Municipalities are not automatically entitled to an award of attorney’s fees when they successfully enforce regulatory statutes and ordinances. This case involved enforcement of excavation standards under RSA Chapter 155-E.
RSA 155-E:4-a, II prohibits excavation “within 50 feet of the boundary of a disapproving abutter….” In a 50-foot setback area on his gravel pit site, Bedard disturbed the surface and used the material to grade a 45-degree slope as part of excavation reclamation. The Town claimed that this disturbance of the setback violated the statute. Bedard petitioned the superior court for a declaratory judgment that the work in the setback area was not “excavation,” because the material was not actually removed from the site. RSA 155-E:1, II defines “excavation” as “a land area which is used, or has been used, for the commercial taking of earth, including all slopes.” Bedard argued that the regrading of material was not “commercial taking of earth.” The trial court agreed with the Town but denied the Town’s request for an award of attorney’s fees for its enforcement efforts. Bedard appealed to the Supreme Court, and the Town cross-appealed on the attorney’s fees issue.
The Supreme Court affirmed the ruling that Bedard had violated the statute, emphasizing the phrase “including all slopes” in the definition of “excavation.” Permitting disruption of the soils in the setback area would contravene the statutory protection for setback areas.
Turning to the attorney’s fees issue, the Court stated the general rule that every party must pay its own attorney’s fees and reviewed the three possible grounds for a court to order a losing party to pay the attorney’s fees of the prevailing party: (1) The “bad faith litigation” theory, where the losing party’s conduct is “unreasonably obdurate or obstinate, and where it should have been unnecessary for the successful party to have brought the action.” (2) The “substantial benefit” theory, where the winning party’s litigation “confers a ‘substantial benefit’ upon the general public.” (3) A specific statute authorizing the court to award attorney’s fees to the prevailing party.
First, the Court ruled that Bedard’s violation was not egregious and there was a reasonable basis for Bedard’s misinterpretation of the statute. Therefore, there was no bad faith to support an award of attorney’s fees. Next, the Court discussed the “substantial benefit” theory, citing two examples in which municipalities were liable for attorney’s fees: Silva v. Botsch, 121 N.H. 1041 (1981) (challenge to illegal removal from office); and Irwin Marine, Inc. v. Blizzard, Inc., 126 N.H. 271 (1985). The Court then held, however, that the “substantial benefit” theory does not apply in favor of municipalities. “A governmental entity’s responsibilities include protection of the public interest, and therefore, the award of attorney’s fees for successfully meeting this responsibility is neither necessary nor warranted.” Finally, the Court upheld the trial court’s denial of attorney’s fees under RSA 155-E:10, under which the decision is within the discretion of the superior court, in contrast to RSA 676:17, which requires the award of attorney’s fees to a municipality for successful planning and zoning enforcement action.