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Bouchard v. Central Coventry fire District

Superior Court of Rhode Island

November 25, 2015

GIRARD BOUCHARD, in his capacity as President of the Board of Directors of the Central Coventry Fire District, Plaintiff,
v.
CENTRAL COVENTRY FIRE DISTRICT, Defendant.

For Plaintiff: William J. Conley, Jr., Esq.

David M. D'Agostino, Esq.

For Defendant: Elizabeth A. Wiens, Esq.

James G. Atchison, Esq. for Municipal Employees' Retirement System of Rhode Island

Lisa M. Kresge, Esq. and Thomas S. Hemmendinger, Esq. for Centreville Savings Bank

Peter J. Furness, Esq. and Alden C. Harrington, Esq. for Town of Coventry

DECISION

STERN, J.

The Court, sua sponte, questions whether it has subject matter jurisdiction over the instant matter. This suit was filed prior to an amendment (the Amendment) to the Fiscal Stability Act (FSA)[1] that prevents any fire district from being put into, or made subject to, any state receivership proceeding. For the following reasons, this Court finds that it has limited jurisdiction over the instant suit, and that the Stay issued on November 13, 2012 (the Stay), within the Permanent Special Master's Appointment Order (the Appointment Order), is unenforceable and thus dismissed in its entirety.

I

Facts[2] and Travel

Central Coventry Fire District (CCFD) is a quasi-governmental entity created through legislative charter in 1959. CCFD provides the District of Central Coventry (the District) with fire protection and emergency medical services. On November 30, 2011, CCFD entered into a secured loan agreement (the Loan) with Centerville Bank (Centerville) for a line of credit totaling $1, 000, 000. The Loan is secured by mortgages on several pieces of property and a security interest in CCFD's tax revenues.

Subsequently, CCFD defaulted on the Loan, and CCFD's Board of Directors (the Board) filed a petition for receivership (the Receivership Petition) with this Court on October 15, 2012. The next day, the Court appointed Richard J. Land, Esq. as a Temporary Special Master, and thereafter appointed him Permanent Special Master. At that time, within the Appointment Order, the Court imposed the Stay on all collection matters by CCFD's creditors, including, among others, Centerville. The Stay provided the following:

"That the commencement, prosecution, or continuance of the prosecution, of any action, suit, arbitration proceeding, hearing, or any foreclosure, reclamation or repossession proceeding, both judicial and non-judicial, or any other proceeding, in law, or in equity or under any statute, or otherwise, against said Defendant or any of its property, in any Court, agency, tribunal, or elsewhere, or before any arbitrator, or otherwise by any creditor, stockholder, corporation, partnership or any other person, or the levy of any attachment, execution or other process upon or against any property of said Defendant, or the taking or attempting to take into possession any property in the possession of the Defendant or of which the Defendant has the right to possession, or the interference with the Special Master's taking possession of or retaining possession of any such property, or the cancellation at any time during the Special Mastership proceeding herein of any insurance policy, lease or other contract with Defendant, by any of such parties as aforesaid, other than the Special Master designated as aforesaid, or the termination of telephone, electric, gas or other utility service to Defendant, by any public utility, without obtaining prior approval thereof from this Honorable Court, in which connection said Special Master shall be entitled to prior notice and an opportunity to be heard, are hereby restrained and enjoined until further Order of this Court."

Subsequently, the FSA was amended to include "fire districts, " preventing CCFD from being subject to a state, judicial, receivership proceeding. The Director of Revenue (DOR) exercised its authority under the FSA and appointed Mark Pfeiffer (Pfeiffer) as receiver. On December 23, 2014, Pfeiffer filed a Bankruptcy Petition (the Bankruptcy Petition) to place CCFD into a Chapter 9 proceeding under the United State Bankruptcy Code. From that time until September 28, 2015, the parties were subject to the provisions of the United States Bankruptcy Code and addressed several issues regarding the priority and validity of creditor claims, including the claim of ...


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