Florida recently enacted HB 837 into law, which greatly modified existing law applicable to injury and wrongful death actions as well as insurance bad faith lawsuits.

It is important to recognize that there are now significant changes which greatly
impact a plaintiff’s claim, including:

•  A reduction of the Statute of Limitations time period to file negligence actions from four years down to two years from the date of the incident. Previously, the two-year time period was only applicable to professional malpractice actions. Please note that this modification only applies to acts which occur after this law was enacted.

• A return to the contributory negligence standard in which any claimant (other than medical malpractice claimants) found to be responsible for more than fifty percent of their damages will not be able to recover damages from a third party. This is a radical departure from the previous “pure comparative” standard which did not a percentage limitation.

• The use of only evidence as to the amount actually paid by or on behalf of a plaintiff in determining the accurate value of medical damages for past or future medical care in personal injury or wrongful death actions. Previously there was a division between the courts in Florida regarding the admissibility of the total medical charges vs. the amount for which the plaintiff was responsible at the time of trial.

• The disclosure of letters of protection regarding medical expenses as a condition precedent to assert a claim for medical expenses in personal injury and wrongful death cases. A plaintiff will now be required to disclose the letter of protection, the identity of the individual who made the referral (including an attorney) and whether any medical insurance coverage was applied.

• The requirement that a jury consider the fault of all persons who may have contributed to the injury, establishes a presumption against negligent security liability in certain specified situations, and further expands immunity for a property owner in an injury action brought by a person who was the victim of a crime when lawfully on the property.

• The presumption in favor owners of multifamily residential property which substantially implement certain security measures in actions involving criminal acts which occur on the premises.

• The repeal of the attorney fee provisions for insurance cases, which previously awarded incurred attorney’s fees and costs to individuals (but not insurance companies) who prevailed in coverage actions. 

The statutory changes also provide much needed benefit to insurance companies as:

• The bad faith standard is now raised as clarify that the insurers’ negligence in handling a claim standing alone is not enough to demonstrate bad faith. The Florida courts had been moving in this direction since the Florida Supreme Court’s decision in Harvey v. GEICO in 2018.

• The requirement that a policyholder or claimant (as well as their representatives) must act in good faith as to providing information, asserting demands, establishing deadlines, and negotiating the resolution of the claim, thereby significantly reducing the likelihood of the “set up” previously utilized by many plaintiff’s attorneys.

• The ability of an insurance company to avoid bad faith liability to a third party if the insurer tenders its policy limits or the demand amount within 90 days after receiving first notice of the claim, including actions involving multiple claimants.   Previously, these issues were considered inherently factual which precluded resolution on summary judgment.

• The limitation of the use of a contingency fee multiplier of an attorney fee award in only very limited circumstances, which is consistent with the methodology utilized by federal courts.

Please note that the changes regarding insurance policies will only apply to those policies issued going forward and will not impact the rights and obligations under prior policies.The other provisions, however, are effective for actions filed after the effective date of this law.

As you can see, these changes will clearly benefit business owners and insurance companies in lawsuits in which they are named as defendants. By contrast, plaintiffs (as well as their counsel) will now be forced to provide increased and more specific information during the litigation process. This factor, in particular for those defendants who are also at fault, will likely reduce both the number of lawsuits as well as their duration going forward.

As always, if you would like further information on the above topic, or a presentation on this and other topics, Shendell & Pollock would be pleased to do so for your group. For more about the firm, please visit http://www.shendellpollock.com. Shendell & Pollock is a full-service litigation and business law firm providing a comprehensive range of services to a wide variety of clients, including public traded companies, privately owned businesses, banks and insurance companies, financial institutions, private lenders & more.

What are Lawyers saying about Remote Proceedings? Shendell & Pollock, P.L. Attorneys share their thoughts on the virtual process and what they have observed. What are your thoughts? It appears in one form or fashion attendance at routine and non-evidentiary hearings post COVID-19 is likely here to stay for civil cases, but not trials. As reported in the Florida Bar News June 2021 edition, the Florida Bar published a “healthy response” from the COVID-19 Recovery Task Force subcommittee to continue Zoom hearings. In this regard, there is a current proposal before the Supreme Court to change the Rules of Judicial Administration Committee to amend Rule 2.530, which governs activities utilizing “Communications Equipment.”

It is important to note that the proposed changes allow parties to object to the request for a Zoom hearing. In the event of a dispute, the presiding Judge will have the discretion to overrule any such objection. From a practice standpoint, potentially there will be a requirement that all Notices for hearings state whether the parties have stipulated to Remote Proceedings. The proposed changes go so far as to allow even evidentiary hearings if the parties agree. Whether Remote Proceedings may be available for evidentiary hearings will be considered by the Court on a case-by-case basis.

Additionally, one practical result of the routines of Remote Proceedings that have arisen out of COVID19 is that it is highly likely attendance at depositions via Zoom will also continue in large measure. However, we are already seeing where lawyers/parties seek to manipulate Zoom deposition attendance to fit their purpose. For example, lawyers are strategically seeking to protect their clients and perhaps key witnesses from live depositions so that those deponents are not subject to a live and potentially intimidating cross-examination that can only occur during a live deposition. We anticipate that Motion practice in these areas will increase as there will undoubtedly be disputes on how particular depositions are to proceed.

Also, regarding depositions, an observation our firm lawyers have made is that there are many instances where the integrity of the deposition process may be compromised. We have experienced instances where undisclosed individuals are sitting in the room with deponents, perhaps providing notes or writing on boards to coach answers to questions. Our firm is instituting a firm procedure for each remote deposition, where our lawyers ask both the deponent and opposing counsel to confirm no one has coached the witness in any way.

The final approval of the above-discussed changes to the Rules of Judicial Administration will be determined by the Supreme Court, to which we will confirm at that time.

As always, if you would like further information on the above topic, or a presentation on this and other topics, Shendell & Pollock would be pleased to do so for your group. For more about the firm, please visit www.shendellpollock.com

Who Are We?
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Shendell & Pollock, P.L. is a full-service litigation and business law firm providing a comprehensive range of services to a wide variety of clients, including publicly traded companies, privately owned businesses, banks and insurance companies, financial institutions, and private lenders & more.

    As the COVID-19 pandemic continues to impact so many industries, the construction and design industries are no exception. We have interviewed major contractors and design professionals throughout the state of Florida and New Jersey to discuss the practical impacts of the pandemic on many projects. The primary impacts of COVID-19 that were identified in our interviews are suspension, lost productivity and material shortages.

     Many contractors are very concerned that as projects are suspended or slowed, there is the potential that idled workers will not return to their projects. Due to cash flow concerns as many contractors are face challenges onboarding projects crew continuity is becoming an impediment to project delivery. For example, where previously contractors had a pool of skilled full-time employees or independent contractors assigned to projects those same projects are being staffed temporary worker, many of whom are added to projects as others leave for other jobs. The Impact on labor due to the COVID-19 pandemic is unprecedented, however we are finding that many firms are adapting and finding ways to mitigate the impact upon their projects. Specifically, firms are mandating that employees receive regular tests, and should anyone test positive that person is required to work from home if possible. Similarly, subcontractors are required to be tested, and should any subcontractor or subcontractor employee refuse to be tested, that subcontractor can be terminated from their contract. It’s important for all contractors to include language within their contract that allows for the termination of the contract for convenience as this provides the primary legal means for the termination of a subcontractor who refuses to test for COVID-19 and could potentially expose other personnel to the disease.

    Many contractors whom we interviewed mentioned they are having problems with material delays, which is effecting critical path delays and delivery of projects on time. Specifically, many firms are finding it difficult to acquire specialized and prefabricated materials due to COVID-19 impacts at the production facilities. The range of materials impacted by COVID-19 includes everything from complex fabricated switchboards and other electrical equipment, to plumbing equipment, elevators, and prefabricated concrete. Impacts in the supply of these pre-fabricated items can have enormous impacts on the critical path of a construction project, and any impact must be analyzed individually based upon the type of item that has been delayed and where it fits in the critical path. Should there be a means of diverting resources elsewhere and prioritizing other portions of the critical path to save time and money, the contractor should take those means as is deemed prudent. Should a pre-fabricated item or material delay present such an impact that there is no way to alter the construction schedule then that impact must be documented by the contractor and form the basis of a future change order to the contract which will include both increased costs for a replacement item and additional labor, as well as an increase in the time allotted within the contract to complete the Project.

   With regard to design professionals who have contractual responsibility to approve submittals of materials and products, COVID-19 related shortages also present a challenge. Design professionals may be confronted with unavailability of specified materials and proposed substituted materials by contractors that the design professional is either not familiar with or falls below the design intent. In these situations, the design professional may face a choice between accepting lesser quality materials or having potential Project delay attributed to his failure to approve submittals. In these instances, it is essential to inform the Owner of the ramification of the decisions being faced and document the file as to these communications.

     Finally, because of these unique conditions and potential impacts associated with COVID-19, design may wish to insert Force Majeure provisions in their future contracts that preclude liability for external events that interfere with the design professionals ability to perform his duties in accordance with the contract or ordinary standard of care.

    We at Shendell & Pollock have handled numerous bodily injury and wrongful death cases throughout Florida, New York and New Jersey, with over 30 years of experience. If you would like to discuss this alert or any concerns regarding defense of legal malpractice claims, contact Gary R. Shendell at gary@shendellpollock.com or William Convey at william@shendellpollock.com.

When the lower tribunal errs as a matter of law in its determination that it has subject matter jurisdiction, the proper remedy is to invoke the original jurisdiction of the appellate court to assess the same, and perhaps restrain the trial judge from exceeding his or her authority. For example, it is well settled that certain claims arising out of Bankruptcy Court and Copyright litigation are “core” functions of the Federal Courts, which have exclusive jurisdiction over such actions, to the exclusion of state courts. It is appropriate to move to dismiss for lack of subject matter jurisdiction. Another example might be the trial court attempting to proceed in equity in a probate litigation, where the pleadings assert only legal causes of action, seeking only monetary damages. In the unequivocal absence of such subject matter jurisdiction, a trial court’s improper exercise of jurisdiction over the parties and the action constitutes irreparable harm to litigants when the trial court attempts to exercise power which it does not possess.

The appellate remedy is the timely filing of the Petition For Writ Of Prohibition in the appropriate appellate court. “Prohibition is an extraordinary writ by which a superior court may prevent an inferior court or tribunal, over which it has appellate and supervisory jurisdiction, from acting outside its jurisdiction.” Scott v. Hinkle, 259 So. 3d 982, 984 (Fla. 1st DCA 2018), citing Mandico v. Taos Constr., Inc., 605 So.2d 850, 853 (Fla. 1992). Subject matter jurisdiction is the “[p]ower of a particular court to hear the type of case that is then before it” or “jurisdiction over the nature of the cause of action and relief sought.” Fla. Star v. B.J.F., 530 So. 2d 286, 288 (Fla. 1988) (quoting Black’s Law Dictionary 767 (5th ed. 1979)). It “means no more than the power lawfully existing to hear and determine a cause.” Malone v. Meres, 91 Fla. 709, 109 So. 677, 684 (1926). Although a writ of prohibition is meant to be employed “with great caution and utilized only in emergencies,” English v. McCrary, 348 So. 2d 293, 296 (Fla. 1977), it “may be granted when a trial court acts outside of its jurisdiction. For example, prohibition is appropriate when another court or administrative body has jurisdiction over the subject matter.” Scott v. Francati, 214 So. 3d 742, 749 (Fla. 1st DCA 2017), review denied sub nom. Francati v. Scott, No. SC17-730, 2017 WL 2991836 (Fla. July 14, 2017). See also Roberts v. Brown, 43 So. 3d 673 (Fla. 2010) (granting prohibition in a matter in which the Florida Supreme Court possessed exclusive jurisdiction); Dep’t of Agric. & Consumer Servs. v. Bonanno, 568 So. 2d 24, 29 (Fla. 1990) (granting prohibition to keep the circuit court from exercising jurisdiction over citrus canker cases within the exclusive jurisdiction of the Department of Agriculture and Consumer Services).

The defense of lack of subject matter jurisdiction cannot be waived, nor can jurisdiction of the trial court be conferred by waiver, agreement or acquiescence. Indeed, lack of subject matter jurisdiction may be asserted for the first time on appeal. And, the Petition For Writ of Prohibition must be filed before the trial court acts, as it cannot be used to undo or unwind court orders, improvidently granted. A Petition seeking prohibition is the proper vehicle and should issue in the circumstance, where there are no disputed issues of fact and the trial court is poised to proceed without subject matter jurisdiction. Am. Mar. Officers Union v. Merriken, 981 So. 2d 544 (Fla. 4th DCA 2008). Prohibition lies to prevent a tribunal from acting without jurisdiction or in excess of its jurisdiction. So, we recommend that you always analyze subject matter jurisdiction, and when appropriate, write the Petition for Writ Of Prohibition to right the ship.

We at Shendell & Pollock have handled numerous trial court and appellate court cases throughout Florida, New York and New Jersey, with over 30 years of experience. If you would like to discuss this alert or any concerns regarding defense of legal malpractice claims, contact Gary R. Shendell at gary@shendellpollock.com .

     Plaintiff Lawyers endeavor to put nursing homes, long term care facilities and other like kind residences on trial, seeking to show that these facilities seek to cut costs for financial gain, all at the risk of sacrificing the quality of care of their residents. Now in the COVID-19 era, we have all heard in the news that as many as 50% of the deaths have occurred in nursing homes. There has been much discussion in the Florida Plaintiff’s Bar that COVID-19 requires owners and operators to spend even more money to ensure their residents are kept safe. When looking backward, should there be a death or other significant health consequence, Plaintiff lawyers will surely be focusing upon whether owners have spent money to protect their residents, and will be alleging not enough money was spent to do so to establish liability arguments.

     People 65 and older are at higher risk for COVID-19, as are people with chronic medical conditions such as heart disease, diabetes, kidney disease and respiratory illness. Both groups are heavily represented among the nation’s 1.3 million nursing home residents. That concentration is a key reason why 1 in 5 U.S. deaths from COVID-19 have occurred in nursing homes and other long-term care facilities, but it’s not the only one. Some nursing homes conditions can exacerbate the spread of the disease:

• shortages of coronavirus tests

• shortages of or lack of access to personal protective equipment (PPE) such as masks and gowns

• necessary and frequent physical contact between residents and staff

• under staffing

• employees who work in multiple facilities, increasing chances for exposure

• residents sharing rooms

• transfers of residents from hospitals and other settings

    These factors make nursing homes potential breeding grounds for viral and bacterial diseases, especially given chronic problems with infection control that predate the pandemic.

    The Centers for Medicare & Medicaid Services (CMS) and the Centers for Disease Control and Prevention (CDC) have issued guidelines on reducing the spread of COVID-19 in nursing homes. Facilities have been instructed to:

• strictly limit visitation

• suspend communal dining and group activities for residents

• screen residents daily for fever and other COVID-19 symptoms

• screen anyone entering the building for symptoms and observe flexible sick-leave policies for staff members

• require staff to wear masks

    If the disease is identified at a nursing home, the federal agencies urge the facility to restrict residents to their rooms; require health care staff to wear gowns, gloves, eye protection, and N95 or medical masks; and treat suspected and confirmed COVID-19 patients in a designated area, away from other residents. The CMS is requiring facilities to promptly alert residents, their families or representatives, and the CDC about new COVID-19 cases. The agency is also posting data, updated weekly, on coronavirus case counts at the national, state and individual nursing home level, and in May it announced tougher rules on infection-control inspections and enforcement.

    Who can visit a nursing home?

    Nursing homes and other senior-living facilities are effectively in lock-down, with entry restricted to essential staff, health care workers and vendors. Under CMS guidelines, outside visitors can come only in “compassionate care situations,” such as when a resident is near death. The CMS issued recommendations on May 18 aimed at helping state and local authorities determine when and how to resume visitation, but it will likely be some time before that happens. Some states are exploring outdoor-only visitation as a transitional step, as studies have shown the risk of coronavirus transmission is considerably lower outside. Indeed, one facility in Miami is arranging “drive by” visitation.
 

    In the meantime, the best way to “see,” check on and observe residents and living conditions during this period is through video-chat and conferencing platforms like Zoom, FaceTime and Skype. Phone calls are another option to speak with residents, and offer emotional support. Isolation “can have very real and serious health impacts” for nursing home residents. Virtual visitation is likely to become the norm it seems. Support of loved ones is best accomplished by staying informed about what’s going on at their facility. Identify a point of contact on staff for questions and concerns.

    Will the nursing home tell if people there are infected?

   The CMS has announced it will require nursing homes to tell residents and their families or representatives within 12 hours if a COVID-19 case is confirmed on-site. The information must also be reported to the CDC. Some states, including Michigan, Illinois, New Jersey, California and Florida, have announced plans to name nursing homes with cases, but not all states are doing so. Greater transparency and accountability will lessen the likelihood of litigation for violations of the standards of care, and the Patient’s Bill Of Rights.

    How are nursing homes regulated?

     They are regulated by the federal government, specifically the Centers for Medicare & Medicaid Services, in collaboration with the states. State survey agencies conduct inspections of nursing homes on behalf of the CMS to check that they comply with federal laws and standards in areas such as staffing, hygiene, record keeping, and residents’ care and supervision. Facilities must be deemed compliant to be certified by the CMS and eligible for payments from Medicare and Medicaid. State surveyors also ensure compliance with state laws, statutes and rules. Last year, the CMS proposed rolling back what it deemed “excessively burdensome regulations” on nursing homes. The proposals, which have not yet been finalized, include relaxing rules on documenting grievances and investigations; requiring facilities to conduct assessments of staff and resource needs every two years, rather than annually; and allowing them to use consultants for infection prevention rather than hiring at least one part-time staff member for that purpose. Further deregulation will likely increase the “policing” by the Plaintiffs’ Bar, especially where attorneys’ fees are available to the prevailing party, through fee shifting statutes.

    What if one has a complaint or concern?

       First, communication and documentation are key. Learn as much as one can about the situation and have specific questions ready. If the facility is not responsive, reach out to your state’s long-term care ombudsman. Ombudsmen programs were established by the federal Older Americans Act in all 50 states, plus the District of Columbia, Puerto Rico and Guam, to address problems related to the health, safety, welfare and rights of residents of nursing homes and long-term care communities. Staff and volunteers at ombudsmen offices work to advocate for residents of long-term care facilities.

     What is nursing home residents’ Bill Of Rights?

        The CMS has a list of residents’ rights and protections under federal and state laws. Broadly speaking, these include the right to:

• be treated with dignity and respect

   

• be free from abuse, neglect and discrimination

   

• have friends and family visit and participate in your care

   

• take part in activities

   

• make complaints without fear of punishment

   

• receive proper medical care

   

• have a doctor, family member or legal representative notified of changes in your condition or treatment

      Keep in mind that state statutes on resident rights often go beyond federal rights. But rights related to visitation and activities are being restricted as part of efforts to curb the spread of COVID-19. The National Consumer Voice for Quality Long Term Care, an advocacy group that focuses on care issues, has a fact sheet on how the pandemic is affecting rights and rules in nursing homes.

     Should a loved one be removed from a nursing home?

      There is no simple answer as some individuals and families may decide that it makes sense for a spouse, parent or other loved one to come home during the pandemic, particularly if there are COVID-19 cases at the facility. But the reality is that some nursing home residents have medical or other needs beyond what can be provided at home. Here are some questions to consider:

• How is the facility handling the coronavirus? For example, are residents and staff being tested? Are there confirmed cases among them? Do staff have PPE? Are staffing levels adequate?

   

• What type and level of care does your loved one need, and are you able to provide it?

   

• Is in-home care available during the pandemic?

   

• Can your home accommodate a loved one with mobility issues or dementia? For example, is there a ground-floor bedroom if they can’t use stairs, or ways to guard against wandering?

   

• Will your loved one be able to return to the nursing home? Many residents rely on Medicaid to help cover their long-term care costs, and leaving a facility can affect eligibility.

     What about other long-term-care facilities, like assisted living?

     Many assisted living facilities and senior care communities have implemented lockdowns and other restrictions to combat COVID-19. The CDC has issued recommendations for assisted living that mirror much of its guidance for nursing homes on controlling the disease, including no outside visitors or group activities and regular screening of staff for symptoms.

     Unlike nursing homes, however, assisted living facilities are generally not subject to federal oversight. For example, the CMS rules on disclosing COVID-19 cases to residents and family members do not apply to assisted living facilities. They are licensed by the states, many of which have not issued disclosure orders, and regulation varies by state.

We at Shendell & Pollock have handled numerous bodily injury and wrongful death cases throughout Florida, New York and New Jersey, with over 30 years of experience. If you would like to discuss this alert or any concerns regarding defense of legal malpractice claims, contact Gary R. Shendell at gary@shendellpollock.com.

We have surveyed numerous real estate agents and brokers related to the impacts they are seeing on closing transactions given that we are now nearly 12 weeks post shelter-in-place. While states are slowly phasing into “reopening” others are seeing an increase in the number of COVID case, including Florida. Agents and brokers are being forced to address and circumvent the multiple roadblocks that have developed due to this crisis including: showing properties, closing risks, legal risks arising from contract language, buyer’s access to financing, logistics of inspections and repair work given the sensitivities to exposing the residence or offices to strangers.

I. Closing Risks

      In the current environment, with recorder’s offices either closed or capacity to process deeds being materially reduced, if the closing is contingent on recording, a buyer may be hesitant to fund the purchase price into escrow without any assurance of when the deed will be recorded due to the costs inherent in having funds remain in escrow for a prolonged period of time. Additionally, there may be an unwillingness on the part of the buyer’s lender to provide funding or to leave funds in escrow for an extended period of time. In a gap closing, title insurance companies may be wary of accepting gap indemnities and issuing title insurance when the date of recordation is a moving target as there is a greater risk of intervening liens as the gap period lengthens. Even if the title insurance company accepts the gap indemnity and is willing to issue title insurance to the buyer, there is a question as to the buyer’s willingness to close when it may have to pursue claims against its title insurance company to clear title of liens or defects following closing. Similarly, the buyer’s lender may consider the title company’s gap coverage insufficient given the possibility of needing to pursue claims against the title company to defend the lender’s lien priority.

      Regardless, the seller typically bears the risk that the title insurance company will fail to issue title insurance and that this condition precedent remains unsatisfied. While failure of the title insurance company to remain committed to issue the title policy is not a default by the seller, the buyer will likely have the right to terminate the contract in the event that: (i) in a deed-recordation closing, the recording cessations or uncertainties mean the title company is not timely committed to issue title insurance as of the scheduled closing date; and (ii) in a gap closing, the title company will not insure the gap as noted above.

       Buyers, on the other hand, risk default under the purchase contract. A buyer will not be in default if it deposits its funds and closing documents in escrow and authorizes closing. As noted above, however, a buyer may be unwilling or, because of its lender, unable to do so in either type of closing. Thus, a buyer’s potentially substantial deposit may be now at risk.

II. When Time Is of the Essence

      The timing of closings has also been impacted due to the COVID-19 crisis. Accordingly, parties should consider the concept of “time of the essence” clauses and notices.

       Where time is of the essence in connection with a party’s obligation, failure to perform by such party by a specific date will constitute an incurable breach. Failure to include such limiting language will be construed to permit a “reasonable time” to perform, including reasonable adjournments of the closing date unless there is bad faith or inexcusable delay.

      In New York, for example, a party can unilaterally create such an obligation by sending a “time of the essence” notice whereby one party must give clear, distinct, and unequivocal notice to the other party setting a closing date that provides a reasonable time for that other party to act. The notice must also state that the other party will be considered in default should it fail to perform on the date designated in the notice.

       What is a “reasonable” amount of time may be subject to change given a prolonged national emergency that results in the periodic extended closure of county recorder’s offices, local governments, courts and businesses. While a question of fact, courts may consider the following as probative of what is “reasonable”: (i) the nature of the contract, (ii) the parties’ previous conduct, (iii) whether the parties acted in good faith, (iv) the experience of the parties, (v) the potential for prejudice or hardship for one of the parties, and (vi) the amount of time provided for performance.

      Parties need to be aware that using “time of the essence” notices during the COVID-19 crisis may not have the same teeth as previously and that it may be viewed as acting in bad faith.

    The COVID-19 crisis may result in clauses inserted into sales contracts permitting delays due to pandemic, government closures and other causes not heretofore deemed to excuse performance by either a seller or a buyer.

III. Potential Defenses for Breaching Parties

      If a non-breaching party is able to establish that it was ready, willing and able to close, but the non-performing party is in default for failing to close — whether due to strict enforcement of timing or a general unwillingness to close — the non-performing party may be able to assert some of the potential defenses below.

A. Impossibility of Performance

  The common law doctrine of impossibility of performance is available generally “when the destruction of the subject matter of the contract or the means of performance makes performance objectively impossible” and the “impossibility” was produced by an unanticipated event that could not have been foreseen or guarded against in the contract. When performance of a contract becomes impossible, performance may be excused, but mere difficulty or inconvenience is insufficient to excuse performance. Arguments that a contract was impossible to perform, even in the face of a government moratorium, will not succeed where the intervening government action was foreseeable. 

B. Frustration of Purpose

     A party may be able to invoke the “frustration of purpose” doctrine where the purpose or “essence” of a contract is frustrated, rather than rendered impossible, by an unforeseeable event. This defense may be available even where performance of the contract is not impossible. To invoke the defense, the frustrated purpose “must be so completely the basis of the contract that, as both parties understood, without it, the transaction would have made little sense.” As with impossibility, the frustrating event must not have been foreseeable by the parties. Note that “changes in market conditions or economic hardship do not excuse performance.” A party is not excused from a contract simply because it becomes more economically difficult to perform.

C. Good Faith and Fair Dealing

     The law of most states includes an implied covenant of good faith and fair dealing to all contracts such that neither party will act in a way that destroys or damages the right of the other to receive the benefits of its contract. It is unclear, however, whether a court would elevate in importance an implied covenant over an express “time of the essence” clause.

D. Force Majeure

     Many non-performing parties to all types of contracts have begun advancing arguments based on force majeure clauses in connection with the effects of COVID-19. Force majeure, or superior force, is a defense that, under certain circumstances, may excuse performance of a contract when a party has been prevented by a force beyond its control. This is a bargained-for contractual right where the defense will depend on the language of the clause and whether it is broad enough to include the effects of the COVID-19 crisis. Since most purchase and sale agreements do not include force majeure clauses and courts are not likely to read a force majeure clause into a contract absent the express language, claims of force majeure are unlikely to excuse a missed closing unless explicitly contained in the contract.

III. Conclusion

    In light of the COVID-19 pandemic, most recorder’s office closings have been resolved through Recording programs and local governments have demonstrated their commitment to maintaining the functions of the property records systems they administer.

    If both parties to a sale transaction desire to consummate a deal, they will need to proactively and collaboratively seek creative solutions. Parties may mutually agree to waive claims for failure of a condition to closing, including for title, or claims for default due to timing issues related to recordings. Parties contracting for future deals will want to account for the possibility of government shutdowns impacting their transactions. However, if one party determines not to move forward with a transaction, the parties will likely face a protracted battle over the deposit, asserting many of the claims and defenses discussed above. These legal battles may be similarly impacted by delays and face protracted schedules as courts are forced to shut down, statutes of limitations are tolled as a result of the very same national crisis that produced the underlying legal dispute.

At Shendell & Pollock we remain available to answer all of your COVID-19 related concerns, questions and claims. Please contact Gary Shendell at gary@shendellpollock.com and Ilana Hanau at ilana@shendellpollock.com to discuss this alert further. gary@shendellpollock.com

On May 17, 2018, Brett R. Bloch, Senior Partner, and our S&P trial team, completed a four day trial defending H.A.T. Services Corporation against allegations that one of its trucks was involved in a rear end collision in Apopka, Florida which injured the Plaintiff. Our trial team obtained a defense verdict notwithstanding having to stipulate to liability, so this result is especially noteworthy. In his lawsuit, Jeb Bachman alleged that he was slowing down for a yellow light at an intersection on a rainy day when his vehicle was impacted by our client’s commercial ice cream delivery truck. The Plaintiff asserted that he sustained a concussion, traumatic brain injury, traumatic disc herniation at the C5-C6 level which required a laminectomy and related soft tissue injuries. The Plaintiff further claimed that he continued to suffer permanent dizziness, neck pain and headaches as a result of the collision.

Although liability was conceded due to the nature of the collision, Brett stressed to the jury that the Plaintiff did not evidence the required clinical elements of a concussion and that all of his neurological tests yielded normal results. Brett also asserted that the Plaintiff’s spinal surgery occurred three and one-half years after the collision and was necessitated by an intervening injury as well as a degenerative condition. In closing arguments, the Plaintiff requested a $1,017,059 damage award.

After a four hour deliberation period, the jury rendered a defense verdict.

The Plaintiff thereafter filed an appeal, contending that the trial court erred in failing to order a new trial due to alleged errors in the verdict form and that the verdict was against the manifest weight of the evidence. Diran Seropian, Senior Partner, and our S&P appellate team represented our client in the appeal, and argued to the appellate court that the Plaintiff’s trial counsel failed to properly object to the use of the subject verdict from and in fact agreed to its use after the court ruled adverse to his client at the charging conference. Diran also asserted that the verdict was entirely appropriate due to conflicting medical testimony between the parties’ respective experts, thereby leaving this issue for jury determination.

On March 20, 2020, the appellate court issued its opinion and denied the Plaintiff’s appeal. In affirming the trial court’s order denying a new trial as well as affirming the judgment entered in favor of our client, the appellate court specifically noted that at trial, the Plaintiff was “aggressively cross-examined” regarding his medical records and the information which he provided to his health care providers and that at trial, the Defendants presented evidence that the Plaintiff’s injuries on the date of the collision “may not have been as severe as he had stated in testimony.”

Jeb Bachman v. H.A.T. Services Corporation., case no. 2015-CA-009291-0, venued in the Circuit Court of the Ninth Judicial Circuit in and for Orange County, Florida. Hon. Heather L. Higbee presiding.
Jeb Bachman v. H.A.T. Services Corporation, case no. 5D18-3376, venued in the District Court of Appeal of the State of Florida, Fifth District.

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