Abramson v. Reiss

CHARLES E. ORTH, Jr., Judge, Specially Assigned. A broken nose suffered in a basketball game has ballooned into a request that Maryland’s century-old charitable immunity doctrine be judicially abrogated. I On 2 January 1992 Douglas Paul Abramson and Ori Reiss, members of the Jewish Community Center of Greater Washington, Inc., were opponents in an apparently informal basketball game played on the JCC’s court. During the game ¹⁹⁵ Abramson was allegedly struck on the nose by Reiss, breaking it and causing other facial injuries.

Abramson instituted an action in the Circuit Court for Montgomery County against Reiss and the JCC. In an Amended Complaint he sought damages from Reiss for assault and battery (1st count), for malicious prosecution (2nd count), 1 and for negligence (3rd count). These complaints were ultimately disposed of by a “Stipulation of Dismissal” filed by Abramson’s attorneys. The stipulation requested that the suit be marked as “ ‘Settled and Off and dismissed with prejudice as to all claims as to Defendant Ori Reiss.” The Amended Complaint also sought damages from the JCC for breach of contract (4th count) and for negligence (5th count).

The damages demanded on each of these counts was $250,000 plus court costs. The JCC filed a Motion to Dismiss the two counts against it on the ground that Abramson’s claims were barred by the doctrine of charitable immunity. 2 The JCC asserted: That doctrine precludes [Abramson] from recovering damages for the tortious conduct of an uninsured eleemosynary institution, such as the JCC, whose assets are held in trust in furtherance of its charitable purposes. “Because of its status,” the JCC declared, “it cannot be sued under a tort theory of liability.” As to the claim under the 4th count, allegedly for breach of contract, the JCC explained: ¹⁹⁶ [I]t is really the same negligence claim that is alleged in [the 5th count]: The count is based upon the alleged negligence of the JCC and seeks identical damages. For this reason, it too is a proper subject of this motion to dismiss. II The Motion was supported by a Memorandum of Points and Authorities.

Extensive argument was presented in the Memorandum. The first phase of the argument dealt with the existence of the doctrine in Maryland and its present status. (Paragraph II A). The second phase of the argument (paragraph II B) was to the effect that the JCC is a recognized Maryland charitable institution entitled to charitable immunity.

Appended to the motion was an affidavit of Jay Manchester, the JCC’s Director of Administration and Chief Financial Officer. His affidavit provided, in substantive part, the basis for the argument set out in the JCC’s Memorandum of Points and Authorities supporting its Motion to Dismiss. Manchester declared in ¶ 3 of his affidavit: As the Director of Administration and Chief Financial Officer of the JCC, it is within the scope of my responsibilities to negotiate and obtain various business-related contracts, including insurance coverage, if any, for the JCC. It is also within the scope of my responsibilities to be aware of the JCC’s existing contracts, whether negotiated and obtained by me or by someone else.

He was not aware of any contract of liability insurance carried by the JCC at the present time or at the time of Abramson’s injury. He emphasized: The net earnings of the organization in no way inure to the . benefit of individuals or private shareholders. Rather, the net earnings of the JCC, if any, are always reallocated to the organization’s programs and services. Paragraph 4.

He explained: The assets of the JCC are held in trust in furtherance of its charitable purposes. The JCC has opted not to carry ¹⁹⁷ insurance in order to devote its assets exclusively to its charitable purposes. Id. We note that the Legislature has enacted a statute with respect to charitable institutions that choose to carry liability insurance.

Maryland Code (1957, 1991 Repl. Vol.) Art. 48A, § 480. In the absence of such insurance, a negligence action cannot be maintained against a charitable institution. See McCormick v. Church, 219 Md. 422, 431 , 149 A.2d 768 (1959).

We looked to the legislative history of Article 48A, § 480 in Howard v. Bishop Byrne Home, 249 Md. 233, 236 , 238 A.2d 863 (1968). We observed that the General Assembly had the opportunity to abrogate the common law doctrine of charitable immunity at that time but declined to do so. The statute it enacted, Article 48A, § 480, did no more than restrict the use of the doctrine by an insurer, not by the charitable institution. It thus assured that a charitable institution which opted for insurance would receive the full benefit of the coverage it had obtained without disturbing the doctrine under other circumstances.

See State v. Arundel Park Corp., 218 Md. 484, 487-488 , 147 A.2d 427 (1959). In ¶ 5 of Manchester’s affidavit, he observed that it was also within the scope of his responsibilities to be aware of the JCC’s corporate status and its purposes, programs and services. He swore that the JCC is a tax-exempt organization organized for charitable purposes. In addition, it is registered as a charitable organization within the State of Maryland.

Paragraph 6. Md.Code (1957, 1990 Repl.Vol.) Art. 41, § 3-201(b)(1) defined “charitable organization” to mean: a person that is or holds itself out to be a benevolent, educational, philanthropic, humane, patriotic, religious, or eleemosynary organization and solicits or obtains contributions solicited from the public for charitable purposes.[ 3 ] ¹⁹⁸ Also appended to the Motion to Dismiss was a letter from the Internal Revenue Service to the JCC. It declared: A search of our files indicates that the [JCC] is exempt from Federal Income Tax under Section 501(c)(3) and other than a private foundation described in Section 509(a)(2) effective November 1987. The letter stated that “this letter may be used to verify your tax-exempt status.” The registration of the JCC as “a charitable organization within the State of Maryland” was pursuant to Article 41, § 3-202(a): Every charitable organization located in this State which intends to solicit contributions within or without this State, or every charitable organization which intends to solicit contributions within this State or to have funds solicited on its behalf shall file a registration statement with the Secretary of State upon forms prescribed by the Secretary of State prior to or upon the commencement of any solicitation.

Thereafter, if the organization intends to engage, or does engage in solicitation, it shall file an annual report. Id. Subsection (b)(1) (i through ix) prescribed what the registration statement shall contain. Article 41, § 3-209 set out: All registration statements, annual reports, fund-raising counsel contracts, professional solicitor contracts, and other documents and information filed under this subtitle with the Secretary of State are public records.

They shall be maintained in the office of the Secretary of State for at least two years, and shall be available to the general public for inspection and photocopying, at reasonable prices, during the normal business hours of the Secretary of State. Paragraph 7 of Manchester’s affidavit discussed the activities of the JCC. The JCC is a United Way volunteer agency. In this capacity, it provides valuable services to new immigrants to the United States, the elderly, the underprivileged, the disabled, and the community’s youth.

The JCC provides these services to its community without regard to the race, ¹⁹⁹ religion, gender or ethnic background of the recipient. For example, in the past year alone, the JCC has enabled over 700 Russian immigrants to learn English through classes and one-on-one home tutoring. Moreover, it has enabled approximately 350 immigrants from Vietnam as well as Hispanic, Asian, African and many other countries to learn the English language. The JCC’s goal is to facilitate the immigrants’ ability to obtain jobs and become productive and self-reliant American citizens. “In addition,” Manchester continued: the JCC’s summer camps have provided a welcome to the United States for approximately eighty Russian immigrant children from the ages of two through fourteen enabling them to make American friends and obtain a head start in the English language so that they will be better prepared as they enter local schools.

Moreover, the JCC provides ongoing hot meals programs and socialization services for approximately 140 new immigrants and senior citizens, com-batting the isolation and depression suffered by older people in a new country. Id. Manchester pointed out: For the past fourteen years, the JCC has been a nationally-recognized pioneer in mainstreaming handicapped children into regular camp activities based upon the individual child’s ability to succeed. Many of these children enter the camp with low self-esteem.

Success in the summer programs helps to build a basis of self-esteem upon which they can achieve other successes. Over the course of the past year alone, the JCC’s summer camps have served approximately two hundred physically, emotionally and mentally handicapped children and adults. These summer programs provide these special individuals with much-needed independent living skills, friendships, and ongoing education. Id.

Furthermore, the JCC provides meals to the community’s senior citizens. The JCC serves senior citizens approximately 800 hot kosher meals per week in nine different locations throughout ²⁰⁰ Montgomery and Prince George’s counties. The service is free of charge for those who can not afford to pay, with only a nominal cost for those who can afford payment. Id.

Manchester declared that “[t]he JCC is also a responsible member of its community. For instance” the JCC was instrumental in planning and hosting a major community-wide conference on affordable housing, the JCC also conducts a massive teen volunteer program of recruiting and placing three hundred teenagers per year as volunteers throughout the community, teaching them the value of giving to others. As volunteers, they work in nursing homes, clean up streams and public parks, help with handicapped children and perform one-on-one peer counseling with troubled teens. Paragraph 8 of Manchester’s affidavit explained that the costs associated with many of the JCC’s charitable services are defrayed by extending memberships to interested citizens.

However, [t]he only services that require actual- membership in the JCC are the sports and fitness facility — -with the exception of individuals who use the facility as part of a health-related activity such as a cardiac program — , and the JCC’s day care and preschool programs. For those who can not afford to pay the membership fee, the JCC provides membership scholarships. During the past year, the Center has already provided over $250,000 dollars worth of membership scholarships. No one in need is ever turned away.

For its members, the Center provides free after school care for elementary age school children grades three through seven and licensed after school day care for children Kindergarten through second grade. Impressed on all of this is the sworn declaration of the JCC’s Director of Administration and its Chief Financial Officer that the net earnings of the JCC, if any, “are always reallocated to the organization’s programs and services.” The JCC’s Motion to Dismiss urged that, in the light of its full compliance with the “Charitable Organization Solicitations” ²⁰¹ statute, its acceptance as a tax-exempt organization by the Internal Revenue Service, its acceptance by the Secretary of State of Maryland as a charitable organization, the charitable nature of its many and varied activities and the allocation of such income and fees it obtains in furtherance of its activities, [t]he JCC is clearly an uninsured charitable organization devoted to religious, educational and community welfare services. Its assets are entirely committed to the furtherance of its charitable purposes. Therefore, the JCC declares, it is entitled to the application of the charitable immunity doctrine recognized in Maryland.

III A Abramson took several positions in opposing the JCC’s Motion to Dismiss. He deemed the use of the JCC’s sports and fitness facilities for a fee of $350 to be a contract, not a mere membership privilege. The contract, he suggested, implied a responsibility on the part of the JCC that the facility be operated in a safe and secure manner. He claimed that the JCC breached this contract resulting in his injury.

He argued that the charitable immunity doctrine is applicable only to torts; it does not apply to contracts. Next, Abramson contended that the use of the sports facilities was a commercial venture and not a charitable activity. He argued that the operation of a sports and fitness facility “is so entirely disengaged from [the JCC’s] charitable functions that [the JCC] should be barred from invoking immunity with respect to its negligent supervision of the sports facility.” Finally, Abramson, urged, “The charitable immunity doctrine should be abolished in light of modern tort law.” He asserted that “[t]he charitable immunity doctrine is a relic of the past.” B The JCC replied to Abramson’s opposition to the Motion to Dismiss. It stated that the alleged contract claim was in ²⁰² actuality not ex contractu but ex delicto, in that the proximate cause of Abramson’s injury was the alleged negligence of the JCC and not of any breach of contract.

The JCC characterized as “artificial” Abramson’s distinction between commercial and charitable activities in the circumstances here and pointed out that, in any event, its brochure, appended to Abramson’s reply, warned that the utilization of the JCC’s facilities and programs are at the members’ own risk. As for Abramson’s notion that the charitable immunity doctrine should be abrogated, the JCC observed that neither this Court nor the Legislature has seen fit to do so in over a century. C The Circuit Court for Montgomery County conducted a hearing on the Motion to Dismiss. After extended argument by counsel, the judge ruled that the JCC’s concept of the law was correct and that the so-called breach of contract count arose in negligence; it was “in fact a negligence count.” The judge stated that he would grant the motion as to both counts IV and V. Whereupon the judge ordered: Upon consideration of the Defendant Jewish Community Center’s (“JCC”) Motion to Dismiss counts IV and V of [the JCC’s] amended complaint on grounds of charitable immunity, and the accompanying Memorandum of Points and Authorities, the Court finds