F.K. VS. INTEGRITY HOUSE, INC. (L-2239-16, ESSEX COUNTY AND STATEWIDE) , 460 N.J. Super. 105 ( 2019 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1862-18T1
F.K.,
Plaintiff-Appellant,
APPROVED FOR PUBLICATION
v. July 8, 2019
INTEGRITY HOUSE, INC., APPELLATE DIVISION
Defendant-Respondent,
and
THOMAS LUSCH and MARVIN
DEUPREE,
Defendants.
____________________________
Submitted May 20, 2019 – Decided July 8, 2019
Before Judges Sumners, Mitterhoff and Susswein.
On appeal from the Superior Court of New Jersey,
Law Division, Essex County, Docket No. L-2239-16.
Marc L. Winograd, attorney for appellant.
Law Offices of Daniel J. Mc Carey, LLC, attorneys
for respondent (Daniel J. Mc Carey, on the brief).
The opinion of the court was delivered by
MITTERHOFF, J.S.C. (temporarily assigned).
Plaintiff F.K. appeals the trial court's December 11, 2018 order granting
summary judgment to defendant Integrity House and dismissing his complaint
with prejudice. The trial court determined that defendant was entitled to
immunity from plaintiff's negligence action under New Jersey's Charitable
Immunity Act ("the Act"), N.J.S.A. 2A:53A-7 to -11. On appeal, plaintiff
contends that the amount of private contributions received by defendant,
roughly $250,000 or 1.26% of annual revenue, is too insignificant to entitle
defendant to charitable immunity. Having reviewed the record in light of the
applicable legal principles, we conclude that defendant did not present
sufficient evidence to support its entitlement to the affirmative defens e of
charitable immunity. Accordingly, we reverse.
I.
We glean the following facts from the record.
Integrity House's stated purpose in its certificate of incorporation is "[t]o
keep former drug addicts drug free." Integrity House is a tax-exempt
organization under section 501 (c)(3) of the Internal Revenue Code, 26 U.S.C.
§ 501(c)(3). On its 2015 tax return, Integrity House described its mission as
follows: "Integrity House is committed to helping individuals and families
through an effective and measurable system of comprehensive therapeutic
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community addiction treatment and recovery support in a way that brings
about positive, long-term lifestyle change."
As alleged in his complaint, plaintiff was a resident at the Integrity
House residential drug-treatment facility in Newark. On November 3, 2015,
he sustained personal injuries when he slipped and fell due to a wet condition
on an interior staircase within the facility. Plaintiff filed a complaint alleging
Integrity House was negligent in the maintenance of the premises.
Integrity House answered the complaint, asserting, among other
defenses, the affirmative defense of charitable immunity. Before the close of
discovery, Integrity House moved for summary judgment on the ground of
charitable immunity. In support of its motion for summary judgment, Integrity
House submitted its 2015 tax return. 1
Integrity House reported $20,094,046 in total revenue for the 2015 tax
year. According to Part VII, "Statement of Revenue," Integrity House received
$15,355,805 from government grants, 2 $157,310 from fundraising events, and
$296,409 from "[a]ll other contributions, gifts, grants, and similar amounts not
1
Specifically, Integrity House filed a Form 990 "Return of Organization
Exempt from Income Tax."
2
Integrity House received $12,036,891 from the New Jersey Department of
Human Services, $1,114,993 from Hudson County, and $1,502,370 from the
New Jersey Department of Children and Families.
A-1862-18T1
3
included above." Integrity House also reported $4,261,364 in "program
service revenue." 3 With regard to the fundraising revenue and private
contributions, Schedule G, Part II, "Fundraising Events," specifies that
Integrity House received $252,855 in "gross receipts" from two fundraising
events4 and $157,310 in "contributions" from those events.
After hearing oral argument on May 12, 2017, the trial court issued an
order and written opinion denying the motion for summary judgment. The
trial court concluded that while Integrity House's 2015 tax return appeared to
show that it received roughly $250,000 in contributions, the record did not
conclusively "reveal the source of those funds and how they were utilized."
The trial court noted that there was still one month before the discovery end
3
The tax return further delineates the "program services revenue" as follows:
$1,553,390 from Work First NJ/SAI; $900,730 from welfare and food stamp
revenue; $286,721 from federal probation program fees; $83,049 from the
intensive supervision program; $1,307,168 from other program related
revenue; and $130,306 from all other program service revenue. In support of
its motion for summary judgment, Integrity House did not submit evidence
detailing the fee structure for its programs, including whether any of its
programs are offered at no or reduced cost or whether it bills medical
insurance providers.
4
These events are listed as "Gala" and "Golf." There is no evidence in the
summary judgment record detailing Integrity House's specific fundraising
efforts in the 2015 tax year.
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date and determined that Integrity House's source of funds remained a disputed
factual issue.
After the close of discovery, Integrity House re-filed its motion for
summary judgment. The renewed motion added only short certifications of
Integrity House's CEO and CFO stating that all of the roughly $252,000 in
"gross receipts" raised from fundraising for the 2015 tax year were used in
furtherance of Integrity House's charitable purposes.
In opposition to defendant's renewed motion for summary judgment,
plaintiff submitted a report from a forensic accounting expert analyzing the
2015 tax return. In pertinent part, the expert concluded:
I have looked at the financial documents and have
highlighted certain pages and line items. Annexed
hereto as Exhibit A is page one of Integrity House's
2015 Form 990. This page reports total revenues
received of $20,094,046 for 2015 but the [d]efendant
in its brief makes no mention of this amount.
With regard to the "charitable contribution of almost
$300,000 for the calendar year," attention is directed
to Schedule G. Part II, Fundraising Events, annexed
hereto as Appendix B. On that page, the sum of
$252,855 is reported as gross receipts from
fundraising events and the sum of $157,310 is
reported as contributions. The [d]efendant in his brief
provides absolutely no explanation as to the source of
the funds for either of these amounts. As a forensic
accountant, without supporting third-party
documentation, I cannot determine whether these
funds were obtained from a government or private
source.
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With regard to the certification of [Integrity House's
CFO], I note that she provides absolutely no
information regarding the source of Integrity House's
revenue in the year 2015. She provides no
explanation regarding the source of the $20,094,046
received by Integrity House during that year and she
provides absolutely no analysis regarding the source
of the $252,855 reported as gross receipts and no
analysis of the $157,310 reported as contributions. It
appears that all she attempts to do in her certification
is justify Integrity House's expenditures. Her
certification does not enable me, as a forensic
accountant, to determine whether these funds were
obtained from a government or private source. The
certification of [Integrity House's CEO] provides
absolutely no information in this regard as well.
Conclusion
In my professional opinion and to a reasonable degree
of certainty in the field of forensic accounting,
Integrity House has failed to provide an analysis of the
source of its funds for the year in which the November
3, 2015 accident took place. Based on the information
provided by Integrity House, there is absolutely no
documentation which would facilitate a determination
of the funding sources.
Without hearing further oral argument, the trial court entered an order granting
summary judgment on October 27, 2017.
Plaintiff appealed, and we vacated the dismissal order and remanded for
further proceedings because the trial court failed to issue an oral or written
reasoning for its conclusion that Integrity House was entitled to chari table
immunity. F.K. v. Integrity House, No. A-1376-17 (App. Div. October 26,
A-1862-18T1
6
2018). On remand, the trial court issued an order and written opinion granting
summary judgment on December 11, 2018. 5
In its written decision, the trial court determined that Integrity House
established the three elements necessary for charitable immunity: that the
organization "(1) was formed for nonprofit purposes; (2) is organized
exclusively for religious, charitable or educational purposes; and (3) was
promoting such objectives and purposes at the time of the injury to plaintiff
who was then a beneficiary of the charitable works." Tonelli v. Bd. of Educ.
of Wyckoff, 185 N.J. 438, 444-45 (2005) (quoting Hamel v. State, 321 N.J.
Super. 67, 72 (App. Div. 1999)).
The trial court found that Integrity House satisfied the first prong based
upon its incorporating documents and status as a non-profit organization as
defined in Section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. §
501(c)(3). In so holding, the trial court rejected plaintiff's reliance on
Abdallah v. Occupational Ctr. of Hudson Cty., Inc., 351 N.J. Super. 280 (App.
Div. 2002) and contention that Integrity House received too small a portion of
its funding from private contributions. The trial court reasoned: "The [c]ourt's
opinion in [Morales v. N.J. Acad. of Aquatic Scis., 302 N.J. Super. 50 (App.
5
The trial court did not allow for new submissions or hold oral argument on
remand.
A-1862-18T1
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Div. 1997)] is clear that a receipt of government funds, even if that
encompasses the majority of an entity's funding, does not eliminate an entity's
protection under the Charitable Immunity Act." 6
The trial court found that Integrity House met the second prong,
reasoning:
Defendant Integrity House has presented extensive
evidence that it does not merely distribute government
funds, but provides actual services to individuals,
including housing and counseling. The [c]ourt finds
that the [d]efendant Integrity House has satisfied the
second prong of the analysis required under N.J.S.A.
2A:53A-7, having demonstrated that is organized for
religious, charitable or education purposes, as
evidenced by their statement of purpose, as well as the
services they provide.
Finally, the trial court concluded that Integrity House satisfied the third
prong because plaintiff was a resident at Integrity House's drug treatment
facility at the time of the accident.
Accordingly, the trial court issued an order granting summary judgment
and dismissing plaintiff's complaint with prejudice.
II.
On appeal, plaintiff challenges only the trial court's determination as to
the second prong of the charitable immunity analysis. He argues that the
6
As discussed below, this analysis actually falls under the second prong.
A-1862-18T1
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$252,855 in private contributions, comprising 1.26% of Integrity House's total
revenue in the 2016 fiscal year, is too insignificant to establish that Integrity
House is organized exclusively for charitable purposes and to entitle it to
immunity under the Act.
Integrity House counters that "no statute or court in this State has
provided precise guidelines regarding the exact percentage of revenue derived
from charitable sources required to confer charitable status." It maintains that
the $252,855 in gross receipts and the $157,310 7 in contributions, comprising
2.04% of its 2016 revenue, are "sufficient for Integrity House to establish that
it is entitled to charitable immunity protection because, unlike the defendant in
Abdallah, Integrity House actively pursued these funding sources and the
funds directly supported its charitable endeavors."
A.
We review a grant of summary judgment de novo, applying the same
standard as the trial court. Henry v. N.J. Dep't of Human Servs., 204 N.J. 320,
330 (2010). Summary judgment must be granted if "the pleadings,
depositions, answers to interrogatories and admissions on file, together with
the affidavits, if any, show that there is no genuine issue as to any material fact
challenged and that the moving party is entitled to a judgment or order as a
7
It appears that Integrity House mistyped this sum as $157,855 in its brief.
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matter of law." R. 4:46-2(c). The court considers whether "the competent
evidential materials presented, when viewed in the light most favorable to the
non-moving party, are sufficient to permit a rational factfinder to resolve the
alleged disputed issue in favor of the non-moving party." Brill v. Guardian
Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
"The trial court's conclusions of law and application of the law to the
facts warrant no deference from a reviewing court." W.J.A. v. D.A., 210 N.J.
229, 238 (2012) (citing Manalapan Realty, L.P. v. Twp. Comm. of Manalapan,
140 N.J. 366, 378 (1995)). Accordingly, "[a] trial court's determination of the
applicability of charitable immunity is reviewed de novo because an
organization's right to immunity raises questions of law." Green v. Monmouth
University, 237 N.J. 516, 529 (2019).
B.
The Supreme Court recently recounted the history of charitable
immunity in New Jersey:
New Jersey's doctrine of charitable immunity was first
declared "as a judicial expression of [New Jersey's]
public policy" in D'Amato v. Orange Memorial
Hospital, 101 N.J.L. 61 (E. & A. 1925), but was
expressly repudiated by this Court in Collopy v.
Newark Eye & Ear Infirmary, 27 N.J. 29 (1958), as
lacking historical foundation and contrary to "modern
concepts of justice."
A-1862-18T1
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The Legislature immediately responded by passing a
precursor to the Charitable Immunity Act and, a year
later, the Act itself. Through that legislation, "'the
common law doctrine as it had been judicially defined
by the courts of this State' was restored."
The Charitable Immunity Act's "original purpose was
to avoid the diversion of charitable trust funds 'to non-
charitable purposes in order to live up to the
reasonable expectations of the benefactors.'" "Over
time, however, our case law has recognized that the
purposes underlying charitable immunity are broader
than simply preserving charitable trust funds and
include the encouragement of altruistic activity" by
limiting the economic impact of litigation on charities.
[Green, 237 N.J. at 529-30 (alteration in original)
(citations omitted).]
The Act provides that
[n]o nonprofit corporation, society or association
organized exclusively for religious, charitable or
educational purposes or its trustees, directors, officers,
employees, agents, servants or volunteers shall . . . 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).]
The Legislature directed that the Act
shall be deemed to be remedial and shall be liberally
construed so as to afford immunity to the said
corporations, societies and associations from liability
as provided herein in furtherance of the public policy
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for the protection of nonprofit corporations, societies
and associations organized for religious, charitable,
educational or hospital purposes.
[N.J.S.A. 2A:53A-10.]
Nonetheless, "[o]nly those classes of entities that were immunized under
common law remain within the sweep of the Act. However, as to those
entities, the several provisions of the Act should be liberally construed to
afford immunity." Tonelli, 185 N.J. at 444; see also Hardwicke v. Am.
Boychoir Sch., 188 N.J. 69, 98 (2006) ("[A]lthough N.J.S.A. 2A:53A-10 states
that [the Act] 'shall be liberally construed,' we must consider the scope of that
common law when interpreting the scope of the immunities provided in the
statute.").
C.
"Charitable immunity is an affirmative defense, as to which, like all
affirmative defenses, defendants bear the burden of persuasion." Abdallah,
351 N.J. Super. at 288. As stated above, an entity seeking charitable immunity
must establish that it "(1) was formed for nonprofit purposes; (2) is organized
exclusively for religious, charitable or educational purposes; and (3) was
promoting such objectives and purposes at the time of the injury to plaintiff
who was then a beneficiary of the charitable works." Tonelli, 185 N.J. at 444-
45 (quoting Hamel, 321 N.J. Super. at 72).
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With regard to the second prong, "neither non-profit status nor the
performance of socially useful services, either independently or together, are
dispositive of charitable status." Abdallah, 351 N.J. Super. 283-84. "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." Kuchera v. Jersey Shore Family Health Ctr.,
221 N.J. 239, 252 (2015). "What is required is an examination of the entity
seeking to clothe itself in the veil of charitable immunity to discover its aims,
its origins, and its method of operation in order to determine whether its
dominant motive is charity or some other form of enterprise." Parker v. St.
Stephen's Urban Dev. Corp., Inc., 243 N.J. Super. 317, 325 (App. Div. 1990).
Because "[b]oth 'educational' and 'religious' have a limited and
commonly understood meaning . . . [but] 'charitable' is a more complex notion
that defies precise definition[,]" the Court has prescribed distinct inquiries for
organizations seeking immunity for educational or religious purposes and
organizations seeking immunity for charitable purposes. Ryan v. Holy Trinity
Evangelical Lutheran Church, 175 N.J. 333, 343 (2003). "Entities that can
prove they are organized exclusively for educational or religious purposes
automatically satisfy the second prong of the charitable immunity standard"
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and "no further financial analysis is required to satisfy the second prong of the
Act." Id. at 346.
In contrast, for an entity asserting that it is organized for charitable
purposes, a reviewing court must conduct a "source of funds assessment" to
discern whether a charitable purpose is being fulfilled. Ibid.; Abdallah, 351
N.J. Super. at 284 (noting that the source of funds analysis "looks beyond the
organization's non-profit structure and social service activities" and "must take
into account the organization's source of funds as a critical element of
charitable status."). In this regard, "an organization claiming immunity under
the Act must demonstrate some level of support from charitable donations
and/or trust funds as it is those sources of income the Act seeks to protect."
Bieker v. Cmty. House of Moorestown, 169 N.J. 167, 178 (2001) (emphasis
added); see also Morales, 302 N.J. Super. at 56 (noting that the defendant
"receive[d] a substantial amount of charitable contributions, which is one of
the essential characteristics of a non-profit corporation entitled to charitable
immunity." (footnote omitted)).
In the seminal case of Parker, Justice Long, then an Appellate Division
judge, explained that an entity asserting a charitable purpose must show it
"undertak[es] acts by which the government is relieved pro tanto from a
burden it would otherwise have to perform." 243 N.J. Super. at 326. In that
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case, we reversed a grant of charitable immunity to a nonprofit corporation
established by St. Stephen's A.M.E. Zion Church to serve "as a conduit for
federal mortgage money and for federal rent subsidies" to fund a low and
moderate income housing complex. Id. at 325. We reasoned that the entity
"was not created to lessen the burden on government but to obtain as much
funding from the government as possible and to operate the project exclusively
with that funding. As such, it is no more entitled to charitable immunity than
the government itself." Id. at 326. We also emphasized that "[e]qually
important is the absence from defendant's operation of fund-raising activities
and charitable contributions." Ibid.Similarly, in Abdallah, we reversed a grant of charitable immunity to an
occupational center that provided training and job placement for vocationally
disabled individuals because it received the vast majority of its funding
through governmental grants and payments from employers for subcontracted
labor. 351 N.J. Super. at 287-88. We found that annual private contributions
amounts of $48,000, or less than one-and-one-half percent of the total revenue,
and $3,000, or less than one-tenth of one percent of total revenue, were "too
insignificant to have any effect on the charitable-status determination." Id. at
288. We also were "concerned that what is disclosed by the record and our
inferences and assumptions therefrom may not constitute a sufficiently
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complete or fair picture of the entirety of the [defendant's] operation." Ibid.For these reasons, we found that the defendant had failed to carry its burden to
establish charitable immunity. Ibid.The Supreme Court also has denied charitable immunity to purported
charitable organizations. See Kuchera, 221 N.J. at 254-55 (rejecting a
contention that an outpatient facility owned by a nonprofit hospital was
organized for charitable purposes based on its provision of charity care and
holding that the organization was entitled only to limited liability for hospitals
under N.J.S.A. 2A:53A-8); Tonelli, 185 N.J. at 450 (holding that a township
school board was not entitled to charitable immunity because it was "not
supported by charitable contributions, philanthropic activity or a spirit of
altruism[,]" was funded solely by public funds, did not "relieve[] the
government of the need to provide beneficent services[,]" and was "an
instrumentality of the State itself[.]"); Bieker, 169 N.J. at 179-80 (remanding
for consideration of whether a community center received too great a quant ity
of income from the rental of its facilities to for-profit entities so as to render
the organization's primary purpose non-charitable).
Nonetheless, "the acceptance of government funds and some measure of
government control does not transform a private non-profit corporation into a
governmental instrumentality." Morales, 302 N.J. Super. at 55; see also
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Estate of Komninos v. Bancroft Neurohealth, Inc., 417 N.J. Super. 309, 325
(App. Div. 2010) (noting that "the percentage figure [of private contributions]
does not rigidly dictate the analysis of charitable status."). Accordingly, we
affirmed the grant of charitable immunity to New Jersey Academy of Aquatic
Sciences, which operated the New Jersey State Aquarium, even though "the
State provide[d] support to the Academy by leasing the Aquarium and its
facilities for a nominal rent . . . [and] exercise[d] control over certain aspects
of its operations[.]" Morales, 302 N.J. Super. at 55. We noted that the
organization "received $4,012,383 in contributions and grants, which
constituted more than 40% of its total revenues." Id. at 56 n.1.
Notably, in 1993 the Law Division held that Integrity House was entitled
to charitable immunity in a published opinion in Pelaez v. Rugby Labs., Inc.,
264 N.J. Super. 450 (Law Div. 1993). In that case, the court discussed the
following evidence of Integrity House's funding:
Lorraine Brown, an employee of Integrity House
familiar with its funding, was deposed. Ms. Brown
testified that Integrity House raises private
contributions through various fund-raising activities.
Contributions are raised by submitting proposals to
various private foundations, conducting car wash
operations, soliciting advertisements for a graduation
journal, and soliciting donations from churches in
exchange for work performed at those churches by
Integrity House patients.
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Integrity House tax returns for 1988 revealed that out
of a total funding of $3,027,009 defendant Integrity
House received $2,550,870 (84.3%) from
governmental grants, and $476,139 (15.7%) from
public support of various organizations, foundations
and individuals. Public support income consisted of
$308,452 (10.2%) worth of in-kind contributions and
$167,687 (5.5%) from monetary contributions.
In 1989, Integrity House tax returns revealed that out
of a total funding of $4,112,706 Integrity House
received $3,398,425 (82.6%) from governmental
grants and $714,281 (17.4%) from public support.
Public support in 1989 consisted of $377,671 (9.2%)
worth of in-kind contributions and $336,610 (8.2%)
from monetary contributions.
[Id. at 453-54.]
Relying on this evidence, the Law Division distinguished Integrity
House's funding from that of the housing organization in Parker. Id. at 457-58.
The court reasoned, "[d]espite plaintiff's argument that private contributions
made up only a small portion of defendant's revenues, tax records indicate that
Integrity House relies on private charitable contributions to operate this drug
rehabilitation center, and accordingly lessens the government burden of
providing such funding." Id. at 457. Whereas the organization in Parker did
not engage in fundraising activities, the Law Division found that the record
supported that Integrity House "made substantial efforts to obtain funding from
private sources." Id. at 458.
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D.
Having carefully reviewed the summary judgment record in light of the
above legal principles, we conclude that Integrity House failed to sustain its
burden to prove entitlement to charitable immunity. Accordingly, the tria l
court improvidently granted summary judgment.
Initially, we note that the parties dispute the percentage of total revenue
that Integrity House receives from private charitable contributions. In his
appellate brief, plaintiff relies on $252,855 designated as "gross receipts" as
the figure for Integrity House's total private contributions for the 2015 year. In
contrast, Integrity House relies on both the $252,855 designated as "gross
receipts" and the $157,310 designated as "private contributions" for a total of
$410,165 in total contributions. Using plaintiff's figure, the $252,855 in "gross
receipts" represents 1.26% of Integrity House's total revenue. Using Integrity
House's figure, the $410,165 in total private contributions represents 2.04% of
Integrity House's total revenue.
Based on the summary judgment record, particularly the unrebutted
forensic accounting expert report, we are unable to conclusively determine
which figures should be used in the charitable immunity analysis. More
broadly, as the trial court found in its initial order and decision denying
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summary judgment, the record does not allow for a conclusive determination
as to the source and use of Integrity House's funding. 8
Because Integrity House did not submit sufficient evidence to
substantiate the source and use of its funding, we find that Integrity House did
not present sufficient evidence to support its burden of persuasion on the
affirmative defense. See Abdallah, 351 N.J. Super. at 288. In addition to
failing to provide evidence to assist in analyzing its tax return and determining
the percentage of funds received from charitable contributions, Integrity House
did not submit any evidence to: (1) specify the fee structure for its services;
(2) detail its fundraising efforts beyond the indication on its tax return t hat it
held a golf event and a gala event; (3) rebut plaintiff's forensic accounting
expert's report; or (4) substantiate that its public service efforts relieved the
government of a burden.
The Law Division's decision in Pelaez is thus factually distinguishable
from the instant matter. Most notably, both the gross sums of private
8
Integrity House failed to certify specifically as to the amount of private
charitable contributions or present its own accounting expert. As plaintiff's
expert found, the CEO's and CFO's certifications added nothing regarding the
source of funding to the record after the trial court initially denied summary
judgment on the grounds that Integrity House had failed to provide a sufficient
analysis as to the source of its funds. Instead, the CEO's and CFO's
certifications only state that the $252,855 in gross receipts from fundraising
events was all spent in advancement of Integrity House's charitable proposes.
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contributions and percentages of total revenue in 1988 ($476,139; 15.7%) and
1989 ($714,281; 17.4%) are substantially greater than the figures presented in
this case. See Pelaez, 264 N.J. Super. at 454. Moreover, the employee's
deposition provided specific evidence of the fundraising activities undertaken
by Integrity House. See id. at 454-55. By contrast, in this case, Integrity
House has not submitted certifications or any evidence other than its 2015 tax
return detailing its fundraising efforts or supporting that it relies on private
charitable contributions for any of its programs.
Unlike Pelaez, the current record does not establish that Integrity House
"actively seeks private contributions and derives a substantial amount of
income from private contributions." Id. at 457. Considering the fact-specific
nature of the analysis of the second prong under the Act, see Kuchera, 221 N.J.
at 252, Integrity House cannot rely on the Law Division's decision based on
financial data from roughly twenty years ago.
In addition, although a determination of the specific percentage of
funding Integrity House receives from private contributions is not necessary
for our analysis, we note for completeness that no published case has granted
charitable immunity to a non-religious, non-educational entity with such a
small portion of funding from private contributions. The closest precedent
with respect to the small percentage of private contributions is Komninos, but
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that case is distinguishable because we determined that the defendant group
home fulfilled an educational purpose, obviating the need to conduct a source
of funds analysis. See Komninos, 417 N.J. Super. at 325 ("Moreover, for the
reasons we have already expressed, [the organization's] immunized status is
established by its core educational purposes.").
Using either plaintiff's or defendant's figures, the percentage of private
contributions received by Integrity House seems too nominal to advance the
underlying purpose of the doctrine to protect and encourage private charitable
contributions. See Abdallah, 351 N.J. Super. at 285 ("[T]here is agreement
that [the doctrine's] underlying purpose and rationale have always been t he
protection and encouragement of private philanthropy both to assure the
continued provision of beneficent services and to relieve government of the
burden of providing them."). Viewing the summary judgment record in the
light most favorable to plaintiff, the substantial sum of government funding
received by Integrity House, $15,355,805 or over three-fourths of its 2015
fiscal year total revenue, allows for the reasonable inference that it is
attempting to maximize the amount of governmental funding it can receive in a
fashion similar to the goals of the housing organization in Parker.
Ultimately, Integrity House bears the burden of persuasion on its
affirmative defense of charitable immunity, Abdallah, 351 N.J. Super. at 288,
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and we must view the evidence in the light most favorable to plaintiff. Brill,
142 N.J. at 540. Judged against these standards, we conclude that the trial
court erred in determining that Integrity House was entitled to charitable
immunity.
Reversed and remanded for further proceedings consistent with this
opinion. We do not retain jurisdiction.
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