News

Judges deal setbacks to efforts to save Shepherd funeral business

By Bill Moss, Published: April 29, 2022

The path to saving the Thos. Shepherd & Son funeral and cemetery business grew more tenuous last week when judges handed the company a pair of decisive losses.

On Tuesday, Superior Court Judge William Coward rejected an appeal by Shepherd attorney Michael Edney of the order in December that shut down the funeral home, revoked the funeral director license of the late Thomas R. “Tom” Shepherd and pulled the crematory manager permit of his wife, Melody Shepherd.
The next day, Superior Court Judge Marvin Pope appointed a receiver to take over the management of Shepherd Memorial Park, saying in his order that the public would be “likely to sustain irreparable harm” if the court did not grant the N.C. Cemetery Commission’s motion.

‘Consumers are the winners here’

In a sweeping win for the N.C. Board of Funeral Service, Coward dismissed Edney’s petition for judicial review of the revocation order, denied his motion to temporarily block the revocation pending appeal and ordered the business to cease and desist all copying, downloading and retaining of active pre-need contracts, relinquish all records of the contracts and destroy all electronic and hard copies after the transfer is complete.
“We’re pleased that the court give it careful and thoughtful consideration,” Catherine E. Lee, general counsel for the regulatory agency, said outside the Transylvania County Courthouse after the hearing concluded. “We’ll be getting the files back to make sure that consumers are protected. I think the consumers are the winners here.”
Coward also ordered Shepherd to pay the regulatory board’s attorney fees, which Lee said totaled $6,000.

The Board of Funeral Service had its own copies of the preneed contracts because funeral homes are required to file with them with the agency. But Lee and the agency’s director say they need any supporting files or other documents the funeral home might have retained. Although Edney said in a hearing before Judge Coward on Feb. 14 that he intended to drop his appeal of the revocation and turn over the preneed contracts, that never happened. Instead, Edney renewed his effort to appeal the revocation order. Last Tuesday he argued that the judge should honor the “constitutional property rights that we have in those contracts.”
The state board first offered the 550 preneed contracts to Jackson Funeral Service based solely on the fact that it was the closest funeral home to the Shepherd business on South Church Street, Stephen Davis, executive director of the funeral service board, told the Lightning. When owner Jay Jackson turned them down, the contracts went to Shuler Forest Lawn. (Under the law, consumers have the right to transfer preneed contracts themselves at any time to whatever funeral home they choose.)
Edney told Judge Coward said that he had a letter of intent from another funeral home that wants to buy the Thos. Shepherd & Son corporation. Edney went on to say that he had told the Board of Funeral Service during its March 9 meeting that “we had a potential buyer.” Instead of granting him more time, “they go behind my back and go behind the court’s back and take the contracts and give them to someone else,” he said. The court should not allow the regulatory board “to continue to violate the rights and laws by assigning the contracts to the company that one of the board members sits on. It doesn’t pass the smell test.”
Edney argued that the revocation ought to be vacated because Tom Shepherd died on Dec. 31. Further, he argued that the hearing via Zoom last November took place with no attorney present to represent Tom and Melody Shepherd and at a time Tom Shepherd “was on his death bed” and unable to participate.

Receiver is ‘in total control’ of cemetery

The day after Coward’s ruling in favor of the funeral service board, Judge Pope similarly granted the Cemetery Commission everything it asked for and rejected Edney’s effort to forestall the receivership while he pursued an appeal. Pope’s order impounded the 30-acre Shepherd Memorial Park, appointed a receiver to “manage, control and administer all property, business, finances and affairs of the cemetery” and barred Shepherd employees from any management role.
In his order, Pope found that Shepherd Memorial Park had failed to contribute to the Perpetual Care Trust Fund as required by law to ensure that cemeteries maintain their grounds, failed to pay assessments owed to the commission, failed to maintain records of lots sold and failed to maintain the grounds by mowing and trimming. “The court is particularly concerned about the lack of proper record-keeping … that accurately reflects the graves that have been sold and the manner in which graves have been opened and closed.”
Among the evidence Pope used to support his ruling were affidavits from the N.C. Cemetery Commission’s director of operations and a commission inspector who found numerous record-keeping violations and who reviewed complaints from the families “who had observed the cemetery in unkept condition, attempted to bury loved ones as contracted (and) cut weeds and grass from loved one’s grave.”
Pope has been presiding over the legal action by the North Carolina Cemetery Commission since last Nov. 18, when he granted the state board’s request to appoint a receiver. Wednesday’s hearing finalized the details of the receivership and resulted in the appointment of Gary McDowell, who as receiver is now in charge of the entire operation — upkeep and maintenance, digging and closing new graves, looking into and resolving a series of complaints, taking inventory of the assets and liabilities and submitting required reports to state regulators.
“You’re taking over everything,” Pope told McDowell during the hearing at the Transylvania County Courthouse. “There’s nothing that’s going to be withheld at all. You’ll have access to everything” and Shepherd employees will control nothing. “It’s in your total control.”
McDowell, who has been in the funeral and cemetery business for 48 years in Western North Carolina, is a licensed funeral director and embalmer who has managed a funeral home in Canton and owned and operated a burial vault business in Asheville. Since 2019, he has worked at the Western North Carolina Veterans Cemetery, where he digs and fills graves and maintains the grounds.
Hendersonville attorney Sharon Alexander, whom the Cemetery Commission retained to argue the case in court, asked McDowell whether he had the time and willingness to manage Shepherd Memorial Park. He responded that he did.
When Edney asked McDowell whether he had experience filing records with the state, he said he did not but would bring on help to comply with the requirements.
Under Judge Pope’s order, McDowell would be paid $50 an hour to manage the operation. By June 15 he must report to the judge the condition of the cemetery and its records and bring it into compliance with state statutes governing cemetery operations. The order also requires him by that date to make contact with people who filed complaints about the cemetery and report on what had been done to resolve their complaints. The money to pay all costs during the receivership comes from the business’s assets and receipts.
In granting the cemetery commission’s motion to take control of the operation, Pope noted that nothing in the order “is intended to imply or presume that the cemetery will be sold or otherwise divested from Shepherd Memorial Park Inc. except by further order of this court.”
McDowell said Monday that he had spent all day Saturday and Sunday sorting out the books and becoming familiar with maps that detail gravesites and grave plots purchased preneed.
“I have printed up a sign and taped it to the front window with my cell number and my name and also my email address,” he said. He said people might find it easier to reach him by text message on weekdays because he works fulltime at the WNC Veterans Center.
SHIRTTAIL
People may contact Shepherd Memorial Park receiver Gary McDowell at 828-776-1970 or gcmcdowell@bellsouth.net. People with questions about the former Shepherd preneed contracts may call Shuler Forest Lawn at 828-693-5220 or the N.C. Board of Funeral Service at 919-733-9380. The N.C. Cemetery Commission is at 919-981-2536.