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BP Business Economic Loss Claim Appeal 2017-444:National Plumbing Construction Company Does Not Operate Out-of-Zone “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

Claimant is a plumbing construction company in Dade City, Florida and received a BEL award of $818,418.78 pre-RTP. BP appeals, alleging that Claimant earned revenue from out-of-zone construction projects at which it used trailers as sites to oversee the work. Appellant alleges these out- of- zone locations constitute Facilities under the Settlement Agreement and, therefore, revenues from these projects should have been excluded from the calculations. BP points to the fact that the company performed work in multiple states which were out of zone and asserts that oversees work at all these sites. As further support for the proposition that Claimant was working and operating at numerous sites around the country.  BP references evidence the company pays substantial lodging expense for its workers in different regions.
There is no question that Claimant in this case performs work all over the country. The question is whether the company has out of zone “Facilities” which would require the exclusion of revenue from these out of zone sites. The Settlement Agreement defines a Facility as a separate and distinct location of a Multi-Facility Business at which it performs or manages its operation. See Exhibit 5. Additionally, the District Court has addressed the issue of whether an on-site trailer at a construction site should be considered a Facility.
Judge Barbier held “An on-site trailer from which a construction company manages a particular construction project is considered a Separate Facility in accord with Claim Administrator’s Policy 467″. This guidance from the Court is consistent with the pertinent language in the Settlement Agreement and Policy 467 and requires a determination of whether Claimant was managing the off-site construction projects from the out-of-zone trailers. Unfortunately, there is not an abundance of evidence in the file that resolves this issue. However, the only submission on point indicates that did not manage the projects from these trailers. There is no identifiable revenue from any of the additional locations in Claimant’s financial documents. Additionally, Claimant’s CEO submitted a statement under oath asserting that no management of any of the jobs was done at the trailers and the trailers were kept on-site only “to keep permit documentation for inspectors to sign off and worker’s compensation materials”.
These circumstances present somewhat of a conundrum . More objective evidence establishing that no project management is done at the trailer sites would be reassuring. However, Claimant’s CEO has made a statement under oath and BP has only presented conjecture that is overseeing and managing the construction from the trailers. In another case dealing with the same issue, the Claimant produced pictures of the trailers confirming they were used merely to store paperwork. Beyond this example, it is hard to envision different pieces of objective evidence that could effectively prove the negative. In the face of a sworn statement from the company’s CEO and only conjecture from BP, there is a finding that the out-of -zone trailers in this case do not constitute Facilities. The fact that company employees worked and stayed at various locations around the country and Claimant performed work at these sites does not, in itself, evidence out-of-zone Facilities in the absence of evidence of operational activities at these sites.
Accordingly, BP’s appeal is dismissed and the award in favor of the Claimant is affirmed.

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