§ 16-1. Policy.

Whenever a civil or criminal action is instituted against any current or former appointed or elected City official, employee or servant, whether or not compensated or hired on a part-time basis, who is authorized to perform any act or service on behalf of the City or any individual subject to N.J.S.A. 40A:9-134.1, 40A:14-155 and 40A:14-128 (hereinafter "employee"); for any act or omission arising out of and within the scope of the performance of the duties of such office, the City shall defray the cost of defending such action as set forth below:

A. 

In a civil matter, if instituted against an employee based upon an act or omission of that employee, the City's obligation hereunder shall be limited to those cases in which:

(1) 

The employee was acting in a matter in which the City had an interest;

(2) 

The employee was acting in the discharge of a duty imposed or authorized by law in furtherance of the employee's official duties;

(3) 

The employee was acting in good faith;

(4) 

The employee is a named defendant in a matter pending before a court of competent jurisdiction or other legal proceeding; and

(5) 

The civil proceeding is dismissed or results in a final disposition without a specific finding of illegal wrongdoing or malfeasance in office by the employee.

B. 

In a criminal matter, if instituted against an employee based upon an act or omission of that employee, the City's obligation shall be limited to those cases in which:

(1) 

The employee was acting in a matter in which the City had an interest;

(2) 

The employee was acting in the discharge of a duty imposed or authorized by law in furtherance of the employee's official duties;

(3) 

The employee was acting in good faith;

(4) 

The employee is a named defendant in a matter pending before a court of competent jurisdiction or other legal proceeding; and

(5) 

The criminal proceeding is dismissed or results in a final disposition in favor of the employee.

C. 

Employees shall not be reimbursed for legal fees pursuant to this chapter in civil or criminal actions where the City is a plaintiff, pursues disciplinary action or otherwise initiates the action against the employee unless required by statute or court order.

D. 

The City's defrayal of the employee's costs of defending legal actions shall not include any post-judgment appellate actions involving the employee unless in the opinion of the Corporation Counsel it is in the best interests of the City to pursue an appeal.

E. 

The City of Atlantic City 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 City Council and the Mayor, upon consultation with Corporation Counsel, the acts committed by the employee upon which damages are based did not constitute actual fraud, actual malice, willful misconduct or an intentional wrong.

F. 

The defense and indemnification provisions of § 16-1 shall not be applicable when the Mayor and City Council, upon consultation with Corporation Counsel, determine that:

(1) 

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

(2) 

The employee failed to deliver to the Corporation Counsel, within 10 calendar days after the time he is served with any summons, complaint, process, notice, demand or pleading, the original or a copy of the same unless excepted by the Corporation Counsel; or

(3) 

The employee has failed to cooperate fully with the defense of the proceeding; or

(4) 

A court of competent jurisdiction has determined that the act or omission was not within the scope of employment.

G. 

Nothing contained in this chapter shall insure to the benefit of any insurance company which has issued a policy of liability insurance or to any person or entity who is obligated to indemnify the City or an employee.