In re Rhode Island Ambulance
| Decision Date | 21 November 1990 |
| Docket Number | Bankruptcy No. 88-505. |
| Parties | In re RHODE ISLAND AMBULANCE, Debtor. |
| Court | United States Bankruptcy Courts. First Circuit. U.S. Bankruptcy Court — District of Rhode Island |
Avram Cohen, Providence, R.I., for debtor.
Matthew J. McGowan, Salter, McGowan, Swartz & Holden, Providence, R.I., for trustee.
Terence J. Tierney, John E. Farley, Sp. Asst. Attys. Gen., Providence, R.I.
DECISION AND ORDER
Heard on August 23, 1990 on the motion of the Trustee for a determination that the State of Rhode Island does not have a right of setoff against funds owed by the State to the debtor, postpetition.
The present dispute arises out of an order entered by this Court on March 15, 1990 approving a compromise between the State of Rhode Island, represented by John Farley, Esq., and the Trustee. As part of said settlement, the debtor and its principal, Dennis Chapell, agreed to, and did, plead guilty to obtaining money under false pretenses1 from Rhode Island Medicaid, the Federal Medicare Program, and the Massachusetts Department of Welfare, in exchange for the State's agreement to accept restitution at a priority level below § 726(a)(5) claims.2
Notwithstanding this (plea bargained) agreement, the State now argues that since the Rhode Island Department of Human Services3 did not receive specific notice of the motion to compromise, this Court should now amend its order approving said compromise or, in the alternative, deny the Trustee's present motion and, pursuant to our broad equitable powers, allow the State to set off amounts which the State owes the debtor, against restitution payments due from the debtor to the State.
It was made clear at the August 23 hearing that this Court would not reconsider only those parts of the agreement which are unfavorable to the State, but that if the State wishes, we would vacate the agreement in toto, including the debtor's guilty plea. But by letter dated August 31, 1990, the State reported that "under the Rhode Island Rules of Criminal Procedure the Department of Attorney General has no authority to vacate a plea agreement." Although somewhat skeptical of the absolute finality of this statement, under the circumstances we have no choice but to accept it.
Nevertheless, based upon the record, we conclude that this is not a proper instance for the exercise of this Court's equitable discretion to grant piecemeal reconsideration, or to permit the requested setoff by the State of Rhode Island.
Pursuant to R.I.GEN.LAWS § 42-9-6, "the Attorney General, . . ....
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