Brugger v. Joseph Academy, Inc.

• Decision Date: 21 November 2002
• Docket Number: No. 92887.,92887.
• Citation: 781 N.E.2d 269,269 Ill.Dec. 472,202 Ill.2d 435
• Parties: Kelly Jean BRUGGER et al., Appellees, v. JOSEPH ACADEMY, INC., Appellant.
• Court: Illinois Supreme Court

781 N.E.2d 269

202 Ill.2d 435

269 Ill.Dec. 472

Kelly Jean BRUGGER et al., Appellees, v. JOSEPH ACADEMY, INC., Appellant.

No. 92887.

Supreme Court of Illinois.

November 21, 2002.

Stellato & Schwartz, Ltd., Chicago (Esther Joy Schwartz, Theodore W. Pannkoke, Donald E. Stellato, of counsel), for appellant.

Clifford Law Offices, Chicago (Robert A. Clifford, Robert P. Sheridan, of counsel), for appellees.

Justice KILBRIDE delivered the opinion of the court:

The defendant, Joseph Academy, Inc. (the academy), is a private, not-for-profit corporation serving special education students pursuant to contracts with various local public school districts. In this appeal, the academy requests that we reconsider the criteria this court recently adopted in Carroll v. Paddock, 199 Ill.2d 16, 262 Ill.Dec. 1, 764 N.E.2d 1118 (2002), for identifying local public entities under section 1-206 of the Local Governmental and Governmental Employees Tort Immunity Act (the Act) (745 ILCS 10/1-206 (West 2000)). Alternatively, the academy argues that it qualifies for immunity under the Carroll criteria.

The trial court granted summary judgment in favor of the academy, finding that it met the definition of a local public entity under the Act. The appellate court reversed and remanded the cause, holding that section 1-206 of the Act was not applicable to the academy. 326 Ill.App.3d 328, 334-35, 260 Ill.Dec. 56, 760 N.E.2d 135. We adhere to our decision in Carroll and affirm the appellate court's judgment, remanding the cause for further proceedings.

I. BACKGROUND

In January 1997, plaintiff Kelly Brugger, then a minor, seriously injured her knee while playing a game of "bombardment" during a physical education class at the academy. Brugger's doctor had previously sent a note to the academy barring her from participation in any activity involving side-to-side movement due to a knee injury, but Brugger alleges that she was ordered to play bombardment or risk receiving a failing grade for the class and being unable to graduate.

The academy is a not-for-profit corporation operating as a "private school for educating emotionally handicapped youth." Brugger's former public school district, Leyden Community High School District 212 (the school district), contracted with the academy for Brugger's education because it was unable to provide an appropriate education for her in its own facilities.

Brugger filed a personal injury complaint against both the academy and the school district, alleging that her injury was caused by willful and wanton misconduct in that she was required to participate in the game of bombardment contrary to her physician's orders. The circuit court of Cook County granted the school district's motion to dismiss it as a party; that ruling is not challenged on appeal. The academy filed a motion for summary judgment, and the trial court granted the motion, finding that the facility had immunity as a "[l]ocal public entity" under section 1-206 of the Act (745 ILCS 10/1-206 (West 2000)). The appellate court reversed, finding that this court's decision in Cooney v. Society of Mt. Carmel, 75 Ill.2d 430, 27 Ill.Dec. 485, 389 N.E.2d 549 (1979), precluded granting immunity to the academy as a "local public entity" under section 1-206. 326 Ill. App.3d at 333, 260 Ill.Dec. 56, 760 N.E.2d 135.

This court granted the academy's petition for leave to appeal on February 6, 2002 (Brugger v. Joseph Academy, Inc., 198 Ill.2d 588, 262 Ill.Dec. 618, 766 N.E.2d 238 (2002)), pursuant to Supreme Court Rule 315(a) (177 Ill.2d R. 315(a)). On February 7, 2002, we filed our decision in Carroll. The lower courts in this case did not have the benefit of the Carroll decision, and the academy now raises important questions concerning the practical application of the Carroll test in the context of a new set of facts.

II. ANALYSIS

The academy raises two issues before this court. First, it argues Carroll v. Paddock, 199 Ill.2d 16, 262 Ill.Dec. 1, 764 N.E.2d 1118 (2002), was wrongly decided. It contends that the test recently adopted in Carroll to identify local public entities qualifying for immunity under the Act is overly restrictive and does not comport with either the plain language of the Act (745 ILCS 10/1-206 (West 2000)) or the intent of the legislature. In the alternative, the academy contends that, even if the Carroll test is applied in this case, it qualifies as a local public entity under section 1-206 of the Act (745 ILCS 10/1-206 (West 2000)). Thus, the academy maintains that the trial court properly granted summary judgment in its favor. We begin our examination of these issues with the academy's challenge to our recent decision in Carroll.

A

The Act grants covered entities immunity from tort liability for injuries "arising from the operation of government." 745 ILCS 10/1-101.1 (West 2000); Carroll, 199 Ill.2d at 23, 262 Ill.Dec. 1, 764 N.E.2d 1118. The entities protected by the Act include the bodies specified in section 1-206 "as well as any not-for-profit corporation organized for the purpose of conducting public business." 745 ILCS 10/1-206 (West 2000).

In Carroll, this court considered whether a not-for-profit hospital was a local public entity within the meaning of section 1-206 and, thus, entitled to immunity. Carroll, 199 Ill.2d at 22,262 Ill.Dec. 1,764 N.E.2d 1118. We concluded that the undefined term "public business" requires the pursuit of "` "an activity that benefits the entire community without limitation. In addition, the phrase `public business' is also today commonly understood to mean the business of the government."'" Carroll, 199 Ill.2d at 25-26,262 Ill.Dec. 1,764 N.E.2d 1118, quoting Carroll v. Paddock, 317 Ill.App.3d 985, 992, 251 Ill.Dec. 732, 741 N.E.2d 326 (2000), quoting O'Melia v. Lake Forest Symphony Ass'n, 303 Ill. App.3d 825, 828, 237 Ill.Dec. 223, 708 N.E.2d 1263 (1999). Furthermore, since "[p]ublic business is the business of government," a not-for-profit organization seeking immunity under section 1-206 must establish that it is "tightly enmeshed with government either through direct governmental ownership or operational control by a unit of local government." Carroll, 199 Ill.2d at 27,262 Ill.Dec. 1,764 N.E.2d 1118. The academy's challenge to our construction of the Act in Carroll presents a question of law. Accordingly, we will review this issue de novo. In re C.N., 196 Ill.2d 181, 208, 256 Ill.Dec. 788, 752 N.E.2d 1030 (2001)

.

The academy first argues that Carroll adopted an erroneous definition of "public business" for purposes of the Act. It contends that, based on our misconstruction of this term, Carroll established an overly restrictive test for determining whether an entity qualifies for tort immunity under the Act. Indeed, the academy claims that our test effectively renders the entire phrase "as well as any not-for-profit corporation organized for the purpose of conducting public business" mere surplusage because the requirement of government ownership or control eliminates all nongovernmental agencies.

The academy's contention that a not-for-profit corporation can never qualify for immunity under our test in Carroll is belied by a case cited in its own brief, Barnes v. Chicago Housing Authority, 326 Ill. App.3d 710, 260 Ill.Dec. 439, 761 N.E.2d 283 (2001). In that case, the plaintiffs filed a tort complaint seeking, in part, recovery for serious personal injuries allegedly caused by the failure of a resident management corporation to provide adequate security at a public housing development in Chicago. Barnes, 326 Ill.App.3d at 716, 260 Ill.Dec. 439, 761 N.E.2d 283.

Resident management corporations are not-for-profit organizations recognized under a program of the United States Department of Housing and Urban Development, designed to promote tenant management of public housing developments. See 24 C.F.R. § 964 et seq. (2001). Pursuant to the United States Housing Act of 1937, the resident management program requirements provide that each resident management corporation "shall enter into a contract with the public housing agency establishing the respective management rights and responsibilities of the corporation and the public housing agency." 42 U.S.C.A. § 1437r(b)(4) (West Supp.2002). That same statute mandates that the contract

"be consistent with the requirements of this chapter applicable to public housing projects and may include specific terms governing management personnel and compensation, access to public housing project records, submission of and adherence to budgets, rent collection procedures, tenant income verification, tenant eligibility determinations, tenant eviction, the acquisition of supplies and materials, rent determination, community service requirements,,[sic] and such other matters as may be appropriate." 42 U.S.C.A. § 1437r(b)(4) (West Supp. 2002).

Other federal regulations further govern the interaction between the public housing authority and the resident management corporation. 24 C.F.R. § 964.120 et seq. (2001). These regulations include provisions restricting eligibility for membership in the resident council (24 C.F.R. § 964.125 (2001)) and mandating election procedures (24 C.F.R. § 964.130 (2001)). Resident councils play an important role because they may establish resident management corporations. 24 C.F.R. § 964.120 (2001). Such close interaction and comprehensive governmental control of a not-for-profit corporation exemplify the characteristics of the type of organization that may be able to qualify for immunity as a "local public entity" under section 1-206 of the Act (745 ILCS 10/1-206 (West 2000)). Without specifically ruling on the immunity of resident management corporations, we reject the academy's contention that Carroll renders the portion of the Act granting immunity to "any not-for-profit corporation organized for the purpose of conducting public business" mere surplusage.

The academy next challenges Carroll's definition of "public...