NO. 4-00-0473

IN THE APPELLATE COURT

OF ILLINOIS

FOURTH DISTRICT

PAUL D. CARROLL, as Administrator of 	)	Appeal from

the Estate of JOSHUA A. CARROLL,		)	Circuit Court of

Deceased,							)	Edgar County

		Plaintiff-Appellant,		)	No. 99L7

		v.						)

JERRY PADDOCK, ROD NEESON; HUMAN		)

RESOURCES CENTER OF EDGAR and CLARK	)

COUNTIES; PARIS COMMUNITY HOSPITAL; and	)	Honorable

MAMERTO GUINTO, M.D.,				)	James R. Glenn,

		Defendants-Appellees.		)	Judge Presiding.

_________________________________________________________________

OPINION

		JUSTICE GARMAN delivered the opinion of the Court:

		Plaintiff, Paul D. Carroll, as the administrator of the

estate of Joshua A. Carroll, appeals the order of the circuit court

of Edgar County dismissing his complaint against defendants, Human

Resources Center of Edgar and Clark Counties (HRC), Jerry Paddock

(Paddock), Rod Neeson (Neeson), and Mamerto Guinto, M.D. (Guinto),

and granting Paris Community Hospital's (Hospital) motion for

summary judgment pursuant to the Local Governmental and Governmen

tal Employees Tort Immunity Act (Act) (745 ILCS 10/1-101 through

10-101 (West 1998)).  Plaintiff also appeals the circuit court's

dismissal of his February 15 and April 24, 2000, motions for a

declaration of unconstitutionality of a portion of section 1-206 of

the Act (745 ILCS 10/1-206 (West 1998)).  Plaintiff argues on

appeal that (1) HRC and the Hospital are not local public entities

under section 1-206 of the Act and are therefore not entitled to

invoke the one-year statute of limitations under section 8-101 of

the Act (745 ILCS 10/8-101 (West 1998)); (2) section 1-206 of the Act, purporting to give governmental tort immunity to "any not-for-

profit corporation organized for the purpose of conducting public

business" (745 ILCS 10/1-206 (West 1998)), is unconstitutional as

constituting special legislation in violation of section 13 of

article IV of the Illinois Constitution of 1970 (Ill. Const. 1970,

art. IV, §13); and (3) section 1-206 of the Act is unconstitutional

in that it cedes or delegates to private entities the sovereign

immunity that belongs solely and exclusively to the state.  Because

we agree with the plaintiff on the first issue, we do not consider

his constitutional challenges.  We reverse and remand.  

	I. BACKGROUND

		The following facts are taken from plaintiff's well-

pleaded complaint, exhibits, and discovery depositions filed in the

record.  On April 14, 1997, Paul and Patricia Carroll brought their

son, Joshua, to the emergency room of the Hospital after he

attempted suicide by slashing his wrists, swallowing a large number

of thyroid pills and ibuprofen tablets, and by ingesting a half

glass of liquid pesticide.  Joshua saw Paddock and Guinto while in

the emergency room.  The Hospital did not admit Joshua but

discharged him from the emergency room on that same day.  On April

15, 1997, Paul and Patricia took their son to HRC's facilities in

Paris, Illinois, where Joshua received psychological assessment,

care, and treatment from Neeson.  Later that morning, Joshua

committed suicide at his home by means of a shotgun.

		HRC is a not-for-profit corporation.  According to its

articles of incorporation, it is organized "[e]xclusively for

charitable and educational purposes, the purposes being limited to those set forth in [s]ection 501(c)(3) of the Internal Revenue Code

[(26 U.S.C. §501(c)(3) (1994))]."  The articles also provide that

"[n]o part of [HRC's] net income will inure to the benefit of

private individuals," and "the organization will not be operated

for the benefit of private individuals or designated individuals,

the creators or their families, or persons controlled directly or

indirectly by such private interest."  Further, HRC's mission

statement explains that the corporation shall "promote and conserve

the mental health of the people of Edgar and Clark [C]ounties." 

		HRC is composed of three divisions: developmental

disabilities, community services, and clinical services.  First,

HRC provides services to developmentally disabled persons, in part,

through vocational rehabilitation programs, including work

opportunities at Café France, an on-site restaurant at HRC; private

contracts for laundry services; and a contract with the Illinois

Department of Transportation for cleanup service at an I-70 rest

area.  HRC also provides substance abuse activities on an out

patient basis.  HRC has a prevention program, driving under the

influence (DUI) assessment evaluation, and classes.  Finally, the

clinical services division provides outpatient mental health

services.  This division provided mental health screening and

assessment to Joshua on April 15, 1997.  According to John Young,

executive director of HRC, HRC provided Joshua's care and treatment

pursuant to a contract with the Coles County Mental Health Center

(Health Center).  HRC contracted to provide screening, assessment,

and support services (SASS) under the terms prescribed by the

Illinois Department of Mental Health and Developmental Disabilities (Department) and the Department of Children and Family Services

(DCFS).  The Health Center pays HRC $17,075 annually for its SASS

services.

		According to the charitable organization supplement for

fiscal year 1998, HRC received 66.13% of its funding from "govern

ment grants" and "membership dues" equaling $1,826,777 out of a

total revenue of $2,762,456.  In addition, HRC received local

funding through property tax assessment; $5,067 from the Edgar

County "708 board" and $8,540 from the Clark County "708 board." 

(A "708 board" is a seven-member community mental health board that

administers the Community Mental Health Act (405 ILCS 20/0.1

through 13 (West 1998)).)  In fiscal year 1997, HRC's financial

statement reports revenue of $1,521,505.88 from "fees and grants

from governmental agencies" out of a total revenue of

$2,781,342.54.  Of this amount, the Department contributed

$541,929.01 through grants to HRC that placed certain requirements

and restrictions on HRC.  The Department and HRC also contracted

for services totaling $556,568.51.  Together, support from the

Department amounted to 41.49% of HRC's total revenues in fiscal

year 1997.

		The Hospital also is a not-for-profit organization.  Its

purpose, as stated in the articles of incorporation, is: 

			"To conduct and carry on the work of the

corporation not for profit but exclusively for

scientific, education[al,] and charitable

purposes in such a manner that no part of its

income or property shall inure to the private benefit of any donor, member, officer[,] or

individual having a personal or private inter

est in the activities of the [c]orporation.

	* * *

			To operate a charitable hospital in Edgar

County, Illinois[,] for the care of the sick

of the area without regard to their ability to

pay for such services and without regard to

their race, color, or creed."

		In 1997, the sources of revenue for the Hospital included

Medicare and Medicaid payments, insurance payments, and self-pay

collections.  The Hospital received $4,318,524 from Medicare and

$545,271 from Medicaid, representing 50.9% of its total revenue for

the year.  The Hospital received $4,936,253 from insurance payments

and self-pay collections.  The only local government funding

provided to the corporation was pursuant to a contract between the

Hospital and the Edgar County Special Service Area for ambulance

service.  For this service, Edgar County paid the Hospital $80,000

in 1997. 

		The Edgar County Board does not control the Hospital's

board of directors.  The latter consists predominantly of business

people of the community and does not include members of the county

board. 

		Plaintiff filed his complaint on April 15, 1999, under

the Wrongful Death Act (740 ILCS 180/0.01 through 2.2 (West 1998))

and requested funeral and burial expenses in connection with

Joshua's suicide of April 15, 1997.  On August 20, 1999, plaintiff requested the court to convert Guinto, a respondent in discovery,

to a defendant.  The trial court granted plaintiff's motion on

September 23, 1999.  Paddock, Neeson, HRC, and Guinto filed motions

to dismiss pursuant to section 2-619(a)(5) of the Illinois Code of

Civil Procedure (Code) (735 ILCS 5/2-619(a)(5) (West 1998)).  The

Hospital filed a motion for summary judgment pursuant to section 2-

1005(b) of the Code (735 ILCS 5/2-1005(b) (West 1998)).  The

motions all asserted that plaintiff's complaint was not timely

filed under the one-year statute of limitations afforded local

public entities under the Act.  After hearings on February 16 and

April 27, 2000, the trial court granted defendants' motions,

finding that HRC and the Hospital are local public entities within

the meaning of the Act and that Paddock, Neeson, and Guinto are

employees and agents of the local public entities.  The court

concluded that the complaint was filed outside the one-year

limitations period.  Additionally, the court rejected plaintiff's

constitutional challenges to section 1-206 of the Act.  Plaintiff

appeals.

		II. ANALYSIS

		Plaintiff argues that HRC and the Hospital are not local

public entities as defined by section 1-206 of the Act; therefore,

both entities and their employees are not entitled to use the one-

year statute of limitations under section 8-101 of the Act (745

ILCS 10/8-101 (West 1998)).  We review the court's granting HRC's,

Neeson's, Paddock's, and Guinto's section 2-619(a)(5) motions to

dismiss de novo.  Johnson v. Du Page Airport Authority, 268 Ill. App. 3d 409, 414, 644 N.E.2d 802, 805 (1994).  We also use de novo review in examining the trial court's granting of the Hospital's

motion for summary judgment.  Wright v. St. John's Hospital of the Hospital Sisters of the Third Order of St. Francis, 229 Ill. App. 3d 680, 683, 593 N.E.2d 1070, 1072 (1992).  

		The purpose of the Act is "to protect local public

entities and public employees from liability arising from the

operation of government."  745 ILCS 10/1-101.1 (West 1998).  The

Act defines the term "local public entity" as:

		"a county, township, municipality, municipal

corporation, school district, school board,

educational service region, regional board of

school trustees, community college district,

community college board, forest preserve

district, park district, fire protection

district, sanitary district, museum district,

emergency telephone system board, and all

other local governmental bodies.  'Local

public entity' also includes library systems

and any intergovernmental agency or similar

entity formed pursuant to the Constitution of

the State of Illinois or the Intergovernmental

Cooperation Act as well as any not-for-profit corporation organized for the purpose of conducting public business.  It does not include the State or any office, officer,

department, division, bureau, board, commis

sion, university[,] or similar agency of the State."  (Emphasis added.) 745 ILCS 10/1-206

(West 1998).

		In interpreting section 1-206 of the Act, our primary

goal is to determine and give effect to the intent of the legisla

ture.  This legislative intent is ascertained primarily from the

language of the Act.  Barnett v. Zion Park District, 171 Ill. 2d 378, 388, 665 N.E.2d 808, 813 (1996).  The Act must be evaluated as

a whole; we construe each provision in connection with every other

section.  Barnett, 171 Ill. 2d at 388-89, 665 N.E.2d at 813.  Because the Act is in derogation of the common law, its terms must

be strictly construed.  Independent Trust Corp. v. City of Chicago Department of Water, 295 Ill. App. 3d 811, 815, 693 N.E.2d 459, 462 (1998). 

		We note initially that our research reveals no Illinois

case that has specifically defined the phrase "organized for the

purpose of conducting public business."  However, Illinois courts,

including this court, have analyzed and interpreted this language. 

We review those cases.

		The United States District Court for the Central District

of Illinois examined whether an entity was "organized for the

purpose of conducting public business" under the Act in McQueen v. Shelby County, 730 F. Supp. 1449 (C.D. Ill. 1990).  In McQueen, the Coles County Mental Health Center (Health Center) counseled,

evaluated, and screened plaintiff's decedent, an inmate at the

Shelby County jail.  The Health Center determined that plaintiff

had no indication of suicidal intent and recommended transfer back

to the county jail.  Upon return to the jail, plaintiff's decedent committed suicide.  McQueen, 730 F. Supp. at 1451.  The Health Center claimed that it was a "local public entity" immune from

liability under the Act.  McQueen, 730 F. Supp. at 1452.  The Health Center, a not-for-profit corporation, "engage[s] exclusively

in scientific, literary[,] and educational activities leading to

the promotion and conservation of the mental health of the people

of the Coles County, Illinois, area."  McQueen, 730 F. Supp. at 1453.  The Health Center received over 90% of its financing from

state and local sources.  McQueen, 730 F. Supp. at 1453.  The district court rejected the argument that the Illinois General

Assembly intended a local public entity to have the power to levy

taxes and held that the Health Center fell within the plain meaning

of the definition of "local public entity" and was entitled to

immunity.  McQueen, 730 F. Supp. at 1454.

		The First District, in Smith v. Northeast Illinois Regional Commuter R.R. Corp., 210 Ill. App. 3d 223, 228, 569 N.E.2d 41, 43 (1991), decided that METRA, a commuter rail line, was a

"local public entity" under the Act and was, therefore, not liable

for punitive or exemplary damages.  The court noted that METRA is

a not-for-profit corporation with no shareholders, funded with

public funds, and operates its commuter rail line in the public

interest.  Smith, 210 Ill. App. at 227, 569 N.E.2d at 43.  The court held that the amendment to section 1-206 of the Act (which

added the language to be interpreted in this case), "includes[,]

within the definition[,] local public entity not-for-profit

corporations like METRA organized for the purpose of conducting

public business."  Smith, 210 Ill. App. 3d at 228, 569 N.E.2d at 43.

		In Johnson v. Decatur Park District, 301 Ill. App. 3d 798, 810-11, 704 N.E.2d 416, 424-25 (1998), this court determined

that the Young Women's Christian Association (YWCA) was not a

"local public entity" under the Act entitled to immunities.  The

mission of the YWCA, a not-for-profit corporation receiving some

public funding, is to create opportunities for women's growth,

leadership, and power.  Johnson, 301 Ill. App. 3d at 810, 704 N.E.2d at 424-25.  This court concluded that, regardless of its

mission statement or sources of funding, the YWCA is a membership

organization.  As a membership organization, the YWCA exists to

benefit its members, not the public at large, and, accordingly, it

is not a public entity entitled to immunity under the Act. 

Johnson, 301 Ill. App. 3d at 811, 704 N.E.2d at 425.

		Similarly, in O'Melia v. Lake Forest Symphony Ass'n, 303 Ill. App. 3d 825, 830, 708 N.E.2d 1263, 1266 (1999), the Second

District held that the Symphony Association was not a "local public

entity" because it is a membership organization and is involved in

the fine arts, an area unrelated to traditional government

functions.  The court distinguished McQueen in that the mental health center at issue in that case provided health services to the

public at large, a function traditionally involving the government. 

O'Melia, 303 Ill. App. 3d at 830, 708 N.E.2d at 1266.

		The court also noted that the term "public business" as

contained in the Act should possess its "plain, ordinary, and

commonly understood meaning."  O'Melia, 303 Ill. App. 3d at 828, 708 N.E.2d at 1265.  The court explained:

			"'Public' is defined as '[p]ertaining to

a state, nation, or whole community; proceed

ing from, relating to, or affecting the whole

body of people or an entire community.  Open

to all ***.  Belonging to the people at large;

*** not limited or restricted to any particu

lar class of the community.'  Black's Law

Dictionary 1227 (6th ed. 1990). *** Thus, to

conduct 'public business' under the Act, a

corporation must pursue an activity that

benefits the entire community without limita

tion.  In addition, the phrase 'public busi

ness' is also today commonly understood to

mean the business of the government." 

O'Melia, 303 Ill. App. 3d at 828, 708 N.E.2d at 1265.

		Next, in Hills v. Bridgeview Little League Ass'n, 306 Ill. App. 3d 13, 24, 713 N.E.2d 616, 625 (1999), rev'd on other grounds, Nos. 87895, 87910 cons. (November 16, 2000), the First District held that the Little League Association (Association) did

not conduct public business under the Act.  The court noted that

the Association did not present any evidence that it was funded by

state or local sources, run by state or village government, or was

part of a governmental unit.  Hills, 306 Ill. App. 3d at 23-24, 713 N.E.2d at 625.  Further, the court concluded that the Association

did not benefit the entire community without limitation or

participate in the business of government.  Hills, 306 Ill. App. 3d at 24, 713 N.E.2d at 625, citing O'Melia, 303 Ill. App. 3d at 828, 708 N.E.2d at 1265.

		Finally, the most recent case to address the issue is

Niehaus v. Rural Peoria County Council on Aging, Inc., 314 Ill. App. 3d 665, 732 N.E.2d 132 (2000).  In Niehaus, the entity in question was the Rural Peoria County Council on Aging (Council). 

The Council is a not-for-profit, charitable organization, incorpo

rated to "help senior citizens to live independently and with

dignity in their own homes."  Niehaus, 314 Ill. App. 3d at 666,  732 N.E.2d at 133.  The corporation receives 65% of its cash funds

from government sources, including local government funding.  The 

Council also receives funding from membership dues, in-kind

contributions, and fund-raising activities.  Niehaus, 314 Ill. App. 3d at 667, 732 N.E.2d at 134.

		The Third District concluded that the Council was not

entitled to the protections of the Act, noting that it is not

"almost entirely government funded" but receives some funding from

government sources, as do many charitable organizations.  Niehaus, 314 Ill. App. 3d at 670, 732 N.E.2d at 136.  In addition, the

Council is a membership organization providing services to a narrow

range of the population.  Niehaus, 314 Ill. App. 3d at 670, 732 N.E.2d at 136.  The court also cited an Illinois Supreme Court tax

exemption case that specifically defined certain requirements for

an organization to be defined as charitable, including that (1) the

organization benefit the public at large, (2) reduce the burdens of government, and (3) derive its funds from public and private

charity.  Niehaus, 314 Ill. App. 3d at 670, 732 N.E.2d at 137, quoting Board of Certified Safety Professionals of the Americas, Inc. v. Johnson, 112 Ill. 2d 542, 546, 494 N.E.2d 485, 488 (1986).  The Niehaus court held that the characteristics that make a not- for-profit corporation a charitable organization do not, without

more, also qualify the corporation as a local public entity under

the Act.  Niehaus, 314 Ill. App. 3d at 670, 732 N.E.2d at 137.

		We agree with the Third District's reasoning and conclude

that a not-for-profit corporation must meet additional requirements

to be included in the definition of "local public entity" under the

Act.  Clearly, the Act's purpose of "protect[ing] local public

entities and public employees from liability arising from the operation of government" requires more.  (Emphasis added.)  745 ILCS 10/1-101.1 (West 1998).

		HRC argues that it receives substantial government

funding--66.13% from government grants and membership dues in

fiscal year 1998 and 55% from fees and grants from governmental

agencies in fiscal year 1997.  HRC points out that it is subject to

governmental regulations and requirements as a consequence of

accepting grant money.  Further, HRC argues that the services it

provides are available to the entire community of Edgar and Clark

Counties.

		We conclude that HRC is not "organized for the purpose of

conducting public business" and is not a "local public entity"

under the Act.  HRC is not almost entirely government funded; the

fact that it receives some grants from government sources does not

bring it within the scope of the Act.  As stated in Niehaus, 314 Ill. App. 3d at 670, 732 N.E.2d at 136-37, many charitable organizations receive government funding.  In addition, HRC has

failed to prove to this court that it participates in the business

of government.  

		Defendant Hospital first argues that there can be "no

serious contention" that its activities do not fall within the

ambit of "conducting public business" because the Act itself sets

out detailed provisions regarding "hospital activities."  According

to the Hospital, these detailed provisions clearly place its

activities within the definition of public business.  See 745 ILCS

10/6-101 through 6-110 (West 1998).  The Hospital, however, has

misread the Act.  To receive immunity from injuries resulting from

"hospital activities," it must first be determined that the entity

is a "local public entity" within the meaning of the Act.  Simply

because an entity engages in "hospital activities" does not

necessarily mean that the entity conducts public business under

section 1-206 of the Act.

  		The Hospital obtained 49.1% of its revenue from private sources, namely, insurance payments and self-pay collections.  It

receives the remainder of its revenue from federal programs--

Medicaid and Medicare.  The only local government funding is

provided by Edgar County through a contract for ambulance services. 

The Hospital argues that it receives a substantial portion of its

revenues from tax dollars and public sources.  Additionally, it is

subject to uniform government regulation.  The Hospital, however,

does not provide any evidence that it is subject to any more

regulation or government control than any other private hospital. 

Moreover, the Hospital's board of directors is not run by the Edgar County Board, nor is any member of the county board a member of the

Hospital's board.  We conclude that the Hospital is not government

funded, nor is it almost entirely government funded.  Further, the

Hospital has not shown that it participates in the business of

government.  

		We hold that HRC and the Hospital are not local public

entities under the Act and, therefore, neither the entities nor

their employees are entitled to invoke the one-year statute of

limitations pursuant to section 8-101 of the Act.  Plaintiff's suit

was timely filed.  Because we find that the Act does not apply to

defendants, we need not specifically address the constitutional

issues raised by the plaintiff.

		Last, we note that HRC filed a motion on appeal to strike

a portion of plaintiff's reply brief regarding his constitutional

challenge to the Act.  We took that motion with the case and

conclude that our resolution of the case based on the Act's

inapplicability to defendants renders moot HRC's motion to strike.

	III. CONCLUSION

		Accordingly, we reverse the judgment of the circuit court

of Edgar County and remand the cause for further proceedings.

		Reversed and remanded.

		STEIGMANN, P.J., and COOK, J., concur.