Editor’s note: This is Cullman County’s No. 3 news story of 2008, as picked by the editorial staff of The Cullman Times.

By Trent Moore

Staff Writer

Thousands were affected this year by the closing of the Memory Gardens cemetery, when the State of Alabama closed the cemetery’s doors after two years of receivership.

On November 14, nearly a thousand people poured into the Cullman County Courthouse — and packed into the hallway, another courtroom, and down the stairs — in a search for answers. The crowd, mostly plot and crypt owners, showed up in force for a town hall meeting about the recent closing of the Cullman Memory Gardens cemetery.

Linda Hudgins, a local resident who owns a handful of plots at the cemetery for her family, said she is very upset with the situation.

“I paid for the pre-arranged things, and now they’re telling us this,” she said. “I’m pretty ticked off about it.”

Hudgins’ late husband is buried at the cemetery, and she had previously purchased plots there, along with her children.

“It just isn’t right, and someone should be held accountable,” she said.

A representative from the Alabama Department of Insurance — the agency that took the cemetery into receivership in 2006 — was on hand for the meeting to answer questions and explain the situation. Doug Williams, who has volunteered to keep the cemetery records, was also present.

How it started

Department of Insurance spokesperson Regan Ingram explained why the agency first took control of the cemetery.

“A Texas operation called Mike Graham & Associates —the people who bought Cullman Memory Gardens — licensed to sell pre-need services,” Ingram explained. He noted a 2002 law that requires all businesses that sell pre-need services, such as funeral plans and grave openings, to be under the jurisdiction of the Department of Insurance. “We set up a rotation of audits to go in and examine the books. When we went into Mike Graham & Associates, we saw severe problems. ... He was not sending money to the right places.”

By policy, when the Department of Insurance finds accounting mistakes and mismanagement like what was present at Cullman Memory Gardens, the company is taken into receivership.

“We put them into receivership, which is kind of like bankruptcy,” Ingram said. “They had more debt than assets, so the department was put in charge of keeping the operation open. But, the state operational money has run out.”

Ingram said the U.S. Attorney General’s Office investigated Mike Graham & Associates for criminal acts, but Graham became afflicted with cancer and passed away before any charges could be brought against him.

“With Graham dead, the money is gone,” he said. “Which leaves everyone here hanging in a lurch.”

He added that Graham’s estate has also been looked at, though it does not have enough assets to make it worth pursuing.

What is covered

Currently, the only pre-need sales that will be indefinitely honored are cemetery plots and mausoleum crypt purchases.

“If you have your documentation, those are yours,” Ingram said. “No one can take those away. No matter what happens, those are safe.”

Though plots are safe, services such as grave openings and pre-bought caskets from Cullman Memory Gardens will no longer be honored.

“For those other services, the funds are not there,” Ingram said, noting they were lost when Mike Graham & Associates were managing the cemetery. “I wish they were there, but they’re not.”

Williams also tried to clarify some confusion regarding local funeral home pre-sales.

“A pre-need funeral from any funeral home in Cullman, those sales are okay,” he said. “The only people losing in this deal are people that bought directly from Cullman Memory Gardens. If they bought through any other funeral homes, it’s still in the bank and still protected.”

Looking for a solution

Ever since the Department of Insurance took the cemetery into receivership, the agency has attempted to sell the business with a stipulation requiring the new owner to honor all pre-sale services. With the state out of funds to keep the cemetery open, that stipulation has now been dropped in an effort to sell the business and keep the property managed.

“We sold some of Mike Graham & Associates other cemeteries,” Ingram said. “But, we’ve gotten to the point where the ones that will sell have already sold.”

Ingram said Cullman Memory Gardens has not sold because the records were not well kept during the Mike Graham & Associates era, so they have yet to accurately calculate exactly how much pre-need liabilities the business includes.

“The records are sketchy to that end,” he said.

The old contact information the Department of Insurance inherited were also incomplete and outdated, so Ingram encouraged everyone present to sign-in and provide an updated address.

“We’re trying to match all the records and get updated information so we can let everyone know what is going on,” he said.

From this point, Ingram said there are essentially two possible courses of action.

“The first is we can sell the cemetery to a buyer who will take over, but not with the stipulation to honor pre-sale services,” he said. “The second solution is to find a local group to take stewardship of the property.”

Exactly how long it will take for a solution to be reached, however, is still far from definite.

“Honestly, I can’t tell you how long it will take,” Ingram said. “But, for right now, Doug (Williams) has access to all the records.”

To offer some hope to those who had pre-paid for services that are now lost, Ingram said if the cemetery can be sold they may be able to recoup some of their lost payments.

“If the property is sold, the first right of payment is sent back to the contract owners,” he said. “It may not make you whole, but you’ll get money before anyone else. But, that’s only if and when the property is sold.”

Numerous plot owners expressed their desire to discuss the situation with a lawyer, which Ingram encouraged.

“That’s the right of anyone in this room to seek,” he said. “This is a frighteningly sad, horrible chapter.”

The future

With no clear end in sight, Williams said he and others are currently working to set up another public meeting with the Department of Insurance — though next time they’re planning for a larger venue.

“We didn’t really expect that many people, but I’m extremely proud of the fact that this many turned out,” he said. “We’re thinking of having the next one at the Cullman Civic Center — though we may need to look at the coliseum at Wallace State.”

Williams said a firm date for the next meeting, which will likely take place in January, has yet to be decided.

“We’re working on it, and we’ll get the word out as soon as we know,” he said. “Most everyone wants a solution and wants to know their plots are taken care of. Sadly, the money’s gone, and we just all have to figure out a solution.”

Jeremy Oden (R), Alabama State Representative, offered some help with mediation at the meeting.

“The state is still trying to go through the records,” he said. “This is a very bad situation.”

Alabama State Senator Zeb Little (D) was also on hand for the meeting, and expressed his concerns about the situation, as well.

“Legislature passed this (Pre-need Funeral and Cemetery Act) in 2002 to prevent this from happening, and it hasn’t prevented it,” he said. “I think either the Insurance Department has fallen down on their responsibilities, or the act is insufficient, or both.”

Little said he is working to draft new legislation that will be more specific, and require pre-need funds to be better protected.

“The way I understand the act, is you can either put monies in a trust or in insurance agreements,” he said. “I’m going to introduce legislation to require trustees to be bonded, so there’s insurance if this happens again. One flaw in the (current) law is apparently these trustees are not required to be bonded, and that’s fundamental. I don’t know why that wasn’t in there, originally.”

For more Cullman Memory Gardens record information, Williams can be contacted at 708-0479.

‰ Trent Moore can be reached by e-mail at trentm@cullmantimes.com, or by telephone at 734-2131, ext. 225.