Title: Office of Lawyer Regulation v. Carl H. Creedy

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

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, 
 
          Complainant, 
 
     v. 
 
Carl H. Creedy, 
 
          Respondent. 
 
FILED 
 
OCT 14, 2014 
 
Diane M. Fremgen 
Clerk of Supreme Court 
 
 
 
 
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   
 
2 
 
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. 
No. 
2013AP1439-D   
 
3 
 
¶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 
No. 
2013AP1439-D   
 
4 
 
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.   
No. 
2013AP1439-D   
 
5 
 
¶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, 
No. 
2013AP1439-D   
 
6 
 
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. 
No. 
2013AP1439-D   
 
7 
 
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. 
No. 
2013AP1439-D   
 
8 
 
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. 
No. 
2013AP1439-D   
 
9 
 
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; . . . . 
 
No. 
2013AP1439-D   
 
10 
 
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. 
No. 
2013AP1439-D   
 
11 
 
¶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." 
No. 
2013AP1439-D   
 
12 
 
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. 
No. 
2013AP1439-D   
 
13 
 
(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 
No. 
2013AP1439-D   
 
14 
 
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. 
 
 
 
No. 
2013AP1439-D   
 
 
 
1