BILLINGS – A state district judge has ruled that Montana does not have to pay a $744,371 judgement reached in settling a sexual harassment claim against former District Judge George W. Huss of Forsyth.
In an order issued Dec. 28 by Judge Jeffery Sherlock, of Helena, Sherlock ruled for the state of Montana’s Office of the Court Administrator and against Charlene Berdahl, a former court reporter who worked with Huss in the 16th Judicial District, which includes Treasure County.
Berdahl filed a complaint in February 2014 with the Montana Human Rights Bureau claiming that Huss sexually harassed her by making romantic advances that made her uncomfortable.
Berdahl quit her job in early 2014, and Huss resigned, effective on Jan. 1.
Berdahl and Huss, with help from a mediator, reached a settlement for $744,371 in September 2014 in which Berdahl agreed not to attempt to collect from Huss and Huss assigned his rights against the state to Berdahl.
In October 2014, the state's Human Rights Bureau issued its final investigative report, which found that Berdahl's employer, the state, was not liable for sex discrimination or harassment. The investigator also found reasonable cause to believe that Huss was guilty of sex harassment.
Berdahl's attorney sent the settlement to the state for payment, and the state refused. The parties then filed suits over the enforceability of the settlement in District Court in Lewis and Clark County.
Berdahl’s attorney, Jory Ruggiero of Bozeman, said he was disappointed with Sherlock’s order and will appeal to the Montana Supreme Court.
The order, he said, makes it impossible for state employees to know when the state is going to defend them against claims.
Sherlock said the main issue was whether the state owed Huss a defense or immunity on Berdahl’s human rights claims against him, and whether the state had an obligation to pay the settlement.
The state, Sherlock ruled, was not liable or obligated to pay the settlement or to further defend or indemnify Huss because he concluded that Huss settled the claim without the state's consent.
Sherlock also ruled that the state is not liable because the conduct on which Berdahl’s claim is based was “conduct outside the course and scope of Huss’ employment.”
Sherlock referred to other court cases that held that someone who acts entirely for his own benefit is generally found to be acting outside the scope of his employment.
"There is simply no way for this Court to conclude that an elected district judge in Montana is acting within the course and scope of his employment when he pursues an unwelcome or sexual relationship with a subordinate employee. He was not getting paid to do that," Sherlock said.
Montana law provides for the defense and indemnification of public employees sued civilly for actions taken within the scope of their employment. The law also provides for some exceptions, including when alleged conduct "does not arise out of the course and scope" of the employee's job.
The judge backed a decision by Beth McLaughlin, the administrator of the Judicial Branch, to stop the defense of Huss because his actions were outside the scope of his employment.
"She made the right decision," Sherlock said.
The state, the judge continued, told Huss in writing that if he entered into a settlement agreement, “it would be without the State’s consent and that the consequence would be that he would lose his right to defense and indemnity.”
Sherlock said the state “did not conceal, withhold or misrepresent its position at all — it gave Huss exactly the information Huss needed. Huss was, after all, an experienced attorney and judge and could look up the statute himself.
“In fact, Huss took this information and did rather well for himself. Warned that the State would not be obligated to pay the stipulated judgment nor provide any defense, if he proceeded with the settlement, he did so anyway,” the judge wrote.
The result was that Huss protected himself against any loss and ended Berdahl’s claims against him, Sherlock said.