Disciplinary Proceedings Against Kelly
2012 WI 55, 341 Wis.2d 104, 814 N.W.2d 844 (2012)
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ATTORNEY disciplinary
proceeding. Attorney's license
revoked.
¶1 PER CURIAM. We review the report
of the referee, Reserve Judge John B.
Murphy, recommending that Attorney T.
Christopher Kelly's license to practice law
in Wisconsin be revoked, that he be required
to pay $31,541.50 to the Lawyers' Fund for
Client Protection (the Fund) as restitution
for the amounts the Fund paid to Attorney
Kelly's former clients due to his
misconduct, and that he be required to pay
the full costs of this disciplinary
proceeding, which were $4,600.44 as of
December 5, 2011. Because no appeal has
been filed in this matter, our review
proceeds pursuant to SCR 22.17(2).
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¶2 Attorney Kelly was admitted to the
practice of law in Wisconsin in June 1980.
He formerly maintained a private law
practice in Madison. In March 2009 this
court temporarily suspended Attorney Kelly's
license due to his willful failure to
cooperate with the grievance investigations
being conducted by the Office of Lawyer
Regulation (OLR). Attorney Kelly's license
has remained temporarily suspended to the
date of this opinion.
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¶3 On July 20, 2011, the OLR filed a
complaint against Attorney Kelly and an
order to answer. The complaint alleged 51
separate counts of misconduct. Attorney
Kelly was personally served with the
complaint and order to answer on August 6,
2011.
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¶4 On August 22, 2011, Attorney Kelly
filed a very brief answer to the OLR's
complaint. The answer consisted of a single
sentence stating that Attorney Kelly
denied "each and every material allegation
of paragraphs 3 through 231." One of the
two paragraphs Attorney Kelly's answer did
not deny has some procedural significance
for this proceeding. Paragraph 2 of the
complaint alleged that Attorney Kelly
resided at an address on Sidney Street in
Madison. Thus, by not denying paragraph 2,
Attorney Kelly's answer admitted that he did
reside at the stated address.
¶5 On September 9, 2011, this court
appointed Reserve Judge Murphy to act as the
referee in this matter. On September 12,
2011, Referee Murphy sent a letter to
Attorney Kelly and Attorney Thomas Basting,
who was representing the OLR. The letter
sent to Attorney Kelly was addressed to the
Sidney Street address he had admitted. The
letter announced that the referee would hold
a scheduling conference via telephone on
September 20, 2011, at 8:15 a.m. The letter
directed Attorney Kelly to provide a
telephone number at which he could be
reached to Attorney Basting, who bore the
responsibility of initiating the conference
call. The letter further informed the
attorneys that if the date and time did not
work for one of them, that attorney should
notify the referee, who would then arrange
another mutually agreeable date and time.
¶6 The referee's report indicates that
Attorney Basting called the referee at the
appointed time on September 20, 2011.
Attorney Basting informed the referee that
he had not received any communication from
Attorney Kelly. Thus, he did not have a
number at which to call Attorney Kelly.
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¶7 According to an affidavit filed by
Attorney Basting, during the September 20,
2011 conference call, the referee instructed
him to file a motion for a default and to
schedule the motion for a telephonic hearing
on October 11, 2011, at 8:15 a.m. Pursuant
to the referee's direction, Attorney Basting
filed a motion to strike the answer that
Attorney Kelly had filed and for a
declaration of a default against Attorney
Kelly. The motion was again addressed to
Attorney Kelly at the Sidney Street address.
¶8 At the scheduled time on October 11,
2011, Attorney Basting again called the
referee. Attorney Kelly did not call either
the referee or Attorney Basting at the time
of the hearing, nor did he otherwise contact
either of them.
¶9 Although there is not a transcript
of the October 11, 2011 telephonic hearing,
it appears that the referee orally found
Attorney Kelly to be in default due to his
failure to appear at the telephonic
scheduling conference and the telephonic
motion hearing. On October 13, 2011,
Attorney Basting sent a letter to the
referee submitting a proposed order that
would strike Attorney Kelly's previously
filed answer and find him to be in default.
Attorney Basting's letter indicated that a
copy of the letter was being sent to
Attorney Kelly at the Sidney Street
address. It further advised Attorney Kelly
that he had 15 days to object to the form of
the order and that if he failed to object,
the referee would sign the proposed order
and the matter would proceed on a default
basis.
¶10 Attorney Kelly did not respond. On
October 30, 2011, Referee Murphy signed an
order entitled "Order Striking Answer and
Finding Respondent in Default." In the
order, the referee struck Attorney Kelly's
answer and found that Attorney Kelly was in
default "for failing to attend the
scheduling conference and for failing to
appear at the motion hearing."
¶11 In the cover letter that accompanied
the October 30, 2011 order, a copy of which
was sent to Attorney Kelly at the Sidney
Street address, the referee advised both
attorneys that they should provide the
referee with their respective
recommendations for discipline by November
11, 2011.
¶12 The OLR submitted a letter setting
forth its position that Attorney Kelly's
license to practice law in Wisconsin should
be revoked. The OLR's letter also stated
that it was requesting that Attorney Kelly
be required to pay $31,541.50 in restitution
to the Fund to reimburse it for payments
that it had made to certain specified
clients. Attorney Kelly did not submit a
sanction letter or memorandum.
¶13 On November 14, 2011, the referee
filed his report and recommendation. The
report did not expressly state that the
referee was accepting as true all of the
allegations of the OLR's complaint, which
would follow from a finding of a default,
nor did it recount the specific allegations
of the complaint, but the report did state
that Attorney Kelly "is guilty of fifty-one
(51) violations of the Supreme Court
Rules." This conclusion indicates that the
referee accepted as true all of the
allegations of the complaint.
¶14 The OLR's complaint describes
Attorney Kelly's conduct in connection with
the representation of 12 criminal
defendants. It also addresses a thirteenth
matter where Attorney Kelly failed to
respond to the OLR's request for information
about a grievance.
¶15 Repeating the allegations of each
separate matter here is not necessary. It
is sufficient to describe the general
pattern that each of the 12 representations
followed. At the beginning of a
representation, Attorney Kelly collected a
substantial advance "flat" fee in exchange
for his promise either to assess a convicted
individual's case for possible
postconviction or appellate challenges or to
pursue either a postconviction motion in the
circuit court or an appeal. In most cases
Attorney Kelly did no substantial work on
the individual's case. In a couple of cases
he did some work, but then stopped his
efforts before they were completed. He
routinely failed to respond to inquiries
from the clients or their families, some of
whom were paying Attorney Kelly's attorney
fees. When he did communicate with the
client or a family member, Attorney Kelly
indicated that he was working on the matter
and would soon have the promised legal
assessment, motion or brief for the client.
Attorney Kelly, however, would not perform
the promised services. In each situation,
the OLR ultimately sent a grievance to
Attorney Kelly and made multiple requests to
him for information about the grievance.
Attorney Kelly failed to respond to the
OLR's requests, which ultimately resulted in
this court's temporary suspension of his
license in March 2009.
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¶16 Among the 51 counts of misconduct
found by the referee were ten counts of
demonstrating a lack of diligence, in
violation of SCR 20:1.3. Ten of the counts
involved Attorney Kelly's failure to
communicate with the client or the client's
family, in violation of the current and
former versions of SCR 20:1.4(a). The
referee further found that in seven
instances Attorney Kelly had committed
professional misconduct by failing to return
all or a portion of the advance fees he had
collected from his clients. SCR 20:1.16
(d). In all 13 matters, Attorney Kelly
failed to respond to the OLR's requests for
information during its investigation of his
conduct, in violation of either SCR 22.03(2)
or SCR 22.03(6).
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¶17 Consistent with the OLR's request,
the referee recommended that Attorney
Kelly's license to practice law in Wisconsin
be revoked as discipline for his
professional misconduct. The referee
further recommended that Attorney Kelly be
required to pay restitution to the Fund for
the $31,541.50 it had paid to compensate the
victims of his misconduct. The referee also
recommended that Attorney Kelly should be
ordered to pay the full costs of this
proceeding.
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¶18 Our review of the referee's findings
of fact, conclusions of law, and sanction
recommendation follows long-established
standards. Specifically, we affirm a
referee's findings of fact unless they are
found to be clearly erroneous, but we review
the referee's conclusions of law on a de
novo basis. In re Disciplinary
Proceedings
Against Inglimo, 2007 WI 126, ¶5, 305 Wis.
2d 71, 740 N.W.2d 125. We determine the
appropriate level of discipline given the
particular facts of each case, independent
of the referee's recommendation, but
benefiting from it. In re Disciplinary
Proceedings Against Widule, 2003 WI 34,
¶44,
261 Wis. 2d 45, 660 N.W.2d 686.
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¶19 Before turning to the merits of the
conclusions of misconduct, we first address
the referee's finding that Attorney Kelly
was in default. In considering this matter,
we look to the rules of civil procedure,
which are applicable to proceedings before a
referee in attorney disciplinary cases. SCR
22.16(1). This is not a case where a
defendant or respondent fails to join issue
through an answer or other responsive
pleading. A defendant's or respondent's
failure to join issue is the usual situation
in which a default may be declared. See
Wis. Stat. § 806.02(1) (2009-10) ("A default
judgment may be rendered as provided in
subs. (1) to (4) if no issue of law or fact
has been joined and if the time for joining
issue has expired.").
¶20 In this case Attorney Kelly did file
an answer, which, while brief, sufficiently
joined issue with the OLR's complaint.
Thus, the only possible way to find Attorney
Kelly to be in default was by means of
striking his answer as a sanction for
misconduct in the action.
¶21 Section 802.10(7) of the Wisconsin
Statutes provides that violations of a
scheduling or pretrial order can subject a
party to the sanctions authorized in Wis.
Stat. §§ 802.05 (signing a false or
frivolous pleading), 804.12 (failing to
provide discovery), and 805.03 (failure to
prosecute or comply with procedural
statutes). Section 802.10(7), Stats., has
been interpreted to mean that the failure to
attend a scheduling conference is a failure
to comply with a scheduling order that can
subject a party to a sanction. See, e.g.,
Gaertner v. 880 Corp., 131 Wis. 2d 492,
501-
02, 389 N.W.2d 59 (Ct. App. 1986). Thus, it
seems clear that the referee had authority
to impose some sort of sanction against
Attorney Kelly due to his failure to appear
for the telephonic scheduling conference and
subsequent failure to appear for the default
motion telephonic hearing.
¶22 The striking of a timely answer and
the granting of a default, however, is a
drastic sanction. The appellate courts of
this state have indicated that under the
various rules authorizing the imposition of
sanctions, the granting of a default against
a defendant is a sanction that may be used
only where the trial court has determined
that the defendant's violation was egregious
or in bad faith. See, e.g., Schneider
v.
Ruch, 146 Wis. 2d 701, 707-08, 431 N.W.2d
756 (Ct. App. 1988) ("Under other statutes
empowering the trial court to impose
sanctions for failure to comply with court
orders, failure to prosecute, and failure to
make discovery, the Wisconsin Supreme Court
and the court of appeals have said that
dismissal is a drastic penalty that should
be imposed only in cases of egregious
conduct by a party. [case citations
omitted]"); Gaertner, 131 Wis. 2d at 501-
02
(upholding trial court's striking of answer
and granting of default due to failure of
defendants to attend scheduling conference
where trial court found defendants' conduct
to be egregious).
¶23 The referee's order striking
Attorney Kelly's answer and finding him to
be in default indicated that it was based on
Attorney Kelly's failure to appear at both
the initial scheduling conference and the
default motion hearing. It did not,
however, include a specific finding that
Attorney Kelly's conduct was either
egregious or in bad faith. While including
such an explicit finding in a default order
is certainly the better practice, the lack
of such an explicit finding does not require
that we remand the matter to the referee.
An appellate court may affirm a trial
court's sanction if the trial court
implicitly found the party's conduct to be
egregious and the facts in the
record "provide a reasonable basis on review
for the court's conclusion." Schneller v.
St. Mary's Hospital, 162 Wis. 2d 296, 311,
470 N.W.2d 873 (1991); Sentry Ins. v.
Davis,
2001 WI App 203, ¶22, 247 Wis. 2d 501, 634
N.W.2d 553.
¶24 Here the record, including the
referee's October 30, 2011 order, indicates
that the referee impliedly found Attorney
Kelly's conduct to be egregious. Moreover,
the facts in the record do provide a
reasonable basis for that conclusion. It is
important to note that the referee did not
strike Attorney Kelly's answer immediately
upon his failure to appear for the initial
scheduling conference. Instead, the referee
suggested that the OLR should bring a motion
to strike the answer and find Attorney Kelly
to be in default. The notice of that motion
and the subsequent hearing gave Attorney
Kelly a second opportunity to appear and
participate in the action. He did not do
so, but instead failed to appear yet again.
In addition, that motion hearing was not
Attorney Kelly's last opportunity to be
heard. The OLR's counsel submitted a
proposed order and, pursuant to the
referee's direction, informed Attorney Kelly
that he had 15 days to object to the form of
the order. This was a third opportunity to
participate, which Attorney Kelly again
chose not to take. Each of the
communications that preceded these three
separate opportunities to participate was
sent to the address that Attorney Kelly's
answer admitted was his proper current
address. Thus, it is reasonable to conclude
that Attorney Kelly received notice of the
proceedings in this case, but intentionally
chose not to participate. Such repeated
refusals to engage in the disciplinary
process warrant a finding that Attorney
Kelly's pattern of failure to appear or
participate constituted egregious conduct
that merited the striking of his answer and
proceeding on the allegations of the OLR's
complaint.
¶25 Because the referee properly struck
Attorney Kelly's answer and found him in
default, the factual allegations of the
OLR's complaint are accepted as true for
purposes of this proceeding. We agree with
the referee that those facts support a
conclusion of professional misconduct on
each of the 51 counts of misconduct set
forth in the complaint.
¶26 We now turn to the question of the
appropriate level of discipline. The facts
detailed in the complaint demonstrate a
clear pattern of neglect by Attorney Kelly
of his clients' needs and objectives and of
disregard for his obligations as an attorney
in this state. Moreover, even though on
most representations Attorney Kelly did
little or no work, he repeatedly refused to
refund any portion of the thousands of
dollars he had obtained from the clients or
their relatives. In a number of the
matters, Attorney Kelly also refused to
return the file to the client or to forward
it to the client's new attorney. Attorney
Kelly repeatedly refused to respond to the
grievances filed by his clients or to the
OLR's requests for information. Finally,
Attorney Kelly's misconduct was not an
isolated or temporary occurrence. It
occurred in 12 separate representations and
in some situations lasted for several
years. We therefore conclude that the
severe sanction of the revocation of his
license to practice law in Wisconsin must be
imposed to protect the public from a
repetition of this misconduct and to deter
other attorneys from engaging in similar
misconduct.
¶27 We further agree with the referee
that Attorney Kelly must be held responsible
for the $31,541.50 that the Fund had to pay
to the clients harmed by his misconduct, and
that he must bear the full costs of this
disciplinary proceeding.
¶28 IT IS ORDERED that the license of T.
Christopher Kelly to practice law in
Wisconsin is revoked, effective the date of
this order.
¶29 IT IS FURTHER ORDERED that within 60
days of the date of this order, T.
Christopher Kelly shall pay restitution to
the Wisconsin Lawyers' Fund for Client
Protection in the amount of $31,541.50.
¶30 IT IS FURTHER ORDERED that within 60
days of the date of this order, T.
Christopher Kelly shall pay to the Office of
Lawyer Regulation the costs of this
proceeding.
¶31 IT IS FURTHER ORDERED that payment
of restitution to the Wisconsin Lawyers'
Fund for Client Protection is to be
completed prior to paying costs to the
Office of Lawyer Regulation.
¶32 IT IS FURTHER ORDERED that T.
Christopher Kelly shall comply, if he has
not already done so, with the requirements
of SCR 22.26 pertaining to the duties of a
person whose license to practice law in
Wisconsin has been revoked.
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