Jacobson v. Atlantic City Hospital

• Decision Date: 01 April 1968
• Docket Number: No. 16522.,16522.
• Citation: 392 F.2d 149
• Parties: Irwin JACOBSON, Executor of the Estate of Jack Jacobson, Deceased, Appellant, v. ATLANTIC CITY HOSPITAL, a Corporation of the State of New Jersey, Harry P. Goodman and Lawrence Strenger.
• Court: U.S. Court of Appeals — Third Circuit

392 F.2d 149 (1968)

Irwin JACOBSON, Executor of the Estate of Jack Jacobson, Deceased, Appellant, v. ATLANTIC CITY HOSPITAL, a Corporation of the State of New Jersey, Harry P. Goodman and Lawrence Strenger.

No. 16522.

United States Court of Appeals Third Circuit.

Argued October 16, 1967.

Decided April 1, 1968.

Richard J. Schachter, Halpern, Schacter and Wohl, Somerville, N. J., for appellant.

Burchard V. Martin, Taylor, Bischoff, Neutze & Williams, Camden, N. J., for appellee.

Before HASTIE, FREEDMAN and SEITZ, Circuit Judges.

OPINION OF THE COURT

HASTIE, Chief Judge.

This is an appeal, perfected under Rule 54(b), from a judgment by a district court in a diversity action dismissing a complaint against the defendant Atlantic City Hospital for lack of jurisdiction. D.N.J.1966, 259 F.Supp. 836.

Plaintiff, executor of the estate of Jack Jacobson, instituted this negligence action in the district court under both the New Jersey Death Act and the New Jersey Survival Act for the recovery of damages from the hospital, a non-profit eleemosynary corporation, and two physicians who attended Jacobson during his hospitalization. The court's jurisdiction was based solely on the diversity statute which requires that the matter in controversy exceed $10,000. The district court dismissed the complaint against the hospital on the ground that, although more than $10,000 in damages was claimed, the maximum recovery allowable against the hospital under New Jersey statutory law is $10,000. The controlling New Jersey statute reads, in pertinent part, as follows:

"N.J.S.A. 2A:53A-7: Non-profit corporations and associations organized for religious, charitable, educational or hospital purposes; liability for negligence

"No nonprofit corporation, society or association organized exclusively for religious, charitable, educational or hospital purposes shall, except as is hereinafter set forth, be liable to respond in damages to any person who shall suffer damage from the negligence of any agent or servant of such corporation, society or association, where such person is a beneficiary, to whatever degree, of the works of such nonprofit corporation, society or association; provided, however, that such immunity from liability shall not extend to any person who shall suffer damage from the negligence of such corporation, society or association or of its agents or servants where such person is one unconcerned in and unrelated to and outside of the benefactions of such corporation, society or association; but nothing herein contained shall be deemed to exempt the said agent or servant individually from their liability for any such negligence. L.1959, c. 90, p. 221, § 1."

"N.J.S.A. 2A:53A-8: Liability to beneficiary suffering damages not exceeding $10,000

"Notwithstanding the provisions of the foregoing paragraph, any non-profit corporation, society or association organized exclusively for hospital purposes shall be liable to respond in damages to such beneficiary who shall suffer damage from the negligence of such corporation, society or association or of its agents or servants to an amount not exceeding $10,000.00, together with interest and costs of suit, as the result of any 1 accident and to the extent to which such damage, together with interest and costs of suit, shall exceed the sum of $10,000 such nonprofit corporation, society or association organized exclusively for hospital purposes shall not be liable therefor. L.1959, c. 90, p. 222, § 2."

Plaintiff concedes that the $10,000 statutory limit applies to the pain and suffering claim asserted by him under the Survival Act because he is in effect asserting the claim on behalf of the deceased and the deceased was a "beneficiary" of the hospital within the meaning of that term in the statute. However, he contends, that the $10,000 limitation does not apply to the wrongful death cause of action. Moreover, even if it does, he argues that it is a completely separate limitation, so that this claim may be added to the claim for pain and suffering to meet the jurisdictional requirement.

We think the district court was correct in concluding that, regardless of the fact that claims for wrongful death and pain and suffering were alleged, the maximum amount recoverable was $10,000 "as the result of any 1 accident." Plaintiff argues that the use of the singular "beneficiary" or "person" indicates that the $10,000 limitation is to apply to each such beneficiary. We think not. If plaintiff's argument was accepted it would mean that by the words "beneficiary, to whatever degree," the legislature intended that the amount the executor could recover for wrongful death might depend on the number of dependent next of kin. However, the statutory focus is on the maximum amount recoverable on the basis of a single accident to a single person. See Trail v. Green, D.N.J.1962, 206 F.Supp. 896.

Plaintiff next argues that under the Death Act the dependents of the deceased are not beneficiaries of the hospital within the meaning of that term as employed in N.J.S.A. 2A:53A-7 and 8. However, a cause of action under the Death Act comes into being because of the legal relationship between the deceased and the beneficiaries of the executor's action. The beneficiaries' dependence upon the deceased and their pecuniary loss due to his demise trigger the right to sue under the Death Act. See Turon v. J. & L. Construction Co., 1952, 8 N.J. 543, 86 A.2d 192. A beneficiary of the benevolence of a nonprofit charitable hospital has been defined as one who is "`the recipient of another's bounty; one who received a benefit or advantage.'" Kolb v. Monmouth Memorial Hospital, E. & A., 1936, 116 N.J.L. 118, 120, 182 A. 822, 823. Dependents of a patient in a nonprofit hospital who would be beneficiaries of a damage action from the negligent death of such patient, come within the statutory language "beneficiary, to whatever degree," in relation to the benevolence and charitable goodness of a nonprofit hospital. N.J.S.A. 2A:53A-7 and 2A:53A-8. To hold otherwise would require us to infer that the New Jersey Legislature intended to limit the recovery of a patient who was injured by the negligence of a nonprofit charitable hospital but would impose no such limitation upon recovery by each of his next of kin if he died as the result of such negligence. We think such a result is not compatible with the legislative objective.

An examination of the history of the case law in New Jersey as it has evolved over the years supports our conclusion that a patient's next of kin are, within the statute, beneficiaries of a nonprofit hospital. Many years ago the State of New Jersey created by judicial decision the rule of charitable immunity in favor of hospitals when sued by patients for negligence. The immunity rule was later extended to non-patients who were beneficiaries of a nonprofit hospital's benevolence. As the court said in Boeckel v. Orange Memorial Hospital, Sup.Ct.1932, 108 N.J.L. 453, 456, 158 A. 832, 833, aff'd E. & A.1933, 110 N.J.L. 509, 166 A. 146:

"In a very real sense the charitable impulses which served the patient served also the patient\'s mother, indeed served all those who, by whatever bond of attachment, suffered through the infirmity of the patient or were eased by the lightening of her pain."

Against this case law background the Supreme Court of New Jersey, in 1958, overruled the charitable immunity doctrine. See Collopy v. Newark Eye and Ear Infirmary, 27 N.J. 29, 141 A.2d 276. A statute was promptly passed in New Jersey which was intended to restore for one year the charitable immunity doctrine as it existed before the Collopy case, except for the $10,000 maximum liability provision as to nonprofit hospitals. This was done to give such hospitals time to obtain insurance coverage. Anasiewicz v. Sacred Heart Church, App.Div.1962, 74 N.J.Super. 532, 181 A. 2d 787, certification denied, 1962, 38 N.J. 305, 184 A.2d 419. Within a year thereafter New Jersey in effect readopted the provisions of the earlier statute without a limitation of time. LaParre v. YMCA, 1959, 30 N.J. 225, 152 A.2d 340. That statute provided that "This Act shall be deemed to be remedial and shall be liberally construed so as to afford immunity to the said corporations * * *," which included those entities operating non-profit hospitals.

We think the legislative and case law background support the conclusion that a Death Act claim is within the "beneficiary" provision of the statute. The district court, therefore, properly construed and applied the statute.

But the conclusion that no liability in excess of $10,000 can be imposed on the hospital does not solve the jurisdictional problem. For in this lawsuit the decedent's executor is demanding damages from two physicians as well as the hospital for the same fatal accident and there is no $10,000 limitation on the physicians' liability. Indeed, on the present record it must be conceded that potentially the jurisdictional amount is recoverable and diversity jurisdiction exists as to the claims against the doctors. So it becomes necessary to inquire whether this is enough to give the court jurisdiction over the entire lawsuit, including the claim of not more than $10,000 against the hospital.

The jurisdictional requirement of Section 1332 is stated in terms of "the amount in controversy" in an "action." Preliminarily, it should be considered in interpreting this language that the Constitutional judicial power of the United States under Section 2 of Article III extends to all "Controversies * * * between Citizens of different States," without regard to the amount involved. However, Congress, concerned that the district courts not be unduly burdened with a very large number of small disputes between citizens of different states and that citizens not be forced to defend minor claims far from home, has seen fit to provide that diversity jurisdiction shall be exercised only if the "action" is one...