The California Supreme Court has suspended a Redondo Beach attorney specializing in employment litigation from practicing law for two years over what the California State Bar said was a “major misappropriation of client funds.”
Zein E. Obagi Jr., who also serves as a Redondo Beach city councilman, will have to spend a third year on probation, according to the Supreme Court order. To be reinstated, Obagi will also have to provide proof of rehabilitation and show that he has complied with all the conditions imposed during the probation period, the court said.
The disciplinary timeline will begin on May 3, according to the State Bar. Obagi was also required to pay monetary sanctions to the State Bar of $2,500.
The attorney, who has represented aggrieved workers since being admitted to the State Bar in July 2009, said he fully expects to be reinstated once the suspension ends.
“In my short career thus far, I’ve recovered millions of dollars for subjects of unlawful discrimination and retaliation at work,” Obagi told the Southern California Record in an email. “My rating on Google was a 4.9, and I’ve been recognized time and again, including during the pendency of the Bar charges, by Super Lawyers.”
The State Bar argued that the attorney failed to pay $515,000 in trust account funds to a client as part of a sales contract while representing two partners in a cannabis dispensary, Valley Herbal Healing Center. A closing trial brief filed by Obagi’s attorney said Obagi believed a court order requiring the payment to dispensary partner Eric Dominguez was the responsibility of partner Tim Cullen, although Obagi conceded later that the belief was not reasonable.
“I made the mistakes that I made, and failed to correct them earlier than I did, in no small part because of the poor representation by insurance-appointed counsel who failed to guide me to correct-course earlier,” Obagi said. “My malpractice case against my former attorney will go to trial in January 2025.”
Obagi also failed to inform the two partners that his representation of both of them could lead to a conflict of interest, according to the State Bar.
Previous legal filings by Obagi’s attorney emphasized that Obagi did not benefit personally through the handling of the $515,000 and that he had a good character and a history of community service.
“The agreed-upon facts and Mr. Obagi’s credible testimony establish that he repeatedly did what he thought was right, that if he had researched his ethical obligations he would have avoided the misconduct, that he did not personally benefit from his handling of the funds at issue, and that he delivered the funds to Mr. Dominguez’s former partner Mr. Cullen because he had an honestly held, though not reasonable belief that the Superior Court’s order that Mr. Cullen pay Mr. Dominguez made Mr. Cullen responsible for making that payment,” the respondent’s closing trial brief says.
Obagi stressed that no outstanding harm was done to any of his former clients as a result of the misappropriations issue.
“I will continue to advance the cases of aggrieved employees serving as legal support to licensed attorneys, assisting in the drafting and preparation of pleadings as permitted by law,” he told the Record.
Obagi “recognizes his wrongdoing and has demonstrated his remorse by apologizing to Mr. Dominguez at a time when there was no conceivable tangible benefit to his doing so, and he demonstrated in his testimony his remorse and recognition of wrongdoing,” Obagi’s September 2023 filing with the State Bar Court states.