                                                              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)
                                      4
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                                                                                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.



                                             5
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                                                                              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).

                                            6
                                                                            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).



                                              7
                                                                       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

                                            8
                                                                           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


                                              9
                                                                        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




                                          10
                                                                 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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