LOS ANGELES (Legal Newsline) – A California appeals court agreed that a trial court abused its discretion when it awarded defendants and appellants Herzog, Yuhas, Erlich & Ardell, APC 10 percent of a more than $18 million wrongful death settlement instead of the 40 percent called for in a contingency fee agreement, or the 31 percent requested by the firm itself.
The decision was filed by the California 2nd Appellate District Court, Division One on Sept. 5 and was certified for publication on Oct. 2. It was written by Judge Frances Rothschild.
The majority of the $18 million dollar settlement was awarded to the family of Ranier Schulz, who died after a 2012 plane crash as the pilot. The cause was determined to be the result of negligence of the aircraft’s systems, maps and charts, the ruling states. The remainder of the settlement was awarded to Schulz’s company Asia Today, of which he was a co-owner with his wife, Silke.
Justice Frances Rothschild
Herzog had agreed to represented Silke Schulz, her children and Asia Today on a contingency fee basis and had negotiated the terms of the representation to be 31 percent of any settlement funds awarded “at least 30 days before trial, and 40 percent if it settled later,” the ruling states.
The case settled a few days before the trial was scheduled to begin after 18 months of litigation. The parties agreed to settle the case for a $18 million. The court rejected Herzog’s proposal to allocate 65 percent of the proceeds, or $11.7 million, to Silke Schulz and to Asia Today, and divide the remaining 35 percent, or $6.3 million, equally among the four children.
"Herzog requested 31 percent of the amount allocated to the children as attorney’s fees and informed the court that it would collect attorney fees from Silke of approximately 30 percent of the amount allocated to her," the ruling states.
Instead, the Los Angeles County Superior Court issued a statement of decision and apportioned all of the settlement proceeds to the four children, less $1, which the court allocated to Silke Schulz.
The trial court also reduced Herzog’s claim to the settlement to 10 percent, acknowledging, “Herzog had done ‘a good job investigating [the] case’ and realized ‘a substantial sum,’" according to the ruling.
The trial court also noted that the "case did not have to be tried,’ and faulted Herzog for a "negligent or a highly questionable tactical decision, which caused much unnecessary litigation and delays," which was identified as its failure to timely notify the decedent's adult daughters of a previous marriage of the pending case.
After the trial court issued its decision, Herzog withdrew its representation and moved for a new trial on the issue of its attorney fees, “alleging that the court had not made adequate findings to support the reduction in its attorney’s fees,” the ruling states.
California 2nd Appellate District Court, Division One case B277493