Gueye v United Parcel Serv., Inc.
Annotate this CaseDecided on March 12, 2008
Civil Court of the City of New York, New York County
Ababacar Gueye, Plaintiff,
against
United Parcel Service, Inc., Defendant.
035096 CVN 2006
For Plaintiff:
Steven Cullen Bennett
521 Fifth Avenue, Suite 1700
New York, New York 10175
For Defendant:
Alston & Bird LLP
90 Park Avenue
New York, New York 10016
Saliann Scarpulla, J.
In this action for breach of contract, negligence, breach of warranty, and deceptive business
practices, plaintiff Ababacar Gueye ("Gueye") moves for summary judgment on the complaint
against defendant United Parcel Service, Inc. ("UPS") and UPS cross-moves for summary
judgment dismissing the complaint.
Background:
Gueye delivered several packages to The UPS Store No.4754, a UPS Authorized Shopping Outlet ("ASO"), located at 243 5th Avenue, New York, New York for delivery to customers in Georgia. Gueye claims that, when he delivered his packages to the ASO, he placed on the packages a sticker containig the UPS logo and the words: "C.O.D. accept money orders only!!"
The ASO then contracted with UPS to ship Gueye's packages to Georgia. The ASO's and UPS's agreement to ship Gueye's packages is governed by the UPS General Tariff and the UPS Rate and Schedule Guide (collectively, "the UPS Tariff"). The UPS Tariff provides, in relevant part, that: Unless instructions to collect cashier's check or money order only are shown on the C.O.D. tag (in conformity with the instructions on the tag) or system generated label, UPS will accept a check or other negotiable instrument issued by or on behalf of the consignee. When instructions to collect cashier's check or money order only are clearly indicated on the C.O.D. tag or system-generated label UPS reserves the right [*2]to accept a cashier's check, money order, official bank check or other similar instrument issued by or on behalf of the consignee.All checks or other negotiable instruments (including cashier's checks, official bank checks, money orders, and other similar instruments) tendered in the payment of C.O.D.s will be accepted by UPS based solely upon the shipper assuming all risk relating thereto including, but not limited to, risk of nonpayment, insufficient funds, and forgery, and UPS shall not be liable upon any such instrument.
It is undisputed that, despite Gueye's instructions on the packages to only accept money orders, UPS accepted checks for some of the packages. Gueye annexes eleven checks which UPS accepted upon delivery of packages to Gueye's customers. Ten of those checks contain the name "Adadcar Gueye" instead of "Ababacar Gueye" and four contain an amount less than the amount that UPS was directed by Gueye to collect on the package.
Gueye presented the eleven checks to his bank for deposit, and he avers that his bank declined to honor the checks. Gueye sought payment from UPS for the dishonored checks, but UPS declined to reimburse Gueye. Gueye then commenced this action. In his complaint, Gueye asserts claims for: (1) negligence, asserting that UPS failed adequately to inspect the checks; (2) breach of contract, asserting that UPS was to accept money orders onlyor at least facially correct checks; (3) a violation of General Business Law §349(h), for UPS's unlawfully engaging in deceptive acts or practices; (4) breach of warranty; and (5) unjust enrichment. Gueye alleges damages of $17,557.34, plus UPS shipment service charges of $1,385.52.
In his motion, Gueye argues that he is entitled to judgment as a matter of law because: (1) UPS was negligent in that it accepted facially defective checks from the recipients of Gueye's packages; (2) UPS breached its contractual agreement by failing to comply with the stickers Gueye affixed to his packages and accepting checks rather than money orders; (3) Gueye has a relationship with UPS through its ASO as reflected in the UPS Tariff and therefore has standing to maintain this action; and (4) the Carmack Amendment does not preempt Gueye's claims against UPS.
In its opposition to Gueye's motion for summary judgment, UPS argues: (1) all of Gueye's
state law claims are preempted by federal law; and (2) pursuant to the UPS Tariff, which states
that Gueye bears all risks of nonpayment and insufficient funds for any instrument collected with
respect to a C.O.D. shipment, UPS was not responsible for Gueye's loss. Additionally, in support
of its cross-motion for summary judgment, UPS argues that Gueye submitted the checks for
further negotiation, which served as a ratification of UPS's collection of the checks and therefore
Gueye has no claim against UPS.
Discussion
UPS first argues that Gueye does not have standing to bring this action against UPS, because he delivered his packages to the ASO and therefore does not have a contractual relationship with UPS. The Court disagrees. Both the federal and state courts have held that an owner of goods who ships through a freight forwarder may bring a direct cause of action against the underlying carrier. See, e.g., Accu-Spec Electronic Servcs., Inc. v. Central Transport, Intnl., 391 F. Supp. 2d 367 (W.D.Pa. 2005); Gulf & Western Indus., Inc. v. Old Dominion Freight Line, 633 F. Supp. 688 (M.D.N.C. 1986); Agricultural Lands, Inc. v. Panhandle & Santa Fe Ry. Co., 60 F. Supp. 108 [*3](W.D. Mo. 1945);Elich-Krumplet v. United Parcel Service, Inc., 13 Misc 3d 1203(A) (Civ. Ct., NY Co. 2006); AIG Uruguay Compania de Seguros, S.A. v. Landair Transport, 902 So. 2d 169 (Fla. App. 3d Dist. 2005). As these federal and state cases hold, the shipper is in essence the undisclosed principal of its agent, the forwarder, in the latter's contract with the carrier and therefore the shipper may sue the carrier directly for its loss.
Further, Gueye's claims against UPS concern UPS's contractual agreement to serve as a collection agent for Gueye, and do not concern the damage or loss of goods in transit. Therefore, Gueye's claims are not preempted by federal statute. See Givoldi, Inc. v. UPS, 286 AD2d 220 (1st Dep't 2001); AIT Int'l, Inc. v. Federal Express Corp., 278 AD2d 439, 440 (2d Dep't 2000). However, to the extent that Gueye is able to prove UPS's liability, he is bound by the remedies provided in the UPS Tariff. See Givoldi v. UPS, 286 AD2d at 220-221. A shipper is bound by the terms of the carrier's filed tariff, even without knowledge or notice of the terms thereof. Domani Jewelers, Inc. v. United Parcel Service, 147 Misc 2d 433 (Sup. Ct., NY County 1990).
In the amended complaint, Gueye pleads breach of contract, tort and equitable causes of action. In his second cause of action Gueye asserts that UPS breached its contract with Gueye by accepting checks rather than money orders. UPS does not deny that it accepted checks rather than money orders, but argues that it was entitled to do so.
The UPS Tariff expressly provides that even when a shipper instructs UPS to collect only money orders, UPS "reserves the right to accept a cashier's check, money order, official bank check or other similar instrument issued by or on behalf of the consignee." The UPS Tarrif also states that UPS will accept a C.O.D. payment only upon the express condition that the shipper assume all risk of nonpayment. These provisions in the UPS Tariff prevent Gueye from recovering on a breach of contract claim for UPS's acceptance of checks instead of money orders.
In addition, Gueye admits that he accepted and deposited the checks without expressing any objection or presenting any condition to UPS. He did not return the checks to UPS and he presented them to the bank without protest. By accepting and depositing the checks, Gueye ratified UPS's acceptance of checks rather than money orders.
Ratification occurs when a shipper unconditionally accepts and deposits an unauthorized form of payment into his account, knowing that the form of payment deviates from that demanded. See Rathbun v. The Citizens' Steamboat Co. of Troy, 76 NY 376 (1879); T.W.A. Trading, Inc. v. Gold Coast Freightways, Inc., 2002 WL 1311648, 2002 Slip Op. 40231(U) (Sup. Ct. App. Term 2d Dep't 2002); Leather Facts, Inc. v. Foy, 157 Misc 2d 35, 36 (Civ. Ct., NY Co. 1993); Domani Jewelers, Inc.,147 Misc 2d at 433. As a result of Gueye's unconditional acceptance of the checks, which he then deposited into his account, he forfeited his right to sue UPS for breach of contract. See Leather Facts, Inc., 157 Misc 2d at 36 citing Rathbun, 76 NY at 380. Accordingly, the Court denies Gueye's demand for summary judgment on the second cause of action for breach of contract in connection with UPS's acceptance of checks instead of money orders, and grants UPS's cross-motion to dismiss the second cause of action.
In his third cause of action Gueye alleges that UPS breached its contract by accepting checks that contain a misspelling of his first name and by accepting checks for less than the declared C.O.D. amount. In support of his third cause of action Gueye submits ten checks collected by UPS that were made payable to "Adadcar Gueye," rather than "Ababacar Gueye." Copied with those checks are [*4]UPS shipping receipts. On four of the checks, the C.O.D. amount to be collected on the shipping receipt differs from the amount of the check copied with the receipt.
With respect to Gueye's contention that UPS should not have accepted the checks which contain a slight misspelling of his first name, here again, by accepting the checks and depositing them in his account, Gueye ratified UPS's acceptance of the checks. See, e.g. Compuknit Industries, Inc. v. Mercury Motors, Express, Inc., 72 Misc 2d 55 (Civ. Ct. Queens Co. 1972)(by accepting and depositing a post-dated check, shipper ratified carrier's acceptance of check and forfeited any claim for breach of contract).
In any event, pursuant to the provisions of the New York Uniform Commercial Code, the slight misspelling in Gueye's first name does not render the checks facially invalid or incapable of being negotiated. First, the N.Y.U.C.C. defines a check as "a draft, other than a documentary draft, payable on demand and drawn on a bank." N.Y.U.C.C. 3-104(f)(2002). The checks at issue satisfy this definition. Further, pursuant to N.Y.U.C.C. §3-110, "[a]n instrument is payable to order when by its terms it is payable to the order or assigns of any person therein specificed with reasonable certainty . . . ." Pursuant to U.C.C. §3-110 a check that contains minor errors in the payee's name does not affect the status of the payee, provided the person specified is identified with reasonable certainty.
Likewise, pursuant to U.C.C. §3-203 "[w]here an instrument is made payable to a person under a misspelled name or one other than his own he may indorse in that name or his own or both; but signature in both names may be required by a person paying or giving value for the instrument." Thus, a misspelling of the payee's name does not affect the check's negotiability, however the payee may be required to indorse in both the correct name and the misspelled name.
Here, the slight misspelling of Gueye's first name is a minor error and Gueye's name is specified on the checks with reasonable certainty. Pursuant to the relevant N.Y.U.C.C. sections, the checks are not facially invalid on account of the slight misspelling of Gueye's first name.
The Court also notes that, to support his claim that the checks were not honored because of the misspelled name, Gueye submits only his bank statement which indicates that three unidentified checks were returned unpaid, with the notation "Deposit/Check Error Correction." Gueye does not submit any evidence to show that this notation on his bank statement relates to the checks collected by UPS, nor does he submit any evidence to explain the significance of the "Deposit/Check Error Correction" notation (i.e. the specific grounds upon which these checks were dishonored). Additionally, Gueye does not submit other competent evidence to prove that the remainder of the checks were dishonored and the grounds upon which they were dishonored.
Inasmuch as Gueye ratified UPS's acceptance of the checks with the misspelled first name, has failed to show that the checks accepted by UPS were facially invalid on account of the misspelled first name (i.e. not capable of negotiation), and has failed to show at all, by the submission of competent evidence, why most of the checks at issue were not paid, Gueye has failed to make out a breach of contract action based upon the misspelling of his first name on several of the checks at issue.
Gueye also contends in the third cause of action that UPS breached its agreement by accepting checks that contain less than the amount it was required to accept for delivery of the goods. Under the UPS Tariff, UPS must "attempt to collect the amount shown on the C.O.D. tag or the system-generated label attached to the package and transmit to the shipper the amount so collected [*5]subject to the provisions of Item 485, or, if collection cannot be made, will return the package to the shipper."
Also, the UPS Tariff provides, under the heading, "Consignee's Checks in Payment of C.O.D.'s," that UPS must forward any check it accepts from the consignee, and on behalf of the shipper, to the shipper. If the amount collected is less than the C.O.D. amount, then UPS is obligated to transmit its own check: All checks or other negotiable instruments (including cashier's checks, official bank checks, money orders, and other similar instruments) will be transmitted to the shipper together with UPS's own check if consignee check(s) collected are for less than the C.O.D. amount.
Attached to the answering memorandum of law, Gueye submits four checks collected by UPS which are made out for an amount that is less than the C.O.D. amount on the shipping receipt copied with the check: (1) C.O.D. amount: $1,280.06, amount collected: $1,062.00; (2) C.O.D. amount: $1,261.94; amount collected: $1,061.00; (3) C.O.D. amount: $1,260.14; amount collected: $1,074.00; (4) C.O.D. amount: $1,273.19; amount collected: $1,081.00.
While Gueye has submitted sufficient evidence to show that he may have a breach of contract claim based upon the fact that UPS collected less than it was required to collect for the four packages at issue, Gueye has failed to show his entitlement to judgment on this claim as a matter of law. Gueye submits four checks, each with a UPS shipping receipt copied on a single sheet of paper with the check. However, nothing on the face of the check or the shipping receipt indicates that the shipping receipt corresponds to the check copied with it, and Gueye submits no further documentary or testimonial evidence to show that the shipping receipt and the check copied together actually correspond with one another.
Each of the four checks alleged to be for an insufficient amount are signed by the same person, "Elisha Jones." Gueye submits a fifth check signed by "Elisha Jones," also allegedly dishonored. The shipping receipt attached to this check shows that "Elisha Jones" significantly overpayed for this shipment. Again, Gueye provides no explanation for this discrepency.
In short, Gueye has not met its burden of showing entitlement to judgment as a matter of law on its claim that UPS collected less than the required C.O.D. amount on the four checks at issue. Gueye's motion for summary judgment is therefore denied as to the third cause of action. UPS's cross-motion for summary judgment is granted on the third cause of action only to the extent that Gueye's breach of contract claim based on the slight misspelling of Gueye's first name on the checks at issue is dismissed. The remaining part of the third cause of action, relating to UPS's alleged acceptance of less than the required C.O.D. amount for the four packages at issue remains for trial.
In his first cause of action, Gueye alleges that UPS acted negligently in accepting checks instead of money orders and in accepting facially invalid checks. Gueye's negligence claim is an impermissible rehash of the breach of contract claim. A claim arising out of an alleged breach of contract may not be converted into a tort action absent the violation of a legal duty independent of that created in the contract. Givoldi, 286 AD2d at 221. "'This legal duty must spring from circumstances extraneous to, and not constituting elements of, the contract, although it may be connected with and dependent upon the contract.'" Givoldi, Inc., 286 AD2d at 221 quoting Clark-Fitzpatrick, Inc. v. Long Island R.R. Co., 70 NY2d 382, 389 (1987). [*6]
Gueye's negligence claim that UPS beached a duty to Gueye by collecting checks rather than money orders, containing misspellings in his name and made out for the wrong amounts all derive exclusively from UPS's contractual agreement to deliver the packages and collect the money. Gueye has neither pled nor proved that UPS had any independent duty apart from its contractual obligation, thus his first cause of action for negligence is dismissed.
Gueye's sixth cause of action for unjust enrichment is likewise be dismissed on the ground that it is subsumed in the breach of contract action. To prevail on a claim of unjust enrichment, a party must show that: "(1) the other party was enriched, (2) at the party's expense, and (3) that it is against equity and good conscience to permit the other party to retain what is sought to be recovered." Citibank, N.A. v. Walker, 12 AD3d 480, 481 (2d Dep't 2004). Recovery for unjust enrichment is barred by a valid and enforceable contract. Whitman Realty Group, Inc. v. Galano, 41 AD3d 590, 593 (2d Dep't 2007). The parties here agree that they were bound by the terms of their contract, the UPS Tariff.
The Court also dismisses Gueye's fourth cause of action for deceptive business practices pursuant to General Business Law §349. Gueye alleges that UPS engaged in deceptive acts and practices when it represented that it would only collect money orders, when "indeed it also would collect other types of instruments it unilaterally regarded as secure."
To establish a claim pursuant to General Business Law §349, Gueye must establish that UPS intended to deceive its customers to the customer's detriment and was successful in doing so. See Samiento v. World Yacht Inc., 2008 WL 382346 *7 (NY) (February 14, 2008). Here, Gueye has not offered any evidence that UPS intentionally deceived him. He offers only his conclusory statement that UPS represented to him that it would only collect money orders. Gueye's shipping receipt plainly states that Gueye "acknowledge[s] and accept[s] the Terms and Conditions" of the UPS Tariff, and Gueye does not dispute that the ASO was provided a copy of the UPS Tariff. The UPS Tariff states that UPS reserved the right to accept other forms of payment even when requested to accept money orders, and Gueye is charged with knowledge of UPS's reservation of that right.
Also, as stated above, Gueye ratified UPS's acceptance of the checks, rather than money orders, when he, without objection, accepted the checks and presented them to his bank for deposit in his account. Having ratified UPS's acceptance of checks instead of money orders, Gueye can not now claim that he was deceived by UPS's acceptance of the checks instead of money orders.
Finally, in his fifth cause of action Gueye alleges breach of warranty. To assert a claim of breach of warranty, the plaintiff must set forth the specific terms of the warranty upon which plaintiff relied. Plaintiff's failure to set forth the specific terms of the warranty will result in dismissal of the breach of warranty claim. See Hicksville Dry Cleaners, Inc. v. Stanley Fastening Systems, L.P., 37 AD3d 218 (1st Dep't 2007); Catalano v. Heraeus Kulzer, Inc., 305 AD2d 356, 358 (2d Dep't 2003); Valley Cadillac Corp. v. Dick, 238 AD2d 894 (4th Dep't 1997).
Gueye does not allege that UPS breached a specific warranty. In the fifth cause of action Gueye states only that "UPS's published advertisments on the internet and in print promising a service that has turned out for the plaintiff to be less than satisfactory." Gueye does not attach a warranty to the complaint, nor does he add any additional details to the breach of warranty cause of action in his affidavit on this motion. As Gueye has failed to plead or prove that UPS breached a specific warranty made to Gueye, the fifth cause of action is dismissed.
In accordance with the foregoing, it is [*7]
ORDERED that plaintiff Ababacar Gueye's motion for summary judgment is denied; and it is further
ORDERED that defendant United Parcel Service, Inc.'s cross-motion for summary judgment dismissing the complaint is granted to the extent that the first, second, fourth, fifth and sixth causes of action are dismissed in their entirety, as is the portion of the third cause of action alleging breach of contract in connection with UPS's acceptance of checks in which Gueye's first name is misspelled; and it is further
ORDERED that the remainder of Gueye's third cause of action for breach of contract in connection with UPS's alleged failure to collect the full amount required for the C.O.D. is severed and shall be tried; and it is further
ORDERED that the Clerk of the Court is directed to enter judgment accordingly.
This constitutes the decision and order of this court.
Dated:New York, New York
March, 2008
E N T E R
_____________________________
J.C.C.
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