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BP Business Economic Loss Claim Appeal 2017-371: Lack of Income Not Fatal to Real Estate Agent Start-Up Claim

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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, a licensed real estate agent in the Destin, Fl (Zone A) area, appeals the denial of his Start-up BEL claim, the Program finding on three occasions that he had not established a sufficient operating history as of April 20, 2010 so as to merit an award, as required by the Settlement Agreement and as interpreted by Policy 362v2.

BP, in support of this finding, notes that Claimant reported no income from real estate operations until November of 2010 and that while he may have been involved in preparations for operating prior to April 20, 2010, he failed to provide evidence truly indicative of actual start-up operations as of April 20. This would include client contact records such as phone logs or email chains indicating his pursuit of real estate sales.

In reply, Claimant notes that he expended much effort in the months preceding April 20, 2010 in studying for and passing the real estate licensing exam (which resulted in his licensure in March of 2010). He further notes that he was affiliated starting in March of 2010 with a local real estate agency which provided for him and all its affiliated agents an office, advertising, client leads, and the like. Claimant was unable to produce documentary evidence of email transactions or phone logs because he left that agency in April of 2011, and said documentation was retained by the agency as proprietary information. Claimant does now attach a letter from that agency confirming his operating there as of March of 2010, and does provide some evidence of expenditures such as real estate association dues paid in March of 2010.

This is a very close and fact-based decision. Initially, it should be noted that, as stated in many prior decisions of this panel, the fact that Claimant reports no income as of April 20, 2010 is not controlling as to the issue of his being in operation as of that date. Particularly in as competitive a field as real estate sales, the lag time between opening a business and producing revenue can be a relatively extended one. This must have been particularly challenging in a known vacation area such as the present one in the days and months following the subject Spill. In the opinion of this panelist, to have BP argue that Claimant was not in operation as of the time of the Spill because it showed no income until November of that year is tantamount to the proverbial child who kills his parents and seeks the court’s mercy because of his status as an orphan. This panelist finds after a de novo review that Claimant under these facts has established that he was a victim of horrible timing in joining the real estate sales profession in the weeks before the Spill. The fact that relatively little documentation can be produced of his operation is, in the opinion of this panelist, a function of his operating out of an agency which largely provided him with the accoutrements of operation in-house. The agency’s recent letter, now a part of that record , and the specific facts of his pre-Spill experience, have persuaded this panelist, in the “claimant-friendly” spirit of the Agreement, to find that he was in fact operating as a full-fledged real estate agent as of April 20, 2010. As such, the Program’s findings must be reversed.

 

 

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