Marion Hospital Ass'n v. Lanphier

688 S.W.2d 322, 15 Ark. App. 14, 1985 Ark. App. LEXIS 1937
CourtCourt of Appeals of Arkansas
DecidedMay 1, 1985
DocketCA 84-254
StatusPublished
Cited by10 cases

This text of 688 S.W.2d 322 (Marion Hospital Ass'n v. Lanphier) is published on Counsel Stack Legal Research, covering Court of Appeals of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Marion Hospital Ass'n v. Lanphier, 688 S.W.2d 322, 15 Ark. App. 14, 1985 Ark. App. LEXIS 1937 (Ark. Ct. App. 1985).

Opinion

Donald L. Corbin, Judge.

This is an appeal from a decision of the Arkansas Workers’ Compensation Commission ruling that appellant, Marion Hospital Association, was not immune from liability to appellee, Mary Lanphier, for Workers’ Compensation benefits.

The main issue in this case is whether the Commission’s decision that appellant failed to sustain its burden of proof that it was an institution maintained and operated wholly as a public charity so as to come within one of the enumerated exceptions to employment contained in Ark. Stat. Ann. § 81-1302(c)(l) (Repl. 1976), is supported by substantial evidence. We reverse and remand.

Since Arkansas has no case law construing Ark. Stat. Ann. § 81-1302(c)(l), we will examine cases which defined charitable institutions for purposes of taxation or tort immunity for guidance. In Williams v. Jefferson Hospital Ass’n., 246 Ark. 1231, 442 S.W.2d 243 (1969), summary judgment was granted in favor of Jefferson Hospital Association on the basis of the doctrine that charitable institutions were immune from tort liability. Williams had brought a tort action against Jefferson Hospital Association and two doctors alleging their negligence in abandoning him after assuming professional responsibility for his treatment. Williams did not controvert the finding that Jefferson Hospital fell into the category of charitable institutions, but argued instead that Arkansas’ doctrine of charitable immunity from tort should be abolished. Citing numerous reasons for not abandoning this doctrine, the Court affirmed the trial court’s order finding Jefferson Hospital to be a charitable institution. In its discussion the Court reviewed previous cases and stated as follows:

Appellant argues that the harshness of the doctrine requires its abandonment. Concededly that attack would be more persuasive if our court applied the doctrine in a broad and liberal manner, as has been true in some jurisdictions. Our court has in fact given the term ‘charitable immunity’ a rather narrow construction. ‘A hospital * * * free to all who are not pecuniarily able, and supported partly by private contributions and partly by fees from patients, but producing no profit, is a purely public charity.’ (Italics supplied.) That statement is found in the early case of Hot Springs School Dist. v. Sisters of Mercy, 84 Ark. 497, 106 S.W. 954 (1907). In Crossett Health Center v. Croswell, 221 Ark. 874, 256 S.W.2d 548 (1953), reference was made to those agencies, including hospitals, entitled to the immunity and they were described as created and maintained exclusively for charity. (Italics supplied.) In that case the hospital was found to fall short of ‘purely benevolent and charitable purposes essential to clothe its property with trust attributes.’ A tort judgment was affirmed. In Helton v. Sisters of Mercy, 234 Ark. 76, 351 S.W.2d 129 (1961), we discussed the many factors which led to the conclusion that the hospital was a public charity. Those were the articles of incorporation; that exemption from all forms of taxes, the free labor of the Sisters; and ‘its doors are always open to anyone, regardless of creed, needing hospitalization’ irrespective of ability to pay . . .

In Burgess, Judge v. Four States Mem. Hosp., 250 Ark. 485, 465 S. W.2d 693 (1971), the Arkansas Supreme Court stated that since all moneys received by Four States Memorial Hospital were expended for its maintenance and improvement, the hospital was within the scope of the constitutional exemption from taxation.

In its decision holding that appellant was not within the exception to employment contained in Ark. Stat. Ann. §81-1302(c)(1), the Commission listed the following factors it believed should be followed in determining whether or not a particular hospital is an institution “maintained and operated wholly as” a public charity:

(1) Do the articles of incorporation provide that the purpose of the hospital is charitable in nature?
(2) Is the corporation maintained for the private gain, profit or advantage of its organizers, officers or owners either directly or indirectly?
(3) Does the hospital have capital stock or does it have provisions for distributing dividends or making a profit?
(4) Does the hospital derive its funds from public and private charity as well as those who are able to pay?
(5) Do all ‘profits’ go toward maintaining the hospital and extending and enlarging its charity?
(6) Is the hospital open to all who are not pecuniarily able?
(7) Are those patients who are unable to pay received into the hospital without charge, without discrimination on account of race, creed or color and are they given the same care as those who are able to pay?
(8) Is the hospital exempt from the payment of both state and federal taxes?

The Commission found that appellant met all of the above enumerated factors with the exception of part of (7) which provides that non-paying patients must be given the same care as those who are able to pay. The Commission concluded that “Although we feel that the Association was intended to be a charitable hospital, we do not feel they sustained their burden of proving that the hospital was, in fact, operated and maintained as a wholly charitable hospital.” This conclusion was based in large part upon the testimony of Helen Paxton, a patient of the hospital over a five-year period. Helen Paxton testified that she felt that as long as her insurance and Medicaid benefits paid bills she incurred while a patient in the hospital, she was provided adequate care. However, she stated that after her insurance and Medicaid benefits ran out, the hospital’s attitude towards her changed. Helen Paxton testified that the nurses would not come as often when she called for them. During one of her hospitalizations, she stated that she received a letter from a collection agency in Tulsa, Oklahoma, informing her they were going to take her home away from her. Objection to this testimony was sustained by the administrative law judge. She testified further that she received a visit from a woman who worked in the office of the hospital informing her that all of her back bills had to be paid and that she would have to leave the hospital the following day. Helen Paxton stated she called her husband who contacted their attorney. She testified that their attorney talked to the administrator of the hospital who later visited Helen Paxton in her room. He informed her that she had a very large bill and that they would have to work something out. She told him she would just have to go home and the administrator informed her that he would not make her go home. She also stated that the administrator told her that she was not going to get good treatment in the hospital. Helen Paxton testified that night she was refused pain medication.

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Bluebook (online)
688 S.W.2d 322, 15 Ark. App. 14, 1985 Ark. App. LEXIS 1937, Counsel Stack Legal Research, https://law.counselstack.com/opinion/marion-hospital-assn-v-lanphier-arkctapp-1985.