[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.[1] 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.
[1]
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.
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:
A.
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.
B.
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:
A.
The act or omission alleged was not within the scope
of the person's employment or official duties;
B.
The act or failure to act alleged was clearly because
of actual fraud, willful misconduct or actual malice or intentional
wrongdoing;
C.
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;
D.
It is not deemed appropriate by the Borough Council
pursuant to law, including N.J.S.A. 59:10-1 et seq.;
E.
The public official, officer or employee has failed
to cooperate fully with the defense provided by the municipality;
F.
Where the legal proceeding involves questions concerning
election law(s);
G.
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
H.
The lawsuit or claims assert a right for punitive
damages.
A.
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.
B.
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.[1]
