Allstates Air Cargo, Inc. v. United States

42 Cont. Cas. Fed. 77,391, 42 Fed. Cl. 118, 1998 U.S. Claims LEXIS 242, 1998 WL 724975
CourtUnited States Court of Federal Claims
DecidedOctober 16, 1998
DocketNo. 96-482C
StatusPublished
Cited by11 cases

This text of 42 Cont. Cas. Fed. 77,391 (Allstates Air Cargo, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allstates Air Cargo, Inc. v. United States, 42 Cont. Cas. Fed. 77,391, 42 Fed. Cl. 118, 1998 U.S. Claims LEXIS 242, 1998 WL 724975 (uscfc 1998).

Opinion

ORDER

MOODY R. TIDWELL, III, Senior Judge.

Plaintiff Allstates Air Cargo, Inc. (All-states), an air freight forwarder, seeks payment of set-offs withheld by the government as penalties for late shipment deliveries. On April 20, 1998, the government filed Defendant’s Motion for Summary Judgment. Plaintiff opposed the motion and on May 19, 1998, filed Plaintiffs Motion to Strike the results of an informal and inconclusive survey submitted as an appendix to Defendant’s Motion for Summary Judgment. On May 20, 1998, Allstates filed Plaintiffs Motion for Summary Judgment. For the following reasons, the court will grant Plaintiffs Motion to Strike, and will deny the cross motions for summary judgment.

BACKGROUND

On December 20, 1991, the Department of Defense (DOD), through its Military Traffic Management Command (MTMC), solicited tenders from air freight forwarders interested in moving freight from Columbus, Ohio, to points throughout the contiguous United States.1 After submitting tender number 600,005 (tender), Allstates was eventually selected as the prime carrier, effective April 12, 1992. Supplemental tenders ultimately extended the expiration date through October 31,1994.

The government and Allstates agree that the terms of the agreement between All-states and the government were contained in the tender. Item 24 defines several of the terms central to the dispute in this case:

a. Overnight Service — Door-to-door service with packages scheduled to be delivered to the consignee’s address by 5:00 p.m., local time, on the following day after pickup or tender of shipment.
b. Second Day Service — Door-to-door service with shipments scheduled to be delivered to the recipient[’]s address by 5:00 p.m., local time, on the second business day after pickup or tender of shipment.
d. On-Time Delivery — For the purpose of this solicitation an on-time delivery will be understood to include delivery of the shipment intact, without loss or damage in the prescribed time. Partial deliveries, damaged elements, and shipments not reported will be construed as late deliveries. A 95% on-time delivery performance vrill be required.

Item 26 required Allstates “to provide daily scheduled pickups and deliveries at the direction of the Government,” with a “present schedule” providing for “1 pickup daily” on Mondays through Fridays, Saturdays, Sundays, and Holidays. “Normal delivery service” was “considered as being Monday through Saturday no later than 5 p.m.” There is no evidence that the government had subsequently directed Allstates to modi[121]*121fy the “normal” schedule. For shipments requiring delivery at a “specific delivery time requested by the shipper,” Allstates was to be entitled to an additional $125.00 per package.

Late shipments were to be paid at a rate of 50 percent of the normal scheduled rate. Under Item 29(d), however, Allstates was not to be penalized for excused late delivery:

When through no fault of the carrier, the consignee is unable to accept the shipment when it is offered for delivery, the carrier agrees to hold the shipment until the next business day or a mutually agreed upon date. Carrier will annotate the delivery receipt with the time/date consignee was notified that shipment was available and the person and telephone number of the individual who declined delivery. This information will be supplied to the shipper, on a continuing basis, at no additional cost.

According to Alstates’ former Controller and Chief Financial Officer, Jeffrey Musoff, before Alstates attempted to physically deliver each shipment to a military installation, an Alstates agent would telephone the installation to learn if it was available to accept shipments that day. If the installation responded that it would not accept shipments up until 5:00 p.m., the Alstates agent “recorded the early[ ]elosing information, along with the time of the call and the name and telephone number of the person who furnished the early closing information, on an Aert Notice.”

Alstates submitted Weekly Proof of Delivery Reports (weekly reports) listing all shipments made during the week by shipment number, and stated the shipment date, the due date, and the actual delivery date. If a receiving installation had made timely delivery impossible because it closed prior to 5:00 p.m., the weekly reports also informed the government of the date that delivery was offered, the actual closing time of the receiving facility, and the name (first, last, or both) and phone number of the person who stated the closing time. This procedure was followed for two and one-half years without objection from the government.

In 1994, the General Services Administration (GSA) began to audit government bills of lading (GBLs) handled by Alstates under the tender. GSA concluded that Alstates had been overpaid on more than 4,860 deliveries made between April 1992 and November 1994 because the deliveries were late and Alstates had been paid the full rate rather than the prescribed 50 percent rate for late deliveries. The government asserted overcharges and, by May 28, 1996, had withheld approximately $250,000 as set-offs. On March 24, 1995, Alstates sought administrative review from GSA in an effort to recover the set-offs and, when that failed, appealed to the Comptroller General of the United States. Ater reviewing “detailed documentation [submitted by Allstates] on six sample transactions,” the Comptroller General decided that “Allstates should not be penalized for deliveries it can show it attempted prior to 5:00 p.m. on specified dates of delivery.” The Comptroller General also concluded, however, that Allstates should support its claim with further documentation. The case was remanded to GSA for Alstates to provide “the records required by item 29d” so that “GSA c[ould] determine whether the delay was excusable.” On remand, Alstates provided Aert Notices and Weekly Proof of Delivery Reports to document its claims that late delivery was excused, but GSA found the evidence insufficient. On August 7, 1996, Alstates filed a complaint in this court requesting payment of the set-off amounts withheld. By May 28, 1998, the amount totaled more than $356,228.72.

On April 20,1998, the government filed its motion for summary judgment. In the Defendant’s Appendix, the government included the affidavit of Carroll E. Calvert, a GSA employee who helped survey thirty of the Aert Notices “to determine the accuracy of the information recorded on them.” Calvert found that many of the persons listed on the Aert Notices “were not listed as being involved with receiving shipments at the stations or depots,” most of the phone numbers listed did not correspond to the person responsible for air cargo freight, and some installations received shipments as late as 9:00 p.m. Carroll concluded that the “amount of incorrect information shown by the carrier [122]*122on these sheets rendered the survey inconclusive.”

On May 19, 1998, Allstates filed a motion to strike Carroll’s affidavit and all references to it in the pleadings. The following day, Allstates filed its motion for summary judgment.

DISCUSSION

I. Motion to Strike

Plaintiff asks the court to strike Calvert’s affidavit, asserting that it is inadmissible hearsay.

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Bluebook (online)
42 Cont. Cas. Fed. 77,391, 42 Fed. Cl. 118, 1998 U.S. Claims LEXIS 242, 1998 WL 724975, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allstates-air-cargo-inc-v-united-states-uscfc-1998.