[HISTORY: Adopted by the Mayor and Council
of the Borough of Madison 9-13-1976 by Ord. No. 26-76; amended in its entirety 1-23-2017 by Ord. No. 4-2017. Subsequent amendments noted where applicable.]
A.
Subject to the limitations set forth in the subsequent sections of
this chapter, whenever any civil action has been or shall be brought
against any person (hereinafter referred to as "employee" or "official")
holding or formerly holding any office, position or employment with
the Borough of Madison for any action or omission arising out of or
in the course of the performance of the duties of such office, position
or employment, the Borough shall defray all costs of defending such
action, including reasonable counsel fees and expenses, together with
costs of appeal, if any, and shall save harmless and protect such
persons from any financial loss resulting from the litigation. The
Borough shall provide for defense of and indemnify any present or
former employee or official of the Borough who becomes a defendant
in a civil action if the person or persons involved:
B.
However, the Borough shall not indemnify any employee or official
against the payment of punitive damages, penalties, or fines, but
may provide for the legal defense of such claims in accordance with
the standards set forth in this chapter. The Borough may refuse to
provide for the defense and indemnification of any civil action referred
to in this chapter if the Borough Council determines that:
(1)
The act or omission did not occur within the scope of a duty authorized
or imposed by law;
(2)
The act or omission was the result of actual fraud, willful misconduct,
or actual malice; or
(3)
The defense of the action or proceeding by the Borough would create
a conflict of interest between the Borough and the employee(s) or
official(s) involved.
C.
In any other action or proceeding, including criminal proceedings,
the Borough may provide for the defense of a present or former employee
or official if the Borough Council concludes that such representation
is in the best interest of the Borough and that the person to be defended
acted or failed to act in accordance with the standards set forth
in this chapter.
D.
Whenever the Borough provides for the defense of any action set forth
herein and as a condition of such defense, the Borough may assume
exclusive control over the representation of such persons defended,
and such person shall fully cooperate with the Borough. The Borough
may provide for the defense pursuant to this chapter by authorizing
its Attorney to act on behalf of the person being defended or by employing
other counsel for this purpose or by asserting the right of the Borough
under any appropriate insurance policy that requires the insurer to
provide the defense. The Borough Attorney or other attorney selected
by the Borough Council shall represent the Borough official or employee,
at a cost not to exceed the hourly rate which the Borough compensates
its Borough Attorney.
The Borough shall not defray the costs of defending any criminal
action against any Borough employee or official except as may be authorized
by state statute or other municipal ordinance or resolution of the
Borough of Madison, and in those circumstances, the responsibility
for defraying the costs of defending such employee or official shall
be applicable only when such criminal proceedings shall have been
dismissed or result in a final disposition in favor of the employee
or official. Further, in the event that the Borough indemnifies the
employee or official, the cost of that indemnification shall not exceed
the hourly rate paid to the Borough Attorney. Nonetheless, should
the Borough Council determine that there is good cause to dismiss
the employee or official arising out of the incident or related incidents
of the criminal prosecution, the Borough will not reimburse the employee
or official for legal defense and costs of defending the suit, even
though criminal proceedings against the employee or official may be
dismissed or the employee or official found not guilty.
The Borough will not provide a defense for employees or officials
who are charged with ethical offenses or violations. The Borough Council
may, however, authorize the Borough to reimburse the employee or official
for the reasonable cost of the defense of ethics proceeding, including
investigation, costs and reasonable legal fees, as further defined
in this chapter, provided that the ethics proceeding is dismissed
or is finally determined in favor of the employee or official. In
addition, the Borough may indemnify an employee or official if the
Mayor and Council, by a majority vote, finds that a Borough employee
or official who is found to have committed an ethical offense acted
in a manner that was reasonably debatable at the time that the violation
occurred and that the employee or official's actions or omissions
did not constitute willful misconduct or an intentional wrong.
A.
The Borough shall not be obligated to defend and indemnify its employees
or officials if:
(1)
The alleged act or omission was not within the scope of employment
or authority, or the act or omission does not arise out of and is
not directly related to the employee's or official's lawful
exercise of his or her authority or duty in furtherance of the employee's
or official's authority or duty;
(2)
The claim arises from circumstances under which the Borough itself
would not be liable for the acts of its employees or officials under
the doctrine of respondent superior;
(3)
The act or omission constitutes a criminal offense, ethical offense,
actual fraud, intentional or willful misconduct, actual malice, or
an intentional or wrongful act or omission;
(4)
There exist policies of insurance, either obtained by the Borough
or by any other, by virtue of which the employee or official is entitled
to a defense in question from any insurer, including coverage pursuant
to the Joint Insurance Fund or Municipal Express Liability Policies;
(5)
If the action or proceeding was brought by the Borough itself against
the employee or official;
(6)
If the Borough employee or official has failed to substantially cooperate
with the Borough and its agents, servants, attorneys, and employees
in connection with the matter; or
B.
Specifically excluded from the provisions of this chapter are the
following classes of employees, officials, or former employees or
officials:
(1)
Any municipal employee or official providing any form of professional
medical services, such as doctors and nurses, insofar as said civil
action arises out of or concerns those professional medical services.
(2)
Any part-time professional municipal employee or official, such as
the Borough Attorney, Assistant Attorney, Auditor and Engineer, insofar
as said civil action arises out of or concerns those professional
services. This exclusion does not pertain to full-time professional
employees such as the Borough Engineering Administrator and Finance
Officer.
If the Borough employee or official files any counteraction,
or counterclaim, or asserts any affirmative claims in the legal proceedings,
the Borough shall not be obligated to reimburse the employee or official
for any attorney's fees or costs attributed to such counteraction,
counterclaim, or affirmative claim.
A Borough employee or official shall not be entitled to indemnification
or reimbursement pursuant to this chapter unless, within 15 calendar
days of the time he or she is served with any summons, complaint,
process, notice, demand or pleading, he or she delivers the original
or a copy thereof to the Borough. Any Borough employee or official
who receives notice of a claim or is named as a party in any civil
suit, ethics proceeding, or criminal proceeding either in his or her
official capacity or in an individual capacity for events arising
out of or connected directly or indirectly with the performance of
his or her duty as a Borough employee or official shall promptly advise
the Borough Administrator and the Borough Attorney of the claim or
that the civil suit or criminal proceeding has been commenced and
shall supply a copy of any and all notices and pleadings pertaining
to the matter. The Borough employee or official shall thereafter cooperate
with the appropriate Borough agents, attorneys, servants and employees
in effectuating the provisions of this chapter.
As used in this chapter, the following terms shall have the
meanings indicated:
Any person elected, appointed or employed by the Borough,
paid or unpaid, in any way connected with the municipal government
of the Borough of Madison, except for persons appointed to committees
having no powers other than to advise. "Employee" shall include all
persons on the municipal payroll. These terms shall not mean:
Any person who is not a natural person;
Any person while providing goods or services of any kind under
any contract with the Borough except an employment contract;
Any person while providing legal or engineering services for
compensation unless said person is a full-time employee of the Borough;
or
Any person who as a condition of his or her appointment or contract
is required to indemnify and defend the Borough and/or secure insurance.
