By a final court order, Iams Funeral Home must transfer all preneed funeral accounts to two other New Martinsville funeral homes and they are not permitted to engage in any preneed funeral arrangements or services. The decision will be appealed by Iams’ counsel Hiram Lewis. On April 24 in Wetzel County Circuit Court, Judge John Madden ruled that Iams Funeral Home was “permanently enjoined from selling, offering for sale, making available, or acting as the provider of any preneed funeral products or services in the State of West Virginia.” Iams was further ordered to reimburse funeral homes that had previously serviced some of his preneed funeral contracts but had not been paid.

The seven-month long suit involved the premier law enforcement official in West Virginia, Attorney General Darrell McGraw, who filed suit Oct. 24 against Iams Funeral Home and its owner, John L. Iams II, in the Circuit Court of Wetzel County. In his lawsuit, McGraw alleged that Iams misappropriated money customers had given him to purchase preneed funeral contracts. The complaint further alleged that Iams failed to file required documentation with the Preneed Division and was operating without a business license.

Iams Funeral Home, represented by legal counsel from Morgantown, Hiram C. Lewis III, on Oct. 26 initiated bankruptcy proceedings, which would have allowed them certain protection under the law. Iams reported almost $448,000 in debts, which included $318,000 in preneed contracts secured by either certificates of deposit or insurance policies, and $77,000 in unpaid debt. It was Iams’ position that the court should stay the Attorney General’s suit due to the bankruptcy proceedings. In U.S. Bankruptcy Court - Northern District of West Virginia, Wheeling, on Nov. 19, Judge Patrick M. Flatley ruled that Iams was not exempt from complying with orders that they cease from selling all preneed funeral contracts.

Iams’ appeals were unheeded and on April 24 Madden made a final order. As part of the order Iams is required to transfer any existent preneed funeral contracts on an alternating basis to Grisell Funeral Home and Jarvis Funeral Home.

This is not Iams’ first encounter with the Attorney General’s office. The funeral home was audited in 2001 and 2005. These audits reportedly revealed that Iams had taken consumers’ money for preneed funeral contracts and placed it into the funeral home’s general account instead of placing it in trust accounts in the consumers’ names. It was alleged Iams would then use these funds to cover operating costs of the funeral home.

Attorney General McGraw said after Madden’s ruling, “These defendants have now been held accountable for their failure to comply with the Preneed Funeral Contracts Act. This statute protects consumers who wish to buy peace of mind when purchasing their funerals. The Legislature has entrusted the oversight of the preneed funeral services industry to my office and we take that responsibility very seriously.”

Hiram Lewis is appealing the decision to the Supreme Court, contending the Attorney General and Madden did not follow the letter of the law, “Contrary to Judge Madden’s opinion, the Attorney General has failed to follow WV Code §47-14-11(b) that requires an administrative hearing to determine violations of the Preneed Act. We strongly believe that the five legal scholars on the West Virginia Supreme Court will agree that the plain language of the statute requires an administrative hearing prior to commencing a civil action.”

Lewis, who is also opposing McGraw in the upcoming election for attorney general, has issued the following statement for his clients: “Iams Funeral Home, Inc., will continue to diligently and aggressively pursue enforcement of the law in regards to regulation of the funeral home industry in West Virginia. . .This patently unfair action by Judge Madden and the Attorney General’s Office is a perfect example of what is wrong with this state.

“It is why West Virginia ranks dead last in legal climate and cost to do business. There exists one justice system for friends of the Attorney General and one for anyone that questions the improper actions of the office.”