Every organization, whether a “non-profit” or “for profit”, is open to liability on any number of acts or omissions. However, where a for profit can pass these costs on to consumers, non-profits of all types often cannot. This means non-profits are forced to divert the limited funds they have away from their mission and into the pockets of insurers. A clear trend in the decisions of New Jersey’s Courts has developed in an attempt to remedy this harsh reality.
N.J.S.A. 2A:53A-7(a), known as the “Charitable Immunity Act”, provides a means for non-profit organizations to gain immunity for otherwise actionable acts or omissions in the State of New Jersey. This Act was conceived as a means to allow for non-profits to focus resources on their good works, rather than on insurance premiums. Since being passed, our Courts have interpreted this act expansively, both in the nature of the organizations covered and the definition of “beneficiaries” covered by the act. This is in large part due to our Legislature’s mandate that the act be “liberally construed”. N.J.S.A. 2A:53A-10.
Traditionally, the Act has been applied by our Court when a non-profit entity, organized exclusively for religious, charitable or educational purposes, was promoting such objectives and purposes at the time of the injury to a person who was a beneficiary. Put another way, the Court’s focus in any case involving charitable immunity essentially boils down to (1) whether the organization is a charitable association, and (2) whether the injured plaintiff is a "beneficiary" of its charitable works." O'Connell v. State, 171 N.J. 484 (2002).
When these two inquiries are combined, the Court’s modern, and expansive, approach to the Charitable Immunity Act becomes evident. Two cases that exemplify this modern approach are Roberts v. Timber Birch-Broadmoore Athletic Ass'n, and the more recent Neumann v. Brick Twp. Bd. of Education.
Roberts dealt with a parent attending her child’s soccer tournament. The plaintiff was on the sidelines and sustained injuries when she slipped over a cooler being used by another youth soccer club for purposes of running a concession stand. She subsequently sued the youth soccer club running the stand, and in turn the soccer club moved for Summary Judgment under the Charitable Immunity Act. The trial Court ultimately granted summary judgment, and Plaintiff appealed, arguing she was not a beneficiary and that running a concession stand had nothing to do with the charitable purposes for which the club was organized. First, the Appellate Division held that the Soccer Club was in fact a qualifying organization, and the act of running a concession stand to raise funds was in furtherance of its purpose under the Act. Next, the Court stated that although her husband was a coach, and she had some unspecified duties to the club, a "but for" test applied in the case of mixed motivations; "If [the] plaintiff would not have attended the tournament but for her children's participation . . . she is a beneficiary" and thus not entitled to sue. On the other hand, if "she was a bona fide volunteer with specific responsibilities which obligated her to attend, she is a contributor and may pursue her claim." Roberts, 371 N.J. Super. at 193. The case was ultimately remanded to the trial Court to determine the Plaintiff’s status.
A few years later the Appellate Division took up Neumann v. Brick Twp. Bd. of Educ., which expanded the definition of beneficiary even further. This case involved a parent who was a coach for her daughter’s youth soccer team who was injured during a scrimmage at practice. The plaintiff argued that she was giving a benefit as a coach, and not receiving one at the time she was injured. The Appellate Division, applying the language of the Act requiring immunity if a plaintiff is a beneficiary “to whatever degree”, held that plaintiff received a tangible benefit through spending time with her daughter, a player in the club.
Roberts and Neumann, two of the latest cases in a long line of New Jersey case law interpreting the Act, illustrate the ever expanding nature of the act and its utility in litigation concerning non-profit organizations. As the list of activities, organizations and benefactions that qualify under the act continues to grow, the use of the Act as an affirmative defense by non-profits is likely to do the same, saving costs and allowing for non-profits to use more funds to support their missions, rather than their insurers.
For questions, concerns or more information, feel free to reach out to me by phone (732) 545-4717 or by email at firstname.lastname@example.org.