Monadnock Reg'l Sch. Dist. v. Monadnock Dist. Educ. Ass'n

• Decision Date: 08 July 2020
• Docket Number: No. 2019-0134,2019-0134
• Citation: 242 A.3d 789,173 N.H. 411
• Parties: MONADNOCK REGIONAL SCHOOL DISTRICT v. MONADNOCK DISTRICT EDUCATION ASSOCIATION, NEA-NH
• Court: New Hampshire Supreme Court

173 N.H. 411

242 A.3d 789

MONADNOCK REGIONAL SCHOOL DISTRICT

v.MONADNOCK DISTRICT EDUCATION ASSOCIATION, NEA-NH

No. 2019-0134

Supreme Court of New Hampshire.

Argued: November 20, 2019

Opinion Issued: July 8, 2020

Drummond Woodsum & MacMahon, of Manchester (James A. O'Shaughnessy and Demetrio F. Aspiras on the brief, and Mr. O'Shaughnessy orally), for the plaintiff.

NEA-New Hampshire, of Concord (Lauren Snow Chadwick and Esther Kane Dickinson on the brief, and Ms. Chadwick orally), for the defendant.

HANTZ MARCONI, J.

The defendant, Monadnock District Education Association, NEA-NH (the Association), appeals an order of the Superior Court (Ruoff, J.) granting summary judgment to the plaintiff, Monadnock Regional School District (the District), and denying the Association's cross-motion for summary judgment. The superior court ruled that $392,381 in unexpended appropriations set aside over a period of four years pursuant to the parties' collective bargaining agreement had lapsed. See RSA 32:7 (2000) (amended 2017). We reverse and remand.

The parties stipulated to the following facts. The District is a duly constituted municipal corporation, specifically, a cooperative school district established pursuant to RSA chapter 195. The Association is the exclusive labor representative of all members of the bargaining unit in the District, which includes high school department heads, classroom teachers, school-assigned counselors, librarians, specialists, speech education teachers, media generalists, and elementary teaching assistant principals. The District and the Association were parties to a collective bargaining agreement (CBA) that was in effect from July 1, 2012, to June 30, 2016.

Article 9.1 of the CBA contained the parties' agreement as to health insurance. It stated, among other things, that the District "will budget $2,300,000 for the first year of this agreement for health insurance," and that the District "agree[d] to fund the health care budget amount by the lesser of the insurance provider's average ‘guaranteed maximum rate’ or 5% for each additional year of the agreement." It stated further that the Association was "responsible for selecting the insurance plans and determining the amount of contribution for each eligible employee." Finally, as is most relevant to this appeal, Article 9.1 established a health insurance "pool," specifying that "[a]ny amount of money in the healthcare budget not expended from the [District's] contribution to annual healthcare premiums and buyout payments will be placed in a pool to offset healthcare coverage for [employees] electing plans that exceed the District's allotment per employee." Article 9.1 further provided that monies from the pool "will be distributed equally among all employees in each plan classification to offset premium costs, as determined by the [Association]."

The District appropriated $2.3 million to fund employees' health insurance benefits for 2012-2013, the first year of the CBA. Although the funds appropriated would have been sufficient to satisfy 100% of each employee's health insurance premiums for that year, the Association determined that employees should bear 15% of the premium costs and that the District should pay 85%. Accordingly, as of June 30, 2013, the end of the 2012-2013 fiscal year for the District, see RSA 197:1 (2008), $213,655 of the $2.3 million remained unspent. That money was placed in the "pool" called for in Article 9.1.

The District continued to appropriate funds for employees' health insurance benefits for each of the subsequent three years of the CBA. For each of those three years, the Association determined that employees should pay 10% of yearly premium costs and the District should pay 90%. As a result, there was a surplus of $192,309 from the CBA's second year, and a surplus of $154,633 from the CBA's third year. When combined with the first year's surplus, the total amount of pool funds was approximately $560,000 going into the 2015-2016 fiscal year, which was the CBA's fourth and final year.

That year, the parties reached an agreement on a successor CBA that contained a provision whereby the pool funds remaining at the expiration of the current CBA would be used to fund health insurance costs during the successor CBA. The District's legislative body, however, voted to not fund it, and as a result no successor CBA went into effect. When the successor agreement did not go into effect, the Association requested, prior to the end of the 2015-2016 fiscal year, that the pool funds be used to reimburse employees for premium payments made in the current fiscal year as well as the three prior fiscal years. In June 2016, the District voted to use some of the pool funds to reimburse employees for their 2015-2016 premium payments, but refused to reimburse employees for prior years' payments. After the employees were fully reimbursed for their 2015-2016 premium payments, the balance of the pool funds was $392,381.

The Association filed unfair labor practice charges with the Public Employee Labor Relations Board (PELRB), arguing that the CBA required the District to reimburse employees' premium payments for the first three years of the agreement. The parties agreed to submit the dispute to arbitration, which, per the terms of the CBA, "shall not be binding on either party, but shall be advisory only except when the parties have mutually agreed ... that the arbitrator's decision shall be final and binding." The arbitrator rendered a decision awarding the pool funds to the Association and/or its members. The CBA stated that, "[u]pon receipt of the advisory arbitration award, the School Board shall meet within twenty (20) days of the receipt of the award to accept or reject the recommendation of the arbitrator."

The District did neither. Instead, it filed this declaratory judgment action, arguing that, despite the arbitrator's award, "it would ... be unlawful to transfer th[e pool] funds to the Association" because "the funds in the pool lapsed in prior years pursuant to RSA 32." The parties later filed cross-motions for summary judgment on a set of stipulated facts. The trial court granted the District's cross-motion and denied the Association's.

The court stated that, under RSA 32:7, ordinarily "a school district cannot retain unexpended funds from year to year without voter authorization." The trial court then discussed the statutory exceptions to the lapse rule enumerated in RSA 32:7 and determined that "[t]he only exception that could apply to the case at bar is RSA 32:7, I." The court ultimately ruled, however, that RSA 32:7, I, did not prevent the funds at issue from lapsing. The trial court interpreted RSA 32:7, I, to provide an exception from lapse only to legally enforceable obligations that arise prior to the end of a given fiscal year. Applying this interpretation of RSA 32:7, I, and construing the CBA without deference to the arbitrator's interpretation, the court concluded that "[t]he CBA did provide a legally enforceable obligation in regard to the pool funds, but that obligation did not arise during any of the ... years ... concerned, as the Association did not seek [to] offset [the cost of premiums] from the pool funds" during those years. The Association filed a motion for reconsideration, to which the District objected. The trial court denied the Association's motion, and this appeal followed.

The primary issue presented by the Association's appeal is whether the trial court erred in granting the District's cross-motion for summary judgment, and denying the Association's, on the basis that the funds at issue lapsed pursuant to RSA 32:7. In reviewing rulings on cross-motions for summary judgment, we consider the evidence in the light most favorable to each party in its capacity as the nonmoving party and, if no genuine issue of material fact exists, we determine whether the moving party is entitled to judgment as a matter of law. JMJ Properties, LLC v. Town of Auburn, 168 N.H. 127, 129, 122 A.3d 977 (2015). If our review of that evidence discloses no genuine issue of material fact and if the moving party is entitled to judgment as a matter of law, then we will affirm the grant of summary judgment. Id. at 129-30, 122 A.3d 977. If, as in this case, the parties filed cross-motions for summary judgment on a set of undisputed facts, we need only review, de novo, the trial court's application of the law to the facts. Id. at 130, 122 A.3d 977.

Resolution of the issue before us requires statutory interpretation. We review matters of statutory interpretation de novo. Id. This court is the final arbiter of the intent of the legislature as expressed in the words of a statute considered as a whole. Id. We first examine the language of the statute and ascribe the plain and ordinary meanings to the words used. Id. Furthermore, we interpret statutes in the context of the overall statutory scheme and not in isolation. Id. Our goal is to apply statutes in light of the legislature's intent in enacting them and in light of the policy to be advanced by the entire statutory scheme. Id.

RSA chapter 32 pertains to municipal budgets. Olson v. Town of Grafton, 168 N.H. 563, 567, 133 A.3d 270 (2016) ; see RSA ch. 32 (2019). It "was designed to control the appropriation and expenditure of money in municipalities including school districts." Board of Selectmen v. School Bd., 113 N.H. 598, 600, 311 A.2d 124 (1973) ; see RSA 32:1 (stating that a purpose of RSA chapter 32 is "to establish uniformity in the manner of appropriating and spending public funds in all municipal subdivisions to which this chapter applies"); see also RSA 32:2 (" RSA 32:1 - 13, shall apply to all ... cooperative school districts ...."). In accordance with the chapter's purpose, RSA 32:7 provides that "[a]ll appropriations shall lapse at the end of the fiscal year and any unexpended portion thereof shall not be expended without further appropriation, unless" an enumerated statutory...