IN RE BROOKINGS SCHOOL DIST. SCHOOL BD.

• Decision Date: 13 August 2003
• Docket Number: No. 22496.,22496.
• Parties: In the Matter of the Petition for WRIT OF CERTIORARI AS TO the WRONGFUL PAYMENTS OF ATTORNEY FEES MADE BY the BROOKINGS SCHOOL DISTRICT SCHOOL BOARD without legal authority.
• Court: South Dakota Supreme Court

668 N.W.2d 538

2003 SD 101

In the Matter of the Petition for WRIT OF CERTIORARI AS TO the WRONGFUL PAYMENTS OF ATTORNEY FEES MADE BY the BROOKINGS SCHOOL DISTRICT SCHOOL BOARD without legal authority.

No. 22496.

Supreme Court of South Dakota.

Considered on Briefs April 28, 2003.

Decided August 13, 2003.

Thomas H. Harmon of Tieszen Law Office, Pierre, SD, for appellant School Board.

Ellie M. Vandenberg, Volga, SD, for appellee Taxpayers.

ZINTER, Justice.

[¶ 1.] Craig Culver, Leon Pesall, Marcia Williams, Henry Williams, Robert Thorson, Hugh Barnett, Robert Schwartz and Diane Culver (Taxpayers) obtained a writ of certiorari setting aside a Brookings School Board (Board) payment of legal fees. The Board had reimbursed two private citizens for the legal fees they incurred in their private legal action to overturn a decision of a school election recount board. The circuit court granted the writ, concluding that the Board's reimbursement of private attorney fees was in excess of its authority. We hold that, under the specific facts of this case, the Board was not authorized to reimburse the private legal fees. However, we reverse that part of the order that, in a certiorari proceeding, ordered the affirmative relief of requiring the Board to commence a legal action to recover the payment. We also reverse the circuit court's award of Taxpayers' attorney fees at trial because the Taxpayers' application was not itemized. We grant Taxpayers' itemized request for appellate attorney fees.

FACTS AND PROCEDURAL HISTORY

[¶ 2.] In 2001, the Board adopted a budget increase, which required that it "opt-out" of a statutory limitation on spending. See SDCL 10-13-36.¹ The Board's decision to opt-out of the spending limitation was subsequently referred to a public vote. Although the public initially voted to uphold the Board's decision to opt-out of the spending limitation, a number of voters filed a petition for a recount. During the recount, it was discovered that 77 absentee ballots had not been properly "stamped," and the school recount board invalidated those unstamped ballots. The invalidation of those ballots overturned the original election result and disallowed the Board's proposed spending increase.

[¶ 3.] However, two private citizens, Aelred Kurtenbach and Craig Johnson (hereinafter referred to as Kurtenbach, Johnson, or private citizens) challenged the recount board's decision by filing an election contest and a petition for writ of certiorari. Kurtenbach and Johnson alleged that the recount board had been illegally convened, and therefore, the recount board's decision was a nullity. That dispute eventually reached this Court, and we agreed that the recount board was illegally constituted. Consequently, the decision of the recount board was overturned. This would have reinstated the original election result and permitted the Board to opt-out of the spending limitation. See In re the Petition for Writ of Certiorari as to the Determination of Election on the Brookings School District's Decision to Raise Additional General Fund Property Tax Revenues in the Amount of $750,000, 2002 SD 85, 649 N.W.2d 581 (Brookings I).

[¶ 4.] This action for certiorari arose because, after the trial in Brookings I, the Board reimbursed the private citizens for the legal fees they incurred in overturning the decision of the recount board. The legal services were provided by Attorney Richard Helsper. Although Helsper was also the Board's attorney, he appeared in Brookings I as counsel of record for the private citizens. This dispute arose because the Board subsequently voted to pay for the private citizens' legal fees.

[¶ 5.] The facts relating to the legal services are undisputed. It appears from the record that the day after the recount, Helsper began researching the possibility of commencing an election contest and a certiorari proceeding. From the Friday following the recount until the following Tuesday when the private citizens' action was filed, Helsper spent substantial time on this matter. During that period of time, Kurtenbach's and Johnson's names appear in Helsper's billings, and the school superintendent "informed" the Board that the Board was going to pay the attorney fees incurred by Kurtenbach and Johnson. However, the Board did not act to approve the superintendent's recommendation. Moreover, the record does not reflect that the Board agreed to participate in the litigation, employ Helsper to represent the Board's interests in the litigation, or authorize anyone else to assert the Board's interests. Consequently, the record reflects that Helsper appeared solely as counsel for Kurtenbach and Johnson in the Brookings I litigation.

[¶ 6.] However, after the Brookings I proceedings concluded in circuit court, the Board voted to pay the private citizens' legal fees. At Board meetings in December of 2001 and January of 2002, the Board voted to pay $12,169.78 for the private citizens' legal fees incurred in Brookings I.

[¶ 7.] Taxpayers subsequently filed this action for writ of certiorari seeking a review of the legality of the Board's decision to pay the fees. The circuit court concluded that the Board did not have the authority to pay Kurtenbach's and Johnson's private attorney fees. The circuit court also ordered the Board to take the affirmative act of suing Kurtenbach and Johnson to recover the expenditure. The Board appeals raising numerous questions that we have consolidated into the first 3 issues.² Taxpayers raise issue 4.

1. Whether the trial court erred in concluding that the Board had no express or implied authority to pay the legal fees of these private citizens.

2. Whether the trial court, in an action for certiorari, had jurisdiction to order the affirmative relief of requiring the Board to commence a suit to recover the payment.

3. Whether the trial court erred in awarding trial attorney fees that were not itemized.

4. Whether Taxpayers are entitled to their itemized attorney fee request in this appeal.

[¶ 8.] On Issue 1, we conclude that a school board has authority to pay legal fees to protect its interests in litigation. However, this Board exceeded its authority when it paid the legal fees of private citizens incurred in litigation in which the Board was not a party, did not employ counsel, and did not elect to appear or assert its interests. On Issue 2, we reverse that portion of the order that required affirmative relief as a remedy in an action for certiorari. On Issue 3, we reverse the Taxpayers' award of non-itemized attorney fees. On issue 4, we grant Taxpayers' itemized request for appellate attorney's fees.

SCOPE AND STANDARD OF REVIEW

[¶ 9.] In certiorari proceedings, the initial scope of review is limited to determining whether the inferior courts, officers, boards or tribunals had jurisdiction to take the action under review, and whether they properly utilized their authority. Our scope of review is also limited:

Because this matter was presented to the trial court on certiorari, our scope of review is limited to the questions of whether the inferior courts, officers, boards, and tribunals had jurisdiction and whether they have regularly pursued the authority conferred upon them. "When such courts, officers, boards, or tribunals have jurisdiction over the subject matter and of the party, their action will be sustained unless in their proceedings they did some act forbidden by law or neglected to do some act required by law."

Peters v. Spearfish ETJ Planning Comm'n, 1997 SD 105, ¶ 6, 567 N.W.2d 880, 883 (internal citations omitted). Moreover, because the facts in this case are essentially undisputed, we are left with questions of law. We review questions of law de novo. Hamerly v. City of Lennox Bd. of Adjustment, 1998 SD 43, ¶ 10, 578 N.W.2d 566, 568.

DECISION

1. The Board was not authorized to pay these private citizens' legal fees.

[¶ 10.] The dispositive question is whether the Board had authority to pay a private citizen's legal fees in an action where the Board was not a party, and it did not elect to assert an interest, employ counsel, or participate in the litigation. In considering that question, we start by noting that school boards are creatures of statute with limited powers. Therefore, a school board cannot exercise power unless it is expressly granted or necessarily implied by statute. Haas v. Independent Sch. Dist. No. 1 of Yankton, 69 S.D. 303, 306, 9 N.W.2d 707, 708 (1943). Although public bodies may exercise implied powers that are necessarily implied from statute, the implication

... should be clear and undoubted, and the party claiming through [it] should be able to point [it] out with certainty and precision.... Mere general arguments drawn from the convenience of possessing a power under certain circumstances in case of emergency—conclusions that, if possessed, it might be beneficially exercised, are very dangerous sources of corporate authority.... Implications spring from the necessities of some power actually conferred, and not from notions of what would be convenient or expedient under particular circumstances.

State ex rel. Bell v. Board of County Comm'rs of Beadle County, 68 S.D. 237, 241-242, 300 N.W. 832, 834 (1941) (internal citations omitted).³

[¶ 11.] Here, the Board relies on two statutes as authority for its decision. The Board first notes that SDCL 13-5-1 grants school boards the power to "sue and be sued." SDCL 13-5-1 provides:

Any territory organized for the express purpose of operating not less than a thirteen-year school program and governed by an elected school board is defined to be a school district. It may sue and be sued, contract and be contracted with, purchase, hold, and use personal and real property for school purposes, and sell and dispose of the same.

Id. (emphasis added). The Board also notes that SDCL 13-8-39⁴ grants school boards the power to "employ any necessary personnel" for the operation of the schools, which it...