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Bieker v. Community House of Moorestown

169 N.J. 167, 777 A.2d 37 (2001)

CHARITABLE IMMUNITY—So long as for-profit use of property owned by a non-profit organization is authorized by the organization’s charter and doesn’t become its dominant use, the non-profit property owner can retain its charitable immunity.

A non-profit organization rented meeting rooms and athletic facilities to charitable organizations, to for-profit entities, and to the general public. One such renter was a basketball group. A young child of a member of that group suffered serious injury from a fall from a fire escape. Although the lower court granted the non-profit organization summary judgment under the Charitable Immunity Act, the Appellate Division reversed, holding that the non-profit organization “did not qualify for charitable immunity because it rented its facilities to private individuals and profit-making entities.” On further appeal, the New Jersey Supreme Court held otherwise. It ruled that “[w]hen activities designed to raise funds in support of a charitable organization’s core purposes and 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.” There was no doubt that the organization was a charitable one that derived its revenue solely from rental fees, donations, and trust income. Its Articles of Incorporation set forth the charitable intent of its founders. In order for an entity to qualify under charitable immunity, it must have been formed for a non-profit purpose. It must also be “organized exclusively for religious, charitable or educational purposes,” and must be promoting such objectives and purposes at the time of injury to a beneficiary of the charitable works. Case law recognized that a wide range of qualifying charitable organizations are aimed at meeting the social and recreational needs of a community. There was no question that this organization’s facility was provided to meet those needs in its service area and, “for that reason [it] serve[d] a recognized charitable purpose, in spite of [its] rental of facilities to the public-at-large.” Here, however, the Court could not tell whether that use had become the dominant, and therefore disqualifying, use of the organization. Because the record was not clear as to the extent of the use of the organization’s facilities by for-profit entities, the Court remanded the matter to the lower court to determine the extent of such use.

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