The Montana Supreme Court held that the state was not required to indemnify a judge on sexual harassment claims that he settled with his court reporter.

Charlene Berdahl worked as the primary court reporter for Montana district court judge George W. Huss. In February, 2014, Berdahl filed a sexual harassment complaint against Huss with the Montana Human Rights Bureau (HRB). She alleged that Huss declared his romantic interest, love, and undying devotion to her during work time. He bought her gifts, offered to make her dinner while his wife was out of town and expressed his desire to kiss and hug her. Berdahl also alleged that Huss retaliated against her when she resisted his advances.

On August 26,2014, the State concluded that Judge Huss did not act in the course and scope of his employment. The State refused to defend and indemnify him and stated that “if Judge Huss agrees to a monetary settlement,... it is without the consent of the State and Judge Huss cannot be subsequently indemnified for any such settlement.”

Nevertheless, Berdahl and Huss entered into mediation. On September 30, 2014, Huss confessed to judgment in Berdahl’s favor in the amount of $744,371. The state became aware of the settlement when Berdahl attempted to collect on the judgment.

The State then filed a declaratory judgment action, seeking to clarify its indemnification obligation to Huss under Montana Code Annotated (MCA) § 2-9-305(7). The district court held that the State owed no duty to defend or indemnify Huss. The court dismissed the claim without prejudice to Berdahl pursuing her claim before the HRB.

The Montana Supreme Court affirmed, holding that the State was not obligated to pay the stipulated judgment entered by Berdahl and Huss.

See: Huss v. Berdahl, MT, P3d (MT 2017)