If a New York cemetery decides to provide all annual lot care services itself, does that void existing contracts between lot owners and outside landscapers?

Plain-English summary

The Annual Care Law gave a cemetery corporation the option to provide annual care services exclusively on all or part of its lands, at rates reviewed by the cemetery board. The Secretary of State asked how that option affects existing contracts and current lot owners' ability to hire outside contractors.

The AG's answer was clean and prospective-only.

When a cemetery exercises the exclusive option, it must include a notice in any contract for sale of a lot, in 10-point bold type, telling the purchaser that "the purchaser of the plot or lot being transferred by this agreement may not contract with any outside party for such annual care services." The statutory notice mechanism, the AG observed, is the legislative tell: it requires notice only to future purchasers, not to existing lot owners. If the Legislature had intended the exclusive option to terminate existing contracts and bar current lot owners from new third-party contracts, presumably it would have required notice to those owners too.

The general rule for statutes also supports prospective application. The AG cited decisions for the rule that statutes are construed prospectively absent express legislative intent to the contrary. It read the Annual Care Law's terms as prospective.

The AG also cited cases holding that retroactive legislation generally may not impair contract obligations. It said limited exceptions to that principle did not apply here.

So the cemetery's exercise of the exclusive option binds only future purchasers. Existing contracts between lot owners and outside contractors continue. Current lot owners can sign new third-party contracts even after the cemetery exercises the option. The exclusivity reaches only forward, as new lots are sold under the new notice regime.

Currency note

This opinion was issued in 1999. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

What does "annual care" mean?

The opinion says annual care generally means care of lawns, trees, shrubs, monuments, and markers.

Why does the statutory notice approach matter?

The statute requires notice to future purchasers. The AG reasoned that if the Legislature intended to invalidate existing agreements or prevent current owners from making new ones, it presumably would have required notice to those owners too.

Could a cemetery raise its prices and effectively force lot owners off third-party contracts?

The statute quoted by the AG says exclusive-care rates are reviewed by the cemetery board. The opinion does not address pricing practices or whether a rate could affect existing owners' decisions to use outside contractors.

What happens to an existing third-party contract when the lot owner dies?

The opinion does not address a lot owner's death or the later status of a care contract. Its conclusion is that exercising the exclusive-care option does not affect existing third-party contracts.

Does this same prospective rule apply to other Annual Care Law provisions?

The opinion interprets the exclusive-care option in § 1506(l). It does not decide the effect of other Annual Care Law provisions.

Background and statutory framework

The quoted Annual Care Law gives cemetery corporations an exclusive-care option and requires notice in later lot-sale contracts. The AG relied on that notice requirement to find the option prospective.

The AG cited Morales v Gross and Landgraf for the presumption that statutes apply prospectively absent contrary legislative intent. It also cited decisions concerning retroactive impairment of contract obligations.

The AG said limited exceptions to the rule against retroactive impairment of contracts were inapplicable here and cited two decisions for that point. It did not analyze those exceptions further.

Citations

• Not-For-Profit Corporation Law § 1506(l) (cemetery corporation option to provide exclusive annual care services).
• Not-For-Profit Corporation Law § 1506-a (related provisions).
• Laws of 1998, ch 548 ("Annual Care Law" enactment).
• Morales v Gross, 230 AD2d 7 (2d Dept 1997) (statutes construed prospectively absent express contrary intent).
• Landgraf v USI Film Products, 511 US 244 (1994) (federal default rule of prospective application).
• Rotodyne, Inc. v Consolidated Edison Company of New York, Inc., 55 AD2d 600 (2d Dept 1976) (contracts clause limit on retroactive legislation).
• Pioneer Transportation Corp. v Kalajian, 122 Misc 2d 412 (Kings County 1984) (same).
• Grove Hill Realty Company v Ferncliff Cemetery Association, 7 NY2d 403 (1960) (cemetery contracts and retroactivity).
• Manigault v Springs, 199 US 473 (1905) (narrow exceptions to contract impairment bar).

Source

• Landing page: https://ag.ny.gov/libraries-documents/opinions/opinions-year
• Original PDF: https://ag.ny.gov/sites/default/files/opinions/99-F5_pw.pdf

Original opinion text

NOT-FOR-PROFIT CORPORATION LAW §§ 1506(l), 1506-a; L 1998, CH 548. A cemetery corporation's exercise of its option to provide exclusive annual care of cemetery lots does not affect existing contracts between lot owners and third-party contractors. The exercise of the option does not apply to existing lot owners and does not prohibit them from entering into third-party contracts for annual care services. The exercise of this option only applies to future purchasers of lots.

October 15, 1999
Hon. Alexander F. Treadwell
Secretary of State
Department of State
41 State Street
Albany, New York 12231-0001

Formal Opinion
No. 99-F5

Dear Secretary of State Treadwell:
Your counsel has inquired whether a cemetery corporation's decision to exercise its option to provide exclusive annual care services pursuant to the "Annual Care Law" (Not-For-Profit Corporation Law § 1506[l]) supersedes existing contracts for annual care between third-party contractors and lot owners. Your counsel also has asked whether exercise of the option prohibits existing lot owners from entering into such third-party contracts. We conclude that a cemetery corporation's option to provide exclusively all annual care services only governs those who purchase lots after exercise of the option. The Annual Care Law provides in pertinent part as follows: Notwithstanding any provision of this article to the contrary, it shall be the right of each cemetery corporation, at its option, to exclusively provide all annual care services to be performed for consideration on all or any part of its lands at rates to be reviewed by the cemetery board.... Every cemetery corporation that chooses to provide, on an exclusive basis, such annual care services shall include in any contract for the sale of any part of its lands the following notice, in at least ten point bold type:

Notice
The ____ (name of cemetery
corporation), pursuant to state law, provides annual care services on an exclusive basis. Therefore, the purchaser of the plot or lot being transferred by this agreement may not contract with any outside party for such annual care services. . . . Not-For-Profit Corporation Law § 1506(l). We note that "annual care" generally means care of lawns, trees, shrubs, monuments and markers. Id. The provisions of the Annual Care Law reflect an intent that the law apply prospectively, that is, to lots purchased after a cemetery corporation exercises its option to provide exclusive annual care services. The statute requires a cemetery corporation to give notice of its decision to provide exclusive annual care services only to future purchasers. If the Legislature had intended to invalidate existing contracts for annual care or to prevent current lot owners from entering into new annual care agreements with outside contractors, presumably it would have required the cemetery corporation to give notice of its status as exclusive provider to those lot owners as well. We believe that the statute thus authorizes only prospective annual care. Indeed, it is well-settled that statutes are construed to be prospective absent express legislative intent to the contrary. Morales v Gross, 230 AD2d 7, 9-10 (2d Dept 1997) (citing, Landgraf v USI Film Products, 511 US 244, 265 [1994]). Here, by its terms the Annual Care Law is prospective in application. Our conclusion also is consistent with precedent holding that the Legislature generally may not pass a statute which, by reason of its retroactive operation, impairs obligations under a contract. See, Rotodyne, Inc. v Consolidated Edison Company of New York, Inc., 55 AD2d 600, 601 (2d Dept 1976); Pioneer Transportation Corp. v Kalajian, 122 Misc 2d 412, 414-415 (Kings County 1984). The limited exceptions to this principle are not applicable here. See, Grove Hill Realty Company v Ferncliff Cemetery Association, 7 NY2d 403, 409 (1960), quoting Manigault v Springs, 199 US 473, 480 (1905). We conclude that a cemetery corporation's exercise of its option to provide exclusive annual care of cemetery lots does not affect existing contracts between lot owners and outside contractors. Nor does the exercise of the option prohibit current lot owners from entering into new agreements with outside contractors for annual care services. The exercise of this option applies only to lots purchased after the option is exercised. Very truly yours,

ELIOT SPITZER
Attorney General