Corning v. Village of Laurel Hollow

• Decision Date: 21 November 1979
• Citation: 398 N.E.2d 537,48 N.Y.2d 348,422 N.Y.S.2d 932
• Parties: , 398 N.E.2d 537 Howard CORNING, Jr., et al., Appellants, v. VILLAGE OF LAUREL HOLLOW, Respondent.
• Court: New York Court of Appeals Court of Appeals

Page 932

422 N.Y.S.2d 932

48 N.Y.2d 348, 398 N.E.2d 537

Howard CORNING, Jr., et al., Appellants, v. VILLAGE OF LAUREL HOLLOW, Respondent.

Court of Appeals of New York.

Nov. 21, 1979.

Gerard A. Dupuis and Christopher G. FitzPatrick, New York City, for appellants

Thomas A. Shaw, Jr., and Robert R. Elliott, III, New York City, for respondent.

OPINION OF THE COURT

COOKE, Chief Judge.

The question here is whether certain former high-ranking officials of the Village of Laurel Hollow are entitled to reimbursement from the village of their costs, disbursements and legal fees incurred in asserting a successful defense to a civil rights action brought against them as a result of acts performed in their official capacities. Reversing Special Term, the Appellate Division held that in the absence of express authority to employ counsel, plaintiffs were not entitled to recover legal fees from the village. There should be an affirmance. Without the benefit of authorizing legislation, reimbursement by the village of these expenses would constitute a gift of public funds for a purely private purpose, a matter expressly forbidden by our Constitution (N.Y.Const., art. VIII, § 1).

The present action finds its genesis in a long-standing conflict between the village and two of its residents, Erwine and Estelle Laverne. In 1954, this court affirmed an order of the Appellate Division which enjoined the Lavernes from using their property, located in a residential zone, for commercial purposes (Incorporated Vil. of Laurel Hollow v. Laverne Originals, 307 N.Y. 784, 121 N.E.2d 618, affg. 283 App.Div. 795, 128 N.Y.S.2d 326). Matters proceeded peacefully until 1962, when, pursuant to the authority of the village zoning ordinance, plaintiffs, the former Mayor, trustees, building inspector and a police officer of the village, conducted three warrantless searches of the Laverne home to ascertain whether there were zoning violations on the premises. Judgments imposing both civil and criminal penalties against the Lavernes were subsequently reversed on the ground that the warrantless searches were unconstitutional (Incorporated Vil. of Laurel Hollow v. Laverne Originals, 17 N.Y.2d 900, 271 N.Y.S.2d 996, 218 N.E.2d 703; People v. Laverne, 14 N.Y.2d 304, 251 N.Y.S.2d 452, 200 N.E.2d 441).

Some years later, the Lavernes instituted a Federal civil rights action (U.S.Code, tit. 42, §§ 1981-1983) against plaintiffs, all of whom had, by this time, discontinued their relationship with the village. The complaint in that action alleged that plaintiffs, while acting under color of State law in their official capacities as officers and officials of the village, had violated the constitutional rights of the Lavernes by unlawfully entering their home and conducting illegal searches and seizures upon entry (see Bivens v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619). The village was not joined as a party in the Federal action, since under then-existing precedent it was not amenable to suit (see Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 L.Ed.2d 492).

Although the reason does not appear on the record, plaintiffs were initially represented by the Nassau County Attorney, presumably at county expense. However, immediately after the Federal District Court granted the Lavernes summary judgment on the issue of liability (Laverne v. Corning, D.C., 316 F.Supp. 629), plaintiffs dismissed the Nassau County Attorney and, on their own initiative, privately retained a prestigious Wall Street law firm as counsel. Throughout the pendency of the Federal action, plaintiffs kept the village apprised of their intention to hold it responsible for the cost of their defense. When the representation of substituted counsel ultimately led to final dismissal of the Laverne action (Laverne v. Corning, D.C., 376 F.Supp. 836, affd. 2 Cir., 522 F.2d 1144), plaintiffs instituted this action to recover from the village the legal fees, costs and disbursements they had incurred following their dismissal of the Nassau County Attorney.

Plaintiffs do not quarrel with the proposition that, in the absence of extraordinary circumstances not present here, a municipality may not be compelled to compensate for services rendered by an attorney unless his retainer is authorized by statute or appropriate resolution of the governing body (e. g., Cahn v. Town of Huntington, 29 N.Y.2d 451, 454-455, 328 N.Y.S.2d 672, 674-675, 278 N.E.2d 908, 909-910; Seif v. City of Long Beach, 286 N.Y. 382, 386-387, 36 N.E.2d 630, 631-632; Lyddy v. Long Is. City, 104 N.Y. 218, 222-223, 10 N.E. 155, 157; 10 McQuillin, Municipal Corporations, § 29.11). The rationale underlying this rule to guard against extravagance and collusion on the part of public officials is aptly illustrated by the circumstances here. Dissatisfied with their representation by the Nassau County Attorney, plaintiffs summarily dismissed him and retained one of the more esteemed and, as this record bears out, costly, New York law firms. This, of course, they had every right to do. But this does not mean that the village must underwrite the consequences of plaintiffs' choice. Were this construction to be adopted, it would enable all public officials to employ counsel whenever it is deemed desirable and, thus, unilaterally empower them to create municipal debt. Allowing these plaintiffs reimbursement would result in a drastic departure from the safeguards erected about the disposition of public funds and would invite invasions of the public fisc for purely personal benefit. Having chosen to forsake the representation gratuitously provided them, plaintiffs may not now seek public funds to alleviate the cost of that selection (see People ex rel. Van Keuren v. Board of Town Auditors of Town of Esopus, 74 N.Y. 310, 313-314).

Indeed, as a practical matter, here there is not even involved a question of entitlement to payment to an attorney who has rendered service to a municipality but who had not been retained in accordance with statute. Rather, these plaintiffs were sued personally for their actions in office and their attorneys performed no services for the village. This case, therefore, does not concern whether plaintiffs' law firm is entitled to its fees, but rather who is responsible for their payment. There is no question that if plaintiffs' law firm had sued the village for fees for services rendered on behalf of plaintiffs, recovery would be denied (Seif v. City of Long Beach, supra ). This result may not be altered by the simple expedient of substituting plaintiffs as a party for the law firm (see Leo v. Barnett, 41 N.Y.2d 879, 393 N.Y.S.2d 994, 362 N.E.2d 1624 affg 48 A.D.2d 463, 464, 369 N.Y.S.2d 789, 791).

Plaintiffs admit that their attorneys were never retained by the village. Instead, they seek to assert some obscure common-law right to reimbursement based upon a novel theory of agency. This argument proceeds on the premise that in conducting the searches, plaintiffs were acting as mere agents for the village, their principal. Since agents are entitled to be indemnified for any damages they suffer as a result of following the directions of their principal, the village must assume plaintiffs' attorney's fees. There is, however, a major practical difficulty in accepting this argument. With the exception of Meehan, plaintiffs simply were not low-level officials executing facially valid directions of their superiors. Rather, they were the very people in whom the decision to search the Laverne home was vested and, thus, are more properly characterized as principals (see Village Law, §§ 3-301, 4-400). Indeed, the underpinnings of the Federal action were not grounded on plaintiffs following the orders of a superior, but on the implementation of a policy over which they alone had control (cf. Restatement, Agency 2d, § 14C). Hence, there is no principal involved to whom the plaintiffs may look for reimbursement.

On an even more fundamental level, any payment by the village to plaintiffs for their previously incurred costs would run afoul of the constitutional prohibition against gifts of public funds to assist a purely private purpose (N.Y.Const., art. VIII, § 1). Well settled is the proposition that a municipality may expend its funds only to meet its lawful obligations incurred as a result of the performance of its governmental functions (Union Free School Dist. v. Town of Rye, 280 N.Y. 469, 474, 21 N.E.2d 681, 683). Conversely, a governmental entity may not compensate a person who performs an act which the government had no duty to undertake Matter of Guarino v. Anderson, 259 N.Y. 93, 95-96, 181 N.E. 60, 61).

One of the risks traditionally associated with the assumption of public office is that of defending oneself against charges of misconduct at one's own expense (Matter of Chapman v. City of New York, 168 N.Y. 80, 85-86, 61 N.E. 108, 109-110). ¹ The public owes no duty to defend or even aid in the defense of such a charge. As was said in Matter of Chapman, supra, at p. 86, 61 N.E. at p. 110: "Whoever lives in a country governed by law assumes the risk of having to defend himself without aid from the public against even unjust attempts to enforce the law, the same as he assumes the burden of taxation * * * Asking for aid to pay the expenses of a defense already made from one's own resources, is like asking for aid in the payment of taxes or the discharge of any public burden. It is not a city or county purpose, but a mere gift" (see, also, Leo v. Barnett, supra; Buckley v. City of New York, 289 N.Y. 742, 46 N.E.2d 352, affg 264 App.Div. 116, 34 N.Y.S.2d 577; Matter of Guarino v. Anderson, supra; Matter of Kilroe v. Craig, 238 N.Y. 628, 144 N.E. 920, affg 208 App.Div. 93, 203 N.Y.S. 71; 17 Opns. St. Comp., 1961, p. 125; 12 Opns. St. Comp., 1956, p. 479).

This is not to question the power of the municipality to enact an ordinance empowering it to defend its officials who in the future may be...