                                                             2014 WI 114

                  SUPREME COURT            OF   WISCONSIN
CASE NO.:               2013AP1439-D
COMPLETE TITLE:         In the Matter of Disciplinary Proceedings
                        Against
                        Carl H. Creedy, Attorney at Law:

                        Office of Lawyer Regulation,
                                  Complainant,
                             v.
                        Carl H. Creedy,
                                  Respondent.



                            DISCIPLINARY PROCEEDINGS AGAINST CREEDY

OPINION FILED:          October 14, 2014
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:

SOURCE OF APPEAL:
   COURT:
   COUNTY:
   JUDGE:

JUSTICES:
   CONCURRED:
   DISSENTED:
   NOT PARTICIPATING:

ATTORNEYS:
                                                                  2014 WI 114
                                                           NOTICE
                                             This opinion is subject to further
                                             editing and modification.   The final
                                             version will appear in the bound
                                             volume of the official reports.
No.       2013AP1439-D


STATE OF WISCONSIN                       :            IN SUPREME COURT

In the Matter of Disciplinary Proceedings
Against Carl H. Creedy, Attorney at Law:

Office of Lawyer Regulation,                                    FILED
              Complainant,
                                                           OCT 14, 2014
      v.
                                                              Diane M. Fremgen
                                                           Clerk of Supreme Court
Carl H. Creedy,

              Respondent.




      ATTORNEY      disciplinary    proceeding.     Attorney          publicly

reprimanded.



      ¶1      PER CURIAM.    Pending before the court is the report

of referee James W. Mohr, Jr., rendered following a hearing and

receipt of a stipulation filed after the respondent, Attorney

Carl H. Creedy, opted to plead no contest pursuant to Supreme

Court Rule (SCR) 22.14.1      The referee recommends that this court

      1
          SCR 22.14(2) states:

           The respondent may by answer plead no contest to
      allegations of misconduct in the complaint. The
                                                     (continued)
                                                               No.   2013AP1439-D



publicly reprimand Attorney Creedy for professional misconduct.

No appeal has been filed so we review this matter pursuant to

SCR 22.17(2).2         We also consider Attorney Creedy's objection to

the   request     by    the    Office   of   Lawyer   Regulation     (OLR)   for

imposition of full costs, which total $17,801.64 as of May 21,

2014.     See SCR 22.24.

      ¶2     We    approve     and   adopt   the   referee's     findings    and

conclusions and we agree that a public reprimand is sufficient

discipline for Attorney Creedy's misconduct.               We further order

that Attorney Creedy pay one-half the costs of this disciplinary

proceeding.       Restitution is not an issue in this matter.

      ¶3     Attorney Creedy was admitted to the practice of law in

Wisconsin in 1980.            He practiced law in Orfordville, Wisconsin

at the time of the filing of the complaint, and now practices in

Janesville, Wisconsin.          He has no previous disciplinary history.


      referee shall make a determination of misconduct in
      respect to each allegation to which no contest is
      pleaded and for which the referee finds an adequate
      factual basis in the record.         In a subsequent
      disciplinary or reinstatement proceeding, it shall be
      conclusively presumed that the respondent engaged in
      the misconduct determined on the basis of a no contest
      plea.
      2
          SCR 22.17(2) states:

           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
      findings;   and   determine  and   impose  appropriate
      discipline.   The court, on its own motion, may order
      the parties to file briefs in the matter.


                                         2
                                                                   No.     2013AP1439-D



    ¶4      Most of the allegations in the OLR's complaint involve

Attorney    Creedy's    business       relationship         with   a    client    named

Joseph   Murphy.       Murphy,    who    is     not    an   attorney,      created    a

company called American Disability Entitlements LLC, intended to

represent     claimants    in    Social        Security       disability     matters.

Social     Security    laws     and    procedures       permit         nonlawyers    to

represent such claimants.             Murphy learned that if an attorney

provides    similar    services,       the     attorney     can    have    fees     paid

directly to the attorney by the Social Security Administration

out of any award.         Murphy approached Attorney Creedy to see if

they could work together representing disability claimants in

order to ensure receipt of any fees.

    ¶5      Murphy and Attorney Creedy both represented claimants

before the Social Security Administration.                     They would discuss

and mutually agree upon a fair division of fees.                         They did not

have a written agreement.

    ¶6      Murphy was routinely accepting unlawful fee advances,

a practice prohibited by applicable Social Security rules and
procedures.     The parties disputed whether Attorney Creedy knew

that Murphy was routinely accepting unlawful fee advances.

    ¶7      Attorney Creedy maintained that he first learned this

was occurring in March of 2010, when an attorney representing a

claimant    advised    Attorney       Creedy    that    the    claimant     had     been

improperly assessed two fees:            one paid by the claimant directly

to Murphy, and another later paid to Attorney Creedy by the

Social Security Administration.                Upon receiving and confirming
this information, Attorney Creedy promptly refunded one set of
                                         3
                                                                         No.     2013AP1439-D



fees to the claimant.                  He then began dissolving the business

arrangement with Murphy.

    ¶8         Meanwhile, law enforcement was investigating Murphy in

connection          with    a     variety      of     matters.          Attorney       Creedy

voluntarily          met    and       provided      law      enforcement        with     some

information about Murphy.

    ¶9         On    June       27,    2013,    the    OLR     filed     an    eight-count

complaint       against           Attorney      Creedy       seeking      a     four-month

suspension of his license to practice law.                              Attorney Creedy

filed    an     answer      and       the   court     appointed    the        referee,    who

conducted an evidentiary hearing in February 2014.

    ¶10        After the hearing, the parties executed a stipulation

whereby the OLR voluntarily dismissed Counts Four, Five, and

Seven of the Complaint.                 The OLR also dismissed its allegation

that Attorney Creedy violated two subsections of the supreme

court rule alleged in Count Three.                    Attorney Creedy withdrew his

answer    and       pled    no    contest      to   the     remaining    allegations       of

misconduct:          Counts One, Two, Six, and Eight, and the remaining
two supreme court rule subsections in Count Three.

    ¶11        Our rules provide that where, as here, a respondent

pleads    no    contest          to   allegations      of    misconduct        pursuant    to

SCR 22.14, the referee shall make a determination of misconduct

in respect to each allegation to which no contest is pled and

for which the referee finds an adequate factual basis in the

record.       The referee rendered a thorough and thoughtful report

in which he summarized the evidence from the hearing and made
detailed factual findings and conclusions.
                                                4
                                                                               No.     2013AP1439-D



       ¶12     As    relevant       to    this     matter,        the     referee      explicitly

stated that he found Attorney Creedy to be both credible and

professional.          He believed that Attorney Creedy was unaware that

Murphy was improperly accepting advance fees until confronted by

a claimant's lawyer in March 2010.                           He deemed Murphy to be a

less    than    credible          witness,    noting         that    Murphy       is    currently

serving time for felony convictions related to a variety of

fraud-related transactions.                  Moreover, the referee observed that

"it    was     clear       that    [Murphy]        had      personal       animosity       toward

[Attorney]      Creedy       and     went    out       of    his     way    to   express       that

animosity."

       ¶13     We summarize the referee's findings and conclusions.

Count    One    of     the    OLR's       complaint         involves       Attorney      Creedy's

resolution of a fee issue where a conflict of interest existed

between Attorney Creedy, Murphy, and a Social Security claimant.

The facts pertaining to this charge are undisputed.                                  Murphy took

unauthorized         advance       fees     from      a     Social      Security       disability

claimant,       a      practice          prohibited          by     the     Social       Security
Administration.            Attorney Creedy was counsel of record for the

claimant       at    the     time.        Additional          fees      were     then    paid    to

Attorney       Creedy        as    part      of       the    ensuing        Social       Security

disability          award.        When     Attorney         Creedy        learned,      from    the

claimant's attorney, that Murphy had already received an advance

fee, Attorney Creedy promptly agreed, on behalf of Murphy, to

refund the advance fees that Murphy had taken improperly.

       ¶14     The problem with this decision is that, as the referee
found, Attorney Creedy had a concurrent conflict of interest,
                                                  5
                                                                       No.        2013AP1439-D



because     Murphy    was   both    a   business          partner    and     a    client   of

Attorney Creedy.        As such, Attorney Creedy's representation of

one client (the Social Security claimant) was directly adverse

to the other client (Murphy).                Attorney Creedy admits he did not

get informed consent, confirmed in writing, signed by either of

his   clients    as    required      by      court       rule.      The     OLR     alleged,

Attorney     Creedy    stipulated,          and    the    referee     agreed       that    the

record     evidence    supported        a    conclusion       that    Attorney        Creedy

violated     SCR 20:1.7(a).3            The       referee    noted,        however,       that

despite having failed to obtain a written, informed consent,

Attorney     Creedy     nevertheless              acted     entirely        properly        in

refunding the excess fees to the Social Security claimant almost

immediately.

      ¶15    Count    Two    of     the       complaint          relates     to     Attorney

Creedy's      failure       to     comply         with      supreme        court      rules,




      3
          SCR 20:1.7(a), as relevant here, states:

      [A] lawyer shall not represent a client if the
      representation involves a concurrent conflict of
      interest. A concurrent conflict of interest exists if:

           (1) the representation of one client                             will     be
      directly adverse to another client; or

           (2) there is a significant risk that the
      representation of one or more clients will be
      materially limited by the lawyer's responsibilities to
      another client, a former client or a third person or
      by a personal interest of the lawyer.


                                              6
                                                                         No.    2013AP1439-D



specifically in violation of SCR 20:1.8(a),4 in the manner in

which      he    entered        the    business      arrangement       with     Murphy      to

represent        Social    Security        claimants.        It   is    undisputed        that

Attorney        Creedy    never       disclosed,     in   writing,      the    terms      upon

which the business relationship was based, never advised Murphy

in    writing      of     the     desirability       of     seeking     the     advice      of

independent legal counsel on the transaction, and never obtained

written, informed consent from Murphy to the essential terms of

the     transaction        and        to    Attorney        Creedy's     role        in    the

transaction.

       ¶16      The referee noted that it was apparent that Murphy was

a    sophisticated        business         person,    but    this      does    not    excuse


       4
           SCR 20:1.8(a) states:

            A lawyer shall not enter into a business
       transaction with a client or knowingly acquire an
       ownership, possessory, security or other pecuniary
       interest adverse to a client unless:

            (1) the transaction and terms on which the lawyer
       acquires the interest are fair and reasonable to the
       client and are fully disclosed and transmitted in
       writing in a manner that can be reasonably understood
       by the client;

            (2) the client is advised in writing of the
       desirability of seeking and is given a reasonable
       opportunity to seek the advice of independent legal
       counsel on the transaction; and

            (3) the client gives informed consent, in a
       writing signed by the client, to the essential terms
       of the transaction and the lawyer's role in the
       transaction,   including   whether    the   lawyer is
       representing the client in the transaction.


                                               7
                                                                    No.     2013AP1439-D



failure      to    comport     with    the       requirements       of      the   rule.

Accordingly, the OLR alleged, Attorney Creedy stipulated, and

the   referee      agreed    that     the       record    evidence        supported   a

conclusion that Attorney Creedy violated SCR 20:1.8(a).

      ¶17     In Count Three, the OLR alleged that Attorney Creedy

violated      SCR 20:5.4(a),     (b),       (c),   and     (d),    which     generally

prohibit a lawyer from partnering and/or sharing legal fees with

a nonlawyer.        The allegations regarding SCR 20:5.4(c) and (d)

were subsequently voluntarily dismissed by the OLR.                         As to the

two remaining subsections, the referee concluded that the OLR

had       failed   to   establish       that       Attorney        Creedy     violated

SCR 20:5.4(a)5       because     federal         law     permits     nonlawyers       to
      5
          SCR 20:5.4(a) states:

           A lawyer or law firm shall not share legal fees
      with a nonlawyer, except that:

           (1) an agreement by a lawyer with the lawyer's
      firm, partner, or associate may provide for the
      payment of money, over a reasonable period of time
      after the lawyer's death, to the lawyer's estate or to
      one or more specified persons;

           (2) a lawyer who purchases the practice of a
      deceased,   disabled,   or  disappeared  lawyer  may,
      pursuant to the provisions of SCR 20:1.17, pay to the
      estate or other representative of that lawyer the
      agreed-upon purchase price;

           (3) a lawyer or law firm may include nonlawyer
      employees in a compensation or retirement plan, even
      though the plan is based in whole or in part on a
      profit-sharing arrangement; and

           (4) a lawyer may share court-awarded legal fees
      with a nonprofit organization that employed, retained
      or recommended employment of the lawyer in the matter.


                                            8
                                                                    No.     2013AP1439-D



represent individuals in Social Security disability claims and

to   receive      fees    as   payment    for    their   services.         The     Social

Security Administration designates these payments as "fees," not

necessarily       "legal       fees."      The    referee    further       noted    that

federal     law    permits      such     representation      by    nonlawyers,       and

concluded that the OLR failed to establish that Attorney Creedy

violated     SCR 20:5.4(b).6             The     OLR   has   not    appealed        this

recommendation and we accept it.

      ¶18    The OLR voluntarily dismissed Counts Four and Five of

its complaint.

      ¶19    Count Six of the OLR's complaint alleged that Attorney

Creedy     failed    to    adequately       supervise     Murphy,      a    nonlawyer,

thereby violating SCR 20:5.3(a) and (b).7                    The OLR's complaint
      6
       SCR 20:5.4(b) states that "[a] lawyer shall not form a
partnership with a nonlawyer if any of the activities of the
partnership consist of the practice of law."
      7
          SCR 20:5.3(a) and (b) state:

           With respect to a nonlawyer employed or retained
      by or associated with a lawyer:

           (a) a partner, and a lawyer who individually or
      together with other lawyers possesses comparable
      managerial authority in a law firm shall make
      reasonable efforts to ensure that the firm has in
      effect measures giving reasonable assurance that the
      person's conduct is compatible with the professional
      obligations of the lawyer;

           (b) a lawyer having direct supervisory authority
      over the nonlawyer shall make reasonable efforts to
      ensure that the person's conduct is compatible with
      the professional obligations of the lawyer; . . . .




                                            9
                                                                      No.     2013AP1439-D



focused on a specific incident in which, as outlined in the

referee's     report,     it   was     unclear     who       would        represent     the

claimant before a Social Security tribunal:                    Attorney Creedy or

Murphy.     Attorney Creedy could not reach Murphy to resolve that

question,    and     therefore    prepared       to    go     to     the     hearing     to

represent the claimant.           As it turned out, Murphy appeared at

the hearing and the claimant opted to proceed with Murphy as her

representative.       The referee found that there "is no evidence in

the   record       that   Murphy       did      anything       unprofessional            or

incompetent in the hearing" and, as such, the referee found no

evidence    that    Attorney     Creedy      failed    to    supervise        Murphy     in

violation of SCR 20:5.3(a) and (b).

      ¶20   Indeed, the referee observed                 that several witnesses

testified    that,    generally,       Murphy    had     a   good     reputation        and

worked diligently on behalf of Social Security claimants.                               The

one   notable      exception     was    Murphy's       taking        of     unauthorized

advance     fee    payments    from     clients,       but    the         referee     found

credible Attorney Creedy's assertion that he did not know Murphy
was doing this until March of 2010.               Thus, the referee concluded

that the OLR had failed to demonstrate that Attorney Creedy

failed to supervise Murphy as alleged in Count Six.

      ¶21   The OLR voluntarily dismissed Count Seven.




                                          10
                                                                No.     2013AP1439-D



    ¶22   In Count Eight, the OLR alleged that Attorney Creedy

violated SCR 20:1.8(b)8 by providing information obtained in the

course of his representation of Murphy to the disadvantage of

Murphy, without Murphy's consent.                 It is undisputed that the

Green County District Attorney's Office and the Monroe Police

Department investigated Murphy.               Attorney Creedy met with these

entities and provided certain information that was adverse to

Murphy,   without    obtaining         Murphy's     informed    consent.         The

investigation     into   Murphy's      conduct     ultimately    led    to    felony

charges   and    convictions      of     Murphy.       Accordingly,       the   OLR

alleged, Attorney Creedy stipulated, and the referee concluded

that by providing information obtained in the course of his

representation of Murphy to the Green County District Attorney's

Office and the Monroe Police Department to the disadvantage of

Murphy, without obtaining Murphy's informed consent,                      Attorney

Creedy violated SCR 20:1.8(b).

    ¶23   Initially the OLR sought a four-month suspension but,

following the evidentiary hearing, the parties submitted a joint
stipulation     agreeing   that   a     public     reprimand    was    sufficient.

The referee observed that there was no evidence that any member

of the public, other than perhaps Murphy, was harmed by Attorney

Creedy's conduct, and characterized any harm to Murphy as de

minimus and the proven ethical violations as technical.                      Indeed,

    8
       SCR 20:1.8(b) states that "[a] lawyer                    shall not use
information relating to representation of a                     client to the
disadvantage of the client unless the client                    gives informed
consent, except as permitted or required by these               rules."


                                         11
                                                            No.    2013AP1439-D



the referee commented that a private reprimand might have been a

sufficient     sanction.     However,      he    accepted    the     parties'

stipulation    and   recommends   that    this   court   impose     a   public

reprimand.

     ¶24   The only remaining dispute involves whether the court

should impose the full costs of this proceeding on Attorney

Creedy.      The OLR seeks imposition of all costs, which total

$17,801.64 as of May 21, 2014.           Attorney Creedy filed a timely

objection, arguing that no costs should be imposed.9

     ¶25   As stated in SCR 22.24(1m),

          The court's general policy is that upon a finding
     of misconduct it is appropriate to impose all costs,
     including the expenses of counsel for the office of
     lawyer regulation, upon the respondent. In some cases
     the court may, in the exercise of its discretion,
     reduce the amount of costs imposed upon a respondent.
     In exercising its discretion regarding the assessment
     of costs, the court will consider the statement of
     costs, any objection and reply, the recommendation of
     the referee, and all of the following factors:

          (a) The number of counts charged, contested, and
     proven.

     9
       Attorney Creedy has also filed a motion asking the OLR to
produce, for this court's in camera review, a list of all
grievances filed by Murphy against any attorney or judge.
Attorney Creedy claims that such information could allow this
court to determine whether the OLR considered "numerous
unfounded grievances" filed by Murphy when the OLR pursued the
instant disciplinary proceeding against Attorney Creedy.     The
OLR   opposes  Attorney   Creedy's  motion,  citing   SCR  22.40
(Confidentiality) and asserting that "whether Mr. Murphy has or
has not filed previous grievances with OLR is irrelevant."    We
can resolve the allocation of costs without any need to consider
the information Attorney Creedy seeks. Accordingly, the motion
is denied.


                                   12
                                                                     No.    2013AP1439-D


           (b) The nature of the misconduct.

         (c) The level of discipline sought by the parties
    and recommended by the referee.

         (d) The   respondent's                  cooperation         with     the
    disciplinary process.

           (e) Prior discipline, if any.

           (f) Other relevant circumstances.
    ¶26    The     referee     carefully          considered        each     of     these

criteria and recommended, both before and after the filing of

Attorney   Creedy's     objection,     that       Attorney     Creedy       should    pay

one-half   of    the   costs   of    the    proceedings.            The    referee   was

mindful that only three of the eight counts were proven.                              His

statements regarding imposition of costs are telling:

         I have considered the submissions of the parties
    and the record in this proceeding.    Although I am a
    staunch   supporter  of  OLR   and  of   the  attorney
    disciplinary process in this state, I have to confess
    that I find the requested imposition of almost $18,000
    in costs to be extraordinarily large.   As I wrote in
    my original Decision, I felt Respondent was "both
    professional and credible" in his appearance and
    testimony before me. (Decision, p. 6). I thought he
    acted properly in promptly returning one set of fees
    to a client as soon as he learned of it and verified
    it (Ibid., p. 9, 10).    I found no evidence that his
    other two violations harmed either a client or the
    public.
    ¶27    The referee reminds the court that "[a]s noted in my

original   Decision,     it    did   not        appear   to   me    that    [Attorney]

Creedy's conduct evidenced any disrespect for the legal system,

or for the rights of members of the public.                        The violations of

the Supreme Court Rules were by no means flagrant."                           He notes
further    that    Attorney      Creedy          cooperated        fully     with    the


                                           13
                                                    No.   2013AP1439-D



disciplinary process.   We agree with the referee's assessment

and we direct Attorney Creedy to pay one-half of the costs of

this proceeding.

    ¶28   IT IS ORDERED that Attorney Carl H. Creedy is publicly

reprimanded for professional misconduct.

    ¶29   IT IS FURTHER ORDERED that within 60 days of the date

of this order, Carl H. Creedy shall pay to the Office of Lawyer

Regulation one-half the costs of this proceeding.




                               14
    No.   2013AP1439-D




1
