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ORD 2008-14TOWN OF TROPHY CLUB, TEXAS ORDINANCE NO. 2008-14 AN ORDINANCE OF THE TOWN OF TROPHY CLUB, TEXAS AMENDING CHAPTER 1 OF THE CODE OF ORDINANCES, ENTITLED "ADMINISTRATION", BY ADDING ARTICLE XV ENTITLED "INDEMNIFICATION OF OFFICERS"; PROVIDING FOR INCORPORATION OF PREMISES; PROVIDING FOR AMENDMENT; PROVIDING A SAVINGS AND REPEALER CLAUSE; PROVIDING A SEVERABILITY CLAUSE; PROVIDING FOR ENGROSSMENT AND ENROLLMENT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Town of Trophy Club is a home rule municipality governed by the laws of the Ordinance No. 2008-02 was adopted on January 21, 2008 and provided for the adoption of a new schedule of fees for the Town of Trophy Club (hereinafter referred to as "Town"); and WHEREAS, Section 3.21 of the Town's Home Rule Charter provides that the Council may, by appropriate ordinance, provide for the indemnification and defense of the officers and employees of the Town, including members of the Council, or any board, commission, or committee, including volunteers, and resulting from any alleged negligent act or omission of such officer, employee, member, or volunteer during the discharge of his duties and within the scope of his office, employment, membership, or assigned voluntary position with the Town, and WHEREAS, Section 3.21 of the Town's Home Rule Charter prohibits indemnification for any act arising out of the intentional or knowing violation of any penal statute or ordinance arising out of any conduct determined by final judgment to be an act of fraud or to have been taken with the intent to deceive or defraud, or for any personal or private business of such officer, employee, member or volunteer, or for the gross negligence or official misconduct, or willful or wrongful act or omission of such officer, employee, member or volunteer or for any criminal misconduct. WHEREAS, in the course of discharge of their public duties, members of the Town of Trophy Club Town Council, board members, employees, volunteers and other Town servants are from time to time the subject of lawsuits and/or claims arising from the discharge of their duties; and WHEREAS, The Town Council has determined it necessary and appropriate to adopt an ordinance providing for the indemnification and defense of the officers and employees of the Town, including members of the Council, or any board, commission, or committee, including volunteers WHEREAS, the Town Council hereby finds that the addition of Article XV, Chapter 1, "Indemnification of Officers" to the Code of Ordinances as further specified herein serves the best interests of the Town. NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE TOWN OF TROPHY CLUB, TEXAS: SECTION 1. INCORPORATION OF PREMISES That the above and foregoing premises are true and correct and are incorporated herein and made a part hereof for all purposes. SECTION 2. AMENDMENT 2.01 Chapter 1 of the Code of Ordinances of the Town of Trophy Club, entitled "Administration" is hereby amended to add Article XV, entitled "Indemnification of Officers", so that Article XV shall be and read in its entirety as follows: 1115.01 Need for Indemnification. A necessity exists for the Town's provision of legal defense and indemnification of Town Officers and Employees. 15.02 Definitions. "Course and scope of employment with or service for" the Town shall mean any act or omission which is performed while an Officer or Employee is carrying out official business of the Town pursuant to the direction of the Town Council or Town Manager, or pursuant to and in accordance with his or her duties as an Officer or Employee of the Town. "Officer or Employee" shall mean a member of the Town Council, whether presently or formerly serving, and his or her estate; a person appointed by the Town Council to any Town position, including without limitation, a board, commission, committee or to a paid position, whether presently or formerly serving, and his or her estate; any other officer, volunteer, or employee of the Town, whether presently or formerly serving, and his or her estate. "Town" shall mean the Town of Trophy Club, Texas, a home rule municipality. 15.03 Indemnification. Except as specifically provided in this Article, any Officer or Employee who is found and finally adjudged to be liable for the 2 payment of any claim for damages arising out of the course and scope of employment with or service for the Town shall be entitled to be indemnified for such damages to the extent permitted by law, together with any reasonable and necessary legal expenses incurred by such Officer or Employee in defending such claim, provided that the acts or omissions resulting in such liability were done in good faith and without malicious or felonious intent. For the purposes of this Article, any act or omission which occurs during a period of time in which the Officer or Employee is engaged in outside employment, outside personal or political activities, or is rendering contractual services to someone other than the Town, is not an act or omission arising out of the course and scope of employment with or service for the Town and therefore shall not be covered by the indemnification provided by this Article. Whether the acts were done in good faith, without malicious or felonious intent, and within the course and scope of employment with or service for the Town shall be determined by the Town Council, and such determination shall be final for the purposes of the representation and indemnity of this Article; provided, however, that in the event such representation and indemnity have been denied by the Town, upon a trial on the merits it is determined that the Officer or Employee was acting in good faith, without malicious or felonious intent and within the scope of employment with or service for the Town the indemnification hereunder shall be granted and reasonable legal expenses incurred in the defense of the claim reimbursed. The Town reserves the right to assert any defense and make any settlement of any claim or suit that it deems expedient. Notwithstanding the foregoing, the Town Council shall have the authority to deny indemnification provided under this Article to any Officer or Employee who has failed to successfully complete training required by state law, ordinance, Town policy or Town Council directive if the Council determines that the suit or claim would not have arisen had the Officer or Employee successfully completed the required training. 15.04 Representation in Actions. The Town shall have the right and duty to provide legal representation through the Town Attorney, or in its discretion through the selection. of outside legal counsel, to any Officer or Employee sued in connection with any claim for damages, other civil action, or alleged violation of civil rights with criminal sanctions, against such person arising out of the course and scope employment with or service for the Town, provided that such Officer or Employee may be entitled to indemnification as set forth in this section. Such legal representation shall be provided at no cost to the Officer or Employee, and any Officer or Employee may have his or her own counsel assist in the defense at the sole expense of the Officer or Employee. The Officer or Employee shall cooperate fully with the Town in 3 preparation and presentation of the case, and the failure to cooperate shall waive such Officer's or Employee's right to representation and indemnity under this section. 15.05 Town's Defenses. Nothing in this section shall be construed as waiving the Town's defense of governmental immunity to it or its Officers or Employees in any action brought against the Town or such Officer or Employee. For any suit or claim arising under the Texas Tort Claims Act, the indemnity provided by this section shall be limited to the statutory limits applicable to the Town provided in said Act, as amended. The Town shall not be liable for any settlement of any such claim or suit affected without its consent. 15.06 Notice. The provisions of this section shall apply only where the Town has been given notice of the action or claim brought against any Town Officer or Employee within ten (10) day of service of process or notice of such claim upon the Officer or Employee. 15.07 Disciplinary Actions. Nothing in this section shall prevent the Town from taking disciplinary action against any Officer or Employee for conduct defended or indemnified by the Town under this section, either before or after conclusion of the civil suit. 15.08 Suits by or on Behalf of the Town. Nothing in this section shall require the Town to indemnify any Officer or Employee for recoveries made against him or her in suits by or on behalf of the Town. The Town Council may, however, authorize the Town Attorney to represent any Officer or Employee in a suit brought by a taxpayer in behalf of the Town against the Officer or Employee. 15.09 Exclusions. A. Official Misconduct / Gross Negligence / Charter Exclusions. This indemnity shall in no event apply to or cover damages awarded against an employee that (1) arise from a cause of action for official misconduct; or (2) arise from a cause of action involving a willful or wrongful act or omission or an act or omission constituting gross negligence; or (3) arise out of the intentional or knowing violation of any penal statute or ordinance; or (4) arise out of any conduct determined by final judgment to be an act of fraud or to have been taken with the intent to deceive or defraud; or (5) arise out of any personal or private business of such Officer or Employee; or (6) for any willful or wrongful act or omission of such Officer or Employee; or (7) for any criminal misconduct or any other damages expressly excluded by the Town's Charter, Town ordinance, or state law. Iv B. Insurance Coverage. This indemnity shall in no event apply to or cover damages awarded against an Officer or Employee to the extent that the damages are recoverable under an insurance contract, insurance policy or self-insurance plan maintained by the Town. C. Punitive or Exemplary Damages. This indemnity shall in no event apply to or cover punitive or exemplary damages where such damages are not recoverable in law or equity against the Town." SECTION 3. SAVINGS AND REPEALER That this Ordinance shall be cumulative of all other Ordinances of the Town affecting indemnification and shall not repeal any of the provisions of such Ordinances except in those instances where provisions of those Ordinances are in direct conflict with the provisions of this Ordinance; whether such Ordinances are codified or uncodified, and all other provisions of the Ordinances of the Town of Trophy Club, codified or uncodified, not in conflict with the provisions of this Ordinance, shall remain in full force and effect. Notwithstanding the foregoing, any complaint, action, cause of action or claim which prior to the effective date of this Ordinance has been initiated or has arisen under or pursuant to such repealed Ordinance(s) shall continue to be governed by the provisions of that Ordinance and for that purpose the Ordinance shall be deemed to remain and continue in full force and effect. SECTION 4. SEVERABILITY If any section, article, paragraph, sentence, clause, phrase or word in this Ordinance, or application thereof to any person or circumstance, is held invalid or unconstitutional by a Court of competent jurisdiction, such holding shall not affect the validity of the remaining portions of the Ordinance, and the Town Council hereby declares it would have passed such remaining portions of the Ordinance despite such invalidity, which remaining portions shall remain in full force and effect. SECTION 5. ENGROSSMENT AND ENROLLMENT The Town Secretary of the Town of Trophy Club is hereby directed to engross and enroll this Ordinance in accordance with the Town Charter and by filing this Ordinance in the Ordinance records of the Town. SECTION 6. EFFECTIVE DATE This Ordinance shall take effect from and after its date of passage in accordance with law, and it is so ordained. 5 PASSED AND APPROVED by the Town Council of the Town of Trophy Club, Texas, this the 19th day of May, 2008. ATTEST: L V Town Secreta , Lisa Ramsey Town of Trophy Club, Texas [SEAL] Town Attorney, Patricia A. Adams Town of Trophy Club, Texas 4k� Mayor, Nick Sanders Town of Trophy Club, Texas reark)r1l 1.1