HUNTINGTON – One of the owners of Gatens-Harding Funeral Home is the target of a “potential and ancillary criminal investigation” after he was accused of cashing in on pre-need funeral contracts for people who were not dead.

In July, Gatens-Harding Funeral Home, Chad Harding and Billie Harding filed a request for the court to waive payment of the plaintiff’s expenses.

“Since the filing of the complaint and the defendant’s answer, efforts to reach a settlement have been ongoing,” the July 5 document states. “Unfortunately, actions directly attributable to individuals other than the defendants has greatly curtailed their ability to arrange financing for the discussed settlements have been difficult and delayed.”

Despite the delay, continued negotiations have resulted in a plan to resolve the involved issues in a manner which the parties believe will be equitable and enforceable with regard to all parties, according to the document.

The defendants claim during the pendency of the matter, they have endured multiple financial, business and personal hardships that have necessitated they carefully prioritize the manner in which they could and would apply their limited resources.

“Given the totality of the circumstances, their need to prioritize their resources, and enhance the potential to equitably settle the instance cause, the defendant’s decided to proceed in a manner which permit them to resolve other more defensible matters and allow them to continue to operate the subject business which is their only source of livelihood,” the document states.

The fact that Chad Harding has been notified that he is the target of a potential and ancillary criminal investigation has impacted his ability to respond to the discovery requests in the instant action, according to the document.

The defendants are requesting the court to reconsider the provisions from its June 28 order, where it ordered the defendants to pay the plaintiff’s expenses.

Homesteaders Life Insurance Company asked District Judge Robert C. Chambers to order the Hardings to pay about $3 million for cashing in on the pre-need contracts.

In June, Homesteaders was granted default judgment, after it alleged that the funeral home cashed in on 111 funeral contracts for people who were not dead.

About $2.7 million of the amount was for reimbursement of damages. Nearly $70,000 was attorney’s fees and $175,000 was interest.

Chambers wrote that the Hardings had refused to comply with court orders and repeatedly missed deadlines. In the order granting default judgment, Chambers said that Jeff C. Woods, the Hardings’ attorney, had a “complete lack of interest in defending this suit” as one of his reasons for granting default judgment.

From September 2012 until March 2015, the funeral home submitted claims to Homesteaders, alleging a member of the pre-need plan had died and the funeral home had rendered services. There were 111 claims that were for individuals who had not really died.

The lawsuit was filed on Aug. 19, 2015. Attorney General Patrick Morrisey has also filed a lawsuit against the funeral home in Kanawha Circuit Court, alleging the funeral home violated the West Virginia Consumer Credit and Protection Act and the West Virginia Funeral Contracts Act.

Another lawsuit, filed by Mack Johnson and Leonard Johnson Funeral Homes in Putnam Circuit Court, alleges they loaned the Hardings money to buy the funeral home. They’re seeking to remove him and take over the business. The Hardings allege Johnson and the funeral home are intentionally damaging a business relationship.

Homesteaders is represented by Keith D. Fisher and Alexander Macia of Spilman Thomas & Battle.

The defendants are represented by Woods of the Law Office of Jeff C. Woods.

U.S. District Court for the Southern District of West Virginia case number: 3:15-cv-12544

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