A.
Compliance with section required. Except as otherwise precluded by law, all obligations by the municipality to indemnify, hold harmless or defend a current or former employee, official, assembly member, or member of a municipal board or commission in an individual capacity are subject to the conditions and limitations set forth in this section. If an indemnified employee, official, assembly member, or board member or commissioner, or former employee, former official, former assembly member, former board member, or former commissioner does not comply with this section, the municipality may elect not to defend, not to indemnify, or not to defend or indemnify.
B.
Defense of claims within scope of employment or duties. The municipality shall defend, indemnify and hold harmless an employee, official, assembly member, member of a municipal board or commission, or former employee, former official, former assembly member, or former member of a municipal board or commission against a claim filed in a civil or administrative action and resulting from any conduct, act or omission of such employee, official, assembly member, or board or commission member, provided such conduct, act or omission was within the scope of the municipal employee's employment, or within the scope of the official duties of the official, assembly member, board member, or commissioner.
C.
Limitations. No obligation to indemnify, hold harmless or defend shall apply to any claim against an employee, official, assembly member, or member of a municipal board or commission:
1.
Based on conduct that was not undertaken in the reasonable belief that the act or omission was in the best interest of the municipality;
2.
Brought by or on behalf of the municipality;
3.
For any fine resulting from a traffic citation;
4.
For punitive or exemplary damages; or
5.
If the municipal attorney determines that the employee, official, assembly member, or member of municipal board or commission engaged in gross negligence, willful, malicious, dishonest, fraudulent or criminal conduct that forms any part of the factual basis for, or that is related or relevant to, the claim; a claim or suit for damages may not be filed against the municipality or the municipal attorney for the determination made or withheld pursuant to this subsection.
D.
Inapplicability to claimants and intervening parties. No obligation to indemnify, hold harmless or defend shall apply to any claim against an employee, official, assembly member, or member of a municipal board or commission that arises as the result of such person's decision to intervene in any action, or such person filing a claim against the municipality.
E.
Availability after insurance. The municipality's obligations imposed in this section shall be available only after application of any other available insurance. No obligation to indemnify, hold harmless or defend by the municipality shall apply to the extent that an employee, official, assembly member, or member of a board or commission is indemnified or defended pursuant to an agreement between the municipality and a third party or under a policy of insurance provided by or on behalf of the municipality.
F.
No limit on insurance agreements; no waiver of immunity. The municipality may purchase insurance to cover its obligations to defend, indemnify, and hold harmless. Nothing in this section or in any other indemnity/defense agreement shall limit the coverage of any policy of insurance or agreement between the municipality and a third party that would otherwise provide for the indemnification or defense of an employee, official, assembly member, or member of a municipal board or commission. Nothing in this section or any other indemnity or defense agreement shall be construed as waiving the defense of governmental immunity otherwise available to the municipality or its employees, officials, assembly members, board members, or commissioners.
G.
Determination of obligation to defend, indemnify or hold harmless. Whether or not the municipality is obligated to indemnify, hold harmless or defend shall be determined by the risk manager, in consultation with the municipal attorney. The risk manager may assume the defense under a reservation of rights. The municipality's decision to indemnify, hold harmless, or defend a claim does not require the municipality to continue to indemnify, hold harmless or defend the claim, nor does it require that the municipality indemnify or hold harmless any person against any resulting judgment, fine or amount paid in settlement. No assumption by the municipality of the indemnification or defense of a claim shall be construed as a waiver by the municipality of any right, condition or limitation of this section, nor shall it preclude the municipality from taking any disciplinary or other employment action against an employee, or from applying to any person the municipal code of ethics. A claim or suit for damages may not be filed against the municipality, the risk manager, or the municipal attorney for a determination made or withheld pursuant to this section.
H.
Obligation to cooperate in defense. The municipality shall have no duty to defend, indemnify or hold harmless a current or former employee, official, assembly member, board member, or commissioner, if the employee, assembly member, board member, or commissioner, fails to reasonably cooperate in the defense and settlement of a claim. Reasonable cooperation includes, without limitation, the following:
1.
Promptly giving the risk manager written notice of any incident potentially giving rise to a claim against the person that includes all information concerning the incident known to the person.
2.
Promptly delivering to the risk manager any claim, demand, notice, summons or other process received by the person and relating to the claim.
3.
Cooperating with the municipal attorney and any attorney retained by the municipality in defending the claim, including without limitation attending interviews, depositions, hearings and trials, responding to discovery requests and assisting in securing and giving evidence and obtaining the attendance of witnesses.
4.
Assisting the municipality in recovering any award for subrogation, contribution or indemnity against any third person that may arise from the claim from which the municipality indemnifies or defends the person.
5.
Refraining, except at their own cost, from voluntarily making any payment, assuming any liability or obligation, or incurring any expense other than for the first aid to others at the time of an accident.
6.
Providing records and information, and authorizing the municipality to obtain records and information, reasonably relevant to a proper defense of the claim.
I.
Control of defense. The municipality shall have the sole right to control the defense and settlement of the claim. The municipality may, in its sole discretion, and without the consent or participation of the employee, official, assembly member, board member or commissioner, compromise or settle the claim on any terms that impose no legal or financial obligation upon the employee, official, assembly member, board member or commissioner. Defense of the claim shall be provided by the municipality attorney or other attorney designated by the municipality in its sole discretion; provided, that where a conflict of interest between the municipality and the employee, official, assembly member, board member or commissioner would cause the representation by designated counsel to violate applicable rules of professional conduct, the employee, official, assembly member, board member or commissioner may select other counsel subject to the municipality's reasonable approval.
J.
Costs of private counsel. After notice by the municipality to an employee, official, assembly member, board member, or commissioner of the municipality's assumption of the obligation to indemnify, defend or hold harmless the employee, official, assembly member, board member or commissioner with respect to a claim, the municipality shall not be liable to such person for any legal or other expenses subsequently incurred by the person with respect to the claim. If, however, the person selects counsel as permitted by this section, the municipality shall pay the reasonable fees and costs of such counsel for defense of the employee.
K.
Transfer of rights to recover. To the extent the municipality makes payments for defense or indemnity of a person, the person must transfer to the municipality the person's rights of recovery against others related to the claim or loss including the right to recover attorney fees and other costs incurred in the defense of the claim.
(AO No. 2016-43, § 1, 5-10-2016)