Town of Goshen, NY Chapter 17 Legal Defense

[HISTORY: Adopted by the Town Board of the Town of Goshen 8-11-2014 by L.L. No. 2-2014.[1] Amendments noted where applicable.]

GENERAL REFERENCES

Ethics — See Ch. 14.

Civil action for highway and sidewalk defects— See Ch. 65.

[1] Editor's Note: This local law repealed former Ch. 17, Legal Defense, adopted 6-24-1982 by L.L. No. 4-1982.

§ 17-1 Legislative intent.

The purpose of this chapter is to provide legal and financial protection for those individuals serving the Town of Goshen (hereinafter the "Town") from civil lawsuits and other proceedings that may be brought against them in their individual capacity for actions or omissions taken while acting within the scope of their employment. By enactment of this chapter, the Town does not intend to establish or enlarge any direct liability of the Town, or to limit or otherwise abrogate any existing right or responsibility of the Town or its officers or employees with regard to indemnification or legal defense.

§ 17-2 Definitions.

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

EMPLOYEE

Any employee, Town Board member, supervisor, officer, member of a Town board or commission, director, volunteer expressly authorized to participate in a publicly sponsored volunteer program, or any other person holding a position by election, appointment or employment in the service of the Town, whether or not compensated, but shall not include an independent contractor. The term "employee" shall include a former employee, his or her estate or judicially appointed personal representative.

TOWN ATTORNEY

The duly appointed Attorney for the Town or any attorney designated to act on behalf of the Town Attorney.

§ 17-3 Town to provide defense.

A. If an employee complies with the provisions of § 17-5, the Town, through the Town Attorney, counsel selected by the Town Board, or any applicable insurance program maintained by the Town, shall provide for the defense of the employee in any civil action or proceeding in any state or federal court, or any proceeding before an administrative agency, arising out of any alleged act or omission which is alleged to have occurred or occurred while the employee was acting within the scope of his or her public employment or duties. For purposes of this chapter, the determination of whether an employee was acting within the scope of his or her employment will be made by the Town Board, upon the advice of the Town Attorney, consistent with then prevailing law. Notwithstanding the above, no act can be so determined to be within the scope of employment if the commission of such act resulted in a conviction of a Class A misdemeanor or higher crime under the New York State Penal Law or similar federal crime under Title 18 of the United States Code, except if the Town Board, in its sole discretion, so determines in the best interests of the Town to allow for the defense of such actions. This duty to provide for a defense shall not arise where such action or proceeding is brought by or on behalf of the Town against such employee.

B. Subject to the conditions set forth in Subsection A of this section, the employee shall be entitled in such action or proceeding to be represented by the Town Attorney, or counsel designated by the Town Board, at no cost to the employee. The employee shall be entitled to representation by private counsel of his or her choice in such action or proceeding at the expense of the Town whenever the Town Attorney determines, based upon an investigation and review of the facts and circumstances of the case and of the prevailing law, that a conflict of interest exists between the employee and the Town, or whenever a court of competent jurisdiction determines that a conflict of interest exists and that the employee is entitled to be represented by counsel of his or her choice at the expense of the Town. Upon such a determination, the Town Attorney shall notify the employee, in writing, that the employee is entitled to be represented by private counsel of his or her choice at the expense of the Town. The Town Board may require, as a condition of the payment of the fees and expenses of such private counsel; that the same counsel represent appropriate groups of such employees. If the employee or group of employees is entitled to representation by private counsel under the provisions of this section at the expense of the Town, the Town Attorney shall so certify this to the Town Board. Attorney fees and litigation expenses shall be paid to such private counsel only to the extent of appropriate and reasonable rates prevailing in Orange County and as paid by the Town for similar representation, all as determined by the Town Attorney. Such attorney fees and litigation expenses shall be paid by the Town to such private counsel from time to time while such action or proceeding is pending, upon submission by the private attorney of a detailed bill itemizing a description of the work performed, the hours worked, the approved rate per hour, and disbursements. However, no extraordinary disbursements or fees shall be paid to such private counsel unless prior written consent of the Town Attorney is obtained. Payment shall also be subject to the audit by the Town Board. Such private counsel shall conform to all recordkeeping and notifications required by the Town Attorney.

C. Any dispute with respect to representation of multiple employees by a single counsel, the reasonableness of attorney fees, or the amount of litigation expenses shall be resolved by a court of competent jurisdiction upon motion or by way of a special proceeding.

D. Where the employee delivers process and a written request for a defense to the Town Attorney as required by § 17-5, the Town Attorney shall take the necessary steps on behalf of the employee, including the retention of private counsel as provided in this section, to avoid entry of a default judgment against the employee pending resolution of any issue pertaining to the obligation of the Town to provide a defense.

§ 17-4 Indemnification.

A. If an employee complies with the provisions of § 17-5, the Town shall indemnify and save harmless the employee in the amount of any final judgment, order or decision obtained against such employee in any civil action or proceeding in any state or federal court, or any proceeding before an administrative agency, or in the amount of any settlement approved by the Town Board of any such action or proceeding, arising out of any alleged act or omission which occurred or is alleged to have occurred while the employee was acting within the scope of his or her public employment. For purposes of this chapter, the determination of whether an employee was acting within the scope of his or her employment will be made by the Town Board, upon the advice of the Town Attorney, consistent with then prevailing law. Notwithstanding the above, no act can be so determined to be within the scope of employment if the commission of such act resulted in a conviction of a Class A misdemeanor or higher crime under the New York State Penal Law or similar federal crime under Title 18 of the United States Code, except if the Town Board, in its sole discretion, so determines in the best interests of the Town to allow for the indemnification of such actions. This duty to indemnify shall not arise where such action or proceeding is brought by or on behalf of the Town against such employee.

B. The amount of any such judgment, order, or decision obtained against such employee, or the amount of any settlement approved by the Town Board, for which the Town will indemnify and save harmless an employee consistent with this section, includes any amounts designated as compensatory, special, punitive, or other damages, including sanctions, fines, costs and attorney fees.

C. Any proposed settlement of such action or proceeding, for which indemnification by the Town is sought, must be reviewed and approved by the Town Board. No employee will be indemnified or saved harmless by the Town in accordance with this chapter in connection with any settlement unless such settlement is so reviewed and approved.

D. Upon the entry or finalization of such final judgment, order or decision against the employee, or upon the settlement of the action or proceeding, the employee shall cause a copy of such judgment, order, decision or approved settlement to be served personally, or by certified or registered mail, within 30 days of the date of entry, finalization or settlement upon the Town Attorney. If such judgment, order, decision or settlement is consistent with the provisions of this chapter, the Town Supervisor, upon the advice of the Town Attorney, shall certify it for payment. As so certified, the judgment, order, decision or settlement shall be paid upon the audit of the Town Board.

§ 17-5 Conditions.

A. The duty to defend, indemnify and save harmless as set forth in this chapter is conditioned upon:

(1) Delivery by the employee to the Town Clerk and Town Attorney of the original or a true and complete copy of any notice of claim, summons, complaint, process, notice, demand or pleading as soon as possible, but in no event later than 10 days after the employee is served with such document or prior to the return date of such document, whichever is sooner; and

(2) The full cooperation of the employee in the defense of such action or proceeding, and in the defense of any action or proceeding against the Town based upon the same or related acts or omissions, and in the prosecution of any appeals thereof.

B. The above-noted delivery of said notices of claim, summonses, complaints, processes, notices, demands or pleadings shall be deemed as a request by the employee that the Town provide for his or her defense and indemnification pursuant to this chapter, and is a condition precedent to the granting of such defense and/or indemnification by the Town.

C. Consistent with this chapter, the determination as to whether the Town will defend and/or indemnify the employee will be based upon an investigation of the facts and circumstances of the matter. The Town Board, in accordance with this chapter and the advice of the Town Attorney, shall make this determination within a reasonable time after the completion of such investigation. Such determination shall be final, except as provided below.

D. Such determination shall be in writing and mailed promptly by the Town Attorney to the employee. If the determination is adverse, in whole or in part, to the employee, it shall state the facts and reasons therefor.

E. A determination favorable to the employee may thereafter be revised and/or revoked for good cause. The revised determination, or the revocation of such determination, shall be in writing and mailed by the Town Attorney promptly to the employee, and shall state the facts and reasons therefor.

F. A special proceeding brought pursuant to Article 78 of the New York Civil Practice Law and Rules shall be the exclusive method by which an employee aggrieved by a determination may seek review of the determination. If, as a result of such judicial review, the employee ultimately obtains a reversal of the determination, the Town shall reimburse the employee for the attorney fees and costs charged the employee in obtaining the reversal, to the extent that such fees and costs were reasonable and necessary.

§ 17-6 Limitation of benefits.

The benefits of this chapter shall inure only to employees as defined herein and shall neither enlarge nor diminish the rights of any other party, nor shall any provision of this chapter be construed to affect, alter or repeal any provision of the Workers' Compensation Law.

§ 17-7 Effect on other laws.

This chapter shall not in any way affect the obligation of any claimant to give notice to the Town under § 50-e of the New York General Municipal Law, or any other provision of any law.

§ 17-8 Applicability.

The provisions of this chapter shall apply to all actions and proceedings then pending on the effective date of this chapter, pursuant to § 12[1] herein, or thereafter instituted.

[1] Editor's Note: This section refers to Section 4 of L.L. No. 2-2014, which provides an effective date in the manner provided for in the Municipal Home Rule Law.

§ 17-9 Construal of provisions.

Except as otherwise specifically provided in this chapter, the provisions of this chapter shall not be construed in any way to establish or enlarge any direct liability of, or to impair, alter, limit, modify, abrogate or restrict any immunity available to or conferred upon, the Town or any unit, entity, officer or employee of the Town, or any right to a defense and/or indemnification provided for any Town officer or employee by, in accordance with, or by reason of any other provision of Town, county, state or federal statutory, regulatory or common law.