On certification to the Superior Court, Appellate Division.
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
Ryan v. Holy Trinity Evangelical Lutheran Church (A-116/117-01)
Argued December 3, 2002 -
Decided February 11, 2003
LONG, J., writing for a unanimous Court.
This appeal considers whether an association organized exclusively for educational purposes is required to demonstrate some level of income from charitable donations to qualify for immunity pursuant to the Charitable Immunity Act, N.J.S.A. 2A:53A-7 to -11 (the Act). This appeal considers also whether a church is engaged in "good works" when it opens its premises to a nonprofit community organization for a nominal fee and whether partakers of the works of the community organization thus qualify as beneficiaries of the works of the church.
In November 1995, plaintiff Jamie C. Ryan was injured while attending a meeting of the Mothers' Center. The Mothers' Center, formed in 1987, is a nonprofit group of parents and expectant mothers organized to exchange and receive information regarding childbirth, child rearing, mothering and family relationships. Members pay annual dues as well as fees to participate in the activities. However, the Mothers' Center is open to non-members, and anyone who subscribes to its basic policies and purposes and wishes to take advantage of its multiple programs is welcome. Plaintiff was a member of the Mothers' Center and had been attending a group that focused on early childhood development. That group met weekly at Holy Trinity's parish house.
At the November 1995 meeting, participants sat in a circle around the room on folding chairs. Plaintiff was seated near a supply closet. One of the two group facilitators for the meeting was defendant Laura Fadem. Fadem had brought her children with her to Holy Trinity. Forty-five minutes into the meeting, Fadem's son wandered over to the supply closet and apparently tried to open it. The door appears not to have been properly hinged, and when it was pulled, it detached and struck plaintiff on the back of her head, causing her to fall to the floor. She alleges that, as a result, she suffered significant injuries. Plaintiff and her husband filed suit in 1997 against Holy Trinity, the Mothers' Center, Fadem, and a series of John Doe defendants.
At the time of the accident, Holy Trinity had a policy of opening its doors to social outreach projects with community purposes and allowing them to use its facilities to conduct meetings. Those groups included the Boy Scouts, Alcoholics Anonymous, Al-Anon, the Children's Psychiatric Center, and a Monday night social club for mentally challenged people. Holy Trinity included notices of meetings in the church bulletin. Permission to use a room could be obtained from the church council for a fee of $15. Although not entirely clear, that fee appears to have been based on the church's estimate of its cost of keeping the building open. Holy Trinity asserted in discovery that no group was refused permission to use the church facilities if it could not afford the fee. The Mothers' Center used the church facilities for many different meetings. Payments were made by check from the Mothers' Center to Holy Trinity. During the period July through December 1995, the Mothers' Center used the church facilities 31 times and paid Holy Trinity a total of $465.
The trial court granted summary judgment to all defendants based on charitable immunity. The Appellate Division affirmed the dismissal of the complaint against Holy Trinity and Fadem in her individual capacity, and reversed the dismissal against the Mothers' Center and Fadem as its agent. Because the evidential record is silent regarding the Mothers' Center's income, the Appellate Division remanded the case for a determination of whether the Mothers' Center received any part of its operating income from charitable contributions. The Mothers' Center petitioned for certification, contending that the finding that it was organized exclusively for educational purposes obviated any
116/117-01 Ryan v. Holy Trinity Evangelical Lutheran Church 2.
further inquiry regarding its finances. The plaintiffs filed a cross-petition contesting the finding that Holy Trinity was entitled to charitable immunity. This court granted both petitions.
HELD: Holy Trinity is entitled to charitable immunity, pursuant to N.J.S.A. 2A:53A-7 to -11, because it is a nonprofit entity, it is organized exclusively for religious purposes, and at the time of the accident, it was promoting its objectives in respect of plaintiff, who was a beneficiary thereof. Because the Mothers' Center is organized exclusively for educational purposes, no further financial analysis is required.
1. The purposes of the Act are to avoid the diversion of charitable trust funds to non-charitable purposes and to encourage altruistic activity. Distilling the statutory language of the Act to its essence, an entity qualifies for charitable immunity when it 1) was formed for nonprofit 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 a plaintiff who was then a beneficiary of the charitable works. (Pp. 9-11).
2. The terms "educational" and "religious" have plain meanings that are subject to literal reading, therefore entities that can prove they are organized exclusively for educational or religious purposes automatically satisfy the second prong of the charitable immunity standard. In contrast, determining whether an entity is organized exclusively for "charitable" purposes requires further examination, pursuant to Parker v. St. Stephens' Urban Dev. Corp. Inc., 243 N.J. Super. 317 (App. Div. 1990), including an examination of the source of the entity's funds. (Pp. 12 to 18).
3. The Mothers' Center bases its claim that it is entitled to charitable immunity on its educational purpose. That purpose was declared in its bylaws and is revealed in its operation, which includes lectures, discussions and the general exchange of information. Its aim is the conveyance of information to all interested parents and prospective parents about birth and childrearing. The discussion format of the programs, like the lecture format, is a valid method of pedagogy. Because the Mothers' Center passes muster as an entity organized exclusively for educational purposes, no further financial analysis is required to satisfy the second prong of the Act. Moreover, plaintiffs having conceded the Mothers' Center's nonprofit status and that plaintiff was a beneficiary of its works, the Mothers' Center and Fadem, as its agent, are entitled to summary judgment based on charitable immunity. (Pp. 18 to 23).
4. Plaintiffs do not challenge the nonprofit status of Holy Trinity and further concede that Holy Trinity is organized exclusively for religious purposes. At issue is whether Holy Trinity satisfies the third prong of the test: at the time of the accident, was it engaged in charitable works and was plaintiff a beneficiary of those works? The test for determining whether a party is a beneficiary has two prongs. The first is that the institution, at the time in question, was engaged in the performance of the charitable objectives it was organized to advance. The second is that the injured party must have been a direct recipient of those good works. (P. 23)
5. The term "works" is defined liberally. Exercises that are designed to aid in the advancement of the spiritual, moral, ethical and cultural life of the community in general are deemed within the purview of the religious society. Here, in furtherance of the tenants and principles of the Lutheran Church, Holy Trinity provided space for community organizations to conduct meetings. By supporting social outreach groups that enriched the life of the community at large, Holy Trinity fell well within the modern view, now sixty years old, that the good works of churches are not limited to parochial concerns. (Pp. 24 to 27).
6. In assessing who is a beneficiary of the works of a charity, that notion is to be interpreted broadly, as evidenced by the use of the words "to whatever degree" modifying the word "beneficiary" in the statute. Those who are not beneficiaries must be unconcerned in and unrelated to the benefactions of such an organization. Here, plaintiff was a beneficiary of the works of Holy Trinity at the time of the accident both as a member of the Mothers' Center, and as an attendee at a Mothers' Center function on Holy Trinity's premises. (Pp. 27 to 30).
The judgment of the Appellate Division is AFFIRMED to the extent that it approved the grant of summary judgment to Holy Trinity and Fadem, individually, and held that the Mothers' Center was organized exclusively for educational purposes; and it is REVERSED to the extent that it remanded the case for a showing that the operating capital of the Mothers' Center is derived from charitable contributions or trust income. Summary judgment in favor of the Mothers' Center and Fadem, as its agent, is REINSTATED.
CHIEF JUSTICE PORITZ and JUSTICES COLEMAN, VERNIERO, LaVECCHIA, ZAZZALI and ALBIN join in JUSTICE LONG's opinion.
The opinion of the court was delivered by: Long, J.
Once again we consider the Charitable Immunity Act, N.J.S.A. 2A:53A -7 to -11 (the Act). More particularly, we are called on to determine whether an association organized exclusively for educational purposes is nevertheless required to demonstrate some level of income from charitable donations to qualify for immunity. We have concluded that it need not. We also have determined that a church can be engaged in its "good works" when it opens its premises to a nonprofit community organization for a nominal fee, and that partakers of the works of the community organization can thus qualify as beneficiaries of the works of the church.
In 1997, plaintiffs Jaime C. Ryan and Robert J. Ryan, husband and wife, filed a complaint in the Superior Court, Law Division, Monmouth County against defendants Holy Trinity Evangelical Lutheran Church, the Mothers' Center of Monmouth County, Laura Fadem, and a series of John Doe defendants. The complaint alleged that due to defendants' tortious conduct, Mrs. Ryan suffered injuries while attending a meeting of the Mothers' Center that was held in Holy Trinity.
All defendants answered, denying the allegations of the complaint and cross claiming against each other for contribution and indemnification. Eventually defendants moved for summary judgment. Charitable immunity was the pivotal issue.
The facts established by the pleadings, discovery, and other documents on file basically are uncontroverted. Mrs. Ryan was injured on the morning of November 17, 1995, while attending a meeting of the Mothers' Center, held in Holy ...