188 [80 O p. Att’y

1 You r questi on is li mi ted to the sale of caskets on a pre-ne ed basis. We areaware of

n o st atu te l i m i ti ng th e s al e of ca sk ets o n a n a t

- ne ed ba sis orunder other circum

stances wh

ere deliv ery of the c as ke t i s m

ade u pon payment of

the pri ce . Th i s op i ni on addre ss esonl

y the si tua ti on in whi ch an in div idua l pa ys money

to the sell er of a casket in

exchan ge for a pro mise of del iv ery wh en the casket wil

l be needed. H EALTH O CCUPATIONS

) M ORTIC IANS

) B USIN ESSES AN D P ROFESSI ONS

) C EMETE RIES

) S ALE OF C ASKE TS ON A “P RE -N EED ” B ASIS

December 21, 1995

Mr. Thom as J. M urphy, III President State Board of

Morticians You have request ed ouropinion on s evera l is sues rel ated t o the pre-n eed s ale of c askets: 1. Does the Maryland M orticians Act p rohibi t a pers on other than a lic ensed mort ician, lice nsed funer al dir ector, or a holder of a surv iving spou se licen se (he reafter “lice nsee ”) from selling cas kets on a pre-nee d basis? 1 In par ticul ar, does t

he Act prohibit a cem etery owner from doing

so? 2. If the Act prohibi ts a cemeter y owner or othernonlice nsee from s elling caske ts on a pre-n eed b asis, m ay the State Board of Mortici ans seek injunctive rel ief agai nst a per son who does so? 3. May a cemeter y owner who is also a lic ense e sell ca skets through the cemet ery? Ou r opin ion is as follow s: 1. The Morticians Actdoes notprohibi t a cemet ery or ot her person from sel linga caske t by means of a pre-nee d contrac t that complie s with Titl e 5, Subt itl e 4 of the Business Regul ation ( “BR”) Article, Mary land Co de.Gen. 188] 189 2. The Board does not h ave au thority to bringan injunc tion acti on against a perso n w ho is unlawfully sell ing c asket s on a preneed basis. 3. A cemetery owner w ho is also a lic ensee may sell caske ts on a pre-nee d basis in eithe r capaci ty.

I Reg ulation of

Pre-N eed Contracts A. Introduct

ion The Maryland Mortici ans Actc areful ly regulate s pre-ne ed contracts. When a licensee s ells a caske t on a pre- need basis , that lice nsee must c omp ly w ith detai ledescrow and other requirements. §7-405 of

the Healt

h Occupations ( “HO”) Arti cle, Maryland Code. Because the Act

expressly p rovid es that a “pre-ne ed co ntract” include s “a cas ke t,” and only lice nsees may sel l “ pre-need cont racts ,” many lic ensees under standably belie ve that the y alone may sellcasket s on a pre-nee d basis. Considered by i tsel f, thi s point of view is logical. But as Oliv er Wendell Holmes f am ousl y put it , “a pa ge of history is worth a volume of log ic.” New York Trust Co. v. Eisner, 256 U.S. 345, 34 9 (1921 ). The h istory of the G eneral Assem bly’s regul ationof pre-need transacti ons is a tortuous one, ma rked by draft ing problems an d unex plaine d cha nges in w ordin g. Ye t this his tory , which we shall s et out in detai l, yi elds a f irm conclusion: lice nsees do not hav e a monopoly ov er the pre-need sale of casket s. B. The Evolution of Paral lel Regul

atory Regimes 1. 1969

)Attempting to regulate pre-need contracts
. The Ge neral A ssemb ly first tried to regul ate pre -needcontra cts in Chapter 684 of t

he Laws of Maryland 19 69. Chapter 684 conta ined th e follow ing defin ition of “p re-nee d con tracts”:

For purposes of

thi s sect ion pre- need contra cts are defined to inc lude th e enter ing into of any contr act, pl an or agr eement190 [80 O p. Att’y wh erein a seller a grees to furni sh to or f or the use of a liv ing pe rson at

the fut ure ti me of death emb almi ng, cremating, or other serv ices and /or the del ive ry of fune ral or burial caskets, vaul ts, and c lo thing such as are n orma lly furni shed by li censed funer al directors and emba lm ers i n the ordinary and normal course of such business. This secti on shall not apply to the sale of cemeter y lots, grave si te s, ma us ol eu ms , m onume nt s, lawn cryp ts , va ults , or othe r merchandi se or serv ices sold by o thers not in conn ection with the practi ce of th e profes sion of a funeral director and a n emba lmer. FormerAr ticle 43, §366A(b). The term “seller” was defined as a lice nsed funeraldirector and em balmer, and no one other than a sell erwas au thorized to enter a pr e-nee d con tract. F orme r Article 43, §36 6A(a). These provi sions di d not achiev e the ev ident leg isl ativ e goalof limi tingthe pre- need sale of funer ary goods and serv ices, including caskets, to li censee s. If a pre-nee d contrac t was defi ned as an agree ment by a sell er, and a s elle r was defi ned as a li censee, t hen a non -licensee’s contrac t to s ell f unerary g oods on a pre- need basi s was not a “pre -need contract” as defined in Chapter 684 and so escaped re gulation. 2. 1981

)Fixing the pr oblem and cre ating a monopoly . The Revisorof St atute s point ed out the regul atory g ap when the Healt h Occupations ( “HO”) Arti cle was enact ed in 1981: It is not clear what class of indi vidua ls the General Assembly intended t o regul at e i n former Art. 43, § 366A(a) a nd (b). FormerArt. 43, §366A(b) de fined a“preneed contrac t” as one in w hich “a seller” agree d to prov ide certa in goods and services. FormerArt. 43, §366A(a) defined “sel ler” a s a licensed fune ral dire ct or and em balmer. That subsect ion als o purport ed to prohibit anyGen. 188] 191
person o the r than a l icensed f uneral director an d embalmer f

rom executing a pre- need contra ct. How ever, be cause a pre -need c ontra ctby defini tion i s one made by a lice nsed funeraldirec to r and emb almer, a person who is not a l icense d funeraldirector and embalmer

ma y make a similar

contrac t withou t violating t

he proh ibition. Chapter8 of the Laws of Maryland1981, Revis or’s Note to HO §6- 404. In t

he same note, the Revi sor expl ained Code Revi sion’ s solut ion to the problem and f lag ged a regul atory i ssue for the General Ass embly:

Af ter considering t

he excepti ons to the d efin iti on of a “pre-need c ontract” that w ere enumerate d in former Art . 43 , §366A(b), the Commissionto Revi se the Annot atedC ode: (1) has stru ctured the de finit i on of “pr e-need co n tract” in §6-101 of this title in t erms of what the co ntract d id rathe r than w ho m ade it; (2) has defi ned “seller” in this secti on as any person who mak es a pre-nee d contrac t; and (3) has li mited t

hose who are authoriz ed to make a pr e-need cont ract to lice nsed morticians. Because of the sc ope of the g oods and serv ices that are included in the t erm “p rene ed contract,” the cl ass of persons most affect ed under this revi sion are those associ atedwith the pract ice of mortuary science

. Because only a l icensed mor tici an is authori zed under thi s sect ion and §6-50 4 o f the this title to make a pr e-need cont ract, any other person who is a “seller” ... who do es so incurs pen alties under §6 -508 of this title. Some other persons ( e.g. cas ke t s alesmen) also mayfall with in these revi sed provisions. Therefore , the GeneralAssem bly may wish to adjust the definiti on of “s elle r” accor dingly.192 [80 O p. Att’y

2 Thatsam

e sessi on, the General

Asse mbly expan ded th e a uth ori ty to ex ec ut e p r e- ne ed co nt r ac t s t o inc lu de li cens ed fu ner al dire ct or s and surv i vi ng s pouse s. SeeChapter 18 4 of the Lawsof Mary

l and 1981

. The General Assembly did not “wish to adjus t the de fini tion of ‘sel ler’ ”; inst ead, it

retained Code Revisi on’s propos ed definition of “seller” to m ean “a pe rson wh o agr ees to p rovid e se rvi ces or merchandis e, directly orin di re ct ly , unde r apr e- ne edco ntra ct .” HO §6-404(a) (1981). T he nex t subsection, H O §6 -4 04(b) (1981), limi tedto l icen sed mo rticia ns those who “ may offer or agr ee, directly or indi rectly, to provide ser vices or merchan dise unde r a pre-need contract.” 2 The 1981 defini tion of

“pre- need contr act,” c odifi ed in HO §6- 101(n), was as follows:

(1) “Pre- need contrac t” means an a greeme nt to pro vide to a th en li vin g individu al on th e dea th of tha t individu al: (i) A serv ice, including

embalming

or cremati on, that a

morti cian norm ally provi des in the ordinary course of b usiness; or (ii) Merchandise, including a casket, vault, or cloth ing, that a morticia n no rmally provides in t

he ordinary course of business. (2) “Pre- need contra ct” does not include an agreement to pro vide to a the n liv ing individu al on th e dea th of tha t individu al: (i) A cem etery lo t or grave site; (ii) A mauso leum, monume nt , l awn crypt; or (iii) Any othe r merc hand is e or ser vic e that is not sold in connect ion with t he pract ice of mort uary sci ence.Gen. 188] 193

3 I n t he Mo rt icia ns A ct , t he Ge ne r al As se mb ly us ed t he sp elling “pre-need.”

I nenac tm ents deal

in g with other persons, the Gen eral Ass emb ly us ed t he sp elling “p r en ee d. ” T o av o id r ea de rdis t r ac t io n, t his opi ni on willhence for t h ado pt a single sp elling no ma tt er the context: “prene ed.”

4 Intermen

t space, cemetery

lots, and grave sites we re excl uded f rom th e term “g oods an

d servi ces .” §16 5B(a

)(3)(i i). As of 1981, the n, the ans wer was clear: No one other than a lice nsee c ould sel l a casket on a pre -need basi s. The exclus ion i n former HO §6-101(n)(2)( iii ) did not author ize a ce metery to sell caskets on a pre-nee d basis, beca use ca skets were “sold in connect ion with the practi ce of mort uary sci ence”; t

herefor e, the pre-n eed s ale of c askets w as ex clusively the province of l icensees. Just as the R evi sor of St atute s stat ed, “c asket sales men” could not sell cask ets on a pre-need basis. 3. 1984

)Regulati ng pre- need contrac ts for burial goods and se rvices . Three years later, the Ge neral A ssemb ly dec ided to regulate “pre- need burial contracts.” 3 In Chapter 76 5 of the La ws of Maryland 1984, the General Ass embly impos ed cert ain escrow and other requi re ments on t

hese contr acts. The term “pre-need burial contra ct” was defined as “any i nstrume nt in wri tingdated on or aft er October1, 19 84, p ursua nt to which pre-need goods and services are to be sold an d delivered or pe rform ed.” F ormer Articl e 23, §165B (a)(11). Th e ke y term “ goods and s ervi ces” was defi ned as follows: “‘Goods and services’ include s, but i s not l imit ed to, vaults, grave liner s, urns, memorial s, monuments , scrol ls, v ases, opening and closi ng of graves , an d other g ood s and services s old in connect ion wit h the int ernment, cremati on, or othe r dispos iti on of human remains.” F ormer Article 23, § 165B (a)(3)(i). 4 The phrase “ other g ood s ... so ld in conne ction wit h the inter ment of human remains ” was surel y broad enough to include a casket. The terms “ casket” and “cof fin” are syno nymo us. See Random H

o use Dicti onary of t

he English Language 322 (2d ed. 1987) (“casket” defined as “coffin”). A coffi n is “ the box or cas e in which the body of a de ad person i s placed f or buri al; c asket .” Id. at 399.194 [80 O p. Att’y Chapter 765 of the L aw s of M ar yland 198 4 exp r essly preserved the exi sti ng regulat o ry r egime applicable to licensees’ pr e-nee d con tra cts: “ N othing in this secti on shallbe construed to apply to pr e-nee d con tra cts entered into by those persons engaged in the practic e of the profess ion of a mortici an or f un era l di rec t or, as defi ned and regulatedby the Health Occupati ons Article of the AnnotatedCode of M aryland. ” F or mer Ar ticle 23, §165B(k)(3). Unlike i t s c ount erp art

i n t he Hea l t h O cc up ati on s A rt icl e, Chapter 765' s regulati on of pre-need contracts di d notcontai n a provision r e stricting who could sell“ pre-need burial goods and services. ” I nd ee d, th e b as i c re gu l at oryr equir em ent w as fr am ed in t erms of “ a person” : “ E xcep t as pr ovid ed in this secti on, a person

... may not offer to sel l or sell p r e-nee d go ods a nd se r vices if de l i ve ry . . . may be delayed lat er than 120 days af ter the receipt of

... payment .

. . . ” F orm er Ar ticl e 23, §165B(b)

. The te rm
“ person” was broadl y def i ne d t o me an“ ani nd i vi du al , firm, co rpo ra tion, partnership, or any other for m of entit y sell ing preneed goods and ser vices. ” F orm er Ar ticl e 23, §165B(a )(7). O ther provisions r efer r ed sim ply to “ seller s, ” a ter m th a t Chapter 765 leftundefined. Ch apter 765 a lso conta ined r epea ted r efer ence s to the obligations of “ cemeter ies. ” See for mer Ar ticl e 23, §165B(c)(1), (c)(4), (h)(3), (i)(4), and ( k)(4). T hese r efer ence s to cemeteries might arguably mean that t he Gener al As sem bly in tendedto li mit pre-need contracts under C hapter 765 t o cemeteries. But

the st atute ’s key l anguage did not do so, and the reference to cemeteries more likely reflec ts a l egisl ative understanding of

the market at the time

)that c emeteries were the entities most extensively engagedin the business of pre-need burial contracts. We do not read Chapter 765 as li miting pre-need burial contracts to cemeter ies.
H ence, as of 1 984 , the G ener al As sem bly h ad allo we d lice nsees to sel l casket s on a pr e-need basis, subject to t he r equir em ents in th e M ar yland Mor tici ans Act; and had allowed cemeteries and others to sell caskets o n a pre-need basis, subject to th e r eq uir em en ts o f fo r m er A r ticl e 2 3, §1 65 B. 4. 1986

)Am ending the funerary pre-need l aw . In Chapter 728 of the Law s of Mar yland 1986, the General Ass em bly repealed the exclusi on from the definition of “ pre-need contr act” that had ap pear ed in for mer H O §6 -101(n)(2 )

. TheGen. 188] 195 exclusi on covered cemetery lots, monum ents, and other goods or services “ not sold in co nnection w ith the pr actice of m or tuar y science

. ” T he bill was introduced with the e xclusi on mar ked for r epea l, and we can find no di scus sion i n t he l eg i sl ati ve hi story explai ning t he un de rl yi ng purpo se . W e c ansp ec ul at e, ho we ve r, that the General Assembly, having regulate d pre-need burial con tra cts in Chapter 765 of the Laws of M aryland 1984, d id no t want to leav e the m isleadin g impression that former HO §6- 101(n)(2) was a separate authorization for the sale of burial goods on a pr e-need basis. Th e 1986 enactment al so rewor ded the core defi niti on of

“ pre-need contract” to mean “ an agreement between a consumer and a lic ensed fune r al dir ector and a license d m or tician to provide any goods and services purchasedpri or t o the t i me of death.” The pur pose of thi s recasting, accor ding to t he re por t of the House Environm entalM atte rs C omm itt ee, was “ to excl ude other types of pre-need contr acts (such as insurance). ” Although pre-need burial contr acts we r e not m enti oned in t he l eg i sl ati ve hi story , the y are cer tainly among the “ other types of pre-need cont racts .

. . ” with which the General Assembly was famili ar, having le gisl ated on the subject only two years before. Thu s, it is r easonable to construe the 1986 am endmen t as a confirmation of the l egisl ative decisi on that t he provisions on preneed contracts in the M orticians Act do notaffect the prerogative of cem eter ies and other s to se l l i nt erme nt -re l at edi t ems )including a cask et

)on a pr e-n eed basi s, subje ct to the r equir em ents applic able to that typ e of p r e-nee d con tra ct. C. Current

Provi sio ns 1. Morticians Act As curr en tly worded, HO §7-405 provides that only a lice nsee may “ offer or agree . . . to provide ser vices or m erchan dise under a pre-need co ntrac t. ” C onv er sely, H O § 7-50 4 pr ohib its anyone other than a li censee from offering or agreeing to provide

“ ser vices o r me r chan dise u nder a pr e-nee d con tra ct. ” The stat ute provides various protect ions t o the buyer ofa preneed contract, including the “seller’s” obligation to depos it al l of the payments int o a trust account. H O §7-405. A “ seller” is “ a196 [80 O p. Att’y
person who agr ees to provide ser vices or m erchan dise

... un de r a pre-need contract. ” HO §7-405(a)

. A “ pre-need contrac t” is defined in HO §7-101(q) as follows:

“ Pr e-needcontract” means an agreement be tween a consumer and a licensed f un era l di rec t or, lice nsed mortician, or sur viving spouse to provide any goods a nd services purchased prior to the time of death. Goods and services shal l include: (1) A service , including any form of preservation and disposition, that a mor tici an nor ma lly pr ovid es in the or din ary c ourse of bu sine ss ; or (2) M ercha n dise, includ ing a c aske t, vault, or clothin g, that a m or tician n or ma lly pro vides in the ordinar y cour se of business. 2. Burial goods and servi ces . In 1992, t he G eneral Assembly recodified Chapter 765' s provisions on pre-need burial contracts into S ubtitle 4 of Tit le 5 of the Business Regulation (“ BR” ) Article. BR §§5-404 through 5- 410 impose va rious r equirem ents on “ pre-need bur ial contracts. ” T his term is defined a s “ a written ins trument under w hich pre-need goods o r pr e-ne ed services are to be sol d and deli vered or perform ed. ” BR §5-401(d)

. The term “ pre- ne ed go ods” is defined in BR §5-401(e) as foll ows:

(1) “ Pr e-needgoods” means goods that are sold: (i) Bef

ore the buyer’s death; and (ii) In con nectio n w ith bur ial. (2) “ Pr e-need goods” includes: ( i ) a g rav e l i ne r; (ii) a m em or ial; (iii) a m onu me nt; (iv) a sc r oll;Gen. 188] 197 (v) an urn; (vi) a vase; and (vii) a va ult. (3) “ Pr e-needgoods” does not i nclude burial space.
BR §5-401(e)

. The list of pre-need goods in B R §8-401(e) may not be read t o exclude cask ets, how ever , simp ly bec ause that ter m is not in the lis t: “ The w ord s ‘include’ or ‘including’ mean, unless the conte xt r equir es oth erwise, include s or including by way of illustration and not by way of li mitati on. ” Ar ticl e 1, §30. The compliance r equi re men ts are fram ed in ter ms o f a

“ sell er. ” See BR §§5-411 and 5- 412(a). “ Sell er” means “ a person who sell s pre-need goods or pre- need ser vices. ” BR §5-40 1(g). The te rm “ p erson” is broadly inc lusi ve. “ < Per son’ means an individ ual, rec ei ve r, tru st ee , gua rdi an , pers on alrep re sent ative , fiduci ary, repr esent ati ve of an y k i nd , pa rtn ers hi p, fi rm, associ ation, cor por ation, or other entity. ” BR §1-10 1(g). Thu s, althou gh th is r egula tor y statute is in the “ Cem eteries” title of t he Business Regulati on Ar ticl e and ref er s to cemeteries in various pro vi si on s, we cann ot

co nc l ud e t

ha t pre - ne edburi alco nt rac t s are re str icte d to cemeteries, anym ore than they were under C hapter 765. T he Revisor’s Notes confi rm that none of the draft ing chan ges w as inten ded to have a sub stantive effect.
D. Conclusion The M or ticians A ct, wh ich lim its to li censees those who may sell cask ets on a pre-need basis , cannot be cons idered in is olati on. The Act mu st be construed so as to give e ffect to the l ater-enact ed BR Title 5, Subtitl e 4. That statute’s defini tion of “pre- need goods”

)“g oods that

are so ld ... in c onn ection with burial ”

)surel y extends to caskets. See Part IB3 abo ve. These two stat

utory sc hemes prese nt the f amili ar pr obl em of overlapping authority. This prob lem typ ically present s it self when the same activity falls w ithin the scop e of p ractice o f two health occupations. See 80 Opinions of the Attorney General180 (1995) (vet erinarians and a cupu ncturis ts may each perf orm acupuncture on anim al s); 76 Opinions of the Attorney General 3 (1991)198 [80 O p. Att’y

5 If an individua l is a li

cens ee a nd

owns a cem

etery, thatin

div idua l ma y se ll caskets in ei

ther capacity. If the in

div idual sell s a ca sk et fr o m his orher f une ral establi sh men t, p re sum abl y as part of a package of f uneral goods and s er vices, t he pr ovisio ns o f t he Mo rt icia ns Ac t wo ul d a pp ly. If t he in div idua l do es so fr o m his o rhe rce met er y, t he pr o visio ns o f BRT it le 5, S ub t it le 4 wo ul d a pp ly. (chiropractors and p hysic al thera pists ma y eac h per form c ertain manipulation s). The issue of pre-need casket sales is n o diffe rent in princip le: Licen sees m ay se ll caskets on a pre-nee d basis unde r the Morticians Act, and c emeteri es and other s may sel l caskets on a pr eneed basis unde r BR Title 5, Subti tle 4. 5 Those who do so under the latter statute do n ot violate th e M ortician s Act. That the tw o statute s differ in their r egula tor y deta ils is imm ater ial. To be sur e, the regulati on of pre-need bur ial con tra cts under BR Title 5, Subti tle 4 ha s signifi cant di fferences from the regulationo f p re-need contracts under the Mor tici ans Act. F or example, B R Ti t l e 5 , Sub t i t l e 4 re quires muc h less money to be held in tr ust. While these di fferences may raise a poli cy issue that the Ge ner al As sem bly m ight wan t to add r ess, they d o no t nega te the sc op e o f

t he “ pre - ne edgo od s” th at ce me t eri es an d o t he rs are allowedto sell. In our o pinion, “ pre-need goods” include caskets.

II
The Boa rd’s R em edial A uthority Someone who sell s casket s on a pre-need basi s but compli es with neithe r the M orticians Act nor BR Title 5, Subti tle 4 is subj ect to a range of potential c ivi l and criminal sancti ons. HO §7-508; BR §§5-411 and 5-412. If the Board be comes aw are of an ins tance of this il leg al ac ti vi ty, it

ma y refe r the mat

ter t o this offi ce or to t he appropri ate S tate ’s Attorney. Howe ver, th e M orticians Act does n ot grant to the Boa rd authori ty to s eekan inju nction against so meo ne w ho is unlaw fully entering pre-need c ontract s. When th e Ge neral As sembly has decidedto gr anta regul atory board authori ty to s eek i njunctive rel ief against cond uct tha t is also a c rime, it has legislated th at auth ority explic itly. See HO §14-20 6(e) (B oard of Ph ysician Qu alityGen. 200] 199 Assurance may see k to enjo in prac tice of m edicin e w ithout a license).
III Con clusion In summ ary, it is o ur op inion th at: 1. The Mo r tici ans Act does not prohibit anyone f

rom sell ing a casket

on a pre-need basis, if the sel ler co m plie s w ith BR Title 5, Subtitl e 4. 2. The Boar d do es no t have autho r ity to bring an injunction acti on against

a person who is unlawfully sell ing casket s on a preneed basis. 3. A cemetery owner who is also a lice nsee may sel l caskets on a pre-need basis in eit her capacity.

J. Jo se phCurran, Jr. AttorneyGeneral Jack Schw ar tz Chief Counsel Opinions & Advice

Editor’ s Note: Cemeteri es are subje ct to a dditi onal regulati on as a res ult of Chapter 675 of t

he Laws of Maryland 1997.