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BP Business Economic Loss Claim Appeal 2016-1824: Policy 345 Does Not Preclude Owner of Self-Storage Facility from Recovery Because Claimant’s Customer Location Different from Storage Location

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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 owns a self-storage facility whose claim was denied on the basis that it could not satisfy the requirements of the Customer Mix Test. The Settlement Program applied Policy 345 to evaluate the Customer Mix Test by using the location of Claimant’s facility as the location of its customers rather then the customers home/provided address. Thus, under the Settlement Program’s analysis, all of Claimant’s customers were considered local, making the Customer Mix Test impossible to satisfy.
Policy 345 provides in pertinent part:
“(b) Property Owners/Commercial Tenants: If a claimant with a BEL or Start-Up BEL claim is the
 owner of a commercial property such as a shopping mall, the location of claimant’s customers shall be
 considered to be the location of the lease space in the shopping mall rather then the physical location
 of the headquarters of each retailer.”
BP argues that policy 345 applies because Claimant leases property for use by its customers in the same manner as a commercial lessor. Claimant and this panelist disagree with the Settlement Program and BP’s position. It is the use of the property leased that distinguishes Claimant’s business from, for example, shopping malls and commercial buildings owners who lease to other businesses which are properly subject to Policy 345. Shopping malls and commercial lessees run their own businesses on the premises, and thus are assigned the same address as the office building or shopping mall. Claimant’s customers are people and businesses located all over and do not generate their own revenues on Claimant’s property. In other words, shopping malls and commercial property owners are in the business of leasing commercial spaces to tenants who operate their businesses at the leased premises. Claimant’s customers do not operate businesses on the premises.
Accordingly, the denial is overturned and the Settlement Program is instructed to analyses this claim in accordance with this decision.

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