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BP Business Economic Loss Claim Appeal 2016-1206: Rental Property Merits Consolidated Claim Instead of Multi-Facility Claims

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The following is an Appeal Panel Decision issued pursuant to Section 6 of the BP Deepwater Horizon Economic & Property Damages Settlement Agreement and the Rules Governing the BP Appeals Process. Links may have been added to assist the reader. The original decision may be found here, as well as a glossary of BP Settlement terms.

The Claims Administrator awarded $35.53 on the Start-Up BEL claim of this commercial landlord in Panama City, Florida (Zone A). Claimant is the owner of several multi-unit rental properties. Individual claims were submitted for each of the two units in this residential duplex.Over the Claimant’s objection, the Claims Administrator consolidated them into a single claim Claimant Appealed.
The basis of Claimant’s appeal is that each of the rental units qualifies as a “Facility” under Policy 467 which entitles it to assert separate claims. The definition of a “Facility” set forth in thispolicy is as follows:
(a) A separate and distinct physical structure or premises;
(b) Owned, leased or operated by the Business Entity; and
(c) Which the Business Entity performs and/or manages its operations.
Claimant bolsters its argument by pointing out that Policy 467(a) merely requires a separate structure or a separate premises. Claimant adds that the use of the words “or premises” indicates thata facility is not limited to a physical structure but may encompass an entire premises in order to qualify. Claimant also cites Policy 467’s provisions governing retail space in shopping malls as equally applicable to residential rental units. In summary, Claimant argues that it is a Multi-Facility business because each of the rental units satisfies the definition of a Facility under Policy 467.
In response, BP argues that the entire building is Claimant’s Facility. Because this is a claim for the rental realized from the building, BP urges that the Administrator was correct in consolidating the claims of each structure, including this one. BP also cites previous appeal panel decisions holding that office spaces, strip malls and the like are a single Facility under Policy 467.
Careful de novo review does not support Claimant’s argument that the requirements of Policy 467(a) are satisfied here. That provision requires a separate and distinct physical structure or premises. Contrary to Claimant’s argument, the use of the terms “structure” and “premises” does not support the construction it seeks. While a premises may not have a structure, a structure will be located on a premises. Hence, the use of the disjunctive “or” cannot be read to create a material distinction between structure and premises. In the context of a Facility, they each refer to a separate and distinct location, with or without a physical structure. Here, the rental units are physically located in a single building structure. Hence, it is neither a separate and distinct physical structure nor a separate and distinct premises.
Claimant’s reliance on Policy 467’s retail space provisions is likewise unavailing. That paragraph provides:
Retail shops and storefront locations within shopping malls will typically be considered separate Facilities, even if the locations are
owned, leased or operated by the same Business Entity, if customers are required to exit one location and use common areas of the
shopping center such as walkways or hallways to access other retail locations.
Although BP urges a different construction of this provision, it is not necessary to engage in further analysis. Under any view, this provision applies to retail shops in shopping malls, not residential rental units.
For the foregoing reasons, the Claims Administrator was correct in consolidating these claims and no error as to that decision nor the award calculation has been shown. Accordingly, Claimant’s appeal is denied

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