Mission Viejo Couple Accepts $300,000 Out of Court : Murder Victim’s Parents Settle With State of Montana

A Mission Viejo couple whose son was decapitated by a man who had escaped from a Montana mental hospital decided to accept a $300,000 out-of-court settlement from that state, their attorney said Tuesday.

Myron G. Cohn, who represented George A. and Irene Schubert in the case against the State of Montana, said the couple could have probably won more money had they decided to go to court.

The Schuberts, who declined to discuss the case, sued Montana for negligence in not providing better security for Cody Leo Schreiber, who escaped from the Warm Springs Mental Institution in 1977. Almost five years later, on Oct. 16, 1982, Schreiber decapitated Dennis James Schubert, 24, and buried the body in the backyard of the house they shared in Mission Viejo.

“It would have been pretty traumatic for them to go through it again,” Cohn said. “There was a lot of anguish involved (in the decision to settle out of court).”

Schreiber, now 30, had been committed to the Montana mental institution after being found not guilty by reason of insanity in the shooting and stabbing death of a cab driver. He is now serving a 25-year sentence at Folsom Prison for Schubert’s murder.

Clayton Herron, an attorney for the Montana Department of Administration’s insurance and legal division, said the $300,000 was the maximum the Schuberts could have received from the state. But he also said the couple had a strong case and could have won much more had they chosen to go to trial.

“We felt it was very possible that a jury would have found negligence on our part, and a jury could have awarded them anywhere in the millions,” Herron said from Helena, Mont.

The Montana official also said that other litigants are challenging the state’s $300,000 maximum settlement on constitutional grounds and that this was another reason the state was anxious to settle with the Schuberts.