It is well settled in Virginia that charitable organizations are immune from liability arising from tort claims asserted by persons who accept the organizations\u27 charitable benefits. The determination of whether a plaintiff is the beneficiary of charitable bounty is a legal issue for the court to decide. Although most older Virginia cases discuss charitable immunity as it applies to hospitals, the doctrine has been applied to many other types of charitable organizations

Williams, Barbara Ann

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University of Richmond Law ReviewVolume 28 | Issue 4 Article 51994Annual Survey of Virginia Law: CharitableImmunity: What Price Hath Charity?Barbara Ann WilliamsFollow this and additional works at: http://scholarship.richmond.edu/lawreviewPart of the Torts CommonsThis Article is brought to you for free and open access by the Law School Journals at UR Scholarship Repository. It has been accepted for inclusion inUniversity of Richmond Law Review by an authorized editor of UR Scholarship Repository. For more information, please contactscholarshiprepository@richmond.edu.Recommended CitationBarbara A. Williams, Annual Survey of Virginia Law: Charitable Immunity: What Price Hath Charity?, 28 U. Rich. L. Rev. 953 (1994).Available at: http://scholarship.richmond.edu/lawreview/vol28/iss4/5CHARITABLE IMMUNITY: WHAT PRICE HATH CHARITY?Barbara Ann Williams*It is well settled in Virginia that charitable organizations areimmune from liability arising from tort claims asserted by per-sons who accept the organizations' charitable benefits.1 Thedetermination of whether a plaintiff is the beneficiary of chari-table bounty is a legal issue for the court to decide.2 Althoughmost older Virginia cases discuss charitable immunity as itapplies to hospitals, the doctrine has been applied to manyother types of charitable organizations.3Over the years, the doctrine of charitable immunity has be-come firmly embedded in Virginia law as well asCommonwealth's general public policy.4 Although several stateshave abolished charitable immunity by judicial fiat, the VirginiaSupreme Court has repeatedly held that abolition of the doc-trine requires action by the General Assembly.5 Thus far, the* Principal, Wright, Robinson, McCammon, Osthimer & Tatum, B.A. MagnaCum Laude, Agnes Scott College; MA., University of Rochester; J.D., University ofVirginia School of Law.1. Weston's Adm'x v. Hosp. of St. Vincent, 131 Va. 587, 601, 107 S.E. 785, 790(1921).2. Roanoke Hosp. Ass'n v. Hayes, 204 Va. 703, 711, 133 S.E.2d 559, 565 (1963).3. See, e.g., Roberts v. Wesley Found., 27 Va. Cir. 121 (Williamsburg 1992) (ap-plying doctrine to a charitable organization that leased its kitchen and meeting spaceto the Peninsula Agency on Aging, which sponsored a lunch program for elderly peo-ple); Stayton v. American Legion Battlefield Post No. 144, 18 Va. Cir. 387 (HenricoCounty 1990) (applying doctrine to Women's Auxiliary of Post); Langston v. AmericanRed Cross, 18 Va. Cir. 451 (Virginia Beach 1990); Boan v. Peninsula YMCA, 18 Va.Cir. 145 (Newport News 1989) (applying the doctrine of charitable immunity toYMCA that sponsored a summer camp and allowed paying guests to use its basket-ball court).4. Memorial Hosp. v. Oakes, 200 Va. 878, 885, 108 S.E.2d 388, 396 (1959) (hold-ing that where a charitable institution has exercised due care in employing its staff,the institution is not liable to the beneficiaries of the charity for its torts).5. Id. at 889, 108 S.E.2d at 396.953UNIVERSITY OF RICHMOND LAW REVIEWlegislature has refused to abolish the charitable immunity ex-ception as it applies to charitable hospitals.6Although the doctrine of charitable immunity is still viable inVirginia, several recent judicial pronouncements greatly limitits scope. For example, in Thrasher v. Winand,7 the court heldthat a non-profit Virginia corporation named "Mountain Magic"was not entitled to charitable immunity. According to the court,the group's charitable purpose was too broad, conferring "indi-rect benefits which [were] too remote to give rise to the defenseof charitable immunity."8Mountain Magic's stated corporate purpose "was to organizeand promote an annual 'Spring Festival' in Buchanan, [Virgin-ia,] to engage in other community activities, and to donate itsnet earnings to local charities."9 The plaintiff, a member of"Purgatory Four Wheelers," a four-wheel-drive truck club thatparticipated in the Spring Festival sponsored by Mountain Mag-ic,' ° was injured when his motorcycle collided with a trucktraveling on a road partially barricaded for the festival. Accord-ing to the plaintiff, the placement of the barricades contributedto the collision."Although Mountain Magic's charitable nature was undisput-ed,'2 the court rejected Mountain Magic's charitable immunityargument. The court explained that although the plaintiff tookpart in his club's activities at the festival and was eligible toreceive Mountain Magic's charitable benefits, he was not abeneficiary. According to the court, the only beneficiaries ofMountain Magic's charitable benefits were those to whomMountain Magic donated the proceeds of fundraising activities.Consequently, the court held that the plaintiff did not become avicarious beneficiary through his membership in Purgatory orhis participation in Purgatory's activities at the festival."Moreover, the court ruled that "mere membership in a class6. See VA. CODE ANN. § 8.01-38 (Cum. Supp. 1991).7. 239 Va. 338, 389 S.E.2d 699 (1990).8. Id. at 342, 389 S.E.2d at 701.9. Id. at 339, 389 S.E.2d at 700.10. Id.11. Id. at 340, 389 S.E.2d at 700.12. Id.13. Id. at 341, 389 S.E.2d at 701.[Vol. 28:953954CHARITABLE IMMUNITYeligible to receive future benefits, conditioned upon circumstanc-es which might never occur, is too remote and speculative to beconsidered."14 In other words, the plaintiffs potential beneficia-ry status was too remote a possibility to trigger the doctrine ofcharitable immunity.Thrasher heralded a trend in Virginia toward a more restric-tive definition of beneficiaries for charitable immunity purposes.This trend was continued in Straley v. Urbanna Chamber ofCommerce.5 In Straley, the plaintiff alleged that she was in-jured at the Urbanna Oyster Festival when a piece of candythrown by a clown struck her in the eye. The plaintiff sued theUrbanna Chamber of Commerce, the Urbanna Oyster FestivalCommittee, and the town of Urbanna for failing to promulgateproper rules and regulations for the behavior of parade partici-pants, and for failing to supervise the participants properly."It was undisputed that the Urbanna Chamber of Commerceis a nonprofit corporation organized for a charitable purpose. 7The Chamber of Commerce's principal source of revenue is theOyster Festival, the proceeds of which are used to pay theChamber's operating expenses and contribute to a number oflocal charitable causes. 8 The plaintiff participated in all of theOyster Festival events. Nevertheless, the court held that theplaintiff "did not become a vicarious beneficiary" of the Cham-ber of Commerce's charity as a result of her participation in thefestival activities. 9The court further concluded that because the plaintiff livedsixty-two miles from the town and received no pecuniary bene-fits from the funds generated by the festival or contributed bythe Chamber of Commerce to local charities, 0 she was not abeneficiary of the Chamber's purpose for conducting the festival.In the court's words: "The relationship between the Chamberand the plaintiff, a member of the public attending the festival,14. Id. at 342, 389 S.E.2d at 701.15. 243 Va. 32, 413 S.E.2d 47 (1992).16. Id.17. Id. at 33-34, 413 S.E.2d at 48.18. Id. at 34, 413 S.E.2d at 48-49.19. Id. at 37, 413 S.E.2d at 50 (quoting Thrasher, 239 Va. at 341, 389 S.E.2d at701).20. Id. at 37, 413 S.E.2d at 50-51.1994] 955UNIVERSITY OF RICHMOND LAW REVIEWis too attenuated and indirect to classify her as a beneficiary ofthe Chamber's charitable activities. She was a mere invitee towhom the defendants owed the duty of reasonable care."2'Thrasher and Straley make it abundantly clear that to beconsidered a charitable beneficiary for the purposes of charita-ble immunity, a person must be a direct beneficiary throughthe receipt of money, goods, or services, and not merely some-one who indirectly receives charitable benefits. Association witha charity's activities or eligibility to receive charitable benefitsin the future is insufficient. This represents a significantchange in Virginia law.'In addition to imposing tighter limits on the scope of thedefinition of "charitable beneficiary," courts have begun to lookpast the "magic words" of charitable intent recited in the corpo-rate charters of many nonprofit organizations. Instead, courtswill examine how the organizations are actually run.' Themost recent example of this trend is Davidson v. The ColonialWilliamsburg Foundation.'The plaintiff in Davidson was a visitor at ColonialWilliamsburg who fell while exiting her car which was parkednear the Visitor Center. She commenced a negligence actionagainst the Colonial Williamsburg Foundation seeking damagesfor her resulting injuries. The Foundation moved for summaryjudgment on the ground that it was immune from suit underthe doctrine of charitable immunity.'21. Id. at 37, 413 S.E.2d at 51.22. Cf Egerton v. R.E. Lee Memorial Church, 395 F.2d 381, 384 (4th Cir. 1968).In Egerton, the court held that a plaintiff injured on church premises was a benefi-ciary of the church's charitable purpose. Although plaintiff was not a member of thechurch and her injury occurred while she was visiting as a tourist and not as a wor-shipper, plaintiff partook of the church's spiritual function and services by visiting it.Id. See also Taylor v. American Natl Red Cross, 8 Va. Cir. 108 (Norfolk 1984) (hold-ing plaintiff, who voluntarily donated blood to the Red Cross, was not a stranger tothe organization's charitable benefits because she and her family were eligible toreceive in the future, at no cost, any needed blood or blood products from the RedCross).23. See, e.g., Danville Community Hosp. v. Thompson, 186 Va. 746, 753, 43S.E.2d 882, 884 (1947) ("[W]hether a hospital is charitable or otherwise . . . may bedetermined not only from the powers and purposes as defined in its articles of incor-poration or charter but also from the manner in which it is conducted.").24. 817 F. Supp. 611 (E.D. Va. 1993).25. Id. at 612.[Vol. 28:953956CHARITABLE IMMINITYThe court denied the Foundation's motion. In doing so, thecourt noted that while the doctrine of charitable immunity hasbeen widely criticized, and indeed abandoned or sharply cur-tailed by many states, it enjoys "continuing vitality in Virgin-ia."' The court, however, also observed that "Virginia has fa-vored a limited form of immunity that does not exempt charita-ble organizations from all tort liability."27Thus, the court's first inquiry was whether the Foundationwas "charitable" in the context of tort immunity. Factors citedby the court as relevant to this determination were:(1) whether the organization's charter limits it to charitableor eleemosynary purposes; (2) whether the organization'scharter contains a "not for profit" limitation; (3) whetherthe organization's goal is to break even; (4) whether theorganization earned a profit; (5) whether any profit orsurplus must be used for charitable or eleemosynary pur-poses; (6) whether the organization depends on contribu-tions and donations for its existence; (7) whether the orga-nization provides its services free of charge to those unableto pay; and (8) whether the directors and officers receivecompensation.'The court cautioned that these factors are illustrative, not ex-haustive, and that no one factor is dispositive."Measured against the above factors, the court in Davidsonconcluded that even though the Foundation's 1990 charter artic-ulated a charitable purpose and the Foundation was entitled tofederal income tax exemption for some of its activities, it couldnot be characterized as "charitable.""0 The court made fourfindings. First, the Foundation's articles in effect in 1990 didnot state that the Foundation operated exclusively "not-for-prof-it.""' Second, the Foundation enjoyed an operating surplus infour of the previous five years." Third, the Foundation was no26. Id. at 612-13.27. Id. at 613 (citations omitted).28. Id. at 614.29. Id.30. Id. at 616.31. Id.32. Id.1994]UNIVERSITY OF RICHMOND LAW REVIEW [Vol. 28:953longer dependent on contributions for its existence.' Fourth,the Foundation paid significant salaries to its chief executiveand other officers.' Based upon these findings, the court de-termined that the Foundation was not entitled to charitableimmunity and, therefore, did not consider the issue of whetherplaintiff was a beneficiary of the Foundation at the time of heraccident.3"Davidson, coupled with Thrasher and Straley, reveal thatnon-profit organizations will no longer be cloaked withcharitable immunity simply because they are ostensibly"charitable organizations." Recreational organizations, historicalassociations, community programs, church groups and other"charitable" entities, especially those that conduct their activi-ties in a business-like manner and generate significant income,should be on notice that their non-profit status may be scruti-nized more closely now than in the past. Moreover, unless theorganization can show that a claimant received a direct benefitfrom its activities, charitable immunity may not shield it fromtort liability.33. Id.34. Id. at 617.35. Id.958

Annual Survey of Virginia Law: Charitable Immunity: What Price Hath Charity?

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Annual Survey of Virginia Law: Charitable Immunity: What Price Hath Charity?

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