[HISTORY: Adopted by the Township Committee of the Township of Cinnaminson 2-20-1991
by Ord. No. 1991-31 (Secs. 1.92.010 through 1.92.090 of the
1995 Code). Amendments noted where applicable.]
As used in this chapter, the following terms shall have the meanings
indicated:
Includes each person 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, being
paid a fixed salary or hourly rate for the performance of his duties, but
shall not include any person furnishing professional or extraordinary unspecifiable
services under separate appointment, retainer, agreement or contract.
The Township of Cinnaminson does 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.
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 in the scope of his
employment, provided that the fact or failure to act does not arise out of
actual fraud, willful misconduct or actual malice. The Township shall defray
all costs of defending such action, including attorney fees, court costs and
expert or technical witness fees and any amount paid in settlement thereof
and actually and reasonably incurred in connection therewith; expenses thus
incurred may be paid in advance of final disposition of the action. Nothing
herein shall authorize the Township to pay for damages resulting from the
commission of a crime. However, the Township is required to 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 Township Committee, the acts committed by the employee upon which the
damages are based did not constitute actual fraud, malice, willful misconduct
or an intentional wrong.
An employee shall immediately notify the Township Clerk when served
with any summons, order to show cause, complaint, process, notice, demand
or pleading and shall deliver the same or a copy thereof to the Township Clerk
in order to notify the Mayor and Township Attorney thereof.
The Township shall provide counsel pursuant to the provisions herein,
either by Township Attorney or counsel so approved or appointed.
If the Township Counsel does not represent any employee, and other counsel is chosen, then as a condition precedent to the Township's provision of indemnification under this chapter, the counsel chosen by the employee shall enter into an agreement with the Township Committee at the earliest possible time and in the manner provided by law for the award of contracts regarding the provision of professional services. The agreement shall set forth both the rate of compensation and the anticipated total cost of defense acceptable to the Township Committee. The agreement shall expressly declare that the Township's obligation to pay counsel shall be conditioned upon the complete satisfaction of the terms and requirements of this chapter and that the Township may disclaim under the terms of § 33-7. The agreement shall also state that payment shall not be due until 30 days following the termination of the matter and the submission of counsel's itemized billing. During the course of litigation, counsel must provide an estimate of the total charges for the case and must, on a monthly basis, provide the Township with a monthly billing printout or an estimate of the fees incurred. Final billing, at the conclusion of the case, must be in accordance with the monthly printouts or estimates and payments in excess thereof will not be approved by the Township Committee.
A.
Disclaimer of coverage. The Township Committee shall
disclaim liability for coverage of defense costs if any of the following conditions
shall occur:
B.
Determination of disclaimer of coverage.
(1)
The Township Committee shall review and pay counsel not later than 30 days following the termination of the case and submission by the employee's counsel to the Township Clerk of an itemized billing (together with a copy of all documents, pleadings, exhibits, transcripts and other papers filed in the case) unless the fees and charges do not comply with the terms of § 33-6. Requirement for the estimate set forth in § 33-6 herein is to permit the Township to project its budgetary expenditures for a particular year; therefore, if the counsel fees exceed the budgetary requirements or constraints, there shall be no obligation upon the Township to make payment for the amount in excess of the amount so estimated by counsel and budgeted in the annual budget.
(2)
The Township Committee shall consider in its determination
the pleadings, evidence and arguments brought out in the case, the verdict
(if any) and any additional pertinent considerations. 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.
(3)
The Township Committee's determination shall be subject
to judicial review; and, where provision of defense costs has been wrongfully
withheld by the Township Committee, the employee shall be reimbursed for all
defense costs and for all costs incurred in prosecuting the action for reimbursement
against the Township.
An employee claiming indemnification under this chapter shall cooperate
fully and in good faith with the Township and with any attorneys, adjusters,
inspectors or expert 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. If the employee neglects, fails or refuses to
cooperate as aforesaid, the Township Committee, after a hearing on 10 days'
written notice to the employee and for cause, may declare all rights created
under this chapter 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.
