Buteas v. Raritan Lodge No. 61 F. & A.M.

• Decision Date: 20 May 1991
• Docket Number: No. A-6635-89T1,A-6635-89T1
• Citation: 248 N.J.Super. 351,591 A.2d 623
• Parties: George BUTEAS and Helen Buteas, Plaintiffs-Appellants, v. RARITAN LODGE # 61 F. & A.M., a Masonic Lodge of the State of New Jersey, a New Jersey Corporation also known as the Masonic Building Society of Perth Amboy, Defendants-Respondents, and Otis Elevator Co., Inc. and Advance Elevator Service, Inc., a New Jersey Corporation, Defendants.
• Court: New Jersey Superior Court — Appellate Division

Page 351

248 N.J.Super. 351

591 A.2d 623

George BUTEAS and Helen Buteas, Plaintiffs-Appellants, v. RARITAN LODGE # 61 F. & A.M., a Masonic Lodge of the State of New Jersey, a New Jersey Corporation also known as the Masonic Building Society of Perth Amboy, Defendants-Respondents and Otis Elevator Co., Inc. and Advance Elevator Service, Inc. a New Jersey Corporation, Defendants.

No. A-6635-89T1

Superior Court of New Jersey,

Appellate Division.

Argued April 16, 1991.

Decided May 20, 1991.

James Hely, Westfield, for plaintiffs-appellants (Weiseman Hely, Mountainside, attorneys).

Michael John Stone for defendant-respondent Raritan Masonic Soc. (Hoagland, Longo, Oropollo & Moran, attorneys, Alan I. Dunst, on the brief), New Brunswick.

Before Judges PRESSLER, DEIGHAN and BAIME.

The opinion of the court was delivered by

PRESSLER, P.J.A.D.

This appeal raises the issue, not heretofore addressed in this jurisdiction, of whether a member of an unincorporated fraternal association may sue the association in tort. In Donnelly v. United Fruit Co., 40 N.J. 61, 190 A.2d 825 (1963), the Supreme Court, overruling Marchitto v. Central R.R. Co. of N.J., 9 N.J. 456, 88 A.2d 851 (1952), recognized that right in members of unincorporated labor unions but expressly declined to consider whether its holding would extend to members of other unincorporated associations. We are now obliged to address this issue. We hold that N.J.S.A. 2A:64-1 to -6 modifies the common-law doctrine of imputed negligence among joint enterprisers, thus enabling a member of a voluntary association encompassed by that legislation to seek a tort recovery from the association subject to applicable principles of comparative negligence. Accordingly we reverse the judgment n.o.v. by which the trial court vacated the jury's allocation of a percentage of negligence to defendant Raritan Lodge # 61, a Masonic Lodge of the State of New Jersey (lodge), and we reinstate in full the jury's verdict in favor of plaintiffs George and Helen Buteas compensating them for the damages they sustained by reason of George Buteas' fall into the elevator shaft in the lodge's building.

Plaintiff was a long time member of the lodge, which is the owner of a four-story building in Perth Amboy. It occupies the upper floors and rents space on lower floors to other tenants. Until 1984 the building was owned by a separate entity, The Masonic Building Society of Perth Amboy (society). In that year the society, described in the deed as a corporation of New Jersey, conveyed the property to a grantee designated as "Raritan Lodge # 61 F. & A.M., a Masonic Lodge of the State of New Jersey, a New Jersey corporation." The society, however, continued for at least several years thereafter to assume responsibility for the maintenance and operation of the building. As we understand the record, the society was eventually absorbed into the lodge as its building committee. The building committee continued to be chaired by the former society president and continued to manage the building. In 1989 the society executed a corrective deed, describing both the grantor society and the grantee lodge as unincorporated associations.

The accident which is the subject of this suit, occurred on April 15, 1986. George Buteas was at that time serving as master of the lodge and had come to the building on lodge business. He intended to use the elevator, access to which was prohibited to non-lodge tenants, in order to reach the upper floor. The elevator was installed in the 1920s when the building was built. It was not originally designed or at any time thereafter modified to be a self-service elevator. It was operated by the lodge members themselves, whose routine use of it required them to gain access to the elevator car by intended emergency procedures. That is, the outer door of the elevator was designed to be opened from the outside only by a trained operator or for emergency reasons. The only method of opening the door from the outside was to insert a quarter-inch rod into a small hole by which an interior door lock could be disengaged. The required rods were left in accessible places on all floors of the building for the members' use. The presence of the elevator at a particular floor could be observed through a glass portion of the door prior to the door being opened. Insofar as we can determine from the record, that procedure had been employed since the elevator was first installed. On the day in question Buteas used the rod to open the door. Failing to observe that the elevator was not there, he stepped into the shaft, fell to the basement level, and sustained head injuries.

As the litigation was finally postured by way of amended pleadings, plaintiffs sought recovery from defendant Advance Elevator Service, Inc., which had, since 1984, performed regular inspection, repair and maintenance services on the elevator under a contract executed by the president of the society. Plaintiffs also sought recovery from the lodge, designated in the complaint as "a New Jersey corporation also known as the Masonic Building Society of Perth Amboy." In both its original and amended answers the lodge referred to itself as "The Masonic Building Society of Perth Amboy (improperly pleaded as Raritan Lodge # 61 F. and A.M.)." The pleadings, which were closed before the execution of the corrective deed, never raised any question as to the asserted corporate status of either the lodge or the society.

At trial plaintiffs presented both their liability and damages proofs. When they rested, defendant lodge raised for the first time the issue respecting its unincorporated status, counsel asserting that he had only learned the night before of the corrective deed describing the lodge as an "unincorporated association." He moved for dismissal of the complaint against the lodge on the ground that plaintiff George Buteas' membership precluded the action under the common-law doctrine, derived from partnership law, that a voluntary association is immune from suits by its members because the members are engaged in a joint enterprise in which each is deemed to be both the principal and agent of every other. Thus the negligence of each is imputed to all. The trial judge denied the motion on the ground that plaintiffs, having been completely surprised thereby, had not had an adequate opportunity to respond to it. Defendants accordingly presented their proofs and the matter was submitted to the jury. The jury returned a damages verdict of $265,000, allocating 30% negligence to plaintiff, 23% to the lodge and 47% to Advance Elevator.

Following the return of the verdict, defendant lodge moved for judgment n.o.v. on the imputed-negligence ground. This time the motion was granted, the judge concluding that he was not at liberty to modify the common law in view of what he perceived to be the Supreme Court's equivocal expressions in Marchitto and Donnelly, supra. The judge then proportionately allocated the lodge's 23% of negligence between plaintiff and Advance Elevator, increasing their respective shares to 39% and 61%. Plaintiffs appealed. Advance Elevator has not participated in the appellate proceedings.

Resolution of the imputed-negligence claim made here requires a historical context. We agree with the trial court's observation that at common law a member of a voluntary association was burdened with imputed liability, precluding his recovery against both the association and its members for harm negligently inflicted upon him by any other member. The ancient doctrine, as stated by Marchitto, supra, 9 N.J. at 466-467, 88 A.2d 851, is that:

In legal effect the plaintiff and every other member of the brotherhood are co-principals joined together in a joint enterprise to accomplish a common purpose with their relationships to each other and to the group being governed by the association's constitution and the by-laws or rules adopted pursuant thereto, and by the common law. As a member of the group the plaintiff is jointly responsible with all other members for the actions of the group itself, and accordingly as a principal he has no cause of action against his co-principals for the wrongful conduct of their common agent.

The logical converse of this principle is that since each member of the association is at least vicariously responsible for the wrongful conduct of every other member, each is liable to third persons injured by another member's wrongful conduct. In addition to these substantive rules, there was also a significant common-law procedural consequence attendant upon the voluntary association structure. As explained by Marchitto, supra, at 466, 88 A.2d 851, the voluntary association was not considered a separate jural entity since it had "no existence apart from its individual members. At common law it could neither sue nor be sued."

The common law was modified by the Legislature by its enactment early in this century of L.1903, c. 247, presently codified as N.J.S.A. 2A:64-1 to -6. This legislation requires close analysis. In its significant provisions, it constitutes every voluntary association "consisting of 7 or more persons and having a recognized name" as a jural entity having the capacity to sue and be sued, N.J.S.A. 2A:64-1, and designates its officers, agents, managers or other persons in charge of its affairs as its agents for receiving process, N.J.S.A. 2A:64-2. And see, so providing, R. 4:4-4(c)(2). It permits execution against the association on a civil judgment "in the same manner as upon a judgment against the corporation," permitting a levy upon its common property. N.J.S.A. 2A:64-3. And if the judgment is not fully satisfied out of common property, it permits an action "to recover the residue thereof against ... such members of the organization or association as may be personally liable." N.J.S.A. 2A:64-4 (emphasis added). Finally, N.J.S.A. 2A:64-5 reserves to any person having a claim against an...