Case Title: Brugger v. Joseph Academy, Inc.

Citation: 

Docket Number: 92887

State: illinois

Court: Illinois Supreme Court

Date: 2002-11-21T00:00:00Z

Document:
Docket No. 92887-Agenda 29-September 2002.
KELLY JEAN BRUGGER et al., Appellees, v. JOSEPH
ACADEMY, INC., Appellant.
Opinion filed November 21, 2002.
	JUSTICE KILBRIDE delivered the opinion of the court:
	The defendant, Joseph Academy, Inc. (the academy), is a
private, not-for-profit corporation serving special education
students pursuant to contracts with various local public school
districts. In this appeal, the academy requests that we reconsider
the criteria this court recently adopted in Carroll v. Paddock, 199 Ill. 2d 16 (2002), for identifying local public entities under section
1-206 of the Local Governmental and Governmental Employees
Tort Immunity Act (the Act) (745 ILCS 10/1-206 (West 2000)).
Alternatively, the academy argues that it qualifies for immunity
under the Carroll criteria.
	The trial court granted summary judgment in favor of the
academy, finding that it met the definition of a local public entity
under the Act. The appellate court reversed and remanded the
cause, holding that section 1-206 of the Act was not applicable to
the academy. 326 Ill. App. 3d 328, 334-35. We adhere to our
decision in Carroll and affirm the appellate court's judgment,
remanding the cause for further proceedings.

I. BACKGROUND
	In January 1997, plaintiff Kelly Brugger, then a minor,
seriously injured her knee while playing a game of
"bombardment" during a physical education class at the academy.
Brugger's doctor had previously sent a note to the academy barring
her from participation in any activity involving side-to-side
movement due to a knee injury, but Brugger alleges that she was
ordered to play bombardment or risk receiving a failing grade for
the class and being unable to graduate.
	The academy is a not-for-profit corporation operating as a
"private school for educating emotionally handicapped youth."
Brugger's former public school district, Leyden Community High
School District 212 (the school district), contracted with the
academy for Brugger's education because it was unable to provide
an appropriate education for her in its own facilities.
	Brugger filed a personal injury complaint against both the
academy and the school district, alleging that her injury was
caused by willful and wanton misconduct in that she was required
to participate in the game of bombardment contrary to her
physician's orders. The circuit court of Cook County granted the
school district's motion to dismiss it as a party; that ruling is not
challenged on appeal. The academy filed a motion for summary
judgment, and the trial court granted the motion, finding that the
facility had immunity as a "[l]ocal public entity" under section
1-206 of the Act (745 ILCS 10/1-206 (West 2000)). The appellate
court reversed, finding that this court's decision in Cooney v.
Society of Mt. Carmel, 75 Ill. 2d 430 (1979), precluded granting
immunity to the academy as a "local public entity" under section
1-206. 326 Ill. App. 3d at 333.
	This court granted the academy's petition for leave to appeal
on February 6, 2002 (Brugger v. Joseph Academy, Inc., 198 Ill. 2d 588 (2002)), pursuant to Supreme Court Rule 315(a) (177 Ill. 2d
R. 315(a)). On February 7, 2002, we filed our decision in Carroll.
The lower courts in this case did not have the benefit of the
Carroll decision, and the academy now raises important questions
concerning the practical application of the Carroll test in the
context of a new set of facts.

II. ANALYSIS
	The academy raises two issues before this court. First, it
argues Carroll v. Paddock, 199 Ill. 2d 16 (2002), was wrongly
decided. It contends that the test recently adopted in Carroll to
identify local public entities qualifying for immunity under the Act
is overly restrictive and does not comport with either the plain
language of the Act (745 ILCS 10/1-206 (West 2000)) or the
intent of the legislature. In the alternative, the academy contends
that, even if the Carroll test is applied in this case, it qualifies as
a local public entity under section 1-206 of the Act (745 ILCS
10/1-206 (West 2000)). Thus, the academy maintains that the trial
court properly granted summary judgment in its favor. We begin
our examination of these issues with the academy's challenge to
our recent decision in Carroll.

A
	The Act grants covered entities immunity from tort liability
for injuries "arising from the operation of government." 745 ILCS
10/1-101.1 (West 2000); Carroll, 199 Ill. 2d  at 23. The entities
protected by the Act include the bodies specified in section 1-206
"as well as any not-for-profit corporation organized for the
purpose of conducting public business." 745 ILCS 10/1-206 (West
2000).
	In Carroll, this court considered whether a not-for-profit
hospital was a local public entity within the meaning of section
1-206 and, thus, entitled to immunity. Carroll, 199 Ill. 2d  at 22.
We concluded that the undefined term "public business" requires
the pursuit of " ' "an activity that benefits the entire community
without limitation. In addition, the phrase 'public business' is also
today commonly understood to mean the business of the
government." ' " Carroll, 199 Ill. 2d  at 25-26, quoting Carroll v.
Paddock, 317 Ill. App. 3d 985, 992 (2000), quoting O'Melia v.
Lake Forest Symphony Ass'n, 303 Ill. App. 3d 825, 828 (1999).
Furthermore, since "[p]ublic business is the business of
government," a not-for-profit organization seeking immunity
under section 1-206 must establish that it is "tightly enmeshed
with government either through direct governmental ownership or
operational control by a unit of local government." Carroll, 199 Ill. 2d  at 27. The academy's challenge to our construction of the
Act in Carroll presents a question of law. Accordingly, we will
review this issue de novo. In re C.N., 196 Ill. 2d 181, 208 (2001).

1
	The academy first argues that Carroll adopted an erroneous
definition of "public business" for purposes of the Act. It contends
that, based on our misconstruction of this term, Carroll established
an overly restrictive test for determining whether an entity
qualifies for tort immunity under the Act. Indeed, the academy
claims that our test effectively renders the entire phrase "as well
as any not-for-profit corporation organized for the purpose of
conducting public business" mere surplusage because the
requirement of government ownership or control eliminates all
nongovernmental agencies.
	The academy's contention that a not-for-profit corporation can
never qualify for immunity under our test in Carroll is belied by
a case cited in its own brief, Barnes v. Chicago Housing Authority,
326 Ill. App. 3d 710 (2001). In that case, the plaintiffs filed a tort
complaint seeking, in part, recovery for serious personal injuries
allegedly caused by the failure of a resident management
corporation to provide adequate security at a public housing
development in Chicago. Barnes, 326 Ill. App. 3d at 716.
	Resident management corporations are not-for-profit
organizations recognized under a program of the United States
Department of Housing and Urban Development, designed to
promote tenant management of public housing developments. See
24 C.F.R. §964 et seq. (2001). Pursuant to the United States
Housing Act of 1937, the resident management program
requirements provide that each resident management corporation
"shall enter into a contract with the public housing agency
establishing the respective management rights and responsibilities
of the corporation and the public housing agency." 42 U.S.C.A.
§1437r(b)(4) (West Supp. 2002). That same statute mandates that
the contract
		"be consistent with the requirements of this chapter
applicable to public housing projects and may include
specific terms governing management personnel and
compensation, access to public housing project records,
submission of and adherence to budgets, rent collection
procedures, tenant income verification, tenant eligibility
determinations, tenant eviction, the acquisition of supplies
and materials, rent determination, community service
requirements,,[sic] and such other matters as may be
appropriate." 42 U.S.C.A. §1437r(b)(4) (West Supp.
2002).
Other federal regulations further govern the interaction between
the public housing authority and the resident management
corporation. 24 C.F.R. §964.120 et seq. (2001). These regulations
include provisions restricting eligibility for membership in the
resident council (24 C.F.R. §964.125 (2001)) and mandating
election procedures (24 C.F.R. §964.130 (2001)). Resident
councils play an important role because they may establish
resident management corporations. 24 C.F.R. §964.120 (2001).
Such close interaction and comprehensive governmental control
of a not-for-profit corporation exemplify the characteristics of the
type of organization that may be able to qualify for immunity as a
"local public entity" under section 1-206 of the Act (745 ILCS
10/1-206 (West 2000)). Without specifically ruling on the
immunity of resident management corporations, we reject the
academy's contention that Carroll renders the portion of the Act
granting immunity to "any not-for-profit corporation organized for
the purpose of conducting public business" mere surplusage.

2
	The academy next challenges Carroll's definition of "public
business" by arguing that it was improperly drawn from
definitions in Black's Law Dictionary, rather than from the
common law usage of that term. See Advincula v. United Blood
Services, 176 Ill. 2d 1, 21-22 (1996). The academy asserts that at
common law "public business" described governmental activities
that furthered the public welfare or affected the public interest.
Since the public has an interest in the traditional governmental
function of education, the academy argues that, pursuant to its
contracts with various public school systems, it conducts "public
business" within the meaning of the Act.
	Initially, we note that the academy's purported "common law"
definition of "public business" appears to rely almost entirely on
the definition of "public purpose" in Black's Law Dictionary
(Black's Law Dictionary 1231 (6th ed. 1990)), as well as on an
alternative definition of "public business" in that same volume
(Black's Law Dictionary 199 (6th ed. 1990)). The academy points
to no case law interpreting the term "public business" as it is used
in the Act, and, as previously stated in Carroll, 199 Ill. 2d  at 23,
we can find no such authority. Thus, we reject the academy's
common law argument because we are unable to find any
substantial basis for construing the term "public business," as it is
used in the Act, as a common law term of art.

3
	The academy also asserts that Carroll's definition of "public
business" failed to recognize the common law concept of a "quasi-public corporation" or a "public service corporation," defined as
a corporation "whose operations serve the needs of the general
public or conduce to the comfort and convenience of an entire
community" (Black's Law Dictionary 342 (6th ed. 1990)). Such
businesses are " 'affected with a public interest' " and thus are
"subject to legislative regulation and control to a greater extent
than corporations not of this character." Black's Law Dictionary
342 (6th ed. 1990). The academy cites waterworks (City of
Danville v. Danville Water Co., 178 Ill. 299, 301 (1899)) and
railroads (People ex rel. Jackson v. Suburban R.R. Co., 178 Ill. 594, 605-06 (1899)) as examples of public service corporations.
As a facility contracting with public school districts to educate
students who cannot be properly served within the districts, the
academy maintains that it is also "affected with a public interest"
and benefits the general public, qualifying it for immunity under
the Act.
	The cited cases do not support the academy's attempt to come
within the protections of the Act. Most importantly, none of the
cases cited by the academy construe the term "public business" as
it is used in the Act. In City of Danville, 178 Ill.  at 304-14, this
court considered the validity of a contract between a municipality
and a private water company and the fixing of rates in that
contract. Similarly, in Suburban R.R. Co., 178 Ill.  at 604-07, the
court considered the issuance of a writ of mandamus to enforce
compliance with conditions required by a local ordinance
authorizing the railroad's operation in the city. Neither case
discusses tort liability or immunity.
	The academy's argument is further undermined by the close
connection our case law has drawn between the use of the label
"quasi-public corporation" and the corporation's critical
operational need for the use of public streets, alleys, and public
places to provide service to all members of the community. See
City of Danville, 178 Ill. at 309-10; Suburban R.R. Co., 178 Ill.  at
605-06. In the instant case, the academy does not need any public
property or facilities to conduct its business. Moreover, the
academy does not attempt to provide services to the entire
community or even to all students who apply for admission. The
academy is free to accept or reject any potential student and need
not admit every student referred for placement by a public school.
Thus, the cases cited by the academy are both factually and legally
distinguishable.

4
	The academy further maintains that the definition of "public
business" in Carroll is impossible to apply in practice since
virtually no entities, even governmental ones, benefit the entire
community. It notes that even public school systems do not
directly benefit anyone without school-age children. The academy
adds that, conversely, many governmental bodies that indisputably
qualify as local public entities, such as public school districts, also
limit the individuals that they serve. This observation, the academy
maintains, again points out the impracticality of our definition in
Carroll.
	The academy's reliance on the restrictions governmental
bodies put on the usage and receipt of benefits is misplaced. First,
it is irrelevant whether governmental bodies such as public school
districts satisfy the criteria in Carroll because section 1-206
specifically identifies numerous entities, including school districts,
qualifying for immunity as "local public entities." 745 ILCS
10/1-206 (West 2000). Carroll did not address that issue. The
criteria in Carroll were simply intended to define an ancillary class
of qualified local public entities, namely, " 'any not-for-profit
corporation organized for the purpose of conducting public
business.' " Carroll, 199 Ill. 2d  at 23-24, quoting 745 ILCS
10/1-206 (West 1998).
	Moreover, the academy's argument confuses governmental
limitations on use with limitations on access to services. While it
is true that public education is accessible without cost to all
children, the use of public school facilities depends on the
students' abiding by the applicable school rules. Similarly, public
transportation and library systems are available to all members of
the relevant community, but the use of those services is
conditioned on adhering to the stated rules. Services may be
denied, for instance, to members of the public who are disorderly
or who present a threat to the safety of other users or to
government property. These limits on use are not the same as
those the academy places on potential students' access to its
facilities. As the academy admits, it retains sole discretion both to
decide whether to interview a particular applicant and, ultimately,
to accept or reject any student on any grounds.

5
	In its final challenge to Carroll, the academy asserts that this
court erred by suggesting that the applicability of the Open
Meetings Act (5 ILCS 120/1.01 et seq. (West 2000)) and the
Freedom of Information Act (5 ILCS 140/1 et seq. (West 2000))
could be used to determine whether a not-for-profit corporation
qualifies for immunity under section 1-206 because those statutes
do not concern "local public entities." See Carroll, 199 Ill. 2d  at
26. We believe that the academy has misconstrued our statement
in Carroll.
	We prefaced that statement by suggesting that if "the
governing body of the not-for-profit corporation is subject to
regulations such as" the aforementioned statutes, it might provide
"[a]n indicia of the requisite control" by a government body.
Carroll, 199 Ill. 2d  at 26. We then offered alternative means of
evincing that same control, such as local ordinances that regulate
the way that the not-for-profit corporation conducts its business.
Carroll, 199 Ill. 2d  at 27. These examples merely demonstrate
factors that could provide evidence of the necessary governmental
control. They are not intended to be used alone as determinative
tests, nor do they provide the only possible bases for finding the
requisite degree of government control. We find no merit in the
academy's final challenge to our decision in Carroll.

6
	In summary, in the absence of prior interpretive guidance, in
Carroll this court construed the term "public business" to
effectuate the intent of the legislature. Carroll, 199 Ill. 2d  at 22. In
so doing, we applied the plain and ordinary meaning of the
statutory language. Carroll, 199 Ill. 2d  at 25-26. We also explicitly
recognized our obligation to construe the Act as a whole rather
than to examine each word and phrase in isolation. Carroll, 199 Ill. 2d  at 22-23. We then applied those fundamental rules of
statutory construction to determine the meaning of the phrase
"public business" as used in section 1-206 of the Act. Carroll, 199 Ill. 2d  at 22-26.
	Today, we adhere to both our method of construction in
Carroll and our interpretation of section 1-206 of the Act. Thus,
any not-for-profit corporation seeking tort immunity under that
section must demonstrate that it conducts "public business" by
establishing that it pursues " ' "an activity that benefits the entire
community without limitation" ' " (Carroll, 199 Ill. 2d  at 25-26,
quoting Carroll v. Paddock, 317 Ill. App. 3d 985, 992 (2000),
quoting O'Melia v. Lake Forest Symphony Ass'n, 303 Ill. App. 3d
825, 828 (1999)) and that it is "tightly enmeshed with government
either through direct governmental ownership or operational
control by a unit of local government" (Carroll, 199 Ill. 2d at 27).

B
	Nonetheless, the academy contends that, even if this court
adheres to our test in Carroll, the trial court properly granted it
summary judgment because it is entitled to immunity under the
Act as a local public entity. According to the academy, it is both
"tightly enmeshed" with the local public school districts making
referrals and open to the public-at-large through the placement
mechanism contained in the School Code (105 ILCS 5/14-7.02
(West 2000)). See Carroll, 199 Ill. 2d  at 26-27.
	When reviewing a grant of summary judgment, this court
must determine whether, when viewed in the light most favorable
to the nonmoving party, the pleadings, depositions, admissions,
and affidavits on file reveal any genuine issues of material fact
and, if not, whether the moving party is entitled to judgment as a
matter of law. 735 ILCS 5/2-1005(c) (West 2000); Barnett v. Zion
Park District, 171 Ill. 2d 378, 384-85 (1996). As with the
construction of a statute, an order of summary judgment presents
a question of law to be reviewed de novo. Ragan v. Columbia
Mutual Insurance Co., 183 Ill. 2d 342, 349 (1998).

1
	The academy first argues that its close contractual ties to the
public school districts qualify it for immunity under the Carroll
criterion that it be "tightly enmeshed with government *** through
*** operational control by a unit of local government." Carroll,
199 Ill. 2d  at 27. Article X of the Illinois Constitution (Ill. Const.
1970, art. X, §1) mandates free public education, and our appellate
court has found that this provision "incorporates programs of
instruction other than the standard course of study established in
the public school system" (Elliot v. Board of Education of the City
of Chicago, 64 Ill. App. 3d 229, 235-36 (1978)), such as private
special education. The academy also notes that the School Code
requires public schools to place students in special education
facilities at no cost to their parents. See 105 ILCS 5/14-4.01,
14-7.02 (West 2000). Thus, the academy claims that it meets the
Act's definition of a "not-for-profit corporation organized for the
purpose of conducting public business" (745 ILCS 10/1-206
(West 2000)) because it is a substitute provider of the
constitutionally mandated free education other students receive in
their local public schools.
	The academy further argues that its special education facilities
are, in fact, controlled by the government because they are
extensively regulated under contracts with local public school
districts, as well as by the Illinois Administrative Code, the Illinois
School Student Records Act (105 ILCS 10/1 et seq. (West 2000)),
and the Governor's Purchased Care Review Board's mandatory
review of allowable costs and payments for special education.
Moreover, the academy must allow local public school districts to
exert control over its operations through visits, evaluations, and
inspections, and it is contractually obligated to provide the districts
with monthly attendance reports, tests and evaluation reports, and
progress reports. Even the academy's curriculum is dictated by
each student's local school district. Finally, the school districts are
legally obligated to provide transportation to students enrolled in
the academy (105 ILCS 5/14-7.02 (West 2000)), and those same
districts provide over 95% of the facility's operating funds. Based
on these facts, the academy contends that it is tightly enmeshed
with government.
	We disagree. First, the academy is only obliged to satisfy the
regulatory schemes and contractual requirements it cites because
it chooses to contract with public schools for students. Second, the
academy's reliance on the quote from Carroll, referring to
"operational control by a unit of local government," is misplaced.
Carroll, 199 Ill. 2d  at 27. The key words in that quote are
"operational control." In its brief, the academy candidly admits
that "in terms of its day-to-day school operations, [it] maintains its
autonomy." Pursuant to the contracts in effect between the
academy and the school district, the academy is permitted to run
its day-to-day operations as it chooses, and its board is not subject
to any outside governmental control. Moreover, the academy's
board is comprised solely of members acting in their individual
capacities. No governmental entity or public official acting in an
official capacity is represented on the board. Under these
circumstances, the government does not possess broad operational
control over the academy. Indeed, the academy's board could
choose to eliminate its government contracts entirely, making
many of the governmental interventions it cites no longer
applicable to it. Truly public school facilities do not have this
option.
	Finally, the academy's contention that its operational funds
are provided by the state is misleading. The monies received by
the academy are simply revenue obtained from tuition payments
made by the contracting public schools. They are not direct
payments from the state budget. Public entities, including schools,
routinely employ outside vendors and service providers. This does
not mean, for example, that a general construction company that
dedicates its entire workforce for a year to a school's major
renovation project becomes a state-funded entity. Rather, it retains
its character as a private business that has temporarily chosen to
reject other employment opportunities. Furthermore, the academy
does not dispute that the amount of revenue it receives is entirely
dependent upon the number of students it chooses to accept, rather
than any state baseline annual budgetary allowance.
	For these reasons, we believe that the academy has failed to
establish that it is sufficiently enmeshed with government to be
entitled to the protections of the Act as a matter of law.

2
	For similar reasons, the academy's argument that the
placement mechanism in the School Code (105 ILCS 5/14-7.02
(West 2000)) enables it to satisfy the requirement in Carroll that
it be " ' "[o]pen to *** the [public] at large" ' " (Carroll, 199 Ill. 2d  at 26, quoting O'Melia, 303 Ill. App. 3d at 828, quoting Black's
Law Dictionary 1227 (6th ed. 1990)) also fails. The academy
attempts to differentiate itself from other private schools because
it enrolls students only from and through referrals by public school
districts (23 Ill. Adm. Code §401.60(h) (2002)), not from parents
privately seeking admission for their children. Thus, the academy
contends that it serves the public at large by stepping directly into
the shoes of local public schools that are unable to provide
appropriate services to disabled children. The academy fails to
note, however, that since it is privately operated and controlled, it
can freely reject any applicant for any reason. Moreover, the
academy may terminate a student's enrollment simply by
providing 30 days' notice under its contract with the public school
district. In contrast, genuinely "public" schools must serve the
eligible public at large and cannot choose their students. For this
reason alone, the academy is not open to the public at large. Thus,
the academy may not claim immunity under the Act because, as a
matter of law, it has failed to meet the requirements in Carroll.
The appellate court properly reversed the grant of summary
judgment in favor of the academy.

III. CONCLUSION
	We adhere to our prior analysis in Carroll and reaffirm the
requirements that a not-for-profit corporation seeking immunity as
a local public entity under section 1-206 of the Act must establish
that it provides benefits to the entire community and "is tightly
enmeshed with government either through direct governmental
ownership or operational control by a unit of local government."
Carroll, 199 Ill. 2d  at 27. We further hold that, applying this test
in the instant case, the academy does not qualify for immunity
under section 1-206 of the Act.
	Accordingly, the judgment of the appellate court, which
remanded the cause to the circuit court of Cook County for further
proceedings, is affirmed.
Appellate court judgment affirmed.
	CHIEF JUSTICE McMORROW took no part in the
consideration or decision of this case.