Stallworth v. Andalusia Hosp., Inc.
| Decision Date | 29 March 1985 |
| Citation | 470 So.2d 1158 |
| Parties | Felicia STALLWORTH, Lorraine Fowler, Dorothy Resser, Tomas Castilla and Myrtle Ruth Williams v. ANDALUSIA HOSPITAL, INC., a dissolved corporation, and Andalusia Health Services, Inc., a corporation. 83-215. |
| Court | Alabama Supreme Court |
Curtis C. Reding, Montgomery, for appellants.
Harold Albritton of Albrittons & Givhan, Andalusia, for appellees.
This is an appeal by Felicia Stallworth, Lorraine Fowler, Dorothy Resser, Tomas Costilla, and Myrtle Ruth Williams from a judgment dismissing their action against Andalusia Hospital, Inc., a dissolved corporation, and Andalusia Health Services, Inc., a corporation. We affirm.
Appellants are citizens and taxpayers of the State of Alabama and Covington County, Alabama.
Andalusia Hospital, Inc., was formed on 28 September 1962. This corporation was dissolved on 30 June 1981.
Andalusia Health Services, Inc., was formed on 2 July 1980.
Two of the purposes of Andalusia Hospital, Inc., as set forth in the certificate of incorporation, were as follows:
The hospital facility constructed by Andalusia Hospital, Inc., was financed by private donations from citizens of Covington County, Alabama, and by public funds.
Andalusia Hospital, Inc., operated for several years at substantial losses. During this period of time, appellants were employed by this corporation. These and other employees were informed of the financial problems of the corporation and were urged by the directors of Andalusia Hospital, Inc., and the administrator, to continue to work without merit raises but with a promise of better compensation when the corporation could afford it. These promises included lump-sum payments for merit raises that they would have otherwise received. The plaintiffs continued to work for Andalusia Hospital, Inc.
The assets of Andalusia Hospital, Inc., were sold to Hospital Corporation of America, Inc., during 1980. A substantial sum of money was received by Andalusia Hospital, Inc. Some employees of Andalusia Hospital, Inc., were paid sums of money, but no payment was made to any plaintiff or to over forty other employees.
Community Hospital of Andalusia, Inc., a wholly owned subsidiary of Hospital Corporation of America, Inc., is a hospital for profit. It presently operates the hospital previously owned by Andalusia Hospital, Inc. Its certificate of incorporation does not provide for health care to the indigent.
Andalusia Hospital, Inc., transferred the funds received from the sale of its assets to a corporation named Andalusia Health Services, Inc. Andalusia Health Services, Inc., has not used these funds to provide medical care for indigent persons.
Also relevant to this appeal are the facts established by the exhibits attached to appellants' complaint. On the basis of the facts established by these exhibits the trial court ruled that the complaint failed to state a claim for which relief could be granted.
Exhibit II to the complaint, incorporated by reference, is the certificate of incorporation of Andalusia Health Services, Inc. It was incorporated as a not-for-profit corporation under the "Alabama Non-Profit Corporation Act." The certificate shows that it was incorporated for the purpose of receiving and administering funds derived from the sale by Andalusia Hospital, Inc., of its hospital facilities, exclusively "for charitable health care services within the meaning of Section 501(c)(3) of the Internal Revenue Code of 1954, amendments thereto and regulations thereunder." To that end, several specific powers were set out including "to make hospital care available to indigent patients, or victims of medical disasters." Strict limitations were included in the certificate of incorporation to ensure that the funds received by the corporation could be used only as permitted under the Alabama Non-Profit Corporation Act, and under the provisions of the Internal Revenue Code governing the operation of charitable organizations. This was in accordance with Article IX of the certificate of incorporation of that corporation, which was styled "Distribution of Assets On Dissolution of Andalusia Hospital, Inc.," and which was referred to in Paragraph 5 of the articles of dissolution.
We note that providing hospital services to indigents was only one of the several purposes listed in the certificate of incorporation of Andalusia...
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Cook v. Lloyd Noland Foundation, Inc.
...general public. They have no standing to institute or maintain a suit to enforce a public charitable trust. [Stallworth] v. Andalusia Hospital, Inc., 470 So.2d 1158 (Ala.1985)." Thereafter, in an order clarifying its January 31, 2000, order, the trial court stated, in pertinent part: "In di......