FILED MAY 26 2099 REPH ALEX SINK CHETATEORTLOMIDAT Docketeg by IN THE MATTER OF: BEACHES MEMORIAL GARDENS, CASE NO.: 103192-09-FC A D/B/A OF CEMETERY PROFESSIONALS, LLC / ADMINSITRATIVE COMPLAINT TO: BEACHES MEMORIAL GARDENS 1500 Main Street ; Atlantic Beach, Florida 32233 BEACHES MEMORIAL GARDENS c/o Wood, Atter & Associates 333-1 East Monroe Street Jacksonville, Florida 32202 BEACHES MEMORIAL GARDENS, a d/b/a of Cemetery Professionals, LLC, (hereinafter “BEACHES”) is hereby notified that the State of Florida Department of Financial Services, Division of Funeral, Cemetery, and Consumer Services (hereafter “Department”) has conducted inspections and examinations in connection with BEACHES’ licensure to operate a cemetery and to sell preneed funeral services or merchandise or burial services or merchandise. On April 28, 2009, a probable cause panel found probable cause to charge BEACHES with violations of Chapter 497, Florida Statutes and the Florida Administrative Code as set forth in this Administrative Complaint. This Administrative Complaint includes violations alleged within examination report numbers EC# 20070200029, SR# 1-326181793, EC# 20070200028, Filed August 25, 2010 11:14 AM Division of Administrative Hearings. and SR# 1-326181755 which were presented to the probable cause panel. Based upon those Department investigations, it is alleged: GENERAL ALLEGATIONS 1. . Pursuant to Section 20.121, Florida Statutes, Chapter 497, Florida Statutes, the “Florida Funeral, Cemetery, and Consumer Services Act,” and Chapter 69K, Florida Administrative Code (hereinafter “Act”), the Department is the state agency charged with regulating the operations of cemeteries. 2. Section 497,005(11), Florida Statutes, defines the term “cemetery” as [A] place dedicated to and used or intended to be used for the permanent interment of human remains or cremated remains. A cemetery may contain land or earth interment; mausoleum, vault, or crypt interment; a columbarium, ossuary, scattering garden, or other structure or place used or intended to be used for the interment or disposition of cremated remains; or any combination of one or more of such structures or places. 3. Section 497.005(12), Florida Statutes, defines the term “cemetery company” as “[A]ny legal entity that owns or controls cemetery lands or property.” 4. Section 497.005(54), Florida Statutes, defines the term “preneed contract” as “[A]ny arrangement or method of which the provider of funeral merchandise or services has actual knowledge, whereby any person agrees to furnish funeral merchandise or service in the future.” 5. Section 497.005(55), Florida Statues, defines the term “preneed sales agent” as “{A]ny person who is licensed under this chapter to sell preneed burial or funeral service and . merchandise contracts or direct disposition contracts in this state.’Section 497.152, Florida Statutes, sets forth conduct that is prohibited and shall constitute grounds for discipline or other enforcement action against the licensee. 6. Section 497.153(1), Florida Statutes, provides that The expiration, nonreneweal, or surrender of licensure under this chapter shall not eliminate jurisdiction in the licensing authority to investigate and prosecute for violations committed by a licensee while licensed under this chapter. The prosecution of any matter may be initiated or continued notwithstanding the withdrawal of any complaint. 7. Section 497.465(7), Florida Statues, provides that “[T]he licensing authority shall continue to have jurisdiction over the inactive preneed licensee and the trust funds as if the preneed license were active and to require such reports and inspect such records as the licensing authority deems appropriate so long as there are funds in trust or preneed contracts that are not fulfilled.” 8. Records of the Department of State, Division of Corporations indicate that BEACHES is a fictitious name owned by The Kuzniar Group, LLC. The registered agent for The Kuzniar Group, LLC is Wood, Atter & Associates. The address for the registered agent is 333-1 East Monroe Street, Jacksonville, Florida 32202. 9. At all times material and relevant to this Administrative Complaint, BEACHES was a licensed cemetery company within the state of Florida, having been issued license number FO39753 (formerly CEM0600046), pursuant to the provisions of the Act, to operate a cemetery at 1500 Main Street, Jacksonville, Florida. 10. At all times material and relevant to this Administrative Complaint, BEACHES was a licensed preneed sales branch of Cemetery Professionals located at 3751 North Cocoa Blvd., Cocoa, Florida, within the state. of Florida, having been issued license number FO19496, pursuant to the provisions of the Act, to sell preneed funeral services or merchandise or burial services or merchandise. 11. A Department examiner conducted an examination of BEACHES for the period of June 1, 2005 through December 31, 2006 (hereinafter “examination period”). The allegations which follow are based on that examination. COUNT ONE 12. The above General Allegations are hereby realleged and fully incorporated herein by reference, 13. During the examination period, BEACHES failed to accurately keep records and reports, in that: a) For those accounts receivable maintained by BEACHES, records were incomplete with numerous payments not posted or accounted for. b) BEACHES did not maintain documentation or records for many of their accounts. c) Records for contracts trusted with SunTrust could not be verified. d) BEACHES did not keep a record of every burial in the cemetery, in that BEACHES could not produce an internment card or lot card which reflected the internment date. e) BEACHES failed to provide accurate work papers and related record. IT IS THEREFORE CHARGED that BEACHES, as a cemetery licensee and preneed licensee, has violated or is accountable under the following provisions of the Act: (a) The licensing authority may prescribe by rule the minimum information to be shown in the books, accounts, records, and documents of a cemetery company to enable the department to determine the company's compliance with this chapter, and may prescribe financial statements that shall be prepared annually by licensed cemetery companies. [Section 497.276(3), Florida Statutes] (b) Account receivable records pertaining to each individual purchaser shall be assigned the same serial number as shown on the purchaser’s contract and shall be maintained in numerical sequence. The name of the purchaser or beneficiary, deferred payment price, date and amount of each payment, outstanding balance, retail price of each item, wholesale price of merchandise by item, a schedule of payments and percentage required to be deposited in each trust fund from each payment. [Rule 69K-6.0051, Fla. Admin. Code] (c) A licensed entity shall prepare and provide accurate work papers to the Department for the purpose of an examination. [Rule 69K-6.0052(1), Fla. Admin, Code] (d) A record shall be kept of every burial in the cemetery of a cemetery company, showing the date of burial and the name of the person buried, together with lot, plot, and space in which the burial was made. All financial records of the cemetery company shall be available at its principal place of business in this state and shall be readily available at all reasonable times for examination by the department. [Section 497.276(1), Florida Statutes] (e) Committing fraud, deceit, negligence, incompetency, or misconduct in the practice of any of the activities regulated under this chapter. [Section 497,152(1)(b), Florida Statutes] (63) Violating any provision of this chapter or any lawful order of the board or department or of the statutory predecessors to the board or department. [Section 497.152(1)(a), Florida Statutes] COUNT TWO 14. The above General Allegations are hereby realleged and fully incorporated herein by reference. 15. | BEACHES did not prepare contracts in accordance with the requirements of the Act in that: a) BEACHES failed to have the purchaser initial and date changes made on the contracts. b) BEACHES failed to provide notice of costs to the consumer of all fees and costs associated with the use of burial rights, merchandise or services purchases. c) BEACHES failed to document engraving services, sold for its Veteran’s monument, on a contract. IT JS THEREFORE CHARGED that BEACHES, as a cemetery licensee and preneed licensee, has violated or is accountable under the following provisions of the Act: (a) The written contract shall be completed as to all essential provisions prior to the signing of the contract by the customer. [Section 497.282(6)(a), Florida Statutes] (b) An executed preneed contract may be amended if the contract change does not affect the description or sales price of merchandise, or the sales price of services or cash advances, as reflected on the originally executed contract. All contract changes must be initialed and dated by the contract purchaser. The contract must be clearly legible before and after any amendments. [Rule 69K-8.004(5), Fla. Admin. Code] . (c) Provide a good faith estimate of all fees and costs the customer will incur to use any burial rights, merchandise, or services purchased. [Section 497.282(4), Florida Statutes] (d) | Written contracts on all sales must be made between the cemetery company or preneed license and the purchaser which contracts shall state the sales prices, terms and other pertinent information relative to the transaction. Such contracts shall be serially numbered and filed by the cemetery company or preneed license in numerical sequence. All sales shall be entered into a sales journal numerically. [Rule 69K-6.0054(1), Fla. Admin. Code] (e) . Each person who engages in preneed sales of funeral or burial merchandise shall determine, and notify the purchaser in writing prior to the completion of the contract, that the merchandise being considered for purchase will be accepted in the cemetery of the purchaser's choice. [Section 497.467, Florida Statutes] (f) ~ Preneed contracts shall contain a description of merchandise purchased with sufficient information to describe the merchandise to the purchaser or any other person. [Rule 69K-8.006(1), Fla. Admin. Code] (g) Committing fraud, deceit, negligence, incompetency, or misconduct in the practice of any of the activities regulated under this chapter. [Section 497.152(1)(b), Florida Statutes} (h) Violating any provision of this chapter or any lawful order of the board or department or of the statutory predecessors to the board or department. [Section 497.152(1)(a), Florida Statutes] COUNT THREE 16. The above General Allegations are hereby realleged and fully incorporated herein by reference. 17. During the examination period BEACHES failed to maintain adequate records regarding the Care and Maintenance Trust Fund in that: a) BEACHES failed to pay into the Care and Maintenance Trust Fund ten percent (10%) of each purchaser’s purchase price for burial rights. b) BEACHES did not make deposits to the Care and Maintenance fund within thirty (30) days following the close of the calendar month in which each payment was received. c) During this time frame, BEACHES did not make deposits into the Care and Maintenance Trust Fund to sufficiently offset the liabilities as required by the Act. The Care and Maintenance Trust fund had a deficiency of approximately $3,492.96. IT IS THEREFORE CHARGED that BEACHES, as a cemetery licensee, has violated or is accountable under the following provisions of the Act: (a) No cemetery company may establish a cemetery, or operate a cemetery if already established, without providing for the future care and maintenance of the cemetery, for which a care and maintenance trust fund shall be established. [Section 497.266(1), Florida Statutes] (b) Deposits to the care and maintenance trust find shall be made by the cemetery company not later than 30 days following the close of the calendar month in which any payment was received. [Section 497,268, Florida Statues] (c) The cemetery company is obligated to pay into the Care and Maintenance Trust Fund ten percent (10%) of the purchase price of burial rights as outlined in Section 497.268, F.S. [Rule 69K-7.001(1), Fla. Admin. Code] (d) The percentages required to be deposited in the care and maintenance fund for crypts commonly known as turf tops, lawn crypts, Westministers, and similar types, shall be computed in the same manner and at the same rate as a mausoleum if the crypt is above or partially above the natural contour of the land. [Rule 69K-7.002, Fla. Admin. Code] (e) Committing fraud, deceit, negligence, incompetency, or misconduct in the practice of any of the activities regulated under this chapter. [Section 497.152(1)(b), Florida Statutes] (f) Violating any provision of this chapter or any lawful order of the board or department or of the statutory predecessors to the board or department. [Section 497.152(1)(a), Florida Statutes] COUNT FOUR 18. The above General Allegations are hereby realleged and fully incorporated herein by reference. 19. — Section 497.458(1)(a), Florida Statutes, provides that 20, funds, in that: Any person who is paid, collects, or receives funds under a preneed contract for funeral services or merchandise or burial services or merchandise shall deposit an amount at least equal to the sum of 70 percent of the purchase price collected for all services sold and facilities rented; 100 percent of the purchase price collected for all cash advance items sold; and 30 percent of the purchase price collected or 110 percent of the wholesale cost, whichever is greater, for each item of merchandise sold. During the examination period BEACHES failed to appropriately handle its trust a) The Preneed Trust account was underfunded as BEACHES did not make deposits to the trust account to sufficiently offset the Preneed Trust Fund liability. b) BEACHES did not make deposits to the Preneed Trust fund within thirty (30) days following the close of the calendar month in which each payment was received. c) ~ During this time frame, BEACHES did not make deposits into the Preneed Trust Fund to sufficiently offset the liabilities as required by the Act. The Preneed Trust Fund had a deficiency of approximately $28,510.00 for the examination period. d) BEACHES had an. additional Pre-need Trust deficit of approximately $15,648.00 due to payments not posted to the accounts, incorrect postings made on the account receivable accounts, and miscalculation of total liability due. e) The Preneed Trust had a total liability of approximately $44,158.00. The Department put BEACHES on notice of that deficiency. BEACHES failed to remit the amount within thirty (30) days of receiving this notice. IT IS THEREFORE CHARGED that BEACHES, as a preneed licensee, has violated or is accountable under the following provisions of the Act: (a) Disbursements of funds discharging any preneed contract fulfilled after September 30, 1993, shall be made by the trustee to the preneed licensee upon receipt of a certified copy of the death certificate of the contract beneficiary or satisfactory evidence as established by rule of the licensing authority that the preneed contract has been performed in whole or in part. However, if the contract is only partially performed, the disbursement shall only cover that portion of the contract performed. In the event of any contract default by the contract purchaser, or in the event that the funeral merchandise or service or burial merchandise or service contracted for is not provided or is not desired by the heirs or personal representative of the contract beneficiary, the trustee shall return, within 30 days after its receipt of a written request therefor, funds paid on the contract to the preneed licensee or to its assigns, subject to the provisions of s, 497.459, [Section 497.460, Florida Statutes] (b) Such deposits shall be made within 30 days after the end of the calendar month in which payment is received, under the terms of a revocable trust instrument entered into with a trust company operating pursuant to chapter 660, with a national or state bank holding trust powers, or with a federal or state savings and loan association holding trust powers. [Section 497.458(1)(c), Florida Statutes] (c) All payments paid toward any preneed funeral or burial service or merchandise contract shall be trusted pursuant to Section 497.458 or 497.464, F.S., unless such merchandise or service is sold by a cemetery company and such merchandise is delivered or such service performed within 120 days after receipt of the final payment in accordance with Section 497.283, F.S. This section shall not apply to preneed contracts sold pursuant to Section 497.461 or 497.462, F.S. [Rule 69K-7.0017(1), Fla. Admin. Code] (d) Failing to remit as required by this chapter the required amounts to any trust fund required by this chapter. [Section 497.152(15)(b), Florida Statutes] 10 (e) Committing fraud, deceit, negligence, incompetency, or misconduct in the practice of any of the activities regulated under this chapter. [Section 497.152(1)(b), Florida Statutes] (63) Violating any provision of this chapter or any lawful order of the board or department or of the statutory predecessors to the board or department. [Section 497.152(1)(a), Florida Statutes] WHEREFORE, the Department respectfully request that the Board enter an order imposing one or more of the following penalties: revocation or suspension of your license; imposition of an administrative fine not to exceed five thousand dollars ($5,000) for each count or separate offense; issuance of a written reprimand; placement of you on probation, assessment of costs associated with investigation and prosecution; requiring you to make restitution; imposition of any or all penalties delineated within Section 497.153(5), Florida Statutes; and any other relief that the Board is authorized to impose pursuant to the Act. Additionally, the Department intends to request the Board to consider a petition to the circuit court for the appointment of a receiver pursuant to Section 497.160, Florida Statutes. NOTICE OF RIGHTS Pursuant to Sections 120.569 and 120.57, Florida Statutes, and Rule 28-106, Florida Administrative Code, you have the right to request a proceeding to contest this action by the Department of Financial Services ("Department"). 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 Tracey Beal, Agency Clerk, at the Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0390. Your written response must 11 be received by the Department 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 AND AN ORDER OF SUSPENSION OR REVOCATION WILL BE ENTERED AGAINST YOU, If you request a proceeding, you must provide information that complies with the requirements of Rule 28-106.2015, Florida Administrative Code. As noted above, completion of the attached Election of Proceeding form conforms to these requirements. Specifically, your response must contain: (a) The name, address, and telephone number, and facsimile number (if any) of the respondent (for the purpose of requesting a hearing in this matter, you are the "respondent"). (b) The name, address, telephone number, facsimile number of the attorney or qualified representative of the respondent (if any) upon whom service of pleadings and other papers shall be made. (c) A statement requesting an administrative hearing identifying those material facts that'are in dispute. If there are none, the petition must so indicate. (d) A statement of when the respondent received notice. of the administrative complaint. (e) A statement including the file number to the administrative complaint. 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 12 documents by subpoena. If a proceeding is requested and there is no dispute of material fact, the provisions of Sections 120.57(2) and 497.153(4)(b), Florida Statutes, apply. You may either submit a written statement and documentary evidence to the Board in lieu of a hearing, or personally attend a hearing conducted by the Board at the location of a regularly scheduled Board meeting. However, if you dispute material facts that are the basis for the Department’s action, you must request an adversarial proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes. These proceedings are held before a State Administrative Law Judge of the Division of Administrative Hearings. Unless the majority of witnesses are located elsewhere, the Department will request that the hearing be conducted in Tallahassee, Florida. 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. Mediation of this matter pursuant to Section 120.573, Florida Statutes, is not available. No Department attorney will discuss this matter with you until the response has been received by the Department. DATED and SIGNED this oy day of M as) , 2009. 2 ! ora TAMMY TES7JON Deputy Chief Financial Officer CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing ADMININSTRATIVE COMPLAINT and ELECTION OF PROCEEDING form has been furnished by U.S. Certified Mail, return receipt request, on Wh 4, of peg , 2009, to the following: BEACHES MEMORIAL GARDENS 1500 Main Street Atlantic Beach, Florida 32233 BEACHES MEMORIAL GARDENS c/o Wood, Atter & Associates 333-1 East Monroe Street Jacksonville, Florida 32202 Asst. General/Counsel Fla. Bar. No.: 0230560 Florida Department of Financial Services 200 E. Gaines St. Tallahassee, FL 32399-4247 Phone (850) 413-4180 Fax: (850) 488-0697 Counsel for the Department 14 STATE OF FLORIDA BOARD OF FUNERAL, CEMETERY AND CONSUMER SERVICES IN THE MATTER OF: BEACHES MEMORIAL GARDENS CASE NO.: 103192-09-FC A D/B/A OF CEMETERY PROFESSIONALS CEM 39753 and PNL 19496 BLECTION OF PROCEEDING I have received and have read the Administrative Complaint filed by the Florida Department of Financial Services ("Department") against me, including the Notice of Rights contained therein, and I understand my options, I am requesting disposition of this matter as indicated below. (CHOOSE ONE) 1] I do not dispute any of the Department’s factual allegations and I do not desire a hearing. I understand that by waiving my right to a hearing, the Board of Funeral, Cemetery and Consumer Services (“Board”) may enter a final order that adopts the Administrative Complaint and imposes the sanctions sought, including suspending or revoking my license(s) as may be appropriate. I do not dispute any of the Department's factual allegations and I hereby clect a proceeding to be conducted in accordance with Sections 120.57(2) and 497,153(4)(b), Florida Statutes. In this regard, I desire to (CHOOSE ONE): [] Submit a written statement and documentary evidence to the Board in lieu of a hearing; or {] Personally attend a hearing conducted by the Board at the location of a regularly scheduled Board meeting, T do dispute one or more of the Department's factual allegations. | hereby request a hearing pursuant to Section 120.57(1), Florida Statutes, to be held before the Division of Administrative Hearings. I have attached to this election form the information required by Rule 28-106,2015, Florida Administrative Code, as specified in subparagraph (c) of the Notice of Rights, Specifically, I have identified the disputed issues of material fact in the response attached hereto, TO PRESERVE YOUR RIGHT TO A HEARING, YOU MUST FILE YOUR RESPONSE WITH THE DEPARTMENT OF FINANCIAL SERVICES WITHIN TWENTY-ONE (21) DAYS OF YOUR RECEIPT OF THE ADMINISTRATIVE COMPLAINT. THE RESPONSE MUST BE RECEIVED BY THE DEPARTMENT NO LATER THAN 3:00 P.M. ON THE TWENTY-FIRST DAY AFTER YOUR RECEIPT OF THE ADMINISTRATIVE COMPLAINT. The address for filing is: Tracey Beal, Agency Clerk, Florida Department of Financial Services, 612 Larson Building, 200 East Gaines Street, Tallahassee, Florida 32399-0390, Signature Print Name Date: Address: Date Administrative Complaint Reesived: If you are represented by an attorney or qualified Phone No.: representative, please attach to this election form his or her name, address, telephone and fax numbers Fax No.:

Docket for Case No: 10-008268

Orders for Case No: 10-008268