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BP Business Economic Loss Claim Appeal 2017-1034:SP Erred in Treating Co-Located Laundromat and RV Park As One Entity

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 and his spouse own an RV park in Pearlington, Mississippi. Claimant also owns a coin-operated laundromat located on the premises of the RV park. Claimant filed a BEL claim for the park and a separate BEL claim for the laundromat. The Settlement Program determined that the laundromat and the RV park constituted one single facility. The Settlement Program closed the claim for the laundromat as a duplicate and proceeded to evaluate the claim with the combined financials of the park and the laundromat. Eventually, the Settlement Program issued an Eligibility Notice with a negative compensation amount. Claimant appeals.
It is noted that the record reflects that Claimant vigorously objected to the consolidation of the two claims at the time they were consolidated. However, there is no method for Claimant to appeal the consolidation until either an Eligibility Notice or a Denial Notice are issued by the Settlement Program.
The issue on appeal is Settlement Program’s determination that the laundromat and the park are a single facility. The panelist directed a Request for Summary of Review on this issue. In due course the Settlement Program responded as follows:
“The Claimant owns both the RV park and the laundromat located within the RV park. The Claimant reports income for the
laundromat on a Schedule C (Doc. p. 4) and income from the RV park on a Schedule E (Doc.p. 8), but both are under his Social
Security Number. Although the Claimant does maintain separate financials for these activities, the Settlement Program
considered these to be one Facility because the laundromat is located on the premises of the RV park and ispart of the RV
park’s integrated operation. The Settlement Program determined that this situation is analogous to an Automobile Dealership
with several integrated departments located on the same parcel of real property, discussed in SectionV.L. of Policy 467 and
there determined to be one Facility.”
The Settlement Program seems to base its decision on the tax returns and the location of the laundromat and the park on the same parcel of property and language of Policy 467. The record reflects that Claimant’s spouse began operating the park as a mobile home park in 1978. Thereafter, the couple married. In 1990 Claimant opened the laundromat as a sole proprietorship. From the get-go, the two entities maintained separate financials and bank accounts. Claimant maintained two separate addresses for the entities. The laundromat is open to the public and not restricted to guests utilizing the park. In fact, Claimant points out that the laundry facility was used by non-resident crabbers, shrimpers and fishermen. The fact that the two business are located on the same piece of property does not necessarily mean that they must be considered as one entity for purpose of the Settlement Agreement.
The Settlement Programs’ reliance of Policy 467 Section V.L. is questionable. An automobile dealership must have a sales department, a finance department and a service department. An RV park does not have to have a laundromat and a laundromat does not have to have an RV park. Both can be stand-alone businesses.
On the tax return issue, Claimant responds:
“In response, the RV park business operations maintain aseparate bank account and the income and expense are reported
on the Schedule E as they always have been. When decided to build the Laundromat, it was always his intention that this was
a separate business operation from the already existing business of the RV park. This business was an entity he was doing separately
as his daily working income, hence making it a sole proprietorship for which he correctly reported on a Schedule C and paid
self-employment taxes in on the profits from this business operating annually. The RV park has a Federal Employer ID # issued
to it of that has been for processing payroll; it is not visually shown on the Sch. E of the taxreturn only due to that form schedule not
having a separate line to list and EIN number.”
After de novo review of the record in this matter, the panel finds that the Settlement Program erred in forcing the consolidation of these separate claims. Each should be evaluated separately and on their own merit. Accordingly, the matter is remanded to the Claims Administrator to evaluate the claims as separate facilities.

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