Draggin' Y Cattle Co. v. Junkermier, Clark, Campanella, Stevens, P.C.

2017 MT 125, 395 P.3d 497, 387 Mont. 430, 2017 Mont. LEXIS 370, 2017 WL 2334480
CourtMontana Supreme Court
DecidedMay 30, 2017
DocketDA 16-0595
StatusPublished
Cited by3 cases

This text of 2017 MT 125 (Draggin' Y Cattle Co. v. Junkermier, Clark, Campanella, Stevens, P.C.) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Draggin' Y Cattle Co. v. Junkermier, Clark, Campanella, Stevens, P.C., 2017 MT 125, 395 P.3d 497, 387 Mont. 430, 2017 Mont. LEXIS 370, 2017 WL 2334480 (Mo. 2017).

Opinion

JUSTICE BAKER

delivered the Opinion of the Court.

¶1 Roger and Carrie Peters and Draggin’ Y Cattle Company, Inc., (collectively Peters) entered into a stipulated settlement with Junkermier, Clark, Campanella, Stevens, P.C., and Larry Addink (collectively Junkermier). The presiding judge—Judge George Huss—determined that the stipulated settlement was reasonable and entered judgment against Junkermier’s insurer, N ew York Marine and General Insurance Company. New York Marine appealed and questioned Judge Huss’s impartiality.

¶2 We concluded in that appeal that Judge Huss should have disclosed a potential conflict of interest. We referred the case to the District Court to determine whether Judge Huss should have been disqualified for cause. The District Court concluded that Judge Huss was required to recuse himself and should have been disqualified. The District Court also vacated all orders that Judge Huss issued after he *432 should have been disqualified. Peters contend that the District Court erred in ruling that Judge Huss should have been disqualified and in vacating Judge Huss’s orders.

¶3 We affirm.

PROCEDURAL AND FACTUAL BACKGROUND

¶4 This is the third time this matter has been before this Court. Draggin’ Y Cattle Co. v. Addink, 2016 MT 98, 383 Mont. 243, 371 P.3d 970 (hereafter Draggin’ Y II); Draggin’ Y Cattle Co. v. Addink, 2013 MT 319, 372 Mont. 334, 312 P.3d 451 (hereafter Draggin’ Y I). We restate the relevant facts briefly.

¶5 Peters sued Junkermier in January 2011 for damages related to tax services Junkermier performed for Peters. Junkermier requested that New York Marine defend and indemnify them against Peters’s claims. New York Marine defended Junkermier subject to a reservation of rights throughout the suit. In the first appeal, we reversed a grant of summary judgment in Junkermier’s favor and remanded. Draggin’ Y I, ¶ 51. Judge Huss assumed jurisdiction of this underlying action following remand.

¶6 Peters and Junkermier entered into a settlement agreement and stipulation for entry of judgment without New York Marine’s participation or authorization in November 2014. On December 5, 2014, New York Marine filed a motion to intervene and requested additional discovery and a stay of the scheduled reasonableness hearing. Ten days later, Judge Huss granted New York Marine’s motion to intervene, denied its motions for additional discovery and to stay, and held the reasonableness hearing. NewYorkMarine contested the stipulated settlement’s reasonableness and denied liability for the settlement. Judge Huss concluded that the stipulated settlement was reasonable and entered judgment in the amount of $10,000,000 in Peters’s favor. New York Marine appealed, and Peters cross-appealed.

¶7 For the first time on appeal, New York Marine asserted that Judge Huss had an apparent conflict of interest stemming from a sexual harassment complaint that his former court reporter filed against him. New York Marine alleged that Judge Huss had individually entered into a stipulated settlement without the participation or authorization of the Office of the Court Administrator (OCA), which acted as Judge Huss’s insurer by paying for his defense under a reservation of rights. New York Marine alleged further that the OCA had filed a declaratory judgment action in which it contested *433 the stipulated settlement amount’s reasonableness. 1 Judge Huss’s potential conflict of interest, New York Marine contended, violated the Montana Code of Judicial Conduct and should have resulted in Judge Huss’s disqualification.

¶8 We concluded that Rule 2.12, M. C. Jud. Cond., required that Judge Huss disclose his participation in his personal stipulated settlement to the parties because the circumstances “could potentially cause the judge’s impartiality reasonably to be questioned.” Draggin’ YII, ¶ 31. But we declined to determine whether Rule 2.12 required Judge Huss to disqualify himself because such a determination “requires findings of fact and conclusions of law following the presentation of evidence.” Draggin’ Y II, ¶ 31. We therefore “determine^] that the appropriate course of action [was] to refer the disqualification issue to a district judge to hear the matter pursuant to § 3-1-805, MCA.” Draggin’ YII, ¶ 31. In a subsequent order, this Court assigned the Honorable Russell C. Fagg to preside over the disqualification proceeding.

¶9 Upon referral, Judge Fagg set a disqualification hearing, at which Judge Huss testified. The court’s ensuing order concluded that Judge Huss was required to recuse himself and should have been disqualified from presiding over the stipulated settlement. The District Court concluded further that the new judge assigned to the case would need to decide the issues raised by the parties after New York Marine intervened in the case. The court’s order therefore had the effect of vacating all of Judge Huss’s orders after New York Marine intervened.

STANDARD OF REVIEW

¶10 We review judicial disqualification questions de novo. Draggin’ Y II, ¶ 10. Our inquiry requires an objective examination of the circumstances surrounding potential judicial disqualification and an accurate interpretation of the Montana Code of Judicial Conduct. Draggin’ YII, ¶ 10.

DISCUSSION

¶11 1. Whether the District Court correctly concluded that Judge Huss *434 was required, to recuse himself and should have been disqualified.

¶12 The District Court issued findings of fact regarding both the Peters’s case and the suit against Judge Huss. The court’s findings related to the Peters’s case focused on the time period following the Peters/Junkermier stipulated settlement. The court also made findings related to the suit against Judge Huss regarding the circumstances and procedural posture of that case and what Judge Huss agreed to under his stipulated settlement. Finally, the court’s findings addressed the overlap in the two stipulated settlements’ timelines. The court found that

Judge Huss did not disclose to the litigants in this case the existence of his confessed judgment in favor of [the court reporter], the fact that he had contractually agreed to cooperate in her execution of that judgment against the OCA, or the fact the OCA had challenged the reasonableness of Judge Huss’ stipulated judgment.

¶13 The court then reviewed the Montana Code of Judicial Conduct, particularly Rule 2.12(A). Based on its interpretation of the Code and “the above facts,” the court determined that Judge Huss’s “impartiality might reasonably have been questioned at the time he presided over and evaluated the stipulated settlement in this litigation, including the December 15, 2014, reasonableness hearing and [New York Marine’s] request for discovery regarding the settlement’s reasonableness.” In making this determination, the court highlighted our observation in Draggin’ Y II

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Cite This Page — Counsel Stack

Bluebook (online)
2017 MT 125, 395 P.3d 497, 387 Mont. 430, 2017 Mont. LEXIS 370, 2017 WL 2334480, Counsel Stack Legal Research, https://law.counselstack.com/opinion/draggin-y-cattle-co-v-junkermier-clark-campanella-stevens-pc-mont-2017.