On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket No. L-3416-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Graves, J.N. Harris, and Koblitz.
Defendant Montville Township Board of Education (the Board) appeals from a summary judgment order in favor of defendant/third-party plaintiff Frances Hersh awarding her counsel fees and costs incurred in connection with a lawsuit filed on behalf of a student.
Ms. Hersh was employed by the Board as a teacher when one of her students filed a lawsuit on November 28, 2007. The student alleged that he suffered "great humiliation and embarrassment" after an "unfavorable video," filmed at a Montville Township school, was uploaded onto the internet. The student asserted claims for negligent supervision and violations of the Anti-Bullying Bill of Rights Act, N.J.S.A. 18A:37-13 to -32, and named the Board, Hersh, and others as defendants.
On January 10, 2008, after the Board filed its answer to the lawsuit, the Board's attorney sent Hersh the following email:
As you know, we are representing the Board of Education in this civil lawsuit which also names you as a defendant. We have concluded that it would be a conflict of interest for us to represent you in this case, and we are therefore going to communicate with the insurance carrier to see if they are willing to appoint separate counsel on your behalf. Since this may take a while, I strongly urge that you contact the NJEA immediately and let them know that you require legal representation. In general, the time to answer a lawsuit is 35 days from the date it was served on you. If need be, I am sure that either NJEA counsel or our office can assist you in obtaining an extension of that time limit.
Hersh did not receive any additional information from either the Board or its insurance carrier regarding her representation. Consequently, she submitted the lawsuit to Horace Mann Insurance Company, her NJEA insurance carrier. The Horace Mann Insurance Company retained an attorney to represent Hersh and paid the costs and fees incurred in her defense. In her answer and third-party complaint, Hersh asserted a statutory claim against the Board for reimbursement of her legal fees and costs.
After the lawsuit settled, Hersh filed a summary judgment motion seeking reimbursement of the costs and fees incurred on her behalf under N.J.S.A. 18A:16-6, which provides, in part, as follows:
Whenever any civil or administrative action or other legal proceeding has been or shall be brought against any person holding any office, position or employment under the jurisdiction of any board of education . . . for any act or omission arising out of and in the course of the performance of the duties of such office, position, [or] employment . . . the board shall defray all costs of defending such action, including reasonable counsel fees and expenses, together with costs of appeal, if any, and shall save harmless and protect such person from any financial loss resulting therefrom The Board opposed plaintiff's motion. It argued that Hersh's claim for reimbursement or indemnification was "prohibited by the New Jersey Tort Claims Act." The Board focused on the last sentence of N.J.S.A. 59:9-2(e), which provides as follows: "No insurer or other person shall be entitled to bring an action under a subrogation provision in an insurance contract against a public entity or public employee."
In an oral decision on August 27, 2010, the trial court determined the Tort Claims Act did not bar Hersh's claim for statutory reimbursement under N.J.S.A. 18A:16-6:
[O]ne of the primary reasons [for granting summary judgment] is that a board of education should not be able to ignore its obligations under N.J.S.A. 18A:16-6, advise an employee to [seek] her own legal defense, and then utilize the Tort Claims Act as a shield.
. . . [A]s a matter of policy we have a specific indemnification statute. And, yes, we have the Torts Claims Act. But when you've got the specific indemnification statute and you've got the board saying, "Well, our attorneys can't represent you because of a conflict of interest, however, we're going to go out and try and get separate counsel for you," and whether they did or did not make any effort, they then go on to say, "Well, you better contact the NJEA and make sure you're represented," which she does . . . through the Horace Mann Insurance Company, gets experienced counsel, the case is settled, and now the Board is trying to use the ...