Except as hereinafter provided, the Borough of Mountain Lakes, hereinafter
known as “the Borough,” shall upon the request of any present
or former official, employee or appointee of the Borough provide for indemnification
and legal defense of any civil action brought against said person or persons
arising from an act or omission falling within the scope and arising out of
his public duties.
The terms of this chapter and the definition of “official,”
“employee” and “appointee” are to be construed liberally
in order to effectuate the purposes of this chapter except that these terms
shall not mean: a) any person who is not a natural person; b) any person while
providing goods or services of any kind under any contract with the Borough
except an employment contract; c) any person while providing legal or engineering
services for compensation unless said person is a full-time employee of the
Borough; and d) any person who as a condition of his or her appointment or
contract is required to indemnify and defend the Borough and/or secure insurance.
The Borough shall provide for defense of and indemnify any present or
former official, employee or appointee of the Borough who becomes a defendant
in a civil action if the person or persons involved: a) acted or failed to
act in a matter in which the Borough has or had an interest; b) acted or failed
to act in the discharge of a duty imposed or authorized by law; and c) acted
or failed to take action in good faith. For purposes of this chapter, the
duty and authority of the Borough to defend and indemnify shall extend to
a complaint, cross-claim or, counterclaim against said person.
The Borough shall not indemnify any person against the payment of punitive
damages, penalties, or fines, but may provide for the legal defense of such
claims in accord with the standards set forth herein. The Borough may refuse
to provide for the defense and indemnification of any civil action referred
to herein if the Mountain Lakes Borough Council determines that: a) the act
or omission did not occur within the scope of a duty authorized or imposed
by law; b) the act or failure to act was the result of commission of a crime,
actual fraud, willful misconduct or actual malice of the person requesting
defense and indemnification; or c) the defense of the action or proceeding
by the Borough would create a conflict of interest between the Borough and
the person or persons involved.
In any other action or proceeding, including criminal proceedings, the
Borough may provide for the defense of a present or former official, employee
or appointee, if the Mountain Lakes Borough Council concludes that such representation
is in the best interest of the Borough and that the person to be defended
acted or failed to act in accord with the standards set forth in this ordinance.
Whenever the Borough provides for the defense of any action set forth
herein and as a condition of such defense, the Borough may assume exclusive
control over the representation of such persons defended and such person shall
cooperate fully with the Borough.
The Borough may provide for the defense pursuant to this chapter by
authorizing its Attorney to act in behalf of the person being defended, by
employing other counsel for this purpose or by asserting the right of the
Borough under any appropriate insurance policy that requires the insurer to
provide defense.
Nothing contained in this chapter shall inure to the benefit of any
insurance company that has issued a policy of liability insurance to any present
or former official, employee or appointee of the Borough or to any person
who is obligated to defend or indemnify any present or former official, employee
or appointee of the Borough.