In a case involving personal injuries suffered at Monmouth University during a Martina McBride concert, the New Jersey Supreme Court recently held that the university was immune from suit under the Charitable Immunity Act at N.J.S.A. 2A:53A-7 et. seq. because the university was engaged in performing the educational objectives it was organized to promote at the time of the concert. Green v. Monmouth University, - N.J. – (2019).
Plaintiff, Francis Green sued Monmouth University for injuries he allegedly sustained while attending a Martina McBride concert. It was held in a university facility but was open to the public.
The question for the Court was whether in hosting the concert the university was engaged in performing the educational objectives it was organized to promote and whether the plaintiff was a direct recipient of those good works when she attended the concert. The Court answered both questions in the affirmative.
Distilled to its essence, an entity qualifies for charitable immunity when it (1) was formed for non-profit purposes; (2) is organized exclusively for religious, charitable or educational purposes; and (3) was promoting such objectives and purposes at the time of the injury to the plaintiff who is then a beneficiary of the charitable works.
The Court held that all of the prongs were met in this case and upheld the dismissal of the plaintiff’s claim.
Life Insurance Void without Insurable Interest
In a case involving a life insurance policy, the New Jersey Supreme Court recently held that the transfer of control over a life insurance policy and its benefit from a named beneficiary who had an insurable interest to investors who did not, did not satisfy New Jersey’s insurable interest requirement and, therefore, was void. Sun Life Assurance Company of Canada v. Wells Fargo, - N.J. – (2019).
In Sun Life, a group of investors paid for a life insurance policy through a trust. The insured was a stranger to them. When the policy was issued, the insured’s grandson was the beneficiary. The policy in question is known as a “STOLI” – a stranger-originated life insurance policy.
The Supreme Court found that STOLI policies run afoul of New Jersey’s insurable interest requirement and are against public policy. Therefore, the policy was void.
State law allows a policy to be procured only if the benefits are payable to someone with an ‘insurable interest” in the person whose life is insured. N.J.S.A. 17B:24-1.1(b). The beneficiary can be the insured herself, a close relative, a person, corporation or charity with certain financial ties to the insured, or select others. N.J.S.A. 17B:24-1.1(a). Distinguishing such policies from viatical settlements under N.J.S.A. 17B:30B-10(a), the Court held that the policies violate public policy and, therefore, are void ab initio – that is it is though the policy never came into existence. The Court rejected defendant’s argument that the policies were merely voidable – meaning that an insurer may waive or be estopped to raise the fraud.
The Court then concluded that, depending upon the circumstances, a party may be entitled to a refund of premium payments it made on the policy. Some of the factors to be used in this determination are the party’s level of culpability, its participation in or knowledge of the illicit scheme, and its failure to notice red flags.