72 N.Y.2d 568 | NY | 1988
OPINION OF THE COURT
In this action to recover legal expenses, the question presented is whether individual trustees of the New York City Police Department Pension Funds (the Fund) may, at cost to the Fund, employ outside counsel to institute a lawsuit against other such trustees to resolve a disagreement over the proper construction of a statute governing eligibility for accident disability pension benefits. For the reasons that follow, we agree with the Appellate Division that, under the circumstances of this case, the individual trustees had no such authority and are, therefore, not entitled to reimbursement for the expenses they incurred.
The Board of Trustees of the Fund has 12 members. Eight
The disagreement between the two sides centered on the proper interpretation of General Municipal Law § 207-k, commonly known as the "Heart Bill”. The statute makes special provision for policemen who, having no history of heart disease prior to employment with the City, subsequently develop "any condition of impairment of health caused by diseases of the heart, resulting in total or partial disability or death”. Under the terms of the "Heart Bill”, such policemen shall be presumed to have incurred their heart disease "in the performance and discharge of duty, unless the contrary be proved by competent evidence”. In 1979, the Corporation Counsel issued an opinion that the rebuttable presumption thus created by the statute applied only to the question whether a cardiac disability was job-related, not to whether the disability was the result of an "accident” — i.e., the result of a particular, sudden, and unexpected event (see, Matter of Knight v McGuire, 62 NY2d 563; Matter of Lichtenstein v Board of Trustees, 57 NY2d 1010). According to his opinion, the burden of proof on that latter question remained with the applicant.
Not surprisingly, the City officials on the Board adopted that interpretation of the "Heart Bill” while the union officials strongly disagreed. The latter took the position that an applicant disabled by heart disease is entitled to accident benefits without having affirmatively to establish a sudden and unexpected event. The disagreement between the two
Following our decision in De Milia, the union officials sought reimbursement from the Fund for expenses incurred in that litigation, as well as in the several related proceedings. When the Fund refused, the union officials commenced the instant action. Supreme Court denied defendants’ motion to dismiss reasoning that, because the union officials could not be represented by the Corporation Counsel whose opinion they were contesting, they had no choice but to retain private counsel (122 Misc 2d 576). Subsequently, Supreme Court granted the union officials’ motion for summary judgment and awarded them the full amount of the attorneys’ fees requested. On appeal, the Appellate Division reversed the orders of Supreme Court and dismissed the complaint. In a thorough opinion, that court concluded that the union officials had neither express authority to retain private counsel nor authority inherent in their duties as trustees (136 AD2d 266). We now affirm.
Disagreement among members of the Board of Trustees does not justify the retention of private counsel by those who take issue with the others’ votes and with the legal advice of the Corporation Counsel upon which those others rely. While each member of the Board of Trustees acts in a fiduciary capacity in the administration of the Fund, the authority of the Board and its individual members is determined by the statutory structure establishing that Fund and defining the Board’s function (see, Administrative Code § 13-216 [a], [b]). The statutory provisions creating the Fund (see, Administrative Code §§ 13-201 — 13-287) are, in effect, the "terms of the trust” which confer and limit the powers of the Board and of each member trustee (see, 3 Scott, Trusts § 186 [3d ed]). Those terms require that the Fund be "administered by [the] board of trustees” and that such administration be "subject to the provisions of law” (Administrative Code § 13-216 [a] [emphasis added]). They also mandate that 'fejvery act of the board of
To be sure, as the union officials point out, the Corporation Counsel could not represent both them and the City officials in the underlying litigation; nor could he have reasonably represented the union officials alone inasmuch as they were challenging his ruling. Nevertheless, they cannot rely on these circumstances to claim necessity — and, therefore, implied authority — to retain private counsel to fulfill their lawful duties. The statutes which created and govern the Fund and the
Strong policy reasons support this conclusion. Administration of the police pension funds is highly regulated; the detailed statutory scheme under which the Board of Trustees operates insures a balance between the interests of the City, represented by its officials, and the interests of employees, represented by members of the union. Each side has the same total number of weighted votes and each resolution before the Board must obtain a majority for approval. Thus, because the Board can only act by such resolution, the affirmative vote of at least one trustee from each side is necessary for the Board to do anything. To permit the trustees on one side to prosecute claims against the others, on routine matters of differing opinion and subject to voting, would disturb that balance and subvert the purpose for requiring majority resolutions. Further, it would encourage such litigation by dissenting trustees over decisions rendered by the Board as a whole — whether denying or granting pension benefits — with the consequent depletion of the Fund to pay for those trustees’ private attorneys’ fees (cf., Corning v Village of Laurel Hollow, 48 NY2d 348, 351-352).
Finally, the cases relied upon by the union officials — Cahn v Town of Huntington (29 NY2d 451), Matter of Commco, Inc. v Amelkin (62 NY2d 260) and Matter of Slominski v Rutkowski (62 NY2d 781) — are inapposite. Whether, under the decisions in those cases, there might be exceptional circumstances where individual trustees, like those here, could ever retain private counsel, we need not decide. No such circumstances are presented here. This is not a case like Cahn, where the
Neither is the situation here comparable to that in Commco, where we upheld the retention of private counsel by a zoning board, even though the municipal attorney was, by statute, the exclusive legal representative of all municipal agencies. There, a conflict of interests arose between the board and the municipality itself and, as a result, the municipal attorney was precluded from representing the board in a proceeding brought by a dissatisfied applicant. In order to fulfill its statutory responsibilities, the board, we held, had implied authority under Cahn to retain its own counsel in order to defend itself. In the present case, however, the Corporation Counsel could and did represent the Board of Trustees in the underlying litigation, and the Board’s decisions were challenged, not externally by a dissatisfied applicant as in Commco, but internally by individual Board members who had neither statutory responsibility nor authority to do so.
Lastly, this case is not analogous to Slominski. There, the underlying dispute was between two high level municipal officers over competing claims of official authority. Because the municipal attorney represented the county executive, the comptroller retained private counsel. This court agreed with the Appellate Division that, under the circumstances of that case, the comptroller should be reimbursed for attorneys’ fees.
Accordingly, the order of the Appellate Division should be affirmed, with costs.
Chief Judge Wachtler and Judges Simons, Kaye, Alexander, Titone and Bellacosa concur.
Order affirmed, with costs.
. The opinions of Corporation Counsel have varied on this point. In August 1973, the "Heart Bill” presumption was interpreted, as in 1979, as applying only to whether the disability was line of duty and not to whether it was an accident. In November of that same year, however, Corporation Counsel reversed itself and interpreted the presumption as applying to both questions.
. Section 13-216 (b) of the Administrative Code of the City of New York provides: "Every act of the board of trustees shall be by resolution which shall be adopted only by a vote of at least seven-twelfths of the whole number of votes authorized to be cast by all of the members of such board.”
. Section 13-238 of the Code provides, in pertinent part: "The trustees and such employees, directly or indirectly, for themselves or as agents or partners of others, shall not borrow any of its funds or deposits or in any manner use the same except to make such current and necessary payments as are authorized by such board”.
. Section 394 (a) of the Charter provides: "Except as otherwise provided in this chapter or other law, the corporation counsel shall be attorney and counsel for the city and every agency thereof and shall have charge and conduct of all the law business of the city and its agencies and in which the city is interested.”
Section 395 of the Charter provides, in pertinent part: "No officer or agency, except as provided in this chapter or otherwise especially provided, shall have or employ any attorney or counsel, except where a judgment or order in an action or proceeding may affect him or them individually or may be followed by a motion to commit for contempt of court, in which case he or they may employ and be represented by attorney or counsel at his own or their own expense.”
. This is not to say, of course, that these same trustees were without standing to initiate litigation to challenge Board actions in -their capacities as union representatives.