Judge declines to dismiss West Bath’s cost-sharing case against RSU

Posted June 12, 2013, at 11:36 a.m.

BATH, Maine — A Sagadahoc County Superior Court judge has denied all four defendants’ motions to dismiss West Bath’s lawsuit against Regional School Unit 1.

Justice Andrew Horton’s order, dated June 7, means that West Bath’s lawsuit, in which it seeks to recover approximately $1.9 million it claims it was overcharged by RSU 1 over the course of four fiscal years, will proceed to pretrial discovery. A conference of counsel will be called shortly to establish a case schedule, Horton advised.

Jonathan Davis, town administrator in West Bath, announced Horton’s decision late Tuesday.

“The [West Bath] Board of Selectmen is pleased with the Superior Court’s decision and is glad that all of these procedural motions have been taken care of such that the parties can now proceed to litigate the merits of this case,” Davis said. “It is regrettable that West Bath had to resort to litigation to have its $1.9 million claim taken seriously, but the selectmen are hopeful that the case will now proceed at a faster pace, and perhaps even settle, so that all parties can ultimately put this matter behind them.”

RSU 1, Bath, Woolwich and Arrowsic are the defendants.

In his order, Horton noted RSU 1 had incorrectly allocated and assessed its operating costs “borne locally by West Bath and RSU 1’s other participating municipalities.” The error spans a four-year period, he wrote.

The principals last met in court May 7, when Horton made no ruling on the motion to dismiss but commented such a motion “could stand” and that West Bath could take new action based on “extraordinary circumstances.”

Regarding “extraordinary circumstances,” Horton wrote that West Bath’s counsel indicated that the town had made efforts to investigate whether the correct formula was being used, and was given false or misleading information in response.

All along, RSU 1 and the other defendants have claimed that West Bath brought its claims too late, and that West Bath did not have standing to challenge the overcharges in court. Moreover, the defendants said, there is no remedy because RSU 1 and the towns cannot re-assess taxpayers.

In his 15-page June 7 ruling, Horton rejected all of those arguments.

Contacted late Tuesday afternoon, Tim Harkins, chairman of the RSU 1 Board of Directors, said it was the first he had heard of Horton’s ruling.

“It’s out of the hands of the RSU and the communities and in the hands of the courts,” Harkins said, “so we’ll just have to wait for the outcome.”

Horton also ruled that the defendants’ premise that the entire case is subject to dismissal for failure to file within the Rule 80B deadline is not necessarily correct.

“Many of West Bath’s claims in both the first amended complaint and the proposed second amended complaint are equitable claims against the defendant municipalities rather than against the RSU,” he wrote. “Restitution based on unjust enrichment and/or mistake is clearly recognized as a cause of action.”

The defendants also argue that West Bath lacks standing because it simply acted as a tax collector and has not itself sustained any “cognizable loss or injury.” Horton referred to case studies in ruling against that argument.

Regarding lack of remedy, Horton noted that the defendants say West Bath cannot seek reimbursement on behalf of its taxpayers because “exact reimbursement cannot be achieved.”

The court, however, “doubts that such exactitude is required,” he wrote.

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