[HISTORY: Adopted by the Mayor and Council of the Borough of Palisades Park 2-26-2024 by Ord. No. 2024-1.[1] Amendments noted where applicable.]
[1]
Editor's Note: This ordinance also repealed former Ch. 164, Indemnification, adopted 7-15-2008 by Ord. No. 1512, as amended 12-15-2014 by Ord. No. 1632; 12-14-2015 by Ord. No. 1658; and 7-24-2018 by Ord. No. 2018-8.
For the purposes of this chapter, unless the context clearly indicates a different meaning:
MUNICIPAL OFFICIAL
Shall mean a present or former municipal employee, appointee, official, elected official, Councilperson, Mayor, or member of the various boards, agencies and commissions of the Borough of Palisades Park whether full or part time, appointed, elected or hired.
Pursuant to the provisions of N.J.S.A. 59:10-1 et seq. and subject to the provisions of this chapter, the Borough of Palisades Park is authorized to provide for the defense of actions brought against its municipal officials and shall indemnify such officials to the extent permissible by law and shall save harmless and protect such persons from financial loss resulting from litigation. Such indemnification shall arise out of any action or legal proceeding of a non-criminal nature directly related, or incidental to, the performance of the duties of the position or office held by such municipal official. The Borough of Palisades Park may indemnify an official for exemplary or punitive damages resulting from the official's civil violation of state or federal law, only if, in the opinion of the governing body of the Borough of Palisades Park, the acts committed by the official upon which damages are based did not constitute actual fraud, actual malice, willful misconduct, or an intentional wrong.
The Borough shall not defray the cost of defending any criminal action against any municipal official except as may be authorized by state statute or other municipal ordinance or resolution of the Borough of Palisades Park, and, in those circumstances, the responsibility for defraying the cost of defending such employee shall be applicable only when such criminal proceeding shall have been dismissed or result in a final disposition in favor of the municipal official. However, should the Borough's governing body determine that there is good cause to dismiss the employee arising out of the incident(s) giving rise to the criminal prosecution, the Borough will not reimburse the municipal official for legal defense and costs in defending this suit, even though criminal proceedings against the employee may be dismissed or the employee found not guilty.
The municipal official shall not be entitled to indemnification or reimbursement pursuant to this chapter unless, within 20 calendar days of the time such official is served with any summons, complaint, process, notice, demand or pleading, the official delivers the original or a copy thereof to the Borough Attorney. The municipal official shall be obliged to cooperate with the Borough in the conduct of the official's defense. Whenever competent and disinterested legal counsel is available to the Borough through any insurance coverage, the municipal official shall be obliged to be represented by such counsel. If the Borough wishes to use the Borough Attorney or the attorney for any board or committee of the Borough to defend that 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 Borough shall terminate the Borough's obligation to reimburse the municipal official.
A. 
If the Borough's governing body determines to provide a defense as authorized by this chapter, it may do so by:
(1) 
Hiring an attorney of its choice; or
(2) 
Reimbursing the municipal official for reasonable attorney's fees and costs incurred in connection with the defense of the act.
B. 
The fee schedule to reimburse the municipal official's private attorney is as follows:
(1) 
Associate in a law firm or of counsel in a law firm with fewer than 15 years of experience in the practice of law: $160 per hour;
(2) 
Partner or equivalent in a law firm: $185 per hour;
(3) 
Paralegal in a law firm: $85 per hour.
C. 
The governing body has the authority to authorize other rates for emergent or extraordinary circumstances. It shall be the responsibility of the municipal official to inform private counsel of the fee schedule contained herein. All attorney's fees incurred by the municipal official that exceed the fee schedule set forth herein shall be the responsibility of the municipal official. If the municipal official has signed or entered into a fee or retainer agreement with an attorney, the municipal official shall disclose the agreement to the Borough and the name and contact information of the attorney in writing to the Borough.
D. 
A resolution shall be adopted appointing counsel for the defense and determining counsel fees. The hourly rate shall not exceed the rate paid to the Borough Attorney without a written resolution of the governing body.
E. 
Nothing in this chapter shall preclude the Borough and/or Borough Attorney from periodically demanding and reviewing any costs and attorney's fees in connection with the defense of the municipal official. In the event a dispute over attorney's fees arises, the Borough reserves the right to submit the dispute to the Fee Arbitration Committee of the District or pursue any other course of legal action.
The Borough shall not be obligated to provide reimbursement in the following instances:
A. 
Where the act or omission was not within the scope of employment or authority.
B. 
Where the act or omission complained of was because of actual fraud, actual malice, willful misconduct, or an intentional wrong.
C. 
Where the legal proceeding is instigated or brought by the Borough of Palisades Park against the municipal official.
D. 
Where the legal proceeding involves a question concerning the election laws.
E. 
Where the action is brought against the Borough by the municipal official.
F. 
Where the defense of the action or proceeding would constitute a conflict of interest between the Borough and the municipal official.
G. 
Where the defense of the action or proceeding is covered by an insurance policy or policies; however, the Borough shall be responsible for the cost of the deductible.
H. 
The municipal official has failed to fully cooperate with the defense.
I. 
Where the act or omission is in violation of the New Jersey Local Government Ethics Law, N.J.S.A. 40A:9-22.1 et seq., or any ethics code adopted pursuant to the statute.
The Borough shall have exclusive control over the representation of the municipal official and such person shall cooperate fully with the Borough and the designated attorney; provided, however, that the municipal official may, at any time at the municipal official's option, take control of the representation by waiving all rights to indemnification and all rights to payment for the defense costs.
The amount the Borough is obliged to reimburse the municipal official shall be reduced by any insurance coverage payable to the municipal official by the net amount (that is, any recovery less attorney's 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 the municipal official.
If the legal proceeding is terminated by an agreement among or between the parties, then the Borough shall not be obligated to reimburse the municipal official unless the Borough approves the settlement agreement.
The obligation of the Borough to reimburse a municipal official for expenses shall arise upon final determination of the legal proceedings. In its discretion the Borough may reimburse a municipal official for a portion of expenses incurred prior to a final decision.
If any article, section or subsection of this chapter is declared for any reason to be unconstitutional or invalid by a court of competent jurisdiction, such provision(s) shall be deemed severed from the remainder of the chapter and shall not affect the enforceability of the remainder of the chapter.
The entire Chapter 164 is repealed and replaced. Any and all ordinances or parts thereof inconsistent with the provisions of this chapter are hereby repealed to such extent as they are so in conflict or inconsistent; provided, however, that the adoption of the chapter shall not prevent or bar the continuance or institution of any proceedings for offenses heretofore committed in violation of any existing ordinance of the Borough of Palisades Park.
This chapter shall take effect upon final passage and publication according to law. Any legal proceeding which may be covered by this chapter which has not been reduced to a final judgment as of the date of passage shall be covered by the terms of this chapter.