Wilentz, Sullivan, Pashman, Clifford, Schreiber, Handler, Pollock Opinion of the Court was delivered by Sullivan, J.
[84 NJ Page 592] This appeal, on certification granted, 82 N.J. 280 (1979), presents the question whether a City of Newark police officer, acquitted by jury verdict of three criminal charges, is entitled to
reimbursement by the city for legal expenses incurred in his defense. Plaintiffs in this case are Gerard Valerius, a police officer of the City of Newark at the time of his indictment, and the law firm of Zazzali, Zazzali & Whipple, which represented Valerius during his criminal trial. The claim for reimbursement is based upon N.J.S.A. 40A:14-155 which 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.
On or about November 12, 1975, the Essex County Grand Jury returned a four-count indictment against Gerard Valerius and four other individuals. Valerius was charged with misconduct in office (Count 1), conspiracy to take money under false pretenses (Count 2), and taking money under false pretenses (Count 3). The essence of the indictment was that Gerard Valerius and Vincent Squatrito, also a Newark police officer, conspired with Vincent DiModica and Raymond Carl Freda whereby DiModica and Freda arranged a proposed sale of a quantity of hashish to two other individuals for a price of $23,000. At the time and place arranged for the sale, Officers Valerius and Squatrito appeared on the scene, confiscated the hashish and the $23,000 on behalf of the Newark Police Department and pretended to arrest DiModica and Freda. The indictment charged that, in fact, no such quantity of hashish ever existed and that the two officers and their co-conspirators intended to trick and defraud their victims into believing that the hashish and the purchase money were being seized by the police department. Officers Valerius and Squatrito never filed any report concerning this alleged incident or turned in any of the money which was purportedly confiscated.
The Internal Affairs Division of the Newark Police Department, an agency established to investigate complaints against
police officers, was notified of the indictment by the Essex County prosecutor's officer. The two officers were summoned to the Division and informed of the indictment. Valerius testified that Lieutenant Gauthier of the Division told him he was in very big trouble and "should get a lawyer." The Lieutenant admitted that he advised Valerius to seek legal advice. Nothing was said, however, about the city furnishing Valerius with legal representation or that he needed official permission before retaining his own attorney.
Valerius consulted George L. Schneider of the firm Zazzali, Zazzali & Whipple, who agreed to represent him. Schneider told Valerius that his fee would approximate $10,000 and Valerius paid him a $3,000 retainer.
Schneider testified that following his retention, he spoke to the officers in charge of the Internal Affairs Division, told them he had been retained by Valerius and that since the charge was misconduct in office, if Valerius were acquitted, the city would have to pay the attorney's fees. Schneider testified that this was the established practice he had with the city. He mentioned more than ten instances in which he had been retained without prior city approval by police officers charged with misconduct and, following their acquittals, the city had paid his legal fees in each case.
The criminal trial lasted from April 26 to May 7, 1976. Valerius testified in his own defense. After denying that the incident described in the indictment ever took place, he expressed the "suspicion" that the testimony of the chief witness against him was motivated by personal animus, because he previously had accused the witness's son of breaking and entering. At the conclusion of the trial, the jury returned a verdict of "not guilty" on all charges. Schneider then prepared an itemized bill on behalf of his law firm for the services rendered. The bill, in the amount of $10,851, was submitted to the city, which refused payment. The instant suit was then filed by Valerius and Zazzali, Zazzali & Whipple, seeking to compel the City of Newark to pay $20,000, which plaintiffs alleged was the reasonable value of the legal services rendered.
The city defended the suit on the grounds that at the time Valerius retained Zazzali, Zazzali & Whipple the established city policy under N.J.S.A. 40A:14-155 obliged a police officer to obtain official permission before employing private counsel. The city claimed that Valerius had not followed the required procedure and therefore it was not responsible for his attorney's fees. With regard to this defense, the trial court found that there was no proof that Valerius had actual notice of this policy, that Valerius had been advised by the Division to ...