For the purpose of this article, 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 be paid by the Township, the municipal official or someone
on his behalf.
MUNICIPAL OFFICIAL
Any officer, employee, board or committee member appointed
or hired by the Mayor or Township Committee, whether full- or part-time.
The term shall also include any person elected by the voters of the
Township to fill any official position in the Township, or any person
subsequently appointed to fill such position.
Subject to the provisions of this article, the
Township shall reimburse a municipal official for all expenses incurred
(specifically including reasonable attorney fees and court costs)
and all monetary judgments (excluding punitive damages) imposed upon
him 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 office held by such municipal official.
The Township shall not be obligated to provide
reimbursement in the following instances:
A. Where the legal proceeding is instigated or brought
by the municipal official.
B. Where the legal proceeding involves a claim or 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 Township against the municipal official.
D. Where the legal proceeding involves a question concerning
the election laws.
The amount the Township is obliged to reimburse
the municipal official shall be reduced by an 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.
A municipal official shall not be entitled to
indemnification or reimbursement pursuant to this article unless,
within 10 calendar days of the time he is served with any summons,
complaint, process, notice, demand or pleading, he delivers the original
or a copy thereof to the Township Attorney. The municipal official
shall be obliged to cooperate with the Township in the conduct of
his defense. Whenever competent and disinterested legal counsel is
available to the Township through any insurance coverage, the municipal
official shall be obliged to be represented by such counsel. If the
Township wishes to use the Township Attorney or the attorney for any
board or committee of the Township 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 Township shall terminate the Township's obligation
to reimburse the municipal official.
If the legal proceeding is terminated by an
agreement among the parties, then the Township shall not be obligated
to reimburse the municipal official unless the Township approves the
settlement agreement.
If the municipal official files a counteraction
in the legal proceedings, the Township shall not be obligated to reimburse
him for any attorney fees or court costs attributable to such counteraction.
The Township may reimburse a municipal official
for a portion of expenses incurred prior to a final decision in a
legal proceeding, but the Township shall be entitled to wait for a
final determination before being obligated to make any payment.
To the extent N.J.S.A. 40A:14-155 provides broader
indemnification to members of a police department of the Township
(if any such department is ever established), that statute shall supersede
this article.