In the Matter of George Martin Derieg
Review Department (2023) 6 Cal. State Bar Ct. Rptr. 46
Overview
This case reemphasizes two important principles in California attorney discipline: (1) the improper use of Business & Professions Code § 6068(a) when a specific Rule of Professional Conduct applies, and (2) the powerful role of mitigation evidence in reducing discipline — even in intentional misappropriation cases.
Respondent committed misconduct in a single probate matter, including early fee withdrawal, misappropriation, illegal fee collection, and misrepresentation to the probate court. Despite serious misconduct, the Review Department affirmed a 15-month actual suspension rather than disbarment due to compelling mitigation.
Facts
Derieg represented an administrator in a probate estate. In January 2017, after real property in the estate sold, Derieg directed escrow to issue:
- $14,300 to himself
- $4,000 to co-counsel
The funds were taken before court approval, as required under the Probate Code. Derieg deposited his $14,300 into his business account (not a client trust account) and spent the funds on unrelated expenses.
Later, in the final accounting filed with the probate court, Derieg requested approval of $14,300 in fees — without disclosing he had already been paid.
When substitute counsel discovered the discrepancy, the court issued an order to show cause. Derieg refunded $10,692 to the estate before court order and apologized to the court.
Culpability
| Violation | Finding |
|---|---|
| Failure to deposit in CTA (former Rule 4-100(A)) | Found |
| Moral turpitude misappropriation (§ 6106) | Found |
| Illegal fee (former Rule 4-200(A)) | Found |
| Misrepresentation to court (§ 6106) | Found |
| Seeking to mislead a judge (§ 6068(d)) | Found |
| § 6068(a) violation (duplicative charge) | Dismissed |
Important Legal Holding
The court reaffirmed that when misconduct is properly charged under a Rule of Professional Conduct, it is improper to also charge the same conduct under § 6068(a). Duplicative statutory charges serve little purpose.
Aggravation
- Multiple acts of wrongdoing
However, aggravation was given only limited weight because: the fees were earned but taken early, and the misconduct occurred in a single client matter.
Mitigation (Compelling)
- 11 years of practice with no prior discipline
- Full restitution before court order
- Completion of probate training seminar
- Hiring experienced probate paralegal
- Substantial cooperation with the State Bar
- 53 character witnesses (8 testified live)
- Extensive community service and pro bono work
- Demonstrated remorse
The Review Department found the mitigation “sufficiently compelling” under Standard 2.1(a) to avoid disbarment for intentional misappropriation.
Discipline
| Sanction Component | Term |
|---|---|
| Stayed Suspension | 2 years |
| Actual Suspension | 15 months |
| Probation | 2 years |
| Conditions | Ethics course, reporting, compliance monitoring |
Why Disbarment Was Not Imposed
Although intentional misappropriation normally results in disbarment, the court emphasized that discipline is not punitive. Where misconduct is aberrational and overwhelming mitigation exists, actual suspension may suffice to protect the public.
The court distinguished more egregious disbarment cases involving concealment, repeated dishonesty, or large sums.
Key Takeaways for Attorneys
- Probate fees require prior court approval.
- Even earned fees must remain in trust until authorized.
- Misrepresentation to a court significantly aggravates discipline.
- Compelling mitigation can reduce discipline even in misappropriation cases.
- Duplicative § 6068(a) charges are improper when rule violations apply.
Misappropriation cases often carry a presumption of disbarment. Strategic mitigation presentation can be decisive. East Bay Law P.C. defends attorneys in State Bar investigations and State Bar Court proceedings.
Contact East Bay Law P.C.