Chasin v. Montclair State University

*442O’HERN, J.,

dissenting.

I find it unusual that the Court should strain so hard to deny legal representation to a professor at one of our State universities in connection with a student’s claim against her. I have a sense that there is implicit in the Court’s decision a determination that it was an unpatriotic act not to award the requested grade to a veteran of the 1991 Persian Gulf War. At first glance, the teacher’s position does appear to conflict with the 1991 Desert Storm Law, L. 1991, c. 167. On closer analysis, as the Appellate Division found, she should be given a hearing to explain her position. The record, fairly read, strongly suggests that Professor Chasin acted in good faith. If she did, then for the Court to sustain the Attorney General’s denial of indemnification for her counsel fees undermines the protection that the Legislature intended to be provided to State employees sued because of the faithful discharge of their public duties.

We often say that government must “turn square corners.” F.M.C. Stores Co. v. Borough of Morris Plains, 100 N.J. 418, 426, 495 A.2d 1313 (1985) (citation omitted). If a mixed metaphor may be forgiven, the State did more here than cut corners; rather it kept moving the goalposts in order to prevent this teacher from obtaining reimbursement for the legal fees that she incurred in vindicating her proper performance of her public duties. First the State represented to Professor Chasin that she would be able to recover her legal expenses under N.J.S.A 59:10-2 of the Tort Claims Act (TCA), N.J.S.A. 59:1-1 to 12-3, so long as she was not guilty of willful misconduct. Then after she had incurred the legal expenses, the State told her that she had no rights under the TCA, but that it was entirely discretionary whether the Attorney General should provide her a legal defense. Finally, when N.J.S.A 18A:60-4 of the Higher Education Act, N.J.S.A. 18A:60-i to -15, appeared to provide a parallel form of indemnity to that under the TCA, the State argued that 18A:60-4 had been impliedly repealed. Except to require a hearing on the issue of willful *443misconduct, the Appellate Division did not accept the State’s arguments. I would affirm its judgment.

I

Professor Chasin is entitled to indemnification under N.J.S.A 59:10-2 because that is what the Attorney General’s office represented to her before she incurred the expenses.

A fair regard for the rights of public employees suggests that public employers should not renege on promises of such consequence. The Attorney General’s August 25, 1992 letter denying representation stated: “This decision is based on the actions of Professor Chasin____” In addition, the letter recited that there would be a serious question of a conflict of interest if the Attorney General were to represent both Chasin and the State. The letter concluded: “In light of this determination, whether Professor Chasin will be entitled to indemnification by the State will be governed by the provisions of N.J.S.A. 59:10-2.”

N.J.S.A 59:10-2 provides indemnification for tortious conduct if the employee establishes that the act or omission complained of occurred within the scope of the employment and the State fails to establish that the employee “acted or failed to act because of actual fraud, actual malice or willful misconduct.”

It is certain that the record in this case does not establish that the teacher’s actions were the result of fraud, actual malice or willful misconduct. Of course, I agree that a public employee has a duty to cooperate with the Attorney General and, indeed, that once the Attorney General, agrees to defend a public employee, the Attorney General has exclusive control over the employee’s representation. N.J.S.A 59:10A-4. I therefore agree that an employee may not willfully or wrongfully disregard the advice of the Attorney General. This does not, however, mean that the employee must follow the incorrect advice of an Attorney General at the expense of forfeiture of her right to indemnification.

*444In its opposition to Professor Chasm’s motion to be indemnified for the legal fees that she had incurred, the Attorney General furnished an affidavit by a Deputy Attorney General stating:

I indicated that Professor Chasin was obliged by that law to award Lloyd a grade on the basis of the work he completed in the course to the date he was called to active duty in the Persian Gulf Conflict [presumably his mid-term exam grade]. It was my opinion that Professor Chasin could not require that Lloyd do additional work for a grade in the course____ Professor Chasin refused to conform to the law as interpreted by the Attorney General’s Office.

The Attorney General’s office appears to have misunderstood Professor Chasm’s position. What she sought was not additional work, but as she stated,

some form of demonstration from [the student] that he has learned the material [from the date of his mid-term exam on November 1 until the date that he left for military service on December 4]. I have offered him the choice of a take-home final or a paper discussing the material covered between the midterm and Dec[ember] 4[ ].

The professor may appear to be a stickler to have insisted on grading the student based on this work but apparently she and he had agreeably discussed this before he left for active duty. In fact, both professor and student had signed an “Incomplete Contract” in December 1990, agreeing that the student would complete either a make-up final examination or a paper covering the material taught from the date of the mid-term examination through the student’s last day of class. The professor’s position does not appear to be totally unreasonable or arbitrary, especially considering that the Desert Storm Law was not approved until June 19,1991.

Pursuant to a stipulation of settlement, the grade approved by the Chancellor of Higher Education to be awarded to the veteran for the course, Sociology of Rich and Poor Nations, Fall 1990, under the Desert Storm Law, was based upon his attendance for the first thirteen weeks of the course until December 4,1990, and his completion of the examinations administered during the first eight weeks of the course. However, it was the University, not the teacher, that was to issue an “administrative grade” with that notation on his transcript. At the very least, there should be, as required by the Appellate Division, a hearing to determine wheth*445er or not Professor Chasm’s understanding of the law was correct or whether she should be penalized for having pursued her understanding to a legal determination different from that of the Attorney General.

For four and one-half years, plaintiff incurred attorneys’ fees in reliance on the Attorney General’s position that plaintiffs entitlement to reimbursement by the State would be governed by N.J.S.A. 59:10-2. It would be a gross breach of trust to permit the State now to renege on its position. See W.V. Pangborne & Co. Inc. v. New Jersey Dep’t of Transp., 116 N.J. 543, 561-62, 562 A.2d 222 (1989) (holding that department’s failure to deal clearly with statute of limitations issue constituted breach of implied duty of good faith and fair dealing); Vogt v. Borough ofBelmar, 14 N.J. 195, 205-07, 101 A.2d 849 (1954) (holding estoppel may be invoked against municipality that promised workers’ compensation benefits to volunteer firemen to prevent manifest wrong and injustice).

II

Even if the Attorney General is permitted to repudiate the offer of reimbursement under the TCA, the claim against Professor Chasin was akin to a civil rights claim entitling her to a defense under the TCA as a matter of right.

In its Civil Case Information Statement for its appeal to the Appellate Division, the Attorney General’s office listed only one basis for challenging the trial court judgment that awarded plaintiff indemnification and reimbursement of attorneys’ fees: “A State employee is not entitled to reimbursement of attorneys’ fees pursuant to N.J.S.A. 59:10-2 or N.J.S.A. 18A:60-4 when the employee is sued because she did not comply with the legal advice of the Attorney General.” Midway through the appeal, four and one-half years after Chasin requested indemnification for the legal costs incurred as a result of the lawsuit, the State asserted that when a State employee is sued in a civil action arising out of her employment, it is entirely within the Attorney General’s discretion to determine whether the employee shall be indemnified if the action seeks only exemplary damages and injunctive relief. This is true, the State contends, even if the employee acted in good *446faith and is completely vindicated in her position. The Appellate Division correctly perceived the flaw in the State’s argument:

[T]he Tort Claims Act was enacted in response to the selective abolition of the State’s sovereign immunity in contract and tort. Helduser v. Kimmelman, 191 N.J.Super. 493, 508-09, 467 A.2d 1094 (App.Div.1983). Further, “[blecause state employees were subject to civil liability although the State was immune, protecting them against civil liability was considered an important goal____” Id. at 509, 467 A.2d 1094. There is no logical basis to distinguish claims where compensatory damages are sought and claims where exemplary damages are sought. Employees need the same security in both situations,

Thus, the Appellate Division read N.J.SA. 59:10A-1 as it is plainly written, and held that unless there is an exception under N.J.SA 59:10A-2, the Attorney General must provide for the defense of any action brought against a State employee on account of an act or omission in the scope of employment.

New Jersey construes its obligation to indemnify employees under the TCA as extending to the defense of civil rights actions brought pursuant to 42 U.S.C.A § 1983. In re Petition for Review of Opinion 552 of Advisory Comm, on Prof l Ethics, 102 N.J. 194, 197, 507 A.2d 233 (1986). In addition, New Jersey is one of the few jurisdictions that will indemnify its employees for punitive damages. N.J.S.A 59:10-1. This was an action seeking damages for rights guaranteed under State law. Numerous State employees in high-profile cases of civil rights violations have been defended by the Attorney General. Professor Chasin was entitled to a defense under N.J.SA 59:10A-1. If the Attorney General refused to defend her, Professor Chasin was entitled to indemnification under N.J.S.A 59:10-2, which provides that “[i]f the State employee establishes that he [or she] was entitled to a defense under the provisions of this chapter, the State shall pay or reimburse” the employee for “all costs of defending the action, including reasonable counsel fees and expenses, together with costs of appeal, if any.”

*447III

N.J.S.A. 18A:60-4 was not impliedly repealed by the TCA.

In the State’s final goalpost move, it asserts that the passage of the TCA in 1972 impliedly repealed N.J.S.A 18A:60-4’s grant of indemnity for a State college professor. The statute, since repealed, provided:

Whenever any civil action has been or shall be brought against any professor, associate professor, [or] assistant professor ... for any act or omission arising out of and in the course of the performance of the duties of such ... position or employment, the state 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 the state may arrange for and maintain appropriate insurance to cover all such damages, losses and expenses.

At the time of the suit against Chasin in 1992, N.J.S.A. 18A:60-4 was in effect. Plaintiff’s complaint for reimbursement of her legal fees made specific reference to the statute. In the answer to the complaint, the Attorney General never asserted that the statute had been impliedly repealed. Quite aside from the fact that the repealer argument was never raised in the State’s trial papers or in defendant’s Appellate Division Case Information Statement, this Court finds that the issue is before us. It is disheartening to me that the Court would so abandon, its precedent as to find an implied repeal in the face of our precedent. I would rather that the Court simply deny counsel fees to Professor Chasin on the basis of her conduct than to suggest that N.J.S.A. 18A:60-4 had been impliedly repealed. This Court has held in a long series of cases that

there is a “strong presumption” against such an implied repeal, City of Camden v. Byrne, 82 N.J. 133, 154, 411 A.2d 462 (1980), and that presumption will be overcome only by proof beyond a reasonable doubt that the [LJegislatwre intended a negation of the prior law. Swede v. City of Clifton, 22 N.J. 303, 317, 125 A.2d 865 (1956)____ [T]he intent of the [Legislature to effect an implied repealer of a prior statute “will not arise by implication unless the subsequent statute'is plainly repugnant to the former and is designed to be a complete substitute for the former.” State v. Drake, 79 N.J.Super. 458, 461-62, 191 A.2d 802 (App.Div.1963). Two statutes are said to be “repugnant” only if it is “impossible to give the two concurrent operative effect.” State v. Gledhill [ ] 67 N.J. [565,] 580[, 342 A.2d 161] [(1975)].
[State v. Milligan, 104 N.J. 67, 70-71, 514 A.2d 1316 (1986) (emphasis added).]

*448In Kemp by Wright v. State, County of Burlington, Justice Coleman summarized the test for determining whether an implied repeal has occurred:

When a subsequent enactment covering a field of operation coexistent with a prior statute cannot by any reasonable construction be given effect while the prior law remains in existence because of irreconcilable conflict between the two acts, the latest legislative expression prevails, and the prior law yields to the extent of the conflict.
Conversely, if the inconsistency between a later act and an earlier one is not fatal to the operation of either, the two may stand together and no repeal will be effected.
[147 N.J. 294, 307, 687 A.2d 715 (1997) (quoting 1A Norman J. Singer, Sutherland Statutory Construction § 23.09 at 338-39 (footnotes omitted)).]

In Kemp, the Court found that the two laws were fatally inconsistent because it was impossible to give them concurrent effect. If there were immunity under the earlier law, there could not be liability under the later law. Not so here. The greater rights, if they are deemed so, afforded to teachers at State colleges under the Higher Education Restructuring Act, L. 1994, c. 48, § 807, may co-exist with the lesser rights afforded to all public employees under the TCA. There is thus no irreconcilable conflict or fatal inconsistency between N.J.S.A. 18A:60-4 and the TCA.

Indeed, there is no apparent conflict at all. Both statutes provide for the indemnification of State employees, including reimbursement of the costs of defending actions and reasonable attorneys’ fees. Both statutes require that in order to be indemnified, the employee’s conduct must have occurred within the scope of employment. The TCA also provides that the employee will not be entitled to indemnification if the State establishes that the employee engaged in “actual fraud, actual malice or willful misconduct.” N.J.S.A 59:10-2. Although this requirement is not explicitly included in N.J.S.A 18A:60-4, our courts have held that an employee cannot claim to have acted within the scope of employment unless the employee acted “in the discharge of a duty imposed or authorized by law and ... in good faith.” Scirrotto v. Warren Hills Bd. of Educ., 272 N.J.Super. 391, 397, 640 A.2d 302 (App.Div.1994) (quoting Errington v. Mansfield Tp. Bd. of Educ., *44981 N.J.Super. 414, 420, 195 A.2d 670 (App.Div.1963), rev’d and remanded on other grounds, 42 N.J. 320, 200 A.2d 492 (1964).)

As noted, the State now argues that the TCA gives the Attorney General absolute discretion to decide whether to indemnify a State employee such as plaintiff. Even if this argument had any merit, it would not create an “irreconcilable conflict” between N.J.S.A. 18A: 60-4 and the TCA.

For example, as plaintiff explains, the TCA provides that a local public authority has the discretion whether to indemnify local public employees. N.J.S.A. 59:10-4. Nonetheless, several other statutes pre-dating the TCA provide that in certain cases, indemnification of local employees is mandatory. See, e.g., N.J.S.A. 18A:12-20 (indemnity in civil actions for members of boards of education); N.J.S.A 18A:16-6.1 (indemnity for local school officials and employees in criminal actions); N.J.S.A. 40A:14-28 (indemnity for employees of municipal fire departments); N.J.S.A 40A:14-155 (indemnity for employees of municipal police departments).

Courts have consistently disapproved of the notion that related indemnification laws were implicitly repealed by the TCA. In Lameiro v. West New York Board of Education, 136 N.J.Super. 585, 589-91, 347 A.2d 377 (Law Div.1975), the court rejected the argument that the TCA impliedly repealed the indemnity provision of N.J.S.A 18A:16-6. Observing that “[ijndemnity ... is not alien to the [A]ct,” the court found no inconsistency between the permissive indemnity of the TCA and the mandatory indemnity of N.J.S.A. 18A:16-6. Id. at 590, 347 A.2d 377.

The legislative history also supports the conclusion that N.J.S.A. 18A:60-4 was not impliedly repealed by passage of the TCA. The Legislature was plainly aware of N.J.S.A 18A:60-4 when it passed the TCA. Plaintiff notes that the Attorney General’s Task Force Report twice discussed N.J.S.A. 18A:60-4, along with several other related provisions. See Report of the Attorney General’s Task Force on Sovereign Immunity 37-38, 47-48 (1972), reprinted in Harry A. Margolis and Robert Novack, Claims *450Against Public Entities (1998). Several of the other provisions discussed were included for explicit repeal, but N.J.S.A. 18A:60-4 was not. Compare id. at 37 (discussing N.J.S.A. 18A:60-4 and N.J.S.A. 38A:4-9, which provided tort immunity to members of organized militia) and id. at 46-49 (discussing N.J.S.A. 18A:20-35, which granted tort immunity to school districts, N.J.S.A. 38A:4-10, which required the Attorney General to represent and defend militia members against tort suits, and N.J.S.A 18A:60-4), with N.J.S.A 59:12-2 (explicitly repealing N.J.S.A. 18A:20-35, N.J.S.A 38A:4-9, and N.J.S.A 38A:4-10). Given the Legislature’s obvious awareness of N.J.S.A. 18A:60-4, the failure to include it for explicit repeal negates an intent of implied repeal. Cf. Bower v. Board of Educ., 287 N.J.Super. 15, 29-30, 670 A.2d 106 (App.Div. 1996), aff'd 149 N.J. 416, 694 A.2d 543 (1997) (observing that “Basic tenets of statutory construction counsel that when one of two similar or related statutes is amended, the fact that the Legislature retains the second statute as originally written operates as an implicit approval of the second statute.”).

The argument that the TCA implicitly repealed N.J.S.A. 18A:60-4 in 1972 is belied by the fact that the Legislature explicitly repealed N.J.S.A. 18A:60-4 twelve years later, with the Higher Education Restructuring Act of 1994, L. 1994, c. 48, § 307. This act, we will recall, abolished the Department of Higher Education and made the State colleges and universities independent institutions. Concomitant with that independence was the right to provide indemnification for their officers and employees independent of that provided by the Attorney General.

. Finally, the “later express repeal of a particular statute may be construed as some indication that the legislature did not previously intend to repeal the statute by implication.” 1A Norman J. Singer, Sutherland Statutory Construction § 23.11, at 362 (5th ed.1993). There is nothing in the Higher Education Restructuring Act of 1994 that states or suggests that N.J.S.A. 18A:60-4 was merely an obsolete or superseded statute that was being removed from the books. Cf. Central Constr. Co. v. Horn, 179 N.J.Super. *45195, 102, 430 A.2d 939 (App.Div.1981) (noting that introductory statement to bill said purpose was “to remove obsolete laws from the books” that had been previously superseded). Nor was N.J.S.A 18A:60-4 repealed as part of a larger repeal of the entire chapter of which it is a part. Indeed, N.J.S.A 18A:60-5, a companion provision for indemnification in criminal actions, remains unaffected. Cf. Kemp, supra, 147 N.J. at 310-11, 687 A.2d 715 (stating that express repeal was part of larger repeal of entire chapter, “in anticipation of the enactment of a new chapter”).

The plain reason for the repeal in 1994 of N.J.S.A. 18A:60-4 is that its plan of indemnification was being replaced by a wholly new system.. Under the Higher Education Restructuring Act of 1994, each State college

shall elect within 75 days of the effective date of this act whether it, and its employees, shall be represented in all such matters by the Attorney General. If the institution elects not to be represented by the Attorney General, it shall be considered and its employees considered employees of a sue and be sued entity for the purposes of the “New Jersey Tort Claims Act” only. The institution shall be required in that circumstance to provide its employees with defense and indemnification consistent with the terms and conditions of the Tort Claims Act in lieu of the defense and indemnification that such employees would otherwise seek and be entitled to from the Attorney General____
[N.J.S.A 18A:3B-6(h)J

In replacing N.J.S.A. 18A:60-4, the Legislature did not intend that the repealed law would have no effect on prior proceedings. On the contrary, the 1994 Act provides that “[a]ll petitions, controversies and disputes pending before ... the Chancellor of Higher Education and not disposed of as of the effective date of this act shall be decided by the commission under the law under which the action arose as though this act had not been enacted.” N.J.S.A 18A:3B-29. Cf. Kemp, supra, 147 N.J. at 311, 687 A.2d 715 (stating that where express repeal is not accompanied'by “savings clause or other language limiting the effect of its repeal ... it is most likely that the Legislature intended that [the repealed law] should be considered ‘as though it had never existed.’ ”) (citation-omitted).

*452Because the Attorney General told Professor Chasin that N.J.S.A. 59:10-2 would apply to her claim, the Attorney General was, subject to a hearing on the issue of willful misconduct, required to indemnify Professor Chasin under that provision once the matter was resolved. Similarly, because the claim against Professor Chasin was a civil rights claim for damages, she was entitled to a defense under the TCA as a matter of right, not as a matter of discretion. Finally, because there is no basis to conclude that the TCA implicitly repealed N.J.S.A. 18A:60-4, Professor Chasm’s legal costs are reimbursable under that Act. For these reasons, I would affirm the judgment of the Appellate Division and allow the remand on the question of Professor Chasm’s conduct.

STEIN, J., joins in this opinion.