BNUMBER: B-261348
DATE: February 16, 1996
TITLE: Atlas Van Lines--Claim for Reimbursement of Amounts
Collected by Setoff for Loss of Household Goods
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Matter of:Atlas Van Lines--Claim for Reimbursement of Amounts
Collected by Setoff for Loss of Household Goods
File: B-261348
Date: February 16, 1996
DIGEST
Although a carrier is generally liable for all damage to property in
its control, the carrier will not be held liable if it shows that the
damage was caused by an act of God as long as there is no intervening
fault on the part of the carrier. When the carrier has adequate
notice of severe flooding and fails to move property in its control,
that failure constitutes the intervening fault of negligence, and the
carrier is liable for the damage which results. The carrier has the
burden of proving that it was not negligent.
DECISION
This is in response to an appeal of a Claims Group settlement which
denied the claim of Atlas Van Lines for reimbursement of amounts
collected by setoff for loss of household goods in storage during the
Great Midwest Flood of 1993.[1] We affirm the Claims Group's
settlement.
At the time of the Great Midwest Flood of 1993, the household goods of
Staff Sergeant Nick Anderson, USAF, were in storage under government
bill of lading No. SP-011,693 at ABC Moving and Storage, an agent of
Atlas Van Lines, in Chesterfield, Missouri. On July 31, 1993, the
Monarch Chesterfield levee on the Missouri River failed. In the
flooding that followed, Sergeant Anderson's household goods were
destroyed. The Air Force paid Sergeant Anderson $19,373.95, and then
collected $3,400.00 from Atlas by offset.
The Claims Group denied Atlas's claim for reimbursement of the
$3,400.00, on the grounds that Atlas should have taken steps to
protect the household goods in its warehouse and was negligent for not
doing so. Atlas argues that its warehouse was not in the Chesterfield
flood plain and that it had very little notice that the levee which
protected the warehouse would fail.
Although a carrier is generally liable for all damage to property in
its control, the carrier will not be held liable if it shows that the
damage was caused by certain events beyond its control and there is no
intervening fault attributable to the carrier. Missouri Pacific R.R.
Co. v. Elmore & Stahl, 377 U.S. 134 (1964); Mamiye Bros. v. Barber
S.S. Lines, Inc., 241 F. Supp. 99 (1965); Richard R. Sigmon, Miller's
Law of Freight Loss and Damage Claims, 83 (4th ed. 1974). A flood can
constitute an act of God sufficient to relieve a carrier if it is
extraordinary as long as there is no intervening fault attributable to
the carrier. 1 Am. Jur. 2d Act of God sec. 5 (1994).
In the present situation, there is no question that the flooding which
occurred in the Midwest in 1993 was extraordinary and was sufficient
to constitute an act of God. However, the Air Force determined that
Atlas's agent had adequate notice of the approaching flood and should
have moved Sergeant Anderson's household goods out of the path of the
flood.[2] Therefore, in the Air Force's view, Atlas was liable
because of the intervening fault of negligence. The burden is on
Atlas to prove that it was not negligent for its failure to move the
household goods. See 377 U.S. at 134.
Because Atlas disputed the Air Force's characterization of its agent's
location, we contacted Missouri officials who informed us that its
agent is located in zone B on the flood plain map. Zone A is the
primary flood plain area, but flooding can occur in zone B under
certain circumstances. The area around the warehouse in question was
in zone B because it was protected by a levee, but that levee was only
expected to prevent flooding completely if the flood were less than a
100-year flood. From the beginning, the 1993 flood was significantly
more severe than a 100-year flood and was eventually determined to be
a 300-year flood. The climax of the flood for Chesterfield was the
structural failure of the Monarch Chesterfield levee. While Atlas is
correct that there was little warning that the levee would fail
structurally, flood waters had spilled over the levee long before it
failed.
The Air Force determined that Atlas was negligent in not moving
Sergeant Anderson's household goods out of the path of the flood, and
Atlas has not proved otherwise. Severe flooding began on the upper
reaches of the Missouri and Mississippi Rivers in June. As the flood
crest gradually moved downstream and as heavy rains continued, it is
our view that at some point Atlas should have determined that the
danger to the household goods in temporary storage in Chesterfield was
serious enough to warrant moving the goods before the flood crest
reached Chesterfield in late July. The flooding moved down the rivers
at a pace which would have allowed Atlas to move the household goods
if it had made that determination in a timely manner, and the
predicted severity of the flood should have prompted it to do so. The
fact that the structural failure of the Monarch Chesterfield levee was
not anticipated does not absolve Atlas of liability, since flood
waters had overtopped the levee long before the levee failed. Failure
to take action to move the household goods before the flood crest
reached Chesterfield constitutes the intervening fault of negligence.
See World Products, Inc. v. Central Freight Service, Inc., 222 F.
Supp. 849 (D. N.J. 1963).
Since Atlas has not proved that it was not negligent, it is liable for
the loss of the household goods up to the limit of its liability,
which the Air Force has calculated as $3,400.00.
Accordingly, we deny Atlas's claim for reimbursement and affirm the
Claims Group's settlement.
/s/Seymour Efros
forRobert P. Murphy
General Counsel
1. Z-219766-39, Mar. 16, 1995.
2. Heavy rains began early in 1993 in the northern Midwest. Flood
crests were reported along the upper Missouri and Mississippi Rivers
in late June. Severe flooding was anticipated as the flood's crest
progressed slowly down the rivers as tributaries which were also at
record levels flowed into the Missouri and the Mississippi.
Chesterfield is located near the Missouri River just west of St.
Louis. The Missouri flows into the Mississippi near St. Louis, and
the severe flooding in that area occurred in late July.