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Judges rule on issues stemming from cemetery case

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The Indiana Court of Appeals ruled on matters involving alleged looting of cemetery funds in two cases Monday, upholding the denial of class certification in one case and adopting a “plain legal prejudice” standard in the other case.

A proposed class-action lawsuit was filed against Memory Gardens Management Corp. regarding alleged misappropriation of millions of dollars in trust funds by the original owners of the corporation, the new owner — Ansure Mortuaries of Indiana, and other entities. William Fishback’s suit sought to recover damages for customers who had paid for perpetual care services; Angela Farno was later added as a plaintiff. She had pre-paid for space and services. Her complaint alleged 11 counts, including claims under Indiana’s Deceptive Consumer Practices Act and violations of statutes governing cemetery trust accounts.

After the proposed class action was filed, the receiver appointed by the Indiana Securities Commissioner filed a complaint asserting similar claims. The class-action claims regarding the perpetual care services were dismissed, leaving Farno as the only named plaintiff. She filed a motion for class certification, which the trial court denied because it found that action was not superior to other available methods for the fair and efficient adjudication of the controversy under Indiana Trial Rule 23(B)(3). The Court of Appeals took up the matter on interlocutory appeal.

After she filed a motion to stay the proceedings pending an appeal, another business agreed to acquire Ansure’s mortuary business and maintain the cemeteries. Farno sought to lift the stay so she could seek preliminary approval of a class-action settlement she had reached with some defendants, including Ansure and the receiver. Matthew Goldberg and his company, Indiana Investment, were the only non-settling defendants to object. Goldberg was alleged to have issued worthless debentures to the trust accounts in order to conceal the misappropriation of funds. The trial court granted preliminary approval to the class-action settlement. The Court of Appeals also accepted Goldberg’s appeal on interlocutory appeal.

In Angela K. Farno v. Ansure Mortuaries of Indiana, LLC, et al., No. 41A05-1002-PL-104, the appellate court affirmed the denial of Farno’s motion for class certification. Farno argued the trial court shouldn’t have considered the receiver’s action or an action brought by the Securities Commissioner in its superiority analysis under T.R. 23(B)(3). The judges cited Kamm v. California City Development Co., 509 F.2d 205 (9th Cir. 1975), as a case supporting that actions brought by third parties are superior to a class action to rule on issues between the class-action plaintiffs and defendants.

Citing Kamm, the judges found Farno and the receiver brought similar claims against many of the same defendants. In addition, Farno didn’t cite any authority for her suggestion that a trial court may not consider factors other than the four listed in T.R. 23(B)(3) when deciding the question of superiority.

“Farno’s stated purpose for requesting class certification was to ‘resolv[e] the customers’ claims to restore the pre-need trust funds and to ensure that customers’ pre-paid burial services and merchandise will be provided when they pass away,’” wrote Judge Terry Crone. “However, the Securities Commissioner’s Action, the Receiver’s Action, and the pending sale of the cemeteries were all geared toward restoring both the pre-need trust funds and the perpetual care trust funds, which would in turn ensure both that the customers’ pre-paid burial services and merchandise will be provided when they pass away and that their burial sites will be cared for in perpetuity. As such, these alternative methods were clearly better suited for ‘handling the total controversy’ in the words of the Federal Rules Advisory Committee.”

In Matthew Goldberg, et al. v. Angela K. Farno, et al., No. 41A01-1007-MF-348, the judges affirmed the trial court’s preliminary approval of the settlement agreement. The 7th Circuit Court of Appeals and other circuits have adopted the doctrine that a defendant must “prove plain legal prejudice in order to have standing to challenge a partial settlement to which it is not a party,” wrote Judge Crone. Indiana Trial Rule 41(a)(2) is substantially similar to Federal Rule of Civil Procedure 41(a)(2) regarding voluntary dismissals. The appellate court adopted the “plain legal prejudice” standard based on Federal Rule 41(a)(2) for determining whether a non-settling defendant has standing to challenge a partial settlement to which it is not a party, whether “in a class action or simply ordinary litigation.”

Goldberg failed to establish plain legal prejudice in this case. The class settlement didn’t interfere with his contractual rights, his ability to seek contribution or indemnification, nor did it strip him of a legal claim or cause of action, wrote Judge Crone. He has no standing to challenge the ruling.

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  1. From back in the day before secularism got a stranglehold on Hoosier jurists comes this great excerpt via Indiana federal court judge Allan Sharp, dedicated to those many Indiana government attorneys (with whom I have dealt) who count the law as a mere tool, an optional tool that is not to be used when political correctness compels a more acceptable result than merely following the path that the law directs: ALLEN SHARP, District Judge. I. In a scene following a visit by Henry VIII to the home of Sir Thomas More, playwriter Robert Bolt puts the following words into the mouths of his characters: Margaret: Father, that man's bad. MORE: There is no law against that. ROPER: There is! God's law! MORE: Then God can arrest him. ROPER: Sophistication upon sophistication! MORE: No, sheer simplicity. The law, Roper, the law. I know what's legal not what's right. And I'll stick to what's legal. ROPER: Then you set man's law above God's! MORE: No, far below; but let me draw your attention to a fact I'm not God. The currents and eddies of right and wrong, which you find such plain sailing, I can't navigate. I'm no voyager. But in the thickets of law, oh, there I'm a forester. I doubt if there's a man alive who could follow me there, thank God... ALICE: (Exasperated, pointing after Rich) While you talk, he's gone! MORE: And go he should, if he was the Devil himself, until he broke the law! ROPER: So now you'd give the Devil benefit of law! MORE: Yes. What would you do? Cut a great road through the law to get after the Devil? ROPER: I'd cut down every law in England to do that! MORE: (Roused and excited) Oh? (Advances on Roper) And when the last law was down, and the Devil turned round on you where would you hide, Roper, the laws being flat? (He leaves *1257 him) This country's planted thick with laws from coast to coast man's laws, not God's and if you cut them down and you're just the man to do it d'you really think you would stand upright in the winds that would blow then? (Quietly) Yes, I'd give the Devil benefit of law, for my own safety's sake. ROPER: I have long suspected this; this is the golden calf; the law's your god. MORE: (Wearily) Oh, Roper, you're a fool, God's my god... (Rather bitterly) But I find him rather too (Very bitterly) subtle... I don't know where he is nor what he wants. ROPER: My God wants service, to the end and unremitting; nothing else! MORE: (Dryly) Are you sure that's God! He sounds like Moloch. But indeed it may be God And whoever hunts for me, Roper, God or Devil, will find me hiding in the thickets of the law! And I'll hide my daughter with me! Not hoist her up the mainmast of your seagoing principles! They put about too nimbly! (Exit More. They all look after him). Pgs. 65-67, A MAN FOR ALL SEASONS A Play in Two Acts, Robert Bolt, Random House, New York, 1960. Linley E. Pearson, Atty. Gen. of Indiana, Indianapolis, for defendants. Childs v. Duckworth, 509 F. Supp. 1254, 1256 (N.D. Ind. 1981) aff'd, 705 F.2d 915 (7th Cir. 1983)

  2. "Meanwhile small- and mid-size firms are getting squeezed and likely will not survive unless they become a boutique firm." I've been a business attorney in small, and now mid-size firm for over 30 years, and for over 30 years legal consultants have been preaching this exact same mantra of impending doom for small and mid-sized firms -- verbatim. This claim apparently helps them gin up merger opportunities from smaller firms who become convinced that they need to become larger overnight. The claim that large corporations are interested in cost-saving and efficiency has likewise been preached for decades, and is likewise bunk. If large corporations had any real interest in saving money they wouldn't use large law firms whose rates are substantially higher than those of high-quality mid-sized firms.

  3. The family is the foundation of all human government. That is the Grand Design. Modern governments throw off this Design and make bureaucratic war against the family, as does Hollywood and cultural elitists such as third wave feminists. Since WWII we have been on a ship of fools that way, with both the elite and government and their social engineering hacks relentlessly attacking the very foundation of social order. And their success? See it in the streets of Fergusson, on the food stamp doles (mostly broken families)and in the above article. Reject the Grand Design for true social function, enter the Glorious State to manage social dysfunction. Our Brave New World will be a prison camp, and we will welcome it as the only way to manage given the anarchy without it.

  4. When I hear 'Juvenile Lawyer' I think of an attorney helping a high school aged kid through the court system for a poor decision; like smashing mailboxes. Thank you for opening up my eyes to the bigger picture of the need for juvenile attorneys. It made me sad, but also fascinated, when it was explained, in the sixth paragraph, that parents making poor decisions (such as drug abuse) can cause situations where children need legal representation and aid from a lawyer.

  5. Some in the Hoosier legal elite consider this prayer recommended by the AG seditious, not to mention the Saint who pledged loyalty to God over King and went to the axe for so doing: "Thomas More, counselor of law and statesman of integrity, merry martyr and most human of saints: Pray that, for the glory of God and in the pursuit of His justice, I may be trustworthy with confidences, keen in study, accurate in analysis, correct in conclusion, able in argument, loyal to clients, honest with all, courteous to adversaries, ever attentive to conscience. Sit with me at my desk and listen with me to my clients' tales. Read with me in my library and stand always beside me so that today I shall not, to win a point, lose my soul. Pray that my family may find in me what yours found in you: friendship and courage, cheerfulness and charity, diligence in duties, counsel in adversity, patience in pain—their good servant, and God's first. Amen."

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