Township of Mansfield, NJ
Burlington County
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Table of Contents
Table of Contents
[HISTORY: Adopted by the Township Committee of the Township of Mansfield as indicated in article histories. Amendments noted where applicable.]
GENERAL REFERENCES
Code of Ethics — See Ch. 17B.
[Adopted 4-23-1992 by Ord. No. 1992-6[1]]
[1]
Editor's Note: This ordinance also repealed former Ch. 25A, Indemnification of Employees, adopted 2-5-1979 by Ord. No. 1979-2.

§ 25A-1 Purpose.

The Township Committee hereby finds that it is appropriate to provide for the indemnification of Township employees and officials in accordance with the provisions of N.J.S.A. 59:10-4 (New Jersey Tort Claims Act), which empowers local public entities to provide for such indemnification.

§ 25A-2 Definitions.

As used in this article, the following terms shall have the meanings indicated:
EMPLOYEE
Includes each person presently holding any office, position or employment, elective or appointive, whether or not such person holds a professional license or certificate and irrespective of the number of hours worked per week or is being paid a fixed salary or hourly rate for the performance of his/her duties, but shall not include any person furnishing professional or extraordinary unspecifiable services under separate appointment, retainer, agreement or contract, and shall also include persons formerly holding office or employment; provided, however, that the events giving rise to a cause of action or claim for which indemnification is sought must have occurred after January 1, 1989, and any claim based on an event prior to that date shall not be covered by this article.

§ 25A-3 Indemnification authorized.

A. 
Pursuant to the authority granted by provisions of the New Jersey Tort Claims Act, N.J.S.A. 59:10-4, the Township of Mansfield, Burlington County, does hereby authorize and provide to its employees and officials indemnification in accordance with the indemnification provisions applicable to all state employees under the New Jersey Tort Claims Act.
B. 
The Township does also hereby authorize indemnification of any person formerly or presently holding any office, position or employment, elective or appointive, hereafter referred to as an "employee" in accordance with the provisions herein.

§ 25A-4 Provision for indemnification of employees.

A. 
Except as otherwise provided herein, the Township shall indemnify and save harmless any employee from financial loss resulting from any civil action, suit or proceeding, including a cross-action, counterclaim or cross-complaint, against such employee on account of any act or omission done in the scope of his/her employment; provided, however, that the act or failure to act does not arise out of actual fraud, willful misconduct or actual malice.
B. 
The Township shall defray all costs of defending legal action against said employee, including attorneys' fees, court costs and expert or technical witness fees and any amount paid in settlement thereof and actually and reasonably incurred in connection therewith, to the extent permitted by general law. Expenses thus incurred may be paid in advance of final disposition of the action.
C. 
Nothing herein shall authorize the Township to pay for damages resulting from the commission of a crime; however, the Township shall indemnify and save harmless each employee from financial loss resulting from any action described above, including punitive or exemplary damages, if, in the opinion of the governing body, the acts committed by the employee upon which the damages are based did not constitute actual fraud, actual malice, willful misconduct or an intentional wrong.

§ 25A-5 Notification.

An employee shall not be entitled to indemnification or the cost of defense under this article unless, within five days of the time such employee is served with any summons, order to show cause, complaint, process, notice, demand or pleading, he/she delivers the same or a copy thereof to the Municipal Clerk, who shall then forthwith notify the Mayor and Township Solicitor of the pending action; provided, however, that this time period may be extended for good cause by the affirmative vote of a majority of the full membership of the governing body.

§ 25A-6 Choice of counsel.

The employee shall have the right to choose his/her own counsel pursuant to the provisions of this article.

§ 25A-7 Agreement with counsel.

A. 
As a condition precedent to the Township's provision of indemnification under this article, the counsel chosen by the employee shall enter into an agreement with the governing body at the earliest possible time and in the manner provided by law for the award of contracts regarding the provision of professional services.
B. 
The agreement between counsel and the municipality shall set forth both the rate of compensation and the anticipated total cost of defense, both of which must be acceptable to the governing body, and said agreement shall expressly provide that the Township's obligation to pay counsel's fee shall be conditioned upon the complete satisfaction of the terms and requirements of this article and the Township may disclaim coverage under the terms of § 25A-9 herein.
C. 
The agreement shall also state that payment shall not be due until 45 days following the termination of the matter in the submission of counsel's itemized bill.

§ 25A-8 Proceedings beyond trial court level.

It shall be within the sole discretion of the governing body to decide whether to pay for the costs of counsel beyond the trial court level.

§ 25A-9 Disclaimer of coverage.

A. 
The governing body shall disclaim liability for coverage of defense costs if any of the following conditions shall occur:
(1) 
The employee is covered by insurance for the cost of his/her defense;
(2) 
The Township is a party complaining against the employee;
(3) 
Any of the acts or omissions complained of was the product of actual fraud, actual malice or willful misconduct; or
(4) 
Any of the acts or omissions complained of was not within the scope of the employee's duties, powers or responsibilities.
B. 
The governing body shall determine not later than 30 days following the termination of the case and submission by the employee's counsel to the Township Clerk an itemized bill (together with copies of all documents, pleadings, exhibits, transcripts and other papers filed in the case) whether it will disclaim liability for coverage of defense costs.
C. 
The governing body shall consider in its determination the pleadings, evidence and arguments brought out in the case, the verdict (if any) and any additional pertinent considerations; provided, however, that the Township may not disclaim coverage under this chapter if there shall have been a specific determination by the trier of fact that the employee's actions or omissions complained of were within the employee's scope of employment, duties and responsibilities and, further, that the employee's actions or omissions complained of did not involve actual fraud, actual malice or willful misconduct.
D. 
The governing body's determination shall be subject to judicial review and, where provision of defense costs has been wrongfully withheld by the governing body, the employee shall be reimbursed for all such costs and for all costs incurred in prosecuting the action for reimbursement under this article.

§ 25A-10 Forfeiture of indemnification.

An employee claiming indemnification under this article shall cooperate fully and in good faith with the Township and with any attorneys, adjusters, investigators or experts or technical personnel engaged by the employee for the preparation and presentation of a defense to such action or the settlement or other disposition thereof, including any counsel or other professionals engaged independently by the municipality, and if the employee neglects, fails or refuses to cooperate as herein required, the governing body, after a hearing on 10 days' written notice to the employee and for cause, may declare all rights created under this article for the benefit of such employee to be forfeited and terminated by the affirmative vote of a majority of the full membership of the Township Committee.
[Adopted 4-23-2008 by Ord. No. 2008-14]

§ 25A-11 Defense and indemnification authorized.

Except as hereinafter provided, the Township of Mansfield, hereinafter known as the "Township," shall, upon the request of any present or former official, employee or appointee of the Township of Mansfield, provide for indemnification and legal defense of any civil action brought against said person or persons arising from an act or omission falling within the scope of their public duties.

§ 25A-12 Punitive damages; authority to refuse action.

A. 
The Township shall not indemnify any person against the payment of punitive damages, penalties, or fines, but may provide for the legal defense of such claims in accord with the standards set forth herein.
B. 
The Township may refuse to provide for the defense and indemnification of any civil action referred to herein if the Mansfield Township Committee 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 failure to act was the result of actual fraud, willful misconduct or actual malice of the person requesting defense and indemnification; or
(3) 
The defense of the action or proceeding by the Township would create a conflict of interest between the Township and the person or persons involved.

§ 25A-13 Interpretation of terms.

The terms of this article and the definition of official, employee and appointee are to be construed liberally in order to effectuate the purposes of this article, except that these terms shall not mean:
A. 
Any person who is not a natural person;
B. 
Any person while providing goods or services of any kind under any contract with the Township except an employment contract;
C. 
Any person while providing legal or engineering services for compensation unless said person is a full-time employee of the Township; and
D. 
Any person who, as a condition of his or her appointment or contract, is required to indemnify and defend the Township and/or secure insurance.

§ 25A-14 Scope.

A. 
The Township shall provide for defense of and indemnify any present or former official, employee or appointee of the Township who becomes a defendant in a civil action if the person or persons involved are alleged to have:
(1) 
Acted or failed to act in a matter in which the Township has or had an interest;
(2) 
Acted or failed to act in the discharge of a duty imposed or authorized by law; and
(3) 
Acted or failed to take action in good faith.
B. 
For purposes of this article, the duty and authority of the Township to defend and indemnify shall extend to a cross-claim or counterclaim against said person.

§ 25A-15 Additional coverage.

In any other action or proceeding, including criminal proceedings, the Township may provide for the defense of a present or former official, employee or appointee if the Mansfield Township Committee concludes that such representation is in the best interest of the Township and that the person to be defended acted or failed to act in accord with the standards set forth in this article.

§ 25A-16 Township control over defense.

Whenever the Township provides for the defense of any action set forth herein and as a condition of such defense, the Township may assume exclusive control over the representation of such persons defended, and such person shall cooperate fully with the Township.

§ 25A-17 Action by Town Attorney, other counsel or insurer.

The Township may provide for the defense pursuant to this article by authorizing its attorney to act in behalf of the person being defended or by employing other counsel for this purpose or by asserting the right of the Township under any appropriate insurance policy that requires that insurer to provide defense.