Commercial landlord-tenant trials are returning to New Jersey.
On June 2, 2021, the New Jersey Supreme Court signed an Order ending the moratorium on commercial landlord-tenant eviction trials. Under the Order, pending and new commercial eviction cases will be scheduled for trial (the moratorium on residential landlord-tenant trials remains in effect). In line with a recent Notice to the Bar recognizing the “substantial benefits” of remote proceedings, such trials will proceed remotely (e.g., Zoom or Microsoft Teams), unless a participant shows it is unable to do so.
The Order ends a nearly fifteen-month moratorium on commercial landlord-tenant trials. The moratorium began in March 2020 with the onset of the COVID-19 pandemic. Although a February 2021 Order eased some of the restrictions on scheduling trials in the event of an “emergent circumstance,” the case backlog is nonetheless substantial. However, as both attorneys and the Court have adapted to remote proceedings during the pandemic, conducting trials remotely will likely alleviate the backlog more quickly than in-person trials alone.
This Order marks a big step in the return to “normalcy” for commercial landlords. We will continue to monitor for additional orders loosening the restrictions put in place when the pandemic began.
In response to the COVID-19 pandemic, in March 2020 the New Jersey Courts postponed all commercial landlord/tenant trials and barred the issuance of Writs of Possession arising out of Final Judgments in Foreclosure in commercial foreclosures. As a result, commercial landlords and lenders in New Jersey faced with tenant and borrower defaults have been left without a remedy for almost a year. Last week, the New Jersey Courts issued two Notices to the Bar that eased these restrictions. Copies of the Notices are posted here and here.
In the first Notice, the Courts expanded the circumstances in which a commercial landlord could seek a landlord/tenant trial—the first step in evicting a commercial tenant. The landlord must still show “emergent circumstances,” and the default in most cases must be for something other than non-payment of rent. In light of this high hurdle, many commercial landlords have delayed filing for possession and instead proceeded with lawsuits against tenants for money damages arising out of the failure to pay rent. However, for the first time, the Courts recognized that emergent circumstances can exist if the tenant’s non-payment of rent risks a foreclosure or tax lien.
The second Notice from the Courts was more straightforward. As of February 15, 2021, post-judgment actions, including writs of possession, in commercial foreclosures will be allowed to proceed. Therefore, unlike most commercial tenants, commercial property owners subject to a final judgment in foreclosure now risk eviction from their properties. We expect that the Courts will continue to issue Notices to the Bar over the next few months further loosening restrictions put in place in early 2020.
Since the outbreak of the coronavirus a little more than 100 days ago, there have been approximately 12,800 known deaths attributed to COVID-19. In New Jersey, nearly 50 percent of those deaths were residents of nursing homes and long-term care facilities. Prominent in the news has been the excessive rates of infection and deaths in two of New Jersey’s state-run veterans’ nursing homes. As of mid-June, at least 28 notices of tort claim have been filed with respect to the veteran facilities in Paramus and Menlo Park, claiming gross negligence and incompetence in the veteran homes’ response to the COVID-19 pandemic.
According to data from the state, at the Menlo Park facility, 62 residents and one staff member died from the virus. At the Paramus veterans’ facility, 80 residents and one employee died from the virus.
Lawyers for the claimants estimate damages for each case at five million dollars per claim, or $140 million for all claims filed thus far. It is likely that additional notices of tort claim will be filed given the high number of deaths at these two facilities, which have been attributed to a failure to follow infection control protocols and/or institute safety measures deemed critical to controlling the spread of the virus.
The allegations of misconduct include:
Administration directing staff not to wear masks or gloves, to avoid frightening residents;
Waiting more than a month after the first patient was diagnosed with COVID-19 to isolate infected residents;
Failing to prohibit residents from congregating in common areas;
Allowing infected staff to continue working;
Preventing staff from having access to personal protection equipment (“PPE”);
Failure to implement infectious disease outbreak plans;
Failure to segregate residents with COVID-19 symptoms from the rest of the facility’s population; and
Failure to implement testing of residents.
Because the veterans’ facilities are government-run and owned, a precondition to instituting a lawsuit is the filing of “tort claim” notices. For non-government-owned facilities, there is no such requirement.
It is likely that long-term care facilities will mount defenses based on various immunities afforded by federal as well as New Jersey statutes, including the Tort Claims Act, and charitable immunities that may apply to nonprofit facilities. In addition, we will likely see other defenses based on vague and conflicting directives issued by the state as to proper protocols and the use of PPE and the lack of communication and leadership from the federal, state, and local governments. For example, initial reports from the Centers for Disease Control and Prevention and Department of Health recommended only limited measures such as washing hands, but there were no lockdown orders in place until the virus had already started its deadly spread. Facilities were unable to obtain necessary PPE; government agencies would confirm that deliveries of PPE would be made, and then when the PPE was not delivered, agencies would claim not to know anything about these PPE orders. The government was slow to implement effective safety protocols—in part because of the lack of information about the virus, which persists to this day. As a result, facilities were left to fend for themselves—often without the resources or finances to obtain the necessary PPE. At the height of the outbreak, there was little to no guidance on the nature and extent of contagion or consequences of exposure. It is noteworthy that the federal government authorized billions of dollars in funds to be used for COVID-19 relief efforts in New Jersey. This could be construed as a recognition that there is a significant need by long-term care facilities for financial and other assistance to provide the proper care to residents given the chaotic and devastating effects of the coronavirus.
There is no doubt that the long-term care industry will be the target of litigation given the disproportionate number of infected residents and deaths from COVID-19. It remains to be seen how the courts will deal with these difficult and disturbing issues.
On May 13, 2020, Governor Phil Murphy signed Executive Order 142 (“EO 142”). Under EO 142, all “nonessential” construction projects, as defined in EO 122, “are permitted to resume” as of 6:00 a.m. on Monday, May 18, 2020.
The order requires contractors who will resume work to adopt social mitigation and infection control policies designed to stop the spread of the coronavirus. For example, EO 142 bans nonessential visitors from entering the job site; requires at least six feet of social distancing; prohibits meetings of 10 or more people; requires staggering work times and break times; and requires contractors to identify and control access to “high-risk areas,” such as bathrooms.
Also, under EO 142 businesses must require workers and visitors to wear cloth face coverings (or a more protective covering, such as a surgical mask) and must require workers to wear gloves. Every business must provide masks and gloves to its employees at its own expense. Moreover, businesses must deny access to a person who refuses to wear a face covering for non-medical reasons. However, if a person refuses to wear a face covering for medical reasons, the business and its staff cannot demand proof of the stated condition.
Finally, businesses must maintain other infection control practices. For example, business must implement policies regarding hand washing, coughing and sneezing etiquette, and proper tissue disposal. If there is no running water at the job site, businesses must provide portable washing stations with soap or hand sanitizer (containing at least 60 percent ethanol or 70 percent isopropanol). Moreover, “high touch” areas, such as bathrooms and equipment, must be regularly sanitized.
The policies are detailed in the text of EO 142 and must be displayed “in conspicuous signage” at the entrances and throughout the worksite. If you intend to commence nonessential construction, you should carefully review the text of EO 142 and implement appropriate workplace policies.
New Jersey Governor Phil Murphy recently signed S2374 into law, expanding the New Jersey Family Leave Act (“NJFLA”) and New Jersey Temporary Disability Benefits Law (“NJTDBL”) and providing additional employee protections during the coronavirus COVID-19 pandemic and future epidemics, including (1) the expansion of reasons for leave; (2) certification changes; (3) intermittent use of such leave; (4) changes related to highly compensated employees; and (5) the expansion of the scope of compensable leave under NJTDBL. These changes are effective immediately and apply retroactively to March 25, 2020.
NJFLA—Expanded Reasons for Leave
During a state of emergency declared by the Governor, or when indicated to be needed by the Commissioner of Health or other public health authority, due to “an epidemic of a communicable disease, a known or suspected exposure to the communicable disease, or efforts to prevent spread of a communicable disease,” an employee may use NJFLA leave for the following new reasons:
Childcare—to care for a child due to a school or daycare closure;
Mandatory quarantine— to care for a family member subject to mandatory quarantine; and
Voluntary self-quarantine—to care for a family member whose doctor recommends a voluntary self-quarantine.
On April 8, 2020, New Jersey Governor Phil Murphy signed Executive Order 122 (2020) (“EO 122”). EO 122 requires that the physical operation of all non-essential construction projects must cease by 8:00 p.m. on Friday, April 10, 2020. Only work on “essential construction projects” may continue to operate physically after that time.
EO 122 defines 14 categories of construction projects that are considered essential. Under EO 122, essential construction relates to the following areas:
“[T]he delivery of health care services,” such as hospitals;
“Transportation projects,” such as roads and bridges;
“Utility projects,” such as projects necessary to produce and transmit electricity;
“Residential projects” if they are exclusively designated as affordable housing;
“Projects already underway” on a single-family home or occupied apartment unit, but only if the construction crew has five or fewer individuals;
“Projects already underway” on a residential unit, where the work must proceed in order for the unit to be occupied by the date set in a legally binding agreement;
Projects involving facilities that manufacture, distribute, store, or service goods or products that are sold online or by essential retail businesses, as defined by Executive Order No. 107 (2020);
“[D]ata centers or facilities that are critical to a business’ ability to function”;
“[T]he delivery of essential social services,” such as homeless shelters;
First responders, such as police and fire departments, related to their response to the coronavirus emergency;
A contract with the federal, state, county, or municipal government;
Securing or abating any hazards on a non-essential construction project site; and
“[E]mergency repairs necessary to ensure the health and safety of residents.”
If a business is engaged in an essential construction project, it must adopt certain policies designed to mitigate the spread of the coronavirus COVID-19. Those policies are generally designed to encourage social distancing and other hygienic practices that reduce the spread of the virus. In addition, businesses engaged in essential construction projects must send home workers with symptoms of COVID-19, must notify its workers of any known exposure to COVID-19 at the worksite without violating their employees’ privacy rights, and must disinfect the worksite when a worker at the site has been diagnosed with the illness.
EO 122 will remain in effect until Governor Murphy revokes or modifies it. Unlike the Commonwealth of Pennsylvania, there does not appear to be a formal waiver process. The full text of EO 122 can be found on the State of New Jersey website here.
Blank Rome’s Princeton office and Coronavirus (“COVID-19”) Task Force are monitoring this ever-changing situation and are here to help. Please contact us if you have any questions about contract compliance during the COVID-19 crisis or any other related commercial issues.
The coronavirus COVID-19 health crisis has interfered with ongoing and future business arrangements throughout New Jersey. As a result, New Jersey businesses that are parties to existing contracts may have rights in the event that they, or their counterparty, are unable to meet their obligations due to COVID-19. There are several legal doctrines that New Jersey businesses may look to in these situations, including impossibility, impracticability, frustration of purpose, and force majeure.
Generally, contract liability is strict liability. This means that a party who breaches a contract is liable for damages even without fault. See Restatement (Second) of Contracts, ch. 11, Introductory Note. However, a party may be able to invoke impossibility, impracticability, frustration of purpose, or force majeure to excuse its failure to perform its contract obligations based on an unforeseen supervening event. Continue reading “When Things Are Not “Business as Usual”: COVID-19 and Contract Defenses”
The outbreak of the novel coronavirus (“COVID-19”) is impacting businesses and public life in New Jersey and around the world. From supply chain disruption, government-ordered closures, and event cancellations to employee safety concerns and social distancing recommendations, every company is facing its own unique challenges in the face of the uncertainties surrounding this global pandemic.
How Can We Help
Blank Rome’s Princeton office, as well as Blank Rome’s Coronavirus (“COVID-19”) Task Force (“Task Force”), is monitoring this ever-changing situation and is here to help. The Task Force is an interdisciplinary group of the Firm’s attorneys with decades of experience helping companies and individuals respond to the legal fallout from disruptive crises and disasters.
Our multifaceted team includes insurance recovery, labor & employment, maritime, litigation, corporate, real estate, and cybersecurity & data privacy attorneys prepared to analyze your issues from every conceivable angle to ensure a holistic, complete, and comprehensive approach to your specific needs and issues. Our Princeton attorneys are ready to assist New Jersey businesses that must respond and prepare for an evolving public health emergency.
Our Task Force continues to update businesses on these and other emerging issues in this rapidly developing legal landscape and has developed helpful and practical preparedness guidance; answers to common questions; and other materials for both individuals and businesses affected by COVID-19.
Links to our most recent guides can be found below: