Putnam Co. funeral home denies it bilked insurance company of nearly $1M

By Chris Dickerson | Sep 14, 2015

HUNTINGTON – The owners of a Putnam County funeral home deny claims they bilked an insurance company of almost $1 million by claiming more than 100 living people were dead.

Gatens-Harding Funeral Home, which is based in Poca, and owners Chad R. Harding and Billie J. Harding filed an answer Sept. 10 in federal court to a complaint filed last month by Homesteaders Life Company, which is based in Iowa.

Homesteaders claimed the funeral home falsely reported the deaths of 111 people who had signed up for pre-need funeral services and collected more than $900,000 from the insurance company. In their answer, the Hardings deny any wrongdoing and seek to have the complaint dismissed.

“The alleged losses or damages experienced by the plaintiffs, if any, were not proximately caused by any acts or omissions of these defendants either individually or in any of their individual or official capacities,” the answer states.

In its complaint, Homesteaders said it sells life insurance and annuity products, including life insurance policies to consumers entering into pre-need funeral contracts. In 2005, the companies entered into an agreement for the sale of pre-need contracts. For each enrollment, Chad Harding would be paid a commission, the complaint states. A similar agreement was signed again in 2007 with Chad Harding. Another similar agreement was signed in 2010 and again in 2012 for Chad Harding and additional employees of Gatens-Harding Funeral Home.

Homesteaders paid commissions totaling $136,719.73 to Chad Harding and other funeral home employees for enrollments, according to the complaint. The funeral home also received an additional $14,667.23 override and bonus. Chad Harding received an additional $7,242.62.

Homesteaders would release funds upon the death of a consumer who had signed up for a pre-need funeral contract. Beginning around September 2012, Chad Harding allegedly started filing false death claims with Homesteaders.

He “engaged in a continuous pattern and practice of submitting materially false death claims to HLC, by telephone, and filling out and signing materially false bank drafts, wherein he fraudulently misrepresented that the … consumers had died … and that the contracted-for funeral services had been provided, when, in fact, said consumers were no deceased and said funeral services had not been provided,” according to the complaint.

“Chad R. Henning, on behalf of Gatens-Harding Funeral Home, signed his name … and falsely certified thereon the date of death of the consumer and that funeral services and goods had been provided.”

To these consumers who still are alive, Homesteaders says it has reinstituted the life insurance policies. Of the 111 people the funeral home claimed to be dead, 14 people did pass away after the funeral home claimed they had passed.

Homesteaders accuses the defendants of fraud, violation of RICO laws for racketeering, conversion, breach of contract and unjust enrichment. It seeks compensatory damages, actual damages, special damages, punitive damages, attorney fees, court costs, pre-judgment interest and other relief.

The funeral home posted a message about the lawsuit last month on its Facebook page.

"We want to say thank you to all the people that have called, emailed and text to say I love you and we support you,” it says. “There are always two sides to every story. We are not perfect and yes we make mistakes. Our attorney is working to get his resolved as soon as possible and if we owe anything it will be paid completely. We appreciate your continued prayers."

The insurance company is being represented by Alex Macia and Keith D. Fisher from Spilman Thomas & Battle PLLC in Charleston. The funeral home and the Hardings are represented by Jeff C. Woods of The Law Office of Jeff C. Woods in Scott Depot.

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

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