[HISTORY: Adopted by the Mayor and Council
of the Borough of Prospect Park 9-25-2000 by Ord. No. 2000-7 (Ch.
7 of the 1974 Code). Amendments noted where applicable.]
As used in this chapter, the following terms
shall have the meanings indicated:
As used in this chapter, the term "defense" refers to the
means by which such public employee may respond to any suit, allegation,
or cause of action. The Borough of Prospect Park 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 their 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 of
Prospect Park against any such employee. Expressly exempted from this
chapter providing defense and indemnification to public employees
of the Borough of Prospect Park are any charges, allegation, or actions
of whatever nature asserted by the Borough of Prospect Park against
its own public employees.
As used in this chapter, "indemnification" means 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.
As used in this chapter, shall include any employee of the
Borough of Prospect Park and shall include any elected or appointed
official or any officer, employee or servant, whether or not compensated,
who is authorized to perform any act or service for the Borough of
Prospect Park. The term public employee shall also include persons
formerly holding office or employment, provided the events giving
rise to a cause of action or claim hereunder conform to the requirements
herein established.
A.Â
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.Â
Said Tort Claims Act also specifies under what circumstances
a public entity may defend and indemnify its officials, employees
and servants.
C.Â
The Mayor and Council for the Borough of Prospect
Park 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.Â
Such defense and indemnification are especially appropriate
for members of appointed boards who serve the Borough of Prospect
Park without monetary compensation.
E.Â
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. (See Petition for Review of Opinion 552, 102 N.J. 194.) Accordingly,
this indemnification policy is also intended to increase the efficiency
and reduce the costs of defending the Borough of Prospect Park and
its employees and agents in the event of such actions.
A.Â
Whenever a civil action shall be brought against any
person holding an office, position or employment with the Borough
of Prospect Park 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 Prospect Park shall provide payment of
that portion of any exemplary or punitive damage award not otherwise
covered by a policy of insurance. Note, however, that the Borough
of Prospect Park does not, by indemnifying its employees against punitive
damage, indirectly or directly waive its own immunity against such
claims. (See T&M Homes, Inc. v. Pemberton Twp., 190 N.J. Super.
637.)
B.Â
Whenever a civil action shall be brought against any
person holding an office, position or employment with the Borough
of Prospect Park 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 Prospect Park 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 of Prospect
Park or its public employees is in dispute, the Borough of Prospect
Park 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. Said public employee has an
affirmative duty, to be eligible for said defense and indemnification,
to cooperate with the Borough of Prospect Park in any and all of its
efforts to resolve any disputed insurance coverage.
C.Â
Whenever a civil action shall be brought seeking compensatory
damages and/or attorney's fees against any person holding an office,
position or employment with the Borough of Prospect Park 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
Prospect Park shall defend and indemnify its officials, employees
and servants.
By common law and this express provision to
this chapter, the Borough of Prospect Park'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 Prospect
Park will not provide the means for defense nor indemnify any public
employee in those instances where the Borough of Prospect Park has
initiated the charges or action. In the event 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 the Borough of Prospect Park 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 chapter.
[Note: the "_____, or may not, _____" clause
addresses those instances wherein an officer is suspended on unrelated
charges, but the proceeding is tolled by a parallel criminal action.]
