General Assembly OKs bill encouraging quick settlement of St. Joseph pension suit

PROVIDENCE — The General Assembly has passed legislation preventing members of the collapsed St. Joseph Health Services pension plan who settle with one of several defendants named in state and federal lawsuits alleging malfeasance managing the plan from losing the right to settle with the others.

The House and Senate bills, 2018-S 2112 and 2018-H 8166, state that a settlement between a claimant and a defendant doesn’t absolve the other defendants from their liability. It also protects a defendant that settles with a claimant from liability and claims from other defendants “in the amount of the consideration paid for the release,” according to the bill.

“That’s what incentivizes defendants to settle and to settle quickly,” said Greg Paré, press secretary for the R.I. Senate.

Filed by Stephen Del Sesto, the receiver for St. Joseph Health Services pension plan, the lawsuit alleges the defendants engaged in deliberate schemes to damage the pension. The defendants include Prospect Medical Holdings, Prospect CharterCare, the Roman Catholic Diocese of Providence and others.

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“There are some defendants willing to settle very quickly,” said House Majority Leader K. Joseph Shekarchi, D-Warwick, Thursday.

That’s important, he said, because many of the 2,700 current and former employees of Our Lady of Fatima Hospital and Roger Williams Medical Center left without the security of the failed pension plan are very old and very sick, and the lawsuit seeking to restore the fund to solvency may take a long time.

“A lot of them can’t wait for it to be resolved,” Shekarchi said.

Similar legislation was enacted in 2014 to induce settlements in the 38 Studios litigation; in 2006 to address the Station fire litigation; and in 1993 to address litigation stemming from the Rhode Island Share and Deposit Indemnity Corp. credit union collapse.

“This legislation could provide a proven legal strategy that has been used successfully to encourage settlements in other high-profile cases in Rhode Island. It’s a tool that can encourage faster settlement of claims, making the pensioners whole or as close to whole as possible,” said Senate President Dominick J. Ruggerio, D-Providence.

Otis Brown, vice president of external affairs at CharterCARE Health Partners, half of a joint venture with Prospect Medical Holdings, said the company has not yet been served with the lawsuit, and could not comment.

The Diocese of Providence released a statement contesting the claims in the suit.

“The Diocese of Providence strongly disagrees with the allegations asserted against it in this very long and complex lawsuit. As we have stated from the very beginning, we continue to be concerned about the well-being of all those affected by the pension situation, and we hope that this matter can be resolved quickly and justly. Nonetheless, the Diocese will respond appropriately to these claims and we are confident that our position will prevail,” the statement read.

“The beneficiaries of this pension plan, many of whom are my constituents, worked hard throughout their careers and did everything required of them to earn a secure retirement. They deserve better than to have the rug pulled out from under them,” Ruggerio said.

Rob Borkowski is a PBN staff writer. Email him at