[HISTORY: Adopted by the Township Committee of the Township of Bethlehem 6-15-1989 as Ord. No. 248-89; amended 8-18-1994 by Ord. No. 270-94. Other amendments noted where applicable.]
GENERAL REFERENCES
Officers and employees — See Ch. 32.
For the purposes of this chapter, unless the context clearly indicates a different meaning, the following words and phrases shall have the meaning set forth:
INSURANCE
Coverage afforded by insurance policies of every kind whether the premiums be paid by the township, the municipal official or someone on his/her behalf. The township shall not be obligated to carry such insurance.
MUNICIPAL OFFICIAL
Any present or former officer, employee, board or committee member appointed or hired by the Township Committee of the township, whether full- or part-time. The term shall also include any person elected by the voters of the township to fill any official position in the township, or any person subsequently appointed to fill such position.
Pursuant to the provisions of N.J.S.A. 59:10-1, et seq. and subject to the provisions of this chapter, the Township of Bethlehem is authorized to provide for the defense of actions brought against its municipal officials and shall indemnify such officials to the extent permissible by law and hereinafter set forth and shall save harmless and protect such persons from financial loss resulting from litigation. Such indemnification shall arise out of any action or legal proceeding of a noncriminal nature directly related, or incidental to, the performance of the duties of the position or office held by such municipal officials. The Township of Bethlehem may indemnify an employee for exemplary or punitive damages resulting from the employee's civil violation of state or federal law if, in the opinion of the Township Committee, the acts committed by the employee upon which damages are based did not constitute actual fraud, actual malice, willful misconduct or an intentional wrong.
A. 
If the Township Committee determines to provide a defense as authorized by this chapter, it may do so by:
(1) 
Hiring an attorney of its choice; or
(2) 
Reimbursing the municipal official for reasonable attorney's fees and costs incurred in connection with the defense of the act.
B. 
A resolution shall be adopted to appoint counsel for the defense and determine counsel fees. Without a written resolution of the Committee, the hourly rate shall not exceed the then rate paid to the Township Attorney. The township may, at its option, make payment directly to the attorney, upon invoices submitted to the township as the matter progresses.
C. 
Nothing in this chapter shall preclude the township and/or Township Attorney from demanding and reviewing periodically any costs and attorney's fees in connection with the defense of the municipal official. In the event that a dispute over attorney's fees arises, the township reserves the right to submit the dispute to the fee arbitration committee of the district or pursue any other course of legal action.
The amount the township is obligated to reimburse the municipal official shall be reduced by any insurance coverage payable to the municipal official and by the net amount (recovery less attorney's fees, disbursements and court costs) of any money received by the municipal official in any counteraction against the person or persons bringing the action against him/her.
A municipal official shall be entitled to indemnification or reimbursement pursuant to this chapter, provided that:
A. 
Within 10 calendar days of the time he/she is served with any summons, complaint, process, notice, demand or pleading, he/she delivers the original or a copy thereof to the Municipal Attorney.
B. 
The municipal official cooperates with the township in the conduct of his/her defense.
C. 
Legal counsel, available to the township through any insurance coverage, for the municipal official is accepted.
D. 
In the event that the Township Committee wishes to utilize the Township Attorney or the attorney for any board or committee of the township to defend an action, the municipal official shall be obligated to be represented by that attorney unless there is a conflict of interest.
E. 
The refusal of the municipal official to cooperate with the township or assigned attorney shall terminate the township's obligation to reimburse the municipal official.
If the legal proceeding is terminated by an agreement amongst the parties, then the township shall not be obligated to reimburse the municipal official unless the township approves the settlement agreement.
If the municipal official files a counteraction in the legal proceedings, the township shall not be obligated to reimburse him/her for any attorney's fees or court costs attributable to such counteraction, and the attorney designated by the township shall not be required to prosecute it unless it has been authorized by the township. The official or his/her attorney shall include a counterclaim for harassing and vexatious litigation and a request for damages and attorneys fees.
The township shall not be obligated to provide reimbursement in the following instances:
A. 
Where the act or omission was not within the scope of employment of the municipal official.
B. 
Where the act or omission complained of was because of actual fraud, willful misconduct or actual malice.
C. 
Where the legal proceeding is instigated or brought by the Township of Bethlehem against the municipal official.
D. 
Where the legal proceeding involves a question concerning election laws.
E. 
Where the action is brought against the township by the municipal official.
If the township elects to pay the expenses incurred in providing a defense, or any part thereof, prior to final determination of the legal proceedings, the municipal official shall reimburse the township for the sums paid out in the event that it is determined that the township was not obligated to provide for such defense pursuant to this chapter. The municipal official shall enter into an agreement with the township providing for said reimbursement prior to payment of these expenses by the township.