State Bar Acts to Take Over Embattled Law Practice

The State Bar of California on Tuesday moved to take control of a San Diego lawyer’s practice, concluding that Richard Degallegos has failed to adequately represent his clients and poses a “possible threat” to the public and the legal profession.

After reviewing evidence and listening to testimony over two days, a State Bar hearing officer ruled that the bar had “probable cause” to take over Degallegos’ law practice because the attorney has repeatedly missed court appearances, ignored judicial orders and knowingly allowed an unlicensed lawyer to represent his clients in court.

Victoria Molloy, senior trial counsel for the State Bar, said she would seek an order from the Superior Court on Thursday to allow the bar to immediately assume control of Degallegos’ San Diego law office.

If the court grants the order, the bar will seize the attorney’s files, contact his clients and recommend that they hire a new lawyer, Molloy said. Depending on the extent of the order, Degallegos could have his license to practice law suspended pending a formal hearing on the matter later this month, she said.

Move Called ‘Very Rare’

Molloy said it is “very rare” that the State Bar attempts to seize control of the law practice of an attorney who is contesting the move and is still actively representing clients.

“Usually, we take this sort of action in the event an attorney has died, disappeared or resigned,” Molloy said. “I can’t recall another instance when we have taken this action under these circumstances.”

Tuesday’s development is the latest setback for the 48-year-old lawyer. Degallegos, who was not at the hearing and did not return telephone calls from a reporter Tuesday, is the target of investigations by the State Bar, the San Diego County district attorney’s office and a federal grand jury.

More than two dozen complaints have been filed against Degallegos with the State Bar. Those allegations include that he missed court appearances, failed to perform work for which he was hired and abandoned clients.

The district attorney’s office, meanwhile, is investigating several accusations that Degallegos misappropriated clients’ funds and is guilty of criminal violations.

It is not uncommon for attorneys to be hit with complaints from unhappy clients or be investigated for misconduct by prosecutors or the State Bar. But the Degallegos case has attracted widespread interest because of his voluminous caseload--an estimated 1,000 cases statewide--and the large number of complaints filed against him.

In an indication of how seriously the local legal community takes the matter, the San Diego County Bar Assn. last month established the first hot line created solely to field calls from clients of Degallegos who are worried about the status of their cases. That number is 231-0784; more than 150 calls had been received as of Monday.

Reasons for Action Detailed

Under the California Business and Professions Code, the State Bar can take emergency action to assume jurisdiction over a lawyer’s practice if he poses a threat of harm to the public. In a Nov. 17 notice alerting Degallegos to the bar’s intention, officials detailed these reasons for taking action against the lawyer:

- Degallegos has been sanctioned 14 times in 1988 by the Superior Court for failure to appear in court or to abide by judicial orders. That number does not include fines that may have been imposed by the Municipal and Family courts, which do not keep a record of sanctions.

- In October, Degallegos was found in contempt of court and sentenced to jail by Municipal Judge Lillian Lim Quon. The five-day jail sentence was suspended pending a review of the matter by the 4th District Court of Appeal next month.

- Degallegos has been unable to meet the needs of all clients and has put some of them or their cases in jeopardy by maintaining three law offices in California and agreeing to handle more than 1,000 cases.

- Degallegos has often allowed non-lawyers and others who are not licensed to practice in California to prepare pleadings, make court appearances for him and otherwise handle cases, thereby endangering clients.

In summary, the bar charged that Degallegos has “become incapable of devoting the time and attention” necessary to protect the interests of his clients.

Testimony From 11 Witnesses

During the two-day hearing, which began Monday, Hearing Officer David Perrine heard testimony from 11 witnesses and reviewed 37 exhibits supporting the State Bar’s case against Degallegos.

Among those testifying was Superior Court Judge Thomas R. Murphy, who said an employee of Degallegos, June Boothby, had represented herself as an attorney while appearing in his courtroom on behalf of her colleague’s clients. Boothby is not licensed to practice law in California.

Murphy also said he believes Degallegos is the only attorney he has ever sanctioned during his eight years on the bench. The judge fined Degallegos twice, once for tardiness and once for failing to turn over funds owed an opposing attorney. The second fine was $1,000.

Murphy also said he became frustrated with Degallegos because the lawyer repeatedly kept clients and other attorneys waiting and asked the court to postpone proceedings in his cases.

Also testifying was a State Bar investigator and clients and former employees of Degallegos, who described an overloaded, disorganized law practice.

Continuance Denied

Before giving the State Bar the green light to proceed against Degallegos, Perrine denied a motion by the attorney requesting a continuance of the hearing. The motion was filed on the second day of the hearing and thus was untimely, Perrine noted. More importantly, he ruled that Degallegos’ argument that he was not granted sufficient notice of the hearing was “specious.”

Degallegos also lost a bid to block the State Bar’s attempt to take over his practice. A U. S. district judge rejected that challenge Friday.

Degallegos, whose San Diego practice is known as Plaza Legal Inc., is a graduate of Western State University School of Law. In previous interviews, he has blamed his woes on his former wife, Susan Eblen, charging that Eblen has prompted former clients to file complaints against him because she is “out to destroy me.”

Should the Superior Court strip Degallegos of his practice, formal disciplinary charges would then be brought against him by the State Bar. A hearing on those charges would be held some time during the next six months. Discipline by the bar could range from a private reproval to disbarment.

Molloy, the bar’s senior trial counsel, said that, if the Superior Court authorizes the transfer of Degallegos’ caseload, she will seek similar orders in Salinas and Santa Maria, where the attorney also maintains offices.