[HISTORY: Adopted by the Borough of Upper Saddle River 2-11-2004 by Ord. No. 1-04. Amendments noted where applicable.]
The Borough hereby finds that it is appropriate to provide for the indemnification and defense of Borough employees, appointees, and officials in accordance with the provisions of N.J.S.A. 59:10-4 and applicable law which empowers local public entities to provide for such indemnification.
As used in this chapter, the following term shall have the meanings indicated:
- Any official, officer or member of the Borough's agencies, commissions or Council of the Borough, or employee or servant, whether or not compensated, full- or part-time, elected, appointed or employed, who is authorized to perform any act or service; provided, however, that the term does not include an independent contractor. The term shall also include persons formerly holding office or employment. The term employee is to be construed liberally in order to effectuate the purposes of this chapter.
Pursuant to the authority granted by provisions of the New Jersey Tort Claims Act, N.J.S.A. 59:10-4, and applicable law, the Borough of Upper Saddle River does hereby authorize and provide to its employees indemnification in accordance with the indemnification provisions applicable to all state employees under the New Jersey Tort Claims Act.
Editor's Note: See N.J.S.A. 59:1-1 et seq.
The Borough does also hereby authorize indemnification of any person formerly or presently holding any office, position or employment, elected or appointed, hereafter referred to as an employee, in accordance with the provisions herein.
Except as otherwise provided herein, the Borough shall indemnify and save harmless any employee from financial loss resulting from any civil action, suit or proceeding, including a cross action, counterclaim or a cross-complaint, against such employee on account of any act or omission done in the scope of his/her employment; provided, however, that the act or failure to act does not arise out of actual fraud, willful misconduct, actual malice or an intentional wrong.
The Borough shall defray all costs of defending a legal action against said employee, including attorney's fees consistent with the current hourly rate established by the Borough, court costs and expert or technical witness fees, and any amount paid in settlement thereof, and actually and reasonably incurred in connection therewith, to the extent permitted by general law. Expenses thus incurred may be paid in advance of final disposition of the action, but the Borough may, in its discretion, wait for a final determination before being obligated to make any payments.
Nothing herein shall authorize the Borough to pay for damages resulting from the commission of a crime; however, the Borough shall indemnify and save harmless each employee from financial loss resulting from any action described above, including punitive or exemplary damages, if, in the opinion of the governing body, the acts committed by the employee upon which the damages are based do not constitute actual fraud, actual malice, willful misconduct or an intentional wrong.
If the Borough employee files a counter action or counterclaim in the legal proceeding, the Borough shall not be obligated to reimburse such employee for any attorneys fees or court costs attributable to such counter action or counterclaim.
An employee shall not be entitled to indemnification or the cost of defense under this chapter unless, within 10 days of the time such employee is served with any summons, order to show cause, complaint, process, notice, demand or pleading, he/she delivers the same, or a copy thereof, to the Borough Clerk, who shall then forthwith notify the Mayor and Council of the pending action; provided, however, that this time period may be extended for good cause by the affirmative vote of a majority of the full membership of the governing body.
The Borough may provide any defense required of it under this chapter through the Borough Attorney or by employing other counsel as it deems appropriate. Where a conflict of interest may exist, the public employee may engage his or her own counsel, which counsel shall be subject to the reasonable satisfaction of the governing body. Such engagement shall be further subject to an appropriate agreement between the Borough and the public employee.
Except as otherwise provided in this chapter, whenever the Borough provides any defense required of it under this chapter, the Borough, through counsel, may assume exclusive control over the representation of the public employee, and such employee shall cooperate fully with the defense.
In the event that a judgment is entered in favor of the public employee at the trial court level and the adverse party files an appeal therefrom, the governing body shall be obligated to pay the costs of counsel beyond the trial court level. In the event that an adverse judgment is entered against the public employee at the trial court level and the public employee or adverse party seeks to appeal therefrom, it shall be within the sole discretion of the governing body to decide whether to pay for the costs of counsel beyond the trial court level.
The governing body may disclaim liability for coverage or defense costs if any of the following conditions shall occur:
The employee is covered by insurance for the cost of his/her defense and indemnification.
The legal proceeding is instigated or brought by the employee.
The legal proceeding is instigated or brought by the municipality against the employee.
Any of the acts or omissions complained of was, in the opinion of the governing body, the product of actual fraud, actual malice, willful misconduct or an intentional wrong.
The legal proceeding involves a question concerning the election laws.
The legal proceeding involves a claim for misfeasance or malfeasance in office or a claim of fraud, theft or misappropriation of public funds, and the employee is found liable for the charge.
The legal proceeding is a criminal or disciplinary action.
The legal proceeding involves an act or omission of the employee which was not within the scope of employment.
The Borough may not disclaim coverage under this chapter if there shall have been a specific determination by the trier of fact that the employee's actions or omissions complained of were within the employee's scope of employment, duties and responsibilities and, further, that the employee's actions or omissions complained of did not involve actual fraud, actual malice or willful misconduct.
An employee claiming indemnification under this chapter shall cooperate fully and in good faith with the Borough and with attorneys, adjusters, investigators or experts, or technical personnel engaged by the Borough for the preparation and presentation of a defense to such action, or the settlement or other disposition thereof, and if the employee neglects, fails or refuses to cooperate as herein required, the governing body, after a hearing on 10 days' written notice to the employee, and for cause, may declare all rights created under this chapter for the benefit of such employee to be forfeited and terminated by the affirmative vote of a majority of the full membership of the Borough Council.