[HISTORY: Adopted by the Mayor and Council of the Borough
of Penns Grove by Ord. No. 2004-14. Amendments noted where applicable.]
As used in this chapter, the following terms shall have the
meanings indicated:
Refers to the means by which such public employee may respond
to any suit, allegation, or cause of action. The Borough of Penns
Grove 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 his or her 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 Penns Grove against any such employee. Expressly
exempted from this chapter providing defense and indemnification to
public employees of the Borough of Penns Grove are any charges, allegations,
or actions of whatever nature asserted by the Borough of Penns Grove
against its own employees.
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.
Includes any employee of the Borough of Penns Grove and shall
include any elected or appointed official, counsel or special counsel,
or any officer, employee or servant, whether or not compensated, who
is authorized to perform any act or service for the Borough of Penns
Grove. 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 requirement herein
established.
[Amended 7-5-2017 by Ord.
No. 2017-5]
The Mayor and Council for the Borough of Penns Grove find as
follows:
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 Penns Grove 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 Penns Grove 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 Penns Grove 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 Penns Grove
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 Penns Grove shall indemnify and provide payment of
any damage award not otherwise covered by any policy of insurance
of the Borough of Penns Grove. Note, however, that the Borough of
Penns Grove does not, by indemnifying its employees against damages,
indirectly or directly waive any immunity against any claims.
B.Â
Whenever a civil action shall be brought against any person holding
an office, position or employment with the Borough of Penns Grove
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 Penns Grove shall provide payment of that portion of
any costs of defense of said action not covered by the Borough's
policy of insurance. Whenever any insurance policy whose purpose is
to provide the defense and indemnification of the Borough of Penns
Grove or its public employees is in dispute, the Borough of Penns
Grove 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 Penns Grove in any and all of its
efforts to resolve any disputed insurance coverage.
By common law and this express provision to this chapter, the
Borough of Penns Grove'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 Penns Grove will
not provide the means for defense nor indemnify any public employee
in those instances where the Borough of Penns Grove 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 his or her 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 Penns Grove 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.)
