Chicago, IL (PRWEB) February 5, 2011
Edward A. Wallace of Wexler Wallace LLP and Steven J. Roeder of Williams, Montgomery & John, Ltd. are pleased to announce that the Illinois Department of Insurance (“DOI”) has finally released funds to Illinois Funeral Directors without conditions.
Funeral Directors brought a lawsuit, Dames, et al. v. Daniel W. Hynes, et al., Case No. 09 CH 21989 (Ill. Cir. Ct. Cook County), against the DOI and then Comptroller Daniel W. Hynes (“Hynes”) following the execution of a consent order between the DOI and Merrill Lynch Life Agency, which resulted in the payment by Merrill Lynch Life Agency of an 18 million dollar fine connected to an alleged scheme that depleted the Illinois Tax-Exempt Pre-Need Trust. According to the original consent order, the $18 million dollars would be distributed to Funeral Directors damaged by the scheme, but only if they executed a Discharge and Satisfaction, which included a release of any claims against Merrill Lynch Life Agency and other Merrill Lynch entities and execute a commitment letter with Hynes that guaranteed a rate of return that isn’t required in existing pre-need funeral contracts.
The Funeral Directors in Dames alleged that the DOI, through its Director Michael T. McRaith, and Hynes acted without statutory authority to enter into a consent order that affected the rights of funeral directors and the families they serve. They specifically claimed that the DOI lacked authority to administer the fine as a settlement fund and demand that the Funeral Directors release Merrill Lynch of liability in order to obtain access to the $18 million dollar fund. Significantly, civil litigation was and still is pending against Merrill Lynch seeking more than $100 million dollars in damages both on behalf of the Funeral Directors. The releases would have extinguished the Funeral Directors’ claims in the litigation.
Judge Mary Ann Mason of the Circuit Court of Cook County granted summary judgment in favor of the Funeral Directors. Among other things, Judge Mason found that the DOI did not have the legal authority to enter into the consent order and require the releases. In addition, the Judge ruled that Hynes acted inappropriately, finding that there was nothing that “cloaks him with authority” to change pre-existing contracts. As a result, the DOI has released the funds to the Funeral Directors without the previous conditions.
Edward Wallace of Wexler Wallace LLP commented that, “The DOI should have known better or at least known that the law applies to its actions too.” His co-counsel, Steven J. Roeder, of Williams, Montgomery & John, Ltd., likewise stated, “It is unfortunate we had to resort to litigation, to obtain a judgment striking down restrictions that the Court ruled could not have been imposed in the first place.”
Funeral Directors around the state of Illinois continue to pursue Merrill Lynch for its alleged misconduct in regard to the Tax-Exempt Pre-Need Trust, which allows consumers to, in essence, pre-pay for their funerals. Despite shortfalls in the Trust that they attribute to Merrill Lynch, Funeral Directors continue to provide pre-need funeral services on behalf of their customers and are thankful that the funds have finally been released. As Jeff Dames, a funeral director from Joliet Illinois and one of the named plaintiffs in the case said, “Illinois Funeral Directors have been meeting all of their obligations despite the financial catastrophe that has been suffered by the Trust. I can assure you we will continue to serve our customers with dignity and compassion. In the meantime, we are very grateful to the Court for its ruling in our favor.”
For information with respect to this matter, please contact Edward A. Wallace at 312-346-2222 or Steven J. Roeder at 312-443-3256.