FLORIDA _ DEPARTMENT OF FINANCIAL SERVICES FILE TOM GALLAGHER GIATEOPRLORIOA Nov 24 2004 IN THE MATTER OF: Docketed by: SAFE HARBOR MANAGEMENT Case Nos: 78562-04-FC SERVICES, INC., d/b/a AT PEACE 78563-04-FC CREMATION, and ROBERT M. 78565-04-FC SHANNON, individually, and as 78572-04-FC President and Registered Agent. 78573-04-FC 78583-04-FC CP 20031000358, CP 20031000430, 78586-04-FC CP 20040600117, CP 20030700587, CP 20040200088, CP 20040600118, CP 20040200343. ; 0) 5. 0 KY ADMINISTRATIVE COMPLAINT TO: Robert M. Shannon, President, and Registered Agent Safe Harbor Management Services, Inc. 531 S. Pineapple, #10 ® Sarasota, Florida 34328 You, Safe Harbor Management Services, Inc. d/b/a At Peace Cremation (hereinafter “Safe Harbor”) and Robert M. Shannon (hereinafter “Shannon”) are hereby notified that, pursuant to Chapter 497, Florida Statutes, the Chief Financial Officer of the State of Florida has caused to be made investigations of your activities related to the sale and fulfillment of preneed funeral and cemetery services and merchandise. The probable cause panel of the Board of Funeral and Cemetery Services within the Department of Financial Services (hereinafter “Department”), found probable cause to charge you with violations of the provisions of Chapter 497, Florida Statutes, “The Funeral and Cemetery Services Act” (hereinafter “the Act”), as a result of which it is alleged: GENERAL ALLEGATIONS 1. Safe Harbor is a Florida profit corporation first licensed by the Department to sell funeral and cemetery preneed contracts (hereinafter “COA”) pursuant to the Act on June 26, 1998. 2. In March of the year 1999, Safe Harbor acquired approximately 6,800 outstanding preneed contracts from the American Family Cremation Society (hereinafter “American Family”) receivership for ten thousand dollars ($10,000). The Department’s predecessor, the Board of Funeral and Cemetery Services under the Department of Banking and Finance, approved the acquisition. Under the terms of approval, Safe Harbor fulfills the American Family contracts at the time of need. If the money trusted for the contract is less than the contract amount, Safe Harbor can make a claim for the balance from the Preneed Funeral Contract Consumer Protection Fund (hereinafter “Consumer Protection Fund”). The referenced fund is statutorily created, administered and regulated by the Department, and funded by the regulated industry, for the purpose of providing a remedy to preneed contract purchasers and their estates due to a COA’s failure to provide the benefits of a preneed contract, or failure to make a refund when the contract is properly cancelled. When a consumer cancels an American Family contract, Safe Harbor is required to refund only the amount of money deposited in trust for the particular contract. The consumer must waive any claim to the Consumer Protection Fund as a predicate to receiving a refund. 3. In December of 1999, the Department, through its Regional Area Financial Manager, advised Mr. Shannon that he could not charge a fifty ($50.00) dollar fee for processing a request for cancellation and refund, and ordered him to stop the practice. Mr. Shannon acknowledged the warning in writing on December 22, 1999, stating that he would no longer charge a fee to cancel American Family contracts. 4. On October 18, 2002, Safe Harbor’s application for renewal of its COA was denied by final order. Safe Harbor continues to be licensed as a direct disposal establishment (license number 370) by the Department of Business and Professional Regulations, and recently changed its principal place of business from 513 South Pineapple, Suite 10, Sarasota, Florida, to 416 Burns Court (R), Sarasota, Florida 34236. 5. Robert W. Shannon is the president and registered agent of Safe Harbor. Although no longer authorized to sell preneed funeral and cemetery services and merchandise, Safe Harbor and Mr. Shannon have ongoing responsibilities to comply with the Act. Pursuant to the provisions of section 497.436, Florida Statutes, and Florida Administrative Code Rule 69K- 5.0025, a certificateholder who becomes inactive must cease all preneed sales to the public, but continue to collect and deposit into trust one hundred percent (100%) of the funds paid toward preneed contracts sold prior to becoming inactive. The trust fund of the inactive certificateholder must be held intact, and the funds disbursed in accordance with the requirements of the written contracts until the funds have been exhausted. Mr. Shannon was advised of the requirements by letter dated November 19, 2002. 6. The Trustee of American Family’s preneed contract trust fund is Funeral Services Inc. (hereinafter “FSI’). 7. The Department continues to have the same jurisdiction over Safe Harbor pursuant to the Act as if the COA were active, and to require appropriate reports and inspections as long as there are funds in trust or preneed contracts that are not fulfilled. COUNT ONE 8. The above allegations are hereby realleged and fully incorporated by reference. 9. On June 24, 1996, Elizabeth H. Barrows entered into a prearranged funeral agreement with American Family for simple cremation services, including transportation from place of death, temporary shelter of remains, completion of necessary documents, standard cremation container, cremation, return of cremated remains, all staff services, and four death certificates. The total cost was five hundred dollars ($500.00) for the simple cremation services, and thirty- two dollars ($32.00) for the four additional death certificates. 10. | When Safe Harbor acquired the contract, Mr. Shannon sent a letter to Ms. Borrows advising her that Safe Harbor had been authorized by the State of Florida to assume responsibility for the American Family preneed contracts. The letter specifically provided that no additional fees would be charged as long as Safe Harbor handled the services. ll. Mrs. Barrows died on September 24, 2003. Her body was picked up and transported by Safe Harbor; however, Safe Harbor demanded an additional one hundred thirty dollars ($130.00) prior to cremation. The additional charge was composed of forty dollars ($40.00) for document procurement services, forty dollars ($40.00) for medical examiner cremation authorization fee and fifty dollars ($50.00) for Safe Harbor to petition the Consumer Protection Fund for reimbursement of Safe Harbor’s costs. All of the foregoing costs were covered by the preneed contract purchased by Ms. Barrows. 12. Mr. Barrows paid the additional charge rather than delay the process. 13. Safe Harbor filed a claim with the Consumer Protection Fund claiming five hundred nine and 60/100 dollars ($509.60), the total cost of the contract less twenty-two and 40/100 dollars ($22.40) in trust. IT IS THEREFORE CHARGED, that you, Safe Harbor Management Services, Inc., d/b/a At Peace Cremations, and Robert M. Shannon, have violated or are accountable under the following provisions of the Act and rules of the Department which constitute grounds for discipline: (a) Assessing fees that have not been disclosed to the customer. {Section 497.233(1)(t), Florida Statutes]; ‘() Misconduct in connection with a preneed transaction. [Section 497.233(1)(i), Florida Statutes]; (c) Violating any provision of the Act. [Section 497.233(1)(a), Florida Statutes]; (d) Making any false or misleading statement regarding the sale of services or merchandise. [Section 497.233(1)(m), Florida Statutes}; (e) Making a material misrepresentation for the purpose and intent of effecting settlement of a claim on less favorable terms than those provided in and contemplated by the prepaid contract. [Section 497.445(5)(b), Florida Statutes]; (f) Misrepresenting pertinent facts on prepaid contracts relating to coverage with such frequency as to indicate a general business practice. [Section 497.445(5)(c) 2, Florida Statutes]. COUNT TWO 14. The above allegations are hereby realleged and fully incorporated by reference. 15. Collette C. Smith entered into a prearranged funeral agreement with American Family on July 17, 1997. Four hundred and six dollars ($406.00) is currently trusted to the credit of her account with FSI. 16. In April of 2003, Ms. Smith moved to Alabama and made a written request to Safe Harbor for cancellation of the contract and refund of the trusted money. After several telephone calls, Safe Harbor directed by Ms. Smith to request her refund from FSI, which, in turn, directed her to the Department. 17. The Department provided a copy of Ms. Smith’s complaint to Safe Harbor on October 28, 2003, and requested a written response. The Department never received a response, and a refund has not been made to Ms. Smith to date. Tr IS THEREFORE CHARGED, that you, Safe Harbor Management Services, Inc., d/b/a At Peace Cremations, and Robert M. Shannon, have violated or are accountable under the following provisions of the Act which constitute grounds for discipline: (a) Violating any provision of the Act. [Section 497.233(1)(a), Florida Statutes]; (b) Failing to make a complete refund of the services, facilities and cash advance portions of a preneed contract within 30 days of receipt of written notice of cancellation. [Sections 497.419(2), (10), and 497.233(1)(u), Florida Statutes; Fla. Admin. Code R. 69K- 8.002]. COUNT THREE 18. The above general and specific allegations are hereby realleged and fully incorporated by reference. 19. Gloria and Roland Dubois entered into prearranged funeral contracts with American Family on January 10, 1996, Two hundred fifty-two dollars ($252.00) was paid on each contract, and one hundred seventy-six and 40/ 100 ($176.40) was paid into trust on each contract 20. | Mr. and Mrs. Dubois requested cancellation of their contracts and a refund, in writing, on April 26, 2004. 21. To date, Safe Harbor has not refunded any money to Mr. and Mrs. Dubois. IT IS THEREFORE CHARGED, that you, Safe Harbor Management Services, Inc., d/b/a At Peace Cremations, and Robert M. Shannon, have violated or are accountable under the following provisions of the Act which constitute grounds for discipline: (a) Violating any provision of the Act. [Section 497.233(1)(a), Florida Statutes]; ‘) Failing to make a complete refund of the services, facilities and cash advance portions of a preneed contract within 30 days of receipt of written notice of cancellation. (Sections 497.419(2), (10), and 497.233(1)(u), Florida Statutes; Fla. Admin. Code R. 69K- 8.002]. COUNT FOUR 22. The above allegations are hereby realleged and fully incorporated by reference. 23. Mr. Joseph R. Belvin entered into a preneed funeral agreement with American Family on January |, 1996. The contract included the simple cremation services package, including transportation from place of death, temporary shelter of remains, completion of necessary documents, death certificate, standard cremation container, cremation, return of cremated remains, and all staff services. In addition, Mr. Belvin paid a cash advance of forty- five dollars ($45.00) for ten additional death certificates. 24. When the contract was assigned to Safe Harbor, Mr. Belvin received a letter signed by Mr. Shannon assuring him that his contract would be honored in its entirety and that no additional fees would be charged as long as Safe Harbor handled the services. 25. When Mr. Belvin died on July 22, 2003, Safe Harbor charged additional fees in the amount of two hundred five dollars ($205.00), consisting of forty dollars ($40.00) for document procurement, forty dollars ($40.00) for medical examiner cremation authorization fee, seventy-five dollars ($75,00) for shipping and handling the cremains, and fifty dollars ($50.00) for the cost of petitioning the State for reimbursement from the Consumer Protection Fund. 26. Safe Harbor refused to authorize the release of the cremains, deliver the death certificates or submit an obituary to the newspaper until the additional fees set forth in the previous paragraph were paid. IT IS THEREFORE CHARGED, that you, Safe Harbor Management Services, Inc., d/b/a At Peace Cremations, and Robert M. Shannon, have violated or are accountable under the following provisions of the Act which constitute grounds for discipline: (a) Assessing fees that have not been disclosed to the customer. [Section 497.233(1)(t), Florida Statutes); (b) Violating any provision of the Act. [Section 497.233(1)(a), Florida Statutes]; (c) Misconduct in connection with a preneed transaction. [Section 497.233(1)(i), Florida Statutes}; (d) Making a false or misleading statement regarding the sale of services of merchandise. [Section 497.233(1)(m)}; (e) Making a material misrepresentation for the purpose and intent of effecting settlement of a claim on less favorable terms than those provided in and contemplated by the prepaid contract. {Section 497.445(5)(b), Florida Statutes]; (f) Misrepresenting pertinent facts on prepaid contracts relating to coverage with such frequency as to indicate a general business practice. [Section 497.445(S)(c) 2, Florida Statutes]. COUNT FIVE 27. The above allegations are hereby realleged and fully incorporated by reference. 28. Thomas A. Leedom entered into a prearranged funeral agreement with American Family for a simple cremation service and five additional death certificates, on June 23, 1996. The contract was paid in full as of July 16, 1997. 29, Mr. Leedom was notified on March 25, 1999 that his contract had been assigned to Safe Harbor. 30. On January 10, 2004, Mr. Leedom died, and Safe Harbor was notified to transport his body. Shortly thereafter, Mrs. Leedom received a bill for one hundred forty dollars ($140.00), consisting of ninety-five dollars ($95.00) for document procurement, and forty-five dollars ($45.00) for Safe Harbor to file a claim with the Consumer Protection Fund for reimbursement. The bill contained a note directing that payment must be received prior to cremation. 31, All of the foregoing services were included in the fully paid preneed contract. Nevertheless, Mrs. Leedom paid the extra fees on January 14, 2004, under protest, to facilitate the disposition of her husband’s body; however, she did not receive his cremains until January 23, 2004. To date, Mrs. Leedom has not received any death certificates from Safe Harbor. IT IS THEREFORE CHARGED, that you, Safe Harbor Management Services, Inc., d/b/a At Peace Cremations, and Robert M. Shannon, have violated or are accountable under the following provisions of the Act which constitute grounds for discipline: (a) Assessing fees that have not been disclosed to the customer. [Section 497.233(1)(t), Florida Statutes); (b) Misconduct in connection with a preneed transaction. [Section 497.233(1)(i), Florida Statutes]; (c) Violating any provision of the Act. [Section 497.233(1)(a), Florida Statutes]; (d) Making a false or misleading statement regarding the sale of services of merchandise. [Section 497.233(1)(m)]; (e) Making a material misrepresentation for the purpose and intent of effecting settlement of a claim on less favorable terms than those provided in and contemplated by the prepaid contract. [Section 497.445(5)(b), Florida Statutes]; (f) Misrepresenting pertinent facts on prepaid contracts relating to coverage with such frequency as to indicate a general business practice. {Section 497.445(5)(c) 2, Florida Statutes]. COUNT SIX 32. The above allegations are hereby realleged and fully incorporated by reference. 33. Enrica Matarazzo entered into a prearranged funeral agreement with American Family on July 2, 1996. The agreement provided for simple cremation and three additional death certificates. 10 34. Anthony Matarazzo entered into a prearranged funeral agreement with American Family on July 2, 1996. The agreement provided for simple cremation and three additional death certificates. 35. Two Hundred sixty dollars ($260.00) was paid on Enrica Matarazzo’s contract, of which one hundred eighty-two and 06/100 dollars ($182.06) was held in trust. 36. | Two Hundred sixty dollars ($260.00) was paid on Anthony Matarazzo’s contract, of which one hundred eighty-two and 06/100 ($182.06) was held in trust. 37. Both Enrica and Anthony Matarazzo requested cancellation and refund in writing, and signed the waiver provided by Shannon on March 17, 2004. Receipt of the request and waiver was acknowledged by Mr. Shannon. 38. To date, neither Enrica nor Anthony Matarazzo have received a refund of their money. IT IS THEREFORE CHARGED, that you, Safe Harbor Management Services, Inc., d/b/a At Peace Cremations, and Robert M. Shannon, have violated or are accountable under the following provisions of the Act which constitute grounds for discipline: (a) Violating any provision of the Act. [Section 497.233(1)(a), Florida Statutes]; (b) Failing to make a complete refund of the services, facilities and cash advance portions of a-preneed contract within 30 days of receipt of written notice of cancellation. [Sections 497.419(2), (10), and 497.233(1)(u), Florida Statutes; Fla. Admin. Code R. 69K- 8.002]. COUNT SEVEN 39. The above allegations are hereby realleged and fully incorporated by reference. 11 40. | Norman D. Welch entered into two prearranged funeral agreements with American Family on March 14, 1997. The beneficiaries of the agreements were Mr. Welch and his wife, Joyce Welch. The contract provided for simple cremation and four death certificates. A\. Three hundred forty-nine dollars ($349.00) was received on Norman Welch’s contract, of which two hundred forty-four and 30/100 ($244.30) was trusted. 42. Four hundred thirty-three dollars ($433.00) was received on Joyce Welch’s contract, of which three hundred three and 10/100 dollars ($303.00) was trusted. 43. BothJ oyee and Norman Welch requested cancellation of their contracts and refund of their money, in writing, and signed the waivers provided by Shannon on February 1, 2001. Receipt of the request and waiver was acknowledged. 44, On February 8, 2001, FSI disbursed a total of five hundred forty-seven and 40/100 dollars ($547.40), the amount in trust for both Norman contracts, to Safe Harbor. 45. Not until March 3, 2004, did Safe Harbor make a full refund to the Welches, and then only following the Department’s intervention. IT IS THEREFORE CHARGED, that you, Safe Harbor Management Services, Inc., d/b/a At Peace Cremations, and Robert M. Shannon, have violated or are accountable under the following provisions of the Act which constitute grounds for discipline: (a) Violating any provision of the Act. {Section 497.233(1)(a), Florida Statutes], (b) Failing to make a complete refund of the services, facilities and cash advance portions of a preneed contract within 30 days of receipt of written notice of cancellation. [Sections 497.419(2), (10), and 497.233(1)(u), Florida Statutes; Fla. Admin. Code R. 69K- 8.002]. 42 WHEREFORE, you, Safe Harbor Management Services, Inc., d/b/a At Peace Cremations, and Robert M. Shannon, are hereby notified that the Department intends to enter an Order imposing such penalties as are provided under the provisions of sections 497.233(2), 497.435, 497.519, Florida Statutes, and Fla. Admin. Code R. 69K-11. NOTICE OF RIGHTS You have the right to request a proceeding to contest this action by the Department pursuant to sections 120.569 and 120.57, Florida Statutes, and Rule 28.107, Florida Administrative Code. The proceeding request must be in writing, signed by you, and must be filed with the Department within twenty-one (21) days of your receipt of this notice. Completion of the attached Election of Proceeding form and/or a petition for administrative hearing will suffice as a written request. The request must be filed with the General Counsel as acting Agency Clerk, at the Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0333. The Department must receive your written response no later than 5:00 p.m. on the twenty-first day after your receipt of this notice. Mailing the response on the twenty-first day will not preserve your right to a hearing. YOUR FAILURE TO RESPOND IN WRITING WITHIN TWENTY-ONE (21) DAYS OF YOUR RECEIPT OF THIS NOTICE WILL CONSTITUTE A WAIVER OF YOUR RIGHT TO REQUEST A PROCEEDING ON THE MATTERS ALLEGED HEREIN. If you request a proceeding, you must provide information that complies with the requirements of Rule 28-107.004, Florida Administrative Code. As noted above, completion of 13 the attached Election of Proceedings form conforms to these requirements. Specifically, your response must contain: (a) The name and address of the party making the request, for purpose of service; (b) A statement that the party is requesting a hearing involving disputed issues of material fact, or a hearing not involving disputed issues of material fact; and (c) A reference to the notice, order to show cause, administrative complaint, or other communication that the party has received from the agency. If a hearing of any type is requested, you have the right to be represented by counsel or other qualified representative at your expense, to present evidence and argument, to call and cross-examine witnesses, and to compel the attendance of witnesses and the production of documents by subpoena. If a proceeding is requested and there is no dispute of material fact, the provisions of section 120.57(2), Florida Statutes, apply. In this regard, you may submit oral or written evidence in opposition to the action taken by the Department or a written statement challenging the grounds upon which the Department has relied. While a hearing is normally not required in the absence of a dispute of fact, if you feel that a hearing is necessary, one will be conducted in Tallahassee, Florida, or by telephonic conference call upon your request. Failure to follow the procedure outlined with regard to your response to this notice may result in the request being denied. All prior oral communication or correspondence in this matter shall be considered freeform agency action, and no such oral communication or correspondence shall operate as a valid request for an administrative proceeding. Any request for an administrative proceeding received prior to the date of this notice shall be deemed abandoned unless timely renewed in compliance with the guidelines as set out above. 14 Mediation of this matter pursuant to section 120.573, Florida Statutes, is not available. No Department attorney will discuss this matter with you until your response is received by the Department of Financial Services. DATED: this w 4 day of November, 2004. KAREN CHANDLER Deputy Chief Financial Officer CERTIFICATE OF SERVICE | HEREBY CERTIFY that a copy of the foregoing ADMINISTRATIVE COMPLAINT has been furnjshed to the person and entity at the addresses above listed by U.S. Certified Mail this cf. day of November, 2004. / UC VLL A Hf, £2 x = Lesley, endelsor, Assistant General Counsel oride Department of Financial Services Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0333 (850) 413-4148 Fla. Bar No. 97569 15

Docket for Case No: 05-000846