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BP Claim Discretionary Review of Appeal 2016-1069: Non-Recurring Land Sale Which Were Assets of Claimant Properly Excluded Under Policies 328, 373 and Exhibit 4B

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The following is a Discretionary Review Order issued by Judge Barbier pursuant to the Rules Governing Discretionary Court Review of Appeal Determinations. Judge Barbier’s rulings are binding on the Claims Administrator and the Appeal Panelists. 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


XXX filed this Business Economic Loss claim under the Settlement Agreement. The Settlement Program denied the claim because Claimant failed the various causation tests articulated in Exhibit 4B of the Settlement Agreement. appeals. I affirm the denial of the claim.
The appellate issue presented is whether the Settlement Program’s exclusion of “land sales” from revenue was proper. If the land sales are revenue, then Claimant passes the causation test in Exhibit 4B. Policy 328v2 provides guidance, as does Policy 373v2. In determining whether revenue is included in the claim analysis, Policy 373v2 states that “recurring revenue streams are included if they are within the normal course of operations.” Policy 328v2 complements Policy 373v2. It holds that revenue is excluded if it is not typically earned as revenue under the course of operations. Therefore, the decision in this case rests on a determination of whether the land sales are a recurring revenue stream.
XXX is in the real estate and forestry industry. The land purchased by XXX was used for ***. . It has sold some adjoining land in 2006, 2008, 2011, and 2012 per the Transactions Details by Account “Land Sales.” See Claimant’s Opening Memorandum at Exhibit D. The sales are thus more than BP represents but arguable in terms of whether they are recurring as a part of normal business operations.
Claimant argues that a recent Appeals Panel decision controls. In that case, the claimant sold off old, fully depreciated school buses every year. The sales were recurring on an annual basis. The process for determining how many buses to sell was based on inventory considerations, a classic part of normal business operations.
Here, we do not have yearly sales. In addition, the essence of Claimant’s business was YYY. . Thus, the sale of land would reduce returns. This highlights the non-recurring nature of the land sales. Further, Policy 328v2 states that “gains or losses from the sale of assets” should not typically be treated as revenue for the various calculations performed by the Claims Administrator. As the sale of land is the sale of assets, I hold the Settlement Program correctly excluded the revenue for Exhibit 4B calculations. Therefore, the Settlement Program correctly denied the claim.
[Editor’s Note: This Order affirms the holding of the appeal panelist in Appeal 2016-1069—Not Reported On Previously in TLE.

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