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By L. Nicholas Deane Just before dawn on Jan. 18, a small fire broke out in a third-floor lounge of Boland Hall, a dormitory at Seton Hall University in South Orange, N.J. It spread, and then grew rapidly in intensity. Hundreds of students fled for their lives, running from the bright orange flames and the thick black smoke. One student jumped from a third-story window, and another hung by his fingertips from a window while the firemen below were initially helpless to do anything for him. Another student ran out completely engulfed in flames. Most of the students made it out alive, but 58 were injured. John Giunta, Frank Caltabilota and Aaron Karol didn’t make it. They were found dead, two of them burned beyond recognition. Why didn’t a sprinkler systems react to prevent this terrible tragedy? Boland Hall was built in 1952, before the law required sprinkler systems in dormitories, and it was grandfathered in under the law. Why didn’t people respond to the alarms? Because the dorm had 18 false alarms in the previous four and half months. Hadn’t the town fire marshal inspected the dorm for safety? If so, according to attorneys for the deceased students, they missed hundreds of fire code violations. Was it negligence on the part of Seton Hall? Lawyers may be able establish it before a judge and jury. Can the families recover in a court of law? Not necessarily. Charitable immunity There’s an old-standing law on the books in New Jersey – dating back to 1959 – that might disallow a cause of action against the school. The law is based on a doctrine of charitable immunity, an old doctrine that shields a charitable organization, its volunteers and its paid staff from cash damages from certain torts. The law applies when the injury was caused by negligence on the part of the organization’s staff, paid or volunteer, and the injured person was a beneficiary of the organization. The idea is to provide protection from tort liability for charitable organizations, which are designed to promote the higher good. Harvey Dale, a professor at the New York University School of Law’s Center on Philanthropy and the Law, uses a soup kitchen in explaining the rationale behind the doctrine. "If you sue the soup kitchen and take all its assets, what happens to the people who need the soup?" Skippy Weinstein, a Morristown, N.J. attorney for one of the plaintiffs in this Seton Hall case, said that the doctrine is based on the theory that beneficiaries of a charitable institution shouldn’t receive compensation for acts or alleged faults of the organization. The doctrine is based on a number of theories. One is the trust fund theory, that is, that the funds of a charity are held in a sort of trust for the charity’s beneficiaries. To permit diversion of these funds to tort claimants would substantially impair the abilities of the charity. So in essence, charitable immunity works like a subsidy to the charity to perform its mission, according to Errol Copelivitz, a partner in the Kansas City, Mo., law firm Copelivitz and Cantor. Another theory is that charities should not be liable for actions committed by their employees or volunteers unless either the action was "corporate" or the action consists of negligent selection of the employee. Thus, even in states that have charitable immunity statutes, charities have been held liable for negligently hiring pederasts or people with a history of drunk driving. The third theory, the weakest of the three, legal experts said, is the implied waiver theory. It says the beneficiary of a charity, by accepting the benefits of the charity, has implicitly waived liability or assumed the risk of negligence. Theoretically at least, charitable immunity is fair. But in practice, it might not work out that way. Why should a plaintiff’s rights be different because the defendant is a charitable organization? NYU’s Dale sees the issue as "not one of good against evil, but of competing goods. Should the organization feed the hungry or compensate the victim?" John P. Yukevich, a personal injury attorney in Beaver, Pa., sees charitable immunity as patently unfair. "It is based on the same rationale as sovereign immunity, where you can’t sue a governmental entity because the king can do no wrong. But the king does wrong all the time." Most states had at one time some sort of charitable immunity statute on the books. But in recent years, courts and legislatures have been chipping away at them, diminishing their strength so that now they are alive and in force in only a few states. Some states have twists on the rules, like Virginia, where the immunity applies only if the charity fails to exercise ordinary care. In Massachusetts you can sue a charitable hospital for malpractice but you can only recover up to $20,000. In Colorado, civil actions may be brought only to the extent of the organization’s insurance coverage. This is because Colorado’s law is based on the trust fund theory, and while a charity may be found liable for a tortious act, its funds were held for the public good and were not subject to the plaintiff’s claims. New Jersey law The trend among states has clearly been away from charitable immunity laws in recent years, said Jennifer Chandler Hauge, deputy director of Pro Bono Partnership, based in White Plains, N.Y., with operations soon to begin in New Jersey. "New Jersey’s statute is the strongest in the nation. In fact, it’s getting stronger. While the law used to cover volunteers, in 1995 the statute was amended to cover paid staff members as well." She also pointed out that New Jersey courts have given the statute more teeth. As an example, she cites the case of Moneghan vs. Holy Trinity Church, Archdiocese of Newark, (App.Div. 1994). In this case, a woman was injured when she stepped in a hole on a church parking lot. She sued, arguing that the church was guilty of gross negligence because church officials were aware the hole existed. Therefore, she argued, the doctrine of charitable immunity didn’t apply. The court found otherwise, stating that the legislature made exceptions to the statute when making exceptions for gross negligence for individual board members, but did no such thing for the institutions themselves. Thus, under New Jersey law, charitable immunity exists even where there is a finding of gross negligence. Nonetheless, attorney Weinstein said that the lawyers for the plaintiffs in the Seton Hall case will attempt to carve out an exception to the charitable immunity law. A Seton Hall University spokesperson did not return five telephone calls seeking comments for this story. The New Jersey statute does provide certain exceptions. For one, the law doesn’t apply if the injury was caused by a motor vehicle accident, which doesn’t apply in the case of the fire. The second exemption is where the charitable organization is not a "bona fide" charity. In making this determination, New Jersey courts look at the state’s nonprofit corporation statute, under which Seton Hall is most likely clearly charitable. The third exception to the law occurs when the injury occurs to someone who is not a beneficiary of the organization. The attorneys might allege that, if the students were paying full tuition, how could they possibly be considered beneficiaries of a charity? That argument very well might be a courtroom battle as well since schools often argue that the tuition paid by students never covers the full costs of an education. The fourth exception is where the plaintiffs’ best hopes may lie: The shield does not apply where the injury is caused by intentional, reckless willful or wanton behavior. Plaintiff’s attorneys will argue that that behavior was a factor in this fire. On March 1, about six weeks after the deadly fire, state fire inspectors notified Seton Hall they had found 828 violations of New Jersey’s Uniform Fire Code, 35 of them in Boland Hall. Also, according to published reports, state fire inspectors took over responsibility for inspecting the campus once they found that South Orange fire inspectors either hadn’t visited the campus in well over a year or hadn’t kept records of their visits. One of the violations state inspectors found was excessive lint buildup in laundry room clothes dryers. This lint buildup contributed to a subsequent fire on March 8 in which nine students were injured. The plaintiffs’ atttorneys will probably also allege reckless negligence in all the false alarms that the school had in the past few months and also in the fact that the school didn’t have sufficient fire drills. Also, plaintiffs’ attorneys will likely argue reckless negligence in not having sprinklers in the building. Even though they were not required by law to do so, legal experts said that there is a solid argument that not doing so constitutes reckless behavior. For instance, in the 1987 DuPont Hotel Fire in Puerto Rico, where more than 100 people died, the hotel did not have sprinklers because it was built before a sprinkler code was enacted. That did not protect the hotel from a huge settlement. How the courts decide to apply the charitable immunity doctrine in this case remains to be seen. But here’s a case where it probably shouldn’t apply, the legal experts said. "While it is overall a good thing, the charitable immunity doctrine is not always fair," said Copelivitz. "Seton Hall may well be a case where it’s unfair."
L. Nicholas Deane is a Montauk, N.Y.-based freelance writer. He previously was senior vice president at Faulkner & Gray, responsible for tax and accounting products.
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