Dempsey v. United States Postal Service

97-3698 (U.S. Dist. Ct. D. N.J. 1997) (Unpublished)
  • Opinion Date: December 19, 1997

POSTAL SERVICE; REGISTERED MAIL—A post office patron has no claim against the Postal Service for lost registered mail if the patron fails to purchase insurance.

A customer sent three stock certificates by registered mail. Believing that registered mail was secure enough, the customer declined to purchase insurance for the package. When the package was lost, the customer had to purchase a surety bond for over $6,000 to replace the stock. The United States Postal Service (USPS) refused to compensate the customer for the loss because the package was not insured.

The District Court granted summary judgment because the customer failed to present a genuine issue of material fact. It stated that the customer’s breach of contract claim was not barred by sovereign immunity under the Federal Tort Claims Act, but found that there was no contract the USPS could have breached. Generally, breach of contract claims against the USPS are based on an insurance contract, but the customer did not purchase insurance. The Court assumed the contract claim was based on “the registered mail contract, i.e. the agreement by which plaintiff paid a fee and the USPS agreed to send the package by registered mail.” However, the manual governing that contract clearly indicates that USPS does not agree to indemnify the sender and the Court cited precedent for the view that USPS is liable for loss or damage only to the extent it agrees to be liable. The Court found such agreement lacking in this case.