[HISTORY: Adopted by the Mayor and Council of the Borough of Alpha 6-11-2002 by Ord. No. 02-06. Amendments noted where applicable.]
Pursuant to law, including 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 or her employment. Pursuant to law, including N.J.S.A. 59:10-4, local public entities are empowered to indemnify local public employees and officials consistent with the provisions of the New Jersey Tort Claims Act. The Borough of Alpha Council deems it in the best interest of the Borough of Alpha to indemnify Borough 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 Borough, the municipal official or someone on his behalf, including, without limitation, coverage provided by and through any insurance fund or joint fund and/or any excess liability policies.
- OFFICIAL, OFFICER or EMPLOYEE
- Any person, presently or in the future, elected or appointed to any public office, board or commission of the Borough of Alpha, 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 Borough of Alpha 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 Borough 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 Borough.
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 law, including 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 Borough of Alpha 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 Borough, the Borough 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 Borough 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 Borough 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 Borough 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.
Wherever an official, officer or employee of the Borough of Alpha 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 clearly because of actual fraud, willful misconduct or actual malice or intentional wrongdoing;
There exists policies of insurance, either obtained by the Borough 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 that referenced herein;
It is not deemed appropriate by the Borough Council pursuant to law, including 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 law(s);
The official, officer or employee fails to notify the Borough in a prompt manner and as soon as possible as to any action threatened against him or her; or
The lawsuit or claims assert a right for punitive damages.
The Borough 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 Borough. It shall be the Borough's sole option to select counsel and wherever permissible by law and/or canons of professional ethics controlling attorneys' practice of law, the Borough 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 or she is served with a summons, complaint, process notice, demand or other pleading he or she delivered the original or a copy thereof to the Borough 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 Borough in the conduct of the defense. Wherever competent and disinterested legal counsel is available to the Borough through any insurance coverage, the municipal official, officer or employee shall be obligated to be represented by such counsel. If the Borough wishes to use the Borough Municipal Attorney or the attorney for any board or committee of the Borough 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 Borough shall terminate the Borough's obligation to provide a defense and/or indemnify or to otherwise reimburse any municipal official, officer or employee.
If the legal proceeding is terminated by an agreement among the parties, then the Borough shall not be obligated to reimburse the municipal official, officer or employee unless the Borough, 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 Borough Municipal Attorney (Solicitor) or the attorney 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 Borough may reimburse a municipal official, officer or employee for a portion of any expense(s) incurred prior to the final decision in the legal proceeding at the Borough's sole discretion. The Borough 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 in such related cases.
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 fees or costs attributed to said counteraction, counterclaim or affirmative cause of action.
Nothing in this chapter shall authorize or require the Borough 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.