Antioch St. Johns Cemetery Company D/B/A American Memorial Park, Grand Prairie, Texas Gerald Weatherall And Beverly Randall-Weatherall v. Texas Department of Banking Commissioner, 03-15-00341-CV

Background

Antioch St. Johns Cemetery Company (d/b/a American Memorial Park) was operated by Gerald Weatherall (president) and Beverly Randall-Weatherall (vice‑president) after a 2009 purchase; the cemetery and corporate charter later experienced forfeiture, bankruptcy, and transfer of title.
The Texas Department of Banking (staff) performed multiple examinations (2010, 2011, limited scope 2012) documenting numerous record‑keeping, platting, and perpetual care trust fund (PCTF) deficiencies—including inaccurate plats for “Section J,” burial/record mismatches, late or incorrect PCTF deposits, and failures to issue conveyance documents.
Staff issued an Emergency Cease‑and‑Desist Order (May 16, 2012) prohibiting most cemetery operations without a valid certificate of authority; a post‑order burial and reporting violation occurred.
A contested‑case hearing was held; the Administrative Law Judge (ALJ) found extensive violations, concluded the facts established a pattern of ‘‘willful disregard’’ (after finding initial ignorance and later incompetence/indifference), and recommended a penalty no higher than the low end of staff’s requested range.
The Banking Commissioner adopted the ALJ’s Proposal for Decision and entered a Final Order assessing $56,000 in administrative penalties against Antioch St. Johns Cemetery Company and Gerald Weatherall in his individual capacity and as former president (jointly and severally).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether ALJ findings and penalty are supported by substantial evidence and not arbitrary/capricious	Weatherall and Randall‑Weatherall argued the ALJ’s findings were internally contradictory, some violations were corrected timely, and the ALJ’s finding of "willful" conduct was unsupported; trial court should reverse	Department (Commissioner) argued the record shows numerous repeated violations (hundreds of instances), failure to timely correct, and facts supporting a pattern of willful disregard; penalty discretionary and supported	Commissioner and trial court adopted ALJ findings; record sustained many violations and a pattern justifying penalties; $56,000 assessed against cemetery and Weatherall individually/as president
Whether penalties against Weatherall in his individual capacity were lawful given corporate form	Appellants argued corporate status shields individual shareholders/officers absent proof the corporation was used to perpetrate actual fraud	Department argued officer (Weatherall) actively managed operations, failed to correct violations, and thus may be held personally responsible under Health & Safety penalty statutes	ALJ/conference concluded Weatherall was personally responsible; Final Order assessed penalty against Weatherall individually; appellants’ veil‑piercing/fraud defense was not accepted on the record
Whether Commissioner erred in treating failure to renew certificate (§712.0037) as a separate penalty‑eligible violation	Appellants argued nonrenewal is consequence of not meeting statutory requirements and not a stand‑alone penal violation after nonrenewal	Department treated operating without a certificate after March 1, 2012 as a violation subject to penalty	ALJ distinguished the renewal‑application statutory provision (not a separate post‑denial penalty) but concluded operation after the renewal date without a certificate was a penalty‑eligible violation; Commissioner adopted that approach
Appropriate penalty amount and scope of Commissioner’s discretion	Appellants argued penalties excessive given corrective actions, shortages were cured, and conduct reflected incompetence rather than bad faith	Department sought a penalty within staff’s recommended range ($56k–$70k) given number/duration/seriousness of violations and a violation of the Cease‑and‑Desist Order	ALJ found facts could support higher penalties but recommended the low end; Commissioner adopted ALJ and imposed $56,000 against cemetery and Weatherall individually/as president

Key Cases Cited

Castleberry v. Branscomb, 721 S.W.2d 270 (Tex. 1986) (corporate officers/shareholders not personally liable for corporate obligations absent use of the corporation to perpetrate an actual fraud)
Texas Health Facilities Comm’n v. Charter Med.‑Dallas, Inc., 665 S.W.2d 446 (Tex. 1984) (standards for judicial review of administrative findings and deference to agencies)
R.R. Comm’n of Tex. v. Torch Operating Co., 912 S.W.2d 790 (Tex. 1995) (definition of "substantial evidence" as more than a scintilla; courts presume agency decisions are supported by substantial evidence)