Peerless Ins. Co. v. US

• Decision Date: 30 December 1988
• Docket Number: Court No. 87-06-00721.
• Citation: 703 F. Supp. 104
• Parties: PEERLESS INSURANCE CO., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

703 F. Supp. 104

PEERLESS INSURANCE CO., Plaintiff, v. UNITED STATES, Defendant.

Court No. 87-06-00721.

United States Court of International Trade.

December 30, 1988.

Doherty & Melahn, William E. Melahn, Boston, Mass., for plaintiff.

John R. Bolton, Asst. Atty. Gen., Washington, D.C., Joseph I. Liebman, Director, Commercial Litigation Branch, Civil Div., U.S. Dept. of Justice, New York City, Barbara M. Epstein, U.S. Customs Service, International Trade Litigation, Edward N. Maurer, for defendant.

DiCARLO, Judge:

This action is before the Court following denial by the United States Customs Service (Customs) of a protest by the Peerless Insurance Company (Peerless) against payment as surety on a single-entry bond. The Court holds that Peerless did not file its protest within the 90 day statutory limit required by 19 U.S.C. § 1514(c)(2)(A) (1982). The Court dismisses this action for lack of jurisdiction.

BACKGROUND

Peerless is the surety on a single-entry bond for laminated boxes imported from Finland by the principal on the bond, the Asoma Corporation (Asoma). The Asoma bond was issued for Peerless through an independent agent, but was executed by a customshouse broker on August 4, 1982 who filed with Customs in the Port of Chicago. Customs liquidated the entry on October 7, 1983 with increased duties that Asoma never paid. On February 1, 1985, Customs mailed Peerless a letter making formal demand for payment of the deficient duties under the Asoma bond as well as other bills not here in dispute. The letter stated:

enclosed herewith is a listing of 419 bill(s) due to the United States Customs Service totaling $1,175,852.25 owed by principals for whom you are surety and which were due and payable on the dates indicated in the enclosure. Formal demands were made on the principals involved but the bills remain unpaid as of February 01, 1985. Under the terms of your bond you are an original promisor and debtor with each of your principals. This is a formal demand upon you for payment of the amounts noted on the enclosures hereto.

An attached computer printout of the bills listed the bill totalling $3055.42 for the Asoma bond. For each bill, the printout set forth in columns under headings the name and address of the delinquent debtor, the bill number, billing date, port name, document date, entry number, the amount due, and the importer number. On October 7, 1986, Customs again sent Peerless a demand letter containing essentially the same language and information as the February 1, 1985 demand. On December 2, 1986, Customs sent Peerless a "supplemental collection letter," mailed after liquidation when there has been no payment or protest filed. This letter included a copy of the Asoma bond and the entry form.

On January 27, 1987, Peerless filed a protest against payment on the Asoma bond, alleging that Customs improperly liquidated the merchandise. Customs denied the protest as untimely because it was not filed within 90 days of the February 1, 1985 demand letter as required by 19 U.S.C. § 1514(c)(2)(A) (1982) and 19 C.F.R. § 174.13(e)(3). Peerless then commenced this action, whereupon Customs moved for dismissal under Rule 12(b)(1) of the Rules of this Court for lack of subject-matter jurisdiction. Peerless counters that the February and October letters were legally insufficient notice for a surety to ascertain its liability and rights on the bond because Customs did not furnish a copy of the bond. Peerless asserts that the supplemental collection letter of December 2, 1986 was the first legally sufficient demand and thus the protest was timely.

DISCUSSION

The only issue is whether the information in Customs' demand for payment provided sufficient notice to Peerless for it to identify the bond without a copy of it being attached to Customs' demand for payment.

Since at least 1977, Customs has made its demands for payment upon sureties using computerized printouts which identify the name and address of the delinquent importer, the bill number, billing date, port of entry, document date, entry number, the amount due, and the importer number. Peerless claims that although Customs has been providing this information since at least 1977, Congress expressed its displeasure with the adequacy of notice given to sureties when it enacted the Trade Agreements Act of 1979. Pub.L. No 96-39, § 1001(b)(3)(E), 93 Stat. 144, 305 (1979). Legislative history of the 1979 Trade Act reveals, however, that Congress extended the period during which sureties could file a protest due to concern that sureties were not receiving timely notice, rather than insufficient notice. See S.Rep. No. 249, 96th Cong. 1st Sess. 254, reprinted in 1979 U.S.Code Cong. & Admin.News 381, 640.

When Customs sent a demand for payment which lacked the information identified in the column headings of the computer printout, this Court found that Customs failure to provide that information gave inadequate notice to the surety. Old Republic Ins. Co. v. United States, 10 CIT 1, 625 F.Supp. 983 (1986). Although the headings in Old Republic were the same as those presently in dispute, the Old Republic court did not decide whether notice would have been sufficient had all the information been provided under each of the column headings.

Unlike Old Republic, Customs has provided Peerless all the information under each of the column headings in the demand on the...