HomeMy Public PortalAbout98:41Co~lllCillBall Presents the following Ordinance Seconded by Councilman
AN ORDINANCE ESTABLISHING THE DEFENSE AND
INDEMNIFICATION OF BOROI GH EMPLOYEES, OFFICERS
AND OFFICIALS
BE IT ORDAINED, by the Mayor and Council of the Borough of Carteret that the
tbllowing be and is hereby added to the Code of the Borough of Carteret as Article
V of ('hapter 38 and shall be titled "Defense and Indemnification":
Chapter 38
DEFENSE AND INDEMNIFICATION
§ 1. Definitions
§ 2. Findings
§ 3. Indemnification
§ 4. Limit of Obligation
DEFINITIONS
A. Public Employee - as used in this ordinance, shall include any employee of
the Borough of Carteret (the "Borough") and shall include any elected or
appointed official or an,; ot'ficet, employee or sen'ant, whether or not
compensated, wbo is attthorized to loe~'on]~ an act or service tbr the Borough
The term public employee sbalt also include persons tbrmerly holding office
or employment, provided the events giving rise to a cause of action or claim
hereunder contbrm to the requirements herein established
B. Defense - As used in this ordinance, the term defense refers to thc means by
which such public employee may respond to any suit, allegation or cause of
action The Borough shall provide the defense of any action, suit o~
proceeding, whether civil, criminal administrative or investigative, including
a cross action, counterclaim or cross complaint against any public employee
because of any act or omission of that employee in the scope of their
employment and shall deft-ax all costs of' defending such action including
reasonable counsel fees and expenses, together with costs of appeal, if any.
excepting actions, suits or proceedings brought by the Borough against any
such employee Expressl5 exempted froln this ordinance providing defense
and indemnification to public employees of the Borough against its own public
employees
PAGE
NO 98-41 ~
Indemnification - as used in this ordinance, indemnification means to secure
against loss or damage which mav occur in the future, or to providc
compensation For or Io repair loss or damage already suff'ered: to insure to
save harmless
§ 2. FINDINGS
Tile Maser and Council lb~ tile Borough ot'Carteret tinds as follows:
A ]'he State of New Jersey, through the passage of the Tort Claims Act.
as amended and supplemented ri'om time to timeNJSA 59:1-1 et
seq, has determined the circumstances under which claims may be
made against public entities and their officials, employees and servants
B Said Tort ('laim Act also specifies under what circumstances a public
entity may defend and indemni~' its ofllcials, employees and se~wants
C Tile Mayor and Council for tile Borough of Carteret he, cb3
provide, under certain circnmstances, for the defense and
indemnification of its officers, employees and se~w'ants in the good faith
pertbrmance of their duties and responsibilities
i) Such defense and indemnification are especially appropriate tbr
members of appointed boards who seiwe the Borough of Carteret
without monetm>' compensation
'Ihe indemnification of municipal employees is also expressly designed
to a',oid a conflict between the employer and the employee when
claims arc lodged The Supreme Court tbr the State of New Jersey }las
noted that because the law does not require, bul does permit.
indemnification of local public entity employees, conflicts of interest
may arise in the absence of such indemnification where an entity and
an employee are both sued tbr compensatory damages in. lbr example,
a cMl rights action and both employ the same attorney to defend
Likewise. the corot pointed out such conflict could arise because the
employee is liable 1'o~ punitive damages and the entity is not
Accordingly, this indenmification policy is also intended to increase the
efficiency and reduce the costs of defending the Borough and its
employees and agents in tile event of such actions
§ 3. INDEMNIFICATION
A \¥henever a civil action shall be brought against any pe~ son holding an
ofrice position or employment ,Mth the Borough i-'or any action or
omission arising out of or in tile course of the performance of tile
duties of such office, position or employment, the Borough of CalTeret
shall provide paymeot of that po~lion of any exemplary or punitive
damage award not otherwise covered by a policy of insurance except
as limited herein Note, ho'~ever, that the Borough of Cat~teret does
not. by indemnil~'ing its employees against punitive damage, indirectly
or directly waive its own immunity against such claims
98-41
B Whenever a civil action shall be brought against any person holding an office.
position or employment with the Borough for any action or omission arising
out of or in tile course of the pedbmmnce of the duties of such office, position
or employment, the Borough shall provide payment of that portion of an~
costs of defense of said action not covered by a policy of insurance
Whenever ally insurance policy xd~ose purpose is to provide the defense and
indemnification of the Borough or its public employees is m dispute, thc
Borough will stand m the place of the insurance carrier, subjecl to all rights
of subrogation, to provide tbr tile det'ense aud indemnification of its employees
as specified herein, said public employee has an affirmative dub to be eligible
for said defense and indenmification to cooperate with tile Borough in any and
all of its efi'o~Xs to resolve any disputed insurance coverage
§ 4. I,IMIT OF OBLIGATION
By common lay, and this express provision to this ordinance, the Borough of
Cartcret's authority to indcmnii~' is limited to acts by public employees that are
xxithin tile scope ofthei! employment and which are not criminal, fi'audulent.
malicious or instances ofx~illfitl misconduct Additionally, thc Borough of
Carterct will not provide the means for defense nor indemnity any public
employee in those instances where tile Borough of Carteret has initiated the
charges or action In tile event any such public employee is charged with
criminal charges and he or she is later acquitted, any application to recover tile
cost of their defense is expressly conditioned upon the ultimate determination
of administrative charges xvhidl may or may not arise oul of the same conduct
or behavior Nomithstandmg all of the above, in the event the Borough of
('arteret elects to assert such administrative charges and even ii' the employee
should thereafter prevail, all such claims for reimbursement for costs of
defense will be subjected to lhe controlling statutoIs' and common law as
opposed to this ordinance
[ Note: lhe "or may not" clause addresses 1hose instances wherein a person entitled
to indemnification hereunder ol'fice~ is suspended on unrelated charges hut tile
proceeding is tolled by a parallel criminal action I
BE IT FIRTHER ORDAINED. thai Il'lis ordinance shall Take eft'ecl and shall be
ad',ertised as provided by' lak~
D() NOI USE SPACE BELOW IllISllNE
RECORI) OF COUNCIL VOTE
Adopted on Ih'st leading of the Cotmcil el thc Borough el Caumct, NJ, oa A~ust~ ~ 1998
Adopted on sec{md leading alle~ heal lng on A~ 20~ ~998 _
BY
ON . NIUNICIPAL CLERK