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06/09/97 WYOMING VALLEY WEST SCHOOL DISTRICT v.

June 9, 1997

WYOMING VALLEY WEST SCHOOL DISTRICT
v.
NORTHWEST SCHOOL DISTRICT, LAKE-LEHMAN SCHOOL DISTRICT, DALLAS SCHOOL DISTRICT AND WYOMING AREA SCHOOL DISTRICT, APPELLANTS



Appealed From No. 67-E of 1995. Common Pleas Court of the County of Luzerne. Judge LOKUTA.

Before: Honorable Dan Pellegrini, Judge, Honorable Rochelle S. Friedman, Judge, Honorable Samuel L. Rodgers, Senior Judge. Opinion BY Judge Friedman.

The opinion of the court was delivered by: Friedman

OPINION BY JUDGE FRIEDMAN

FILED: June 9, 1997

Northwest School District, Lake-Lehman School District, Dallas School District and Wyoming Area School District (collectively, Districts) appeal from an order of the Court of Common Pleas of Luzerne County (trial court), which granted the Motion for Summary Judgment filed by Wyoming Valley West School District (Wyoming Valley) in its Declaratory Judgment Action, thereby confirming Wyoming Valley's right to terminate its participation in the Consolidated Articles of Agreement for the Establishment and Operation of the West Side Area Vocational-Technical School as of July 1, 1996.

The Districts and Wyoming Valley, five neighboring public school districts, entered into an agreement to establish and operate the West Side Area Vocational-Technical School (Vo-Tech) on June 23, 1966. This original agreement was superseded by the current Consolidated Articles of Agreement for the Establishment and Operation of the West Side Area Vocational-Technical School (Articles), dated May 31, 1974, as amended November 25, 1986.

According to paragraph 18 of the Articles, participating school districts contribute toward the operating expenses of Vo-Tech in proportionate shares based on the average daily membership of pupils from each district attending Vo-Tech from the school year two years prior to the year of funding. (Amendment to the Articles, para. 18, R.R. at 19-20.) Based on enrollment data from the 1994-95 school year, the combined Districts provided forty-one percent (41%) of Vo-Tech's student enrollment and Wyoming Valley provided fifty-nine (59%). (Districts' brief, Exhibit B.) Consequently, Wyoming Valley pays 59% of Vo-Tech's operating costs.

However, with respect to the governing of Vo-Tech, the Articles provide for equal voting representation among the five participating school districts. The Articles establish two governing structures, the Area Vocational-Technical Board (Board) and the Operating Agent (Joint Committee), with the Board delegating the operation, administration and management of Vo-Tech to the Joint Committee. (Articles at para. 8, R.R. at 12.) The Board consists of all the members of the school boards of the participating school districts, and the Joint Committee consists of three school board members from each participating school district, for a total of fifteen, with one vote per member. *fn1 (Articles at para. 10a, R.R. at 13.) The Board takes "actions" by majority vote of the members of the school boards from all five participating school districts, except that approval of the annual budget also requires the affirmative vote of two-thirds of the participating school districts. (Articles at paras. 9a, 9c, R.R. at 12.) Thus, while paying almost 3/5 of Vo-Tech's total expenses, Wyoming Valley has only 1/5 of the voting power in Vo-Tech's governance structure.

Dissatisfied that its share of operating expenses was disproportionate to its voting strength, and alleging that this incongruence rendered it unable to prevent decisions and actions relating to the fiscal affairs and operation of Vo-Tech which, in its view, were inappropriate and imprudent, Wyoming Valley sought to have the Articles modified, pursuant to paragraph 26 of the Articles, to increase its voting power. *fn2 Wyoming Valley stated that, if the Districts refused to consider this possibility, it would terminate its participation in the Articles effective July 1, 1996, pursuant to paragraph 25 of the Articles.

Paragraphs 25 and 26 of the Articles provide:

25. This agreement shall continue in full force and effect for a term or period of thirty years commencing July 1, 1966, and thereafter until otherwise terminated.

26. No change shall be made in this agreement without the consent of each of the Participating School Districts first obtained by the affirmative vote of a majority of the school directors thereof.

(R.R. at 17.) The current dispute involves the differing interpretations over the effect of the language of paragraph 25 on the continuation of Vo-Tech. Wyoming Valley contends that, through its clear and unambiguous language, paragraph 25 establishes Wyoming Valley's right to terminate its participation in the Articles, after expiration of the thirty-year term, without the consent of the other participating school districts. However, the Districts claim that, because the termination provision in paragraph 25 is governed by the unanimous consent provision in paragraph 26, the Articles can be terminated only by unanimous consent of all the participating school districts. Thus, according to the Districts, Wyoming Valley lacks the power to unilaterally terminate the Articles on July 1, 1996, or any other date.

On May 11, 1995, Wyoming Valley filed an Action for Declaratory Judgment seeking a declaration that it may terminate its participation in the Articles unilaterally, with or without cause, effective July 1, 1996, the termination date of the Articles. Preliminary Objections to Wyoming Valley's Complaint were denied, and the Districts then ...


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