Terry Kuchera v. Jersey Shore Family Health Center (073483)

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