Digital Extra: The Station Fire

No enforcement of the $23,800 in workers' comp penalties, plus $4,000 in legal fees, is expected until a review of the case by the state Supreme Court.

01:00 AM EDT on Wednesday, May 18, 2005

BY LYNN ARDITI
Journal Staff Writer

PROVIDENCE -- A state Workers' Compensation Court judge yesterday found the owners of The Station nightclub in contempt for failing to show why they cannot afford to pay about $180,000 in benefits to the families of four nightclub employees killed in the fire on Feb. 20, 2003.

Judge Bruce Q. Morin assessed penalties of about $23,800, plus $4,000 in legal fees against Jeffrey A. and Michael A. Derderian, and their company, Derco LLC.

The Derderians and Derco, court records show, now owe the employees' families about $207,000.

But the families are not expected to receive those benefits anytime soon.

The state Supreme Court last week agreed to stay the collection of any benefits pending that court's consideration, on May 31, of whether to hear the case on appeal.

Meanwhile, lawyers representing the Derderians said that their clients do not have the financial resources to pay the state mandated workers' compensation benefits as ordered March 3.

State law says that failure to make two or more benefit payments within 14 days of a court order is grounds for a 20-percent penalty on the amount owed. (No penalty, however, is assessed on death benefits, to cover funeral expenses.)

Judge Morin had given the Derderians' lawyers until yesterday to provide financial records to prove the claim.

During a pretrial conference in state Workers' Compensation Court yesterday, lawyers representing the Derderians refused to disclose in open court any of their clients' financial records, citing their clients' Fifth Amendment right against self-incrimination.

Such disclosures could jeopardize the Derderians' defense in the criminal case under way in Superior Court, said Jeffrey B. Pine, a lawyer who represents Jeffrey Derderian.

The Derderians are each charged with 200 counts of voluntary manslaughter in connection with the deaths of 100 people in the nightclub fire.

Assistant Attorney General William J. Ferland said in Superior Court on Monday that the state is expected to introduce evidence in the criminal trial that the Derderians had sufficient funds to bring the nightclub into compliance with state building and fire codes, yet made a "conscious decision . . . not to make these remedies because of fiscal reasons."

"The state," Pine said yesterday, "wants to show the condition of the club as evidence of negligence."

Kathleen M. Hagerty, a lawyer representing Michael Dederian, offered to allow Morin to view -- in the privacy of his court chambers -- the last two years of income tax returns for Derco, plus a "balance sheet statement of assets for Michael and Jeffrey Derderian."

Morin asked whether the balance sheet was up-to-date.

"It's as of today," Hagerty said, noting that the document shows that "over $400,000 has been paid in legal fees."

Lawyers representing the victims' families objected to providing financial documents only for viewing in chambers, saying they would be off-limits for cross-examination to determine their accuracy.

"The whole point of this statute is to have an open exchange of documents . . . which they have not complied with," said John M. Harnett, a lawyer representing the mother of Steven R. Mancini, a 30-year-old guitarist killed in the fire.

State law requires all businesses with one or more employees to carry state workers' compensation insurance. The insurance protects employers from being held liable in the event that a worker is injured on the job. It also provides benefits to employees who are injured or die at work.

The family of someone who dies on the job is entitled, by law, to receive $15,000 for funeral expenses. Spouses or other dependents also are entitled to receive a portion of the deceased person's lost wages. Dependent children are entitled to benefits until age 18 or, if they are in college, age 23.

However, at the time of the fire, The Station nightclub, in West Warwick, had no workers' compensation insurance.

The four workers killed in the blaze were bouncer Tracy F. King, 39; waitress Dina Ann DeMaio, 30; Mancini, 39; and his wife, Andrea Louise Jacavone Mancini, 28.

At the time of their death, both King and DeMaio were supporting young children.

The Derderians have been sending the employees' families monthly checks -- $125 for those without children and $500 to those with children -- since April 1, according to lawyers for both sides.

"I do not find the respondents have submitted any justifiable excuse," Morin said, for failing to pay the full benefits ordered on March 3.

Morin agreed to deduct the payments made thus far from the total workers' compensation benefits owed. The benefits owed, including penalties, are listed in court documents as follows:

Barbara Magness, the mother of Steven Mancini, $15,000 plus $1,000 in attorneys' fees;

Evelyn King, wife of Tracy King, $97,500, plus $1,000 in attorneys' fees;

Patricia Belanger, mother of Dina DeMaio, $75,325, plus $1,000 in attorneys' fees;

Jacqueline Jacavone, mother of Andrea Louise Jacavone Mancini, $15,000 plus $1,000 attorneys' fees.

Lynn Arditi can be reached at (401) 277-7335 or by e-mail at larditi [at] projo.com