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The Rogak Report: 31 Oct 2005 ** Moving Companies - Limitation of Liability **

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  • Lawrence Rogak
    Message 1 of 1 , Oct 31, 2005

      Wenig, Ginsberg Saltiel & Greene LLP v. Precision Movers Inc., NYLJ
      10/31/05 (Civil Court, Kings County) (KURTZ, j)

      In this property damage action plaintiff, a law firm, contracted with
      defendant, a moving company, to transport plaintiff's office
      equipment, boxes, furniture, and supplies from its location at 31
      Smith Street in Brooklyn to its new location at 26 Court Street in
      Brooklyn on December 27, 2003. The basis of plaintiff's complaint is
      the damage to its copier, which both parties agree was rendered
      inoperable beyond repair.

      Plaintiff claimd that the damage to its copier was caused by
      employees of defendant. Defendant claims that plaintiff failed to
      prove that the damage to the copier was caused by defendant's
      employees and further claims that even if the Court finds that its
      employees did cause the damage to the copier, its liability is
      limited by the terms of its agreement with plaintiff to thirty cents
      per pound per article.

      The credible and uncontroverted evidence adduced at the trial
      revealed the following: On or about December 23, 2003, plaintiff
      contacted defendant by telephone regarding the relocation of its
      offices from 31 Smith Street to 26 Court Street in Brooklyn. As a
      result of that conversation defendant faxed a letter to plaintiff's
      representative, Jeffrey Saltiel, setting forth certain details of the
      move, for example, that the hourly rate is $100 per hour for a truck
      and crew of four movers; that the estimated cost was $900; that
      packing materials are charged additionally; that payment is due when
      the movers reach the second location; and that "$0.30 per lbs. per
      article is a basic valuation in transit that is already included in
      the cost of your move."

      On the day of the move, Mr. Saltiel, a number of his employees and a
      few of his partners were present at plaintiff's offices on Smith
      Street when the four movers arrived. Prior to the move, the foreman
      had Mr. Saltiel fill out some forms and they discussed what was to be
      moved. Among the forms filled out and signed by Mr. Saltiel before
      the move began were an Order For Service form and a Uniform Household
      Goods Bill of Lading and Freight Bill. Both forms included a
      declaration of valuation for the shipment which Mr. Saltiel entered
      as "30¢ per pound per article." In addition, each of these forms
      provides that "The shipment will move subject to the rules and
      conditions of the carrier's tariff." Defendant's tariff, which was
      admitted into evidence by stipulation, provides in pertinent part:


      (A) On shipments subject to HOURLY RATES published in this tariff:

      When a shipment moves under hourly rates and is released to a value
      of 30 cents per pound per article, the base transportation rate will
      apply with no additional valuation charge. However, when the shipper
      declares a lump sum value for the entire shipment (which cannot be
      less than $2500), an additional valuation charge of 50 cents for each
      $100, or fraction thereof, of the released or declared value will be
      assessed . . . .

      Mr. Saltiel stated that he was aware of this limitation at the time
      he filled out these forms and made a decision at that time not to
      declare a higher value for the shipment.

      Among the items to be moved was a Panasonic Digital Printer which
      weighed approximately 300 pounds. Prior to the packing and moving of
      the copier, Mr. Saltiel had a discussion with the foreman regarding
      the machine. Mr. Saltiel advised the foreman that the machine had
      four handles and suggested that all four men move it at the same
      time, each holding a handle. The foreman assured Mr. Saltiel that he
      knew how to move the copier. Mr. Saltiel deferred to the foreman's
      expertise and assurances and permitted the move to proceed.

      The copier was wrapped in bubble wrap and cardboard on all six sides
      by defendant's employees. It was then loaded onto defendant's truck,
      transported to plaintiff's new office location at 26 Court Street,
      unloaded from the truck, and brought to a storage room on the 26th
      floor at 26 Court Street at plaintiff's request because its new
      offices on the 5th floor would not be available until February, 2004.

      After the copier was placed in the storage room on the 26th floor, it
      remained there for approximately seven weeks until the Saturday of
      President's Day weekend in February, 2004, when the storage room was
      to be emptied. When the copier was unpacked, it was revealed that the
      machine had been turned upside down. It was also revealed that the
      toner cartridge, which had been left inside the copier, had leaked
      and emptied toner all over the machine. During the seven week period
      between the time the copier had been placed in the storage room,
      presumably by defendant's employees, and the time it was unpacked by
      plaintiff, Mr. Saltiel, his partner, an office manager, as well as
      several of plaintiff's employees had access to and had actually been
      to the storage room. Mr. Saltiel could not say with certainty when or
      by whom the copier was turned upside down. The copier was
      subsequently taken to a repair shop where it was determined to be
      unrepairable and was declared a total loss.

      The evidence adduced at the trial with respect to the damages claimed
      by plaintiff as a result of the loss of use of its copier was that
      $11,295.45 was due in outstanding payments on the lease. The Buy-Out
      Agreement indicates that a residual charge of $3,023.87 was to be due
      at the end of the lease term. Plaintiff, rather than purchasing or
      leasing a replacement copier, handled its copying needs by using
      another copier. However, use, or overuse, of this second machine
      resulted in additional charges of $1,170.32 as well as a repair
      service charge of $749.51.

      Defendant's expert testified that in his experience, it is the buyer
      or seller of a particular machine that prepares it for transport by
      the moving company; that part of the preparation for transport is the
      removal of the toner cartridge; that toner cartridges are usually
      removed by a merchant's service technician; and that moving company
      workers never remove toner cartridges. Further, if a toner cartridge
      is not removed from a copier prior to transportation, the toner can
      spill out causing damage to the machine; that spillage can occur
      while the copier is being moved from one room to another or while
      being loaded onto the truck; and that it is not necessary for a
      copier to be turned upside down for toner spillage to occur.

      The Court held, first, that both New York Transportation Law §181 and
      its federal counterpart, the Carmack Amendment (49 U.S.C.A. §14706)
      permit regulated motor carriers to limit their liability for loss,
      damage or injury to property to an agreed-upon, declared, or released
      value of the property. In 1906, Congress enacted the Carmack
      Amendment permitting carriers to limit their liability to the
      declared or released value of goods so long as that declared value
      determined the shipping rates charged and an opportunity to declare a
      higher value was afforded. The New York State Legislature has
      consistently expressed an intent that intrastate motor carriers in
      this State be regulated under statutory schemes consistent with the
      Federal regulatory scheme relating to motor carriers engaged in
      interstate commerce. "Given the close similarity between the Federal
      and State statutes under consideration and the common purpose served
      by the two statutes, it is consistent with sound principles of
      statutory construction, that the statutes be construed harmoniously."

      Federal courts as well as this State's courts have held that in order
      to avoid the application of an agreed-upon limitation of liability, a
      shipper of goods must establish a true conversion, that is, a non-
      delivery of the goods resulting from the carrier's affirmative,
      willful or intentional misconduct. [Lerakoli, Inc. v. Pan Am. World
      Airways, 783 F2d 33 (2d Cir 1986), cert denied, 479 US 827 (1986);
      D'Utassy v. Barrett, 219 NY 420 (1916); Rifkin v. Pologeorgis Furs,
      Inc.,160 Misc 2d 256 (NY Sup App Term 1st Dept, 1994).] "Where no
      such proof is forthcoming, the agreed-upon limitation of liability is

      "In order for plaintiff to recover from defendant in this action, it
      would have had to establish three things - first, that the copier was
      delivered in a damaged condition so as to render it unusable by
      plaintiff; second, what caused the toner spillage which resulted in
      the damage to the copier; and third, that defendant's employees
      committed the act or acts which caused the toner spillage. Moreover,
      even if plaintiff had established all three items, in light of the
      State and Federal law governing carrier liability, in order for
      plaintiff to avoid the agreed-upon limitation of liability and
      recover the full amount of its claimed damages, it would have had to
      establish a fourth item - that defendant's employees acted wilfully
      or intentionally in causing the toner spillage. Based upon the
      credible evidence adduced at the trial, plaintiff has failed to
      establish any of the four items."

      "As to the first item, plaintiff has failed to establish the
      condition of the copier upon its arrival, either when it was removed
      from defendant's truck onto the street outside 26 Court Street or,
      assuming it was brought up to the storage room on the 26th floor by
      defendant's employees, its condition when it arrived at the storage
      room. The copier was not unpacked until some seven weeks after it was
      delivered. The Court would have to speculate that during that seven
      week period, the copier remained in the same condition it was in when
      it was delivered despite the evidence that during that extended
      period, plaintiff's employees had access to the storage room."

      "As to the second item, plaintiff produced no evidence, expert or
      other, to establish what caused the toner to spill inside the copier.
      The only evidence offered by plaintiff was Mr. Saltiel's testimony
      that he advised the foreman that the machine had four handles and
      suggested that the movers move the copier by using the handles; that
      the movers didn't take his suggestion and totally encased the copier
      in bubble wrap and cardboard; and that when he unwrapped the copier
      in the storage room, he discovered that the copier was upside down
      and that the toner had spilled inside the copier. There was no
      evidence that had the movers taken Mr. Saltiel's advice, the toner
      would not have spilled. Nor was there any evidence offered by
      plaintiff regarding whose responsibility it was, if anyone, to either
      remove the toner cartridge or to secure it to assure that it wouldn't
      spill during transportation. The only evidence offered on these
      issues was by defendant's witness... who testified that in his
      experience, toner cartridges are usually removed prior to moving;
      that it's the shipper's service technician who usually removes the
      cartridge; that copiers do not need to be turned upside down for
      there to be toner spillage; and that mere movement of the copier from
      one room to another or being loaded onto a truck could result in
      severe damage to the copier from toner spillage."

      "As to the third item, assuming, arguendo, that the toner spillage
      resulted from turning the copier upside down, plaintiff failed to
      establish that it was defendant's employees who turned it upside
      down. It was not established when the copier was turned over or by
      whom. As previously indicated, it was unclear from the testimony
      whether or not any of plaintiff's employees helped the movers
      transport the copier from the truck unloading area to the storage
      room on the 26th floor. Moreover, also as previously indicated, the
      copier remained in the 26th floor storage room for seven weeks after
      it was delivered, during which time plaintiff's employees had access
      to the room."

      "Finally, as to the fourth item, even if the Court were to find that
      plaintiff proved the first three items, there was absolutely no
      evidence presented whatsoever to establish willful or intentional
      misconduct on the part of defendant's employees. With respect to this
      item, plaintiff's reliance on the case of I.C.C. Metals, Inc. v.
      Municipal Warehouse Comp., 50 NY2d 657 (1980), is misplaced. In that
      case, involving the failure of a warehouse to deliver goods stored
      with it and the inability of the warehouse to offer more than
      speculation as to the reason the goods were missing, the Court of
      Appeals held 'that proof of delivery of the stored property to the
      warehouse and its failure to return that property upon proper demand
      suffices to establish a prima facie case of conversion . . . ' and
      divests the warehouse of the benefit of the liability-limiting
      provisions of the storage agreement. The Court in I.C.C. Metals
      placed the burden upon the warehouse to come forward with evidence
      sufficient to prove that its failure to return the property did not
      result from its conversion of that property to its own use and thus
      overcome the presumption of conversion. However... [in another case]
      the Court of Appeals expressly held 'that the presumption of
      conversion articulated in I.C.C. Metals should not be extended to
      common motor carriers.' Consequently, without the benefit of a
      presumption of conversion, plaintiff would have had to establish a
      true conversion, that is, the appropriation of the property to
      defendant's own use and beneficial enjoyment or an intentional
      destruction, rather than an accidental loss or destruction."

      Because plaintiff failed to prove a prima facie case, the Complaint
      was dismissd.

      Larry Rogak
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