Sahli v. Woodbine Bd. of Educ., No. A-92-06 (N.J. Jan. 30, 2008)
The New Jersey Supreme Court has ruled that a school board’s attorney who acted as secretary pro tem during an executive session of the board was entitled to district indemnification in that capacity, but not in his capacity as the board’s attorney. In response to a special education teacher’s allegations about the district’s special education program, the Woodbine Board of Education (WBOE) convened an executive session during which its solicitor, Ronald Sahli, was appointed secretary pro tem. He again acted as secretary pro tem when the board held another executive session to discuss the charges with the teacher. After resigning her position, the teacher sued WBOE, its superintendent, and Mr. Sahli. Mr. Sahli requested that WBOE indemnify and defend him under its insurance policy. The request was denied on the ground that he was an independent contractor who did not meet the policy’s definition of an insured. Mr. Sahli then sued WBOE for reimbursement of his defense costs. A state trial court ruled in his favor based on a state law that “provides for indemnification in defense of a civil action for ‘any person holding any office, position or employment’ with a board of education.” However, the court found he was not entitled to coverage under the insurance policy because he did not qualify as an insured. The state appellate court reversed, holding that because Mr. Sahli was primarily acting as board solicitor, he was covered by neither the law nor the insurance policy.
The New Jersey Supreme Court affirmed in part and reversed in part. Rejecting Mr. Sahli’s claim for indemnification as board solicitor under state law, the court found that the law’s “focus was solely upon school board members and school employees, and those preparing for teaching careers, and the statute did not include a board solicitor as a person holding any office, position or employment of a school board.” As to his argument for indemnification in his capacity as secretary pro tem, the court pointed out that had “the regular secretary of the Board ... been sued because of the manner in which the minutes were drafted, the secretary would be covered by the statute as a person holding a ‘position’ of the Board.” The temporary nature of Mr. Sahli occupying the position did not alter the fact that he was standing in the secretary’s shoes. Turning to Mr. Sahli’s contention that the insurance carrier was required to reimburse him for his attorneys’ fees, the high court agreed that when he took on the volunteer role of secretary during the two executive sessions, he fell within the policy’s definition of “an insured” because that definition includes “volunteers while acting within the scope of their duties for a [m]ember.” “[T]o the extent plaintiff incurred legal fees in his capacity as secretary pro tem, both [state law] and the [insurance policy] afford him protection.”
Sahli v. Woodbine Bd. of Educ., No. A-92-06 (N.J. Jan. 30, 2008)