Borough of Rockaway, NJ Defense and Indemnification

A present or former municipal employee, appointee, official, professional appointee, elected official or member of the various boards, agencies and commissions of the Borough of Rockaway, whether full- or part-time, appointed, elected or hired. The terms of this chapter and the definitions of "official," "employee" and "appointee" are to be construed liberally in order to effectuate the purposes of this chapter except that the terms shall not mean a) any person who is not a natural person; b) any person while providing goods or services of any kind under any contract with the Borough except for services provided pursuant to an employment contract or a professional services contract; or c) any person while providing legal, engineering, accounting or other professional services for compensation if the action involves professional negligence and is otherwise covered by the person's professional liability insurance policy or unless said person is a full-time employee of the Borough of Rockaway. The use of the terms "official," "employee" or "appointee" shall include all such persons even if not specifically stated in this chapter.

§ 23-2 Civil actions.

Pursuant to the provisions of N.J.S.A. 59:10-1 et seq., and subject to the provisions of this chapter, the Borough of Rockaway is authorized to and shall provide for the defense of actions brought against its municipal officials, employees and appointees; shall indemnify such officials, employees, and appointees to the extent permissible by law; and shall save harmless and protect such persons from financial loss resulting from litigation. Such indemnification shall arise out of any action or legal proceeding of a noncriminal nature directly related to, or incidental to, the performance of the duties of the position or office held by such municipal official, employee or appointee. Pursuant to N.J.S.A. 59:10-4, the indemnification and defense provided for in this chapter shall include exemplary or punitive damages resulting from the official's, employee's, or appointee's civil violation of state or federal law, provided that such violation does not constitute actual fraud, actual malice, willful misconduct or an intentional wrong as may be adjudicated by a court of competent jurisdiction.

§ 23-3 Criminal actions.

The Borough shall not defray the cost of defending any criminal action against any municipal official except as may be authorized by state statute or other municipal ordinance or resolution of the Borough of Rockaway, and in those circumstances, the responsibility for defraying the cost of defending such employee shall be applicable only when such criminal proceeding shall have been dismissed or shall have resulted in a final disposition in favor of the municipal official. However, should the Mayor and Borough Council determine that there is good cause to dismiss the employee arising out of the incident(s) giving rise to the criminal prosecution, the Borough will not reimburse the municipal employee for legal defense and costs in defending this suit, even though criminal proceedings against the employee may be dismissed or the employee found not guilty.

§ 23-4 Notification of Borough; cooperation with Borough.

The municipal official shall not be entitled to indemnification or reimbursement pursuant to this chapter unless within 10 calendar days of the time such municipal official is served with any summons, complaint, process, notice, demand or pleading, the official delivers the original or a copy thereof to the Borough Attorney or to the Municipal Clerk.

The municipal official shall be obliged to cooperate with the Borough in the conduct of the municipal official's defense. Whenever competent and disinterested legal counsel is available to the Borough through any insurance coverage, the municipal official shall be obliged to be represented by such counsel. If the Borough wishes to use the Borough Attorney or the attorney for any board or council of the Borough to defend that action, the municipal official shall be obligated to be represented by that attorney unless there is a conflict of interest. The refusal of the municipal official to reasonably cooperate with the Borough shall terminate the Borough's obligation to reimburse the municipal official.

§ 23-5 Method of providing for defense; attorney's fees.

If the Borough Council determines to provide a defense as authorized by this chapter, it may do so by:

(1)

Hiring an attorney of its choice; or

(2)

Reimbursing the municipal official for reasonable attorney's fees and costs incurred in connection with the defense of the act.

A resolution shall be adopted appointing counsel for the defense and determining counsel fees. The hourly rate shall not exceed the then rate paid to the Borough Attorney without a written resolution of the Council. Nothing in this chapter shall preclude the Borough and/or Borough Attorney from demanding and reviewing periodically any costs and attorney's fees in connection with the defense of the municipal official. In the event that a dispute over attorney's fees arises, the Borough reserves the right to submit the dispute to the Fee Arbitration Council of the district or pursue any other course of permissible legal action.

§ 23-6 Exceptions.

The Borough shall not be obligated to provide reimbursement in the following instances:

Where the act or omission was not within the scope of the municipal official's employment or authority.

Where the act or omission complained of was because of actual fraud, willful misconduct, actual malice or the commission of a crime.

Where the legal proceeding is instigated or brought by the Borough of Rockaway against the municipal official.

Where the legal proceeding involves a question concerning the election laws.

Where the action is brought against the Borough by the municipal official. If any such legal proceeding shall be dismissed or finally determined in favor of the municipal official or employee, the official or employee shall be reimbursed for the expense of the defense, providing:

(1)

The employee proves that the act or omission was within the scope of employment or authority; and

(2)

The Borough fails to prove the act or omission complained of was because of actual fraud, willful misconduct or actual malice.

Where the defense of the action or proceeding would constitute a conflict of interest between the Borough and the municipal official.

Where the defense of the action or proceeding is covered by an insurance policy or policies; however, the Borough shall be responsible for the cost of the deductible.

Where the person is providing legal, accounting or engineering services for compensation and the legal defense is covered by the person's professional liability insurance. However, the Borough shall be responsible for the cost of any deductible of the employee's professional liability insurance policy.

The municipal official has failed to fully cooperate with the defense.

Where the act or omission is in violation of the New Jersey Local Government Ethics Law, N.J.S.A. 40A:9-22.1 et seq., or any ethics code adopted pursuant to the statute.

§ 23-7 Exclusive control as condition for defense.

The Borough shall have exclusive control over the representation of the municipal official, and such person shall cooperate fully with the Borough and the designated attorney; provided, however, that the municipal official may at any time at the municipal official's option take control of the representation by waiving all rights to indemnification and all rights to payment for the defense costs.

§ 23-8 Reduction of reimbursement.

The amount the Borough is obliged to reimburse the municipal official shall be reduced by any insurance coverage payable to the municipal official by the net amount (that is, any recovery less attorney's fees, disbursements and court costs) of any money received by the municipal official in any counteraction against the person or persons bringing the action against him or her.

§ 23-9 Approval of settlement agreements.

If the legal proceeding is terminated by an agreement among or between the parties, then the Borough shall not be obligated to reimburse the municipal official unless the Borough approves the settlement agreement.

§ 23-10 Costs attributable to counterclaims or cross-claims.

If the municipal official files a counterclaim or cross-claim in the legal proceedings, the Borough shall not be obligated to reimburse for any attorney's fees or court costs attributable to such action.

§ 23-11 Time of payment.

The obligation of the Borough to reimburse a municipal official for expenses shall arise upon the official incurring the expense for the official's defense of the legal proceedings and shall be payable from time to time upon presentation of vouchers by the official for the services rendered and cost incurred.

§ 23-12 Severability.

If any article, section or subsection of this chapter is declared for any reason to be unconstitutional or invalid by a court of competent jurisdiction, such provision(s) shall be deemed severed from the remainder of the chapter and shall not affect the enforceability of the remainder of the chapter.

§ 23-13 Repealer.

Any and all ordinances or parts thereof inconsistent with the provisions of this chapter are hereby repealed to such extent as they are so in conflict or inconsistent; provided, however, that the adoption of this chapter shall not prevent or bar the continuance or institution of any proceedings for offenses heretofore committed in violation of any existing ordinance of the Borough of Rockaway.

§ 23-14 When effective; effect on prior actions.

This chapter shall take effect upon final passage and publication according to law.

Any legal proceeding which may be covered by this chapter which has not been reduced to a final judgment as of the date of passage shall be covered by the terms of this chapter.