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