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

Citation: 

Docket Number: 

State: wisconsin

Court: Wisconsin Supreme Court

Date: 1997-05-01T00:00:00Z

Document:
SUPREME COURT OF WISCONSIN 
 
 
Case No.: 
96-1300-D 
 
 
Complete Title 
of Case: 
 
 
In the Matter of Disciplinary Proceedings  
Against Robert T. Malloy, Attorney at  
Law. 
 
 
DISCIPLINARY PROCEEDINGS AGAINST MALLOY 
 
 
Opinion Filed: 
May 1, 1997 
Submitted on Briefs: 
 
Oral Argument: 
 
 
 
Source of APPEAL 
 
COURT: 
 
 
COUNTY: 
 
 
JUDGE: 
 
 
 
JUSTICES: 
 
Concurred: 
 
 
Dissented: 
 
 
Not Participating:  
 
 
ATTORNEYS: 
 
 
 
 
No.  96-1300-D 
 
 
1 
 
NOTICE 
This opinion is subject to further editing and 
modification.  The final version will appear in 
the bound volume of the official reports. 
 
 
No. 96-1300-D 
 
STATE OF WISCONSIN               :        
        
 
 
 
 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings 
Against ROBERT T. MALLOY, Attorney at Law. 
FILED 
 
MAY 1, 1997 
 
Marilyn L. Graves 
Clerk of Supreme Court 
Madison, WI 
 
 
 
 
Attorney 
disciplinary 
proceeding. 
 
Attorney’s 
license 
suspended.  
¶1 
PER CURIAM.   We review the recommendation of the 
referee that the license of Robert T. Malloy to practice law in 
Wisconsin 
be 
suspended 
for 
one 
year 
as 
discipline 
for 
professional misconduct. 
That 
misconduct consisted of his 
mishandling of client funds and commingling his own funds with 
them, failure to keep required trust account records, failure to 
respond to requests from clients for information concerning 
their matters, repeated failure to file or pursue legal matters 
for which he was retained, failure to refund unearned retainers 
promptly, and repeated failure to cooperate with the Board of 
Attorneys 
Professional 
Responsibility 
(Board) 
in 
its 
investigation of client grievances.  
¶2 
We determine that the license suspension recommended 
by the referee is appropriate discipline to impose for Attorney 
Malloy’s professional misconduct established in this proceeding. 
 
 
No.  96-1300-D 
 
 
2 
Notwithstanding having been disciplined on a prior occasion for 
similar misconduct, Attorney Malloy has continued to ignore his 
professional 
responsibilities 
in 
representing 
clients 
and 
commingle his own personal and law office funds with funds 
belonging to his clients. In addition to the license suspension, 
we require that, upon reinstatement, Attorney Malloy submit to 
regular audits of his client trust account to ensure that he 
treats client funds appropriately.  
¶3 
Attorney Malloy was admitted to practice law in 
Wisconsin in 1992 and practices in Milwaukee. In July, 1994, he 
consented to a public reprimand from the Board as discipline for 
failing to appear at municipal court trials on behalf of three 
clients, failing to appear at a hearing on the court’s order to 
show cause why he should not be held in contempt for his failure 
to appear at one of those trials, failing to maintain complete 
and accurate trust account records of client funds coming into 
his employer’s possession, commingling his personal and business 
funds with client funds in his trust account, and continuing to 
practice law while administratively suspended for nonpayment of 
State Bar dues. The referee in this proceeding, Attorney Joan 
Kessler, made findings of fact to which Attorney Malloy 
stipulated concerning his conduct in the following matters.  
¶4 
When notified that a check drawn on his trust account 
to pay a client’s bankruptcy filing fee had been dishonored, the 
Board asked Attorney Malloy to provide information and records 
concerning his trust account. The Board then learned that the 
only 
record 
Attorney 
Malloy 
kept 
of 
his 
trust 
account 
transactions was a check register and a computer-generated 
 
 
No.  96-1300-D 
 
 
3 
document that disclosed many discrepancies with bank records of 
the trust account’s activity. Further, Attorney Malloy was using 
his client trust account to deposit funds he identified as fees 
to which he was entitled and used funds in that account to pay 
filing fees and costs of clients who had no funds on deposit in 
it. He also used for personal purposes the cash clients had 
given him to pay fees and costs, subsequently paying those fees 
and costs out of the funds in his trust account that represented 
his fees in other cases. Thus, Attorney Malloy failed to 
maintain complete and accurate trust account records, in 
violation of SCR 20:1.15(e),1 and failed to hold client funds in 
                     
1 SCR 20:1.15 provides, in pertinent part: Safekeeping 
property 
. . . 
(e) Complete records of trust account funds and other trust 
property shall be kept by the lawyer and shall be preserved for 
a period of at least six years after termination of the 
representation. Complete records shall include: (i) a cash 
receipts journal, listing the sources and date of each receipt, 
(ii) a disbursements journal, listing the date and payee of each 
disbursement, with all disbursements being paid by check, (iii) 
a subsidiary ledger containing a separate page for each person 
or company for whom funds have been received in trust, showing 
the date and amount of each receipt, the date and amount of each 
disbursement, and any unexpended balance, (iv) a monthly 
schedule of the subsidiary ledger, indicating the balance of 
each client’s account at the end of each month, (v) a 
determination of the cash balance (checkbook balance) at the end 
of 
each 
month, 
taken 
from 
the 
cash 
receipts 
and 
cash 
disbursement journals and a reconciliation of the cash balance 
(checkbook balance) with the balance indicated in the bank 
statement, and (vi) monthly statements, including canceled 
checks, vouchers or share drafts, and duplicate deposit slips. A 
record of all property other than cash which is held in trust 
for clients or third persons, as required by paragraph (a) 
hereof, shall also be maintained. All trust account records 
shall be deemed to have public aspects as related to the 
lawyer’s fitness to practice.  
 
 
No.  96-1300-D 
 
 
4 
trust separate from his own funds, in violation of SCR 
20:1.15(a).2  
¶5 
In another matter, after a client’s divorce was 
granted in August, 1995, Attorney Malloy did not file the final 
divorce papers and obtain her former husband’s signature on a 
quitclaim deed until February of the following year. He did not 
tell the client he had filed those papers, and when he did not 
respond to her numerous requests that he amend the findings to 
include her change of name, the client retained other counsel to 
do so. Attorney Malloy did not respond to letters from the Board 
concerning that client’s grievance and did not produce his 
client’s file as the Board requested, in violation of SCR 
22.07(2) and (3)3 and 21.03(4).4 His failure to keep the client 
                     
2 SCR 20:1.15 provides, in pertinent part: Safekeeping 
property 
(a) A lawyer shall hold in trust, separate from the 
lawyer’s own property, property of clients or third persons that 
is 
in 
the 
lawyer’s 
possession 
in 
connection 
with 
a 
representation. All funds of clients paid to a lawyer or law 
firm shall be deposited in one or more identifiable trust 
accounts as provided in paragraph (c) maintained in a bank, 
trust company, credit union or savings and loan association 
authorized to do business and located in Wisconsin, which 
account shall be clearly designated as “Client’s Account” or 
“Trust Account” or words of similar import, and no funds 
belonging to the lawyer or law firm except funds reasonably 
sufficient to pay account service charges may be deposited in 
such an account. . . . 
3 SCR 22.07 provides, in pertinent part: Investigation. 
. . . 
(2) 
During 
the 
course 
of 
an 
investigation, 
the 
administrator or a committee may notify the respondent of the 
subject being investigated. The respondent shall fully and 
fairly disclose all facts and circumstances pertaining to the 
alleged misconduct or medical incapacity within 20 days of being 
 
 
No.  96-1300-D 
 
 
5 
reasonably informed of the status of her matter and promptly 
comply with reasonable requests for information concerning it 
violated SCR 20:1.4(a).5  
¶6 
In the summer of 1994, the Board sent Attorney Malloy 
information concerning grievances it had received from three 
other clients, but he did not respond to numerous letters from 
the Board requesting information about them. He also failed to 
attend a confidential investigation meeting conducted by Board 
staff. This conduct constituted a failure to cooperate with the 
Board during the course of its investigation, in violation of 
SCR 21.03(4) and 22.07(3).  
                                                                  
served by ordinary mail a request for response to a grievance. 
The administrator in his or her discretion may allow additional 
time 
to 
respond. 
Failure 
to 
provide 
information 
or 
misrepresentation 
in 
a 
disclosure 
is 
misconduct. 
The 
administrator or committee may make a further investigation 
before making a recommendation to the board.  
(3) 
The 
administrator 
or 
committee 
may 
compel 
the 
respondent to answer questions, furnish documents and present 
any information deemed relevant to the investigation. Failure of 
the respondent to answer questions, furnish documents or present 
relevant information is misconduct. The administrator or a 
committee may compel any other person to produce pertinent 
books, papers and documents under SCR 22.22.  
4 SCR 21.03 provides, in pertinent part: General principles.  
. . . 
(4) Every attorney shall cooperate with the board and the 
administrator in the investigation, prosecution and disposition 
of grievances and complaints filed with or by the board or 
administrator.  
5 SCR 20.1.4 provides, in pertinent part: Communication 
(a) A lawyer shall keep a client reasonably informed about 
the status of a matter and promptly comply with reasonable 
requests for information.  
 
 
No.  96-1300-D 
 
 
6 
¶7 
In July, 1995, Attorney Malloy was retained to file a 
bankruptcy on behalf of a client, for which he was paid $410. 
After numerous calls to him concerning the matter were not 
returned, the client retained other counsel to pursue it. That 
attorney made several calls and wrote Attorney Malloy attempting 
to ascertain the status of the bankruptcy and obtain the 
client’s file, but Attorney Malloy did not respond. After the 
client filed a grievance with the Board in April, 1996, Attorney 
Malloy returned the client’s retainer, but he did not respond to 
four letters of inquiry from the Board requesting information 
concerning the grievance or produce the client’s file. Attorney 
Malloy’s conduct in this matter violated SCR 20:1.4(a) and 
22.07(2) and 21.03(4).  
¶8 
In January, 1996, Attorney Malloy was retained to 
represent a woman in a modification of a divorce judgment to 
gain custody of her child, for which he was given a $200 
retainer. He failed to appear at a meeting to discuss the matter 
with the client and never contacted the client again, despite 
her repeated attempts to reach him. He did not respond to 
numerous letters from the client requesting information on the 
status of the matter or to her many telephone calls and did not 
return her papers or refund her retainer, as she had requested. 
Attorney Malloy also failed to respond to letters from the Board 
concerning that client’s grievance or produce the client’s file 
as the Board requested. Attorney Malloy failed to act with 
reasonable diligence and promptness in representing this client, 
in violation of SCR 20:1.3,6 failed to keep the client informed 
                     
6 SCR 20:1.3 provides: Diligence 
 
 
No.  96-1300-D 
 
 
7 
of the status of her matter and promptly comply with reasonable 
requests for information concerning it, in violation of SCR 
20:1.4(a), failed to return the client’s property and unearned 
fee upon termination of representation, in violation of SCR 
20:1.16(d),7 
and 
failed 
to 
cooperate 
in 
the 
Board’s 
investigation, in violation of SCR 22.07(2) and (3) and 
21.03(4).  
¶9 
Attorney Malloy was retained in August of 1995 to 
represent a client in a bankruptcy, for which he received an 
advance fee of $210. After obtaining financial information and 
bills from the client, he never contacted her again, failing to 
respond to at least weekly telephone calls from her for a period 
of six months. He also did not refund the client’s retainer. He 
thus failed to act with reasonable diligence and promptness in 
pursuing the client’s legal matter, in violation of SCR 20:1.3, 
failed to respond to her reasonable requests for information, in 
violation of SCR 20:1.4(a), violated SCR 20:1.16(d) by failing 
to return her retainer, and failed to provide a written response 
                                                                  
A lawyer shall act with reasonable diligence and promptness 
in representing a client.  
7 SCR 20:1.16 provides, in pertinent part: Declining or 
terminating representation 
. . . 
(d) Upon termination of representation, a lawyer shall take 
steps to the extent reasonably practicable to protect a client’s 
interests, such as giving reasonable notice to the client, 
allowing time for employment of other counsel, surrendering 
papers and property to which the client is entitled and 
refunding any advance payment of fee that has not been earned. 
The lawyer may retain papers relating to the client to the 
extent permitted by other law.  
 
 
No.  96-1300-D 
 
 
8 
to the client’s grievance and produce the client’s file at the 
Board’s request during its investigation, in violation of SCR 
22.07(2) and (3) and 21.03(4).  
¶10 Finally, Attorney Malloy was retained in July of 1993 
to represent a client on an employment discrimination claim. 
After negotiations 
with 
the 
employer 
proved 
unsuccessful, 
Attorney Malloy failed to file the claim with the appropriate 
state agency by the statutory deadline. He then drafted a 
complaint and attempted to file it in federal court, but his 
check in payment of the filing fee that was drawn on his trust 
account was returned for insufficient funds. His second attempt 
to pay the filing fee resulted in a second check drawn on that 
account being dishonored, following which the court dismissed 
the complaint. Attorney Malloy did not inform his client of 
either the filing or of the dismissal of the complaint. His 
failure to act with reasonable diligence and promptness in 
representing this client violated SCR 20:1.3, and his failure to 
keep the client reasonably informed of the status of the matter 
violated SCR 20:1.4(a).  
¶11 In recommending a one-year license suspension as 
discipline for that misconduct, the referee emphasized that 
Attorney Malloy’s mishandling of client funds in his trust 
account was not intended for his own personal gain. The referee 
also noted that the misconduct established in this proceeding 
was substantially similar to the conduct for which he was 
publicly reprimanded in 1994 and that the reprimand obviously 
was insufficient to impress upon Attorney Malloy the necessity 
 
 
No.  96-1300-D 
 
 
9 
of maintaining adequate records of trust account transactions 
and properly handling client funds coming into his possession.  
¶12 In addition to the license suspension, the referee 
recommended that, as a condition of reinstatement of his 
license, 
Attorney 
Malloy 
be 
required 
to 
demonstrate 
affirmatively that he has corrected the problems that led to his 
professional misconduct. In that regard, the referee had noted 
that Attorney Malloy practices law with no support services 
other than an answering service and relies almost exclusively on 
oral communications with clients. The referee also asserted that 
he lacks an understanding of the purposes for detailed trust 
account records and the segregation of his own funds from those 
of his clients. The referee considered it significant that 
Attorney Malloy had not instituted any reforms in his practice 
while this disciplinary proceeding was pending. 
¶13 We 
adopt 
the 
referee’s 
findings 
of 
fact 
and 
conclusions of law and determine that the recommended one-year 
license suspension is appropriate discipline to impose for 
Attorney Malloy’s professional misconduct. In addition, as a 
condition of reinstatement of his license following the period 
of 
suspension, 
Attorney 
Malloy 
shall 
establish 
to 
the 
satisfaction of the Board and the court that his practice of law 
will be conducted in such a way as to keep him in regular 
contact with his clients  and ensure that he make scheduled 
court appearances and otherwise meet his obligations to clients 
and maintain the required recordkeeping in respect to his client 
trust account. In the latter regard, we also impose upon 
Attorney Malloy as a condition of his continued practice for two 
 
 
No.  96-1300-D 
 
 
10
years following reinstatement regular audits of his trust 
account under supervision of the Board to ensure that his 
recordkeeping and handling of client funds is being carried out 
appropriately.  
¶14 IT IS ORDERED that the license of Robert T. Malloy to 
practice law in Wisconsin is suspended for a period of one year, 
commencing June 10, 1997.  
¶15 IT IS FURTHER ORDERED that, upon reinstatement of his 
license to practice law and for a period of two years 
thereafter, Robert T. Malloy shall submit to an audit of his 
client trust account, at his own cost, at least quarterly, as 
required by the Board of Attorneys Professional Responsibility.  
¶16 IT IS FURTHER ORDERED that within 60 days of the date 
of this order Robert T. Malloy pay to the Board of Attorneys 
Professional Responsibility 
the costs 
of this 
proceeding, 
provided that if the costs are not paid within the time 
specified and absent a showing to this court of his inability to 
pay the costs within that time, the license of Robert T. Malloy 
to practice law in Wisconsin shall remain suspended until 
further order of the court.  
¶17 IT IS FURTHER ORDERED that Robert T. Malloy comply 
with the provisions of SCR 22.26 concerning the duties of a 
person whose license to practice law in Wisconsin has been 
suspended.  
 
 
 
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