[HISTORY: Adopted by the Mayor and Council of the Borough of Emerson 10-8-2002 by Ord. No. 1215. Amendments noted where applicable.]
Pursuant to N.J.S.A. 59:10-1 et seq., indemnification is provided for defense costs arid payment of a judgment rendered against a municipal/state employee for actions or failures to act while in the scope of his/her employment. Pursuant to N.J.S.A. 59:10-4, local public entities are empowered to indemnify local public employees and officials consistent with the provisions of the New Jersey Tort Claims Act. The Borough Council deems it in the best interest of the Borough to indemnify Borough officials, officers and employees consistent with the New Jersey Tort Claims Act.
For the purpose of this chapter. unless the context clearly indicates a different meaning, the following words and phrases shall have the meanings set forth:
- Coverage afforded by insurance policies of any and every kind, whether the premium be paid by the Borough, the municipal official or someone on his behalf, including, without limitation, coverage provided by and through a Joint Insurance Fund (JIF) and/or the Municipal Excess Liability (MEL) Policies, or other like arrangements and undertakings.
- OFFICIAL, OFFICER or EMPLOYEE
- Any person presently or at any time in the future employed, elected
or appointed to any public office, board or commission of the Borough of Emerson,
whether full- or part-time, whether or not compensated for the appointed or
elected position. It shall not include officials, officers and employees who
are appointed, elected or employed by the Emerson Borough Board of Education.
It shall include all other boards, commissions and authorities which are subdivisions
of municipal government. It shall also mean any person employed or retained
by the Borough for any office, commission or board thereof, whether or not
said person serves in a paid or unpaid capacity; provided, however, that these
terms do not include independent contractors employed by the Borough.[Amended 9-23-2003 by Ord. No. 1241]
It is the intent and purpose of this chapter to provide for the defense of actions against and the indemnification of public officials, officers and employees for civil actions as permitted by N.J.S.A. 59:10-1 et seq., as permitted by this chapter. This chapter shall be liberally construed to provide the fullest defense and indemnification allowed by law.
Whenever an official, officer or employee of the Borough of Emerson is a named defendant in any civil action or civil legal proceeding arising out of or incidental to the performance of his or her duties as an official, officer or employee of the Borough, the Borough shall provide the official, officer or employee with the necessary and reasonable defense and shall hold such official, officer or employee harmless and indemnify him or her from the payment of any settlement or judgment resulting from the proceedings, except as otherwise set forth in this chapter. The Borough shall indemnify officials, officers and employees from all civil claims, including defense costs, if and only if the person establishes that the act or omission upon which the claim or judgment was based occurred within the scope of his or her employment as an official, officer or employee of the Borough and the person establishes that he or she did not act or failed to act because of actual fraud, actual malice or willful conduct. The following sets forth situations in which the Borough shall not have a duty to defend or indemnify:
Where the action has been initiated or brought by the municipality itself or any board, commission or authority established as a subdivision of municipal government against said official, officer or employee.
Where the official, officer or employee has been specifically found by a final judgment rendered by a court or other competent tribunal in the proceedings to have acted with actual fraud, actual malice or willful misconduct or to have acted or failed to act within the scope of employment.
Where the official, officer or employee is found by a final judgment rendered by a court or other competent tribunal to have violated any of the Borough's Code of Ethics or any code of ethics existing by and pursuant to the laws of the State of New Jersey in the course of conduct that led to or is subject of the litigation.
This chapter and the indemnification provided herein shall not apply where the basis for a claim is an act or omission which occurred on or before October 8, 2002, the date of adoption of Ordinance 1215.
[Added 9-23-2003 by Ord. No. 1241]
Wherever an official, officer or employee of the Borough of Emerson is a defendant in any criminal action or legal proceeding arising out of or incidental to the performance of his or her duties and in the event that said action or legal proceeding is dismissed or finally determined in favor of the official, officer or employee, he or she shall be entitled to be reimbursed for the reasonable defense costs. This shall only include any criminal action instituted against an official, officer or employee based upon an act or omission of that official, officer or employee arising out of and directly related to the lawful exercise of his or her official duty or under color of his authority and that action is dismissed or results in a final disposition in favor of that official, officer or employee.
The provisions of a defense and indemnification, as set forth in the above sections of this chapter, shall justifiably be refused by the municipality if it is the determination of the governing body that:
The act or omission alleged was not within the scope of the person's employment or official duties;
The act or failure to act alleged was because of actual fraud, willful misconduct or actual malice or intentional wrongdoing;
There exists policies of insurance, either obtained by the Borough or by any other, by virtue of which the official, officer or employee is entitled to a defense of the action in question from any insurer, including coverage pursuant to the JIF or MEL;
It is not deemed legal and appropriate by the Borough Council pursuant to N.J.S.A. 59:10-1 et. seq.;
The public official, officer or employee has failed to cooperate fully with the defense provided by the municipality;
Where the legal proceeding involves questions concerning election laws; and,
The official, officer or employee fails to notify the Borough in a prompt manner and as soon as possible as to any action threatened against him or her.
The Borough may provide any defense required of it pursuant to the within chapter through an attorney from its own staff or by employing other counsel selected by the Borough. It shall be the Borough's sole option to select counsel and, wherever permissible by law and/or canons of professional ethics controlling attorney's practice of law, the Borough may assume exclusive control of the representation of said official, officer or employee.
A municipal official, officer or employee shall not be entitled to indemnification or reimbursement pursuant to this chapter unless within 15 calendar days of the time he is served with a summons, complaint, process notice, demand or other pleading he delivered the original or a copy thereof to the Borough Clerk with a request to defend and indemnify. Notwithstanding the foregoing, a present or former municipal officer, employee or official who is a party to any pending litigation or the subject of a tort claim notice presently filed prior to the effective date of this enactment shall be covered and included in the coverage herein without further notice to the Borough or other actions being taken. It is the intention to cover and indemnify those officials, officers or employees from actions or claims which have been brought and are pending, are being defended by the Joint Insurance Fund or are merely threatened. The municipal official, officer or employee shall be obligated to cooperate to the fullest extent possible with the Borough in the conduct of the defense. Wherever competent and disinterested legal counsel is available to the Borough through any insurance coverage, the municipal official, officer or employee shall be obligated to be represented by such counsel. If the Borough wishes to use the Borough Municipal Attorney or the attorney for any board or council of the Borough to defend the claim, the municipal official, officer or employee shall be obligated to be represented by that attorney unless there is a conflict of interest. The refusal of the municipal official, officer or employee to cooperate with the Borough shall terminate the Borough's obligation to provide a defense and/or indemnity or to otherwise reimburse any municipal official, officer or employee.
If the legal proceeding is terminated by an agreement among the parties, then the Borough shall not be obligated to reimburse the municipal official, officer or employee unless the Borough, by and through the governing body and/or by court order, approves the settlement agreement.
Counsel fees to be paid to outside counsel, other than the Municipal Solicitor or the solicitor for any board or commission, for services rendered in connection with a claim subject to this chapter, shall be reasonable and shall be established by the governing body through resolution prior to the retention of such counsel. The Borough may reimburse a municipal official, officer or employee for a portion of any expense incurred prior to the final decision in the legal proceeding at the Borough's sole discretion. The Borough shall be entitled to wait for a final determination before making a determination to reimburse defense costs and/or honor indemnity.
To the extent that N.J.S.A. 40A:14-155 provides broader indemnification to members of the municipality's Police Department, that statute shall apply.
If the municipal official, officer or employee files a counteraction, counterclaim or asserts any affirmative claims in the legal proceeding, the municipality shall not be obligated to reimburse him for any attorney's fees or costs attributed to said counteraction, counterclaim or affirmative cause of action.
Nothing in this chapter shall authorize or require the Borough to pay for punitive or exemplary damages or damages resulting from the commission of a crime.
This chapter shall take effect upon final passage and publication according to law, and it shall apply to any and all claims and suits pending as of or brought after the effective date of this chapter, whether or not said claim or suit relates to conduct or omissions occurring before the effective date of this chapter.