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Local Burial Association Has State Hearing on Wednesday

January 26th, 2015 by

BEFORE THE ARKANSAS BURIAL ASSOCIATION BOARD
IN THE MATTER OF:LINDA SHEPHERD, SECRETARY/TREASIIRER
JOSEPH CAVENESS, PRESIDENT, DREW COUNTY BURIAL ASSOCIATION

NOTICE OP HEARING
Pursuant to its supervisory authority over Arkansas burial associations, Ark. Code Ann. 5 23-7S-109, and its statutory authority to conduct hearings and revoke licenses and authorities. Ark. Code. Sec. 23-78-124, the Arkansas Burial Association Board (the Board) has determined that it will conduct a hearing on its own coniplaint against Linda Shepherd, Secrctary-Treasurer of the Drew County Burial Association
(Respondent Shepherd ), and Joseph Caveness, President of the Drew County Burial Association (“despondent Caveness ). Respondent Shepherd and Respondent Caveness are hereafter referred to collectively as the “Respondents.
ALLEGATIONS OF FACT

Fl. The Drew County Burial Association ((he “DCBA”) is a burial associaUon operating under the authority of the Board.
F2. Respondent Shepherd is licensed by the Board as the Secretary-Treasurer of the DCBA (although that license is currently suspended, pursuant to the Board’s emergency order of December 18,2014).
F3. Respondent Caveness serves as President of the DCBA (although his authority to act as president is currently suspended pursuant to the Board s emergency order of December 18, 2014).
F4. In the early months of 2012, the DCBA petitioned the Board for approval of the DCBA s plan of voluntary dissolution.
F5. The Board conducted a hearing on that petition on May 23, 2012. Following the hearing, the Board issued an order on the matter dated June 7, 2012. By that order, the Board concluded that it lacked the statutory authority to concur with plans
to dissolve a burial association, and it denied the DCBA’s request for approval.
F6. No petition for judicial review of the Board’s June 7,2012 order was ever filed.
F7. In July of 2U12, the DCBA filed a petition for declaratory judgment against the Board in the Circuit Court of Pulaski County, Arkansas, seeking a declaration from the Court that DCBA had the right to voluntarily dissolve. That case was styled
Drew County Buria! Associaiton v. Arktansas Burial Association Board, Circuit. Court of Pulaski County, Arkansas, No. 60cv-20I2-3199.
F8. Ultimately, the DCBA voluntarily dismissed its declaratory judgment lawsuit. The dismissal order was entered on October 29, 2014.
F9. On or about December 15, 2014, the Respondents took steps to liquidate and distribute substantially all assets of the DCBA to its members, including those assets in the DCBA’s mortuary fund. These payments out of the mortuary fund were not for the
payment of benefits provided by membership certificates, nor were they directed toward making any of the types of investments on DCBAs behalf that might be authorized under Ark. Code Ann. §23-78-122. In taking these actions, the Respondents were seeking to effectuate dissolution of the DCBA. The Board had not authorized such dissolution.

F10. The Board learned of the Respondents’ actions and entered an emergency order, dated December 18, 2014, ordering the following:
a. That the license and/or authority of all then-officials of the DCBA, specifically including the Respondents, was suspended pending further administrative proceedings, and prohibiting those officers from making withdrawals from any accounts held by or on behalf of the DCBA;
b. That Amy Goode, Executive Secretary of the Board was appointed Secretary-Treasurer of the DCBA, effective immediately and until further notice; and
c. That all DCBA accounts held in financial institutions would be frozen,
CHARGES
C1. By liquidating the assets of the DCBA’s mortuary fund and distributing them for purposes other than the payment of benefits provided by membership certificates or making authtorized investments on the DCBA’s behalf, the Respondents violated Ark. Code Ann. g 23-78.122.
C2. Pursuant to Ark. Code Ann. § 23-78-124(e)(l), if the Board determines that either Respondent is guilty of violating any provision of Ark. Code Ann. g 23-78101, et seq., his or her license or other authority shall be revoked.
TIME AND PLACE OF HEARINt;
Respondents are hereby notified that the Board will hold a hearing on the allegations and charges set out above on January 28, 2015, beginning at 11;00 a,m., in
Conference Room “C,” on the lower level of the Main Street Mail building, located at 101 East Capitol Ave., Little Rock, Arkansas, 72201. The hearing will be conducted pursuant to the Arkansas Administrative Procedure Act Ark. Code Ann. sec. 25-15-201, et seq. The Respondents may appear in person, may be represented by counsel, and may offer witnesses, affidavits, and/or documentaiy evidence in response to the allegations and charges contained in this notice.
Respondents are hereby notified that a continuance will be granted only for good cause, and, if Respondents fail to appear at the hearing and have nut obtained a continuance, the Board may conduct the hearing in the Respundenls absence.
Respondents are also notified that all evidence. Including any documents and any oral testimony to be admitted into evidence shall be introduced on fhe day of the hearing.
No additions will be permitted, nor will the record be allowed to be supplemented after the hearing is concluded.
ARKANSAS BURIAL ASSOCIATION BOARD

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