                        NOT FOR PUBLICATION WITHOUT THE
                      APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court."
      Although it is posted on the internet, this opinion is binding only on the
         parties in the case and its use in other cases is limited. R.1:36-3.



                                       SUPERIOR COURT OF NEW JERSEY
                                       APPELLATE DIVISION
                                       DOCKET NO. A-3150-14T3

ESMAY PARCHMENT,

        Plaintiff-Appellant,

v.

CITY OF EAST ORANGE,

        Defendant-Respondent,

and

INSERVCO INSURANCE SERVICES,
INC. and PENN NATIONAL
INSURANCE,

     Defendants.
___________________________________

              Argued October 25, 2016 – Decided July 17, 2017

              Before Judges Ostrer and Vernoia.

              On appeal from the Superior Court of New
              Jersey, Law Division, Essex County, Docket No.
              L-182-12.

              Michael J.      Fioretti    argued    the   cause    for
              appellant.

              Littie E. Rau argued the cause for respondent
              (Ruderman, Horn & Esmerado, P.C., attorneys;
              Ms. Rau, of counsel and on the brief).

PER CURIAM
     The primary issue in this appeal is whether principles of

estoppel require a municipality to indemnify two of its police

officers for judgments against them for violating a citizen's

civil rights.      The municipality abided by its obligations under

its collective negotiations agreement and N.J.S.A. 40A:4-155 to

provide a means of defense for the officers, but did not expressly

disclaim liability for indemnification.        We conclude no duty to

indemnify arises.      We therefore affirm the trial court's January

28, 2015 order granting summary judgment to defendant City of East

Orange,     and   dismissing   the   declaratory   judgment   action    of

plaintiff Esmay Parchment, who obtained a judgment against the

City's officers and sought indemnification of the officers from

the City.

                                     I.

     The facts are largely undisputed.         Two East Orange police

officers used excessive force when they arrested plaintiff in her

home.     She filed a complaint against the two arresting officers,

William Flood and Kim Johnson, as well as the City, asserting

violations of her constitutional rights under 42 U.S.C.A. §§ 1983

and 1985.1


1
 Plaintiff also named two other officers, who were later dismissed
from the lawsuit.



                                     2                           A-3150-14T3
     Pursuant   to   its   collective     negotiations    agreement

(Agreement)2 with the East Orange Fraternal Order of Police (FOP),

the City selected separate counsel to represent and defend each

officer in the civil rights litigation.   The relevant language in

the Agreement that obligated the City to provide representation

for the officers stated:

          Whenever an Employee is a defendant in any
          action or legal proceeding arising out of and
          directly related to the lawful exercise of
          police powers in furtherance of his/her
          official duties, the City, pursuant to
          N.J.S.A. 40A:14-155, shall provide such
          officer with the necessary means for the
          defense of such action or proceeding . . . .

     The City did not participate in a municipal joint insurance

fund, nor did it have applicable commercial insurance (although

it had excess coverage that was not implicated).     The City paid

for the officers' representation out of its coffers and hired

separate counsel for itself.   However, it did not expressly advise

the officers that it would disclaim liability for any judgment

obtained against them.

     Before trial, the City obtained a dismissal with prejudice,

based on Monell v. Department of Social Services, 436 U.S. 658,



2
 The City entered separate agreements with the FOP for the periods
of July 1, 1999 through June 30, 2006 and July 1, 2006 through
June 30, 2010; however, the provision relating to legal
representation was substantively unchanged.

                                 3                          A-3150-14T3
98 S. Ct. 2018, 56 L. Ed. 2d 611 (1978).      About a year later, a

jury returned a verdict in plaintiff's favor, finding that Flood

and Johnson "falsely arrest[ed] and/or imprison[ed]" her and used

excessive   force.   The    jury   awarded   plaintiff   $300,000    in

compensatory damages.3     The court also assessed attorneys' fees

and costs in the amount of $27,190.

     After obtaining the judgment, plaintiff served the City with

a demand for payment. The City refused, stating it was not legally

responsible for the officers' actions or the judgment against

them.   The present litigation followed.        Plaintiff sought a

declaratory judgment that the City was obligated to indemnify

Flood and Johnson (Count Two).4        She also sought relief, as a

third-party beneficiary, based on the City's alleged breach of the

Agreement (Count Three).    Finally, she alleged the City violated

its duty of good faith (Count Four).




3
 Although plaintiff had alleged in her complaint that the officers
acted willfully, "outside the scope of [their] jurisdiction and
without authorization of law," the jury was not asked to render
an express verdict on this issue.
4
  In Count One, plaintiff sought declaratory relief against
Inservco Insurance Services, Inc. and Penn National Insurance,
which plaintiff alleged provided excess liability coverage for
losses over $300,000.      However, Inservco was a third-party
administrator, not an insurer; and the City had no pertinent
insurance coverage for plaintiff's claim. Count One was dismissed
and is not the subject of this appeal.

                                   4                          A-3150-14T3
     Thereafter, Flood assigned to plaintiff any claim he had to

indemnification from the City; in return, plaintiff promised not

to take any further action to collect her judgment against him.

Flood certified that the City had declined to indemnify him for

the adverse judgment, "claiming that the acts were outside the

scope of [his] employment and/or malicious, criminal or amounted

to willful misconduct." Flood stated the City assigned him counsel

in the case, but "never indicated that they were defending [him]

. . . with a reservation of their rights to deny indemnification

at a later date."    Plaintiff did not obtain a similar assignment

of rights from Johnson.

     After a period of discovery, the City moved for summary

judgment on all counts. Plaintiff cross-moved for summary judgment

on Count Two.    The parties did not dispute the facts we have set

forth above.    The City did dispute plaintiff's allegation that it

offered $25,000 on the eve of trial to settle the case against the

officers.   The City also disputed plaintiff's allegation that the

City made "[l]itigation decisions, such as settlement and terms"

related to the officers' defense.

     In a written opinion, Judge James S. Rothschild, Jr. granted

the City's motion and denied plaintiff's cross-motion.    The court

rejected plaintiff's argument, based on Griggs v. Bertram, 88 N.J.

347 (1982), that the City was estopped from disclaiming liability

                                  5                         A-3150-14T3
to indemnify the officers after it agreed to defend them.               The

judge held that Griggs did not apply to the City, which was a

public entity, not an insurer.      The City had not agreed to insure

its employees, nor had it obtained insurance from an outside

insurer or participated in a joint insurance fund.              The court

noted there was no proof the officers' attorneys disserved the

officers' interests and favored the City.

      Citing N.J.S.A. 40A:10-1, Judge Rothschild explained that the

City was permitted, but not required to carry insurance for its

employees; consequently, the City was not obligated to indemnify

the officers.      The court noted that the Agreement required the

City to provide a defense, but was silent on a duty to indemnify

or pay the costs of an adverse judgment.             Likewise, N.J.S.A.

40A:14-155 obligated the City to pay defense costs, but imposed

no   duty   to   indemnify.   The   court   noted   this   limitation   was

recognized in City Council of Elizabeth v. Fumero, 143 N.J. Super.

275, 284 (Law Div. 1976) and Hurley v. Atlantic City Police

Department, 944 F. Supp. 371, 375 (D.N.J. 1996).           The court thus

dismissed plaintiff's declaratory judgment and breach of contract

claims.

      The court also found no basis to hold the City to the same

duty of good faith standard imposed on insurers.                The court

highlighted that most of the alleged acts of bad faith consisted

                                    6                             A-3150-14T3
of the refusal to indemnify — which the court found the City was

not obligated to do — and the alleged breach of the Agreement —

which breach the court found did not exist.    Therefore, the court

concluded the City did not act in bad faith. This appeal followed.

                                 II.

     We review the trial court's grant of summary judgment de

novo, applying the same standard as the trial court.       Henry v.

N.J. Dep't of Human Servs., 204 N.J. 320, 330 (2010). We "consider

whether the competent evidential materials presented, when viewed

in the light most favorable to the non-moving party, are sufficient

to permit a rational factfinder to resolve the alleged disputed

issue in favor of the non-moving party."     Brill v. Guardian Life

Ins. Co. of Am., 142 N.J. 520, 540 (1995).

     On appeal, plaintiff has jettisoned her breach of contract

claim.     That is not surprising.     As Judge Rothschild cogently

reviewed, the Agreement plainly imposes only a duty to provide a

defense.    The same is true of N.J.S.A. 40A:14-155.5


5
  Likewise, we note that the Tort Claims Act imposes no duty to
indemnify; rather, it grants a municipality the option to indemnify
its employees. See N.J.S.A. 59:10-4 ("Local public entities are
hereby empowered to indemnify local public employees consistent
with the provisions of this act."). The Act also imposes special
conditions upon indemnification for punitive or exemplary awards.
See id. (stating that a municipality may do so only if the
governing body finds "the acts committed by the employee upon
which the damages are based did not constitute actual fraud, actual
malice, willful misconduct or an intentional wrong.").

                                  7                         A-3150-14T3
    Instead, plaintiff argues, as she did before the trial court,

that the City was equitably estopped from denying responsibility

for the judgment against the officers.     Plaintiff also contends

the City breached a duty to act in good faith, which compelled it

to indemnify the officers.   We reject both arguments.

                                A.

    At the outset, we pause to address the difference between

self-insurance and no insurance — inasmuch as plaintiff refers to

the City as a self-insured entity and contends that, as such, it

was obligated to indemnify the officers.     As has been observed,

the term "self-insurance" is ambiguous.    1A Couch on Insurance 3d

§ 10:1, at 10-3 (2010).      In some respects, "so-called self-

insurance is not insurance at all.        It is the antithesis of

insurance."   Am. Nurses Ass'n v. Passaic Gen. Hosp., 192 N.J.

Super. 486, 491 (App. Div.), aff'd in part and rev'd in part, 98

N.J. 83 (1984).

         The essence of an insurance contract is the
         shifting of the risk of loss from the insured
         to the insurer.       The essence of self-
         insurance, a term of colloquial currency
         rather than of precise legal meaning, is the
         retention of the risk of loss by the one upon
         whom it is directly imposed by law or
         contract.

         [Ibid.]




                                8                           A-3150-14T3
     However, under some circumstances, "self-insurance" is more

than "no insurance."

            In a sense, all risks not otherwise insured
            are "self-insured."    However, many formal
            procedures exist whereby an entity can become
            recognized as a self-insurer.    This is most
            commonly accomplished by filing a bond or
            furnishing another form of proof of the
            ability to pay amounts for which the self-
            insurer may become liable.       To meet the
            conceptual definition of self-insurance, an
            entity would have to engage in the same sorts
            of underwriting procedures that insurance
            companies   employ.      These    underwriting
            procedures include: (1) estimating likely
            losses during the period; (2) setting up a
            mechanism to create sufficient reserves to
            meet those losses as they occur; and (3)
            arranging for commercial insurance for losses
            that are beyond a preset amount.

            [Couch, supra, § 10:1, at 10-3 to -4.]

     Under various legislative schemes, New Jersey has formally

recognized qualified entities as self-insurers.      For example, an

owner or lessor of a fleet of twenty-five or more vehicles may

comply with the compulsory automobile insurance law by obtaining

a certificate of self-insurance, provided that the Commissioner

of Insurance is satisfied with the owner's or lessor's financial

standing.    See N.J.S.A. 39:6-52.    Under that particular scheme,

"a certificate of self-insurance is the functional equivalent of

a policy of insurance."    Ryder/P.I.E. Nationwide, Inc. v. Harbor

Bay Corp., 119 N.J. 402, 411 (1990).   Notably, public entities are


                                  9                          A-3150-14T3
not required to obtain insurance or self-insure, but may "go bare."

N.J. Mfrs. Ins. Co. v. Hardy, 178 N.J. 327, 336 (2004); Ross v.

Transp. of N.J., 114 N.J. 134, 139 (1989).

      Employers         may    also       self-insure     mandatory      workers'

compensation liability, see N.J.S.A. 34:15-77, by complying with

its "stringent self-insurance requirements."                Romanny v. Stanley

Baldino Constr. Co., 142 N.J. 576, 580 (1995); see also In re

Pathmark Stores, Inc., 367 N.J. Super. 50, 54-55 (App. Div. 2004).

Furthermore, municipalities may join together to establish joint

insurance funds.         N.J.S.A. 40A:10-36.         Although the fund is not

an   insurance    company      or    an   insurer,   N.J.S.A.    40A:10-48,    its

"activities are subject to like regulation by the Commissioner of

Insurance, and are designed to spread the self-insurance risks of

municipal governments."         Shapiro v. Middlesex Cty. Mun. Joint Ins.

Fund, 307 N.J. Super. 453, 458 (App. Div.), certif. denied, 154

N.J. 607 (1998).

      Here, the City is not a formal self-insurer in the foregoing

sense.   It has not assumed the responsibility, or demonstrated to

regulators the capacity, to pay claims as do self-insurers under

the compulsory automobile insurance and workers' compensation

laws.    The     City    has   not    agreed   to    indemnify   its   employees.

Instead, it has decided to "go bare" — obtaining no commercial



                                          10                              A-3150-14T3
insurance coverage — for its own potential liability, at least for

amounts below which excess coverage is triggered.

      We recognize an entity's exposure to losses below the point

at which its insurer becomes liable under an excess policy is

often denominated as a "self-insured retention."                  However, absent

some other policy to cover those losses, it may be more accurate

to say the entity is uninsured.              In American Nurses Association

v. Passaic General Hospital, 98 N.J. 83, 88-90 (1984), a hospital

had   a   "self-insured    sum"    of    $100,000,       before    its   liability

insurance, which covered its nurses, would be implicated.                  A nurse

was separately covered by her own policy, which made "other

insurance" primary.     Id. at 86-87.         Her insurer contended that the

hospital's "self-insured sum" qualified as "other insurance."                   Id.

at 88-89.     The Court disagreed.            Noting that the "tendency has

been not to regard self-insurance as 'insurance,'" the Court

concluded that nothing in the hospital's policy required it to pay

the first $100,000 of a judgment against the nurse, nor was the

hospital otherwise obligated to pay the first $100,000.                    Id. at

89. Furthermore, the hospital's decision to investigate the claim,

which arose out of its insurance package, did not compel it to pay

the first $100,000.       Id. at 90.

      Against   this   backdrop,    we       turn   to   plaintiff's     principal

argument: that like an insurer, the City as a "self-insured entity"

                                        11                                 A-3150-14T3
should be estopped from disclaiming liability for indemnifying the

officers,    since      it    provided    the    officers      a   defense   without

expressly reserving its right to disclaim liability.                      Plaintiff

relies heavily on Griggs, supra.               Her reliance is misplaced.

      In Griggs, supra, an insured teenager injured another teen

in a fight.       88 N.J. at 353.        After the insured promptly notified

the   insurer,     it   immediately      investigated         by   interviewing   the

insured, who admitted he intentionally hit the other teenager.

Ibid.    Although the policy excluded intentional torts, the insurer

did not disclaim liability nor investigate further.                     Id. at 353-

54.     Seventeen months later, the injured teen sued the insured.

Id. at 353.       Upon receiving the complaint, the insurer disclaimed

coverage, relying on the intentional tort exclusion.                    Id. at 354.

The     insured     subsequently         settled        the    case    and    sought

indemnification from the insurer.               Ibid.

      The Court held the insurer was estopped from denying coverage,

noting that it had previously found that an insurer's actual

control of an investigation or defense triggers an insured's

justifiable reliance that the insurer will be responsible for any

judgment.     Id. at 356 (citing Merchs. Indem. Corp. v. Eggleston,

37 N.J. 114, 127 (1962)).            "The insured's justifiable reliance

arises from the insurer's contractual right to control the defense

under the policy."           Ibid.

                                          12                                 A-3150-14T3
       Notably, in Griggs, the insurer had "neither assumed the

actual control of a case nor undertaken the preparation of any

defense on behalf of the insured . . . ."       Id. at 357.     However,

the policy authorized the insurer to control an investigation and

defense. Id. at 359-60. It also required the insured to cooperate

with the insurer in any lawsuit.       Id. at 359.    The insured was to

"refrain from 'voluntarily . . . assum[ing] any obligation,'" and

to "avoid independent action which will contravene any of the

essential terms of the policy" or otherwise "interfere with the

insurer's paramount right to control the case . . . ."            Id. at

359-60.

       In view of the insurer's authority and the insured's duty not

to "act for itself under the policy," the insured justifiably

relied upon the insurer's actions to expect coverage.         Id. at 362.

Absent a clear disclaimer or other conduct that clearly repudiated

coverage, "the insured [was] justified in believing the insurer

[was] vigorously exercising these rights in a manner which [would]

fully protect the insured's interest under the policy."               Ibid.

Furthermore, prejudice arising from the reliance is presumed,

since the "course cannot be rerun."         Ibid. (quoting Eggleston,

supra, 37 N.J. at 129 (internal quotation marks omitted)).

       For several reasons, Griggs provides no grounds to estop the

City   from   denying   indemnification.     First,    an   insured   must

                                  13                              A-3150-14T3
reasonably    believe       there    is    insurance     at    all,    in    order    to

justifiably rely on an insurer's actions and to expect coverage

in a particular circumstance.             However, the City is not an insurer

or even a formal self-insurer, as described above.                    Unlike either,

the City undertook no obligation to indemnify its officers for

judgments     against       them.         In     fact,   the     officers'       labor

representatives       did    not     secure      an   agreement       to    indemnify.

Therefore, it would be unjustified for the officers to expect a

duty to indemnify in their particular circumstances, when there

was no reason to expect such a duty under any circumstance.

     Second, like the hospital in American Nurses Association,

supra, the fact that the City has some form of excess coverage

does not make it an insurer of the amount within the "self-insured

retention."     Moreover, just as the hospital was not obligated to

indemnify the nurse in American Nurses Association, supra, the

City was not obliged to indemnify the officers here.

     Finally, although the actual or potential control of the

investigation    or     defense      may    arguably     justify       an    insured's

reliance and expectation of coverage, none was present here.                         The

City provided the officers a means of a defense in accord with its

contractual and statutory obligations.                   We reject plaintiff's

unsupported     allegation         that    the    City   controlled         litigation

decisions.     See Ridge at Back Brook, LLC v. Klenert, 437 N.J.

                                           14                                  A-3150-14T3
Super. 90, 97-98 (App. Div. 2014) ("Bald assertions are not capable

of either supporting or defeating summary judgment.").                       There is

no evidence suggesting that the City controlled the defense or

precluded the officers from presenting any defense that they, with

the advice of their independent attorneys, wished to pursue.                       Nor

were the officers obligated to defer to any "paramount" authority

of the City to control the investigation and defense of the case

against them. In short, the City took no actions that "preempt[ed]

its [officers] from defending" themselves, nor did the City leave

them "defenseless or seriously hampered in [their] ability to

protect [themselves]," so as to give rise to estoppel.                        Griggs,

supra, 88 N.J. at 356.

                                           B.

      We next turn to plaintiff's contention that the City violated

its   duty   of    good       faith,   which    required   it    to   indemnify    its

officers.         We    are    unpersuaded.       "[E]very      insurance    contract

contains an implied covenant of good faith and fair dealing."

Price v. N.J. Mfrs. Ins. Co., 182 N.J. 519, 526 (2005).                  An insurer

owes a duty of good faith in processing an insured's claim, and

an insured has a right of action for a bad faith failure to pay a

claim   where      no   debatable      reason    for   denying     payment    exists.

Pickett v. Lloyd's, 131 N.J. 457, 481 (1993).                    The standard also

applies to "inattention to payment of a valid, uncontested claim."

                                          15                                  A-3150-14T3
Id. at 473.      However, "[i]f the insured is unable to establish a

right     to   the   coverage    claimed,    the   bad   faith   claim   must    be

dismissed." Wacker-Ciocco v. Gov't Emps. Ins. Co., 439 N.J. Super.

603, 612 (App. Div. 2015).           As discussed above, the City did not

insure     the   officers   against    the    judgment     plaintiff     obtained

against them.        Thus, it did not breach an insurer's duty of good

faith.6

     Nor did plaintiff establish that the City breached its implied

duty of good faith and fair dealing found in its Agreement with

the officers and FOP.           "Every party to a contract . . . is bound

by a duty of good faith and fair dealing in both the performance

and enforcement of the contract."             Brunswick Hills Racquet Club,

Inc. v. Route 18 Shopping Ctr. Assocs., 182 N.J. 210, 224 (2005).

Pursuant to that duty, a party must "refrain from doing anything

which will have the effect of destroying or injuring the right of

the other party to receive the benefits of the contract."                  Id. at

225 (internal quotation marks and citation omitted).




6
  As we conclude the City was not a formal self-insurer, we need
not address the extent to which one is bound by the same duty of
good faith imposed on an insurer. See 14 Couch on Insurance 3d §
198.19, at 198-42 to -43 (2007) (noting a split among jurisdictions
regarding whether self-insurers are held to the same standards of
good faith and fair dealing toward insureds and third parties as
traditional insurers).

                                       16                                 A-3150-14T3
     A breach may occur if a defendant "acts with ill motives and

without    any    legitimate      purpose"        to   destroy    a    plaintiff's

"reasonable      expectations,"    or    if   a    plaintiff     "relies    to   its

detriment on a defendant's intentional misleading assertions."

Id. at 226.      While the covenant "cannot override an express term

in a contract, a party's performance under a contract may breach

that implied covenant even though that performance does not violate

a pertinent express term."        Wilson v. Amerada Hess Corp., 168 N.J.

236, 244 (2001).

     Applying these principles, plaintiff has failed to establish

a breach of the covenant implied in the Agreement.                    Plaintiff has

not established that indemnification was necessary to fulfill the

parties' expectations.         Nor is there any showing that the City

acted with ill motive or intentionally misled the officers.                      The

City did not deprive the officers of the fruits of the Agreement,

because no right to indemnification was provided, expressly or

impliedly.

     To the extent not addressed, plaintiff's remaining arguments

lack sufficient merit to warrant extended discussion in a written

opinion.   R. 2:11-3(e)(1)(E).

     Affirmed.




                                        17                                  A-3150-14T3
