Terry Kuchera v. Jersey Shore Family Health Center (073483) , 221 N.J. 239 ( 2015 )

SYLLABUS
(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
interest of brevity, portions of any opinion may not have been summarized.)
Terry Kuchera v. Jersey Shore Family Health Center (A-60-13) (073483)
Argued December 2, 2014 -- Decided March 31, 2015
CUFF, P.J.A.D. (temporarily assigned), writing for a unanimous Court.
In this appeal concerning a premises liability action, the Court addresses whether a health care facility is
entitled to charitable immunity pursuant to N.J.S.A. 2A:53A-7, or the limited liability afforded to nonprofit entities
organized exclusively for hospital purposes pursuant to N.J.S.A. 2A:53A-8.
On Saturday, March 7, 2009, plaintiff attended a free eye screening conducted by the New Jersey
Commission for the Blind and Visually Impaired (Commission) at the Jersey Shore Family Health Center (Family
Health Center). After registering for her screening, plaintiff slipped and fell on the tile floor. As a result, plaintiff
allegedly sustained injuries, including a torn ligament in her ankle, and herniated and bulging discs in her back.
The Family Health Center is a nonprofit charitable clinic in the Meridian Health hospitals system. It is
located in Neptune in a separate building next to the Jersey Shore University Medical Center (Medical Center). The
Family Health Center provides medical care for those “who are uninsured, underinsured, without a primary care
physician and/or who lack access to regular medical care.” The Medical Center, a 600-bed hospital, is one of six
hospitals that comprise the Meridian Health system. The Medical Center provides a spectrum of specialized care
including cardiac, oncology, behavioral health, and pediatrics, and conducts several residency programs. Meridian
Health and its constituent hospitals were organized as a nonprofit organization within the meaning of Section
501(c)(3) of the Internal Revenue Code. Meridian Health was organized, generally, to operate hospitals and health
care facilities, to promote or carry on educational and research activities, to render necessary health care regardless
of the patient’s ability to pay, and to promote and protect the health and welfare of the general public.
Plaintiff filed a complaint against the Family Health Center, the Medical Center, Meridian Health, and
Modern Health Realty, the record owner of the property (collectively the Meridian Health defendants), seeking
compensatory damages for her injuries. An initial motion for summary judgment was denied, but, on the day of
trial, the Meridian Health defendants renewed their motion, and the trial judge conducted a hearing focused on the
Medical Center’s status. Noting that the central issue was whether the entity is organized exclusively for hospital
purposes or for religious, educational, and/or hospital purposes, the court determined that the Medical Center has a
hybrid purpose that includes educational and charitable services as well as the operation of a hospital. The court,
therefore, concluded that the Meridian Health defendants are entitled to the absolute immunity conferred on certain
charitable organizations by N.J.S.A. 2A:53A-7, and dismissed plaintiff’s complaint with prejudice.
The Appellate Division affirmed in an unpublished decision. The panel accepted the hybrid purpose
analysis, concluding that “in addition to maintaining a hospital, defendants also provide the beneficial services listed
in [N.J.S.A. 2A:53A-7] and are, therefore, not engaged solely in hospital functions to the exclusion of educational
and charitable purposes.” The Court granted plaintiff’s petition for certification. 217 N.J. 287 (2014).
HELD: The site of plaintiff’s fall was part of a nonprofit health care corporation organized exclusively for hospital
purposes. Defendants, therefore, are not entitled to absolute immunity, but rather are entitled to the limitation of
damages afforded to nonprofit institutions organized exclusively for hospital purposes.
1. The Charitable Immunity Act, N.J.S.A. 2A:53A-7 to -11 (CIA or the Act), provides immunity for certain
charitable institutions. However, the Legislature’s codification of charitable immunity was not universal: certain
personnel were not immune from liability for negligence, and nonprofit hospitals were granted a cap on damages
from liability for negligence rather than immunity. N.J.S.A. 2A:53A-7 to -13.1. (pp. 9-10).
1
2. To emphasize the distinction between certain entities, the CIA addressed nonprofits organized exclusively for
charitable, religious, or educational purposes, and those organized for hospital purposes in separate sections.
N.J.S.A. 2A:53A-7 and -8. The most prominent distinction between nonprofit entities organized exclusively for
charitable, religious, or educational purposes and nonprofits organized exclusively for hospital purposes is that the
former are immune from liability, N.J.S.A. 2A:53A-7(a), while the latter are subject to liability for negligence, albeit
with a cap on its damages, N.J.S.A. 2A:53A-8. The immunity bestowed by the CIA extends to the buildings and
other facilities actually used for the purposes of the qualifying organization, such as a hospital. N.J.S.A. 2A:53A-9.
Further, N.J.S.A. 2A:53A-10 instructs that the CIA is remedial legislation and should be liberally construed so as to
further the legislative purpose of immunity. (pp. 11-12)
3. By the plain language of N.J.S.A. 2A:53A-7 and -8, a hospital is subject to limited liability under section 8 if it is
formed as a nonprofit corporation, society, or association, is organized exclusively for hospital purposes, was
promoting those objectives and purposes at the time the plaintiff was injured, and the plaintiff was a beneficiary of
the activities of the hospital. Thus, this appeal is confined to the issue of whether the free eye screening conducted
at the Family Health Center can be considered a hospital purpose. (pp. 13-14)
4. Few cases have addressed the phrase “organized exclusively for hospital purposes” in the context of the CIA. To
begin, the term “exclusively” used in sections 7 and 8 of the CIA has been interpreted as meaning single or sole.
Recently, the Court discussed the meaning of the phrase “organized exclusively for hospital purposes” in the context
of considering whether an offsite facility owned and operated by a nonprofit hospital was exempt from local
property taxation. Hunterdon Med. Ctr. v. Twp. of Readington, 195 N.J. 549 (2008). There the Court stated that
“the core aspects of a hospital’s purposes are to address the needs of all of the types of patients that a hospital is
expected to serve,” and further held that the site of the delivery of the service does not detract from its inclusion as a
hospital purpose. Id. at 572. Thus, as recognized by the courts of this State and courts around the country, the
modern hospital is a place where members of the community not only seek emergency services but also preventative
services, therapy, educational programs, and counseling, and the conception of “hospital purposes” must expand to
reflect the many health-related pursuits of the modern hospital. Accordingly, to advance the legislative mandate that
the CIA be liberally construed to effectuate its purpose, the Court focuses on the many medical pursuits of a modern
New Jersey hospital. (pp. 14-18)
5. Whether a nonprofit entity, whose certificate of incorporation and by-laws provide that it is organized exclusively
for charitable, religious, educational, or hospital purposes, actually conducts its affairs consistent with its stated
purpose often requires a fact-sensitive inquiry. After reviewing the principles applicable to a modern hospital, the
Court concludes that the Meridian Health defendants, and specifically the Medical Center and its Family Health
Center, are governed by the more specific expressions of legislative intent regarding hospitals articulated in N.J.S.A.
2A:53A-8. Thus, the Meridian Health defendants are subject to liability for negligence applicable to nonprofit
corporations, associations, and societies organized exclusively for hospital purposes with any damage award capped
at $250,000. The Appellate Division’s judgment to the contrary – specifically that the Meridian Health defendants
were immune from liability pursuant to N.J.S.A. 2A:53A-7 – utilized a restrictive concept of a hospital that did not
account for the multi-function nature of the modern hospital and its role in the provision of health care in this
society. (pp. 19-23)
The judgment of the Appellate Division is REVERSED, and the matter is REMANDED to the trial court
for further proceedings consistent with this opinion.
CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, PATTERSON, FERNANDEZ-
VINA and SOLOMON join in JUDGE CUFF’s opinion.
2
SUPREME COURT OF NEW JERSEY
A-60 September Term 2013
073483
TERRY KUCHERA,
Plaintiff-Appellant,
v.
JERSEY SHORE FAMILY HEALTH
CENTER, JERSEY SHORE
UNIVERSITY MEDICAL CENTER,
MERIDIAN HEALTH and MODERN
REALTY CORPORATION,
Defendants-Respondents.
Argued December 2, 2014 – Decided March 31, 2015
On certification to the Superior Court,
Appellate Division.
Steven L. Kessel argued the cause for
appellant (Drazin & Warshaw, attorneys).
Richard A. Amdur argued the cause for
respondents (Amdur, Maggs & Shor,
attorneys).
JUDGE CUFF (temporarily assigned) delivered the opinion of
the Court.
This is a premises liability case. Plaintiff slipped and
fell on a wet spot on a floor in an outpatient health care
facility owned and operated by a nonprofit hospital.
The issue before this Court is whether the health care
facility is entitled to charitable immunity pursuant to N.J.S.A.
2A:53A-7, or the limited liability afforded to nonprofit
1
entities organized exclusively for hospital purposes pursuant to
N.J.S.A. 2A:53A-8.
The fall occurred while plaintiff Terry Kuchera was
attending a free eye screening offered by the New Jersey
Commission for the Blind and Visually Impaired (Commission) held
at a family health care facility of a regional teaching
hospital. Plaintiff filed a complaint seeking compensatory
damages for injuries sustained in the fall. Summary judgment
was granted in favor of the hospital pursuant to N.J.S.A.
2A:53A-7, which grants immunity from negligence actions to
nonprofit entities organized exclusively for charitable,
educational, or religious purposes. The Appellate Division
affirmed, rejecting plaintiff’s argument that the health care
entity that owned and operated the clinic facility was
“organized exclusively for hospital purposes,” and, therefore,
is entitled to the protections of N.J.S.A. 2A:53-8, which
exposes such entities to actions for negligence but caps the
amount of damages that may be awarded to a successful plaintiff.
The panel held that the parent-hospital’s provision of charity
care and medical education rendered the hospital a hybrid
nonprofit institution organized exclusively for charitable and
educational purposes. It concluded that the hospital was
accordingly immune from liability for negligence pursuant to
section 7 of the Charitable Immunity Act, N.J.S.A. 2A:53A-7 to -
2
11 (CIA or the Act), rather than subject to a cap on damages for
negligence pursuant to section 8 of that statute.
Whether a nonprofit organization is entitled to charitable
immunity or subject to the limitation on damages afforded to
those institutions organized exclusively for hospital purposes
turns on the purpose of the institution, not the use to which
the facility is put on any given day. Here, the site of
plaintiff’s fall was part of a nonprofit health care corporation
organized exclusively for hospital purposes. Defendants
therefore are not entitled to absolute immunity for a lack of
due care in the maintenance of their facility. Rather, they are
entitled to the limitation of damages afforded to those
nonprofit institutions organized exclusively for hospital
purposes. We reverse the Appellate Division judgment that
affirmed entry of summary judgment in favor of the hospital.
I.
On Saturday, March 7, 2009, plaintiff attended a free eye
screening conducted by the Commission. The screening was
conducted at the Jersey Shore Family Health Center (Family
Health Center). The staff, who conducted and assisted the eye
screening clinic, was composed of Commission representatives, as
well as Family Health Center employees serving as volunteers.
After Kuchera arrived at the Family Health Center, she went
to an office to register for the screening. As she left the
3
office to return to the waiting room, Kuchera fell on the tile
floor. She reported that she slipped on an oily substance, and
asserts that one of the nurses pointed to nearby paper towels
and said, “oh, I was going to clean it up in a minute.” As a
result of the fall, Kuchera alleges that she injured her left
hip and knee, her shoulder, wrist, and neck, and suffered a torn
ligament in her ankle, and herniated and bulging discs in her
lower back.
The Family Health Center is a nonprofit charitable clinic
in the Meridian Health hospitals system. It is located next to
the Jersey Shore University Medical Center (Medical Center) in a
separate building. According to a vice president of the Medical
Center, the Family Health Center provides medical care for those
“who are uninsured, underinsured, without a primary care
physician and/or who lack access to regular medical care.”
The Medical Center is one of six hospitals that comprise
the Meridian Health system. The Medical Center is a 600-bed
hospital located in Neptune and associated with several
satellite facilities, including the Family Health Center. The
Medical Center provides a spectrum of specialized care including
cardiac, oncology, behavioral health, and pediatrics, and
conducts several residency programs. Meridian Health and its
constituent hospitals were organized as a nonprofit organization
within the meaning of Section 501(c)(3) of the Internal Revenue
4
Code. According to Meridian Health’s 1998 certificate of
incorporation, they were organized for the following purposes:
(a) To establish, maintain and operate one or
more hospitals and other health care
facilities for the treatment and care of the
sick, injured and disabled without regard to
race, sex, age, creed, national origin,
ancestry, marital status, sexual orientation,
family status or handicap.
(b) To promote and carry on, by itself or
together with others, directly or through
other entities in which it has an interest or
in which it participates, such other hospital,
health care, educational and research
activities related to its said purpose as the
Board of Trustees may determine to be in the
best interests of the general public health in
the communities which it serves.
(c) To render necessary health care and
related services to all who require such care
regardless of their ability to pay and to
promote, improve and protect the health and
welfare of the general public in the
Communities served by [Meridian Health].
(d) To carry out such other acts and to
undertake such other activities as may be
necessary, appropriate or desirable in
furtherance of, or in connection with, or
complementary to the conduct, promotion or
attainment of the foregoing purposes.1
II.
Kuchera filed a complaint against the Family Health Center,
the Medical Center, Meridian Health, and Modern Health Realty,
1Meridian Health’s 2010 restated certificate of incorporation
reiterates essentially the same purposes.
5
the record owner of the property (collectively referred to as
the Meridian Health defendants).2 She alleged that she was
injured when she slipped on the floor at the Family Health
Center.
An initial motion for summary judgment was denied. On the
day of trial, the Meridian Health defendants renewed their
motion for summary judgment. The trial judge conducted an
evidentiary hearing focusing on the status of the Medical
Center. A Medical Center vice president testified that the
event at the Family Health Center was a Commission-sponsored eye
screening and that the people who worked at the event were
Commission employees or volunteers. He described the Family
Health Center as a community outreach clinic that provides free
care to community members. In response to a question posed by
the trial judge, the Medical Center representative stated that
the Medical Center is the academic teaching hospital in the
Meridian Health system and is affiliated with Robert Wood
Johnson University Medical Center and the University of Medicine
and Dentistry of New Jersey. The trial judge asked whether “it
[is] fair to say that a fundamental component of the corporation
or purpose of the corporation is educational purposes?” The
2 The complaint against Modern Health Realty was dismissed for
failure to prosecute, and an amended complaint added Kleen Rite
Corporation as a defendant.
6
Medical Center representative responded affirmatively, citing
the numerous residency programs based at the hospital that train
medical students and newly graduated physicians.
Noting that the central issue was whether the entity
itself, not the building that it owns, is organized exclusively
for hospital purposes or for religious, educational, and/or
hospital purposes, the trial judge determined that the Medical
Center has a hybrid purpose that includes educational and
charitable services as well as the operation of a hospital. The
judge therefore concluded that the Meridian Health defendants
are entitled to absolute immunity conferred on certain
charitable organizations by N.J.S.A. 2A:53A-7, and dismissed
plaintiff’s complaint with prejudice.
In an unpublished opinion, the Appellate Division affirmed.
The panel accepted the hybrid purpose analysis of the trial
judge. It concluded that “the undisputed proofs demonstrate
that, in addition to maintaining a hospital, defendants also
provide the beneficial services listed in [N.J.S.A. 2A:53A-7]
and are, therefore, not engaged solely in hospital functions to
the exclusion of educational and charitable purposes.” In
addition, it concluded that the term “educational purposes”
should be interpreted broadly, extending beyond mere scholarly
pursuits. Citing the various residency programs and offsite
facilities providing medical education and training, the panel
7
determined that the Medical Center “has a clear mission to
promote the educational development of future physicians, and
provides educational services through a variety of platforms.”
Furthermore, the panel concluded that the Medical Center
was organized for “charitable purposes,” based on the
interpretation of N.J.S.A. 54:4-3.6, as adopted by Presbyterian
Homes v. Division of Tax Appeals, 55 N.J. 275, 284 (1970). As
support, the panel cited the charitable health clinics operated
by the Medical Center.
This Court granted plaintiff’s petition for certification.
Kuchera v. Jersey Shore Family Health Ctr., 217 N.J. 287 (2014).
III.
Plaintiff argues that N.J.S.A. 2A:53A-8 expresses the
intent of the Legislature regarding a hospital’s liability for
negligence to a beneficiary of its services. She contends that
the Legislature expressly addressed charitable immunity for
those nonprofit entities organized exclusively for hospital
purposes and rejected the application of absolute charitable
immunity to them. Rather, plaintiff argues that the Legislature
declared that nonprofit entities organized exclusively for
hospital purposes are not immune from suit by a person injured
as a result of its negligence. She notes that the Legislature
imposed a cap on damages recognizing the financial impact of
unlimited monetary damage awards on qualifying hospitals.
8
Furthermore, she urges this Court to recognize that hospital
purposes include teaching and operating community health clinics
for those unable to pay for medical care.
Defendants urge this Court to affirm the analysis of the
Appellate Division. They contend that the factual record
demonstrates that the Medical Center is neither organized nor
operated exclusively for hospital purposes. Furthermore,
defendants urge that the immunity analysis should focus on the
function or use of the facility at the time the negligent act
occurred on its premises. They contend that defendants “were
not engaged in providing medical treatment, clinical instruction
or in operating an outpatient clinic at the time of plaintiff’s
injury. Instead, the activity was the purely charitable one of
lending the Family Health Center facility to an unrelated entity
. . . to conduct a charitable event, the free eye-screening.”
IV.
A.
Prior to 1958, the common law recognized charitable
immunity for charitable institutions such as churches and
hospitals. See Bianchi v. S. Park Presbyterian Church, 123
N.J.L. 325, 330-32 (E. & A. 1939) (recognizing common law
principle of charitable immunity as bar to negligence actions
against church by recipient of its benefactions); D’Amato v.
Orange Mem’l Hosp., 101 N.J.L. 61, 65 (E. & A. 1925) (holding
9
that public policy requires immunity from liability of
charitable institution maintaining hospital for negligent acts
of medical personnel even for paying patients). That principle
was discarded by this Court in Benton v. Young Men’s Christian
Ass’n of Westfield, 27 N.J. 67 (1958); Collopy v. Newark Eye &
Ear Infirmary, 27 N.J. 29 (1958); and Dalton v. St. Luke’s
Catholic Church, 27 N.J. 22 (1958). The Legislature promptly
responded by passing the CIA to restore charitable immunity.
See Lawlor v. Cloverleaf Mem’l Park, Inc. 56 N.J. 326, 336
(1970); L. 1959, c. 90 (codified as N.J.S.A. 2A:53A-7 to -11).3
The CIA serves two primary purposes. First, immunity preserves
a charity’s assets. O’Connell v. State, 171 N.J. 484, 496
(2002). Second, immunity recognizes that a beneficiary of the
services of a charitable organization has entered into a
relationship that exempts the benefactor from liability. Ibid.Generally stated, the restoration of charitable immunity
was not universal. The legislative scheme imposes certain
conditions: certain personnel were not immune from liability for
negligence, and nonprofit hospitals were granted a cap on
damages from liability for negligence rather than immunity.
3 Subsequent amendments provide that members of volunteer public
assistance squads, such as volunteer first aid personnel and
volunteer fire personnel are immune from liability for acts or
omissions arising out of and in the course of rendering first
aid or emergency services. N.J.S.A. 2A:53A-12 to -13.1.
10
N.J.S.A. 2A:53A-7 to -13.1. To emphasize the distinction
between certain entities, the CIA addressed nonprofits organized
exclusively for charitable, religious, or educational purposes,
and those organized for hospital purposes in separate sections.
N.J.S.A. 2A:53A-7 and -8. The most prominent distinction
between nonprofit entities organized exclusively for charitable,
religious, or educational purposes and nonprofits organized
exclusively for hospital purposes is that the former are immune
from liability while the latter are subject to liability for
negligence, albeit with a cap on its damages.
Specifically, N.J.S.A. 2A:53A-7(a) grants immunity from
liability for negligence to nonprofit corporations, societies,
or associations organized exclusively for religious, charitable,
or educational purposes. It provides:
No nonprofit corporation, society or
association organized exclusively for
religious, charitable or educational purposes
or its trustees, directors, officers,
employees, agents, servants or volunteers
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[.]
[N.J.S.A. 2A:53A-7(a).]
By contrast, N.J.S.A. 2A:53A-8 provides that
11
[n]otwithstanding the provisions of [N.J.S.A.
2A:53A-7], any nonprofit corporation, society
or association organized exclusively for
hospital purposes shall be liable to respond
in damages to such beneficiary who shall
suffer damage from the negligence of such
corporation, society or association or of its
agents or servants to an amount not exceeding
$250,000,4 together with interest and costs of
such suit[.]
The immunity bestowed by the CIA extends to the buildings
and other facilities actually used for the purposes of the
qualifying organization, such as a hospital. N.J.S.A. 2A:53A-9.
Section 9 provides in relevant part that, “[f]or the purposes of
this act but not in limitation thereof, the buildings and places
actually used for [educational purposes,] . . . religious
worship, charitable or hospital purposes, . . . when so operated
and maintained by any such nonprofit corporation, society or
association, shall be deemed to be operated and maintained for a
. . . hospital purpose.” Finally, N.J.S.A. 2A:53A-10 instructs
that the CIA is remedial legislation and should be liberally
construed so as to further the legislative purpose of immunity.
B.
Plaintiff contends that the Family Health Center is an
integral part of the health care provided by defendant Medical
Center. She argues that providing educational programs and
4 Initially, the Legislature capped damages at $10,000. L. 1959,
c. 90, ¶ 48.
12
services related to health and operating neighborhood health
clinics without regard to ability to pay for the provided
services fall within the term “hospital purposes.” The Meridian
Health defendants contend that the Family Health Center engages
in activities that stray beyond the stated purpose of a
hospital. Defendants claim that, having ventured into
charitable activities, albeit health-related, those activities
cloak defendant hospital with the immunity afforded to nonprofit
charitable organizations. The Appellate Division determined
that defendant hospital was not organized exclusively for
hospital purposes but was actually a hybrid hospital and
charitable institution due to its public health and educational
offerings. The panel concluded that hybrid status afforded
defendant hospital complete immunity from liability under the
CIA.
By the plain language of N.J.S.A. 2A:53A-7 and -8, a
hospital is subject to limited liability under section 8 if it
is formed as a nonprofit corporation, society, or association,
is organized exclusively for hospital purposes, was promoting
those objectives and purposes at the time the plaintiff was
injured, and the plaintiff was a beneficiary of the activities
of the hospital. Cf. Hardwicke v. Am. Boychoir Sch., 188 N.J.
69, 95 (2006). This appeal is confined to the issue of whether
13
the free eye screening conducted at the Family Health Center can
be considered a hospital purpose.
We have identified few cases that address the phrase
“organized exclusively for hospital purposes” in the context of
the CIA, and those cases shed little, if any, light on the issue
presented in this appeal. The term “exclusively” used in
sections 7 and 8 of the CIA has been interpreted as meaning
single or sole. Kirby v. Columbian Inst., 101 N.J. Super. 205,
208 (Cty. Ct. 1968). There, the trial court held that a
fraternal organization, that was at least partially organized to
promote the welfare of its members, was not afforded the shelter
of charitable immunity because it was not exclusively or solely
organized for charitable purposes. Id. at 209-10.
In Gould v. Theresa Grotta Center, 83 N.J. Super. 169, 174-
75 (Law Div. 1964), aff’d, 89 N.J. Super. 253 (App. Div. 1965),
a trial judge strictly interpreted the term organized
“exclusively for hospital purposes” and refused to consider a
nursing home as a qualifying entity, notwithstanding the
provision of some incidental health care to its residents. The
judge further determined that an entity organized for hospital
purposes “must necessarily import an absence of the additional
charitable and beneficial functions of a nursing home.” Id. at
176.
14
Recently, the Court discussed the meaning of the phrase
“organized exclusively for hospital purposes” in Hunterdon
Medical Center v. Township of Readington, 195 N.J. 549 (2008).
The discussion arose in the context of whether an offsite
facility owned and operated by a nonprofit hospital was exempt
from local property taxation. We recognize that whether real
property and improvements thereon are exempt from local property
taxation and whether an entity satisfies the criteria for
immunity from liability for negligence implicate different
statutory provisions and public policy concerns. Nevertheless,
the view expressed by this Court regarding the organization and
role of a modern hospital is instructive.
The Court observed that any analysis of the meaning and
scope of “hospital purposes must take into consideration the
many medical pursuits permitted to the ‘modern’ hospital in New
Jersey.” Id. at 553. It emphasized that the analysis of the
term “hospital purposes” starts with the accepted concept of a
hospital as “a place where a patient can obtain twenty-four hour
continuous care.” Id. at 569.
However, the Court’s analysis did not end there.
Concluding that confining the definition of hospital to a
twenty-four hour continuous care facility for an inpatient
population ignores the larger role of a hospital “as an expected
and, to be sure, legitimate, provider of numerous patient
15
services,” the Court stated that the analysis must focus on the
core aspects of a hospital’s purposes. Id. at 572. The Court
stated that
the core aspects of a hospital’s purposes are
to address the needs of all of the types of
patients that a hospital is expected to serve.
Therefore, we hold that any medical service
that a hospital patient may require pre-
admission, during a hospital stay (whether it
is for less than a day or for one or more
days), or post-admission, constitutes a
presumptive core “hospital purpose” under
N.J.S.A. 54:4-3.6. Our definition amplifies
the more abbreviated explanation of “hospital
purposes” previously articulated in
connection with N.J.S.A. 54:4-3.6
applications.
[Ibid.]
The Court also held that the site of the delivery of the
service did not detract from its inclusion as a hospital
purpose. Ibid. Thus, if the service was delivered in a
facility on the main campus or in a hospital-owned building
adjacent to the hospital campus, “[t]he use is presumptively for
core ‘hospital purposes.’” Ibid.Indeed, in various contexts, courts throughout the country
have recognized the evolving character of hospitals and
healthcare. A hospital is no longer viewed as simply a facility
at which medical professionals treat their patients. See Clark
v. Southview Hosp. & Family Health Ctr., 628 N.E.2d 46, 53 (Ohio
1994) (explaining courts have recognized “the status of the
16
modern-day hospital and its role in contemporary society” as
“the only place where the best equipment and facilities and a
full array of medical services are available at any time without
an appointment. With hospitals now being complex full-service
institutions, the emergency room has become the community
medical center, serving as the portal of entry to the myriad of
services available at the hospital”); Burless v. W. Va. Univ.
Hosps., Inc., 601 S.E.2d 85, 93 (W. Va. 2004) (noting “[t]he
public’s confidence in the modern hospital’s portrayal of itself
as a full service provider of health care”); Lewis v. Physicians
Ins. Co., 627 N.W.2d 484, 493 (Wis. 2001) (“As full-care modern
health facilities, hospitals are no longer mere structures where
physicians treated and cared for their patients.” (internal
quotation marks and citation omitted)).
The modern hospital is now a place where members of the
community not only seek emergency services but also preventative
services, therapy, educational programs, and counseling. For
instance, New Jersey supports several “Quit Centers,” which
operate in some hospitals across the State and provide a number
of services to help residents quit smoking.5
5 NJ Quit Centers, New Jersey HealthLink,
http://www.nj.gov/njhealthlink/addict/quitcenters.html?pageID=NJ
(last visited Feb. 23, 2015).
17
Similarly, many hospitals, including the Medical Center,
provide specialized and comprehensive services pertaining to
particular diseases, such as diabetes. One major hospital
operates an education center for adults and children, which
provides inpatient and outpatient diabetes care, educational
programs certified by the American Diabetes Association,
individual diabetes counseling, nutritional counseling, and
psychosocial support services through a licensed clinical social
worker. As these programs illustrate, hospitals now provide
comprehensive services beyond acute inpatient care, and our
conception of “hospital purposes” needs to expand to reflect the
many health-related pursuits of the modern hospital.
We discern no reason to confine the term “hospital
purposes” to the vintage conception of a hospital as a facility
providing a site for physicians to provide acute and continuous
inpatient care for their patients. Rather, to effectuate the
legislative mandate that the CIA should be liberally construed
to effectuate its purpose, we focus on the many medical pursuits
of a modern hospital in New Jersey.
C.
Whether a nonprofit entity, whose certificate of
incorporation and by-laws provide that it is organized
exclusively for charitable, religious, educational, or hospital
purposes, actually conducts its affairs consistent with its
18
stated purpose often requires a fact-sensitive inquiry. Bieker
v. Cmty. House of Moorestown, 169 N.J. 167, 175 (2001). The
Court recognized in Bieker that some nonprofit associations,
such as churches, provide a wide range of services beyond their
core purpose. Id. at 176. The Court embraced the idea that a
church may engage in various activities and services and that
its status as a nonprofit corporation or association organized
exclusively for religious purposes is not eviscerated as long as
the services or activities further the charitable objectives the
church was organized to advance. Ibid. (citing Loder v. St.
Thomas Greek Orthodox Church, 295 N.J. Super. 297, 302 (App.
Div. 1996)); accord Ryan v. Holy Trinity Evangelical Lutheran
Church, 175 N.J. 333, 349 (2003) (noting ancillary services that
enhance mission of qualifying entity do not undermine
exclusivity of qualifying entity’s purpose); Estate of Komninos
v. Bancroft Neurohealth, Inc., 417 N.J. Super. 309, 320 (App.
Div. 2010) (recognizing nonprofit organizations are afforded
wide latitude to determine how they shall achieve their stated
objective). Applying that approach to the defendant, a
community house organized and maintained “as a center of
community life for the people of Moorestown and its surrounds,”
the Court held that it served a recognized charitable purpose.
Bieker, supra, 169 N.J. at 177. The Court remanded, however, to
determine the quantity of income received from its rental of
19
facilities to for-profit entities and whether that share of its
income required a finding that the community organization lost
its charitable status. Id. at 179-80.
V.
Defendant Medical Center is a member of Meridian Health,
which is a nonprofit corporation organized to engage in a series
of activities relating to the improvement of human health and
the provision of care to the sick, injured, and disabled. To
that end, Meridian Health and its constituent medical centers
engage in educational and research programs and coordinate,
sponsor, promote, and advance activities to improve the physical
health and welfare of persons living in and around the
geographic area it serves. Notably, Meridian Health views its
core hospital mission as providing not only inpatient but also
outpatient medical care. It also identifies its core hospital
mission as addressing the public health needs of the community
in which its constituent units are located.
The record reveals that the Family Health Center is a
nonprofit, charitable ambulatory care facility located on the
main campus of the Medical Center in Neptune. It is an integral
unit of the Meridian Health system. It provides numerous
specialized free clinics to the community. The eye screening
offered by the Commission at the Family Health Center attended
20
by plaintiff was an example of the clinics offered by this
facility.
The modern hospital in New Jersey offers a variety of
inpatient and outpatient services. Some of the outpatient
services, as discussed in Hunterdon Medical Center, supra, are
related to medical services that will be administered on an
inpatient basis in the acute care hospital facility. 195 N.J.
at 554. Some services, however, will be offered on an
outpatient ambulatory basis because the medical service need not
be performed on an inpatient basis or the medical service is in
the nature of preventative care. The delivery of such services
in an outpatient setting is consistent with the nature of modern
health care and a hospital's role as a facility that engages in
care for more than the acutely ill or injured person.
The modern hospital in New Jersey may also include a
teaching component. The education of medical students,
physicians, nurses, and other health professionals is a
significant core hospital purpose related to the provision of
quality health care to patients. The modern hospital in New
Jersey also provides medical care to those who can pay for the
care and to those who cannot. In fact, every acute care
hospital in this State is required to provide care to anyone who
seeks care without regard to the ability to pay. N.J.S.A.
21
26:2H-18.64. The provision of charity care is a core function
of a hospital.
Applying these principles, we conclude that the Meridian
Health defendants, and specifically the Medical Center and its
Family Health Center, are governed by the more specific
expressions of legislative intent regarding hospitals
articulated in N.J.S.A. 2A:53A-8. In short, the Meridian Health
defendants are subject to liability for negligence applicable to
nonprofit corporations, associations, and societies organized
exclusively for hospital purposes with any damage award capped
at $250,000. Ibid. Here, the Appellate Division utilized a
restrictive concept of a hospital that did not account for the
multi-function nature of the modern hospital and its role in the
provision of health care in this society. By focusing on the
use of a facility on any given day, the panel failed to consider
the relationship of that single activity to the central
organizing principles of the hospital. In addition, the panel
misapprehended the role that public health activities -- such as
eye screenings, provision of health care without consideration
of the patient’s ability to pay, and educational programs for
health professionals -- play in advancing the core organizing
purposes of the modern hospital.
We recognize that charitable immunity has historically been
considered a means to conserve assets of the qualifying entity.
22
It is therefore significant that when the Legislature raised the
cap on damages, it did so believing that additional monetary
exposure for negligent acts might encourage heightened oversight
of the quality of care thereby reducing incidents of medical
malpractice and containing the costs of care. See Schiavo v.
John F. Kennedy Hosp., 258 N.J. Super. 380, 384 (App. Div. 1992)
(holding 1991 amendment should be applied prospectively), aff’d,
131 N.J. 400 (1993). In premises liability actions, such as
this one, any concerns that this ruling may sap nonprofit
hospital resources is ameliorated by the opportunity of the
organization to obtain indemnification from those entities with
which the hospital contracts to maintain its facilities.
We, therefore, conclude that the Appellate Division
incorrectly held that the Meridian Health defendants were immune
from liability pursuant to N.J.S.A. 2A:53A-7.
VI.
The judgment of the Appellate Division is reversed and the
matter is remanded for further proceedings consistent with this
opinion.
CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN,
PATTERSON, FERNANDEZ-VINA, and SOLOMON join in JUDGE CUFF’s
opinion.
23
SUPREME COURT OF NEW JERSEY
NO. A-60 SEPTEMBER TERM 2013
ON CERTIFICATION TO Appellate Division, Superior Court
TERRY KUCHERA,
Plaintiff-Appellant,
v.
JERSEY SHORE FAMILY HEALTH
CENTER, JERSEY SHORE
UNIVERSITY MEDICAL CENTER,
MERIDIAN HEALTH and MODERN
REALTY CORPORATION,
Defendants-Respondents.
DECIDED March 31, 2014
Chief Justice Rabner PRESIDING
OPINION BY Judge Cuff
CONCURRING/DISSENTING OPINIONS BY
DISSENTING OPINION BY
REVERSE AND
CHECKLIST
REMAND
CHIEF JUSTICE RABNER X
JUSTICE LaVECCHIA X
JUSTICE ALBIN X
JUSTICE PATTERSON X
JUSTICE FERNANDEZ-VINA X
JUSTICE SOLOMON X
JUDGE CUFF (t/a) X
TOTALS 7
1