Town of Warren et al.
v.
Bristol Warren Regional School District et al. And Town of Bristol by and through its Town Council and its Town Treasurer, Julie Goucher, As Interested Party.
Providence
County Superior Court PC 14-1628, Louis M. Matos, Associate
Justice
For
Plaintiffs: Anthony DeSisto, Esq. Peter F. Skwirz, Esq.
For
Defendants: Andrew D. Henneous, Esq. Michael J. Polak, Esq.
Gina A. DiCenso, Esq. Michael A. Ursillo, Esq.
Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and
Indeglia, JJ.
OPINION
Francis X. Flaherty, Associate Justice
These
consolidated appeals arise from a judgment of the Superior
Court regarding the statutory interpretation of the manner in
which state education aid funds that are received by the
Bristol Warren Regional School District (BWRSD or district)
should be calculated and apportioned to its constituent
towns, Bristol and Warren. The defendants, the BWRSD, the
Bristol Warren Regional School Committee (BWRSC or
committee), and the Town of Bristol, appeal from a Superior
Court judgment granting Warren's petition and complaint
for declaratory judgment.[1] The defendants argue that the trial
justice misconstrued the Rhode Island Board of Education Act,
G.L. 1956 chapter 7 of title 16 (Education Act) and the Rhode
Island Education Equity and Property Tax Relief Act, G.L.
1956 chapter 7.2 of title 16 (Funding Formula Act). The
defendants further maintain that the trial justice failed to
accord proper deference to the Rhode Island Department of
Education's (RIDE) interpretation of those statutes. In a
separate argument, Bristol posits that the Superior Court did
not have jurisdiction over this declaratory-judgment action
because Warren failed to join all interested parties and
further that Warren's claims are barred by the doctrine
of res judicata. After careful consideration of the
record, and for the reasons set forth in this opinion, we
affirm the judgment of the Superior Court.
I
Facts
and Travel
The
BWRSD and the Enabling Legislation
The
contiguous towns of Bristol and Warren form the BWRSD, which
was established pursuant to chapter 330 of the 1991 Public
Laws of Rhode Island (enabling legislation). The BWRSC,
consisting of nine members, was created to govern the BWRSD
in accordance with the enabling legislation. The Joint
Finance Committee (JFC) was formed under P.L. 1991, ch. 330,
sec. 3, § X(I)(3) of the enabling legislation; it
consists of nine members appointed by the town councils of
Bristol and Warren. At the time of the dispute, the JFC
comprised six representatives from Bristol and three from
Warren.[2]
The
enabling legislation lays out the approval process for the
district's annual budget. In that regard, it provides
that the superintendent of the district is to prepare and
present a preliminary annual budget to the committee
containing estimates of the funds needed to operate the
district for the ensuing fiscal year. The committee then
submits its proposed budget to the JFC for approval. Upon
approval of the budget, each town is required to appropriate
funds for the district, which are "apportioned between
the cities on a per public pupil calculation using enrollment
as of the prior October 1, " pursuant to the enabling
legislation.[3]
The
parties have stipulated[4] that, since the formation of the BWRSD,
its treasurer would reduce the annual budget, as approved by
the JFC, by the total amount of state aid and any other
miscellaneous revenue sources, and then would apportion the
remaining balance of the budget by the student population, on
a per-capita basis from each municipality.
The
Prior Litigation
In
2012, the BWRSD and the BWRSC filed suit against Warren,
seeking a declaratory judgment and a writ of mandamus,
demanding that Warren appropriate its full share of the
2012-2013 school budget for the BWRSD, as was determined by
the JFC. See Bristol Warren Regional School District v.
Town of Warren, No. PC12-4653, 2014 WL 1396941 (Apr. 4,
2014) (the prior litigation). The budget for that fiscal year
required that Warren pay the sum of $12, 164, 919 to the
district. Id. at *2. However, Warren balked; at its
financial town meeting, the town voted to appropriate only
$11, 748, 919 of the budgeted amount. Id. In April
2014, the Superior Court determined that Warren was not
authorized to reject a budget that had been approved by the
JFC because the enabling legislation cloaked the JFC with
final budgetary authority. Id. at *6. Therefore, the
court ordered Warren to appropriate the additional funds to
the BWRSD. Id. That judgment was not appealed.
The Current Dispute
In
early December 2013, while the prior litigation remained
pending, the state representative for Warren contacted RIDE
about the state calculations for the education aid funding
formula. In particular, he questioned why Bristol and Warren
were assessed the same local share per pupil even though
Warren students, because of a higher rate of state aid, were
generating a greater per-pupil share of the state revenues.
In response to his inquiry, RIDE provided a spreadsheet that
compared the formula aid by region and by member town for the
BWRSD. According to Warren, those calculations
"confirmed Warren's claim that it would in fact
receive more aid if the calculations were made with reference
to the comparative rates of students receiving free or
reduced price lunch, rather than with reference to a blended
figure."
In
March 2014, Warren's finance director received an email
from the district informing him of the projected 2014-2015
school budget. That same day, the finance director submitted
a memorandum to the town manager, indicating that the proper
allocation of state education aid should be on a weighted
per-pupil basis in accordance with the basis of need of the
municipalities. Attached to the memorandum was RIDE's
funding formula analysis for the 2015 fiscal year showing the
figures for Bristol and Warren, both separately and as a
regional district. The memorandum was presented to the JFC
shortly thereafter. The JFC, however, did not adopt the
recommendations set forth in the memorandum.
Later
that month, Warren filed a petition for writ of mandamus,
injunctive relief, and a complaint for declaratory judgment
against the BWRSD, the BWRSC, and the Town of Bristol. In its
filing, Warren claimed that the enabling legislation and the
Funding Formula Act required that state aid be allocated not
on a per-capita per-pupil basis, but on a weighted per-pupil
basis, taking into account the number of students with free
or reduced-price lunch in each town, the median income of
each town, and the total assessed property values of each
town.
The
Lower Court Proceedings
During
a hearing on May 12, 2014, RIDE's senior finance officer
testified that RIDE made use of specific data components to
determine state education aid for individual districts. Those
data components include the state share ratio, which consists
of, among other factors, property values, free and
reduced-price lunch data for students, and adjusted equalized
weighted assessed valuations (EWAV). The senior finance
officer affirmed that, under the funding formula, a poorer
community typically is allocated more money from the state
for education aid than a more affluent community. She further
specified that, in the case of Bristol and Warren, state aid
is currently "calculated as a regional district, so the
data components are added together." Significantly, she
testified that, if state aid were to be calculated
separately, the state aid assigned to each student for
Bristol would be $2, 897 and $5, 442 for Warren for the 2015
fiscal year.
Subsequent
hearings were held on May 13 and 15, 2014. During the May 15
hearing, the trial justice determined that Warren's claim
was not precluded under the doctrine of res
judicata. In that regard, the trial justice concluded
that he did "not believe that the issue of how the
credits are to be apportioned [wa]s squarely addressed by the
enabling legislation." The trial justice, however, did
not at that time come to a conclusion about the ultimate
statutory interpretation issue; instead, he asked the parties
to submit supplemental memoranda and encouraged Warren to
consider joining RIDE as a party to the litigation.
Warren
then filed a second amended petition and complaint, naming
RIDE as a defendant, because that agency oversees and
disburses state aid to schools. Warren alleged that, rather
than allocate aid separately to Warren and Bristol as
provided for under the Education Act and the Funding Formula
Act, RIDE disbursed a lump sum to the BWRSD, which in turn
subtracted the amount of state aid from its total budget and
then apportioned the remaining cost to each town on a
per-student basis. According to Warren, this improperly
shifted some of Warren's state aid to Bristol and
resulted in Warren being "overcharged" $2, 054, 790
in fiscal year 2014-2015. RIDE subsequently filed a motion to
dismiss Warren's second amended petition and complaint on
the ground that the complaint failed to state a claim upon
which relief could be granted against RIDE. All parties,
including Warren, Bristol, the BWRSD, and the BWRSC, filed
objections to RIDE's motion to dismiss. After a hearing
on RIDE's motion to dismiss in July 2014, the trial
justice denied the motion.
The
case was reached for trial in April 2015. At the close of all
the evidence, and after taking into consideration the
memoranda and oral arguments of the parties, the trial
justice issued a bench decision. With respect to the argument
that the Superior Court lacked jurisdiction under the Uniform
Declaratory Judgments Act (G.L. 1956 chapter 30 of title 9)
because all interested parties had not been joined, the trial
justice determined that there had not been any motion to add
additional defendants by any party, nor had there been any
request for intervention by any other school district to
participate in the matter. The trial justice found that a
determination in favor of defendants on the ground of failing
to join all necessary parties would "essentially
require[] the [c]ourt to speculate as to which other parties
may or may not be affected by the [c]ourt's
holding[.]" And the trial justice declared that
"the [c]ourt should not have to speculate as to which
other parties are going to be affected and which parties
should or should not be joined."
With
respect to defendants' arguments as to the amount of
deference that should be afforded to RIDE, the trial justice
recognized that there had been no regulation or authority
that had been promulgated by the agency on the issue. The
trial justice specified that
"where the statute and any rule established by RIDE
ha[d] not been established pursuant to any rulemaking
process, any vetting, any solicitation of opinions, anything
of that nature, that at most RIDE's position may have
persuasive authority in order to give effect to the purpose
of the Act as intended by the [L]egislature * * *."
He
concluded that RIDE was "not entitled to full
Chevron[5] deference because
there ha[d] been no rule or regulation established by RIDE in
regards to this legislation."
Turning
to the statutory interpretation argument, the trial justice
articulated "that RIDE and the Town of Bristol [we]re to
a large extent basing their argument on a section that
contain[ed] the definition of certain terms." He
continued, "that definitional section d[id]n't in
any way state how moneys [we]re to be allocated to other
regional school districts. It only deal[t] with
Chariho.[6] And the only section that
state[d] specifically how the equalized weighted assessed
valuation [wa]s to be determined [wa]s at [§]
16-7-21." The trial justice said that "the
[L]egislature could have made a clear statement that Bristol
Warren should be treated jointly for allocation and
distribution, [but] it did not." The trial justice
voiced that "the clear language of that statute * * *
indicate[d] that the allocation should be determined directly
pursuant to Bristol and Warren's individual tax bases as
required by the funding formula both at [§] 16-7-21 and
at [§] 16-7-20." He found "that the clear
language require[d] that the allocation be made pursuant to
each city and town." And he stated "that at best
[§] 16-7-16 create[d] an ambiguity" and "what
[wa]s more persuasive to the [c]ourt as to how to resolve
that ambiguity [wa]s contained in the section regarding the
legislative findings * * *."[7] The trial justice resolved "that if
the money was allocated the way RIDE and Bristol ha[d]
advocated, that that determination would not treat property
taxpayers [equitably]; because it is clear and undisputed
that Warren's tax base is substantially more depressed
than Bristol's tax base." The trial justice
determined that RIDE should calculate the funds separately,
allocate them separately, and distribute the funds to the
BWRSD separately.
On May
20, 2015, Warren filed a motion for final judgment pursuant
to Rule 54(b) of the Superior Court Rules of Civil Procedure.
The Superior Court entered judgment on July 24, 2015,
"direct[ing] entry of a declaratory judgment that, under
the State Funding Formula, the Rhode Island Department of
Education shall calculate and disburse funding formula funds
separately for the Town of Bristol and the Town of Warren and
distribute each allotment separately to the regional school
district so that the treasurer of the regional school
district under Section 12 of the enabling legislation shall
receive the funds for each town and allocate credit
accordingly[.]"
After
judgment was entered on behalf of Warren, defendants timely
appealed.[8]
II
Issues on Appeal
On
appeal, the BWRSD and the BWRSC argue that the Superior Court
erred when it (1) failed to give effect to the plain language
of the Education Act and the Funding Formula Act mandating
that state aid for a regional school district be calculated
for the district as a whole and not separately for each
municipality and (2) did not give full deference to
RIDE's interpretation of the statutory framework
concerning the proper manner of calculating and allocating
state aid to regional school districts. In its appeal, the
Town of Bristol contends that the Superior Court (1)
misinterpreted the governing statutory scheme and ignored the
statutory definition of "community" as it applies
to funding to the BWRSD; (2) lacked jurisdiction because
plaintiff failed to join the necessary parties; (3) did not
afford the required deference to RIDE's interpretation of
the statute; and (4) failed to bar plaintiff's claims
pursuant to the doctrine of res judicata.
III
Res
Judicata
A
Standard
of Review
This
Court "determine[s] the applicability of res judicata as
a matter of law." Ritter v. Mantissa Investment
Corp., 864 A.2d 601, 605 (R.I. 2005) (citing Wright
v. Zielinski, 824 A.2d 494, 497 (R.I. 2003)). We review
determinations of questions of law de novo.
Lamarque v. Centreville Savings Bank, 22 A.3d 1136,
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