By Lauraann Wood

Law360 (April 10, 2020, 4:04 PM EDT) -- An Illinois federal judge on Friday ordered a food and housekeeping company to continue working with a senior living center operator for now despite their contract disputes, saying 1,600 of those most vulnerable to the coronavirus need its "critical" services right now.

Neither senior living center operator Lexington Health Network nor Morrison Management Specialists Inc. want to work together anymore, and they're both trying to terminate the service contract they entered in June. But U.S. District Judge Robert Dow Jr. said he's going to hold the companies to their contract for two more weeks and let the parties resolve their contract disputes later, because the 1,600 seniors living in Lexington's 11 facilities "need adequate food, clean laundry, and sanitized living spaces right now."

Those are essential services in normal times, but during a pandemic, the seniors' interest in receiving them "is absolutely critical," Judge Dow said.

"It is difficult to overstate the strength of the public interest in making sure senior citizens get the services [Morrison] contracted to supply to them," he said.

Lexington has claimed that it invoked a provision allowing it to terminate its contract with Morrison within 90 days over allegedly poor service, and it wants Morrison to continue to serve its residents while it transitions to a new provider.

Morrison, though, claims it validly invoked a provision allowing the company to exit the contract within seven days over $5 million in unpaid invoices.

It's "not obvious who will ultimately prevail" with both sides pointing fingers at each other, Judge Dow said. But temporarily enjoining Morrison's seven-day contract termination is favorable partly because Lexington has "some chance" of prevailing on the merits, he ruled.

Morrison argued that forcing it to keep working with Lexington would force it to work with a company that isn't paying its bills. But Lexington has said it would pay for Morrison's services through the provider transition, Judge Dow said.

And even if Morrison's claim is true, any more unpaid bills could be added to what the company already claims it's owed, Judge Dow said. That can "easily be sorted out in the remainder of the case," he said.

On the other hand, if Morrison isn't temporarily blocked from invoking the seven-day contract termination, Lexington "would be faced with finding immediate care for 1,600 senior citizen residents who lacked food, laundry, and essential cleaning services," he said.

"Those harms significantly outweigh the risks to [Morrison]," Judge Dow ruled.

Morrison also argued that Lexington's injunction pursuit is its attempt to force performance of a personal services contract, which goes against public policy. But Judge Dow said he wasn't persuaded by that argument, partly because it's not clear that the agreement at issue is for personal services.

Even if it were, case precedent suggests that courts can order parties to temporarily perform under their management and service contracts for an orderly transition, Judge Dow said. But also, it's "against public policy to allow senior citizens to go without food and cleaning services in the midst of a global pandemic," he ruled.

"If the court must choose between those public policy principles, it chooses to protect the seniors," he said.

Representatives for Lexington declined to comment Friday, and representatives for Morrison did not immediately respond to a request for comment.

Lexington is represented by Joseph Becker and Scott Ahmad of Winston & Strawn LLP.

Morrison is represented by Eric Walker, Jonathan Buck and Christopher Eby of Perkins Coie LLP.

The case is Lexington Health Care Center of Bloomingdale Inc. et al. v. Morrison Management Specialists Inc., case number 1:20-cv-01949, in the U.S. District Court for the Northern District of Illinois.

--Editing by Jack Karp.

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