STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MEMORIALS, INC. D/B/A DAYTONA ) MEMORIAL PARK, )

)

Petitioner, )

)

vs. ) CASE NO. 78-1662

)

OFFICE OF THE COMPTROLLER, )

DEPARTMENT OF BANKING AND ) FINANCE, AND LAWRENCE W. HUNT, )

as Receiver of Belleview ) Memorial Park Association, Inc. ) d/b/a Cedar Hill Memory Gardens, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, G. Steven Pfeiffer, held a public hearing in this case on October 12, 1978, in Daytona Beach, Florida.

The following appearances were entered: Morton M. Biegel, Miami, Florida, for the Petitioner, Memorials, Inc. d/b/a Daytona Memorial Park; Franklyn J. Wollett, Tallahassee, Florida, for the Respondent, Department of Banking and Finance; John B. Liebman, Orlando, Florida for the Protestant, Lawrence Hunt as receiver for Belleview Memorial Park Association, Inc.; and John R. Tamm and Robert E. Tamm, Daytona Peach, Florida, for the Protestant, Lakeview Cemetery, Inc., d/b/a Cedar Hill emery Gardens.

On or about August 14, 1978 the Petitioner, Memorials, Inc. d/b/a Daytona Memorial Park, filed an application for authority to transfer an existing cemetery company with the Department of Banking and Finance. Lawrence Hunt, as receiver for Belleview Memorial Park Association, Inc., requested a public hearing on the application by letter dated August 24, 1978. Lakeview Cemetery, Inc. d/b/a Cedar Hill Memory Gardens requested a hearing on the application by letter dated August 29, 1978. The Department forwarded the matter to the office of the Division of Administrative Hearings for the assignment of a Hearing Officer and the scheduling of a hearing. The hearing was scheduled by notice dated September 15, 1978. The Protestant Lawrence W. Hunt, filed a Motion in Objection to Petition. The motion was denied on the record at the final hearing.

The Petitioner called the following witnesses: Thomas B. Levinson, the Petitioner's president; and Joseph M. Erlich, a deputy director of the Division of Finance of the Department of Banking and Finance. The Protestant, Lawrence Hunt, testified as a witness on his own behalf, and recalled Joseph Erlich. The Protestant, Lakeview Cemetery, Inc., called the following witnesses: Willard I. Timmer, the Chairman of the Board of Directors of Lakeview; and Lawrence Hunt.

Donald U. Sessions, a member of the public-at-large testified in that capacity.

Mr. Sessions happens to be an attorney and he submitted legal memoranda in opposition to the application. Petitioner's Exhibits 1-5, Respondent's Exhibit 1, Belleview Exhibits 1-4, and Lakeview Exhibits 1-3 were all received into evidence. In addition to the foregoing evidence, the undersigned, together with counsel for the parties, viewed the area to which the contested application pertains. The parties have submitted posthearing legal memoranda and Proposed Recommended Orders.

FINDINGS OF FACT

1. Prior to July 16, 1976, Belleview Memorial Park Association, Inc. operated a cemetery at the southwest corner of Belleview Avenue and Terrace Avenue in Daytona Beach, Volusia County, Florida. Belleview was properly licensed by the Department of Banking and Finance, the state agency which is responsible for regulating the operation of cemeteries, and for licensing cemetery operators. Belleview experienced financial difficulties. One of its creditors was Memorials, Inc. Memorials, Inc. sold bronze markers to Belleview, which Belleview used to mark grave sites. In order to prevent Memorials, Inc. from taking drastic collection action, Belleview gave Memorials, Inc. a mortgage on a portion of the Belleview Cemetery property. In giving the mortgage Belleview neither requested nor received approval from the Department of Banking and Finance. Belleview defaulted on the mortgage, and Memorials, Inc. initiated a foreclosure action in Circuit Court in Volusia County. A judicial sale was conducted, and a certificate of title was issued to Memorials, Inc.

   
   

2. Belleview gave similar mortgages covering other portions of the cemetery property to two other creditors: Heritage Federal Savings and Loan Association, and Southeast Bank of New Smyrna. Belleview did not seek nor obtain approval from the Department before it issued these mortgages. Heritage and Southeast foreclosed on their mortgages, and purchased the respective parcels at a public sale. Heritage later conveyed its parcel by warranty deed to Lakeview Cemetery, Inc. Lakeview has for some years, and continues to operate a cemetery directly across Belleview Avenue from the Belleview Cemetery. The Southeast Bank entered into an option agreement with Memorials, Inc. whereby Southeast agreed to convey its portion of the cemetery property to Memorials, Inc., in the event that Memorials, Inc. is successful in obtaining a license to operate a cemetery on the property. The original option agreement has expired, however, it has been extended, and the option is still in effect.

   
   

3. As a result of Belleview's financial troubles, and the apparent failure of Belleview to maintain its trust accounts, the Department of Banking and Finance brought an action in Circuit Court in Volusia County to appoint a receiver to manage the affairs of the cemetery. A receiver was initially appointed on July 16, 1976. By order entered August 17, 1976, Lawrence W. Hunt was substituted as the receiver. Hunt, in his capacity as receiver, has operated the Belleview Cemetery since that date. He has operated and maintained the cemetery including the parcels owned by Lakeview, Memorials, Inc., and Southeast Bank, as if it were a single entity. He has honored burial agreements without regard to which parcel the burial plot was located upon.

   
   

4. Memorials, Inc., originally filed an application with the Department of Banking and Finance for authority to transfer a portion of the existing Belleview Cemetery to it. Memorials, Inc. was proposing to operate a cemetery on the portion of the Belleview Cemetery that it obtained through foreclosure. The application was filed under authority of Florida Statutes 559.33. The Comptroller entered an order approving the application for further processing subject to several conditions. Thereafter Lakeview Cemetery, Inc., and Lawrence

   W. Hunt, as receiver of Belleview, petitioned for a hearing, and the matter was forwarded to the office of the Division of Administrative Hearings. A hearing was scheduled, but prior to the hearing Memorials, Inc. withdrew its application. On August 14, 1978 Memorials, Inc. filed an application with the Department for authority to transfer an existing cemetery. This application was filed under authority of Florida Statutes 559.34 Lakeview, and Hunt as receiver again protested the application and the matter was forwarded to the Division of Administrative Hearings. The final hearing was conducted on October 12, 1978.

   
   

5. Memorials, Inc., in effect, is seeking to transfer a portion of Belleview's license to it, so that it can operate a cemetery on the property which it obtained through foreclosure. Although the application in this regard is not clear, it appears that Memorials, Inc. is seeking authority only to operate a cemetery on that portion of the former Belleview property that it obtained through foreclosure. Memorials, Inc. is not, at this juncture, seeking authority to operate a cemetery on the property for which it has obtained an option from the Southeast Bank of New Smyrna.

   
   

6. The individuals primarily responsible for the operation of Memorials, Inc., are Dorothy Levinson Rubin, Thomas B. Levinson, and H. T. Forrest. Each of these persons is of good moral character, has extensive experience in operating cemetery businesses, and is financially equipped to operate a cemetery business. The financial condition of Memorials, Inc. is such that it could responsibly operate a cemetery busi:ess.

   
   

7. The interests of the public would not be served by granting Memorials, Inc. authority to operate a cemetery either solely on the property that it obtained through foreclosure, or upon both that property and the property upon which it has an option to purchase. The property which Memorials, Inc. presently owns, is located virtually in the middle of what has been Belleview Memorial Park. No natural boundaries separate Memorials, Inc.`s property from property presently owned by Lawrence Hunt as receiver, or property presently owned by the Lakeview Cemetery, Inc. The boundaries run directly through grave sites that are presently occupied, and would separate several family plots. The result of granting Memorials, Inc. the authority that it seeks, would be to make Memorials, Inc. responsible for maintaining one portion of a family plot, or of an individual grave site, while other entities (Hunt as receiver of Belleview or Lakeview) would be responsible for maintaining the result. A mausoleum is located virtually on the boundary line which separates the property owned by Memorials, Inc. from property owned by Lakeview. The mausoleum appears to lie on the Lakeview side of the boundary; however, it would not be possible to conduct any service at the mausoleum, or to read the inscriptions on it without standing on property owned by Memorials, Inc. It would be contrary to the public interest to require people to confront two entities to assure that the burial sites of their relatives are properly maintained.

   
   

8. The Belleview Cemetery, including these portions owned by Memorials, Inc., Lawrence Hunt as receiver, and Lakeview, is irrigated through a single water system, and is presently maintained through a single maintenance facility. There is no room on the property owned by Memorials, Inc. to dig a well to provide a separate irrigation system for it. There is also no room to construct an adequate maintenance facility. The property constitutes only approximately four acres. The property has been totally platted for grave sites, and all but approximately six of the sites have been sold. Approximately fifty percent of the sites have been filled with interments. There is therefore no economic viability to operating the Memorials, Inc. property as a separate cemetery.

9. Even if Memorials, Inc. operated its property as a cemetery in conjunction with the property for which it now has an option of purchase, there would still be no economic viability. While maintenance and irrigation facilities could be located on the option property, the option property and the property which Memorials, Inc., already owns are not contiguous. There would thus be a problem of operating an irrigation system, which would necessarily have to traverse the property owned by others, and of maintaining a non- contiguous cemetery. Furthermore, operating both properties as a cemetery would not solve the dilemma caused by the fact that several burial sites and family plots are traversed by boundary lines.

   
   

10. Thomas B. Levinson, the President of Memorials, Inc. testified that Memorials, Inc. would not necessarily honor provisions of contracts of those who have purchased plots on the property that it now owns at the Belleview Cemetery respecting purchase of burial markers. Thus people who have already paid for markers might not receive them. This would do serious injury to these members of the public, and to other cemetery businesses.

    
    

11. Memorials, Inc., has failed to establish any need for the operation of a separate cemetery in the Volusia County area. It does not appear that there is any shortage of competition in the area, and no population or death rate data was presented.

    
    

12. Memorials, Inc. would not be unfairly prejudiced by a denial of its application. Memorials, Inc. obtained the subject property through a mortgage foreclosure. It was fully aware when it took the mortgage and when it foreclosed the mortgage that the property was a portion of an existing cemetery.

    
    

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative hearings has jurisdiction over the subject matter of this proceeding, and over the parties. 120.57(1), 120.60, Florida Statutes (1977)

    
    

14. Memorials, Inc. has filed its application in accordance with the provisions of 559.34, Florida Statutes (1977). The statute provides:

    
    

    In any case where a person, a group of persons, or a corporation proposes to purchase or acquire control of an existing cemetery company either by purchasing the outstanding capital stock of any cemetery company, or the interest of the owner or owners, and thereby to change the control of said cemetery company, such persons shall first make application to the department [Department of Banking and Finance] for a certificate of approval of such proposed change of control of said cemetery company. . .

    
    

    The instant application is not properly filed under this section. This is not a case in which Memorials, Inc. is seeking to acquire control of Belleview Memorial Park Association, Inc. Memorials, Inc. has not purchased any of the outstanding capital stock of Belleview and the control of Belleview has not changed. The only interest that Memorials, Inc. has obtained is a property interest in a portion of the cemetery. The property interest is not one that

    Memorials, Inc. proposes to obtain, but rather one it has already obtained in connection with the foreclosure of a mortgage. The mortgage itself was given Memorials, Inc. by Belleview without Belleview having obtained approval from the Department of Banking and Finance as required under the provisions of 559.481, Florida Statutes (1977). The provisions of 559.34 do not fit what Memorials, Inc. is attempting to accomplish.

    
    

15. Even if the instant application is proper under the provisions of 559.34, the application should be denied. Section 559.34 establishes the following requirements for an application:

    
    

    1. aid application shall contain the name and address of the proposed new owners and the said department [the Department of Banking and Finance] shall issue said certificate of approval only after it has

       become satisfied that the proposed new owners are qualified by character, experience and financial responsibility to control and operate the said cemetery company in a

       legal and proper manner, and that the interest of the public generally will not be jeopardized by the proposed change in ownership and management. . .

       
       

       Section 559.39, Florida Statutes (1977) provides further elucidation into the matters that the Department must consider in determining whether to grant an application filed pursuant to Section 559.34. The statute provides:

       
       

       Upon receipt of application for authority under Sections 559.33 and 559.34, the department shall investigate the following:

       1. Character, reputation, financial standing, business qualifications, and motives of the proponents.

       2. The need for a cemetery in the community to be located, giving consideration to the adequacy of existing facilities

          and the need for further facilities in the area to be served, which need may be presumed upon the following criteria being met:

          1. The population; rate of population growth; death rate; ratio of burials to death; adequacy of existing facilities;

             and the solvency of the care and maintenance trust fund of the existing facilities.

          2. In order to promote competition, the department may waive the criteria promulgated in Paragraph (a) in order that each county shall have at least two

             cemeteries operated by different licensees.

       3. The proposed financial structure.

       4. Zoning approval, where applicable, and if zoning is not in effect the approval and acceptance of a majority of adjacent property owners.

       5. Suitability of property for cemetery use.

          
          

          Memorials, Inc. has established that it, and its principal officers have good character, and adequate financial standing and experience to operate a cemetery. They have failed to establish the need for any further cemetery facilities in Volusia County. The evidence rather establishes that there is adequate competition in the area, and that there is no further need for additional cemetery facilities. Furthermore, it is evident that the public interest would not he served by approving this application. The fact that boundary lines between the Memorials, Inc. property aid property owned by other entities traverse burial sites and family memorial plots mitigates strongly against granting the application. The fact that separate maintenance and irrigation facilities would be required in a place where there is no room for them further indicates the fact that the public interest would not be served by granting this application.

          
          

16. Denying the application of Memorials, Inc., will not frustrate the rights of persons who have purchased grave sites on the property now owned by Memorials, Inc. These persons have valid contracts to be interred on the property, and their contracts run with the land. Denying the application will also not frustrate the rights of relatives of persons buried on the Memorials, Inc. property to visit grave sites. Cemetery property is of a peculiar nature, and ownership of cemetery lots grants to lot owners and their relatives peculiar rights which are irrevocable. See e.g.: Whitesall v. City of Montgomery, 355 So.2d 701 (Ala. 1978); Vidrine v. Vidrine, 225 So.2d 691 (La. App. 1969); United Cemeteries Company v. Strother, 61 S.W. 2nd 907; 14 C.J.S. Cemeteries 25 et seq.; 14 Am. Jur. 2d Cemeteries 25-31, 36, 37.

    
    

17. The application of Memorials, Inc. to transfer a cemetery company should be denied.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is, hereby,

RECOMMENDED:

That the application of Memorials, Inc. d/b/a Daytona Memorial Park for authority to transfer a cemetery company be denied.

RECOMMENDED this 4th day of December, 1978, in Tallahassee, Florida.

G. STEVEN PFEIFFER, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Morton M. Biegel, Esquire Suite 430

2121 Ponce de Leon Boulevard Coral Gables, Florida 33134

Franklyn J. Wollett, Esquire Assistant General Counsel Office of the Comptroller The Capitol

Tallahassee, Florida 32304

John B. Liebman, Esquire Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P. A.

P. O. Box 1171

Orlando, Florida 32802

John R. Tamm, Esquire and Robert E. Tamm, Esquire

P. O. Drawer 2718

408 North Wild Olive Avenue Daytona Beach, Florida 32015

Docket for Case No: 78-001662

Orders for Case No: 78-001662