December 5, 2012

The Tale of Dale Fotsch.

Have you heard of Dale Fotsch? This woman owes her lawyer $180,000 despite winning the lawsuit and being awarded the costs. Why? Because her ex-(common-law) husband declared bankruptcy. She's in the horrible situation of having her lawyer foreclose on the very home he was hired to help her keep. It's the Jugular of Irony.



There's three things that upset me about this: the first is with a legal system that allows someone with nothing to lose to engage another person in litigation, and then bail from all accountability by declaring bankruptcy. How can this be?

The second thing is that there seems to be no effective regulating body for lawyers. This lawyer was in a position of conflict of interest - how can a lawyer protect a client's assets if they have an interest in them? Amiright?



Thirdly, there's a problem with legal fees. They're beyond reach for most people; $300 per hour may seem insanely expensive but I've seen worse. I know someone who's divorce lawyer was in the $700 range. Yikes.

A lawyer's job is to advocate on behalf of a client, to argue their case for them, and to represent their interests. But people will make bad decisions when they are afraid, as many folks are when put into a situation of litigation....it's intimidating.

Anyhoo, the fabulous Chris Bird started an Indiegogo campaign to try to help Dale Fotsch. Please share it! Here's the campaign and here's an easy click-to-tweet. We may not put a dent in her outrageous debt, but perhaps we can generate enough social media noise to make others beware of the big, big holes in the legal system.

Do you think that she agreed to her lawyer's deal and she owes him the money? Or do you think that Dale Fotsch's lawyer is being an asshole?


31 comments:

  1. "Do you think that she agreed to her lawyer's deal and she owes him the money? Or do you think that Dale Fotsch's lawyer is being an asshole?"

    Both? She definitely owes him the money and he is definitely entitled to it. I don't necessarily think he's an asshole for foreclosing on the house, but I do think he could have lawyered the situation a little bit better.

    Lawyer: So, Ex. You're going to drag this case through court because you want the house, huh?
    Ex: Yup. I'm not backing down.
    Lawyer: Well, guess what? You've dragged this case out so long that to pay her legal fees, your wife had to use the house as collateral. Do you know what that means?
    Ex: That she loses the house if she doesn't pay?
    Laywer: Exactly. So can you predict what is going to happen?
    Ex: Durrr...?
    Laywer: If you win the case and you get the house, she probably won't be very motivated to pay my bill. And then, guess what. Either YOU pay off my lien on the house or I foreclose on it. And after allll this, you won't have your precious house, anyway.


    Seems like negotiations may have been more successful with this approach...

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  2. JC, thank you so much for bringing this story to light, and for helping to raise awareness, and hopefully, funds for Dale. You are a joy to know, and have my undying respect, admiration, and friendship.

    Rachel, I want you to be my lawyer, if the need ever arises.

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  3. He's an asshole. Why not have some compassion and do a deal to save her home. She got a disabled kid and is obviously not rich. The justice system is not set up to help the average person and is very anti-women. Lawyers need to get some ethics, compassion and stop chasing after just money.

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    1. Many say it's a trend (and I've noticed it too even in my limited experience) that many lawyers purposefully drag things out between them to make it cost more. Much of the chargeable "work" is not actually work.

      The Law Society should have a look at the accounts to see what he actually did.

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    2. The Law Society takes very close looks at almost all lawyers billable hours and any cheating with billable hours is a very serious infraction. The legal system is NOT anti-women, nor is it out of reach for the average person. Most civil suits work on a contingency basis - if you dont win, you dont pay. There are not realistic better alternatives.

      Lawyers are highly trained individuals who have spent 8+ years post secondary school to get where they are - if suddenly lawyers got paid 1/2 what they do now, the field would have trouble attracting any of the brilliant minds it NEEDS to keep the legal system running. While it is true that if you are very rich, you can make more use of the legal system than a poor person would be able to, if you have been wronged and cant afford a lawyer you will still be able to recover your losses through the contingency based system.

      The only thing wrong with this case is that the lawyer AND the mother should have predicted that the husband was going to declare bankruptcy. He must have had zero assets and other creditors as it is. You dont sue a bum because you know you are wasting your time.

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    3. I wonder why they weren't able to predict it. Looking through the appeal case pdf, the ex-husband had many undesirable qualities that were logged during the case (including a cocaine habit). He practically had "nothing to lose" sprayed on his forehead.

      This case is so interesting.

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    4. 'Sue a bum'? She was defending a suit brought by a bum! ...or did I miss something?

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  4. $88 of interests a day? Wow! Math is not my forte but isn't that about 17% of interests a year, more or less? I am surprised the lawyer can charge so much in interests. According to the Italian law that would be a crime of usury.

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    1. Yup, the word "usury" has been mentioned in other convos I've had about this case. The story of the Merchant of Venice comes to mind...

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  5. Just a few more words - I know I have tons. LOL.

    I know I'm a law student and soon-to-be lawyer, so I'm not unbiased, but it really, REALLY bothers me when people suggest the lawyer is being greedy and should have just had a heart and let her keep her house. If any of you ever did 3 years of work and then people suggested you should just suck it up and not get paid so that the people you did work for wouldn't be out something, you probably wouldn't be thrilled.

    I don't agree with the ridiculous interest charge. But that's pretty much it. The only arena I've ever really heard of dragging work out to make the client pay more is in corporate law, and even then it's something lawyers could lose their license for.

    Obviously there are exceptions to the rule, but generally lawyers aren't willing to lie to win their case, either. That hasn't really come up, here, but it is another allegation people frequently throw out about lawyers. Lawyers spending a lot of time and money to get their license to practice law. Most are unwilling to jeopardize that just so their client can win their case.

    I'm not sure about the ethics of the lawyer having a lien on the house he was fighting to keep. It seems sketchy to me, not because she might lost what he fought to keep, but for the very situation I described in my previous comment. If its okay for the lawyer to take a lien on whatever it is in dispute, it could become common practice for the lawyer to put a lien on it just to be able to say to the other side "neener neener neener, i'm going to take it away from you if you win".

    But really, what bothers me most is people acting like lawyers are douchebags for expecting to get paid for the work they do. Nobody else has to justify why they want to get paid for their work. Lawyers shouldn't have to, either.

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    1. I think that it's difficult to know exactly what this particular lawyer did or didn't do; but the sketchy bits naturally makes one question his intentions on the whole.

      I admire your passion Rachel!

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  6. I think the lawyer is irrelevant. the ex is an ass.

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  7. This is a horrible story on too many fronts.

    With some googling I found the appeal case decision which describes both the original decision made and the overturning of that decision on appeal.

    The link is http://andersenpaullaw.com/pdf/case-law%20Wilson%20v.%20Fotsch.pdf

    Basic facts. They were together from 1995-2002. She left him in 2002. He sued for "unjust enrichment". It came to trial in 2007 with the original decision in 2008. The common-law ex-husband (Leigh Wilson) was awarded $99,091.14. Ms Fotsch appealed. The appeal was granted, heard in November 2009, with a decision in May 2010. The appeal overturned the original decision, giving nothing to the ex-husband and making him responsible for Ms. Fotsch's legal fees. Then, of course, the ex declares bankruptcy.

    According to media reports, sometime in 2007, her lawyer asked her to mortgage her property as a lien to collect his lawyer fees, and that the legal fees would earn interest at 18%. She agreed. It would only be speculation as to how (and when) this agreement was reached. Was it before or after the court ruling (which was actually in 2008) when she was facing a judgement of $99,000 plus legal fees?

    My opinion, the common law ex-husband was a total sponge - not sure how he could have won the initial judgement in the first place.

    Secondly, the ethics where the lawyer places a lien on the property which was being litigated is more than sketchy -- it does not pass the sniff test.

    Thirdly, the 18% interest is ridiculous. This is not a credit card debt, this is a mortgage.

    Fourth, I have no legal training, but I have been told that in almost all civil cases, the losing side gets saddled with the winners legal costs. Although not mentioned in the case facts, in the original decision she was liable for the $99,000 awarded to her ex, her own lawyers fees, and possibly her ex-husbands legal fees. That would have been a sizable figure, assuming that the ex-husbands legal fees would be similar to her own.

    It took 8 years for the legal system to make the right decision - but the costs to Ms Fotsch are obscene.

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    1. Nice search results. I read through a bit a of that PDF and was shocked at the gall of the ex. What a dick!
      Fotsch was stuck between a rock and a hard place and her lawyer knew it.

      Also I wonder how much the ex owed his own lawyer before he declared bankruptcy. I wonder what that lawyer is doing to try to claim his costs.

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    2. Lesson #1: Try your best never to end up in civil litigation in Canadian courts. It's a playground for the very rich, and the lawyers and judges (who are also lawyers, of course!) who work there. This is their domain, not yours.

      Secondly, since Fotsch didn't play her hand right, the only card she may have left in her deck is the "BANKRUPTCY" card. She can apply for protection from her creditors in the form of a "STAY OF PROCEEDINGS", which is a standard issue by the bankruptcy trustee when a person goes bankrupt in Canada. This would give Fotsch back some control over her finances and a reprieve from the wolves knocking at her door, not to mention some personal/emotional relief. Then she could negotiate a settlement with her creditors, pay them off (trustee may have to sell some of the land) and keep some of her assets. Other than that, it looks to me like she could lose it all. She needs to see a trustee in bankruptcy right away and get some more advice on this. It's a cheaper and safer route to go, rather than more civil litigation or hiring more lawyers to vacuum the bank account clean.

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    3. JC, I am assuming the ex's lawyer made sure he was paid in full first, by his client, before heading to court. These days the cost for the planning and execution of one legal proceeding (a hearing) in the BC Supreme Court is about $10,000.00. And that amount is just for the attorney, not the court house fees on top of that. It can get outrageously expensive. Again, it's a rich man's game in the BCSC and the BCCoA. It's ALWAYS best to try to negotiate a settlement out of court. Because if it does go to court, usually the only people to benefit are the judges, the lawyers, the court clerks, the sheriffs... I think you get the picture.

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    4. If someone sues another person, does that person have to hire a lawyer to defend them? I mean, what are the options to protect yourself and your assets?

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    5. JC, you can defend yourself in BC Supreme court, or the other two higher levels of Canadian courts. But note, judges and other attorneys hate when you do that. And the judge will constantly tell you that you need a lawyer. It can be quite demeaning. The rules and forms are available online. And you should know your case law and be prepared to argue your points using case law. Lots of info online is available to do this. But it's a tall order to pull it off and be successful. And more often than not the pro se defendant or pro se plaintiff comes away devastated mentally, emotionally, financially. Not a pretty place to be at. I'd sooner be charged dragged through a criminal court matter than be dragged through the supreme civil court system. It truly is that bad.

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  8. Unfortunately, most people do not know the real background of this story and this woman. Her legal exploits go back many years before this battle - she enjoys litigation.

    Having said that, her lawyer should reduce the interest rate to reflect current mortgage rates.

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    1. You seem to be be someone who knows more about her. And if it's true that she "enjoys litigation" I wonder if she was very over the moon to hear that her ex was trying to sue her in the first place.

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  9. Fotsch owns 37 acres of land outright. That's enough to build 185 family size homes on. Her 37 acres has an estimated value of $680,000.00, according to Fotsch, and I think that's on the very low side of it. She is loaded with property assets, compared to most of us out there. And she could (and can) afford to pay her legal bill. It's her own fault for having this go as far as it did.

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    1. Hello Anonymous and welcome to my blog. You seem to have insider information on this. Won't you grace us with a citation?

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    2. JC Little, I just listened to CKNW today. Fotsch was on the show. That's all. But I have civil litigation experience dating back to 1995. And I will say, if her legal fees were only $180K for going through two levels of court in BC, she got off easy! ;) I also mentioned in my last post that the only option she may have left is to see a trustee and bankruptcy and get a 'stay of proceedings' slapped on her creditor(s). A trustee is basically someone who comes in and takes control of all the assets. The trustee works for both parties involved. I think this may be her only option left. But I haven't seen enough of the details headed to court to make any further comment on this. It's all my opinion of course.

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    3. Ah. But even if she is loaded with property assets, it still seems unfair that the ex gets away with bankruptcy, and that the lawyer now takes the very house he was meant to be saving for her. Plus there's all that interest. It may be legal and everything but it feels unfair.

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    4. The ex-hubby went BK probably because he never had anything left, because his attorney took it all, lol. But section 178 bankruptcy insolvency act can lend some relief to a creditor who is looking to recoup some of their losses by someone who went BK on them and dumped them with a boat load of legal fees and other debt owning to them. But again, it's a huge frustrating challenge and it means more expensive litigation in a BK court. And that too can add up to additional tens of thousands of dollars in additional litigation fees in chasing a bankrupt individual. It's the most confusing, frustrating crazy legal sh*t you can ever get yourself involved in. But highly profitable to the attorneys who are clever enough to get their gullible clients to keep on keeping on through the courts :-)

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  10. Hey JC. If you want to listen to the radio show she was on, CKNW 98 AM Radio has an online radio vault for past aired programs. Was about 10 minutes long, if I remember right. Have a good one.

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  11. @Eric Spelt - Eric, you appear to live in dreamland. Surely you must be jesting in all you wrote? If not, good Lord....

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