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BP Business Economic Loss Claim Appeal 2016-1853:Row Crop Farmer’s Revenue and Expenses Properly Examined By SP

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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.

BP appeals the BEL award to claimant, a row crop farmer in Bonita, Louisiana. BP asserts the Settlement Program(SP) failed to analyze adequately the timing of claimant’s 2010 Custom Hire/Work revenue; and whether claimant’s 2010 “supplies and parts”expense (a fixed expense) was imbedded in claimant’s “repairs and
maintenance” expense (a 50% variable expense). Claimant responds the SP inquired into these issues and that the record provides ample justification for the decision reached by the SP.
A review of the record discloses that he Calculation Notes, paragraph 12, styled “Revenue-Custom Work/Hire”, contains this entry:”Within the farming industry,it is not uncommon for farmers to provide labor assistance to other farmers.  Although the provided assistance (and corresponding revenues) are not consistent month over month or even year over year, the revenue is considered part of the normal course of business within the industry.***.”
Claimant explained most of such revenues were attributed to November and December because 2010 was a dry year and claimant did not harvest his crop until October, after which he performed custom work for neighbors in November and December. The final contention of BP surmises that since claimant recorded a “supply” expense in years prior to 2010 but recorded none in 2010, claimant imbedded this expense in its “repairs and maintenance” expense and thus caused the award to be inflated.  Apart from the conjectural nature of this argument,the record discloses that the claimant did not claim a “supply” expense on his 2010 federal tax return, consistent with the challenged P&Ls for 2010.
Assuming arguendo the contention of BP is correct, this panelist does not find it persuasive in this baseball appeal process. BP asserts correcting the award would reduce it by $37,427, yet in its final proposal, BP suggests zero dollars.Claimant’s final proposal of $142,324.85 is the more persuasive one. Accordingly, the decision of the Claims Administrator is affirmed, the final proposal of claimant is selected and the appeal of BP is denied.

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