By TOM LoBIANCO, Associated Press
INDIANAPOLIS (AP) — Indiana lawmakers presented their decision to offer an additional $6 million to victims of a deadly stage collapse at last year's state fair as a way to help those who weren't adequately compensated by its first settlement. But buried in the legislation was a clause protecting the state from having to pay even more.
The clause sought by Attorney General Greg Zoeller enabled him to tie the state money to a settlement with the company that owned the stage, and thrust the state into the role of negotiator as lawsuits swirled over the Aug. 13, 2011, stage collapse at a show by country duo Sugarland.
The state would make $6 million available, and victims could share another $7.2 million offered by the stage owner and manufacturer if they agreed not to sue the companies.
"This is about putting victims first," Zoeller said in a June 22 press release announcing the combined settlement, which he said lawmakers had approved.
What Zoeller didn't tout — and what has surprised even the bill's author — was that the enhanced settlement also was designed to shield the state from potentially paying out even more for the collapse that killed seven people and injured dozens more.
Documents obtained this week by The Associated Press show Mid-America Sound Corp., which owned the stage, was ready to sue the state to get back any money victims won in lawsuits against the bankrupt the companies.
Invoices signed by fair executive director Cindy Hoye in the months after the collapse include an "indemnification" clause that requires the fair to assume all responsibility for any judgments, fines, injuries and loss of life resulting from use of the equipment and to hold the companies harmless.
Fair spokeswoman Stephanie McFarland referred questions about the invoices to the attorney general's office Tuesday.
Attorneys for Mid-America claim the invoices constitute binding contracts, a contention the state disputes. But after the state had already paid $5 million, and with lawmakers prepare to provide $6 million more, Zoeller decided it was better not to test that argument in court.
Zoeller's point man on the fair settlement, Larry Hopkins, told The Associated Press the plan tying the additional state money to the settlement offer from the two companies was the best way to avoid years of wrangling in court while protecting the state from a potentially massive judgment.
"The idea would be that if these claimants sued Mid-America and they succeeded in winning the lawsuit and there was a judgment, that potentially the state then is on the hook for that, even though we would fight it as vigorously as we could," Hopkins said. "Part of our mission with that new legislation was to try and deal with that indemnification claim and extinguish it."
The potential threat to the state was huge. Indiana law caps the state's liability at $5 million per incident for claims made directly by victims, but state lawyers said the "indemnification" argument Mid-America used could have fallen outside that cap.
It's still unclear whether the settlement will stand. Zoeller's office has said a "sufficient number" of victims must accept the offer for it to go forward, but it won't say what that number is. The state has secured waivers from 51 of the 62 victims and their estates, agreeing to clear Mid-America Sound and stage manufacturer James Thomas Engineering of any wrongdoing. The companies have until Aug. 15 to decide whether that's enough for them to agree to the settlement and let the state off the hook.
Attorney Kenneth J. Allen, who represents the estates of three women killed in the collapse, says the victims' families are appalled that the state is carrying water for a private company. The families of the three — Alina Bigjohny, Christina Santiago and Tammy Vandam — have refused to agree to the settlement because they don't think the companies should be released from responsibility. They've filed a lawsuit in Marion County Superior Court objecting to the deal.
Allen said the families are willing to agree not to sue the state, but they won't release the companies from liability because the law doesn't require it and because they want their day in court.
"My victims are most interested in justice here, and that's not going to be done by backroom deals," Allen said.