation
for service Codes 1 and 2 and is fully paid by the Government. If the
claimant is due additional recovery money, the words ``claimant due
carrier recovery'' must be added on the claims file to ensure the
recovered amount is provided to the claimant if eligible. IRV is not
reflected on the GBL by an special language. For Codes 1 and 2 shipments
picked up after the effective dates mentioned above, the carrier's
released valuation is $1.25 multiplied by the new weight of the shipment
($2.50 multiplied times the net weight of the shipment for shipments to
and from Alaska). For example, if the weight of an IRV shipment moved
from Kansas to New York is 10,000 pounds, the most the carrier could be
held liable for would be $12,500 (10,000 pounds times $1.25=$12,500). If
the same shipment was moved from Alaska to New York, the maximum carrier
liability would instead be $25,000 (10,000 pounds times $2.50=$25,000).
(2) Higher Increased Released Valuation (Option 1). This type of
coverage may be purchased by an owner who desires protection for items
whose value exceeds a maximum allowance or for a shipment whose value
exceeds the statutory maximum. If the claimant is due additional
recovery money, the words ``claimant due carrier recovery'' must be
added in the claims file. Option 1 must be annotated on the original
GBL. A GBL correction notice is acceptable only if the carrier or his
agent has notice of the correction before pick-up. Option 1 may be
listed in block 27 or block 30 either as a lump sum, such as ``Option 1-
-$30,000,'' or as a multiple, such as ``Option 1--$3.00 times the net
weight.'' The carrier's maximum liability is whatever higher valuation
the claimant places on the shipment. For example: The owner of a 10,000
pound shipment requests Option 1 coverage of $30,000.00 and has this
listed on the GBL. The carrier's maximum liability is $30,000.00. Under
basic coverage, the carrier's maximum liability for this shipment would
only be $12,500.00. The claimant must initially file a claim with the
carrier. The Government will only accept a claim if the carrier denies
the claim, if delay would
[[Page 426]]
cause hardship, or if the carrier fails to satisfactorily settle the
claim within 30 days. The claim is adjudicated in the normal fashion,
applying depreciation and maximum allowances. Demand is then made on the
carrier for the full value of the item lost or damaged. When recovery is
effected, the Government keeps an amount equal to that paid to the
claimant and disperses the remaining recovery to the claimant.
(3) Full Replacement Protection (Option 2). This type of coverage
may be purchased by an owner who desires protection for items whose
value exceeds a maximum allowance, for a shipment whose value exceeds
the statutory maximum, or because the claimant does not wish to have the
replacement cost of destroyed or missing items depreciated to their fair
market value. The minimum coverage available under Full Replacement
Protection is $21,000.00 or $3.50 times the net weight of the shipment,
whichever is greater. A member who chooses this coverage must initially
file a claim with the carrier, allowing the carrier the right to repair
or replace items. The Government will only accept a claim if the carrier
denies the claim, if delay would cause hardship, or if the carrier fails
to satisfactorily settle the claim within 30 days. If a claim is
submitted to the Government, the claim is adjudicated normally, applying
depreciation and maximum allowances. The claimant should be informed
that any additional amount will be forwarded after recovery action is
effected against the carrier. Option 2 must be annotated on the original
GBL. A GBL correction notice is acceptable only if the carrier or his
agent receives notice of the correction before pick-up. Option 2 may be
listed in block 27 or block 30 either as a lump sum, such as ``Full
Replacement Protection--$50,000.00,'' or as a multiple, such as ``Full
Replacement Protection--$3.50 times the net weight.'' The carrier's
maximum liability is the higher valuation the claimant places on the
shipment. For example: The owner of a 10,000 pound shipment requests
full replacement protection of $3.50 times the net weight of the
shipment and has this listed on the GBL. The carrier's maximum liability
is $35,000.00 (10,000 pounds times $3.50=$35,000.00). Under basic
coverage, the carrier's maximum liability for this shipment would only
be $12,500.00.
(4) Calculating liability on IRV, Option 1, and Option 2 shipments.
(i) Under IRV and Option 1, the carrier's maximum liability for loss or
damage to a single item is limited to the repair cost or depreciated
replacement cost of the item. Under Option 2, the carrier's maximum
liability for a single item is the repair cost or the undepreciated
replacement cost of the item. The carrier's maximum liability for the
entire claim is limited to the released valuation, which is either the
lump sum declared by the owner or the net weight of the shipment times
the applicable multiplier. The net weight of the shipment is normally
listed in block 4 of DD Form 1840 (block 3 of DD Form 1840 dated
September 84). If the net weight is missing, it should be obtained from
the transportation office.
(ii) In completing the carrier liability section of DD Form 1844,
ignore the Joint Military-Industry Table of Weights. Assert the amount
adjudicated on each item for which the carrier is liable in the carrier
liability column. Where the Government payment was limited by
application of a maximum allowance (or by depreciation on full
replacement cost claims), assert the full, substantiated value. Total
the amounts for which the carrier is liable in the carrier liability
column. If this total exceeds the maximum carrier liability for the
entire claim, the maximum carrier liability should be entered on DD Form
1843 as the amount demanded. Do not, however, change the total of the
amounts for which the carrier is liable on the DD Form 1844.
(iii) If the amount the claimant receives from the Government is
limited by application of a maximum allowance (or by depreciation on
full replacement protection claims) leaving the claimant with an
uncompensated loss, the claimant may be due reimbursement from recovery
money after recovery is effected on the claim. Claimants with
uncompensated losses who have basic coverage are only entitled to
reimbursement from recovery money if the amount recovered exceeds the
amount paid by the Government (unless the loss was in excess of the
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statutory maximum). Claimants with uncompensated losses who purchased
Option 1 or Option 2 are entitled to reimbursement up to the value of
their additional coverage. Such files should be marked: ``claimant due
carrier recovery.'' The claimant should be informed that recovery from
the carrier is dependent on the amount and quality of the substantiation
the claimant provided, and that the actual recovery may be less than
anticipated. The claimant should further be informed that considerable
time will elapse before recovery is effected and reimbursement made.
Such claims should be processed for recovery action as expeditiously as
possible.
(b) Codes 4 and 6 (International and Hawaii). On Codes 4 and 6,
international GBL shipments, carrier liability is computed at $.60 per
pound multiplied by the weight of the article or carton as prescribed by
the Joint Military-Industry Table of Weights. In cases where the entire
shipment is lost or damaged, liability will be computed on the net
weight of the shipment times $.60 per pound. The net weight of the
shipment may be obtained from the origin transportation office.
(c) Codes 5 and T (International and Hawaii). (1) A Code 5 shipment
is the movement of household goods in Military Traffic Management
Command (MTMC) approved door-to-door shipping containers (wooden boxes)
and where a carrier provides line-haul service from origin residence to
a military ocean terminal. The Government, through the Military Sealift
Command (MSC), provides ocean transportation to the designated port of
discharge, and the carrier provides line-haul service to the destination
residence.
(2) A Code T shipment is the movement of household goods where the
carrier provides containerization at origin and transportation to the
designated Military Airlift Command (MAC) terminal. MAC provides
terminal services at both origin and destination, and air transportation
to a designated MAC terminal. The carrier provides transportation to the
destination residence.
(3) On Code 5 and T shipments, it is often difficult to decide
whether the Government or the carrier was in actual custody of the
shipment at the time of loss or damage. In order to reduce liability
disputes in such situations, a 50-percent compromise agreement between
industry and the military has been reached.
(4) When the 50-percent compromise is appropriate or applicable, the
DD Form 1844 is prepared in the normal fashion utilizing weights
indicated in the Military-Industry Table of Weights multiplied by $.60
per pound. Two different sums should be listed for carrier liability at
the bottom of the DD Form 1844, the amount of liability due under the
50-percent compromise and the full amount that will be offset if carrier
fails to pay, e.g., ``$100.00 Code T, $200.00 Full Liability.'' This
same computation should be reflected in the ``amount of claim'' box on
DD Form 1843 (Demand on Carrier/Contractor). If a carrier refuses to
make a satisfactory settlement or fails to make a timely response to the
demand, the carrier's full liability will be collected.
(d) Codes 7, 8, and J (Unaccompanied Baggage Shipments). Gross
Weight Rules. Government payment to the carrier for transportation of
unaccompanied baggage (Codes 7, 8, and J) is based upon gross weight of
the shipment. Unless the inventory is prepared as a ``Proper Household
Goods Descriptive Inventory,'' computation of carrier liability for loss
or damage incurred in a Code 7, 8, or J shipment will also be based upon
gross weight. Gross weight is defined as the total weight of all
articles, including necessary packing materials and packing containers.
The shipping container is the external crate (tri-wall or other
Government approved container) into which individual articles and/or
packing cartons are placed. For the majority of claims, liability will
be asserted on gross weight of the container.
(2) Baggage shipments prepared using a ``Proper Household Goods
Descriptive Inventory.'' The Joint Military/Industry Table of Weights
will apply to Code 7, 8, or J unaccompanied baggage shipments if the
inventory has been prepared as a ``Proper Household Goods Descriptive
Inventory,'' in accordance with Paragraph 54 of the Tender of Service
for Personal Property Household Goods and Unaccompanied Baggage (DOD
4500.34-R, appendix A). A
[[Page 428]]
properly prepared inventory should reflect the size of each individual
carton, give a general description of carton contents, and note
preexisting damage. The complete inventory, not just a portion, must
have been prepared as a proper household goods inventory. If an
inventory is only partially prepared as a proper household goods
descriptive inventory, gross weight will be used.
(e) Local moves and NTS. There are basically two types of NTS
shipments: A direct delivery from NTS by the same company that stored
the property and a delivery from NTS which was picked up at the
warehouse by a GBL carrier. Direct deliveries of household goods from
NTS are often erroneously construed as local moves. It is sometimes
difficult to tell the difference between the two since a shipment
delivered from NTS by the warehouseman is usually also a short distance
(local) move. The type of contract involved determines whether or not
the shipment is considered a local move, a direct delivery from NTS, or
a carrier delivery picked up from NTS. These distinctions are important
since different liability is involved.
(1) Local move. A local move is a shipment performed under a local
contract that authorizes property to be moved from one residence to
another within a specified area (usually a move from off base to on
base, or the reverse). The contract for a local move is the purchase
order prepared by the transportation office which lists the services
required of the carrier in accordance with the provisions of the Federal
Acquisition Regulation (FAR). The purchase order usually includes
packing and picking up the goods at origin residence or from storage,
transporting the goods within a designated distance, and delivering and
unpacking the goods at destination. All these services are performed
under the authority of one purchase order and will usually be
accomplished the same day or within a few days of pickup. Timely notice
must exist in order to pursue carrier recovery and liability is usually
based on a released valuation of $.60 per pound per article. The Joint
Military/Industry Table of Weights is used to calculate liability. There
is no insurance coverage required on local contractors; if the local
contractor is no longer in business or bankrupt, the file may be closed.
(2) Direct delivery from NTS. In circumstances where one contractor
is responsible for pick-up, NTS, and delivery of the shipment, liability
for loss or damage is assessed against that carrier. Nontemporary
storage of household goods requires completion of DD Form 1164 (Service
Order for Personal Property) in accordance with the provisions of the
Basic Ordering Agreement (BOA). The ``handling-in'' portion of the
shipment is accomplished by issuance of the Initial Service Order, DD
Form 1164. The goods are usually stored for a period of 6 months to 4
years. The ``handling-out'' and post-storage services are accomplished
by a supplemental service order. These are usually long term storage,
short distance moves processed under the authority of at least two
documents: the initial service order and the supplemental service order.
The BOA states that the contractor shall be liable ``in an amount not
exceeding fifty dollars ($50.00) per article or package listed on the
warehouse receipt or inventory form'' (i.e., $50.00 per inventory line
item).
(3) Carrier delivery picked up from NTS. The NTS portion of the
shipment requires completion of an Initial Service Order, DD Form 1164,
to accomplish the ``handling-in'' of the goods into the warehouse for
storage, as prescribed by the provisions of the BOA. When storage is
terminated, the ``handling-out'' and post-storage services are
accomplished by issuance of a GBL in accordance with the tender of
service. The GBL may be issued to a different company or in some cases
to the same company that stored the goods. These are long-term storage,
long-distance moves processed under the authority of two documents: the
initial service order and the GBL. Liability is assessed entirely
against the delivering carrier at whatever rate is appropriate for the
code of service involved, unless the carrier prepares an exception sheet
(rider) noting damage or loss at the time the goods are picked up from
the warehouse. The exception sheet must be signed by a warehouse
representative.
[[Page 429]]
If a valid exception sheet exists, liability for items noted on the
exception sheet is assessed against the NTS warehouse at $50.00 per
inventory line item. An exception sheet should be prepared by the GBL
carrier who picks up the goods from NTS even if that carrier is the same
company that stored the goods. This is necessary in order to relieve the
carrier from liability as a carrier. If either the carrier alone, or
both the carrier and the NTS facility, fail to pay their proper
liability, the file is forwarded to the Naval Material Transportation
Office, (NAVMTO), Norfolk, Virginia for offset action.
(f) Direct Procurement Method (DPM). (1) A DPM move is a method in
which the Government manages the shipment from origin to destination.
Contracts are issued to commercial firms for packing, containerization,
local drayage, and storage services, or Government facilities and
employees provide these services. Separate arrangements are made with
carriers and separate documents are issued for each segment throughout.
DPM contractors are also known as packing and crating (P&C) contractors,
as local drayage contractors, or just as local contractors.
(2) GBL's for DPM shipments are usually only issued to motor freight
carriers.
(i) Block 3 on the GBL entitled ``service code'' will contain the
letters A, B, H, or V, followed by a second letter A, H, K, N, P, R, W,
X, or Y. These two letter codes identify the GBL as a DPM contract.
(ii) Block 18, ``consignee,'' and Block 19, ``from,'' on the GBL
contain the name and address of another carrier or transportation office
rather than the name and address of the claimant.
(iii) Block 27, ``description of shipment,'' on most GBL's contains
the statement, ``household goods released at a value of 10 cents per
pound per article.'' This refers to the motor freight carrier's
liability only. The origin and destination contractors' liability is
still $.60 per pound times the weight of the article or carton, as
indicated in the Joint Military/Industry Table of Weights.
(iv) If liability lies against the motor freight carrier, the term
``article'' is defined as the weight of each packed item, such as the
weight of a broken dish within a carton rather than the net weight of a
carton, as used against the origin and destination contractors.
Liability is computed against the motor freight carrier at a rate of
$.10 per pound times the weight of the article.
(3) Since 1 January 1981 the destination contractor has been held
liable for loss and damage unless it can prove that it is not at fault,
i.e., took exceptions prior to receipt of goods. The motor freight
carrier is liable for any damage or loss noted against it during its
portion of the move. If the motor freight carrier has noted specific
damage when it received the shipment, liability is charged against the
origin contractor at $.60 per pound times the weight of the article or
carton. Damage noted against the origin contractor or motor freight
carrier should be indicated on a valid shipping document and generally
involves distinct damage to or missing containers. These documents must
be signed by all parties involved in the transfer of the goods.
(4) The destination contractor must receive timely notice of loss or
damage via DD Form 1840/1840R and a demand packet. If exceptions were
taken against the origin contractor or motor freight carrier on a
transfer document, they should receive only demand packets.
(5) In determining destination or origin contractor's liability, the
term ``article'' has been defined as each shipping carton or container
and the contents thereof, less any exterior crate or shipping carton.
The net weight of each article (carton or box) packed within the
exterior crate or carton may be used to determine the contractor's
liability for a damaged or missing item originating out of that carton.
(6) Claims offices should obtain a copy of the DPM contract from the
local contracting office or transportation office in order to identify
which company has the DPM contract and verify the limits of the
liability clause. Contracts are awarded on a calendar-year basis.
(g) Mobile homes. Mobile home claims represent such a small
percentage of claims received that claims personnel
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are often unfamiliar with the requirements and documentation necessary
to process such claims. For an explanation of the adjudication of such
claims and the forms used to effect shipment, see Sec. 751.12(g) above.
(1) Carrier liability--(i) For damage to the mobile home. Carrier
liability for damage to a mobile home is generally the full cost of
repairs for damage incurred during transit. A mobile home carrier is
excused from liability when the carrier can introduce substantial proof
that a latent structural defect (one not detectable during the carrier's
preliminary inspection) caused the loss or damage.
(ii) For damage to contents. The carrier's liability for loss or
damage to household or personal effects inside the mobile home (such as
clothing and furniture. or furnishings which were not part of the mobile
home at the time it was manufactured) is limited to $250.00 unless a
greater value is declared in writing on the GBL. Under the Mobile Home
One-Time-Only (MOTO) rate system, effective for shipments after 1
November 1987 the owner no longer prepares his own inventory. Under the
MOTO system, the carrier in coordination with the owner is required to
prepare a legible descriptive inventory on DD Form 1412, Inventory of
Articles Shipped in House Trailer.
(iii) Agents of the mobile home carrier. If the shipment is
transferred to another mobile home carrier for transport, the first
carrier will continue to be shown on the GBL and is responsible for the
mobile home from pickup to delivery. The carrier is also responsible for
damage caused by third parties it engages to perform services such as
auxiliary towing and wrecking.
(iv) Water damage. Water damage to a double-wide or expando-type
mobile home is usually due to the carrier's failure to provide
sufficient protection against an unexpected rainstorm. Carriers will
often assert that this damage is due to an ``act of God'' and attempt to
avoid liability. It is, however, the carrier's responsibility to ensure
safe transit of the mobile home from origin to destination. Not only
should carriers be aware of the risk of flash floods and storms in
certain locales during certain seasons, but a carrier is supposed to
provide protective covering over areas of the mobile home exposed to the
elements. Carrier recovery should be pursued for water damage to these
types of mobile homes.
(v) Waivers signed by the claimant. The carrier may attempt to
escape liability by having the owner execute a waiver of liability. Such
waivers are not binding upon the United States.
(vi) Extensions of storage in transit (SIT). The extension of SIT
past 180 days is only applicable to household goods and holdbaggage
shipments. It is not applicable to the shipment of mobile homes. If a
mobile home remains in SIT past 180 days, storage is at the owner's
expense.
(2) Notice. Item 306 of the carrier's rate solicitation states that:
``Upon delivery by the carrier, all loss of or damage to the mobile home
shall be noted on the delivery document, the inventory form, the DD Form
1800, and/or the DD Form 1840. Late(r) discovered loss or damage,
including personal property within the mobile home, will be noted on DD
Form 1840R not later than 75 days following delivery and shall be
accepted by the carrier as overcoming the presumption of correctness of
delivery receipt.'' Notification to the carrier may be made on any of
the documents. Claims personnel will dispatch the DD Form 1840R in
accordance with Sec. 751.14.
(3) Preparation of demands. The carrier is liable for the full
amount of substantiated damage to the mobile home itself (less estimate
fees), plus up to $250.00 for loss or damage to contents (unless the
claimant purchased increased released valuation on the contents).
Prepare a demand for this amount. In addition to the DD Form 1843 and DD
Form 1844, the demand packet should include the following documents:
(i) DD Form 1800, Mobile Home Inspection Record;
(ii) DD Form 1863, Assessorial Services, Mobile Home;
(iii) DD Form 1840/1840R, Joint Statement of Loss or Damage at
Delivery/Notice of Loss;
(iv) DD Form 1412, Inventory of Items Shipped in House Trailer;
(v) DD Form 1841, Government Inspection Report;
[[Page 431]]
(vi) Driver's statement, from the driver of the towing vehicle;
(vii) Claimant's statement concerning previous moves;
(viii) Estimates of repair, preferably two, from firms in the
business of repairing mobile homes; and
(ix) Engineer's statement, or statement by other qualified
professionals.
(4) References. Chapter 3 and Appendix E of DOD 4500.34-R, pertain
to mobile home shipment and contain much valuable information. Another
source is NAVSUP 490, Chapter 10 ``Mobile Homes of Military Personnel.''
Sec. 751.26 Demand on carrier, contractor, or insurer.
(a) Carrier. When property is lost, damaged, or destroyed during
shipment under a GBL pursuant to authorized travel orders, the claims
investigating officer or adjudicating authority (whichever can more
efficiently perform the task) shall file a written claim for
reimbursement with the carrier according to the terms of the bill of
lading or contract. This demand shall be made against the last carrier
known to have handled the goods, unless the carrier in possession of the
goods when the damage or loss occurred is known. In this event, the
demand shall be made against the responsible carrier. If it is apparent
the damage or loss is attributable to packing, storing or handling while
in the custody of the Government, no demand shall be made against the
carrier.
(b) Marine Corps claimants. For Marine Corps claimants, the claims
investigating officer will prepare the claim against the carrier,
contractor, and/or insurer and will mail it (together with the DD Form
1842 claim package) to the Commandant of the Marine Corps (MHP-40), who
will submit and assume the responsibility of monitoring the claim
against the carrier.
(c) NTS warehousemen. Whenever property is lost, damaged, or
destroyed while being stored under a basic agreement between the
Government and the warehouseman, the claims investigating officer, or
appropriate Naval Legal Service Command (NLSC) activity, shall file a
written claim for reimbursement with the warehouseman under the terms of
the storage agreement.
(d) Insurer. When the property lost, damaged, or destroyed is
insured, the claimant must make a demand against the insurer for payment
under the terms of the insurance coverage within the time provided in
the policy. If the amount claimed is clearly less than the policy
deductible, no demand need be made. Failure to pursue a claim against
available insurance will result in reducing the amount paid on the claim
by the amount which could have been recovered from the insurer. When an
insurer makes a payment on a claim in which the Government has made a
recovery against the carrier or contractor, the insurer shall be
reimbursed a pro rated share of any money recovered.
Sec. 751.27 Preparation and dispatch of demand packets.
Demand on a carrier or contractor shall be made in writing on DD
Form 1843 (Demand on Carrier) with a copy of the adjudicated DD Form
1844 (Schedule of Property) attached.
(a) Demand packets. A demand is a monetary claim against a carrier,
contractor, or insurer, to compensate for loss or damage incurred to
personal property during shipment or storage. DD Form 1843 represents
the actual demand. The demand packet is a group of documents, stapled
together and sent to the liable third party. More than one demand packet
should be prepared when more than one party is deemed to be liable. Do
not use original documents. Demand packets should be mailed in official
DON envelopes. No demand packet should be prepared for claim files that
have been closed or when potential recovery is $25.00 or less. In those
cases the outside of file folders in the upper left-hand corner should
be marked ``CLOSED.'' A demand packet will include the following:
(1) DD Form 1843, Demand on Carrier/Contractor;
(2) DD Form 1844, Schedule of Property and Claim Analysis Chart;
(3) DD Form 1841, Government Inspection Report (if available);
(4) DD Form 1164, Service Order for Personal Property (when
applicable);
[[Page 432]]
(5) Copies of all repair estimates (translated from foreign
languages); and
(6) Copies of all other supporting documents deemed appropriate.
(b) Dispatch of demand packets. (1) The demand packets are directly
dispatched by the appropriate personal property office or the Naval
Legal Service Office to the third party.
(2) Privately Owned Vehicles (POV's). Demands for loss or damage to
POV's will not be made directly against ocean carriers operating under
contract with the MSC. After payment is made to the claimant, one copy
of the complete claim file will be forwarded directly to Commander, MSC.
Each file shall include the following:
(i) The payment voucher;
(ii) The completed personnel claim forms;
(iii) The estimated or actual cost of repair;
(iv) A document indicating the conditions of the items upon delivery
to the carrier; and
(v) a document indicating the forwarding condition of the POV upon
its return to Government control.
The letter of transmittal should identify the vessel by name,
number, and if available, the sailing date.
Sec. 751.28 Assignment of claimants rights to the government.
The claimant shall assign to the Government, to the extent of any
payment made on the claim, all rights and interest the claimant may have
against any contractor, carrier, or insurer or other party arising out
of the incident on which the claim is based. The claimant shall also
furnish such evidence as may be required to enable the Government to
enforce its claim. If the claimant refuses to cooperate, steps may be
taken to ensure return of monies paid on the item which the Government
is trying to collect.
Sec. 751.29 Recoveries from carrier, contractor, or insurer.
(a) Recoveries. If a claimant receives payment from the Government
under this instruction and also receives compensation from a carrier,
contractor, or insurer for the same loss, the Government shall collect
from the claimant the amount necessary to prevent the claimant from
being compensated twice for the same loss. If the amount payable on a
claim is less than the adjudicated value of the claim, excess recoveries
from carriers, and other third parties shall be paid to the member as
long as the total amount paid does not exceed the value of the claim as
adjudicated.
(b) Recovered property. When lost property is found, the claimant
may, at his option, accept all or part of the property and return the
full payment or a pro-rated share of the payment received from the
Government on the claim for the recovered property. Surrendered property
shall be disposed of under applicable salvage and disposal procedures.
Sec. 751.30 Settlement procedures and third party responses.
(a) Settlement procedures. In the interest of expeditious office
administration, correspondence to carriers and contractors should be
kept to a minimum. Normally, one rebuttal to a third party's denial of
liability is sufficient, unless the carrier or contractor raises new
arguments or provides new information.
(1) Checks from third parties. Accept checks for the amount demanded
from carriers and contractors. If a carrier or contractor forwards a
check for less than the amount demanded, review the carrier's arguments
for reducing liability to determine if they are acceptable. If the third
party's basis for reducing liability is acceptable in the light of all
evidence, deposit the check and dispatch the unearned freight letter, if
applicable. Mark the front upper left-hand corner of the file as
``CLOSED.''
(2) Third party offers of settlement. If a carrier or contractor
offers to settle the claim, review the carrier's arguments for reducing
liability to determine if they are acceptable. If the third party's
basis for reducing liability is acceptable in light of all evidence,
inform the carrier that the offer is accepted, but that offset action
will be initiated if a check for that amount is not received within 45
days. If a check
[[Page 433]]
in the amount acceptable to the Government is received, deposit it and
dispatch the unearned freight letter, if applicable. Mark the front
upper left-hand corner of the file as ``CLOSED.'' If a check in the
proper amount is not received within 45 days, send the request to
NAVMTO, Norfolk (or appropriate contract officer) for offset action (see
Sec. 751.32 of this part).
(3) Unacceptable third party checks and offers of settlement. If a
third party's basis for denying liability is not valid, respond to that
carrier or contractor. Return unacceptable checks. Explain the reasons
for not accepting the check or offer, and request the amount that is
justified under the circumstances in the light of all the evidence. If a
release was included, amend the release to the revised amount and sign,
date, witness, and return it. Warn the carrier or contractor that the
claim will be forwarded for offset action if a check for the amount
justified under the circumstances is not received within 45 days.
Suspend the file for 45 days and if a check in the proper amount is
received, deposit it and dispatch the unearned freight letter, if
applicable. If a check in the proper amount is not received within 45
days, request NAVMTO, Norfolk (or appropriate contract officer) to take
offset action.
(4) Third party denials of liability. Upon receipt, review the
carrier or contractor's basis for denying liability in the light of all
the evidence.
(i) Acceptable third party reasons for denial. Mark the front upper
left-hand corner of such files as ``CLOSED.''
(ii) Partially acceptable and unacceptable third party reasons for
denial. If the carrier or contractor's basis for denying liability is
acceptable only in part or is completely unacceptable, follow the
procedures in subparagraph (3) above, requesting the amount that is
justified under the circumstances in the light of all the evidence. If a
response is not received within 45 days, or if the third party's reply
is not responsive, request NAVMTO, Norfolk (or appropriate contract
officer) take offset action as described above.
(b) Depreciation. In determining payments to claimants, the
depreciation rates from the Allowance List--Depreciation Guide are used.
In determining third party liability, however, a different depreciation
guide, the Joint Military/Industry Depreciation Guide is used instead.
In most instances, the depreciation rates are the same in both guides,
and claims personnel are not required to consult the Joint Military/
Industry Depreciation Guide or alter the depreciation taken on items
prior to dispatching demands. If, however, a carrier or contractor
objects to the depreciation rate utilized for certain items, consult the
Joint Military/Industry Depreciation Guide and use the depreciation rate
found in that guide if it differs from the rate in the Allowance List-
Depreciation Guide.
Sec. 751.31 Common reasons for denial by carrier or contractor.
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
[[Page 434]]
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
[[Page 435]]
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.
Sec. 751.32 Forwarding claims files for offset action.
(a) General. Claim files are forwarded with a recommendation for
offset action when 120 days have passed since a demand and a response
has not been received from the carrier or contractor. Files are also
forwarded for offset action when an impasse is reached. An impasse
occurs when legitimate efforts to collect the fully justified amount
demanded have reached a standstill and the carrier has no valid basis
for denial. Prior to forwarding files for offset action, claims
personnel must ensure that timely notice has been given, that all
necessary documents are included, and that the demand and any
correspondence were mailed to the proper carrier or contractor at its
correct address. When applicable, claims personnel must also ensure that
an unearned freight packet is included.
(b) Claim files forward to local contracting offices. Claims
forwarded to local contracting offices for offset action include claims
involving local moves and DPM shipments in which the origin and/or
destination contractor is determined to be liable. When the contractor
fails to reply to a demand within 120 days or fails to make an
acceptable offer, the file should be forwarded to the local contracting
office with a request for offset action.
(c) Unjustified denials and inadequate settlement offers by carrier
or contractor--(1) GBL carriers. If a GBL carrier or insurer has refused
to acknowledge or respond to a demand within a reasonable time (usually
30 days), if the claims investigating officer considers a valid claim to
have been denied or not adequate settlement offered, or if settlement
has been delayed beyond 120 days (see Sec. 751.32(a)), the claim shall
be forwarded to the NLSC activity serving the geographical location
recommending that set-off action be taken against the carrier or
contractor. The 120-day period begins to run on the date initial demand
is made on the carrier. The NLSC activity shall review the file and if
the carrier liability is correctly computed, forward a copy of the GBL,
copies of the DD Forms 1843 and 1844, SCAC code, and final demand on
carrier to the Commanding Officer, Naval Material Transportation Office,
Code 023, Bldg. Z-133-5, Naval Station, Norfolk, VA 23511 directing set-
off action against the carrier or contractor.
(2) Nontemporary warehousemen. If a warehouseman or insurer has
refused to acknowledge or respond to a claim within a reasonable time,
if the claims investigating officer considers a valid claim to have been
denied or no adequate settlement offered, or if settlement has been
delayed beyond 120 days, the claim shall be referred to the NLSC
activity serving the geographic location recommending set-off action be
taken against the contractor. The 120-day time period begins to run on
the date the initial demand was made. The NLSC activity shall review the
file and if the warehouseman's liability is correctly computed, forward
the file to the appropriate MTMC Regional Storage Management Office for
set-off.
Sec. 751.33 Unearned freight packet.
(a) Preparation. An unearned freight packet should be prepared when
the loss or destruction of an item in shipment is attributable to a GBL
carrier. Unearned freight packets should be addressed to the carrier,
and not to the agents of GBL carriers, NTS contractors, or other
contract movers. An unearned freight packet is required when a mobile
home is lost or completely destroyed. An unearned freight packet
includes:
(1) A Request For Deduction of Unearned Freight Charges;
(2) A copy of DD Form 1843;
(3) A copy of DD Form 1844; and
(4) A copy of the GBL.
(b) Dispatch. The unearned freight packet is not dispatched to the
NAVMTO, Norfolk until the carrier has paid its agreed liability or when
offset has been accomplished.
Sec. 751.34 GAO appeals.
(a) General. Sections 1 through 12 and 52 through 65 of Title 4, GAO
Manual,
[[Page 436]]
Policy and Procedures Manual for Guidance of Federal Agencies, and 4 CFR
parts 30-32 set forth procedures for carriers to appeal setoff action.
Before a carrier can appeal a setoff action to GAO, the command
requesting setoff action must make an administrative report to GAO.
(b) Procedures for appeals. (1) The carrier must request appeal from
the command requesting setoff action and request a GAO review.
(2) The command requesting setoff action will review the appeal and
if it is determined the setoff action was appropriate, will do an
administrative report and notify the carrier when this has been
accomplished.
(3) The administrative report and complete claims file will be
forwarded to the NLSC activity serving the geographic location for
review prior to forwarding to GAO.
(4) The complete claims package, including all correspondence with
the carrier, will then be forwarded to GAO.
(c) The administrative report and enclosures must support the setoff
action.
(d) GAO Manual. All NLSC activities have been provided a copy of a
manual published by the Claims Group General Government Division, U.S.
General Accounting Office entitled Procedures of the U.S. General
Accounting Office for Household Goods Loss and Damage Claims. Other
commands dealing with carrier recoveries should get a copy of the manual
from the NLSC activity servicing the local area.
Sec. 751.35 Forms and instructions.
Copies of all of the forms and instructions discussed in this part
may be obtained if needed, from the Commanding Officer, Naval
Publications and Forms Center, 5801 Tabor Avenue, Philadelphia, PA
19120.
PART 752--ADMIRALTY CLAIMS--Table of Contents
Sec.
752.1 Scope.
752.2 Organization.
752.3 Claims against the Navy.
752.4 Affirmative claims.
752.5 Salvage.
Authority: 5 U.S.C. 301; 10 U.S.C. 5013, 5148, and 7621-7623; 32 CFR
700.206 and 700-1202.
Sec. 752.1 Scope.
This part applies to admiralty-tort claims. These include claims
against the United States for damage caused by a vessel in the naval
service or by other property under the jurisdiction of the Navy, or
damage caused by a maritime tort committed by an agent or employee of
the Navy, and affirmative claims by the United States for damage caused
by a vessel or floating object to Navy property.
[39 FR 9962, Mar. 15, 1974
Sec. 752.2 Organization.
(a) Administrative authority of the Secretary of the Navy. The
Secretary of the Navy has administrative authority for settlement and
direct payment where the amount paid does not exceed $1,000,000 and
where the matter is not in litigation, of claims for damage caused by
naval vessels or by other property under the jurisdiction of the Navy,
or damage caused by a maritime tort committed by an agent or employee of
the Navy, and for towage or salvage services rendered to naval vessels
(10 U.S.C. 7622 (1994)). The Secretary also has authority to settle
affirmative admiralty claims for damage caused by a vessel or floating
object to property under the jurisdiction of the Navy (10 U.S.C. 7623
(1994)).
(b) Admiralty and Maritime Law Division of the Office of the Judge
Advocate General. The Navy's admiralty-tort claims are processed and
adjudicated in the Admiralty and Maritime Law Division of the Office of
the Judge Advocate General. All correspondence with the Admiralty and
Maritime Law Division should be addressed to the Office of the Judge
Advocate General (Code 11), 1322 Patterson Avenue SE, Suite 3000,
Washington Navy Yard, DC 20374-5066.
(c) Mission and policy. The primary mission of the Admiralty and
Maritime Law Division is to effect prompt and equitable settlements of
admiralty claims, both against and in favor of the United States. The
settlement procedure has evolved to eliminate the expenses and delays
arising out of litigation and to obtain results advantageous to the
financial interests of the United States. Where settlements
[[Page 437]]
cannot be made, litigation ensues in the Federal Courts. The final test
of whether a settlement is justified is the probable result of
litigation. Settlements are therefore considered and determined by the
probable results of litigation. The policy of the Navy is to effect fair
and prompt settlements of admiralty claims wherever legal liability
exists.
(d) Admiralty-tort claims. As indicated above, the Admiralty and
Maritime Law Division primarily handles admiralty-tort claims. These are
claims for damage caused by vessels in the naval service or by other
property under the jurisdiction of the Navy, or damage caused by a
maritime tort committed by an agent or employee of the Navy, and claims
for damage caused by a privately owned vessel to a vessel or property of
the Navy (affirmative claims). The Admiralty and Maritime Law Division
also handles claims for towage and salvage services rendered to a vessel
in the naval service.
(e) Admiralty-contract claims. Admiralty-contract claims arising out
of the operations of the Military Sealift Command (MSC) are handled by
its Office of Counsel. MSC is responsible for the procurement of vessels
and space for the commercial ocean transportation of Department of
Defense cargo, mail, and personnel. It is also responsible for the
maintenance, repair, and alteration of Government-owned vessels assigned
to it. The Office of Counsel, MSC, deals with the various claims of a
contract nature which arise out of these operations. These include
claims for cargo damage, charter hire, redelivery, general average, and
claims arising under MSC ship-repair contracts.
(f) Damage caused by Navy contract stevedores. Office of Counsel,
Naval Supply Systems Command, has cognizance of admiralty claims for
damage caused by Navy contract stevedores. Under these stevedore
contracts, the stevedoring companies are responsible for negligent acts
of their employees which result in vessel damage. It is important that
the extent of any such damage be accurately determined and promptly
reported to the contracting officer having cognizance of the particular
stevedore contract involved.
(g) Resolving conflicts. Admiralty-tort claims, such as collision,
personal-injury, and death claims, are dealt with by the Admiralty and
Maritime Law Division, irrespective of whether an MSC vessel or other
naval vessel is involved. Whether any particular claim is to be handled
by JAG or by MSC, therefore, is determined by the nature of the claim.
Cases may arise which could be handled by either office. If doubt
exists, such matters should be reported both to JAG and to MSC. An
agreement will then be reached between the Admiralty and Maritime Law
Division and the Office of Counsel, MSC, as to how the incident should
be handled.
[39 FR 9962, Mar. 15, 1974, as amended at 55 FR 12173, Apr. 2, 1990; 65
FR 60861, 60862, Oct. 13, 2000]
Sec. 752.3 Claims against the Navy.
(a) Settlement authority. 10 U.S.C. 7622 (1994) provides settlement
authority for ``(1) Damage caused by a vessel in the naval service or by
other property under the jurisdiction of the Department of the Navy; (2)
compensation for towage or salvage service, including contract salvage,
rendered to a vessel in the naval service or to other property of the
Navy; or (3) damage caused by a maritime tort committed by any agent or
employee of the Department of the Navy or by property under the
jurisdiction of the Department of the Navy.'' The limit on the
Secretary's settlement authority is payment of $1,000,000. A claim which
is settled for an amount over $1,000,000 is certified to Congress for
payment. Section 7622 provides that the Secretary may delegate his
settlement authority in matters where the amount to be paid is not over
$100,000. Under the Secretary's delegation, settlements not exceeding
$100,000 may be effected by the Judge Advocate General, Deputy Judge
Advocate General, Assistant Judge Advocate General (General Law), and
the Deputy Assistant Judge Advocate General (Admiralty and Maritime
Law). Authority has also been delegated to Deputy Commander in Chief,
U.S. Naval Forces, Europe, and to Commander Sixth Fleet, to pay
admiralty claims against the Navy not exceeding $10,000, and to
[[Page 438]]
(b) Settlement is final. The legislation specifically authorizes the
Secretary to settle, compromise, and pay claims. The settlement, upon
acceptance of payment by the claimant, is final and conclusive for all
purposes.
(c) Settlement procedures. Where the amount paid is over $100,000,
after agreement is reached with counsel or claimants, the procedure is
to prepare a settlement recommendation for the approval of the Secretary
of the Navy. When settlement has been approved, the voucher required for
effecting payment is prepared. The settlement check is then exchanged,
in keeping with the commercial practice, for an executed release. In
some situations, where the exchange of documents is impracticable, a
claimant is requested to forward the executed release by mail, on the
understanding that the release does not become effective until the check
is received in payment. Claims settled under 10 U.S.C. 7622 are paid out
of annual Department of Defense appropriations.
(d) Limitation period. The Secretary's settlement authorization is
subject to a two-year limitation. This limitation is not extended by the
filing of claim nor by negotiations or correspondence. A settlement
agreement must be reached before the end of the two-year period. If
settlement is not accomplished, then the claimant must file suit under
the appropriate statute to avoid the limitation bar. The agreement
reached in negotiations must receive the approval of the Secretary of
the Navy or his designee, depending on the amount involved, prior to the
expiration of the two-year period.
(e) Matters in litigation. When suit is filed, the matter comes
within the cognizance of the Department of Justice, and the Secretary of
the Navy is no longer able to entertain a claim or to make
administrative settlement.
[39 FR 9962, Mar. 15, 1974, as amended at 55 FR 12173, Apr. 2, 1990; 65
FR 60861, 60862, Oct. 13, 2000]
Sec. 752.4 Affirmative claims.
(a) Settlement authority. The Navy has the same authority to settle
affirmative admiralty claims as it does claims against the Navy. The
statute conferring this authorization is codified in 10 U.S.C. 7623
(1994), and is the reciprocal of 10 U.S.C. 7622 (1994) referred to in
Sec. 752.3.
(b) Scope. 10 U.S.C. 7623 is a tort claims-settlement statute. It is
not limited to affirmative claims arising out of collision, but embraces
all instances of damage caused by a vessel or floating object to
property of the United States under the jurisdiction of the Department
of the Navy. Perhaps the most frequent instance is where a privately
owned vessel damages a Navy pier or shore structure. To eliminate any
issue of whether the damaging instrumentality was a vessel, the words
``or floating object'' were included.
(c) Statute of limitation. The United States is subject to a three-
year statute of limitation when it asserts an affirmative claim for
money damages grounded in tort. This limitation is subject to the usual
exclusions, such as inability to prosecute due to war, unavailability of
the ``res'' or defendant, and certain exemptions from legal process (28
U.S.C. 2415, 2416 (1994)).
(d) Litigation. 10 U.S.C. 7623 does not apply to any claim where
suit is filed. If the Admiralty and Maritime Law Division is unable to
effect settlement, the matter is referred to the Department of Justice
for the filing of a complaint against the offending party. Thereafter,
as in the case of adverse litigated claims, the Navy has no further
authority to effect settlement.
[39 FR 9962, Mar. 15, 1974, as amended at 55 FR 12174, Apr. 2, 1990; 65
FR 60861, Oct. 13, 2000]
Sec. 752.5 Salvage.
(a) Scope. This section relates to salvage claims against or by the
Navy for compensation for towage and salvage services, including
contract salvage, rendered to a vessel in the naval service or to other
property under the jurisdiction of the Department of the Navy, or for
salvage services rendered by the Department of the Navy. Suits for
salvage may be maintained under the Public Vessels Act, and salvage
claims are within the Secretary of the Navy's administrative-settlement
authority under 10 U.S.C. 7622. Salvage claims against the Navy are
reported to and processed by the Judge Advocate General (Admiralty and
Maritime
[[Page 439]]
Law Division). Both claims and suits for salvage against the United
States are subject to the two-year limitation of the Public Vessels Act
and the Navy's settlement authority.
(b) Affirmative claims. Authorization for the settlement of
affirmative salvage claims is contained in 10 U.S.C. 7365 (1994).
Assertion of such claims is handled in the first instance by the
Assistant Supervisor of Salvage (Admiralty), USN, Naval Sea Systems
Command (SEA OOCL), 2531 Jefferson Davis Highway, NC/3 Room 11E54,
Arlington, VA 22242-5160. Salvage claims are referred to the Admiralty
Division only if the Assistant Supervisor of Salvage (Admiralty) is
unsuccessful in making collection. Any money received in settlement of
affirmative salvage claims is credited to appropriations for maintaining
salvage facilities by the Navy, pursuant to 10 U.S.C. 7367 (1994).
[39 FR 9962, Mar. 15, 1974, as amended at 41 FR 26866, June 30, 1976; 55
FR 12174, Apr. 2, 1990; 65 FR 60861, 60862, Oct. 13, 2000]
PART 755--CLAIMS FOR INJURIES TO PROPERTY UNDER ARTICLE 139 OF THE UNIFORM CODE OF MILITARY JUSTICE--Table of Contents
Sec.
755.1 Statutory authority.
755.2 Scope.
755.3 Claims not cognizable.
755.4 Limitation on claims.
755.5 Complaint by the injured party and investigation.
755.6 Action where offenders are members of one command.
755.7 Action where offenders are members of different commands.
755.8 Reconsideration and appeal.
755.9 Effect of court-martial proceedings.
Authority: 5 U.S.C. 301; 10 U.S.C. 939, 5013, and5148; E.O. 11476,
as reported in 3 CFR, 1969 Comp., p. 132; 32 CFR 700.206 and 700.1202.
Source: 56 FR 42232, Aug. 27, 1991, unless otherwise noted.
Note 1: This part 755 is chapter IV of the Manual of the Judge
Advocate General of the Navy.
Note 2: The Uniform Code of Military Justice (10 U.S.C. 801-940) is
referred to in this part 755 as the ``UCMJ''. The Manual for Courts-
Martial, United States, 1984 (E.O. 12473 of August 1, 1984) is referred
to in this part 755 as ``MCM 1984''.
Sec. 755.1 Statutory authority.
Article 139, UCMJ, redress of injuries to property, is the basis for
this chapter.
Sec. 755.2 Scope.
This chapter provides for assessments against the pay of members of
the naval service in satisfaction of claims for property damage caused
under certain circumstances. Claims for damage, loss, or destruction of
privately owned property caused by a person or persons in the naval
service, are payable under Article 139, UCMJ, only if such damage, loss,
or destruction is caused by riotous conduct, willful conduct, or acts
showing such reckless or wanton disregard of the property rights of
others that willful damage or destruction is implied. Acts of the type
punishable under Article 109, UCMJ, are cognizable under Article 139,
UCMJ. Charges against pay under these regulations shall be made only
against the pay of persons shown to have been principal offenders or
accessories.
Sec. 755.3 Claims not cognizable.
The following claims are not cognizable under this chapter.
(a) Claims resulting from simple negligence.
(b) Claims of subrogees.
(c) Claims for personal injury or death.
(d) Claims arising from acts or omissions within the scope of
employment of the offender.
(e) Claims for reimbursement for damage, loss, or destruction of
Government property.
Sec. 755.4 Limitation on claims.
(a) Time limitations. A claim must be submitted within 90 days of
the incident giving rise to it.
(b) Acts of property owner. When the acts or omissions of the
property owner, his lessee, or agent were a proximate contributing
factor to the loss or damage of the property, assessments will not be
made against members of the naval service in excess of the amount for
which they are found to be directly responsible, i.e., comparative
responsibility for the loss will be the
[[Page 440]]
standard for determining financial responsibility.
(c) Only direct damages considered. Assessment will be made only for
direct physical damages to the property. Indirect, remote, or
inconsequential damage will not be considered.
Sec. 755.5 Complaint by the injured party and investigation.
(a) A claim shall contain a statement setting forth the amount of
the claim, the facts and circumstances surrounding the claim and any
other information that will assist in the investigation and resolution
of the matter. When there is more than one complaint resulting from a
single incident, each claimant must file a claim separately and
individually. The claim shall be personally signed by the claimant or
his duly authorized representative or agent.
(b) Where the claim alleges misconduct by members of the command, a
commanding officer to whom the claim is submitted shall convene an
investigation under this Manual to inquire into the matter. Where a
complaint is received by a commanding officer to whose command the
alleged offenders do not report, he shall forward the claim and other
pertinent information about the matter to the member's commanding
officer who will convene an investigation into the incident. Where the
command of the alleged offenders cannot be determined, the claim and
supporting materials shall be forwarded to the Chief of Naval Personnel
or the Commandant of the Marine Corps, as appropriate, for action.
(c) The investigation shall inquire into the circumstances
surrounding the claim, gather all relevant information about the matter
(answering the who, what, where, when, why, and how questions) and make
findings and opinions, as appropriate, about the validity of the claim
under Article 139, UCMJ, and these regulations. The investigation shall
determine the amount of damage suffered by the property owner.
(d) The investigation shall make recommendations about the amount to
be assessed against the pay of the responsible parties. If more than one
person is found responsible, recommendations shall be made about the
assessments against all individuals.
Sec. 755.6 Action where offenders are members of one command.
(a) Action by commanding officer. The commanding officer shall
ensure the alleged offenders are shown the investigative report and are
advised they have 20 days within which to submit a statement or
additional information on the incident. If the member declines to submit
information, he shall so state in writing within the 20 day period. The
commanding officer shall review the investigation and determine whether
the claim is properly within the provisions of Article 139, UCMJ, and
these regulations, and whether the facts indicate responsibility for the
damage on members of the command. If the commanding officer finds the
claim payable under these regulations, he shall fix the amount to be
assessed against the offenders.
(b) Review. If the commanding officer has authority to convene a
general court-martial, no further review of the investigation is
required as to the redress of injuries to property. If the commanding
officer does not have general court-martial convening authority, the
investigation and the commanding officer's action thereon shall be
forwarded to the officer exercising general court-martial jurisdiction
(OEGCM) over the command for review and action on the claim. That
officer's action on the claim shall be communicated to the commanding
officer who will take action consistent with the determination.
(c) Charge against pay. Where the amount does not exceed $5,000.00,
the amount ordered by the commanding officer shall, as provided in the
Navy Comptroller Manual, be charged against the pay of the offenders and
the amounts so collected will be paid to the claimant. Where the amount
exceeds $5,000.00, the claim, the investigation, and the commanding
officer's recommendation shall be forwarded for review prior to checkage
to Headquarters, U.S. Marine Corps (Code JAR) or the Judge Advocate
General, as appropriate. The amount charged in any single month against
the pay of offenders shall not exceed one-half of
[[Page 441]]
basic pay, as defined in paragraph 126h(2), Manual for Courts-Martial.
The action of the commanding officer in ordering the assessment shall be
conclusive on any disbursing officer for payment to the claimant of the
damages assessed, approved, charged, and collected.
Sec. 755.7 Action where offenders are members of different commands.
(a) Action by common superior. The investigative report shall be
forwarded to the common superior exercising general court-martial
jurisdiction over the commands to which the alleged offenders are
assigned. That officer shall ensure the alleged offenders are shown the
investigative report and permitted to comment on it, should they desire,
before action is taken on the claim. That officer shall review the
investigation and determine whether the claim is properly within the
provisions of Article 139, UCMJ, and these regulations, and whether the
facts indicate responsibility for the damage on members of his command.
If the claim is found payable under these regulations, he shall fix the
amount to be assessed against the offenders and direct the appropriate
commanding officers to take action accordingly.
(b) Forwarding to SECNAV (JAG). Where it is not practical or
possible to carry out the procedure in Sec. 755.7(a) of this section,
the investigation or investigations shall be forwarded to the Secretary
of the Navy (Judge Advocate General) who will take action in the matter.
Commanding officers, in such a situation, are not to make charges
against the pay of their members until directed by the Secretary of the
Navy (Judge Advocate General).
Sec. 755.8 Reconsideration and appeal.
(a) Reconsideration. The OEGCM may, upon a receipt of a request for
reconsideration by either the claimant or a member who has been assessed
pecuniary liability, reopen the investigation or take any other action
he believes is necessary in the interests of justice. If the OEGCM
contemplates acting favorably on the request, he will provide all
individuals interested in the claim with notice and an opportunity to
respond. The basis for any change will be noted in the OEGCM's decision.
(b) Appeal. In claims involving $5,000.00 or less, a claimant or
member who has been assessed pecuniary liability may appeal the decision
to the OEGCM. An appeal must be submitted within 5 days of the receipt
of the OEGCM's decision. Appeals will be forwarded, via the OEGCM, to
the Judge Advocate General for review and final action. In the event of
an appeal, the imposition of the OEGCM's decision will be held in
abeyance pending the final action by JAG. If it appears that good cause
exists that would make it impracticable for an appeal to be submitted
within 5 days, the OEGCM may, in his discretion, grant an extension of
time, as appropriate. His decision on extensions is final and
nonappealable.
Sec. 755.9 Effect of court-martial proceedings.
Administrative action under these regulations is separate and
distinct from and is not affected by any disciplinary action against the
offender. The two proceedings are independent. Acquittal or conviction
of the alleged offender by court-martial is evidence for the
administrative action, but is not determinative on the issue of
responsibility for damages under these regulations.
PART 756--NONAPPROPRIATED-FUND CLAIMS REGULATIONS--Table of Contents
Sec.
756.1 Scope.
756.2 Definitions.
756.3 Notification.
756.4 Responsibility.
756.5 Investigation.
756.6 Negotiation.
756.7 Payment.
756.8 Denial.
756.9 Claims by employees.
Authority: 5 U.S.C. 301; 10 U.S.C. 939, 5013, and 5148; E.O. 11476
(3 CFR, 1969 Comp., p. 132); 32 CFR 700.206 and 700.1202.
Source: 57 FR 4736, Feb. 7, 1992, unless otherwise noted.
Sec. 756.1 Scope.
This part explains how to settle claims for and against the United
States for property damage, personal
[[Page 442]]
injury, or death arising out of the operation of nonappropriated-fund
instrumentalities.
Sec. 756.2 Definitions.
(a) Nonappropriated-fund instrumentality (NAFI). An instrumentality
of the Federal Government established to generate and administer
nonappropriated-funds for programs and services contributing to the
mental and physical well-being of Department of Defense personnel and
their dependents. A NAFI is not incorporated under the laws of any State
and enjoys the privileges and immunities of the Federal Government.
(b) Nonappropriated-funds. Funds generated through the use and
patronage of NAFI's, not including funds appropriated by Congress.
(c) Employees of NAFI. Civilian personnel employed by NAFI's whose
salaries are paid from nonappropriated-funds. Also, military personnel
working part-time at NAFI's when compensated from nonappropriated-funds.
Sec. 756.3 Notification.
(a) Some NAFI's, such as flying clubs, carry private commercial
insurance to protect them from claims for property damage and personal
injury attributable to their operations. The Commandant of the Marine
Corps, the Chief of Naval Personnel, and the Commander, Naval Supply
Systems Command determine whether NAFI's within their cognizance shall
carry liability insurance or become self-insurers, in whole or in part.
(b) The Marine Corps requires mandatory participation in the Morale,
Welfare and Recreation (MWR) Composite Insurance Program by the
following operations: MWR operations and retail services, food and
hospitality, recreation; and special NAFI activities including flying
clubs, rod and gun clubs, Interservice Rifle Fund, Marine Corps Marathon
and Dependent Cafeteria Fund. The following organizations may also
participate in the MWR Composite Insurance Program, if desired: Child
welfare centers, billeting funds, chapel funds, and civilian welfare
funds.
(c) When the operations of NAFI's result in property damage or
personal injury, the insurance carrier, if any, should be given
immediate written notification. Notification should not be postponed
until a claim is filed. When the activity is self-insured, the self-
insurance fund shall be notified of the potential liability by the
activity.
Sec. 756.4 Responsibility.
The primary responsibility for the negotiation and settlement of
claims resulting from nonappropriated-fund activities is normally with
the NAFI and its insurer. NAFI's, however, are Federal agencies within
the meaning of the Federal Tort Claims Act if charged with an essential
function of the Department of the Navy and if the degree of control and
supervision by the Navy is more than casual or perfunctory. Compare
United States v. Holcombe, 277 F.2d 143 (4th Cir. 1960) and Scott v.
United States, 226 F. Supp. 846, (D. Ga. 1963). Consequently, to the
extent sovereign immunity is waived by the Federal Tort Claims Act, 28
U.S.C. 1346(b), 2671-2672, 2674-2680, the United States remains
ultimately liable for payment of NAFI claims.
Sec. 756.5 Investigation.
Claims arising out of the operation of NAFI's, in and outside the
United States, shall be investigated in accordance with the procedures
for investigating similar claims against appropriated fund activities in
order to protect the residual liability of the United States. All claims
should be submitted to the command having cognizance over the NAFI
involved.
Sec. 756.6 Negotiation.
(a) General. Claims from NAFI's should be processed primarily
through NAFI claims procedures, using as guidelines the regulations and
statutes applicable to similar appropriated fund activity claims.
(b) When the NAFI is insured. When a NAFI is insured, the insurer or
the contracted third-party claims administrator (TPA) will normally
conduct negotiations with claimants. The appropriate naval adjudicating
authority as shown in 32 CFR 750.34(c)(2)(ii) has the responsibility of
monitoring the negotiations conducted by the insurer or TPA. Monitoring
is normally limited
[[Page 443]]
to ascertaining someone has been assigned to negotiate, to obtain
periodic status reports, and to close files on settled claims. Any
dissatisfaction with the insurer's or TPA's handling of the negotiations
should be referred directly to the Judge Advocate General for
appropriate action. Under special circumstances, even when there is an
insurer or TPA, the appropriate naval adjudicating authority may conduct
negotiations, provided the command involved and the insurer agree to it.
When an appropriate settlement is negotiated by the Navy, the
recommended award will be forwarded to the insurer or TPA for payment.
(c) When the NAFI is not insured. When there is no private,
commercial insurer and the NAFI has made no independent arrangements for
negotiations, the appropriate Navy adjudicating authority is responsible
for conducting negotiations. When an appropriate settlement is
negotiated by the Navy, the recommended award will be forwarded to the
NAFI for payment from nonappropriated-funds.
Sec. 756.7 Payment.
(a) Claims that can be settled for less than $1000.00. A claim not
covered by insurance (or not paid by the insurer), that can be settled
for $1000.00 or less, may be adjudicated by the commanding officer of
the activity concerned or designee. The claim shall be paid out of funds
available to the commanding officer.
(b) Claims that cannot be settled for less than $1000.00. A claim
negotiated by the Navy, not covered by insurance, that cannot be settled
for less than $1000.00, shall be forwarded to the appropriate
nonappropriated-fund headquarters command for payment from its
nonappropriated-funds.
(c) When payment is possible under another statute. In some cases
neither the NAFI nor its insurer may be legally responsible. In those
instances, when there is no negligence, and payment is authorized under
some other statute, such as the Foreign Claims Act, 10 U.S.C. 2734-2736,
the claim may be considered for payment from appropriated funds or may
be referred to the Judge Advocate General for appropriate action.
(d) Other claims. A NAFI's private insurance policy is usually not
available to cover losses which result from some act or omission of a
mere participant in a nonappropriated-fund activity. In the event the
NAFI declines to pay the claim, the file shall be forwarded to the Judge
Advocate General for determination.
Sec. 756.8 Denial.
Claims resulting from nonappropriated-fund activities may be denied
only by the appropriate naval adjudicating authority. Such a denial is
necessary to begin the 6-month limitation on filing suit against the
United States for claims filed under the Federal Tort Claims Act. Denial
of a claim shall be in writing and in accordance with subparts A or B of
part 750 of this chapter, as appropriate. The appropriate naval
adjudicating authority should not deny claims which have initially been
processed and negotiated by a nonappropriated-fund activity, its insurer
or TPA until the activity or its insurer has clearly stated in writing
that it does not intend to pay the claim and has elected to defend in
court.
Sec. 756.9 Claims by employees.
(a) Personal injury or death of citizens or permanent residents of
the United States employed anywhere, or foreign nationals employed
within the United States. Compensation is provided by the Longshore and
Harbor Workers' Compensation Act (33 U.S.C. 901-950) for employees of
NAFI's who have suffered injury or death arising out of and in the
course of their employment (5 U.S.C. 8171). That Act is the exclusive
basis for Government liability for injuries or deaths that are covered
(5 U.S.C. 8173). A claim should first be made under that Act if there is
a substantial possibility the injury or death is covered.
(b) Personal injury or death of foreign nationals employed outside
of the continental United States. Employees who are not citizens or
permanent residents, and who are employed outside the continental United
States, are protected by private insurance of the NAFI or by other
arrangements (5 U.S.C. 8172). When a nonappropriated-fund activity
[[Page 444]]
has neglected to obtain insurance coverage or to make other
arrangements, the matter shall be processed as a Foreign Claims Act or a
Military Claims Act claim if appropriate, and any award will be paid
from nonappropriated-funds.
PART 757--AFFIRMATIVE CLAIMS REGULATIONS--Table of Contents
Subpart A--Property Damage Claims
Sec.
757.1 Scope of subpart A.
757.2 Statutory authority.
757.3 Regulatory authority.
757.4 Claims that may be collected.
757.5 Assertion of claims and collection procedures.
757.6 Waiver, compromise, and referral of claims.
757.7-757.10 [Reserved]
Subpart B--Medical Care Recovery Act (MCRA) Claims
757.11 Scope of subpart B.
757.12 Statutory authority.
757.13 Responsibility for MCRA action.
757.14 Claims asserted.
757.15 Claims not asserted.
757.16 Claims asserted only with JAG approval.
757.17 Statute of limitations.
757.18 Asserting the claim.
757.19 Waiver and compromise.
757.20 Receipt and release.
Authority: 5 U.S.C. 301; 10 U.S.C. 939, 5013, and 5148; E.O. 11476,
3 CFR, 1969 Comp., p. 132; 32 CFR 700.206 and 700.1202.
Source: 57 FR 5072, Feb. 12, 1992, unless otherwise noted.
Subpart A--Property Damage Claims
Sec. 757.1 Scope of subpart A.
Subpart A describes how to assert, administer, and collect claims
for damage to or loss or destruction of Government property through
negligence or wrongful acts.
Sec. 757.2 Statutory authority.
(a) General. With the exception of MCRA claims, all affirmative
claims for money or property in favor of the United States shall be
processed in accordance with the Federal Claims Collection Act (31
U.S.C. 3711). Department of Defense Directive 5515.11 \1\ of 10 December
1966 delegates to the Secretary of the Navy, and designees, the
authority granted to the Secretary of Defense under the Federal Claims
Collection Act.
---------------------------------------------------------------------------
\1\ Copies may be obtained if needed, from the Commanding Officer,
U.S. Naval Publications and Forms Center, 5801 Tabor Avenue,
Philadelphia, PA 19120.
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(b) Statute of limitations. There is a 3-year statute of limitations
on affirmative Government tort claims pursuant to 28 U.S.C. 2415(b).
Sec. 757.3 Regulatory authority.
The regulations published in 4 CFR chapter II control the collection
and settlement of affirmative claims. This section supplements the
material contained in those regulations. Where this section conflicts
with the materials and procedure published in 4 CFR chapter II, the
latter controls.
Sec. 757.4 Claims that may be collected.
(a) Against responsible third parties for damage to government
property, or the property of nonappropriated-fund activities. It should
be noted, however, that as a general rule, the Government does not seek
payment from servicemembers and Government employees for damages caused
by their simple negligence. Exceptions to this general policy will be
made when the incident involves aggravating circumstances.
(b) For medical costs from third party payers in accordance with 10
U.S.C. 1095. These claims are asserted and collected by the medical
treatment facilities under the coordination of benefits program.
(c) For money paid or reimbursed by the government for damage to a
rental car in accordance with the Joint Federal Travel Regulations
(volume 1, paragraph U 3415-C and volume 2, paragraph C 2101-2).
Collection action shall be taken against third parties liable in tort.
Collection action shall not be taken against Government personnel who
rented the vehicle.
(d) Other claims. Any other claim for money or property in favor of
the United States cognizable under the
[[Page 445]]
Federal Claims Collection Act not specifically listed above.
Sec. 757.5 Assertion of claims and collection procedures.
(a) General. The controlling procedures for administrative
collection of claims are established in 4 CFR part 102.
(b) Officials authorized to pursue claims. The following officers
are authorized to pursue and collect all affirmative claims in favor of
the United States:
(1) The Judge Advocate General; the Deputy Judge Advocate General;
any Assistant Judge Advocate General; and the Deputy Assistant Judge
Advocate General (Claims and Tort Litigation); and
(2) Commanding officers of Naval Legal Service Offices and
applicable Detachments, except Naval Legal Service Offices in countries
where another service has single service responsibility in accordance
with DOD Directive 5515.8.\2\
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\2\ See footnote 1 to Sec. 757.2.
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(c) Dollar limitations. All of the officers listed in Sec. 757.5(b)
are authorized to compromise and terminate collection action on
affirmative claims of $20,000.00 or less.
(d) Determining liability. Liability must be determined in
accordance with the law of the place in which the damage occurred,
including the applicable traffic laws, elements of tort, and possible
defenses.
(e) Assertion of a claim. (1) Assertion of the claim is accomplished
by mailing to the tortfeasor a ``Notice of Claim.'' The notice is to be
mailed certified mail, return receipt requested, and should include the
following information:
(i) Reference to the statutory right to collect;
(ii) A demand for payment or restoration;
(iii) A description of damage;
(iv) The date and place of the incident; and
(v) The name, phone number, and office address of the claims
personnel to contact.
(2) See also 4 CFR part 102.
(f) Full payment. When a responsible party or insurer tenders full
payment or a compromise settlement on a claim, the payment should be in
the form of a check or money order made payable to the collection
activity, such as the ``Commanding Officer, Naval Legal Service Office,
(Name).'' The check or money order shall then be forwarded to the
disbursing officer serving the collecting activity for deposit in
accordance with the provisions of the Navy Comptroller Manual.
(g) Installment payments. See 4 CFR 102.11 for specific procedures.
In general, if the debtor is financially unable to pay the debt in one
lump sum, an installment payment plan may be arranged. Installment
payments will be required on a monthly basis and the size of payment
must bear a reasonable relation to the size of the debt and the debtor's
ability to pay. The installment agreements should specify payments of
such size and frequency to liquidate the Government's claim in not more
than 3 years. Installment payments of less than $50.00 per month should
be accepted only if justified on the grounds of financial hardship or
for some other reasonable cause. In all installment arrangements, a
confession of judgment note setting out a repayment schedule should be
executed.
(h) Damage to nonappropriated-fund instrumentality (NAFI) property.
Any amount collected for loss or damage to property of a NAFI shall be
forwarded to the headquarters of the nonappropriated-fund activity for
deposit with that activity. In those situations where the recovery
involves damage to both NAFI-owned property and other Government
property, e.g., destruction of an exchange building resulting in damage
to both the building and the exchange-owned property inside, recovery
for the exchange-owned property shall be forwarded to the NAFI. Recovery
for building damage shall be deposited in accordance with Sec. 757.5(f)
above.
(i) Damage to industrial-commercial property. When a loss or cost of
repair has been borne by an industrial-commercial activity, payment
shall be deposited in the Navy Industrial Fund of the activity in
accordance with the provisions of the Navy Comptroller Manual. When a
claim is based on a
[[Page 446]]
loss or damage sustained by such an activity, a notation to this effect
shall be included in any claim file forwarded to the Judge Advocate
General.
(j) Replacement in kind or repair. The responsible party, or
insurer, may want to repair or replace in kind damaged property. The
commanding officer or officer in charge of the activity sustaining the
loss is authorized to accept repair or replacement if, in his
discretion, it is considered to be in the best interests of the United
States.
(k) Release. The commanding officer or officer in charge is
authorized to execute a release of the claim when all repairs have been
completed to the Government's satisfaction, and when all repair bills
have been paid. No prior approval from the Judge Advocate General is
required for this procedure. If repair or replacement is made, a
notation shall be made in any investigation or claims file.
Sec. 757.6 Waiver, compromise, and referral of claims.
(a) Officials authorized to compromise claims. The officers
identified in Sec. 757.5(b) may collect the full amount on all claims,
and may compromise, execute releases or terminate collection action on
all claims of $20,000.00 or less. Collection action may be terminated
for the convenience of the Government if the tortfeasor cannot be
located, is found to be judgment-proof, has denied liability, or has
refused to respond to repeated correspondence concerning legal liability
involving a small claim. A termination for the convenience of the
Government is made after it is determined that the case does not warrant
litigation or that it is not cost-effective to pursue recovery efforts.
(b) Claims over $100,000.00. Claims in excess of $100,000.00 may not
be compromised for less than the full amount or collection action
terminated without approval from the Department of Justice (DOJ).
(c) Notification. The Judge Advocate General shall be notified prior
to all requests made to the DOJ to compromise, terminate collection, or
referral for further collection action or litigation.
(d) Litigation Reports. Litigation reports prepared in accordance
with 4 CFR part 103 shall be forwarded to the DOJ along with any case
file forwarded for further collection action or litigation as required
by the Federal Claims Collections Standards.
Secs. 757.7-757.10 [Reserved]
Subpart B--Medical Care Recovery Act (MRCA) Claims
Sec. 757.11 Scope of subpart B.
Subpart B describes the assertion and collection of claims for
medical care under the Medical Care Recovery Act (MCRA). The MCRA states
that when the Federal Government provides treatment or pays for
treatment of an individual who is injured or suffers a disease, the
Government is authorized to recover the reasonable value of that
treatment from any third party legally liable for the injury or disease.
Sec. 757.12 Statutory authority.
Medical Care Recovery Act, 42 U.S.C. 2651-2653 (1982).
Sec. 757.13 Responsibility for MCRA action.
(a) JAG designees. (1) Primary responsibility for investigating,
asserting, and collecting Department of the Navy (DON) MCRA claims and
properly forwarding MCRA claims to other Federal departments or agencies
rests with the following officers:
(i) Commanding officers and officers in charge, Naval Legal Service
Command (NLSC) activities, in their areas of geographic responsibility;
(ii) Officer in charge, U.S. Sending State Office, Rome in his area
of geographic responsibility.
(2) JAG designees may assert and receive full payment on any MCRA
claim. They may, however, agree to compromise or waive only claims for
$40,000.00 or less. Claims in excess of $40,000.00 may be compromised or
waived only with DOJ approval. Such claims will be forwarded to the
Judge Advocate General in accordance with Sec. 757.6. See Sec. 757.7 for
further discussion of waiver and compromise.
(b) Navy Medical Treatment Facilities (MTF). (1) Naval MTF's are
responsible
[[Page 447]]
for ensuring potential MCRA claims are brought to the attention of the
appropriate NLSC activity or U.S. Sending State Office (USSSO).
(2) The MTF reports all potential MCRA cases by forwarding a copy of
the daily injury log entries and admissions records to the cognizant
NLSC activity or USSSO within 7 days of treatment for which a third
party may be liable. The NLSC activity or USSSO makes the determination
of liability.
(i) MTF computes the value of the care it provided on NAVJAG Form
5890/12. Rates used to compute this value are published annually in the
Federal Register by the Office of Management and Budget.
(ii) Block 4 of NAVJAG Form 5890/12 requires a statement from the
patient describing the circumstances of the injury or disease.
(iii) An ``interim'' report is prepared for inpatients only. An
interim report is prepared every 4 months until the patient is released,
transferred or changed to an outpatient status.
(iv) A ``final'' report is prepared for all patients when inpatient
and outpatient treatment is completed or the patient's care is
transferred to another facility. A narrative summary should accompany
the final report in all cases involving inpatient care. In addition, the
back side of NAVJAG Form 5890/12 is completed as part of the final
report when the value of Federal Government care exceeds $1,000.00.
(c) The Office of Medical and Dental Affairs (OMA). The office pays
emergency civilian medical expenses incurred by active duty members.
This office furnishes MCRA claims information to the NLSC activity or
USSSO. The address is Bldg. 38H, U.S. Naval Training Center, Great
Lakes, IL 60088-5200.
(d) Civilian Health and Medical Program of the Uniformed Services
(CHAMPUS) contractors. CHAMPUS contractors forward reports of payments
in injury cases to the appropriate NLSC activity. Responsible JAG
designees should, however, initiate regular contact with contractors
within their geographic area to ensure all relevant cases have been
reported.
(e) Department of Justice (DOJ). Only the DOJ may authorize
compromise or waiver of an MCRA claim in excess of $40,000.00; settle an
MCRA claim which was previously forwarded by the DON to DOJ for action;
or settle an MCRA claim in which the third party has filed a suit
against the United States or the injured person as a result of the
incident which caused the injury.
Sec. 757.14 Claims asserted.
(a) General. The DON asserts MCRA claims when medical care is
furnished to Navy and Marine Corps active duty personnel, retirees, or
their dependents, and third-party tort liability for the injury or
disease exists. Claims are asserted when the injured party is treated in
a military MTF or when the DON is responsible for reimbursing a non-
Federal care provider. Claims for medical care furnished are also
asserted using alternate theories of recovery if the MCRA does not
apply. See Sec. 757.14(e).
(b) Independent cause of action. The MCRA creates an independent
cause of action for the United States. The Government can
administratively assert and litigate MCRA claims in its own name and for
its own benefit. Procedural defenses, such as a failure of the injured
person to properly file and/or serve a complaint on the third party,
that may prevent the injured person from recovering, do not prevent the
United States from pursuing its own action to recover the value of
medical treatment provided to the injured person. The right arises
directly from the statute; the statutory reference to subrogation
pertain only to one mode of enforcement. In creating an independent
right in the Government, the Act prevents a release given by the injured
person to a third party from affecting the Government's claim.
(c) Liable parties. MCRA claims may be asserted against individuals,
corporations, associations and non-Federal Government agencies subject
to the limitations described in Sec. 757.15.
(d) Reasonable value of medical care. The reasonable value of
medical care provided to an injured person is determined:
(1) By using the rates set by the Office of Management and Budget
and published in the Federal Register for
[[Page 448]]
care provided in Federal medical care facilities; or
(2) By the actual amount paid by the Federal Government to non-
Federal medical care providers.
(e) Alternate Theories of Recovery. Often, recovery under the MCRA
is not possible because no third-party tort liability exists. For
example, if a member, retiree, or dependent is driving a vehicle and is
injured in a single-car accident, there is no tortfeasor. State law,
including insurance, workers' compensation, and uninsured motorist
coverage provisions, determines the DON's right to recover in situations
not covered by the MCRA. If, under the law where the injury occurred,
the injured party is entitled to compensation for medical care received,
usually the Federal Government may recover. The two most common
alternate theories are described below.
(1) Recovery may be possible under the injured party's automobile
insurance policy. In most cases, the Federal Government should seek
recovery as a third-party beneficiary under the medical payments or the
underinsured/uninsured portion of the injured party's policy. The
ability of the Federal Government to recover as a third-party
beneficiary has been upheld in some states, while other states have
taken the contrary position.
(2) Recovery may also be possible under State workers' compensation
laws. Case law in this area is still emerging, but in most
jurisdictions, the United States stands in the position of a lien
claimant for services rendered.
Sec. 757.15 Claims not asserted.
In some cases, the MCRA or public policy considerations limit the
DON's assertion of claims against apparent third-party tortfeasors. MCRA
claims are not asserted against:
(a) Federal Government agencies. Claims are not asserted against any
department, agency or instrumentality of the United States. ``Agency or
instrumentality'' includes self-insured, non-appropriated-fund
activities but does not include private associations.
(b) Injured servicemembers, dependents and employers of the United
States. Claims are not asserted directly against a servicemember, the
dependent of a servicemember, or an employee of the United States who is
injured as a result of his willful or negligent acts. The United States
does assert, however, against medical care and treatment insurance
coverage the member, employee, or dependent might have.
(c) Employers of merchant seamen. Claims are not asserted against
the employer of a merchant seaman who receives Federal medical care
under 42 U.S.C. 249.
(d) Department of Veterans Affairs care for service-connected
disability. Claims are not asserted for care provided to a veteran by
the Department of Veterans Affairs when the care is for a service-
connected disability. The United States will, however, claim for the
reasonable value of care provided an individual before he is transferred
to a Department of Veterans Affairs hospital.
Sec. 757.16 Claims asserted only with JAG approval.
The responsible NLSC activity or USSSO will investigate potential
MCRA claims against the following third parties and forward a copy of
their claims file, along with recommendations on assertion, to the Judge
Advocate General:
(a) Certain Government contractors. JAG approval is required before
asserting an MCRA claim against a Federal Government contractor when the
contract provides that the contractor will be indemnified or held
harmless by the Federal Government for tort liability.
(b) Foreign Governments. JAG approval is required before asserting
MCRA claims against foreign governments, their political subdivisions,
Armed Forces members, or civilian employees.
(c) U.S. personnel. JAG approval is required before asserting MCRA
claims against U.S. servicemembers, their dependents and employees of
the United States, or their dependents for injury to another person.
Sec. 757.17 Statute of limitations.
(a) Federal. The United States, or the injured party on behalf of
the United States, must file suit within 3 years after an MCRA action
accrues. 28
[[Page 449]]
U.S.C. 2415. Generally this is 3 years from the date of initial Federal
treatment or Federal Government payment to a private care provider,
whichever is first.
(b) State. Some State statutes of limitations may also apply where
recovery is based on authority such as workers' compensation statutes,
no-fault insurance statutes, no-fault medical payments, or uninsured
motorist provisions of insurance contracts.
Sec. 757.18 Asserting the claim.
(a) Initial action by JAG designee. When advised of a potential MCRA
claim, the JAG designee will determine the Federal agency or department
responsible for investigating and asserting the claim.
(1) When the DON has reimbursed a non-Federal provider for health
care or when CHAMPUS has made payment for a Navy health care
beneficiary, the DON will assert any resulting MCRA claim.
(2) When care is provided in a Federal treatment facility, the
status of the injured person will determine the agency which will assert
a resulting MCRA claim.
(i) Where Navy or Marine Corps members, retirees, or their
dependents receive medical treatment from another Federal agency or
department, the DON will usually assert any MCRA claim on behalf of the
United States based on information provided by the treating agency or
department.
(ii) Similarly, where a Navy MTF provides care to personnel of
another Federal agency or department, that other agency or department
will usually assert any claim on behalf of the United States.
(3) If the claim is not one which the DON should assert, the JAG
designee will forward all available information to the appropriate
department or agency.
(4) If the claim is one which the DON should assert, the JAG
designee will ensure an appropriate investigation into the circumstances
underlying the claim is initiated and will provide notice to the injured
party and all third parties who may be liable to the injured person and
the United States under the MCRA.
(b) Investigating the claim. While there is no prescribed form or
content for investigating these claims, the claims file will contain
sufficient information on which to base valuation, assertion,
settlement, waiver, and/or compromise decisions. Usually the file will
contain:
(1) Identification of each person involved in the incident including
name, address, occupation, and nature of involvement;
(2) Police, social service, and other Federal, State and local
agency reports on the incident;
(3) Completed copies of NAVJAG Form 5890/12 \3\ or equivalent forms
from other agencies and departments;
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\3\ See footnote 3 to Sec. 757.2.
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(4) Inpatient summaries and outpatients records of treatment of the
involved injury in non-Federal facilities;
(5) Documents reflecting Federal payment for non-Federal treatment
of the injured person;
(6) Calculations of the reasonable value of the Government's MCRA
claim;
(7) Itemized repair bills or estimates of repair of damaged Federal
Government property;
(8) Where an identified third-party tortfeasor is a uniformed
servicemember or a U.S. employee, information and findings concerning
that person's duty or scope of employment status at the time of the
incident giving rise to the injury;
(9) Where an identified third-party tortfeasor is a uniformed
servicemember or a U.S. employee or the dependent of a uniformed service
member or U.S. employee, information and findings concerning whether
that individual was grossly negligent or willfully culpable and whether
that individual had insurance coverage at the time of the incident
giving rise to the injury;
(10) Financial information on identified third-party tortfeasors
including names and addresses of insurance carriers, insurance policy
numbers, and extent of coverage; and
(11) A statement whether the injured person or his attorney will
protect the interests of the United States.
[[Page 450]]
(c) Claims forwarded to JAG or DOJ. In those cases where the file
must be forwarded to JAG or DOJ, the file will also include:
(1) A summary of the case which includes the circumstances of the
incident which caused the injury, the source, extent and value of
medical care provided and a brief of the applicable law on the liability
of the third party;
(2) Copies of all correspondence; and
(3) Recommended disposition.
(d) Request for assistance in conducting investigation. When an
injury for which the DON may assert an MCRA claim occurs at a place
where the DON does not have a command, unit, or activity conveniently
located for conducting an inquiry into the circumstances underlying the
injury, the NLSC activity or USSSO having responsibility for
administering any resulting MCRA claim may request assistance from any
other command, unit, or activity within the DOD. Such assistance may
take the form of a complete inquiry into the circumstances underlying
the incident or it may only cover part of the necessary inquiry and fact
gathering. If a NLSC activity or USSSO receives a similar request from
another command, unit or activity within the DOD, every effort should be
made to honor the request. Assistance will normally be provided without
reimbursement from the requesting service.
(e) Notice of claim. (1) The JAG designee will assert appropriate
MCRA claims by mailing, certified mail, return receipt requested, a
notice of claim (SF 96) to identified third-party tortfeasors and their
insurers, if known. Many insured tortfeasors fail to notify their
insurance companies of incidents. This failure may be a breach of the
cooperation clause in the policy and may be grounds for the insurer to
refuse to defend the insured or be responsible for any liability. The
United States, as a claimant, may preclude such an invocation by giving
the requisite notification itself. The purpose of the insurance clause
is satisified if the insurer receives actual notice of the incident,
regardless of the informant. This notice should be mailed as soon as it
reasonably appears an identified third party may be liable for the
injuries to the injured person. It is not necessary or desirable to
delay mailing this notice until the completion of the investigation
convened to inquire into the circumstances underlying the incident
causing the injury. The prompt assertion of the claim will ensure that
the Government is named on the settlement draft. If the United States is
not so named, and the claim has been asserted, the insurer settles at
its own risk.
(2) The JAG designee will also notify the injured person or his
legal representative of the Government's interest in the value of the
medical care provided by the United States. This notice will advise
that:
(i) The United States may be entitled to recover the reasonable
value of medical care furnished or paid for by the Federal Government;
(ii) The injured person is required to cooperate in the efforts of
the United States to recover the reasonable value of medical care
furnished or paid for by the Federal Government;
(iii) The injured person is required to furnish a statement
regarding the circumstances surrounding the care and treatment;
(iv) The injured person may seek legal guidance concerning any
possible claim for personal injury;
(v) The injured person is required to furnish information concerning
legal action brought against any individual involved in the incident and
provide the name of counsel representing the parties to such an action;
and
(vi) The injured person should not execute a release or settle a
claim arising from the incident causing the injury without first
notifying the JAG designee.
(f) Administering the claim. (1) After investigating and asserting
the claim, the JAG designee will maintain contact with all parties,
their legal representatives, and insurers.
(2) An effort should be made to coordinate collection of the Federal
Government's MCRA interest with the injured person's action to collect
his own claim for damages.
(i) Attorneys representing an injured person may be authorized to
include the Federal Government's MCRA claim
[[Page 451]]
as an item of special damages with the injured person's claim or suit.
(ii) An agreement that the Government's claim will be made a party
of the injured person's action should be in writing and state that
counsel fees will not be paid by the Government or computed on the basis
of the Government's portion of recovery.
(3) If the injured person is not bringing an action for damages or
is refusing to include the Federal Government's MCRA interest, the JAG
designee will pursue independent collection. The United States is
specifically allowed to intervene or join in any action at law brought
by or through the injured person against the liable third person or
bring an original suit in its own name or in the name of the injured
person. The JAG designee will ensure all parties are aware that the
United States must be a party to all subsequent collection negotiation.
(4) When the MCRA interests are not being represented by the injured
person and independent collection efforts have failed, the JAG designee
will request JAG to refer the claim to the DOJ for possible suit. In
such cases, the JAG designee will forward the complete file to JAG in
accordance with Secs. 757.18 (b) and (c).
(g) Access to DON records and information. (1) The medical records
of the injured person will be released to the injured person or his
legal representative upon request. This release will be without cost
except in unusual circumstances. These records may not be released to
anyone else outside the DON except in accordance with the provisions of
the Privacy Act, 5 U.S.C. 552a. Usually such a release will require
authorization from the injured individual or legal representative or an
order from a court of competent jurisdiction. A clerk or attorney signed
subpoena is not ``an order from a court of competent jurisdiction.''
(2) In appropriate cases, military health care providers who have
examined or treated the injured person may be made available by their
commands to testify regarding the medical care provided to the injured
person. Requests for such testimony will be processed in accordance with
DOD Directive 5405.2, 28 CFR part 725, and 32 CFR part 725, except when
the injured party is asserting the Federal Government's MCRA claim as
part of his action for damages. In that situation, the injured person or
legal representative is considered also to be a representative of the
United States and the foregoing regulations are not applicable. In such
a case, the JAG designee may, if appropriate, request the command of an
involved military health care provider to make the provider available
for testimony on behalf of the injured person.
Sec. 757.19 Waiver and compromise.
(a) General. A JAG designee may authorize waiver or compromise of
any MCRA claim under his authority which does not exceed $40,000.00. A
third party's liability for medical costs to the United States arising
from a particular incident will be considered as a single claim in
determining whether the claim is more than $40,000.00 for the purpose of
waiver and compromise. When the JAG designee considers waiver or
compromise appropriate in a claim which exceeds $40,000.00, the claim
file will be forwarded to JAG in accordance with Secs. 757.18 (b) and
(c).
(b) Waiver. The JAG designee may waive the Federal Government's MCRA
interest when a responsible third-party tortfeasor cannot be located, is
judgment proof, or has refused to pay and litigation is not feasible.
Waiver is also appropriate when, upon written request by the injured
person or legal representative, it is determined that collection would
cause undue hardship to the injured person. In assessing undue hardship,
the following circumstances of the injured person should be considered:
(1) Permanent disability or disfigurement;
(2) Lost earning capacity;
(3) Out-of-pocket expenses;
(4) Financial status;
(5) Disability, pension and similar benefits available;
(6) Amount of settlement or award from third-party tortfeasor; and
(7) Any other factors which objectively indicate fairness requires
waiver.
(c) Compromise. The JAG designee may, upon written request of the
injured person or legal representative,
[[Page 452]]
compromise the Federal Government's MCRA interest using the criteria
listed above.
Sec. 757.20 Receipt and release.
(a) Payment. The JAG designee may receive payment in part or in full
for any claim for which he is responsible. Written acknowledgment of
this receipt will be mailed to the party making payment and a copy of
the acknowledgement kept in the claim file.
(b) Release. The JAG designee will execute and deliver a release to
third parties making full or compromised payment on the Federal
Government's MCRA interest. A copy of the release will be kept in the
claims file.