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FEBRUARY 2013
FUNERAL HOME & CEMETERY NEWS
S ec t i on A
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By Atty. Harvey I. Lapin
Harvey I. Lapin, P.C., is a member of the Illinois Bar and Florida Bar. He
is a member of the faculty at the John Marshall Law School in Chicago
and is presently teaching the subject of Tax Exempt Organizations. He is
also associated with Florida-based law firm Sachs, Sax & Caplan, leading
the firm’s Funeral, Cemetery and Cremation Practice Group.
He has written numerous articles on the subject of taxation, funeral
and cemetery law.
The subject discussed in this article and future articles resulted from
the questions from readers. If you have any questions about the top-
ics covered in this column or in obtaining professional assistance, please
contact the author c/o Harvey I. Lapin, 2592 Chedworth Ct, Northbrook,
Illinois 60062. Phone (847)509-0501 or fax to (847)509-1027.
The author writes articles for CB Legal Publishing Corporation also
publishes the Release Form Kit, which was prepared by the author and
has been recently updated and revised. This Kit contains Release and
Hold Harmless forms for Funeral Homes, Cemeteries and Crematories to
use in situations where it has resolved a complaint with a customer, and
wants to be sure that there will be no further action by the customer or
their relatives. The forms can be purchased on a custom basis with your
business name and addressed preprinted at the top of each form. Call
Cheryl Lapin and she will send you an order form that contains the cur-
rent prices. See the number below.
The author also writes more extensive articles on subjects of inter-
est to the industry in the newsletter Cemetery & Funeral Business and
Legal Guide published by CB Legal Publishing Corporation. Anyone in-
terested in subscribing can contact Cheryl Lapin, at the address of CB
Legal Publishing Corporation, 2592 Chedworth Ct, Northbrook, Illinois
60062. Future Issues of the Cemetery & Funeral Business and Legal
Guide are only available in an electronic PDF version. The Subscription
price is $75.00 per year. Readers that wish to subscribe should send
a check in the amount of $75.00 payable to CB Legal Publishing
Corporation along with the name of the subscribing individual and the
email address to be used.
Legal
Speak
Dispute Over the Transfer of
Irrevocable Pre-Need Contracts
Many state pre-need funeral laws provide that a pre-need
funeral contract can be irrevocable in order for a purchaser
to comply with the requirements for public aid. Sometimes
there is an issue of whether an irrevocable pre-need funeral
contract can be transferred to a new provider. Obviously,
if the original provider is no longer in business or has been
sold there should be a mechanism in the law allowing for a
transfer to a new provider or refund to the purchaser. An-
other issue may arise if another provider in the competi-
tive area actively encourages consumers that have such con-
tracts to transfer the contract to them.
Of course the laws of the various states may differ on
these issues so readers should check on their own state laws.
Recently, the Supreme Court of Mississippi in the case of
Coleman Funeral Home (“Coleman”) v. Waller Funeral
Home (“Waller”), 2012 WL 5519652 (November, 2012)
dealt with these issues in the appeal of a decision by a jury
and trial court.
According to the Supreme Court, the facts were as fol-
lows:
Waller had sold pre-need funeral contracts (“Contract”)
6. The case should be remanded to the lower court for
consideration of Waller’s claim of lost profits.
While this case deals with Mississippi laws, it is impor-
tant because of the issue related to interference with pre-
need contracts by advertising and other means. Industry
members that engage in misleading advertising related to
preneed sales in order to encourage consumers to transfer
preneed contracts from a competitor or not to enter into
the preneed contract in the first place should be aware
there is now a precedent for challenging their actions.
and placed the funds received in the Mississippi Funeral Di-
rectors Trust Fund (“Trust”). Waller had been established in
1977 and Coleman was established in 2004. Coleman had
advertised that it would perform funeral services for custom-
ers who previously had entered in to pre-need contracts with
other providers. One customer (“Parham”) sought to have his
Contract transferred to Coleman. Waller denied the transfer
and the Mississippi Secretary of State, the administrator of
the state law, confirmed to Coleman that then current law
allowed a Contract to be irrevocable and non transferable.
Coleman and Parham filed a Declaratory Judgment Action
in the lower court. Waller responded with a counterclaim
that Coleman had interfered with the Contract, had violated
the federal Latham Act with advertising that misrepresented
the laws and defamed Waller’s reputation. Waller also asked
for punitive damages and reimbursement for legal expenses.
Waller was successful with a partial summary judgment mo-
tion holding the Contract was valid, enforceable, irrevocable
and not transferable. The remainders of the issues were con-
sidered by a jury that awarded both actual and punitive dam-
ages to Waller. The lower court subsequently eliminated the
punitive damages on the basis Coleman had a negative net
worth, but Waller was awarded reimbursement for legal fees.
Both sides appealed.
The Supreme Court reviewed the arguments of Coleman
and Waller on the issues and concluded the following:
1. Under the Common law and the statutory provision at
the time the Contract was entered into if the Contract
did not contain a revocation clause it was irrevocable and
non transferable;
2. While Waller had proven that Coleman had interfere
with the Contracts there was no damages because all the
future Contracts were valid and enforceable;
3. The jury’s determination that Coleman had falsely and
deceptively advertised in violation of the federal Lanham
Act was supported by the evidence;
4. The trial judge’s determination to award attorney fees
was not erroneous;
5. The trial judge’s determination to eliminate punitive
damages was not erroneous; and
Florence Katy Johnson
James W. Russo
The 1940s Hearse
William L. Russo accepts 75-Year Plaque from Dorthea Jones
Sacred Hope Funeral Home Celebrates
75 Years of Service
Continued from Front Page
well as, contemporary fa-
vorites delighted the at-
tendees amid the beauty
of Christmas wreaths and
poinsettia.
Russo was presented
with a plaque in recogni-
tion of Sacred Hope’s 75
years of service by
Dorth-
ea Jones
, president of the
Houston Funeral Directors
and Morticians Association
.
Guests included
Jason Alt-
ieri
, president of
Common-
wealth Institute of Funeral
Service
, where Mr. Russo
graduated valedictorian in
1973 and now serves on
the alumni board, as well
as area funeral directors,
members of the communi-
ty and friends.
Opened on September
11, 1937, Sacred Hope
has continued to serve
the Houston communi-
ty with the commitment
set forth by its co-found-
ers. Mr. Russo’s paternal
grandmother,
Florence
Katy Johnson
, and his
father,
James W. Russo
,
were dedicated to provid-
ing a befitting, respectable
funeral service unlike any
provided heretofore to all
who entered the doors of
Sacred Hope.
In an excerpt from a
1940s Sacred Hope souve-
nir booklet:
“The modern funeral
service, as viewed by
the directors of Sa-
cred Hope Funeral
Home, has a double
purpose. It is first, of
course, a tribute of
farewell to one who
has departed. But
equally important, it
should be a source of
consolation to those
who remain. Instead
of adding grief, these
last rites should be a
beautiful memory.
They should bring
comfort and peace
through the digni-
fied beauty of the ser-
vice.”
Sacred Hope continues to
be a family-owned and op-
erated funeral home. Mr.
Russo is active in various
local, state and national fu-
neral industry associations.
He is past-president of the
Houston Funeral Direc-
tors and Morticians Asso-
ciation, and a member of
the
Houston Metropolitan
Funeral Directors Associa-
tion
, the
Independent Fu-
neral Directors Association
of Texas
, and the
National
Funeral Directors and Mor-
ticians Association
.
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