Liability of Officers of Nonprofit Organizations

Section 10-11-1. Legislative intent.

The Legislature finds and declares that the services of not-for-profit corporations, organizations, associations, boards, authorities and commissions are critical to the efficient conduct and management of the public, civic and charitable affairs of the citizens of this state. Noncompensated officers, directors, trustees and members of governing bodies of such not-for-profit entities must be permitted to operate without undue concern for the possibility of litigation arising from the discharge of their duties as policymakers.

(Acts 1987, No. 87-706, p. 1242, §1.)

Section 10-11-2. Definitions.

The following terms shall have the following respective meanings for the purposes of this chapter:

(1) QUALIFIED ENTITY.

1. Any not-for-profit corporation, association or organization which is exempt from federal income taxation under Section 501(c) of the Internal Revenue Code of 1954, as amended;
2. Any not-for-profit corporation, association or organization which is organized pursuant to Section 10-3A-1, et seq.;
3. Any organization organized under Sections 22-51-1, 22-51-2, 22-51-3, 22-51-4, 22-51-5, 22-51-6, 22-51-7, 22-51-8, 22-51-9, 22-51-10, 22-51-11, 22-51-12, 22-51-13, and 22-51-14;
4. Any self-insured fund established pursuant to Section 11-26-1, 11-26-2, 11-30-2 or 25-5-9, provided, however this chapter shall not apply to any self-insured employer operating under Section 25-5-8; and
5. Any board, authority or commission the members of which are appointed by the governing body or bodies of any county or municipality, or by the Governor or other constitutional officer or member of the Legislature pursuant to legislative or constitutional authorization, or the members of which are constitutionally or legislatively delegated.

(2) OFFICER. Any officer, director, trustee or member of the governing body of a qualified entity who does not receive compensation for serving in such capacity. A per diem amount of not more than $300.00 per day and actual, reasonable, and necessary expenses shall not constitute compensation for the purposes of this chapter. Provided, however, that the immunity granted herein shall not extend to officers and directors of any board, authority or commission dealing with pari-mutuel betting, gambling or games of chance.

(Acts 1987, No. 87-706, p. 1242, §2.)

Section 10-11-3. Officer immune from suit; exception for willful misconduct, fraud or gross negligence; for-profit subsidiary not immune.

Any noncompensated officer of a qualified entity shall be immune from suit and not subject to civil liability arising from the conduct of the affairs of such qualified entity except when the act or omission of such officer, which gives rise to a cause of action, amounts to willful or wanton misconduct or fraud, or gross negligence. Provided however, such immunity shall not, except to such extent as may otherwise be provided by law, extend to the qualified entity, to a for-profit subsidiary of such qualified entity or to the officers of such for-profit subsidiary but only to the qualified entity's officers as defined in this chapter. Nothing contained herein shall be construed to immunize the corporate entity or qualified entity for the acts or omissions of noncompensated officers as defined in this chapter.

(Acts 1987, No. 87-706, p. 1242, §3.)

Section 10-11-4. Application.

Nothing in this chapter shall be construed to affect any civil action brought by any qualified entity against any officer of such qualified entity or to create any liability that did not exist prior to the chapter's passage or to diminish any immunity from suit or liability now enjoyed by a qualified entity or any officer thereof. The provisions of this chapter shall not apply to any claim, cause of action, action or suit brought against an officer for any personal injury to or death of another person or property damage arising out of an accident inflicted by that officer while acting within the line and scope of said officer's duties.

(Acts 1987, No. 87-706, p. 1242, §4.)

Section 10-11-5. Construction.

Nothing in this chapter shall be construed to affect any action brought under Title 41, Chapter 5.

(Acts 1987, No. 87-706, p. 1242, §5.)