L.A. and Horace Mann Insurance Company v. Board of Education of the City of Trenton, Mercer County (073401)

SYLLABUS
(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
interest of brevity, portions of any opinion may not have been summarized).
L.A. v. Board of Education of the City of Trenton (A-59-13) (073401)
Argued January 5, 2015 -- Decided March 25, 2015
SOLOMON, J., writing for a unanimous Court.
In this appeal, the Court considers the circumstances under which a school board employee is entitled to
indemnification for attorney’s fees and costs spent in defense of a civil action arising from the same allegations
contained in a criminal indictment that has been dismissed.
L.A. was employed by the Trenton Board of Education (Board) as an elementary school security guard.
While at work, L.A. allegedly had unlawful sexual contact with two minor students, N.F. and K.O. The allegations
were referred to the Institutional Abuse Investigation Unit (IAIU) of the Department of Children and Families
(DCF) and defendant was subsequently indicted. In the N.F. indictment, L.A. was charged with third-degree
aggravated criminal sexual contact and second-degree endangering the welfare of a minor. In the K.O. indictment,
L.A. was charged with two counts of second-degree sexual assault and one count of second-degree endangering the
welfare of a minor. L.A. pled guilty to one count of second-degree endangering the welfare of a minor (N.F.) in
exchange for dismissal of the remaining charges regarding N.F. and complete dismissal of the K.O. indictment.
K.O.’s guardian ad litem subsequently filed a civil complaint alleging that L.A. sexually assaulted K.O. and
that the Board negligently hired L.A. The Board answered the complaint, taking no position with regard to the
allegations against L.A. However, L.A. was assigned counsel by the Horace Mann Insurance Agency (Horace
Mann), pursuant to a private insurance policy maintained by the New Jersey Education Association. Ultimately,
K.O.’s civil action was settled without any admission of wrongdoing by L.A. or the Board. After the settlement,
L.A., through counsel provided by Horace Mann, filed a verified petition against the Commissioner of Education
(Commissioner) seeking reimbursement for the attorney’s fees and costs incurred in defending against K.O.’s civil
action. The matter was transferred to the Office of Administrative Law and L.A.’s counsel and the Board filed cross
motions for summary decision.
The Administrative Law Judge (ALJ) granted L.A.’s motion, denied the Board’s, and awarded L.A.
attorney’s fees and costs pursuant to N.J.S.A. 18A:16-6, the statute that addresses the right to indemnification for
officers and employees of boards of education in civil actions. The ALJ concluded that the Board had failed to meet
its burden of establishing that L.A.’s conduct fell outside of the performance of his duties as an elementary school
security guard. The Commissioner adopted the ALJ’s decision and ordered the Board to reimburse L.A. for
attorney’s fees and costs for the defense of K.O.’s civil action.
On appeal by the Board, the Appellate Division reversed, holding that indemnification was not warranted
because the IAIU report substantiated K.O.’s allegations against L.A. and provided sufficient evidence to prove that
the claim did not arise out of, or in the course of performance of, his employment duties. Horace Mann filed a
petition for certification on L.A.’s behalf arguing that the Appellate Division incorrectly determined that L.A. had
the burden of showing a favorable outcome in the criminal proceedings to be entitled to indemnification under the
civil statute, N.J.S.A. 18A:16-6. This Court granted certification. 217 N.J. 286 (2014).
HELD: N.J.S.A 18A:16-6 requires indemnification for fees and costs associated with defending against a civil action
unless there is proof by a preponderance of the evidence that the employee’s conduct fell outside the course of
performance of his or her employment duties.
1
1. Resolution of this appeal requires an understanding of the applicable civil and criminal indemnification statutes.
Under the civil indemnification statute, N.J.S.A. 18A:16-6, a board of education employee may be indemnified for
attorney’s fees and costs incurred defending civil actions arising out of an act or omission that took place in the course
and scope of employment duties. The plain language of that statute requires that the underlying civil action be related
to conduct falling within the employment duties of the school board employee. The criminal indemnification statute,
N.J.S.A. 18A:16-6.1, requires a disposition of the criminal charges in favor of the employee before he or she is entitled
to reimbursement for costs incurred in defending against the charges. (pp. 12-13)
2. In Bower v. Bd. of Educ. of E. Orange, 149 N.J. 416, 423 (1997), in the context of a claim under the criminal
indemnification statute following resolution of a criminal proceeding, the Court held that the criminal and civil
indemnification statutes must be read together and require that “(1) any act or omission on which the criminal
charges are based arose 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. Relying on
Bower, the Appellate Division here conflated the civil and criminal indemnification statutes. In Bower, this Court
had to consider both the criminal and civil indemnification statutes because the criminal indemnification statute does
not mention the threshold inquiry, which is whether the employee’s conduct was within the scope of his or her
employment duties. That is not the case here. This case presents a question of civil indemnification, which requires
only a determination of whether the employee was acting within the scope of his or her employment duties. Thus,
the criminal indemnification statute, N.J.S.A. 18A:16-6.1, is not relevant. (pp. 14-15)
3. Here, the ALJ’s resolution of this matter by summary decision was premature. To determine whether summary
decision is appropriate, a court must ascertain whether the competent evidence presented, when viewed in the light
most favorable to the non-moving party in consideration of the applicable evidentiary standard, is sufficient to
permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party. A court is not
bound by an agency’s interpretation of a statute or its determination of a strictly legal issue. (pp. 15-16)
4. To decide whether L.A. was entitled to indemnification under N.J.S.A. 18A:16-6, the ALJ was required to
determine by a preponderance of the evidence whether L.A. was acting within the scope of the duties of his
employment. The ALJ based that determination solely on the fact that L.A. had not been adjudicated in any prior
forum to have committed any criminal act regarding K.O. The ALJ failed to consider the extent of any factual
overlap between the offenses alleged in the N.F. indictment, to which L.A. admitted, and the offenses alleged in the
K.O. indictment. The ALJ also failed to consider L.A.’s admission during his plea colloquy that he spoke
inappropriately to K.O. or the evidence in the IAIU report substantiating K.O.’s allegations. The IAIU report, being
investigative in nature, is distinguishable from an adjudicatory finding. However, the report could have been offered
into evidence at a hearing with the testimony of the DCF investigator, which would have afforded L.A. an
opportunity to cross-examine the investigator and other witnesses to rebut the charge. L.A.’s admission during his
plea colloquy and the IAIU report supporting K.O.’s allegations show that there are issues of fact in dispute that are
material to determining whether L.A. committed the acts alleged by K.O. in the civil action. Therefore summary
decision was inappropriate. (pp. 16-18)
5. When a school board employee seeks civil indemnification under N.J.S.A. 18A-16-6, the only question to be
answered is whether the employee was acting within the scope of his or her employment duties. A conviction or
other unfavorable disposition in a related criminal matter answers that question in the negative. Here, the K.O.
indictment was dismissed, and therefore resolved in L.A.’s favor. However, because there are material facts at issue
bearing upon whether L.A. committed the acts alleged by K.O., and was therefore acting outside the scope of his
employment duties, the ALJ’s summary decision resulted in an insufficient record to decide whether L.A. was
entitled to indemnification. (p. 18)
The judgment of the Appellate Division is REVERSED and the matter is REMANDED to the
Commissioner of Education for an evidentiary hearing.
CHIEF JUSTICE RABNER; JUSTICES LaVECCHIA, ALBIN, PATTERSON and FERNANDEZ-
VINA; and JUDGE CUFF (temporarily assigned) join in JUSTICE SOLOMON’s opinion.
2
SUPREME COURT OF NEW JERSEY
A-59 September Term 2013
073401
L.A. and THE HORACE MANN
INSURANCE COMPANY,
Petitioners-Appellants,
v.
BOARD OF EDUCATION OF THE
CITY OF TRENTON, MERCER
COUNTY,
Respondent-Respondent.
Argued January 5, 2015 – Decided March 25, 2015
On certification to the Superior Court,
Appellate Division.
Gidian R. Mellk argued the cause for
appellants (Mellk O'Neill, attorneys; Ms.
Mellk and Arnold M. Mellk, of counsel and on
the brief).
Patrick F. Carrigg argued the cause for
respondent Board of Education of the City of
Trenton, Mercer County (Lenox, Socey,
Formidoni, Giordano, Cooley, Lang & Casey,
attorneys; Michael A. Pattanite, Jr., on the
briefs).
Beth N. Shore, Deputy Attorney General,
submitted a letter in lieu of brief on
behalf of respondent Commissioner of
Education (John J. Hoffman, Acting Attorney
General of New Jersey, attorney).
JUSTICE SOLOMON delivered the opinion of the Court.
We are called upon to determine whether N.J.S.A. 18A:16-6
entitles a school board employee to indemnification for
1
attorney’s fees and costs spent in defense of a civil action
arising from the same allegations contained in a dismissed
criminal indictment. We conclude that in such circumstances
N.J.S.A. 18A:16-6 requires indemnification unless there is proof
by a preponderance of the evidence that the employee’s conduct
fell outside the course of performance of his or her employment
duties.
Here, rather than conducting an evidentiary hearing, the
Administrative Law Judge (ALJ) disposed of the matter by way of
summary decision. Because there are disputed issues of material
fact regarding whether L.A. was acting within the scope of the
responsibilities of his employment, the judgment of the
Appellate Division is reversed. The matter is remanded to the
Commissioner of Education for a hearing to determine whether
L.A.’s conduct fell outside the course of performance of his
employment duties.
I.
The relevant facts gleaned from the scant record are as
follows. Petitioner L.A. was employed by the Trenton Board of
Education (Board) as a security guard at an elementary school.
While at work, L.A. allegedly had unlawful sexual contact with
two minor students, N.F. and K.O. The allegations were referred
to the Institutional Abuse Investigation Unit (IAIU) of the
Department of Children and Families (DCF). In its investigative
2
report, the IAIU stated that the “[s]exual [a]buse/[s]exual
[m]olestation was substantiated regarding the actions of
[L.A.].” However, the report explained that “[n]o adjudicative
findings have been made” and “IAIU’s review herein is solely
investigative.”
As a result of the sexual abuse allegations against L.A., a
Mercer County grand jury returned two separate indictments –-
one arose out of the allegations regarding N.F. and the other
arose out of the allegations regarding K.O. In the N.F.
indictment, L.A. was charged with third-degree aggravated
criminal sexual contact, N.J.S.A. 2C:14-3(a), and second-degree
endangering the welfare of a minor, N.J.S.A. 2C:24-4. In the
K.O. indictment, L.A. was charged with two counts of second-
degree sexual assault, N.J.S.A. 2C:14-2(b), and one count of
second-degree endangering the welfare of a minor, N.J.S.A.
2C:24-4.
In order to resolve both indictments, L.A. entered into a
plea agreement with the State in which he agreed to plead guilty
to one count of second-degree endangering the welfare of N.F. in
exchange for dismissal of the remaining charges in the N.F.
indictment and dismissal of the K.O. indictment. During his
plea colloquy, L.A. made no admissions regarding the allegations
contained in the K.O. indictment, but he did admit that he had
“engag[ed] in conversation of a sexual nature with two females,
3
both of whom were minors and under [his] supervision,” and that
he “engag[ed] in an inappropriate touching of at least one of
those minors during the course of that day[.]”
Subsequently, a civil complaint was filed on K.O.’s behalf
by her guardian ad litem alleging that L.A. sexually assaulted
K.O., and that the Board negligently hired L.A. The Board
answered the complaint on its own behalf, taking no position
with regard to the allegations against L.A. However, L.A. was
assigned counsel by Horace Mann Insurance Agency (Horace Mann),
pursuant to a private insurance policy.1 K.O.’s civil action was
settled without any admission of wrongdoing by L.A. or the
Board.
After the settlement was finalized, L.A., through counsel
provided by Horace Mann, filed a verified petition against the
Commissioner of Education (Commissioner) seeking reimbursement
for the attorney’s fees and costs incurred in defending against
K.O.’s civil action. The matter was transferred to the Office
of Administrative Law, and L.A.’s counsel and the Board filed
cross motions for summary decision.
1 The Appellate Division referred to Horace Mann as “the Board’s
liability carrier underwriter.” At oral argument, the parties
acknowledged that Horace Mann provided counsel to L.A. in the
civil action under a private insurance policy of the New Jersey
Education Association.
4
The ALJ issued an initial decision2 based only upon the
moving papers and supporting documents without an evidentiary
hearing. The ALJ granted L.A.’s motion for summary decision,
denied the Board’s motion, and awarded L.A. attorney’s fees and
costs pursuant to N.J.S.A. 18A:16-6, which addresses the right
to indemnification for officers and employees of boards of
education in civil actions. The ALJ concluded that the Board
had failed to meet its burden of establishing that L.A.’s
conduct fell outside of the performance of his duties as an
elementary school security guard because the Board failed to
prove that K.O.’s allegations of abuse in the civil action had
occurred. The ALJ determined that the sexual assault
allegations against L.A. were “never substantiated in a prior
adjudicatory hearing” and that indemnification could not be
denied in reliance upon “mere suspicion.” The ALJ stated:
To be indemnified for costs associated with a
civil suit, a school employee’s action must
arise from and be during the course of
performance of one’s duties. While it is
undisputed that the claim in this matter of
sexual assault does not arise from a security
officer’s duties, the claim was never
substantiated in a prior adjudicatory hearing.
2Pursuant to N.J.S.A. 52:14B-10(c), all hearings of a State
agency required to be conducted as a contested case are assigned
to an ALJ who must provide a “report and [initial] decision
which contains recommended findings of fact and conclusions of
law . . . based upon sufficient, competent, and credible
evidence.” The initial decision may be adopted, modified or
rejected by the agency head, in this case the Commissioner, who
is authorized to make a final decision in the matter. Ibid.
5
Under New Jersey Supreme Court precedents,
absent such evidence, a school employee is
entitled to indemnification for costs in
defending a civil suit, regardless of mere
suspicion that there may be truth to the
claim. Thus, I [conclude], that summary
decision for [L.A.] is appropriate at this
time.
The Commissioner adopted the ALJ’s initial decision and
ordered the Board to reimburse L.A. for attorney’s fees and
costs for the defense of K.O.’s civil action. The Commissioner,
agreeing with the ALJ’s reasoning, stated “the civil case
against [L.A.] was settled without admission or adjudication of
the alleged facts; consequently there is no proof that he
engaged in any untoward conduct toward the child, K.O.”
The Board appealed. The Appellate Division reversed the
Commissioner, holding that “the statutory provisions of N.J.S.A.
18A:16-6 and -6.1 must be read collectively and are
complementary.” The panel noted that N.J.S.A. 18A:16-6.1
requires a favorable outcome in criminal and quasi-criminal
proceedings brought against board of education employees before
indemnification is warranted and, therefore, N.J.S.A. 18A:16-6,
which governs indemnification in civil proceedings, required
L.A. to prove the outcome in the related criminal indictment was
in his favor before he would be entitled to indemnification for
defending K.O.’s civil action. The panel held that “the
Commissioner did not consider [that L.A.’s] conduct led to a
6
criminal conviction of endangering the welfare of children, but
was persuaded by the fact that the events occurred while L.A.
was working on school property and the civil litigation filed by
K.O. was settled without L.A.’s admission of wrongdoing.”
The panel determined that the Commissioner’s “reasoning
ignore[d] the [IAIU] investigative findings, the criminal
conviction resulting from the conduct [against N.F], and the
likely testimony from the victims presented at a hearing,” and
held that “L.A.’s guilty plea resolved the charges in both
indictments and was not a final disposition of the criminal
charges favorable to L.A.” Finally, the panel determined:
In matters such as this one, where the
conduct giving rise to alleged civil
liability is also the basis for criminal
charges, the factual basis for and
ultimate disposition of those criminal
charges is highly probative when
determining whether the employee’s
conduct arose out of and in the course of
the performance of his or her duties.
Here, the record does not support a
sufficient nexus between L.A.’s official
duties as a security guard and his
conduct with the students to trigger the
protection of N.J.S.A. 18A:16-6.
The panel further held that “indemnification was not warranted”
because the IAIU report substantiated K.O.’s allegations against
L.A. and provided sufficient evidence to show that the claim did
not arise out of or in the course of performance of his
employment duties.
7
Horace Mann, on behalf of L.A., filed a petition for
certification with this Court arguing that the Appellate
Division incorrectly determined that L.A. had the burden of
showing a “favorable outcome” in the criminal proceedings to be
entitled to indemnification under the civil statute, N.J.S.A.
18A:16-6. We granted certification. L.A. v. Bd. of Educ. of
Trenton, 217 N.J. 286 (2014).
II.
A.
L.A. contends that the Appellate Division improperly
imported the requirement under the criminal indemnification
statute, N.J.S.A. 18A:16-6.1 -- that he must show that he
received a favorable outcome in the criminal proceeding to be
entitled to indemnity -- into the civil indemnification statute,
N.J.S.A. 18A:16-6, which contains no such requirement. L.A.
argues that had the Legislature intended that boards of
education be required to indemnify employees for costs
associated with the defense of civil actions only when a final,
favorable disposition of the related criminal matter was
reached, it would have included such language in the civil
indemnification statute.
L.A. maintains there is no support for the Appellate
Division’s conclusion that he did not receive a favorable
8
outcome in the criminal matter merely because he pled guilty to
the charges in the N.F. indictment, which formed the basis of
the panel’s finding that the alleged acts in K.O.’s civil action
did not arise out of the performance of L.A.’s employment
duties. L.A. argues that, in any event, disposition of the
criminal charges is immaterial to the indemnification litigation
under the civil indemnification statute. Alternatively, he
argues that the K.O. indictment was disposed of in his favor
because all the charges were dismissed, and L.A. never provided
any factual basis for the charges in the K.O. indictment.
L.A. also contends that the Appellate Division violated his
due process rights by relying on the IAIU investigative report
to find that he had abused K.O. and was “thus acting outside the
scope of his employment duties” as a security guard. L.A.
argues that the nature of the IAIU report required the ALJ to
provide him with the right to confront the witnesses against
him, or, at a minimum, a right to a factual determination
regarding the credibility of those witnesses. Thus, L.A. urges
the Court to affirm the Commissioner’s final agency
determination adopting the ALJ’s initial decision, which he
maintains was sufficiently supported by the record. He
concludes that the record does not suggest that the Commissioner
“clearly erred.”
B.
9
The Board asserts that, because the criminal matter and the
civil suit are intertwined, the Appellate Division properly
found that L.A. had to show a favorable result from the related
criminal proceeding in order to be entitled to indemnification
under the civil indemnification statute. Thus, the Board claims
that whether L.A.’s criminal charges were resolved in his favor
is relevant to determining whether the conduct occurred within
the scope of L.A.’s employment. According to the Board, L.A.’s
guilty plea was an unfavorable result with respect to both
indictments, establishing that he acted outside the scope of his
employment and therefore was not entitled to indemnification
under the civil indemnification statute.
Alternatively, the Board claims that even if the Appellate
Division incorrectly conflated N.J.S.A. 18A:16-6 and N.J.S.A.
18A:16-6.1, the civil indemnification statute still requires
that the underlying conduct in the civil action arise out of and
in the course of performance of employment duties. Therefore,
L.A. is not entitled to indemnification because more than a
preponderance of the evidence supports that the acts underlying
the civil action were outside the scope of L.A.’s employment as
a security guard. That evidence includes the IAIU report that
“substantiated” the allegations of abuse against K.O. and L.A.’s
admission during his plea colloquy that he spoke inappropriately
to both N.F. and K.O.
10
The Board claims, from a public policy standpoint, that
adoption of L.A.’s position would result in indemnification in
all civil proceedings where related criminal charges are
resolved in a defendant/employee’s favor. Instead, the Board
urges us to adopt a rule consistent with the Appellate
Division’s opinion. Such a rule would permit the factfinder to
assess the totality of the circumstances when determining
whether, by a preponderance of the evidence, a school board
employee acted within the course and scope of his or her
employment duties and is entitled to indemnification.
III.
A.
Resolution of this appeal requires an understanding of the
applicable civil and criminal indemnification statutes.
Initially, we must consider the statutes and attempt to “divine
and effectuate the Legislature’s intent.” State v. Shelley, 205
N.J. 320, 323 (2011). In doing so, we first examine “[t]he
plain language of [each] statute” and “apply to the statutory
terms the generally accepted meaning of the words used by the
Legislature.” Patel v. N.J. Motor Vehicle Comm’n, 200 N.J. 413,
418 (2009); see also State v. Bolvito, 217 N.J. 221, 228-29
(2014); accord N.J.S.A. 1:1-1. “When the Legislature’s chosen
words lead to one clear and unambiguous result, the
11
interpretative process comes to a close, without the need to
consider extrinsic aids.” Shelley, supra, 205 N.J. at 323.
When, as here, an issue concerns more than one statutory
provision, “‘[r]elated parts of an overall scheme can . . .
provide relevant context.’” Beim v. Hulfish, 216 N.J. 484, 498
(2014) (quoting Dep’t of Children & Families, N.J. Div. of Youth
& Family Servs. v. A.L., 213 N.J. 1, 20 (2013)). In other
words, in addition to “‘ascrib[ing] to the statutory words their
ordinary meaning and significance[,]’” the court must “‘read
them in context with related provisions so as to give sense to
the legislation as a whole.’” Ibid. (quoting DiProspero v.
Penn, 183 N.J. 477, 492 (2005) (internal citations omitted)).
B.
With those standards in mind, we begin our analysis by
applying the rules of statutory interpretation to the relevant
indemnification statutes. Under the civil indemnification
statute, N.J.S.A. 18A:16-6, a board of education employee may be
indemnified for attorney’s fees and costs incurred defending
civil actions arising out of an act or omission that took place
in the course and scope of employment duties. Specifically,
N.J.S.A. 18A:16-6 provides:
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
12
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 plain language of that statute requires that the underlying
civil action be related to conduct falling within the employment
duties of the school board employee.
The criminal indemnification statute, N.J.S.A. 18A:16-6.1,
requires a disposition of the criminal charges in favor of the
employee before he or she is entitled to reimbursement for costs
incurred in defending against the charges. Specifically,
N.J.S.A. 18A:16-6.1 provides:
Should any criminal or quasi-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.
See also Bd. of Educ. of Florham Park v. Utica Mut. Ins. Co.,
172 N.J. 300, 308 (2002) (holding that school board employee’s
right to indemnification for costs of his or her defense in
criminal matter will not accrue unless “criminal charges result
in an acquittal or otherwise are dismissed”).
13
In the context of a claim under the criminal
indemnification statute following resolution of a criminal
proceeding, we have held that the criminal and civil
indemnification statutes must be read together and require that
“(1) any act or omission on which the criminal charges are based
[arose] ‘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.” Bower v. Bd. of Educ. of E. Orange, 149 N.J.
416, 423 (1997).
IV.
Relying on Bower, the Appellate Division in this case
conflated the civil and criminal indemnification statutes.
However, in Bower, supra, this Court had to consider both the
criminal and civil indemnification statutes because the criminal
indemnification statute does not mention the threshold inquiry –
- whether the employee’s conduct was within the scope of his or
her employment duties. 149 N.J. at 423. That is not the case
here. We have a question of civil indemnification, which
requires only a determination of whether the employee was acting
within the scope of his or her employment duties. Thus, the
criminal indemnification statute, N.J.S.A. 18A:16-6.1, is not
germane to our inquiry.
14
While Bower, supra, held that an employee-defendant’s
conviction in a related criminal proceeding is dispositive proof
that the employee-defendant was not acting within the scope of
the responsibilities of his or her employment, the fact that an
employee was charged with a crime but not convicted does not
establish that the conduct was within the scope of his or her
employment duties. 149 N.J. at 431, 433-34; see also Valerius
v. Newark, 84 N.J. 591, 596-97 (1980).
V.
A.
Here, the matter was resolved prematurely by summary
decision pursuant to N.J.A.C. 1:1-12.5. The standard governing
agency determinations under N.J.A.C. 1:1-12.5 is “substantially
the same as that governing a motion under Rule 4:46-2 for
summary judgment in civil litigation.” Contini v. Bd. of Educ.
of Newark, 286 N.J. Super. 106, 121-22 (App. Div. 1995)
(citations omitted), certif. denied, 145 N.J. 372 (1996). In
other words, a court must ascertain “whether the competent
evidential materials presented, when viewed in the light most
favorable to the non-moving party in consideration of the
applicable evidentiary standard, 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.
15
of Am., 142 N.J. 520, 523 (1995); see also Contini, supra, 286
N.J. Super. at 121-22.
A court is “‘in no way bound by [an] agency’s
interpretation of a statute or its determination of a strictly
legal issue.’” Dep’t of Children & Families, N.J. Div. of Youth
& Family Servs. v. T.B., 207 N.J. 294, 302 (2011) (alteration in
original) (quoting Mayflower Sec. Co. v. Bureau of Sec. in Div.
of Consumer Affairs of Dep’t of Law & Pub. Safety, 64 N.J. 85,
93 (1973)). Because an agency’s determination on summary
decision is a legal determination, our review is de novo.
Contini, supra, 286 N.J. Super. at 121-22; Manalapan Realty,
L.P. v. Manalapan Twp. Comm., 140 N.J. 366, 378 (1995).
B.
As discussed above, to decide whether L.A. was entitled to
indemnification under N.J.S.A. 18A:16-6, the ALJ was required to
determine by a preponderance of the evidence whether L.A. was
acting within the scope of the duties of his employment. The
ALJ based his determination that L.A. was acting within the
scope of his employment responsibilities solely on the fact that
L.A. had “not been adjudicated in any prior forum to have
committed any criminal act regarding K.O.” In so doing, the ALJ
failed to consider the extent of any factual overlap between the
offenses alleged in the N.F. indictment, which L.A. admitted to,
and the offenses alleged in the K.O. indictment. Nor did the
16
ALJ consider L.A.’s admission during his plea colloquy that he
spoke inappropriately to K.O., or the evidence referred to in
the IAIU report substantiating K.O.’s allegations.
We note that the IAIU report, being investigative in
nature, is distinguishable from an adjudicatory finding. In re
R.P., 333 N.J. Super. 105, 116-17 (App. Div. 2000). However,
the report could have been offered into evidence at a hearing
with the testimony of the DCF investigator, which would have
afforded L.A. “an opportunity to cross-examine the investigator
and other witnesses [offered] and to present evidence to rebut
the charge.” Id. at 117.3
Thus, unlike Bower, supra, where dismissal of the criminal
indictment and the lack of any additional evidence “clearly
satisf[ied] Bower’s burden of proof under the statute” to show
that he was acting within the scope of his employment, 149 N.J.
at 434, here L.A.’s admission during his plea colloquy and the
IAIU report supporting K.O.’s allegations show that there are
issues of fact in dispute that are material to determining
3 The testimony of the DCF investigator regarding the contents of
the report may be admitted as substantive evidence pursuant to
N.J.A.C. 1:1-15.5, which permits the use of hearsay evidence in
administrative proceedings, subject to the discretion of the
ALJ. The evidence “admitted shall be accorded whatever weight
the judge deems appropriate taking into account the nature,
character and scope of the evidence, the circumstances of its
creation and production, and, generally, its reliability.”
N.J.A.C. 1:1-15-5.
17
whether L.A. committed the acts alleged by K.O. in the civil
action.
We therefore conclude that summary decision in this case
was inappropriate. See Gaines v. Bellino, 173 N.J. 301, 320
(2002) (“[M]aterial issues of disputed fact in the context of a
motion record can deny a defendant summary dismissal[.]”); cf.
Frank v. Ivy Club, 120 N.J. 73, 98 (1990) (“[W]here no disputed
issues of material fact exist, an administrative agency need not
hold an evidential hearing in a contested case.”), cert. denied,
498 U.S. 1073, 111 S. Ct. 799, 122 L. Ed. 2d 860 (1991).
VI.
The only question to be answered when a school board
employee seeks civil indemnification under N.J.S.A. 18A-16-6 is
whether the employee was acting within the scope of his or her
employment duties; a conviction or other unfavorable disposition
in a related criminal matter answers that question in the
negative. Here, it has been established that the K.O.
indictment was dismissed and therefore resolved in L.A.’s favor.
However, the ALJ’s summary decision presented to the
Commissioner an insufficient record to decide whether L.A. was
entitled to indemnification pursuant to N.J.S.A. 18A:16-6
because there are material facts at issue bearing upon whether
L.A. committed the acts alleged by K.O. and was therefore acting
outside the scope of his employment duties.
18
For the foregoing reasons the judgment of the Appellate
Division is reversed, and the matter is remanded to the
Commissioner for an evidentiary hearing.
CHIEF JUSTICE RABNER, JUSTICES LaVECCHIA, ALBIN, PATTERSON,
and FERNANDEZ-VINA, and JUDGE CUFF (temporarily assigned) join
in JUSTICE SOLOMON’s opinion.
19
SUPREME COURT OF NEW JERSEY
NO. A-59 SEPTEMBER TERM 2013
ON CERTIFICATION TO Appellate Division, Superior Court
L.A. and THE HORACE MANN
INSURANCE COMPANY,
Petitioners-Appellants,
v.
BOARD OF EDUCATION OF THE
CITY OF TRENTON, MERCER
COUNTY,
Respondent-Respondent.
DECIDED March 25, 2015
Chief Justice Rabner PRESIDING
OPINION BY Justice Solomon
CONCURRING/DISSENTING OPINIONS BY
DISSENTING OPINION BY
REVERSE AND
CHECKLIST
REMAND
CHIEF JUSTICE RABNER X
JUSTICE LaVECCHIA X
JUSTICE ALBIN X
JUSTICE PATTERSON X
JUSTICE FERNANDEZ-VINA X
JUSTICE SOLOMON X
JUDGE CUFF (t/a) X
TOTALS 7
1