Pier 34 Lawsuits Settle for $29.5 Million

Shannon P. Duffy
January 29, 2004

In a global settlement of the lawsuits filed after the collapse of Pier 34, the plaintiffs will be paid a total of $29.5 million, with the estates of the three women who died each receiving 25 percent of the fund and the remaining 25 percent to be shared by the 43 injured plaintiffs.

Lawyers said the estates of those who died will each receive about $7.4 million and that the injured plaintiffs have agreed to have their respective shares of the fund decided in binding arbitration.

The lawsuits were especially complex because the plaintiffs had named two dozen defendants, alleging each had played a role in causing the May 18, 2000, disaster by ignoring the warning signs for years that the pier was in serious disrepair and allowing a nightclub to be built on it. The case name is In re: Pier 34 Litigation.

Five years before the accident, the suits alleged, the owners of the pier were told that it needed more than $1.2 million in repairs that would entail replacing 600 pilings. But instead of spending the money, the suit alleged, the pier's owners opted to install a series of braces that ultimately failed to keep the pier in place.

Experts were prepared to testify at trial that in the weeks before the pier's collapse, the warning signs were especially clear -- including a widening crack in the nightclub's floor -- but that the owners of the pier and the Heat nightclub refused to close the pier and instead made only cosmetic repairs, according to court papers.

In interviews yesterday, the lead lawyers for the plaintiffs and the defendants said the settlement could not have happened without the leadership of Philadelphia Common Pleas Judge William J. Manfredi.

"This was as complex a puzzle as you can imagine, and Judge Manfredi put it together," said plaintiffs' attorney Robert Mongeluzzi of Saltz Mongeluzzi Barrett & Bendesky.

Attorney Thomas R. Kline of Kline & Specter, who together with Mongeluzzi served as co-lead counsel for the plaintiffs, said, "It's really not overstating it to call Judge Manfredi's work on this case a Herculean effort. This was a six-month marathon of judicial involvement. The judge had dozens of meetings with defendants, plaintiffs and insurance carriers."

Defense attorney Louis A. Bove of Bodell Bove Grace & Van Horn concurred with his opponents, saying, "all the credit for the resolution rests with Judge Manfredi. He worked tirelessly . . . and this was not an easy matter to resolve."
One lawyer, who asked to be quoted anonymously, expressed praise for Man-fredi's work more bluntly, saying, "This judge spent countless hours banging heads."

Plaintiffs' attorney Alan M. Feldman of Feldman Shepherd Wohlgelernter & Tanner, who hosted monthly meetings of the plaintiffs' committee, said the settlement was "a great credit to the tenacity of Judge Manfredi."

Feldman also said the plaintiffs' team deserved credit for working together as a group. "No one said, 'I'm going to work on my own case.' There was some terrific teamwork here," Feldman said.

Feldman said attorney Roberta D. Pichini of Litvin Blumberg Matusow & Young deserved special mention for taking the lead in handling a federal suit that threatened to derail the state court litigation when one of the defendants took the position that the case was governed by federal maritime law.

Manfredi, in an interview in his chambers yesterday afternoon, said he was determined that if the case did not settle, it would go to trial this spring. But he also said he was happy the case had settled because any trial would have lasted three months and required a huge space to accommodate all of the lawyers.

"To be perfectly honest, I didn't even know where I would put it," Manfredi said, adding that he had looked into the possibility of renting space in the convention center.

Manfredi said he divided the lawyers into groups and met with them separately in an effort to achieve a global settlement.

The task was a complicated one, Manfredi said, because many of the defendants had trial counsel and separate insurance coverage counsel.

Manfredi said his colleague, Judge Norman Ackerman, deserved credit for handling the case for more than a year in the discovery stage.

According to court papers, Pier 34 was originally constructed in 1890 but was significantly expanded in 1909.

In 1984, developer Michael Asbell, the head of Portside Investors, purchased Pier 34 for $850,000.

In 1992, Eli Karetny opened a nightclub on the pier called Eli's Pier 34.

By 1995, Karetny was in negotiations with Campbell's Soup heiress Dorrance Hamilton and her company, HMS Ventures, to bring The Moshulu, a 394-foot ship, to the pier as a floating restaurant.

Instead of investing in Karetny's company, Hamilton lent his company $500,000 for pier repairs, according to court papers. Later, Hamilton agreed to go forward with moving The Moshulu to the pier, and it opened for business in May 1996. In 1996, HMS also bought Karetny's nightclub, which was later renamed Heat.

In August 2001, the Philadelphia District Attorney's Office filed criminal charges against Asbell and Karetny, including three counts of involuntary manslaughter and 43 counts each of reckless endangerment, risking catastrophe, failure to prevent a catastrophe and criminal conspiracy.

Common Pleas Judge Benjamin Lerner dismissed all of the felony charges against Asbell and Karetny but allowed the misdemeanor charges -- including the involuntary manslaughter charges -- to go forward.

The DA's Office appealed Lerner's ruling, but the Pennsylvania Superior Court upheld his decision in October 2003. The DA's Office has now appealed that ruling as well.

A real estate expert hired by the plaintiffs opined in his report that Asbell, Karetny and Hamilton all share responsibility for the disaster. The report was written by the expert in preparation for trial and submitted to Manfredi.

Robert S. Griswold of Griswold Real Estate Management in San Diego, a member of the elite group of Realtors who carry the designation "counselor of real estate," concluded in his report that Asbell and Karetny were liable because "the warning signs - such as the dramatic expansion of the cracks and increase in number of cracks between May 16 and May 18 -- were so obvious that . . . the decision to open the pier constituted a conscious and reckless indifference to the safety and well being of the public."

Griswold also reviewed Hamilton's role in the decisions about pier repairs in the mid-1990s and said he concluded that she, too, was liable. No criminal charges were filed against Hamilton.

Hamilton, he said, was aware that a barge had collided with the pier in 1955 and that it suffered a partial collapse in 1994.

"Yet she made the decision to dock The Moshulu at Pier 34 and expand HMS's operations to include a nightclub, restaurant and ballroom on the pier," Griswold wrote.