Opinion
DOCKET NO. A-1826-13T2
06-19-2015
NEW JERSEY MANUFACTURERS INSURANCE COMPANY, Plaintiff-Respondent, v. COUNTY OF ESSEX, Defendant-Appellant, and ANTONIO M. RUA (for discovery purposes only), Defendant. ANTONIO RUA and GINA RUA, his wife, Plaintiffs, v. JOSE RAMIREZ and COUNTY OF ESSEX, Defendants.
Alan Ruddy, Assistant County Counsel, argued the cause for appellant (James R. Paganelli, Essex County Counsel, attorney; Mr. Ruddy, on the brief). Katrine L. Hyde argued the cause for respondent (Carroll McNulty & Kull LLC, attorneys; John P. Gilfillan and Ms. Hyde, on the brief). Lisa A. Puglisi, Assistant Attorney General, argued the cause for the Office of Attorney General (John J. Hoffman, Acting Attorney General, attorney; Ms. Puglisi, of counsel; Brian P. Wilson, Deputy Attorney General, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Ostrer and Tassini. On appeal from the State of New Jersey, Office of the Attorney General, and Superior Court of New Jersey, Law Division, Essex County, Docket Nos. L-2441-13 and L-4765-13. Alan Ruddy, Assistant County Counsel, argued the cause for appellant (James R. Paganelli, Essex County Counsel, attorney; Mr. Ruddy, on the brief). Katrine L. Hyde argued the cause for respondent (Carroll McNulty & Kull LLC, attorneys; John P. Gilfillan and Ms. Hyde, on the brief). Lisa A. Puglisi, Assistant Attorney General, argued the cause for the Office of Attorney General (John J. Hoffman, Acting Attorney General, attorney; Ms. Puglisi, of counsel; Brian P. Wilson, Deputy Attorney General, 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 his alleged negligent use of a county vehicle. We conclude that the State's duty to defend and indemnify is implicated under Wright v. State, 169 N.J. 422, 456 (2001) only when an employee's automobile use arose from the prosecutor's power to enforce the criminal law, and constituted an exercise of that power. See Lavezzi v. State, 219 N.J. 163, 178 (2014).
The undisputed facts of record indicate that defendant Jose Ramirez, a homicide lieutenant with the Essex County Prosecutor's Office (ECPO), was off-duty when he crashed his county car, injuring himself and his passenger, plaintiff Antonio M. Rua, an ECPO homicide detective. We therefore affirm the Attorney General's decision, denying the Essex County Counsel's request for a defense and indemnification of Ramirez.
I.
The following facts are undisputed for the purposes of this appeal. Ramirez and Rua worked their regular 4:00 p.m. to midnight shift on June 10, 2011. They left work together sometime before 12:30 a.m. on the 11th. Ramirez was driving his county-assigned vehicle, a 2006 Ford Crown Victoria. Ramirez stated that they may have dropped off paperwork in Newark. They then stopped at a Dunkin Donuts in Newark to get food and coffee, and proceeded to a cigar lounge in Belleville. Rua stated they were celebrating the closing of a homicide case. Other ECPO employees met them at the Belleville lounge.
Ramirez and Rua entered the lounge sometime around 1:00 a.m. Ramirez stated that while there, he drank two eight-ounce rum-and-Cokes. The first one consisted of one-third rum; the next one contained less rum. Sometime after 2:30 a.m., Ramirez and Rua left the cigar lounge. They took with them an open bottle of rum and a bottle of Coke. They drove to a restaurant in Bloomfield to see if Rua could get something to eat, but the kitchen was closed.
Ramirez was driving Rua home, heading west on Route 22 in Union, when the collision occurred. He alleged another driver cut him off. Ramirez alleged he swerved to avoid a collision, lost control of his vehicle, and skidded off the highway, where he crashed into a steel beam. Rua and Ramirez both suffered injuries requiring medical treatment. Ramirez claimed to have seen two individuals running from the crash site, getting into a car, and fleeing. A blood draw at the hospital where Ramirez was taken for treatment indicated he had a blood alcohol level of .07.
Rua filed a complaint against Ramirez and Essex County, and various fictitious parties, alleging that Ramirez, while acting as an agent of the County, negligently operated his vehicle, causing Rua injuries. Ramirez sought coverage from the County, and from his personal automobile insurer, New Jersey Manufacturers Insurance Company (NJM). Ramirez also sought first party coverage from NJM, asserting that the accident was caused by a phantom vehicle.
NJM filed a declaratory judgment action against the County and Rua, seeking a declaration regarding its obligation to defend and indemnify Ramirez in the Rua action. In the Rua action, the County filed a third-party complaint against the State. In October 2013, the trial court consolidated the declaratory judgment action and the Rua action, for the purposes of discovery.
Separate from the County's third-party complaint, the ECPO, by its executive assistant prosecutor, and Ramirez, in his individual capacity, requested the State's defense and indemnification, by letter dated July 19, 2013. The ECPO and Ramirez simultaneously requested a defense and indemnification from the County.
By letter dated October 9, 2013, from Assistant Attorney General (AAG) Lisa A. Puglisi, the Attorney General denied the defense and indemnification request. The Attorney General did so because Ramirez "was off-duty and not engaged in a 'classic law enforcement activity.'" Citing Wright, supra, 169 N.J. at 444, the Attorney General wrote that prosecutor's office employees hold a hybrid status: when they engage in enforcement and investigative functions, they act as officers of the State, but when they are performing administrative functions, they act on behalf of the county. Only in the former case are they entitled to a defense and indemnification from the State. The Attorney General reviewed the facts here, which we have already recited, and concluded that Ramirez was not engaged in a law enforcement or investigative function when he crashed the county car with Rua on board.
Apparently, the assistant county counsel also sent a request for defense and indemnification to the Attorney General on July 23, 2013. AAG Puglisi's letter was addressed to the assistant county counsel and referred to his letter (although describing it as dated July 25) and not the letters from Ramirez and the executive assistant prosecutor.
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 also held that, irrespective of the State's obligations under the Tort Claims Act (TCA), N.J.S.A. 59:1-1 to 12-3, the County was required to insure and defend, based on its statutory obligation to insure, or self-insure, all county-owned vehicles.
The County appealed from the Attorney General's final agency action. The County's sole point on appeal is that a prosecutor's office homicide lieutenant should be considered a State and not a county employee for purposes of defense and indemnification under Wright. The County argues that Ramirez was not performing administrative functions.
In the meantime, the trial court stayed all further proceedings in the underlying actions until we resolve this appeal.
II.
We apply a deferential standard of review to the Attorney General's decision, and must determine whether it is arbitrary, capricious, or unreasonable. Lavezzi, supra, 219 N.J. at 171-72 (reviewing a request for defense and indemnification); Prado v. State, 186 N.J. 413, 427 (2006) (same). Under the arbitrary, capricious, and unreasonable standard, our scope of review is guided by three major inquiries: (1) whether the agency'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); see also Lavezzi, supra, 219 N.J. at 171-72. 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). To the extent that the Attorney General's denial of a defense or indemnification constitutes a legal question, we review it de novo. Lavezzi, supra, 219 N.J. at 172.
In Wright, Somerset County sought the Attorney General's defense and indemnification of its county prosecutor's office and its employees, regarding 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 430-32. The Attorney General declined Somerset County's request. Id. at 432.
The Court held the State was obliged, under N.J.S.A. 59:10-1 and N.J.S.A. 59:10A-1, to defend and indemnify the county prosecutor's office and its subordinates. Wright, supra, 169 N.J. at 453-56. N.J.S.A. 59:10A-1 states the Attorney General shall, if requested, "provide for the defense of any action brought against such State employee . . . on account of an act or omission in the scope of his employment." The Court stated, "[T]he 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. Wright, supra, 169 N.J. at 453.
The TCA relieves the Attorney General of the defense obligation if, among other things, "the act or omission [of the State employee] was not within the scope of employment." N.J.S.A. 59:10A-2(a). Although Ramirez was off-duty when he was involved in the collision, the State does not rely on this provision, arguing more narrowly that Ramirez was not involved in a law enforcement function, and therefore, was not acting as a State employee. Consequently, we do not address whether the Attorney General was empowered to avoid a defense based on the "scope of employment" exception.
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 Court recently applied the principles enunciated in Wright in reviewing the Attorney General's denial of a defense or indemnification to Essex County, which had been sued for damaging property seized in the execution of a search warrant, and subsequently stored for an extended period of time. Lavezzi, supra, 219 N.J. at 169. The record did not reflect when or how the property was damaged. Id. at 178-79. The Court summarized Wright's holding "that when county prosecutors investigate criminal activity and enforce the law, 'they are discharging a State responsibility that the Legislature has delegated to the county prosecutors' in N.J.S.A. 2A:158-4, 'subject to the Attorney General's [authority] to supersede' pursuant to N.J.S.A. 52:17B-106." Lavezzi, supra, 219 N.J. at 175.
The Court held the Attorney General's defense and indemnification obligation was not implicated merely by the presence of a nexus between the underlying liability and law enforcement. Id. at 177-78. Thus, the Court approved the holding in Courier News v. Hunterdon County Prosecutor's Office, 378 N.J. Super. 539 (App. Div. 2005), wherein we denied a claim that the State bear the responsibility for a counsel fee award under the Open Public Records Act (OPRA), N.J.S.A. 47:1A-1 to - 13. Hunterdon County, contrary to OPRA, withheld a 9-1-1 tape that related to law enforcement. As the Court explained, "the conduct by the prosecutor's office that prompted the litigation was the refusal to produce the tape, which was not a law enforcement function." Lavezzi, supra, 219 N.J. at 177.
The Court articulated the following decision rule:
[T]he test is whether the act or omission of the county's prosecutor's office and its employees that gave rise to the potential liability derived from the prosecutor's power to enforce the criminal law, and constituted an exercise of that power. See Wright, supra, 169 N.J. at 454 (focusing "on whether the function that the county prosecutors and their subordinates were performing during the alleged wrongdoing [was] a function that traditionally has been understood to be a State function and subject to State supervision in its execution").
[Lavezzi, supra, 219 N.J. at 178.]
Applying that test, the Court held that the Attorney General was responsible for defending the property damage claim because the "retention of plaintiffs' property, either intentionally or by oversight, derives from and directly relates to the law enforcement function that the Prosecutor's Office fulfilled when it seized and retained the evidence." Id. at 179. The Court added that if it was later demonstrated that the property was stored in a facility at the county's direction, and the damage "resulted from the condition or maintenance of that facility," then the State could seek reimbursement of its defense and indemnification costs. Id. at 180.
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 the "formulation [that] places the appropriate burden on the Attorney General to justify a departure from the general rule of representation"); see also Lavezzi, supra, 219 N.J. at 173. On the other hand, an appellant 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); see also Lavezzi, supra, 219 N.J. at 179 (referring to county's burden to demonstrate that the Attorney General's determination was arbitrary, capricious, or unreasonable).
III.
Applying these principles, we conclude that we must view the activity of driving a county vehicle in light of the purpose of the journey. We are persuaded that Ramirez was not performing a law enforcement function so as to trigger the State's defense and indemnification obligation. Applying the Lavezzi test, Ramirez's off-duty activities did not "derive[] from the prosecutor's power to enforce the criminal law" nor did they "constitute[] an exercise of that power." See Lavezzi, supra, 219 N.J. at 178.
The investigation and enforcement of 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. There is nothing in the record that indicates that Ramirez was performing a law enforcement function around 4:30 a.m., when he was off-duty, and was driving a fellow officer home after a night of drinking and celebrating.
The County asserts that Ramirez was provided a county vehicle so that he would be available at any time to respond to an emergent situation. There was no competent evidence in the record to support a claim that Ramirez was, essentially, on call at all times, or at least during the early morning hours of June 11, 2011. Moreover, given Ramirez's apparent level of intoxication, it is questionable whether Ramirez was in fact ready and able to perform if called.
Inasmuch as we hold that the State has no defense or indemnification responsibility, we need not address whether the State's responsibility would nonetheless be secondary to the defense obligation arising under mandatory insurance or self-insurance. See N.J.S.A. 59:10A-5 (stating that the Attorney General, when obliged to defend a State employee, may "assert[] the State's right under any appropriate insurance policy which requires the insurer to provide the defense"); see also N.J.S.A. 40A:10-3 (stating each county is obliged to insure or self-insure "the operators of all motor vehicles, equipment and apparatus owned by or under its control"). --------
Therefore, we conclude that the State is not obliged to defend or indemnify Ramirez or the County, as the undisputed evidence demonstrates that he was not performing a law enforcement function.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION