Opinion ID: 2320890
Heading Depth: 1
Heading Rank: 3

Heading: Finding of Good Faith

Text: The Stipulation provides in part: [I]n the event of a rate increase by IDDI [DDS and Region 10] agree to use their best reasonable efforts to secure additional funding to cover any IDDI rate increase consistent with He-M 503.... The parties agree to cooperate in good faith regarding these issues. The petitioners argue that the trial court erred when it found that DDS and Region 10 acted in good faith to use their best reasonable efforts to secure additional funding to accommodate the increased rates at IDDI. This finding was unsupported by the evidence, the petitioners argue, and constituted an unsustainable exercise of discretion. Findings of fact are binding upon us unless they are not supported by the evidence or are erroneous as a matter of law. Mahoney v. Town of Canterbury, 150 N.H. 148, 150, 834 A.2d 227 (2003). Good faith performance or enforcement of a contract emphasizes faithfulness to an agreed common purpose and consistency with the justified expectations of the other party; it excludes a variety of types of conduct characterized as involving `bad faith' because they violate community standards of decency, fairness or reasonableness. Harper v. Healthsource New Hampshire, 140 N.H. 770, 776, 674 A.2d 962 (1996) (quotation omitted). Thus, the question before us is whether the evidence supports the trial court's finding that the respondents were faithful to the agreed common purpose that they would use their best reasonable efforts to secure additional funding. The trial court based its finding upon the following evidence. Matthew Ertas, the administrator of the Bureau of Developmental Services, testified that DDS depends upon the legislature for its funding. In 2004, DDS had to postpone paying over $2,000,000 in bills until the next fiscal year because it did not have enough funding to pay for all of the services to developmentally disabled people that it had committed to pay. The trial court also heard testimony from Dennis Powers, the executive director of the Association of Area Agencies, who testified that, since 1994, there has been a statewide waiting list of more than 200 people with priority one status, meaning that their developmental disabilities put them most immediately in need of services. Powers also testified that this waiting list receives an average of 110 new applicants each year. Both Ertas and Powers testified that the respondents' inability to meet the needs of all eligible disabled people results from a lack of funding from the legislature to DDS. The trial court also considered evidence that, despite the budgetary constraints described above, the respondents increased Robin's allotted funding after IDDI increased its rates. The parties stipulated that, beginning in 2000, the respondents increased Robin's annual funding from $95,000 to $100,000. In 2002, they made a one-time payment to IDDI of $5,000. In 2003, the respondents made a one-time payment to IDDI of $7,500. The trial court found, based upon the parties' stipulated facts, that the amount spent on Robin is more than double the amount allotted for the care of the average developmentally disabled person in New Hampshire. William Dillon, the finance director for Region 10, testified that, despite a deficit in Region 10's operating budget over the past five years, funding for Robin's care has increased by six percent. Such a substantial increase in funding, Dillon testified, is generally only seen in individuals whose needs have drastically changed. Dillon also testified that IDDI's rates have increased by 19 percent since the parties signed the stipulation agreement, and that Region 10 could only meet that rate increase by substantially increasing its deficit. Based upon the facts stated above, the trial court found that the respondents acted in good faith to use their best reasonable efforts to secure additional funding to cover any IDDI rate increase. Considering this evidence of increased funding for Robin despite budgetary constraints, we cannot conclude that the trial court's finding was unsupported by the evidence or erroneous as a matter of law.