Title: Ryan v. Holy Trinity Evangelical Lutheran Church

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). In November 1995, plaintiff Jamie C. Ryan was injured while attending a meeting of the Mothers' Center. The Mothers' Center, formed in 1987, is a nonprofit group of parents and expectant mothers organized to exchange and receive information regarding childbirth, child rearing, mothering and family relationships. Members pay annual dues as well as fees to participate in the activities. However, the Mothers' Center is open to non-members, and anyone who subscribes to its basic policies and purposes and wishes to take advantage of its multiple programs is welcome. Plaintiff was a member of the Mothers' Center and had been attending a group that focused on early childhood development. That group met weekly at Holy Trinity's parish house. At the November 1995 meeting, participants sat in a circle around the room on folding chairs. Plaintiff was seated near a supply closet. One of the two group facilitators for the meeting was defendant Laura Fadem. Fadem had brought her children with her to Holy Trinity. Forty-five minutes into the meeting, Fadem's son wandered over to the supply closet and apparently tried to open it. The door appears not to have been properly hinged, and when it was pulled, it detached and struck plaintiff on the back of her head, causing her to fall to the floor. She alleges that, as a result, she suffered significant injuries. Plaintiff and her husband filed suit in 1997 against Holy Trinity, the Mothers' Center, Fadem, and a series of John Doe defendants. At the time of the accident, Holy Trinity had a policy of opening its doors to social outreach projects with community purposes and allowing them to use its facilities to conduct meetings. Those groups included the Boy Scouts, Alcoholics Anonymous, Al-Anon, the Children's Psychiatric Center, and a Monday night social club for mentally challenged people. Holy Trinity included notices of meetings in the church bulletin. Permission to use a room could be obtained from the church council for a fee of $15. Although not entirely clear, that fee appears to have been based on the church's estimate of its cost of keeping the building open. Holy Trinity asserted in discovery that no group was refused permission to use the church facilities if it could not afford the fee. The Mothers' Center used the church facilities for many different meetings. Payments were made by check from the Mothers' Center to Holy Trinity. During the period July through December 1995, the Mothers' Center used the church facilities 31 times and paid Holy Trinity a total of $465. The trial court granted summary judgment to all defendants based on charitable immunity. The Appellate Division affirmed the dismissal of the complaint against Holy Trinity and Fadem in her individual capacity, and reversed the dismissal against the Mothers' Center and Fadem as its agent. Because the evidential record is silent regarding the Mothers' Center's income, the Appellate Division remanded the case for a determination of whether the Mothers' Center received any part of its operating income from charitable contributions. The Mothers' Center petitioned for certification, contending that the finding that it was organized exclusively for educational purposes obviated any further inquiry regarding its finances. The plaintiffs filed a cross-petition contesting the finding that Holy Trinity was entitled to charitable immunity. This court granted both petitions. HELD : Holy Trinity is entitled to charitable immunity, pursuant to N.J.S.A. 2A:53A-7 to -11, because it is a nonprofit entity, it is organized exclusively for religious purposes, and at the time of the accident, it was promoting its objectives in respect of plaintiff, who was a beneficiary thereof. Because the Mothers' Center is organized exclusively for educational purposes, no further financial analysis is required. 1. The purposes of the Act are to avoid the diversion of charitable trust funds to non-charitable purposes and to encourage altruistic activity. Distilling the statutory language of the Act to its essence, an entity qualifies for charitable immunity when it 1) was formed for nonprofit 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 a plaintiff who was then a beneficiary of the charitable works. (Pp. 9-11). 2. The terms "educational" and "religious" have plain meanings that are subject to literal reading, therefore entities that can prove they are organized exclusively for educational or religious purposes automatically satisfy the second prong of the charitable immunity standard. In contrast, determining whether an entity is organized exclusively for "charitable" purposes requires further examination, pursuant to Parker v. St. Stephens' Urban Dev. Corp. Inc., 243 N.J. Super. 317 (App. Div. 1990), including an examination of the source of the entity's funds. (Pp. 12 to 18). 3. The Mothers' Center bases its claim that it is entitled to charitable immunity on its educational purpose. That purpose was declared in its bylaws and is revealed in its operation, which includes lectures, discussions and the general exchange of information. Its aim is the conveyance of information to all interested parents and prospective parents about birth and childrearing. The discussion format of the programs, like the lecture format, is a valid method of pedagogy. Because the Mothers' Center passes muster as an entity organized exclusively for educational purposes, no further financial analysis is required to satisfy the second prong of the Act. Moreover, plaintiffs having conceded the Mothers' Center's nonprofit status and that plaintiff was a beneficiary of its works, the Mothers' Center and Fadem, as its agent, are entitled to summary judgment based on charitable immunity. (Pp. 18 to 23). 4. Plaintiffs do not challenge the nonprofit status of Holy Trinity and further concede that Holy Trinity is organized exclusively for religious purposes. At issue is whether Holy Trinity satisfies the third prong of the test: at the time of the accident, was it engaged in charitable works and was plaintiff a beneficiary of those works? The test for determining whether a party is a beneficiary has two prongs. The first is that the institution, at the time in question, was engaged in the performance of the charitable objectives it was organized to advance. The second is that the injured party must have been a direct recipient of those good works. (P. 23) 5. The term "works" is defined liberally. Exercises that are 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. Here, in furtherance of the tenants and principles of the Lutheran Church, Holy Trinity provided space for community organizations to conduct meetings. By supporting social outreach groups that enriched the life of the community at large, Holy Trinity fell well within the modern view, now sixty years old, that the good works of churches are not limited to parochial concerns. (Pp. 24 to 27). 6. In assessing who is a beneficiary of the works of a charity, that notion is to be interpreted broadly, as evidenced by the use of the words "to whatever degree" modifying the word "beneficiary" in the statute. Those who are not beneficiaries must be unconcerned in and unrelated to the benefactions of such an organization. Here, plaintiff was a beneficiary of the works of Holy Trinity at the time of the accident both as a member of the Mothers' Center, and as an attendee at a Mothers' Center function on Holy Trinity's premises. (Pp. 27 to 30). The judgment of the Appellate Division is AFFIRMED to the extent that it approved the grant of summary judgment to Holy Trinity and Fadem, individually, and held that the Mothers' Center was organized exclusively for educational purposes; and it is REVERSED to the extent that it remanded the case for a showing that the operating capital of the Mothers' Center is derived from charitable contributions or trust income. Summary judgment in favor of the Mothers' Center and Fadem, as its agent, is REINSTATED. CHIEF JUSTICE PORITZ and JUSTICES COLEMAN, VERNIERO, LaVECCHIA, ZAZZALI and ALBIN join in JUSTICE LONG's opinion. SUPREME COURT OF NEW JERSEY A-116/ 117 September Term 2001 JAMIE C. RYAN and ROBERT J. RYAN, her husband, Plaintiffs-Respondents and Cross-Appellants, v. HOLY TRINITY EVANGELICAL LUTHERAN CHURCH, Defendant and Cross-Respondent, and MOTHERS CENTER OF MONMOUTH COUNTY, Defendant-Appellant, and LAURA FADEM, JOHN DOE (1-5), a fictitious name, party intended being unknown and ABC CORPORATION (1-5), a fictitious name, party intended being unknown, Defendants. Argued December 3, 2002 Decided February 11, 2003 On certification to the Superior Court, Appellate Division. Mauro C. Casci argued the cause for appellant. Harry V. Osborne, II, argued the cause for respondents and cross-appellants (Evans, Osborne and Kreizman, attorneys). David M. Molnar argued the cause for cross-respondent (Anthony W. Guidice, attorney). The opinion of the Court was delivered by LONG, J. Once again we consider the Charitable Immunity Act, N.J.S.A. 2A:53A 7 to 11 (the Act). More particularly, we are called on to determine whether an association organized exclusively for educational purposes is nevertheless required to demonstrate some level of income from charitable donations to qualify for immunity. We have concluded that it need not. We also have determined that a church can be engaged in its good works when it opens its premises to a nonprofit community organization for a nominal fee, and that partakers of the works of the community organization can thus qualify as beneficiaries of the works of the church. The promotion of those purposes, according to the bylaws of the Center, is to be effectuated through an education program directed toward parents .... The Mothers Center runs a number of programs, including a post-partum project, along with discussions and informational groups on parenting techniques and discipline. At general membership meetings, speakers are often scheduled to talk on topics relating to parenting and motherhood, including medical issues. The Mothers Center also provides childcare during meetings, which enables its members to participate in group discussions and other activities. Childcare services are provided, along with playgroups for children and activities for mothers and children together. The Mothers Center is open to non-members. Anyone who subscribes to its basic policies and purposes and wishes to take advantage of its programs is welcome. Members pay annual dues as well as fees to participate in the organization s activities. The dues in 1995 were $25 for the year. Membership is not required for programs but is necessary for participation in the governance of the participants. Generally, the discussion groups meet weekly. Each subject is covered in depth over approximately an eight-week period. Trained facilitators focus the discussions, present topics, and resolve any disagreements between participants. Mrs. Ryan was a member of the Mothers Center and had been attending a group that focused on early childhood development. Ten to twelve mothers typically participated in that group. Although the meetings for some discussion groups were held in members homes, the group Mrs. Ryan was attending held its weekly meetings at the parish house of Holy Trinity. At the November 17, 1995, meeting, the participants sat in a circle around the room on folding chairs. Mrs. Ryan was seated near a supply closet. One of the two group facilitators for that meeting was defendant Laura Fadem.See footnote 2 On November 17, 1995, Fadem brought her children with her to Holy Trinity. She sent her daughter to the childcare room on the second floor, and took her son with her to the meeting. Forty-five minutes into the meeting, the boy wandered over to a supply closet door and apparently tried to open it. The door appears not to have been properly hinged, and when it was pulled, it detached and struck Mrs. Ryan on the back of her head, causing her to fall to the floor. She alleges that, as a result, she suffered significant injuries and required long-term treatment, including surgery. At the time of the accident, Holy Trinity had a policy of opening its doors to social outreach projects with community purposes and allowing them to use its facilities to conduct meetings. Those groups included the Boy Scouts, Alcoholics Anonymous, Al-Anon, the Children s Psychiatric Center, and a Monday night social club for mentally challenged people. Holy Trinity included notices of meetings in the church bulletin. Permission to use a room could be obtained from the church council for a fee of $15. Although not entirely clear, that fee appears to have been based on the church s estimation of how much was needed to cover the costs of electricity, heat, and air conditioning, in other words, the cost of keeping the building open. Each group that used the church s facilities paid the same fee. Holy Trinity asserted in discovery that no group was refused permission to use the church facilities if it could not afford the fee. The Mothers Center used the church facilities for many different meetings. Payments were made by check from the Mothers Center to Holy Trinity. During the period July through December 1995, the Mothers Center used the church facilities a total of 31 times. At $15 per use, the Mothers Center paid Holy Trinity a total of $465 for that period. On those facts, the trial court granted summary judgment to all defendants based on charitable immunity. The Ryans appealed. The Appellate Division affirmed the dismissal of the Ryans complaint against Holy Trinity and Laura Fadem, individually, and reversed the dismissal against the Mothers Center and Laura Fadem as its agent. Because the evidential record is silent regarding the Mothers Center s income (other than dues and fees) the Appellate Division, citing Bieker v. Community House of Moorstown, 169 N.J. 167, 178 (2001), and Parker v. St. Stephens Urban Dev. Corp., Inc., 243 N.J. Super. 317, 326 (App. Div. 1990), remanded the case for a determination of whether the Mothers Center received any part of its operating income from charitable contributions. The Mothers Center petitioned for certification and the Ryans filed a Cross-Petition. On May 13, 2002, we granted both petitions. 172 N.J. 355 (2002). We now affirm in part and reverse in part. [N.J.S.A. 2A:53A-7.] The history of the Act has been recounted repeatedly, Bieker, supra, 169 N.J. at 174-75; Schultz v. Roman Catholic Archdiocese of Newark, 95 N.J. 530, 537 (1984); Hamel v. State, 321 N.J. Super. 67, 73-74 (App. Div. 1999), and need not be repeated here, except to note that its original purpose was to avoid the diversion of charitable trust funds to non-charitable purposes in order to live up to the reasonable expectations of the benefactors. Parker, supra, 243 N.J. Super. at 321. Over time, however, our case law has recognized that the purposes underlying charitable immunity are broader than simply preserving charitable trust funds and include the encouragement of altruistic activity. See O Connell, supra, 171 N.J. at 496 ( [T]he statute s legislative history suggests that preservation of a charity s assets was only one of a number of purposes propelling the [Act s] enactment. ); Schultz, supra, 95 N.J. at 537 ( The focus of the legislative process was not on the question of what exceptions were consistent with the historical development of the doctrine of common law charitable immunity. The focus was on the economic effect of abolition of the doctrine upon the charities. ) (citing Hearings on S. 204 re Exemption of Religious, Charitable and Hospital Organizations from Negligence Liability, Before the Assembly Judiciary Committee (July 17, 1958)); Abdallah v. Occupational Ctr. of Hudson County, 351 N.J. Super. 280, 284 (App. Div. 2002) ( [T]here is agreement that [the Act s] underlying purpose and rationale have always been the protection and encouragement of private philanthropy both to assure the continued provision of beneficent services and to relieve government of the burden of providing them. ) (citing Restatement (Second) of Torts 895E cmt. c (1979); 2 Harper & James on Torts, 29.16 (1956)); see also Note, The Quality of Mercy: Charitable Torts and Their Continuing Immunity, 100 Harv. L. Rev. 1382, 1384 (1987) ( [S]ome courts, pointing to public policy considerations in favor of charitable good works, feared that damage awards might drive charities to bankruptcy or cost them prospective donors. ) (citing Vermillion v. Woman's College of Due West, 104 S.C. 197 (1916)). Distilling the statutory language to its essence, this Court has held that an entity qualifies for charitable immunity when it (1) was formed for nonprofit 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. O Connell, supra, 171 N.J. at 489 (quoting Hamel v. State, 321 N.J. Super. 67, 72 (App. Div. 1999)). As an interpretive rationale, N.J.S.A. 2A:53A-10 instructs that the Act shall be deemed to be remedial and shall be liberally construed so as to afford immunity to the said corporations, societies and associations from liability as provided herein in furtherance of the public policy for the protection of nonprofit corporations, societies and associations organized for religious, charitable, educational or hospital purposes. [Ibid.] That is the backdrop for our inquiry. [Id. at 325.] Applying those principles, the court in Parker ruled that the community housing corporation before it was not entitled to immunity because it did not seek to provide housing through its own efforts, either by the dedication of church funds or through a program of charitable solicitation; because its board members were unpaid, not because of any benevolent instinct, but as a quid pro quo for federal funding; and because it was created, not to lessen the burden on government, but to obtain as much money from the government as possible, and to run its program with that money. The court concluded that, as a conduit for federal money, the housing corporation was not an entity organized exclusively for charitable purposes but was the quasi-public sponsor of a federally funded housing project. Id. at 327. That fact-sensitive approach is in line with our prior treatment of the notion of charitable purposes. Such a determination depends on the facts or circumstances of each case. Presbyterian Homes, supra, 55 N.J. at 285. In Presbyterian Homes, a nonprofit organization that provided housing for the aged sought a property tax exemption because its property was being operated for a charitable purpose. Although we recognized care of the elderly as laudable and the aim of the sponsor as altruistic, we held that the question of whether it was charitable depended on the manner in which the property was used to achieve that end. Id. at 288. We found that manner wanting. The by-laws of Presbyterian Homes did not obligate it to continue providing a home to seniors who were not financially equipped to pay its fees or who became ill. Seniors who had expended all of their assets could be turned out and potentially could become public charges. Moreover, although rental fees in themselves would not necessarily eliminate charitable status, there was a direct relationship between the size of the rental payment and the desirability of the unit. Id. at 286-87. In rejecting the charitable characterization, we invoked the reasoning of the Illinois Supreme Court in Methodist Old Peoples Home v. Korzen, 39 Ill. 2d 149, 158 (1968), concluding that such circumstances lack the warmth and spontaneity indicative of charitable impulse. Presbyterian Homes, supra, 55 N.J. at 287. We recently cited Presbyterian Homes and Parker approvingly in Bieker, supra, 169 N.J. at 178-79. There, the Moorestown Community House, a nonprofit corporation that operated and rented meeting rooms and athletic facilities both to charitable and for-profit entities contended that it was organized exclusively for charitable purposes. Id. at 172-73. We held that a determination was needed regarding whether the dominant motive of the Community House was, in fact, charitable or some other form of enterprise. Although recognizing that receiving income from some limited non-charitable activity would not prevent an otherwise eligible entity from obtaining immunity, we held that the question of how much of the rental operation was devoted to for-profit entities had to be resolved in order to determine whether the entity was exclusively charitable. Id. at 178-79. O Connell did not distinguish Parker or Bieker because they were not relevant to its analysis. O Connell was concerned only with an entity organized exclusively for educational purposes. O Connell, supra, 171 N.J. at 491. In that case, we interpreted the Charitable Immunity Act literally and held that the second prong of the Act was satisfied based solely on the fact that education was Montclair s exclusive purpose. Ibid. The same analysis would apply to an entity organized solely for religious purposes. The reason is that the terms educational and religious have plain meanings that are subject to literal reading. Abdallah, supra, 351 N.J. Super. at 284. In contrast, as the court in Abdallah observed in assessing the charitable characterization in connection with an entity that served as a combination employment agency and shelter workshop: [W]here a non-profit, non-religious, non-educational organization relies on the immunity based on its asserted charitable status, a traditional analysis as exemplified by Parker, which looks beyond the organization's non-profit structure and social service activities, continues to be mandated. And, we are convinced, that traditional analysis must take into account the organization's source of funds as a critical element of charitable status. [Id. at 284.] We fully subscribe to that view. Entities that can prove they are organized exclusively for educational or religious purposes automatically satisfy the second prong of the charitable immunity standard. Entities seeking the shelter of the Act by proving that they are organized exclusively for charitable purposes must engage in the traditional factual analysis of Parker, including a source of funds assessment. In the present case, the Mothers Center s claim of entitlement to charitable immunity is grounded in the assertion that it is organized exclusively for educational purposes. If that is correct, O Connell governs and no further financial analysis is required to satisfy the second prong of the Act. [Bianchi v. South Park Presbyterian Church, 123 N.J.L. 325, 332-33 (E. & A. 1939).] That principle was cited recently with approval by this Court in Bieker, supra, 169 N.J. at 176 (quoting Loder v. Saint Thomas Greek Church, 295 N.J. Super. 297, 302 (App. Div. 1996) (quoting Bianchi, supra, 123 N.J.L. at 332-33)). Bianchi is on all fours with this case. There, the defendant religious society operated a building next to its church that housed, among other things, the administration offices, choir practice, a gymnasium and meeting rooms. The church house, as it was called, was used as a social center as well as for administration of church affairs. Its social and recreational uses were not confined to the members of the religious society. Id. at 328. A Girl Scout troop, of which the plaintiff was a member, held weekly meetings at the church house. The troop made a voluntary donation to the church at the beginning of each year that was not sufficient to defray the costs of keeping the building open for its meetings. Other than to use the church house and make the annual donation, the troop was not affiliated with the church body. Ibid. The plaintiff, who suffered injury when she fell down an unlit staircase in the church house, filed suit against the church. The trial court directed a verdict for the church, in part, on the ground that the plaintiff was a beneficiary of its good works. Id. at 329-30. In affirming, the Court of Errors and Appeals concluded that permitting the troop to use the church house for its meetings was plainly classifiable as a secondary church function in aid of its primary purpose, which served to exemplify the religious doctrine. Id. at 333. Our cases have followed that expansive view. For example, in Anasiewicz, the plaintiffs attended a wedding ceremony as invited guests at the defendant Sacred Heart Church where Mrs. Anasiewicz fell and suffered injuries. Anasiewicz, supra, 74 N.J. Super. at 533-34. She brought suit against Sacred Heart. Ibid. In determining whether Mrs. Anasiewicz was a beneficiary of the works of the church, the Appellate Division found that, although not members of Sacred Heart, the plaintiffs were within the benefactions of the church. Whether they actually benefited spiritually by their attendance [was] of no moment. Id. at 537-38. The court went on to identify as the work of the church the preservation of moral or sociological concepts held by the community generally. Id. at 538. Even when a religious organization is not advancing its own religious tenets, or promoting religion at all, it can still be engaged in its works. In Bixenman v. Christ Episcopal Church Parish House, 166 N.J. Super. 148, 150 (App. Div. 1979), the defendant Christ Episcopal church loaned its premises to a Greek Orthodox church for a nominal fee until such time as the Greek Orthodox church could move into its own facilities. The plaintiff, a member of the Greek Orthodox church, was injured while leaving the parish house of Christ Episcopal after having attended services of the Greek Orthodox church held on the premises. Id. at 150-51. Applying the rule of Bianchi, the Appellate Division concluded that the defendant was engaging in its works when it loaned its facilities to the Greek Orthodox church. Facilitating worship, whether by its own parishioners, or those of a different faith, is one of the foremost reasons for which churches exist. Id. at 151. Recently, the court in Loder, continued the broad definition of works that had been set forth in our case law. Loder, supra, 295 N.J. Super. at 297. There, a patron at a church-sponsored cultural festival was injured on church property. The festival apparently included service of food as well as demonstrations of dancing. The patron, Loder, was not a member of the church and had gone to the festival to enjoy the food. Id. at 299-300. The Appellate Division found that there was no doubt that St. Thomas was engaged in the performance of its objectives. Through the festival, it was attempting to demonstrate to the community the rich traditions of the Greek Orthodox Church and the importance of the Hellenic culture in the Orthodox religion, as expressed through food and dance. Id. at 302. According to the court, those activities bore a direct and substantial relationship to the church s function. Id. at 303. We cited Loder with approval in Bieker, supra, 169 N.J. at 176. In this case, in furtherance of the tenets and principles of the Lutheran Church, Holy Trinity provided space for community organizations to conduct meetings. By supporting social outreach groups that enriched the life of the community at large, Holy Trinity fell well within the modern view, now sixty years old, that the good works of churches are not limited to parochial concerns. Thus, Holy Trinity was engaged in its good works at the time of Mrs. Ryan s accident. NO. A-116/117 SEPTEMBER TERM 2001 ON CERTIFICATION TO Appellate Division, Superior Court JAMIE C. RYAN and ROBERT J. RYAN, her husband, Plaintiffs-Respondents And Cross-Appellants, v. HOLY TRINITY EVANGELICAL LUTHERAN CHURCH, Defendant and Cross-Respondent, And MOTHERS CENTER OF MONMOUTH COUNTY, Defendant-Appellant. DECIDED February 11, 2003 Chief Justice Poritz PRESIDING OPINION BY Justice Long CONCURRING OPINION BY DISSENTING OPINION BY