Transportation Law

Ted Agniel, Esquire

Delivery service breached  contract and, therefore required to pay shipper when it delivered COD package, but collected cashier’s check payable to someone other than the correct payee, the shipper.   Kelly v. United Parcel Service, Inc. No. 2364093 (Mo. App. S.D., May 30, 2013), Rahmeyer, J.

UPS delivered a package from Missouri to Louisiana, COD valued at $10,796.32.  At delivery, UPS collected a cashier’s check in that amount, but the check was payable to “Gary” E. Kelly.  The shipper was “Jerry” E. Kelly.  Jerry Kelly endorsed the check, but the bank refused to deposit it due to the incorrect payee’s name.  Kelly sued UPS for the full amount.  The trial court agreed and determined that UPS had breached its contract with Kelly. 

UPS argued on appeal that its Tariff/Terms & Conditions limited its liability to Kelly.  The Southern District affirmed the trial court’s order.  Contrary to the agreement with Kelly, UPS did not produce a facially valid negotiable instrument made payable to the correct “Kelly.”  It was UPS’ duty under the tariff to collect the full amount of cash or an acceptable alternative for the delivery.   Further, UPS produced no case law to support its alternate argument that Kelly’s endorsement of the check (never accepted by the bank) constituted ratification of its conduct.