Antioch St. Johns Cemetery Company D/B/A American Memorial Park, Grand Prairie, Texas Gerald Weatherall And Beverly Randall-Weatherall v. Texas Department of Banking Commissioner

Opinion

ACCEPTED 03-15-00341-CV 7260424 THIRD COURT OF APPEALS AUSTIN, TEXAS 10/6/2015 8:57:09 PM JEFFREY D. KYLE CLERK

FILED IN 3rd COURT OF APPEALS 03-15-00341-CV AUSTIN, TEXAS 10/7/2015 4:41:09 PM IN THE JEFFREY D. KYLE THIRD DISTRICT COURT OF APPEALS Clerk AUSTIN, TEXAS __________________________________________________________________

Antioch St. Johns Cemetery Company d/b/a American Memorial Park, Grand Prairie, Texas; Gerald Weatherall; and Beverly Randall-Weatherall Appellants

v.

Texas Department of Banking Commissioner Appellee __________________________________________________________________

On Appeal from the 261st Judicial District Court, Travis County, Texas _______________________________________________________________

BRIEF OF APPELLANTS ANTIOCH ST. JOHNS CEMETERY, GERALD WEATHERALL, AND BEVERLY RANDALL-WEATHERALL __________________________________________________________________

Kevin S. Wiley, Jr. LAW OFFICES OF KEVIN S. WILEY, JR. 325 N. St. Paul Street, Suite 4400 Dallas, Texas 75201 Telephone: (469) 619-5721 Telecopier: (469) 619-5725 Email: kevinwiley@lkswjr.com ATTORNEY FOR APPELLANTS APPELLANTS INDEX

CERTIFICATE OF INTERESTED PERSONS

Appellants hereby certify the following constitutes a list of interested persons who are

financially interested to the outcome of the appeal:

1) Antioch St. Johns Cemetery d/b/a Memorial Park Cemetery – Appellant Kevin S. Wiley, Jr. 325 North St. Paul Street, Suite 4400 Dallas, TX 75201 Counsel for Appellant

2) Gerald Weatherall Kevin S. Wiley, Jr. 325 North St. Paul Street, Suite 4400 Dallas, TX 75201 Counsel for Appellant

3) Beverly Randall-Weatherall Kevin S. Wiley, Jr. 325 North St. Paul Street, Suite 4400 Dallas, TX 75201 Counsel for Appellant

4) Texas Department of Banking Ann Hartley Assistant Attorney General General Litigation Division Office of the Attorney General of Texas P.O. Box 12548 Austin, Texas 78711-2548 Counsel for Appellee

i TABLE OF CONTENTS

INDEX OF AUTHORITIES .....................................................................................................iii

RECORD AND PARTY REFERENCES ................................................................................. 1

STATEMENT OF THE CASE ................................................................................................. 1

ISSUE PRESENTED ................................................................................................................ 1

Whether the trial court erred in deciding that the Administrative Law Judge’s findings of fact and conclusions of law and penalties assessed against the Appellants for violations of the Texas Health and Safety Code were warranted with the facts submitted to the ALJ during a contested case hearing.

FACTUAL BACKGROUND …………………………………………………………………… 2

ARGUMENT …………………………………………………………………………………. 3

CONCLUSION AND PRAYER ……………………………………………………………. 7

CERTIFICATE OF SERVICE ……………………………………………………………….…8

ii INDEX OF AUTHORITIES

Cases:

Castleberry v Branscomb 721 S.W. 2d 270 (Tex. 1986)……………………………………………………………… 7

R.R. Com'n of Texas v. Torch Operating Co., 912 S.W.2d 790, 792 (Tex.1995)…………………………………………………………. 4

Texas Health Facilities Com'n v. Charter Medical-Dallas, Inc., 665 S.W.2d 446, 452 (Tex.1984)…………………………………………………………. 4

Statute:

Texas Government Code § 2001.174 …....................………………….....………………… 3

Tex. Gov't Code Ann. § 2001.174(2)(E)....................………………….....………………... 4

Texas Health & Safety Code § 711.003……………………………………………………. 5

Texas Health and Safety Code § 711.021…………………………………………………. 6

iii RECORD AND PARTY REFERENCES

Appellants Antioch St. Johns Cemetery Company d/b/a American Memorial

Park, Grand Prairie, Texas, Gerald Weatherall and Beverly Randall-Weatherall file

this, its Brief of Appellants. Antioch St. Johns Cemetery Company d/b/a American

Memorial Park, Grand Prairie, Texas, Gerald Weatherall and Beverly Randall-

Weatherall will be referred to as “Appellants.”

Appellee, the Texas Department of Banking will be referred to as the

“Appellee.”

The clerk’s record is volume 1-3. References in the Brief of Appellants to the

clerk’s records are shown as the Banking of Department page numbers to Volume 3

of the Clerk’s Record: “[DB ___]” with the page number(s) in the brackets.

STATEMENT OF THE CASE

This case involves Appellant seeking redress for fees and fines imposed by

the Appellee beyond the legal and factual parameters promulgated by the State of

Texas.

ISSUE PRESENTED

Whether the trial court erred in deciding that the Administrative Law Judge’s

findings of fact and conclusions of law and penalties assessed against the Appellants

APPELLANTS’ BRIEF PAGE - 1 for violations of the Texas Health and Safety Code were warranted with the facts

submitted to the ALJ during a contested case hearing.

FACTUAL BACKGROUND

Appellant Antioch St. Johns Cemetery Company d/b/a American Memorial Park, Grand Prairie, Texas (“St. Johns”) is an entity operating in the State of Texas as cemetery facility. Appellants Gerald Weatherall, performed his duties as St. Johns’ President, and Appellant, Beverly Randall-Weatherall, was its Vice-President. Appellee is an agency promulgated by the Texas Finance Code in and for the State of Texas that administers the operations of cemeteries under the provisions of the Texas Health & Safety Code. On November 25, 2013, the Texas Banking Commission submitted findings of fact that assessed administrative penalties against Appellants, Gerald Weatherall and Beverly Randall-Weatherall as responsible parties operating the St. Johns cemetery. Gerald Weatherall and Beverly Randall-Weatherall were aggrieved by the Decision rendered by the Texas Banking Commissioner in that the Decision was in error and was not supported by the evidence. Specifically, Gerald Weatherall and Beverly Randall-Weatherall showed that the Texas Banking Commissioner that they should not have had penalties imposed against them since the evidence showed that they timely ameliorated any financial discrepancies under Texas Administrative Code § 26.2. Gerald Weatherall and Beverly Randall-Weatherall also showed that corrective action was taken in compliance with the Reports for Examination and audits that occurred on June 20, 2011 and June 30, 2011 to correct the defective

APPELLANTS’ BRIEF PAGE - 2 condition of the cemetery plots. Appellants further disputed the decision of the Texas Banking Commissioner which affirmed the Administrative Law Judge’s Opinion and Order as it pertains to the sufficiency of the evidence, findings of fact, and conclusions of law. Appellants asserts that the Decision of the Texas Banking Commissioner is not supported by the evidence and is against the overwhelming weight of the evidence as to be clearly wrong or manifestly unjust. For this, they appealed the Judicial Review of same to the 261st Judicial District of Tarrant County, Texas. Upon the judicial review, Gerald Weatherall and Beverly Randall-Weatherall requested that the administrative penalties assessed against them in their individual capacities be denied. However, the trial court found that the penalties imposed by the ALJ were within the scope of penalties awarded for such violations. II. ARGUMENT Texas Government Code § 2001.174 provides the scope of judicial review from an agency decision. The code states in pertinent part:

If the law authorizes review of a decision in a contested case under the substantial evidence rule or if the law does not define the scope of judicial review, a court may not substitute its judgment for the judgment of the state agency on the weight of the evidence on questions committed to agency discretion but:

(1) may affirm the agency decision in whole or in part; and

(2) shall reverse or remand the case for further proceedings if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:

(A) in violation of a constitutional or statutory provision;

APPELLANTS’ BRIEF PAGE - 3 (B) in excess of the agency's statutory authority;

(C) made through unlawful procedure;

(D) affected by other error of law;

(E) not reasonably supported by substantial evidence considering the reliable and probative evidence in the record as a whole; or

(F) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

Additionally, the Texas Administrative Procedure Act (APA) authorizes a

reviewing court to test an agency's findings, inferences, conclusions, and decisions

to determine whether they are reasonably supported by substantial evidence

considering the reliable and probative evidence in the record as a whole. See Tex.

Gov't Code Ann. § 2001.174(2)(E) (Vernon Pamph.1998); Texas Health Facilities

Com'n v. Charter Medical-Dallas, Inc., 665 S.W.2d 446, 452 (Tex.1984). The

reviewing court must presume that the agency's decision is supported by substantial

evidence. See Charter Medical-Dallas, Inc., 665 S.W.2d at 453. Substantial

evidence requires only more than a mere scintilla. See R.R. Com'n of Texas v. Torch

Operating Co., 912 S.W.2d 790, 792 (Tex.1995).

In this case, the findings of fact by the ALJ were completely contradictory. At

APPELLANTS’ BRIEF PAGE - 4 some points in his decision, he states the Mr. and Mrs. Weatherall addressed the

agencies concerns regarding the violations of Texas Health & Safety Code §

711.003, or were ignorant of the law regarding the violations of the Health & Safety

Code. [DB 420 paragraph 39]. However, within the same opinion, the ALJ found

that despite the efforts of Mr. and Mrs. Weatherall, the violations were so numerous

that same showed a “willful disregard for the law that applies to perpetual care

cemeteries.” [See DB 420; par. 38]. For these reasons, Mr. and Mrs. Weatherall

contend that the ALJ opinion is arbitrary and capricious in that same observes that

best efforts were made by Mr. and Mrs. Weatherall to correct the violations of the

Texas Health & Safety Code. The testimonial evidence from Mr. Weatherall also

supports that he repaid the perpetual cemetery trust fund which was a point of

contention brought by the Banking Commission. However, the ALJ states that due

to the number of violations, Mr. and Mrs. Weatherall’s conduct was “willful” despite

any evidence or testimony indicating that the conduct was “willful.” Accordingly

the findings of the ALJ are not supported by the evidence. The Trial Court heard and

reviewed this evidence and contradictory conclusions of the ALJ, but ignored same

in upholding the ALJ opnion.

In addition to the foregoing, Appellant’s contend that the ALJ and Trial Court

APPELLANTS’ BRIEF PAGE - 5 committed an error on the law in assessing penalties against Mr. and Mrs. Weatherall

in their individual capacities.

Texas Health and Safety Code § 711.021 provides that a cemetery can be

operated by a person that is a corporate entity. This section states in pertinent part:

(a) An individual, corporation, partnership, firm, trust, or association may not engage in a business for cemetery purposes in this state unless the person is a corporation organized for those purposes.

(b) A corporation conducting a business for cemetery purposes, including the sale of plots, may be formed only as provided by this section.

The corporation must be a filing entity or foreign filing entity, as those terms are defined by Section 1.002, Business Organizations Code.

8. In Texas, a shareholder’s personal liability for obligations of a Texas

corporation is governed by Article 2.21 of the Texas Business Corporation Act [or

Sections 21.223, 21.224, and 21.225 of the Texas Business Organizations Code,

where that Code is applicable] (“Article 2.21”). Article 2.21 now provides that no

personal liability for contractual obligations exists unless the plaintiff can

demonstrate that the shareholder, owner, subscriber, or affiliate caused the

corporation to be used for the purpose of perpetrating and did perpetrate an actual

fraud on the plaintiff primarily for the direct personal benefit of the shareholder,

APPELLANTS’ BRIEF PAGE - 6 owner, subscriber, or affiliate. See Castleberry v Branscomb 721 S.W. 2d 270 (Tex.

1986).

Mr. and Mrs. Weatherall are shielded by the existence of St. Johns as a

corporate entity unless it is found that the corporation has been used to perpetuate a

fraud. Id. There was no evidence adduced in the contested hearing that Mr. and Mrs.

Weatherall utilized to perpetuate a fraud. As a result, they cannot be assessed

personally for the fines assessed against the corporate entity.

CONCLUSION AND PRAYER

By ALJ’s assessment of fines and penalties against Appellant’s Gerald and

Beverly-Randall Weatherall, the trial court committed clear error. For these reasons,

the Order upholding the fines and assessment of penalties against the Appellants

should be overturned in this case and the matter remanded for rehearing on the

merits.

APPELLANTS’ BRIEF PAGE - 7 Respectfully submitted LAW OFFICES OF KEVIN S. WILEY, JR.

_______________________________ Kevin S. Wiley, Jr. State Bar of Texas # 24029902 325 N. St. Paul Street, Suite 4400 Dallas, TX 75201 Tel. (469) 619-5721 Fax (469) 619-5725 Email: kevinwiley@lkswjr.com ATTORNEY FOR APPELLANTS

CERTIFICATE OF COMPLIANCE

Pursuant to Tex. R. App. P. 9.4(i)(3), I hereby certify that this brief contains 2888 words. This is a computer-generated document created in Microsoft Word, using 14-point typeface for all text. In making this certificate of compliance, I am relying on the word count provided by the software used to prepare the document.

___________________________ Kevin S. Wiley, Jr.

CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing Appellant Brief has been served on the Banking Commission by and through their counsel of record below on this 1st day of October, 2015 via electronic mail to the parties listed below.

APPELLANTS’ BRIEF PAGE - 8 Ann Hartley Assistant General Counsel Texas Department of Banking 2601 N. Lamar Blvd. Austin, Texas 78705

/s/ Kevin S. Wiley, Jr.

APPELLANTS’ BRIEF PAGE - 9 APPELLANT APPENDIX

TAB 1 - Proposal For Decision Following Exceptions and Final Order [DB 399-430] TAB - 1 BANKING DEPT 399

/^^**\

Docket No. BE-13-11-326

IN THE MATTER OF ANTIOCH § BEFORE THE BANKING ST. JAMES CEMETERY COMPANY § d/b/a AMERICAN MEMORIAL PARK, § GRAND PRAIRIE, TEXAS, (Certificate § of Authority No. 74, expired); § § GERALD WEATHERALL, ST. AS ITS § COMMISSIONER OF TEXAS PRESIDENT AND IN HIS INDIVIDUAL § CAPACITY; AND, § § BEVERLY RANDALL-WEATHERALL § AS ITS VICE-PRESIDENT § AUSTIN, TRAVIS COUNTY, TEXAS

PROPOSAL FOR DECISION FOLLOWING EXCEPTIONS

ThisProposal for Decision Following Exceptions is issued following consideration of

the record consisting of testimony, documentary evidence, andargument ofthe parties, which

were received at a contested casehearing onJune 10,2013, andExceptions to theProposal

for Decision that were filed on October 7,2013.

STATEMENT OF THE CASE

This is an enforcement action involving a perpetual care cemetery, which staffof the

Department ofBanking initiated against the respondents: Antioch St. James Cemetery Company d/b/a American Memorial Park, Grand Prairie, Texas; Gerald Weatherall, Sr., as its

President and individually; and, Beverly Randall-Weatherall as its Vice-President Staff

alleges that the respondents violated provisions ofthe Texas Health and Safety Code, Chapters 711 and 712, and Texas Finance Commission Rules, 7Tex. Admin. Code Chapter 26; and, of Commissioner Order 2012-011, signed onMay16,2012. Staffseeks

administrative penalties against the company, Mr. Weatherall in his capacity as president and BANKING DEPT /in 00

his individual capacity, and against Ms. Randall-Weatherall in her capacity as vice-president

ofthe company. Antioch St. James Cemetery Company d/b/a American Memorial Park will

be referred to as the "Cemetery Company." References to the transcript ofthe contested case

hearing will be "[TR (page number)]."

Charges of Violations

The department staff charged the respondents with up to fifteen types of violations

involvingten separate Health and SafetyCode provisions and five Finance Commission

Rules,with failure to complywith and violations of anEmergency Order To Cease and Desist

that is dated May 16,2012, and with operating a perpetual care cemetery without a certificate

of authority. Department staff argued that the respondents' actions established apattern of

wilful disregard for the requirements oflaw concerning operation ofthe Cemetery Company, within the meaning ofHealth Code §§711.056 and 712.0442, and that the Commissioner

should impose administrative penalties and costs of thisproceeding against all the

respondents, jointly.and severally. The specific violations with corresponding provisions of the Health and Safety Code, the Finance Commission Rules, and the Cease and Desist Order, are set forth intheNotice of Hearing that was signed on May 2,2013.

DISCUSSION

Appearances

Department staff, represented by Deborah H. Loomis, Assistant General Counsel, presented evidence of violations with testimony from MarkE. LaPlante and Russell Reese and

with documents, including Reports ofExamination from 2010,2011, and 1012; spreadsheets showing information from operations ofthe cemetery; records conceming four complaints DOB Docket 13-11-326 Antioch St James Cemetery Company, et al. Proposal for Decision Following Exceptions Page 2 BANKING DEPT 401

from 2011 and 2012; and, other correspondence. Ultimately, the staffrecommended the

imposition ofadministrative penalties within a range between $56,000 and $70,000 for

fourteen violations. [TR 91-92].

Mr. Gerald D. Weatherall, Sr., appeared for the Cemetery Company, as former

president ofthe company, and for himselfindividually. Mr. Weatherall also owns and

operates the Eternal Rest Funeral Home that islocated inPiano, Texas. [TR 108; DOB

Exhibit 1, p. 47]. Ms. Weatherall appeared as former vice-president ofthe Cemetery Company. Mr. Weatherall presented evidence in the form oftestimony and documents. He declined to offer an original plat ofthe cemetery, which included what appeared to be anewer depiction ofSection Jthat was taped over the original version on that plat. In general, Mr. Weatherall testified about his efforts to address the violations after receiving notifications from the Department He testified that they hired aman to run the cemetery and contract workers and that the only time he got involved was at the inspections. [TR 100,101 ]. Mr. Weatherall testified that Ms. Randall-Weatherall did not participate in any ofthe operations of the Cemetery Company and should not be held responsible for any ofthe violations. Mr. Weatherall felt that he tried to do everything that the Department asked them to do. He testified that once he found out they were not equipped to handle acemetery, they put it into Chapter 7 bankruptcy, terminated the company's corporate charter, and lost title to the cemetery propertythrough foreclosure.

The Administrative Law Judge concludes that Mr. Weatherall is responsible for violations ofthe law and recommends assessment ofan administrative penalty against himi as president ofthe cemetery company and individually, and against the cemetery company, as set #^ forth in the recommendation that follows.

DOB Docket 13-11-326 Antioch St James Cemetery Company, etal. Proposal for Decision Following Exceptions paffe o BANKING DEPT 402

/$^v Applicable Law

Pertinent law for the regulation of perpetual care cemeteries is found inthe Health and

Safety Code, Chapters 711 and 712, and Finance Commission Rules: Title 7, Part 2, Chapter 26 ofthe Texas Administrative Code. The applicable provisions are set out in detail in the

Notice of Hearing, appear inthe Emergency Cease and Desist Order, and will beset forth in the Conclusions of Law conceming each asserted violation.

Discussion of the Evidence

The Cemetery, the Cemetery Company and the Weatheralls' Ownership This matter involves acemetery that at least apart ofwhich, named Antioch Cemetery, was dedicated in 1896. [Weatherall Exhibit 3J. The property is located between Avenue D and Hardy Road in Grand Prairie, Dallas County, Texas. The record shows that the cemetery property was not owned by theCemetery Company.

The Cemetery Company was organized as acorporation beginning in 1952. [TR 111]. Mr. Weatherall was president and adirector ofthe corporation and Ms. Randall-Weatherall was vice-president and adirector ofthe corporation. The Secretary ofState forfeited the corporate charter in early 2011 for failure to pay franchise taxes and reinstated the charter by November, 2011, after payment was made. At some time in 2012, the respondents terminated or dissolved the corporation through the Secretary ofState, after the bankruptcy filing and forfeiture ofthe cemetery property. [TR 110]. On June 3,2009, Mr. Gerald Weatherall, Sr., and Ms. Beverly Ann Randall- Weatherall purchased the cemetery property and the cemetery company from Mr. Robert Wright and Mr. Ray Windham. [TR 11]. The records for the purchase and change of

DOB Docket 13-11-326 Antioch St. James Cemetery Company, etal. Proposal for Decision Following Exceptions Page 4 BANKING DEPT 403

ownership ofthe cemetery company and Certificate of Authority No. 74, including the

documentation thatthe respondents filed withtheDepartment, showed 50% ownership by

Weatherall Family Funeral Service, LLC, and 50% ownership by Beverly-Randall Weatherall.

At the time ofthe 2011 examination, Mr. Weatherall reported that he owned 50% ofthe

cemetery property and company,but documentation ofthat was not provided. [TR 32]. The

information required to complete a changeof ownership was submitted to the Department,

which recorded the change of ownership and ofCertificateof Authority No. 74 on or about

December 21,2009. [Id.]. At some time after the February 7,2012, Report of Examination,

the Cemetery Company filed for bankruptcy under Chapter 7 and the bankruptcy proceedings

ended with the Cemetery Company being converted b ack to the respondents,becausethere

were no assets to sell. Also after February 7,2012, the respondents transferredtitle to the

property on which the cemetery is located by deed in lieu of foreclosure to Avery Weatherall,

Gerald Weatherall, Sr.'s son. Avery Weatherall lent the money for the Weatheralls' purchase

ofthe propertyin 2009.

Overview ofthe Asserted Violations

The focus ofthis proceeding was directed to the general condition ofthe cemetery

grounds, the record-keeping, and the maintenance ofthe Perpetual Care Trust Fund ("PCTF")

by the cemetery company, and the operations within two areas ofthe northeast portion ofthe

cemetery. [See generallyt DOB Exhibits 2 and 3]. The two areaswere identified as "Section

J" and "New Section J" and in this proposal for decision will be referred to in combination as

"Section J." [Weatherall Exhibit 3 and DOB Exhibit 4]. The records, although too poorly

kept to enable an exact count, show that few burialstook place in Section J before 2009, when

DOB Docket 13-11-326 Antioch St James Cemetery Company, et al. Proposal for Decision Following Exceptions Page 5 BANKING DEPT 404

the respondents took over operation. The records show a total of approximately24 burialsin

that section between 1984 and 2008, with no burialsrecorded during 10 ofthose 25 years.

POB Exhibit 3]. Approximately 132 burials were done from 2009 through 2012, with 106

ofthose done in 2010 and 2011. [Id.]. MrWeatherall testifiedthat 80-83% ofthe graves were

sold directly to his funeral home [TR 129] andthat many ofthe graves were donated for

hardship cases.

Reports ofExamination from the Staffand Responses from the Cemetery Company

From the outset ofthe respondents' ownership, Department staff reviewed the

respondents' operations ofthe cemetery. Staffperformed three audits orexaminations ofthe

operations ofthe Cemetery Company and prepared aReport of Examination ("ROE") for

each ofthe audits/examinations. As aresult ofthe examinations and the inadequacy ofthe

respondents' attempts of compliance, the Commissioner of Banking issued a Cease and Desist

Order in 2012,andthe staffinitiated this enforcement proceeding.

First Audit: Period Ended June 30.2010

The first audit ofthe Cemetery Company's operations covered the period to June 30,

2010. POB Exhibit 1, pp. 7-20]. In general, the ROE noted that cemetery operations were

adequate, the property and grounds were adequately maintained, and nocomplaints were on

file. The ROE documented what was stated tohave been 11 violations of law [TR 16], involving at least 67 instances ofviolation. POB Exhibit 1, pp. 7-20]. The ROE from this audit was sent to the respondents by letter dated August 2,2010, and directed correction by no later than September 6,2010. [DOB Exhibit 1, pp. 8-9]. The evidence does not present an accurate picture ofthe respondent's response to this ROE. [TR 21].

(f^ DOB Docket 13-11-326 Antioch St JamesCemeteryCompany, etal. Proposal for Decision Following Exceptions Page 6 BANKING DEPT 405

Second Audit: June 20.2010 to June 30.2011

The results ofthe second audit, which coveredthe period of June 20,2010 to June 30,

2011, are contained in the ROE that was sent to the respondents by letterdated October 19,

2011. POB Exhibit 1, pp. 22-41]. This ROEnoted thatthe overall condition ofthe operation

ofthe Cemetery Company had deteriorated. The corporate charter hadbeen forfeited as of

January 28,2011, for failure to pay franchise taxes. The grounds werein poor condition and

a complaint was on file. In the complaint, a family was concerned aboutthe condition ofthe

grandfather's grave. [TR 22; DOB Exhibit 1, pp. 69-72]. Mr. LePlante inspected the cemetery

on August 11,2011, in response to the complaint and concluded, in general, thatthe

complaint was well founded. pOB Exhibit 1,p. 73]. Mr. LePlante noted that poor condition

ofthe grounds, mostly in Section J, which included sunken-in graves, what appeared tohave

been part of a casket protruding from theground, graves laid out in different directions, poor

marking of graves without headstones, veryold headstones having beenbroken, with some

appearing to havebeen pushed offof graves and partially covered by dirt inthe excess dirt

pilein the far northeast corner ofthe cemetery. [TR 25]. Lotpins that locate sections ofthe

cemetery were lying on the ground in various places. Mr. Weatherall responded to the

complaint and parts of Mr. LePlante's report ofhisAugust 11 site visit byletter dated

September 6,2011. Mr. Weatherall's response included hisunderstanding that the headstones

found inthe dirt pile were inashed that was there when they purchased the property, which was torn down to make room for more burial plots. pOB Exhibit 1, p. 82].

The 2011 ROE listed 19 violations of law, including 8 repeat violations (from the audit in 2010), which involved more than 350 instances ofviolations. [DOB Exhibit 1, pp. 21-

DOB Docket 13-11-326 AntiochSt. James CemeteryCompany, et al. Proposal for Decision Following Exceptions Page7 BANKING DEPT 406

41; DOB Exhibit2]. There was a shortage of $2,770.19 in the PCTF, whichthe respondents

made up before the end of November, 2011. [TR 32; DOB Exhibit 1, p. 58]. The re-plat of

Section J was deficient in several respects. [TR 34-44; DOB Exhibit 4 (Re-Plat of Section J,

filed for record on 09/01/11); DOB Exhibit5 (Plat of "Old Cemetery Section," showing

county record numbers)]. DOB Exhibit 5 is understood to have been the plat of Section J as it

was set out atthe time when ownership ofthe cemetery changed from Mr. Wrightto the

respondents. [TR 43]. Conveyance documents had not been issued for 6 ofthe 50 instances

that the 2010 ROEdocumented had notbeen issued as of June 30,2010. [TR 54]. The ROE

includes a report of each category ofviolation with adescription of supporting evidence.

The June 30,2011, ROEwassentto Mr. Weatherall by letter dated October 19,2011,

withinstructions to correct theviolations byNovember 23,2011. [TR 22-23; seeDOB

Exhibit 1,p. 60]. Mr. Weatherall testified that corrective action had been taken. [TR 58-60]. The respondents sent acopyof theMinutes of November 11,2011, board meeting at which

discussions oftheviolations and corrective actions were recorded. POB Exhibit 1, pp. 58- 60]. The minutes summarized adiscussion that Mr. Weatherall was not aware that adeposit

tothe PCTF was due for donated graves, that he misunderstood the amount for deposit could include $1.75 per square foot as an alternative to 15% ofthetotal sales price, and that 85% of the graves were donated. The minutes noted aplan for making and monitoring deposits and for auditing all books and deposits monthly. The minutes stated that all shortages have been corrected, correction for the contract for sale has been corrected, the interment/disinterment

register has been corrected, all deeds have been corrected and issued to buyers, documentation of proofofownership ofthecemetery was provided, ownership ofthe"Museum" (an unused

^ DOB Docket 13-11-326 Antioch St James CemeteryCompany, et al. Proposal for Decision Following Exceptions Page 8 BANKING DEPT 407

mausoleum, see, DOB Exhibit 1, p. 64) was provided, correction regarding corporate status

was provided, and that response to the consumercomplaint was timely done. Also noted is an

intentionby the board to ask for an extension oftime to re-plat the property. The minutes

made referencesto tabs of supporting documents for most items, but the tabs were not

included in the exhibit. Per a December 20,2011, letter, the staff concluded that most ofthe

stated corrections were not adequate, listed the deficiencies, and referenced an upcoming

limited scope examination. pOB Exhibit 1,pp. 61-66]. Per a January 24,2011,letter, the

staffnoted receipt ofthe required documentation regarding the platting issue and proofof

deposit to ihePCTF. POB Exhibit 1, p. 67], Department staff instructed Mr. Weatherall to

provide by January 14,2012, documentation of all actions taken to address the uncorrected

violations stated in the December 20 letter. [TR61 -66]. Mr. Weatherall sentnotice on

(^ January 24,2012, which stated they had stopped selling graves in and closed Section J. Limited Scope Examination: Period Ending February 7.2012

As a result ofthe findings of auniform riskrating of 5 in the previous examination, a

limited scope examination was conducted sooner than according tothe usual schedule. [TR

56]. The limited scope examination was conducted todetermine the extent that management corrected the 19categories of violations that were documented inthe June 30,2011, ROE and

to review operations between July 1,2011, andthe date ofthe exam. Mr. LePlante was on-

site inNovember, 2011, determined the extent that the respondents corrected violations from

the 06/30/11 ROE, reviewed all post-June 30,2011, purchase and conveyance documents, and

compared burial cards and interment recor4ds for all ofthe recordedburials in Section J. The

ROE from the limited scope examination documents the findings oftheDepartment staff. [TR

#*^ DOB Docket 13-11-326 Antioch St JamesCemetery Company, et al. Proposal for Decision Following Exceptions Page 9 BANKING DEPT 408

42-57]. Mr. LePlante determined that, as ofthe November 23,2011 deadline, corrective action had not been taken for 11 ofthe 19 categories ofviolations from the 06/30/11 ROE. POB Exhibit 1, p. 47]. The 02/07/12 ROE also documents 16 categories ofnew violations, including 11 repeat violations, which involved many instances ofviolation. POB Exhibit 1, pp. 42-57; See also, TR 57]. In general, the overall condition ofthe cemetery had not improved and was described to be critically poor. [DOB Exhibit 1, p. 47]. The condition in Section Jwas slightly improved. [Id., at p. 49]. More specifically, the ROE includes areport ofeach category ofviolation with adescription ofsupporting evidence. From an exit meeting by telephone on February 16,2012, the ROE notes that Mr. Weatherall agreed with the findings and planned toimplement corrective actions. [DOB Exhibit 1, p. 56]. The staff concluded that it willrefer thematter tothelegal division for action. pOB Exhibit 1, p. 56].

Certificate of Authority No. 74

The Cemetery Company operated under authority of Certificate of Authority No. 74

from the time of change of ownership in2009. The department did notrenew the certificate

asofthe March 1,2012renewal date. POB Exhibit 1, p. 3]: Mr. Weatherall testified that

they did notreceive notice that the application for renewal ofthe certificate had been denied.

[TR 108;Weatherall Exhibit 1].

Cease and Desist Order

On May 16,2012,the Commissioner signed Order No. 2012-011, anEmergency

Order To Cease And Desist From Operating A Perpetual Care Cemetery Without A Valid

Certificate Of Authority And From Violating Texas Health And Safety Code, effective the

date of signing. The order included Findings of Fact and Conclusions that the respondents

DOB Docket 13-11-326 Antioch St. James Cemetery Company, et al. Proposal for Decision Following Exceptions Page 10 BANKING DEPT 409

^^*N

violated many provisions ofthe Health and SafetyCode andFinance Commission Rules.

[DOB Exhibit 1, pp. 1-6]. The Commissioner ordered the respondents to ceaseand desist (1)

from the sale of any cemetery spaces or interment rights in the cemetery until the department

confirmed that all violations were corrected, and (2) from all cemetery operations except for

burials for persons who own plots as ofthe date ofthe order, and for maintenance ofthe

property. [Id.]. The commissioner also ordered the respondents to ensure that each burial

allowed under the order occurs in a plot that is exclusively reserved for the use ofthe current

owner and that all required documentation is properly completed and maintained and sent to

the department within two business days of burial. [Id.].

Banking Commissioner's Enforcement Authority

Health and Safety Code Sec. 711.055 (b) After notice and opportunity forhearing,the commissioner may impose an administrative penalty on a personwho: (1) violates this chapter or a final orderofthe commissioner or rale of the Finance Commission ofTexas and does not correct the violation before the 31st day after the date the personreceiveswrittennoticeofthe violation from the Texas Department of Banking; or, ' (2) engages in a pattern ofviolations, as determined by the commissioner. (c) The amount ofthe penalty for each violation may not exceed $1,000 for eachday the violation occurs. (d) In determining the amountofthe penalty, the commissioner shall consider the seriousness ofthe violation,the person'shistory of violations, and the person's good faith in attempting to comply with this chapter. The commissionermay collect the penalty in the same manner that a money judgment is enforced in district court

Health and Safety Code Sec. 711.056 (a) If aftera hearing conductedas provided by Chapter 2001, Govemment Code,the trier of fact finds that a violation ofthis chapter or a rule ofthe Finance Commission ofTexas establishes a pattern of wilful disregard forthe requirements ofthis chapter of rules ofthe finance commission, the trier of fact shall recommend to the commissioner that the maximum administrative penalty permitted under Section 711.055 be imposed on the person committing the violation orthat the commissioner cancel ornotrenew the person's permit under Chapter 154, Finance Code, ifthe person holds sucha permit.

f^ DOB Docket 13-11-326 Antioch St JamesCemetery Company, et al. Proposal for Decision Following Exceptions Page 11 BANKING DEPT m 4 r\

*f IU

/SS^N (b) For the purposes ofthis section, violations corrected as provided by Section 711.055 may beincluded in determining whether a pattern ofwilful disregard for the requirements ofthis chapter or rules ofthe finance commission exists.

A permit underChapter 154 ofthe Finance Codeis not involved in this case.

Health and Safety Code 712.0441 (a) After notice and opportunity for hearing, the commission may impose an administrative penalty on a person who: (1) violates this chapter ora final order ofthecommissioner or rule ofthe Finance Commission ofTexas and does not correct the violation before the 31st day after the date the person receives written notice ofthe violation from the banking department; or,

(2) engages in apattern ofviolations, as determined by the commissioner. (b) The amount ofpenalty for each violation may not exceed $1,000 for each day the violation occurs. (c) In determining the amount ofthe penalty, the commissioner shall consider the seriousness ofthe violation, the person's history ofviolations, and the person's good faith in attempting to comply with this chapter.

Health and Safety Code Sec. 712.0442 (a) If, after ahearing conducted as provided by Chapter 2001, Government Code, the trier of fact finds that aviolation ofthis chapter or arule ofthe Finance Commission ofTexas establishes apattern ofwilful disregard for the requirements ofthis chapter rules ofthe finance commission, the trier offact may recommend to the commissioner that the maximum administrative penalty permitted under Section 712.0441 be imposed on the person committing the violation or that the commissioner cancel or not renew the corporation's certificate ofauthority under this chapter ifthe person holds such a certificate. (b) For the purposes ofthis section, violations corrected as provided by Section 712.0441 may be included in determining whether apattern ofwilful disregard for the requirements of this chapter or rules of thefinance commission exists.

Analysis by the Administrative Law Judge

The evidence proves the occurrence ofviolations ofthe laws regulating the operation ofaperpetual care cemetery as charged by the stafffor each violation, with one exception. The administrative lawjudge concludes that the charge ofviolation ofHealth and Safety Code §712.0037, which sets forth the conditions for annual renewal ofacertificate ofauthority, does not meet the criteria for imposition ofan administrative penalty after adecision not to

DOB Docket 13-11-326 Antioch St. James Cemetery Company, etal. Proposal for Decision Following Exceptions page j2 BANKING DEPT 411

renew the certificate of authority. Under Section 712.0037(a),the commissioner reviews the

holder's application for renewal and determineswhether the holder meets the qualifications

and requirements for holding a certificate. The charged violation involves one ofthose

requirements. The commissioner may decide not to renew the certificate of authority, which

is what happened in this case. The decision not to renew was the consequence for the

respondents' failingto meet the requirements of Section 712.0037(a). The administrative law

judge concludes that failure to meet the requirements of Section 712.0037(a) is not a violation

that is subjectto assessment of an administrative penalty afterthe decision not to renewthe

respondents' certificate of authority. Operation ofa perpetual care cemetery without a

certificate of authority is a violation, of course, and that violation is included in the

Conclusions ofLaw. The remainingissues involve the assessment and amount ofan

administrative penalty.

The Commissioner Has Discretion To Determinethe Amount of Penalty

Assessment ofan administrative penalty is discretionary. Under Health and Safety

Code §§711.056 and 712.0441, the Commissioner may assess an administrative penalty of up

to $1,000 perdayofviolation iftheresponsible person (1) does not correct the violation

within30 days ofnotification or(2) engages in a pattern ofviolation. In thiscase, Mr.

Weatherall is responsible for multiple violations that are set forth in the Conclusions of Law,

which countin the hundreds and which involve multiple days for mostviolations. The

violations include boththose that were notcorrected within-30 days of notice and those that

establish apattern of violation. Accordingly, the Commissioner isauthorized by Chapters 711 and 712 to assess administrative penalties in an amount greatly exceeding the staffs

DOB Docket 13-11-326 Antioch St James Cemetery Company, et al. Proposal for Decision Following Exceptions Page 13 BANKING DEPT « 4 n

recommended range of $56,000 to $70,000 for fourteen violations.

If thetrier of fact finds that violations establish a pattern of wilful disregard for the

requirements of law, then thetrier of fact may under §712.0442(a) and shall under

§711.056(a) recommend that the Commissioner impose the maximum administrative penalty permitted or, under Section 712.0442, cancel or not renew the corporation's certificate of

authority under this chapter ifthe person holds such acertificate. The evidence presented at the hearing proved apattern ofwilful disregard conceming the violations. It appears that the main reasons for the continuing violations were ignorance ofthe law at first, but later was incompetence and an indifference concerning management ofthe cemetery and the cemetery company. Nevertheless, the evidence proves the factors that support making afinding of wilful disregard. Adetermination ofthe issue ofwilful disregard would not have apractical impact in this case, however, because the staffhas recommended alesser monetary penalty than what would be 1he, maximum.

The seriousness ofthe violation, the person's history ofviolations, and the person's good faith in attempting to comply with the requirements oflaw are the factors prescribed by §§711.055 and 712.0442 to consider for deciding how much administrative penalty to assess. In this case, the many types ofviolations cover arange ofseriousness. The violations concerning failure todisclose on the sale/purchase agreements the accurate amount to be deposited in the Perpetual Care Trust Fund appear to be low on the seriousness scale. Failure to make timely deposits in the Perpetual Care Trust Fund involve ahigher seriousness, but the shortages ultimately were made up. The violations offailure to accurately plat and file for record an accurate plat and offailures to keep accurate burial records are particularly serious,

^^ DOB Docket 13-11-326 Antioch St James Cemetery Company, etal. Proposal for Decision Following Exceptions Page 14 BANKING DEPT 413

because they are necessary for anyone to locate the graves of those who were buried. It

appears that theseviolations werea factor in some ofthe complaints. The violation ofthe

Commissioner's Order is a very serious violation. The history of somay violations during a

short period of time andofa violation ofthe Cease and Desist order weighs heavily in favor

of a higher penalty. Mr. Weatherall's actions to correct many ofthe violations and that

resulted in the continuing occurrence of violations demonstrates both good faith anda lack of

good faith. In addition, it appears that the non-renewal ofthe certificate ofauthority and the tacts that the respondents have lost ownership ofthecemetery property, have terminated the

corporation, and are out ofthe cemetery business, would weigh substantially against ahigher amount of penalty.

Ultimately, the evidence supports an administrative penalty inthe range that the staff advocated. The evidence shows a very large number ofdays ofviolation, with some ofthe

violations being very serious. The evidence also could support a lesser penalty than the minimum ofthe range that the staffseeks, because ofthe factors discussed above andbecause

the respondents appear to have acted more inincompetence than in bad faith. Based on the

above analysis, the administrative lawjudge recommends that the Commissioner impose an administrative penalty that isno higher than the low end ofthe range advocated by the staff. FINDINGS OF FACT

Based on the evidence ofrecord and applicable law, the Administrative Law Judge makes the following findings of factand conclusions of law.

1. Notice of hearing was timely given to all respondents.

2. Mr. Gerald Weatherall, Sr., appeared at the hearing individually and as former

DOB Docket 13-11-326 Antioch St James Cemetery Company, et al. Proposal for Decision Following Exceptions Page 15 BANKING DEPT 414

President of Antioch St. Johns Cemetery d/b/a American Memorial Park.

3. Ms. Beverly Randall-Weatherall appeared at 1he hearing as former Vice-

President of Antioch St. Johns Cemetery d/b/a American Memorial Park.

4. Antioch St Johns Cemetery d/b/a American Memorial Park was aperpetual care cemetery that islocated on 3.2 acres of land inGrand Prairie, Texas.

5. Antioch St Johns Cemetery d/b/a American Memorial Park was operated as a corporation beginning in 1958, and is referred to herein as the "cemetery company."

6. Gerald Weatherall, Sr., and Beverly Randall-Weatherall purchased and began operating the cemetery property and the cemetery company in June, 2009. 7. The Secretary ofState forfeited the cemetery company's corporate charter as of ^ January, 2011, for failure to pay franchise taxes and reinstated the charter as of November 7,2011.

8. Antioch St Johns Cemetery d/b/a American Memorial Park operated as a perpetual care cemetery under Certificate ofAuthority No. 74. 9. When the Department decided not to renew Certificate ofAuthority No. 74, it expired as ofthe March 1,2012, renewal date.

10. The Commissioner ofBanking signed Order No. 2012-011, an Emergency Order to Cease and Desist against the cemetery company, Mr. Weatherall, and Ms. Randall-Weatherall, on May 16,2012. .

11. The respondents did not request ahearing concerning Order No. 2012-011 or otherwise challenge it.

f* DOB Docket 13-11-326 Antioch St James Cemetery Company, etal. Proposal for Decision Following Exceptions Paee 16 BANKING DEPT 415

12. The cemetery company filed for Chapter 7 bankruptcy after May 16,2012, but

the estate was converted back to the owners because there were no assets to sell

in bankruptcy.

13. Mr. Weatherall and Ms. Randall-Weatherall conveyed the cemetery property by

deed in lieu of foreclosure to Avery Weatherall after May 16,2012.

14. The respondents-terminated the cemetery company's corporate charter with the

Secretary of State after May 16,2012.

15. Gerald Weatherall, Sr., was president ofthe cemetery company and exercised

an active role as the person and officer who was responsible for the operations

ofthe cemetery and the cemetery company.

16. Beverly Randall-Weatherall was vice-president of the cemetery company but

did not exercise an active role in or responsibility for the operationsofthe

cemetery or the cemetery company.

17. The Findings ofFactthat areset forth in Order No. 2012-011 support

conclusions that the cemetery company and Gerald Weatherall, Sr., individually

and as president ofthe cemetery company, violated provisions ofthe Health

and Safety Code Chapters 711 and 712 and ofthe Finance Commission Rules

that are set forth therein and did not correctthe violations within 30 days after

receiving notice of them.

18. Staff of the Department's Special Audits Division conducted an examination of

the cemetery property and cemetery company as ofthe close of business on

June 30,2010. The Report of Examination identified violations of applicable

f^ DOB Docket 13-11-326 Antioch St James Cemetery Company, et al. Proposal for Decision Following Exceptions Page 17 BANKING DtPT 416

law and instructed the respondents to correct the violations no later than

September 6,2010. Staff sentthe Report of Examination to the respondents on

August 2,2010.

19. Staff ofthe Department's Special Audits Divisionconducted an examination of

the cemetery property andcemetery company as ofthe closeofbusiness on

June 30,2011. TheReport of Examination identified violations of applicable

law and instructed the respondents to correct the violations no later than

November 23,2011. Staffsent the Report of Examination totherespondents

onOctober 19,2011. Theresponsible persons did nottimely correct all ofthe

violations.

20. StaffoftheDepartment's Special Audits Division conducted alimited scope

examination ofthe cemetery property and cemetery company asofthe close of

business on February 7,2012, in orderto determine the extent to which the

respondents had corrected previously noted violations. The Report of Limited

Scope Examination identified the extent to which previously noted violations had been corrected and noted additional violations of applicable law and

instructed the respondents to notify the department oftheir actions correcting the violations no later than July 4,2012. Staff sent the Report ofLimited Scope Examination tothe respondents on April 30,2012. The responsible persons did not timely correct all ofthe violations.

21. The condition ofthe cemetery property deteriorated after the respondents began operation ofthe cemetery and cemetery company. In general, themaintenance

DOB Docket 13-11-326 C Antioch St James Cemetery Company, et al. Proposal for Decision Following Exceptions Page 18 BANKING DEPT 417

ofthe cemetery was very poor, including the following: an entrance did not

have an adequate sign; sections within the cemetery werenot adequately

marked; graves had collapsed, creating deep sink holes, while therewere

mounds of dirt in otherareas; and, graves had been dug in both directions in

some cases.

22. The respondents corrected some ofthe individual violationsthat were set forth

in the reports of examination, but did not correctall the violations in eachtype

of violation within the stated deadlines.

23. Burial cards and the interment register show at least 77 instances of violation of

record keeping requirements concerning sales of cemetery plots and burials,

which were not correctedwithin 30 days after notice ofthe facts ofviolation

was given to the respondents.

24. The cemetery company records were in such poor shape that it is difficult and

probably impossible to determine from the records whose remains were buried

in which location. Examples ofthe deficiencies in the records are shown on

Department ofBanking Exhibit No. 3 and include:

a 21 burials shown on the burial cards were not recorded on the interment register;

b. the interment register reflects two burials in the samespace on 8 occasions;

c. the interment register reflectsa burial in a plot on 6 occasions when the burial card for the plot does not show a burial;

d. on 4 occasions, the burial card showsthe burial of a person in a plotand the interment register showsthe burial of another person in that plot;

DOB Docket 13-11-326 Antioch St. James Cemetery Company, et al. Proposal for Decision Following Exceptions Page 19 BANKING DEPT 418

/*^***V

e. on 4 occasions,the burial cardsand the interment register show different burial plots for the same person; and,

f. on 4 occasions, the burial cards andthe interment register show different persons wereburied in the sameburial plot.

25. The cemetery companyon manyoccasions did not accurately identify on the

interment records ofthe cemetery the plot in which the remains of an individual

are interred.

26. The cemetery company did notrecord the final disposition of purchase

agreements on the historical contract register on many occasions and did not

correctthe deficiencies within 30 days after notice ofthe facts ofviolation was

given to the respondents.

27. The cemetery company didnotmaintain accurate separate property files in the

names ofthe purchasers of burial plots on many occasions and did not correct

the deficiencies within 30 days after notice ofthe facts of violation was given to

the respondents.

28. The cemetery company repeatedly did notmaintain a current financial

statement that substantiated the use ofincome from the Perpetual Care Trust

Fund.

29. The cemetery company consistently did notaccurately calculate the amount of

money to be deposited in the Perpetual CareTrust Fund.

30. The cemetery company did not for almost every month of its operation deposit within 20 days after the end ofthe month in which purchase agreements were

paid in full any amount of money in the Perpetual Care Trust Fund. The

J**V DOB Docket 13-11-326 Antioch St James CemeteryCompany, et al. Proposal for Decision Following Exceptions Page 20 BANKING DEPT 419

cemetery company did deposit the required amounts after department staff

notified the respondents ofthe deficiencies.

31. The cemetery company did not disclose onagreements to purchase acemetery

plot the correct amount ofmoney to be deposited in the Perpetual Care Trust Fund on many occasions and didnotcorrect the deficiencies within 30 days

after notice of the facts' of violation was given to the respondents.

32. The cemeterycompany didnot maintain accurate monthlyrecapitulations ofthe

interment rights or conveyance ofburial plot rights on many occasions anddid

not correct the deficiencies within 30 days after notice ofthe facts of violation

was given to the respondents.

33. The cemetery company did not prepareand file with the county clerk an

accurate map or plat of Section J that showed the cemetery plots and their

orientation to the remainder ofthe cemetery property, including the boundaries

of the cemetery property.

34. The cemetery company sold cemetery plots on many occasions without having

filed an adequate accurate map or plat of Section J with the countyclerkand

has not filed such a plat

35. The cemetery company did not issue to the appropriate person and file in its

office the conveyance document aftercemetery plots were paid in full on many

occasions and often did not correct those deficiencies within 30 days after

notice ofthe facts of violation was given to the respondents.

36. The cemetery companyoperated andconducted cemeteryoperations after

March 1,2012.

DOB Docket 13-11-326 Antioch St. James Cemetery Company, et al Proposal for Decision Following Exceptions Page 21 BANKING DEPT

37. The cemetery company did not send notice ofthe June 14,2012, burial ofLena Sneed-Holleman to the department within two days as required by Order No. 2012-011.

38. Although Mr. Weatherall attempted to address violations that were brought to hisattention, the failure tocorrect all oftheviolations and the continual

frequent repetition ofthe several types ofviolation throughout the time he was responsible for the operations ofthe cemetery company establishes apattern of wilful disregard for the requirements ofthe law that applies to perpetual care cemeteries.

39. The continual occurrences ofviolations and Mr. WeatheraU's actions concerning the operations ofthe cemetery and the cemetery company were initially more the result ofignorance ofthe legal requirements and later, of combinations ofan inability to accomplish and inattention to the accomplishment ofthe legal requirements. Mr. Weatherall eventually made up the shortages in the Perpetual Care Trust Fund after the department staff notified him and demanded compliance. He attempted to address the complaints. Some ofthe record-keeping deficiencies were corrected after notice and demand from the staff He ultimately gave up the cemetery and cemetery company as aresult of financial insolvency. He has continued to pay for some maintenance ofthe cemetery property.

DOB Docket 13-11-326 Antioch St James Cemetery Company, etal. Proposal for Decision Following Exceptions p 99 BANKING DEPT 421

CONCLUSIONS OF LAW

1. Proper notice ofhearing was timely given to Antioch St. James Cemetery Company d/b/a/ American Memorial Park ("cemetery company"), Gerald Weatherall Sr., individually and as president ofthe cemetery company, and Beverly Randall-Weatherall as vice-president ofthe cemetery company. 2. The Commissioner ofBanking has jurisdiction to enforce the provisions ofthe Texas Health and Safety Code and Texas Finance Commission Rules

concerning the operations ofperpetual care cemeteries, specifically with respect to Antioch St James Cemetery Company d/b/a American Memorial Park, the actions ofGerald Weatherall, Sr., individually and as president ofthe cemetery company, and the actions ofBeverly Randall-Weatherall as vice-president of the cemetery company, and to the violations which are charged in this docket. 3. During the period from 2009 to March 1,2012, when itwas owned and operated by the respondents, Antioch St. James Cemetery d/b/a American Memorial Park was aperpetual care cemetery under Health and Safety Code §711.001(24) that was operated under Certificate ofAuthority No. 74. 4. Order No. 2012-011, the May 16,2012, Emergency Cease and Desist Order concerning the respondents in this case, is afinal order and its Findings ofFact are taken as true.

5. The responsible persons violated Health andSafety Code §711.003(4) on multiple occasions by failing to accurately identify on the interment records of the cemetery the plot in which the remains ofaspecific individual was interred DOB Docket 13-11-326 Antioch St. James Cemetery Company, etal. Proposal for Decision Following Exceptions p ~o BANKING DEPT 422

and failing to correct the violations within 30 days after receiving notice ofthe

violations from the Department

6. The responsible persons violated Finance Commission Rule 7 Texas

Administrative Code §26(2)(b)(4) on multiple occasions by failing to record the

final disposition of purchase agreementson the historicalcontractregisterand

failing to correctthe violationswithin 30 days after receiving notice ofthe

violations from the Department

7. The responsible persons violated FinanceCommission Rule 7 Texas

Administrative Code §26(2)(b)(3) on multiple occasions by failing to maintain

separate property files in the names ofthe purchasers and failing to correct the

violations within 30 days afterreceiving notice ofthe violations from the

Department.

8. The responsible personsviolated Finance Commission Rule 7 Texas

Administrative Code §26.2(b)(l)(A) on several occasions by failing to maintain

a financial statement thatsubstantiates the cemetery's use oftrust fund income

and failing to correct the violations within 30 days after receiving notice ofthe

violations from the Department

9. The responsible persons violated Health and Safety Code §712.028(a) on

multiple occasions by failing to accurately calculate theamount of perpetual

care funds to bedeposited and failing tocorrect theviolations within 30 days

after receiving notice ofthe violations from theDepartment.

DOB Docket 13-11-326 Antioch St JamesCemetery Company,et al. Proposal for Decision Following Exceptions Page 24 BANKING DEPT 423

r 10. The responsible persons violated Health and Safety Code §712.029(c) on

multiple occasions by failing to timely deposit thecorrect amount of funds into

the perpetualcare trust fund.

11. The responsible persons violated Health and Safety Code §712.029(a) on multiple occasions by failing todisclose on the purchase agreements the correct amount of perpetual care funds tobe deposited inthe perpetual care trust fund

and failing to correct the violations within 30 days after receiving notice ofthe violations from the Department.

12. The responsible persons violated Finance Commission Rule7 Texas

Administrative Code §26.2(b)(5) on multiple occasions by failing to maintain accurate monthly recapitulations ofall interment rights issued and failing to correct theviolations within 30days after receiving notice ofthe violations from the Department

13. The responsible persons violated Health and Safety Code §711.034(a)(1) by failing to accurately survey and map or plat Section Jofthe cemetery property showing the plots contained within the perimeter boundary and showing a specific unique number for each plot and failing to correct the violations within 30 days after receiving notice ofthe violations from the Department. 14. The responsible persons violated Health and Safety Code §711.034(b) by failing to file an accurate map or plat ofSection.Jwith the county clerk in which the cemetery is located and failing to correct theviolations within 30

days after receiving notice ofthe violations from the Department

DOB Docket 13-11-326 AntiochSt James Cemetery Company, et al. Proposal for Decision Following Exceptions Paee 25 BANKING DEPT 424

15. The responsible persons violated Health and Safety Code §711.038(a)(1) by selling, conveying, or both selling and conveying the exclusive right of

sepulture ina plot inSection Jbefore an accurate map or plat and acertificate

or declaration of dedication was filed with the county clerk as provided by

Section711.034and failing to correct the violations within30 days after

receiving notice ofthe violations from the Department.

16. The responsible persons violated Finance Commission Rule §26.5 by failing on

multiple occasions, withrespect to Section J, to issue aconveyance document

for a cemetery plot, as defined by Health and Safety Code §711.001(25), no

later than 20 days afterthe end ofthe monthin which the contract is paid in full

and failingto correct the violations within 30 days afterreceivingnotice ofthe

violations from the Department

17. The responsible persons violated Health and Safety Code §711.038(c) by

failing on multiple occasions, with respectto Section J, to file in the cemetery

organizations'office the conveyance ofthe exclusive rightof sepulture in

Section J and failing to correct the violations within 30 days after receiving

notice ofthe violations from the Department

18. The responsiblepersonsviolated Health and Safety Code §712.0032 by

operatinga perpetual care cemetery after March 1,2012, without holdinga

certificate of authority to operate a perpetual care cemetery under Health and

Safety Code Chapter 712.

DOB Docket 13-11-326 Antioch St James Cemetery Company, et al. Proposal for Decision Following Exceptions Page 26 BANKING DEPT 425

19. The responsible persons violated Commissioner Order No. 2012-011 by

burying the body ofa person on June 14,2012, and failing to timely send the

required documentation to the Department.

20. With respect to the assertedviolation of Health and Safety Code §712.0037(a),

the responsible person's actions conceming failure to maintain required

minimum capital did not amount to a violation oflaw that is subjectto

imposition of an administrative penalty after the department decided not to

renew the certificate of authority.

21. Gerald Weatherall, Sr., is the person who is responsible, individually and in his

capacity as former president ofAntioch St. James Cemetery d/b/a American

Memorial Park, for the violations oflaw that are set forth in these Findings of

Fact and Conclusions of Law.

22. The Commissioner of Banking in his discretion has the authority under Health

and Safety Code Sections 712.0441 and 711.055 to assess an administrative

penalty against Antioch St James Cemetery d/b/a American Memorial Park

and Gerald Weatherall, Sr., in his individual capacity and in his capacity as

former president ofthe cemetery company, in the amount of$1,000 for each

day of violation.

23. An administrative penalty in the amount of up to $70^000.00 is supported by

the evidence under the provisions ofHealth and Safety Code Sections 711.055,

711.056, 712.0441, and 712.0442.

DOB Docket 13-11-326 Antioch St. James Cemetery Company, et al. Proposal for Decision Following Exceptions Page 27 BANKING DEPT 429

m Order No. 2013- U

IN THE MATTER OF ANTIOCH § BEFORE THE BANKING ST. JOHNS CEMETERY COMPANY § d/b/a AMERICAN MEMORIAL PARK, § GRAND PRAIRIE, TEXAS, (Certificate § of Authority No. 74, expired); § § GERALD WEATHERALL, SR., AS ITS § COMMISSIONER OF TEXAS PRESIDENT AND IN HIS INDIVIDUAL § CAPACITY; AND, § § BEVERLY RANDALL-WEATHERALL § AS ITS VICE-PRESIDENT § AUSTIN, TRAVIS COUNTY, TEXAS

FINAL ORDER

rA On this 35" day ofNovember, 2013 came on to be considered Docket No. BE-13-11-326. After reviewing the administrative record and the Proposal for Decision Following Exceptions issued by the Administrative Law Judge on November 12,2013,1 have determined that the Findings ofFact and Conclusions ofLaw are supported by the evidence of record and applicable law.

I, therefore, ADOPT the Proposal for Decision Following Exceptions, including specifically the Findings ofFact and Conclusions ofLaw that are set forth in the Proposal for Decision Following Exceptions and incorporate in this Order the Findings ofFact and Conclusions of Law therein as if set out in full in this Order.

Based ontherecord and the Findings ofFact and Conclusions ofLaw, I conclude that an administrative penalty inthe amount of$56,000 is justified and appropriate under the factors required by law.

It is, therefore, ORDERED that an administrative penalty in the amount of$56,000 be and is hereby ASSESSED against respondents Antioch St. Johns Cemetery Company d/b/a American Memorial Park, and Gerald Weatherall, Sr., inhis individual capacity and inhis capacity offormer President of Antioch St. Johns Cemetery Company d/b/a American Memorial Park. BANKING DEPT 430 iv

f^ Respondents Antioch St. Johns Cemetery Company d/b/a American Memorial Park, and Gerald Weatherall, Sr., in his individual capacity and in his capacityof formerPresidentof Antioch St. Johns Cemetery Company d/b/a American Memorial Park, jointly and severally, are ORDERED to pay anadministrative penalty of$56,000 to the Texas Department of Banking.

All relief that was requested but not granted orotherwise disposed ofherein is denied. oCT£i SIGNED and ENTERED this <*> day of November, 2013.

(^-*s?' /CsL- Charles G. Cooper Banking Commissioner

Page 2 DOB Docket 13-11-326 Antioch St. Johns Cemetery Company, et al Final Order