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Attorney reinstatement proceeding.
Reinstatement granted with conditions.
¶1 PER CURIAM. We review a report
filed by Referee Dennis J. Flynn
recommending that the court reinstate the
license of Robert T. Malloy to practice law
in Wisconsin with certain conditions. Upon
careful review of the matter we agree that
Attorney Malloy's license should be
reinstated with certain conditions, as
described herein. We hold in abeyance until
further order of the court our determination
as to whether Attorney Malloy should be
required to pay the full costs of the
reinstatement proceeding, which are
$6,362.17 as of December 4, 2018.
¶2 Attorney Malloy was admitted to
practice law in Wisconsin in 1992. He was a
sole practitioner in Milwaukee with a
general practice. In 1994, Attorney Malloy
received a public reprimand for failing to
appear for court hearings and mismanaging a
trust account. Public Reprimand of Robert
T. Malloy, No. 1994-8 (electronic copy
available at
https://compendium.wicourts.gov/app/raw/0003
27.html). In 1997, his law license was
suspended for one year for mishandling
client funds, comingling personal funds in
his trust account, failing to keep proper
trust records, lack of diligence, lack of
communication with clients, failure to
promptly refund unearned fees and repeated
failure to cooperate with the Office of
Lawyer Regulation's (OLR) investigations.
In re Disciplinary Proceedings Against
Malloy, 209 Wis. 2d 264, 562 N.W.2d 147
(1997). During that suspension, another
disciplinary complaint was filed, alleging
misconduct including a lack of diligence,
lack of communication, failure to promptly
refund unearned fees, and failure to
cooperate with the disciplinary
investigation. This proceeding resulted in
an additional three-month suspension that
was imposed consecutive to the one-year
suspension. In re Disciplinary
Proceedings Against Malloy, 212 Wis. 2d
649, 568 N.W.2d 638 (1997).
¶3 In April 2000, Attorney Malloy filed
an unsuccessful petition for reinstatement.
OLR v. Malloy, 1996AP1300 and
1996AP3636, unpublished order (S. Ct. Sept.
21, 2001). This court accepted the
referee's recommendation that reinstatement
was not warranted because Attorney Malloy
had failed to comply fully with the
requirements of SCR 22.26. In addition, the
referee concluded that Attorney Malloy had
not established that his resumption of the
practice of law would not be detrimental to
the administration of justice or subversive
of the public interest and had not
established that he had the moral character
to practice law in Wisconsin. Id.
¶4 The reinstatement proceeding
prompted the OLR to reopen a pending
grievance regarding Attorney Malloy's
handling of a divorce proceeding, including
failure to file certain documents, and
failure to provide the client file to
successor counsel. This court publicly
reprimanded Attorney Malloy for that
misconduct. In re Disciplinary
Proceedings Against Malloy, 2002 WI 52,
252 Wis. 2d 597, 644 N.W.2d 663. In
addition to his disciplinary suspension,
Attorney Malloy's law license is also
administratively suspended for noncompliance
with continuing legal education requirements
and for failure to pay State Bar dues.
¶5 On December 27, 2017, Attorney
Malloy filed a second petition seeking the
reinstatement of his Wisconsin law license.
The OLR conducted an investigation during
which it contacted eight individuals
familiar with Attorney Malloy, including
employers, attorneys, and friends; their
recommendations were "impressive." In July
2018, the OLR filed a thorough response
stating it did not oppose Attorney Malloy's
reinstatement, but recommended two
conditions on his practice: (1) that
Attorney Malloy attend the OLR's trust
account seminar, and (2) provide the OLR
with quarterly trust account and business
accounting records for two years.
¶6 The referee conducted a one-day
evidentiary hearing on August 28, 2018, in
Milwaukee. The parties stipulated to the
admission of certain exhibits and Attorney
Malloy testified. He expressed remorse for
his misconduct in the past and for his
defiant approach to the initial
investigation by the OLR. He answered a
number of questions about the nature of his
work since the date of his license
suspension. No other witnesses appeared.
¶7 On November 14, 2018, after some
delay while Attorney Malloy confirmed he had
satisfied all continuing legal education
requirements, the referee issued a report
concluding that Attorney Malloy had
satisfied his burden of proof and had met
the requirements for reinstatement set forth
in Supreme Court Rule (SCR) 22.31. The
referee recommends reinstatement with
certain conditions.
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¶8 No appeal has been filed from the
referee's report and recommendation so our
review proceeds under SCR 22.17(2). When we
review a referee's report and
recommendation, we will adopt the referee's
findings of fact unless they are clearly
erroneous. Conclusions of law are reviewed
de novo. See In re Disciplinary
Proceedings Against Eisenberg, 2004 WI 14,
¶5, 269 Wis. 2d 43, 675 N.W.2d 747.
¶9 Supreme Court Rule 22.31(1) provides
the standards to be met for reinstatement.
The petitioner must show by clear,
satisfactory, and convincing evidence that
he or she has the moral character to
practice law, that his or her resumption of
the practice of law will not be detrimental
to the administration of justice or
subversive to the public interest, and that
he or she has complied with SCR 22.26 and
the terms of the order of suspension. In
addition, SCR 22.31(1)(c) incorporates the
statements that a petition for reinstatement
must contain pursuant to SCR 22.29(4)(a)-
(4m). Thus, the petitioning attorney must
demonstrate that the required
representations in the reinstatement
petition are substantiated.
¶10 The referee found that Attorney
Malloy desires to have his license
reinstated and that during the period of his
suspension, Attorney Malloy has not
practiced law in Wisconsin. The referee
found that Attorney Malloy has maintained
competence and learning in the law by
attending identified educational activities.
The referee specifically found that Attorney
Malloy's conduct since the suspension has
been exemplary and above reproach and that
Attorney Malloy has a proper understanding
of and attitude toward the standards that
are imposed upon members of the bar and will
act in conformity with those standards. In
support of these findings, the referee noted
Attorney Malloy's remorse for his past
misconduct, his current cooperation with the
OLR, his stable life, which Attorney Malloy
attributes to his long-term marriage, his
wife's positive influence, and his openness
with family and friends about his prior
misconduct. The referee observed that
Attorney Malloy has considered how new
technology might help him today in the
management and organization of his new law
practice. Attorney Malloy also expressed a
commitment to careful client selection, if
reinstated. The referee expressed some
concern that Attorney Malloy might be
shifting blame for his past misconduct on
the "demands" of low income and pro bono
clients, but ultimately concluded that
Attorney Malloy has the moral character to
practice law, and that his resumption of the
practice of law will not be detrimental to
the administration of justice or subversive
of the public interest.
¶11 Attorney Malloy has represented that
if his license to practice law is
reinstated, he would practice in the areas
of tax, finance, estate planning and
probate. Beyond those specific areas he
noted that he would use retainer agreements
that would set clear parameters regarding
the scope of his law work. On balance, the
referee concluded that Attorney Malloy can
safely be recommended to the legal
profession, the courts, and the public as a
person fit to be consulted by others and to
represent them and otherwise act in matters
of trust and confidence and in general to
aid in the administration of justice as a
member of the bar and as an officer of the
courts. SCR 22.29(4)(g).
¶12 Twenty years have elapsed since
Attorney Malloy's law license was suspended
by this court, and 17 years since he was
last disciplined. This court agrees with
the referee that Attorney Malloy has met his
burden of proof with respect to all elements
needed to justify his reinstatement.
¶13 We turn to the question whether it
is appropriate to impose certain conditions
on Attorney Malloy's practice of law. The
referee concluded that conditions should be
imposed on Attorney Malloy's license because
his previous misconduct was substantial and
protracted. The referee stated, "[h]is
conduct reflected a lack of understanding of
his responsibilities as a lawyer." Given
the length of time that has elapsed, the
referee concluded that some additional
education was appropriate and that,
"monitoring of his Trust Account and
business accounts will help to insure that
Respondent's past practice problems do not
reappear and impact his future rendition of
legal services to the public and in the
Courts of this State."
¶14 The two conditions proposed by the
OLR, to which Attorney Malloy does not
object, are appropriate and we impose them,
namely, attendance at an OLR Trust Account
Seminar and quarterly submission to the OLR
of his trust accounts and business records
for a period of two years following his
reinstatement.
¶15 The referee also proposed the
following condition:
Attorney Malloy should be required to
repay any funds due to [L.K.], if in fact
there are any funds due to her as a result
of his past misconduct. It is understood
that Attorney Malloy believed that his past
payment of $500.00 to the Fund was for the
purpose of compensating L.K. However, those
funds were paid by the Fund to a different
claimant.
¶16 Our rules require an attorney
seeking reinstatement to demonstrate that
the lawyer has made restitution to or
settled all claims of persons injured or
harmed by petitioner's misconduct, including
reimbursement to the Wisconsin Lawyers' Fund
for Client Protection for all payments made
from that fund, or, if not, the petitioner's
explanation of the failure or inability to
do. SCR 22.29(4)(4m). Attorney Malloy
testified that he had done so. During the
evidentiary hearing, there was some
discrepancy as to whether one client, L.K.,
was in fact reimbursed. The referee said
this:
[T]he credible evidence indicates
that Attorney Malloy does not owe any
restitution. He has paid $500 to the
Lawyers' Fund for Client Protection
(hereinafter the Fund). This sum was for
reimbursement to [L.B] as a result of an
approval by the Fund on 5 November 1997.
Respondent indicated that he believed the
$500.00 he paid was to go to [L.K.], one of
the Grievants whose matter was addressed in
the 2nd disciplinary proceeding captioned
96-3636-D. As a result it appears that a
sum may still be due to [L.K.]. This is
noted but it does not act to impugn
Respondent's fitness to be reinstated to the
practice of law, since he believed that this
reimbursement had been made.
(Emphasis added). The referee concluded
that Attorney Malloy had satisfied the
requirement of SCR 22.29(4)(4m). We agree.
¶17 The referee then observed that,
"this [restitution] obligation, if it
exists, should be paid by Respondent."
(Emphasis added). The referee's finding
that Attorney Malloy does not owe any
restitution is inconsistent with the
observation that "a sum might still be due
to L.K." We observe that the OLR
unequivocally asserts that Attorney Malloy
does not owe restitution. See OLR's SCR
22.30(2) Response filed July 30, 2018 at 20.
We conclude that there is not sufficient
record evidence to sustain a finding that
restitution is owed to L.K. and we decline
to impose this condition upon Attorney
Malloy's reinstatement.
¶18 Finally, we hold in abeyance our
decision regarding whether Attorney Malloy
should pay the full costs of the proceeding,
which are $6,362.17 as of December 4, 2018.
By order dated February 19, 2019, we have
directed the OLR to provide this court with
an itemization of the fees and costs and a
decision will issue by separate order in due
course.
¶19 IT IS ORDERED that the license of
Robert T. Malloy to practice law in
Wisconsin is reinstated effective the date
of this order.
¶20 IT IS FURTHER ORDERED that, as a
condition of the reinstatement of his
license to practice law in Wisconsin, Robert
T. Malloy shall, until further order of the
court, comply with the following conditions:
• Robert T. Malloy is required to
attend the Office of Lawyer Regulation Trust
Account seminar as soon as possible
following his reinstatement.
• Robert T. Malloy is required to
provide quarterly trust account and business
accounting records to the Office of Lawyer
Regulation for a period of two years after
the date of his reinstatement.
¶21 IT IS FURTHER ORDERED that the
question of the costs to be imposed on
Attorney Malloy remains under advisement and
a decision will issue on further order of
the court.
¶22 IT IS FURTHER ORDERED that the
administrative suspension of Robert T.
Malloy's license to practice law in
Wisconsin, due to his failure to pay
mandatory bar dues and for noncompliance
with continuing legal education
requirements, will remain in effect until
each reason for the administrative
suspension has been rectified pursuant to
SCR 22.28(1).
¶23 IT IS FURTHER ORDERED that
compliance with all of the terms of this
order remains a condition of Robert T.
Malloy's license to practice law in
Wisconsin.
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