Cahn v. Town of Huntington, 29 N.Y.2d 451 (1972)
A municipal board possesses implied authority to employ counsel when the municipal attorney is incapable of acting due to a conflict of interest, provided the board acts in good faith and in the public interest.
Summary
This case addresses whether a town’s planning board had the authority to hire outside legal counsel to represent it in a lawsuit brought by the town board, when the town attorney, who normally represents the planning board, represented the town board in the action. The Court of Appeals held that the planning board did have the implied authority to hire outside counsel under these specific circumstances. The Court reasoned that because the town attorney represented the opposing party (the town board), he could not also represent the planning board, creating a situation where the planning board needed independent legal representation to properly defend itself.
Facts
The Town Board of Huntington commenced an Article 78 proceeding against the Planning Board regarding the appointment of the Planning Board’s chairman. A dispute had been ongoing between the two agencies regarding which agency held the power to appoint the chairman. The Town Attorney represented the Town Board in this litigation. The Planning Board, believing the Town Attorney had a conflict of interest, retained private counsel (the plaintiff) to represent it.
Procedural History
The Supreme Court ruled in favor of the Town Board on the chairmanship issue but ruled in favor of the Planning Board on a counterclaim regarding budgetary control. The plaintiff submitted bills to the Planning Board, which approved payment. When the Town of Huntington refused to authorize payment, the plaintiff sued the Town. Special Term granted summary judgment to the plaintiff. The Appellate Division affirmed.
Issue(s)
Whether the Planning Board was authorized to employ private legal counsel to represent it in litigation against the Town Board when the Town Attorney represented the Town Board.
Holding
Yes, because a municipal board has implied authority to hire counsel when the municipal attorney is incapable of acting due to a conflict of interest, and the board acts in good faith and in the public interest.
Court’s Reasoning
The Court acknowledged the general rule that an attorney may not be compensated for services rendered to a municipal board unless retained according to statutory authority, stating that “express authority, either by statute or by appropriate resolution of the governing body, must be shown to justify the retention of an attorney by a municipal board or officer.” This rule aims to prevent municipal corruption, extravagance, and confusion in litigation. However, the Court carved out an exception to this rule.
The Court stated that “a municipal board or officer possesses implied authority to employ counsel in the good faith prosecution or defense of an action undertaken in the public interest, and in conjunction with its or his official duties where the municipal attorney refused to act, or was incapable of, or was disqualified from, acting.” This implied authority is necessary for the board to function properly. Here, the Town Attorney represented the Town Board, creating a conflict of interest that prevented him from representing the Planning Board. Thus, the Planning Board had no choice but to hire outside counsel. Section 65(1) of the Town Law, which places the burden of prosecuting and defending actions on the Town Board, does not apply to litigation between town officers concerning the performance of their duties.
The court reasoned, “If it did, a situation would be created in which the Town Board could prevent the board it sued from engaging counsel. We should not, of course, ascribe to the Legislature an intent to have such a result ensue.” The court specifically noted that there was no evidence that the Planning Board acted in bad faith or with malice.