Byrne set to speak at Webinar

Posted on August 12th, 2021

David J. Byrne Esq., Chair of Ansell Grimm & Aaron’s Community Association Law Group, will be a featured presenter at the Community Associations Institute of New Jersey’s Wednesday, August 18th, Webinar.  CAI’s Webinar one-hour Webinar will begin at noon. Mr. Byrne’s presentation will focus on the rights of, and strategies available to, community associations facing demands for accommodations, emotional support and service animals.

Registration is free and currently open for all CAI-NJ members via the CAI-NJ website. Community association managers will receive 1 CEU credit for attending.

Ansell Grimm & Aaron Roundup July 2021

Posted on August 12th, 2021

Mitchell Ansell Featured in Industry Magazine

NJ Criminal Defense AttorneyMitchell Ansell, Shareholder, and Chair of the Criminal Defense Department, recently was featured as a power player by Industry Magazine in their July/August 2021 issue. This inclusion provides an opportunity to more personally know a power player who prides himself on the lasting impact and positive influence he provides to clients.

Industry Magazine covers anything and everything of interest for influential tastemakers and trendsetters across New Jersey and New York, from fashion and entertainment to lifestyle and health, to travel and business. The article is available here.


NJSBA Submits Report & Recommendations to the NJCRC

The New Jersey State Bar Association’s Cannabis Law Committee provided the New Jersey Cannabis Regulatory Commission (“CRC”) with a report and recommendations regarding the CRC’s implementation of the New Jersey Cannabis Regulatory Enforcement Assistance, and Marketplace Modernization Act (“CREAMMA”). The report covers a broad range of topics, from macro-issues like marketplace and licensing regulations to more micro-issues related to expungements and CREAMMA’s impact on family law matters. Both Joshua Bauchner and Zachary Windham (pictured) of AGA’s Cannabis Law Practice Group, contributed to the report and recommendations. A copy of the report is available here.



Michael Benedetto Closes on Ocean Block Lot Sale

NJ Commercial Real Estate AttorneyMichael Benedetto, Managing Partner and President of the Firm, who also serves as the Chair of the Commercial Real Estate Department and the Corporate, Finance, & Banking Department, recently served as counsel to the Seller in an off-market sale of a parcel of property that sits approximately 300 feet from the Atlantic Ocean in Long Branch, New Jersey. The property was the last parcel for an ocean block assemblage of just over 1.8 acres. The purchaser of the property was PV Motel, LLC, an affiliate of Kushner Companies, who reportedly intends to construct an oceanfront hotel on the site along with three other lots which make up the assemblage.



Joshua Bauchner Featured in Commerce Magazine

NJ Bankruptcy AttorneyJoshua Bauchner, a shareholder who serves as both Co-Chair of the Litigation Department and head of the Cannabis Law Practice Group, was featured in the July 2021 issue of Commerce Magazine as part of the article Cannabis: A Growing Business Sector in the Garden State? Josh was one of several influential attorneys from across New Jersey asked to discuss what this budding industry means for entrepreneurs right now. Commerce Magazine is the flagship publication of the Commerce & Industry Association of New Jersey. The article is available here.x



Ashley Whitney Files PBA Appeal with NJ Supreme Court

Ashley Whitney of AGA’s Woodland Park office recently filed an appeal with the New Jersey Supreme Court, challenging an opinion from the Appellate Division which upheld the termination of a police officer with no prior discipline for alleged violations of the Criminal Justice Information System through his use of full-disclosure vehicle registration searches despite the police department’s failure to identify a single full-disclosure search conducted without justification.

The Appellate Division’s decision may have a lasting impact upon the law enforcement community as the performance of searches by police has not been significantly addressed by New Jersey Courts since the decision in State v. Donis, 157 N.J. 44 (1998).

The decision is especially pertinent to the issues facing police as it comes on the heels of the Supreme Court’s decision in the matter of In re AG Law Enf’t Directive Nos. 2020-5 & 2020-6, 2021 N.J. LEXIS 486 (June 7, 2021), which upheld the New Jersey Attorney General’s Directives requiring the release of the names of police officers who receive major discipline.

Seth Rosenstein Appointed as FINRA Arbitrator

Seth Rosenstein of AGA’s Woodland Park and White Plains offices was recently appointed a FINRA Dispute Resolution Services Arbitrator. Having practiced in all aspects of securities class action litigation before state and federal courts throughout the United States, as well as representing Fortune 500 financial services companies in arbitration actions brought before FINRA arbitration panels, Mr. Rosenstein will now hear disputes subject to FINRA jurisdiction — which will supplement his unique perspective and experience representing aggrieved investors and financial services professionals. FINRA representation is one component to Mr. Rosenstein’s multi-disciplined practice, which continues to include commercial litigation, cannabis law, and disputes concerning real estate and home improvement contractors.


Roy Hibberd Counsels Insurance Company Acquisition

Roy Hibberd, corporate counsel in the firm’s Ocean office, recently provided legal counsel to McCue Captains Agency of Little Silver, NJ, in its acquisition by World Insurance Associates LLC. The acquisition was announced on July 1, 2021. As a Top 100 Insurance Brokerage, World Insurance Associates’ acquisition will provide McCue the opportunity to expand their national presence while continuing to provide personalized services in Property, Liability, Life and Benefits insurances for both businesses and individuals.



Jennifer Krimko Helps Hillel Win Expansion Approval

New Jersey Real Estate AttorneyJennifer S. Krimko, Esq., Co-Chair of the Firm’s Land Use and Zoning Department, recently secured approval for an expansion of the Hillel School campus in Ocean Township, as well as the construction of a new, state-of-the-art firehouse for the Township’s Fire District, at no cost to the taxpayers. The approval includes the construction of: a new, approximately 56,613 square-foot, three-story high school building; approximately 15,872 square foot addition to the school’s early learning center building; and approximately 6,725 square-foot, new fire station building. Additionally, construction of tennis courts, a basketball court, new parking, drainage structures, landscaping, and related site improvements were also approved.

You can view the video of the Board’s decision, including a digital rendering of the expanded facility here.



Cannabis CLEs

On July 22 Joshua Bauchner participated as an invited speaker for a webinar hosted by the New Jersey State Bar Association’s Cannabis Law Committee. The webinar, The Ins and Outs of Licensing of Recreational Cannabis Businesses in New Jersey, addressed the parameters set out by the New Jersey Cannabis Regulatory Enforcement Assistance, and Marketplace Modernization Act (“CREAMMA”) and what those parameters mean for potential licensees.
The panel discussed the six classes of licensure, microbusinesses, impact zones, municipal land use, and anticipated regulations from the Cannabis Regulatory Commission (“CRC”).
Josh also moderated a CLE on August 5, 2021, as part of the NJ Society of CPA’s day-long Cannabis Conference. The panel will discuss “The Legal Lifecycle of a Cannabis Business.”

Ansell Grimm & Aaron is Hiring

Ansell Grimm & Aaron PC is seeking a Law Clerk to work in our Real Estate Department. For more information or to apply, please visit us on LinkedIn .


Cannabis Law Update

Posted on July 16th, 2021

NJSBA Cannabis Law Committee Issues Report and Recommendations to NJ Cannabis Regulatory Committee

On Tuesday, July 13, 2021, the New Jersey State Bar Association Cannabis Law Committee provided the New Jersey Cannabis Regulatory Committee with a comprehensive Report detailing issues with the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (“CREAMMA”), and proposing recommendations to resolve those concerns.  The Report was presented with the goal of clarifying apparent ambiguities, providing further transparency, and remedying apparent inconsistencies identified in CREAMMA.

In doing so, the Report identifies twelve (12) overarching topics on various issues of concern and provides a recommendation for each; including:  (i) lab testing, (ii) regulation of cannabis, (iii) marketplace regulations of recreational cannabis, (iv) marketplace regulation pertaining to hemp, (v) licensing, (vi) microbusiness and conditional licensing, (vii) municipal/land use, (viii) taxes, (ix) taxes, (x) impact zones, (xi) acute impairment considerations, (xii) expungement, and (xiii) family law considerations.

Ansell Grimm & Aaron attorneys Joshua S. Bauchner, co-chair of the Cannabis Law Committee, and Zachary L. Windham, a committee member, led the effort in conjunction with Lisa Gora, co-chair, and Sarah Trent, secretary.  The Report was informed by the contributions of numerous Committee members across multiple disciplines, as reflected in the appendix.

A copy of the Report is available here:
Report and Recommendations to
NJ Cannabis Regulatory Commission


The Ins and Outs of Licensing of Recreational Cannabis Businesses in New Jersey

On Thursday, July 22, the New Jersey State Bar Association’s Cannabis Law Committee will be hosting a webinar to discuss what you need to know about licensing in the State’s new recreational cannabis industry. The webinar will address the industry parameters set out by New Jersey’s Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (“CREAMMA”) and what those parameters mean for potential licensees. Topics will include the six classes of licenses, microbusinesses, impact zones, municipal land use, and anticipated regulations from the Cannabis Regulatory Commission (“CRC”). You will hear from Jordan Asch, Esq. of Asch Legal LLC, Joshua S. Bauchner, Esq. of Ansell Grimm & Aaron, PC, Lisa Gora, Esq. of Wilentz, Goldman & Spitzer, PA, Charles Latini of L&G Planning, LLC, and Sarah Trent, Esq. of Valley Wellness.

For more information and NJICLE Webcast- The Ins and Outs of Licensing of Recreational Cannabis Businesses in New Jersey click here.

Ansell Grimm & Aaron’s Cannabis Law Practice helps clients, at every stage of their cannabis business’ development, to navigate the complex legal landscape including production, sale, use, regulation and legalization.  Please contact Joshua S. Bauchner, Esq. ( or Zachary L. Windham, Esq. ( at (973) 247-9000 for additional information.



Client Alert: Municipalities’ Implementation Of CREAMMA
What You Need To Know

Posted on June 15th, 2021


Q. When do we need to decide whether to opt in or out?
A. Municipalities have 180 days from the effective date (February 22, 2021) of the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA) to opt-out of specific cannabis license Classes, or by August 21, 2021.

Q. What happens if we do not make a decision before the opt-out deadline?
A. If no action is taken, Class 5 license activity (cannabis retailers) will be a conditional use in all commercial zones or retail zones and Class 1, 2, 3, 4, and 6 license activities (cultivator, manufacturer, wholesaler, distributor, & delivery respectively) will be permitted uses in all industrial zones.  In effect, taking no action equates to opting-in.

Q. Can we choose to opt-out of specific license Classes?
A. Yes. A municipality may prohibit the operation of any one or more license Classes. However, the license Class(es) you do permit will fall under the default zoning requirements without additional municipal action.

Q. Can we prohibit adult-use cannabis establishments if we already have an Alternative Treatment Center dispensary in our municipality.
A. Yes. However, a prohibition ordinance could impact the Alternative Treatment Center’s ability to participate in the adult-use cannabis market depending on the license Class(es) you prohibit in the ordinance.

Q. Can we limit the number of licenses of a particular Class?
A. Yes. Municipalities can restrict the number of available licenses for each Class of license permitted in the Municipality.

Q. What sort of distance requirements can we place on cannabis licenses?
A. You can require that cannabis licenses be minimum distances from places like schools, houses of worship, childcare facilities, substance rehabilitation facilities, etc. You can tailor the requirements by cannabis license class or location, requiring licensees maintain a certain distance. You can also require that cannabis licensees be a minimum distance from other cannabis licensees and specify by license class.

Q. Can we regulate the signage/store front of a cannabis licensee?
A. Yes. You can regulate a cannabis establishment’s signage as you would any other business in your municipality.

Q. Can we create a local licensing process for potential licensees?
A. Yes. Municipalities can impose their own local licensing requirements as part of the restrictions on the number of cannabis licenses.

Q. Can we make state licensure a requirement for municipal approval?
A. No. CREAMMA dictates that a municipality shall notify the Cannabis Regulatory Commission that it either approves or denies each application forwarded to it. Therefore, municipal approval is a prerequisite to receiving a state license from the Commission.

Ansell Grimm & Aaron Round Up: June 2021

Posted on June 3rd, 2021

AGA Secures Dismissal Of Nationwide Class Action 

Ansell Grimm & Aaron attorneys Joshua S. Bauchner and Anthony J. D’Artiglio obtained dismissal of a putative, nationwide class action for lack of subject matter jurisdiction in New Jersey federal district court.  The case, Cindy Adam v. Frank V. Barone, et al., Civ. A. No.: 3:20-cv-10321-MAS-LHG, concerned claims alleging that Defendants violated various California and Federal consumer protection statutes through their online sale of natural beauty products, including seeking to certify a nationwide class alleging violations of over 40 different States’ consumer protection statutes.  Following Ansell Grimm & Aaron successfully securing a transfer of the case from the Northern District of California to the District of New Jersey, Defendants filed a Motion to Dismiss arguing, among other things, that a pre-litigation offer of a full refund for the purchased products made in the ordinary course of business mooted plaintiff’s claims and divested the Court of subject matter jurisdiction.

The Court rejected plaintiff’s argument that the U.S. Supreme Court’s decision in Campbell-Ewald Co. v. Gomez, did not moot the claims because, in that case, the Supreme Court held that an unaccepted offer of judgment or an unaccepted settlement offer could not defeat subject matter jurisdiction.  Ansell Grimm & Aaron explained that Campbell-Ewald does not apply because a pre-litigation, ordinary course offer of a refund is not a “settlement offer” – a bright-line distinction between pre-litigation refunds and post-litigation settlements.   The Court agreed explaining that it was declining “to extend Campbell-Ewald as Plaintiff suggests, where a refund was offered in the ordinary course of business by a representative of the company during a phone call with a customer.”  As a result, the offer of a refund mooted Plaintiff’s claims such that there was no “case or controversy” permitting Article III subject matter jurisdiction for the Court.  By securing dismissal at the pleading stage, Ansell Grimm & Aaron saved its clients substantial time and expense which otherwise would have been wasted defending a meritless, nationwide class action.

Ansell, Grimm & Aaron attorneys regularly engage in class action defense arising from frivolous claims and seek to obtain a similarly quick and cost-effective result for our clients. Of course, some matters do have merit, in which case our attorneys work to narrow the claims or class towards minimizing damages and obtaining a favorable settlement.

For additional information on Ansell Grimm & Aaron’s class action practice, please contact Joshua S. Bauchner, Esq. ( or Anthony D’Artiglio, Esq. ( at (973) 247-9000.

AGA Attorney Testifies Before State Cannabis Regulatory Commission

Ansell Grimm & Aaron attorney Zachary L. Windham testified before the Cannabis Regulatory Commission on June 1, 2021.  His testimony concerned whether limitations should be imposed on the potency of concentrates and edibles that will be sold in New Jersey marijuana dispensaries.  Zachary explained:  “The path of least resistance from a consumer standpoint would be to purchase all of their cannabis products from the unregulated supplier, who could provide them with a wider variety of product types.”  Accordingly, Zachary recommended against restrictions favoring effective labeling and consumer education.  Media coverage concerning his testimony is available here.

Our dedicated Cannabis Law Practice Group stands ready to assist applicants with ensuring they are prepared when the Request for Applications is issued for adult use cannabis, as well as for additional medical licenses.  Please contact Joshua S. Bauchner, Esq. ( or Zachary L. Windham, Esq. ( at (973) 247-9000 to get started today.

George A. McGowan III Joins AGA As Corporate Attorney

George A. McGowan, III, joined as counsel with the firm. His practice is concentrated in areas of corporate and commercial law (both public and private companies), technology, and transactional matters including Mergers and Acquisitions, Trusts and Estates, Financing and Real Estate. His client roster includes a major data center, a streaming media company, several international manufacturing companies, professional practices, and closely held businesses. Mr. McGowan brings our clients both his private practice expertise with Fortune 500 Company knowledge and experience.

He is a graduate of Manhattan College with a Bachelor’s of Science in two majors, Finance and Marketing. He graduated from Seton Hall University School of Law with a J.D.  He clerked for the Honorable Patrick McGann, in the Chancery-General Equity Court in Monmouth County. He is admitted to practice in the State of New Jersey and its Federal Courts.

Nicholas J. Falcone Joins AGA As Counsel In The Land Use Department

Nicholas J. Falcone is counsel to the firm with the concentration of his practice relating to zoning and land use, and the representation of clients in all phases of governmental approvals for site plans, subdivisions and variances before municipal planning and zoning boards, as well as appeals therefrom. Before joining the firm Mr. Falcone represented planning boards and school districts in Monmouth County, as well as business statewide. Earlier, Mr. Falcone worked at the national law firms Fox Rothschild and the labor and employment boutique Grotta, Glassman and Hoffman, where his practice focused on labor and employment law, representing employers in state and federal courts in all aspects of civil litigation, administrative hearings, and provided HR counseling.

After law school graduation, Mr. Falcone was law clerk to the Honorable Martin L. Greenberg, Superior Court, Chancery Division: General Equity and Probate, and to Honorable Seymour Margulies and Honorable Fred J. Theemling, Jr., Superior Court, Civil Division, Hudson County, New Jersey. While in law school, Mr. Falcone worked as a law clerk at the firm of former U.S. District Court Judge Herbert J. Stern.

Mr. Falcone has had life long association with the arts. Prior to becoming an attorney, Mr. Falcone worked in the Broadway theater, including for the legendary director/producer Harold Prince, film and opera communities. Mr. Falcone served on Board of Directors of the Garden State Film Festival, 2009-2019, including as Chairman of the Board and Chairman and of the Programming Committee for the last six of those years.

Lunch & Learn:  Social Equity in New Jersey and New York Cannabis Programs Video and Presentation

Posted on May 13th, 2021

NJCBA VP Marianne Bays, Ph.D., hosted a special guest panel last week which discussed Social Equity in NJ & NY Cannabis Programs. They shared the attached presentation slides with their contact information and additional handouts on the topic.

Josh Bauchner, Partner/Head of Cannabis Law Practice, Ansell Grimm & Aaron, PC
Zachary Windham, Associate/Cannabis Law Practice, Ansell Grimm & Aaron, PC
Lisa Reid, Managing Director, Government Relations, Mercury LLC

The presentation was sponsored by Ansell Grimm & Aaron, PC; Inglesino, Webster, Wyciskala & Taylor; Burton Trent Public Affairs; and NJ Buzz Productions.

Below is a recording of the May 7th, 2021 Lunch & Learn Session along with the aforementioned presentation slides and handouts.

Cannabis Law Update

Posted on May 10th, 2021

Adult-Use Licensing

Attention again turns toward applications and licensing as a result of the passage of adult-use legislation in February, the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (“CREAMMA”). The firm is working with a number of clients interested in pursuing one of six license types:  cultivation, processing, wholesaling, distribution, delivery and dispensary.

In addition to standard licenses, the newly formed Cannabis Regulatory Commission (“CRC”) is also offering micro-licenses targeting New Jersey entrepreneurs. Microbusiness licenses will be restricted to residents who have lived in the State for at least two years and will limit the size and number of employees of the Microbusiness. However, there will be no limit on the number of Microbusiness licenses that can be issued. CREAMMA requires that a minimum of 10% of the licenses issued for each license type be issued to Microbusinesses, and that 25% of the total licenses issued be awarded to Microbusinesses. The Microbusiness classification is expected to expand the opportunity for New Jersey residents to participate in the industry by removing the need for such applicants to compete for a finite number of licenses.

Medical Marijuana Licensing

The pending applications for the 2018 and 2019 medical marijuana licenses were formally transferred from the Department of Health (“DOH”) to the CRC.  As a result of a decision from the Appellate Division reversing and remanding the DOH’s 2018 scoring decisions, a number of appellants were permitted to resubmit their applications for additional review.  That process remains underway and likely will take another 90-120 days, at least.  Similarly, after the Appellate Division ruled on the 2019 appeal, the CRC is now scoring those applications and decisions are expected shortly.  As demand continues to vastly exceed supply, and it can take a year or longer to start operations, we are hopeful that the CRC will act quickly in awarding the six vertically integrated licenses available under the 2018 RFA and the 34 licenses of various types available under the 2019 RFA.

Cannabis Regulatory Commission

The CRC got off to a quick start hosting a number of virtual meetings to introduce the six commissioners –Dianna Houenou – Chair of the CRC, and Commissioners Krista Nash, Maria Del Cid-Kosso, Sam Delgado, and Charles Barker — and to establish an agenda for the significant amount of work which lies ahead.  Jeff Brown, who led the medical marijuana program under the DOH, came over as Executive Director of the CRC.

In support of that effort, Zachary Windham, who previously worked as the Legal & Financial Director for a Marijuana Business Operator with retail locations across the state of Colorado and recently joined the firm, submitted comments to the CRC concerning social equity issues, Minority and Women Business Enterprise (“MWBE”) point allocations, and the need to increase cultivation capacity in accord with the findings of the New Jersey Department of Health’s Biennial Report on the Medical Marijuana Industry, among other topics.

Zachary explained that there was a need to educate social equity applicants concerning the licensing process as the current  30 day window between issuance of the final rules and the application deadline was insufficient time to prepare a comprehensive application. He also recommended utilizing the State’s current MWBE designation as mechanism to allot additional points to social equity applicants, in the event there is insufficient opportunity for the CRC to create its own social equity designation.  Finally, Zachary explained that the Biennial Report noted the need to increase cultivation capacity, and that 10% of the 37 cultivation licenses (i.e., four licenses) would be awarded to micro-businesses.  However, as the micro-licenses are capped at 2,500 square foot canopy, it would only add 10,000 square feet of cultivation capacity.  While a robust microbusiness sector is critical to ensuring social equity at the consumer level, we also need to increase supple to meet the demand of more than 106,000 registered patients in addition to the adult-use market.

NJSBA Annual Meeting and Chair Appointment

Joshua Bauchner will be presenting at the NJ State Bar Association’s Annual Meeting on Thursday, May 20, 2021.  The virtual panel will provide an overview of CREAMMA addressing topics such as licensing, employment law, expungement and social justice issues, banking and business issues and more.  Registration remains open here.

Josh also was appointed Chair of the NJSBA Cannabis Law Committee for the 2021-2022 term, along with his friend  and colleague, Lisa Gora, Esq. of Wilentz Goldman & Spitzer, PA.

Client Alert: Insurance Coverage for COVID-19 Pandemic-Related Losses

Posted on April 30th, 2021

The COVID-19 pandemic continues to present challenges to business owners across nearly all industries, even as a return to normalcy is in sight.  Widespread economic losses have been incurred, some of which may be covered by commonly held insurance policies.  In light of applicable statutes of limitation that vary state-to-state, as well as policy-imposed limitations on when claims may be made, it is vital that businesses suffering economic losses review their insurance policies and work with experienced legal counsel to determine whether coverage may extend to COVID-related losses.

There are various types of business-related insurance policies that may afford coverage for COVID-related losses.  One business-related insurance policy to examine is business interruption, which may contemplate losses in the circumstances faced throughout the pandemic.  In a notable decision, the North Carolina General Court of Justice in North State Deli, LLC, et al. v. The Cincinnati Insurance Company, et al., Case No. 20-CVS-02569, granted a summary judgment motion, finding that the policies at issue provided “coverage for Business Income and Extra Expenses for Plaintiffs’ loss of use and access to the covered property mandated by the Government Order as a matter of law.”  While North Carolina case law is merely persuasive in New Jersey, New York, and Pennsylvania, it is clear that courts are taking a close look at the language set forth in insureds’ policies — and claims made by restaurants, fitness centers, and other businesses affected by state Executive Orders may be particularly successful.

In addition to business interruption insurance, property, general liability, workers’ compensation, employers’ liability, and political risk insurance policies also may afford coverage for COVID-related losses.  By way of example, while one may not expect a property insurance policy to afford COVID-related coverage, the mere presence of the COVID-19 pathogen may constitute loss of or damage to property, thus triggering coverage.  In Motorists Mutual Insurance Co. v. Hardinger, 131 F. App’x 823 (3d Cir. 2005), the Third Circuit Court of Appeals addressed e-coli contamination of the property and whether the presence of that pathogen excused performance under the subject lease.  The Court in that matter found that there was a question of fact as to whether the insured’s property was “nearly eliminated or destroyed, or whether their property was made useless or uninhabitable” by the contamination.”  Similarly, in Gregory Packing, Inc. v. Travelers Property Cas. Co. of America, 2014 WL 66675934 (D.N.J. Nov. 25, 2014), the District Court for the District of New Jersey found that a property insurance policy covered property damage resulting from the release of ammonia into the subject building, rendering the building unsafe until the ammonia could be fully removed and the property cleaned.  Crucially, the court held that “property can sustain physical damage without experiencing structural alteration.” Whether the presence of COVID-19 constitutes loss of or damage to property is likely to be an issue of first impression to most courts, and will be a key part of any court’s analysis.  It is important to note that most policies impose a requirement that insureds mitigate their damages — and a failure to make reasonable efforts to do so may damage efforts to seek compensation under insurance policies.

In the more recent matter of Optical Services USA/JC1, et al. v. Franklin Mut. Ins. Co., Docket No. BER-L-3681-20 (N.J. Super. Ct. Bergen Cnty. Aug. 13, 2020), the court declined to dismiss an insured’s complaint based on the insurance carrier’s assertion that “loss of physical functionality and use of [a] business” does not constitute “direct physical loss.”  It is crucial in reviewing insurance policies, however, to ensure that anti-concurrent causation provisions are not present which might serve to exclude claims for viruses and bacteria.  In another recent case, Mac Property Group LLC v. Selective Fire & Casualty Insurance Co., Docket No. CAM-L-2629-20 (N.J. Sup. Ct. Law Div. Nov. 5, 2020), the court declined to find coverage where an anti-concurrent causation provision excluded coverage “regardless of any other cause of event that contributes concurrently or in any sequence to the loss.”

The New Jersey Superior Court, Appellate Division holding in Wakefern Food Corp. v. Liberty Mut. Fire Ins. Co. is likely to be instructive as COVID-related claims are litigated, as that court held:  “The fact that the term ‘physical damage’ is capable of at least two different reasonable interpretations convinced us that it is ambiguous.  And well-established precedent teaches us that such an ambiguous provision must be construed favorably to the insured.”  406 N.J. Super. 524, 541 (App. Div. 2009).  By contrast, in Causeway Automotive LLC v. Zurich American Insurance Co., C.A. No. 20-8393-FLW-DEA (D.N.J. 2021), Chief Judge Wolfson of the United States District Court for the District of New Jersey found that a virus exclusion in an insurance policy barred the plaintiff from obtaining COVID-related losses, and rejected the plaintiff’s argument that the virus exclusion is contrary to public policy.  Of course, in that matter, the virus exclusion itself, and not any policy ambiguity, was found to control.

Case law addressing disputes arising from the COVID-19 pandemic is limited, and is evolving regularly as litigations progress on this novel issue.  Indeed, the limited pre-2019 cases concerned the 1918 Spanish Flu epidemic, and are rarely applicable to the modern circumstances facing businesses.  Ansell Grimm & Aaron’s attorney have been at the forefront of litigating pandemic-related matters of first impression, and are well positioned to protect our clients’ interests in an ever-changing environment.