Heiston v. Schwartz & Zonas, LLP

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
DOMINIC HEISTON, as personal )
representative for the Estate of Dylan )
Matthew Heiston, deceased, )
)
Appellant, )
)
v. ) Case No. 2D16-3417
)
SCHWARTZ & ZONAS, LLP, )
)
Appellee. )
)
Opinion filed July 7, 2017.
Appeal from the Circuit Court for Collier
County; Vincent Murphy, Acting Circuit
Judge.
P. Brandon Perkins and Kristen D. Perkins,
of Rogers Towers P.A., Fort Myers, for
Appellant.
Joseph D. Stewart of Joseph D. Stewart,
P.A., Naples, for Appellee.
WALLACE, Judge.
This case involves a dispute between two law firms regarding the
allocation of an attorney's contingent fee earned after the settlement of a wrongful death
claim. Dominic Heiston, as personal representative of the Estate of Dylan Heiston,
deceased, appeals the trial court's order that awarded the entire fee to Schwartz &
Zonas, LLP, the attorneys for the decedent's statutory survivors. Because the trial court
erred in awarding the entire fee to Schwartz & Zonas and nothing to the law firm that
represented the personal representative, we reverse.
I. THE FACTS AND PROCEDURAL BACKGROUND
Dylan Heiston, who was sixteen years old, was killed in an automobile
accident on July 31, 2014. Rasjia Heiston and Kristina Heiston, Dylan's parents, were
his statutory survivors under the Florida Wrongful Death Act, sections 768.16-.26,
Florida Statutes (2014) (the Act). Dylan had an older brother, Dominic Heiston. Neither
Rasjia nor Kristina were able to qualify as the personal representative of Dylan's estate.
Thus, Dominic, who did qualify, was appointed as the personal representative. The law
firm of Morgan & Morgan, P.A., represented Dominic in his capacity as personal
representative.1
Morgan & Morgan filed an action for wrongful death on Dominic's behalf
against the driver of the other automobile involved in the accident. Ultimately, all claims
arising from the accident were settled, and the lawsuit was dismissed after Morgan &
Morgan received payments from two different insurance companies. Allstate, the
insurer for the other driver involved in the accident, paid its policy limits of $100,000.
Century 21, the carrier that provided uninsured motorist's coverage under a policy that
covered Dylan, paid its policy limits of $100,000 plus a $5000 death benefit. Thus, the
total recovery was $205,000. Morgan & Morgan agreed to reduce its contingent fee
from thirty-three and one-third percent of the recovery to twenty-five percent of
$200,000 or $50,000. Morgan & Morgan did not claim a fee on the $5000 death benefit.
1
In this opinion, we will refer to the members of the Heiston family by their
first names to avoid confusion.
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Schwartz & Zonas had a contingent fee agreement with Dylan's parents,
Rasjia and Kristina. Schwartz & Zonas attempted—unsuccessfully—to have Rasjia
appointed as the personal representative of Dylan's estate. When it became apparent
that Rasjia could not qualify, Schwartz & Zonas attempted to have an unrelated third
party appointed. This attempt also failed. Although Schwartz & Zonas did not represent
the personal representative, it actively pursued the wrongful death claim. Schwartz &
Zonas sent demand letters to the two insurance companies and received settlement
checks. These checks were never deposited. Schwartz & Zonas also filed a wrongful
death action on behalf of Rasjia and Kristina. In the complaint, Schwartz & Zonas
alleged on behalf of their clients—inaccurately—that Rasjia had been appointed as the
personal representative of Dylan's estate. Notably, there was no dispute between
Rasjia and Kristina concerning their respective shares of the amount of the recovery
payable to the survivors; each claimed one-half of the proceeds. Ultimately, Rasjia and
Kristina would each disclaim any interest in the proceeds of the wrongful death recovery
with the result that the entire share of the survivors will be distributed to their son,
Dominic.
After the wrongful death claim was settled, Dominic filed a final accounting
and petition for discharge. The estate had no assets other than the $205,000 proceeds
of the wrongful death claim. The final accounting reflected disbursements as follows:
$3878.26 for the payment of funeral expenses, $4621.74 for the probate attorney's fees
and costs to date, and $50,190.51 to Morgan & Morgan for their fees and costs. In the
petition for discharge, Dominic proposed to pay himself a personal representative's fee
of $6150 and an additional $2078.26 to the probate attorney for fees and costs. The
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total of the disbursements already paid and proposed to be paid left a balance of
$138,081.23. Dominic proposed to distribute this balance in equal shares to Rasjia and
Kristina. The only person or entity that filed an objection to the final accounting or to the
proposed distribution of the estate assets was Schwartz & Zonas.
Schwartz & Zonas objected to the disbursement of $50,190.51 in fees and
costs to Morgan & Morgan. In support of their objection, Schwartz & Zonas alleged:
All assets as stated in the Amended Inventory were collected
by the Law Offices of Schwartz & Zonas LLP during their
lawful representation of both Rasjia Heiston and Kristina
Heiston. As Morgan & Morgan PA performed no duties in
the collection of Estate Assets, it is not entitled to an attorney
fee.
Schwartz & Zonas also filed a petition for an order authorizing payment of attorney's
fees. In this petition, Schwartz & Zonas requested payment of one-third of $205,000 or
$68,333.34. Schwartz & Zonas based their attorney's fee claim on the contingent fee
agreement between the firm and Dylan's parents.
II. THE TRIAL COURT'S RULING
The trial court conducted an evidentiary hearing on the objection and the
separate fee petition. At the conclusion of the hearing, Schwartz & Zonas argued that
they were "entitled to the lion's share of the attorney fees" because (1) Schwartz &
Zonas represented the parents, who were the real parties in interest; (2) Morgan &
Morgan had a disqualifying conflict of interest because they did not represent the
parents; (3) Allstate and Century 21 had tendered the checks for payment to Schwartz
& Zonas before Morgan & Morgan's involvement; (4) Morgan & Morgan was not
authorized to settle the case because it did not represent the parents; and (5) Schwartz
& Zonas did the majority of the legal work in obtaining the proceeds of the wrongful
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death claim arising from Dylan's death. In conclusion, Schwartz & Zonas modified its
objection to the disbursement to Morgan & Morgan by suggesting that Schwartz &
Zonas should receive eighty percent of the total fee, leaving twenty percent of the fee
for Morgan & Morgan.
After the hearing, the trial court entered an order sustaining Schwartz &
Zonas's objection to the final accounting and petition for discharge. Despite Schwartz &
Zonas's suggestion that it receive eighty percent of the fee and Morgan & Morgan
collect the remaining twenty percent, the trial court authorized payment of a $50,000 fee
and directed that the entire amount be paid to Schwartz & Zonas. This appeal by
Dominic followed.
III. THE APPLICABLE LAW
The legal principles applicable to the prosecution and settlement of
wrongful death claims in Florida are well settled:
By statute, the personal representative is the only party with
standing to bring a wrongful death action to recover
damages for the benefit of the decedent's survivors and the
estate. § 768.20, Fla. Stat. (2005); see also Wiggins v.
Estate of Wright, 850 So. 2d 444, 446 (Fla. 2003). The
survivors may not bring separate legal actions and are
required to participate in the single legal action filed by the
estate. Wiggins, 850 So. 2d at 446. However, the survivors
are still entitled to be represented by counsel of their choice.
Id. at 449.
Wagner, Vaughan, McLaughlin & Brennan, P.A. v. Kennedy Law Grp., 64 So. 3d 1187,
1191 (Fla. 2011). "Under Florida's Wrongful Death Act, . . . . [t]he personal
representative has the exclusive authority to conduct litigation and settle all claims. The
survivors are not parties to the wrongful death litigation, even when the claims are
brought for their benefit." Kadlecik v. Haim, 79 So. 3d 892, 893 (Fla. 5th DCA 2012)
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(citations omitted); see also § 768.20, Fla. Stat. (2014) ("The action shall be brought by
the decedent's personal representative, who shall recover for the benefit of the
decedent's survivors and estate all damages, as specified in this act, caused by the
injury resulting in death."). The statutory power to settle a wrongful death action is
vested in the personal representative. Thompson v. Hodson, 825 So. 2d 941, 949, 953
(Fla. 1st DCA 2002). The personal representative has the power to hire counsel to
carry out his or her duties with regard to wrongful death claims. In re Estate of
Catapane, 759 So. 2d 9, 11 (Fla. 4th DCA 2000).
The principles applicable to the allocation of attorney's fees to be paid
from the proceeds of a wrongful death claim when one or more of the survivors are
represented by separate counsel are also well established in Florida law. With regard
to the payment of "Litigation Expenses," section 768.26 of the Act provides for the
payment of the attorney hired by the personal representative of the decedent's estate as
follows:
Attorneys' fees and other expenses of litigation shall
be paid by the personal representative and deducted from
the awards to the survivors and the estate in proportion to
the amounts awarded to them, but expenses incurred for the
benefit of a particular survivor or the estate shall be paid
from their awards.
See also Catapane, 759 So. 2d at 11 (quoting the statute). In the Catapane case, the
Fourth District worked out the principles controlling the allocation of the contingent fee
paid from the recovery on a wrongful death claim where one or more of the survivors
are represented by separate counsel. Id. at 11-12. The Florida Supreme Court has
expressly agreed with the Catapane court's analysis. Wiggins v. Estate of Wright, 850
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So. 2d 444, 447 (Fla. 2003). In the Wiggins case, the court concluded its discussion of
the case before it by summarizing these principles as follows:
When survivors have competing claims, and are
represented by separate attorneys, awarding attorneys' fees
from a wrongful death suit in a manner commensurate with
the attorneys' work properly provides for proportional
payment of attorneys' fees by all survivors, out of their
respective awards. For example, if there are two competing
survivors represented by separate attorneys throughout the
litigation who successfully prosecute a claim to judgment,
the fees should ordinarily be awarded out of the respective
recoveries. This will always be subject to the caveat that
where it can be demonstrated that one attorney played a
greater role in securing the total award, a larger fee may be
proper. In no instance, however, should a survivor be
penalized for hiring separate counsel by having to pay a fee
for recovery of the same amount twice.
We agree with and approve of the Catapane method
of allocating fees, whereby a trial court determines the
attorneys' fee awards by compensating the personal
representative's attorney out of the total settlement
proceeds, reduced by the amount necessary to reasonably
compensate the other survivors' attorneys for their services
in representing those survivors in the proceedings.
Id. at 450. Later, in the Wagner case, the court held that section 768.26 of the Act
applies to instances where a wrongful death claim is settled presuit and not just to
cases where an action has been filed or litigated. 64 So. 3d at 1192. In Wagner, the
court once again approved the Fourth District's analysis in Catapane. Id. at 1192-93.
IV. DISCUSSION
The trial court's order in this case does not mention any of the provisions
of the Act. The order does not cite to Wagner, Wiggins, Catapane, or any other
pertinent case law. For these reasons, it has been difficult for us to discern the legal
basis underlying the trial court's ruling that denied the payment of any portion of the
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contingent fee in this case to Morgan & Morgan. The trial court seems to have decided
to prefer Schwartz & Zonas for payment of the entire fee because they became active in
the matter before Morgan & Morgan. In basing its ruling on which law firm was the first
to act, the trial court overlooked that Morgan & Morgan's client, the personal
representative of the estate, was the sole party who was authorized under the Act to
pursue the claim, not Rasjia or Kristina. The trial court erred in preferring Schwartz &
Zonas for payment of the entire contingent fee simply because they were the first to
contact the insurance companies and to file a lawsuit.
We reverse the order under review and remand this case to the trial court
for further proceedings consistent with this opinion. On remand, the trial court shall
reconsider the allocation of the $50,000 attorney's fee between the two law firms based
on the provisions of the Act and the principles stated in Wagner, Wiggins, Catapane,
and other pertinent case law. Thus, the trial court must award the full $50,000
contingent fee to Morgan & Morgan and then reduce the fee award in a manner
commensurate with the value, if any, of the services that Schwartz & Zonas provided to
the statutory survivors, Rasjia and Kristina. See Garces v. Montano, 947 So. 2d 499,
504 (Fla. 3d DCA 2006) (reversing the trial court's order allocating fees from the
settlement of an action for wrongful death and remanding for further proceedings
pursuant to Wiggins).
Reversed and remanded for further proceedings consistent with this
opinion.
SLEET and LUCAS, JJ., Concur.
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