COVID-19 Commercial Tenant Eviction Update

by Mark E. Ellinghouse

As March approaches, we are poised to hit the two-year anniversary of California’s March 4, 2020, State of Emergency Proclamation relating to the COVID-19 health crisis. In the months that followed, we watched federal, state, and local governments adopt myriad laws, rules, emergency orders, proclamations, declarations, ordinances, and mandates, creating a patchwork of rules and regulations for commercial real estate that defied generalization or statewide compliance practices. The market may never look exactly like it did before COVID-19 (note our last article: to-go alcoholic drinks are here to stay!).

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How New Legislative Policy May Affect COVID-Related Lease Disputes

by Mark E. Ellinghouse

Over the last eighteen months, we have been forced to devote significant resources to interpreting how largely-forgotten legal doctrines apply to real estate contracts in a post-COVID world. These principles, including force majeure, frustration of purpose, and impossibility/impracticability, were generally overlooked in real estate transactions until life-altering global events required their use. Indeed, many of the cases interpreting these doctrines date back to the world wars that dominated the first half of the twentieth century. 

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NY Court of Appeals Decision Highlights Growing Trend of Higher Courts Ruling Against COVID-Related Lease Defenses

by Mark E. Ellinghouse

Since the start of the COVID-19 health crisis, we have been approached by both landlord and tenant clients asking how COVID affects their leasehold obligations. While we have generally encouraged our clients to approach these matters in an honest and amicable manner with a focus on resolution, disputes have arisen between owners and occupiers. Legal resolution does not come quickly, as the legal process tends to delay final adjudication for several years. Some decisions have been rendered in interim proceedings (such as bankruptcies),

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Litigation Update: North Carolina Court Finds Insurers Liable Under Business Interruption Policies for COVID Losses Resulting from Shutdown Orders

by Josiah M. Prendergast, Mark E. Ellinghouse

In our last update, we highlighted a recent case out of the US District Court of Missouri (Studio 417) in which the court issued a preliminary ruling that allowed a group of policyholders to proceed with claims against their insurers based on allegations that the insurers wrongfully denied claims due to losses sustained as a result of the COVID-19 health crisis under business interruption insurance policies.  Prior to that ruling,

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Josh Escovedo in the Sacramento Business Journal: An Attorney's Take on Enforcing Covid-19 Rules

Real estate litigation attorney Josh Escovedo is quoted in the Sacramento Business Journal on his take on the inconsistencies and difficulties of enforcing Covid-19 restrictions relating to businesses.

Government must find a balance between enforcing its rules and protecting the livelihood of small businesses, which can be a difficult position, Escovedo said. 

Read the full article here.

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Recent Federal Decision Regarding Business Interruption Insurance Could Mark a Turning Point for COVID-Affected Businesses (Updated 9/29/2020)

by Josiah M. Prendergast, Mark E. Ellinghouse

Many businesses affected by COVID-19 and the related shelter-in-place orders are turning to their business interruption insurance policies in hope of finding relief. In general terms, a business interruption insurance policy replaces some or all of a business’s income when the business is forced to curtail or cease its operations as the result of a disaster. In the vast majority of cases, insurance companies have turned away COVID-related business interruption claims, claiming that these policies do not provide coverage for COVID-related claims.

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Recent Case Confirms Need for Landlords and Tenants to Address Force Majeure and COVID-19 in All Current and Future Agreements

by Mark E. Ellinghouse

While the effects of the COVID-19 health crisis have impacted daily life for months, the legal implications of this pandemic are just starting to develop. Unforeseen conditions often wreak havoc on existing contractual relationships, which are typically based on factual assumptions that, due to unexpected conditions like COVID-19, may no longer be appropriate. Many parties work through these circumstances through negotiation, reconciling their previous expectations and current conditions with their desired outcome, but these negotiations aren’t always successful.

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