Jorge De Jesus instituted an action in the Federal District Court against two police officers and the City of Elizabeth by whom the police officers were employed demanding both consequential and punitive damages; his wife joined in the suit seeking a derivative per quod recovery.
The couple advanced three separate theories of liability, the first being predicated upon 42 U.S.C.A. § 1983, alleging that Jorge De Jesus was deprived of his constitutional
rights by reason of an illegal arrest, unnecessary force in making the arrest, assault and battery and false imprisonment. The second theory of liability is directed against the City of Elizabeth and seeks to hold the city liable for the alleged wrongdoings of its police officers. The third basis of liability is predicated upon the doctrine of "pendant" jurisdiction, contending that the conduct of the police officers constituted an assault and battery at common law.
In the action presently before this court the City of Elizabeth (hereinafter city), seeks a declaratory judgment determining the nature and extent of its duty to provide a defense for its employee police officers and whether it would be obligated to indemnify the individual defendants named in the federal suit for any judgment which may be recovered against them. Specifically, the city seeks an interpretation of the duties and responsibilities imposed upon it by N.J.S.A. 40A:14-155, and in light thereof, the effect of a collective bargaining agreement between the city and the Elizabeth Patrolmen's Benevolent Association (PBA). Additionally, the city seeks a determination of the applicability of an insurance policy and the responsibilities of Underwriters At Lloyds, an insurance company authorized to do business in the State of New Jersey (hereinafter insurance company), from whom the city purchased said policy pursuant to a collective bargaining agreement between the city and the PBA. More particularly, the city seeks clarification as to the nature and extent of the coverage provided in said policy as it pertains to the action instituted by Mr. and Mrs. De Jesus in the federal court, which action finds its genesis in incidents arising out of the alleged false arrest by police officers.
Initially, the duties and responsibilities of the city, vis-a-vis the police officers, must be examined. The relevant statute, N.J.S.A. 40A:14-155, provides:
Whenever a member or officer of a municipal police department or force is a defendant in any action or legal proceeding arising out of or incidental to the performance of his duties, the governing body of the municipality shall provide said member or officer with necessary means for the defense of such action or proceeding, but not for his defense in a disciplinary proceeding instituted against him by the municipality or in a criminal proceeding instituted as a result of a complaint on behalf of the municipality. If any such disciplinary or criminal proceeding instituted by or on complaint of the municipality shall be dismissed or finally determined in favor of the member or officer, he shall be reimbursed for the expense of his defense.
The collective bargaining agreement between the city and the PBA, which predated the institution of De Jesus' suit in federal court, incorporated this statute verbatim. Immediately following that recitation the agreement contained the following pertinent provision:
The City agrees to furnish all necessary legal advice and representation in the defense of civil charges and allegations brought in any legal action against a member of the bargaining unit covered by this agreement, and shall undertake to defend or arrange for the defense of members of the bargaining unit. In the event of a judgment against a member of the bargaining unit arising out of or incidental to the performance of his duty, the City agrees to pay for said judgment or arrange for the payment of said judgment.
Paragraph 4 of the same agreement, in an attempt to limit the applicability of N.J.S.A. 40A:14-155, states:
It is specifically understood between the parties to this Agreement that a judgment of punitive damages which may be recovered against a member of the bargaining unit is specifically exempt from the requirement of representation or payment by the City, and the employee or employees shall be responsible in an individual capacity for the payment of any judgment of punitive damages which may be rendered against them by a court of competent jurisdiction.
Pursuant to this agreement the city purchased a "false arrest" policy from defendant insurance company. The policy named the members of the Elizabeth police force as beneficiaries.
Upon being served with the summons and complaint in the federal suit, the police officers retained private counsel, who attempted to negotiate with the city on the subject of payment of reasonable attorney's fees. The city took the position that the collective bargaining agreement set forth a specific manner of implementing the provisions of N.J.S.A. 40A:14-155, and that their statutory obligations were discharged by the procurement of the "false arrest" policy. The police officers asserted that the city's obligation to pay their legal expenses was absolute, notwithstanding any contrary provisions in the collective bargaining agreement. Because of this difference of interpretation no agreement concerning the payment of legal fees has been reached.
It must first be determined whether N.J.S.A. 40A:14-155 was intended to include within its purview the defense of claims for punitive damages, as well as claims for compensatory damages. When attempting to interpret a statute, it is necessary to ascertain the intent of the Legislature in promulgating such a provision. Highlands v. Davis , 124 N.J. Super. 217 (Law Div. 1973). In the cited case the court examined the ...