Caruso v. New York City Police Dept. Pension Funds

• Decision Date: 05 May 1983
• Parties: In the Matter of the Claim of Phil CARUSO, President, Patrolmen's Benevolent Association of the City of New York; J. Patrick Burns, First Vice-President, Patrolmen's Benevolent Association of the City of New York, et al., Plaintiffs, v. The NEW YORK CITY POLICE DEPARTMENT PENSION FUNDS, Article 1 and Article 2, and The City of New York, Defendants.
• Court: New York Supreme Court

Page 963

470 N.Y.S.2d 963

122 Misc.2d 576

In the Matter of the Claim of Phil CARUSO, President,

Patrolmen's Benevolent Association of the City of New York;

J. Patrick Burns, First Vice-President, Patrolmen's

Benevolent Association of the City of New York, et al., Plaintiffs, v. The NEW YORK CITY POLICE DEPARTMENT PENSION FUNDS, Article 1 and Article 2, and The City of New York, Defendants.

Supreme Court, Special Term,

New York County, Part I.

May 5, 1983.

Botein, Hays, Sklar & Herzberg, New York City, for plaintiffs.

Allen G. Schwartz, Corp. Counsel, New York City, for defendants by Richard N. Bowers, New York City.

EDWARD J. GREENFIELD, Justice:

Motions numbered 108 of January 11, 1982 and 174 of November 10, 1981 are consolidated for disposition.

In each, defendant City of New York moves pursuant to CPLR § 3211(a)(7) to dismiss the complaint upon the grounds plaintiffs have failed to state a cause of action for counsel fees and expenses in connection with prior Heart Bill litigation.

In 1979, a controversy arose among the City members and union members of the Board of Trustees (Board) of the Fire Department Pension Fund (F.D. Fund) and also among the respective members of the Police Department Pension Fund (P.D. Fund). The controversy centered on what constituted an accidental death or disability under General Municipal Law § 207-K (the "Heart Bill"). The union members of each board voted to grant line-of-duty accidental death or disability benefits unless the applicant affirmatively proved the death or disability was caused by an identified accident.

Each pension fund is administered by its Board and disability pensions may only be awarded upon a majority vote of its members. The F.D. Fund's Board has 24 votes (N.Y.C.Admin.Code § B 19-2.0), 12 controlled by the union and 12 controlled by the City and resolutions must be adopted by at least 14 votes (N.Y.C.Admin.Code § B 19-2.0[b] ). Similarly the P.D. Fund's Board has 12 votes, six controlled by the Union and six controlled by the City and at least seven votes are required to adopt a resolution (N.Y.C.Admin.Code § B 18-2.0[b] ).

Because of the even split between the union members of the boards and the City members concerning their respective interpretations of what constituted an accident within the meaning of the "Heart Bill", the requisite majority vote was not achieved and applicants were retired on ordinary disability ( Matter of the City of New York v. Schoeck, 294 N.Y. 559, 63 N.E.2d 104). The union members of the P.D. Fund retained Botein, Hayes, Sklar & Herzberg as counsel, and the union members of the F.D. Fund retained Gordon & Shechtman as counsel to challenge the interpretation of the city controlled members on the Heart Bill retirement applications. In both cases, the union position was sustained (Uniformed Firefighters Association v. Beekman, 52 N.Y.2d 463, 438 N.Y.S.2d 746, 420 N.E.2d 938 and DeMilia v. McGuire, 52 N.Y.2d 463, 438 N.Y.S.2d 746, 420 N.E.2d 938).

Upon this motion to dismiss, defendants contend that the actions were commenced on behalf of plaintiff unions and their constituencies to challenge the Pension Funds' failure to grant line-of-duty disability pensions under the "Heart Bill." However, the prior record of both the Police (DeMilia v. McGuire, 52 N.Y.2d 463, 438 N.Y.S.2d 746, 420 N.E.2d 938, aff'g 76 A.D.2d 1039, 429 N.Y.S.2d 336, aff'd N.Y.L.J. Nov. 20, 1979, p. 6 [Ascione, J.] ) and Uniformed Firefighters Asso. v. Beekman, 52 N.Y.2d 463, 438 N.Y.S.2d 746, 420 N.E.2d 938, aff'g 76 A.D.2d 1039, 429 N.Y.S.2d 336, aff'g 104 Misc.2d 829, 430 N.Y.S.2d 909 [Greenfield, J.] "Heart Bill" litigation cases clearly shows that the plaintiff trustees in bringing their respective declaratory judgment actions acted qua members of the Board of Trustees and in title and text of all pleadings in the litigation, sued, appeared, acted and described themselves to be suing and acting as Members of the Board of Trustees of the New York City Police Department and Fire Department Pension Funds. Moreover, the defendants in those actions did not challenge the standing of those plaintiffs to bring suit nor did those defendants dispute the right of the Trustee plaintiffs to retain their own counsel. Of course, acquiescence in the right of an adverse litigant to select its counsel cannot be equated with any agreement to pay such counsel.

Defendants also assert that absent an agreement or specific statutory authority, a private litigant may not recover his counsel fees from an adverse litigant (See Soffer v. Glickman, 27 Misc.2d 721, 724-725, 209 N.Y.S.2d 743; Judiciary Law § 474; Doyle v. Allstate Ins. Co., 1 N.Y.2d 439, 444, 154 N.Y.S.2d 10, 136 N.E.2d 484; Matter of Loomis, 273 N.Y. 76, 81-82, 6 N.E.2d 103).

Judiciary Law § 474 specifically provides that: "the compensation of an attorney or counsellor for his services is governed by agreement, express or implied, which is not restrained by law, * * *." (emphasis supplied). The issue here presented is whether the responsibility for payment of the plaintiffs' counsel fees is implied in law and is not otherwise restrained or prohibited.

In order to address this issue, a brief summary of the circumstances leading up to the commencement of the two actions is necessary.

In 1970, after years of effort by Police and Firefighters organizations, there was enacted the "Heart Bill" (General Municipal Law § 207-k, L.1970, ch. 805). The bill had previously been passed by the Legislature 13 previous times and vetoed by the Governor on each occasion. The purpose of the law was to relieve the pension applicant of the onerous burden of proving the connection between the applicant's heart condition and his service by providing for a rebuttable presumption that an applicant's heart disease was incurred as a result of his service. The statute was enacted originally for a period of one year. However, despite considerable opposition, it was re-enacted by the Legislature annually until 1979, and then extended two years to June 30, 1981 (L.1979, ch. 321). During this period of time and up to February, 1979, Gen.Munic.Law § 207-k was uniformly construed in conformity with its above-described purpose by the successive Boards of Trustees of the P.D. Fund and the F.D. Fund, by the New York City Employees Retirement System, and by a succession of Corporation Counsel for the City of New York including J. Lee Rankin, Norman Redlich, Adrian P. Burke and W. Bernard Richland.

In February, 1979, the then Corporation Counsel, Allen G. Schwartz, in conformity with the vehement and vocal opposition to the law, expressed by Mayor Edward Koch " * * * rendered an opinion that despite the presumption of § 207-k * * * that heart disease sustained during the period of service of a uniformed policeman or fireman was incurred in the performance and discharge of duty, the disability pension applicant would still have to prove 'that his disability is the result of some discrete and identifiable, unusual and sudden event which alone would constitute an "accident" * * *.' (Corporation Counsel Opn. No. 25-79). He advised the Board of Trustees that they could not apply and interpret the disability sections as they had in the past." (Uniformed Firefighters, etc. v. Beekman, 104 Misc.2d 829, 833-834, 430 N.Y.S.2d 909; aff'd. 52 N.Y.2d 463, 469, 438 N.Y.S.2d 746, 420 N.E.2d 938).

This reversal of position created turmoil in the proceedings of the Boards of Trustees. The City controlled members voted to deny accidental disability benefits unless a specific accident was demonstrated, but the Union controlled members, relying on the prior interpretation of Gen.Munic.L. § 207-k, voted to grant disability benefits without such proof. The Boards' votes were split 50-50 and, in consequence of not having obtained the majority necessary to adopt resolutions (N.Y.C.Admin.Code §§ B 18-2.0[b] [for the P.D. Fund]; B 19-2.0[b] [for the F.D. Fund] ), applicants were retired on ordinary disabilities. Thus, the Corporation Counsel's new interpretation was adopted by the Boards of Trustees by default. To rectify this situation, the union Trustees retained counsel and commenced declaratory judgment actions.

It is beyond peradventure that the position taken by the Union Trustees was adverse to that of the Corporation Counsel (Corp. Counsel) and that Corp. Counsel could not in good conscience and in law represent them. In fact, the Corp. Counsel represented the City Trustees in both actions. Plaintiffs here contend that Corp. Counsel could not have sought to represent the Union Trustees under the Canons of Ethics and the position now taken by the City in opposition to the request for counsel fees is contrary to established principles and practice commonly adhered to by the City, by City agencies and by the New York City Corp. Counsel. Cited examples include the recent retention by the City Council at City expense of the law firm of Paul, Weiss, Rifkind, Wharton & Garrison to represent its interests in redistricting litigation. The hiring of independent counsel was predicated upon a " * * * very real possibility of a future conflict in the legal positions and litigation strategies to be pursued by the City Council as opposed to the Mayor * * * " (Gerena-Valentine v. Koch, N.Y.L.J. Oct. 5, 1981, p. 14, cols. 3, 4 [Helman, J.] ). In Golden v. Koch, 49 N.Y.2d 690, 427 N.Y.S.2d 780, 404 N.E.2d 1321, all members of the City Council other than the Mayor were represented by independent counsel at City expense and the Mayor was represented by Corp. Counsel in a case where the Board of Estimate sued the Mayor to obtain a declaratory judgment concerning the right of the Mayor to vote on certain budget modifications. Similarly, in Board of Education v. City, 41 N.Y.2d 535, 394 N.Y.S.2d 148, 362 N.E.2d 948, the Board of Education, an "agency" of the City (See City Charter § 1150[2] ) was represented by independent City paid counsel in its suit against the City...