Campbell County School Dist. v. Catchpole

• Decision Date: 23 June 2000
• Docket Number: No. 98-310.,98-310.
• Citation: 6 P.3d 1275
• Parties: CAMPBELL COUNTY SCHOOL DISTRICT, State of Wyoming, and Lincoln County School District No. 1, State of Wyoming, Appellants (Plaintiffs), v. Judy CATCHPOLE, Superintendent of Public Instruction, State of Wyoming, in her official capacity; Cynthia Lummis, Wyoming State Treasurer, in her official capacity; and Max Maxfield, Wyoming State Auditor, in his official capacity, Appellees (Defendants).
• Court: Wyoming Supreme Court

6 P.3d 1275

CAMPBELL COUNTY SCHOOL DISTRICT, State of Wyoming, and Lincoln County School District No. 1, State of Wyoming, Appellants (Plaintiffs), v. Judy CATCHPOLE, Superintendent of Public Instruction, State of Wyoming, in her official capacity; Cynthia Lummis, Wyoming State Treasurer, in her official capacity; and Max Maxfield, Wyoming State Auditor, in his official capacity, Appellees (Defendants).

No. 98-310.

Supreme Court of Wyoming.

June 23, 2000.

Representing Appellants: Ford T. Bussart of Bussart, West, Rossetti, Piaia & Tyler, P.C., Rock Springs, WY. Argument by Mr. Bussart.

Representing Appellees: Gay Woodhouse, Attorney General; Michael L. Hubbard, Deputy Attorney General; and Rowena L. Heckert, Senior Assistant Attorney General. Argument by Ms. Heckert.

Before LEHMAN, C.J., and THOMAS, MACY,¹ and GOLDEN, JJ., and VOIGT, D.J.

LEHMAN, Chief Justice.

Appellants Campbell County School District and Lincoln County School District No. 1 (Campbell and Lincoln 1, or the Districts) claim they are entitled to a rebate of excess recapture monies they paid to the Department of Education. Because we conclude the district court erred in its interpretation of the recapture statute, Wyo. Stat. Ann. § 21-13-102 (Michie 1997), we reverse its denial of the Districts' claim for declaratory relief.

ISSUES

The Districts present the following issue for review:

Whether Appellees (Defendants) have unlawfully refused to rebate to Appellant School Districts (Plaintiffs) overpayments of "recapture" revenues paid by the Districts to the State of Wyoming for the following fiscal years:

Campbell County School District—

Fiscal Years 1994, 1995, and 1996

Lincoln County School District Number One—

Fiscal Years 1995 and 1996

FACTS

Appellant Districts are "recapture districts" as defined by Wyoming's public education finance statutes, specifically Wyo. Stat. Ann. § 21-13-102. That is, they are school districts in which locally generated revenue exceeds 109% of the amount to which each district is entitled for operation during a fiscal year under the Wyoming public education foundation program, Wyo. Stat. Ann. § 21-13-301 through 317.² Under the version of Wyo. Stat. Ann. § 21-13-102(b) in effect at all times relevant to this case, recapture districts were required to rebate to the Department of Education (the Department) the amount by which locally generated revenue exceeded 109% of foundation program costs.³ The amount rebated by these districts is thus "recaptured" by the Department and credited to the public school foundation program account.

Pursuant to subsection (e) of Wyo. Stat. Ann. § 21-13-102, the amount to be rebated to the Department by recapture districts for a particular year is initially determined by estimates, based upon data from the preceding school year, computed by the Department in August of each fiscal year.⁴ The August estimates are superseded later in the fiscal year by recapture amounts certified by the Department to the districts no later than March 1. Wyo. Stat. Ann. § 21-13-102(e). Under subsection (b) of the statute, recapture districts are required to pay recapture in installments on January 15, March 15, and April 15, with the balance to be paid on June 15.

The dispute in this case arose when the Districts, relying on Wyo. Stat. Ann. § 21-13-102(c), sought a refund of amounts of recapture they claim to have overpaid.⁵ The Districts claimed to have rebated more to the Department than the amount by which actual revenues exceeded 109% of foundation program costs in the following years and amounts:

Campbell Cty. Lincoln Cty. Sch Sch. Dist. Dist. No. 1 FY 1993/94 $162,332 FY 1994/95 $342,493 $299,483 FY 1995/96 $435,419 $176,999

These alleged discrepancies exist because recapture estimates are based on assessed values, and the counties were either unable to collect all that was assessed or were required to refund some amounts.

Based on these figures, in May of 1995, Campbell sent a letter to the Department requesting recalculation and recertification of the amount of recapture due for fiscal years 1993/94 and 1994/95. By letter dated June 12, 1995, the Department refused Campbell's request, stating that "[t]he current law simply grants us no authority to recalculate and recertify the amount of recapture due." The Department further stated in its letter: "In accordance with W.S. XX-XX-XXX(b) and (e), the final amount of recapture must be certified to the districts no later than March 1 of each year."

Following the Department's refusal to recalculate the amount of Campbell's recapture, the Districts began to file claims with the state auditor. In May of 1996, Lincoln 1 filed a claim with the state auditor, pursuant to Wyo. Stat. Ann. § 9-1-404, for repayment of the excess recapture it paid for fiscal year 1994/95. Two days later, on May 24, Campbell filed a similar claim with the state auditor for repayment of the excess amounts it paid for 1993/94 and 1994/95. These claims were denied by the state auditor on July 15, 1996. A month later, Campbell and Lincoln 1 filed claims with the auditor for repayment of the excess payments made for fiscal year 1995/96. Nothing in the record indicates the state auditor ever responded to these claims. On November 21, 1996, Campbell and Lincoln 1 filed a complaint for declaratory relief in district court against the state superintendent of public instruction, the state treasurer and the state auditor (hereinafter the state defendants or State) alleging overpayment of recapture in amounts totaling $940,244 and $476,437 respectively. The Districts asked the court to enter an order declaring the purpose of, and duties of the Department under, Wyo. Stat. Ann. § 21-13-102(c). They also asked the court to direct payment to the Districts of the amounts in question.

On December 17, 1996, the state defendants filed an answer in which they claimed the court lacked jurisdiction because the recapture statute at issue was declared unconstitutional in Campbell County Sch. Dist. v. State, 907 P.2d 1238, 1267-69 (1995). The state defendants also raised numerous affirmative defenses, including failure to state a claim; judicial, collateral and equitable estoppel; res judicata; failure to exhaust administrative remedies; waiver; and laches. On July 20, 1998, a trial to the bench on stipulated facts was held in district court.

Following trial, the district court issued a decision letter ruling the Department's interpretation of Wyo. Stat. Ann. § 21-13-102(c) should be given effect. Under that interpretation, final recapture amounts would be based on assessed valuations, without regard for revenue actually received by the school districts. Although referring to the Department's interpretation as "strained," the court concluded the agency interpretation of the statute is entitled to deference. A judgment was later filed referencing the decision letter and denying the Districts' claim for declaratory relief. This timely appeal followed.

DISCUSSION

Before addressing what we view as the real issue in this case, that is, the meaning of Wyo. Stat. Ann. § 21-13-102(c), we will address whether the Districts' claim is precluded for any of the reasons advanced by the State. Because the State has not filed a cross-appeal, the Districts argue the State should not be permitted to assert these issues. We disagree. We have written:

The rules are well settled concerning matters which an appellee properly may raise in response to an appeal taken by the adverse party. An appellee need not cross-appeal to assert an alternative theory, offered to and rejected by the district court, which would support the district court's ultimate disposition of the case. First Wyoming Bank, N.A., Rawlins v. Trans Mountain Sales & Leasing, Inc., Wyo., 602 P.2d 1219 (1979). Conversely, to attack the effect of the judgment, an appellee must perfect a cross-appeal to this court. Wyoming State Treasurer v. City of Casper, Wyo., 551 P.2d 687 (1976). We said in Wyoming State Treasurer, 551 P.2d at 693:

"The controlling rule has been settled for many years. In United States v. American Railway Express Co., 1924, 265 U.S. 425, 435, 44 S.Ct. 560, 564, 68 L.Ed. 1087, 1093, it was said:

"`... [A] party who does not appeal from a final decree of the trial court cannot be heard in opposition thereto when the case is brought here by the appeal of the adverse party. In other words, the appellee may not attack the decree with a view either to enlarging his own rights thereunder or of lessening the rights of his adversary, whether what he seeks is to correct an error or to supplement the decree with respect to a matter not dealt with below. ...'

"In summary, a non-appealing party may not attack the ultimate effect of the judgment below but may support it by any matter appearing in the record. The rejection of a contention, argument or theory in support of a claim does not reject the final upholding of the claim itself."

Broyles v. Broyles, 711 P.2d 1119, 1123 (Wyo. 1985). See also Dechert v. Christopulos, 604 P.2d 1039, 1046 (Wyo.1980)

. Here, the preclusive doctrines advanced by the State would serve to uphold the district court's ultimate disposition of the case and are properly before us despite the lack of a cross-appeal. Our decision of these issues is further assisted because, although it did not address these issues in its decision letter, the district court heard extensive argument by the State on these issues at the trial on stipulated facts.

Estoppel

The State advances the theories of res judicata, collateral estoppel, and judicial estoppel to support its contention that our decision in Campbell County Sch. Dist. v. State, 907 P.2d 1238 (Wyo.1995) precludes the present action. In essence, the argument is that a party cannot seek enforcement of an unconstitutional statute.

In Campbell County Sch. Dist. v. State, we held the recapture statute unconstitutional because we found that the statutory...