ALBANY — A former Albany police officer who was fired after a high-profile arrest for alleged drunken driving on Interstate 787 should not have been terminated simply because his driver's license was revoked, an appeals court ruled Wednesday.

The Appellate Division of state Supreme Court unanimously agreed that the May 3, 2011, firing of Officer Brian Lutz was "both arbitrary and capricious and contrary to law," according to a decision authored by Presiding Justice Karen Peters.

Lutz was arrested on charges of driving while intoxicated and refusing to submit to a chemical breath test Dec. 11, 2010, in Menands. As his legal case remained in the courts, Police Chief Steven Krokoff fired Lutz because his license had been revoked for a year. The chief reasoned that Lutz no longer had the ability to drive, which was a minimum requirement to work as a police officer. The criminal case is still pending in Menands court.

On Wednesday, the Appellate Division ruled otherwise.

"Here, (Lutz) asserts that since possession of a valid driver's license was not an express condition or requirement of his employment, Krokoff erred in terminating him without a hearing," the ruling stated. "We agree."

The decision was supported by Justices Edward Spain, Robert Rose and Elizabeth Garry.

"In our view," the decision stated, "both due process and fundamental fairness require that a qualification or requirement of employment be expressly stated in order for an employer to bypass the protections afforded by the Civil Service Law or a collective bargaining agreement and summarily terminate an employee."

As a result of Wednesday's ruling, the city could be liable to pay Lutz back pay for months since was fired.

Officer Steve Smith, a spokesman for Albany police, said Krokoff wanted to review the decision and speak with attorneys before determining how to proceed. He was represented in the appeals battle by attorney Mary M. Roach.

"The city is, of course, disappointed with the decision," Roach said in an email, adding she and her partner, Elayne Gold, will meet with Krokoff and the corporation counsel to discuss how to move forward.

Lutz was represented by Christine Caputo Granich, associate general counsel for Council 82, the umbrella union for Albany police officers.

"I am pleased with the decision because all along, all Council 82 did was ask that the city follow the law and the collective bargaining agreement and today's decision not only supports our position, but is also a crystal clear enunciation of the law in this area," the attorney told the Times Union via email.

The ruling stated that almost one-third of the city's police force performs functions other than patrol — and that of the 200 patrol officers, "at least 33 are regularly assigned to patrol by means other than motor vehicle."

The decision noted that the department's standard operating procedures dictate that officers should possess valid driver's licenses "whenever required as a condition of employment," which leaves room for not having it.

"This conditional language certainly suggests that there are police officers in the APD who are not required to possess a driver's license as a necessary condition of employment," the ruling stated.

It found a qualification or requirement, such as holding a valid driver's license, "must be clearly and explicitly set forth."

By contrast, Albany city firefighters have a specific requirement to hold a valid driver's license "at the time of employment and throughout the duration thereof," the decision stated.

Lutz's arrest generated headlines across the region. He was arrested after he allegedly drove drunk and fell asleep in his car on Interstate 787. A Menands village police officer discovered Lutz asleep in his idling 2003 Lincoln Aviator in a northbound right lane before 6 a.m., court papers said.

The documents said Lutz recognized the arresting officer after he woke him up.

"Why are you doing this to me?" Lutz allegedly asked Officer Thomas Johnson during field sobriety tests. "Did I ever do you wrong?"

Johnson reported he earlier found the headlights of Lutz's car on and its door ajar. Vomit was nearby.

"Tommy, it's me, Brian," Lutz told the officer, according to the summary of his remarks in court papers.

"Do I know you?" Johnson replied.

"It's Lutzy. Brian Lutz," he allegedly responded.

Johnson contends he asked Lutz to pull over to the highway shoulder, but Lutz drove away, turned onto Route 378 and stopped in a lot on Broadway.

After Lutz's arrest, a police precinct video camera caught Lutz speaking to Council 82 President Christian Mesley, who told Lutz he was unlikely to get leniency from the office of District Attorney David Soares.

"Brian, don't forget, you know, if we got Paul Clyne or Sol Greenberg it's easier for us to handle this kind of stuff, but with this (expletive) you're not going to get any play," Mesley said in references to Soares and his two predecessors.

rgavin@timesunion.com • 518-434-2403 • @RobertGavinTU