May 17, 2012
A.B., GUARDIAN AD LITEM ON BEHALF OF B.B., A MINOR, PLAINTIFF,
MONTVILLE BOARD OF EDUCATION, GARY BOWEN, AND MARYANNE LAUX, DEFENDANTS-APPELLANTS, AND FRANCES HERSH, DEFENDANT-THIRD-PARTY PLAINTIFF/RESPONDENT,
J.C., GUARDIAN AD LITEM OF B.S., A MINOR, AND B.S., INDIVIDUALLY, ALEX BONDROFF, GUARDIAN AD LITEM OF A.B., A MINOR, AND A.B., INDIVIDUALLY, SCOTT ROSEFF AND THERESA ROSEFF, GUARDIAN AD LITEM OF J.R., A MINOR, AND J.R., INDIVIDUALLY, THIRD-PARTY DEFENDANTS.
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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 26, 2011
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 Torts Claims Act as a shield in connection with reimbursement. As a policy matter I don't think that's right when there's a specific reimbursement statute on the books.
The trial court granted Hersh's summary judgment motion in an order dated August 27, 2010. Thereafter, on December 20, 2010, the court ordered the Board to reimburse Hersh for the "costs and fees expended upon her behalf, pursuant to N.J.S.A. 18A:16-6, in the amount of $34,496.79."
On appeal, the Board does not dispute that the allegations in the lawsuit arose out of Hersh's performance of her duties as a school teacher. Additionally, the Board does not dispute the reasonableness of the costs and fees awarded by the court. Instead, the Board argues that "the Tort Claims Act bars an insurer from reimbursement of its defense costs and fees." We do not agree.
A trial court's grant of summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c). When reviewing a trial court's grant of summary judgment, an appellate court utilizes the same standard applied by the trial court. See, e.g., Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). We must first determine "whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). If there is no genuine issue of material fact, we must then decide whether the trial court's application of the law was correct. Id. at 537.
The Tort Claims Act modified the doctrine of sovereign immunity and created limited situations in which parties could assert tort claims against public entities. Feinberg v. State, D.E.P., 137 N.J. 126, 133 (1994). In addition, N.J.S.A. 59:9-2(e) prohibits subrogation claims against governmental entities arising out of any injuries for which the governmental entity may be liable in tort. Pinkowski v. Twp. of Montclair, 299 N.J. Super. 557, 569 (App. Div. 1997).
In this case, however, Hersh did not pursue any tort claims against the Board, and the Tort Claims Act has no bearing on her right to statutory indemnification under N.J.S.A. 18A:16-6. See N.J.S.A. 59:1-4 ("Nothing in [the Tort Claims Act] shall affect liability based on contract or the right to obtain relief other than damages against the public entity or one of its employees."); see also Owens v. Feigin, 194 N.J. 607, 613-14 (2008) (finding the notice of claim requirement in the Tort Claims Act does not apply to causes of action under New Jersey's Civil Rights Act); Greenway Dev. Co. v. Borough of Paramus, 163 N.J. 546, 557 (2000) (stating "the notice provision of the TCA does not apply to inverse condemnation claims"); Brook v. April, 294 N.J. Super. 90, 101 (App. Div. 1996) (stating that "none of the immunities conferred in the Tort Claims Act apply to claims arising from Workers' Compensation Law").
The Board also claims the trial court erred because "Hersh did not suffer any outlay of monies in her defense," and her union liability insurer is not entitled to be reimbursed for her defense costs. We reject this argument for two reasons. First, it ignores the fact that Hersh paid for the coverage she received from the NJEA insurance policy through her union dues. In addition, the Board is not entitled to relief because it created the present situation when it failed to defend Hersh in the underlying lawsuit, and it instructed her to contact the NJEA for legal representation. Under these circumstances, we agree with Judge W. Hunt Dumont that the Board of Education should not be able to ignore its obligation under N.J.S.A. 18A:16-16, by utilizing "the Tort Claim Act as a shield."
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