[HISTORY: Adopted by the City Council of the City of Orange 9-5-2017 by Ord. No. 51-2017. Amendments noted where applicable.]
The purpose of this chapter is for the City of Orange Township
to authorize and provide a uniform policy respecting the procedure
for the defense of civil lawsuits and criminal charges brought against,
and the indemnification of, its employees, appointees and officials
in accordance with the provisions applicable to all state employees
and consistent with N.J.S.A. 59:10-1 et seq. This chapter shall be
liberally construed to provide the fullest defense and indemnification
allowed by law.
For the purposes 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 every kind whether
the premiums be paid by the City, the Municipal Official or someone
on his behalf.
Any officer, employee, board or committee member appointed
or hired by the Mayor, City Council or Business Administrator whether
full or part-time. The term shall also include any member of an authority
or agency, whenever such member has been appointed to such position
by action of the Mayor and Council and the authority or agency has
been created by the municipality and such authority or agency does
not have an independent source of revenue or funding so as to enable
such authority or agency to independently fund its operating needs
and to provide adequate liability coverage. The term shall also include
any person elected by the voters to fill any official position in
the City or any person subsequently appointed to fill such position.
Whenever a civil or criminal action is instituted against any
current or former appointed or elected Municipal Official, whether
or not compensated or hired on a part-time basis, who is authorized
to perform any act or service on behalf of the City, and for any act
or omission arising out of and in the course of, and within the scope
of, the performance of the duties of such office, the City shall defray
the cost of defending such action only in the manner as set forth
in this chapter.
Whenever a Municipal Official of the City is a named defendant
in a matter pending before a court of competent jurisdiction or other
legal proceeding arising out of or incidental to the performance of
his or her duties as a Municipal Official based upon an act or omission
of that individual, the City shall provide the Municipal Official
with the necessary and reasonable defense and shall hold such Municipal
Official harmless and indemnify such Municipal Official from the payment
of any settlement or judgment resulting from the proceedings, except
as otherwise set forth in this chapter. The City shall indemnify a
Municipal Official from all civil claims, including defense costs,
if and only if the person establishes to the satisfaction of the City
Attorney that the act or omission upon which the claim or judgment
was based occurred within the scope of the individual's employment
as a Municipal Official and shall be limited to those cases in which:
A.
The Municipal Official was acting in a manner in which the City had
an interest;
B.
The Municipal Official was acting in the discharge of a duty imposed
or authorized by law in furtherance of the employee's official
duties;
C.
The Municipal Official was acting in good faith; and
D.
The Municipal Official agrees, in writing, to reimburse the City
for all costs and expenses, unless the civil proceeding is subsequently
dismissed or results in a final disposition without a specific finding
of actual fraud, actual malice or willful misconduct in office by
the Municipal Official.
Whenever a criminal action by way of investigation, complaint,
charge or other proceeding is instituted against a Municipal Official
for any act or omission arising out of and in the course of, and within
the scope of, the performance of his or her duties of employment or
under cover of his or her authority, the City shall defray the cost
of defending such action only in the manner as set forth below:
A.
The Municipal Official is not a named defendant;
B.
The Municipal Official was acting in a manner in which the City had
an interest;
C.
The Municipal Official was acting in the discharge of a duty imposed
or authorized by law in furtherance of the employee's official
duties;
D.
The Municipal Official was acting in good faith; and
E.
The Municipal Official agrees, in writing, to reimburse the City
for all costs and expenses, unless the criminal proceeding is subsequently
dismissed or results in an acquittal.
In the event that the Municipal Official is a named defendant
in a criminal matter and the proceeding is subsequently dismissed
or results in a final disposition without a specific finding of illegal
wrongdoing or malfeasance in office by the Municipal Official, that
individual may then seek reimbursement for costs of the defense he
or she was otherwise not indemnified for under the provisions of this
chapter.
Subject to the provisions of this chapter, the City shall indemnify
a Municipal Official for exemplary or punitive damages resulting from
the Municipal Official's civil violation of state or federal
law if, in the opinion of the City Council, upon the advice of the
City Attorney, the acts committed by the Municipal Official upon which
the damages are based did not constitute actual fraud, actual malice,
willful misconduct, or an intentional wrong.
The City shall not be obligated to provide reimbursement in
the following instances:
A.
Where the legal proceeding is instigated or brought by the Municipal
Official.
B.
Where the action has been brought by the City itself or any board,
commission or authority established by a subdivision of municipal
government against the Municipal Official.
C.
Where the legal proceeding involves a claim of misfeasance or malfeasance
in office, or a claim of fraud, theft or misappropriation of public
funds, and the Municipal Official is found liable for the charge.
D.
Where the legal proceeding is instigated or brought by the City against
the Municipal Official.
The amount the City is obliged to reimburse the Municipal Official
shall be reduced by any insurance coverage payable to the Municipal
Official by the net amount (recovery less attorney 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 him or her.
A Municipal Officer shall not be entitled to indemnification
or reimbursement pursuant to this chapter unless, within ten (10)
calendar days of the time he or she is served with any summons, complaint,
process, notice, demand or pleading, he delivers the original or a
copy thereof to the City Clerk. The Municipal Official shall be obliged
to cooperate with the City in the conduct of his defense. Whenever
competent and disinterested legal counsel is available to the City
through any insurance coverage, the Municipal Official shall be obliged
to be represented by such counsel. If the City wishes to use the City
Attorney or the Attorney for any board or committee of the City to
defend the action, or any such other counsel as may be assigned by
the City, at a rate consistent with rates paid by the City for matters
of the particular type and scope, since the City is self-insured,
the Municipal Official shall be obligated to be represented by the
attorney unless there is a conflict of interest. The refusal of the
Municipal Official to cooperate with the City shall terminate the
City's obligation to reimburse the Municipal Official.
If the legal proceeding is terminated by an agreement among
the parties, then the City shall not be obligated to reimburse the
Municipal Official unless the City approves the settlement agreement.
If the Municipal Official files a counteraction in the legal
proceedings, the Municipality shall not be obligated to reimburse
him or her for any attorney fees or court costs attributable to such
counteraction.
The City's defrayal of the Municipal Official's costs
of defending legal actions shall not include any post-judgment appellate
actions involving the individual unless, in the opinion of the City
Attorney and upon the approval of the City Council, it is determined
that it is in the City's best interests to pursue an appeal.
If the Municipal Official is entitled to reimbursement as set
forth in the chapter, attorney's fees shall be reimbursed at
a rate set periodically by resolution of City Council. Costs incidental
to the representation may be approved on an individual basis.
To the extent N.J.S.A. 40A:14-155 provides broader indemnification
to members of the municipality's Police Department, that statute
shall supersede this chapter.
This chapter shall take effect upon final passage and publication
according to law. Any legal action 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.
