[Code of Federal Regulations]
[Title 32, Volume 5]
[Revised as of July 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 32CFR751.31]

[Page 436-438]
 
                       TITLE 32--NATIONAL DEFENSE
 
                   CHAPTER VI--DEPARTMENT OF THE NAVY
 
PART 751_PERSONNEL CLAIMS REGULATIONS--Table of Contents
 
           Subpart B_Demand On Carrier, Contractor, or Insurer
 
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

[[Page 437]]

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 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.

[[Page 438]]

    (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 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.