CEMETERIES ‑- CONTRACTS ‑- TRUSTS ‑- FUNDS ‑- ENDOWMENT
(1) To the extent that a prearrangement contract calls for the furnishing of services and/or the delivery of merchandise, the contract must be fully performed by the cemetery authority with which it was made, in accordance with its terms, before any withdrawals of moneys from the prearrangement trust fund provided for in RCW 68.46.030 can be made.
(2) When an endowment care cemetery accepts a reservation for a burial plot with no requirement on the part of the beneficiary to make any payments until actual interment, and where the beneficiary is not obligated to utilize the reservation, the cemetery authority is not required to make any payments into its endowment care fund under RCW 68.40.010.
- - - - - - - - - - - - -
April 17, 1974
Honorable V. E. Rasmussen
Chairman, Washington State
11111 Aurora N.
Seattle, Washington Cite as: AGLO 1974 No. 50
By letter previously acknowledged, you have requested our opinion on two questions which we paraphrase as follows:
(1) May a cemetery authority which has sold merchandise by a "prearrangement contract," as defined in RCW 68.46.010, withdraw moneys from the trust fund established with respect to that contract under RCW 68.46.030 where the merchandise, having been ordered and paid for by the cemetery authority, is retained and stored by the supplier or manufacturer until delivery is requested by the cemetery authority?
(2) When an endowment care cemetery accepts a reservation for a burial plot with no requirement on the part of the beneficiary to make any payments until actual interment, and where the beneficiary is not obligated to utilize the "reservation," is the cemetery authority required to make any payments into its endowment care fund under RCW 68.40.010?
We answer question (1) in the negative as qualified in our analysis, and question (2) in the unqualified negative.
By its enactment of chapter 68, Laws of 1973, 1st Ex. Sess., now codified as chapter 68.46 RCW, the legislature provided for certain procedures to be followed by cemetery authorities in connection with any "prearrangement contracts" entered into by those authorities. A "prearrangement contract" as defined in RCW 68.46.010, means:
[[Orig. Op. Page 2]]
". . . a contract for purchase of cemetery merchandise or services, to be furnished at a future date for a specific consideration which is paid in advance by one or more payments in one sum or by installment payments."
The term "cemetery merchandise or services" is also defined in the foregoing statute to mean and include,
". . . monuments, markers, memorials, nameplates, liners, vaults, boxes, urns, vases, interment services, or any one or more of them."
A basic substantive requirement of this new law is that set forth in RCW 68.46.020, as follows:
"Any cemetery authority selling by prearrangement contracts any merchandise or services shall establish and maintain one or more prearrangement funds for the benefit of beneficiaries of prearrangement contracts."
RCW 68.46.030 then provides that:
"Fifty percent of all funds collected in payment of each prearrangement contract, excluding sales tax and endowment care if such charge is made, may be retained by the cemetery authority. Deposits to the prearrangement trust fund shall be made not later than the twentieth day of each month following receipt of each payment as made on the last fifty percent of each prearrangement contract, excluding sales tax and endowment care, if such charge is made."
Next to be noted is RCW 68.46.040, which requires:
"All prearrangement trust funds shall be deposited in a qualified public depository as defined by RCW 68.46.010. . . ."
And finally, RCW 68.46.050 provides for withdrawals from a prearrangement trust fund as follows:
[[Orig. Op. Page 3]] "A bank, trust company, or savings and loan association designated as the depository of prearrangment funds shall permit withdrawal by a cemetery authority of all funds deposited under any specific prearrangement contract plus interest accrued thereon, under the following circumstances and conditions:
"(1) If the cemetery authority files a verified statement with the depository that the prearrangement merchandise and services covered by a contract have been furnished and delivered in accordance therewith; or
"(2) If the cemetery authority files a verified statement that a specific prearrangement contract has been canceled in accordance with its terms."
Our generally negative answer to your first question is based upon the fact that subsection (1) of this last quoted statute only allows a withdrawal of prearrangement trust funds by a cemetery authority when a verified statement has been filed by the authority stating that:
". . . the prearrangement merchandise and services covered by a contract have been furnished and delivered in accordance therewith; . . ."
What this language means, in our opinion, is that to the extent a prearrangement contract calls for the furnishing of services and/or the delivery of merchandise, the contract must be fully performed by the cemetery authority in accordance with its terms before any withdrawal of those trust funds can be made. Any analysis of the question of whether "delivery" has occurred must thus be based upon the terms of the particular prearrangement contract in question. Assuming, however, that in the case of the merchandise which is contemplated by your question the contract calls for its ultimate delivery to the place of burial ‑ either expressly or by necessary implication ‑ nothing short of that performance will constitute delivery under the terms of the law. The mere fact that a so-called "certificate of title" to the merchandise may have been delivered would not, in our opinion, constitute a delivery of the merchandise itself.
[[Orig. Op. Page 4]]
Your second question involves RCW 68.40.010 which reads as follows:
"An endowment care cemetery is one which deposits in its endowment care fund not less than the following amounts for plots sold: Ten percent of the gross sales price, with a minimum of ten dollars for each adult grave; five dollars for each niche; and thirty dollars for each crypt.
"The deposits shall be made not later than the twentieth day of the month following the final payment on the sale price.
"Any endowment care cemetery hereafter established shall also have deposited in its endowment care fund the additional sum of twenty-five thousand dollars before disposing of any plot or making any sale thereof: Provided, That the requirement of an additional deposit of twenty-five thousand dollars shall not apply to any cemetery in existence on January 1, 1961, having an area not exceeding ten acres."
With this statute in mind you have asked:
When an endowment care cemetery accepts a reservation for a burial plot with no requirement on the part of the beneficiary to make any payments until actual interment, and where the beneficiary is not obligated to utilize the "reservation," is the cemetery authority required to make any payments into its endowment care fund under RCW 68.40.010?
The reason for our negative answer to this question is that the transaction described therein does not constitute a "sale" of a plot within the contemplation of RCW 68.40.010, supra.
A sale is an arrangement whereby a seller transfers property or passes title to a buyer for a consideration or price. See, RCW 62A.2-106. In the above described "reservation" situation, however, there is no transfer of property to the beneficiary nor any consideration or price paid to the seller. Accordingly, it follows that [[Orig. Op. Page 5]] there is no obligation on the part of the cemetery authority to place any moneys in its endowment care fund as a consequence of its acceptance of such a reservation as you have described.
We trust that the foregoing will be of some assistance to you.
Very truly yours,
WADE E. GANO
Assistant Attorney General