                                                                                                   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
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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
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                                                                                                       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
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        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
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                                                                                                     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
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                  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
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                                                                                                 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
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           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
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                                                                                                    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
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                                                                                                        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
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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
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        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
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                                                     m
                                  Order No. 2013- U<AC
                                  Docket No. BE-13-11-326

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
