VILLAGE LAW, §4-412: A village may not purchase liability
insurance, nor agree to indemnify third parties against
claims for damage to vehicles owned by the village fire
This is in reply to your inquiries concerning the relationship between a village and the village fire department. You state that a fire protection contract will be negotiated among the town board, on behalf of a fire protection district, the incorporated volunteer fire company which constitutes the village fire department, and the village.
You ask whether the village may agree in the contract to be responsible for maintaining the requisite liability insurance on the fire-fighting equipment used by the fire company, all of which is owned by the company. In addition, you ask whether the contract may provide that the village and the fire company, but not the town, are responsible for the cost of damage to equipment, owned by the fire company, used while responding to or returning from an alarm within the district. Finally, you ask about the liability of the village when an outside fire company responds to a call for assistance from within the fire protection district.
Initially, we note that although the volunteer fire company in question is a corporation, separate and distinct from the village, a volunteer fire company within a village constitutes the village fire department and is subject to the control of the village board of trustees (Village Law, §§10-1000, 10-1008; Not-For-Profit Corporation Law, §1402[e]). Therefore, this Office has concluded that a village must be a party to any contract entered into by the village fire department to furnish fire protection outside the village (1987 Opns St Comp No. 87-73, p 110; 1981 Opns St Comp No. 81-347, p 380; 26 Opns St Comp, 1970, p 189). Under section 209-d of the General Municipal Law, however, no such contractmay be made without the consent of the fire company which constitutes the village department.
Your first question concerns the provision in the contract which would obligate the village to maintain a specified amount of liability insurance on the equipment owned by the fire department. We are aware of no authority for the village to purchase liability insurance on equipment owned by a volunteer fire department (Opn 87-76, supra; cf. Town Law, §176; 18 Opns St Comp, 1962, p 303, concerning the authority of a fire district to purchase liability insurance to cover fire company vehicles). In addition, we have previously concluded that a village may not make a gift of money to the fire department to be used for the purchase of liability insurance in connection with equipment owned by the fire department (4 Opns St Comp, 1948, p 396; NY Const, art VIII, §1).
With respect to the provision in the contract under which the village and the fire company would agree that the town shall not be liable for damage to fire equipment sustained while providing fire protection services to the fire protection district, we note that such a clause is consistent with the "definite sum" requirement imposed by section 184 of the Town Law. Under section 184(5), a fire protection contract entered into by a town, on behalf of a fire protection district, must "specify a definite sum to be paid each year for all the services to be rendered thereunder." This Office has interpreted this provision to mean that the sum specified in the contract is in lieu of any additional items of cost, including materials and equipment used in rendering fire protection services, loss or damage to fire equipment, and premiums for insurance coverage against such loss or damage (1982 Opns St Comp No. 82-355, p 449; 1980 Opns St Comp No. 80-757, unreported; 1974 Opns St Comp No. 74-520, unreported).
A single, limited exception to the "definite sum" requirement is found in section 30(12) of the Volunteer Firefighters' Benefit Law (VFBL). Under section 30(12), the contract is generally required to provide that the party receiving fire protection pay for any increases in the cost of VFBL insurance attributable to the protected area during the contract term unless a sum for such increased cost has been specifically included in the contract price. Aside from this exception, it is assumed that the parties will take the costs of providing the fire protection into consideration when determining the specified annual sum.
Although the contract would provide that the town will not be responsible for any claim paid in connection with loss, injury or damage to equipment used in responding to or returning from fires, it would provide that the village and the fire department would be responsible for such claims. As noted above, however, the village is not authorized to purchase liability insurance for fire company vehicles. Similarly, we are aware of no statutory authority for a village to pay the costs for damages to a fire company's vehicles, absent a claim based on the negligence of the village (cf. Village Law, §10-1000 stating that a village has the care, custody and control of all village property of the fire department).
While the village may not pay for the liability insurance on or damages to equipment owned by the fire company directly, the fire company may pass on these costs under a fire protection contract. In this regard, we note that General Municipal Law, §209-d provides that a portion of the consideration stated in a fire protection contract may be paid directly to the volunteer fire department or company providing the services. The moneys paid to the department or company may be expended only for department or company purposes. There is no limitation on the percentage of consideration which may be paid to the department or company unless the municipality in which the department or company is located owns all of the fire equipment or apparatus necessary to carry out the contract, in which case the department or company may not be paid in excess of thirty-five percent of the proceeds. This authorization for the company to receive a greater percentage of the proceeds when it owns equipment used in providing protection under the contract is, we believe, a recognition of the company's responsibility with respect to damage to its own property.
Based on the above, we conclude that, where a village has entered into a contract with the village fire department for fire protection within the village, the definite sum stated in that contract may include the amount necessary for the fire department to purchase insurance for its equipment (see Village Law, §4-412 which, among other things, requires that such a contract "specify a definite sum to be paid each year..."; Opn No. 87-76, supra). Similarly, the definite sum stated in the fire protection contract with the town, on behalf of the fire protection district, may reflect that portion of the cost of insurance attributable to the provision of fire protection within the fire protection district (see Town Law, §184; Opn No. 82-355, supra).
In conjunction with the above, the village should consider that, because the fire department is under the control of the village board of trustees, it is conceivable that tort liability on the part of the village could arise from the actions of the department or its volunteer firefighters (see, e.g., Thomas v Consolidated Fire District No. 1 of Town of Niskayuna, 50 NY2d 143, 428 NYS2d 443, 405 NE2d 1009; Knapp v Union Vale Fire Company, Inc., 141 AD2d 509, 529 NYS2d 132; Cook v City of Geneva, 127 Misc 2d 261, 485 NYS2d 497; Cuddy v Town of Amsterdam, 62 AD2d 119, 403 NYS2d 590; Cox v Village of Greenwich, 33 AD2d 264, 306 NYS2d 987). Therefore, the village board of trustees may deem it advisable to purchase liability insurance to cover the village in such an eventuality (Opn No. 87-76, supra; 24 Opns St Comp, 1968, p 654; 4 Opns St Comp, 1948, supra).
Your final question concerns the potential liability of the village when an outside fire company or department responds to a call for assistance within the fire protection district. Under section 209 of the General Municipal Law, fire departments and companies are authorized to answer calls for assistance outside the area regularly served and protected by the department or company. We have concluded that section 209 does not apply to a call answered by a fire company or department in an area regularly served and protected by it pursuant to a contract and for which it receives consideration (Opn No. 82-276, supra).
When a fire company other than the village fire department answers a call for assistance from outside the area it regularly serves, it is subject to the provisions of section 209 of the General Municipal Law. Under section 209(2), any loss or damage to, or expenses incurred in the operation of equipment used in answering the call, and the cost of any materials used in connection with the call are a charge against and paid by the area which issued the call for assistance. Thus, should outside assistance be requested to fight a fire in the fire protection district, the district would be responsible for these costs (see 1981 Opns St Comp No. 81-99, p 98). Conversely, the provision of volunteer firefighters' benefits to firefighters injured while providing outside assistance remains the responsibility of the "home area" (VFBL §30; 1982 Opns St Comp No. 82-164, p 211; Opn No. 81-99, supra). With respect to negligence of a fireman in responding to a call for assistance, section 209(1) provides that a city, village, fire district or town shall be liable for the negligence of firemen of the city, village, fire district, or town fire department, respectively, occurring in the performance of their duties, in the same manner and to the same extent as if such negligence occurred in the performance of their duties within the area regularly served and protected by such department.
April 19, 1989