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Tuesday, October 28, 2014

Ebola Virus: Guidance for Commercial Landlords

With the  number of individuals positively diagnosed with the Ebola virus disease on the rise in the United States, commercial landlords are understandably concerned about their responsibilities and their potential liability to tenants, invitees and employees.  Common questions include the following: Could a person that contracts the disease at the landlord’s property sue the landlord for damages?  Could the landlord be forced to tear down its property if the disease is spread on site, as was the case for the Reston facility described in The Hot Zone: A Terrifying True Story (the best-selling 1994 non-fiction thriller by Richard Preston)?

This article attempts to provide commercial landlords with some basic guidance for Ebola-related matters.  Past crisis situations such as the 9/11 attacks and outbreaks of legionnaire’s disease are instructive to landlords.

What action should a landlord take now to reduce potential liability to tenants?

First, contact your insurance carrier. Determine if your existing policy provides coverage for the decontamination, loss of income and potential liability to tenants in the event property is closed for a period of time as a result of a possible Ebola contamination. Some policies exempt claims caused by or related to Ebola.  Here is a link to an article that discusses concerns a landlord may want to raise with its own insurance carrier:
 
Second, you should review your general emergency preparedness plan with your property manager.  If you do not have an emergency preparedness plan, you should consider adopting one.  The plan need not (and should not) specifically address Ebola disease; but rather, should generally address how the property manager should respond in the event of an emergency with respect to notification of tenants and evacuation of the property.

Unlike mold, radon or pest controls, there is no reasonable method by which the landlord can prevent a person infected with Ebola from entering the Premises.  There are no laws or regulations requiring landlords to take action with respect to Ebola disease. Accordingly, the landlord should not assume any responsibility in that regard, as it could only increase the landlord’s potential liability should Ebola disease be transmitted on the landlord’s property.  

The New Jersey case of Vellucci v. Allstate Insurance Company, New Jersey, Appellate Division, May 23, 2013, is instructive for how a court would probably treat a landlord in an Ebola case.  In that case, the plaintiff contracted Legionnaire’s disease from the water in the men’s bathroom and later died.  In the suit against the landlord, the court found that the landlord “did not test the water for contaminants” until after the plaintiff contracted the disease.  The plaintiff argued that the landlord had an affirmative duty to test the water at the premises.  The trial court disagreed and dismissed the plaintiff’s claim, which dismissal was confirmed on appeal. The N.J. Court of Appeals stated in its ruling that “Plaintiff did not present any rational basis to impose a duty on [the landlord] to foresee the advent of the Legionella bacteria in the building’s water system. There is no statutory or regulatory scheme imposing a duty on owners and managers of commercial office building to take affirmative action to detect the presence of Legionella.”  And, it further stated that “[t]here are no industry standards that require [the landlord] to have done anything more than what it did in response to the salient facts of this case. Once relevant information concerning decedent’s illness was brought to its attention, [the landlord] took appropriate measures to investigate the matter and ascertain what needed to be done to prevent a recurrence.”  (Also see Flaherty v. Legum & Norman Realty, 2007 U.S. District Court for the Eastern District of Virginia – wrongful death suit by occupant who died of legionnaire’s disease was dismissed by the court for plaintiff’s inability to prove standard of care required by property management company)


We can expect that, if an individual is diagnosed with Ebola disease and exposes the property and the tenants to potential risk, the government authorities will inform the landlord of the situation. Only then will the landlord have a duty to take effective action as discussed below.

Here is a link to an Ebola Crisis Communication Plan: http://www.aon.com/ebola-response/attachments/Ebola-Communication_Checklist.pdf
 
Are there actions that a landlord should take to lessen potential liability to its own employees?

A landlord, like any employer, should avoid providing medical advice to an employee.  Landlords should encourage but not demand that its employees speak with their own doctors about their questions and concerns.  Landlord can also refer employees to the Center for Disease Control (CDC) information page on Ebola (http://www.cdc.gov/vhf/ebola/).

In most cases, if an employee is infected with Ebola disease, the employee will be covered by health insurance and worker’s compensation insurance.  The landlord’s principal concern may actually be protecting the confidentiality of the employee’s medical records, which duty may conflict with the landlord’s obligation to protect other employees and the occupants of the property.  The medical facility that diagnoses the disease will undoubtedly report the finding to the CDC, and the government may determine what should be done with respect to the employee and the property. 

If a person with Ebola disease did enter the property, what should the landlord do?

If someone diagnosed with Ebola enters a building, the landlord should immediately contact the Centers for Disease Control, the local Department of Public Health, its lawyer and its insurance carrier.  We know that in Texas the local government disinfected the residential premises of the infected individual and paid for the operation. In New York, the bowling alley visited by an infected doctor was shut down for a period of time. 

Closing the building raises some tricky legal issues.  On the one hand, keeping the building open leaves the landlord vulnerable to a lawsuit if someone who enters the property does in fact contract Ebola disease. On the other hand, closing the building could render the landlord responsible for the loss of business incurred by tenants who are forced to close. Although decisions will have to be made on a case-by-case basis depending on the particular circumstances in consultation with the landlord’s lawyers, the landlord should probably not close the building absent instructions from the federal, state or local authorities that the building must be closed.  Landlords should review their standard leases to determine if there is a waiver of liability under these circumstances. 

Conclusion


Although it is counterintuitive and contrary to the “must do something” nature of most property owners and managers, from a liability perspective, it is probably best to take no preemptive action with respect to Ebola.  Historically, courts have been reluctant to hold property owners responsible for third-party activities on their properties unless the landlord has clear notice of imminent danger.  In the event that the property is visited by an individual with the Ebola disease, the landlord should notify the governmental authorities and follow their instructions in consultation with their lawyers.