No. 81-436 IN THE SUPREME COURT OF THE STATE OF MONTANA 1981

MISSOULA HIGH SCHOOL LEGAL DEFENSE ASSOCIATION, Plaintiff and Respondent,

SUPERINTENDENTOF PUBLIC INSTRUCTION OF THE STATE OF MONTANA, and ED ARGENBRIGHT, et al., Defendants ,andAppellants.

Appeal from: District Court of the Fourth Judicial District, In and for the County of Missoula Honorable James B. Wheelis, Judgepresiding. Counsel of Record: For Appellants: JohnW.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~IMr. Justice John C. Sheehy delivered the Opinion of the Court.

This is an appeal by the Superintendent of Public Instruction of the Stateof Montana from an adverse ruling ina declaratoryjudgment and injunction action issued by the DistrictCourt, Fourth Judicial District, Missoula County. The ~istrict Court ordered the Superintendent topay $1,275,735.50 toa Missoula County high school district and awarded counsel for the respondent attorney fees and costs of $2,177.00 outof the funds tobe sopaid. We affirm theDistrictCourt. The Superintendent contends that the District Court erred inits interpretation and application of section 20-1-301, MCA, and that it further erred in awarding attorney fees to the respondent. The disputed statutefollows: "20-1-301. School fiscalyear. The school fiscalyear shallbegin on July 1and end on June 30. Atleast 180 school days of pupil instruction shallbe conducted during each school fiscalyear, [except that 175 days of pupil instruction for graduating seniors may be sufficientasprovided in20-9-313, or] unless a variance for kindergarten has been granted under 20-1-302 or a district is granted a variance under the provisions of chapter 9, part 8, of this title. Any districtthat fails toprovide for atleast 180 school days of pupil instruction shallnot be entitled toreceive any apportionment of the stateinterest and income funds. Any such forfeitedmoneys shallbe apportioned by the county superintendent tothe other elementary districtsof his county." The bracketed portion of the above statutewas added by an amendment inthe 1981 legislative session and was effectiveatalltimesduring thisdispute. Section 1, Ch. 148, Laws of Montana (1981). The Missoula County high school districtwas forced toclose its high schools 18 days earlier than the required180 day school term because of a teachers' strike. The total amount of interest and incomemonies to which the high school districtwould have been entitled for the school year 1980-81was $1,275,735.50. TheMissoula CountyAttorney, and later the Superintendent 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 wewill 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 incomemonies and 1/180th of the remaining state equalization aid for eachmissed 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 Superintendentof Public Instruction, the plaintiff, Missoula High School Legal Defense Association, a private associationorganized 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, itwould be a denial of dueprocess for the Superintendentof Public Instruction to impose such a penalty without first conducting a factfinding procedure to determine whether the failure to provide for at least 180 days of pupil instructionwas 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 statuteby inserting theword "elementary"thus: "Any [elementary] district that fails to provide for at least 180 school days of pupil instruction shallnot 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 1972Montana Constitution,Art. XIand the statutory widelines for interpretationof 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 Superintendentcontends, 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),113Mont. 466, 129 P.2d 101, 102. In order to agree with the Superintendent, this Courtmust ignore either the word "other" or the word "elementary."There would be no difficulty in applying the statute if

we were dealing herewith an elementary school district - that had failed to provide 180 school days of pupil instruction. It iswhen a high school district is involved, as here, that the internal conflicts within the statute manifest themselves tomake the statute unworkable. Since this is a penal statute, admitted on all sides, itmust 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 conflictwith section 20-9-805(1). A study of the legislative history of section 20-1-301, is instructive to demonstrate suchpotential 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&Imoney is derived as proceeds from land grants, gifts, escheated estates, and other sources set out in 1972Mont. Const., Art. XI § 2. Ninety-five percent of such income must be "equitably apportioned annually to public elementary and secondary school districts 

# . .." 1972Mont. Const., Art. XI § 5. Before the adoption of the 1972Montana Constitution, section 75-6908,R.C.M. 1947 (Section 258,Ch. 5, Laws of Montana (1971)),erovided for the distribution by the Superintendent from the state treasury of I&Imonies 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 fiscalyear and stated that if an elementary district didnot provide a 180 day school year of pupil instruction, it forfeited the I&I monies to the "otherelementary districts." At that time, under section 75-6909,R.C.M. 1947 (Section259, Ch. 5, Laws of Montana (1971)),the county superintendent apportioned the county's I&Imonies only to elementary school districts on the basis of school census figures

# . Prior to the 1972 Constitutional Convention, there were two sources of statemonies which were distributed to school districts. The I&Imonies 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 1972Montana Constitution, however, changed the law relating to I&Imonies to provide that distribution of those funds should be made to secondary as well as elementary school districts. 1972 Mont. Const., Art. XI § 5. In 1973, the legislature acted with respect to I&I monies to comport with 1972 Mont. Const., Art. XI § 5. In an amendment to section 75-6908, R.C.M. 1947 (Section10, Ch. 137, Laws of Montana (1973)), itwas provided that the State Board of Land Commissioners should deposit the I&I monies into the "earmarkedrevenue 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 integratedwith other funds under the foundation program in the earmarked revenue fund as "stateequalization aid." Section 20-9-343,MCA. The state equalization aid is distributed and apportioned to provide an annual minimum operatingrevenue for elementary and high schools in each county. Section 20-9-344,MCA. The distribution of state equalization aid,which now includes the I&Imonies, 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 1979when it was enacted. That section provides: "20-9-805. -- Rate of reduction -- in annual apportionment entitlement. (1) For each schoolday short of theminimum number of schooldays 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&Imonies 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&Imonies 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, smallblame to him, to conclude that a schooldistrictwhich failed to conduct 180 schooldays 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 districtthat fails to provide 180 schooldays 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 themeans of carrying out thoseprovisions are not adequate or effective, the courtsmust declare the penal provisions void. State v. Nagle (1935), 100Mont. 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 districtmay 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 incomemonies. 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 costswas improper in this case because of 1972Mont. 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 Superintendentadmitted the power of school districts to hire private attorneyswhen 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. "Thedoctrine is well recognized and has been quoted in severalMontana 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 itwould otherwisebe entitled to receive bring the respondent within the "common fund doctrine." Accordingly, it is entitled to recover reasonableattorney 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. Thematter of attorney fees to be awarded on appeal, where proper, is completelywithin our prerogative, but when, as here,we find an evidentiary hearing is necessary,we request and order the DistrictCourt to determine a reasonable 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. 

# J Justice IWeConcur:

Chief Justice