This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.
PUBLIC OFFICERS AND EMPLOYEES -- Legal Expenses (reimbursement of private legal fees when town official sued both individually and officially)
SUPERINTENDENT OF HIGHWAYS -- Legal Expenses (recovery of private legal fees when sued both individually and officially)
RATIFICATION -- Claims (legal services)
PUBLIC OFFICERS LAW, §§17, 18: The duty of the State or a municipality to provide a legal defense to an employee under Public Officers Law, §17 or §18 respectively has been equated by the courts to the duty of an insurance company to provide a defense under an insurance policy, and correspondingly the duty to defend has been said to be broader than the duty to indemnify. 1982 Opns St Comp No. 82-243, p 303 and other prior opinions are superseded to the extent they are inconsistent.
You ask whether a town may reimburse a former town superintendent of highways for legal expenses incurred in defending a lawsuit brought against the town and the superintendent in both his individual and official capacities. The litigation disputed the town board's designation of a private road as a highway by use and the highway superintendent's power to maintain the road and ability to use it for access to his own property. The lawsuit is in the process of being settled without a judicial resolution of the disputed factual issue of whether public use and town maintenance of the road was sufficient over a 10-year period to qualify it as a town highway by use under Highway Law, §189.
The acts complained of occurred, and the litigation was commenced, while the superintendent was in office. At all times relevant to this inquiry, the town had in effect a local law authorizing the town, under certain circumstances, to provide a legal defense for town "employees" by the town attorney or an attorney retained by the town board. Section (2)(a) of the local law provides as follows:
Upon compliance by the employee with the provisions of section 3 of this local law, the town shall provide for the defense of the employee in any civil action or proceeding in any state or federal court arising out of any alleged act or omission which occurred or is alleged in the complaint to have occurred while the employee was acting or in good faith purporting to act within the scope of his public employment or duties. (emphasis added)
Section 3 of the local law provides that the duty to defend "shall be contingent upon" (a) delivery of the summons and complaint to the town attorney or town supervisor, and (b) full cooperation of the employee in the defense of the action or proceeding. It appears that the town attorney informally advised the highway superintendent that she would not represent him in his individual capacity, whereupon the superintendent, without the consent of the town board, retained private counsel to defend himself.
It is a general rule that, in the absence of special circumstances, a municipal officer may not retain private counsel at municipal expense without prior express authority such as a State statute, local law, or a collective bargaining agreement (see Corning v Village of Laurel Hollow, 48 NY2d 348, 422 NYS2d 932; 1985 Opns St Comp No. 85-22, p 29; cf. Cahn v Town of Huntington, 29 NY2d 452, 328 NYS2d 672, pertaining to the implied authority of a municipal board or officer to retain counsel). Therefore, since there is no collective bargaining agreement applicable in the instant situation, whether the town may reimburse the superintendent's legal fees depends on whether the reimbursement is authorized by either State statute or the town's local law.
The town's local law was apparently adopted under the authority of Municipal Home Rule Law, §10, prior to the enactment of Public Officers Law, §18 (L 1981 ch 277), which authorizes a "public entity", including a town, to adopt a local law providing for the defense and indemnification of its "employees". Since it is our policy to render opinions only on matters which are of general concern to the municipalities of this State, we do not render opinions to local officials interpreting local enactments. Rather, we believe the meaning and intent of such enactments must be determined, in the first instance, by the local officials responsible for their enactment and administration. Therefore, we express no opinion as to whether the town's local law authorizes reimbursement for the superintendent's legal fees under the facts presented and, if so, whether the superintendent has complied with the procedural requirements of the local law.
We note, however, that the local law appears to authorize representation under circumstances which, in some respects, resemble those under which representation may be provided to State employees pursuant to Public Officers Law, §17 and to municipal employees pursuant to Public Officers Law, §18. Section 17(2)(a) provides as follows:
Upon compliance by the employee with the provisions of subdivision four of this section, the state shall provide for the defense of the employee in any civil action or proceeding in any state or federal court arising out of any alleged act or omission which occurred or is alleged in the complaint to have occurred while the employee was acting within the scope of his public employment or duties; or which is brought to enforce a provision of section nineteen hundred eighty-one or nineteen hundred eighty-three of title forty-two of the United States code and the act or omission underlying the action occurred or is alleged in the complaint to have occurred while the employee was acting within the scope of his public employment or duties. This duty to provide for a defense shall not arise where such civil action or proceeding is brought by or on behalf of the state.
Section 18(3)(a) provides as follows:
Upon compliance by the employee with the provisions of subdivision five of this section, the public entity shall provide for the defense of the employee in any civil action or proceeding, state or federal, arising out of any alleged act or omission which occurred or allegedly occurred while the employee was acting within the scope of his public employment or duties. This duty to provide for a defense shall not arise where such civil action or proceeding is brought by or at the behest of the public entity employing such employee.
Consequently, the authorities construing sections 17 and 18 may be of assistance to the town in construing its own local law.
In order to determine whether the local law authorizes reimbursement of the superintendent's legal expenses, town officials first must determine whether the superintendent is an "employee" within the intendment of the local law and has complied with section 3 of the local law. If town officials determine that the superintendent complied with section 3, then the town's duty to defend depends upon satisfying the remaining provisions of section 2(a) quoted above which, as already noted, closely resemble the wording of Public Officers Law, §§17 and 18 (cf. General Municipal Law, §50-k, relating to defense of New York City employees). The cases construing Public Officers Law, §§17 and 18 address the scope of employment issue, and consider the effect of two contrasting allegations in the complaint, i.e., (1) an allegation that act or omission of employee occurred while the employee was acting within the scope of his public employment, and (2) either an allegation that act or omission occurred while the employee was acting outside the scope of his employment and in an individual capacity, or simply no specific allegation that the employee was acting within the scope of his public employment.
The courts have indicated that when the first type of allegation is made in the complaint, the State or municipality has a statutory duty to defend the employee irrespective of the actual facts or ultimate factual determination (Mathis v State, 140 Misc 2d 333, 531 NYS2d 680 , re: §17; Spitz v Abrams, 123 Misc 2d 446, 473 NYS2d 931 , affd 105 AD2d 904, 482 NYS2d 68, re: §17; Hassan v Fraccola, 851 F2d 602 [2d Cir 1988], re: §18). In other words, the plain language of both sections 17 and 18 of the Public Officers Law require a defense in such circumstances and do not permit further inquiry or determination by the State or municipality.
It has been held that when the second type of allegation ( above) is made in the complaint, the Attorney General on behalf of the State, in applying Public Officers Law, §17, should look behind the pleading to the facts underlying the occurrence in determining the scope of employment issue and the duty to defend (Mathis v State, supra; see also Spitz v Abrams, supra; see also Beare v Byrne, 103 AD2d 814, 478 NYS2d 44, affd 67 NY2d 922, 502 NYS2d 135, 493 NE2d 238, re: County Law, §§409, 501). In Mathis v State, supra, the court held that the Attorney General does not have broad discretion to weigh the facts and make an objective, independent judgment whether the employee was acting within the scope of his employment. Instead, the Attorney General should apply the same standard used by an insurance company when faced with a decision whether to defend an action against an insured.
Like an insurance company, the only time the Attorney General can deny a defense based upon his determination that the employee was acting outside the scope of employment is when the facts are so clear-cut that reasonable minds could reach no other conclusion (140 Misc 2d at 339, 531 NYS2d at 684).
The Attorney General's denial of a defense, therefore, is equivalent to a finding that there is no reasonable basis upon which a jury could find that the employee was acting within the scope of his employment. Other courts also have observed that the role of the State under Public Officers Law, §17, or a municipality under Public Officers Law, §18, in deciding whether there is a duty to defend is similar to that of an insurance company under an insurance policy, and that the duty to defend is broader than the duty to indemnify (Spitz v Abrams, supra; Hassan v Fraccola, supra; see also Giordano v O'Neill, 131 AD2d 722, 517 NYS2d 722  and Dooley v Boyle, 140 Misc 2d 177, 531 NYS2d 161 , re: interpretation of defense provisions in county codes).
Therefore, the foregoing court decisions should be helpful to town officials in determining the scope of employment and duty to defend issues under section 2(a) of the local law because of the close similarity with the wording of Public Officers Law, §§17 and 18. This assumes, of course, that town officials have determined that the superintendent complied with section 3 of the local law. If town officials determine that the superintendent complied with section 3 of the local law and that the town had a duty to defend the superintendent under section 2(a) of the local law, but that the town board failed to take action under the local law to provide for the defense of the superintendent, then the town board may wish to consider the doctrine of ratification in connection with the reimbursement of all or part of the superintendent's legal expenses.
In general, whatever acts public officials may do or authorize to be done in the first instance may be adopted or ratified by them subsequently with the same effect as though done properly under prior authority (see, gen., 10A McQuillin, Municipal Corporations, §29.104; 1990 Opns St Comp No. 90-25, p 58; 1983 Opns St Comp No. 83-208, p 270; 1979 Opns St Comp No. 79-770, p 166). Thus, the governing body of a municipality, in the exercise of its discretion, may ratify the retention without prior approval of an attorney by the municipal governing board (see Seif v City of Long Beach, 286 NY 382; 1981 Opns St Comp No. 81-417, p 465; 1978 Opns St Comp No. 78-365, unreported). The question whether the doctrine of ratification applies in this instance under the provisions of the local law must be decided by local officials.
If town officials conclude that there is no authority to reimburse the superintendent's legal expenses under the local law, then they might consider Town Law, §65(1). With respect to authorization for reimbursement under Town Law, §65(1), that section provides, in relevant part, that a town board, as it deems necessary for the benefit and protection of the town, may direct town officers to defend any action "in the name of the town", but prohibits employment of legal counsel except as directed by the town board. We have previously interpreted section 65(1) as authorizing a town to pay for the legal defense of a town officer when the officer is sued, together with the town, to enforce liability arising from the performance of official duties for which the town as well as the officer may be liable (1986 Opns St Comp No. 86-37, p 58; 1979 Opns St Comp No. 79-506, p 95; 17 Opns St Comp, 1961, p 125). Further, we have concluded that pursuant to section 65(1) a town may pay for the legal defense of an officer sued in his or her individual capacity if: (1) the allegations against the officer in his or her individual capacity are merely conclusive and speculative and unsupported by the evidence; (2) based on an objective appraisal of the facts, the officer was acting within the scope of his or her authority and in an official capacity at the time of the alleged act; and (3) the town as well as the officer may be liable (Opn No. 86-37, supra; see also Beare v Byrne, supra). We have also concluded, however, that section 65(1) does not authorize a town to pay for the legal defense of an officer who is sued individually under circumstances where neither the town nor the town officer in his or her official capacity could be found liable (id; Opn No. 79-506, supra; 17 Opns St Comp 1961, supra). Therefore, a town's authority to defend a town officer pursuant to section 65(1) depends on the gravamen of the case and not on whether the moving papers name the officer in his official or individual capacity. In the absence of prior town board approval of the retention of an attorney to defend, the doctrine of ratification, discussed above, may also be considered.
1982 Opns St Comp No. 82-243, p 303 and other prior opinions are superseded to the extent they are inconsistent with the views expressed herein.
November 15, 1990
Polly A. Hoye, Esq., Attorney at Law
Town of Bleeker