Case Title: Office of Lawyer Regulation v. Robert T. Malloy

Citation: 

Docket Number: 

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2019-02-26T00:00:00Z

Document:
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 
Attorneys Professional Responsibility, 
 
          Complainant, 
 
     v. 
 
Robert T. Malloy, 
 
          Respondent. 
FILED 
 
FEB 26, 2019 
 
Sheila T. Reiff 
Clerk of Supreme Court 
 
 
 
 
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   
 
2 
 
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 
Nos. 1996AP1300-D 
      1996AP3636-D   
 
3 
 
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 
Nos. 1996AP1300-D 
      1996AP3636-D   
 
4 
 
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) 
Nos. 1996AP1300-D 
      1996AP3636-D   
 
5 
 
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. 
Nos. 1996AP1300-D 
      1996AP3636-D   
 
6 
 
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 
                                                 
2 SCR 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).   
3 SCR 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). 
Nos. 1996AP1300-D 
      1996AP3636-D   
 
7 
 
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). 
Nos. 1996AP1300-D 
      1996AP3636-D   
 
8 
 
¶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 
Nos. 1996AP1300-D 
      1996AP3636-D   
 
9 
 
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 
Nos. 1996AP1300-D 
      1996AP3636-D   
 
10 
 
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 
Nos. 1996AP1300-D 
      1996AP3636-D   
 
11 
 
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.   
 
 
Nos. 1996AP1300-D 
      1996AP3636-D   
 
 
 
1