New Jersey AG’s Office Can’t Use County’s Insurance to Cover Tort Judgment

The New Jersey Attorney General’s Office can’t rely on a county’s insurance to cover judgment against a public entity facing tort claims, New Jersey’s Appellate Division has ruled.

This comes after an Ocean County Prosecutor’s Office (OCPO) detective was driving a county vehicle and rear-ended a van carrying passengers in May 2016. One of the passengers, Keith McQuade-Sabat, was allegedly injured in the accident and sued the detective, the OCPO and Ocean County, among others, for negligence. At the time of the accident, the detective was acting in her capacity as part of the OCPO homicide squad, according to the Appellate Division opinion.

A couple of years later in May 2018, county counsel wrote to the New Jersey Attorney General requesting that the state defend and indemnify the OCPO and the detective. A deputy attorney general responded that the attorney general would take over defense and indemnification in this case.

In December 2019, however, a deputy attorney general advised county counsel that the state’s obligations to defend and indemnify the OCPO and detective were secondary to the county’s mandatory insurance obligation. Under New Jersey law, counties are required to maintain insurance for the operators of all motor vehicles and equipment owned by or under the counties’ control. Ocean County was self-insured for up to $250,000, with an excess policy covering additional exposure.

According to court documents, county counsel did not respond to this initial advisory. In January 2020, the deputy attorney general called county counsel to reiterate that current case law indicates the county’s mandatory insurance coverage could be utilized for any portion of a judgment or a settlement.

The deputy attorney general later sent a follow-up letter in February 2020, and county counsel did not respond to the letter. The state of New Jersey then filed a verified complaint and an order to show cause for a declaratory judgment. It argued that under the New Jersey Tort Claims Act (TCA), it was entitled to use any appropriate insurance policy to defend and indemnify Ocean County in this matter.

The state of New Jersey claimed that because the county was required to have insurance, its self-insurance and excess policies were primarily responsible for any judgment or settlement in the tort suit. The motion judge, however, issued a written order denying the application and dismissing the state’s complaint in April 2020. The state of New Jersey appealed the order, and the matter was taken up by the Appellate Division.

The Appellate Division found that while the TCA permits the attorney general to designate an attorney from their own staff or by employing other counsel, it does not permit the state to designate who bears the costs of indemnity. This means that if the state is obligated to defend, regardless of who is designated to defend, the state also bears the corresponding cost of indemnification.

With this in mind, the Appellate Division upheld the motion judge’s decision and ruled that the state of New Jersey is obligated to defend and indemnify the OCPO and its detective without utilizing Ocean County’s insurance.

The case is State of New Jersey v. County of Ocean.

Topics New Jersey