Courts

Comments | Recommended

Judge rules against Derderians in insurance suit

01:00 AM EDT on Wednesday, July 8, 2009

By Katie Mulvaney

Journal Staff Writer

PROVIDENCE — A Superior Court judge has ruled that Michael A. and Jeffrey A. Derderian’s insurance company is not bound to pay the legal costs of defending the brothers against criminal charges that arose from The Station fire.

The brothers, who owned the West Warwick club, were indicted on 200 counts of involuntary manslaughter stemming from the Feb. 20, 2003, blaze that claimed 100 lives. Flames engulfed the packed nightclub after pyrotechnics lit off by a band manager set fire to flammable foam the brothers had installed to soundproof the building.

After the fire, the Derderians demanded that their insurer, Essex Insurance Co., pay their criminal defense costs. They argued the company had to cover those expenses under a state law that establishes a defendant’s liability to a victim for personal injury or property loss claims after a defendant is convicted of a felony.

The insurance policy in place at the time of the fire states that the brothers would be covered for any suit that seeks damages for bodily injury or property damage caused by an “occurrence” at the coverage area, court records show.

The Derderians said the indictments constituted lawsuits because they led to an entry of a civil judgment against the brothers under state law.

Essex, however, refused to pay. Its lawyers said that the law that requires an automatic entry of judgment against convicted felons for civil liability is intended to advance the interests of crime victims, not criminal defendants.

Superior Court Judge Alice B. Gibney sided with Essex on June 25, finding that the allegations contained in their criminal indictment were not covered by the policy because they did not constitute a lawsuit. The court states that the law does not convert felony criminal prosecutions into simultaneous civil proceedings.

The Derderians pleaded no contest in September 2006 to 100 counts of misdemeanor manslaughter in the blaze. Michael was sentenced to four years in the Adult Correctional Institutions and was released late last month. Jeffrey was ordered to perform 500 hours of community service. Daniel M. Biechele, the band manager who triggered the pyrotechnics, pleaded guilty and was sentenced to four years in prison.

Jeffrey Derderian’s criminal defense team consisted of Jeffrey B. Pine, a former attorney general; Kathleen M. Hagerty and Thomas Dickinson, both former state prosecutors, and Boston lawyer Anthony M. Cardinale. Hagerty was also co-counsel with Boston lawyer Richard M. Egbert for Michael.

Dickinson on Tuesday would not comment on the costs of their criminal defense, but he said he planned to appeal Gibney’s ruling. He and lawyer Robert E. Flaherty are representing the Derderians.

Essex has covered the costs of numerous wrongful-death, personal injury and property damage claims and civil lawsuits stemming from the blaze. A federal judge is now in the process of determining how to disburse the $176 million that’s been offered by dozens of parties that were sued in U.S. District Court by fire victims and their families. The band, Great White, offered $1 million to the victims and their families; the Derderians offered $813,218.82 — the balance of a liability insurance policy they had on the club through Essex.

kmulvane@projo.com

Advertisement

Reader Reaction