By Scott Welker, Attorney, Vial Fotheringham LLP
In American law, there is a long, quiet history of the ill suing the people who made them ill. Dating at least back to the 1800s, defendants have been held liable in court for negligently spreading infectious diseases. These cases have run the gambit, including lawsuits for the spread of tuberculosis (1953), smallpox (1910), typhoid fever (1896), and whooping cough (1884), just to name a few. In more modern times, lawsuits regarding the spread of sexually transmitted diseases have become common.
Now we are in the age of COVID-19. We are already seeing the first signs of the litigation that will no doubt follow as the dust settles. You may have read reports of a 51-year old Walmart employee who recently died of coronavirus, which he allegedly contracted on the job. His estate has sued megastore for wrongful death.
So, do community association’s have cause for concern? I believe they do. A community association’s legal obligations to its members are defined by the association’s governing documents, which makes the situation a little different than the cases referenced above. In order to sue an association for contractions of an infectious disease, a plaintiff would need to establish that the association or the board breached the governing documents or other legal duties owed to the members (such as fiduciary duties). This is exactly what one litigant did in Florida in 2008 in a case that resulted in a Federal Court decision involving the homeowner, the HOA, the community management company, and the insurance providers for the HOA and the management company.
In this case, a Florida homeowner sued its HOA and community management company when the homeowner’s child contracted a viral infection after swimming in the HOA’s pool. The homeowner alleged through expert testimony that the viral infection originated from the pool and that the pool was not properly chlorinated. The HOA and the management company each tendered claims to their general liability insurance providers but the Federal Court held that the insurance companies had no obligation to provide coverage under the policies (which were written by a large underwriter commonly used across the country).
The lack of insurance coverage is particularly concerning in this case. The outcomes in these kinds of cases will likely vary widely depending on the specific facts and circumstances of each case. They will likely depend heavily on each side’s use of expensive, expert witnesses and they might involve Plaintiff’s counsel working on a contingency basis – meaning that the homeowner escapes paying legal fees to keep the case moving. So, regardless of the final outcome, if an HOA cannot rely on insurance coverage either during or at the end of the case, the lawsuit itself will be a substantial financial burden.
Community associations should take early steps to mitigate the risk of infection. Directives from national and local policy makers should be followed closely as they could be used as evidence of a baseline standard in fiduciary duty claims against a board. Policies should be drafted and adopted in consultation with legal counsel for closure of facilities, virtual meetings, and other best practices. Drafting formal policies both helps ensure consistent action and provides good evidence in case of a legal challenge. Boards should carefully consider how to handle reports of sickness from homeowners with an eye toward protecting privacy and protecting health. Again, professionals should be consulted on these matters.
Better days are to come. Until then, let’s steer our communities through these times responsibly.