[HISTORY: Adopted by the Common Council of the City of Beverly 4-11-2023 by Ord. No. 2023-2. Amendments noted where applicable.]
Pursuant to N.J.S.A. 59:10-1 et seq., indemnification is provided for defense costs and payment of a judgment rendered against a municipal/state employee for actions or failures to act while in the scope of his/her employment. Pursuant to N.J.S.A. 59:10-4, local public entities are empowered to indemnify local public employees and officials consistent with the provisions of the New Jersey Tort Claims Act[1] if, in the opinion of the Common Council, the act committed by the employee/officer upon which damages are claimed did not constitute actual fraud, actual malice, willful misconduct, or an intentional wrong. The Common Council deems it in the best interest of the City to indemnify City officials, officers and employees consistent with the New Jersey Tort Claims Act.
[1]
Editor's Note: See N.J.S.A. 59:1-1 et seq.
For the purpose of this chapter, unless the context clearly indicates a different meaning, the following words and phrases shall have the meanings set forth:
INSURANCE
Coverage afforded by insurance policies of any and every kind, whether the premium be paid by the City, the municipal official or someone on their behalf, including, without limitation, coverage provided by and through the Joint Insurance Fund (JIF) and/or the Municipal Excess Liability (MEL) Policies.
OFFICIAL, OFFICER or EMPLOYEE
Any person, presently or in the future, elected or appointed to any municipal public office or board of the City of Beverly, whether full- or part-time, whether or not compensated for the appointed or elected position. It shall also mean any person employed or retained by the City for any office, or board thereof, whether or not said person serves in a paid or unpaid capacity; provided, however, that the terms do not include independent contractors employed by the City.
It is the intent and purpose of this chapter to provide for the defense of actions against and the indemnification of City officials, officers and employees for civil actions as permitted by the New Jersey Tort Claims Act,[1] as permitted by this chapter. This chapter shall be liberally construed to provide the fullest defense and indemnification allowed by law.
[1]
Editor's Note: See N.J.S.A. 59:1-1 et seq.
Whenever an official, officer or employee of the City is a named defendant in any civil action or civil legal proceeding arising out of or incidental to the performance of his or her duties as an official, officer or employee of the City, the City shall provide the official, officer or employee with the necessary and reasonable defense and shall hold such official, officer or employee harmless and indemnify him or her from the payment of any settlement or judgment resulting from the proceedings, except as otherwise set forth in this chapter. The City shall indemnify officials, officers and employees from all civil claims, including defense costs, if and only if the person establishes that the act or omission upon which the claim or judgment was based occurred within the scope of his or her employment as an official, officer or employee of the City and the person establishes that he or she did not act or fail to act because of actual fraud, actual malice or willful misconduct. The following sets forth situations in which the City shall not have a duty to defend or indemnify:
A. 
Where the action has been brought by the municipality itself, or any board, commission or authority established as a subdivision of municipal government, against said official, officer or employee.
B. 
Where the official, officer or employee has been specifically found by a court or other competent tribunal in the proceedings to have acted with actual fraud, actual malice or willful misconduct or to have acted or failed to act within the scope of employment.
C. 
Where the official, officer or employee is found to have violated any code of ethics existing by and pursuant to the laws of the State of New Jersey.
Wherever an official, officer or employee of the City of Beverly is a defendant in any criminal action or legal proceeding arising out of or incidental to the performance of his or her duties and in the event that said action or legal proceeding is dismissed or finally determined in favor of the official, officer or employee, he or she shall be entitled to be reimbursed for the reasonable defense costs. This shall only include any criminal action instituted against an official, officer or employee based upon an act or omission of that official, officer or employee arising out of and directly related to the lawful exercise of their official duty or under color of their authority and that action is dismissed or results in a final disposition in favor of that official, officer or employee.
The provisions of a defense and indemnification, as set forth in the above sections of this chapter, shall justifiably be refused by the City if it is the determination of the Common Council that:
A. 
The act or omission alleged was not within the scope of the person's employment or official duties;
B. 
The act or failure to act alleged was because of actual fraud, willful misconduct or actual malice or intentional wrongdoing;
C. 
There exist policies of insurance, either obtained by the City or by any other, by virtue of which the official, officer or employee is entitled to a defense of the action in question from any insurer, including coverage pursuant to the JIF or MEL;
D. 
It is not deemed appropriate by the Common Council pursuant to N.J.S.A. 59:10-1 et seq.;
E. 
The public official, officer or employee has failed to cooperate fully with the defense provided by the City;
F. 
Where the legal proceeding involves questions concerning election laws;
G. 
The official, officer or employee fails to notify the City in a prompt manner and as soon as possible as to any action threatened against him or her;
H. 
The suit or claims assert a right for punitive damages; or
I. 
The plaintiff of a suit or claim is an employee, officer, or official of the City and the employee, officer or official initiates a suit or a claim which may result in said employee, officer or official receiving a counterclaim lawsuit in response.
A. 
The City may provide any defense required of it pursuant to this chapter through an attorney from its own staff or by employing other counsel selected by the City. It shall be the City's sole option to select counsel and, wherever permissible by law and/or canons of professional ethics controlling attorneys' practice of law, the City may assume exclusive control of the representation of said official, officer or employee.
B. 
A City official, officer or employee shall not be entitled to indemnification or reimbursement pursuant to this chapter unless within 15 calendar days of the time they are served with a summons, complaint, process notice, demand or other pleading they delivered the original or a copy thereof to the City Clerk with a request to defend and indemnify. The City official, officer or employee shall be obligated to cooperate to the fullest extent possible with the City in the conduct of the defense. Wherever competent and disinterested legal counsel is available to the City through any insurance coverage, the City official, officer or employee shall be obligated to be represented by such counsel. If the City wishes to use the City Solicitor or the attorney for any board of the City to defend the claim, the City official, officer or employee shall be obligated to be represented by that attorney unless there is a conflict of interest. The refusal of the City official, officer or employee to cooperate with the City shall terminate the City's obligation to provide a defense and/or indemnify or to otherwise reimburse any City official, officer or employee.
If the legal proceeding is terminated by an agreement among the parties, then the City shall not be obligated to reimburse the City official, officer or employee unless the City, by and through the governing body and/or by court order, approves the settlement agreement.
Counsel fees to be paid to outside counsel, other than the City Solicitor or the solicitor for any board, for services rendered in connection with a claim subject to this chapter shall be reasonable and shall be established by the Common Council through resolution prior to the retention of such counsel. The City may reimburse a City official, officer or employee for a portion of any expense incurred prior to the final decision in the legal proceeding at the City's sole discretion. The City shall be entitled to wait for a final determination before making a determination to reimburse defense costs and/or honor indemnity.
To the extent that N.J.S.A. 40A:14-155 provides broader indemnification to members of the City's Police Department, that statute shall supersede the provisions of this chapter.
If the City official, officer or employee files a counteraction, counterclaim or asserts any affirmative claims in the legal proceeding, the City shall not be obligated to reimburse him for any attorneys' fees or costs attributed to said counteraction, counterclaim or affirmative cause of action.
Nothing in this chapter shall authorize or require the City to pay for punitive or exemplary damages or damages resulting from the commission of a crime.
This chapter shall take effect upon final passage and publication according to law, and it shall apply to any and all claims and suits filed or brought after the effective date of this chapter whether or not said claim or suit relates to conduct or omissions occurring before the effective date of this chapter.
The "whereas" clauses are incorporated herein by reference.[1]
[1]
Editor's Note: The preamble of Ord. No. 2023-2 provided as follows: "WHEREAS, the Common Council of the City of Beverly, in the County of Burlington (the "City") desires to adopt an ordinance in order to provide for the defense of actions against and the indemnification of public officials, officers and employees for civil actions as permitted by N.J.S.A. 59:10-1 et seq., ("New Jersey Tort Claims Act"), and as further permitted by this ordinance."