BP oil spill worker offered $2.7 million injury claim faces fraud allegations

NEW ORLEANS – A supply boat crewman who was working in a vessel near the Deepwater Horizon oil platform when it exploded will be allowed to pursue his $2.7 million injury claim against BP, but will have to convince a lower court he did not fraudulently overstate his injuries, an appeals court has ruled.

Elton Johnson, claims he was injured as an employee on a crew boat operated by Tidewater Marine LLC that was servicing the Deepwater Horizon oil rig when it exploded in May 2010, setting off the Gulf oil spill. In his claim, Johnson alleged the force of the blast threw him into a door resulting in back and shoulder injuries as well as post-traumatic stress disorder. However, Tidewater, Johnson's employer, said he overstated his injuries, which led BP to appeal the original $2.7 million claim award.

Johnson’s claim was left intact by U.S. District Judge Carl Barbier, who ruled that BP did not file a timely appeal in the settlement, allowing Johnson to sign an agreement to accept a $2.7 million settlement. The Fifth Circuit Court of Appeal upheld Barbier's ruling, but nonetheless said Johnson will have to return to court and prove that his damage claim wasn't based on fraudulent information.

“[Witnesses] maintained that Johnson performed his duties capably and did not exhibit any signs of injury whatsoever," the appeals court ruling says. “BP also produced evidence that Johnson repeatedly denied being injured on the date of the incident. Because BP’s evidence suggests that Johnson may have submitted a wholly fabricated claim to the GCCF, BP may raise fraudulent inducement as a defense to enforcement of the settlement.”

The appeals ruling was a 2-1 decision with Judges W. Eugene Davis and Carolyn Dineen King finding Barbier did not properly take into account the evidence of potential fraud and ruled in favor of sending the case back to the lower court for further review.

In the majority ruling Judge Davis wrote that the case would need to reviewed due to new evidence alleging fraud occurred in the claim.

“Where the defendant subsequently uncovers previously unavailable evidence that the plaintiff was in fact not injured at all, or sustained only de minimis injuries, the defendant may argue that the plaintiff fraudulently induced it to enter into a settlement agreement,” he wrote. “In such circumstances, the district court must hold an evidentiary hearing to weigh the newly-discovered evidence of fraud.”

In dissent, Judge Pricilla Owen said the settlement offered to Johnson was not a binding contract because he did not sign a release necessary for it to be processed.

BP spokesman Geoff Morrell called the appeals court decision a win for the oil giant.

“We are pleased with the Fifth Circuit’s decision vacating the judgement awarding Mr. Johnson more than $3 million in damages,” Morrell said.

BP has long maintained the claims program is beset by fraud and keeps a “Fraud Tally” noting some 184 fraud convictions worth over $21 million have been handled out in connection with the settlement.