Howard v. The Roman Catholic Archdiocese of Los Angeles Cemeteries Class Action

The Court has certified a class action against the Roman Catholic Arch Diocese for unfair business practices regarding the charges for Care and Maintenance in burial contracts from 1992 forward. The lawsuit alleges that, starting in 1992, the Roman Catholic Archdiocese of Los Angeles engaged in deceptive and unfair business practices by charging a line item in burial contracts for Archdiocese of Los Angeles Cemeteries  for “Care and Maintenance” when, in reality, the money could be used for other purposes and some of the money was used  to settle claims brought by victims of sexual abuse. Plaintiff alleges that this conduct violated California law and that the class members are entitled to restitution of the money paid for “Care and Maintenance” and injunctive relief for the violations. The Roman Catholic Archdiocese of Los Angeles has denied any wrongdoing.

The case proceeded to a class action trial and the court found the contracts were deceptive and violated California’s Unfair Competition Law and made numerous findings including:

In or about 1992, Defendant began using new burial contract templates for its burial
services which contained a column for “Fees, Care and Maintenance” (“F, C & M”).

Defendant’s contracts included charges in the F, C & M column from 1992 to the
Spring of 2020.

The specific dollar amounts for F, C & M are written on the face of the burial
contracts in the F, C & M column, when the contracts are presented to the burial plot purchasers at the time the purchasers sign the contracts.

Defendant trained its mortuary need sales representatives to advise customers (if they
ask) that the F, C & M charge was for care and maintenance of the cemeteries. Sales representatives were not trained to inform the customers that sums designated for care and maintenance could be used for any other purpose Defendant chose.

Class members testified that they noticed the F, C & M charges and believed those
charges were to maintain the cemetery. There was nothing in the burial contracts to suggest otherwise.

Based on the layout and text of the burial contracts, a reasonable consumer who read
these contracts would likely believe that the F, C & M charges are identified in a separate column to inform the consumer that these amounts will be spent for the dedicated purpose of care and maintenance of cemetery plots.

There was nothing in the burial contracts that informed consumers that the F, C & M
charges could be spent for purposes other than Fees, Care & Maintenance of cemetery plots.

Defendant acknowledges that customers who read the care and maintenance charge in
the contracts would think “some of the money is going to be spent on care” (of grave sites).

Amounts listed in the F, C & M charge column of burial contracts were not
necessarily used by Defendant for ongoing care and maintenance of its cemeteries.

All money earned from the sale of burial contracts was deposited into an unrestricted
Care Fund, including amounts paid by customers that was identified in the F, C & M column of the burial contracts (amounting to t5% of the purchase price for burial services).

Defendant paid for ongoing care and maintenance of cemeteries from the general
operating fund.

The “Care Fund” is comprised solely of the money customers had paid for the F, C &
M charges in the contracts and investment income derived therefrom.

The Care Fund was a reserve account item that was not used for care and maintenance
of the cemeteries and could be spent in any manner Defendant chose.

In 2007, the Care Fund balance was $83,418,463.11.

In 2007, Defendant withdrew $80 million from the Care Fund and used it to pay for
settlements of sex abuse cases, reducing the balance of the Care Fund to $3,418,463.11.

As of June 30, 2022, the balance of the Care Fund, holding the money from the F, C &
M charges, is approximately $140 million. This figure is based on the Care and Maintenance charges paid by the consumers since 2007 (after the $80 million was removed) and investment returns on that corpus.

Defendant has never spent any of the money from the F, C & M charges on care and
maintenance of cemeteries.

None of the money Defendant had received from the F, C & M charges is needed for
any current cemetery care or maintenance obligations.

The Court finds the F, C & M charge in the burial contracts informed the consumers
that the money charged was for fees, care and maintenance of their gravesites and the cemetery.
Burial contracts did not inform consumers that the money paid for the F, C & M charge was for
anything other than the fees, care and maintenance of their burial sites and the cemetery.

The Court finds a reasonable consumer was likely to believe monies paid for the Fees,
Care & Maintenance charge in the burial contracts was to be used for the care and maintenance of the cemeteries and their burial sites.

The Court finds that the Defendant did not dedicate the money obtained from the F, C & M charge in the burial contracts for the care and maintenance of the cemeteries, but rather that
Defendant commingled the money from the F, C & M charge, with other monies of Defendant.

The F, C & M charge in the contracts was deceptive because it was likely to cause
members of the public to believe the charge was for the care and maintenance of the cemeteries and
their burial sites, when it was not needed for or used for that purpose.

The F, C & M charge in the contracts was deceptive because it did not inform
members of the public that the money charged for F, C & M was not required to be spent on care and maintenance of the cemeteries but was and could be spent on anything the Defendant chose.

The Court finds the class action claim for violation of the Unfair Competition Law
(Bus. & Prof. Code, section 17200 et seq.) against Defendant has benefitted the public by causing the Defendant to eliminate the deceptive F, C & M charge from its burial contracts.”