Township of Old Bridge, NJ Chapter 119 Defense and Indemnification of Officers and Employees

[HISTORY: Adopted by the Township Council of the Township of Old Bridge 5-23-2005 by Ord. No. 13-2005 (Sec. 3-7 of the 1973 Revised General Ordinances). Amendments noted where applicable.]

GENERAL REFERENCES

Ethics — See Ch. 145.

Personnel policies — See Ch. 351.

§ 119-1 Intent and purpose.

It is the intent and purpose of this chapter to provide for the defense of actions against the indemnification of public employees and officials as permitted by N.J.S.A. 59:10-1 et seq.

§ 119-2 Definitions.

As used in this chapter, the following terms shall have the meanings indicated:

EMPLOYEE or OFFICIAL

Includes an officer, employee, servant or official, whether or not compensated or part-time, who is authorized to perform any act or service; provided, however, that the term does not include an independent contractor.

PUBLIC EMPLOYEE or PUBLIC OFFICIAL

Any employee or official or former employee or former official of the Township of Old Bridge.

§ 119-3 Defense of actions and indemnifications; rate for private counsel.

A. The Township of Old Bridge shall provide for indemnification and the defense of any action brought against a public employee or official on account of any act or omission in the scope of his employment, and this obligation shall extend to any cross-actions, counterclaims or cross-complaints against such employee.

B. Private counsel engaged to represent officers or employees shall be paid the rate of $135 per hour unless a different hourly rate is provided by contract between the Township of Old Bridge and the attorney.

§ 119-4 Exceptions.

The provisions of § 119-3 shall not be applicable when a court of competent jurisdiction determines that:

A. The act or omission was not within the scope of employment; or

B. The act or failure to act was because of actual fraud, willful misconduct or actual malice; or

C. The defense of the action and indemnification are provided for by an insurance policy or policies, whether obtained by the Township or by any other person; or

D. The public employee or official failed to deliver any original or a copy of the same to the Township Clerk of the Township of Old Bridge within 10 calendar days after the time he or she is served; or

E. The public employee or official has failed to cooperate fully with the defense.

§ 119-5 Withholding defense; defending under reservation.

A. If the defense and indemnification are not provided for by an insurance policy or policies, and if it appears to the Township Council that a particular claim, lawsuit, action or proceeding may not be properly the subject for municipal indemnification because of factual disputes which can only be resolved as the case develops (during investigation, discovery motion or trial), the Township Council may elect to either:

(1) Withhold a defense until such time as the matter is established to be a proper one for indemnification. In such case the employee, officer, or official shall engage his or her own counsel to defend the claim, lawsuit, action or proceeding subject to reimbursement or reasonably necessary fees and costs. Reimbursement shall be made only in the case of a later determination that the claim was the proper subject of indemnification; or

(2) The Township of Old Bridge may elect to provide a defense in such case but subject to a reservation of rights with respect to any obligation to indemnify the employer, officer or official.

B. In the event the Township of Old Bridge extends a defense to an officer or employee under a reservation of rights, the Township Council may require the officer or employee to sign an agreement to repay defense costs expended by the Township of Old Bridge if an exception under § 119-4 is determined by a court of competent jurisdiction.

§ 119-6 Methods of providing defense.

The Township of Old Bridge may provide any defense required of it under this chapter through an attorney from its own staff or by employing other counsel.

§ 119-7 Control over litigation.

Whenever the Township of Old Bridge provides any defense required of it under this chapter, the Township of Old Bridge through counsel may assume exclusive control over the representation of the public employee or official, and such employee or official shall cooperate fully with the defense.

§ 119-8 Indemnification.

A. In any case where the Township of Old Bridge is required to provide a defense under this chapter, the Township of Old Bridge shall pay or shall reimburse the public employee or official for:

(1) Any bona fide settlement agreements entered into by the employee or official;

(2) Any judgments entered against the employee or official; and

(3) If the Township of Old Bridge has failed to provide such required defenses, all costs of defending the action, including reasonable attorney fees and expenses, together with costs of any appeal.

B. In addition, in any case where the Township of Old Bridge would be required to provide a defense under this chapter except for the fact that such defense is provided for any insurance, the Township of Old Bridge shall provide indemnification as aforesaid, but only to the extent not covered by insurance.

§ 119-9 Punitive damages.

A. The Township of Old Bridge shall also indemnify any employee or official in any case where a defense has been provided with respect to awards of punitive or exemplary damages except in the following cases:

(1) The act or omission was not within the scope of employment for the Township of Old Bridge; or

(2) The employee or official engaged in actual fraud; or

(3) The employee or official engaged in willful misconduct or actual malice.

B. In these cases where no defense has been provided or a defense has been provided under a reservation of rights, the Township of Old Bridge shall not indemnify any person for liability or an award of damages whether compensatory, punitive or exemplary unless the governing body has first declared and determined that the employee or official is properly entitled to indemnification.