BEDFORD SCHOOL DISTRICT & a.
STATE OF NEW HAMPSHIRE & a.
Argued: April 17, 2018
Wadleigh, Starr & Peters, P.L.L.C., of Manchester
(Michael J. Tierney on the brief and orally), for the
J. MacDonald, attorney general (Anne M. Edwards, associate
attorney general, on the brief and orally), for the
State together with the other defendants (the New Hampshire
Department of Education; Margaret Wood Hassan, individually;
Christopher T. Sununu, as Governor; Virginia M. Barry,
individually; and Frank Edelblut, as Commissioner of the New
Hampshire Department of Education) (collectively, the
"defendants") appeal an order of the Superior Court
(Ruoff, J.) granting the plaintiffs, Bedford School
District and William Foote (collectively,
"Bedford"), attorney's fees in a case that
Bedford had filed to recover adequate education funding that
the State withheld in fiscal year 2016 because of a statutory
limit on state funding imposed under RSA 198:41, III(b)
(Supp. 2015) (repealed 2015, repeal effective July 1, 2017).
On appeal, the State argues that because the trial court
specifically declined to find that the State had acted in bad
faith in this litigation, the trial court unsustainably
exercised its discretion in awarding attorney's fees. The
State also argues that Bedford waived its right to
attorney's fees when it accepted education funds
appropriated by a bill that contained a waiver provision. We
198:40-a (Supp. 2017) sets forth the formula that the New
Hampshire Department of Education uses to determine "the
cost of an adequate education for each municipality based on
the . . . pupils who reside in that municipality." RSA
198:40-a, III. Before it was repealed, RSA 198:41, III(b)
limited the total education grant a municipality could
receive to a percentage of the previous year's grant.
See RSA 198:41, III(b).
2015, the City of Dover brought a case against the State
challenging the constitutionality of the limit that RSA
198:41, III(b) imposed on adequate education funding. See
Dover v. State, Strafford County Superior Court, No.
219-2015-CR-00312 (Tucker, J.). In the
Dover case, the parties reached an agreement (the
"Dover Stipulation") in August 2015, which stated:
In the event that the City is successful in obtaining a
preliminary or permanent injunction against the cap required
by R.S.A. 198:41 III(b) . . . the State will make a
supplemental payment equal to the sum total of all funds
withheld in any education adequacy payments made on or after
September 1, 2015, because of the application of the cap,
within ten (10) business days [of the time the order becomes
a final judgment].
Further, in the interests of judicial economy and based on
the fact that this is a constitutional challenge to a
systematic statewide payment, the State agrees that it will
be bound by any rulings issued in this matter regarding the
constitutionality of the cap contained in R.S.A. 198:41,
III(b) as it applies to all other school districts in the
state and that other school districts shall not be required
to intervene or join this action, or file separate actions to
benefit from any injunctive or declaratory order issued
2016, while the Dover case was still pending,
Bedford sought to "enjoin the application of the
adequacy funding cap imposed by RSA 198:41, III(b)." The
trial court denied the motion, reasoning that the plaintiffs
had "failed to sustain their burden of demonstrating
irreparable harm" because "any short fall [Bedford]
experienced in FY 2016 will likely be remedied by the ruling
on the similar issue presented in Dover v.
State." In September 2016, the trial court in
Dover granted a permanent injunction, ruling
"that the percentage cap is unconstitutional when it
operates to reduce the full amount of the statutory
grant." The State did not appeal that decision. Nor,
notably, did the State distribute the funds withheld from
Bedford within ten business days after the order became a
November 2016, Bedford moved for summary judgment, seeking a
court order that the State pay Bedford $4, 287, 533 - the
amount that had been withheld in fiscal year 2016 due to the
cap. Bedford also requested "reasonable attorneys'
fees for needing to bring this action and motion." In
its objection, filed in January 2017, the State asserted that
the Dover Stipulation did not, in fact, require the State to
pay the withheld funds to Bedford within 10 days of the time
the Dover order became a final judgment. The State
also argued that it should not be required to pay
Bedford's attorney's fees.
January 2017, House Bill (HB) 354-A was introduced in the
legislature to appropriate "additional adequate
education grants to certain municipalities as calculated in
RSA 198:40-a and 198:41." The requested appropriation
included the amount withheld from Bedford. As of early April
2017, the bill had not passed. Nonetheless, on April 6, the
trial court "order[ed] the State to pay Bedford School
District the withheld funds for FY 2016 within 30 days of
April 1, 2017." The court also ordered the State to pay
Bedford's attorney's fees, citing Harkeem v.
Adams, 117 N.H. 687, 691 (1977), for the proposition
that an exception to the general rule that parties are
responsible for their own attorney's fees is warranted
"[w]here an individual is forced to seek judicial
assistance to secure a clearly defined and established right,
which should have been freely enjoyed without such
intervention." (Quotation omitted.) Although the trial
court observed that it "stop[ped] short of finding bad
faith," it ruled that:
an award of attorney's fees in this matter is appropriate
because the State has always promised to pay, yet never has.
. . . This lawsuit was necessary to enforce compliance with
the statute and to compel the State to comply with promises
and representations it made to both the Court . . . and
Plaintiffs . . . .
court gave Bedford thirty days "to file an affidavit
outlining its request for reasonable ...