(b) In no event shall the state be obligated to defend or indemnify
such city, in any action, proceeding, claim or demand arising out of the
actual operation of a vehicle or other equipment while engaged in the
operation of repair and maintenance under any such agreement, nor any
action, proceeding, claim or demand arising out of services of lighting,
cleaning, sweeping and sprinkling any such public street, main route or
thoroughfare or portions thereof nor any work on or in connection with
subsurface installations and structures that are owned and operated by
any city, including sanitary sewers, gas mains, water lines, and
conduits, and appurtenances thereto.
(c) The city shall be entitled to representation by the attorney
general in any claim described in paragraph (a) of this subdivision,
provided, however, that the city shall be entitled to itself defend any
such action, proceeding, claim or demand whenever the attorney general
determines, based upon his investigation and review of the facts and
circumstances of the case that representation by the attorney general
would be inappropriate, or whenever a court of competent jurisdiction
determines that a conflict of interest exists and that the city is
entitled to be separately represented. Whenever the municipality is
entitled to defend the action itself, the state shall reimburse the
municipality for any and all costs and expenses, including, but not
limited to, counsel fees and disbursements.
(d) The state shall indemnify and save harmless such city in the
amount of any judgment obtained against such city in any state or
federal court in any claim described in paragraph (a) of this
subdivision, or in the amount of any settlement of such claim, or shall
pay such judgment or settlement; provided, however, that the act or
omission from which such judgment or settlement arose occurred while the
city was acting within the scope of its functions for maintenance and
repair of state arterial highways; provided, further, that no
stipulation of settlement of any such action, proceeding, claim or
demand shall be made or executed without approval of the attorney
general and of the commissioner of transportation or his designee.
Payment of any claim made pursuant to settlement shall not exceed the
sum of fifty thousand dollars. Nothing herein shall authorize the state
to indemnify or save harmless with respect to punitive or exemplary
damages.
(e) The duty to defend or indemnify and save harmless prescribed by
this subdivision shall be conditioned upon (i) delivery to the attorney
general or an assistant attorney general at an office of the department
of law in Albany or New York city and by delivery to the commissioner of
transportation or his designee of a copy of any claim, summons,
complaint, process, notice, demand or other pleading within ten days
after such city is served with such document and (ii) the full
cooperation of the city in the defense of such action, proceeding, claim
or demand and in the defense of any action, proceeding, claim or demand
against the state based upon the same act or omission, and in the
prosecution of any appeal.
(f) The benefits of this subdivision shall inure only to such city and
shall not enlarge or diminish the rights of any other party nor shall
any provision of this subdivision be construed to effect, alter, or
repeal any provision of the workers' compensation law.
(g) This subdivision shall not in any way affect the obligation of any
claimant to give notice to the state under section ten of the court of
claims act or any other provision of law.
(h) The provisions of this subdivision shall not be construed to
impair, alter, limit or modify the rights and obligations of any insurer
under any insurance agreement.
(i) Except as otherwise specifically provided in this subdivision, the
provisions of this subdivision shall not be construed in any way to
impair, alter, limit, modify, abrogate, or restrict any immunity
available to or conferred upon any unit, entity, officer, or employee of
the state or city of any other level of government, or any right to
defense and indemnification provided for any governmental officer or
employee by, in accordance with, or by reason of, any other provision of
state or federal statutory or common law.
9. Whenever the commissioner of transportation shall deem such
maintenance and repair by any such city to be inadequate or
unsatisfactory according to the terms of such agreement, he may, by
official order to be filed in his office, and by filing a certified copy
thereof in the office of the department of state, cancel said agreement,
and the payments thereunder provided by the state shall cease and
determine; whereupon the commissioner may carry out such maintenance and
repair in the same manner as other state highways are maintained by the
state. The official order provided in this subdivision shall become
effective at the expiration of five days after the commissioner shall
mail a certified copy thereof to the city clerk or other official who
performs related duties in such city. Thereupon, the street, main route
or thoroughfare or portion thereof described in said official order
shall be maintained and repaired as provided in this section.