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THE SUPREME COURT OF NEW HAMPSHIRE

___________________________

Cheshire 

No. 2017-0422

BEDFORD SCHOOL DISTRICT & a.

v.

STATE OF NEW HAMPSHIRE & a.

Argued: April 17, 2018

Opinion Issued: August 17, 2018

Wadleigh, Starr & Peters, P.L.L.C., of Manchester (Michael J. Tierney on 

the brief and orally), for the plaintiffs.

Gordon J. MacDonald, attorney general (Anne M. Edwards, associate 

attorney general, on the brief and orally), for the defendants.

BASSETT, J. The State together with the other defendants (the New 

Hampshire Department of Education; Margaret Wood Hassan, individually; 

Christopher T. Sununu, as Governor; Virginia M. Barry, individually; and 

Frank Edelblut, as Commissioner of the New Hampshire Department of 

Education) (collectively, the “defendants”) appeal an order of the Superior Court 

(Ruoff, J.) granting the plaintiffs, Bedford School District and William Foote 

(collectively, “Bedford”), attorney’s fees in a case that Bedford had filed to 

recover adequate education funding that the State withheld in fiscal year 2016 

because of a statutory limit on state funding imposed under RSA 198:41, III(b) 
2

(Supp. 2015) (repealed 2015, repeal effective July 1, 2017). On appeal, the 

State argues that because the trial court specifically declined to find that the 

State had acted in bad faith in this litigation, the trial court unsustainably 

exercised its discretion in awarding attorney’s fees. The State also argues that 

Bedford waived its right to attorney’s fees when it accepted education funds 

appropriated by a bill that contained a waiver provision. We reverse. 

RSA 198:40-a (Supp. 2017) sets forth the formula that the New 

Hampshire Department of Education uses to determine “the cost of an 

adequate education for each municipality based on the . . . pupils who reside in 

that municipality.” RSA 198:40-a, III. Before it was repealed, RSA 198:41,

III(b) limited the total education grant a municipality could receive to a 

percentage of the previous year’s grant. See RSA 198:41, III(b). 

In 2015, the City of Dover brought a case against the State challenging

the constitutionality of the limit that RSA 198:41, III(b) imposed on adequate 

education funding. See Dover v. State, Strafford County Superior Court, No. 

219-2015-CR-00312 (Tucker, J.). In the Dover case, the parties reached an

agreement (the “Dover Stipulation”) in August 2015, which stated:

In the event that the City is successful in obtaining a preliminary 

or permanent injunction against the cap required by R.S.A. 198:41 

III(b) . . . the State will make a supplemental payment equal to the 

sum total of all funds withheld in any education adequacy 

payments made on or after September 1, 2015, because of the 

application of the cap, within ten (10) business days [of the time 

the order becomes a final judgment]. 

Further, in the interests of judicial economy and based on the fact 

that this is a constitutional challenge to a systematic statewide 

payment, the State agrees that it will be bound by any rulings 

issued in this matter regarding the constitutionality of the cap 

contained in R.S.A. 198:41, III(b) as it applies to all other school 

districts in the state and that other school districts shall not be 

required to intervene or join this action, or file separate actions to 

benefit from any injunctive or declaratory order issued herein. 

In June 2016, while the Dover case was still pending, Bedford sought to 

“enjoin[] the application of the adequacy funding cap imposed by RSA 198:41,

III(b).” The trial court denied the motion, reasoning that the plaintiffs had 

“failed to sustain their burden of demonstrating irreparable harm” because

“any short fall [Bedford] experienced in FY 2016 will likely be remedied by the 

ruling on the similar issue presented in Dover v. State.” In September 2016, 

the trial court in Dover granted a permanent injunction, ruling “that the 

percentage cap is unconstitutional when it operates to reduce the full amount 

of the statutory grant.” The State did not appeal that decision. Nor, notably, 
3

did the State distribute the funds withheld from Bedford within ten business 

days after the order became a final judgment. 

In November 2016, Bedford moved for summary judgment, seeking a

court order that the State pay Bedford $4,287,533 — the amount that had 

been withheld in fiscal year 2016 due to the cap. Bedford also requested 

“reasonable attorneys’ fees for needing to bring this action and motion.” In its 

objection, filed in January 2017, the State asserted that the Dover Stipulation 

did not, in fact, require the State to pay the withheld funds to Bedford within 

10 days of the time the Dover order became a final judgment. The State also 

argued that it should not be required to pay Bedford’s attorney’s fees.

In January 2017, House Bill (HB) 354-A was introduced in the legislature 

to appropriate “additional adequate education grants to certain municipalities

as calculated in RSA 198:40-a and 198:41.” The requested appropriation 

included the amount withheld from Bedford. As of early April 2017, the bill 

had not passed. Nonetheless, on April 6, the trial court “order[ed] the State to 

pay Bedford School District the withheld funds for FY 2016 within 30 days of 

April 1, 2017.” The court also ordered the State to pay Bedford’s attorney’s

fees, citing Harkeem v. Adams, 117 N.H. 687, 691 (1977), for the proposition 

that an exception to the general rule that parties are responsible for their own 

attorney’s fees is warranted “[w]here an individual is forced to seek judicial 

assistance to secure a clearly defined and established right, which should have 

been freely enjoyed without such intervention.” (Quotation omitted.) Although 

the trial court observed that it “stop[ped] short of finding bad faith,” it ruled

that:

an award of attorney’s fees in this matter is appropriate because 

the State has always promised to pay, yet never has. . . . This 

lawsuit was necessary to enforce compliance with the statute and 

to compel the State to comply with promises and representations it 

made to both the Court . . . and Plaintiffs . . . .

The court gave Bedford thirty days “to file an affidavit outlining its request for 

reasonable attorney’s fees.”

On April 27, 2017, the legislature passed HB 354-A, which appropriated 

$4,287,533 to Bedford. The bill provided that:

Acceptance of a disbursement by a municipality under this act 

shall constitute a waiver and full release of any and all claims it 

may have against the state of New Hampshire . . . arising out of the 

state’s adequate education payments between September 1, 2008 

and June 30, 2016.

Laws 2017, 28:1. On May 1, the State wired the $4,287,533 to Bedford. 
4

Shortly thereafter, Bedford’s attorney submitted an affidavit in support of 

its request for attorney’s fees. In response, the State argued that an award of 

attorney’s fees was “unwarranted.” The State alternatively argued that,

“Bedford released its claim for attorney’s fees when it accepted, without protest 

or reservation, the funds made available to [it] via HB 354-A.” On June 19, the 

court ordered the State to pay Bedford $21,479 in attorney’s fees that were 

“directly attributable” to the “State’s schizophrenic representations and 

litigation strategy in this case.” This appeal followed.

On appeal, the State argues that the trial court unsustainably exercised 

its discretion in awarding Bedford attorney’s fees because the exception to the 

general rule that each party pays its own attorney’s fees cannot be applied in 

the absence of a finding that the losing party has acted in bad faith. See

Harkeem, 117 N.H. at 690-91. The State also argues that, even if the award of 

attorney’s fees was adequately supported by the record, it should be vacated 

because “Bedford waived its claim for fees when it accepted the payment 

offered by HB 354-A.” Bedford counters that the trial court sustainably 

exercised its discretion in awarding attorney’s fees because Harkeem does not 

require an explicit finding of bad faith and, alternatively, the fee award could be 

affirmed on other grounds. Bedford also argues that its receipt of funds from 

the State did not operate as a waiver of its right to an award of attorney’s fees. 

Because we conclude that, by accepting funds appropriated by HB 354-A, 

Bedford waived its right to an award of attorney’s fees, we need not decide 

whether the trial court’s award of those fees was a sustainable exercise of 

discretion. 

As a threshold matter, Bedford contends that the State did not properly 

preserve for appeal the issue of waiver because it did not argue waiver in its 

summary judgment pleadings. Bedford further argues that, “even if the 

argument was timely made but not considered, the State was obligated to move 

for reconsideration . . . in order to preserve this argument for appellate review.” 

We disagree. HB 354-A did not become effective until April 27, 2017, and 

Bedford did not receive the appropriated funds until May 1. On May 18, when 

responding to Bedford’s affidavit and request for fees, the State argued that 

“Bedford’s claim for attorney’s fees should . . . be denied in its entirety . . .

[because] by accepting the funds provided by HB 354[-A], Bedford released the 

State from that claim.” To preserve an argument for judicial review, we 

generally require issues to be raised at the earliest possible time because trial 

forums should have a full opportunity to come to sound conclusions and 

correct errors in the first instance. See Sklar Realty v. Town of Merrimack, 125 

N.H. 321, 328 (1984). Here, because the State raised the issue of waiver at the 

earliest possible time, and the trial court implicitly rejected the State’s waiver 

argument when it awarded fees, we conclude that the waiver argument is 

preserved. 
5

Addressing the parties’ waiver arguments requires us to engage in 

statutory interpretation. In matters of statutory interpretation, we are the final 

arbiters of the legislature’s intent as expressed in the words of the statute 

considered as a whole. State v. Actavis Pharma, 170 N.H. 211, 217 (2017), 

cert. denied, 138 S. Ct. 1261 (2018). When interpreting statutes, we ascribe 

the plain and ordinary meanings to the words used. Id. Our goal is to apply 

statutes in light of the legislature’s intent in enacting them and in light of the 

policy sought to be advanced by the entire statutory scheme. Id.

Bedford first asserts that, because the funds were “provided by wire 

transfer,” Bedford did not “accept” them within the meaning of the statute. The 

State counters that Bedford “fails to explain how receiving those funds by wire 

transfer (without protest or reservation as far as the record indicates) differs 

from an ‘acceptance’ of them.” We agree with the State. 

HB 354-A does not define “acceptance.” When a term is not defined in a 

statute, we look to its common usage, using the dictionary for guidance. See

K.L.N. Construction Co. v. Town of Pelham, 167 N.H. 180, 185 (2014). 

Webster’s Third New International Dictionary defines “acceptance” as “an 

agreeing either expressly or by conduct to the act or offer of another so that a 

contract is concluded and the parties become legally bound.” Webster’s Third 

New International Dictionary 11 (unabridged ed. 2002). Black’s Law Dictionary

defines “acceptance” as “[a]n offeree’s assent, either by express act or by 

implication from conduct, to the terms of an offer in a manner authorized or 

requested by the offeror, so that a binding contract is formed.” Black’s Law 

Dictionary 14 (10th ed. 2014). Here, Bedford acknowledges that “[o]n May 1, 

2017, the State paid the $4,287,533.00 due to [Bedford].” Moreover, at oral 

argument, Bedford conceded that at the time it received the payment, “the 

town was absolutely aware of the language in HB 354[-A].” Accordingly, we 

conclude that Bedford “accepted” the funds within the meaning of HB 354-A 

when it received the funds, with full knowledge that HB 354-A contained a 

waiver provision, yet did not return the payment, hold the funds in escrow, or 

inform the State that, although it intended to keep the funds, it did not intend 

to waive its claim for attorney’s fees. 

Bedford next argues that it did not waive its right to an award of 

attorney’s fees because the funds that it received from the State were not 

disbursed pursuant to HB 354-A, but rather were “wired . . . in compliance 

with the Superior Court’s Order.” The State counters that “the fact that the 

court ordered the State to pay Bedford the shortfall in adequacy aid . . . does 

nothing to change the fact that the funds to make the payment were disbursed 

by HB 354-A.” We agree with the State. We construe Bedford’s argument as 

an assertion that, as a matter of law, payment could not be disbursed

pursuant to HB 354-A and, at the same time, comply with the trial court order. 

Bedford cites no legal authority for this proposition, and we see no reason why 

the fact that the trial court ordered the payment means that the payment could 
6

not also be disbursed pursuant to, and subject to the conditions set forth in

HB 354-A. The two need not be mutually exclusive. On April 6, 2017, the trial 

court ordered the State to pay Bedford. On April 27, the legislature

appropriated the funds to be paid to Bedford and other municipalities. Laws 

2017, 28:1. HB 354-A states “the commissioner of the department of 

education shall disburse a lump sum to each municipality as follows: . . . 

Bedford $4,287,533.” Laws 2017, 28:1 (emphasis added). The State paid 

Bedford $4,287,533 on May 1. We conclude that the payment was disbursed 

pursuant to HB 354-A. 

Bedford also contends that we should reject the State’s waiver argument 

because “[t]he State does not explain how passage of HB 354[-A] on April 27, 

2017 could change the Superior Court’s April 6, 2017 Order awarding fees. HB 

354[-A] was only effective after April 27, 2017 or three weeks after the Superior 

Court already awarded fees . . . .” The State responds that “even if the trial 

court correctly ruled that Bedford was entitled to its attorneys’ fees, the final 

order awarding those fees should still be vacated because, by operation of the 

plain language of HB 354-A, Bedford has waived that claim.” We agree with 

the State. As explained above, notwithstanding the fact that the trial court 

ordered the State to pay Bedford’s attorney’s fees, Bedford waived its right to 

those fees when it accepted funds disbursed by HB 354-A.

Bedford also argued that the receipt of funds did not operate to waive its 

right to attorney’s fees because the attorney’s fee claim is not a claim “arising 

out of the state’s adequate education payments between September 1, 2008 

and June 30, 2016.” Laws 2017, 28:1. Bedford contends that the waiver 

provision in “HB 354[-A] simply does not apply” because the trial court 

awarded attorney’s fees “as a result of the State’s contradictory representations 

regarding the applicability of the Stipulation,” not because of “the State’s 

failure to make the constitutionally required funding payments.” The State 

counters that, “[b]y the plain terms of the statute,” Bedford waived its right to 

attorney’s fees because these fees were “incurred in seeking to recover its 

‘capped’ adequacy payments from fiscal year 2016.” We agree with the State. 

Although the trial court awarded fees based upon the “litigation strategy 

employed by the State,” the underlying case was brought to recover adequacy 

payments. Bedford acknowledged as much in its motion for summary 

judgment: “This case concerns RSA 198:41, [III](b) and the State’s 

constitutional obligations under Part II, Article 83, of the New Hampshire 

Constitution to fund a constitutionally adequate education for . . . the 2016 . . . 

Fiscal Year[].” Therefore, we conclude that the award of attorney’s fees falls 

within the scope of the statutory waiver, as it is a “claim[] . . . arising out of the 

state’s adequate education payments between September 1, 2008 and June 30, 

2016.” Laws 2017, 28:1.

 

At oral argument, for the first time, Bedford advanced two additional 

arguments as to why its receipt of funds from the State did not operate to waive 
7

its right to attorney’s fees: first, because RSA 198:42, II allows money from the 

general fund to be used to pay for adequate education grants under certain 

circumstances, in fact the funds may not have been disbursed pursuant to HB 

354-A, RSA 198:42, II (Supp. 2017); and, second, HB 354-A gives rise to a 

“separation of powers problem” because, by including the waiver provision, the 

legislature effectively nullified a trial court order. Because both of these 

arguments were raised for the first time at oral argument, we decline to 

address them. See In the Matter of Gendron & Plaistek, 157 N.H. 314, 319-20 

(2008) (stating that we generally decline to address issues raised for the first 

time at oral argument because neither the parties nor the court will be 

prepared to discuss an issue not addressed in the briefs).

Accordingly, for the reasons set forth above, we conclude that Bedford 

waived its right to an award of attorney’s fees.

 

Reversed.

LYNN, C.J., and HICKS and HANTZ MARCONI, JJ., concurred.