GORDON GRAHAM ESQ
200 MAIN STREET
SALEM NH 03079

RECEIVED DEC 27 1999

99-E-0220 JERE R. BECKMAN, ET AL v. OYSTER RIVER SCHOOL BOARD, ET AL

Please be advised that on 12/27/1999 Judge Fauver made the following order relative to:

Court Order ;

Order on Petition for Injunctive Relief

SEE ATTACHED ORDER.

12/27/1999

Julie W. Howard
Clerk of Court

cc: ANTHONY A MCMANUS ESQ

Form SUCP050 (Rev. 09/03/1999)

The plaintiffs, voters within the Oyster River Cooperative School District, seek an order invalidating the results of a vote taken at the November 16, 1999 Special School District Meeting, approving a $19,951,897 bond for construction at the Oyster River High School. The plaintiffs argue that the vote is invalid because fifty percent (50%) of the registered voters did not participate in the vote as required by RSA 197:3. In addition, the plaintiffs assert that House Bill 111 does not apply because the bonding for the school is not an issue "raised by resolution of the Claremont lawsuit," and the bond is not an obligation which will "mature prior to March 31, 2000."

In response, the defendants argue that even though less than 50% of the registered voters participated in the vote, it is nevertheless valid under section 2.3 of House Bill 111. Specifically, the defendants assert that chapter 2 of the New Hampshire Laws of 1999 (House Bill 111) authorized the School Board to call a special meeting, without court approval, which would have the same authority as an annual district meeting. The defendants assert that the legislature placed no limits on what action could be taken at such a meeting. Because resolution of the Claremont lawsuit netted an additional $3,250,456 in State aid to the Oyster River School District, and decreased the school tax rates of each town within the district, the defendants argue that the School Board was within its authority to call a special meeting to permit voters to decide whether they wished to appropriate additional money for the building project. Finally, the defendants assert that the doctrine of laches bars the plaintiffs from obtaining the relief sought.

During the 1999 legislative session, the legislature adopted temporary legislation to address the confusion and uncertainty generated by the Claremont lawsuit. See Chapter 2 of the New Hampshire Laws of 1999 (House Bill 111). House Bill 111 is made up of three parts (sections 2.1, 2.2 and 2.3). Sections 2.1 and 2.2 address concerns raised by the banking community relative to their ability to legally lend money to municipalities during the transition period. Section 2.3 allows school districts and towns to hold special meetings to address issues raised by the resolution of the Claremont lawsuit.

Preliminarily, the court notes that section 2.3, which is at issue in this case, is independent from the first two sections of House Bill 111. As such, the court rejects the plaintiffs' argument that a bond approved at a special meeting validly held under section 2.3 of H.B. 111 must mature prior to March 3, 2000. In addition, the court rejects the plaintiffs' argument that a meeting validly called under section 2.3 of H.B. 111 requires that a majority of registered voters participate in the vote. See RSA 197:3 (providing that emergency authority "give[s] said district meeting the same authority as an annual district meeting").

Nevertheless, for the reasons discussed below, the court finds that the vote in this case was not specially authorized by House Bill 111; therefore, the general requirements of RSA 197:3 with regard to number of voters had to be met. Specifically, the court finds that although the bond issue was indirectly related to Claremont in that the proposed bond became more affordable after resolution of the lawsuit, the bond was not an issue "raised by resolution of the Claremont lawsuit." In addition, having reviewed the legislative history of House Bill 111, the court finds that the vote in this case was not consistent with the legislative purpose of the temporary legislation.

Section 2.3 of House Bill 111 provides,

A school board may call a special school district meeting under RSA 197:3, without court approval, and a town may call a special town meeting under RSA 31.5, without court approval, to address any issues raised by resolution of the Claremont lawsuit. This authority shall expire no later than December 31, 1999. (emphasis added)

RSA 197:3, I(a) provides,

No school district at any special meeting shall raise or appropriate money nor reduce or rescind any appropriation made at a previous meeting, unless the vote thereon is by ballot, nor unless the ballots cast at such meeting shall be equal in number to at least 1/2 of the number of voters of such district entitled to vote .... In case an emergency arises requiring an immediate expenditure of money, the school board may petition the superior court for permission to hold a special district meeting, which, if granted, shall give said district meeting the same authority as an annual district meeting. (emphasis added)

In accordance with the rules of statutory construction, the court looks first to the language of the applicable statutes. See Appeal of Soucy, 139 N.H. 110, 116 (1994). Where statutory language is not specifically defined, the court gives the language "its plain and ordinary meaning, if possible." Id. "In doing so, [the court] must keep in mind the intent of the legislation, which is determined by examining the construction of the statute as a whole, and not simply by examining isolated words and phrases found therein." Id. Furthermore, "[w]hen interpreting two statutes which deal with a similar subject matter, [the court] will construe them so that they do not contradict each other, and so that they will lead to reasonable results and effectuate the legislative purpose of the statute." Petition of Public Service Co. of N.H., 130 N.H. 265, 282 (1988).

In this case, the court must examine section 2.3 and RSA 197:3 in relation to each other since they deal with similar subject matter, and particularly since section 2.3 specifically refers to RSA 197:3. A reasonable construction of section 2.3 is that it simply removes from RSA 197:3, in certain circumstances, the requirement that a school board petition the superior court to establish an "emergency" in order to hold a special meeting. Reading section 2.3 and RSA 197:3 together, along with the legislative history of House Bill 111, suggests that the legislature determined that superior court review is unnecessary and costly in cases where the issue to be addressed arises from the resolution of the Claremont lawsuit, because such issues are presumptively urgent and would necessarily qualify as "emergencies" under RSA 197:3. Absent an issue "raised by resolution of the Claremont lawsuit," a school board would lack the emergency authority granted by section 2.3 to hold a special meeting. In such a case, the general requirements of RSA 197:3 would have to be met, requiring either superior court approval or participation of 50% of the voters.

In this case, the defendants argue that the bond issue is sufficiently connected to the resolution of the Claremont lawsuit in that the school district netted an additional $3.5 million in state aid thereby lowering the tax rate in each of the participating communities and making the bond issue more affordable. The defendants cite Citizens of Merrimack v. Merrimack School District, 99-E-0326 (Hillsborough County Superior Court Southern District), in support of the proposition that section 2.3 puts no limitation on the type of action which can be taken at a special meeting.

The Merrimack case is distinguishable from the case at hand. The Merrimack School District was to receive approximately $10.1 million in state aid as a result of the legislative resolution of the Claremont lawsuit. The school board called a special meeting to determine whether the district should spend approximately $5.7 million of the anticipated $10.1 million to fund construction at the high school. In that case, the question of how to use the unbudgeted money was clearly an issue raised by the resolution of the Claremont lawsuit.

In the present case, the special meeting was not called to determine how to allocate unbudgeted money received as a result of the resolution of the Claremont lawsuit; rather, the purpose of the vote was to approve a twenty year, $19.9 million bond. The fact that the tax decrease resulting from Claremont might make the bond proposal, which had failed twice in the past, more appealable to voters does not make this matter an issue "raised by the resolution of Claremont," as contemplated in section 2.3 of H.B. 111.

An overview of the legislative history of House Bill 111 makes it clear that the primary intent of section 2.3 was to give school districts an opportunity to revisit their budgets after the resolution of the Claremont lawsuit. Although the legislature intentionally used vague language in referring to the issues which could be addressed at a special meeting called under section 2.3, the reason for that vagueness was an uncertainty about the types of issues which might arise after the resolution of Claremont. Because the resolution of the Claremont lawsuit would presumably create "emergency" situations for many school districts, the legislature authorized special meetings for the express purpose of dealing with the Claremont aftermath. The special meeting called by the Oyster River School Board, to consider a twenty year $19.9 million bond, did not comply with either the letter or the spirit of House Bill 111.

Although the phrase "to address any issues raised by resolution of the Claremont lawsuit" should be read broadly, it must also be read as a limitation on the authorization granted by section 2.3. If the legislature had intended the Bill to allow school boards to hold a special meeting for any and all purposes, as suggested by the defendants, the Bill would have stated such an intent. In contrast, the Statement of Intent included in the Finance committee Report relative to H.B. 111 states, "The amendment permits school boards and towns to call special school district and town meetings . . . if necessary to address issues created by any resolution of the Claremont lawsuit." (emphasis added) .

The court finds that the special meeting in this case was not called to address an issue raised by resolution of the Claremont lawsuit. The meeting was not called to rework the budget, as envisioned by House Bill 111, nor to allocate unbudgeted state aid. Unlike the Merrimack School District, the Oyster River School District did not expect to receive a large sum of state aid which could fund the $19.9 million construction project. Instead, the district would be encumbered by a twenty year bond. Because raising money directly affects all taxpayers in a district, the legislature has decided that absent an emergency, at least 50% of the voters must participate in such a vote held at a time other than the annual district meeting. Although the temporary legislation allows school districts to address such emergencies absent court approval, the special authority granted by House Bill 111 is limited by the express language of the Bill. Although indirectly related to the Claremont resolution, the bond issue in this case clearly was not "raised by resolution of the Claremont lawsuit." Furthermore, the vote was not consistent with the legislative purpose of the temporary legislation.

Because the matter was not an issue "raised by resolution of the Claremont lawsuit," the court finds that section 2.3 of House Bill 111 did not give the November 16, 1999 meeting the same authority as an annual district meeting. Absent such authority, the vote would have to satisfy the requirements of RSA 197:3, as to number of voters, in order to be valid. Because at least 50% of the registered voters did not participate in the vote, the court finds that the November 16, 1999 vote is invalid for failure to satisfy the requirements of RSA 197:3.

Finally, the court considers the defendants' argument that the plaintiffs' claim is barred by the doctrine of laches. Laches is an equitable doctrine which "'will constitute a bar to suit only it the delay was unreasonable and prejudicial.'" Healey v, Town of New Durham, 140 N.H. 232, 241 (1995) (quoting Jenot v. White Mt. Acceptance Corp., 124 N.H. 701, 710 (1984)). "In determining whether the doctrine should apply to bar a suit, the court should consider 'the knowledge of the plaintiffs, the conduct of the defendants, the interests to be vindicated, and the resulting prejudice.'" Id. (quoting N.H. Donuts, Inc. v. Skipitaris, 129 N.H. 774, 785 (1987)).

In this case, the defendants assert that the plaintiffs were notified of the special meeting on September 22, 1999; however, they failed to challenge the validity of the special meeting until November 24, 1999, after the bond had already passed. The defendants argue that this delay was unreasonable and has prejudiced the school district.

The court finds that the delay was not unreasonable. The vote was scheduled to occur on November 16, 1999. Although the special meeting was not authorized by House Bill 111, RSA 197:2 provides that a special meeting may be held "whenever, in the opinion of the school board, there is occasion therefor . . . ." Absent "emergency" authority granted by either the superior court or House Bill 111, a vote to raise or appropriate money at such a special meeting is valid only if "at least l/2 of the number of voters of [the] school district" participate. If 50% of the voters had participated in the November 16, 1999 vote, therefore, that vote would have been valid under RSA 197:3, I(a), notwithstanding the inapplicability of House Bill 111. As such, it was not until the bond proposal passed, with less than 50% of the voters participating, that the plaintiffs could challenge the validity of the vote. The court finds, therefore, that the plaintiffs' claim is not barred by laches.

Accordingly, the plaintiffs' Petition for Injunctive Relief from Action Taken at the November 16, 1999, Oyster River Special School District Meeting is GRANTED. The plaintiffs' request for reimbursement of costs incurred in bringing this action is DENIED.

So ORDERED.

Date: 12 - 27 - 99

Last update on 28-Dec-99 at 11:24 PM.

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