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Davis Nursing Association v. Neal

Court of Appeals of Arkansas, Divisions II, III

September 19, 2018

DAVIS NURSING ASSOCIATION d/b/a DAVIS LIFE CARE CENTER APPELLANT
v.
GRACIE NEAL, AS PERSONAL REPRESENTATIVE OF THE ESTATE OF JOHNNY NEWBORN AND ON BEHALF OF THE WRONGFUL DEATH BENEFICIARIES OF JOHNNY NEWBORN APPELLEE

          APPEAL FROM THE JEFFERSON COUNTY CIRCUIT COURT [NO. 35CV-13-217] HONORABLE JODI RAINES DENNIS, JUDGE

          Anderson, Murphy & Hopkins, by: David A. Littleton and Mark D. Wankum; and Brockman, Norton & Taylor, by: C. Mac Norton, for appellant.

          Reddick Moss, PLLC, by: Robert W. Francis, for appellee.

          RITA W. GRUBER, CHIEF JUDGE

         This is an appeal from a jury trial on whether Davis Life Care Center (Davis), a long-term-care facility, was entitled to charitable immunity. Johnny Newborn died on December 6, 2011, while residing at Davis. After Newborn's death, Gracie Neal sued Davis in her capacity as personal representative of his estate and on behalf of his wrongful-death beneficiaries. Davis responded by claiming it was entitled to charitable immunity, and the circuit court granted summary judgment to Davis on this basis. Neal appealed, and our court reversed and remanded. See Neal v. Davis Nursing Ass'n, 2015 Ark.App. 478, 470 S.W.3d 281. On remand, the circuit court held a jury trial on whether Davis was entitled to charitable immunity, and the jury concluded that it was not. Davis appeals arguing that (1) a jury trial was improperly held; (2) the jury was improperly instructed; and (3) substantial evidence did not support the jury's verdict. We affirm.

         I. Background

         In 2013, Neal sued Davis for negligence, medical malpractice, breach of the admission agreement, violations of the Long-Term Care Facility Residents' Rights Act, and breach of the provider agreement. Davis answered Neal's complaint and raised the affirmative defense of charitable immunity. Thereafter, the circuit court granted summary judgment to Davis based on charitable immunity, concluding that Neal failed to refute evidence that Davis is a nonprofit organization created for charitable purposes.

         Neal timely appealed the order granting summary judgment to our court. On appeal, we engaged in a review of the factors our supreme court adopted in Masterson v. Stambuck, 321 Ark. 391, 902 S.W.2d 803 (1995), to analyze whether a corporation is entitled to charitable immunity. These factors, which are illustrative and not exhaustive, include:

(1) whether the organization's charter limits it to charitable or eleemosynary purposes; (2) whether the organization's charter contains a "not-for-profit" limitation; (3) whether the organization's goal is to break even; (4) whether the organization earned a profit; (5) whether any profit or surplus must be used for charitable or eleemosynary purposes; (6) whether the organization depends on contributions and donations for its existence; (7) whether the organization provides its services free of charge to those unable to pay; and (8) whether the directors and officers receive compensation.

Id. at 401, 902 S.W.2d at 809. With these standards in mind, our court determined that questions of fact susceptible to different interpretations by reasonable persons precluded summary judgment. Specifically, we concluded that, considered together, Davis's relationship to Davis Life Care Services, its failure to ever earn a profit, its questionable characterization of free care and lack of charitable donations, and its intentions as they relate to profitability could reasonably result in the conclusion that Davis was not truly operating as a charity. Neal, 2015 Ark.App. 478, at 8, 470 S.W.3d at 285-86. Accordingly, we reversed and remanded the case to the circuit court for further proceedings. Neal, supra.

         On remand, Davis moved to bifurcate the proceedings, with the circuit court first resolving whether Davis was entitled to charitable immunity and then proceeding to the liability and damages phase of trial in the event it was determined that Davis was not immune from suit. In the motion, Davis maintained that charitable immunity is properly decided as a matter of law by the court, rather than a jury. Neal opposed both the bifurcation of the trial and the submission of the immunity question to the court.[1] Ultimately, the circuit court granted Davis's request for bifurcation but ordered that the question of Davis's immunity would be submitted to a jury.

         On November 15-17, 2016, a jury trial was held on the issue of whether Davis was entitled to charitable immunity. At the conclusion of the evidence, the circuit court instructed the jury on the applicable law. The primary instruction given was based on the Masterson factors. Significantly, the circuit court declined to give five instructions proffered by Davis that included language gleaned from prior charitable-immunity caselaw. The case was submitted to the jury on a single interrogatory: "Do you find from a preponderance of the evidence that Davis is entitled to the affirmative defense of charitable immunity?"[2] The jury returned a verdict with an answer of "No."

         Thereafter, the circuit court entered a judgment memorializing the jury's verdict. Following the entry of the judgment, Davis moved for a new trial, which was deemed denied.

         Davis timely appealed the circuit court's judgment and its denial of the motion for new trial and raises three arguments for reversal. Most significantly, Davis argues the circuit court erred by holding a jury trial on the issue of charitable immunity. Davis also seeks reversal based on the circuit court's refusal to give five proffered jury instructions. Finally, Davis contends the jury's verdict was not supported by substantial evidence.

         II. The Right to a Jury Trial

         Davis argues that entitlement to charitable immunity is a question of law, which must be decided by the court rather than a jury, and that accordingly, the circuit court erred by submitting this question to a jury. We disagree. Although the question of whether charitable immunity may be decided by a jury has not been squarely addressed in Arkansas, our review leads us to conclude that it may.

         We begin our analysis by acknowledging that article 2, section 7 of the Arkansas Constitution provides in relevant part, that "the right of trial by jury shall remain inviolate, and shall extend to all cases at law." This is a fundamental right that extends to the trial of issues of fact in civil and criminal causes. Craven v. Fulton Sanitation Serv., Inc., 361 Ark. 390, 395, 206 S.W.3d 842, 845 (2005).

         Furthermore, our supreme court has contemplated that factual issues involving charitable immunity may be resolved by a jury. In Crossett Health Center v. Croswell, our supreme court held that Crossett Health Center was not entitled to charitable immunity and stated that "there are factors sufficient for the jury to find that [Crossett Health Center] was not a trust involving dedication of its property to the public." 221 Ark. 874, 883, 256 S.W.2d 548, 552 (1953).

         Our supreme court's opinion in Anglin v. Johnson Regional Medical Center is also instructive and, indeed, more persuasive than Croswell. 375 Ark. 10, 289 S.W.3d 28 (2008). In Anglin, the supreme court affirmed the grant of summary judgment to a hospital based on charitable immunity; however, the court stated that "where there are disputed facts concerning an organization's charitable status, those facts should be presented to the jury." 375 Ark. at 21, 289 S.W.3d at 35.

         Finally, although only persuasive authority, we acknowledge that Justice Robert Brown twice dissented from majority opinions wherein the supreme court held that certain hospitals were entitled to charitable immunity. See Anglin, supra; George v. Jefferson Hosp. Ass'n, Inc., 337 Ark. 206, 987 S.W.2d 710 (1999). In both Anglin and George, our supreme court affirmed a circuit court's order granting summary judgment based on charitable immunity. In his dissents, Justice Brown maintained that, based on his understanding of Croswell, it was clear that, when there are factual issues involved in a charitable-immunity defense, this court has held that the matter is for the jury to resolve. Anglin, 375 Ark. at 23, 289 S.W.3d at 37 (Brown, J., dissenting); George, 337 Ark. at 218, 987 S.W.2d at 716 (Brown, J., dissenting). It is noteworthy that the majority opinion in Anglin also recognizes that disputed facts regarding an organization's charitable status should be presented to a jury and that the majority opinion in George does not engage in any analysis of whether disputed facts should be presented to a jury.

         The language in the caselaw we discuss comports with how our court has handled the issue of charitable immunity. Our recent cases indicate that the question of charitable immunity often involves facts on which reasonable persons could reach different conclusions. Specifically, our court has held that "if the evidence presented creates a genuine issue of material fact, the matter cannot be determined as a matter of law." Progressive Eldercare Services-Saline, Inc. v. Cauffiel, 2016 Ark.App. 523, at 10, 508 S.W.3d 59, 66.

         In the previous appeal of this matter, we noted several issues of fact and reversed and remanded the case to the circuit court for further proceedings, and it stands to reason that Neal has a right to have those issues of fact decided by a jury. Based on article 2, section 7 of our constitution and our caselaw, we affirm the ...


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