[Adopted 8-20-1998 by Ord. No. 98-41]
As used in this article, the following terms
shall have the meanings indicated:
Refers to the means by which such public employee may respond
to any suit, allegation or cause of action. The Borough shall provide
the defense of any action, suit or proceeding, whether civil, criminal,
administrative or investigative, including a cross action, counterclaim
or cross complaint against any public employee because of any act
or omission of that employee in the scope of his or her employment
and shall defray all costs of defending such action, including reasonable
counsel fees and expenses, together with costs of appeal, if any,
excepting actions, suits or proceedings brought by the Borough against
any such employee. Expressly exempted from this article: providing
defense and indemnification to public employees of the Borough against
its own public employees.
To secure against loss or damage which may occur in the future,
or to provide compensation for or to repair loss or damage already
suffered; to insure to save harmless.
Includes any employee of the Borough of Carteret (the "Borough"),
and shall include any elected or appointed official or any officer,
employee or servant, whether or not compensated, who is authorized
to perform an act or service for the Borough. The term "public employee"
shall also include persons formerly holding office or employment,
provided that the events giving rise to a cause of action or claim
hereunder conform to the requirements herein established.
The Mayor and Council for the Borough of Carteret
find as follows:
A.
The State of New Jersey, through the passage of the
Tort Claims Act, as amended and supplemented from time to time, N.J.S.A.
59:1-1 et seq., has determined the circumstances under which claims
may be made against public entities and their officials, employees
and servants.
B.
Said Tort Claim Act also specifies under what circumstances
a public entity may defend and indemnify its officials, employees
and servants.
C.
The Mayor and Council for the Borough of Carteret
hereby provide, under certain circumstances, for the defense and indemnification
of its officers, employees and servants in the good faith performance
of their duties and responsibilities.
D.
Such defense and indemnification are especially appropriate
for members of appointed boards who serve the Borough of Carteret
without monetary compensation.
E.
The indemnification of municipal employees is also
expressly designed to avoid a conflict between the employer and the
employee when claims are lodged. The Supreme Court for the State of
New Jersey has noted that because the law does not require, but does
permit, indemnification of local public entity employees, conflicts
of interest may arise in the absence of such indemnification where
an entity and an employee are both sued for compensatory damages in,
for example, a civil rights action and both employ the same attorney
to defend. Likewise, the court pointed out such conflict could arise
because the employee is liable for punitive damages and the entity
is not. Accordingly, this indemnification policy is also intended
to increase the efficiency and reduce the costs of defending the Borough
and its employees and agents in the event of such actions.
A.
Whenever a civil action shall be brought against any
person holding an office, position or employment with the Borough
for any action or omission arising out of or in the course of the
performance of the duties of such office, position or employment,
the Borough of Carteret shall provide payment of that portion of any
exemplary or punitive damage award not otherwise covered by a policy
of insurance, except as limited herein. Note, however, that the Borough
of Carteret does not, by indemnifying its employees against punitive
damage, indirectly or directly waive its own immunity against such
claims.
B.
Whenever a civil action shall be brought against any
person holding an office, position or employment with the Borough
for any action or omission arising out of or in the course of the
performance of the duties of such office, position or employment,
the Borough shall provide payment of that portion of any costs of
defense of said action not covered by a policy of insurance. Whenever
any insurance policy whose purpose is to provide the defense and indemnification
of the Borough or its public employees is in dispute, the Borough
will stand in the place of the insurance carrier, subject to all rights
of subrogation, to provide for the defense and indemnification of
its employees as specified herein, and said public employee has an
affirmative duty to be eligible for said defense and indemnification
to cooperate with the Borough in any and all of its efforts to resolve
any disputed insurance coverage.
By common law and this express provision to
this article, the Borough of Carteret's authority to indemnify is
limited to acts by public employees that are within the scope of their
employment and which are not criminal, fraudulent, malicious or instances
of willful misconduct. Additionally, the Borough of Carteret will
not provide the means for defense nor indemnify any public employee
in those instances where the Borough of Carteret has initiated the
charges or action. In the event that any such public employee is charged
with criminal charges and he or she is later acquitted, any application
to recover the cost of their defense is expressly conditioned upon
the ultimate determination of administrative charges which may or
may not arise out of the same conduct or behavior. Notwithstanding
all of the above, in the event that the Borough of Carteret elects
to assert such administrative charges and even if the employee should
thereafter prevail, all such claims for reimbursement for costs of
defense will be subjected to the controlling statutory and common
law as opposed to this article. (Note: the "or may not" clause addresses
those instances wherein a person entitled to indemnification hereunder
officer is suspended on unrelated charges but the proceeding is tolled
by a parallel criminal action.)
