(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
(A-88/89-96)
Argued January 22, 1997 -- Decided June 10, 1997
STEIN, J., writing for a majority of the Court.
This appeal concerns the right of Paul Bower, a public school kindergarten teacher indicted on
various charges alleging that he sexually abused three of his pupils during the school day and on school
premises, to indemnification from the East Orange Board of Education for his legal expenses after all
charges against him were dismissed.
On February 10, 1987, Bower, now deceased, was indicted on four counts of aggravated sexual
assault and three counts of endangering the welfare of children. Testimony from the children and their
parents before the grand jury indicated that the incidents took place in a bathroom connected to Bower's
kindergarten classroom in the Ashland School. Each child involved in the incidents was a student of Bower.
Bower was suspended without pay on March 3, 1987.
On October 11, 1988, Judge Falcone dismissed the indictment without prejudice due to the State's
unpreparedness for trial. Thereafter, on March 15, 1989, an Essex County grand jury returned a second
indictment against Bower on the same charges. Judge Hazelwood dismissed the second indictment with
prejudice on July 3, l990. Both dismissals occurred prior to trial and, therefore, prior to the presentation of
any evidence or testimony concerning the relationship of the alleged acts to the duties of Bower's
employment.
Prior to the dismissal of the second indictment, Bower filed a petition with the Commissioner of
Education seeking indemnification from the Board of his legal fees and costs incurred in defending against
prosecution of the first indictment, pursuant to N.J.S.A. 18A:16-6.1 (“the statute”), which the Commissioner
referred to the Office of Administrative Law. Following a hearing, the Administrative Law Judge (ALJ) filed
a written decision recommending that the Commissioner deny Bower's request for legal fees because Bower
could not establish, on the record before him, that the conduct alleged in the charges arose “out of and in
the course of the performance of [his] duties”as a teacher, as required by the statute and, further, because
the dismissal of the first indictment without prejudice did not constitute a “final disposition in favor” of
Bower, as also required by the statute. The Commissioner adopted the ALJ's findings and dismissed the
petition.
By the time Bower appealed the Commissioner's dismissal to the State Board of Education, the
second indictment had been dismissed with prejudice. Therefore, the State Board of Education remanded
the matter to the ALJ for determination in light of that second dismissal, instructing that, on remand, Bower
had the burden of establishing both a nexus between the alleged conduct and the performance of his duties
and a favorable disposition of the criminal charges. After considering a supplemental record, the ALJ again
recommended the denial of Bower's request for indemnification because Bower was unable to establish that
the conduct alleged in the criminal charges arose “out of the performance of his duties as a teacher.” The
Commissioner adopted the ALJ's recommendation, emphasizing that Bower had failed to explain why he
was in the bathroom with any or all of the three boys in question and further noting the absence of any proof
suggesting how his behavior was legitimately linked to his bona fide teaching responsibilities.
Bower again appealed to the State Board of Education, which affirmed the Commissioner's ruling. The State Board reemphasized that Bower had filed to meet his “affirmative burden” of establishing a relationship between the conduct alleged and the performance of his duties as a teacher. Thereafter, while Bower was pursuing his administrative remedies, Bower's attorneys filed suit in behalf of Bower and
themselves in the Law Division, seeking a judgment for attorney fees and disbursements, representing the
work done in defending Bower against both indictments. The Law Division judge concluded that the
criminal charges indeed had arisen out of the performance of Bower's duties because his involvement with
the children was produced by his contact with them as a teacher. The judge, therefore, awarded both the
attorney fees and disbursements.
By a divided panel, the Appellate Division reversed the judgment of the State Board and affirmed
the judgment of the Law Division. East Orange and the State Board appealed to the Supreme Court as of
right.
HELD: The criminal indemnification statute for board-of-education employees requires mere proof by a
preponderance of the evidence that the acts on which the criminal charges are predicated arose out of and in
the course of performance of the duties of employment and the imposition of proof requirements specific to
Bower's claim in the adjudicatory proceeding instituted by Bower was impermissible.
1. N.J.S.A. 18A:16-6.1 prescribes a two-part standard for determining whether board-of-education employees
are entitled to indemnification of counsel fees and expenses incurred in the defense of criminal charges. (pp.
8-9)
2. The handful of published opinions that have implicated the criminal indemnification statute applicable to
board-of-education employees shed little light on the issue of whether the conduct alleged arose out of and
in the course of the performance of Bower's duties as a teacher. (pp. 9-14)
3. Although the Legislature has amended the indemnification statute applicable to police officers in response
to Supreme Court decisions finding coverage in certain police actions, it has not seen fit to do so in the
criminal indemnification statute applicable to board-of-education employees. (pp.14-19)
4. In the absence of any contradictory evidence in the administrative proceeding, dismissal of the indictment
requires the assumption that Bower committed no acts other than to perform his duties as a kindergarten
teacher, and the inference is compelling that Bower's indictment was premised on acts arising out of and
directly related to the lawful exercise of his official duties. (pp. 19-20)
5. The Board's supplementary requirement that specific testimony be presented by the claimant that rebuts
the charges or explains their specific relationship to the claimant's performance of his assigned duties is
absent from the statute and has not been imposed by an administrative regulation adopted to supplement or
clarify the statutory requirements for indemnification. (pp.20-22)
6. The State Board may adopt regulations consistent with the statute to more effectively implement the
requisite burden of proof required to carry out the legislative will. (p. 24)
Judgment of the Appellate Division is AFFIRMED.
JUSTICE GARIBALDI filed a separate dissenting opinion in which CHIEF JUSTICE PORITZ and
JUSTICE COLEMAN join. Essentially, Justice Garibaldi disagreed with the majority's conclusion that
Bower and his attorneys had met their burden of proving that the alleged conduct underlying the criminal
charges arose out of and in the course of the performance of Bower's duties as a teacher, rather than
merely in the course of employment. Justice Garibaldi further viewed the majority's opinion as having
created a new standard whereby it will be presumed that a dismissed indictment of a teacher seeking
indemnification was premised on acts arising out of and directly related to the performance of his or her
duties as a teacher.
JUSTICES HANDLER, POLLOCK and O'HERN join in JUSTICE STEIN's opinion. JUSTICE
GARIBALDI filed a separate dissenting opinion in which CHIEF JUSTICE PORITZ and JUSTICE
COLEMAN join.
SUPREME COURT OF NEW JERSEY
A-88/
89 September Term 1996
PAUL NORMAN BOWER and WILLS O'NEILL
& MELLK,
Plaintiffs-Respondents,
v.
BOARD OF EDUCATION OF THE CITY OF
EAST ORANGE,
Defendant-Appellant.
PAUL NORMAN BOWER,
Petitioner-Respondent,
v.
BOARD OF EDUCATION OF THE CITY OF
EAST ORANGE,
Respondent-Appellant.
Argued January 22, 1997 -- Decided June 10, 1997
On appeal from the Superior Court, Appellate
Division, whose opinion is reported at 287
N.J. Super. 15 (1996).
Mary C. Jacobson, Assistant Attorney General,
argued the cause for appellant New Jersey
State Board of Education (Peter G. Verniero,
Attorney General of New Jersey, attorney; Ms.
Jacobson and Mary F. Rubinstein, Deputy
Attorney General, on the briefs).
Ronald S. Sampson argued the cause for
appellant Board of Education of the City of
East Orange (Love & Randall, attorneys).
Sanford Oxfeld argued the cause for
respondent Paul Norman Bower (Balk, Oxfeld,
Mandell & Cohen, attorneys; Gail Oxfeld
Kanef, on the brief)
Arnold M. Mellk argued the cause for
respondents Paul Norman Bower and Wills,
O'Neill & Mellk (Wills, O'Neill & Mellk,
attorneys).
David W. Carroll submitted a brief on behalf
of amicus curiae, Montgomery Township Board
of Education (Carroll & Weiss, attorneys).
The opinion of the Court was delivered by
STEIN, J.
This appeal concerns the right of Paul BowerSee footnote 1, a public
school teacher indicted on various charges alleging that he
sexually abused three of his pupils during the school day and on
school premises, to indemnification from the East Orange Board of
Education for his legal expenses after all charges against him
were dismissed. The relevant statutes, N.J.S.A. 18A:16-6 and
-6.1, provide that indemnification is mandatory if the charges
are dismissed or result in a favorable final disposition and if
the “act or omission” on which the criminal charges are
predicated arises out of and in the course of the performance of
the duties of employment.
The criminal charges having been dismissed before trial, no
evidence was adduced in the criminal proceeding, or in the civil
proceedings seeking indemnification, concerning whether any
predicate acts or omissions (aside from Bower's daily presence in
his classroom) had occurred that could serve as the basis for
establishing the second prong of the statutory test for
indemnification, that the act or omission arose out of and in the
course of the duties of employment.
The parties to this appeal agree that the second prong of
the statute should not be tested against the alleged acts of
sexual abuse, because such an application of the statute would
deny indemnification to any school employee forced to incur legal
expenses in the successful defense of false charges of criminal
conduct that, if true, could not possibly have occurred in the
course of performance of the duties of employment. Bower
contends that because no “act or omission” has been proved, the
criminal charges must necessarily be understood to have arisen
solely because of and in the course of his employment as a
teacher. The East Orange Board of Education (East Orange) and
the New Jersey State Board of Education (State Board) both
contend that Bower bears an additional burden of refuting or
explaining the charges against him to an extent sufficient to
verify that he satisfies the statutory test.
Bower's administrative appeal from East Orange's denial of
indemnification resulted in a State Board decision affirming that
denial on the basis of Bower's failure to satisfy the statutory
criteria. A separate proceeding instituted in the Law Division
by Bower's attorneys resulted in a judgment granting
indemnification to the extent of $30,000 in attorney fees and
$2,500 in disbursements. (Although the question is not raised,
the Law Division action should have been dismissed because the
Commissioner of Education has primary jurisdiction to hear and
determine all controversies arising under the school laws.
N.J.S.A. 18A:6-9; see Dore v. Board of Educ.,
185 N.J. Super. 447, 452 (App. Div. 1982)). The Appellate Division consolidated
the appeals, and in a published opinion,
287 N.J. Super. 15
(1996), a divided panel of that court reversed the judgment of
the State Board and affirmed the judgment of the Law Division.
Id. at 33. East Orange and the State Board appeal as of right.
R. 2:2-1(a)(2).
The Appellate Division's majority opinion contains a
thorough summary of the facts and procedural history underlying
this appeal:
On February 10, 1987, Bower was indicted
on four counts of aggravated sexual assault
in violation of N.J.S.A. 2C:14-2 and three
counts of endangering the welfare of children
in violation of N.J.S.A. 2C:24-4. Testimony
before the grand jury from two children and
their parents and a statement from a third
child described incidents of sexual abuse by
Bower. The incidents allegedly took place
during school hours in a bathroom connected
to Bower's classroom in the Ashland School.
Each child was a student of Bower. The Board
suspended Bower without pay on March 3, 1987.
On October 11, 1988, Judge Falcone dismissed the indictment without prejudice.
The State's unpreparedness for trial
occasioned the dismissal. Bower returned to
work in a non-teaching assignment on October
17, 1988. On March 15, 1989, an Essex County
grand jury returned a second indictment
against Bower on the same charges. On March
20, 1989, the Board of Education again
suspended Bower. Judge Hazelwood dismissed
the second indictment with prejudice on July
3, 1990.
On March 30, 1989, prior to dismissal of
the second indictment, Bower filed a petition
with the Commissioner of Education seeking
indemnification from the Board of his legal
fees and costs incurred in defending against
prosecution of the first indictment, pursuant
to N.J.S.A. 18A:16-6.1. The Commissioner
referred the matter to the Office of
Administrative Law.
Following a hearing, the Administrative
Law Judge filed a written decision
recommending that the Commissioner deny
Bower's request for $20,340.95 in legal fees.
On the record before him, the A.L.J. was
unable to determine whether the children
allegedly abused were Bower's students and
whether the alleged abuse took place on
school property during school hours.
Consequently, the A.L.J. determined that
Bower could not establish the nexus required
by N.J.S.A. 18A:16-6.1, that the conduct
alleged in the charges against him arose "out
of and in the course of the performance of
[his] duties" as a teacher. Furthermore, the
A.L.J. found that dismissal of the first
indictment without prejudice was not a "final
disposition in favor" of Bower as required by
N.J.S.A. 18A:16-6.1. The Commissioner of
Education adopted the A.L.J.'s findings and
dismissed the petition on August 10, 1990.
On August 14, 1990, Bower appealed the Commissioner's dismissal to the State Board of Education. As noted, the second indictment was dismissed on July 3, 1990. The State Board of Education remanded the matter to the A.L.J. for determination in light of the dismissal of the second indictment, instructing that [o]n remand, Petitioner has the burden of establishing 1)
a nexus between the alleged conduct forming
the basis of the charges and the performance
of his duties in the district so as to
support a finding that the criminal actions
against him involved alleged acts or
omissions arising out of and in the course of
the performance of his duties, and 2) a
favorable disposition of the criminal
charges.
On September 27, 1991, after considering
a supplemented record, the A.L.J. again
recommended that Bower's request for
indemnification be denied. Although the
A.L.J. concluded that the second dismissal
constituted a final favorable disposition,
Bower was unable to satisfy the A.L.J. that
the conduct alleged in the criminal charges
arose "out of the performance of his duties
as a teacher". The A.L.J. noted:
At most, the only thing that can be
said is that Bower's accusers are
his former students and that the
locale of the alleged misconduct is
on school property. None of the
proofs supply the crucial element
that the charges are connected with
his teaching assignment or that
Bower was engaged in carrying out
his official duties.
The Commissioner adopted the A.L.J.'s
recommendation on November 12, 1991,
emphasizing that Bower failed to
explain[ ] why he was in the
bathroom with any or all of the
three boys in question. Neither is
there any testimony or evidence
proffered in this remand suggesting
how his behavior in regard to any
of these charges, or denial of
same, is legitimately linked to his
bona fide teaching responsibil-ities. (emphasis in original).
Bower again appealed to the State Board of Education. On August 4, 1994, the State Board affirmed the Commissioner's ruling. The State Board reemphasized that Bower failed to meet his "affirmative burden" of
establishing the required nexus between the
conduct out of which the charges arose and
the performance of his duties as a teacher.
The State Board stated:
The record, as supplemented on
remand, indicates only that the
alleged conduct occurred in a
bathroom adjoining petitioner's
kindergarten classroom. There is no
indication in the record as to
whether this facility was for the
exclusive use of students or
whether teachers also used the
facility . . . . Nor is there
anything to show that any of his
teaching duties required that he
accompany the students into the
facility. Bower filed a notice of
appeal to this court on August 23,
1994.
On March 19, 1991, while Bower was
pursuing his administrative remedy, Bower's
attorneys filed suit on behalf of Bower and
themselves in the Law Division, seeking a
judgment of $41,024 in attorney fees and
$2,500 for disbursements, representing the
work done in defending Bower against both
indictments. Judge Paley concluded that the
criminal charges filed against Bower did,
indeed, arise out of the performance of his
duties because Bower's "involvement with
those children was produced by his contact
with them . . . as a teacher." On March 31,
1994, Judge Paley awarded $2,500 for
disbursements and $30,000 for attorney fees
to plaintiffs.
N.J.S.A. 18A:16-6, the statute governing indemnification of
employees of local boards of education in civil suits, reads:
Whenever any civil action has been or shall
be brought against any person holding any
office, position or employment under the
jurisdiction of any board of education,
including any student teacher or person
assigned to other professional pre-teaching
field experience, for any act or omission
arising out of and in the course of the
performance of the duties of such office,
position, employment or student teaching or
other assignment to professional field
experience, 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; and said board may arrange for and
maintain appropriate insurance to cover all
such damages, losses and expenses.
N.J.S.A. 18A:16-6.1, the statute providing for
indemnification in criminal actions, refers back to the section
dealing with indemnification in civil actions. Scirrotto v.
Warren Hills Bd. of Educ.,
272 N.J. Super. 391, 396 (App. Div.
1994). The criminal indemnification statute provides:
Should any criminal action be instituted
against any such person for any such act or
omission and should such proceeding be
dismissed or result in a final disposition in
favor of such person, the board of education
shall reimburse him for the cost of defending
such proceeding, including reasonable counsel
fees and expenses of the original hearing or
trial and all appeals.
The Appellate Division concluded, and the parties agree,
that the "such act or omission" language in N.J.S.A. 18A:16-6.1
means any act or omission "arising out of and in the course of
the performance of the duties of such office" pursuant to
N.J.S.A. 18A:16-6. 287 N.J. Super. at 22. Thus, N.J.S.A.
18A:16-6.1, read in connection with the complimentary provisions
of N.J.S.A. 18A:16-6, prescribes a two-part standard for
determining whether board of education employees are entitled to
indemnification of counsel fees and expenses incurred in the
defense of criminal charges: (1) any act or omission on which the
criminal charges are based must arise “out of and in the course
of performance of the duties” of the position held by the
employee, and (2) the charges must either be dismissed or result
in a final disposition favorable to the employee.
The parties agree that dismissal of the second indictment
with prejudice constitutes a final disposition favorable to
Bower. The only issue remaining unresolved is whether the
criminal charges of aggravated sexual assault and endangering the
welfare of children were based on “acts or omissions” that arose
“out of and in the course of the performance of [Bower's] duties”
as a teacher.
Only a handful of published opinions have implicated the
civil and criminal indemnification statutes applicable to board
of education employees, and those cases shed little light on the
issue before us. Typically, the predicate conduct is
sufficiently well-defined so as to simplify the inquiry about
whether the civil claim or criminal charge was based on an act or
omission arising out of and in the course of performance of the
duties of office. Thus, in Titus v. Lindberg,
49 N.J. 66 (1967),
we acknowledged the responsibility of the Middletown Township
Board of Education to indemnify a school principal held liable
for negligence in failing to supervise a thirteen-year-old
student who seriously injured another student by striking him
with a paper clip shot from an elastic band. We noted that the
indemnification statute then in effect also required as a
condition of indemnity that the employee “must be acting in the
discharge of his duties within the scope of his employment,” a
condition we described as “clearly and fully satisfied here.”
Id. at 79-80.
Another early decision applying a prior version of the
indemnification statutes at issue here is Errington v. Mansfield
Township Board of Education,
81 N.J. Super. 414 (App. Div. 1963),
rev'd and remanded on other grounds,
42 N.J. 320 (1964), decision
following remand
100 N.J. Super. 130 (App. Div. 1968). In
Errington, the president of a local school board, without
consulting with a majority of the board, published a letter in a
local newspaper that the plaintiff alleged was defamatory. After
the plaintiff filed a libel action against the board president, a
majority of the other board members adopted a resolution reciting
that the president had acted in the board's behalf in writing the
letter and authorizing her legal defense by the board's counsel.
The plaintiff then filed a libel suit against those board
members, and the board subsequently adopted a resolution
authorizing their defense as well. The plaintiff filed a new
action to restrain the board from expending public funds in
defense of either libel suit. The Law Division granted
plaintiff's motion for summary judgment, and the Appellate
Division affirmed. 81 N.J. Super. at 418, 421. This Court
reversed and remanded for trial so that the issue of the board's
authority to defend the libel actions could be resolved on the
basis of a more complete record. 42 N.J. at 322. On remand, the
Appellate Division reiterated its earlier conclusion that the
resolution approving defense of the board president was
unauthorized because she had not written the allegedly defamatory
letter in the course of the performance of her duties as a member
or as the president of the board of education. 100 N.J. Super.
at 135. The court, however, rejected the trial court's
conclusion that the board members' adoption of the invalid
resolution authorizing defense of the board president had not
arisen in the course of performance of the board members' duties,
observing that “such a strict construction of `duties' would
exclude all tortious conduct by a board member, because it is
never a `duty' of a board member to commit a tort." Id. at 137.
The court held that the board members had adopted the invalid
resolution in the course of the performance of their board duties
and therefore were entitled to be defended in the second libel
suit at the board's expense. Id. at 137-38.
Powers v. Union City Board of Education, 124 N.J. Super. 590 (Law Div. 1973), is the earliest of two prior decisions applying the board of education indemnification statute to criminal charges. Powers, a member of the Union City Board of Education, was indicted with four co-defendants for extorting money from contractors that did business with the board, allegedly requiring suppliers to pay kickbacks for the privilege of doing business and to insure prompt payment of invoices. Id. at 592. The evidence against Powers indicated that he had served on the board's maintenance committee, which had recommended the award of board contacts; that he had been partially responsible for supervision of the board's architect, whose contract and kickbacks were involved in the criminal charges; and that he had participated with another board member in the monthly calculation of the kickbacks and in dividing them among the board members. Id. at 592-93. Powers denied all allegations. Id. at 592. Although two co-defendants were convicted, Powers was acquitted of all charges. Ibid. Nevertheless, the Law Division denied Powers' claim for reimbursement of his legal expenses. Id. at 598. The court noted that reimbursement should not be denied merely because Powers allegedly engaged in criminal conduct that was necessarily beyond the scope of his prescribed duties, because so strict a construction of the statute would frustrate the legislative intent. Id. at 595. But the court concluded that the specific conduct on which the extortion charges were
based had not occurred in the course of performance of Power's
duties as a board member. Id. at 597.
Scirrotto, supra,
272 N.J. Super. 391, is the second
decision applying the board of education indemnification statute
to criminal charges. The criminal charges against Scirrotto
arose out of events that occurred after the local school board
had declined to renew Scirrotto's employment as a history
teacher, thereby denying him tenure. Id. at 393. Subsequently,
during a meeting requested by the high-school principal on the
pretext of discussing a student-parent demonstration related to
Scirrotto's denial of tenure, Scirrotto threatened to disclose to
the public information that would embarrass school officials, but
represented that he would withhold disclosure if he were awarded
tenure. Id. at 394 & n.3. Unknown to Scirrotto, the
conversation was recorded and the tape was released to the
prosecutor's office. Id. at 394. Scirrotto was indicted for
bribery in official matters, for threats and improper influence
in official matters, and for the crime of compounding. Ibid.
Scirrotto was convicted of bribery after a jury trial, and the
remaining charges were dismissed on his motion for acquittal.
Ibid. In an unreported opinion, the Appellate Division reversed
Scirrotto's bribery conviction because insufficient evidence had
been adduced to prove that Scirrotto had offered a “benefit” to
school officials in return for tenure. Id. at 394-95. This
Court affirmed the dismissal of the bribery conviction.
115 N.J. 38, 48-49 (1989).
Scirrotto then filed suit seeking reimbursement of counsel
fees incurred in defense of the criminal charges. Scirrotto,
supra, 272 N.J. Super. at 395. The Law Division granted the
board's motion for summary judgment, reasoning that the
statements made by Scirrotto and intended to influence the
principal to grant him tenure were not made in the course of
performance of his duties as a history teacher. Ibid. The
Appellate Division agreed, reasoning that “[i]t surely was not
part of Scirrotto's duties
. . . `to play dirty pool' or to represent that he had `concrete
bad' evidence of conduct . . . [that] he was willing to withhold
in exchange for tenure.” Id. at 397. "Acquiring tenure by the
threatened use of allegations of criminal sexual behavior
involving children and teachers is not conduct in good faith
arising out of and in the course of performing the duties of
employment." Id. at 398.
To support the conclusion that Bower's claim for
indemnification should be denied, the dissenting member of the
Appellate Division panel asserted that the board of education
indemnification statute should be construed in a manner
consistent with the Legislature's recent amendment, L. 1985, c.
457, of the indemnification statute applicable to police
officers, N.J.S.A. 40A:14-155, an amendment intended in part to
deny reimbursement of legal expenses to policemen for defense of
criminal charges arising solely from a claimant's status as a
police officer. 287 N.J. Super. at 34 (Landau, J.A.D.,
dissenting). That amendment apparently was enacted in response
to this Court's decisions in Valerius v. City of Newark,
84 N.J. 591 (1980), and Moya v. City of New Brunswick,
90 N.J. 491
(1982). Bower, supra, 287 N.J. Super. at 34. (Landau, J.A.D.,
dissenting).
In Valerius, supra, a police officer and his attorneys
brought suit for the reimbursement of legal fees incurred in
successfully defending against three criminal charges. 84 N.J.
at 594. Those charges arose from allegations that Valerius and
another officer had seized $23,000 in a staged drug bust and had
kept the money for personal use. Id. at 593. Valerius was
acquitted of all charges against him, and sued the city for
indemnification under N.J.S.A. 40A:14-155. Id. at 594. That
statute read:
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.
[Id. at 593 (quoting N.J.S.A. 40A:14-155).]
The Court noted that the charges against Valerius involved his status as a police officer, observing that if the conduct
charged had occurred, it would have constituted "a perversion and
prostitution of his duties as a police officer." Id. at 595-96.
The Court explained that a conviction would have established that
his conduct "neither arose out of nor was incidental to the
performance of his duties" and that therefore Valerius would not
have qualified for indemnification. Ibid. However, as Valerius
had been acquitted, no basis existed for a conclusion that he had
improperly used his status as a police officer. Id. at 596-97.
The Court noted that "`[p]olice officers, by the very nature of
their duties, are exposed to a substantial risk that . . . civil
or criminal actions will be initiated, regardless of their
merits.'" Id. at 597 (quoting Van Horn v. City of Trenton,
80 N.J. 528, 536-37 (1979)). It then determined that the
legislative intent was to protect the officer and require his
indemnification if he was acquitted and the action arose out of
or was incidental to the performance of his duties. Id. at 598-99. The Court held that Valerius therefore was entitled to
indemnification. Id. at 600.
Two years later, we decided Moya v. New Brunswick, supra.
Moya and other officers were charged with participating in a
burglary ring. 90 N.J. at 495. The indictments charged that
Moya, while "acting under color of [his] office," had assisted
other officers in breaking and entering "in police uniforms, in
police vehicles and while performing the duties for which [their]
office was created." Id. at 496. A jury found Moya not guilty
of two of the three charges. Ibid. The third charge was
dismissed on motion of the prosecutor. Ibid. Moya and his
attorney then instituted suit against the city for
indemnification. Ibid.
Affirming the Appellate Division decision granting
indemnification, this Court held that the charges against Moya,
which were conclusively assumed to be false, were primarily made
because he was a police officer. Id. at 498. Noting that
indemnification would serve the legislative intent "to increase
the morale of police departments . . . and to encourage the
effective pursuit of police duties . . . by providing counsel to
police officers who are the subject of charges," the Court
concluded that this legislative purpose extended beyond the
literal meaning of the statute. Id. at 500 (citations omitted).
The "unique vulnerability of a police officer" to false
accusations was instrumental in the Court's decision. Id. at
500-01. The Court noted that police officers would "strongly
resent" nonindemnification of an exonerated colleague when, in
fact, that officer's sole crime "was being a police officer."
Id. at 506. The majority, joined by Justice Pashman, concurring,
held that Moya was entitled to indemnification. Id. at 511, 518.
(Pashman, J., concurring).
The dissenting members argued that the charges against Moya
"did not spring from any asserted use of his status as a law
enforcement officer." Id. at 520 (Clifford, J., dissenting).
Rather, Moya was indicted under "garden variety" charges for
which the statutory language did not afford indemnification. Id.
at 518-20. The dissent concluded that Moya was not exposed to
criminal prosecution due to his status as a police officer, and
was therefore not entitled to indemnification. Id. at 520.
In 1985, the Legislature enacted L. 1985, c. 457, which
amended N.J.S.A. 40A:14-155, apparently in response to the
decisions in Valerius and Moya. The scope-of-employment test was
changed to provide for indemnification of a police officer only
"in any action or legal proceeding arising out of and directly
related to the lawful exercise of police powers in the
furtherance of his legal duties . . . ." The Senate County and
Municipal Government Committee Statement accompanying the
revisions read:
Senate Bill No. 1684 [c. 457] would
amend N.J.S. 40A:14-155 to clarify the scope
of a municipality's obligation to provide for
the defense, or reimburse the expense of
defense, of members or officers of the
municipal police department or force who are
defendants in any action or legal proceeding.
A number of decisions by the courts of this
State have expanded the obligation imposed by
the literal terms of this section to reach,
not only charges of improper performance of
police duties, but also charges arising from
acts outside the scope of police duties, but
occurring in the course of the performance of
those duties, and charges arising solely from
the person's status as a police officer. The
bill would eliminate the coverage of this
section for charges arising from acts outside
the scope of police duties, but occurring in
the course of the performance of those
duties, and for "status charges."
[Senate County and Municipal Government
Committee, Statement to Senate Bill No. 1684,
at 1 (June 18, 1984).]
Amicus curiae Montgomery Township Board of Education also
relies on a fairly recent amendment to the indemnification
provisions relating to the Tort Claims Act, L. 1989, c. 77, § 1,
which it asserts adopts a standard for indemnification similar to
that embodied in the amendment to the police indemnification
statute. Thus, N.J.S.A. 59:10-2.1 provides:
If any criminal action is instituted
against any State officer based upon an act
or omission of that officer arising out of
and directly related to the lawful exercise
of his official duties or under color of his
authority, and that action is dismissed or
results in a final disposition in favor of
that officer, the State shall reimburse the
officer for the cost of defending the action,
including reasonable attorney's fees and
costs of trial and appeals.
Initially, we note that the Legislature has not seen fit to enact an amendment to the criminal indemnification statute for board-of-education employees that is similar to the police or Tort Claims Act indemnification provisions. We note further, however, that neither the language of the Tort Claims Act indemnification statute ("arising out of and directly related to the lawful exercise of his official duties") nor that of the amendment to the police indemnification statute ("arising out of and directly related to the lawful exercise of . . . powers in the furtherance of his legal duties") definitively would resolve the issue before us. In the absence of any contradictory evidence in the administrative proceeding, dismissal of the indictment requires the assumption that Bower committed no acts other than to perform his duties as a kindergarten teacher.
Thus, the inference is compelling that Bower's indictment was
premised on acts arising out of and directly related to the
lawful exercise of his official duties. Where the record in the
criminal proceeding reveals no evidence of any conduct other than
the employee's performance of his lawful duties, the factual
basis for the indictment becomes inextricably linked with the
employee's duties as a teacher.
The parties to this appeal agree that indemnification cannot
be denied merely because the alleged criminal acts, if committed,
would have been beyond the scope of a teacher's lawful duties.
In the State Board decision on remand, the State Board agreed
with the Commissioner's decision to deny indemnification, but
noted: "However, to the extent that [the Commissioner's
decision] may be read to automatically preclude indemnification
where the conduct as alleged does not fall within the scope of a
teacher's duties, we find it necessary to modify the
Commissioner's decision." The Attorney General's brief
characterizes the State Board's position on that issue:
[I]ndemnification will not be automatically
precluded where the charged conduct, even if
true, could not have been within the scope of
the teacher's duties. Rather, the State
Board looks at the quality and character of
the charges and whether the record
demonstrates a nexus between the conduct
forming the basis of the charge and the
teacher's performance of pedagogical duties.
[Emphasis added.]
The obvious difficulty in applying the State Board's
standard to this record is that no proof exists of any “conduct
forming the basis of the charge.” The allegation that Bower
engaged in acts of sexual misconduct with students in the
bathroom adjacent to the kindergarten classroom is simply
unproved. Nor is it established or conceded that Bower ever
entered the bathroom when students were present. The only
"conduct forming the basis of the charge" that is undisputed is
that the alleged events took place in the school, during school
hours, and while Bower was required to be engaged in performing
his duties as a teacher.
Nevertheless, the State Board asserts that Bower failed to
meet his "affirmative burden to demonstrate that the alleged
conduct arose out of and in the course of the performance of his
duties." As we understand the State Board's position, it
contends that Bower not only had the burden of proving that the
charges against him were connected sufficiently to his official
duties, but that only certain specified testimony would be
adequate to satisfy Bower's burden of proof. According to the
Board, the indispensable testimony consisted either of an
explanation of Bower's presence in the bathroom with his students
or a denial that he had been there. The Attorney General's brief
summarizes the State Board's position:
While the State Board held that Bower did not
have to defend against the dismissed criminal
charges in the indemnification action, it did
find that on this record he had at least the
burden of showing that his teaching
responsibilities required his presence in the
bathroom with his students. Such a showing
was necessary to demonstrate that his actions
arose out of legitimate teaching duties.
When Bower never refuted the claim that he
was in the bathroom with students, or
established that he had a right or
responsibility to be there, the State Board
reasonably found that he had not met the
burden of a teaching staff member seeking
indemnification under the statute.
Thus, the State Board appears to contend that even if a
claimant's proofs in support of indemnification establish the
statutory criteria by a preponderance of the evidence, the
indemnification claim should be denied if the proofs do not
satisfy the Board's supplementary requirement that specific
testimony be presented by the claimant that rebuts the charges or
explains their specific relationship to the claimant's
performance of his assigned duties. That requirement of
supplementary testimony is absent from the statute, and has not
been imposed by an administrative regulation adopted to
supplement or clarify the statutory standard for indemnification.
We frequently have recognized the administrative-law principle
that "fairness requires that an administrative agency use its
rulemaking power to establish the standards it intends to enforce
by adjudication[.]" Department of Labor v. Titan Constr. Co.,
102 N.J. 1, 14 (1985); see, e.g., State, Dep't of Envtl.
Protection v. Stavola,
103 N.J. 425, 436-38 (1986); Crema v. New
Jersey Dep't of Envtl. Protection,
94 N.J. 286, 301 (1983).
We also note that, following dismissal of the indictment,
East Orange vacated its suspension of Bower and permitted him to
return to work in a non-teaching capacity. No proceedings were
instituted to dismiss Bower, a tenured teacher, on the basis of
his alleged misconduct. See N.J.S.A. 18A:6-10. Had the local
board seen fit to institute such dismissal proceedings, we assume
that any evidence adduced at the hearing addressing those charges
would have been material to the proceeding instituted by Bower
for indemnification of his legal expenses.
We detect from the record before us a sense of frustration
on the part of the State Board, stemming no doubt from its
concern that the allegations against Bower, although unproved,
may have been truthful, in which event indemnification surely
would be inappropriate. The State Board's insistence on
additional proof from Bower, even proof as simple as a denial
that he ever had entered the bathroom when children were present,
reflects the Board's understandable reluctance to authorize the
reimbursement of a substantial legal fee to a teacher, charged
with the commission of serious unlawful acts, who offers no
affirmative defense other than that the indictment against him
has been dismissed.
Although we understand the State Board's concerns, we are
firmly convinced that they cannot be addressed, case by case, by
the imposition of case-specific proof requirements intended to
satisfy the State Board's ad hoc notion of adequate proof to
satisfy the statute. Read literally, the statute prescribes the
standards for a civil claim for indemnification, and thus
requires mere proof by a preponderance of the evidence that the
act on which the charges are predicated arose out of and in the
course of performance of the duties of employment. There being
proof of no underlying act other than Bower's presence in the
school and performance of his classroom duties, the indictment
and its dismissal -- unrebutted by any other evidence -- clearly
satisfy Bower's burden of proof under the statute.
The State Board correctly perceives that the statute may
mandate indemnification in cases in which, despite a favorable
disposition of the criminal charges, doubts may persist about the
actual innocence of the teacher seeking reimbursement. The State
Board may question the soundness of that legislative judgment but
it cannot disregard the statute's clear mandate. To the extent
that the State Board may conceive that the statutory requirements
could be more effectively implemented through rulemaking that
might address prospectively and more specifically the scope of
the evidentiary hearing and the requisite burden of proof
required to implement the legislative will, we foresee no
obstacle to the adoption of regulations consistent with the
statute and specifically designed for that purpose. We hold only
that the imposition of proof requirements specific to Bower's
claim in the adjudicatory proceeding instituted by Bower was
impermissible. See Titan Constr., supra, 102 N.J. at 14.
On this record, we are persuaded that Bower has satisfied
the burden of proof imposed on him by N.J.S.A. 18:16-6.1.
Accordingly, we affirm the judgment of the Appellate Division.
JUSTICES HANDLER, POLLOCK and O'HERN join in JUSTICE STEIN's
opinion. JUSTICE GARIBALDI filed a separate dissenting opinion
in which CHIEF JUSTICE PORITZ and JUSTICE COLEMAN join.
SUPREME COURT OF NEW JERSEY
A-88/
89 September Term 1996
PAUL NORMAN BOWER and WILLS O'NEILL
& MELLK,
Plaintiffs-Respondents,
v.
BOARD OF EDUCATION OF THE CITY OF
EAST ORANGE,
Defendant-Appellant.
____________________________________
PAUL NORMAN BOWER,
Petitioner-Respondent,
v.
BOARD OF EDUCATION OF THE CITY OF
EAST ORANGE,
Respondent-Appellant.
GARIBALDI, J., dissenting.
For plaintiffs' claim for indemnification to be granted, they must demonstrate by a preponderance of the evidence that they meet the two-prong test required by our education statutes: (l) that the criminal charges were "dismissed or result[ed] in a final disposition in favor" of the employee, N.J.S.A. 18:16-6.1; and (2) that the act or omission upon which the criminal charges
were based arose "out of and in the course of the performance of
the duties" of the employee, N.J.S.A. 18A:16-6. I agree with the
majority that the dismissal of Mr. Bower's second indictment with
prejudice satisfies the first prong of the test, because it
constitutes a final disposition in his favor. I disagree,
however, with the majority's conclusion that plaintiffs have met
their burden of proof with respect to the second prong of the
test, because there is no evidence demonstrating that the acts or
omissions underlying the criminal charge arose out of and in the
course of the performance of Mr. Bower's duties as a teacher.
Accordingly, I dissent.
The purpose of school indemnification is to protect school employees from paying litigation costs resulting from civil or criminal actions arising out of the employees' legitimate employment duties. Educators must be able to discharge their duties freely for the public good without fear of economic loss due to legal actions generated by their official acts. See Powers v. Union City Bd. of Educ., l 24 N.J. Super. 590, 594 (Law Div. l973), aff'd o.b., l 27 N.J. Super. 294 (App. Div.), certif. denied, 65 N.J. 575 (l974).
Indemnification, however, is based on the assumption that the charges were unjustified and the employee's actions fell within his or her scope of employment. When the public is asked to reimburse an employee for criminal defense costs, the person seeking such reimbursement must demonstrate by a preponderance of
the evidence that the criminal charges arose out of and in the
course of the performance of his or her duties as an employee.
Two appellate cases that apply the indemnification statutes
to criminal charges deal with the second prong of the test. In
the earlier case, Powers, supra, decided under N.J.S.A. l8A:l2-20, the defendant, who worked for the Board of Education, was
alleged to have received kickbacks. In addressing the second
prong of the indemnification test, the court noted that although
the criminal acts were obviously beyond Power's prescribed
duties, that did not immunize the board from statutory liability.
124 N.J. Super. at 595. The court found that the statute
requires that the criminal charge involve an act or omission
arising out of the performance of a board member's duties, and
that the act or omission arise in the course of performing those
duties. In denying indemnification, the court found that
although the alleged criminal conduct may have originated out of
Power's performance of his duties as a member of the board, it
could not have been done in the course of carrying out those
duties. Id. at 597.
Likewise, in Scirrotto v. Warren Hills Bd. of Educ.,
272 N.J. Super. 39l, 394-95 (App. Div. l994), the Appellate Division
denied reimbursement to a teacher who prevailed against bribery
and other charges. Scirrotto allegedly sought to bribe the
principal in order to be rehired as a teacher at the school. The
panel concluded that although the events arose in the course of
his employment, they did not arise out of the performance of his
teaching duties. Id. at 397. Both Powers and Scirrotto
demonstrate that in evaluating a teacher's petition for
indemnification, a court's inquiry under the second prong of the
test must be whether the acts or omissions, upon which the
indictment was based, arose out of the performance of teaching
duties rather than merely in the course of employment.
In resolving educational disputes, we adhere to the rule that "the ultimate administrative decision-maker in reviewing . . . school matters is the State Board, whose final decision will not be upset unless unreasonable, unsupported by the record or violative of the legislative will." Capodilupo v. Board of Educ., 218 N.J. Super. 5l0, 5l5 (App. Div.) (citation omitted), certif. denied, l 09 N.J. 5l4 (l987); see also G.E. Solid State, Inc. v. Director, Div. of Taxation, l 32 N.J. 298, 306 (l993) ("Generally courts accord substantial deference to the interpretation an agency gives to a statute that the agency is charged with enforcing."); Kaprow v. Board of Educ., l3l N.J. 572, 59l (l993) ("Ordinarily, we will not reverse the determination of an administrative agency unless it is arbitrary, capricious or unreasonable, or is not supported by substantial credible evidence in the record as a whole."). That rule derives from our recognition that "`certain subjects are within the peculiar competence of the agency.'" Dennery v. Board of Educ., l3l N.J. 626, 637 (l993) (citation omitted).
The Administrative Law Judge (ALJ), the Commissioner of
Education (Commissioner), and the State Board of Education (State
Board), all found that plaintiffs had not satisfied their burden
of showing that the criminal charges against Mr. Bower originated
out of the performance of his duties as a teacher, the second-prong of the test. A review of the record demonstrates that none
of the three acted arbitrarily or unreasonably in declining to
grant plaintiffs' claim for reimbursement. See, e.g., Kaprow,
supra, l3l N.J. at 582.
As was observed "in Scirrotto, [supra,] `the facts
underlying the criminal charge should be analyzed strictly rather
than liberally, so that reimbursement of legal fees and expenses
should only ensue when the circumstances are such as to fit
clearly within the legislative limitations.'" Bower v. Board of
Educ., 287 N.J. Super. l5, 34 (1996) (Landau, J.A.D., dissenting)
(quoting Scirrotto, supra, 272 N.J. Super. at 396). The fact
that the criminal charges were resolved in a final disposition in
Mr. Bower's favor is insufficient to establish that the charges
arose out of and in the course of the performance of his duties
as a teacher. The dismissal of the criminal charges merely
fulfills the first prong of the test.
As the State Board correctly determined,
the fact that the criminal charges against
petitioner were dismissed and the acts giving
rise to those charges were alleged to have
occurred on school premises is not sufficient
to satisfy petitioner's statutory burden. It
was his affirmative burden to demonstrate
that the alleged conduct arose out of and in
the course of the performance of his duties.
He failed to satisfy that burden. Therefore,
we find that he has failed to establish that
the Board has any responsibility to indemnify
him.
No testimony was provided at the administrative hearings.
There was a brief stipulation of facts at the second hearing,
supplemented by a summary of the abuse allegations against Bower,
including copies of the Grand Jury testimony and the police
reports that included the statements made to police by three
children in Bower's kindergarten class, who alleged that they
were victims of Bower's sexual misconduct. None of that evidence
proved that the charges against Mr. Bower arose out of and in the
course of the performance of his teaching duties.
In particular, the State Board was troubled by the
children's consistent statements about Mr. Bower's presence, with
them, in the single-occupancy bathroom attached to his classroom.
In its Decision, dated August l3, l994, the State Board
acknowledged that
[p]etitioner is not required to defend against the
dismissed criminal charges in this action for
indemnification. However, despite the opportunity
to do so, petitioner has not established that the
criminal charges arose from conduct occurring at a
place where he was entitled to be in the course of
fulfilling the duties of his employment or doing
something incidental to it. The record, as
supplemented on remand, indicates only that the
alleged conduct occurred in a bathroom adjoining
petitioner's kindergarten classroom. There is no
indication in the record as to whether this
facility was for the exclusive use of students or
whether teachers also used the facility. See
N.J.A.C. 6:22-5.4(h)(4) (toilet facilities for
kindergarten classrooms must be provided in each
classroom or adjacent thereto and must be located
and equipped so as to ensure privacy for the
pupils). Nor is there anything to show that any of
his teaching duties required that he accompany the
students into the facility.
The State Board, thus, was concerned that a bathroom was not a
place where one would ordinarily fulfill teaching duties, and
concluded that no nexus existed between Mr. Bower's alleged
conduct and the performance of his teaching duties. I defer to
that agency decision, because it is based on expert knowledge
concerning kindergarten children and a kindergarten teacher's
duties.
III
What plaintiffs and the majority essentially assert is that
all a teacher must do to receive indemnification is to satisfy
the first prong of the two-prong test. As the majority states,
[i]n the absence of any contradictory
evidence in the administrative proceeding,
dismissal of the indictment requires the
assumption that Bower committed no acts other
than to perform his duties as a kindergarten
teacher. Thus, the inference is compelling
that Bower's indictment was premised on acts
arising out of and directly related to the
lawful exercise of his official duties.
The majority, in effect, holds that dismissal of the criminal
charges alone is sufficient to satisfy both prongs of the
indemnification test. That conclusion, however, negates the need
for the second prong of the test, because the first prong of the
test specifically requires dismissal of the charges or some other
disposition in favor of the employee.
Moreover, the majority improperly places the burden of proof
on the local school board to demonstrate that the acts, on which
the indictment was based, did not relate to the lawful exercise
of Mr. Bower's teaching duties. The majority, thus, has created
a new standard whereby it will be presumed that a dismissed
indictment of a teacher, seeking indemnification, was premised on
acts arising out of and directly related to the performance of
his or her duties as a teacher. See ante at ___ (slip op. at
20). The majority's reasoning rests on the fact that the local
school board failed to provide proof that Mr. Bower accompanied
the children to the bathroom, the act forming the basis for the
complaint:
The obvious difficulty in applying the State
Board's standard to this record is that no
proof exists of any "conduct forming the
basis of the charge." The allegation that
Bower engaged in acts of sexual misconduct
with students in the bathroom adjacent to the
kindergarten classroom is simply unproved.
Nor is it established or conceded that Bower
ever entered the bathroom when students were
present. The only "conduct forming the basis
of the charge" that is undisputed is that the
alleged events took place in the school,
during school hours, and while Bower was
required to be engaged in performing his
duties as a teacher.
However, the Legislature intended that the teacher, seeking indemnification, rather than the local school board, bear the burden of satisfying the two-prong test by a preponderance of the evidence. Mr. Bower failed to meet his burden because he did not produce evidence indicating that he did not accompany his
students to the bathroom or that it was part of his duties to do so. Contrary to the majority's claim, therefore, the State Board's decision did not require plaintiffs to submit supplementary proofs. See ante at ___ (slip op. at 22). The State Board properly required plaintiffs to submit proof establishing the second prong of the two-prong indemnification test -- that t