The Claims Administrator for the BP Deepwater Horizon Court Supervised Settlement Program (Program) denied a Business Economic Loss (BEL) claim filed by a home builder. The Program determined that the home builder claimant was a real estate developer and thus was excluded under Section 22.214.171.124 of the Settlement Agreement. The claimant filed a Notice of Appeal on the grounds that it was not an excluded developer.
Unlike other industries excluded from filing claims under the terms of the Settlement Agreement, the real estate developer exclusion is not further defined in the Agreement nor any of its exhibits. In fact, until the recent promulgation of Policy 299 by the Claims Administrator, it was nearly impossible to determine whether a claiming entity involved in real estate or construction was in fact a “developer” for purposes of filing a claim.
Policy 299 generally defines a developer as an entity which purchases large tracts of raw land, then engages in horizontal development activities with the goal of selling the further developed dirt to a builder. The confusion arises when an entity performs both development and construction tasks. Should such a claimant be considered an excluded developer or an included construction company?
Policy 299 provides the following safe harbor for construction companies:
” … an Entity engaged in construction that also acquires land for the purposes of erecting residential dwellings for sale on a dwelling by dwelling basis, rather than as part of a subdivision or other development by the Entity, will not be considered to be an Excluded Real Estate Developer.”
To-date the Claims Administrator has issued over 500 policies which attempt to interpret the intent of the parties and the often vague language of the Settlement Agreement. Policies which the parties (BP and Class Counsel) agree to or that are approved by the Court are binding upon the Appeal Panelists. Otherwise such policies are instructive but not binding.
The Appeal Panelist in appeal 2014-285 determined that the Claims Administrator had erred in excluding the claimant. In light of the evidence provided by the claimant, the panelist determined that it was a construction company and not an excluded developer.