On Wednesday, September 6, 2023, the Presiding Disciplinary Judge of the Arizona Supreme Court issued a reprimand and order for restitution against Gabriel Vadasz, a lawyer not licensed in Arizona but admitted pro hac vice to represent a client in an Arizona court case. The reprimand and order came after the Judge accepted an Agreement for Discipline by Consent between Vadasz and the State Bar of Arizona.
The case is entitled “In the Matter of Gabriel Vadasz,” with case number PDJ 2023-9067.
The agreement details that in early 2021, Vadasz’s law firm Diamondback Legal entered into engagement letters with Xin Zhang to represent Zhang or his businesses in several legal matters. This included an interpleader case filed in Maricopa County Superior Court by Comerica Bank against one of Zhang’s businesses, G-Service LLC. Vadasz was granted pro hac vice admission in April 2021 for the Comerica case.
In the Comerica case, the court ordered the release of $221,635 to Diamondback Legal in May 2021 to pay G-Service’s bills. By October 2021, Diamondback Legal had distributed $151,755 of those funds but was unable to distribute the remaining $78,380. The court then ordered Diamondback Legal to return the undistributed funds to the Clerk of Court. Vadasz used a cashier’s check rather than a trust account check to return the funds, which was cited as an ethical violation.
The agreement also states that Diamondback Legal’s engagement letters with Zhang failed to clearly explain the scope of work covered by a $2 million flat fee for a possible class action case. The letters also did not disclose that Zhang could be billed additional funds for taxes if the total fees exceeded $50,000 annually. However, Diamondback Legal invoices subsequently billed over $200,000 for taxes.
Based on these facts, Vadasz agreed he violated rules requiring lawyers to act with reasonable diligence, keep clients reasonably informed, and properly handle client property.
The September 2023 order imposed a reprimand against Vadasz as a discipline. He was also ordered to comply with any restitution ordered through pending private arbitration over legal fees paid to Diamondback Legal. Finally, Vadasz must pay $1,200 in costs to the State Bar of Arizona.
The agreement between Vadasz and the State Bar was approved after notice to Zhang, who objected to the proposed discipline as too lenient. The State Bar responded that the reprimand was appropriate given Vadasz’s status as a non-member lawyer in Arizona. The fee dispute issues raised by Zhang were deferred to the private arbitration process.
According to avvo.com, Mr. Vadasz is a business attorney in New Mexico. He acquired his law license in New Mexico in 2019.
A copy of the original filing can be found here.
