On Wednesday, May 7, 2025, the Supreme Court of California suspended attorney Rachael Anne Callahan from practicing law for one year, with the execution of the suspension stayed. She was also placed on probation for one year, during which she will be suspended from the practice of law for the first 30 days. Callahan faced disciplinary action due to misconduct involving a settlement dispute.
The case is entitled “In the Matter of Rachael Anne Callahan,” with case no. S289690.
The case stems from events beginning in 2016 when Callahan leased commercial space for her law office from Alan Yaghdjian, operating as Mission Valley Terrace. Callahan’s practice focuses on representing landlords in unlawful detainer cases. In December 2020, Yaghdjian filed an unlawful detainer action against Callahan in the San Diego Superior Court to reclaim the property. In response, Callahan initiated a small claims action in March 2021, seeking the return of her security deposit and other damages. Yaghdjian then filed a civil lawsuit in April 2021, pursuing damages for alleged lease breaches related to the same property.
On June 3, 2021, the parties reached a verbal settlement agreement during a conference, agreeing that Yaghdjian would pay Callahan $34,000 within 15 days of her vacating the premises. Callahan was to vacate within 15 days, port her phone lines within 20 days, and both parties would dismiss their respective claims. By June 11, 2021, Callahan had vacated the property, ported her phones, and dismissed her small claims case. She drafted a settlement agreement based on the June 3, 2021, terms and sent it to Yaghdjian’s counsel.
On June 25, 2021, Yaghdjian’s attorney sent Callahan a modified settlement agreement, along with a photograph of a $34,000 cashier’s check, stating it was being held until the agreement was finalized. Despite not signing the modified agreement, Callahan processed the check for payment on June 30, 2021, using the provided front image and a photograph of the back of a different check with her endorsement. Court documents state she knew she lacked authorization to deposit the check, as it was contingent on signing the modified agreement.
In August and September 2021, Callahan filed motions to enforce the original settlement agreement in both the unlawful detainer and civil cases. In a September 21, 2021, declaration, she stated that Yaghdjian had “tendered full payment” of the $34,000, a claim deemed misleading since she knew the check had not been formally given to her. Yaghdjian later received a refund for the check from Bank of America in October 2021, and both cases were dismissed.
The State Bar Court found Callahan’s actions constituted moral turpitude and dishonesty, violating Business and Professions Code section 6106. Her unauthorized deposit of the check and misleading court statement were cited as willful violations. No aggravating factors were noted, but mitigating factors included her 13 years of discipline-free practice since her admission in 2011, 26 character reference letters attesting to her professionalism, and her cooperation in entering a prefiling stipulation.
Callahan’s probation conditions include taking the Multistate Professional Responsibility Examination, complying with California Rules of Court, Rule 9.20, within 30 and 40 days of the court’s order, attending the State Bar’s Client Trust Accounting School, and submitting quarterly reports to the Office of Case Management and Supervision. She must also pay $1,250 in monetary sanctions to the State Bar’s Client Security Fund and cover disciplinary costs. Failure to meet these conditions could result in further suspension or disbarment.
The Disposition states:
“The court orders that Rachael Anne Callahan (Respondent), State Bar Number 275627, is suspended from the practice of law in California for one year, execution of that period of suspension is stayed, and Respondent is placed on probation for one year subject to the following conditions: Respondent is suspended from the practice of law for the first 30 days of probation.”
According to Avvo.com, Ms. Callahan is a real estate attorney in San Diego, California. She attended the University of San Diego School of Law, graduating in 2011. She acquired her law license in California in the same year.
A copy of the original filing can be found here.
