DEFENDING COMMERCIAL EVICTIONS DURING COVID-19/CORONAVIRUS PANDEMIC
Small businesses, perhaps more than any other enterprises, have been slammed hard by the present abrupt, catastrophic economic decline. Landlords holding leases on the premises where the vast majority of small business entrepreneurs operate are serving, or threatening to serve, eviction notices.
Due to the combination of “stay at home” directives and general fear of contracting the deadly Covid-19/coronavirus, in-person customers for goods and services have dropped to near zero. The inevitable consequence is inability of small business owners to meet the financial demands of their lease. It is not uncommon for the leases under which small business owners operate to not contain any reference to anything other than eminent domain or fire damage as justification for nonpayment of rent. In leases prepared prior to the business conditions which now exist, little, or no, attention has been given to what is now upon us, an economic disaster of proportions not seen since the Great Depression between 1929 and 1939.
BUT THERE IS HOPE!
We at CPLS, P.A. (The Center For Professional Legal Services) have taken the initiative for our clients. Although there is a paucity of Florida law addressing “economic disaster” as an affirmative defense in an action for breach of contract we have found some cases which should be of help in establishing such defense in light of today’s economic conditions.
The affirmative defense of impossibility of performance has been defined as
“…(referring) to those factual situations, too numerous to
catalogue, where the purposes, for which the contract was
made, have, on one side, become impossible to perform.”
A major issue inherent in the “impossibility” defense is lack of foreseeability of the event upon which reliance is made. In Florida, hurricanes of certain intensities and cyclical declines in real estate values have been held to be foreseeable events in existence at the inception of the contract, thus defeating the “impossibility” defense.
The root cause of the crash of commercial inactivity is a combination of widespread fear of contracting a deadly, highly contagious, viral disease for which there is no known cure coupled with governmental directives for the general public to self-quarantine in an effort to prevent proliferation of the disease. I suggest it is safe to argue the ensuing nationwide near total discontinuance of traditional economic activity was not foreseeable.
The concept of force majeure is not to be confused with “Act of God”. Act of God means “…only an unforeseeable act exclusively occasioned by the violence of nature without interference of any human agency.” A force majeure is “(a)n event or effect that the parties could not have anticipated or controlled.” Black’s Law Dictionary, Seventh Editiion1999.
Reservation of “Act of God” as an affirmative defense for nonperformance must be contained in the underlying contract in order to be available. It appears as though, in the absence of express exclusion in the underlying contract, force majeure is more likely to be successful.
It would seem Hurricane Andrew, which swept through Florida in 1992, qualifies as an act of God as contrasted with the huge earthquake which occurred in Haiti., the latter being more clearly a force majeure.
For further information or answers to your questions, contract Attorney
J. Leonard Fleet, Esq. at email@example.com