No. 81-436
IN THE SUPREME COURT OF THE STATE OF MONTANA
1981
MISSOULA HIGH SCHOOL LEGAL DEFENSE ASSOCIATION,
Plaintiff and Respondent,
SUPERINTENDENT OF PUBLIC INSTRUCTION OF THE
STATE OF MONTANA, and ED ARGENBRIGHT, et al.,
Defendants ,and Appellants.
Appeal from: District Court of the Fourth Judicial District,
In and for the County of Missoula
Honorable James B. Wheelis, Judge presiding.
Counsel of Record:
For Appellants:
John W.Larson argued, Helena, Montana
Rick Bartos argued, Helena, Montana
For Respondent:
Jonkel and Kemmis, Missoula, Montana
Daniel Kemmis argued, Missoula, Montana
For Amicus Curiae:
Hilley and Loring, Great Falls, llontana
Garnaas, Hall, Riley and Pinsoneault, Missoula, Montana
H. L.Garnaas argued, Missoula, Montana
Submitted: December 3, 1981
Decided: December 22, 1981
Filed: L]Ec c !Y~I
Mr. J u s t i c e John C . Sheehy d e l i v e r e d t h e Opinion o f
t h e Court.
T h i s i s an a p p e a l by t h e S u p e r i n t e n d e n t of P u b l i c
I n s t r u c t i o n of t h e S t a t e of Montana from an a d v e r s e r u l i n g
i n a d e c l a r a t o r y judgment and i n j u n c t i o n a c t i o n i s s u e d by
t h e D i s t r i c t Court, Fourth J u d i c i a l D i s t r i c t , Missoula
County. The ~ i s t r i c C o u r t o r d e r e d t h e S u p e r i n t e n d e n t
t
t o pay $1,275,735.50 t o a Missoula County h i g h s c h o o l d i s t r i c t
and awarded c o u n s e l f o r t h e r e s p o n d e n t a t t o r n e y f e e s and
c o s t s o f $2,177.00 o u t o f t h e f u n d s t o be s o p a i d .
W e a f f i r m t h e D i s t r i c t Court.
The S u p e r i n t e n d e n t c o n t e n d s t h a t t h e D i s t r i c t C o u r t
e r r e d i n i t s i n t e r p r e t a t i o n and a p p l i c a t i o n of s e c t i o n
20-1-301, MCA, and t h a t it f u r t h e r e r r e d i n awarding a t t o r n e y
f e e s t o t h e respondent.
The d i s p u t e d s t a t u t e f o l l o w s :
"20-1-301. School f i s c a l y e a r . The s c h o o l
f i s c a l y e a r s h a l l b e g i n on J u l y 1 and end
on June 30. A t l e a s t 180 s c h o o l d a y s o f
p u p i l i n s t r u c t i o n s h a l l be conducted d u r i n g
e a c h s c h o o l f i s c a l y e a r , [ e x c e p t t h a t 175 d a y s
of p u p i l i n s t r u c t i o n f o r graduating s e n i o r s
may be s u f f i c i e n t a s p r o v i d e d i n 20-9-313, o r ]
u n l e s s a v a r i a n c e f o r k i n d e r g a r t e n h a s been
g r a n t e d under 20-1-302 o r a d i s t r i c t i s g r a n t e d
a v a r i a n c e under t h e p r o v i s i o n s o f c h a p t e r 9,
p a r t 8 , o f t h i s t i t l e . Any d i s t r i c t t h a t f a i l s
t o p r o v i d e f o r a t l e a s t 180 s c h o o l d a y s of p u p i l
i n s t r u c t i o n s h a l l n o t be e n t i t l e d t o r e c e i v e
any a p p o r t i o n m e n t o f t h e s t a t e i n t e r e s t and income
f u n d s . Any such f o r f e i t e d moneys s h a l l be
a p p o r t i o n e d by t h e county s u p e r i n t e n d e n t t o t h e
o t h e r elementary d i s t r i c t s of h i s county."
The b r a c k e t e d p o r t i o n o f t h e above s t a t u t e w a s added
by a n amendment i n t h e 1981 l e g i s l a t i v e s e s s i o n and w a s
e f f e c t i v e a t a l l t i m e s during t h i s dispute. S e c t i o n 1,
Ch. 148, L a w s of Montana ( 1 9 8 1 ) .
The Missoula County h i g h s c h o o l d i s t r i c t w a s f o r c e d
t o c l o s e i t s h i g h s c h o o l s 18 days e a r l i e r t h a n t h e r e q u i r e d
180 day school term because of a teachers' strike. The
total amount of interest and income monies to which the
high school district would have been entitled for the school
year 1980-81 was $1,275,735.50.
The Missoula County Attorney, and later the Super-
intendent of Public Instruction, asked the Attorney General
for an opinion as to the effect of section 20-1-301, in view
of the shortened school term and also in light of section
20-9-805(1), MCA, to which we will later advert. The Attorney
General issued an opinion to the effect that the high
school district, by way of penalty, should lose its interest
and income monies and 1/180th of the remaining state equal-
ization aid for each missed school day.
When it appeared that the High School District would
lose the interest and income monies by virtue of the Attorney
General's opinion and the compliance with that opinion by
the Superintendent of Public Instruction, the plaintiff,
Missoula High School Legal Defense Association, a private
association organized in connection with the teachers'
strike, filed action in the District Court for a declaratory
judgment that the high school district was entitled to its
interest and income monies regardless of the statutes. The
District Court so found and issued its order and judgment
which is here appealed.
We first examine the provisions of section 20-1-301,
supra. The District Court concluded that the words of the
statute and its legislative history indicate that the penalty
provision of that section applies only to elementary districts
and not to high school districts. The District Court
further concluded that even if the penalty provision did
apply to high school districts, it would be a denial of due
process for the Superintendent of Public Instruction to
impose such a penalty without first conducting a fact-
finding procedure to determine whether the failure to
provide for at least 180 days of pupil instruction was a
result of willful acts of the school district trustees.
The Superintendent contends that by its interpretation
the District Court amended the penalty provision of the
statute by inserting the word "elementary" thus:
"Any [elementary] district that fails to provide
for at least 180 school days of pupil instruction
shall not be entitled to receive any apportionment
of the state interest and income funds."
The Superintendent contends that such interpretation
violates the equal funding requirements of 1972 Montana
Constitution, Art. X I and the statutory widelines
for interpretation of statutes contained in sections 1-2-101
and 1-2-233, MCA. He further contends that the "plain
meaning rule" adopted by this Court in State v. Cudahy
Packing Co. (1905), 33 Mont. 179, 82 P. 833, 837, is
violated by the District Court's interpretation.
It is obvious that section 20-1-301, MCA, as it is now
constituted, is ambiguous. The 1981 amendment did not clear
up the ambiguity, as the Superintendent contends, but rather
intensified it. The statute speaks of apportioning money
"to the other elementary districts." The provision makes no
sense unless an elementary district has already been referred
to. This is clear from the common understanding of the word
"other" and from ordinary rules of grammar, which this Court
is bound to follow. Steinbrenner v. Love (1942), 113 Mont.
466, 129 P.2d 101, 102. In order to agree with the Super-
intendent, this Court must ignore either the word "other" or
the word "elementary."
There would be no difficulty in applying the statute if
we were dealing here with an elementary -
school district
that had failed to provide 180 school days of pupil instruc-
tion. It is when a high school district is involved, as
here, that the internal conflicts within the statute manifest
themselves to make the statute unworkable. Since this is a
penal statute, admitted on all sides, it must be strictly
construed. State v. State Highway Patrol (1958), 133
Mont. 162, 321 P.2d 612, 613.
Section 20-1-301, MCA, also appears to conflict with
section 20-9-805(1). A study of the legislative history of
section 20-1-301, is instructive to demonstrate such potential
conflict, as well as to indicate how the problem we are
dealing with here arose.
"Interest & income moneys" (I&I) are defined in section
20-9-341, MCA. Essentially our I&I money is derived as
proceeds from land grants, gifts, escheated estates, and
other sources set out in 1972 Mont. Const., Art. XI § 2.
Ninety-five percent of such income must be "equitably
apportioned annually to public elementary and secondary
school districts . . ." 1972 Mont. Const., Art. XI § 5.
Before the adoption of the 1972 Montana Constitution,
section 75-6908, R.C.M. 1947 (Section 258, Ch. 5, Laws of
Montana (1971)), erovided for the distribution by the Super-
intendent from the state treasury of I&I monies on the basis
of the number of school census children through the county
superintendent of schools.
Section 75-7402, R.C.M. 1947 (Section 366, Ch. 5,
Laws of Montana (1971)), provided for a 180 day school
fiscal year and stated that if an elementary district did
not provide a 180 day school year of pupil instruction, it
forfeited the I&I monies to the "other elementary districts."
At that time, under section 75-6909, R.C.M. 1947
(Section 259, Ch. 5, Laws of Montana (1971)), the county
superintendent apportioned the county's I&I monies only to
elementary school districts on the basis of school census
figures .
Prior to the 1972 Constitutional Convention, there were
two sources of state monies which were distributed to school
districts. The I&I monies went only to elementary school
districts. The other form of aid, state equalization monies
under the foundation system, were distributed both to high
school (secondary) districts and to elementary school
districts. The 1972 Montana Constitution, however, changed
the law relating to I&I monies to provide that distribution
of those funds should be made to secondary as well as
elementary school districts. 1972 Mont. Const., Art. X I §
5.
In 1973, the legislature acted with respect to I&I
monies to comport with 1972 Mont. Const., Art. X I § 5.
In an amendment to section 75-6908, R.C.M. 1947 (Section 10,
Ch. 137, Laws of Montana (1973)), it was provided that the
State Board of Land Commissioners should deposit the I&I
monies into the "earmarked revenue fund for state equalization
aid." This provision is now contained in section 20-9-342,
MCA .
Under the present law, therefore, the I&I monies are
integrated with other funds under the foundation program in
the earmarked revenue fund as "state equalization aid."
Section 20-9-343, MCA. The state equalization aid is dist-
ributed and apportioned to provide an annual minimum operating
revenue for elementary and high schools in each county.
Section 20-9-344, MCA. The distribution of state equal-
ization aid, which now includes the I&I monies, is ordered
by the board of public education on the basis of annual
entitlements determined by the Superintendent. Section 20-
9-344 (2)(c), MCA.
This brings us to section 20-9-805(1), MCA, which did
not exist prior to 1979 when it was enacted. That section
provides :
"20-9-805. - -
Rate of reduction - - annual
in
apportionment entitlement. (1) For each
school day short of the minimum number of
school days required by law that a school
district fails to conduct by reason of one
or more unforeseen emergencies or by reason
of any other cause and for which the school
district is not entitled to apportionment
credit, the superintendent of public instruction
shall reduce the equalization apportionment
and entitlement of the district for that
school year by 1/180th."
It appears that the legislature failed to consider
that the I&I monies were now a part of the "equalization
apportionment" referred to in section 20-9-805(1). The
result is that section 20-1-301, the disputed statute here,
requires the elimination of I&I monies from the offending
district, and section 20-9-805(1), includes those I&I monies
in determining the equalization apportionment for which the
entitlement is to be reduced by 1/180th. These confusing
statutes led the attorney general, small blame to him, to
conclude that a school district which failed to conduct 180
school days due to a teachers strike would lose the whole of
the interest and income monies, and a 1/180th reduction of
"remaining state equalization aid for each missed school
day." Obviously section 20-9-805(1), does not include the
word "remaining."
These ambiguous provisions relating to the penalty to
be assessed against any elementary or high school district
that fails to provide 180 school days of pupil instruction
are so conflicting that they require legislative review and
revision. Meanwhile, since these are penal statutes, courts
are powerless to apply them. Statutes which impose penalties,
either civil or criminal, must be clear and explicit, and
where such statutes are so vague and uncertain in their
terms as to convey no meaning, or if the means of carrying
out those provisions are not adequate or effective, the
courts must declare the penal provisions void. State v.
Nagle (1935), 100 Mont. 86, 45 P.2d 1041, 1042-1043.
We point out in passing that section 20-1-301, MCA,
is further ambiguous in that it provides that a high school
district may provide 175 school days of pupil instruction
for graduating seniors, but nevertheless, in its final
sentence states that if a district fails to provide at
least 180 school days of pupil instruction it is not entitled
to interest and income monies. While that ambiguity is not
involved in this case, we point it out to the legislative
draftspersons.
Now to the second issue. The Superintendent contends
that the award of attorney fees and costs was improper in
this case because of 1972 Mont. Const., Art. XI § 3, which
provides that the public school funds shall forever remain
inviolate, guaranteed by the state against loss or diversion.
The respondent contends that the attorney fees are
proper under the "common fund" doctrine.
Art. XI § 3, is not violated when a school district
expends funds to preserve or properly administer school
funds. The Superintendent admitted the power of school
districts to hire private attorneys when necessary, and that
school funds could be used for the payment of the legal
expenses thus incurred.
In Means v. Montana Power Co. (1981), Mont .- I
625 P.2d 32, 38 St-Rep. 351, we said:
"The 'common fund' concept provides that
when a party through active litigation
creates, reserves or increases a fund, others
sharing in the fund must bear a portion of the
litigation costs including reasonable attorney
fees. The doctrine is employed to spread the
cost of litigation among all beneficiaries so
that the active beneficiary is not forced to
bear the burden alone and the 'stranger' (i.e.,
passive) beneficiaries do not receive their
benefits at no cost to themselves. See Vincent,
supra, 557 F.2d at 769.
"The doctrine is well recognized and has been
quoted in several Montana cases. [Citing
cases.]" 625 P.2d at 37.
The actions of the respondent to preserve for the
Missoula County high school district the interest and monies
that it would otherwise be entitled to receive bring the
respondent within the "common fund doctrine." Accordingly,
it is entitled to recover reasonable attorney fees and costs
incurred in that effort out of the common fund.
We therefore affirm the order and judgment of the
District Court and remand the cause to the District Court
for an evidentiary hearing with respect to attorney fees and
costs to which respondent is entitled by reason of this
appeal. The matter of attorney fees to be awarded on appeal,
where proper, is completely within our prerogative, but when,
as here, we find an evidentiary hearing is necessary, we
request and order the District Court to determine a reason-
able attorney fee and costs for appeal and to submit the
same to us in an order for of our approval. Meanwhile, time
for petitions for rehearing and remittitur shall run from
the date hereof in the usual course.
I
J Justice
W e Concur:
Chief J u s t i c e