[HISTORY: Adopted by the Township Committee of the Township of Hamilton 7-7-1997 by Ord. No. 1276-97. Amendments noted where applicable.]
Officers and employees — See Ch. 60.
Pursuant to N.J.S.A. 59:10-1 et seq., indemnification is provided for defense costs and payment of a judgment rendered against a municipal/state employee for actions or failures to act while in the scope of his/her employment. Pursuant to N.J.S.A. 5:10-4, local public entities are empowered to indemnify local public employees and officials consistent with the provisions of the New Jersey Tort Claims Act. The Township Committee deems it in the best interest of the township to indemnify township officials, officers and employees consistent with the New Jersey Tort Claims Act.
Editor's Note: See N.J.S.A. 59:1-1 et seq.
For the purpose of this chapter, unless the context clearly indicates a different meaning, the following words and phrases shall have the meanings set forth:
- Coverage afforded by insurance policies of any and every kind, whether the premium be paid by the township, the municipal official or someone on his behalf, including, without limitation, coverage provided by and through the Joint Insurance Fund (JIF) and/or the Municipal Excess Liability (MEL) Policies.
- OFFICIAL, OFFICER or EMPLOYEE
- Any person, presently or in the future, elected or appointed to any public office, board or commission of the Township of Hamilton, whether full- or part-time, whether or not compensated for the appointed or elected position. It shall not include officials, officers and employees who are appointed, elected or employed by the Hamilton Township Municipal Utilities Authority nor the Hamilton Township Board of Education. It shall include all other boards, commissions and authorities which are subdivisions of municipal government. It shall also mean any person employed or retained by the township for any office, commission or board thereof, whether or not said person serves in a paid or unpaid capacity; provided, however, that these terms do not include independent contractors employed by the township.
It is the intent and purpose of this chapter to provide for the defense of actions against and the indemnification of public officials, officers and employees for civil actions as permitted by N.J.S.A. 59:10-1 et seq., as permitted by this chapter. This chapter shall be liberally construed to provide the fullest defense and indemnification allowed by law.
Whenever an official, officer or employee of the Township of Hamilton is a named defendant in any civil action or civil legal proceeding arising out of or incidental to the performance of his or her duties as an official, officer or employee of the township, the township shall provide the official, officer or employee with the necessary and reasonable defense and shall hold such official, officer or employee harmless and indemnify him or her from the payment of any settlement or judgment resulting from the proceedings, except as otherwise set forth in this chapter. The township shall indemnify officials, officers and employees from all civil claims, including defense costs, if and only if the person establishes that the act or omission upon which the claim or judgment was based occurred within the scope of his or her employment as an official, officer or employee of the township and the person establishes that he or she did not act or failed to act because of actual fraud, actual malice or willful conduct. The following sets forth situations in which the township shall not have a duty to defend or indemnify:
Where the action has been brought by the municipality, itself or any board, commission or authority established as a subdivision of municipal government against said official, officer or employee.
Where the official, officer or employee has been specifically found by a court or other competent tribunal in the proceedings to have acted with actual fraud, actual malice or willful misconduct or to have acted or failed to act within the scope of employment.
Where the official, officer or employee is found to have violated any of the township's Code of Ethics or any code of ethics existing by and pursuant to the Laws of the State of New Jersey.
Wherever an official, officer or employee of the Township of Hamilton is a defendant in any criminal action or legal proceeding arising out of or incidental to the performance of his or her duties and in the event that said action or legal proceeding is dismissed or finally determined in favor of the official, officer or employee, he or she shall be entitled to be reimbursed for the reasonable defense costs. This shall only include any criminal action instituted against an official, officer or employee based upon an act or omission of that official, officer or employee arising out of and directly related to the lawful exercise of his or her official duty or under color of his authority and that action is dismissed or results in a final disposition in favor of that official, officer or employee.
The provisions of a defense and indemnification, as set forth in the above sections of this chapter, shall justifiably be refused by the municipality if it is the determination of the governing body that:
The act or omission alleged was not within the scope of the person's employment or official duties;
The act or failure to act alleged was because of actual fraud, willful misconduct or actual malice or intentional wrongdoing;
There exists policies of insurance, either obtained by the township or by any other, by virtue of which the official, officer or employee is entitled to a defense of the action in question from any insurer, including coverage pursuant to the JIF or MEL;
It is not deemed appropriate by the Township Committee pursuant to N.J.S.A. 59:10-1 et. seq.;
The public official, officer or employee has failed to cooperate fully with the defense provided by the municipality;
Where the legal proceeding involves questions concerning election laws;
The official, officer or employee fails to notify the township in a prompt manner and as soon as possible as to any action threatened against him or her; or
The suit or claims assert a right for punitive damages.
The township may provide any defense required of it pursuant to the within chapter through an attorney from its own staff or by employing other counsel selected by the township. It shall be the township's sole option to select counsel and wherever permissible by law and/or canons of professional ethics controlling attorney's practice of law, the township may assume exclusive control of the representation of said official, officer or employee.
A municipal official, officer or employee shall not be entitled to indemnification or reimbursement pursuant to this chapter unless within 15 calendar days of the time he is served with a summons, complaint, process notice, demand or other pleading he delivered the original or a copy thereof to the Township Clerk with a request to defend and indemnify. The municipal official, officer or employee shall be obligated to cooperate to the fullest extent possible with the township in the conduct of the defense. Wherever competent and disinterested legal counsel is available to the township through any insurance coverage, the municipal official, officer or employee shall be obligated to be represented by such counsel. If the township wishes to use the Township Municipal Attorney or the attorney for any board or committee of the township to defend the claim, the municipal official, officer or employee shall be obligated to be represented by that attorney unless there is a conflict of interest. The refusal of the municipal official, officer or employee to cooperate with the township shall terminate the township's obligation to provide a defense and/or indemnity or to otherwise reimburse any municipal official, officer or employee.
If the legal proceeding is terminated by an agreement among the parties, then the township shall not be obligated to reimburse the municipal official, officer or employee unless the township, by and through the governing body and/or by court order, approves the settlement agreement.
Counsel fees to be paid to outside counsel, other than the Municipal Solicitor or the solicitor for any board or commission, for services rendered in connection with a claim subject to this chapter, shall be reasonable and shall be established by the governing body through resolution prior to the retention of such counsel. The township may reimburse a municipal official, officer or employee for a portion of any expense incurred prior to the final decision in the legal proceeding at the township's sole discretion. The township shall be entitled to wait for a final determination before making a determination to reimburse defense costs and/or honor indemnity.
To the extent that N.J.S.A. 40A:14-155 provides broader indemnification to members of the municipality's Police Department, that statute shall supersede the provisions of this chapter.
If the municipal official, officer or employee files a counteraction, counterclaim or asserts any affirmative claims in the legal proceeding, the municipality shall not be obligated to reimburse him for any attorney's fees or costs attributed to said counteraction, counterclaim or affirmative cause of action.
Nothing in this chapter shall authorize or require the township to pay for punitive or exemplary damages or damages resulting from the commission of a crime.
This chapter shall take effect upon final passage and publication according to law, and it shall apply to any and all claims and suits filed or brought after the effective date of this chapter whether or not said claim or suit relates to conduct or omissions occurring before the effective date of this chapter.