Rocky Hill
NJ

Ordinance
ORDINANCE-2018-11
Final Adoption
Nov 5, 2018 7:30 PM

An Ordinance Adding Chapter 9 to the General Code of the Borough of Rocky Hill Titled: DEFENSE OR INDEMNIFICATION OF BOROUGH EMPLOYEES

Information

Department:AdministrationSponsors:
Category:Agreement

Attachments

  1. Printout

Body

Chapter 9:  DEFENSE OR INDEMNIFICATION OF BOROUGH EMPLOYEES.

 

9-1    Purpose.

   Each municipality in the State of New Jersey may defend or indemnify its officials and employees in connection with municipal affairs and operations pursuant to N.J.S.A. 59:10-4.

   It is deemed desirable to establish rights and procedures with respect to the defense and indemnification of Borough officials and employees.

 

9-2    Definitions.

   As used in this section:

Borough shall mean the Borough of Rocky Hill, in the County of Somerset.

Borough employee shall mean and include any past, present and future member of the governing body of the Borough; any past, present and future member of any other Borough board, body, commission or Council, whether created by State law or by municipal ordinance or resolution; and any other past, present and future Borough officer, official or employee, whether elected or appointed, compensated or uncompensated, full-time or part-time, who by reason of position or employment is authorized to perform any acts or services of any nature whatsoever for or on behalf of the Borough; provided, however, that independent contractors shall not be considered Borough employees for purposes of this section.

 

9-3    Defense of Civil Actions or Proceedings Against Borough Employees.

   Except as provided in Sections 9-4, 9-5, 9-10 or 9-11, the Borough shall provide for the defense of any civil action or proceeding commenced against any Borough employee on account of any act or omission by a Borough employee involving Borough affairs, operations or services. The duty to defend shall extend to a cross-action, counterclaim or cross-complaint.

 

9-4    Notice to Borough of Civil Action or Proceeding; Delivery of Documents.

   Every Borough employee who is served with any summons, complaint, process, notice, demand or pleading in a civil action or proceeding involving Borough affairs, operations or services and who desires that the Borough provide for a defense shall deliver the original or a complete copy thereof to the Borough Clerk within seven (7) calendar days of the time that service is made upon such Borough employee. Each document shall bear a notation as to the date upon which service was made upon the Borough employee. The Borough employee shall promptly furnish such additional information regarding the matter as may be requested by the Borough. Failure to comply with the foregoing requirements shall constitute grounds for a refusal by the Borough to provide the Borough employee with a defense to any civil action or proceeding in accordance with the provisions of this section.

 

9-5    Refusal of Borough to Provide Defense.

   The Borough shall not be required to provide for the defense of a civil action or proceeding against a Borough employee if the Borough Council determines that it is likely that:

a.     The act or omission was not within the scope of employment; or

b.     The act or the failure to act involved actual fraud, actual malice or willful misconduct; or

c.     The act or failure to act was in violation of the Local Government Ethics Law; or

d.     The defense of the action or proceeding by the Borough would create a conflict of interest between the Borough and the Borough employee.

   In the event of an action or proceeding against more than four  (4) members of the Borough Council, the Borough Attorney, in consultation with the unconflicted Council Members, may make any determination which might otherwise be made by the Borough Council in accordance with this Section 9-5.

   In the event that the Borough shall refuse to provide for the defense of a civil action or proceeding for any of the reasons mentioned above, the Borough shall cause notice of such refusal to be given to the Borough employee concerned in such manner that the notice of refusal is received within fourteen (14) calendar days after the original service upon the Borough employee of the document mentioned in Section 9-4.

 

9-6    Method of Providing Defense; Borough Control Over Litigation; Satisfaction of any Judgment or Settlement.

   Defense for a Borough employee may be provided by the Borough Attorney, or by other counsel employed by the Borough for such purpose, or by an exercise of the Borough's right under any appropriate insurance policy to require the insurer to provide the defense.

   Whenever the Borough provides for the defense of a Borough employee pursuant to any provision of this Section, the Borough or the Borough's insurer may assume exclusive control over the representation of such Borough employee, who shall cooperate fully with the Borough or the Borough's insurer in all matters relating to the defense.

   The Borough or the Borough's insurer, as the case may be, shall have the right to settle or compromise any litigation involving a defense provided for a Borough employee. In the event that a Borough insurance policy contains a deductible amount and the defense is provided by the insurer, the terms of the settlement shall be approved by the Borough Council.  In the event that the action or proceeding is against more than four (4) members of the Borough Council, the terms of the settlement shall be approved by the Borough Attorney, in consultation with the unconflicted Council Members.

   The Borough and/or the Borough's insurer shall provide for the payment and satisfaction of any amount which may be due under any judgment against the Borough employee or shall provide for the payment of any amount due by reason of the settlement of any action or proceeding, and the Borough employee shall not be required to contribute to any such payment.

 

9-7    Indemnification.

   In any case where the Borough is required to provide a defense under this article, the Borough employee shall be entitled to indemnification from the Borough.  Any indemnification shall include the amount of any judgment or the amount under any bona fide settlement agreement, as well as all costs of defending the civil action or proceeding, including reasonable counsel fees and expenses, together with the costs of appeal, if any.

 

   In the event that in accordance with the provisions of Section 9-5 the Borough shall refuse to provide for a defense to a civil action or proceeding, the Borough employee shall be entitled to indemnification from the Borough if the Borough employee establishes that the act or omission upon which the claim or judgment was based occurred within the scope of employment as an employee of the Borough, and the Borough fails to establish that the act or omission constituted actual fraud, actual malice or willful misconduct or was in violation of any provision of the Local Government Ethics Law.

 

9-8  Effect of Private Insurance.

   This indemnification shall be deemed primary unless the Borough employee has in effect, with respect to any claim made, a personal professional liability policy.  If such a policy is in effect, this indemnification shall be deemed secondary to the extent that coverage is afforded under the terms of that policy.  In other words, the amount the Borough is obliged to indemnify the Borough employee shall be reduced by any insurance coverage payable to the Borough employee.

9-9  Obligations of Insurer under an Insurance Policy.

   No provision of this Chapter shall be interpreted or construed as affecting or limiting any obligation of any insurer under the terms of any insurance policy carried by the Borough.

9-10  Statutory Obligations of Borough to Particular Employees.

   This Chapter shall not apply to any Borough employee so as to modify the rights or benefits under any statutory or decisional law applicable to such Borough employee.

9-11  Action or Proceeding Instituted by the Borough.

   No provision of this Chapter shall apply to any action or proceeding of any nature instituted by the Borough against any Borough employee.

 

 

Meeting History

Oct 15, 2018 7:30 PM  Borough Council Second Meeting of Month

The ordinance lays out that the Borough will defend or indemnify its employees, council members, board members, etc. in the event that they are named personally in litigation involving Borough affairs, operations or services. The Borough’s employees and volunteers would therefore be protected from the legal and financial burden of defending themselves if they are sued in connection with municipal affairs.

RESULT:FIRST READING [UNANIMOUS]Next: 11/5/2018 7:30 PM
MOVER:Mark Sibley, Councilman
SECONDER:Irene Battaglia, Councilwoman
AYES:Irene Battaglia, Amy Kirtland, Billy Dawson, John Hagemann, Mark Sibley, Robert Uhrik
Nov 5, 2018 7:30 PM  Borough Council First Meeting of Month

The floor was open to public hearing on the ordinance. Hearing none, the floor was immediately closed.

RESULT:FINAL ADOPTION [UNANIMOUS]
MOVER:Billy Dawson, Council Member
SECONDER:Mark Sibley, Councilman
AYES:Billy Dawson, Mark Sibley, Robert Uhrik
ABSENT:Irene Battaglia, Amy Kirtland, John Hagemann

Discussion