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BP Business Economic Loss Claim Appeal 2016-1215: Owner of Building with Multiple Rental Units can file a Separate Facility Claim for Each unit Under Policy 467

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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.


Claimant appeals the award in its Start Up BEL claim. This appeal involves a somewhat unique issue: Whether an owner of a building with multiple rental units can file a separate Facility claim for each rental unit.
Claimant owns a building which contains three units. Each of these units has a separate address and a separate entrance. Each unit is rented out to a retail business. Claimant is able to separate out its revenue and expenses for each unit. Claimant filed three claims in connection with the building, arguing that each unit qualified as a Facility. The Settlement Program disagreed, and merged the three claims into a single claim for the entire building.
Policy 467 defines a Facility as:
(a) A separate and distinct physical structure or premises;
(b) Owned, leased or operated by the Business Entity;
(c) At which the Business Entity performs and/or manages its
operations.
Policy 467 addresses some specific situations, including “Retail Space in Shopping Malls.” That provision states that:
“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.”
Claimant contends that this provision allows Claimant to treat each unit in its “strip mall” as a separate Facility. BP argues that this provision is meant to apply only to the operators of the individual retail businesses, not the owner of the mall.
This Panel disagrees with BP’s restriction. Nothing in the language of this provision appears to limit its application. Additionally, if a retail location in a shopping mall can qualify as a Facility, then that qualification ought to inure to the benefit of not only to the operator of the location, but also the owner.
This Panel is aware that several other Panels have reached a different conclusion with respect to this issue. However, those appeals
involved residential rental units rather than units leased to retail businesses. This “Retail Space” distinction appears to have been noted at one time by the Settlement Program. In an email exchange between Claimant and Brown Greer, the reviewer stated the following:
“We are reviewing these claims and could use your help in clarifying
some questions identified by the review team. The Claimant filed claims
for a standalone commercial building, a strip mall, a residential duplex,
a residential quadplex, and a single-family home.Can you please clarify if the
strip mall has a common area that would allow someone to move from unit
to unit internally or if each unit can only be accessed externally? Can the same
clarification also be provided for the duplex and the quadplex aswell?”
Based on the Claimant’s response that the units only had external entrances, the reviewer note that: “Based on my understanding of Pol-467 and the response provided,these facilities do appear to fit the criteria to be treated as separate facilities.”
In light of the above, this matter is remanded for further processing in accord with this decision.

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