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BP Business Economic Loss Claim Appeal 2017-640:Contractor Not a “Real Estate Developer” As BP Argues

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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

The three-member Appeal Panel assigned this appeal claim unanimously finds and holds as follows: BP appeals the $1,361,468.72 pre-RTP Bel award to Montgomery, Alabama-based contractor arguing as its sole ground that the Settlement Program did not adequately analyze status as an excluded Real Estate Developer(“RED”).
BP cites to two sets of circumstance in support of its position that “the record demonstrates that Claimant engaged in significant real estate development activities before, during, and after the relevant 2007 – 2010 time frame.” First, BP references in its Initial Proposal the statement from website that BP then offers as Exhibit 4 the records of the that show that on December 19, 2006, plat for developing a 20-lot single-family residential subdivision in was approved. Next, BP presents as Exhibit 5 documents showing that owned 12 lots in up through 2008 to 2015; and presents as Exhibit 6 documents showing that still owns 13 lots in that subdivision.
One problem with those submissions is that the approved lots in “Plat 3” of , whereas all of the lots in Exhibits 5 and 6 are in “Plat 2.” It is well known that large subdivisions are developed in stages or sections, and the 25 lots covered by BP’s two exhibits clearly aren’t the same as the 20 lots approved in December 2006.
As points out in its Final Proposal, Section II.F.2 of Policy 468 says that “In deciding whether an Entity was a construction contractor or builder, or an excluded Real Estate Developer, the Claims Administrator will consider whether the Entity engaged in 2010 in any or all of the following activities that may indicate Real Estate
Development Activity:” followed by three types of activity, none of which is shown to have done in 2010. It apparently sold some undeveloped lots in “Plat 2” in 2010, and held others in its portfolio, but that isn’t one of the listed activities. is primarily a “Highway, Street and Bridge Construction” company, as the NAICS it used on its 2010 tax return and the Settlement Program assigned it, confirm.
Moreover, its website’s description of its various capacities and projects clearly shows that its emphasis is on large-scale excavation projects; site developments for
and shopping centers; railroad, airport and mining construction projects; and road and bridge work, including numerous interstate roadway projects. 2010 P&Ls and tax returns reflect nothing facially attributable to RED. There otherwise are no permits or licenses issued to in 2010, or any other of the 2010 “criteria” for assessing a claimant’s engagement in RED activity that year, as listed in Section II.C.1-5 of Policy 468, that might signal 2010 involvement in RED “Activity.”
BP’s second cited circumstantial evidence of 2010 RED Activity involves its participation as a limited, minority partner in. This issue is easily disposed of because there is no evidence that had any role in the “development” of the, which is apparently that LLC’s sole asset. The LLC was created back in 2003 to “acquire/own/operate/manage real property” a building that was built in 1989. (BP refers to the LLC in its Initial Proposal as conveniently dropping the word “XXX”) BP’s limited showing as to this purported RED involvement, falls short of the mark.
BP requests in its Final Proposal that the award be vacated, and offers a Final Proposal amount of “$0.” It also states “Should the Appeal Panel have additional questions regarding Claimant’s status as an excluded Real Estate Developer, BP respectfully suggests that remand would be appropriate to address that issue.” The Panel has no additional questions and, under the controlling Baseball Process, is obliged to adopt Final Proposal, in the amount of the Settlement Program’s award, over the zero proposal of BP. Appeal denied.

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