Does a NY town have to pay for a town board member's defense in a defamation suit by the police chief?

Subject

Defense is owed if the complaint alleges behavior within scope of employment

Plain-English summary

A member of the East Hampton Town Board was sued in state court for defamation by the police chief, based on statements the board member allegedly made to newspaper reporters. The town had adopted a local code that paralleled Public Officers Law § 18, which is the municipal defense-and-indemnification statute. The deputy town attorney asked three questions about how the town board should handle the request for defense.

The AG worked through each. First, the trigger for the duty to defend under § 18 is the complaint. Following Hassan v Fraccola, the Second Circuit's reading of § 18, the AG concluded that if the complaint alleges that the defendant was acting within the scope of employment, the town must defend, full stop. The complaint's allegations control at that stage.

Second, if the complaint does not itself allege scope, the town board has to make its own factual determination. The board investigates whether the alleged act or omission actually occurred within the scope of duties (Polak v Schenectady; Beare v Byrne). This determination is the town board's, not the town attorney's. The town attorney can advise, but Town Law § 65 puts the call with the board.

Third, the AG rejected the idea that the town board could simply refuse to fund a defense while waiting for a court to determine scope. Section 18 requires the defense to be set up at the time the litigation is commenced, based on the complaint or on a factual determination. Withholding a defense pending judicial resolution would defeat the statute's purpose, because the duty to defend is broader than the ultimate duty to indemnify (Giordano v O'Neill). Unless the town can conclusively show the employee was acting outside scope, it has to provide the defense.

Currency note

This opinion was issued in 1995. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Why is the duty to defend broader than the duty to indemnify?

Because defense costs money even when the underlying claim is dubious, and a public employee should not have to absorb defense costs out of pocket while the merits get litigated. The statute is structured so the town fronts the defense based on the allegations, and only at the end does the indemnification question turn on what actually happened. Giordano v O'Neill stated this distinction directly.

What did the Hassan v Fraccola case actually decide?

The Second Circuit held that an allegation in the complaint that the defendant was acting within the scope of employment is sufficient to trigger the municipality's duty to defend under § 18. The court relied on the statute's reference to acts that "allegedly occurred" within scope, and on the legislative history showing that § 18 was meant to parallel § 17's complaint-driven duty.

Can the town board override the town attorney's opinion on scope?

Yes. The opinion is clear that the town attorney can advise, but Town Law § 65 makes the town board the ultimate decisionmaker on whether to provide a defense. The AG cites 1980 Op Atty Gen (Inf) 152 for that proposition.

What if the court eventually finds the officer was acting outside scope?

Indemnification (paying any judgment or settlement) requires that the act actually occurred within scope under § 18(4)(a). So if the court later finds the officer was acting outside scope, the town would not have to indemnify. But the defense costs the town already paid generally would not be recoverable, because the duty to defend was triggered earlier on a separate test.

Does this apply to all public employees or just elected officials?

Section 18 applies to "employees" of a local government that has opted into its provisions. That category includes elected officials, appointed officers, and ordinary employees. The key requirement is that the local governing body has affirmatively adopted § 18 (or a parallel local provision). East Hampton had done so.

Statutory framework

Public Officers Law § 18 is the elective defense-and-indemnification statute for local governments. A municipality opts in by resolution or local law (East Hampton had a parallel town code). Once opted in:

• § 18(3)(a) requires the town to defend an employee in any civil action arising out of any act or omission that occurred or "allegedly occurred" while acting within the scope of public duties.
• § 18(4)(a) requires the town to indemnify the employee for any judgment or settlement if the act occurred within scope.

Public Officers Law § 17 is the parallel statute for state employees, and its complaint-triggered defense rule informed Hassan's reading of § 18.

Town Law § 65 establishes the town board's authority over town legal affairs, including the call on whether the duty to defend applies.

Source

• Landing page: https://ag.ny.gov/libraries-documents/opinions/opinions-year
• Original PDF: https://ag.ny.gov/sites/default/files/opinions/I_95-6_pw.pdf

Original opinion text

PUBLIC OFFICERS LAW §§ 17, 18; TOWN LAW § 65.
Under section 18 of the Public Officers Law and the town
code, a town is authorized to provide defense to one of its
employees if the complaint alleges behavior within the scope of
the employee's duties or upon a factual determination that this
is the case by the town board.

February 2, 1995

John C. Jilnicki, Esq.
Deputy Town Attorney
Town of East Hampton
159 Pantigo Road
East Hampton, NY 11937

Informal Opinion
No. 95-6

Dear Mr. Jilnicki:
You have asked several questions relating to the defense of
a town official under section 18 of the Public Officers Law (your
town code parallels its provisions). You have explained that a
member of the town board was sued for defamation in State court
by the chief of police arising out of statements allegedly made
by the defendant to newspaper reporters. You have described the
context in which the statements were made. This, however, is a
question of fact which need not be defined for purposes of
answering the questions of law that you have raised and is
appropriately left to the town board which ultimately must decide
whether provision of defense is appropriate.
You have asked whether the town board has discretion under
Public Officers Law § 18 to provide the town officer with a
defense in the defamation action where the complaint fails to
allege unlawful conduct within the scope of the defendant's
employment. Second, in these circumstances, you ask whether the
town board must accept the opinion of its town attorney as to
whether the officer is entitled to a defense. Finally, you ask
whether the town board has discretion under section 18 to refuse
to pay defense costs pending a determination as to whether the
defendant was acting within the scope of his employment.
Section 18 of the Public Officers Law authorizes and
establishes the procedure for defense and indemnification of
local government officers and employees. It applies upon the
affirmative decision of the local governing body to confer its
benefits upon its employees. Under section 18, a local
government must provide for the defense of an employee

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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.

Public Officers Law § 18(3)(a). A local government is required
to indemnify and save harmless its employees in the amount of any
judgment obtained in a State or Federal court or in the amount of
any settlement of a claim, provided that the act or omission
occurred while the employee "was acting within the scope of his
public employment or duties". Id., § 18(4)(a).
In Hassan v Fraccola, 851 F2d 602 (2d Cir 1988), the Court
of Appeals for the Second Circuit dealt with the question whether
an allegation in the complaint that the act occurred within the
defendant's scope of employment established an obligation of
defense by the municipality. The Court traced the history of
section 18 and focused on the language that the act "allegedly
occurred" within the scope of employment. It concluded that an
allegation in the complaint that the defendant was acting within
the scope of his employment is sufficient to establish the duty
of the local government to provide a defense.
This interpretation is consistent with section 18's legislative
history, which indicates that its defense and indemnification
provisions were intended to be the same as those of section 17, in
which the duty to defend is triggered by the complaint.

Hassan, supra, at p 605.
If the complaint fails to allege that the defendant acted
within the scope of his duties, the second test authorized by
section 18 is applied in which the local government investigates
whether the alleged act or omission occurred within the scope of
the employee's duties. Polak v Schenectady, 181 AD2d 233, 236
(3d Dept 1992). This determination is made regardless of the
allegations made in the complaint. Ibid. This second test is
required by the language of section 18 which authorizes a defense
where the alleged act or omission "occurred" while the employee
was acting within the scope of his duties. This determination
should be an objective one based on the actual facts of the case.
Beare v Byrne, 103 AD2d 814, 815 (2d Dept 1984); Informal Opinion
No. 92-12. The duty to defend is broader than the ultimate
obligation to indemnify. Informal Opinion No. 92-12; Giordano v
O'Neill, 131 AD2d 722, 723 (2d Dept 1987). In the event the
local government fails to demonstrate conclusively that the
employee was acting outside the scope of his or her employment,
it is required to provide a defense. Giordano, supra, at p 724.
Returning to your inquiries, if the complaint fails to
allege conduct within the scope of employment, under section 18
the town board must review the actual facts relating to the

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lawsuit. If the facts indicate conduct within the scope of
employment, a defense must be provided. Second, the town board
need not accept the opinion of the town attorney as to whether
the town must provide a defense. The town board has
responsibility for making this decision. Town Law § 65; 1980
Op Atty Gen (Inf) 152.
Finally, in our view the town board does not have authority
automatically to refuse to provide a defense or pay for defense
costs pending a judicial determination as to whether the employee
acted within the scope of his duties. Such action would be
inconsistent with section 18 of the Public Officers Law which
requires the provision of a defense based upon allegations in the
complaint or upon the making of certain factual determinations at
the time the litigation is commenced. Giordano, supra, at p 723.
We conclude that under section 18 of the Public Officers Law
a town is authorized to provide a defense to one of its employees
if the complaint alleges behavior within the scope of the
employee's duties or upon a factual determination that this is
the case by the town board.
The Attorney General renders formal opinions only to
officers and departments of State government. This perforce is
an informal and unofficial expression of the views of this
office.
Very truly yours,

JAMES D. COLE
Assistant Attorney General
in Charge of Opinions