Submitted May 20, 2019
appeal from the Superior Court of New Jersey, Law Division,
Essex County, Docket No. L-2239-16.
L. Winograd, attorney for appellant.
Offices of Daniel J. Mc Carey, LLC, attorneys for respondent
(Daniel J. Mc Carey, on the brief).
Judges Sumners, Mitterhoff and Susswein.
F.K. appeals the trial court's December 11, 2018 order
granting summary judgment to defendant Integrity House and
dismissing his complaint with prejudice. The trial court
determined that defendant was entitled to immunity from
plaintiff's negligence action under New Jersey's
Charitable Immunity Act ("the Act"), N.J.S.A.
2A:53A-7 to -11. On appeal, plaintiff contends that the
amount of private contributions received by defendant,
roughly $250, 000 or 1.26% of annual revenue, is too
insignificant to entitle defendant to charitable immunity.
Having reviewed the record in light of the applicable legal
principles, we conclude that defendant did not present
sufficient evidence to support its entitlement to the
affirmative defense of charitable immunity. Accordingly, we
glean the following facts from the record.
House's stated purpose in its certificate of
incorporation is "[t]o keep former drug addicts drug
free." Integrity House is a tax-exempt organization
under section 501 (c)(3) of the Internal Revenue Code, 26
U.S.C. § 501(c)(3). On its 2015 tax return, Integrity
House described its mission as follows: "Integrity House
is committed to helping individuals and families through an
effective and measurable system of comprehensive therapeutic
community addiction treatment and recovery support in a way
that brings about positive, long-term lifestyle change."
alleged in his complaint, plaintiff was a resident at the
Integrity House residential drug-treatment facility in
Newark. On November 3, 2015, he sustained personal injuries
when he slipped and fell due to a wet condition on an
interior staircase within the facility. Plaintiff filed a
complaint alleging Integrity House was negligent in the
maintenance of the premises.
House answered the complaint, asserting, among other
defenses, the affirmative defense of charitable immunity.
Before the close of discovery, Integrity House moved for
summary judgment on the ground of charitable immunity. In
support of its motion for summary judgment, Integrity House
submitted its 2015 tax return.
House reported $20, 094, 046 in total revenue for the 2015
tax year. According to Part VII, "Statement of
Revenue," Integrity House received $15, 355, 805 from
government grants,  $157, 310 from fundraising events, and
$296, 409 from "[a]ll other contributions, gifts,
grants, and similar amounts not included above."
Integrity House also reported $4, 261, 364 in "program
service revenue." With regard to the fundraising revenue and
private contributions, Schedule G, Part II, "Fundraising
Events," specifies that Integrity House received $252,
855 in "gross receipts" from two fundraising
events and $157, 310 in "contributions"
from those events.
hearing oral argument on May 12, 2017, the trial court issued
an order and written opinion denying the motion for summary
judgment. The trial court concluded that while Integrity
House's 2015 tax return appeared to show that it received
roughly $250, 000 in contributions, the record did not
conclusively "reveal the source of those funds and how
they were utilized." The trial court noted that there
was still one month before the discovery end date and
determined that Integrity House's source of funds
remained a disputed factual issue.
the close of discovery, Integrity House re-filed its motion
for summary judgment. The renewed motion added only short
certifications of Integrity House's CEO and CFO stating
that all of the roughly $252, 000 in "gross
receipts" raised from fundraising for the 2015 tax year
were used in furtherance of Integrity House's charitable
opposition to defendant's renewed motion for summary
judgment, plaintiff submitted a report from a forensic
accounting expert analyzing the 2015 tax return. In pertinent
part, the expert concluded:
I have looked at the financial documents and have highlighted
certain pages and line items. Annexed hereto as Exhibit A is
page one of Integrity House's 2015 Form 990. This page
reports total revenues received of $20, 094, 046 for 2015 but
the [d]efendant in its brief makes no mention of this amount.
With regard to the "charitable contribution of almost
$300, 000 for the calendar year," attention is directed
to Schedule G. Part II, Fundraising Events, annexed hereto as
Appendix B. On that page, the sum of $252, 855 is reported as
gross receipts from fundraising events and the sum of $157,
310 is reported as contributions. The [d]efendant in his
brief provides absolutely no explanation as to the source of
the funds for either of these amounts. As a forensic
accountant, without supporting third-party documentation, I
cannot determine whether these funds were obtained from a
government or private source.
With regard to the certification of [Integrity House's
CFO], I note that she provides absolutely no information
regarding the source of Integrity House's revenue in the
year 2015. She provides no explanation regarding the source
of the $20, 094, 046 received by Integrity House during that
year and she provides absolutely no analysis regarding the
source of the $252, 855 reported as gross receipts and no
analysis of the $157, 310 reported as contributions. It
appears that all she attempts to do in her certification is
justify Integrity House's expenditures. Her certification
does not enable me, as a forensic accountant, to determine
whether these funds were obtained from a government or
private source. The certification of [Integrity House's
CEO] provides absolutely no information in this regard as
In my professional opinion and to a reasonable degree of
certainty in the field of forensic accounting, Integrity
House has failed to provide an analysis of the source of its
funds for the year in which the November 3, 2015 accident
took place. Based on the information provided by Integrity
House, there is absolutely no documentation which would
facilitate a determination of the funding sources.
hearing further oral argument, the trial court entered an
order granting summary judgment on October 27, 2017.
appealed, and we vacated the dismissal order and remanded for
further proceedings because the trial court failed to issue
an oral or written reasoning for its conclusion that
Integrity House was entitled to charitable immunity. F.K.
v. Integrity House, No. A-1376-17 (App. Div. October 26,
2018). On remand, the trial court issued an order and written
opinion granting summary judgment on December 11,
written decision, the trial court determined that Integrity
House established the three elements necessary for charitable
immunity: that the organization "(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 plaintiff who was then a beneficiary of the
charitable works." Tonelli v. Bd. of Educ. of
Wyckoff, 185 N.J. 438, 444-45 (2005) (quoting Hamel
v. State, 321 N.J.Super. 67, 72 (App. Div. 1999)).
trial court found that Integrity House satisfied the first
prong based upon its incorporating documents and status as a
non-profit organization as defined in Section 501(c)(3) of
the Internal Revenue Code, 26 U.S.C. § 501(c)(3). In so
holding, the trial court rejected plaintiff's reliance on
Abdallah v. Occupational Ctr. of Hudson Cty., Inc.,
351 N.J.Super. 280 (App. Div. 2002) and contention that
Integrity House received too small a portion of its funding
from private contributions. The trial court reasoned:
"The [c]ourt's opinion in [Morales v. N.J. Acad.
of Aquatic Scis., 302 N.J.Super. 50 (App. Div. 1997)] is
clear that a receipt of ...