Opinion
DOCKET NO. A-0735-13T2
06-20-2014
BRENTON WHITTAKER, Plaintiff, v. ANTONIO M. RUA, Defendant, and COUNTY OF ESSEX, Defendant/Third-Party Plaintiff-Respondent, v. STATE OF NEW JERSEY, Third-Party Defendant-Appellant.
Lisa A. Puglisi, Assistant Attorney General, argued the cause for appellant (John J. Hoffman, Acting Attorney General, attorney; Ms. Puglisi, of counsel; Brian P. Wilson, Deputy Attorney General, on the briefs). Alan Ruddy, Assistant County Counsel, argued the cause for respondent (James R. Paganelli, Essex County Counsel, attorney; Mr. Ruddy, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Ostrer and Higbee.
On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-635-11.
Lisa A. Puglisi, Assistant Attorney General, argued the cause for appellant (John J. Hoffman, Acting Attorney General, attorney; Ms. Puglisi, of counsel; Brian P. Wilson, Deputy Attorney General, on the briefs).
Alan Ruddy, Assistant County Counsel, argued the cause for respondent (James R. Paganelli, Essex County Counsel, attorney; Mr. Ruddy, on the brief). PER CURIAM
In this appeal, we consider whether the Attorney General is required to defend and indemnify a county prosecutor's office employee for claims arising out of the negligent use of a county vehicle, when the employee is traveling on law enforcement business. We conclude that if the purpose of the employee's journey is to investigate or enforce the criminal laws, then the State's duty to defend and indemnify is implicated under Wright v. State, 169 N.J. 422, 456 (2001). However, the State's duty to defend is secondary to that of the county, which is separately required to insure, or self-insure, all vehicles owned or operated under its control. See N.J.S.A. 40A:10-3, -4. The State's duty to indemnify is likewise excess to the county's insurance obligation.
I.
According to the complaint of plaintiff Brenton Whittaker, defendant Antonio M. Rua, an Essex County Prosecutor's Office Detective, collided with Whittaker's vehicle on Springfield Avenue in Newark on March 4, 2009. Whittaker alleged that Rua drove carelessly and negligently. Whittaker named Rua, Essex County, and various fictitiously named defendants in a complaint filed on January 21, 2011.
Neither party included the complaint in the record on appeal, which unquestionably was a "part[] of the record . . . essential to the proper consideration of the issues." R. 2:6-1(a)(1)(I). We rely on a copy of the complaint that was included in a related motion previously filed with this court.
Rua requested a defense and indemnification from the State by letter to the Division of Law, Department of Law and Public Safety, dated March 1, 2011. He also addressed his request to the Essex County Counsel. Rua asserted that the "lawsuit [was] filed against me in my capacity as a law enforcement official in the Essex County Prosecutor's Office." However, he provided no further details of the purpose of his trip when he allegedly collided with Whittaker.
The Attorney General denied the request by letter dated March 31, 2011. The Attorney General found that Essex County both owned and insured Rua's vehicle. Citing Fiscor v. Atlantic County Board of Chosen Freeholders, 293 N.J. Super. 19 (App. Div.), certif. denied, 147 N.J. 263 (1996), the Attorney General concluded that the County was obliged to defend and indemnify Rua, and neither the Tort Claims Act (TCA), nor Wright, required a contrary result. The Attorney General also found that Essex County maintained liability insurance that covered the claim against Rua. Consequently, even if the TCA applied, the Attorney General was authorized to assert "the State's right under any appropriate insurance policy which requires the insurer to provide the defense." N.J.S.A. 59:10A-5.
The letter was actually addressed to the deputy chief assistant prosecutor and referred to her March 1, 2011 letter. It is unclear whether the prosecutor's office asked, separately from Rua, for defense and indemnification of its employee.
A copy of the police report of the collision, included in the related motion record, indicated that the Essex County Prosecutor owned the vehicle Rua was driving.
Neither Rua nor the County appealed the Attorney General's decision. Instead, on May 24, 2011, the County filed a motion before the Law Division in Whittaker's suit, seeking leave to file a third-party complaint against the State. The court granted the motion on June 21, 2011, and the County filed its third-party complaint. The pleading alleged, "To the best of defendant/third party plaintiff's information and belief, defendant, Antonio Rua acted pursuant to the criminal responsibilities of the Essex County Prosecutor's Office."
More than ninety days had elapsed since Rua and the County filed their answer, reportedly on February 15, 2011. See R. 4:8-1(a). Although the record on appeal does not include the motion, or supporting certifications, we rely on copies included in support of a motion filed earlier with our court.
The third-party complaint was signed on July 21, 2011. No filed copy is included in the record. Apparently, the third-party pleading was not property filed and served until November 2011.
The State moved to dismiss the third-party complaint on December 5, 2011. The State argued that the Appellate Division had exclusive jurisdiction over the Attorney General's decision denying defense and indemnification. The County cross-moved for an order to compel the defense and indemnification of Rua, and summary judgment dismissing the complaint against Essex County. The County asserted in its statement of undisputed material facts that Rua was "[e]n route to the Irvington Police Department pursuant to his duties as a homicide investigator." However, none of the various administrative reports cited in support of that assertion addressed the purpose of Rua's journey. In oral argument, the assistant county counsel reasserted the claim.
We rely here as well on submissions in connection with a related motion filed with our court. Neither party included the cross-motion papers in its record on appeal.
The court held that "the Appellate Division gets to make the call, unless they decline to do it." The court directed the parties to seek appellate review. The trial court declined to dismiss the third-party complaint, but also denied the County's motion. The court's order provided, "the motion appealing the Attorney General's denial of coverage is denied [because] appeals from action or non-action of an administrative agency belong[] with the Appellate Division."
The State moved for reconsideration. The State argued that because the court had found that the appellate court had jurisdiction over the review of the Attorney General's decision, the third-party complaint against it should be dismissed. However, the judge held that the third-party complaint should remain in place until the appellate court ruled. The court clarified that the County bore the burden to seek appellate review of the Attorney General's decision. In particular, the judge noted that the appellate court could delegate to the trial court the review of the Attorney General's decision. The trial court entered its order on April 13, 2012.
The County initially filed a notice of appeal from the Attorney General's March 2011 denial of representation, "[a]s per decision . . . of January 6[,] 2012 and April 13, 2012" of the trial court. The Appellate Division clerk advised the County that if it sought to appeal from the March 2011 Attorney General's decision, it needed to seek leave to file out of time. If the County sought review of the trial judge's orders, which appeared to be interlocutory, then leave to appeal was also required.
The County thereafter sought leave to appeal in a motion filed July 12, 2012. Attempting to distinguish Prado v. State, 186 N.J. 413 (2006), the County argued it was not obliged to appeal from the Attorney General's March 2011 denial because it did not "have privity to the original decision . . . which dealt with defendant Rua's individual request for representation." Although not set forth in its notice of motion, the County argued in its motion brief that the court should grant not only leave to appeal nunc pro tunc from the trial court's two orders, but also "leave nunc pro tunc from . . . the decision of the Attorney General's Office as the final agency decision."
A separate panel of our court denied the motion for leave to appeal. The panel also dismissed the appeal as interlocutory, in an order filed September 13, 2012.
The County filed a second motion in January 2013, renewing its request that this court decide the issue of Rua's defense. The panel denied the motion by order filed April 1, 2013.
In May 2013, the County filed a motion for summary judgment on its third-party complaint. The State cross-moved to transfer the matter to our court. None of the summary judgment papers are included in the record before us. The motion came before a different trial judge. In oral argument, the deputy attorney general argued that driving a car is not part of a county prosecutor detective's law enforcement function, even if interrogating a suspect at the detective's destination would be. The judge disagreed, and found that driving to another police station in the county of jurisdiction is a necessary part of the criminal investigative process. The judge also interpreted our prior orders as an indication that he should address the dispute between the County and the State. The court ordered the State to defend and indemnify Rua and dismissed the County as a party to Whittaker's suit. The court did not expressly deny the State's cross-motion for a transfer.
See R. 2:6-1(a)(1)(I) (stating that "[i]f the appeal is from a summary judgment, the appendix shall also include a statement of all items submitted to the court on the summary judgment motion and all such items shall be included in the appendix").
The State then filed a motion for leave to appeal, which another panel of our court granted. The State asks us to reverse the trial court's order. The State argues, procedurally, that the trial court lacked jurisdiction to review the Attorney General's decision denying a defense and indemnification, and the County is out of time to appeal the decision. If we reach the merits of the Attorney General's decision, the State argues that we should affirm.
II.
A.
Beginning with the State's procedural arguments, we agree the trial court lacked jurisdiction to review and override the Attorney General's decision denying Rua a defense and indemnification. Rule 2:2-3(a)(2) states that, subject to exceptions not relevant here, appeals from final decisions or actions of any state administrative agency or officer shall be taken to the Appellate Division. The Supreme Court declared in Prado, supra, 186 N.J. at 422-23, that, pursuant to the Rule, the Appellate Division has exclusive jurisdiction over the review of decisions by the Attorney General whether to defend and indemnify state employees under N.J.S.A. 59:10A-1 (duty to defend) and N.J.S.A. 59:10-1 (duty to indemnify), subject only to the appellate court's authority to transfer a case to the Law Division in exceptional circumstances.
Prado involved a request for a defense and indemnification by an employee of the Department of Labor. Id. at 415-16. The State denied the employee's request pursuant to N.J.S.A. 59:10A-2. Id. at 418-19. That section allows the Attorney General to refuse to defend in cases that involve acts or omissions outside the scope of employment, or arise from actual fraud, or willful misconduct or actual malice. N.J.S.A. 59:10A-2. The Court expressly rejected the appellate opinion in Prado, which found "'efficient judicial administration'" warranted an exception to Rule 2:2-3(a)(2). Prado, supra, 186 N.J. at 423-24.
We recognize that this case does not involve the application of the exceptions set forth in N.J.S.A. 59:10A-2. Instead, it involves the fundamental question whether, under Wright, Rua should be deemed a State employee. Nonetheless, the holding and reasoning in Prado applies with equal force here.
We therefore vacate the trial court's order compelling the State to defend and indemnify Rua. We also reverse the trial court's order dismissing the complaint against the County, which was predicated on the court's finding that Rua was acting as a State employee.
Although the State argues persuasively that only this court, and not the trial court, is empowered to review the Attorney General's decision, the State also contends that the Attorney General's decision should evade our review. The State urges that result because neither Rua nor the County timely filed an appeal from the March 31, 2011, decision. We disagree.
We recognize that the Attorney General's March 2011 decision was a final agency decision; and an appeal should have been filed within forty-five days, Rule 2:4-1(b), or within no more than seventy-five days, if an allowable thirty-day extension were granted under Rule 2:4-4(a). Instead of filing a timely appeal, the County filed its third-party complaint on May 24, 2011. Although that was slightly beyond the forty-five-day period for filing an appeal, it was within the thirty days by which the court may extend the filing period. Concededly, the filing was with the wrong forum, the trial court. The trial court also did not transfer the complaint pursuant to Rule 1:13-4(a), which would have been the correct procedure.
We do not question our co-panel's orders denying review. The County's case information statement, accompanying its May 2012 notice of appeal expressly stated that the County was appealing only the trial court's January 6, 2012 and April 13, 2012 orders — notwithstanding that the notice of appeal stated the County was appealing from the "State Agency decision entered on March 13, 2011 [a]s per decision . . . of January 6[,] 2012 and April 13, 2012." After the clerk inquired about the County's intention, the County followed with a motion seeking leave to appeal from the trial court decisions. The County's notice of motion did not formally seek leave to appeal out of time from the March 2011 Attorney General decision, despite the clerk's suggestion.
However, under similar circumstances, we have chosen not to preclude review if the matter was timely filed, albeit in the wrong forum. Mutschler v. N.J. Dep't of Envtl. Prot., 337 N.J. Super. 1, 10-11 (App. Div.), certif. denied, 168 N.J. 292 (2001); see also Bouie v. N.J. Dep't of Cmty. Affairs, 407 N.J. Super. 518, 526-27 (App. Div. 2009). In addition, the Attorney General's decision regarding the defense under N.J.S.A. 59:10A-1 involves "a matter of public importance and interest." In re Rodriguez, 423 N.J. Super. 440, 447 (App. Div. 2011) (reviewing Attorney General's obligation to represent correctional officers charged with using excessive force). "[W]e have also considered the fact that the right to seek judicial review of administrative action is of constitutional dimension." Id. at 448.
We do not condone the County's or Rua's failure to timely appeal from the Attorney General's decision, particularly in light of the clarity of the Court's directions in Prado. Nor do we intend to foreclose the possibility that a county or county employee may be foreclosed in the future. Nonetheless, given the public importance of the issues raised, we shall consider the merits of the Attorney General's decision denying Rua a defense and indemnification.
B.
We review the Attorney General's decision for an abuse of discretion, and must determine whether it is arbitrary, capricious, or unreasonable. Prado, supra, 186 N.J. at 427. Under the arbitrary, capricious, and unreasonable standard, our scope of review is guided by three major inquiries: (1) whether the agency administrator's decision followed relevant law; (2) whether substantial credible evidence in the record supported the decision; and (3) whether in applying the law to the facts, the administrative agency clearly erred. In re Stallworth, 208 N.J. 182, 194 (2011). While we defer to an agency's expertise and knowledge of the field, Greenwood v. State Police Training Center, 127 N.J. 500, 513 (1992), we are not bound by an agency's "determination of a strictly legal issue." Mayflower Sec. Co. v. Bureau of Sec, 64 N.J. 85, 93 (1973).
In Wright, Somerset County sought the Attorney General's defense and indemnification of its county prosecutor's office and its employees, in connection with a complaint against them alleging false arrest, invasion of privacy, malicious prosecution, false imprisonment, assault and battery, and other causes of action. Wright, supra, 169 N.J. at 430-31, 432. The Attorney General declined Somerset County's request. Id. at 432.
The Court held the State was obliged to defend and indemnify the county prosecutor's office and its subordinates under N.J.S.A. 59:10-1 and N.J.S.A. 59:10A-1. Id. at 453-56. The Court also held "the State may be held vicariously liable for the tortious actions of [county] prosecutors and their subordinates performed during the investigation, arrest, and prosecution" of a defendant. Id. at 453.
On the question of defense and indemnification, the Court deemed determinative "whether the function that the county prosecutors and their subordinates were performing during the alleged wrongdoing is a function that traditionally has been understood to be a State function and subject to State supervision in its execution." Id. at 454. Among the State functions subject to State supervision is "enforcement of the State's criminal laws." Id. at 455.
[W]hen county prosecutors and their subordinates are involved in the investigation and enforcement of the State's criminal laws, they perform a function that has traditionally been the responsibility of the State and for which the Attorney General is ultimately answerable. In our view, the State should be obligated to pay the county prosecutors and their subordinates' defense costs and to indemnify them if their alleged misconduct involved the State function of investigation and enforcement of the criminal laws.In other words, the defense and indemnification obligation applies to county prosecutorial employees when they are "sued on the basis of actions taken in the discharge of their law enforcement duties." Id. at 456.
[Ibid.]
The Court recognized that county prosecutorial employees have a "hybrid status." Id. at 454. They act as agents of the State when using "'tools lawfully available to them to combat crime,'" and they act as agents of the county when performing "'administrative tasks unrelated to their strictly prosecutorial functions, such as a decision whether to promote an investigator.'" Ibid. (quoting Coleman v. Kaye, 87 F.3d 1491, 1499 (3d Cir. 1996), cert. denied, 519 U.S. 1084, 117 S. Ct. 754, 136 L. Ed. 2d 691 (1997)).
The Attorney General bears the burden to establish grounds to refuse to defend under N.J.S.A. 59:10A-2. See Prado, supra, 186 N.J. at 427 (establishing "formulation [that] places the appropriate burden on the Attorney General to justify a departure from the general rule of representation"). The Court has not expressly assigned the burden as it relates to the issue of whether a county prosecutor's office employee is acting as an agent of the State. However, it would appear that the burden of production, at least, should rest on the employee, who is in a better position than the State to access information establishing the nature of his duties that triggered the claim. See J.E. ex rel. G.E. v. State, 131 N.J. 552, 569-70 (1993). An appellant also bears the burden of demonstrating that an agency decision was arbitrary, unreasonable, or capricious. Barone v. Dep't of Human Servs., 210 N.J. Super. 276, 285 (App. Div. 1986), aff'd, 107 N.J. 355 (1987).
Applying these principles, we cannot accept the State's argument that driving a vehicle "falls . . . within the scope of daily office activities" and is distinct from the investigation and enforcement of the criminal laws. Rather, the activity of driving a vehicle must be considered in light of the purpose of the journey. The investigation and enforcement of the criminal laws is implicated when a county prosecutor's office employee drives to a location to execute a search warrant, transports evidence from a crime scene or to and from a court, ferries a prisoner, or pursues a fugitive. Investigation and enforcement is also implicated when the employee travels to meet a witness, or a local law enforcement officer on a common investigation or prosecution.
However, the record includes no competent evidence of the purpose of Rua's travel on March 4, 2009. The County's unsupported assertion that Rua was driving to meet Irvington police regarding a homicide investigation does not suffice. Certainly, neither Rua nor the prosecutor's office presented competent evidence to the Attorney General in support of the original request for a defense and indemnification. Consequently, we are not prepared on this record to find the Attorney General erred, although we rely on a different rationale than the one urged by the State.
We may affirm an agency's decision for reasons other than those relied upon by the agency itself. See State v. Heisler, 422 N.J. Super. 399, 416 (App. Div. 2011).
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In addition, any obligation of the State to defend would be secondary to the defense obligation arising under mandatory insurance or self-insurance. The TCA provides that the Attorney General, when obliged to defend a State employee, may utilize his or her "own staff," employ outside counsel, or "assert[] the State's right under any appropriate insurance policy which requires the insurer to provide the defense." N.J.S.A. 59:10A-5.
Whether or not a county prosecutor's office employee is engaged in the investigation or enforcement of the criminal laws, the County is obliged to provide insurance coverage, if the vehicle is "owned by or under its control." N.J.S.A. 40A:10-3. The statute requires at least $5000 in property damage coverage; $50,000 in liability coverage for injury to one person; and $100,000 for injury to more than one person. Ibid. The same minimum limits apply to self-insured governmental entities. N.J.S.A. 40A:10-4.
Although these provisions do not expressly require a local unit to defend its employee, the requirement is implicit. Fiscor, supra, 293 N.J. Super. 19, is instructive. We held that Atlantic County was required to defend and indemnify its employee who, driving while intoxicated, caused an accident resulting in a fatality. Id. at 22, 32. The employee was later convicted of reckless manslaughter. Id. at 22. The duty to defend and indemnify arose from the county's obligation under N.J.S.A. 40A:10-3 and -4. Id. at 29. Therefore, the court rejected the county's argument that it was not required to indemnify under N.J.S.A. 59:10-4, because the employee engaged in a criminal act. Id. at 32.
If the Attorney General is obliged to defend, then the State is obliged to indemnify. Prado, supra, 186 N.J. at 424-25 (citing N.J.S.A. 59:10-1). The duty to indemnify follows, whether the defense is provided directly by the State, or through outside counsel, or insurer's counsel. Nonetheless, reading N.J.S.A. 59:10-1 in harmony with N.J.S.A. 40A:10-3 and -4, we conclude that the State's duty to indemnify must be secondary to that of mandated insurance coverage.
Therefore, we conclude that the State is not obliged to defend or indemnify Rua, so long as the mandatory coverage by the county is not exhausted. Finally, the State's obligation would depend on a showing by Rua, through competent evidence, that he was on his way to the Irvington Police Department, to further a homicide investigation.
Reversed and remanded. We do not retain jurisdiction.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF APPELLATE DIVIDION