December 30, 2011
NANETTE COURTINE, PLAINTIFF-APPELLANT,
BOROUGH OF VICTORY GARDENS DEFENDANT/THIRD-PARTY PLAINTIFF-RESPONDENT,
SELECTIVE INSURANCE COMPANY OF AMERICA, THIRD-PARTY DEFENDANT.
On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-1805-10.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted: December 7, 2011
Before Judges Axelrad and Sapp-Peterson.
Plaintiff, Nanette Courtine, the former mayor of the Borough of Victory Gardens (the Borough), appeals from summary judgment dismissal of her declaratory judgment action seeking a declaration that it was unconstitutional for defendant, the Borough, to expend public funds to pay the legal bills of Debra Evans, the Borough Clerk/Administrator. The Law Division judge had found plaintiff's complaint was procedurally time-barred and substantively barred by the Tort Claims Act (TCA). We affirm.
The legal expenses, which the Borough agreed to pay by resolution, arose out of litigation commenced by plaintiff in the Law Division on or about August 28, 2008, against Evans and two others alleging, among other claims, defamation. Although Evans was named individually in the lawsuit, plaintiff identified her in her official capacity, alleging Evans was "responsible for directing the circulation of a recall petition to remove [plaintiff] from her office as mayor." Plaintiff further alleged: (1) she left a stack of "Year in Review" newsletters in the municipal building that she had the town print with instructions that Evans have them delivered to the residents, but Evans told a councilwoman to remove them from the building, and (2) Evans then "dictated the direction of the recall petition, recruited individuals to circulate the petition, and told [co-defendants] to inform voters whom they lobbied to sign the petition that [plaintiff] had opened a credit card in the town's name and used it to purchase personal items" when, in fact, plaintiff only used the account for reprinting the newsletters.*fn1
Evans commenced a third-party action against the Borough seeking indemnification. A subsequent settlement resulted in the dismissal of the third-party action. In exchange, the Borough agreed by resolution adopted on March l0, 2009, to defend and indemnify Evans in the underlying suit, including reimbursement of her prior legal fees.
Fifteen months later, plaintiff filed the current declaratory judgment action against the Borough seeking to vacate the resolution as violative of the state constitution. On cross-motions for summary judgment, Judge Hunt Dumont granted the Borough's motion to dismiss plaintiff's complaint, finding it was time-barred as filed outside the forty-five day deadline for a prerogative writs action. R. 4:69-6(a).
Plaintiff's challenge was also substantively barred as it was within the Borough's discretion to indemnify Evans under the TCA. See N.J.S.A. 59:10-4 (authorizing a local public entity to indemnify its employee for damages resulting from its "employee's civil violation of State . . . law if, in the opinion of the governing body of the local public entity, the acts committed by the employee upon which the damages are based did not constitute actual fraud, actual malice, willful misconduct or an intentional wrong"). Judge Dumont recognized that merely calling the actions willful in the complaint were insufficient to bring the claim outside of N.J.S.A. 59:10-4. As the only specific allegation against Evans was that she had removed flyers that plaintiff had printed for distribution, the judge was not convinced the Borough had abused its discretion in assuming the defense and indemnification of Evans at that stage of the proceeding. He noted the caveat that, if after trial in the underlying case, it was determined Evans engaged in conduct constituting an exclusion under the TCA, reimbursement would be appropriate. The judge did not address the constitutional challenge. This appeal ensued.
On appeal, plaintiff argues the forty-five day period should have been expanded because the borough's action involved "important and novel constitutional questions" or "important public rather than private interests" that require adjudication, citing Tri-State Ship Repair & Dry Dock Company v. City of Perth Amboy, 349 N.J. Super. 418, 423 (App. Div.), certif. denied, 174 N.J. 189 (2002). She urges that the trial court erred in not deciding the constitutional issue and finding the Borough's conduct was violative of the prohibition against spending public money for private use set forth in Article 8, section 3, paragraph 2 of the State constitution. She also challenges Judge Dumont's holding that the Borough's indemnification of Evans is permitted by the TCA.
When reviewing a grant of summary judgment, we employ the same standards used by the motion judge under Rule 4:46. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). We first address whether the moving party has demonstrated there were no genuine disputes as to material facts, viewed in the light most favorable to the non-moving party. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995). We need not address this step because the matter proceeded on cross-motions and plaintiff does not claim there are material issues of fact. We then decide whether the motion judge's application of the law was correct. Atl. Mut. Ins. Co. v. Hillside Bottling Co., 387 N.J. Super. 224, 231 (App. Div.), certif. denied, 189 N.J. 104 (2006). In so doing, we accord no deference to the motion judge's conclusions on issues of law, Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 382-83 (2010); Manalapan Realty, L.P., v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995), which we review de novo.
As Judge Dumont dismissed plaintiff's complaint on substantive grounds, we need not address the prerogative writs time-bar issue. Based on our review of the record and applicable law, we are satisfied Judge Dumont's ruling on the TCA issue was correct as a matter of law, and summary judgment dismissal of plaintiff's complaint was appropriate on that ground.
As we held in Loigman v. Board of Chosen Freeholders of County of Monmouth, 329 N.J. Super. 561, 565-66 (App. Div. 2000), absent extraordinary circumstances, we should defer to a governing body's discretionary decision to indemnify its employee, explaining:
The Legislature conferred plenary authority on the local public entity to determine whether indemnification of a punitive damage award is appropriate under the circumstances. The key statutory language is "in the opinion of." We do not find the language chosen by the Legislature to be accidental, but rather, to reflect an acknowledgment that this decision, which implicates the appropriation of funds, should be insulated from examination absent extraordinary circumstances. The Legislature recognized that those who enter public employment should not have to fear that the performance of their duties will expose them to the risk of law suits with the potential of damages that could bankrupt the employee. If a high caliber of employee is to be attracted into the public sector, it is essential this type of protection be made available. What that ultimately means is that the local public entity in appropriating these funds, is essentially rendering a legislative policy determination. Courts do not review such determinations because "they constitute a purely political decision and an exercise of governmental discretion." Borough of Glassboro v. Byrne, 141 N.J. Super. 19, 24 . . . (App. Div.), certif. denied, 71 N.J. 518 . . . (1976); see also Loigman v. Trombadore, 228 N.J. Super. 437, 442, 444 . . . (App. Div. 1988). In matters within the discretion of municipal officers, we will not substitute our judgment for that of those to whom budget matters have been entrusted. In re City Affairs Comm. of Jersey City, 129 N.J.L. 589, 592 . . . (Sup. Ct. 1943).
Judge Dumont correctly held that the Borough, in deciding to indemnify its employee, appropriately compared the allegations against Evans contained in the underlying complaint with the language of the TCA, and had ample basis for its decision. Even if the limited specific factual allegation against Evans were proven -- that plaintiff left the newsletters in the municipal building in Evans' care as Borough Clerk/Administrator with instructions for them to be delivered to town residents but Evans directed a councilwoman to remove the newsletters from the building to prevent their distribution -- the Borough's governing body was well within its discretion to conclude that Evans acted within her official position and her conduct did not constitute "actual fraud, actual malice, willful misconduct or an intentional wrong" under N.J.S.A. 59:10-4. As noted by the trial court, if additional facts were revealed during discovery and proven at trial to the contrary, plaintiff could revisit the issue.
Plaintiff's continued reliance on Palmentieri v. City of Atlantic City, 231 N.J. Super. 422 (Law Div. 1988) is unpersuasive. As we noted in Loigman, supra, 329 N.J. Super. at 566, although the Palmentieri decision post-dated the December 24, 1987 amendment of N.J.S.A. 59:10-4, it is apparent the judge relied on the pre-amendment version in reaching his decision. We further explained that the statement in Palmentieri that "it would be impermissible for a local public entity to indemnify its employee for damages assessed in a defamation case because the employee's actions 'would necessarily constitute willful misconduct[,]'" id. at 440, "cannot be reconciled with the plain language of the [TCA] as it now exists." Loigman, supra, 329 N.J. Super. at 566-67.
Moreover, plaintiff provides no legal support for her newly-minted position seeking to distinguish the Borough's payment of legal fees from its indemnification of Evans, and her claim that legal fees, as opposed to the payment of a judgment for damages, should be excluded from coverage under the TCA.
Having concluded that Judge Dumont correctly dismissed plaintiff's complaint as a matter of law, we discern no error by him in not addressing the constitutional issue advanced by plaintiff. Nor will we.
As the Supreme Court recently reiterated in The Committee to Recall Robert Menendez from the Office of United States Senator v. Wells, 204 N.J. 79, 95-96 (2010),
In addressing this and like disputes [senatorial recall process], we strive to avoid reaching constitutional questions unless required to do so. See Harris v. McRae, 448 U.S. 297, 306-07, 100 S. Ct. 2671, 2683, 65 L. Ed. 2d 784, 798 (1980) ("[I]f a case may be decided on either statutory or constitutional grounds, this Court, for sound jurisprudential reasons, will inquire first into the statutory question."); Randolph Town Ctr., L.P. v. County of Morris, 186 N.J. 78, 80 . . . (2006) ("Courts should not reach a constitutional question unless its resolution is imperative to the disposition of litigation." (citations omitted)); accord Burnett v. County of Bergen, 198 N.J. 408, 420 . . . (2009) (quoting Hennessey v. Coastal Eagle Point Oil Co., 129 N.J. 81, 109 . . . (1992) (Pollock, J., concurring)); Bell v. Twp. of Stafford, 110 N.J. 384, 389 (1988).
This appeal does not warrant a deviation from that policy of constitutional restraint.