(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).
Argued November 27, 2000 -- Decided July 23, 2001
PORITZ, C.J., writing for a unanimous Court.
This case involves application of the Charitable Immunity Act, N.J.S.A. 2A:53A-7 to -11, to an
independent non-profit entity that derives part of its funding from renting facilities to for-profit entities.
Moorestown Community House, Inc., (Community House) is a non-profit corporation that rents meeting
rooms and athletic facilities to charitable organizations, for-profit entities, and the general public. Edward Bieker,
Sr., belonged to a men's basketball group that rented the Community House gymnasium. On May 2, 1996, Edward,
Sr., was playing basketball when his three-and-a-half year old son, who was keeping himself entertained with a
basketball while his father played, fell seven feet down a fire escape and suffered serious injuries.
The Biekers sued Community House on behalf of their injured son. The trial court granted Community
House's motion for summary judgment under the Charitable Immunity Act. The Appellate Division reversed,
holding that Community House did not qualify for charitable immunity because it rented its facilities to private
individuals and profit-making entities.
The Supreme Court granted Community House's petition for certification.
HELD: When activities designed to raise funds in support of a charitable organizations' core purposes
generally contribute to those purposes, they do not change the charitable nature of the entity. When non-charitable
activities become the “dominant motive” of the organization, it loses immunity under the Charitable Immunity Act.
1. Community House is a charitable organization that derives its revenues solely from rental fees, donations, and
trust account income. It's facilities are rented out for a variety of social, religious, educational and recreational
activities. Community House's Articles of Incorporation set forth the charitable intent of its founders. Over time,
Community House began to solicit users from the general public and the private sector. (Pp.4-6)
2. An entity qualifies for charitable immunity under the Charitable Immunity Act if; (1) it was formed for a non-
profit purpose; (2) it was organized exclusively for religious, charitable or educational purposes; and (3) it was
promoting such objectives and purposes at the time of the injury to plaintiff who was then a beneficiary of the
charitable works. (Pp. 7-9)
3. Our case law recognizes that a wide range of charitable organizations that meet the social and recreational needs
of a community, and generally promote the public welfare, are deemed to have charitable purposes. Community
House's facilities are provided to meet those specific needs in the greater Moorestown area, and for that reason
serve a recognized charitable purpose, in spite of Community House's rental of facilities to the public-at-large.
When those same facilities are rented to for-profit entities, however, the charitable status of the organization may
come into question. Where such use becomes the dominant use of the organization, the organization would no
longer qualify for charitable immunity. In the case of Community House, it is not clear from the record the extent to
which Community House's facilities are used by for-profit entities. The Court therefore remands the matter to the
trial court to determine the extent of such use. (Pp. 9-16)
4. Should the trial court determine that the dominant motive of Community House is charity, the remaining
question would be whether or not Edward, Jr., was a beneficiary under the Charitable Immunity Act. Electing to
dispose of that issue now, the Court concluded that as a companion of his father and a spectator at his father's
basketball game, Edward, Jr., was a beneficiary of Community House's charitable purposes. (Pp. 17-18)
Judgment of the Appellate Division is REVERSED and the matter is REMANDED to the Law Division
for proceedings not inconsistent with this opinion.
JUSTICES STEIN, COLEMAN, LONG, VERNIERO, LaVECCHIA, and ZAZZALI join in CHIEF
JUSTICE PORITZ'S opinion.
SUPREME COURT OF NEW JERSEY
A-
107 September Term 1999
EDWARD BIEKER, JR., a minor
by his Guardians Ad Litem,
MICHELLE BIEKER and EDWARD
BIEKER, SR.; and MICHELLE
BIEKER and EDWARD BIEKER,
SR., individually,
Plaintiffs-Respondents,
v.
COMMUNITY HOUSE OF
MOORESTOWN, a New Jersey
corporation,
Defendant-Appellant.
Argued November 27, 2000 -- Decided July 23, 2001
On certification to the Superior Court,
Appellate Division, whose opinion is
reported at
327 N.J. Super. 467 (2000).
Michael J. O'Mara argued the cause for
appellant (Crawshaw, Mayfield, Turner,
O'Mara, Donnelly & McBride, attorneys;
Michael A. Katz, on the briefs).
Michael A. Kaplan argued the cause for
respondents (Tomar, O'Brien, Kaplan, Jacoby
& Graziano, attorneys; Alan H. Sklarsky, of
counsel; Carlos M. Bollar, on the brief).
The opinion of the Court was delivered by
PORITZ, C.J.
We are called on in this case to determine whether
Moorestown Community House, Inc. (Community House), a nonprofit
corporation that operates and rents meeting rooms and athletic
facilities to charitable organizations, for-profit entities, and
the general public, is entitled to immunity from suit under the
Charitable Immunity Act, N.J.S.A. 2A:53A-7 to -11. The question
arises because N.J.S.A. 2A:53A-7a states that an entity seeking
the protection of the Act must be “organized exclusively for
religious, charitable or educational purposes.” Plaintiff
contends that because for-profit entities and the general public
pay rental fees to Community House it is not organized
exclusively as a charity. We hold that activities designed to
raise monies in support of a charitable organization's core
purposes generally contribute to those purposes and do not change
the “'essence of the entity itself.'” Snyder v. American Ass'n
of Blood Banks,
144 N.J. 269, 305 (1996) (quoting Parker v. St.
Stephen's Urban Dev. Corp., Inc.,
243 N.J. Super. 317, 327 (App.
Div. 1990)). Only when those non-charitable activities become
the “dominant motive” of the organization do we have “some other
form of enterprise” such that the organization will lose its
immunity under the statute. Parker, supra, 243 N.J. Super. at
325.
Edward Bieker, Sr., was a frequent patron of the Community House gymnasium where he participated in an informally organized adult men's basketball group that paid rental fees to Community House for use of its facilities. On May 2, 1996, Edward, Sr., brought his three-and-a-half year old son, Edward, Jr., with him to the Community House gymnasium. During his father's basketball game, the child kept himself occupied by playing with a basketball. Unfortunately, when chasing after his ball, the child left the gymnasium area through doors that led onto an adjoining fire escape and fell a distance of approximately seven feet, suffering serious injury.
The Biekers, as guardians ad litem for Edward, Jr., brought this lawsuit seeking damages for their son's personal injuries. Community House responded by motion for summary judgment, claiming immunity from liability under the Charitable Immunity Act, N.J.S.A. 2A:53A-7 to -11, based on its status as an independent, nonprofit corporation created to meet the social and recreational needs of the community. The trial court granted defendant's motion, concluding that “[a]n organization . . . established to serve [such purposes] . . . and to reap no profits” has a “charitable” purpose and consequently is entitled to charitable immunity. The Appellate Division reversed. Bieker v. Community House of Moorestown, 327 N.J. Super. 467 (App. Div. 2000). It considered this case atypical “[b]ecause Community House does not itself conduct programs within its facilities, but instead rents to other entities and individuals.” Id. at 473. According to the panel, any immunity claimed by Community House is therefore “derivative” and “depends on the nature of the programs conducted by those entities and individuals.” Ibid. The court held that since Community House “rents facilities to various private individuals and profit-making entities which engage in activities that clearly are not charitable or educational, . . . . [it is not] organized 'exclusively' for religious, charitable or educational purposes” as required by statute. Id. at 474.
We granted Community House's petition for certification and now reverse.
The Articles of Incorporation of Community House set forth the purposes for which the corporation was formed more than seventy years ago. Article IIA specifically states the founders' intent to provide
for the purchase or construction and
maintenance and operation of a building or
buildings . . . [that] shall be devoted to
and used exclusively for the benefit and
purposes . . . of corporations and
organizations that are or may be hereafter
incorporated . . . for religious, charitable,
scientific, literary and educational
purposes.
The corporations and organizations identified in the articles
include a Post of the American Legion, the Church Federation of
Moorestown, the Moorestown Free Library Association, the
Moorestown Young Men's Christian Association (YMCA), the Women's
Club of Moorestown, the Moorestown Visiting Nurse Association,
and any other like incorporated entities.
In a recent brochure, however, Community House describes its
purposes somewhat differently:
The Moorestown Community House is a unique
institution. Founded expressly to meet the
social and recreational needs of
organizations and individuals, the House has
been serving the community continuously since
we opened our doors in 1926.
Indeed, in the years between its incorporation and the present,
Community House has adopted a policy of renting its facilities to
any interested organization or member of the public. Those
facilities include a gymnasium, swimming pool, kitchen, and
several air-conditioned rooms capable of handling meetings and
social functions. Patrons rent the several rooms, the gymnasium,
and the pool for a variety of activities, including dance
classes, ballet and karate lessons, piano recitals, meetings,
seminars, birthday and anniversary parties, wedding receptions,
and baby showers. To support those activities, and for an
additional fee, Community House also makes available banquet
tables, chairs, card tables, coffee pots, audiovisual equipment,
and sound systems.
As an independent non-profit entity, Community House
receives no financial or other assistance from government;
rather, its revenues are derived solely from rental fees,
donations, and trust account income. It is registered as a
501(c)(3) organization with the Internal Revenue Service, and as
a charity with the New Jersey Division of Consumer Affairs. In
recognition of its charitable mission, Community House charges
nonprofit organizations lower rents, except that all users of the
gymnasium pay $30 per hour. It claims, however, that pool fees
constitute the largest source of its rental income, and that most
of those fees are paid by nonprofit entities such as the YMCA,
the Town of Moorestown, and the senior swimming program.
Community House does not charge membership fees and frequently
runs an operating deficit that it covers with interest generated
by its trust fund.
The doctrine of charitable immunity was first recognized in New Jersey in D'Amato v. Orange Memorial Hospital, 101 N.J.L. 61 (E. & A. 1925). Its roots are found in the common law principle described by Justice Burling in Jones v. St. Mary's Roman Catholic Church:
[I]t would be contrary to the interests of
society that funds dedicated to a charitable
use be permitted to be diverted or diminished
by the payment of judgments resulting from
the torts of agents, servants or employees of
the organization or institution administering
the charity where suit is instituted by the
beneficiary of the charity.
That principle was ultimately rejected by this Court. In a
trilogy of cases that reconsidered the doctrine of charitable
immunity from the perspective of the injured plaintiff, we
reasoned: “Due care is to be expected of all, and when an
organization's negligent conduct injures another there should, in
all justice and equity, be a basis for recovery without regard to
whether the defendant is a private charity.” Collopy v. Newark
Eye and Ear Infirmary,
27 N.J. 29, 39 (1958); accord Dalton v.
St. Luke's Catholic Church,
27 N.J. 22 (1958); Benton v. YMCA, 27
N.J. 67 (1958).
The Legislature responded to the Court's decisions a year
later by passing the Charitable Immunity Act.See footnote 11 N.J.S.A. 2A:53A-7
to -11. By that Act, “the common law doctrine as it had been
judicially defined by the courts of this State” was restored.
Schultz v. Roman Catholic Archdiocese,
95 N.J. 530, 533 (1984)
(internal quotations omitted). In relevant part, N.J.S.A.
2A:53A-7a provides:
No nonprofit corporation . . . organized
exclusively for religious, charitable or
educational purposes . . . shall . . . be
liable to respond in damages to any person
who shall suffer damage from the negligence
of any agent or servant of such corporation
. . . where such person is a beneficiary, to
whatever degree, of the works of such
nonprofit corporation . . . ; provided
however, that such immunity from liability
shall not extend to any person who shall
suffer damage from the negligence of such
corporation . . . where such person is one
unconcerned in and unrelated to and
outside of the benefactions of such
corporation . . . .
Under Section 7a of the Act, an entity qualifies for
charitable immunity when it “(1) was formed for non-profit
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.” Hamel v. State,
321 N.J.
Super. 67, 72 (App. Div. 1999); accord Loder v. St. Thomas Greek
Orthodox Church,
295 N.J. Super. 297, 301 (App. Div. 1996) (“[I]n
litigation concerning the Act, the focus is on whether the
organization is a charitable association, and whether the injured
plaintiff is a 'beneficiary' of its charitable works.”)
Because it is undisputed that Community House is a nonprofit
entity, we begin our analysis with the question whether Community
House is organized exclusively for charitable purposes.
In Presbyterian Homes v. Division of Tax Appeals, 55 N.J. 275, 284 (1970), we grappled with the definition of “charitable purposes” in order to evaluate the tax exempt status of a senior citizens' housing complex under N.J.S.A. 54:4-3.6. Albeit in a different context, we observed that “the determination of whether property is devoted to charitable purposes depends upon the facts or circumstances of each case.” Presbyterian Homes, supra, 55 N.J. at 285. As a guide to that determination, we turned to a definition of charitable purposes formulated by the Illinois Supreme Court: [A]n 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.
[Id. at 284 (emphasis omitted) (quoting Coyne Elec. Sch. v. Paschen, 12 Ill.2d 387, 398 (1957)).]
Although the provision of housing for indigent or ailing senior
citizens undoubtedly serves such a purpose, Presbyterian Homes
reserved the right to force the residents of the complex to
return to their families or be placed elsewhere when they
“bec[a]me either financially unable to meet their monthly charges
or unmanageable because of illness.” Id. at 286.See footnote 22 For that
reason, among others, we held that the property in Presbyterian
Homes was “not 'actually' used for 'charitable' purposes.” Id.
at 288.
More recently, in Loder v. St. Thomas Greek Orthodox Church,
supra, the Appellate Division concluded that churches provide a
wide range of charitable activities associated with their core
religious purposes, and that those activities are within the
purview of the Act:
Although a church's main purpose may be to
provide a place of worship and spiritual
guidance,
[its] function is not so narrowly
confined. It is not limited to
sectarian teaching and worship. In
[the] modern view, exercises
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.
A social center is now commonly
regarded as a proper adjunct of the
local church -- conducive to the
public good, as well as
advantageous to the congregation.
[295 N.J. Super. at 302 (quoting Bianchi v.
South Park Presbyterian Church,
123 N.J.L. 325, 332-33 (E. & A. 1939)).]
Consonant with its broad reading of charitable purposes, the
panel held that a Greek festival organized by the church, at
which meals were sold and dances performed, furthered the
“charitable objectives [the church] was organized to advance.”
Id. at 303 (internal quotations omitted).
The import of our caselaw is that “a wide range of nonprofit
organizations that provide educational opportunities or other
services which promote the public welfare” are deemed to have
charitable purposes. Morales v. New Jersey Academy of Aquatic
Sciences,
302 N.J. Super. 50, 53-54 (App. Div. 1997); see also
Pomeroy v. Little League Baseball,
142 N.J. Super. 471, 474 (App.
Div. 1976) (holding nonprofit organization's “teaching and
supervision of baseball skills” serves educational purpose);
Heffelfinger v. Town of Morristown,
209 N.J. Super. 380, 388 (Law
Div. 1985) (holding nonprofit entity that maintains small public
park serves charitable purpose). In this case, as evidenced by
defendant's Articles of Incorporation and distributed literature,
Community House was organized and is maintained to provide
facilities for the social and recreational needs of organizations
and individuals. Through the provision of those facilities,
Community House operates as a center of community life for the
people of Moorestown and its surrounds, thereby serving a
recognized charitable purpose. And, as pointed out by the
Appellate Division, under N.J.S.A. 2A:53A-9, “buildings . . .
actually used for . . . charitable . . . purposes, . . . shall be
deemed to be operated and maintained for a religious, charitable,
educational or hospital purpose.”
The Appellate Division concluded, however, that by renting
facilities to members of the public and for-profit entities,
Community House has deviated from the statutory requirement that
it must be “organized exclusively” for charitable purposes.See footnote 33
Bieker, supra, 327 N.J. Super. at 473-74. In respect of
defendant's permitting the public-at-large to use its facilities
for celebrations such as weddings and birthday parties, or for
piano recitals, dance classes, sports, and other similar
activities, we find that those uses meet important social and
recreational needs of the community. Indeed, such celebrations,
classes and sports activities take place on the premises of many
religious and charitable organizations, including churches,
synagogues, the YMCA, and others. Although its Articles of
Incorporation appear to limit Community House to providing
facilities for only charitable, educational and religious
organizations, we consider an expansion of those initial
restrictions to be relevant to the issue at hand only when that
expansion is unrelated to an appropriate charitable purpose.
That is not the case here.
For-profit entities present a different issue. Plaintiff
alleges that Community House rents its facilities to local
businesses although the limited record on summary judgment fails
to inform us about the scope and type of those rentals. Assuming
that for-profit use is substantial, a question is raised whether
the “dominant motive [of Community House] is charity or some
other form of enterprise.” Parker, supra, 243 N.J. Super. at
325.
In Parker, St. Stephen's A.M.E. Zion Church organized a
nonprofit corporation to serve as a conduit for federal funds
that, with rental payments, would cover the costs of low and
moderate income housing built by the corporation. Essentially
because no charitable donations or trust funds were used to
support the project, the court held that “notwithstanding its
benevolent aims,” the corporation could not obtain the protection
of the Charitable Immunity Act. Id. at 328. Justice Long, then
a judge of the Appellate Division, explained:
Equally important is the absence from
defendant's operation of fund-raising
activities and charitable contributions. As
far as our research reveals, no New Jersey
case has ever applied the immunity statute in
circumstances such as these. Private
charitable contributions have been involved
at least in part in every case in which
immunity has been conferred. This is
understandable in light of the fact that the
essence of the public policy favoring
charitable immunity is the preservation of
private charitable contributions for their
designated purposes.
Parker teaches that an organization claiming immunity under
the Act must demonstrate some level of support from charitable
donations and/or trust funds as it is those sources of income the
Act seeks to protect. That does not mean, however, that income
from some limited noncharitable activity would prevent a
corporation not otherwise ineligible from obtaining immunity
under the Act. Such a result would call into doubt the status of
any charitable, religious or educational organization that holds
fund-raisers or bake sales, or conducts bingo nights. See, e.g.,
Book v. Aguth Achim Anchai,
101 N.J. Super. 559, 564 (App. Div.
1968) (holding, without questioning status of religious
organization, that plaintiff injured during bingo game was not
beneficiary of organization's “works”). Generally, those
activities are an adjunct to the organization's core purpose if
only because they provide a source of income, in addition to
charitable donations and trust funds, that enables the
organization to carry out that purpose. Community House, for
example, has run an operating deficit for several years and
apparently uses the higher fees charged to for-profit entities to
offset losses.
The difficulty in this case is that aside from Lockheed-
Martin, the record does not indicate whether other for-profit
entities use Community House facilities. Community House claims
that the amount of fees collected from such entities is minimal,
and points out that 19% of its operating budget is derived from
renting permanent office space to nonprofits. Defendant also
claims that pool fees constitute the largest source of its rental
income (one-third), most of which is paid by nonprofits such as
the YMCA, the Town of Moorestown, and the senior swimming
program. Its 1999 Federal Tax Return indicates that Community
House collected $293,398 in rental fees, $42,988 in charitable
donations, and $65,143 in interest on its trust account.
Even with that information, however, we cannot tell
how much of the rental fee income derives from entities that
operate for profit. We therefore remand this matter to the trial
court for an initial determination whether the “dominant motive
[here] is charity or some other form of enterprise.” Parker,
supra, 243 N.J. Super. at 325. Only if rentals by for-profit
entities have become a dominant use should Community House be
denied immunity under the Act. We leave it to the trial court to
determine whether a hearing is necessary to make that
determination.
The trial court found “that [Edward Jr.] (who was injured while playing basketball[)] was a beneficiary of [Community House].” Although the Appellate Division did not reach that issue, if on remand it is determined that the dominant motive of Community House is charity, the question whether plaintiff was a beneficiary under the Act will be dispositive. In the interest of judicial economy, we decide the issue now.
N.J.S.A. 2A:53A-7a (emphasis added) provides:
No nonprofit corporation . . . organized
exclusively for religious, charitable or
educational purposes . . . shall . . . be
liable to respond in damages to any person
who shall suffer damage from the negligence
of any agent or servant of such corporation
. . . where such person is a beneficiary, to
whatever degree, of the works of such
nonprofit corporation . . . ; provided,
however, that such immunity from liability
shall not extend to any person who shall
suffer damage from the negligence of such
corporation . . . where such person is one
unconcerned in and unrelated to and
outside of the benefactions of such
corporation . . . .
It is uncontroverted that plaintiff's father brought his son to
the Community House gymnasium when he played basketball there.
After the child chased a ball he was bouncing, he fell from an
adjoining fire escape and sustained injury. The child was
plainly a recipient of Community House's “benefactions,” even if
only as a companion of his father and a spectator at his father's
basketball game. See Pomeroy, supra, 142 N.J. Super. at 475
(“[A] spectator at a Little League baseball game is a beneficiary
of defendant's works since . . . . at the time [she] was injured
defendant was engaged in . . . the charitable objectives it was
organized to advance.”); Anasiewicz v. Sacred Heart Church,
74 N.J. Super. 532, 537-38 (App. Div. 1962) (holding that wedding
guest was beneficiary of charitable benefactions of Sacred Heart
Church). Viewing the facts in this context, plaintiff's
“presence was clearly incident to accomplishment” of defendant's
charitable purposes, Gray v. St. Cecilia's Sch.,
217 N.J. Super. 492, 495 (App. Div. 1987), and thus plaintiff was a beneficiary
of its works. Mayer v. Fairlawn Jewish Ctr.,
38 N.J. 549, 553-54
(1962).
The judgment of the Appellate Division is reversed and the matter is remanded to the trial court for proceedings not inconsistent with this opinion.
JUSTICES STEIN, COLEMAN, LONG, VERNIERO, LaVECCHIA and ZAZZALI join in CHIEF JUSTICE PORITZ's opinion.
NO. A-107 SEPTEMBER TERM 1999
ON APPEAL FROM
ON CERTIFICATION TO Appellate Division, Superior Court
EDWARD BIEKER, JR., a minor
by his Guardians Ad Litem,
MICHELLE BIEKER and EDWARD
BIEKER, SR.; and MICHELLE
BIEKER and EDWARD BIEKER,
SR., individually,
Plaintiffs-Respondents,
v.
COMMUNITY HOUSE OF
MOORESTOWN, a New Jersey
corporation,
Defendant-Appellant.
DECIDED July 23, 2001
Chief Justice Poritz PRESIDING
OPINION BY Chief Justice Poritz
CONCURRING OPINION BY
DISSENTING OPINION BY
Footnote: 1 1A temporary statute identical to the Charitable Immunity Act was passed almost immediately after the decisions. N.J.S.A. 16:1-48 to 53. That statute expired in 1959 and was reenacted at that time. Footnote: 2 2We also observed in Presbyterian Homes that charging a fee for services would “not necessarily deny a charitable purpose.” Id. at 287; see also Rupp v. Brookdale Baptist Church, 242 N.J. Super. 457, 465 (App. Div. 1990) (holding day camp operated by church for fee “was a charitable undertaking”); Casper v. The Cooper Hosp., 26 N.J. Super. 535, 540 (App. Div. 1953) (stating that doctrine of charitable immunity is “applicable even where the person injured has paid for the services rendered by the charity”). Footnote: 3 3The Appellate Division assumed, without deciding, that “a nonprofit entity that rents facilities exclusively to other non- profit entities 'organized exclusively for religious, charitable or educational purposes' would be entitled to immunity under the Charitable Immunity Act.” Bieker, supra, 327 N.J. Super. at 473.