[HISTORY: Adopted by the Mayor and Borough Council of the
Borough of Rocky Hill 11-5-2018 by Ord. No. 11-2018. Amendments noted
where applicable.]
A.
Each
municipality in the State of New Jersey may defend or indemnify its
officials and employees in connection with municipal affairs and operations
pursuant to N.J.S.A. 59:10-4.
B.
It
is deemed desirable to establish rights and procedures with respect
to the defense and indemnification of Borough officials and employees.
As used in this chapter, the following terms shall have the
meanings indicated:
The Borough of Rocky Hill, in the County of Somerset.
Includes any past, present and future member of the governing
body of the Borough; any past, present and future member of any other
Borough board, body, commission or Council, whether created by state
law or by municipal ordinance or resolution; and any other past, present
and future Borough officer, official or employee, whether elected
or appointed, compensated or uncompensated, full-time or part-time,
who by reason of position or employment is authorized to perform any
acts or services of any nature whatsoever for or on behalf of the
Borough; provided, however, that independent contractors shall not
be considered Borough employees for purposes of this section.
Except as provided in § 9-4, 9-5, 9-10 or 9-11, the Borough shall provide for the defense of any civil action or proceeding commenced against any Borough employee on account of any act or omission by a Borough employee involving Borough affairs, operations or services. The duty to defend shall extend to a cross-action, counterclaim or cross-complaint.
Every Borough employee who is served with any summons, complaint,
process, notice, demand or pleading in a civil action or proceeding
involving Borough affairs, operations or services and who desires
that the Borough provide for a defense shall deliver the original
or a complete copy thereof to the Borough Clerk within seven calendar
days of the time that service is made upon such Borough employee.
Each document shall bear a notation as to the date upon which service
was made upon the Borough employee. The Borough employee shall promptly
furnish such additional information regarding the matter as may be
requested by the Borough. Failure to comply with the foregoing requirements
shall constitute grounds for a refusal by the Borough to provide the
Borough employee with a defense to any civil action or proceeding
in accordance with the provisions of this section.
A.
The
Borough shall not be required to provide for the defense of a civil
action or proceeding against a Borough employee if the Borough Council
determines that it is likely that:
(1)
The act or omission was not within the scope of employment; or
(2)
The act or the failure to act involved actual fraud, actual malice
or willful misconduct; or
(4)
The defense of the action or proceeding by the Borough would create
a conflict of interest between the Borough and the Borough employee.
B.
In the event of an action or proceeding against more than four members of the Borough Council, the Borough Attorney, in consultation with the unconflicted Council Members, may make any determination which might otherwise be made by the Borough Council in accordance with this § 9-5.
C.
In the event that the Borough shall refuse to provide for the defense of a civil action or proceeding for any of the reasons mentioned above, the Borough shall cause notice of such refusal to be given to the Borough employee concerned in such manner that the notice of refusal is received within 14 calendar days after the original service upon the Borough employee of the document mentioned in § 9-4.
A.
Defense
for a Borough employee may be provided by the Borough Attorney, or
by other counsel employed by the Borough for such purpose, or by an
exercise of the Borough's right under any appropriate insurance
policy to require the insurer to provide the defense.
B.
Whenever
the Borough provides for the defense of a Borough employee pursuant
to any provision of this section, the Borough or the Borough's
insurer may assume exclusive control over the representation of such
Borough employee, who shall cooperate fully with the Borough or the
Borough's insurer in all matters relating to the defense.
C.
The
Borough or the Borough's insurer, as the case may be, shall have
the right to settle or compromise any litigation involving a defense
provided for a Borough employee. In the event that a Borough insurance
policy contains a deductible amount and the defense is provided by
the insurer, the terms of the settlement shall be approved by the
Borough Council. In the event that the action or proceeding is against
more than four members of the Borough Council, the terms of the settlement
shall be approved by the Borough Attorney, in consultation with the
unconflicted Council Members.
D.
The
Borough and/or the Borough's insurer shall provide for the payment
and satisfaction of any amount which may be due under any judgment
against the Borough employee or shall provide for the payment of any
amount due by reason of the settlement of any action or proceeding,
and the Borough employee shall not be required to contribute to any
such payment.
A.
In
any case where the Borough is required to provide a defense under
this chapter, the Borough employee shall be entitled to indemnification
from the Borough. Any indemnification shall include the amount of
any judgment or the amount under any bona fide settlement agreement,
as well as all costs of defending the civil action or proceeding,
including reasonable counsel fees and expenses, together with the
costs of appeal, if any.
B.
In the event that in accordance with the provisions of § 9-5 the Borough shall refuse to provide for a defense to a civil action or proceeding, the Borough employee shall be entitled to indemnification from the Borough if the Borough employee establishes that the act or omission upon which the claim or judgment was based occurred within the scope of employment as an employee of the Borough, and the Borough fails to establish that the act or omission constituted actual fraud, actual malice or willful misconduct or was in violation of any provision of the Local Government Ethics Law.
This indemnification shall be deemed primary unless the Borough
employee has in effect, with respect to any claim made, a personal
professional liability policy. If such a policy is in effect, this
indemnification shall be deemed secondary to the extent that coverage
is afforded under the terms of that policy. In other words, the amount
the Borough is obliged to indemnify the Borough employee shall be
reduced by any insurance coverage payable to the Borough employee.
No provision of this chapter shall be interpreted or construed
as affecting or limiting any obligation of any insurer under the terms
of any insurance policy carried by the Borough.
This chapter shall not apply to any Borough employee so as to
modify the rights or benefits under any statutory or decisional law
applicable to such Borough employee.
No provision of this chapter shall apply to any action or proceeding
of any nature instituted by the Borough against any Borough employee.
