Borough of Bloomsbury, NJ Chapter 17 Defense and Indemnification

[HISTORY: Adopted by the Mayor and Council of the Borough of Bloomsbury 8-24-2004 by Ord. No. 113-04. Amendments noted where applicable.]

§ 17-1 Purpose.

This chapter is intended to either reimburse or indemnify municipal officers and employees for legal expenses, court costs and, in certain instances, judgments incurred by or imposed against them in connection with the performance of their duties.

§ 17-2 Definitions.

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:

INSURANCE

Coverage afforded by insurance policies of every kind, whether the premiums are paid by the Borough, the municipal official or someone on his or her behalf.

MUNICIPAL OFFICIAL

Any officer, employee, or board or committee member appointed or hired by the Mayor or Council, whether full or part time. The term shall also include any person elected by the voters to fill any official position in the Borough or any person subsequently appointed to fill such a position.

§ 17-3 Reimbursement of expenses; grounds for refusal.

Subject to the provisions of this chapter, the Borough shall reimburse a municipal official for all expenses incurred, specifically including reasonable attorney fees and court costs, and all monetary judgments imposed upon him or her in any action or legal proceeding of a noncriminal nature arising out of or incidental to the performance of the duties of the position or the office held by such municipal official. The Borough 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. The Borough may refuse to provide for the defense and indemnification of any civil action referred to herein if the Borough Council determines that:

A. The act or omission did not occur within the scope of a duty authorized or imposed by law;

B. 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

C. The defense of the action or proceeding by the Borough would create a conflict of interest between the Borough and the person or persons involved.

§ 17-4 Exceptions to reimbursement.

The Borough shall not be obligated to provide reimbursement in the following instances:

A. Where the legal proceeding is instigated or brought by the municipal officer.

B. Where the legal proceeding involves a claim of misfeasance or malfeasance in office or a claim of fraud, theft or misappropriation of public funds and the municipal official is found liable for the charge.

C. Where the legal proceeding is instigated or brought by the municipality against the municipal official.

D. Where the legal proceeding involves a question concerning the election laws.

§ 17-5 Reduction of reimbursement.

The amount the Borough is obliged to reimburse the municipal official shall be reduced by any insurance coverage payable to the municipal official by the net amount (recovery less attorney fees, disbursements and court costs) of any money received by the municipal official in any counteraction against the person or persons bringing the action against him.

§ 17-6 Delivery of summons or complaint; cooperation with Borough required.

A. A municipal official shall not be entitled to indemnification or reimbursement pursuant to this chapter unless, within 10 calendar days of the time he/she is served with any summons, complaint, process notice, demand or pleading, he/she delivers the original or a copy thereof to the Borough Attorney and Borough Clerk.

B. The municipal official shall be obliged to cooperate with the Borough in the conduct of his defense.

C. Whenever competent and disinterested legal counsel is available to the Borough through any insurance coverage, the municipal official shall be obliged to be represented by such counsel. If the Borough wishes to use the Borough Attorney or the attorney for any board or committee of the Borough to defend the action, the municipal official shall be obligated to be represented by that attorney unless there is a conflict of interest. The refusal of the municipal official to cooperate with the Borough shall terminate the Borough's obligation to reimburse the municipal official.

§ 17-7 Approval of settlements.

If the legal proceeding is terminated by an agreement among the parties, then the Borough shall not be obligated to reimburse the municipal official unless the Borough approves the settlement agreement.

§ 17-8 Costs attributable to counteraction.

If the municipal official files a counteraction in the legal proceeding, the municipality shall not be obligated to reimburse him for any attorney fees or court costs attributable to such counteraction.

§ 17-9 Time of payment.

The Borough may reimburse a municipal official for a portion of any expenses incurred prior to a final decision in a legal proceeding, but the Borough shall be entitled to wait for a final determination before being obligated to make any payments.

§ 17-10 Effect on existing actions.

Any legal action which may be covered by this chapter which has not been reduced to final judgment as of the date of passage shall be covered by the terms of the chapter.