However, even after settlement had been struck in principle with every defendant, and the McGovern plan of distribution adopted, the consolidated Station fire cases could not be wrapped up without executed settlement agreements. Negotiations on a form of Master Release and Settlement Agreement to be signed by every plaintiff and defendant began in early 2009. A document acceptable to all parties did not emerge until November of that year.
Try getting two lawyers to agree on the provisions of a twenty-seven-page document addressing timing of payments, case dismissals, indemnifications for Medicare and other liens, and possible complications like a constitutional challenge to Rhode Island’s newly modified (and retroactively applied) joint tortfeasor contribution statute. Then, try getting fifty lawyers to agree to it — particularly when forty of them well know that final agreement means their defense billing juggernaut will soon chug to a halt. That the process only took eleven months is perhaps more surprising than the fact that it took that long.
As the seven-year anniversary of the fire approached, and an end to the litigation appeared possible, the victims still hadn’t received any money. Several had been seriously burned. Many had lost family breadwinners. All had conducted themselves admirably in agreeing to a distribution plan that may not have been as generous as they wished. But still they persevered. And waited.
The last thing they needed was to be further victimized.
Yet, that is exactly what happened to some. With settlements in principle announced long before any monies could actually be disbursed to victims, a relatively new breed of shark smelled blood in the water and began to circle. They were the “litigation funding companies,” or “LFCS.” The genesis of the LFC business tells all one needs to know about the industry.
In the mid-1990s, Perry Walton was lending money at high interest rates out of his Nevada home through a business he called Wild West Funding. An undercover detective assigned to investigate complaints that the company threatened late-paying customers quoted Walton as telling him that he “worked for loan sharks,” and “if you fuck with these people, you’ll end up in the desert, dead.” Walton denied ever threatening anyone, but, in 1997, he pleaded guilty to a charge of “extortionate collection of debt,” and was sentenced to eighteen months’ probation.
By 1999, Walton was back operating under a different business model. Called Future Settlement Funding Corp., it advanced money to plaintiffs in lawsuits at stratospheric rates, characterizing the transaction as an “advance” or “assignment of future proceeds” rather than a loan, in order to skirt state usury laws. The advance would only be collectible from the proceeds of the lawsuit; theoretically, if there were none, the “funding company” would not be repaid. Walton also hosted two-day seminars, charging as much as $12,400 to teach would-be litigation financiers the ropes of the game. As of 2000, he had trained four hundred people in its finer points.
A present-day Google search under “litigation financing company” garners over 100,000 hits. The industry is unregulated in almost all states, and there are virtually no barriers to its entry, particularly since the advent of Internet advertising. The Wild West of funding now includes all points of the compass rose.
Typical contracts with LFCS provide for effective annual interest rates between 48 and 120 percent, depending upon whether minimum payment terms are enforced. Spokesmen for LFCS publicly justify such abusive rates by citing the supposed “high risk” of litigation funding; however, because the industry is largely unregulated, no one knows just how risky it is — or isn’t. The CEOS of two LFCS have been quoted as admitting to 4 percent and 2 percent default rates, respectively — far below that of credit-card or other unsecured lending. One thing is certain — LFCS prefer “sure things.” They tend to target lawsuits in the “mid-resolution” stage, according to Harvey Hirschfeld, president of LawCash and chairman of an LFC industry trade group. They keep attorneys on staff to evaluate (and minimize) the risk of every case they get involved in.
Lawyers are barred by ethical rules from lending money to clients for their personal use. But the dirty secret of LFCS is that attorneys may be heavily involved in them, perhaps as silent investors, but definitely as case evaluators and contract enforcers. If lawyers enable lending, at usurious rates, to vulnerable litigants, then the spirit, if not the letter, of the ethical rule has been violated. What is needed, at a minimum, is for states to bring LFCS within the ambit of their usury laws, creating transparency and capping interest rates. When an industry that collects a 60 percent annual percentage rate from desperate victims has a mere 2–4 percent default rate, then there is something very wrong with the equation. Yes, the business is barely legal (a testament to the lobbying clout of this kind of money); but just because something can be done, does not mean that it should be done.
The long-pending settlements in the Station fire cases were like raw meat for LFCS. During the two years between settlement of all claims in principle and actual disbursement of proceeds under the McGovern plan, LFCS persuaded several cash-strapped plaintiffs, over their attorneys’ vociferous objections, to take “advances.” Some fire victims only took one or two modest advances, which did not greatly reduce their final net recovery in the case. One Station fire widow, however, took thirteen separate LFC advances over sixteen months, totaling $80,500. In month seventeen, she had to repay $137,777 under her LFC contract.
Annual percentage rate on the transaction: 64.7 percent.
CHAPTER 29
MEMENTO MORI
FIVE YEARS TO THE DAY AFTER THE FIRE, four shivering people, wrapped tightly in winter coats, have paused to reflect. They are standing on a tiny piece of ground, smaller than a house lot, where one hundred homemade crosses have been arranged in a rough oval, each with a white balloon tethered to it. At each cross there are attempts to individualize a memorial — photos of the deceased, or even votive candles. Other objects are left as reminders of a visit, including countless stuffed animals, bedraggled by wind, sun, and rain; poems; and angel figurines. On one cross hangs a construction hard hat.
A van from WPRI-TV Channel 12 idles in what remains of The Station’s parking lot. Inside it, a cameraman and reporter keep warm until it’s time for their stand-up, marking the fifth anniversary of the fire. It’s doubtful, though, that the logo of Jeff Derderian’s old TV station is something the mourners really want to see.
Against the hood of a parked car leans a street-corner preacher of sorts, dressed in black, a Bible at his side. He engages the visitors in comforting conversation. One asks if he lost anyone in the fire. “I feel that I lost all one hundred of them,” the man of the cloth responds, with a trace of self-importance.
No offense is taken. In a state this small, all are permitted to mourn.
The ground at 211 Cowesett Avenue in West Warwick, Rhode Island, is considered sacred by many. Flanked by Barry Warner’s house, a busy four-lane road, and a car dealership, this unlikely plot of land sprouted makeshift memorials from the moment the crime scene fence came down. The personal nature of the memorials maintained by loved ones at the site is a poignant reminder that the round number, one hundred, does a grave injustice to the individuality of the souls lost in the Station fire. It is too easy to simply refer to that terrible sum. It is much harder to read the memorial tributes, and study the biographies, of each victim.
The individual memorials at the Station site began as one hundred wooden crosses, assembled by an anonymous loved one out of tongue-and-groove flooring salvaged from the club’s wreckage. Names of the deceased were carved or painted on each. Memento mori soon followed — and were supplemented as the seasons changed. Halloween pumpkins; Christmas decorations; Mardi Gras beads; in a Ziploc plastic bag, a greeting card addressed “to my son on his birthday.” The odd-angled, slapdash construction of many of the crosses strangely parallels that of the club where each of the victims perished.
A few years after the fire, someone installed one hundred solar-powered landscaping lights to illum
inate the site at night — one at each makeshift memorial. The years, and elements, have since rendered each light useless, almost as if the ground there eventually kills everything on it. As much as anything, the site is a memorial to the impermanence of a life, and of the objects we choose to symbolize it.
A cross for Sandy and Michael Hoogasian occupies one spot up front, near the rutted parking lot. It is covered with smiling photographs of the couple. One visitor has added a kaleidoscope; another, sunglasses. At the memorial to Jeff Rader’s girlfriend, Becky Shaw, lie a box of chocolates and a Valentine’s Day card from her parents and brother. At Jeff Rader’s cross, someone has inexplicably left waffles.
Many have chosen to wear Station fire memorials on their bodies. Dozens of fire survivors acquired tattoos in remembrance of those who did not escape the flames. Erin Pucino’s entire forearm, covered in flames and crosses, is dedicated to those who fell behind her in the crush at The Station’s front doors. She understands all too well just how close she came to their fate.
One Station patron, who narrowly escaped from the flames, restored a ’59 Chevy Biscayne, transforming it into an antique red fire chief’s vehicle, complete with dome light and siren. On its doors are lettered in gold leaf, “Rhode Island Station Nightclub Fire.” Its trunk lid is covered with the names of all one hundred persons killed in the fire. Strange? Perhaps. Heartfelt? There can be no doubt.
Few expressions of grief at the Station site could be called traditional. Several were understandably angry. The father of one young woman killed in the fire commissioned a professionally lettered metal sign for the site, which read, “Our daughter’s life [sic] was no accident. . . . It was a tragic event that could have been prevented!” Other less permanent, but no less strident, signs seethed anger at town officials for their part in the tragedy.
Profound loss often clouds judgment. One grieving parent took it upon herself to uproot the cross for Great White guitarist Ty Longley, who lost his life in the blaze. She left behind a scribbled note: “Ty and his band KILLED MY DAUGHTER . . . I’m sorry but Ty doesn’t deserve to have a cross here. The killer isn’t honored with thoes [sic] he killed. As many times as something goes up I will tear it down.”
In truth, Longley was a mere session musician with no control whatsoever over the Great White tour, its venues, or its pyrotechnics. The guitarist probably died because he chose to follow his friend, Bill Long, toward the atrium windows, rather than exit with his bandmates through the nearby stage door. On the other hand, that mother’s rage might more understandably be directed at Jack Russell himself, who controlled the tour in all respects, pyro included.
Russell’s career continued apace following the fire. Seven years later, Great White was still packing them in. Before an appearance at Neumeir’s Rib Room and Beer Garden in Fort Smith, Arkansas (population 84,000), Russell, sans pirate bandanna and four inches of hairline, was asked by a local reporter how he and his band “found strength to soldier on after the tragedy.” After pausing for dramatic effect, the front man explained, “The love of music helped us push forward. There is nothing like it, having so many people sing your songs and seeing all of the smiling faces in our fans.”
The seating capacity of Neumeir’s is two hundred.
One Station fire tribute, however heartfelt, was not without its irony. At a memorial service one year after the fire, Michael Kaczmarczyk, the lead singer for Human Clay, sang a Creed song. In the past, Human Clay had hired “Grimace” Davidson to shoot pyro on multiple occasions at The Station. With the same foam on the walls. And the same overcrowding. There, but for dumb luck, had gone Human Clay.
Even luckier, in the final analysis, was Jeff Derderian, whose criminal sentence was completely suspended following his no-contest plea. His brother Michael didn’t exactly do hard time, either. He spent only two years and three months of his four-year sentence in medium security prison, then was paroled with time off “for good behavior.”
A year after the fire, the brothers tried an interesting legal ploy, suing their own liability insurance company, claiming that it owed them the cost of their legal defense against the criminal charges. The Superior Court judge, not surprisingly, disagreed.
In yet another legal proceeding, the Derderians challenged a Workers’ Compensation judge’s ruling that they personally owed a $1 million dollar fine for failing to carry workers’ compensation insurance before the fire. The brothers dodged that bullet in 2004 when legal counsel for the state Department of Labor and Training opined that only the Derderians’ (penniless) limited liability company, DERCO LLC, and not they, personally, owed the fine.
Less than a year after his early release from prison, and shortly before the seventh anniversary of the Station fire, Michael Derderian agreed to be a featured speaker, along with his brother Jeffrey, at a conference for amusement park operators and inspectors in Pennsylvania. Displaying stunning tone-deafness for music impresarios, the brothers chose as their presentation topic “safety in places of public assembly/amusement.”
Within a week of announcing their speaking gig, the brothers abruptly canceled it, in the face of public outrage in their home state. It will probably be a little while before Rhode Islanders accept the idea of Michael and Jeffrey Derderian lecturing anyone on the subject of safety.
The only other person who was convicted of a crime in the Station fire, Great White road manager Dan Biechele, quietly served less than half his four-year prison sentence before being released on parole. Several relatives of Station fire victims wrote letters to the parole board in support of Biechele’s early release. One, Chris Fontaine, whose daughter died in the fire, observed, “He is the only one that I feel demonstrated any remorse whatsoever for what happened, and I didn’t feel it was put on. It felt genuine.” After doing his time, Biechele immediately moved back to Florida, preferring to put Rhode Island, and its horrific memories, as much in the past as possible.
The Station fire evoked an unprecedented outpouring of charitable giving in the state. Over sixty companies made in-kind donations during and after the relief efforts. The Station Nightclub Relief Fund was established, and $200,000 was raised in its first forty-eight hours. When the fund reached $2 million, its management was transferred to the nonprofit philanthropic Rhode Island Foundation. Additionally, the state Crime Victims Compensation Fund provided up to $25,000 to each victim for proven economic losses.
It was inevitable that someone would try to game even this charitable system. One Station regular applied to the Crime Victims Compensation Fund for “medical expenses,” “counseling” expenses, and “lost wages,” despite the fact that his two companions’ statements to the police placed him outside the club with them, safely across the street in the Cowesett Inn parking lot (fetching cigarettes from a car), when the fire erupted.
Would-be scammers aside, the fire was not without some positive aftereffects. The tragedy spurred improvements to Rhode Island’s fire code. Business owners fought the changes, arguing (not without some merit) that merely enforcing existing fire and building codes would have prevented the Station tragedy. Nevertheless, even as the Cocoanut Grove fire spawned new restrictions on flammable decorative materials in public spaces, so, too, the Station fire gave rise to new regulations for owners of large clubs and function halls. To their credit, Rhode Island lawmakers ended the pernicious practice of “grandfathering” older places of public assembly that do not meet current code, requiring sprinklers in all gathering places with occupancies over three hundred, regardless of their vintage. That change alone may prove lifesaving for future generations.
Changes of a different kind occurred for several officials who played roles in the Station fire tragedy. West Warwick town manager and apologist-in-chief Wolfgang Bauer (“Our officials were doing their customary public duty in a conscientious way”) was fired in December 2007 after he reportedly authorized purchase orders for a town project that exceeded its $3.2 million budget by $802,000. (Presumably, he, too, had been
doing his “customary duty in a conscientious way.”) Bauer sued the town, alleging wrongful termination, later effectively settling for his retirement pension.
Jay Kingston, the ME investigator who worked unassisted for seventeen hours managing the extrication and transportation of ninety-six burned corpses from The Station, returned to work right after the fire, declining any mental health assistance and denying any problems. Kingston had long been an insulin-dependent diabetic, who kept his blood sugar well managed — right up until the fire. Then, in the summer of 2003, things began to change. It was harder and harder to keep his blood sugar within the normal range, even with adjustments to his insulin pump. His night vision deteriorated.
The one-year anniversary of the Station fire was a turning point for Kingston. Whenever the investigator opened his morning newspaper, there were retrospectives about the fire. When he turned on his car radio, all talk was about the fire and its aftermath. If he clicked his TV remote, he was bombarded with images long suppressed in his memory. Kingston began to decompensate into profound post-traumatic stress syndrome. Within weeks, his blood sugar became absolutely uncontrollable. With additional insulin, his count would sometimes paradoxically increase. As a result, Jay developed an intractable condition in his right eye called flash neovascular glaucoma. By the following August, the eye could not be saved. Kingston now wears a glass prosthesis in its place. He joins Joe Kinan, the most severely burned fire survivor, in an unfortunate distinction — each lost an eye to the Station fire.
Kingston’s boss, Chief State Medical Examiner Elizabeth Laposata, MD, who never found it necessary to report to the Station site, resigned her position in June 2005 after a Health Department investigation discovered that reports were never written for hundreds of autopsies. Her successors have been more willing to actually attend crime scenes, and file paperwork.
Killer Show Page 31