Village of Great Neck, NY Chapter 38 Defense and Indemnification

[HISTORY: Adopted by the Board of Trustees of the Village of Great Neck 11-17-1981 by L.L. No. 5-1981; amended in its entirety 3-18-2003 by L.L. No. 6-2003 (Ch. 11 of the 1976 Code). Subsequent amendments noted where applicable.]

GENERAL REFERENCES

Code of Ethics — See Ch. 53.

§ 38-1 Legislative intent.

A. The Board finds that it is in the best interests of the Village, for the proper operation of its government, for its elected and appointed officials, counsel, and employees to be free from intimidation. In order to encourage residents to partake in public office and to encourage others to accept public employment, it is important that such individuals be free of the fear of significant economic loss from a judgment, including one for punitive damages, when such individuals are acting in the proper discharge of their duties and within the scope of their office, appointment, or employment.

B. The purpose of this chapter is to provide legal and financial protection for those elected and appointed officials, counsel, and employees serving the Village from claims that may be made against them in their individual capacities for actions taken while in the performance of their duties and within the scope of their office, appointment, or employment with the Village

C. By enactment of this chapter, the Board does not intend to abrogate or otherwise limit any existing right or responsibility of the Village or its elected and appointed officials, counsel, and employees with regard to indemnification or legal defense.

§ 38-2 Definitions.

As used in this chapter, the following terms shall have the meanings indicated:

APPOINTMENT IN THE SERVICE OF THE VILLAGE

Any appointment by the Mayor in his capacity as Mayor and/or Chief Executive Officer of the Village, whether or not the approval of the Board of Trustees is required, including, but not limited to, an appointment of himself, and any appointment by the Board of Trustees, including, but not limited to, an appointment of a member of the Board of Trustees, whether pursuant to the Village Law, the Public Authorities Law, the Public Housing Law, or any other law, or not pursuant to any law, to any board, committee, authority, or other entity, including, but not limited to, the Water Authority of Great Neck North, the Great Neck Housing Authority, the Municipal Sponsoring Board of the Length of Service Awards Program for the Alert Engine, Hook and Ladder and Hose Company No. 1, Inc., the New York Conference of Mayors, the Nassau County Village Officials Association, the Great Neck Village Officials Association, the Manhasset Bay Protection Committee, the Public Access TV Corporation, the Great Neck/North Shore Cable Commission, and the Great Neck Chamber of Commerce.

[Added 9-23-2014 by L.L. No. 5-2014]

BOARD

Board of Trustees of the Village.

EMPLOYEE

Any person holding an office or other position by election, appointment, or employment in the service of the Village, whether or not compensated, or a volunteer expressly authorized to participate in a municipally sponsored volunteer program, including but not limited to the Mayor, Trustees, board and commission members, Village Attorney and other legal counsel, whether performing retainer or nonretainer services. The term "employee" shall include a former employee as well as such employee's estate or judicially appointed personal representative.

VILLAGE

The Village of Great Neck. References to the Mayor, Treasurer, Trustees, Village Attorney, and Village Clerk refer to the respective Mayor, Treasurer, Trustees, Village Attorney, and Village Clerk of the Village.

§ 38-3 Application of Public Officers Law.

The full benefits of § 18 of the Public Officers Law of the State of New York are hereby conferred upon all of the employees of the Village, and the Village shall be liable for all of the costs incurred under that section, as well as the costs incurred under §§ 38-5 and 38-6 hereof.

§ 38-4 Benefits in addition to other provisions.

The benefits accorded employees of the Village under § 18 of the Public Officers Law shall be available in addition to defense and indemnification provisions conferred by any other enactment.

§ 38-5 Obligation to provide indemnification and defense.

A. The Village shall be liable for and shall assume the liability to the extent that it shall save harmless any employee for any negligent act or tort, provided such employee, at the time of the negligent act or tort complained of, was acting in the performance of such employee's duties and within the scope of such employee's office, appointment, or employment with the Village. Such liability and saving harmless shall not apply when a civil action or proceeding is brought by or on behalf of the Village, including, but not limited to, cross-claims and third-party claims interposed or brought by or on behalf of the Village.

B. In addition to the requirements of Subsection A of this section, the Village shall provide for the defense of any civil action or proceeding brought against an employee and shall indemnify and save harmless such employee from any judgment of a court of competent jurisdiction, including, but not limited to, judgments for punitive or exemplary damages, fines or penalties, or in the amount of any settlement of a claim, provided further that, in the case of a settlement, the duty to indemnify and save harmless shall be conditioned upon the approval of the amount of settlement by the Village. Whenever such action, proceeding, or judgment is for punitive or exemplary damages, fines or penalties, such defense, indemnification, and saving harmless shall only pertain when such action, proceeding, or judgment arises out of a negligent act or other tort of such employee committed while in the proper discharge of such employee's duties and within the scope of such employee's office, appointment, or employment, subject to the limitations as more fully set forth in Subsection C. The Village is authorized and empowered to purchase insurance to cover the cost of such defense and indemnification. The duty to provide for a defense as set forth in this chapter shall not arise where such civil action or proceeding is brought by or on behalf of the Village, including, but not limited to, cross-claims and third-party claims interposed or brought by or on behalf of the Village.

C. The duty to defend, indemnify, and save harmless set forth in this chapter shall not pertain if, based upon the facts and circumstances then known to the Board, the employee's actions were not within the scope of such employee's office, appointment, or employment or not within the scope of such employee's duties. It shall be conclusively presumed that such actions were not within the scope of such employee's office, appointment, or employment or not within the scope of such employee's duties, when the actions were:

(1) Reckless, malicious, or grossly negligent;

(2) Not made in good faith or an intentional wrong doing; or

(3) In willful violation of a clearly established provision of law or Village policy.

D. No action or special proceeding instituted hereunder shall be prosecuted or maintained against the Village or such employee unless notice of claim shall have been made and served upon the Village in compliance with § 50-e of the General Municipal Law. Every such action shall be commenced pursuant to the provisions of § 50-i of the General Municipal Law. The foregoing shall be a defense against any claim by a plaintiff or petitioner against an employee or the Village but shall not limit the obligations of the Village under this section to an employee if the provisions of this subsection are not enforced by the court against the plaintiff or petitioner.

E. It shall be conclusively presumed that any action taken by the Mayor or any Trustee while at any Village meeting, or otherwise when acting, including but not limited to speaking, with regard to the Village or Village activities, or applications presently before or proposed to the Village, is an action within the scope of their office and in the discharge of their duties. In the event of any doubt, the benefit of the doubt shall be in favor of the Mayor and Trustees. The intent of this Subsection E is to give the broadest coverage and protection to the Mayor and Trustees permitted by law.

F. Upon entry of a final judgment against an employee or upon the settlement of a claim, as provided for in Subsections A and B above, the employee shall serve a copy of such judgment or settlement, personally or by certified or registered mail, within 30 days of the date of entry or settlement, upon the Village Clerk, and, if not inconsistent with the provisions of this chapter, such judgment or settlement shall be certified for payment by the Village Clerk. If the Board concurs in such certification, the judgment or settlement shall be paid upon the audit and warrant of the Treasurer.

§ 38-6 Representation by private counsel.

Subject to the conditions set forth in §§ 38-5 and 38-8, an employee shall be entitled to be represented by the Village Attorney or other counsel designated by the Board or the Village's insurance carrier; provided, however, that the employee shall be entitled to representation by private counsel of such employee's choice in any civil action or proceeding whenever the Village Attorney, or other counsel designated by the Board or the Village's insurance carrier, determines, based upon tile Village Attorney, other counsel, or the insurance carrier's investigation and review of the facts and circumstances of the case, that representation by the Village Attorney or other designated counsel would be inappropriate or whenever a court of competent jurisdiction, upon appropriate motion or by a special proceeding, determines that a conflict of interest exists and that the employee is entitled to be represented by private counsel of such employee's choice. The Village Attorney, or other counsel designated by the Board or the insurance carrier, shall notify the employee, in writing, of such determination that the employee is entitled to be represented by private counsel of such employee's choice. The Board or the insurance carrier may require, as a condition to payment of the fees and expenses of such representation, that the same counsel represent appropriate groups of such employees. If the employee or group of employees is entitled to representation by private counsel under the provisions of this chapter, the Village Attorney, other designated counsel, or the insurance carrier shall so certify to the Board. Reasonable attorneys' fees and litigation expenses shall be paid by the Village or the insurance carrier to such private counsel from time to time during the pendency of the civil action or proceeding, upon the audit and warrant of the Treasurer or the approval of the insurance carrier. Any dispute with respect to representation of multiple employees by a single counsel or the amount of litigation expenses or the reasonableness of attorneys' fees shall be resolved by the court upon motion or by way of a special proceeding.

§ 38-7 Preparation by Village Attorney or insurance carrier to avoid default.

Where the employee delivers process and a request for defense to the Village Attorney as required by § 38-8, the Village Attorney shall take the necessary steps, including the retention of private counsel under the terms and conditions provided in § 38-6, on behalf of the employee to avoid entry of a default judgment, pending resolution of any question pertaining to the obligation to provide for a defense. In the event that insurance is available for such defense, in lieu of the foregoing, the Village Clerk shall forward such process to the insurance carrier or carriers that are responsible for providing such defense.

§ 38-8 Responsibility of employee; settlement.

A. The duty to defend, indemnify, and save harmless provided by this chapter shall be conditioned upon delivery to the Village Clerk by the employee of the original or a copy of any summons, complaint, process, notice, demand, or pleading within five days after such employee is served with such document and the full cooperation of the employee in the defense of such action or proceeding and in defense of any action or proceeding against the Village based upon the same act or omission and in the prosecution of any appeal. Such delivery shall be deemed a request by the employee that the Village provide for such employee's defense pursuant to this chapter.

B. In the event that the Village or its insurance carrier recommends settlement of any such action or proceeding, and the employee refuses to agree to the settlement, the Village and its insurance carrier, if any, shall have no liability for any judgment, including, but not limited to, judgments for punitive or exemplary damages, fines or penalties, or any settlement to the extent that the amount of such judgment or settlement exceeds the settlement recommended and refused by the employee.

§ 38-9 Construal of provisions; applicability.

A. The benefits of this chapter shall inure only to employees as defined herein and shall not enlarge or diminish the right of any other party, nor shall any provision of this chapter be construed to affect, alter or repeal any provision of the Workers Compensation Law.

B. The provisions of this chapter shall not be construed to impair, alter, limit, or modify the rights and obligations of any insurer under any policy of insurance.

C. The provisions of this chapter shall apply to all actions and proceedings pending upon the effective date thereof or thereafter instituted.

D. Except as otherwise specifically provided in this chapter, the provisions of this chapter shall not be construed in any way to impair, alter, limit, modify, abrogate, or restrict any immunity or any right to defense and/or indemnification available to or conferred upon any unit, entity, officer, or employee of the Village by, in accordance with, or by reason of any other provisions of state or federal statutory or common law.

§ 38-10 Severability.

If any provision of this chapter or the application thereof to any person or circumstance shall be held unconstitutional or invalid in whole or in part by any court of competent jurisdiction, such holding of unconstitutionality or invalidity shall in no way affect or impair any other provision of this chapter or the application of any such provision to any other person or circumstance to the maximum extent permitted by such determination.

§ 38-11 Supersession of Public Officers Law and General Municipal Law.

Pursuant to the authority granted to villages by Municipal Home Rule Law § 10(1)(ii)(e)(3), the provisions with regard to defense and indemnification of officers and employees of public entities of § 18 of the Public Officers Law and with regard to liability of police officers for negligence in the performance of duty of § 50-j of the General Municipal Law are hereby superseded in their relation to the Village to the extent required, if at all, that such provisions in said § 18 and § 50-j are hereby supplemented, but not diminished, by the additional indemnification and hold harmless provisions set forth in this chapter.