Suing UPS in Small Claims Court

[Will H.]

Jurisdiction

Georgia

I shipped a rifle barrel, just the barrel, to a licensed FFL/Gunsmith for some work. I shipped it through UPS and paid for insurance. I was informed by the recipient that UPS delivered the box, damaged with a big hole torn in the side, and the barrel was not in there. The website did not have any tariffs or rules against shipping firearm parts, there is no federal law against it as the law states that a firearm can be shipped to a licensed gunsmith directly from an individual for the purposes of repair. The item was required to be named exactly, and I provided the exact item name, and insurance was offered and paid for. UPS accepted the package. I filed a claim with UPS, and was given non working fax numbers after being told to upload the documents via their website, which immediately locked and wouldn't let me upload the required documents. More than a month later I was informed, after having to call to get an update, that the claim was making its way to the third party claim company. I was informed today that my claim was denied on the grounds that the tariff, that they only informed FFL's about, stated that they wouldn't accept any firearms or firearm parts for shipment and wouldn't honor any insurance claims. I am going to send a demand letter to their corporate office but am not hopeful. I am going ahead and planning to file in small claims court for the cost of replacing the items, the cost of shipping, as they failed to deliver the item as contracted to do, and the cost of the insurance they did not honor. Since they are a business that does business in my county, would I need to file in my county or the county where UPS has their corporate office?

 

[adjusterjack]

Wait.

You shipped the barrel FROM a foreign country to an FFL in the US?

What country did you ship from?

 

[Will H.]

Wait.

You shipped the barrel FROM a foreign country to an FFL in the US?

What country did you ship from?

Foreign country? It was shipped from Georgia, the state. Tariff is what UPS refers to as their terms on their website that I was sent by the claim investigator.

 

[adjusterjack]

I'm laughing at myself. You wrote county and I read country. Sorry about that.

You can file in your local small claims court but make sure you serve the statutory agent of the company. That's what a statutory agent is for.

 

[Tax Counsel]

Before you file the lawsuit, I suggest you read the UPS terms of shipment and the insurance policy. As I recall the UPS shipment contract caps the company's obligation to you at $50 unless you buy the insurance. You did buy the insurance, apparently, so both documents would be important to the claim. In GA attorneys are allowed in magistrate's court (which is the court that handles smalls in GA) so if the company does decide to defend the claim, you'll be facing off against the company's lawyer.

 

[retic]

<-- FFL

UPS does not accept firearm parts from non-FFL's or from FFL's who have not entered their approved UPS agreement. I do not ship anything using UPS, I use USPS for all shipping. I looked into using UPS but could not guarantee a minimum $100,000 per year in shipping contracts, which is one requirement of the UPS agreement.

https://www.ups.com/us/en/support/s...egulated-items/prohibited-items/firearms.page

Definitions:

"Firearm" will have the same definition as set forth in Title 18, Chapter 44, and Title 26, Chapter 53, of the United States Code.

"Firearm Part" is any part or component of a Firearm that does not by itself meet the definition of a "Firearm." By way of example only, Firearm Parts include, but are not limited to, barrels, stocks, grips, firing pins, sights, and magazines/clips.

"Firearm Products" means Firearms and Firearm Parts. The term Firearm Product does not include scopes.

UPS accepts packages containing Firearm Products for shipment only as a contractual service and only from Shippers who are licensed importers, licensed manufacturers, licensed dealers, or licensed collectors (as defined in Title 18, Chapter 44 of the United States Code) to authorized recipients, as outlined in the approved UPS agreement for the transportation of Firearm Products.

To transport packages containing Firearm Products, the Shipper must enter into an approved UPS agreement for the transportation of Firearm Products.

 

[Tax Counsel]

I looked into using UPS but could not guarantee a minimum $100,000 per year in shipping contracts, which is one requirement of the UPS agreement.

A minimum of $100,000 of shipping costs? You'd have to move a lot of product, I'd guess, to meet that. Do you have any idea why it's so high?

 

[retic]

I have no idea why FedEx selected that value. Bear in mind that's not just shipping for firearms but for everything the company sells, and most have online presences these days.

 

[Tax Counsel]

I have no idea why FedEx selected that value. Bear in mind that's not just shipping for firearms but for everything the company sells, and most have online presences these days.

You said before it was UPS. Now you are saying it's FedEx. Which is it and how'd you end up mixing the two in this thread?

 

[retic]

Sorry I mixed them up because both FedEx and UPS require an FFL compliance agreement; simply being a licensee is not good enough. UPS also had the annual minimal limit and the prohibition on firearm parts, where FedEx will let anyone ship parts such as the OP's barrel, it's only firearms that have the additional rules.

 

[Redemptionman]

Yeah you can only ship firearms and parts via USPS or FedEx in some situations and then it is to a registered FFL. Why would the third party insurer deny the claim? You file in the county/ city from which you shipped the product. You should get your money back for the barrel, they will make you run through hoops first though.

Good Luck.

 

[Tax Counsel]

Why would the third party insurer deny the claim?

First, I suspect that the OP did not buy the insurance, but rather declared a higher value for the shipment. The shipping contract limits UPS liability $100 unless you pay for a higher liability limit. This is NOT insurance, though many people think it is and even some UPS clerks refer to it as insurance. So if you buy increased coverage limits, it is UPS itself that pays the claim, there is no insurance company involved. That is how most consumers protect their shipments, though increased liability limits.

You do have the option to actually insure the package. But if you are buying the insurance with UPS, the insurance is not a third party insurer. It is provided by a captive insurance company, which means an insurance company wholly owned by UPS. The UPS subsidiary that provides the insurance is UPS Capital. So even if the OP did truly buy the insurance, the money paid for the claim still comes out of the pockets of UPS as it owns the insurance company.

You could go to a third party insurer, but that requires searching out that insurer and buying the separate coverage. In that case, you don't make the claim for loss with UPS. Instead you make the claim of loss through the insurance company from which you bought the coverage.

And, by the way, FedEx operates much the same way.

 

[Zigner]

First, I suspect that the OP did not buy the insurance, but rather declared a higher value for the shipment. The shipping contract limits UPS liability $100 unless you pay for a higher liability limit. This is NOT insurance, though many people think it is and even some UPS clerks refer to it as insurance. So if you buy increased coverage limits, it is UPS itself that pays the claim, there is no insurance company involved. That is how most consumers protect their shipments, though increased liability limits.

You do have the option to actually insure the package. But if you are buying the insurance with UPS, the insurance is not a third party insurer. It is provided by a captive insurance company, which means an insurance company wholly owned by UPS. The UPS subsidiary that provides the insurance is UPS Capital. So even if the OP did truly buy the insurance, the money paid for the claim still comes out of the pockets of UPS as it owns the insurance company.

You could go to a third party insurer, but that requires searching out that insurer and buying the separate coverage. In that case, you don't make the claim for loss with UPS. Instead you make the claim of loss through the insurance company from which you bought the coverage.

And, by the way, FedEx operates much the same way.

With UPS, if you declare a higher value for the package, you are charged more for insurance to cover that higher value.

 

[Tax Counsel]

With UPS, if you declare a higher value for the package, you are charged more for insurance to cover that higher value.

You are charged more, but that's because the company takes on more risk, not selling an insurance product. It's not insurance you get when you declare a higher value. If you look closely at the document you sign when declaring a higher value you'll note the word "insurance" doesn't appear. The company is agreeing to assume more liability than the usual $100 cap. UPS and FedEx offer this option because it puts a little more money in their pockets than actually insuring everything. Declared value is a term of art in the shipping business. FedEx clearly explains whata it means on it's page What is Declared Value? While UPS doesn't have a page clearly explain it as FedEx does, the concept is exactly the same. For most consumers shipping the occasional item that does not have value into many thousands of dollars or the difference doesn't mean all that much in practical terms; whether through declared value or insurance they still get reimbursed when packages are damaged, destroyed, lost, or stolen so long as the terms of the declared value liability waiver is met.

By contrast, what you get from the USPS to cover valuables is insurance, and the USPS specifically describes it as insurance. Why the difference from the private shippers? Because by statute the USPS cannot be sued for negligence in the delivery of mail and it not about to weaken that statutory protection by providing for liability using the declared value method.

 

[Zigner]

You are charged more, but that's because the company takes on more risk, not selling an insurance product. It's not insurance you get when you declare a higher value. If you look closely at the document you sign when declaring a higher value you'll note the word "insurance" doesn't appear. The company is agreeing to assume more liability than the usual $100 cap. UPS and FedEx offer this option because it puts a little more money in their pockets than actually insuring everything. Declared value is a term of art in the shipping business. FedEx clearly explains whata it means on it's page What is Declared Value? While UPS doesn't have a page clearly explain it as FedEx does, the concept is exactly the same. For most consumers shipping the occasional item that does not have value into many thousands of dollars or the difference doesn't mean all that much in practical terms; whether through declared value or insurance they still get reimbursed when packages are damaged, destroyed, lost, or stolen so long as the terms of the declared value liability waiver is met.

By contrast, what you get from the USPS to cover valuables is insurance, and the USPS specifically describes it as insurance. Why the difference from the private shippers? Because by statute the USPS cannot be sued for negligence in the delivery of mail and it not about to weaken that statutory protection by providing for liability using the declared value method.

I don't disagree, but you are pointing out a distinction without a difference. It is not insurance, but it IS a higher liability that UPS/FedEx accepts for the shipment. In other words, if your $5,000 widget gets broken by UPS and you declared a the higher value, they will have a liability for that breakage up to the higher value you declared. Of course, if you violate the terms with what you shipped, that extra liability the company accepted won't mean anything. That's the same with USPS shipping insurance.

 

[zddoodah]

Since they are a business that does business in my county, would I need to file in my county or the county where UPS has their corporate office?

UPS does business in every county in the U.S. Since UPS's HQ are in Atlanta, the appropriate place to sue would be Fulton County. However, you should carefully read the terms of the "insurance" that you bought to ensure who the proper defendant is.

 

[welkin]

First, I suspect that the OP did not buy the insurance

I shipped a rifle barrel, just the barrel, to a licensed FFL/Gunsmith for some work. I shipped it through UPS and paid for insurance

You do have the option to actually insure the package. But if you are buying the insurance with UPS, the insurance is not a third party insurer

That is not the way it works with UPS. Any amount that you insure for over $100 is automatically underwritten by a third party insurer. It is this third party insurer that insulates UPS from claims and they will automatically deny the claim no matter what it is. Their first line of defense is that it is your fault for faulty packaging.

What you need to do is keep going after UPS until they tell their insurer to pay out the claim.

Been there done that with something insured for over $4K. Eventually they paid.

However, you should carefully read the terms of the "insurance" that you bought to ensure who the proper defendant is.

There are no terms of the insurance on the receipt you get when you drop off the package or have it picked up and nothing that tells you anything about their insurance but what you insured it for and what you paid for the insurance.

 

[Tax Counsel]

The reason I suspect the OP didn't buy the insurance is because (1) most people use declared value to provide protection from damages, not insurance and (2) most people incorrectly refer to declared value as insurance. As I explained before, in the carrier business declared value is a term of art referring to adjusting the liability limits and is expressly NOT insurance.

That is not the way it works with UPS. Any amount that you insure for over $100 is automatically underwritten by a third party insurer.

If you actually take the actual insurance (which is not what I've ever had a UPS clerk even mention, they all pointed to the declared value line of the shipping contract) it is not a third party insurer. As I explained before, it is a captive insurance company wholly owned by UPS. If you want third party insurance, you have to go somewhere other than UPS to get it.

Their first line of defense is that it is your fault for faulty packaging.

That's the first line of defense in a declared value claim in my experience. As I have never bought the actual insurance (and I'm pretty sure you haven't either) I don't know if they employ that defense as regularly for the insurance claims.

What you need to do is keep going after UPS until they tell their insurer to pay out the claim.

That's the bottom line either way, and that's why people don't generally make a distinction between declared value and insurance with UPS damage claims. Either way, UPS is the one paying it and thus UPS is the one that you pursue for your claim. To the average consumer of occaisonal UPS services using declared value is pretty much like getting insurance. Their experience is the same either way. But the consumer thinking it's insurance doesn't make it so.

There are no terms of the insurance on the receipt you get when you drop off the package or have it picked up and nothing that tells you anything about their insurance but what you insured it for and what you paid for the insurance.

That's because declaring a higher value is NOT insurance and for that reason the standard consumer contract with UPS does not mention insurance. What you are paying for is for a higher liability for UPS than the $100 that you get by default. That is not the same thing as buying insurance, but like I said, to many consumers that's what it looks like. But there is legally a difference.

 

[Zigner]

The reason I suspect the OP didn't buy the insurance is because (1) most people use declared value to provide protection from damages, not insurance and (2) most people incorrectly refer to declared value as insurance.

For UPS, it appears to be synonymous. From https://www.ups.com/us/en/support/glossary-of-terms.page:

Declared Value/Insured Value
Declared Value or Insured Value is the combined value of the merchandise and cost of freight, packaging, forwarding charges and consular fees for which insurance is obtained.

Enter a Declared Value amount of up to US$25,000. Pre-authorization is required for Declared Value amounts greater than US$25,000.

For additional information refer to the UPS Air Freight Terms and Conditions of Contract.

With that said, their terms and conditions (https://www.ups.com/assets/resources/webcontent/en_US/terms_service_us.pdf) is contradictory, and I understand that the terms of service are controlling:

When a Shipper declares a value in excess of $100, it does not receive any form of insurance. Shippers desiring cargo insurance, all risk insurance, or another form of insurance should purchase such insurance from a third party


As I mentioned in my earlier post, I agree that it is not "insurance", but for the majority of incidences, it is functionally equivalent from a consumer's perspective.

As a side note for the OP: The document I linked to (the UPS terms of service) specifically prohibits you from shipping the item(s) you shipped.

 

[welkin]

I don't know how UPS's terms of service are now but I dug out my file from 9/10/2009 when I shipped 3 wooden crates of woodwork from NJ to FL using UPS. I have the bills and all the paperwork.

Each crate was written up for shipment separately. Each has a declared value of between $1,800.00 and $2,000.00. I was charged for making those declared values on the invoices between $16.20 and $19.80 each.

UPS picked up the crates and they affixed the shipping labels to them. In transit, one of the labels fell off and one crate ended up in an UPS warehouse in FL They opened the crate to see if there was any paperwork like an invoice. They took all the styrene packaging out of the crate and never replaced it. I sent them pictures and they finally found it and completed the delivery.

However, the architectural piece inside was damaged. I filed a claim and a company called Crawford was the claims representative for UPS. Their first response to the claim was to deny it for improper packing. They finally admitted that UPS was responsible for the improper packing.

In the end, Crawford settled with me for $445.00, the cost to have someone in FL repair the damage and a discount for my client so she would accept the piece.

It took a few weeks for them to settle but they did.

Declared value or insurance I'm not sure but I paid for the declared value and they paid a bit more than $100.00.

From that experience with UPS I switched to FedEx and they actually do insure up to the declared value. Had a claim with them for a lost template being shipped to a glass company. They paid right away with no hassle.