Before Judges Skillman, D'Annunzio and Newman.
The opinion of the court was delivered by: Newman, J.A.D.
Telephonically argued: February 14, 2000
On appeal from the Superior Court of New Jersey, Law Division, Monmouth County.
This appeal raises issues concerning the authority and reviewability of the decision of the governing body of a county, the Board of Chosen Freeholders, to indemnify a public employee, in this case, the Monmouth County Prosecutor, against whom punitive damages were awarded in federal jury trials in civil actions arising out of the performance of his duties. We hold that, absent extraordinary circumstances, the Board's action, authorized in N.J.S.A. 59:10-4, is a legislative decision to appropriate public funds for a lawful purpose and is not reviewable.
In a libel case brought against John A. Kaye (Kaye), Monmouth County Prosecutor, in the United States District Court, a jury returned a verdict against Kaye for $45,000 in compensatory damages and $55,000 in punitive damages, finding that Kaye had libeled a former assistant prosecutor in a newspaper interview. In a separate action against Kaye, also brought in the United States District Court, a jury returned a verdict in favor of a county investigator, finding that she had suffered gender discrimination at the hands of Kaye. The jury verdict against Kaye was in the amount of $425,000, $50,000 of which was for punitive damages. The Monmouth County Board of Chosen Freeholders (the Board) agreed to indemnify Kaye for the full amount of both judgments.
Asserting taxpayer standing, on October 13, 1993, plaintiff, Larry S. Loigman, filed a complaint against defendants, the Board and the Attorney General of the State of New Jersey, alleging that public funds of Monmouth County (the County) were unlawfully being used to pay for the damage award ordered against Kaye in the libel action.
On October 25, 1994, approximately one year later, plaintiff filed an amended complaint alleging that county funds were unlawfully being used to pay the damage award ordered against Kaye in the discrimination action.
Thereafter, defendants filed motions for summary judgment. In a written opinion, dated March 31, 1998, the motion judge granted the Attorney General's motion for summary judgment, reasoning that the plaintiff has not pled or argued that the Attorney General must indemnify Kaye. The trial court denied the Board's motion for summary judgment, concluding that, with regard to indemnification for the damages arising from the libel suit, the resolution submitted by the Board did not meet the standards set forth in N.J.S.A. 59:10-4. The court further determined that the Board had failed to produce evidence of the adoption of a resolution authorizing indemnification for the damages arising out of the discrimination suit.
On May 22, 1998, the motion judge stated that the March 31, 1998 decision was incorrect in stating that the County had not submitted a resolution regarding the indemnification of Kaye for damages assessed in the discrimination case. The County had submitted a resolution, but it was not adopted by the Board until after the matter had been heard by the court on October 31, 1997.
On July 9, 1998, the Board adopted resolutions 98-560 and 98-561, amending the resolutions the motion judge had found insufficient to permit indemnification under N.J.S.A. 59:10-4. The amended resolutions were not discussed in executive session, but were introduced and adopted at the Board's meeting. On or about July 10, 1998, the Board filed a motion for summary judgment, asserting that the indemnification of Kaye was "authorized as a matter of law under N.J.S.A. 59:10-4[.]"
The motion judge found the amended resolutions legally sufficient to permit the indemnification of Kaye. The court granted summary judgment in favor of the Board and dismissed plaintiff's complaint with prejudice.
On appeal, plaintiff argues that the standards of the indemnification statute were not satisfied, that the OPMA was violated, requiring vacation of the Board's resolutions, and that discovery was improperly precluded. We now address each of plaintiff's arguments.
Plaintiff asserts that the indemnification of Kaye is not permitted under N.J.S.A. 59:10-4. Plaintiff contends that "[i]mplicit in the jury's verdict was a finding that the damages were based upon actions constituting actual fraud, actual malice, willful misconduct, or an intentional wrong[.]" Plaintiff's argument derives from the fact that "[t]o be subject to liability for punitive damages, a defendant's conduct must be willfully and wantonly reckless or malicious." Gennari v. Weichert Co. Realtors, 148 N.J. 582, 610 (1997). Thus, plaintiff reasons the Board cannot indemnify ...