2017-0422, Bedford School District & a. v. State of New Hampshire & a.

because of a statuto ry limit on state funding imposed under RSA 198:41, III(b) recover adequate education funding that the Stat e withheld in fiscal year 2016 (collectively, “Bedford”), attorney ’s fees in a case that Bedford had filed to (Ruoff, J.) granting the plaintiffs, Bedford School District and William Foo te Education) (collectively, the “defendants”) appeal an order of the Superior Court Frank Edelblut, as Commissioner of the New Hampshire Department of Christopher T. Sununu, a s Governor; Virginia M. Barry, i ndividually; and Hampshire Department of Education; Margaret Wood Hassan, individually; BASSETT, J. The State together with the other defendants (the New

attorney general, on the brief and orally), for the defendants. Gordon J. MacDonald, attorney general (Anne M. Edwards, associate

the brief and orally), for the plaintiff s. Wadleigh, Starr & Peters, P.L.L.C., of Manchester (Michael J. Tierney on

No. 2017 - 0422 Cheshire

http://www.courts.state.nh.us/supreme. release. The direct address of the court's home page is: Opinions are available on the Internet by 9:00 a.m. on the morning of their reported by E - mail at the following address: reporter@courts.state.nh. us. corrections may be made before the opinion goes to press. Errors may be Doe Drive, Concor d, New Hampshire 03301, of any editorial errors in order that requested to notify the Reporter, Supreme Court of New Hampshire, One Charles as formal revision before publication in the New Hampshire Reports. Readers are NOTICE: This opinion is subject to motions for rehearing under Rule p. 2 22 as well 2

of the statutory grant.” The State did not appeal that decision. Nor, notably, percentage cap is unconstitutional when it operates to reduce the full amount the trial court in Dover granted a permanent injunction, rul ing “that the ruling on the similar issue presented in Dover v. State.” In September p. 2 2016, “any short fall [Bedford] experienced in FY 2016 will likely be remedied by the “failed to sustain their burden of demonstrating irreparable harm” because III(b).” The trial court denied the motion, reasoning that the plaintiffs had “enjoin[] the application of the adequacy funding cap imposed by RSA 198:41, In June 2016, while the Dover case was still pending, Bedford sought to

benefit from any injunctive or declaratory order issued herein. required to intervene or join this action, or file separate actions to districts in the state and th at other school districts shall not be contained in R. S. A. 198:41, III(b) as it applies to all other school issued in this matter regarding the constitutionality of th e cap payment, the State agrees that it will be bound by any rulings that this is a constitutional challenge to a systematic statewide Further, in the interests of judicial economy and based on the fact

the order becomes a final judgment]. application of the cap, within ten (10) business days [of the time payments made on or after September 1, p. 2 2015, because of the sum total of all funds withheld in any education adequacy III(b) . . . the State will make a supplemental payment equal to the or permanent injunction against the cap required by R.S.A. 198:41 In the event that the City is successful in obtaining a preliminary

a greement (the “Dover Stipulation”) in August p. 2 2015, which stated: 219 - 2015 - CR - 00312 (Tucker, J.). In the Dover case, t he parties reached a n education funding. See Dover v. State, Strafford County Superior Court, No. the constitutionality of the limit that RSA 198:41, III(b) imposed on adequate In 2015, the City of Dover brought a case against the State challenging

percentage of the previous year’s grant. See RSA 198:41, III(b). III(b) limited the total education grant a municipality could receive to a that municipality.” RSA 198:40 - a, III. Before it was repealed, RSA 198:41, adequate education for each municipality base d on the . . . pupils who reside in Hampshire D epartment of E ducation uses to determine “the cost of an RSA 198:40 - a (Supp. p. 2 2017) sets forth the formula that the New

appropriate d by a bill that contained a waiver provision. We reverse. Bedford waived its right to attorney ’s fees when it accepted education funds exercised its discretion in awarding attorney ’ s fees. The State also argues that State had acted in bad faith in this litigation, the tria l court unsustainably State argues that because the trial court specifically declined to find that the (Supp. p. 2 2015) (repealed 2015, repeal effective July 1, 2017). On appeal, the p. 3 3

Laws 2017, 28:1. On May 1, the State wired the $4,287,5 p. 3 33 to Bedford.

and June p. 3 30, 2016. state’s adequate education payments between September 1, 2008 may have against the state of New Hampshire . . . arising out of the shall constitute a waiver and full release of any and all claims it Acceptan ce of a disbursement by a municipality under this act

$4,287,5 p. 3 33 to Bedford. The bill provided that: On April 27, 2017, the l egislature passed HB 354 - A, which appropriated

reasonable attorney’s fees.” The court gave Bedford thirty days “to file an affidavit outlining its request for

made to both the Court . . . and Plainti ffs. . . . to compel the State to comply with promises and representations it lawsuit was necessary to enforce compliance with the statute and the State has always promised to pay, yet never has. . . . This an award of attorney ’ s fees in this matter is appropriate because

that: the trial court observed that it “stop[ped] short of finding bad faith,” it ruled been freely enjoyed without such intervention.” (Quotation omitted.) Although assistance to secure a clearly defined and esta blished right, which should have attorney’s fees is warranted “[w]here an individual is forced to seek judicial that a n exception to the general rule that parties are resp onsible for their own fees, cit ing Harkeem v. Adam s, 117 N.H. 687, 691 (1977), for the proposition April 1, 2017.” The court also ordered the S tate to pay Bedford’s attorney’ s pay Bedford School District the withheld funds for FY 2016 within p. 3 30 days of had not p assed. Nonetheless, on April 6, the trial court “order[ed] the State to included the amount withheld from Bedford. As of early April 2017, the bill as calcul ated in RSA 198:40 - a and 198:41.” The requested appropriation to appropriate “additional adequate education grants to certain municipalities In January 2017, House Bill (HB) 354 - A was introduced in the legislature

argued that it should not be required to pay Bedford’s attorney’s fees. 10 days of the time the Dover order became a final judgment. The State also did not, in fact, require the Stat e to pay the withheld funds to Bedford within objection, filed in January 2017, the State asserted that the Dover Stipula tion “reasonable attorney s’ fees for needing to bring this action and motion.” In its been withheld in fiscal year 2016 due to the cap. Bedford also requested court order that the State pay Bedford $4,287,5 p. 3 33 — the amount that had In November 2016, Bedford moved for summary judgment, seeking a

days after the order became a final judgment. did t he State distribute the funds withheld from Bedford within ten business p. 4 4

preserved. argument when it award ed fees, we conclude that the waiver argument is earliest possible time, and the trial court implicitly rejected the State’s waiver N.H. 321, 328 (198 p. 4 4). Here, because the State raised the issue of waiver at the correct errors in the first instance. See Sklar Realty v. Town of Merrimack, 125 forums should have a full opportunity to come to sound conclusions and generally require issues to be raised at the earliest possible time because tria l State from that claim.” T o preserve an argument for judicial review, we [because] by accepting the funds provided by HB 354 [- A], Bedford released the “Bedford’s claim for attorney’s fees should . . . be deni ed in its entirety. . . responding to Bedford’s affidavit and request for fees, the State argued that Bedford did not receive the appropriated funds until May 1. On May 18, when We disagree. HB 354 - A did not become effective until April 27, 2017, and for reconsideration . . . in order to preserve this argument for appellate review.” argument was timely made but not considered, the State was obligated to move summary judgment pleadings. Bedford further argues that, “even if the preserve for appeal the issue of waiver because it did not argue waiver in its As a threshold matter, Bedford contends that the State did not properly

discretion. whether the trial court ’s award of those fees was a sustainable exercise of Bedford waived its right to an award of attorney’s fees, we need not decide Because we conclude that, by accepting funds appropriated by HB 35 p. 4 4 - A, the State did not operate as a waive r of its right to an award of attorney ’s fees. affirmed on other grounds. Bedford also argues that its receipt of funds from require an explicit findin g of bad faith and, alternatively, the fee award could be exercised its discretion in awarding attorney ’s fees because Harkeem does not offered by HB 354 - A.” Bedford counters that the trial court sustainably because “Bedford waived its claim for fees when it accepted the payment attorney ’s fees was adequately supported by the record, it should be vacated Harkeem, 1 17 N.H. at 690 - 91. The S tate also argues that, e ven if the award of the absence of a finding that the losing party has acted in bad faith. See general rule that each party pays its own attorney ’s fees cannot be applied in its discretion in awarding Bedford attorney ’s fees because the exception to the On appeal, the S tate argues th at the trial court unsustainably exercised

litigation strategy in this case.” This appeal followed. “directly attributable” to the “State’s schizophrenic representations and court ordered the State to p ay Bedford $21, p. 4 479 in attorney ’s fees that were or reservation, the funds made available to [it] via HB 3 p. 5 54 - A.” On June 19, the “Bedford released its claim for attorney ’s fees when it accepted, without protest attorney ’s fees was “unwarranted.” The State alternatively argued that its request for attorney ’s fees. In response, t he State argued that an award of Shortly thereafter, Bedford’s attorney submitted an affidavit in support of 5

the fact that the trial court ordered the payment means that the payment could Bedford cites no legal authority for this proposition, and we see no reason why pursuant to HB 3 p. 5 54 - A and, at the same time, comply with the trial court order. an assertion that, as a matter of law, payment could not be disbursed by HB 354 - A.” We agree with the State. We construe Bedford’s argument as nothing to change the fact that the funds to make the payme nt were disbursed court ordered the State to pay Bedford the shortfall in adequacy aid . . . does with the Superior Court’s Order.” The State counters that “the fact that the disbursed pursuant to HB 354 - A, but rather were “wired . . . in compliance attorney’s fees because the funds that it received from the State were not Bedford next argues that it did not waive its right to an award of

to waive its claim for attorney’s fee s. inform the State that, although it intended to keep the funds, it did not intend waiver provision, yet did not return the payment, hold the funds in escrow, or when it received the funds, with full knowledge that HB 3 p. 5 54 - A contained a conclude that Bed ford “accepted” the funds within the meaning of HB 354 - A town was absolutely aware of the language in HB 354 [- A].” Accordingly, we argument, Bedford conceded that at the time it received the payment, “the 2017, the State paid the $4,287,533.00 due to [Bedford].” Moreover, a t oral Dictionary 14 (1 0th ed. 2014). Here, Bedford acknowledges that “[o]n May 1, requested by the offeror, so that a binding contract is formed.” Black’s Law implication from conduct, to the terms of an offer in a manner authorized or defines “acceptance” as “[a]n offeree’s assent, either by express act or by New International Dictionary 11 (unabridged ed. 2002). Black’s Law Dictionary contract is concluded and the pa rties become legally bound.” Webster’s Third agreeing either expressly or by conduct to the act or offer of another so that a Webster’s Third New International Dictionary defines “acceptance” as “an K.L.N. Construction Co. v. Town of Pelham, 167 N.H. 180, 185 (2014). statute, we look to its common usage, using the dictionary for guidance. See HB 354 - A does not define “acceptance.” When a term is not defined in a

from an ‘acceptance’ of them.” We agree with the State. transfer (without protest or reserv ation as far as the record indicates) differs State counters that Bedford “fails to explain how receiving those funds by wire transfer,” Bedford did not “accept” them within the meaning of the statute. The Bedford f irst asserts that, because the funds were “provided by wire

policy sought to be advanced by the entire statutory scheme. Id. statutes in light of the legislature’s intent in enacting them and in light of the the plain and ordinary meanings to the words used. Id. Our goal is to apply cert. denied, 138 S. Ct. 12 p. 6 61 (2018). When interpreting st atutes, we ascribe considered as a whole. State v. Actavis Pharma, 170 N.H. 211, 217 (2017), arbiters of the legislature’s intent as expressed in the words of the statute statutory interpretation. In matters of statutory interpretation, we are the final Addressing the parties’ waiver arguments requires us to engage in 6

arguments as to why its receipt of funds from the State did not operate to waive At oral argument, for the first time, Bedford advanced two additional

201 p. 6 6.” Laws 2017, 28: 1. s tate’s adequate education payments between September 1, 2008 and June 30, within the scope of the statutory waiver, as it is a “claim []. . . arising out o f the Fiscal Year[].” Therefore, we conclude that the award of attorney’s fees fal ls Constitution to fund a constitutionally adequate education for . . . the 2016 . . . constitutional obligations under Part II, Article 83, of the New Hampshire judgment: “T his case concerns RSA 198:41, [III] (b) and the State’s payments. Bedford acknowledged as much in its motion for summary employed by the State,” the underlying case was brought to recover adequacy Although the trial court awarded fees ba sed upon the “litigation strategy ‘capped’ adequacy payments from fiscal year 2016.” We agree with the State. attorney ’s fees because these fees were “incurred in seeking to recover its counters that, “[b]y the plain terms of the statute,” Bedford waived its right to failure to make the constitutionally required funding payments.” The State regarding the applicability of the Stipulation,” not because of “the State’s awarded attorney ’s fees “as a result of the State’s contradictory representations provision in “HB 354 [- A] simply does not apply” because the trial court and June 30, 2016.” Laws 2017, 28: 1. Bedford contends that the waiver out of the s tate’s adequate education payments between Sept ember 1, 2008 right to attorney’s fees because the attorney’s fee claim is not a claim “arising Bedford also argued that the receipt of funds did not operate to waive its

those fees when it accepted funds disbursed by HB 354 - A. order ed the State to pay Bedford ’s attorney ’s fees, Bedford waived its right to the State. As explained above, notwithstanding the fact that the trial court plain language of HB 354 - A, Bedford has waived that claim.” We agree with order awarding thos e fees should still be vacated because, by operation of the court correctly ruled that Bedford was entitled to its attorneys’ fees, the final Court already awarded fees.. . .” The State responds that “even if the trial 354 [- A] was only effective after April 27, 2017 or three weeks after the Superior 2017 could change the Superior Court’s April p. 6 6, 2017 Order awarding fees. HB because “[t] he State does not explain how passage of HB 354 [- A] on April 27, Bedford also contends that we should reject the State’s waiver argument

pursuant to HB 354 - A. Bedford $4,28 p. 7 7,533 o n May 1. W e conclude that the payment was disbursed Bedford $4,287,533.” Laws 2017, 28:1 (e mphasis added). T he State paid education shall disburse a lump sum to each municipality as follows: . . . 2017, 28: 1. HB 354 - A states “the commissioner of the departm ent of appropriat ed the funds to be paid to Bedford and other municipalities. Laws court order ed the State t o pay Bedford. On April 27, t he legislature HB 354 - A. The two need not be m utually exclusive. O n April p. 6 6, 2017, t he trial not also be disbursed pursuant to, and subject to the conditions set forth in 7

LYNN, C.J.