This year, hurricanes, with record rain, storm surges and winds, have resulted in severe damage to both commercial and residential buildings, mold contamination, and significant interruption to businesses in the impacted areas. Several Caribbean islands have been wiped away, Key West is unrecognizable, and Houston may have lost more than 150,000 homes. For most of us, luckily, the damage was less severe. My wife and I have leaks in our roof and elsewhere and lost a window (but gained an indoor tree). We lost power for about four and a half days. Friends in South Miami are still without power as of the writing of this post.

The legal implications of the hurricane aftermath extend well beyond mere rebuilding. Mold contamination and water intrusion must be addressed and properly remediated. Design and construction defects may be alleged to have exacerbated the extent of the damage from the hurricane. Employers may face workers’ compensation claims from employees and also may have vacation and lost wages concerns. Insurance coverage may be at issue. Construction costs may have escalated causing losses to builders or developers. Building permits and development approvals may expire due to delays caused by the hurricane. Condominium associations may not have sufficient reserves to act on emergency repairs. Construction licensing regulations may affect the ability to commence repairs and provide penalties for failure to engage properly certified contractors.

So what to do?

  • Make sure you and your family, employees and customers will be safe in your home or building.
    • Are there electrical system damage and risks?
    • Is the water safe to drink?
    • Is there a risk to the structural integrity of improvements?
    • Other Physical Hazards (don’t panic, but snakes and scorpions like piles of debris).
    • Contamination? Such as leaking petroleum tanks, chemical spills and the like.
  • Address potential health risks, whether mold or risky property conditions.
  • Secure your property and protect it from potential or further loss of property value.
  • Deal with Insurance.
  • Deal with Government Agencies such as FEMA
  • Deal with FP&L’s reimbursement programs.
  • Check with your mortgage lender. The lender may have the right to collect insurance proceeds and disburse the funds as repair and rebuilding proceed.
  • Only then commence to restore your property. Use only licensed and insured contractors. Where required by law, obtain all necessary permits and approvals. If you are part of a condominium or property owners’ association, make sure all Board approvals are obtained.
  • Get on with your life

Our lawyers have assisted clients in resolving insurance disputes, negotiating agreements in connection with assessment and remediation services, resolving design and construction defect claims,  implementing programs for addressing employee benefits, preparing hurricane and disaster response plans, and in finding their way through myriad environmental regulations.   In one recent example,  we resolved an insurer’s denial of coverage for water damage based on a theory that the building envelope was defectively designed or constructed and that the damage was not caused by a windstorm (as provided in the policy). By engaging the proper experts, a successful argument was made that the building envelope was properly designed and constructed and that it was indeed the hurricane-force winds that caused the water intrusion.

In another example, we assisted a client in requesting an extension of the expiration date for various development approvals that could not be met due to the direct delays of the hurricane, the difficulty in obtaining materials and the need to redesign to address increases in construction costs.

In addition to helping guide our clients in making proper recovery efforts, we are also focusing our clients’ attention on preventative measures to avoid future repeat damage and liability. We have found that many building and business owners have been hesitant to expend significant sums in prevention, in part to the belief that the recent hurricane landfalls in Florida were merely a fluke.  Whether global warming or a regular climatological cycle, it appears that the Atlantic hurricane season has been on an upswing that may continue for a decade or more. Proper preparation can lessen the business impacts and speed up recovery efforts.

 

Sometimes the facts of a case are just sad. A tenant recently came to see me because he was being evicted from the condo he was renting.  He was not going to contest the eviction.  There were only 30 days left on the lease any way and, one way or the other, he had to move.  He had found a new condo to rent, but when the new landlord did a background check, he found about the eviction and the circumstances surrounding it and denied the rental application.  Now, the tenant wanted some sort of revenge.

The circumstances leading up to the eviction stemmed from the complaints of a cantankerous neighbor. The neighbor was an elderly man who lived with his even older mother.  From the day the tenant and his fiancée moved into the condo, the neighbor had issues.  The mother accused the tenant and his fiancée of being drug dealers (she is a nurse and he is a medical technician and has an at home e-commerce business).  The neighbor began to call condo security and file noise complaints.  The first complaint was about 2 months after the tenant moved in.  The neighbor complained about “loud music” at 6:00 p.m. on a Saturday.  Security responded.  When they arrived, they could not hear any music, but asked the tenant to keep it down.  The next complaint was filed for loud talking on the balcony at night.  Security was again dispatched.  Several similar complaints were filed and, at least one time, the police were called.  The police found no disturbance and did not file a report.

However, because of the number of complaints, the condominium association determined that the tenant was in violation of condo rules and advised the landlord, the owner of the condo unit that it had to evict the tenant. If landlord failed to evict tenant, association would fine landlord.  Therefore, landlord filed the eviction.

Tenant asked me if he could sue the association for defamation. However, everything that the association would have told a potential landlord was true – there were numerous complaints against the tenant and an action to evict was pending.  It didn’t matter if the neighbor’s complaints were not true.  We turned our attention to the neighbor.  The neighbor’s harassment of the tenant was the direct cause of the eviction and the subsequent denial of the tenant’s denial of a new lease. Neighbor was the cause of all of tenant’s problems.  Was there anything that could be done for the tenant?  What damage had tenant suffered?

Tenant expressed that he only wanted his reputation back. The eviction was damaging to him and his fiancée.  We discussed whether we could get some letter from the neighbor explaining that his false accusations led to the eviction.  But what leverage did we have to get such a letter?  A lawsuit perhaps?  The theories were sparse:  tortious interference with contract and slander and defamation.  These would be costly to prosecute and very difficult to prove.  And worst of all, a “crazy” defendant is a dangerous defendant.  Moreover, it really is not a good idea to use the court system for this purpose – to extract an apology.  Unless the tenant was willing to go all in on a lawsuit, we couldn’t take the case.

Looking back, my advice would have been, had the tenant called me as the neighbor was harassing him, to fight the complaints with the association at the time that they were made. Set the record straight as quickly as possible.  Make sure that the security reports were thorough and accurate.  If this were done, the association would have had no grounds to force the landlord to evict and, as the neighbor continued to complain, the association would have eventually stopped listening.  Sadly, one cranky neighbor affected another person’s ability to occupy and enjoy one condo and to rent another.  Tenant should have fought back early and hard.

 

chopper_drone (00152264)The best and worse examples of drone use recently occurred on the same day. On July 17th of this year, the first FAA-approved unmanned aerial vehicle (UAV)delivery occurred, bringing medicine to a remote, rural Virginia clinic. On the same day, one or more private drones interfered with the helicopters of the San Bernardino County Fire Department and the US Forestry Service as they were attempting to quell a raging wildfire that had crossed Interstate 15 northeast of Los Angeles. The interference grounded the helicopters for more than 20-minutes.

While for several years, UAV development and use in the United States was hampered by a recalcitrant Federal Aviation Administration (FAA), European nations proceeded rapidly to implement the use of drones for commercial use. Commercial drone operators, such as Google and Amazon, were concerned that the FAA’s foot-dragging, primarily through the use of draconian and Luddite rules, would irreparably delay the UAV “flight path”. The commercial operators lobbied Congress, which then passed the FAA Modernization and Reform Act (Public Law 112-95). The Act requires that the FAA come up with a plan for “safe integration” of UAVs by September 30, 2015.

Initially, the FAA resisted losing control over the nation’s air space, and floated [pun intended] proposed rules that had the effect of hampering the use of drones for general commercial purposes. For example, FAA insiders initially suggested that the agency may require licensing of UAV pilots with requirements for training and fees close to that required of private pilots. Initially proposed rules would have instituted regular monitoring requirements for drone pilots, limited flights to an apex of 400 feet and only in daylight, and limited flights to control by line-of-sight. While some operator training certainly seems a reasonable requirement, the technology in off-the-shelf drones has already eliminated the need for daylight and line-of-sight limitations.

Whether through lobbying efforts or pressure by Congress, the FAA appears to have removed its agency “head” from the clouds. More exemptions to existing rules have been granted in the last few months than in all of the preceding years and rules that would limit UAV flight to daytime and line-of-sight no longer have wings.

Now that having silent rotor-driven, 4-armed drones flying through business districts and residential neighborhoods seems inevitable, what risks should concern a property owner?

The first risk to come to mind is property damage and personal injury. Drones will, without a doubt, crash. Do you really want the guy who delivers your cold pizza, flying a drone to your front door with your mushroom, pepperoni 2-for-1 special? On one hand, the law of negligence in most states is well-settled, and the tort-feasor may be liable for his or her negligent actions. A new set of laws will not be necessary for a private civil action against an errant UAV pilot. On the other hand, will insurance be available to cover the damages? An exclusion from coverage under the typical commercial general liability insurance policy is:

Bodily injury or property damage that may result from the use of aircraft,           watercraft, or autos that are owned, operated, or rented or loaned to any insured is excluded.

That exclusion will not void coverage to an injured property owner so long as the owner is not the one owning or operating the UAV. What happens though when the pizza parlor in the retail center accidently sends its drone through the window of a jewelry store in the same center? After the inevitable free for all for free Rolexes ends, will the pizza parlor have sufficient insurance (if any) to cover jewelry theft? Will the landlord or property manager have liability for allowing drone flights by a tenant? Will business interruption insurance cover for loss of business caused by a drone crash? Will it be necessary for a landlord to install secure UAV landing pads as more tenants insist on the right to use drones in their businesses?

Similarly, most homeowner insurance policies also exclude injury and property damage from use of aircraft; meaning that your assets may be exposed if your drone crashes through your neighbor’s patio screening. However, under the standard ISO 2000 Homeowners 3 Policy form, “aircraft” is defined as “any contrivance used or designed for flight except model or hobby aircraft not used or designed to carry people.” While the form does not consider model or hobby planes as “aircraft”, that exception changes if they are designed to or are used to carry cargo, in which case the exclusion would then apply.

From a business or property owner’s point of view, having insurance coverage adapted to this new age will be critical. For the insurance company that is first to the runway with appropriate coverage, the sky’s the limit.

We won’t address the use of drones for police surveillance in this post, but privacy rights are an issue for property owners as well. For example, you own a luxury condo unit on the 35th floor of Baywatch Tower on South Beach and a drone appears outside of your spacious balcony. A video of you au naturel becomes a You Tube sensation (and not in a good way). What rights do you have as the unit owner? Does the condo association have any rights or obligation to protect its unit owners’ privacy?

What if the major tenant in your Sunrise suburban office building is harassed by a drone outside of its windows? As the landlord, you control the common areas; you will, therefore, likely be responsible to cause the intrusion to end. How do you track down the drone operator? May the air space above your property be used by third parties? What responsibility do you have under your leases?

Self-help is not recommended. Last November, a New Jersey man was arrested after shooting down a camera drone that was taking pictures over his property. More recently, a drone operator prevailed in a lawsuit against a neighbor that had blasted his UAV out of the air with a shotgun. The neighbor had also been jailed for possession of a weapon for unlawful purpose and criminal mischief as a result of his actions.

So, what is a property owner to do? Trespass and nuisance are possible causes of action against the snooping drone pilot. A trespass is any unwanted physical intrusion upon property owned by another. As the FAA refines its regulations and drone use becomes widespread, courts will likely narrow the definitions of an unwanted physical intrusion and interference.

The common law concepts of intrusion upon seclusion and public disclosure of embarrassing private facts also may provide an action for violation of primary privacy claims arising from drone use. Most states apply an “objective person standard” for an intrusion claim, meaning that the complainant must show that a person of ordinary sensibilities would be offended by the alleged intrusion. Generally, the intrusion must also be of a highly offensive nature and intentional (of course, that You Tube video will be shown endlessly in court, will it be worth it?)

So, where will drones take us? To infinity and beyond? Or a legal morass? Time will tell, but we may not have to wait long for an answer.

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