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Ryan v. Holy Trinity Evangelical Lutheran Church

175 N.J. 333, 815 A.2d 419 (2003)

CHARITABLE IMMUNITY—For purposes of affording charitable immunity to eligible property owners, persons attending functions sponsored by organizations renting space from the eligible property owner are treated as beneficiaries of that property owner’s “work” if the general purpose of the function is within the charitable purposes of the property owner.

While attending a meeting of a nonprofit group of parents and expectant mothers, a child was injured when an improperly hinged door fell off and hit the child who pulled it on the back of the head. The parents, acting for the child, sued both the nonprofit group and the church where its meeting was held. The mother was a dues-paying member of the nonprofit group. The nonprofit group also was open to non-members. At the time of the accident, the church “had a policy of opening its doors to social outreach projects for community purposes and allowing them to use its facilities to conduct meetings.” Permission to use a room could be obtained for a nominal fee. The church asserted “that no group was refused permission to use the church facilities if it could not afford the fee.” Over a six month period, the mother’s group used the church’s facilities thirty-one times, paying a total of $465.

The purposes of the charitable immunity act “are to avoid the diversion of charitable trust funds to non-charitable purposes and to encourage altruistic activity.” In essence, to qualify for charitable immunity, an entity must show that it was formed for non-profit purposes, was organized exclusively for religious, charitable or educational purposes, and was promoting its objectives at the time of an injury. “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.” On the other hand, “determining whether an entity is organized exclusively for ‘charitable’ purposes requires further examination, ..., including an examination of the source of the entity’s funds.” In this case, the nonprofit entity faced “its claim that it [was] entitled to charitable immunity on its educational purpose.” That purpose was declared in the group’s bylaws and it clearly operated for that purpose. The mother conceded that the organization had nonprofit status and that she and her child were beneficiaries of its works. Consequently, the nonprofit organization qualified for charitable immunity.

This left the issue as to whether the church satisfied the third prong of the test, i.e., “was it engaged in charitable works” at the time of the accident and was the child a beneficiary of those works. There is a two prong test for determining whether a party is a beneficiary. First, an inquiry is made as to whether the institution, “at the time in question, was engaged in the performance of the charitable objectives it was organized to advance” and whether the injured party was a direct recipient of those “good works.” 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.” The Court found that, the church supported “social outreach group that enriched the life of the community at large” by providing space for community organizations to conduct meetings. As to whether the child was a beneficiary of the charitable works, the Court pointed out that a broad interpretation was required. To the Court, that requirement was “evidenced by the use of the word ‘to whatever degree’ modifying the word ‘beneficiary’ in the statute.” Here, both the mother and child were held to be beneficiaries of the work to the church at the time of the accident, both as members of the nonprofit organization and as attendees of a function held by the nonprofit organization on the church’s premises.

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