Title: Edward Bieker, Jr., v. Community House of Moorestown

State: new-jersey

Issuer: New Jersey Supreme Court

Document:

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). PORITZ, C.J., writing for a unanimous Court. This case involves application of the Charitable Immunity Act, N.J.S.A. 2A:53A-7 to -11, to an independent non-profit entity that derives part of its funding from renting facilities to for-profit entities. Moorestown Community House, Inc., (Community House) is a non-profit corporation that rents meeting rooms and athletic facilities to charitable organizations, for-profit entities, and the general public. Edward Bieker, Sr., belonged to a men's basketball group that rented the Community House gymnasium. On May 2, 1996, Edward, Sr., was playing basketball when his three-and-a-half year old son, who was keeping himself entertained with a basketball while his father played, fell seven feet down a fire escape and suffered serious injuries. The Biekers sued Community House on behalf of their injured son. The trial court granted Community House's motion for summary judgment under the Charitable Immunity Act. The Appellate Division reversed, holding that Community House did not qualify for charitable immunity because it rented its facilities to private individuals and profit-making entities. The Supreme Court granted Community House's petition for certification. HELD: When activities designed to raise funds in support of a charitable organizations' core purposes generally contribute to those purposes, they do not change the charitable nature of the entity. When non-charitable activities become the dominant motive of the organization, it loses immunity under the Charitable Immunity Act. 1. Community House is a charitable organization that derives its revenues solely from rental fees, donations, and trust account income. It's facilities are rented out for a variety of social, religious, educational and recreational activities. Community House's Articles of Incorporation set forth the charitable intent of its founders. Over time, Community House began to solicit users from the general public and the private sector. (Pp.4-6) 2. An entity qualifies for charitable immunity under the Charitable Immunity Act if; (1) it was formed for a non- profit purpose; (2) it was organized exclusively for religious, charitable or educational purposes; and (3) it was promoting such objectives and purposes at the time of the injury to plaintiff who was then a beneficiary of the charitable works. (Pp. 7-9) 3. Our case law recognizes that a wide range of charitable organizations that meet the social and recreational needs of a community, and generally promote the public welfare, are deemed to have charitable purposes. Community House's facilities are provided to meet those specific needs in the greater Moorestown area, and for that reason serve a recognized charitable purpose, in spite of Community House's rental of facilities to the public-at-large. When those same facilities are rented to for-profit entities, however, the charitable status of the organization may come into question. Where such use becomes the dominant use of the organization, the organization would no longer qualify for charitable immunity. In the case of Community House, it is not clear from the record the extent to which Community House's facilities are used by for-profit entities. The Court therefore remands the matter to the trial court to determine the extent of such use. (Pp. 9-16) 4. Should the trial court determine that the dominant motive of Community House is charity, the remaining question would be whether or not Edward, Jr., was a beneficiary under the Charitable Immunity Act. Electing to dispose of that issue now, the Court concluded that as a companion of his father and a spectator at his father's basketball game, Edward, Jr., was a beneficiary of Community House's charitable purposes. (Pp. 17-18) JUSTICES STEIN, COLEMAN, LONG, VERNIERO, LaVECCHIA, and ZAZZALI join in CHIEF JUSTICE PORITZ'S opinion. EDWARD BIEKER, JR., a minor by his Guardians Ad Litem, MICHELLE BIEKER and EDWARD BIEKER, SR.; and MICHELLE BIEKER and EDWARD BIEKER, SR., individually, Plaintiffs-Respondents, v. COMMUNITY HOUSE OF MOORESTOWN, a New Jersey corporation, Defendant-Appellant. Argued November 27, 2000 -- Decided July 23, 2001 On certification to the Superior Court, Appellate Division, whose opinion is reported at 327 N.J. Super. 467 (2000). Michael J. O'Mara argued the cause for appellant (Crawshaw, Mayfield, Turner, O'Mara, Donnelly & McBride, attorneys; Michael A. Katz, on the briefs). Michael A. Kaplan argued the cause for respondents (Tomar, O'Brien, Kaplan, Jacoby & Graziano, attorneys; Alan H. Sklarsky, of counsel; Carlos M. Bollar, on the brief). The opinion of the Court was delivered by PORITZ, C.J. for the purchase or construction and maintenance and operation of a building or buildings . . . [that] shall be devoted to and used exclusively for the benefit and purposes . . . of corporations and organizations that are or may be hereafter incorporated . . . for religious, charitable, scientific, literary and educational purposes. The corporations and organizations identified in the articles include a Post of the American Legion, the Church Federation of Moorestown, the Moorestown Free Library Association, the Moorestown Young Men's Christian Association (YMCA), the Women's Club of Moorestown, the Moorestown Visiting Nurse Association, and any other like incorporated entities. In a recent brochure, however, Community House describes its purposes somewhat differently: The Moorestown Community House is a unique institution. Founded expressly to meet the social and recreational needs of organizations and individuals, the House has been serving the community continuously since we opened our doors in 1926. Indeed, in the years between its incorporation and the present, Community House has adopted a policy of renting its facilities to any interested organization or member of the public. Those facilities include a gymnasium, swimming pool, kitchen, and several air-conditioned rooms capable of handling meetings and social functions. Patrons rent the several rooms, the gymnasium, and the pool for a variety of activities, including dance classes, ballet and karate lessons, piano recitals, meetings, seminars, birthday and anniversary parties, wedding receptions, and baby showers. To support those activities, and for an additional fee, Community House also makes available banquet tables, chairs, card tables, coffee pots, audiovisual equipment, and sound systems. As an independent non-profit entity, Community House receives no financial or other assistance from government; rather, its revenues are derived solely from rental fees, donations, and trust account income. It is registered as a 501(c)(3) organization with the Internal Revenue Service, and as a charity with the New Jersey Division of Consumer Affairs. In recognition of its charitable mission, Community House charges nonprofit organizations lower rents, except that all users of the gymnasium pay $30 per hour. It claims, however, that pool fees constitute the largest source of its rental income, and that most of those fees are paid by nonprofit entities such as the YMCA, the Town of Moorestown, and the senior swimming program. Community House does not charge membership fees and frequently runs an operating deficit that it covers with interest generated by its trust fund. [I]t would be contrary to the interests of society that funds dedicated to a charitable use be permitted to be diverted or diminished by the payment of judgments resulting from the torts of agents, servants or employees of the organization or institution administering the charity where suit is instituted by the beneficiary of the charity. That principle was ultimately rejected by this Court. In a trilogy of cases that reconsidered the doctrine of charitable immunity from the perspective of the injured plaintiff, we reasoned: Due care is to be expected of all, and when an organization's negligent conduct injures another there should, in all justice and equity, be a basis for recovery without regard to whether the defendant is a private charity. Collopy v. Newark Eye and Ear Infirmary, 27 N.J. 29, 39 (1958); accord Dalton v. St. Luke's Catholic Church, 27 N.J. 22 (1958); Benton v. YMCA, 27 N.J. 67 (1958). The Legislature responded to the Court's decisions a year later by passing the Charitable Immunity Act.See footnote 11 N.J.S.A. 2A:53A-7 to -11. By that Act, the common law doctrine as it had been judicially defined by the courts of this State was restored. Schultz v. Roman Catholic Archdiocese, 95 N.J. 530, 533 (1984) (internal quotations omitted). In relevant part, N.J.S.A. 2A:53A-7a provides: No nonprofit corporation . . . organized exclusively for religious, charitable or educational purposes . . . shall . . . be liable to respond in damages to any person who shall suffer damage from the negligence of any agent or servant of such corporation . . . where such person is a beneficiary, to whatever degree, of the works of such nonprofit corporation . . . ; provided however, that such immunity from liability shall not extend to any person who shall suffer damage from the negligence of such corporation . . . where such person is one unconcerned in and unrelated to and outside of the benefactions of such corporation . . . . Under Section 7a of the Act, an entity qualifies for charitable immunity when it (1) was formed for non-profit purposes; (2) is organized exclusively for religious, charitable or educational purposes; and (3) was promoting such objectives and purposes at the time of the injury to plaintiff who was then a beneficiary of the charitable works. Hamel v. State, 321 N.J. Super. 67, 72 (App. Div. 1999); accord Loder v. St. Thomas Greek Orthodox Church, 295 N.J. Super. 297, 301 (App. Div. 1996) ( [I]n litigation concerning the Act, the focus is on whether the organization is a charitable association, and whether the injured plaintiff is a 'beneficiary' of its charitable works. ) Because it is undisputed that Community House is a nonprofit entity, we begin our analysis with the question whether Community House is organized exclusively for charitable purposes. Although the provision of housing for indigent or ailing senior citizens undoubtedly serves such a purpose, Presbyterian Homes reserved the right to force the residents of the complex to return to their families or be placed elsewhere when they bec[a]me either financially unable to meet their monthly charges or unmanageable because of illness. Id. at 286.See footnote 22 For that reason, among others, we held that the property in Presbyterian Homes was not 'actually' used for 'charitable' purposes. Id. at 288. More recently, in Loder v. St. Thomas Greek Orthodox Church, supra, the Appellate Division concluded that churches provide a wide range of charitable activities associated with their core religious purposes, and that those activities are within the purview of the Act: Although a church's main purpose may be to provide a place of worship and spiritual guidance, [its] function is not so narrowly confined. It is not limited to sectarian teaching and worship. In [the] modern view, exercises designed to aid in the advancement of the spiritual, moral ethical and cultural life of the community in general are deemed within the purview of the religious society. A social center is now commonly regarded as a proper adjunct of the local church -- conducive to the public good, as well as advantageous to the congregation. [295 N.J. Super. at 302 (quoting Bianchi v. South Park Presbyterian Church, 123 N.J.L. 325, 332-33 (E. & A. 1939)).] Consonant with its broad reading of charitable purposes, the panel held that a Greek festival organized by the church, at which meals were sold and dances performed, furthered the charitable objectives [the church] was organized to advance. Id. at 303 (internal quotations omitted). The import of our caselaw is that a wide range of nonprofit organizations that provide educational opportunities or other services which promote the public welfare are deemed to have charitable purposes. Morales v. New Jersey Academy of Aquatic Sciences, 302 N.J. Super. 50, 53-54 (App. Div. 1997); see also Pomeroy v. Little League Baseball, 142 N.J. Super. 471, 474 (App. Div. 1976) (holding nonprofit organization's teaching and supervision of baseball skills serves educational purpose); Heffelfinger v. Town of Morristown, 209 N.J. Super. 380, 388 (Law Div. 1985) (holding nonprofit entity that maintains small public park serves charitable purpose). In this case, as evidenced by defendant's Articles of Incorporation and distributed literature, Community House was organized and is maintained to provide facilities for the social and recreational needs of organizations and individuals. Through the provision of those facilities, Community House operates as a center of community life for the people of Moorestown and its surrounds, thereby serving a recognized charitable purpose. And, as pointed out by the Appellate Division, under N.J.S.A. 2A:53A-9, buildings . . . actually used for . . . charitable . . . purposes, . . . shall be deemed to be operated and maintained for a religious, charitable, educational or hospital purpose. The Appellate Division concluded, however, that by renting facilities to members of the public and for-profit entities, Community House has deviated from the statutory requirement that it must be organized exclusively for charitable purposes.See footnote 33 Bieker, supra, 327 N.J. Super. at 473-74. In respect of defendant's permitting the public-at-large to use its facilities for celebrations such as weddings and birthday parties, or for piano recitals, dance classes, sports, and other similar activities, we find that those uses meet important social and recreational needs of the community. Indeed, such celebrations, classes and sports activities take place on the premises of many religious and charitable organizations, including churches, synagogues, the YMCA, and others. Although its Articles of Incorporation appear to limit Community House to providing facilities for only charitable, educational and religious organizations, we consider an expansion of those initial restrictions to be relevant to the issue at hand only when that expansion is unrelated to an appropriate charitable purpose. That is not the case here. For-profit entities present a different issue. Plaintiff alleges that Community House rents its facilities to local businesses although the limited record on summary judgment fails to inform us about the scope and type of those rentals. Assuming that for-profit use is substantial, a question is raised whether the dominant motive [of Community House] is charity or some other form of enterprise. Parker, supra, 243 N.J. Super. at 325. In Parker, St. Stephen's A.M.E. Zion Church organized a nonprofit corporation to serve as a conduit for federal funds that, with rental payments, would cover the costs of low and moderate income housing built by the corporation. Essentially because no charitable donations or trust funds were used to support the project, the court held that notwithstanding its benevolent aims, the corporation could not obtain the protection of the Charitable Immunity Act. Id. at 328. Justice Long, then a judge of the Appellate Division, explained: Equally important is the absence from defendant's operation of fund-raising activities and charitable contributions. As far as our research reveals, no New Jersey case has ever applied the immunity statute in circumstances such as these. Private charitable contributions have been involved at least in part in every case in which immunity has been conferred. This is understandable in light of the fact that the essence of the public policy favoring charitable immunity is the preservation of Parker teaches that an organization claiming immunity under the Act must demonstrate some level of support from charitable donations and/or trust funds as it is those sources of income the Act seeks to protect. That does not mean, however, that income from some limited noncharitable activity would prevent a corporation not otherwise ineligible from obtaining immunity under the Act. Such a result would call into doubt the status of any charitable, religious or educational organization that holds fund-raisers or bake sales, or conducts bingo nights. See, e.g., Book v. Aguth Achim Anchai, 101 N.J. Super. 559, 564 (App. Div. 1968) (holding, without questioning status of religious organization, that plaintiff injured during bingo game was not beneficiary of organization's works ). Generally, those activities are an adjunct to the organization's core purpose if only because they provide a source of income, in addition to charitable donations and trust funds, that enables the organization to carry out that purpose. Community House, for example, has run an operating deficit for several years and apparently uses the higher fees charged to for-profit entities to offset losses. No nonprofit corporation . . . organized exclusively for religious, charitable or educational purposes . . . shall . . . be liable to respond in damages to any person who shall suffer damage from the negligence of any agent or servant of such corporation . . . where such person is a beneficiary, to whatever degree, of the works of such nonprofit corporation . . . ; provided, however, that such immunity from liability shall not extend to any person who shall suffer damage from the negligence of such corporation . . . where such person is one unconcerned in and unrelated to and outside of the benefactions of such corporation . . . . It is uncontroverted that plaintiff's father brought his son to the Community House gymnasium when he played basketball there. After the child chased a ball he was bouncing, he fell from an adjoining fire escape and sustained injury. The child was plainly a recipient of Community House's benefactions, even if only as a companion of his father and a spectator at his father's basketball game. See Pomeroy, supra, 142 N.J. Super. at 475 ( [A] spectator at a Little League baseball game is a beneficiary of defendant's works since . . . . at the time [she] was injured defendant was engaged in . . . the charitable objectives it was organized to advance. ); Anasiewicz v. Sacred Heart Church, 74 N.J. Super. 532, 537-38 (App. Div. 1962) (holding that wedding guest was beneficiary of charitable benefactions of Sacred Heart Church). Viewing the facts in this context, plaintiff's presence was clearly incident to accomplishment of defendant's charitable purposes, Gray v. St. Cecilia's Sch., 217 N.J. Super. 492, 495 (App. Div. 1987), and thus plaintiff was a beneficiary of its works. Mayer v. Fairlawn Jewish Ctr., 38 N.J. 549, 553-54 (1962). NO. A-107 EDWARD BIEKER, JR., a minor by his Guardians Ad Litem, MICHELLE BIEKER and EDWARD BIEKER, SR.; and MICHELLE BIEKER and EDWARD BIEKER, SR., individually, Plaintiffs-Respondents, v. COMMUNITY HOUSE OF MOORESTOWN, a New Jersey corporation, Defendant-Appellant. DECIDED July 23, 2001 Chief Justice Poritz