Charitable Immunity and the Definition of “Hospital”

Kuchera v. Jersey Shore Family Health Center, — A.3d — (N.J. 2015)

This case concerns the charitable immunity invoked by a hospital in response to a patient’s slip-and-fall suit. In New Jersey, nonprofit organizations “organized exclusively for religious, charitable or educational purposes” enjoy a complete exemption from liability in torts, whereas “any nonprofit corporation, society or association organized exclusively for hospital purposes” can be held liable for tort damages up to a $250,000 limit. N.J.S.A. 2A:53A–7(a) & 2A:53A–8.

The defendant sought a complete immunity based on its engagement in medical education, but the New Jersey Supreme Court disagreed. The Court held that “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” and that there is “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.” Consistent with this vision, the Court decided that the definition of “hospital” for charitable immunity purposes should encompass “the many medical pursuits of a modern hospital in New Jersey” that include a teaching component, and not just the inpatient and out-patient care. “The education of medical students, physicians, nurses, and other health professionals” – it explained – “is a significant core hospital purpose related to the provision of quality health care to patients.”

Based on this understanding, the Court ruled that the defendant is “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,” while adding that “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.”