79-516. School board; power to indemnify; liability insurance; purchase.

(1) For purposes of this section, (a) school board has the definition found in section 79-101 and (b) school district has the definition found in such section.

(2) A school district may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, other than an action by or in the right of the school district, by reason of the fact that such person is or was a school board member or an officer, employee, or agent of the school district, against expenses, including attorney's fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit, or proceeding if such person acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the school district and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, or conviction or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that such person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the school district and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.

(3) A school district may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the school district to procure a judgment in its favor by reason of the fact that such person is or was a school board member or an officer, employee, or agent of the school district, against expenses, including attorney's fees, actually and reasonably incurred by him or her in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the school district, except that no indemnification shall be made in respect of any claim, issue, or matter as to which such person was adjudged to be liable for negligence or misconduct in the performance of his or her duty to the school district unless and only to the extent that the court in which such action or suit was brought determines upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court deems proper.

(4) To the extent that a school board member or an officer, employee, or agent of a school district has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to in subsections (2) and (3) of this section or in defense of any claim, issue, or matter in such action, suit, or proceeding, he or she shall be indemnified against expenses, including attorney's fees, actually and reasonably incurred by him or her in connection with such defense.

(5) Any indemnification under such subsections, unless ordered by a court, shall be made by the school district only as authorized in the specific case upon a determination that indemnification of the school board member or the officer, employee, or agent of the school district is proper in the circumstances because he or she has met the applicable standard of conduct set forth in such subsections. Such determination shall be made by the school board members by a majority vote of a quorum consisting of school board members who were not parties to such action, suit, or proceeding or, if such a quorum is not obtainable or even if obtainable a quorum of disinterested board members so directs, by independent legal counsel in a written opinion.

(6) Expenses incurred in defending a civil or criminal action, suit, or proceeding may be paid by the school district in advance of the final disposition of such action, suit, or proceeding as authorized in the manner provided in subsection (5) of this section upon receipt of an undertaking by or on behalf of the school board member or the officer, employee, or agent of the school district to repay such amount unless it is ultimately determined that he or she is entitled to be indemnified by the school district as authorized in this section.

(7) The indemnification provided by this section shall not be deemed exclusive of any other rights to which the person indemnified may be entitled under any agreement, either as to action in his or her official capacity or as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a school board member or an officer, employee, or agent of the school district and shall inure to the benefit of the heirs, executors, and administrators of such person.

(8) A school district may purchase and maintain insurance on behalf of any person who is or was a school board member or an officer, employee, or agent of the school district against any liability asserted against him or her and incurred by him or her in any such capacity or arising out of his or her status as such, whether or not the school district would have the power to indemnify him or her against such liability under this section.

Source

Annotations

The school district is not required to indemnify its board members and it may not do so if the action against the board members is by or in the right of the school district. School districts have the authority to purchase insurance. Sandy Creek P.S. v. St. Paul Surplus Lines Ins. Co., 222 Neb. 424, 384 N.W.2d 279 (1986).