Los Angeles Archdiocese Sued Over Cemetery Lease Termination

AP reported  yesterday that S.E. Funeral Homes of California Inc. has filed a $250 million breach of contract lawsuit in state court in California against the Catholic Archdiocese of Los Angeles.  The suit claims that the Archdiocese in 1997 agreed to a 40 year lease of land on or near six cemeteries for S.E. Funeral Homes to operate its funeral services business. The company spent $37 million to build funeral homes, mausoleums and other facilities and pre-sold $190 million worth of services. However in early September the Archdiocese notified the company that it would terminate the leases in a month, claiming that the company was in breach of lease because of a reverse merger with a subsidiary of Service Corp. International. At issue is a clause in the lease that bars "transfer or entrustment of operations" without the consent of the Archdiocese. S.E. Funeral says the Archdiocese is acting in bad faith to seize its lucrative business.