- Associated Press - Wednesday, May 4, 2016

HELENA, Mont. (AP) - A hearing should be held to determine if a state judge should have disqualified himself from a case in which he approved a $10 million settlement to be paid by an insurance company without the company’s input, the Montana Supreme Court ruled.

New York Marine and General Insurance Co. appealed a May 2015 order made by District Judge George “Jerry” Huss in a professional negligence case that a Dillon couple filed against a tax accountant whose firm was insured by the company.

New York Marine said Huss should have disclosed that while he was presiding over the case against the accountant, he had reached an agreement to settle a sexual harassment lawsuit filed by his court reporter as long as she collected the $744,000 from the state. The state Office of the Court Administrator, which defends judges against legal challenges, had warned Huss in writing not to enter into settlement agreement without its consent.

OCA appealed the harassment settlement. District Judge Jeffrey Sherlock ruled in December the state was not responsible for the payment because Huss’ actions were outside the scope of his employment.

The result of Huss’ actions is that he protected himself against any financial loss and ended the woman’s complaint against him, Sherlock wrote. The woman appealed Sherlock’s decision to the Supreme Court.

Tuesday’s order said the Supreme Court wanted to wait for the results of the disqualification hearing before deciding if the $10 million professional negligence settlement should be reversed.

Justices Jim Rice and Laurie McKinnon thought the court should have gone farther.

“In my view, a clear basis for disqualification has already been established and should be ordered to ensure the appearance of, and the public’s confidence in, a fair and impartial judiciary,” Rice wrote. Huss resigned on Jan. 1.

The court did not take up a cross claim filed by the Dillon couple seeking a declaration that New York Marine was liable to pay the settlement.

New York Marine has filed a separate complaint against the accounting firm for breach of contract.

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