Opinion ID: 2364737
Heading Depth: 1
Heading Rank: 3

Heading: structure of the board of trustees

Text: The Board argues that it is a public entity created by the legislature to operate a hospital owned by the City. Under the Board's analysis, it is entitled to sovereign immunity because it is an arm of the state, functioning separately from the City. The plaintiffs respond that the Board is not a public entity because it is neither created by the legislature nor subject to local control. Because it is not a public entity, the plaintiffs argue, the Board is not entitled to any protection from suit. The parties to this dispute disagree as to whether the Board is a public or private entity, but, in framing the issue in this manner, they ignore the possibility that the Board is not an entity but rather a part of the City of North Kansas City. To determine whether the Board is actually entitled to sovereign immunity, we must first decide whether the Board is a cognizable entity at all. A careful examination of the Board and its relationship with the City reveals that it is not.
A full understanding of the nature of the Board requires an understanding of the statutory framework under which the Board operates. North Kansas City Hospital was created under Chapter 96, RSMo, specifically sections 96.150, RSMo Supp. 1991, through 96.228. [3] The statute creating the predecessors to these sections was entitled AN ACT to authorize cities of the third class to purchase, erect, lease, equip and maintain grounds and buildings for hospital purposes and to conduct and operate such hospital. 1921 Mo.Laws 46 (1st Extra Session). The act does not describe itself as creating an entity to run hospitals for cities that own them. Rather, the title shows that the act was intended to give third class cities a means of operating hospitals. [4] Currently, Chapter 96 provides a mechanism for voters to petition for a tax to support a hospital. Section 96.150.1 provides that [w]hen one hundred voters of any city of the third class shall petition the mayor and council asking that an annual tax ... be levied for ... a health care facility in such city ... the mayor and council shall submit the question to the voters. § 96.150.1, RSMo Supp.1991. The statute specifies that the form of the question shall be in substantially the following form: Shall there be .......... cent tax for.......... (establishment of, equipping, operating and maintaining) a .......... (hospital, nursing home, or convalescent home, etc.) in the city for the care and treatment of the sick, disabled and infirm? § 96.150.2 (Supp.1991). Upon a two-thirds vote, the tax is levied and set aside in a separate fund for the facility. § 96.150.3, RSMo Supp.1991. Chapter 96 also includes provisions relating to the powers of boards of trustees. Specifically, [t]he trustees shall have authority to operate, maintain and manage a hospital and hospital facilities, and to make and enter into contracts ...; to make and enter into leases [with some limitations]...; and further to provide rules and regulations for the operation, management or use of a hospital.... § 96.150.5 RSMo Supp.1991. Nowhere in Chapter 96 is a board granted a corporate or political existence, perpetual succession, or existence after dissolution of its city. Neither is a board granted the power to sue and be sued, to tax, to issue bonds, or to hold property except as special trustees. The structure of a Chapter 96 board of trustees requires a close relationship between a board and its city. The members of a board are subject to control of the city because membership on the board depends upon selection by the city government. The members of a board are selected by the mayor with the approval of the council. § 96.160. The members of a board may be removed for any of the reasons listed in the statute upon a majority vote of the council. § 96.175. Even the size and composition of a board may, within limits, be varied by the city council. § 96.160. Furthermore, the funds of a Chapter 96 hospital are tied to the city. The tax is levied by the city following approval by the voters of the city. § 96.150.3. The tax is levied and collected in the same manner as other municipal taxes. Id.; § 96.220. Any bonds issued for the hospital are issued by the city, upon recommendation of the board. § 96.222. Although a board has control of the expenditures of funds to operate the hospital, the funds are kept in the city treasury. § 96.190. The funds are kept separate from other city monies, but the board must annually make a detailed report to the city council, showing the receipts of all funds and the expenditures therefrom, and showing each donation and amount thereof. § 96.200.
That the Board is not an entity becomes clearer when the Board and Chapter 96 are compared with entities that have been recognized as such. The recent opinions of this Court contain examples of public entities. See, e.g., State ex rel. Regional Justice Information Service Commission v. Saitz, 798 S.W.2d 705, 707 (Mo. banc 1990) (REJIS, created under authority of § 70.260); State ex rel. Trimble v. Ryan, 745 S.W.2d 672 (Mo. banc 1988) (Bi-State Development Agency, an interstate compact agency formed under authority of § 70.370); State ex rel. St. Louis Housing Authority v. Gaertner, 695 S.W.2d 460, 463 (Mo. banc 1985) (municipal housing authority created under Chapter 99); State ex rel. New Liberty Hospital District v. Pratt, 687 S.W.2d 184 (Mo. banc 1985) (hospital district created under Chapter 206). These diverse entities have varying and distinct powers appropriate to fulfill the purposes for which they were created. However, all of these entities share the common feature of enabling statutes that expressly grant them corporate existence. See, e.g., § 70.260.2, RSMo Supp.1991 (REJIS, a body corporate and politic); § 70.370, art. III (Bi-State, a body corporate and politic); § 99.080.1 (housing authority shall constitute a municipal corporation and have power to have perpetual succession); § 206.010.2 (hospital district shall be a body corporate and political subdivision of state). The Board, on the other hand, has no existence except through the continued existence of the City of North Kansas City. [5] While the Board has some features in common with some of the entities in these cases, it lacks the fundamental feature of an existence separate and distinct from that of the City. Like the St. Louis Housing Authority, the Board is selected and may be removed by the city government. See St. Louis Housing Authority, 695 S.W.2d 460. Like the New Liberty Hospital District, the Board operates a public hospital. See New Liberty Hospital District, 687 S.W.2d 184. But, both of these entities are specifically granted corporate existence and do not depend upon any other entity for their existence. It is this aspect of the entities involved in these previous cases that sets them apart from the Board in this case. Aside from the entities that have been before this Court in sovereign immunity cases, the statutes have other examples that provide useful comparisons. The Board essentially argues that the legislature created the Board as an independent arm of the state, rather than a part of the City, for the sole purpose of running a hospital for the City. The legislature could have created such an entity, if it had wished. The law providing for hospital districts permits such an independent entity. See § 206.010.2. The statutes contain other examples of independent entities that might be created by the citizenry, such as the city library district, which shall be a body corporate. § 182.140. Street light maintenance districts are [t]o have perpetual existence. § 235.150. And if you create an ambulance district, it shall be a body corporate and a political subdivision of the state. § 190.010. The legislature did not include any grant of separate existence when it enacted the original law providing for city hospitals in third class cities. Neither has it added such a grant in any of the amendments to the law. The most recent amendment occurred in 1987 and explicitly listed the authority of a Chapter 96 board of trustees but did not give the board any authority to have perpetual succession or to be a body corporate. See § 96.150.5, RSMo Supp.1991. Lacking any separate existence, the Board is not an entity but is a part of the City of North Kansas City. [6] Not all of the statutes defining some part of government create entities. Statutes similar to the sections in Chapter 96 grant authority for zoning commissions and boards of adjustment, §§ 89.070-89.090, park boards in third class cities, §§ 90.500-90.570, and boards to operate municipally owned utilities, §§ 91.270, 91.480. The statutes do not grant corporate existence or political subdivision status to these boards either. These statutes govern the operation of parts of city government in the same way sections 96.150 through 96.228 govern operation of the Board. The statutes granting authority to the Board are like the statutes setting forth the powers of the mayor and city council in third class cities. See §§ 77.060-77.360. A city council has no corporate existence either. Rather, the city has corporate existence. § 77.010. A city has the power to sue and be sued, while the city council does not. [7] See id. Thus the Board is not a public entity in its own right, but rather a part of the City, and, for purposes of sovereign immunity, the Board enjoys such immunity as the City would enjoy.