Pelaez v. Rugby Laboratories, Inc.

• Decision Date: 17 March 1993
• Citation: 624 A.2d 1053,264 N.J.Super. 450
• Parties: Eric PELAEZ, Plaintiff, v. RUGBY LABORATORIES, INC., Integrity, Inc., Physicians & Nurses Supply Corp., Corrine Deas, R.N., Estate of Juanita Clark R.N., Defendants.
• Court: New Jersey Superior Court

Page 450

264 N.J.Super. 450

624 A.2d 1053

Eric PELAEZ, Plaintiff, v. RUGBY LABORATORIES, INC., Integrity, Inc., Physicians &

Nurses Supply Corp., Corrine Deas, R.N., Estate of

Juanita Clark R.N., Defendants.

Superior Court of New Jersey, Law Division,

Essex County.

Argued March 5, 1993.

Decided March 17, 1993.

Mitchell J. Makowicz, Jr., Newark, for plaintiff (Blume, Vazquez, Goldfaden, Berkowitz & Donnelly, attorneys; Mr. Makowicz on the brief).

Douglas J. Susan, New Brunswick, for defendants Integrity, Inc., and Corrine Deas, R.N.; (Hoagland, Longo, Oropollo & Moran, attorneys; Mr. Susan on the brief).

Kathleen B. Lucy, New Providence, for defendant Rugby Laboratories, Inc. (Scanlon & Spell, attorneys).

SCHWARTZ, J.S.C.

This matter is before the court on defendant's motion for summary judgment pursuant to N.J.S.A. 2A:53-7, the Charitable Immunity Act. The issue before the court is whether a nonprofit corporation which is largely funded by governmental grants, but also funded in part by private contributions should be entitled to protection under the Charitable Immunity Act.

Plaintiff, Eric Pelaez, initiated this suit alleging that on July 16, 1989, while a patient at defendant Integrity, Inc. (sometimes referred to hereinafter as "Integrity House"), he suffered second degree burns from an allegedly defective chemical cold compress manufactured by defendant Physicians & Nurses Supply Corp., supplied by defendant Rugby Laboratories Inc., and administered by a nurse employed at Integrity House.

Plaintiff alleges that on June 28, 1989, he injured his hamstring while playing softball at Integrity House, and sought medical attention from the on-duty nurse. In answers to interrogatories, plaintiff stated that Nurse Clark treated his leg injury by administering a chemical cold compress which leaked, causing chemical burns to the treated area. Plaintiff claims that the treating nurse failed to treat him in a reasonable manner and failed to instruct him on the proper and safe use of the compress.

Integrity Inc., a non-profit corporation of New Jersey whose organizational purpose is "to keep former drug addicts drug free" (Defendant's Exhibit B, Certificate of Incorporation), asserts that plaintiff's claims are barred by N.J.S.A. 2A:53A-7, which provides as follows:

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.

Lorraine Brown, an employee of Integrity House familiar with its funding, was deposed. Ms. Brown testified that Integrity House raises private contributions through various fund-raising activities. Contributions are raised by submitting proposals to various private foundations, conducting car wash operations, soliciting advertisements for a graduation journal, and soliciting donations from churches in exchange for work performed at those churches by Integrity House patients.

Integrity House tax returns for 1988 revealed that out of a total funding of $3,027,009 defendant Integrity House received $2,550,870 (84.3%) from governmental grants, and $476,139 (15.7%) from public support of various organizations, foundations and individuals. Public support income consisted of $308,452 (10.2%) worth of in-kind contributions and $167,687 (5.5%) from monetary contributions.

In 1989, Integrity House tax returns revealed that out of a total funding of $4,112,706 Integrity House received $3,398,425 (82.6%) from governmental grants and $714,281 (17.4%) from public support. Public support in 1989 consisted of $377,671 (9.2%) worth of in-kind contributions and $336,610 (8.2%) from monetary contributions.

Under N.J.S.A. 2A:53-7 the defendant must demonstrate that it is a non-profit corporation, society or association that is organized exclusively for religious, charitable, educational or hospital purposes, and promoted such purposes at the time of the incident. Heffelfinger v. Town of Morristown, 209 N.J.Super. 380, 383, 507 A.2d 761 (Law Div.1985). Defendant must also demonstrate that plaintiff was a beneficiary of its charitable works at the time of the injury. Id., 209 N.J.Super. at 384, 507 A.2d 761; Parker v. St. Stephen's Urban Development Corp., 243 N.J.Super. 317, 324, 579 A.2d 360 (App.Div.1990).

When there is no dispute as to the material facts, the determination of whether a non-profit corporation, society or association is organized for religious, charitable, educational or hospital purposes is a question of law for the court to decide. See e.g., Bixenman v. Christ Episcopal Church Parish Home, 166 N.J.Super. 148, 150, 399 A.2d 312 (App.Div.1979); Gould v. Theresa Grotta Center, 83 N.J.Super. 169, 171, 199 A.2d 74 (Law Div.1964), aff'd o.b., 89 N.J.Super. 253, 214 A.2d 537 (App.Div. 1965). Since no such dispute of material facts exists, it is appropriate for the court to decide this matter on motion for summary judgment.

Defendant Integrity House must demonstrate that it was promoting its stated charitable purposes of keeping former drug addicts drug free when this incident occurred. Pomeroy v. Little League Baseball of Collingswood, 142 N.J.Super. 471, 475, 362 A.2d 39 (App.Div.1976). Plaintiff has admitted that he was a patient at Integrity House at the time of the injury. Plaintiff alleges this injury occurred as a result of defendant's negligent treatment of a hamstring injury he suffered while playing softball at Integrity House as a patient there. Courts have long recognized that recreation is a form of education which leads to the furtherance of charitable purposes. Stoolman v. Camden County Council Boy Scouts, 77 N.J.Super. 129, 135-136, 185 A.2d 436 (Law Div.1962); Pomeroy, supra, 142 N.J.Super. at 475, 362 A.2d 39. The court concludes that at the time plaintiff sustained his injury as a result of treatment following a recreational activity Integrity House was promoting its charitable purposes and that plaintiff clearly was a beneficiary of those charitable works. Accordingly, the issue before the court is whether at the time plaintiff suffered his injury, Integrity House was a charitable organization.

It is undisputed that defendant, Integrity House, is a nonprofit corporation. Defendant has produced its certificate of incorporation which demonstrates that Integrity, Inc. was incorporated as a non-profit corporation on August 23, 1968. Defendant has also produced corporate tax returns for 1989, demonstrating that it was a viable nonprofit corporation the year this incident occurred. Nonprofit status alone, however, does not demonstrate that a corporation is organized for "charitable purposes."

The court in Presbyterian Homes v. Division of Tax Appeals, 55 N.J. 275, 284, 261 A.2d 143 (1970) when evaluating a plaintiff's tax exempt status under N.J.S.A. 54:4-3.6, defined "charitable purposes" as an application of property for the benefit of an indefinite number of persons, either by bringing their hearts under the influence of education or religion, by relieving their bodies from disease, suffering and constraint, by assisting them to establish themselves for life, or by erecting or maintaining public buildings or works, or otherwise lessening the burdens on government.

The court in Parker v. St. Stephen's Urban Development Corp., supra, 243 N.J.Super. at 324, 579 A.2d 360, noted that the language contained in N.J.S.A. 54:4-3.6 is nearly identical to that of the charitable immunity statute, and cited Presbyterian Homes, to explain that "nonprofit status cannot be equated with charitableness. Rather, it is but one factor which merits consideration in the determination whether property is being used for charitable purposes."

Plaintiff, relying on Parker, contends that defendant should not be...