Appeal of

ALLSTATE LEASING, INC.

Under Contract No. 475630-94-B-1211
PSBCA Nos. 4784, 4789

APPEARANCE FOR APPELLANT:
Edward J. Puls, Jr., Esq.

APPEARANCE FOR RESPONDENT:
Patrice R. Dickey, Esq.

OPINION OF THE BOARD

            Appellant, Allstate Leasing, Inc., has appealed from contracting officer's decisions partially denying its claims for the cost of repairing a number of vehicles leased to Respondent, United States Postal Service.  These appeals are being decided on the record under the Board's Accelerated procedure.  39 C.F.R. §§955.12, 955.13.  Only entitlement is at issue (See Order dated August 23, 2001).

FINDINGS OF FACT

            1.  Contract No. 475630-94-B-1211 was awarded to Appellant on March 15, 1994.  Under the contract, Respondent leased from Appellant 14 passenger vans for use in "park and loop" service in Hallandale, Florida.  The term of the contract was from April 16, 1994, through April 15, 2000.  By mutual agreement, the lease for six of the vehicles was extended to June 8, 2000.  (Appeal File for PSBCA No. 4784, Tab (“AF”) 1).

            2.  The "Servicing and Maintenance" clause of the contract generally placed the responsibility for all maintenance and servicing on Appellant, including the changing of flat tires.  The clause required Appellant to "maintain the vehicles in a clean and safe condition (inside and out)."  (AF 1, Contract Clause C.5, SERVICING AND MAINTENANCE – COMMERCIAL LEASE (Clause OB-467) (July 1990)).

            3.  The contract’s “Vehicle Availability” clause required Appellant to ensure that the specified vehicles were available without interruption throughout the term of the contract.  Appellant was obligated to repair any vehicles that were not safely operable and to provide Respondent a loaner until the contract vehicle was repaired.  The clause provided, “If the Postal Service finds that any vehicle is not safely operable, the contractor will be notified.”  (AF 1, Contract Clause C.4, VEHICLE AVAILABILITY (Clause OB-466) (July 1990)).

            4.  The "Liability Requirements" clause provided, in part,

"The Postal Service will be responsible for loss of, or damage to, the contractor's vehicles while in its custody only when caused by the act or negligence of any officer or employee of the Postal Service acting in the scope of his or her employment ….  In no event will the Postal Service be responsible for ordinary wear and tear which includes damage to vehicles from flying rocks and debris, substandard streets and roads, minor dents and scratches to the sides of vehicles from the doors of other vehicles in parking lots and garages, inclement weather conditions and the regular passage of time.”  (AF 1, Contract Clause G.5, LIABILITY REQUIREMENTS – COMMERCIAL LEASE (Clause OB-469) (January 1991)).

            5.  When the vehicles were returned to Appellant at the end of the contract term, representatives of both parties jointly inspected the vehicles.  As required by the contract, the results of the inspection of each vehicle were recorded on a separate PS Form 4577, Leased Vehicle Condition Report, which was signed by a representative of each party, certifying that the vehicle had been "examined at time of return and deficiencies noted above."  The Forms 4577 in the record are single-page forms with spaces available to note the "before" and "after" mechanical condition of the vehicles and the "before" and "after" condition of the vehicle bodies and interiors.  The vehicle body condition is noted by marking up small, generic preprinted drawings of the front, back, top and sides of a vehicle to show the location of damage.  (AF 1 (Contract Clause C.3.a, VEHICLE REMOVAL/REPLACEMENT (Clause OB-465) (July 1990)), 2-10; Appeal File for PSBCA No. 4789, Tab (“4789AF”) 2).

            6.  Appellant submitted claims seeking to recover the cost of repairing damage to ten of the leased vehicles.  Vehicles 68973, 68977, 68978 and 68983 were returned to Appellant on April 24, 2000, and claims for those vehicles were submitted on May 1, 2000.  Vehicles 68975, 68976, 68981, 68982, 68984 and 68985 were returned in mid-June, and claims for damage to those vehicles were submitted on July 7, 2000.  Each claim was accompanied by two estimates, the lower of which corresponded to the amount of the claim.  (AF 2-10; 4789AF 2).

            7.  Respondent's Supervisor of Vehicle Maintenance reviewed each of the ten claims and provided his analysis and a recommendation of a payment amount to the contracting officer on PS Form 4523, Damage Claim Certification – Hired Vehicle, (Oct. 1987).  The supervisor recommended against payment of any charges for cleaning the vehicles and removing decals.  In addition, the supervisor did not recommend payment for damage noted on Appellant's estimates but not also shown on each Form 4577.  In those instances in which the supervisor recommended payment, he accepted the amounts contained in Appellant's estimate for repair of each item of damage.  (AF 2-10; Declaration of Walter Dobson, dated September 7, 2001 (“Dobson Decl.”)).

            8.  The claims for vehicles 68973, 68975, 68978, 68983 and 68984 included the costs of repairing torn seats.  The Supervisor of Vehicle Maintenance recommended on the PS Form 4523 (Finding 7) that no payment be made for damaged seats.  However, that recommendation was not accepted as is evidenced by a notation added to each Form 4523 allowing Appellant $90 for the repair of each of the seats.  (AF 2, 3, 6, 9, 10, 11).

            9.  On February 7, 2001, the contracting officer issued a final decision covering Appellant’s damage claims for all of the vehicles except 68985.  In each, he granted a substantial portion of the claim and denied the rest, and the final decision reflected the upward adjustment previously allowed for seat damage.  (AF 11).  The timely appeal of this final decision was docketed as PSBCA No. 4784 (AF 12).

            10.  On March 23, 2001, the contracting officer issued a final decision denying Appellant’s claim of $75 for the cleaning and decal removal for vehicle 68985 (4789AF 3).  The timely appeal of this final decision was docketed as PSBCA No. 4789 (4789AF 4).

            11.  In its claims, Appellant included a charge of $45.00 each for cleaning vehicles 68975, 68976, 68981, 68982, 68984 and 68985 and a $30.00 charge for removing decals on each of these vehicles (AF 2-10; 4789AF 2).  The contracting officer denied all claims for cleaning and decal removal (AF 3, 4, 7, 8, 10, 11; 4789AF 3).

            12.  The left front door of vehicle 68977 was misaligned when the vehicle was returned and one hubcap had dents as if struck by a hammer.  The door had been repaired for a similar condition in the past, and the faulty repair led to the misalignment at the time the vehicle was returned.  Respondent denied payment for these damages, and Appellant seeks to recover them in this proceeding.  (AF 5; Dobson Decl.).

            13.  Appellant’s claim for an allegedly missing spare tire on vehicle 68978 was denied, and Appellant seeks to recover the cost in this proceeding.  The PS Form 4577 for that vehicle does not reflect that the spare was missing when the vehicle was returned to Appellant.  (AF 6).

            14.  The hinge assembly on the left front door of vehicle 68981 had failed, allowing the door to be opened beyond its normal limits and to come into contact with the left fender.  The contracting officer denied Appellant’s claim for the cost of repairing the resulting damage to the fender and door.  (AF 7; Dobson Decl.).

            15.  The claims remaining for vehicles 68973 and 68983 are for replacement of floor mats.  Neither Form 4577 reflected damage to a floor mat.  The maintenance supervisor determined this type of damage to be ordinary wear and tear, and the contracting officer denied the claim.  (AF 2, 9; Dobson Decl.).

            16.  The driver’s armrest on vehicle 68984 had a six to eight inch long tear in it.  The maintenance supervisor concluded the tear was ordinary wear and tear, and the contracting officer denied this part of the claim.  (AF 10; Dobson Decl.).

            17.  Regarding vehicles 68975, 68976, 68977, 68982 and 68984, the contracting officer denied recovery for damage claimed that was not shown on the PS Forms 4577 completed by the parties when the vehicles were returned.  Appellant seeks to recover for such damage in these appeals.  (AF 3, 4, 5, 8).

DECISION

            Appellant makes a number of general arguments and several addressed to particular vehicles.

            Appellant argues that Respondent has applied the phrase "ordinary wear and tear" to some items not specifically listed in the definition (See Findings 4, 15, 16).  However, the Board has previously concluded that the definition of "ordinary wear and tear" in the contract is not limited to those items specifically mentioned.  Allstate Leasing, Inc., PSBCA No. 4787, 2001 PSBCA LEXIS 16, *17, November 8, 2001.

            With regard to the claims for cleaning expenses, Appellant argues that the parties amended the contract in 1998 to remove the requirement that Appellant keep the vehicles in a "clean condition."  According to Appellant, this amendment and the fact that none of the Forms 4577 stated that the vehicles were clean makes Respondent liable for the cleaning charge assessed for certain of the vehicles (Finding 11).  The record contains an amendment form dated March 2, 1998, but the attachment referred to in the amendment, which presumably includes its substance, is not included.  Nevertheless, even assuming the amendment changed the contract as Appellant alleges, although such a contract modification would have relieved Appellant of the obligation to keep the vehicles clean, it would not have the effect of imposing a cleaning obligation on Respondent.  Allstate Leasing, Inc., PSBCA No. 4787, 2001 PSBCA LEXIS 16, *17-*18, November 8, 2001; see J. Leonard Spodek d/b/a Nationwide Postal Management, PSBCA Nos. 3833, 3941, 97-2 BCA ¶ 29,273 at 145,644, aff'd 217 F.3d 854 (Fed. Cir. 1999) (table).  Appellant has not shown that Respondent had a duty, under the contract or otherwise, to keep the vehicles clean when in use or when returned to the contractor.  Accordingly, Appellant may not recover the cleaning charges it claims.^[1]

            Appellant argues that it is not limited to recovery for damages that were recorded on the PS Form 4577 when the vehicles were returned and that it should be able to recover for damage recorded by its estimator on its own forms and for damage noted during an assessment done by its agent after the vehicles were returned.  The contract required the parties to inspect the vehicles jointly when they were returned and to prepare a Form 4577 (Finding 5).  That is the opportunity for both parties jointly to record damage.  As a contemporaneous document signed by both parties and required by the contract, it is entitled to substantial weight as an indicator of the extent of damage to the vehicles when they were returned.  See Jake Sweeney Auto Leasing, Inc., PSBCA Nos. 2821-2826, 91-2 BCA ¶ 23,891.

            Appellant argues that its representative was not allowed to make any markings on the Forms 4577 and was forced to sign the forms in order to retrieve the vehicles.  Therefore, Appellant argues, it chose to sign the forms but also prepare inspection reports of its own (its repair estimates) to be submitted to Respondent.  Appellant contends that the Forms 4577, having been filled out by Respondent's employees with no allowance for comments by Appellant's representative, should be interpreted against Respondent.  However, Appellant offered no evidence to support its allegation that its representatives were denied the opportunity to record damage on the Forms 4577.

            Appellant also argues that the size of the drawings prevented recording an accurate and detailed description of the damage.  However, what was recorded on the Forms 4577 was only the location of the damage, and not any details of the nature or severity of the damage.  With very few exceptions, for those locations noted on the Form 4577 as being damaged, Respondent accepted Appellant's claim regarding the nature of the damage and the cost of repairs.  Therefore, the absence of a detailed description of the damage on the Forms 4577 did not prejudice Appellant.  In the face of a Form 4577 signed by both parties and in the absence of evidence showing that Appellant was precluded from noting all deficiencies, we do not accept Appellant's estimates alone as sufficient to show that damage other than that shown on the Form 4577 was actually present when the vehicles were returned.  See Jake Sweeney Auto Leasing, Inc., PSBCA Nos. 2821-2826, 91-2 BCA ¶ 23,891.  Absent persuasive evidence that other damage occurred while the vehicles were in Respondent's custody, or other evidence showing agreement by Respondent that additional damage occurred for which it is responsible, Appellant may not recover costs for damage not shown on the Form 4577 signed by both parties.  Accordingly, Appellant may not recover on vehicles 68975, 68976, 68977, 68978, 68982 and 68984 (Findings 13, 17) for damage not shown on the Form 4577.

            Appellant continues to argue its entitlement to recover for the costs to repair damage to the seats in vehicles 68973, 68975, 68978, 68983 and 68984, even though Respondent allowed recovery for damaged seats in each of the above vehicles (Findings 8, 9).  Respondent allowed $90 for the repair of each of the seats, which is less than claimed by Appellant.  However, as this is an entitlement-only case, Respondent’s acknowledgement of liability for the seat damage in the Form 4523 (Findings 8, 9) is sufficient to resolve the issue.  Whether $90 per seat is sufficient is for the parties to negotiate on remand.

            In general, to recover for damage to its vehicles, Appellant has the burden of proving that the proximate cause of the damage was the act or negligence of an officer or employee of the Postal Service and that the damage exceeded ordinary wear and tear.  Jake Sweeney Auto Leasing, Inc., PSBCA Nos. 3286-94, 3304, 3305, 93-3 BCA ¶ 25,945, and cases cited therein; Jake Sweeney Auto Leasing, Inc., PSBCA Nos. 2859-2862, 92-1 BCA ¶ 24,444.  The damage to vehicle 68977 was not shown to have been caused by the act or negligence of Respondent’s employees.  The misalignment of the left front door was shown to have resulted from the faulty previous repair of the same condition (Finding 12).  Appellant argues that Respondent had a duty under the contract’s Vehicle Availability clause (Finding 3) to notify Appellant of such damage so it could repair it.  The language relied upon by Appellant provides that Respondent will notify Appellant of vehicles that are not safely operable (Finding 3).  There has been no showing that the misaligned front door rendered this vehicle not safely operable, and therefore appellant has failed to establish a duty on Respondent’s part to notify Appellant earlier of the misalignment of the door.

            The only evidence regarding the hubcap damage to vehicle 68977 is that it was dented as if struck by a hammer (Finding 12).  Without more, this does not establish that the damage was caused by the act or negligence of a Postal Service employee (Finding 4).  The damage was not shown to be most likely caused by negligent driving of the vehicle nor does the nature of the damage indicate that Respondent’s employee was present when the damage occurred, which could shift to Respondent the burden of producing evidence regarding the cause.  Accordingly, Appellant has not shown that it is entitled to recover for damage to this vehicle in addition to that granted by the contracting officer.

            Regarding the torn armrest of vehicle 68984, although it has not been shown that the damage was caused by the act or negligence of a Postal Service employee, the nature of that damage indicates that it likely occurred while the vehicle was attended by a Postal Service employee.  Under these circumstances, it would be appropriate to shift to Respondent the burden of coming forward with evidence as to the cause of the damage.  See Allstate Leasing, Inc., PSBCA No. 4787, 2001 PSBCA LEXIS 16, *20-*21, November 8, 2001; Cardel Leasing, PSBCA No. 3223, 93-2 BCA  ¶ 25,740 recon. denied 93-3 BCA ¶ 26,117.  The general statements of the maintenance supervisor that this is ordinary wear and tear are not sufficient to carry that burden, and Appellant is entitled to recover for the repair of the arm rest.

            Appellant has not demonstrated by a preponderance of the evidence that the damage to the door and fender of vehicle 68981 was the result of the act or negligence of Respondent’s employee and that it was other than ordinary wear and tear.  Appellant argues that repeated opening and closing of the door could not be considered normal use, but the contract states the nature of the use to which the vehicles will be put, and the evidence establishes no more than that the hinge assembly failed in the ordinary, expected use of the vehicle on a park and loop route.  Additionally, Appellant argues that it was negligent of the carrier to open the door beyond the normal limit, but it has not shown that the carrier’s action was negligent or caused the failure of the hinge.  Additionally, as discussed above, there has been no showing that the condition of the door rendered the vehicle not safe to operate.  Therefore, Appellant has not shown any duty on Respondent’s part to notify Appellant of the condition.

            Appellant has not shown that damage to the floor mats in vehicles 68973 and 68983, not reported on the Forms 4577, was anything other than ordinary wear and tear for a vehicle in park and loop service.  Accordingly, Appellant has not shown entitlement to an additional recovery for the claim on these vehicles.

CONCLUSION

            As discussed above, PSBCA No. 4784 is granted to the extent Appellant is entitled to recover for the cost of repairing the seats in vehicles 68973, 68975, 68978, 68983 and 68984 and the armrest in vehicle 68984.  The matter is remanded to the parties for negotiation of quantum, and Respondent is entitled to credit for the amounts already allowed for repair of the seats.  Appellant may recover interest under the Contract Disputes Act on amounts it recovers.  Except as to the withdrawn claims for decal removal, which are dismissed with prejudice, PSBCA No. 4784 is otherwise denied.   PSBCA No. 4789 is denied except as to the claim for decal removal, which is dismissed with prejudice.

Norman D. Menegat
Administrative Judge
Board Member

I concur:
James A. Cohen
Administrative Judge
Chairman

     [1] Appellant has withdrawn all of its claims related to decal removal.  Appellant’s Brief, p. 3.