[Adopted 1-13-2010 by L.L. No. 1-2010[1]]
[1]
Editor's Note: This local law also repealed former Art. II,
Defense and Indemnification, adopted 5-24-1988 by L.L. No. 2-1988.
[Amended 6-15-2011 by L.L. No. 2-2011]
The purpose of this article is to provide legal and financial
protection for those individuals serving the Village of Tuxedo Park
(hereinafter the "Village") from civil lawsuits, proceedings and fraudulent
public filings which may be brought against them in their individual
capacity for actions or omissions taken while acting within the scope
of their employment, or by virtue of their public office or employment. By
enactment of this article, the Village does not intend to establish
or enlarge any direct liability of the Village, or to limit or otherwise
abrogate any existing right or responsibility of the Village or its
officers or employees with regard to indemnification or legal defense.
As used in this article, the following terms shall have the
meanings indicated:
Any employee, trustee, mayor, officer, member of a Village
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 Village of Tuxedo Park, 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.
The duly appointed Attorney for the Village or any attorney
designated to act on behalf of the Village Attorney.
A.
If an employee complies with the provisions of § 15-11, the Village, through the Village Attorney, counsel selected by the Board of Trustees, or any applicable insurance program maintained by the Village, 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 article, the determination of whether an employee was acting within the scope of his or her employment will be made by the Board of Trustees, upon the advice of the Village 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 Board of Trustees, in its sole discretion, so determines in the best interests of the Village 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 Village against such employee.
[Amended 6-15-2011 by L.L. No. 2-2011]
B.
Subject to the conditions set forth in Subsection A of this section, the employee shall be entitled in such action or proceeding, or for purposes of the removal and mitigation of such fraudulent public filings, to be represented by the Village Attorney, or counsel designated by the Board of Trustees, 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, or for the removal and mitigation of such fraudulent public filings, at the expense of the Village whenever the Village 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 Village, 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 Village. The Board of Trustees may require, as a condition of the payment of the fees and expenses of such private conflict counsel, that the same counsel represent appropriate groups of such employees. If the employee or group of employees is entitled to representation by private conflict counsel under the provisions of this section at the expense of the Village, the Village Attorney shall so certify this to the Board of Trustees. Notwithstanding the lack of a conflict of interest as described above, an employee shall be entitled to counsel of their selection in the defense of any fraudulent public filing matter if the employee objects to the counsel designated by the Village. Attorney fees and litigation expenses shall be paid to any private counsel authorized by this subsection only to the extent of appropriate and reasonable rates prevailing in Orange County and as paid by the Village for similar representation, all as determined by the Village Attorney. Such attorney fees and litigation expenses shall be paid by the Village 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 Village Attorney is obtained. Payment shall also be subject to the audit by the Board of Trustees. Such private counsel shall conform to all record keeping and notifications required by the Village Attorney.
[Amended 6-15-2011 by L.L. No. 2-2011]
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 or proof of a fraudulent public filing, together with a written request for a defense, to the Village Attorney as required by § 15-11, the Village 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 Village to provide a defense.
[Amended 6-15-2011 by L.L. No. 2-2011]
A.
If an employee complies with the provisions of § 15-11, the Village 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 Board of Trustees of any such action or proceeding, or in the amount necessary to mitigate the consequence of a fraudulent public filing, all 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 or by virtue of their public office or employment. For purposes of this article, the determination of whether an employee was acting within the scope of his or her employment or office, or that fraudulent public filings were initiated by virtue of their public office or employment, will be made by the Board of Trustees, upon the advice of the Village 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 Board of Trustees, in its sole discretion, so determines in the best interests of the Village 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 Village against such employee.
[Amended 6-15-2011 by L.L. No. 2-2011]
B.
The amount of any such judgment, order, or decision obtained against
such employee, or the amount of any settlement approved by the Board
of Trustees, for which the Village 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 proceedings, for which
indemnification by the Village is sought, must be reviewed and approved
by the Board of Trustees. No employee will be indemnified or saved
harmless by the Village in accordance with this article 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 to the date of entry, finalization
or settlement, upon the Village Attorney. If such judgment, order,
decision or settlement is consistent with the provisions of this article,
the Mayor, upon the advice of the Village Attorney, shall certify
it for payment. As so certified, the judgment, order, decision or
settlement shall be paid upon the audit of the Board of Trustees. Any
request for indemnification for the consequences of such fraudulent
public filings not calculated in the course of a final judgment, order,
decision or settlement of an action or proceeding, shall be accompanied
by specific and itemized proof of actual damage. The Board of Trustees,
upon the advice of the Village Attorney and any other consultant desired
by the Board of Trustees, shall make a determination as to the amount
of damages that are properly shown and which shall be paid on such
account as are a proximate and foreseeable cause of the fraudulent
filings.
[Amended 6-15-2011 by L.L. No. 2-2011]
A.
The duty to defend, indemnify and save harmless as set forth in this article
is conditioned upon (1) delivery by the employee to the Village Clerk
and Village 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, or, in the event of a fraudulent
public filing, by the delivery to the Village Clerk and Village Attorney
of notice and/or proof of such fraudulent public filing within 30
days of the actual knowledge of the employee as to the existence of
such fraudulent public filing, and (2) the full cooperation of the
employee in (a) the defense of such action or proceeding, (b) the
defense of any action or proceeding against the Village based upon
the same or related acts or omissions, (c) in the prosecution of any
appeals of such actions or proceedings, and (d) any action to rectify
or minimize the fraudulent public filing. The above-noted delivery
of said notices of claim, summonses, complaints, processes, notices,
demands, proof or pleadings shall be deemed as a request by the employee
that the Village provide for his or her defense and indemnification
pursuant to this article, and is a condition precedent to the granting
of such defense and/or indemnification by the Village.
[Amended 6-15-2011 by L.L. No. 2-2011]
B.
Consistent with this article, the determination as to whether the
Village will defend and/or indemnify the employee will be based upon
an investigation of the facts and circumstances of the matter. The
Board of Trustees, in accordance with this article and the advice
of the Village Attorney, shall make this determination within a reasonable
time after the completion of such investigation. Such determination
shall be final, except as provided below.
C.
Such determination shall be in writing and mailed promptly by the
Village 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.
D.
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 Village
Attorney promptly to the employee, and shall state the facts and reasons
therefor.
E.
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 Village 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.
The benefits of this article 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 article be construed
to affect, alter or repeal any provision of the Workers' Compensation
Law.
This article shall not in any way affect the obligation of any
claimant to give notice to the Village under § 50-e of the
New York General Municipal Law, or any other provision of any law.
[Amended 6-15-2011 by L.L. No. 2-2011]
The provisions of this article shall apply to all actions, proceedings
and fraudulent public filings then pending on the effective date of
this article or thereafter instituted.
Except as otherwise specifically provided in this article, the
provisions of this article 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 Village or any unit, entity, officer or employee of Village, or
any right to a defense and/or indemnification provided for any Village
officer or employee by, in accordance with, or by reason of, any other
provision of county, state or federal statutory, regulatory or common
law.
