Schulz v. Jeppesen Sanderson, Inc.

238 Cal. Rptr. 3d 737, 27 Cal. App. 5th 1167
CourtCalifornia Court of Appeal, 5th District
DecidedSeptember 5, 2018
DocketB277493
StatusPublished
Cited by4 cases

This text of 238 Cal. Rptr. 3d 737 (Schulz v. Jeppesen Sanderson, Inc.) is published on Counsel Stack Legal Research, covering California Court of Appeal, 5th District primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schulz v. Jeppesen Sanderson, Inc., 238 Cal. Rptr. 3d 737, 27 Cal. App. 5th 1167 (Cal. Ct. App. 2018).

Opinion

ROTHSCHILD, P. J.

*739This case arises out of a wrongful death lawsuit, in which appellant Herzog, Yuhas, Ehrlich & Ardell, APC (Herzog) represented plaintiffs and respondents Silke Schulz and her four young children.1 Silke's husband Rainer died when the plane he was piloting crashed just before landing at an airport in Germany. Herzog obtained a settlement of $18,125,000 from the manufacturers of the aircraft and from the providers of some of the aircraft's systems, maps, and charts, all of whose negligence allegedly contributed to the crash. After a trial to determine the allocation of the settlement funds among Silke, her four young children with Rainer, Rainer's two adult daughters from a previous marriage, and Asia Today, the trial court allocated virtually all the settlement proceeds to the minor children. The court awarded Herzog 10 percent of the children's funds as attorney fees, rather than the 40 percent called for in the contingency fee agreement or the 31 percent requested by Herzog. Herzog contends that the trial court abused its discretion by reducing its fee to 10 percent. We agree and reverse.

FACTS AND PROCEEDINGS BELOW

At the time of his death, Rainer was the president and co-owner with Silke of Asia Today. Silke had previously worked alongside Rainer at Asia Today, but she left the business in 2010 when her first son Lukas was born. In 2011, the family expanded to add triplets. The triplets were born prematurely, and two suffered serious, permanent disabilities. At the time of his death, Rainer was primarily responsible for the financial support of Silke and the four children. Rainer also had two adult daughters from a prior marriage, both of whom had been receiving financial support from him at the time of his death.

On March 1, 2012, Rainer was piloting a small Cessna jet aircraft owned by Asia Today with a co-pilot and three other passengers onboard on their way to Egelsbach airport near Frankfurt, Germany. As the plane began its final approach, it struck a grove of trees on a hilltop approximately two miles from the runway, crashing and killing everyone on board.

Before hiring Herzog, Silke consulted with aviation experts to determine the cause of the crash. Two experts consulted the preliminary report from the BFU, the German government agency responsible for investigating air accidents, and concluded that pilot error was the primary *740cause of the crash.2 The experts concluded that Rainer disregarded standardized operating procedures and failed to fly a stabilized approach, with the result that the plane flew too fast too close to the airport, and when difficulty arose, he and his co-pilot did not have the situational awareness or time to recover. Attorneys for the estate of Rainer's co-pilot also attributed insufficient visibility as another potential cause of the crash. The Egelsbach airport lacks the technology to allow pilots to land relying solely on instruments, meaning that they must maintain visual contact with the runway in order to land. At the time of the accident, cloud cover may have been as low as 400 to 800 feet.

Herzog agreed to represent Silke, her sons, and Asia Today on a contingency basis. Herzog hypothesized that the Cessna's enhanced ground proximity warning system was not functioning properly, and that as a result, a "[p]ull-up" warning sounded only two seconds before impact. Herzog believed that if the warning system had been functioning properly, it would have begun sounding alarms 14 seconds before impact, which would have allowed enough time for Rainer to avoid crashing. Herzog also suspected that the aviation charts on which Rainer relied, which did not fully describe the hills nor chart the crash site elevation, may have contributed to the crash.

Silke, together with Klaus Hoffman, the chief executive officer of Asia Today, negotiated the terms of Herzog's representation, with the participation of Asia Today's corporate attorneys. According to Herzog, Silke and Hoffman considered several attorneys to represent them in the case; they had the resources to pay for legal representation on an hourly basis, but chose a contingency arrangement because of, among other reasons, the risk that the plaintiffs might not be able to recover enough to warrant the expense of hourly fees. According to Herzog, the other attorneys Silke spoke with would not take the case on a contingency basis. In addition to the causation risk, Silke was aware that the defendants might attempt to remove the case to Germany. Rainer and Silke were German nationals, the chart manufacturer was a German entity, and the accident had occurred in Germany. According to Herzog, removal to Germany would likely reduce the potential value of the case to the plaintiffs, as damages awards in Germany are typically smaller than in United States courts. Respondents do not challenge this assertion.

The fee agreement that Herzog negotiated with Hoffman and Silke called for Herzog to receive 31 percent of any settlement funds if the case settled at least 30 days before trial, and 40 percent if it settled later. In discovery, plaintiffs learned that the chart manufacturer had surveyed the area where the crash took place a few months before the accident, but had not revised its charts until after the crash. Herzog also discovered that the manufacturer of the plane's guidance software had released a software update shortly after the sale of the aircraft, but the update was never installed on Asia Today's plane. The Cessna service bulletin listed the software update as "[o]ptional" rather than "[r]ecommended" or "[m]andatory," and did not describe the safety enhancements in the update. Herzog's experts claimed that, if the update had been installed, the guidance system would have issued visual and *741audio warnings 16 seconds before the crash, allowing Rainer time to abort the landing. Flight records indicated that the guidance system did not issue any such warnings until two seconds before the crash.

After approximately 18 months of litigation, and a few days before trial was scheduled to begin, the parties agreed to settle the case for an unallocated $18,125,000.

In the case of any wrongful death award, including one obtained through settlement, the trial court must apportion the award among the claimants. ( Code of Civ. Proc., § 377.61 ; Corder v. Corder (2007) 41 Cal.4th 644, 653-654, 61 Cal.Rptr.3d 660, 161 P.3d 172.) In any case in which settlement proceeds are paid to a minor, the court must approve the attorney fees paid out of the minor's share. (See Prob. Code, §§ 3600 - 3601.)

Herzog proposed that the court allocate 65 percent of the proceeds, or $11,781,250, to Silke and Asia Today,3 and divide the remaining 35 percent, or $6,343,750, equally among the four children.

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Cite This Page — Counsel Stack

Bluebook (online)
238 Cal. Rptr. 3d 737, 27 Cal. App. 5th 1167, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schulz-v-jeppesen-sanderson-inc-calctapp5d-2018.