Draggin' Y Cattle Co. v. Addink

May 3 2016
DA 15-0354
Case Number: DA 15-0354
IN THE SUPREME COURT OF THE STATE OF MONTANA
2016 MT 98
_________________
DRAGGIN’ Y CATTLE COMPANY,
INC.; and ROGER and CARRIE PETERS,
Plaintiffs, Appellees, and Cross-Appellants,
v.
LARRY ADDINK; and JUNKERMIER,
OPINION
CLARK, CAMPANELLA, STEVENS, P.C,
AND
ORDER
Defendants and Appellees,
and
NEW YORK MARINE AND GENERAL
INSURANCE COMPANY,
Intervenor and Appellant.
_________________
¶1 New York Marine and General Insurance Company appeals the order of the
Eighteenth Judicial District Court, Gallatin County, denying its motion for discovery
regarding the reasonableness of the stipulated settlement between Roger and Carrie
Peters and Draggin’ Y Cattle Company, Inc., (collectively Peters) and Junkermier, Clark,
Campanella, Stevens, P.C., and Larry Addink (collectively Junkermier). Peters
cross-appeal the District Court’s dismissal of their cross-claim seeking a declaration that
New York Marine is liable to pay the stipulated settlement. While the parties raise
multiple issues on appeal, we restate the dispositive issue as follows:
Whether New York Marine timely raised its disqualification claim, and if so,
whether the claim should be considered on the merits because the judge did not
disclose circumstances that could potentially cause the judge’s impartiality to be
reasonably questioned.
¶2 We remand for further proceedings.
PROCEDURAL AND FACTUAL BACKGROUND
¶3 This matter has been before this Court on a previous occasion. Draggin’ Y Cattle
Co. v. Addink, 2013 MT 319, 372 Mont. 334, 312 P.3d 451 (hereafter Draggin’ Y I).
Because the underlying suit’s background facts are delineated in Draggin’ Y I, we restate
the facts only briefly.
¶4 In January 2011, Peters filed a complaint against Junkermier alleging multiple
counts stemming from tax services Junkermier performed for Peters. Junkermier
tendered the defense to New York Marine, which insured Junkermier under a
professional liability policy. Thereafter, New York Marine defended Junkermier subject
to a reservation of rights.
¶5 Junkermier eventually moved for summary judgment in the underlying action on
the ground that Peters’s claims were barred by the statute of limitations. The District
Court granted Junkermier’s motion for summary judgment in December 2012 and Peters
appealed. In Draggin’ Y I, we concluded that Peters’s claims were timely filed.
Draggin’ Y I, ¶ 51. Accordingly, we reversed the District Court’s order granting
Junkermier summary judgment and remanded for further proceedings. Draggin’ Y I,
¶ 51.
2
¶6 On remand, Peters filed a motion for substitution of district court judge pursuant to
§ 3-1-804(12), MCA. Judge Huss assumed jurisdiction in December 2013. Litigation
continued for nearly a year and then on November 13, 2014, Peters and Junkermier
entered into a settlement agreement and stipulation for entry of judgment without New
York Marine’s participation. Shortly thereafter, the District Court issued an order
scheduling a hearing on the stipulated settlement’s reasonableness.1
¶7 Prior to the hearing, New York Marine filed a motion to intervene and request for
stay, discovery, and status conference. On December 15, 2014, the District Court granted
New York Marine’s motion to intervene but denied its motions for additional discovery
and to stay the reasonableness hearing. The court held the reasonableness hearing that
same day. At the hearing, Peters filed a cross-claim seeking a declaration that New York
Marine was liable to pay the stipulated settlement under the insurance contract.
¶8 On March 5, 2015, the District Court entered findings of fact, conclusions of law,
and an order finding that the stipulated settlement amount was reasonable. On May 6,
2015, the court entered judgment in the amount of $10,000,000 in Peters’s favor and
further ordered that Junkermier was not liable for the stipulated settlement. The court
dismissed Peters’s cross-claims on June 5, 2015, on the ground that the federal district
court retained jurisdiction over all claims filed by New York Marine in the federal court.
1
On the same day, New York Marine filed a complaint against Junkermier for declaratory relief
and breach of contract in the United States District Court for the District of Montana, Great Falls
Division. That case remains pending.
3
New York Marine appeals the District Court’s order denying its motion for discovery on
the reasonableness of the settlement. Peters cross-appeal the June 5 order of dismissal.
¶9 On appeal, New York Marine asserts for the first time that Judge Huss erred by
not disclosing an apparent conflict of interest. New York Marine claims that the alleged
conflict stems from a complaint that a former court reporter filed against Judge Huss in
February 2014. In October 2014—during the pendency of this case—Judge Huss
individually entered into a stipulation and confession of judgment. The Office of the
Court Administrator (OCA) had been paying for Judge Huss’s defense and Judge Huss
allegedly entered into the stipulated settlement without the OCA’s participation or
knowledge. On November 17, 2014—four days after Peters and Junkermier entered into
their stipulated settlement—the OCA filed a complaint against Judge Huss in a Helena
district court seeking a declaration that it had no duty to defend or indemnify him. In its
complaint, the OCA specifically contested the stipulated settlement amount’s
reasonableness. Judge Huss did not disclose the stipulated settlement or his dispute with
the OCA to the parties in the case at issue. Judge Huss resigned effective January 1,
2016.
STANDARD OF REVIEW
¶10 We recently adopted a standard of review for analyzing judicial disqualification
under the Montana Code of Judicial Conduct. State v. Dunsmore, 2015 MT 108, ¶ 10,
378 Mont. 514, 347 P.2d 1220. Our “inquiry into disqualification requires an objective
examination of the circumstances surrounding” potential judicial disqualification and “an
4
accurate interpretation” of the Montana Code of Judicial Conduct. Dunsmore, ¶ 10.
Accordingly, we review judicial disqualification questions de novo, “determining
whether the lower court’s decision not to recuse was correct under the Montana Code of
Judicial Conduct.” Dunsmore, ¶ 10.
DISCUSSION
¶11 Whether New York Marine timely raised its disqualification claim, and if so,
whether the claim should be considered on the merits because the judge did not disclose
circumstances that could potentially cause the judge’s impartiality to be reasonably
questioned.
¶12 On appeal, New York Marine asserts that Judge Huss’s potential conflict of
interest raises reasonable questions regarding his impartiality. New York Marine
contends that the “undeniable parallels between Judge Huss’ interests in the litigation he
was (and still is) defending in his personal capacity and [Peters’s] interests in not
permitting [New York Marine] to meaningfully challenge the stipulated settlement”
create “an apparent and significant conflict of interest.” As such, New York Marine
claims that Judge Huss was required, at a minimum, to disclose his apparent conflict of
interest to the parties under the Montana Code of Judicial Conduct. New York Marine
accordingly asserts that Judge Huss erred by failing to disclose the potential grounds for
disqualification. Finally, New York Marine claims that the issue is properly before this
Court on appeal because it “only became aware of the facts giving rise to Judge Huss’
potential bias in May 2015, when it discovered that Judge Huss had submitted a letter of
resignation (dated April 21, 2015 and effective January 1, 2016) and investigated the
circumstances behind that resignation.”
5
¶13 Peters counter that the issue is not properly before this Court because New York
Marine raises it for the first time on appeal. Peters contend that the information regarding
the potential conflict of interest is not in the record and that New York Marine may not
address additional matters on appeal because it is bound by the record before the District
Court. Accordingly, Peters urge this Court to “strike all such material” concerning the
potential conflict of interest. They assert further that New York Marine had the
opportunity to raise the issue in the District Court because the judgment did not become
final until Judge Huss entered the order dismissing Peters’s cross-claims on June 5,
2015—a month after New York Marine claims that it discovered the information on
which it bases its disqualification argument. Finally, Peters claim that Judge Huss’s
“personal experience” does not require disqualification under the Montana Code of
Judicial Conduct. Peters assert that under New York Marine’s “formulation, a judge who
is in a car accident should not preside over a car accident case, because there may be an
‘appearance of impropriety’ based on the judge’s personal experience.”
¶14 New York Marine requests that we take judicial notice of a number of exhibits—
which are attached to its opening brief on appeal—regarding Judge Huss’s stipulated
settlement and the ensuing dispute with the OCA. The OCA’s complaint for declaratory
judgment against Judge Huss is a record of a court of this state of which we take judicial
notice. M. R. Evid. 202(b)(6), (d). See Farmers Plant Aid, Inc. v. Fedder, 2000 MT 87,
¶¶ 26-27, 299 Mont. 206, 999 P.2d 315 (concluding that M. R. Evid. 202(b)(6) allows a
6
court to take judicial notice of proceedings in other cases). The complaint alleges
sufficient facts to inform our inquiry for purposes of this Opinion.
¶15 It is well established that we generally do not consider issues raised for the first
time on appeal. Pilgeram v. GreenPoint Mortg. Funding, Inc., 2013 MT 354, ¶ 20, 373
Mont. 1, 313 P.2d 839 (citations omitted). This Court, however, reserves the power to
consider an issue raised for the first time on appeal if the issue “affects the substantial
rights of a litigant.” Cottrill v. Cottrill Sodding Serv., 229 Mont. 40, 42, 744 P.2d 895,
896 (1987) (quoting In the Matter of N.B., 190 Mont. 319, 323, 620 P.2d 1228, 1231
(1980)) (internal quotations omitted). Accord State v. Carter, 2005 MT 87, ¶ 13, 326
Mont. 427, 114 P.3d 1001; Eastman v. Atl. Richfield Co., 237 Mont. 332, 337, 777 P.2d
862, 865 (1989). “It is axiomatic that a fair trial in a fair tribunal is a basic requirement
of due process.” Dunsmore, ¶ 11. This basic requirement “includes the requirement that
any judge who is biased or partial with regard to a particular matter or party be
disqualified from hearing the case.” Dunsmore, ¶ 11. Furthermore, this Court reserves
the right to address issues raised for the first time on appeal “if extenuating circumstances
justify the party’s failure to assert [its] legal theory at trial.” Pilgeram, ¶ 21 (citing
Marcus Daly Memorial Hosp. Corp. v. Borkoski, 191 Mont. 366, 369, 624 P.2d 997, 999
(1981); Carter, ¶ 13).
¶16 We conclude that New York Marine raises a claim sufficient to invoke its
substantial right to due process because of Judge Huss’s potential conflict of interest. We
conclude further that the combination of several factors presents extenuating
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circumstances justifying New York Marine’s failure to raise the issue at trial. These
factors include: Judge Huss’s failure to disclose the potential conflict of interest; the
nature of that conflict; Judge Huss’s announcement of his resignation; the fact that New
York Marine did not discover the potential grounds for disqualification until at least a
month after the court’s approval of the settlement; and the additional fact that final
judgment was entered shortly after the potential conflict’s initial discovery. Furthermore,
New York Marine’s claims present a number of significant issues impacting the
judiciary’s integrity that this Court has not yet addressed. We deem it appropriate, under
these circumstances, to consider whether the merits of New York Marine’s claim should
be reached even though it did not raise the claim until it filed this appeal.
¶17 We turn first to Peters’s contention that New York Marine had sufficient
opportunity to raise its disqualification claim before the District Court. Although not
stated directly, Peters essentially argue that New York Marine waived its disqualification
claim by not raising it prior to Judge Huss’s June 5, 2015 final order.
¶18 “The 2008 Montana Code of Judicial Conduct ‘establishes standards for the
ethical conduct of judges and judicial candidates.’” Reichert v. State, 2012 MT 111,
¶ 41, 365 Mont. 92, 278 P.3d 455 (quoting M. C. Jud. Cond., Preamble [3]). Rule 2.12 of
the Montana Code of Judicial Conduct and §§ 3-1-803, and -805, MCA, governs judicial
-
disqualification. See Dunsmore, ¶ 12; Reichert, ¶¶ 41-51. Rule 2.12(C) provides that
disqualification claims may be waived by the parties unless disqualification is “for bias or
prejudice under paragraph (A)(1).” M. C. Jud. Cond., Rule 2.12(C). New York Marine
8
does not assert that Judge Huss had “a personal bias or prejudice concerning a party or a
party’s lawyer, or personal knowledge of facts that are in dispute in the proceeding.” M.
C. Jud. Cond., Rule 2.12(A)(1). Rather, New York Marine relies on Rule 2.12(A) to
assert that Judge Huss’s “impartiality might reasonably be questioned” based on the
nature and timing of his potential conflict of interest. M. C. Jud. Cond., Rule 2.12(A).
As such, New York Marine’s disqualification claim is subject to waiver. Dunsmore,
¶¶ 18-19 (concluding that disqualification claims may be waived under Rule 2.12(C)
unless the claim is for bias or prejudice under Rule 2.12(A)(1)).
¶19 We recently adopted a “timeliness requirement” to determine whether a party has
waived a disqualification claim under Rule 2.12. Dunsmore, ¶ 18. Under this
requirement, “A claim for disqualification of a judge must be brought within a reasonable
time after the moving party learns the facts forming the basis for a claim that the judge
should be disqualified.” Dunsmore, ¶ 20. If a party does not raise its disqualification
claim “within a reasonable time” of learning the facts underlying its claim, the claim is
waived. Dunsmore, ¶ 20.
¶20 In Dunsmore, the judge in question conducted a sentencing proceeding “a little
over a year after charges were filed” against the party asserting a disqualification claim.
Dunsmore, ¶ 5. We observed that the party knew of the factual basis for the claim prior
to the sentencing proceeding, “but did not raise disqualification.” Dunsmore, ¶ 20. We
determined that the party asserting disqualification “made an apparent tactical decision
not to seek [the judge’s] disqualification” by waiting until after the sentencing proceeding
9
to assert the disqualification claim. Dunsmore, ¶ 19. Accordingly, we concluded that the
party did not bring its disqualification claim within a reasonable time and therefore
waived the claim. Dunsmore, ¶ 20.
¶21 The instant case is distinguishable from Dunsmore. Here, New York Marine
asserts that it did not learn of the factual basis for its disqualification claim until May
2015. The District Court dismissed Peters’s cross-claims in a June 5, 2015 order. New
York Marine, therefore, had about a month to investigate and raise its disqualification
claim before Judge Huss’s final order. Furthermore, New York Marine allegedly learned
of the potential conflict of interest around the same time that the court entered judgment
in Peters’s favor on May 6, 2015, and about two months after the court declared that the
stipulated settlement was reasonable. The court, therefore, already had decided the
primary issues against New York Marine. Consequently, it appears that New York
Marine did not make “an apparent tactical decision not to seek [Judge Huss’s]
disqualification” prior to raising the issue on appeal. Dunsmore, ¶ 19. Under these
circumstances, we conclude that New York Marine raised its claim for disqualification
“within a reasonable time” after learning of the circumstances underlying the claim.
Dunsmore, ¶ 20. Accordingly, New York Marine did not waive its disqualification
claim.
¶22 We emphasize that the timeliness requirement we adopted in Dunsmore ordinarily
will mean that a party must raise a disqualification issue before a district court. Rule 2.12
contemplates that a judge against whom a disqualification claim is asserted should have
10
appropriate opportunity to address the claim in the first instance. M. C. Jud. Cond., Rule
2.12(C) (“A judge subject to disqualification under this Rule . . . may disclose in writing
or on the record the basis of the judge’s disqualification and may ask the parties and their
lawyers to consider, outside the presence of the judge and court personnel, whether to
waive disqualification.”). Disqualification issues, therefore, may be resolved by the court
itself. See M. C. Jud. Cond., Rule 2.7 (“A judge shall hear and decide matters assigned to
the judge, except when disqualification is required by Rule 2.12 or other law.”
(Emphasis added)). A party also may seek disqualification by invoking the procedures of
§ 3-1-805, MCA. In either case, a party may and ordinarily should raise disqualification
issues discovered after an order or final judgment as a motion for relief from judgment in
accordance with M. R. Civ. P. 60(b). See Forsmark v. State, 349 N.W.2d 763, 768 (Iowa
1984) (addressing a disqualification claim brought in a petition to vacate judgment under
the Iowa Rules of Civil Procedure); Blaisdell v. City of Rochester, 609 A.2d 388, 390
(N.H. 1992) (addressing a disqualification claim brought in a post-final judgment motion
to recuse and vacate). Given that we are announcing this principle for the first time here,
however, we do not conclude in this case that New York Marine waived its
disqualification argument by failing to file a Rule 60(b) motion. Future parties in a
similar situation should raise disqualification in accordance with Rule 60(b) in order to
preserve the claim for appeal.
¶23 New York Marine claims that Judge Huss, at a minimum, was obligated to
disclose information to the parties that he believed might reasonably be relevant to a
11
potential disqualification claim. New York Marine contends further that “it is hard to
argue that there was not, at the very least, the appearance of impropriety in Judge Huss’
ruling on [New York Marine’s] motion to intervene and on the reasonableness of the
stipulated judgment.” We decline to address whether Rule 2.12 required Judge Huss to
disqualify himself. This would have been the issue if Judge Huss had disclosed the
potential conflict of interest and refused to recuse himself. Under the current situation,
however, New York Marine did not have adequate opportunity to raise its
disqualification claim earlier because it did not learn of the potential problem until Judge
Huss’s April 2015 letter of resignation became public. We therefore address whether
Judge Huss initially should have disclosed the circumstances to the parties.
¶24 The circumstances under which a judge should disclose information that
reasonably may cause a party to question the judge’s impartiality present an issue of first
impression in Montana. The Preamble to the Montana Code of Judicial Conduct
provides, in part, “Judges should maintain the dignity of judicial office at all times, and
avoid both impropriety and the appearance of impropriety in their professional and
personal lives. They should aspire at all times to conduct that ensures the greatest public
confidence in their independence, impartiality, integrity, and competence.” M. C. Jud.
Cond., Preamble [2]. In order to maintain the dignity of judicial office, the Code
mandates, “A judge shall disqualify himself or herself in any proceeding in which the
judge’s impartiality might reasonably be questioned.” M. C. Jud. Cond., Rule 2.12(A).
See also Dunsmore, ¶ 11.
12
¶25 Rule 2.12(C) provides, “A judge subject to disqualification under this Rule . . .
may disclose in writing or on the record the basis of the judge’s disqualification.” M. C.
Jud. Cond., Rule 2.12(C) (emphasis added). Comment 5 to Rule 2.12 provides further,
“A judge should disclose on the record information that the judge believes the parties or
their lawyers might reasonably consider relevant to a possible motion for disqualification,
even if the judge believes there is no basis for disqualification.” M. C. Jud. Cond., Rule
2.12 cmt. [5] (emphasis added). Rule 2.12(C) and Comment 5 counsel that a judge has a
duty to disclose information that may be grounds for disqualification under Rule 2.12
unless the judge voluntarily recuses himself or herself on the basis of that information.
This conclusion comports with a judge’s affirmative duty to “disqualify himself or herself
in any proceeding in which the judge’s impartiality might reasonably be questioned.”
M. C. Jud. Cond., Rule 2.12(A). See also M. C. Jud. Cond., Rule 2.12 cmt. [2] (“A
judge’s obligation not to hear or decide matters in which disqualification is required
applies regardless of whether a motion to disqualify is filed.”). The Code undoubtedly
requires judges to disqualify themselves if a party might reasonably question their
impartiality. In order for the party to be informed of the circumstances, a judge should
disclose information that is relevant to a possible motion for disqualification.
Furthermore, disclosure under Rule 2.12 advances one of the Code’s fundamental
purposes—promoting confidence in the judiciary. See M. C. Jud. Cond., Rule 1.2 (“A
judge shall act at all times in a manner that promotes public confidence in the
independence, integrity, and impartiality of the judiciary, and shall avoid impropriety and
13
the appearance of impropriety.”); M. C. Jud. Cond., Rule 2.2 (“A judge shall uphold and
apply the law, and shall perform all duties of judicial office fairly and impartially.”).
¶26 Montana’s Code of Judicial Conduct is based on the ABA Model Code of Judicial
Conduct. Dunsmore, ¶ 12. “We adopted the ABA Model Code of Judicial Conduct . . .
in part because it would allow us to consider a well-developed body of case law from
other jurisdictions.” Dunsmore, ¶ 16 (citing In the Matter of the 2008 Montana Code of
Judicial Conduct, No. AF 08-0203 (Mont. Dec. 12, 2008)). A number of jurisdictions
that have adopted the Model Code interpret their equivalent to Rule 2.12 as requiring
judges to disclose information that may be grounds for disqualification. E.g., Forsmark,
349 N.W.2d at 768 (concluding that a judge has “a duty to disclose” potential
disqualifying information and that the “judge’s failure to disclose the information
deprived plaintiffs of the opportunity to make a timely request that he disqualify himself
on the ground . . . that ‘his impartiality might reasonably be questioned’”); Blaisdell, 609
A.2d at 390 (concluding that it is a “judge’s responsibility to disclose, sua sponte, all
information of any potential conflict between [the judge] and the parties or their attorneys
when [the judge’s] impartiality might reasonably be questioned”); Adams v. State, 601
S.W.2d 881, 884 (Ark. 1980) (concluding that if Arkansas’s equivalent to Rule 2.12(A)
“is applicable, then the judge must disqualify on [the judge’s] own initiative or must
comply with [the equivalent to Rule 2.12(C)] on [the judge’s] own initiative”).
¶27 Peters contend that Judge Huss was not required to disclose his personal
settlement because requiring disqualification under the circumstances at issue here is
14
equivalent to requiring disqualification from a car accident case of a judge who has been
involved personally in a car accident. We are unpersuaded by this contention because the
situations are distinguishable.
¶28 The Code defines “impartiality” as an “absence of bias or prejudice in favor of, or
against, particular parties or classes of parties, as well as maintenance of an open mind in
considering issues that may come before a judge.” M. C. Jud. Cond., Terminology,
“Impartiality.” Comment 1 to Rule 2.12 makes clear that “a judge is disqualified
whenever the judge’s impartiality might reasonably be questioned.” M. C. Jud. Cond.,
Rule 2.12 cmt. [1].
¶29 A judge’s average personal experiences—including being involved in a car
accident—undoubtedly shape the judge’s perspective. This does not mean, however, that
such experiences necessarily preclude a judge from maintaining an “open mind in
considering issues that may come before a judge.” M. C. Jud. Cond., Terminology,
“Impartiality.” As such, a judge’s average personal experiences do not generally lead to
reasonable questions about the judge’s impartiality and subsequent disqualification under
Rule 2.12. Rule 2.7 reinforces this conclusion. It provides, “A judge shall hear and
decide matters assigned to the judge, except when disqualification is required by Rule
2.12 or other law.” M. C. Jud. Cond., Rule 2.7. Comment 1 to Rule 2.7 explains:
Although there are times when disqualification is necessary to protect the
rights of litigants and preserve public confidence in the independence,
integrity, and impartiality of the judiciary, judges must be available to
decide matters that come before the courts. Unwarranted disqualification
may bring public disfavor to the court and to the judge personally. The
dignity of the court, the judge’s respect for fulfillment of judicial duties,
15
and a proper concern for the burdens that may be imposed upon the judge’s
colleagues require that a judge not use disqualification to avoid cases that
present difficult, controversial, or unpopular issues.
M. C. Jud. Cond., Rule 2.7 cmt. [1]. If a judge’s average personal experiences required
disqualification under Rule 2.12, judges would not be “available to decide matters that
come before the courts.” M. C. Jud. Cond., Rule 2.7 cmt. [1]. Such “[u]nwarranted
disqualification” is prohibited by the Code. M. C. Jud. Cond., Rule 2.7 cmt [1].
¶30 The alleged ground for disqualification here, however, is not an average personal
experience. Only a few weeks before Peters and Junkermier entered into their stipulated
settlement, Judge Huss entered into a stipulated settlement stemming from a lawsuit
against him individually. A month before Judge Huss held a hearing to determine the
reasonableness of the stipulated settlement at issue here, the OCA—which acted as an
insurer by paying for Judge Huss’s defense—filed a complaint in which it claimed that
Judge Huss’s personal stipulated settlement was unreasonable. In other words, Judge
Huss presided over a hearing in which an insurer questioned the reasonableness of a
stipulated settlement while the reasonableness of his own personal stipulated settlement
was being questioned by his insurer. The timing and nature of the circumstances
reasonably raise concerns regarding Judge Huss’s ability to maintain “an open mind in
considering” the reasonableness of the stipulated settlement at issue here. M. C. Jud.
Cond., Terminology, “Impartiality.” Accordingly, Judge Huss’s “impartiality might
reasonably be questioned” under Rule 2.12(A). We conclude that, under these
circumstances, Judge Huss was required to disclose his participation in his personal
16
stipulated settlement to the parties under Rule 2.12(C) because the circumstances might
lead to reasonable questions regarding Judge Huss’s impartiality.
¶31 Based on the foregoing analysis, we hold that New York Marine did not waive its
disqualification claim. We conclude that the presiding judge should have disclosed
circumstances that could potentially cause the judge’s impartiality reasonably to be
questioned. We decline to determine on appeal, however, whether Judge Huss should
have been disqualified for cause. That is a determination that requires findings of fact
and conclusions of law following the presentation of evidence—a matter that may not be
addressed in the first instance by an appellate court. Accordingly, we determine that the
appropriate course of action is to refer the disqualification issue to a district judge to hear
the matter pursuant to § 3-1-805, MCA. An order of assignment will follow. The ruling
on the disqualification motion may be appealed by either party. Until that process is
concluded, it would be premature to consider whether the District Court’s orders and
final judgment should be reversed because of the presiding judge’s failure to recuse
himself. We decline to address the other issues raised on appeal at this time.
¶32 IT IS THEREFORE ORDERED that the appeal is DISMISSED without prejudice,
pending referral to a district judge for hearing New York Marine’s request for
disqualification for cause. An appropriate order of assignment will follow in due course.
DATED this 3rd day of May, 2016.
/S/ BETH BAKER
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We concur:
/S/ PATRICIA COTTER
/S/ JAMES JEREMIAH SHEA
/S/ JIM RICE
Chief Justice Mike McGrath and Justice Micheal E Wheat recused themselves from
participation in this case.
Justice Jim Rice, concurring.
¶33 I concur in the Court’s opinion, and because it correctly states the law, I have
signed it. This case takes us into new territory and I understand the Court’s desire to
carefully lay out the procedures to be followed to address the serious charge of judicial
impartiality and the manner in which to raise it and test it, including the entry of findings
and conclusions after a hearing, and to remand for such a process to be undertaken.
However, on the basis of what is the uncontested material evidence that the presiding
judge, at the time he was approving a stipulated judgment over the objections of the
insurer in this case, was likewise entering a stipulated judgment in personal litigation at
the potential detriment of his insurer, and for which he would similarly seek judicial
approval, I would go further. If there were four votes to do so, I would reverse the May
2015 judgment and June 2015 dismissal order entered by the presiding judge and remand
18
this matter for further proceedings before a new judge, who would review and decide
New York Marine’s motion for discovery, the stipulated judgment’s reasonableness, and
New York Marine’s motion to dismiss Peter’s cross-claims. I see no point in prolonging
this litigation to conduct an evidentiary hearing on disqualification, at which the
presiding judge, who has now resigned under circumstances related to his stipulated
judgment, will be called to opine on these circumstances in testimony, and whose
credibility on these matters must inevitably be contested; then for entry of an order, and
then for a subsequent appeal from that order (see Opinion, ¶ 30). 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.
/S/ JIM RICE
Justice Patricia Cotter joins in the concurring Opinion of Justice Rice.
/S/ PATRICIA COTTER
Justice Laurie McKinnon, concurring in part and dissenting in part.
¶34 I agree that this matter should be dismissed without prejudice for a district judge to
consider the issue of Judge Huss’s impartiality. In my opinion, however, the Court
unnecessarily concludes that Judge Huss was required to disclose his personal settlement.
We have not addressed such an issue previously and I would refrain from doing so given
the absence of any record or decision of the trial court regarding the specific issue of
19
disclosure or a decision from the Judicial Standards Commission. As a result, I fear the
Court has announced a new rule of judicial disclosure concerning the personal and
subjective circumstances of a trial judge which ultimately will prove problematic and
unmanageable for trial courts given the absence of any factual record supporting,
explaining, or substantiating the Court’s reasoning and the multitude of personal
situations that potentially could be relevant for disclosure.
¶35 Indeed, it is not clear what relevance Judge Huss’s failure to disclose has to the
issue of disqualification or even whether the matter is more appropriately committed to a
disciplinary proceeding. Significantly, a trial judge has many personal experiences which
are common to those of the litigants appearing before him. Some experiences, for
example a trial judge presiding over a contested parenting proceeding when he is also
involved in a contested parenting proceeding involving his own children, would not
appear to require disclosure—except upon the existence of particularly relevant facts.
The Court has deemed disclosure was required because a legal process utilized by Judge
Huss was similarly utilized by Peters—contesting the reasonableness of a stipulated
settlement. It would seem at first glance that there would be a sundry of legal
proceedings that a trial judge may be involved in personally that would parallel those
upon which he was presiding over as trial judge. This is why a decision that Judge Huss
was required to disclose must first take place through a fact-finding process in order to
clarify the nexus and relevance of the disqualifying circumstances to the issue of the
20
judge’s impartiality. It is axiomatic that such an evidentiary process cannot occur in this
Court.
¶36 With this one exception regarding the rendering of an advisory opinion on judicial
disclosure, I agree that this matter should be dismissed for a hearing on the issue of Judge
Huss’s impartiality.
/S/ LAURIE McKINNON
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