Cape Retirement Community, Inc. v. Kuehle

In Cape Retirement Community, Inc. v. Kuehle, 798 S.W.2d 201 (Mo. App. 1990), tax exemption was denied to a not-for-profit corporation that operated a retirement facility which screened its residential applicants based on financial resources. Despite the fact that the retirement community had in fact assumed obligations of insolvent residents, the appellate court held that "it is not enough that Cape Retirement regularly underwrites some of the costs of qualified residents and agrees to fully support selected residents if such residents suffer financial reverses because its retirement home is not equally available to both rich and poor." Id. at 204. Critical to the Missouri court's decision was the fact that the financial screening requirements "limited meaningful access to the retirement home by the majority of the elderly." 798 S.W.2d at 203. By screening out lower income individuals, the application process was "structured to avoid the result of providing services to both the rich and the poor" and thereby failed to "benefit society generally" and "an indefinite number of persons."' Id. at 203-04. Consequently, the court found that the retirement home was not operated" exclusively' for charitable purposes."' Id. at 204.