2019 WI 16
SUPREME COURT OF WISCONSIN
CASE NO.: 1996AP1300-D & 1996AP3636-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against Robert T. Malloy, Attorney at Law.
Office of Lawyer Regulation f/k/a Board of
Attorneys
Professional Responsibility, Complainant,
v.
Robert T. Malloy,
Respondent.
DISCIPLINARY PROCEEDINGS AGAINST MALLOY
OPINION FILED: February 26, 2019
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
CONCURRED:
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
2019 WI 16
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
Nos. 1996AP1300-D
1996AP3636-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings
Against Robert T. Malloy, Attorney at Law.
Office of Lawyer Regulation f/k/a Board of FILED
Attorneys Professional Responsibility,
Complainant, FEB 26, 2019
v. Sheila T. Reiff
Clerk of Supreme Court
Robert T. Malloy,
Respondent.
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
Nos. 1996AP1300-D
1996AP3636-D
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/000327.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
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Nos. 1996AP1300-D
1996AP3636-D
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
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1996AP3636-D
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.
¶8 No appeal has been filed from the referee's report and
recommendation so our review proceeds under SCR 22.17(2).1 When
1 SCR 22.17(2) provides:
If no appeal is filed timely, the supreme court
shall review the referee's report; adopt, reject or
modify the referee's findings and conclusions or
remand the matter to the referee for additional
(continued)
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Nos. 1996AP1300-D
1996AP3636-D
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
findings; and determine and impose appropriate
discipline. The court, on its own motion, may order
the parties to file briefs in the matter.
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Nos. 1996AP1300-D
1996AP3636-D
suspension, Attorney Malloy has not practiced law in Wisconsin.2
The referee found that Attorney Malloy has maintained competence
and learning in the law by attending identified educational
activities.3 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.4 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
2SCR 22.29(4)(a)-(b). Much of the testimony at the
evidentiary hearing involved Attorney Malloy's work history
since 2001. Generally, he worked in the area of finance and
other areas that are ancillary to the practice of law. He also
worked at a family business and did some tax work and some debt
resolution work for customers. The OLR sought to ensure that
none of his work constituted the unauthorized practice of law.
The record supports the conclusion that Attorney Malloy did not
practice law during his license suspension and that he has
complied with the requirements of SCR 22.26. SCR 22.29(4)(c),
(h), (k).
3SCR 22.29(4)(d). Although Attorney Malloy had attended a
significant number of legal seminars, there was some delay
obtaining the Board of Bar Examiners (BBE) letter regarding the
petitioner's compliance with Wisconsin's law education
requirements, because certain ethics credits were still
required. After the evidentiary hearing, Attorney Malloy
completed this requirement and the referee received the
requisite BBE continuing legal education compliance letter,
dated November 6, 2018.
4 SCR 22.29(4)(e)-(f).
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Nos. 1996AP1300-D
1996AP3636-D
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.5 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).
5 SCR 22.29(4)(j).
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Nos. 1996AP1300-D
1996AP3636-D
¶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
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Nos. 1996AP1300-D
1996AP3636-D
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
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Nos. 1996AP1300-D
1996AP3636-D
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
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Nos. 1996AP1300-D
1996AP3636-D
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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Nos. 1996AP1300-D
1996AP3636-D
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