CERTIFIED MAIL – RETURN RECEIPT REQUESTED 5890/DWHZ 

Number: 7012 2210 0001 7214 9678 3 July 2013 

 

Gregory Smith

. 

Re: Claim Number: N10036-1936 

Dear Mr. Smith, 

The National Pollution Funds Center (NPFC), in accordance with the Oil Pollution Act of 1990, 33 

U.S.C. § 2701 et seq. (OPA) and the associated regulations at 33 C.F.R. Part 136, denies payment on the 

claim number N10036-1936 involving the Deepwater Horizon oil spill. Please see the attached Claim 

Summary/Determination Form for further explanation. 

You may make a written request for reconsideration of this claim. The reconsideration must be received 

by the NPFC within 60 days of the date of this letter and must include the factual or legal basis of the 

request for reconsideration, providing any additional support for the claim. However, if you find that you 

will be unable to gather particular information within the time period, you may include a request for an 

extension of time for a specified duration with your reconsideration request. 

Reconsideration of the denial will be based upon the information provided. A claim may be reconsidered 

only once. Disposition of that reconsideration in writing will constitute final agency action. Failure of 

the NPFC to issue a written decision within 90 days after receipt of a timely request for reconsideration 

shall, at the option of the claimant, be deemed final agency action. All correspondence should include 

claim number N10036-1936. 

Mail reconsideration requests to:

Director (ca)

NPFC CA MS 7100

US COAST GUARD

4200 Wilson Blvd, Suite 1000 

Arlington, VA 20598-7100 

Sincerely,

Claims Adjudication Division

National Pollution Funds Center 

U.S. Coast Guard 

Enclosure: Claim Summary/Determination

cc: 

 No. 7012 2210 0001 7214 9661

 

U.S. Department of 

Homeland Security

United States

Coast Guard

Director

National Pollution Funds Center

United States Coast Guard

NPFC CA MS 7100

US COAST GUARD

4200 Wilson Blvd. Suite 1000

Arlington, VA 20598-7100

Staff Symbol: (CA)

Phone: 800-280-7118

E-mail: arl-pf-npfcclaimsinfo@uscg.mil

Fax: 703-872-6113
CLAIM SUMMARY/DETERMINATION FORM

Claim Number N10036-1936

Claimant Gregory Smith

Type of Claimant Private (US)

Type of Claim Loss of Profits or Impairment of Earning Capacity

Amount Requested $82,000.00

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 

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 

certain individual and business claims on behalf of BP.

On 08 March 2012, the United States District Court, Eastern District of Louisiana issued a 

"Transition Order" (TO) limiting the GCCF's ability to accept, process, or pay claims except as 

provided in that order. The TO created a Transition Process (TP) to facilitate the transition of the 

claims process from the GCCF to a proposed Court Supervised Settlement Program (CSSP). The 

Court granted Preliminary Approval of the proposed settlement agreement on 02 May 2012, and 

the CSSP began processing claims on 04 June 2012.

CLAIM AND CLAIMANT

On 16 May 2013, Mr. J. Knox Boteler III, legal representative of Mr. Gregory Smith, 

(collectively, “the Claimant”) submitted a claim to the Oil Spill Liability Trust Fund (OSLTF) 

for $82,000.00 in loss of profits or impairment of earning capacity damages allegedly resulting 

from the Deepwater Horizon oil spill.

1

 

At the time of the oil spill, the Claimant was attempting to sell a property in Mobile, Alabama. 

On 19 April 2010, the buyer and seller signed an agreement indicating that the property sale 

would be finalized at a price of $951,000.00 on a date between 15 May 2010 and 30 June 2010 if 

certain contingencies were met. However, the sale was not finalized and the property is still on 

the market as of the date this claim was submitted to the NPFC. The Claimant alleged that “as a 

result of the spill, the buyer was released from the contract.”2 The Claimant has relisted the 

home at $869.000, but has been unable to sell it.

3

The Claimant seeks to recover $82,000.00 allegedly lost due to the cancelled sales contract. This 

amount is the difference between the initial un-executed sales contract and asking price of the 

home at the time this claim was submitted to the Responsible Party.

APPLICABLE LAW 

1 Optional OSLTF Claim Form, signed on 6 May 2013. 2 Optional OSLTF Claim Form, signed on 6 May 2013. 3 It appears as though the Claimant listed the home at 869,000.00 from approximately March of 2010 until May of 

2013, when the price was reduced to $789,899.00. See, home value/sales data, available at, 

http://www.zillow.com/homedetails/5870-Riverchase-Dr-N-Mobile-AL-36619/51045759_zpid/, accessed on 2 July 

2013.

 
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 

water, adjoining shorelines, or the exclusive economic zone of the United States, as described in 

§ 2702(b) of OPA. 

The OSLTF is available to pay claims for uncompensated damages pursuant to 33 U.S.C. § 

2712(a)(4) and § 2713 and the OSLTF claims adjudication regulations at 33 C.F.R. Part 136. 

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:

(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; and

(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 undertaken, 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.

Under 33 U.S.C. § 2712(f), payment of any claim or obligation by the Fund under OPA shall be 

subject to the United States Government acquiring, by subrogation, all rights of the claimant or 

State to recover from the responsible party.

DETERMINATION OF LOSS 

Claimant’s Submission to the NPFC

The Claimant submitted the following documentation in support of this claim:

− Claim cover letter/representation letter, 8 May 2013;
− Denial letter, BP Claims Program, 17 April 2013;

− Optional OSLTF Claim Form, signed on 6 May 2013;

− List of supporting documents;

− BP Claims Program – Claim Form for Individuals and Businesses;

− BP Claims Program Attorney Consent Form;

− Certified mail receipt/letter indicating intent to be excluded from the E&PD Settlement 

Class, 31 October 2012;

− Warranty Deed, 16 August 2001;

− Photographs of subject property;

− Map showing location of the property;

− Purchase agreement, signed 19 April 2010;

− Purchase Agreement addendum #1, signed on 19 April 2010;

− Seller’s disclosure statement, 22 March 2010;

− Reserved Items by Seller on 5870 Riverchase Drive North, 19 April 2010;

− Record of Payment for “Riverchase,” 4/18/2010;

− Purchase Agreement Addendum #2, Right of First Refusal.

On 15 January 2013, the Claimant presented these alleged losses to the Responsible Party 

through the BP Claims Program.

4

 The BP Claims Program denied payment on the claim in a 

letter dated 17 April 2013.

On 16 May 2013, the Claimant presented this claim to the NPFC, seeking $82,000.00 in loss of 

profit and impairment of earning capacity damages.5 Because it appears as though this claim 

was first presented to and denied by the Responsible Party, OPA presentment requirements have 

been satisfied.

6

Furthermore, evidence in this claim submission indicates that the Claimant has opted out of the 

Deepwater Horizon Economic and Property Damage Class Action Settlement (E&PD 

Settlement).

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, destruction or loss of real or personal property or of 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 all evidence, information, and 

documentation deemed necessary by the Director, NPFC, to support the claim.

For the reasons explained below, this claim is not compensable under OPA. 

1. The claim is currently the subject of an action in court by the Claimant to recover the 

same damages as now before the NPFC.

In accordance with OPA’s implementing regulations, the NPFC may not make payment on a 

claim “during the pendency of an action by the person in court to recover costs which are the 

subject of the claim.”7 The Claimant has indicated that a Complaint has been filed in the District 

Court for the Eastern District of Louisiana, in which the Claimant is attempting to recover the 

4 BP Claim Form, Individuals and Businesses.

5 Optional OSLTF Claim Form, signed on 6 May 2013 6 33 C.F.R. § 136.103(c)(2).

7 33 C.F.R. § 136.103(d).

 
same damages as now before the NPFC.8

 As such, the NPFC would be precluded from making a 

payment on this claim. 

2. The Claimant has not experienced a loss or reduction in income.

In order to prove a claim for loss of profits or impairment of earning capacity damages, a 

claimant must provide evidence sufficient to prove that (1) the Claimant sustained an 

uncompensated loss or reduction in income and (2) that the financial loss was caused by damage 

to real property or natural resources resulting from the discharge of oil caused by the Deepwater 

Horizon oil spill.

The Claimant has alleged that he was unable to close on a property sale because of the effects of 

the Deepwater Horizon oil spill. The property, which is not located on the water, was not 

actually damaged by the oil spill.

The Claimant indicated that a potential buyer signed a sales agreement on 19 April 2010, but that 

the sale did not proceed to closing “as a result of the spill.”9 The Claimant has not resold the 

home, but asserts that it is listed for sale at approximately $82,000.00 less than the price agreed 

upon by the potential buyer who the Claimant released from the contract. 

In order to prove that a claimant has experienced loss of profit or impairment of earning capacity

damages, a claimant must prove, at least, “that the claimant’s income was reduced,”10 as well as 

“the actual net reduction or loss of earnings or profits suffered.”11 In this case, because the 

Claimant maintains ownership of the home has not actually sold it at a loss, the Claimant has not 

sustained a certain amount of lost income, and cannot be compensated under OPA’s loss of 

profits or impairment of earning capacity damage category.

3. The Claimant has not proven that the alleged financial loss was caused by the Deepwater 

Horizon oil spill.

Furthermore, the Claimant has not provided evidence sufficient to prove that the contract failed 

to move forward as a result of damage to real property or natural resources caused by the 

discharge of oil resulting from the Deepwater Horizon oil spill. A copy of the sales contract 

provided by the Claimant indicates that closing was contingent upon the buyer “receiv[ing] an 

acceptable [offer] on [the buyer’s property, which was also for sale].”12 As of 19 April 2010, the 

buyer presumably had not received an acceptable offer and the contract had not been finalized.

According to the contract between the Claimant and the potential buyer, the Claimant’s property

was to remain on the market and the buyer would maintain a right of first refusal until 30 June 

2010.13 The Claimant has not provided any evidence to indicate that this contingency regarding 

the sale of the buyer’s property was indeed met, nor has the Claimant otherwise proven that the 

contract between the parties was ever finalized. The Claimant has also not provided any 

evidence to indicate why the sale never proceeded to closing, other than a statement indicating 

that “as a result of the spill, the buyer was released from the contract.”14 

8 Optional OSLTF Claim Form, signed on 6 May 2013.

9 Optional OSLTF Claim Form, signed on 6 May 2013.

10 33 C.F.R. § 136.233(b). 11 33 C.F.R. § 136.235. 12 Purchase Agreement, Addendum #1, signed 19 April 2010. 13 Purchase Agreement, Addendum #1. 14 Optional OSLTF Claim Form, signed on 6 May 2013.

 
Furthermore, the NPFC notes that publicly available information indicates that the property was 

listed for sale at $869,999.00 at various points throughout 2010, 2011 and 2012 before the list 

price was reduced to $789,899.00 in May of 2013.15 Because the Claimant has not been able to 

sell the property during the last three years, at a lower price than the price being negotiated in 

April of 2010, it is not evident that the oil spill, and not other factors which have caused the 

home to remain on the market, caused the particular sale identified by the Claimant to fail to 

close.

In sum, the Claimant has not experienced an actual loss on the sale of the home, which has not 

yet been sold, and has not proven that contract was cancelled as a result of damage to property or 

natural resources caused by the Deepwater Horizon oil spill.

Based on the foregoing, this claim is denied because the Claimant has failed to provide evidence 

sufficient to prove (1) that he sustained a financial loss in the amount $82,000.00, or (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 discharge of oil. 

Claim Supervisor: NPFC Claims Adjudication Division

Date of Supervisor’s Review: 7/3/2013

Supervisor’s Action: Denial approved

Supervisor’s Comments: 

15 See, Zillow listing, available at, http://www.zillow.com/homedetails/5870-Riverchase-Dr-N-Mobile-AL36619/51045759_zpid/, accessed on 2 July 2013.