CLAIM SUMMARY/DETERMINATION FORM

Claim Number N10036-1496

Claimant Edward F. Cochran

Type of Claimant Private (US)

Type of Claim Loss of Profits and Impairment of Earnings Capacity

Amount Requested $17,945.00

FACTS 

On or about 20 April 2010, the Mobile Offshore Drilling Unit Deepwater Horizon 

(Deepwater Horizon) exploded and sank in the Gulf of Mexico. As a result of the 

explosion and sinking, oil was discharged. The Coast Guard designated the source of the 

discharge and identified BP as a responsible party (RP). BP accepted the designation and 

advertised its OPA claims process. On 23 August 2010, the Gulf Coast Claims Facility 

(GCCF) began accepting and adjudicating claims for certain individual and business 

claims on behalf of BP.

CLAIM AND CLAIMANT

On 11 October 2011, Edward F. Cochran (the Claimant) presented a claim to the Oil Spill 

Liability Trust Fund (OSLTF) for $17,945.00 for loss of profits and impairment of 

earnings capacity resulting from the Deepwater Horizon oil spill. 

The Claimant is a salesperson for Safeguard Alarms Systems, Inc. His sales territory 

includes Terrebone, Lafouche and Saint Mary parishes in Louisiana. He sells burglar 

alarms, fire alarms, CCTV systems and access control systems.1

 As a result he asserts his 

earnings began to show a decline starting in January 2011 due to the oil spill.2

APPLICABLE LAW 

Under the Oil Pollution Act of 1990 (OPA), at 33 U.S.C. § 2702(a), responsible parties 

are liable for removal costs and damages resulting from the discharge of oil into or upon 

the navigable waters or adjoining shorelines or the exclusive economic zone, as described 

in Section 2702(b) of OPA. 

The OSLTF which is administered by the NPFC, is available, pursuant to 33 U.S.C. § 

2712(a)(4) and § 2713 and the OSLTF claims adjudication regulations at 33 C.F.R. Part 

136, to pay claims for uncompensated damages. One type of damages available pursuant 

to 33 C.F.R. § 136.231 is a claim for loss of profits or impairment of earning capacity due 

to injury to or destruction of natural resources.

Under 33 C.F.R. § 136.233 a claimant must establish the following:

1 Letter from Safeguard Alarm Systems, Inc. dated 31 August 2011 and 27 September 2011 signed by Rick 

Morales, President, concerning Claimant’s employment 2 Letter from Claimant dated 30 October 2011 in response to NPFC letter requesting additional information

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(a) That real or personal property or natural resources have been injured, destroyed, 

or lost.

(b) That the claimant’s income was reduced as a consequence of injury to, destruction 

of, or loss of property or natural resources, and the amount of that reduction.

(c) The amount of the claimant’s profits or earnings in comparable periods and 

during the period when the claimed loss or impairment was suffered, as 

established by income tax returns, financial statements, and similar documents. In 

addition, comparative figures for profits or earnings for the same or similar 

activities outside of the area affected by the incident also must be established.

(d) Whether alternative employment or business was available and undertaken and, if 

so, the amount of income received. All income that a claimant received as a 

result of the incident must be clearly indicated and any saved overhead and other 

normal expenses not incurred as a result of the incident must be established. 

Under 33 C.F.R. § 136.105(a) and § 136.105(e)(6), the claimant bears the burden of 

providing to the NPFC, all evidence, information, and documentation deemed necessary 

by the Director, NPFC, to support the claim. 

Under 33 C.F.R. § 136.235, the amount of compensation allowable for a claim involving 

loss of profits or impairment of earning capacity is limited to the actual net reduction or 

loss of earnings or profits suffered. Calculations for net reductions or losses must clearly 

reflect adjustments for—

(a) All income resulting from the incident;

(b) All income from alternative employment or business undertaken;

(c) Potential income from alternative employment or business not undertake, but 

reasonably available;

(d) Any saved overhead or normal expenses not incurred as a result of the incident; 

and

(e) State, local, and Federal taxes.

DETERMINATION OF LOSS 

Claimant’s Submission to the OSLTF

To support this claim, Claimant submitted the following documentation:

• OSLTF Claim Form signed by the Claimant 26 September 2011

• Letter from Safeguard Alarm Systems, Inc. dated 31 August 2011 and 27 

September 2011 signed by Rick Morales, President, concerning Claimant’s 

employment

• GCCF Denial Letter on Interim Payment/Final Payment Claim dated 21 

September 2011

• Worksheets prepared by Claimant showing 2009, 2010 and 2011 Income by 

Month

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• Yearly Earnings from 01 January to 31 December 2010 and 2011 from Safeguard 

Alarm Systems Inc.

• W-2 from Safeguard Alarms Systems for 2008, 2009 and 2010

• Form 1040 US Individual Income Tax Return for 2008, 2009 and 2010

• Letter from Claimant dated 30 October 2011 in response to NPFC letter 

requesting additional information

• Copies of Safeguard Alarm Systems Sales Agreements from April 2010 to August 

2011 that total $266,143.00

On 19 October 2011, the NPFC sent the Claimant a letter requesting additional 

information in order to further evaluate the claim. On 31 October 2011, the Claimant 

responded to the request.

Before presenting the claim to the NPFC, the Claimant filed an Interim Payment Claim 

(ICQ22011) with the GCCF.3 The claim was assigned Claimant ID #1621758 and claim 

#9353267. The Interim claim was denied on 30 April 2011 and 03 August 2011.

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Additionally, the Claimant filed a Re-Review of the claim with the GCCF. The ReReview was denied on 21 September 2011.

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Based upon the evidence provided by the Claimant, it appears that the subject matter of 

the GCCF claims are the same as the subject matter of the claim before the NPFC, i.e., 

Claimant lost earnings as a result of the Deepwater Horizon oil spill. The NPFC has not 

been able to confirm the amount of the Interim claim as of the date of this determination. 

The NPFC deems the GCCF claims to be properly presented to the Responsible Party. 

To the extent the amount of the claims presented to the Responsible Party are equal to or 

greater than the amount currently presented to the NPFC, the subject claim is properly 

presented to the NPFC. Accordingly, this Claim Summary Determination for NPFC 

Claim N10036-1496 considers and addresses the loss of earnings up to the amount of 

$17,945.00 for all claims presented to the Responsible Party, specifically: GCCF Claim 

#9353267 ICQ22011.

NPFC Determination

Under 33 U.S.C. § 2702(b)(2)(E) and 33 C.F.R. Part 136, a claimant must prove that any 

loss of income was due to injury or destruction or loss of real or personal property or a 

natural resource as a result of a discharge or substantial threat of a discharge of oil. 

Under 33 C.F.R. § 136.105(a) and § 136.105(e)(6), the claimant bears the burden of 

providing to the NPFC all evidence, information, and documentation deemed necessary 

by the Director, NPFC, to support the claim. 

3 GCC On-Line Claim Status Report 4 GCCF Denial Letters dated 30 April 2011 and 03 August 2011

5 GCCF Denial Letter dated 21 September 2011

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The Claimant did not provide convincing documentation that supports his alleged loss of 

earnings of $17,945.00. The Claimant prepared worksheets comparing his monthly 

commissions for 17 months for April 2010 through August 2011.6

 The worksheets were

based on his pay checks from a Safeguard Alarm Systems Yearly Earnings Report.7

 It 

takes about 1 to 2 months after an order is placed to install a system in existing 

structures.8 Yet the worksheet shows only a $589.00 loss of earnings in 2010 following

the oil spill.

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The Claimant provided documentation that did not show the Deepwater Horizon oil spill 

caused his loss of earnings. The Claimant submitted 55 copies of Safeguard Alarm 

System Sales Agreements for 28 April 2010 to 04 August 2011 that totaled 

$266,143.00.10 Of these, 14 were dated in 2010 and 41 were dated in 2011.11 The NPFC 

Adjuster attempted to contact 16 of the buyers to corroborate the claim. Of these, 14 

buyers responded and 2 did not. Of the 14 that responded, 13 stated that their decisions

to not use Safeguard Alarm Systems were not due to the Deepwater Horizon oil spill.12

This claim is denied because the Claimant failed to meet the burden to demonstrate (1) 

that there was an alleged loss in the amount claimed, and (2) that the alleged loss is due 

to the injury, destruction or loss of property or natural resources as a result of a discharge 

or substantial threat of a discharge of oil.

Claim Supervisor: Claims Adjudication Division

Date of Supervisor’s Review: 21 November 2011

Supervisor’s Action: Denial approved

Supervisor’s Comments:

6 Worksheets prepared by Claimant showing 2009, 2010 and 2011 Income by Month 7 Yearly Earnings from 01 January to 31 December 2010 and 2011 from Safeguard Alarm Systems Inc.

8 Based on conversation between Rick Morales, President of Safeguard Alarms Systems, and the NPFC 

Claims Adjuster 17 November 2011. Mr. Morales stated new building construction generally takes up to 

12 months to installation and existing facilities takes up to 1 to 2 months. 

9 Worksheets prepared by Claimant showing 2009, 2010 and 2011 Income by Month 10 Copies of Safeguard Alarm Systems Sales Agreements from April 2010 to August 2011 that total 

$266,143.00

11 Based on a count by the NPFC Claims Adjuster 12 Telephone conversations between 14 potential customers and NPFC staff 16 and 17 November 2011. 

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