Court negates deal by MOVE father for payout

A federal appeals court has upheld a ruling to reverse an agreement made by the father of Birdie Africa - the only child to survive the 1985 MOVE bombing - to get a lump sum of money on a settlement he reached with the city in 1991.

The U.S. Court of Appeals for the Third Circuit ruled that an arbitration between Andino Ward and a firm called Rapid Settlements, which arranged the lump-sum payout, was not legal because a court approval was required for the money transfer and no state court had approved it.

Ward and his son, now known as Michael Moses Ward, settled with the city in 1991 for $840,000 and escalating lifetime payments for each. The settlement stemmed from a lawsuit filed against the city after police dropped a bomb on the West Philadelphia compound of the anti-establishment group MOVE.

Allstate Settlement, a division of Allstate insurance, had been charged with distributing the funds, and took Rapid Settlements, a Houston firm, to court after the elder Ward agreed to sign over about $334,000 in future payments in exchange for about $32,000 upfront from the company in 2005.

According to Stewart A. Feldman, a partner in Feldman Law Firm in Houston, which represented Rapid Settlements, the arrangement would have given the company 15 percent interest over 20 years before the future payments became due from Allstate. "Rapid takes the credit risk that Allstate's going to be around," he said last night.

Ward, who could not be reached for comment, had already received about $10,000 from Rapid Settlements, according to Feldman. The appellate court rejected two decisions by a Texas arbitrator that Ward pay the money back after a Montgomery County court would not approve the deal, Feldman said.

Feldman said that Rapid Settlements plans to return to the Third Circuit to ask for a rehearing on the case, arguing that the arbitration in Texas has legal standing.

In its opinion, written by U.S. Circuit Judge Joseph F. Weis Jr. and filed March 3, the appellate court said that companies negotiating to pay lump sums of settlements up front in exchange for the rights to some or all payments in the future are "seizing what they perceive as a lucrative financial opportunity."

The opinion said the lower court "did not abuse its discretion" to negate what it called an "arbitration scheme" that evaded a Pennsylvania law to protect consumers.

Allstate brought the case, the opinion says, when an arbitrator ruled that the company must issue settlement checks to Rapid Settlements.

Two Philadelphia attorneys representing Allstate did not respond to messages for comment left late yesterday.

Bryan Coleman, the Houston arbitrator who approved the Ward deal, told the Associated Press that he had not known that a state court rejected it.

"I think the entire industry of people purchasing structured settlements is an unfortunate thing," Coleman said, adding that he is required to review such cases.