§ 645 — Limited liability

§ 645. Limited liability. 1. As used in this section, the term\n"employee" shall mean the members of the board, president, officers,\nemployees, or a former employee, his or her estate or judicially\nappointed personal representative.\n 2. Neither the members of the board nor any officers or employee of\nthe trust acting on behalf thereof, while acting within the scope of\nsuch person's authority, shall be subject to any liability resulting\nfrom carrying out any of the powers expressly given in this article.\n 3. At the request of the employee, and upon compliance by the employee\nwith the provisions of this section, the trust shall provide for the\ndefense of an employee in any civil action or proceeding in any state or\nfederal court, arising out of any alleged act or omission which the\ntrust finds occurred while the employee was acting within the scope of\nhis or her public employment and in the discharge of his or her public\nduties and was not in violation of any rule or regulation of the trust\nat the time the alleged act or omission occurred. This duty to provide\nfor a defense and indemnification shall not arise where such civil\naction or proceeding is brought by or on behalf of the trust against the\nemployee.\n 4. The trust shall indemnify and hold harmless its employees in the\namount of any civil judgment obtained against such employees in any\nstate or federal court, or in the amount of any settlement of a claim\napproved by the trust provided that the act or omission from which such\njudgment or settlement arose occurred while the employee was acting\nwithin the scope of his or her public employment and in the discharge of\nhis or her public duties and was not in violation of any rule or\nregulation of the trust at the time the alleged damages were sustained.\nThe duty to indemnify and hold harmless prescribed by this section shall\nnot arise where the injury or damage resulted from an intentional\nwrongdoing, or recklessness on the part of the employee. Nothing in this\nsection shall authorize the trust to indemnify or hold harmless an\nemployee with respect to punitive or exemplary damages, fines or\npenalties.\n 5. The duty to defend and indemnify and hold harmless prescribed by\nthis section shall be conditioned upon (a) delivery by the employee to\nthe president or general counsel of the trust at the office of the trust\nof the original or a copy of any summons, complaint, claim, process,\nnotice, demand or pleading within ten days after the employee is served\nwith such document, and (b) the full cooperation of the employee in the\ndefense of such action or proceeding and in defense of any action or\nproceeding against the trust based upon the same act or omission, and in\nthe prosecution of any appeal. Such delivery shall be deemed a request\nby the employee that the trust provide for his or her defense pursuant\nto this section. In the event that the trust shall assume an employee's\ndefense and thereafter the employee fails or refuses to cooperate in the\nformation or presentation of his or her defense, the court shall permit\nthe trust to withdraw its representation ten days after giving written\nnotice to the employee of its intention to discontinue such\nrepresentation.\n 6. In the event that the act or omission upon which the court\nproceeding against the employee is based was or is also the basis of a\ndisciplinary proceeding by the trust against the employee,\nrepresentation and indemnification by the trust, as set forth in this\nsection, may be withheld (a) until such disciplinary proceeding has been\nresolved, and (b) unless the resolution of the disciplinary proceeding\nexonerated the employee as to such act or omission.\n 7. Subject to the conditions set forth in this section, such employee\nshall be entitled to representation by the general counsel of the trust\nor by any attorney or attorneys designated by the general counsel,\nprovided, however, that the employee shall be entitled to be represented\nby private counsel of his or her choice in any civil action or\nproceeding whenever the trust determines that representation would be\ninappropriate, or whenever a court, upon appropriate motion or otherwise\nby a special proceeding, determines that a conflict of interest exists\nand that the employee is entitled to be represented by private counsel\nof the employee's choice. The general counsel of the trust shall notify\nthe employee in writing of such determination that the employee is\nentitled to be represented by private counsel. Provided, however, that\nthe trust may require, as a condition to payment of the fees and\nexpenses of such representation, that appropriate groups of such\nemployees be represented by the same counsel. Reasonable attorneys' fees\nand litigation expenses shall be paid by the trust to such private\ncounsel from time to time during the pendency of a civil action or\nproceeding.\n 8. Any dispute with respect to representation of multiple employees by\na single counsel or the reasonableness of attorneys' fees or the amount\nof litigation expenses shall be resolved by the court upon motion or by\nway of a special proceeding.\n 9. The benefits of this section shall inure only to employees as\ndefined in this section and shall not enlarge or diminish the rights of\nany other party nor shall any provision of this section be construed to\naffect, alter or repeal any provision of the workers' compensation law.\n 10. The provisions of this section shall not be construed in any way\nto impair, alter, limit or modify the rights and obligations of any\ninsurer under any policy of insurance.\n 11. Except as otherwise specifically provided in this section, the\nprovisions of this section shall not be construed in any way to impair,\nalter, limit, modify, abrogate or restrict any immunity available to or\nconferred upon any unit, entity, member, officer or employee of the\ntrust, or any right to defense or indemnification provided for any\nmember, officer or employee by, in accordance with, or by reason of, any\nother provision of state, federal or local law or common law.\n 12. Every action or proceeding instituted pursuant to the provisions\nof this section shall be commenced pursuant to section six hundred\nforty-one of this article, and subject to any condition or limitation\nset forth in such section.\n 13. The provisions of this section shall apply to the actions and\nproceedings set forth herein notwithstanding any inconsistent provisions\nof state or local law.\n