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BP Business Economic Loss Claim Appeal 2017-362: Electrical Contractor’s Out-of-Zone Trailers Not “Facilities” Under Policy 467


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 a BEL award of $888,989.26 to an electrical contractor in Fort Myers, Florida, (Zone D). Policy 495 criteria were triggered and the Construction Methodology was used to facilitate matching. BP voices no opposition to the applied methodology but instead, argues that the program accountant failed to address out-of-zone revenue from construction trailer facilities that it alleges the Claimant likely operated. BP faults the Settlement Program for not investigating Claimant’s out-of-zone projects which, according to BP, surely included revenue that should have been excluded.
The essence of BP’s argument is based on Policy 467 which addresses construction site trailers. When such trailers are used as a permanent office for the duration of a project, Policy 467 instructs that they are to be considered a Facility if the claimant owns, operates or leases the trailer and performs or manages its operations there. BP bootstraps its position by reference to Claimant’s financials which include invoices for out-of-zone projects. Without supporting evidence, BP contends that Claimant must have operated its out-of-zone projects from trailers at these locations. BP therefore seeks remand accompanied by a Final Proposal of $0.
In response, Claimant acknowledges that temporary trailers were used on some out-of-zone jobs. Claimant argues that these were used solely for storage of wiring, light fixtures and materials utilized on the projects. In addition to the temporary nature of the trailers, Claimant adds that all of its projects were managed and controlled from the company’s headquarters in Fort Myers, Florida. Claimant therefore argues that BP’s appeal is based on speculation since the temporary trailers lacked air conditioning, offices or other amenities for human occupation.
Under Policy 467, a construction site trailer does not qualify as a Facility that generates separate revenue unless it is used by the entity to perform or manage its operations. Operations are performed at a location if, in the normal course of an entity’s business, it has employees who perform their work there and/or it provides services or products at the location. An entity manages its operations at a location if it has employees or agents present on a full or part-time basis who are
responsible for the management, supervision or direction of the operations of the entity. With these criteria in mind, this panelist is unpersuaded that the construction site trailers used by the Claimant are not Facilities.
With its memorandum brief, Claimant uploaded photographs of the exterior and interior of representative trailers of the type used on its projects. These structures resemble shipping containers that lack electrical lighting or other amenities associated with performing or managing an entity’s operations. The trailers are filled with shelves stacked with materials and supplies.  Claimant also submitted an affidavit from its Vice-President attesting that the trailers are temporary
in nature and used solely to house supplies.
This panelist is aware that the District Court previously issued a discretionary review decision in No. 2015-1851 that addressed on-site construction trailers. That decision held that “[A]n on-site trailer from which a construction company manages a particular construction project is considered a separate Facility in accord with Claims Administrator’s Policy 467.” In No. 2015-1851, the District Court reversed the appeal panel, finding sufficient evidence that the contractor performed or managed its operations at on-site-trailers. In contrast, there is no evidence that this Claimant’s use of its temporary trailers involved the performance or management of its operations at the out-of-zone locations.
De novo review persuades this panelist that the trailers utilized by the Claimant cannot be considered a separate Facility. For the foregoing reasons, BP’s appeal is denied and Claimant’s Final Proposal is selected.

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