[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.
A.
Pursuant to the authority granted by provisions of the
New Jersey Tort Claims Act,[1] 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.
[1]
Editor's Note: See N.J.S.A. 59:1-1 et seq.
B.
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.
A.
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.
B.
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.
C.
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.
D.
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.
A.
The governing body may disclaim liability for coverage
or defense costs if any of the following conditions shall occur:
(1)
The employee is covered by insurance for the cost of
his/her defense and indemnification.
(2)
The legal proceeding is instigated or brought by the
employee.
(3)
The legal proceeding is instigated or brought by the
municipality against the employee.
(4)
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.
(5)
The legal proceeding involves a question concerning the
election laws.
(6)
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.
(7)
The legal proceeding is a criminal or disciplinary action.
(8)
The legal proceeding involves an act or omission of the
employee which was not within the scope of employment.
B.
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.
