In the Matter of the Disciplinary Proceeding Against DANA KRISTIN FOSSEDAL, an Attorney at Law.
Fossedal misappropriated more than $117, 000 in client funds
for which she was convicted of first degree theft. The
Washington State Bar Association (WSBA) charged her with five
violations of the RPCs stemming from this misconduct. After a
disciplinary hearing, the hearing officer noted that the
presumptive sanction for theft of client funds is disbarment,
but nevertheless recommended a three-year suspension. On
review, the WSBA Disciplinary Board (Board) modified the
hearing officer's decision and unanimously recommended
disbarment instead of suspension.
asks us to reject the Board's unanimous recommendation of
disbarment. However, she is unable to identify any clear
reason to depart from the Board's recommendation.
Accordingly, we disbar Fossedal from the practice of law.
has been a licensed attorney in Washington since 1998. In
2005, she opened her own law office, focusing on family law.
As of 2009, she employed an associate and a paralegal.
Fossedal personally maintained the firm's finances, and
was the only person in the office who handled financial
matters and signed checks.
end of 2009, Fossedal was almost never in the office. By
2011, Fossedal spent "essentially no time" there.
Findings of Fact & Conclusions of Law (FF/CL) at 4.
Theft of Brian Schoof's Funds
this time, Brian Schoof, a part-time King County Metro bus
driver, hired Fossedal to represent him in the dissolution of
his marriage. He and Fossedal entered into a fee agreement
for an hourly fee of $250 and an advance fee deposit of $5,
000. Fossedal assigned the matter to her associate, Misty
Hayes, a recent law school graduate. Hayes managed the client
file, including attending a mediation. In December 2009, the
court entered a "Decree of Dissolution" in the
Schoof matter. It awarded $117, 225.17 to Schoof as an
equalization payment for his interest in the family
January 20, 2010, Fossedal received a check for $117, 225.17
on behalf of Schoof. Fossedal personally endorsed the check
and deposited it into her KeyBank trust account. She did not
tell Schoof that she had received his funds and did not
disburse any of the money to him.
moved all her business and personal accounts, including her
trust account, from KeyBank to Chase Bank later that year. On
September 3, 2010, she issued a check for $122, 434.96 from
her KeyBank trust account and deposited it into her new Chase
Bank trust account. That check included the $117, 225.17 of
Schoof s funds.
the next year, Fossedal made many withdrawals from the Chase
Bank trust account. Most of her withdrawals from trust were
wire transfers to her general account or personal account.
She testified that she made these transfers based on
estimates rather than by keeping track of hours worked. By
September 16, 2011, the trust account balance had dropped to
a mere $24.74.
never disbursed any of Schoof s funds to him. Instead, she
used Schoof s funds "for her own benefit, directly or
indirectly, without authorization to do so."
Id. She used his funds for daily business and
personal expenses such as payroll, office supplies, rent,
symphony and Mariners tickets, groceries, pet food,
restaurants, and manicures. Fossedal never sent Schoof any
billing statements or accountings before removing his funds
Letter from Misty Hayes
March 2011, Fossedal's firm was fifteen months delinquent
on billing. Hayes, her associate, sent Fossedal a letter
expressing her concerns about the firm's financial
management and her ethical obligations to its clients,
I am more than a little concerned about the status of my
clients' funds in trust since we have not billed in such
a long time. Logic suggests if we are not billing, we cannot
be transferring monies out of trust. If we are working on
cases, we are earning our fees and that money cannot stay in
trust. This creates quite an ethical conundrum. Further, if
we are not billing then we are not receiving any payments
from our clients. With such high overhead and no incoming
funds, I am unclear how you can sustain this firm.
Ex. 9; FF/CL at 6; 1 Verbatim Report of Proceedings (VRP)
(Mar. 7, 2016) at 74. Hayes then requested the most recent
trust account statements and reconciliations for the client
accounts on which she had been working.
responded by e-mail the following week, informing Hayes that
"you have absolutely no access nor any responsibility as
pertains to any of the office financial accounts, " and
that failure to turn over documents relating to the
firm's financial accounts within 24 hours "shall be
considered insubordination and cause for possible
termination." Ex. 10. In closing, she added that
"[t]his letter is intended to relieve you of any ethical
obligations regarding the firm's financial business,
including the trust accounts." Id; FF/CL at 6;
1 VRP (Mar. 7, 2016) at 86. Hayes left the firm soon
Schoof's Efforts To Recover His Funds: WSBA Grievance and
April 2010, Schoof learned from Hayes that his settlement
proceeds had been transferred to Fossedal. He made several
attempts to contact Fossedal and recover the funds.
called Fossedal's office on a monthly basis, seeking
disbursement. He was never able to speak with Fossedal, and
she never returned his calls. Fossedal either failed to
respond to his e-mails or, when she did, failed to provide
substantive information or stated that she was sick and
"needed time to get back to him with regard to the
funds." FF/CL at 7; Ex. 28 (Certification for
Determination of Probable Cause at 3).
filed a grievance with WSBA in May 2012. Fossedal never filed
2012, Schoof hired a lawyer, Hans Mil, to collect his funds
from Fossedal. Juhl unsuccessfully tried to contact Fossedal
about the money. However, after getting in touch with Hayes,
he obtained a copy of the disbursement check from the title
through Juhl, sued Fossedal and obtained a default judgment
for $161, 186.75, which included the amount that Fossedal
stole from Schoof, the advance fees Schoof paid, attorney
fees, and interest. Juhl tried to get in touch with Fossedal
to set up a plan for repayment, to no avail. Ultimately,
Schoof was able to collect less than $4, 000 by garnishing
Fossedal's husband's wages. That money went toward
attorney fees to Juhl.
filed for bankruptcy in 2014, She listed the default judgment
she owed Schoof as an unsecured debt on her bankruptcy
schedules. Schoof hired another lawyer to bring an adversary
proceeding to contest the dischargeability of the debt based
on fraud and defalcation. After Fossedal's husband got a
job that paid enough to avoid bankruptcy, Fossedal later
abandoned the bankruptcy without obtaining a discharge.
Schoof s adversary proceeding was dismissed without
August 2015, the WSBA's Lawyers' Fund for Client
Protection (LFCP) made a $117, 225.17 gift to
Schoof. FF/CL at 9.
Fossedal's First Degree Theft Conviction
March 5, 2014, the King County Prosecuting Attorney's
Office charged Fossedal with first degree theft, with an
aggravating factor of abuse of trust.
pleaded guilty as charged on July 16, 2014. She filed a
"Statement of Defendant on Plea of Guilty" that
read, "[W]ith intent to deprive another of property . .
., I executed unauthorized control over money belonging to
Brian Schoof. ... I used my position of trust, confidence,
and fiduciary duty as his attorney to facilitate the
commission of the theft." Id. at 8.
sentencing, the prosecutor argued for an exceptional sentence
of 12 months. She noted that during the time frame that
Fossedal was spending Schoof s money, Schoof was financially
destitute, sleeping on a friend's couch, and waiting for
his divorce settlement funds to help get him back on his
feet. The court sentenced Fossedal to a six-month jail term,
later amended to nine months of electronic home monitoring.
court also ordered Fossedal to pay restitution of $131,
065.07, to be applied against Schoof s default judgment. In
March 2015, Fossedal began working part time caregiving for a
friend's mother, earning $20 per hour. As of March 8,
2016 (the time of the ...