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Polaroid Corp. v. Hermann Forwarding Co.

argued: May 25, 1976.

POLAROID CORPORATION, A DELAWARE CORPORATION, APPELLANT,
v.
HERMANN FORWARDING CO., A NEW JERSEY CORPORATION, APPELLEE, POLAROID CORPORATION, A DELAWARE CORPORATION, APPELLANT, V. KOWALSKY'S EXPRESS SERVICE, A NEW JERSEY CORPORATION, APPELLEE



Appeal From the United States District Court for the District of New Jersey. D.C. Civil Nos. 550-73 and 551-73.

Adams, Gibbons and Hunter, Circuit Judges. Gibbons, Circuit Judge, dissenting.

Author: Hunter

Hunter, Circuit Judge.

Plaintiff-appellant Polaroid Corporation entrusted two separate shipments of photographic goods to two common carriers for delivery in interstate commerce: one to defendant-appellee Hermann Forwarding Company ("Hermann") and the other to defendant-appellee Kowalsky's Express Service ("Kowalsky"). The shipments were hijacked and neither shipment was ever recovered. On April 23, 1973, Polaroid instituted the present action against Hermann and Kowalsky under 49 U.S.C. § 20(11) for damages sustained as a result of the loss by hijacking of the two shipments. The respective shipments were under uniform straight bills of lading approved by the Interstate Commerce Commission, which provided in pertinent part that "suits shall be instituted against any carrier only within two years and one day from the day when notice in writing is given by the carrier to the claimant that the carrier has disallowed the claim or any part or parts thereof specified in the notice." App. at 18a. The bill of lading is in conformity with section 20(11) of the Interstate Commerce Act, 49 U.S.C. § 20(11), which provides in part:

The primary issue presented is whether Polaroid filed suit on its claims within two years and one day from the date of written notice of disallowance of its claims.

The Hermann hijacking occurred on January 16, 1970 and the Kowalsky hijacking on November 10, 1970. Written notices of claims aggregating $58,941.83 were filed by Polaroid with Hermann on February 11, 1970; notices aggregating $131,168.95 were filed with Kowalsky on December 9, 1970. The timeliness of the filing of the claims is not disputed.

Transport Insurance Company ("Transport") insured both carriers and handled all communications with Polaroid concerning the claims. Polaroid's claim for $58,941.83 on the goods hijacked from the Hermann shipment represented the alleged dealer invoice price of those goods. On April 9, 1970, after preliminary letters had been exchanged between Polaroid and Transport, Transport informed Polaroid that it did not agree that Polaroid was entitled to the dealer invoice price, which included manufactured cost plus profit. The letter in pertinent part reads:

No doubt this shipment was reordered and your company received a profit on the reordered shipment. Your company would not be entitled to a double profit. Our obligation is to place your company in the exact same position it would have been if the loss had never occurred.

We would suggest that you resubmit your cargo loss claim not to include profit but to include only what you have lost. Your claim should include only your manufactured cost figures. We will await your comments.

App. at 68a. Polaroid responded on April 17, 1970: "It has also been requested that these claims be amended to our manufactured cost . . . . We are not in a position to amend these claims to an amount less than dealer price." Id. at 69a.

Various letters subsequently passed between Polaroid and Transport concerning the proper measure of loss. On October 19, 1970, Transport wrote, regarding the Hermann claim:

We are not willing to accept your contention that you are entitled to the dealer's price on the basis you are simply acting on behalf of these dealers in settling the claims. You have not furnished us bills of lading as proof the shipments were effectively transferred to these dealers, nor have you furnished us anything in the way of proof that the dealers have paid you for the merchandise. Therefore, let's go back to the basics, which is the manufacturer's cost of the stolen merchandise.

On the basis of other claims we have had involving Polaroid, we are aware of the fact you add 54.9% operating cost to standard costs to determine what you consider manufacturing costs. On top of this you are adding on anywhere from 10 to 50% mark up on the dealer price, or an approximate average of one-third. In other words, you are between 30 and 60% above your actual loss in your demand of $58,710.30. In the spirit of compromise, however, we are willing to concede that the range is as low as 40% and are prepared to pay you $35,226.18 in settlement of the combined claims. We are therefore, enclosing a general release in like amount with the request that you have it properly executed and return to us. Immediately upon receipt of the release, we will issue our draft to Polaroid.

Id. at 78a. Enclosed with the letter was a "Release In Full of All Claims."*fn1

On February 9, 1971, Transport responded to Polaroid's December 9, 1970, claim for the dealer invoice price of the merchandise hijacked from Kowalsky:

Our position on the above captioned matter [Kowalsky claim] is the same as our position in the case of Polaroid against Hermann Forwarding, your Claim Number 70-1000 thru 70-1019.

We are not going to pay you any more than the manufacturers cost. This represents about 60% of the ...


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