Court rules that burial insurance policy limited to face amount
by ICCFA General Counsel Robert M. Fells, Esq.
On May 22, the Louisiana Supreme Court waded into a controversial area of insurance by deciding whether a funeral home's burial insurance policy obligates it to provide all of the funeral services and merchandise contracted under the policy regardless of the policy's face value.
In Sims v. Mulhearn Funeral Home Inc., the court decided the funeral home's obligation to perform the contract was limited to the face amount of the policy, under the facts in this particular case.
The decedent purchased two policies in 1958 and 1963, respectively, each with a face amount of $500. "Both policies provided that upon the death of the insured, funeral benefits in the face amount of the policies will be furnished, which shall include the following: casket and outside case, burial garments if requested, preparation of the body, funeral coach, arrangement and transportation of flowers, conducting of the funeral, furnishing information to newspapers, cemetery equipment, chairs, use of funeral home ... ."
Following the insured's death in 2003, his widow presented the policies to the funeral director, who applied the total $1,000 in benefits to offset the total cost of the funeral of $5,998.39.
The widow sued the funeral home in a class action for breach of contract and infliction of emotional distress, claiming the entire funeral contract should have been performed for the face value of the policies. The court analyzed the policies using basic contract law stating, "An interpretation of the policies to provide for a complete funeral, at no additional expense, regardless of the amount of coverage purchased, is not reasonable and would lead to absurd consequences."
The plaintiff also challenged as unconstitutional a 2004 state law that clearly limits the liability of burial policies to their stated face amounts. However, the court reasoned that it was unnecessary to review the statute for its constitutionality due to the clear language in the policies at issue in the case.
Procedural vote kills union bill-for now
The controversial Employee Free Choice Act (H.R. 800/S. 1041), a bill that would abolish secret ballot elections for workers in deciding whether or not to unionize, was "killed" for the time being in the U.S. Senate. Following vigorous debate over the bill on June 25 and 26, a vote was taken to close debate. This procedure, known as cloture, is necessary in order to allow the bill to be brought to a vote and requires 60 votes. Otherwise, debate will continue or, as is usually the case, the bill is tabled for future consideration.
The cloture vote failed 51-48 and further consideration of the bill was tabled. Observers believe the bill will not be considered again until next year at the earliest. H.R. 800 was quickly approved by the House of Representatives on March 1, by a vote of 241-185. (See the Irwin Shipper interview on page 12 for more information on this legislation)
Court: University not obliged to track donated bodies
In the second decision in as many years on the issue of bodies donated to science, the California state appeals court ruled that the University of California's "willed body program" had no responsibility to keep track of the bodies donated to it nor to return the cremated remains to the family.
Unlike the liability in the private sector, the state university is specifically exempted from charges of mishandling a corpse.
The court explained the distinction by stating: [Private sector] funeral-related services are principally for the comfort of the living, having as their aim the consolation of the leading mourners. The expectations of the survivors, and 'the essence of the contract for such services is a reasonable expectation of dignity, tranquility and personal consolation.'
"In contrast, the mission of UCI's WBP [University of California's Willed Body Program] is to obtain cadavers for study and dissection by medical students. In recognition of this distinction, the Legislature specifically exempted public institutions, hospitals, and medical schools from the Funeral Directors and Embalmers Law."
This decision, Conroy v. Regents of the University of California, is consistent with an earlier decision by the court in the Bennett case decided in 2005.
These decisions suggest that individuals and families donating bodies to science should carefully review the written agreements with the institution in question prior to signing.
Under the agreement, families may be waiving their expectation of having the remains treated in a dignified manner and returned for interment or memorialization.