Culver City Edition Northeast Edition

Archdiocese settles lawsuit involving local cemeteries

LOS ANGELES — The Archdiocese of Los Angeles and a funeral home company have settled dueling litigation concerning the lease of land at six Catholic cemeteries for the operation of mortuaries, including Holy Cross Cemetery in Culver City and Calvary Cemetery in East Los Angeles.

Lawyers for S.E. Funeral Homes of California Inc. filed paperwork Aug. 18 in Los Angeles Superior Court stating that the resolution includes the sale and transfer of the mortuaries in Los Angeles and Ventura counties to a subsidiary of the archdiocese in a deal scheduled to close Nov. 30. No additional specifics were given.

The litigants on both sides provided City News Service Aug. 29 with a joint statement regarding the settlement.

“The transition of ownership of the mortuaries is expected to close in the fall of 2016. It will also resolve litigation pending since 2014,” the statement said. “We are working together to ensure a smooth transition for our staff, employees and the families we serve. During this time of transition, we will remain focused on our mission and continue to offer a high level of care and exceptional mortuary and funeral services to our client families and the Catholic community.”

S.E. Funeral Homes, an indirect subsidiary of Service Corp. International, filed suit in September 2014, alleging breach of contract and seeking a court order to prevent the archdiocese from taking possession of the premises.

The archdiocese countersued in June 2015, alleging the funeral home firm violated the lease terms when its corporate parent, Stewart Enterprises Inc., agreed to a reverse merger transaction with Service Corp. International without getting their landlord’s permission.

According to the S.E. Funeral Homes suit, the company spent about $37 million building funeral homes, chapels, mausoleums and administrative offices on leased land at All Souls Cemetery in Long Beach, Queen of Heaven Cemetery in Rowland Heights, San Fernando Mission Cemetery in Mission Hills and Santa Clara Cemetery in Oxnard, in addition to Holy Cross and Calvary cemeteries.

In September 1997, the archdiocese and S.E. Funeral Homes agreed to let the plaintiffs lease land for 40 years to operate chapels and funeral homes at the six cemeteries from January 1998 until December 2038, the S.E. Funeral Homes suit stated.

In September 2014, the archdiocese notified the funeral home company that it was breaking the leases with the reverse merger transaction, according to the S.E. Funeral Homes complaint. Archdiocese attorney Stephen Alexander said previously that the plaintiffs, not his clients, breached the contract.

“We believe our consent was required for a change in control,” Alexander said previously. “This was a very specific written contract negotiated by the parties.”

S.E. Funeral Homes maintained that no such consent was needed if there was an ownership change.

“The archdiocese’s claim that [S.E. Funeral Homes] needed the archdiocese’s permission is ridiculous, a fiction much like one a greedy landlord designs to cast out a good tenant in order to raise the rent or to put pressure on a lucrative business deal to sweeten the lease’s financial terms,” its suit alleged.