Bieker v. Community House of Moorestown

• Decision Date: 23 July 2001
• Citation: 777 A.2d 37,169 N.J. 167
• Parties: 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.
• Court: New Jersey Supreme Court

777 A.2d 37

169 N.J. 167

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.

Supreme Court of New Jersey.

Argued November 27, 2000.

Decided July 23, 2001.

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, Cherry Hill, 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.

We are called on in this case to determine whether Moorestown Community House, Inc. (Community House), a nonprofit corporation that operates and rents meeting rooms and athletic facilities to charitable organizations, for-profit entities, and the general public, is entitled to immunity from suit under the Charitable Immunity Act, N.J.S.A. 2A:53A-7 to -11. The question arises because N.J.S.A. 2A:53A-7a states that an entity seeking the protection of the Act must be "organized exclusively for religious, charitable or educational purposes." Plaintiff contends that because for-profit entities and the general public pay rental fees to Community House it is not organized exclusively as a charity. We hold that activities designed to raise monies in support of a charitable organization's core purposes generally contribute to those purposes and do not change the " `essence of the entity itself.' " Snyder v. American Ass'n of Blood Banks, 144 N.J. 269, 305, 676 A.2d 1036 (1996) (quoting Parker v. St. Stephen's Urban Dev. Corp., Inc., 243 N.J.Super. 317, 327, 579 A.2d 360 (App.Div.1990)). Only when those non-charitable activities become the "dominant motive" of the organization do we have "some other form of enterprise" such that the organization will lose its immunity under the statute. Parker, supra, 243 N.J.Super. at 325,579 A.2d 360.

I

Edward Bieker, Sr., was a frequent patron of the Community House gymnasium where he participated in an informally organized adult men's basketball group that paid rental fees to Community House for use of its facilities. On May 2, 1996, Edward, Sr., brought his three-and-a-half year old son, Edward, Jr., with him to the Community House gymnasium. During his father's basketball game, the child kept himself occupied by playing with a basketball. Unfortunately, when chasing after his ball, the child left the gymnasium area through doors that led onto an adjoining fire escape and fell a distance of approximately seven feet, suffering serious injury.

The Biekers, as guardians ad litem for Edward, Jr., brought this lawsuit seeking damages for their son's personal injuries. Community House responded by motion for summary judgment, claiming immunity from liability under the Charitable Immunity Act, N.J.S.A. 2A:53A-7 to -11, based on its status as an independent, nonprofit corporation created to meet the social and recreational needs of the community. The trial court granted defendant's motion, concluding that "[a]n organization ... established to serve [such purposes] ... and to reap no profits" has a "charitable" purpose and consequently is entitled to charitable immunity.

The Appellate Division reversed. Bieker v. Community House of Moorestown, 327 N.J.Super. 467, 743 A.2d 893 (App.Div.2000). It considered this case atypical "[b]ecause Community House does not itself conduct programs within its facilities, but instead rents to other entities and individuals." Id. at 473, 743 A.2d 893. According to the panel, any immunity claimed by Community House is therefore "derivative" and "depends on the nature of the programs conducted by those entities and individuals." Ibid. The court held that since Community House "rents facilities to various private individuals and profit-making entities which engage in activities that clearly are not charitable or educational, .... [it is not] organized `exclusively' for religious, charitable or educational purposes" as required by statute. Id. at 474, 743 A.2d 893.

We granted Community House's petition for certification and now reverse.

II

The Articles of Incorporation of Community House set forth the purposes for which the corporation was formed more than seventy years ago. Article IIA specifically states the founders' intent to provide

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.

III

A

The doctrine of charitable immunity was first recognized in New Jersey in D'Amato v. Orange Memorial Hospital, 101 N.J.L. 61, 127 A.340 (E. & A.1925). Its roots are found in the common law principle described by Justice Burling in Jones v. St. Mary's Roman Catholic Church:

[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.

[7 N.J. 533, 537, 82 A.2d 187 (1951).]

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, 141 A.2d 276 (1958); accord Dalton v. St. Luke's Catholic Church, 27 N.J. 22, 141 A.2d 273 (1958)

; Benton v. YMCA, 27 N.J. 67, 141 A.2d 298 (1958).

The Legislature responded to the Court's decisions a year later by passing the Charitable Immunity Act.¹N.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, 472 A.2d 531 (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, 728 A.2d 264 (App. Div.1999); accord Loder v. St. Thomas Greek Orthodox Church, 295 N.J.Super. 297, 301, 685 A.2d 20 (App.Di...