CLAIM SUMMARY / DETERMINATION FORM

Claim Number : N10036-1648

Claimant : KP LLC

Type of Claimant : Private (US)

Type of Claim : Loss of Profits and Earning Capacity

Amount Requested : $103,100.00

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 20 January 2012, Mrs. Melinda Parsons, on behalf of KP, LLC (collectively, the Claimant) 

presented a claim to the Oil Spill Liability Trust Fund (OSLTF) originally seeking $110,772.00 

in loss of profits damages, and $1,086,000 in diminution of value for the condominium.1

 Upon 

clarification by the NPFC2 of OPA’s real or personal property damage category, the Claimant 

withdrew this component of the claim, noting that they had not actually sold the property at the 

diminished value, and that the property was not physically damaged by oil.3

The Claimant owns a condominium unit in Gulf Shores, Alabama, which was first made 

available for rent approximately one month prior to the Deepwater Horizon oil spill.4

 The 

Claimant alleged that the oil spill and subsequent decrease in tourism caused the Claimant to 

sustain an uncompensated loss of rental income from September 2010 through May of 2011, 

totaling $110,772.00.5

 The Claimant later amended this amount, reducing the claim for loss of 

profits damages to $103,100.00.6

 

The Claimant alleged the oil spill caused tourists to avoid Gulf Shores and Orange Beach, 

causing the Claimant to sustain an uncompensated loss of rental income totaling $103,100.00 

from September 2010 to May 2011.7

 The Claimant calculated these losses by comparing actual 

rental revenue to rental revenue the Claimant would have earned, had the unit been fully booked 

for each week of the claimed loss period.8

 

2 NPFC Request for additional information, 10 February 2012

3 Cover Letter, response to NPFC request for additional information, 10 February 2012.

4 Letter from the Claimant to the GCCF, 27 August 2011.

5 Optional OSLTF Claim Form, signed on 11 January 2012. 6 Response to NPFC request for additional information, 10 February 2012.

7 Response to NPFC request for additional information, 10 February 2012.

8 Handwritten booking calendar, loss calculation sheets by month, prepared by Claimant.

 
Furthermore, the Claimant stated that losses presented in this claim were not compensated by the 

$55,000.00 payment previously made to the Claimant by the GCCF. According to the Claimant, 

this payment covered only losses sustained from May to August 2010.9 

Prior to presenting a claim to the Oil Spill Liability Trust Fund, on 23 August 2010, the Claimant 

presented a six-month Emergency Advance Payment (EAP) claim to the RP/GCCF, seeking 

$55,000.00 in loss of profits and wages damages.10 The Claimant was assigned Claimant ID # 

1149772, and the EAP claim was assigned claim # 7786.11 The RP/GCCF issued payment on 

this claim in the full amount of $55,000.00 in November of 2010.12 

Also on 23 August 2010, the Claimant submitted an Emergency Advance Payment (EAP2) claim 

to the RP/GCCF, seeking Real Property damages in the amount of $926,000.00.13 EAP2 was 

assigned claim # 7907 and was denied by the RP/GCCF.14

On 14 December 2012, the Claimant submitted a Supplemental claim to the RP/GCCF, seeking 

loss of wages and earnings damages in the amount of $34,662.00.15 This claim was assigned 

claim # 4063339, and was also denied.

On 9 September 2011, the Claimant submitted a Third Quarter Interim Claim (ICQ32011) to the 

RP/GCCF, seeking loss of wages and earnings damages in the amount of $96,784.00.16 In a 

letter dated 30 November 2011, the RP/GCCF issued a determination on the Claimant’s 

ICQ32011, concluding that previous payments to the Claimant had fully compensated the 

Claimant for all sustained losses, and offering the Claimant $25,000.00 as full and final 

payment.17 As of the date of this determination, the Claimant has not accepted the final payment 

offer.

In a letter dated 30 January 2012, the NPFC requested that the Claimant provide certain 

additional information in support of this claim. Among other items, the NPFC requested 

“records of reservation cancellations due to the oil spill, including contact information for each 

cancelling party” and “a booking calendar, showing bookings from 2010 – present.”18 The 

NPFC also requested that the Claimant identify time periods in which the Claimant utilized the 

unit, so that it was not available for rent.19 In response to these requests, the Claimant provided a 

handwritten record of bookings for December 2010 to August of 2011.20 However, the Claimant 

failed to provide any evidence of cancelled rental reservations as a result of the oil spill. The 

Claimant also stated that because the condominium complex was relatively new, it would not be 

possible to provide comparable rental records to demonstrate the level of bookings of a similar 

unit in the period prior to the oil spill. 21

9 Response to NPFC request for additional information, 10 February 2012.

10 GCCF United States Coast Guard Report, 16 February 2012. 11 GCCF United States Coast Guard Report, 16 February 2012. 12 GCCF United States Coast Guard Report, 16 February 2012. 13 GCCF United States Coast Guard Report, 16 February 2012. 14 GCCF United States Coast Guard Report, 16 February 2012. 15 GCCF United States Coast Guard Report, 16 February 2012. 16 GCCF United States Coast Guard Report, 16 February 2012. 17 GCCF Claimant Status, accessed on 5 March 2012. 18 NPFC Request for additional information, 30 January 2012. 19 NPFC Request for additional information, 30 January 2012. 20 PHONECON: NPFC Staff and the Claimant, 9 February 2012. 21 PHONECON: NPFC Staff and the Claimant, 9 February 2012.

 
The NPFC denied the claim originally on March 26, 2012 on the basis that in order to prove a 

claim for loss of profits and impairment of earning capacity damages, a Claimant must provide 

documentation sufficient to prove (1) that the Claimant sustained an actual financial loss, and (2) 

that the loss was caused by the discharge of oil resulting from the Deepwater Horizon oil spill. 

The NPFC noted that tourism statistics reflected that tourism for the winter of 2010 and fall of 

2011 was higher than in previous years and did not support Claimant’s assertion that the oil spill 

caused a decrease in tourism and caused its loss of profits. 

The NPFC informed the Claimant should she decide to pursue this claim on reconsideration, the 

Claimant should include detailed monthly profit and loss statements, in order to allow the NPFC 

to calculate the extent to which the $55,000.00 payments previously made to the Claimant by the 

RP have compensated the Claimant’s actual lost profits. 

REQUEST FOR RECONSIDERATION:

On May 22, 2012, the Claimant sent a request for reconsideration to the NPFC stating she would 

like the NPFC to reconsider her claim. 

CLAIMANT’S REQUEST FOR RECONSIDERATION:

The Claimant requested reconsideration which was received by the NPFC on May 22, 2012. The 

Claimant provided a two-page letter requesting reconsideration, copy of two-page GCCF 

Supplemental Request Form dated 11/21/10 requesting $34,662.00 in lost profits; four-pages of 

handwritten notes for loss rental income from September 2010 through November 2010; news 

article entitled “Orange Beach developers want BP funds for Turquoise condo project” dated 

April 29,2012 in AL.com; news article from National Geographic Daily News entitled “Gulf Oil 

Spill Pictures: Oiled Beaches Time Line”; news article from the Chief Organizer entitled “Oil 

Spill Tar Balls on Orange Beach”, news article from National Geographic dated October 12, 

2010 entitled “Aerial photo of shoreline in Orange Beach AL near Florida border; news article 

from NPR entitled “ Reminders of BP’s Oil Spill Linger Along Gulf Coast” dated October 28, 

2010; news article from hiffingtonpost.com entitled “Oil Spill Continues To Wash Ashore in 

Gulf, BP Deep-Cleaning Beaches in Response”; news article entitled “Stress of oil spill still 

lingering in Orange Beach” from September 2010; news article entitled “Oil mat seen as threat to 

Orange Beach tourism” dated May 8, 2012; and news article entitled “ Oil mat cleanup underway 

in Orange Beach”.

Claimant asserts that she does not have historical data to provide to the NPFC since they just 

started renting their unit in March 2010 but that she can unequivocally say that given their 

experiences over the last two years, that their earning power was definitely diminished over the

last quarter of 2010 and beyond to May 2011.

The news articles submitted by the Claimant focus on the Orange Beach area, the oil spill and 

tourism. The Claimant asserts that she is not in agreement with the NPFC’s statistical data 

provided in its original denial determination. The Claimant asserts that the articles she has 

provided corroborate oil spill activity in the Orange Beach area during the time period for which 

she seeks compensation and as such she asserts that the articles verify that her area of Orange 

Beach was hit much harder than other areas of Gulf Shores and she doesn’t believe the statistics 

used by the NPFC differentiate the areas.

NPFC Determination on Reconsideration
Under 33 CFR 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 CFR § 136.233, a claimant must establish loss of profits or 

impairment of earning capacity and that the loss was due to the destruction or injury to real or 

personal property or natural resources. The NPFC considered all the documentation submitted 

by the Claimant. The request for reconsideration must be in writing and include the factual or 

legal grounds for the relief requested, providing any additional support for the claim. 33 CFR 

136.115(d). 

The NPFC performed a de novo review of the entire claim submission upon reconsideration. 

Upon consideration of all information and arguments made by the Claimant on reconsideration, 

the NPFC still cannot determine whether the $55,000.00 EAP payment made by the RP to the 

Claimant fully compensated the Claimant. In the NPFC’s initial determination, the NPFC stated 

that if the Claimant sought reconsideration, she should provide profit & loss statements to allow 

the NPFC to calculate their lost profits. To date, the Claimant has not provided the requested 

information. Instead, the Claimant is claiming lost revenue based on their handwritten booking 

calendar which lists straight rental rates. The Claimant is seeking to recover straight rental 

revenue plus cleaning fees of $250.00 a week. The NPFC does not understand how the Claimant 

would be able to claim a cleaning fee as a loss unless they were doing the cleaning themselves 

which the NPFC finds unlikely since the Claimant resides in Georgia.

On reconsideration the Claimant asserts that if it were not for the oil spill, their unit would have 

been booked every single day between September 2010 and May 2011. The Claimant has 

provided no evidence to support this assertion. Condo occupancy rates for the winter months in 

Gulf Shores/Orange Beach are closer to 15-20% according to the Gulf Shores/Orange Beach 

Convention and Visitors Bureau (CVB). The Claimant has not provided evidence on 

reconsideration to show that this particular unit is always booked throughout the offseason.

The Claimant alleges on reconsideration that Gulf Shores/Orange Beach tourism statistics are not 

relevant for Orange Beach. The areas, however, are basically indistinguishable. The Gulf 

Shores/Orange Beach CVB (where the NPFC obtained the stats in the initial denial 

determination) includes stats from both areas. According to Google maps, the distance between 

the center of Gulf Shores and the center of Orange Beach is approximately 5 miles. The 

Claimant has not provided evidence to show why Gulf Shores/Orange Beach statistics are not 

relevant for Orange Beach.

The Claimant asserts on reconsideration that because the building was new at the time of the oil 

spill, they could not provide comparables showing that the unit subject of this claim had been 

booked from the May to September time period of the prior year. However, units at Turquoise 

were available for rent starting around June 2008, when the first occupancy notices were given. 

The Claimant should have been able to provide evidence of a similar unit’s bookings from 

September 2009 through May 2010. The Claimant also has not provided booking data past 

October 2011, so the extent of the Claimant’s bookings from September 2011 through May 2012 

is not evident. As such, the NPFC cannot determine if the Claimant’s condominium would have 

been booked every day for that period, without, at least being able to make the year-to-year 

comparison.

 
Finally, the Claimant still has not provided evidence to actually demonstrate lost profits and the 

extent to which the RP payment of $55,000.00 may have fully compensated the Claimant for 

their alleged losses.

Based on the foregoing, the NPFC has determined that this claim is again denied upon 

reconsideration because the Claimant has failed to meet the burden to demonstrate a loss in the 

amount claimed or that the alleged loss was 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: Thomas Morrison

Date of Supervisor’s review: 8/16/12

Supervisor Action: Denial on reconsideration approved

Supervisor’s Comments: 
U.S. Department of

Homeland Security

United States

Coast Guard

Director

United States Coast Guard

National Pollution Funds Center

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: 

@uscg.mil

Fax: 703-872-6113

5890 

8/16/2012 

CERTIFIED MAIL – RETURN RECEIPT REQUESTED 

Number: 7011 1570 0001 4803 7629

 

KP LLC

ATTN: 

230 West Paces Ferry Road NW

Atlanta, GA 30305

RE: Claim Number: N10036-1648 

Dear : 

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 claim number N10036-1648 involving the Deepwater Horizon oil spill. Please see 

the enclosed Claim Summary/Determination Form for further explanation. 

Disposition of this reconsideration constitutes final agency action.

Sincerely, 

Thomas S. Morrison

Chief, Claims Adjudication Division

U.S. Coast Guard

Encl: Claim Summary / Determination Form