As the first two COVID-19 vaccines begin to rollout to select populations in Michigan categorized by the CDC as priority Phase 1A, Community Associations and all Michiganders are looking forward to an end to the coronavirus pandemic. With the pandemic's end finally coming into view, litigation relating to COVID-19 infections and exposure are likely to flourish in 2021. Fortunately for Michigan's Community Associations, the COVID-19 Response and Reopening Liability Assurance Act (the "Act"), signed into law by Michigan Governor Gretchen Whitmer, provides a liability shield to individuals and entities that comply with the various COVID-19-related governmental directives.
In short, the Act provides immunity from COVID-19 tort liability claims to a "person" (meaning an individual, partnership, corporation, association, governmental entity, or other legal entity) acting in compliance with the COVID-19-related laws, rules, regulations and executive orders that "had not been denied legal effect at the time of the conduct or risk that allegedly caused harm."
Under Michigan law, tort liability claims include causes of action such as negligence, gross negligence, or breach of fiduciary duty. Under the Act, a "COVID-19 claim" could be a claim for negligence, gross negligence, breach of fiduciary duty, or perhaps even the intentional infliction of emotional distress "arising out of, based on, or in any way related to exposure or potential exposure to COVID-19, or to conduct intended to reduce the transmission of COVD-19." Immunity from claims of breach of fiduciary duty are of particular importance to Community Associations because it provides protection from personal liability for the individual board members of the Association.
It must be noted that the immunity provided by the Act is specifically limited to tort claims, potentially leaving open the prospect of other COVID-19 claims that may still exist such as claims for breach of contract for an alleged failure to properly repair or maintain property under the Community's Documents. Fortunately, these breach of contract claims are generally more limited in scope because they must be asserted by an owner and cannot be asserted by a tenant, invitee, or guest like the tort liability claims. The Act applies retroactively to any claim or cause of action that accrues after March 1, 2020.
The Act provides that Michigan Community Associations cannot be subjected to tort liability for COVID-19 exposure claims if they establish that they complied with the federal and state statutes or regulations, executive orders, state agency orders, and public health guidance in effect at the time of the conduct or risk that allegedly caused harm. Compliance with executive orders and other directives that are subsequently overturned or struck down will not apply, so Community Associations should keep abreast of the current statutes, executive orders, and related guidance and keep records evidencing their compliance.
Of particular importance, the Act provides individuals and entities with some leeway in regard to compliance with the quickly changing administrative and legal landscape. Specifically, "an isolated, de minimis deviation from strict compliance" with COVID-19-related government directives will not cause individuals or entities to lose their immunity under the aforementioned Act. This means that isolated, minor defects with an Association's compliance with the applicable directives should not result in the Association losing the immunity protection afforded by the Act.
Overall, the COVID-19 Response and Reopening Liability Assurance Act will benefit Michigan's Community Associations. While the immunity provided is limited to tort claims, the Act will encourage and help protect Community Associations that take COVID-19 governmental directives seriously and follow them closely.
If you have any questions regarding the Act or ensuring compliance with applicable government directives, or would like assistance with drafting appropriate COVID-19 rules and regulations, please contact one of the experienced attorneys at our firm.