LEATHERMON et al v. GRANDVIEW MEMORIAL GARDENS, INC. et al

Filing 328

ENTRY ON PLAINTIFFS' MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT - 296 Motion for Leave to File First Amended Complaint - Class Action is GRANTED in part and DENIED in part. With regard to Count II, Count III, Count VI, and Count VII, th e Motion is DENIED and all of these claims are DISMISSED. In all other respects, including the addition of new plaintiffs and new defendants, the motion is GRANTED, subject to the requirement that Plaintifs cure the financial losses incurred by Defe ndants in taking the depositions of the four individuals who no longer will serve as class representatives. Defendants shall submit to Plaintiffs their calculations reflecting their costs as referenced above within 15 days of the date of this entry. If Plaintiffs object to this tabulation, as opposed to the underlying requirement to pay, they may file their statement in opposition within 30 days of the date of this entry. See Entry for details. Signed by Judge Sarah Evans Barker on 6/15/2011. (LBT)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
NEW ALBANY DIVISION

DELMAR H. LEATHERMON, MARGARET
L. LEATHERMON, RHONDA WILEY, JOHN J.
JAYNES, TERRY ROWLETT and KAREN S.
ROWLETT, on behalf of themselves and all
others similarly situated,
Plaintiffs,
v.
GRANDVIEW MEMORIAL GARDENS, INC.,
JIMMY W. SIMPSON, CARRIAGE FUNERAL
SERVICES OF INDIANA, CARRIAGE
CEMETERY SERVICES, INC., a wholly
owned subsidiary of Carriage Services, Inc.,
CARRIAGE SERVICES, INC., JAMES R.
HOLT, MADISON FUNERAL SERVICES, INC.
and GRANDVIEW MEMORIAL GARDENS, LLC,
Defendants.

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4:07-cv-137-SEB-WGH

ENTRY ON PLAINTIFFS’ MOTION FOR LEAVE TO FILE
FIRST AMENDED COMPLAINT

This matter is before the court on Plaintiffs’ Motion for Leave to File First
Amended Complaint – Class Action filed January 26, 2011. (Docket No. 296-97).
Defendants Carriage Cemetery Services, Inc., Carriage Funeral Services of Indiana,
Carriage Services, Inc., Grandview Memorial Gardens, LLC, James R. Holt, Madison
Funeral Service, Inc., and Jimmy W. Simpson filed a Response on February 24, 2011.
(Docket No. 309). Defendants James R. Holt and Madison Funeral Service, Inc., filed a

separate Response on February 24, 2011. (Docket No. 310). Plaintiffs filed a Reply brief
on March 10, 2011. (Docket No. 319). Defendants filed a Surreply on March 14, 2011.
(Docket No. 322).

I.

Background

Plaintiffs filed their motion seeking to amend the Complaint in this class action
lawsuit. In moving to amend their Complaint, Plaintiffs propose several changes to their
original Complaint: First, Plaintiffs seek to “clarify the identity of the class” to include
"persons vested with the right to control the disposition of the remains of decedents
buried at Grandview Cemetery, personal representatives of decedents either buried or
intended to be buried in lawn crypts at Grandview Cemetery, and/or close relatives of
individuals who have been improperly interred in lawn crypts at Grandview Cemetery.”
(Memorandum in Support of Motion for Leave to File First Amended Complaint–Class
Action at 4). Second, Plaintiffs seek to withdraw Plaintiffs Rhonda Wiley, John Jaynes,
Terry Rowlett, and Karen Rowlett (each of whom had filed suit individually and as
representatives of the estates of various deceased individuals) as class representatives.
Third, Plaintiffs seek to substitute the following new plaintiffs (individually and as
representatives of the estates of various deceased individuals) as class representatives:
Cindy Jones, Terri Cosby, Richard Albus, Willa Albus-Skirvin, Charlotte Hall, and
Claudia Spennenberg. (See First Amended Complaint–Class Action). Fourth, Plaintiffs

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seek to add two new Defendants: Carriage Funeral Holdings, Inc., and Mainstreet
Investments, Inc. Fifth, Plaintiffs seek to add several new causes of action, including:
Count II Tortious Interference With Dead Bodies; Count III Negligent Infliction of
Emotional Distress; Count VII Fraud/Misrepresentation/Concealment/Non-Disclosure;
Count VIII Violation of Deceptive Consumer Sales Act; and Count X Fraudulent
Conveyance. Sixth, and finally, Plaintiffs seek to add separate causes of action for
equitable/injunctive relief (Count IV) and punitive damages (Count IX).1

II.

Discussion

The amendment of pleadings by a party is governed by Rule 15(a) of the Federal
Rules of Civil Procedure. That rule permits such an amendment after a responsive
pleading has been filed only upon leave of the court or consent of the adverse party,
though leave to amend is to be freely given when justice requires. FED. R. CIV. P. 15.
“Although the rule reflects a liberal attitude towards the amendment of pleadings, courts
in their sound discretion may deny a proposed amendment if the moving party has unduly
delayed in filing the motion, if the opposing party would suffer undue prejudice, or if the
pleading is futile.” Campania Management Co., Inc. v. Rooks, Pitts & Poust, 290 F.3d
843, 848-49 (7th Cir. 2002).

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Defendants do not object to the addition of Counts IV and IX. Therefore, the Motion for
Leave to File First Amended Complaint is GRANTED with regard to Counts IV and IX.
3

Thus, the Court must address and resolve these issues: whether there has been
undue delay in the filing of Plaintiffs’ Motion for Leave to File First Amended
Complaint–Class Action; whether defendants would suffer undue prejudice if we were to
allow the Complaint to be amended; and whether any of the proposed amendments to the
Complaint would be futile.

We begin our discussion with a review of the history of this litigation. Plaintiffs’
Complaint was originally filed on August 17, 2007 in the Jefferson Circuit Court.
Defendant Grandview Memorial Gardens, LLC, removed the case to this Court on
October 15, 2007. (See Docket No. 1). As of April 1, 2008, discovery was limited to
issues relating to the remand, to Rule 12 jurisdiction and to class certification. (Docket
No. 80 ¶ 2). Pursuant to the Case Management Order, as amended on June 25, 2008,
Plaintiffs filed a Motion to Remand on July 30, 2008, and a Motion for Class
Certification on October 14, 2008. (Docket Nos. 99, 108). The Motion to Remand was
denied on January 22, 2009. (Docket No. 134). Each of the originally named Plaintiffs
was deposed as were various Defendants during the months of February, March, and
April 2009. The final Answer by one of the Defendants was filed on March 24, 2009.
(Docket No. 146).

During a telephonic status conference on March 31, 2009, Plaintiffs’ counsel
informed the Court and the other parties that, based on class discovery to date and certain
other circumstances, the nature of their claims had shifted. (See Docket No. 147 ¶ 1).

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Shortly thereafter, pursuant to the Court’s Order and two weeks after the final named
class representative’s deposition, on April 24, 2009, Plaintiffs filed a Motion to Amend
and Supplement Complaint and to Add Parties. (Docket No. 151). Defendants’
requirement to respond to the Motion for Class Certification was stayed. (Docket No.
147 ¶ 2).

At about the same time, on April 22 and April 24, 2009, Defendants Jimmy W.
Simpson and Grandview Memorial Gardens, LLC separately filed motions to disqualify
Plaintiffs’ counsel. (Docket Nos. 149, 152). The Motions to Disqualify and Plaintiffs’
Motion to Amend were briefed, and, on February 19, 2010, the Court permitted the
parties to conduct discovery in an effort to identify any other classes of Plaintiffs who
might be appropriately incorporated into the claims asserted in the original or amended
Complaint to permit a ruling on class certification following the dispositions of the
pending motions. (Docket No. 244 ¶ 4).

On March 31, 2010, following an evidentiary hearing, the Court granted
Grandview Memorial Gardens, LLC’s Motion to Disqualify. (Docket No. 251).
Plaintiffs’ Motion to Amend and Supplement Complaint and to Add Parties, which, by
that time, had been fully briefed, and the Motion for Class Certification, to which no
response had yet been filed, were dismissed as moot without prejudice to their re-filing
upon Plaintiffs’ retention of new counsel. (Docket No. 251 at 33).

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Because the original motion seeking to amend the Complaint was dismissed
without prejudice, and no fault can be attributed to Plaintiffs based on that dismissal, we
need not consider any issues relating to delay or prejudice arising between April 24, 2009
(when the original Motion to Amend and Supplement Complaint and to Add Parties was
filed) and January 26, 2011 (when the new Motion for Leave to File Amended
Complaint-Class Action was filed). Our analysis, therefore, is limited to whether there
was undue delay or undue prejudice prior to April 24, 2009.

Did Plaintiffs Unduly Delay the Filing of This Motion?

As an initial matter, we note that Plaintiffs seek to amend their complaint not only
to add new claims, but also to add new parties. When a plaintiff seeks to amend its
complaint to add new parties, Rule 20 of the Federal Rules of Civil Procedure is
implicated. That rule allows plaintiffs to join in a single action if they assert a right to
relief that arises out of the same transaction, occurrence or series of transactions or
occurrences and there is a common question of law or fact. FED. R. CIV. P. 20. A district
court is permitted wide discretion in determining whether to allow joinder. As the
Seventh Circuit has explained:

We have recognized that this discretion allows a trial court to consider, in
addition to the requirements of Rule 20, other relevant factors in a case in
order to determine whether the permissive joinder of a party will comport
with the principles of fundamental fairness. If joinder would create
prejudice, expense or delay the court may deny the motion.

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Chavez v. Illinois State Police, 251 F3d 612, 632 (7th Cir. 2001)(internal quotations and
citations omitted). None of the parties disputes whether joinder would be proper under
Rule 20. Rather, Defendants assert undue delay under Rule 15. After careful
consideration, we conclude that no undue delay occurred in the filing of the Motion for
Leave to File First Amended Complaint–Class Action. We previously denied a Motion to
Remand on January 22, 2009. The final Answer to the original Complaint was filed on
March 24, 2009. (Docket No. 146). The prior Motion to Amend and Supplement
Complaint and to Add Parties was filed on April 24, 2009, a mere thirty days following
the final Answer. A lapse of thirty days does not constitute undue delay.

Have Defendants Demonstrated Undue Prejudice?

Defendants contend that they will suffer undue prejudice if an amendment is
permitted at this late date because, although the proposed amended complaint
“contains no new facts," the new complaint is “flatly inconsistent with Plaintiffs’ own
testimony”; it “abandons the core theory of the original Complaint”; it “drops four of
the six original putative class representatives and four of the Complaint’s causes of
action, and [it] adds six new proposed class representatives and five new claims.” (See
Defendants’ Opposition to Plaintiffs’ Motion for Leave to Amend Complaint, p. 1).
Defendants point out that the proposed changes come “after the time for class
discovery – during which the litigants exchanged tens of thousands of documents and
deposed each of the six original plaintiffs and four defendants – has ended.” (Id.)

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In deciding whether undue prejudice to Defendants is threatened by a belated
amendment to the Complaint, it is important to note that Plaintiffs are not pleading new
or revised facts in their proposed amendments. Where the factual basis for the claim
remains unchanged, courts are reluctant to dismiss a pleading based on Rule 15,
assuming the legal theories espoused in the amended complaint still state a claim for
relief. We are unable to ascertain at this stage of the litigation whether the Plaintiff’s
“own testimony” in their depositions relating to class action issues is inconsistent with
the pleadings, leaving that decision until all evidence has been heard.

Magistrate Judge Hussmann's orders at Docket Nos. 241 and 244 permitted
discovery to be undertaken for the limited purposes of identifying persons with
information as well as repositories of information to facilitate a resolution of the class
certification issues. While his orders also permitted some merits discovery to proceed,
no showing has been made here that significant discovery on issues other than class
certification has been completed.

We concede that Defendants have incurred costs associated with deposing the
four class representatives who would no longer fill that role in the proposed amended
complaint. However, we view that expense and inconvenience to be relatively
inconsequential. To alleviate any monetary prejudice, we shall require Plaintiffs to
absorb the reasonable costs incurred for the court reporter fees and the defense attorney
fees generated in taking the depositions of persons who in the Amended Complaint

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will no longer serve as class representatives. We note that, although Plaintiffs filed
their motion to certify a class on October 14, 2008 (Docket No. 108), Defendants have
not responded and, therefore, have not incurred any costs in that regard.

In summary, because: (1) the proposed amended complaint does not advance
any new facts; (2) substantial discovery on the merits has not been undertaken; (3) no
briefing in opposition the motion for class certification has occurred; and (4) the
expenses generated by the depositions of the four original class representatives can be
ameliorated by Plaintiffs’ shouldering those costs; we hold that, by permitting the
Complaint to be amended, no undue prejudice will befall Defendants.2

2

Defendants separately argue that “Plaintiffs’ motion to add class representatives after class
discovery ended and after Plaintiffs had filed their motion for class certification is improper and
would unduly prejudice Defendants and delay proceedings unnecessarily by requiring costly and
time-consuming new discovery.” (Defendants’ Opposition to Plaintiffs’ Motion for Leave to Amend
Complaint at 18). Defendants cite several sources, including 1 McLaughlin on Class Actions § 4:36
(6th ed. 2010), and Velazquez v. GMAC Mortgage Corp., 2009 WL 2959838 (C.D. Cal. 2009), in
support of their argument. Those authorities cited by Defendants do not set out a separate test for
determining whether to allow an amendment to a complaint to add new plaintiffs as class
representatives. Instead, they rely on the undue delay/undue prejudice requirements of Rule 15 as
well as the permissive joinder analysis of Rule 20. Furthermore, those authorities cited by
Defendants focus on circumstances where Plaintiffs are attempting a wholesale substitution of
Plaintiffs in a class action lawsuit (either because the original Plaintiff is no longer available or
because all claims by the original Plaintiff have been dismissed).
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Are Plaintiffs’ New Claims Futile?

1. Negligent Infliction of Emotional Distress

For many years, Indiana courts recognized only one set of circumstances under
which an individual could recover damages for negligent infliction of emotional
distress. Referred to as the “impact rule,” Indiana courts required: 1) an impact on the
plaintiff; 2) which caused physical injury to the plaintiff; 3) which physical injury, in
turn, caused the emotional distress. Boston v. Chesapeake & O. Ry., 61 N.E.2d 326,
327 (Ind. 1945). In Shuamber v. Henderson, 579 N.E.2d 452 (Ind. 1991), the Indiana
Supreme Court adopted the “modified impact rule” in which plaintiffs who suffered an
impact could now recover emotional distress damages without sustaining a direct
physical injury. The Indiana Supreme Court explained:
[w]hen ... a plaintiff sustains a direct impact by the negligence of another
and, by virtue of that direct involvement sustains an emotional trauma
which is serious in nature and of a kind and extent normally expected to
occur in a reasonable person, ... such a plaintiff is entitled to maintain an
action to recover for that emotional trauma without regard to whether the
emotional trauma arises out of or accompanies any physical injury to the
plaintiff.
Id. at 456. While a plaintiff need not demonstrate a physical injury, she still must show
a “direct physical impact.” Atlantic Coast Airlines v. Cook, 857 N.E.2d 989, 996 (Ind.
2006).

After Shuamber, the Indiana Supreme Court in Groves v. Taylor, 729 N.E.2d 569
(Ind. 2000), recognized a second means by which a plaintiff may recover damages for

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negligent infliction of emotional distress referred to as the “bystander rule.” The rule
explains that:
where the direct impact test is not met, a bystander may nevertheless
establish “direct involvement” by proving that the plaintiff actually
witnessed or came on the scene soon after the death or severe injury of a
loved one with a relationship to the plaintiff analogous to a spouse,
parent, child, grandparent, grandchild, or sibling caused by the
defendant’s negligent or otherwise tortuous [sic] conduct.
Id. at 573. After Groves, the Indiana Supreme Court has affirmed that “in order to
recover damages for the negligent infliction [of] emotional distress, a plaintiff must
satisfy either the modified impact rule or the bystander rule.” Atlantic Coast Airlines,
857 N.E.2d at 998 (emphasis added). The Indiana Supreme Court has recently
declined to extend the circumstances in which an individual can recover for negligent
infliction of emotional distress beyond these two tests. Smith v. Toney, 862 N.E.2d 656
(Ind. 2007).

In the case before us, Plaintiffs assert that they are permitted to bring a cause of
action for negligent infliction of emotion distress based on the fact that their respective
loved ones’ remains were damaged due to improper installation of lawn crypts. As an
example of their claims, they assert: “To the family’s horror, Fred Leathermon’s body
and casket were significantly and prematurely deteriorated because of water that had
pooled in the improperly installed lawn crypt.” (First Amended Complaint–Class
Action ¶ 6). Plaintiffs cite the Indiana Court of Appeals’s decision in Blackwell v.
Dykes Funeral Homes, Inc., 771 N.E.2d 692 (Ind. Ct. App. 2002) to support their claim.
In Blackwell, the defendant funeral home had allegedly lost the urn containing the
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remains of the Plaintiffs’ son. The Indiana Court of Appeals correctly noted that the
modified impact rule did not apply because Plaintiffs had not demonstrated a direct
physical impact. However, the court determined that the bystander rule should be
extended to include the losing of a family member’s remains, noting that “[e]ven
though the tripartite [bystander] test set forth above may be inapposite here, our
supreme court’s reasoning in Groves is persuasive and compelling. While there was no
physical impact, the Blackwells have alleged serious emotional trauma and it is of a
kind that a reasonable person would experience. In our view, this is the type of claim
that our supreme court spoke of in Groves where the plaintiff is sufficiently and
directly involved in the incident giving rise to the emotional trauma.” Blackwell, 771
N.E.2d at 697.

Contrary to the Indiana Court of Appeals holding in Blackwell, however, the
Indiana Supreme Court has routinely declined to extend the bystander rule beyond the
tripartite test set out in Groves. An individual must: 1) actually witness or come on the
scene soon after; 2) the death or serious injury; 3) of a loved one with a relationship
analogous to a spouse, parent, child, grandparent, grandchild, or sibling. See Toney,
862 N.E.2d at 659. The Indiana Supreme Court in Toney declined to extend the
protected relationships to include a fiancé and also explained that learning of a death or
injury independently was not sufficient to implicate the bystander rule; “[t]he scene
viewed by the claimant must be essentially as it was at the time of the incident, the
victim must be in essentially the same condition as immediately following the incident,
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and the claimant must not have been informed of the incident before coming upon the
scene.” Id. at 661-63. The Indiana Court of Appeals very recently in York v. Fredrick,
- - N.E.2d - - - (Ind. Ct. App. 2011), reaffirmed the limited nature of the bystander rule
in a case very similar to the matter before us in which the plaintiffs alleged that the
body of a loved one had been damaged. As the Indiana Court of Appeals explained, a
plaintiff must witness either the death or serious injury of a loved one, and a claim of
damage to a plaintiff’s loved one’s remains is not the type of injury covered by the
bystander rule.

Based on the Indiana Supreme Court’s clear, precedential holding in Toney, as
well as the Indiana Court of Appeals recent decision in York, we conclude that
Plaintiffs cannot sustain a state law cause of action for negligent infliction of emotional
distress in the case before us. They do not and cannot allege that they personally
witnessed the death or serious injury of a loved one almost immediately after it
occurred. Thus, their claim of negligent infliction of emotional distress must be
deemed futile, and the Motion for Leave to File Amended Complaint-Class Action
with regard to Count III is DENIED.

2. Tortious Interference With Dead Bodies

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Plaintiffs also allege that Defendants’ mishandling of their loved ones’ remains
has deprived them of their rights to control these remains and has led to their great
mental anguish. Plaintiffs contend that Defendants’ actions implicated Section 868 of
the Second Restatement of Torts which prohibits the tortious interference with dead
bodies. That section provides that “[o]ne who intentionally, recklessly or negligently
removes, withholds, mutilates or operates upon the body of a dead person or prevents
its proper interment or cremation is subject to liability to a member of the family of the
deceased who is entitled to the disposition of the body.” Restatement (Second) of
Torts § 868. It is noteworthy that the accompanying Comments to Section 868 state
that this cause of action “has served as a mere peg upon which to hang damages for the
mental distress inflicted upon the survivor; and in reality the cause of action has been
exclusively one for the mental distress.” Id.

No court in Indiana has ever recognized a cause of action for tortious
interference with dead bodies. Furthermore, as discussed in detail above, the
circumstances in which an individual can sustain a cause of action for negligent
infliction of emotional distress are extremely limited. To recognize a separate cause of
action for tortious interference with dead bodies based on emotional distress that goes
beyond the limits set out in the bystander rule and the modified impact rule would
extend Indiana law beyond its current boundaries. We decline to take that step without
clear authority to do so under Indiana law. Consequently, Count II of Plaintiffs’

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proposed First Amended Complaint–Class Action is also futile, and Plaintiffs’ Motion
for Leave to File First Amended Complaint–Class Action is similarly DENIED.

3. Intentional Infliction of Emotional Distress

Indiana courts first recognized intentional infliction of emotional distress
(“IIED”) as a separate cause of action in Cullison v. Medley, 570 N.E.2d 27 (Ind. 1991).
An individual may be liable for IIED if he, “by extreme and outrageous conduct
intentionally or recklessly causes severe emotional distress to another.” Id. at 31. The
four elements of an IIED claim are as follows: 1) defendant engages in extreme or
outrageous conduct; 2) which intentionally or recklessly; 3) causes; 4) severe
emotional distress to another. Id. “It is the intent to harm the plaintiff emotionally
which constitutes the basis for the tort of intentional infliction of emotional distress.”
Id. The Indiana Court of Appeals has explained that the conduct giving rise to a claim
of IIED must be even beyond extreme:
The cases thus far decided have found liability only where the
defendant’s conduct has been extreme and outrageous. It has not been
enough that the defendant has acted with an intent which is tortious or
even criminal, or that he has intended to inflict emotional distress, or
even that his conduct has been characterized by ‘malice,’ or by a degree
of aggravation which would entitle the plaintiff to punitive damages for
another tort. Liability has been found only where the conduct has been so
outrageous in character, and so extreme in degree, as to go beyond all
possible bounds of decency, and to be regarded as atrocious, and utterly
intolerable in a civilized community. Generally, the case is one in which
the recitation of the facts to an average member of the community would
arouse his resentment against the actor, and lead him to exclaim,
‘Outrageous!

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Bradley v. Hall, 720 N.E.2d 747, 752-53 (Ind. Ct. App. 1999)(quoting Restatement
(Second) of Torts cmt. d).

Here, Plaintiffs maintain that Defendants’ alleged actions satisfy the elements of
IIED because Defendants intentionally sold lawn crypts in a section of a cemetery that
was not intended for and could not support the drainage system necessary for lawn
crypts. Plaintiffs further allege that Defendants knew the lawn crypts would collect
water which would lead to the premature deterioration of the remains of Plaintiffs’
loved ones. However, elsewhere in their Complaint, Plaintiffs allege that Defendants
secretly pumped water out of the lawn crypts in an effort to hide from Plaintiffs the
poor drainage problem, suggesting an attempt to ameliorate any emotional distress
Plaintiffs might have otherwise had to endure. (See First Amended Complaint–Class
Action ¶¶ 37, 40, 79, 96). Given these alleged facts, Plaintiffs clearly have failed to
state a cause of action for IIED. There is no allegation regarding the requisite intent to
emotionally harm Plaintiffs; instead, the claims aver that Defendants intent was to
conceal their actions from Plaintiffs to save them from emotional distress. Plaintiffs’
Motion for Leave to File First Amended Complaint–Class Action to add Count VI
alleging intentional infliction of emotional distress must therefore be DENIED.

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4. Fraud

Defendants next argue that Plaintiffs’ Motion for Leave to File First Amended
Complaint–Class Action must be denied with regard to the fraud claim in Count VII.
Defendants maintain that Plaintiffs can not base their fraud claim on a future promise
and that Plaintiffs have failed to plead fraud with sufficient particularity as required by
the Federal Rules of Civil Procedure.

Rule 9(b) of the Federal Rules of Civil Procedure expressly requires that a fraud
claim be pled with particularity. This means that Plaintiffs must describe the “who,
what, when, where, and how” of the alleged fraud. See Rao v. BP Products North
America, Inc., 589 F.3d 389, 401 (7th Cir. 2009). Moreover, as the Seventh Circuit has
explained:
To meet the particularity requirements of Rule 9(b), a complaint must
specify the identity of the person making the misrepresentation, the time,
place, and content of the misrepresentation, and the method by which the
misrepresentation was communicated to the plaintiff. A complaint that
attributes misrepresentations to all defendants, lumped together for
pleading purposes, generally is insufficient.
Sears v. Likens, 912 F.2d 889, 893 (7th Cir. 1990)(emphasis added).

Here, Plaintiffs’ fraud claim alleges that all Defendants “uniformly” made
representations to all Plaintiffs that the lawn crypts at issue in this case would be
installed with proper drainage systems. Plaintiffs' First Amended Complaint does not
identify each individual who allegedly made the misrepresentations or the time, place,
and content of any specific misrepresentation. Plaintiffs’ lumping together all the
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alleged misrepresentations renders them unable to satisfy their burden under Rule 9(b)
to plead fraud with particularity. Plaintiffs’ Motion for Leave to File First Amended
Complaint–Class Action must again be DENIED, as to Count VII.

5. Deceptive Consumer Sales Act

Plaintiffs also seek to amend their Complaint to add a cause of action under
Indiana’s Deceptive Consumer Sales Act (“DCSA”). Ind. Code § 24-5-0.5-1 et seq.
The deceptive acts asserted pursuant to the DCSA were Defendants’ sale of lawn
crypts that they allegedly knew were defective/improperly constructed/improperly
maintained. All of the parties agree that, pursuant to Indiana Code § 24-5-0.5-5, each
of Plaintiffs’ alleged violations of the DCSA occurred more than two years prior to the
filing of this lawsuit and thus would be barred by the statute’s two-year limitations
period unless Plaintiffs can demonstrate fraudulent concealment which would toll the
limitations period. Under the fraudulent concealment doctrine “a person is estopped
from asserting the statute of limitations as a defense if that person, by deception or
violation of a duty, has concealed material facts from the plaintiff and thereby
prevented discovery of a wrong.” Boggs v. Tri-State Radiology, Inc., 730 N.E.2d 692,
698 (Ind. 2000). In their effort to establish that Plaintiffs’ DCSA claim is time barred,
Defendants contend that Plaintiffs’ fraudulent concealment argument is flawed in four
distinct ways.

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Like Plaintiffs’ fraud claim discussed above, Defendants argue that Plaintiffs’
allegation of fraudulent concealment must satisfy the particularity requirement of Rule
9(b) of the Federal Rules of Civil Procedure. Plaintiffs rejoin that Defendants’ secretly
pumping of water out of the allegedly defective lawn crypts amounted to fraudulent
concealment. Plaintiffs further note that they have pled that all Defendants acted to
conceal the drainage problems from Plaintiffs by pumping water from the lawn crypts
immediately prior to burials so that Plaintiffs would not be able to discover the
drainage problems when they were present at the cemetery. In our view, these facts are
sufficiently particular in their details to satisfy the requirements of Rule 9(b).

Defendants also contend that Plaintiffs have failed to demonstrate active and
intentional concealment as opposed to mere passive silence. Since Plaintiffs’
fraudulent concealment claim is that Defendants actively and secretly pumped water
out of the lawn crypt system each time a burial took place as a means of keeping
Plaintiffs in the dark about the problems with the drainage in the lawn crypts, it is
inaccurate to characterize such conduct as "passive silence." Therefore, Plaintiffs pass
this test for properly pleading active fraudulent concealment.

Defendants next maintain that Plaintiffs have not alleged that Plaintiffs
themselves exercised the requisite due diligence and ordinary care in an effort to
discover the alleged wrongful conduct. The Indiana Court of Appeals has explained
that:

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to avoid the time-bar imposed by the statute of limitations under the
doctrine of fraudulent concealment, the plaintiff must show that he used
due diligence to detect the fraud. For the doctrine of fraudulent
concealment to apply, Indiana law requires, among other things, a
showing of reasonable care and due diligence on the part of the plaintiff.
When the plaintiff obtains information that would lead to the discovery of
the cause of action through ordinary diligence, the statute of limitations
begins to run, regardless of any fraudulent concealment perpetrated by
defendant.

Doe v. United Methodist Church, 673 N.E.2d 839, 844 (Ind. Ct. App. 1996). In the case
at bar, as previously noted, Plaintiffs have pled that Defendants concealed problems
with the lawn crypts by pumping water out of the lawn crypts each time a burial
occurred and that the concealment continued until at least the summer of 2006, when a
public meeting was held to discuss some of the water problems. (First Amended
Complaint–Class Action ¶ 96). Whether Plaintiffs exercised due diligence is thus a
question of fact to be resolved by the fact finder at trial. The proposed Amended
Complaint in terms of the issue of Plaintiffs' due diligence is sufficient.

Fourth, and finally, Defendants assert that, in order to properly allege fraudulent
concealment, this particular claim must be separate from Plaintiffs' underlying DCSA
claim. The underlying DCSA claim alleges that Defendants sold lawn crypts which
they knew were defective. The claim of fraudulent concealment asserts that
Defendants pumped water out of the lawn crypts to keep Plaintiffs from discovering
the problems with the lawn crypts and thus appears to us to be totally separate from the

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DCSA claim We therefore conclude that Plaintiffs’ claim of fraudulent concealment
is viable and can proceed.

In summary, Count VI of Plaintiffs’ proposed First Amended Complaint–Class
Action alleging violation of the DCSA is not futile, and Plaintiffs’ Motion to File First
Amended Complaint–Class Action is GRANTED with regard to that claim.

6. Fraudulent Conveyance

Additionally, Plaintiffs seek to amend their complaint to add Count X which
asserts a fraudulent conveyance, in violation of Ind. Code § 32-18-2-1 et seq. In this
context, Plaintiffs also seek to add a new defendant, Mainstreet Investments, Inc., the
party to whom the alleged fraudulent conveyance was made. Defendants Madison
Funeral Service, Inc., and James R. Holt filed a separate response to this part of
Plaintiffs’ motion, arguing that the fraudulent conveyance claim is barred by the fouryear statute of limitations period set out in Ind. Code § 32-18-2-19, given that the
conveyance was made on May 18, 2006, and Plaintiffs’ Motion to File First Amended
Complaint–Class Action was filed well after May 18, 2010.

However, as discussed above in substantial detail, Plaintiffs filed a previous
Motion to Amend and Supplement Complaint and to Add Parties on April 24, 2009.
Included in that original First Amended and Supplemental Complaint was a claim of
fraudulent conveyance. On March 31, 2010, we granted Defendants’ Motion to

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Disqualify Counsel and dismissed all then-pending motions without prejudice,
including the Motion to Amend and Supplement Complaint and to Add Parties.
Therefore, through no fault of Plaintiffs, their original motion seeking to amend the
Complaint was dismissed and, before Plaintiffs were able to re-file a new motion to
amend the four year limitations period expired. The court concludes that, under these
circumstances, Indiana’s Journey’s Accounts Statute saves Plaintiffs’ claim of
fraudulent conveyance. Indiana Code § 34-11-8-1, the Journey’s Account Statue,
provides in applicable part as follows:
(a) This section applies if a plaintiff commences an action and:
(1) the plaintiff fails in the action from any cause except
negligence in the prosecution of the action;
****
(b) If subsection (a) applies, a new action may be brought no later than
the later of:
(1) three (3) years after the date of the determination under
subsection (a); or
(2) the last date an action could have been commenced
under the statute of limitations governing the original
action;
and be considered a continuation
of the original action commenced
by the plaintiff.

Here, Plaintiffs originally commenced their fraudulent conveyance action on
April 24, 2009, with their first attempt to amend the Complaint. Plaintiffs' effort
fizzled on March 31, 2010, when a dismissal order entered by the Court without
prejudice included the Motion to Amend and Supplement Complaint and to Add
Parties. Pursuant to Section 34-11-8-1, Plaintiffs had three years following March 31,
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2010 to re-file a motion to amend their complaint alleging inter alia fraudulent
conveyance. Because Plaintiffs filed their renewed Motion to File First Amended
Complaint–Class Action well before that three-year period expired, their motion was
timely, and we now GRANT the motion with regard to the fraudulent conveyance in
Count X.

7. Individual Claims of the Leathermons and Charlotte Hall

Finally, Defendants contend that Plaintiffs Delmar Leathermon, Margaret
Leathermon, and Charlotte Hall have all brought claims based on their own individual
purchases of lawn crypts, claims that each released as part of a settlement of a previous
class action lawsuit, Means v. River Valley Financial Bank, et al. If the Court were to
permit these three Plaintiffs to recover damages in this lawsuit, Defendants contend,
they would receive a double recovery. Whether an enforceable settlement agreement
from a prior case bars these three Plaintiffs’ individual claims in this lawsuit is not an
issue we can resolve at this time, given that it would require the court to examine
evidence beyond the four corners of the proposed First Amended Complaint–Class
Action. Consequently, Plaintiffs’ Motion for Leave to File First Amended
Complaint–Class Action is GRANTED with respect to these three individual Plaintiffs'
claims and whether they are entitled to proceed to or recover on a final judgment is a
question we defer to another day.

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III.

Conclusion

For the reasons outlined above, Plaintiffs’ Motion for Leave to File First
Amended Complaint–Class Action is GRANTED in part and DENIED in part. With
regard to Count II alleging Tortious Interference with Dead Bodies, Count III alleging
negligent infliction of emotional distress, Count VI alleging intentional infliction of
emotional distress, and Count VII alleging fraud, the Motion for Leave to File First
Amended Complaint–Class Action is DENIED, and all of these claims are
DISMISSED. In all other respects, including the addition of new plaintiffs and new
defendants, the motion is GRANTED, subject to the requirement that Plaintiffs cure
the financial losses incurred by Defendants in taking the depositions of the four
individuals who no longer will serve as class representatives. Defendants shall submit
to Plaintiffs their calculations reflecting their costs as referenced above within fifteen
(15) days of the date of this entry. If Plaintiffs object to the tabulation, as opposed to
the underlying requirement to pay), they may file their statement in opposition within
thirty (30) days of the date of this entry.

IT IS SO ORDERED.
_______________________________

06/15/2011
Dated: __________________

SARAH EVANS BARKER, JUDGE
United States District Court
Southern District of Indiana

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