Quiller, Inc. v. United States of America

Background

Quiller, Inc. brought claims under the Federal Tort Claims Act against the United States and the United States Postal Service. The claims arose from a September 7, 2017 collision between a Postal Service truck and Quiller’s parked auto-hauling vehicle. Quiller sought damages for physical damage to the vehicle and for lost profits or loss of use.

Quiller bought the vehicle for $10,683.51. After the collision, the truck component remained drivable, but Quiller did not repair the vehicle or rent a replacement auto-hauler. Progressive later paid Quiller $13,058.88 under an insurance policy. Progressive also submitted a claim to the Postal Service, which settled that claim for $12,783.88. The settlement included a release barring additional or future claims against the United States, the Postal Service, or the employee whose conduct caused the claim, based on the same subject matter.

Quiller separately submitted an administrative claim to the Postal Service seeking $30,000 for property damage and $250,000 for expected loss of profits for 12 months of loss of use. The Postal Service requested additional supporting documentation several times and later denied the claim for failure to submit competent evidence of damages. Quiller then filed this lawsuit. The Government moved for summary judgment under Federal Rule of Civil Procedure 56, which permits judgment without a trial when there is no genuine dispute over a material fact and the moving party is entitled to judgment as a matter of law.

Property-Damage Claim

The Government argued that Quiller’s insurance policy barred recovery of property damages. The court agreed. Applying New York law, the court explained that the policy’s express subrogation terms controlled. The policy stated that, if recovery had already been made from the responsible party, the recovery rights of the person claiming coverage no longer existed.

Because Progressive had already recovered from the Postal Service, the court held that the policy ended Quiller’s right to recover property damages from the Government. The court rejected an interpretation based on the “made whole rule,” an equitable principle that can sometimes preserve an insured person’s right to additional recovery, because the policy’s wording did not leave room for that rule. The court granted the Government’s motion for summary judgment on Quiller’s property-damage claim.

Lost-Profits/Loss-of-Use Claim

The Government argued that, under New York law, Quiller could recover only the reasonable rental cost of a replacement auto-hauler, rather than lost profits. The court agreed. It explained that reasonable rental cost is generally the proper measure of loss-of-use damages unless the owner proves that a suitable replacement could not be obtained.

Quiller argued that no rental market existed for auto-haulers. But Quiller offered no admissible evidence showing that it was unable to obtain a suitable replacement. Fletcher Quiller’s statements that specialized auto-haulers could not be rented were not accepted as proper lay testimony because he had not been offered as an expert, had not shown that his statements were based on firsthand perceptions, and had not researched or attempted to obtain a rental vehicle. The court therefore held that lost profits were not the proper measure of damages under the circumstances.

The Government also argued that Quiller had failed to present a rental-cost claim to the Postal Service before filing suit. The court treated the Federal Tort Claims Act’s administrative-presentment requirement as jurisdictional. Quiller’s administrative claim referred to expected lost profits from loss of use but did not mention damages based on the reasonable rental cost of the damaged vehicle. Because the agency therefore could not estimate the value of a rental-cost claim, the court held that Quiller was barred from seeking that form of damages. The court granted the Government’s motion for summary judgment on Quiller’s lost-profits/loss-of-use claim.

Disposition

Judge Analisa Torres granted the Government’s motion for summary judgment. The court directed the clerk to terminate the motion at ECF No. 55 and close the case.