Title: Office of Lawyer Regulation v. Richard E. Reilly

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2020 WI 19 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2018AP1176-D 
 
 
 
COMPLETE TITLE: 
In the Matter of Disciplinary Proceedings 
Against Richard E. Reilly, Attorney at Law: 
 
Office of Lawyer Regulation, 
          Complainant-Respondent, 
     v. 
Richard E. Reilly, 
          Respondent-Appellant. 
 
 
 
 
 
DISCIPLINARY PROCEEDINGS AGAINST REILLY 
 
 
OPINION FILED: 
February 20, 2020   
SUBMITTED ON BRIEFS: 
December 23, 2019   
ORAL ARGUMENT: 
        
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
        
 
COUNTY: 
        
 
JUDGE: 
        
 
 
 
JUSTICES: 
 
ZIEGLER J., dissents, joined by REBECCA GRASSL BRADLEY, J. 
NOT PARTICIPATING: 
        
 
 
 
ATTORNEYS: 
 
 
For the respondent-appellant, there were briefs filed by 
Peyton B. Engel, Richard E. Reilly, and Hurley Burish, S.C., 
Madison.  
 
For the complainant-respondent, there was a brief filed by 
Kim M. Kluck and Office of Lawyer Regulation, Madison 
 
 
 
 
2020 WI 19
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.   2018AP1176-D 
 
 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings 
Against Richard E. Reilly, Attorney at Law: 
 
Office of Lawyer Regulation, 
 
          Complainant-Respondent, 
 
     v. 
 
Richard E. Reilly, 
 
          Respondent-Appellant. 
FILED 
 
FEB 20, 2020 
 
Sheila T. Reiff 
Clerk of Supreme Court 
 
 
 
 
ATTORNEY 
disciplinary 
proceeding.   Attorney's 
license 
suspended.   
 
¶1 
PER CURIAM.   Attorney Richard E. Reilly has appealed a 
report and recommendation filed by Referee John B. Murphy, finding 
that Attorney Reilly committed five counts of professional 
misconduct and recommending that his license to practice law in 
Wisconsin be suspended for 60 days.  Attorney Reilly has stipulated 
to the misconduct.  He has appealed the referee's recommendation 
for a 60-day suspension and argues that a public reprimand is an 
appropriate sanction. 
No. 
2018AP1176-D   
 
2 
 
¶2 
Upon careful review of this matter, we uphold the 
referee's findings of fact and conclusions of law.  We agree with 
the referee that a 60-day suspension of Attorney Reilly's Wisconsin 
law license is an appropriate sanction for his misconduct.  We 
also agree that Attorney Reilly should be required to satisfy any 
financial obligations that may be imposed by the circuit court in 
the E.M. case.  In addition, we find it appropriate to follow our 
normal custom of imposing the full costs of this proceeding, which 
are $15,830.87 as of September 5, 2019, on Attorney Reilly. 
¶3 
Attorney Reilly was admitted to practice law in 
Wisconsin in 1966 and practices at Gimbel, Reilly, Guerin & Brown, 
LLP.  In 1985 he received a consensual private reprimand for 
neglecting two estates and not communicating with an heir.  Private 
reprimand, No. 85-4.  In 2004, he received a consensual public 
reprimand for misconduct that consisted of failing to act with 
reasonable diligence and promptness by failing to thoroughly 
prepare a divorce client's case and for failing to timely file his 
own Wisconsin income tax returns.  Public Reprimand of Richard E. 
Reilly, 
No. 
2004-6 
(electronic 
copy 
available 
at 
https://compendium.wicourts.gov/app/raw/ 
002074.html. 
¶4 
On June 25, 2018, the Office of Lawyer Regulation (OLR) 
filed a complaint alleging that Attorney Reilly had engaged in 
five counts of misconduct.  The first three counts of misconduct 
arose out of his representation of E.M. in a divorce action in 
Ozaukee County Circuit Court.  Attorney Reilly began representing 
E.M. in the divorce in June 2014.  E.M. had previously been 
No. 
2018AP1176-D   
 
3 
 
represented by two other attorneys.  E.M.'s husband, M.M., was 
represented by Attorney Linda Ann Ivanovic in the divorce and post-
judgment proceedings.  
¶5 
On October 22, 2014, E.M. filed her financial disclosure 
statement.  She listed a number of debts that would subsequently 
be listed in the same amounts in her list of debts in the divorce 
judgment.  Attorney Reilly's law firm assisted E.M. in preparing 
the financial disclosure statement. 
¶6 
A trial was held in the divorce proceeding beginning on 
October 22, 2014 and continuing on two days in November, 2014.  
Ozaukee County Circuit Court Judge Paul V. Malloy granted the 
judgment of divorce on November 25, 2014.   
¶7 
On December 10, 2014, Attorney Reilly deposited a check 
from M.M. made payable to Gimbel, Reilly, Guerin & Brown, LLP Trust 
Account in the amount of $97,286.85 into his law firm's trust 
account.  The funds related to a retirement account, and the memo 
line on the check said, "50% of Ameritrade." 
¶8 
On January 21, 2015, Judge Malloy held a hearing to 
clarify the divorce judgment.  Judge Malloy said E.M.'s debts "need 
to be resolved" and that E.M. was "not to discharge them in 
bankruptcy."  Referring to the funds from the retirement account, 
Judge Malloy said, "As far as I'm concerned, that money was being 
put into essentially a constructive trust to make sure everybody 
is paid, that [E.M.] walks out of this without all kinds of debt 
because they would come back to [M.M.]." 
¶9 
Judge Malloy entered the findings of fact, conclusions 
of law and judgment of divorce in the case on February 26, 2015.  
No. 
2018AP1176-D   
 
4 
 
In the judgment of divorce, Judge Malloy appointed Scribner Cohen 
& Company as E.M.'s conservator to manage her funds, maintenance, 
assets, and pay her bills.  The judgment of divorce set forth the 
division of specific debts and financial obligations and said that 
E.M.'s conservator "shall manage her debts" and "is ordered to pay 
all of her debts with the funds she received from Respondent's 
401(k)."  
¶10 The 
judgment 
of 
divorce 
specified 
that 
E.M.'s 
psychologist fees, CPA fees, and fees owed to the parties' 
attorneys shall take priority and be considered marital support 
orders.  The divorce judgment ordered that title to a 2014 Range 
Rover vehicle be immediately transferred to E.M.  The divorce 
judgment ordered that E.M.'s one-half of the Ameritrade account be 
cashed in and the funds be provided to E.M.'s conservator, who 
shall manage her assets and pay her bills as specified in the 
divorce judgment. 
¶11 Attorney Reilly did not provide the Ameritrade funds, 
which had been placed in his law firm's trust account, to the 
conservator.  Attorney Reilly used some of the Ameritrade funds to 
pay for items not included in E.M.'s debts listed in the divorce 
judgment, including cleaning services, payments for personal 
loans, credit card and dentist bills for one of E.M.'s children, 
cable television and DirecTV bills, car maintenance and repair 
bills, medical spa treatment bills, and a plane ticket for one of 
E.M.'s children.  Attorney Reilly's use of the Ameritrade funds to 
pay for items that were not listed in the divorce judgment left 
other debts that were listed in the judgment unpaid. 
No. 
2018AP1176-D   
 
5 
 
¶12 In April 2015, Capital One filed a small claims action 
against E.M. to collect credit card debt that had been listed in 
the divorce judgment but had not yet been paid.  Judgment was 
entered against E.M. on May 20, 2015 for $4,623.03, plus costs and 
fees. 
¶13 On June 1, 2015, Capital One filed another small claims 
action against E.M. to collect credit card debt that had been 
listed in the divorce judgment but had not yet been paid.  Judgment 
was entered against E.M. in that case on October 7, 2015 for 
$5,089.25, plus costs and fees. 
¶14 The judgment in the first small claims case was satisfied 
in June 2015. 
¶15 In either June or the beginning of July 2015, Scribner 
received a check for $392,322.72 which represented E.M.'s share of 
the 401(k) retirement account funds.  On July 8, 2015, Attorney 
Reilly directed Scribner to pay $134,375.67 to his law firm for 
work performed for E.M. in the divorce.  This amount represented 
work performed up to the date of payment. 
¶16 On July 15, 2015, E.M. was charged in a criminal 
complaint with one count of battery or threat to a judge, a felony, 
and two counts of aggravated battery-intend great bodily harm, 
also a felony, in Ozaukee County Circuit Court.  The charges 
stemmed from E.M.'s efforts to hire a hit man to batter Judge 
Malloy, M.M., and M.M.'s then girlfriend. 
¶17 On August 3, 2015, Attorney Reilly deposited a check for 
$71,000 from S & S Auto Broker, Inc. made payable to E.M. into a 
second trust account at his law firm.  The check was for the sale 
No. 
2018AP1176-D   
 
6 
 
of the 2014 Range Rover.  Attorney Reilly did not deliver the funds 
from the sale of the Range Rover to Scribner. 
¶18 On August 7, 2015, Waukesha County Circuit Court Judge 
Jennifer R. Dorow was assigned to preside over post-judgment 
proceedings in the M. divorce. 
¶19 On August 10, 2015, Attorney Reilly directed that 
$25,000 be paid to his law firm as an advanced fee from his law 
firm's trust account (the account holding the Range Rover sale 
proceeds) as a retainer for E.M.'s criminal defense. 
¶20 On August 17, 2015, Attorney Ivanovic, on behalf of M.M., 
filed a third post-judgment order to show cause for contempt on 
E.M., Attorney Reilly, and Scribner, based on the fact that M.M. 
had not received the attorney fees which E.M. had been ordered to 
pay in the divorce judgment.  On September 16, 2015, Attorney 
Ivanovic amended the third order to show cause to include a request 
for an accounting of E.M.'s funds held by Attorney Reilly and 
Scribner. 
¶21 On November 17, 2015, Attorney Reilly provided a joint 
accounting to Attorney Ivanovic which did not distinguish which 
funds were being held by him and which funds were being held by 
Scribner. 
¶22 On November 24, 2015, M.M. filed a fourth post-judgment 
order to show cause for contempt alleging that Attorney Reilly and 
Scribner violated the orders contained in the judgment of divorce 
by directing that money be used to pay for debts which were not 
specifically identified in the divorce judgment. 
No. 
2018AP1176-D   
 
7 
 
¶23 On December 9, 2015, Attorney Reilly directed that 
$34,000 be paid from his law firm's trust account holding the Range 
Rover proceeds to the Ozaukee County Clerk of Courts for E.M.'s 
bail.  The $34,000 included $15,000 that Attorney Reilly's law 
firm had received from E.M.'s family member and $19,000 that his 
law firm received from the sale of the Range Rover.  After issuing 
the check for $34,000 toward E.M.'s bail and a check for GPS 
monitoring, $48.25 remained in the trust account that had been 
holding the Range Rover proceeds. 
¶24 As of December 9, 2015, all $97,286.85 of the Ameritrade 
funds had been disbursed from the trust account by Attorney 
Reilly's law firm.  As of that date, unpaid debts and obligations 
exceeding $72,000 that had been ordered paid in the divorce 
judgment remained unpaid.   
¶25 On or about December 22, 2015, Attorney Reilly directed 
Scribner to pay $6,000 from funds held by Scribner toward E.M.'s 
bail in the criminal case.   
¶26 Judge Dorow heard testimony regarding the fourth order 
to show cause on January 16 and February 25, 2016.  Attorney 
Reilly, M.M., and Scribner representative Jessica Gatzke testified 
at the hearing.   
¶27 Jessica Gatzke testified she knew the $71,000 received 
from the sale of the Range Rover and $97,000 from the Ameritrade 
account, which the court had ordered her to manage, had been placed 
in Attorney Reilly's trust accounts.  Gatzke testified that she 
did not request that those funds be transferred to Scribner because 
No. 
2018AP1176-D   
 
8 
 
the money was in an attorney's trust account and she had no reason 
to believe it was not accounted for. 
¶28 Attorney Reilly testified he did not turn over proceeds 
from the sale of the Range Rover to Scribner because there was a 
need for funds for E.M.'s criminal defense.  Attorney Reilly 
admitted that the $97,000 in funds from the Ameritrade account 
were placed in his law firm's trust account and that he did not 
turn those funds over to the conservator.  He further admitted he 
approved paying some of amounts in excess of the amounts specified 
in the divorce judgment, and he admitted he directed the 
conservator and his law firm to pay money for E.M.'s bail even 
though there was nothing in the divorce judgment authorizing funds 
to be used for that purpose. 
¶29 On July 6, 2016, Attorney Reilly's law firm, on behalf 
of Attorney Reilly and E.M., and Attorney Ivanovic presented 
argument to Judge Dorow regarding the fourth order to show cause.  
In Judge Dorow's oral decision, she found Attorney Reilly in 
contempt of court for multiple intentional and willful violations 
of the divorce judgment, including failing to turn over the 
Ameritrade funds or the proceeds from the sale of the Range Rover 
to the conservator; directing excess payments to his law firm and 
other creditors; paying a $25,000 retainer to his law firm in 
E.M.'s criminal matter; paying $19,000 from his law firm's trust 
account toward E.M.'s bail; and directing the conservator to pay 
$6,000 toward E.M.'s bail. 
¶30 Judge Dorow ordered that the Ameritrade funds, the 
proceeds from the Range Rover sale, the retainer in the criminal 
No. 
2018AP1176-D   
 
9 
 
case, the bail money, and the excess payments of professional fees 
be returned within 30 days.  She also found that so long as the 
debts listed in the divorce judgment remained unpaid, the contempt 
of court was ongoing.  Judge Dorow commented, "[It] really appears 
to this Court that the funds of [E.M.] were nothing short of a 
repository of funds for Gimbel, Reilly, Guerin and Brown and their 
attorneys' fees."  Judge Dorow entered a written decision of her 
findings on July 18, 2016.  Attorney Reilly and Scribner were 
ordered to pay specific amounts to a successor conservator.   
¶31 In August 2016, Attorney Reilly filed a notice of appeal 
from the order holding him in contempt of the judgment of divorce.  
The court of appeals affirmed in part and reversed in part.  With 
respect to the award of attorney fees, the court of appeals held 
that the circuit court did not err in determining that Attorney 
Reilly and Scribner engaged in contemptuous conduct in paying 
Attorney Reilly fees related to the divorce action that were in 
excess of the fees due through February 26, 2015.  The court of 
appeals remanded the issue to the circuit court to determine what 
amount of fees was reasonably incurred through February 26, 2015. 
¶32 The court of appeals also held that the circuit court 
did not err in determining that Attorney Reilly and Scribner 
engaged in contemptuous conduct in paying professional fees in 
excess of the fees due.  The court of appeals observed that by 
paying excess professional fees, Attorney Reilly and Scribner 
compromised Scribner's ability to fairly pay other debts as ordered 
in the divorce judgment.   
No. 
2018AP1176-D   
 
10 
 
¶33 With respect to Scribner using $6,000 from E.M.'s funds 
toward payment of E.M.'s bail, the court of appeals noted that 
Scribner's clear and specific directive in the divorce judgment 
was to pay E.M.'s debts and bills listed in the divorce judgment.  
The court of appeals held that using funds for bail unquestionably 
did not qualify as payment of a debt, much less one of the itemized 
debts that Scribner was authorized and directed to pay.  In 
addition, the court of appeals held the circuit court did not err 
in finding Attorney Reilly in contempt for directing that $19,000 
be paid from his trust account toward E.M.'s bail.   
¶34 The court of appeals also affirmed the circuit court's 
finding of contempt in relation to Attorney Reilly's payment of 
the $25,000 to his law firm because he did not specifically 
challenge that finding of contempt.  The court of appeals said 
Attorney Reilly's involvement with selling the Range Rover and 
keeping $25,000 of the funds as payment to his law firm for E.M.'s 
criminal representation was directly in conflict with the divorce 
judgment.  Scribner filed a petition for review with this court.  
This court denied the petition for review in October 2017. 
¶35 The OLR's complaint alleged the following counts of 
misconduct with respect to Attorney Reilly's handling of E.M.'s 
divorce: 
Court One:  By failing to deliver the funds from the 
sale of the 2014 Range Rover vehicle and the funds from 
the Ameritrade account to Scribner, Attorney Reilly 
No. 
2018AP1176-D   
 
11 
 
violated former SCR 20:1.15(d)(1) and current SCR 
20:1.15(e)(1).1 
Count Two:  By failing to comply with the February 26, 
2015 judgment of divorce, Attorney Reilly violated 
SCR 20:3.4(c).2 
Count Three:  By continuing to represent E.M. in the 
post-judgment proceedings while there was a significant 
risk that his representation was materially limited by 
his own personal interest with respect to the order to 
show cause for contempt, Attorney Reilly violated 
SCR 20:1.7(a)(2).3 
                                                 
1 Effective July 1, 2016, substantial changes were made to 
Supreme Court Rule 20:1.15, the "trust account rule."  See S. Ct. 
Order 14-07, 2016 WI 21 (issued Apr. 4, 2016, eff. July 1, 2016).  
Because the conduct underlying this case arose prior to July 1, 
2016, unless otherwise indicated, all references to the supreme 
court rules will be to those in effect prior to July 1, 2016. 
Former 
SCR 
20:1.15(d)(1) 
was 
renumbered 
as 
SCR 20:1.15(e)(1).  The text of the rule was not changed 
and provides:   
Upon receiving funds or other property in which a 
client has an interest, or in which the lawyer has 
received notice that a 3rd party has an interest 
identified by a lien, court order, judgment, or 
contract, the lawyer shall promptly notify the client or 
3rd party in writing.  Except as stated in this rule or 
otherwise permitted by law or by agreement with the 
client, the lawyer shall promptly deliver to the client 
or 3rd party any funds or other property that the client 
or 3rd party is entitled to receive.   
2 SCR 20:3.4(c) provides: "A lawyer shall not knowingly 
disobey an obligation under the rules of a tribunal, except for an 
open refusal based on an assertion that no valid obligation 
exists."   
3 SCR 20:1.7(a)(2) provides: 
(a) Except as provided in par. (b), a lawyer shall 
not represent a client if the representation involves a 
concurrent conflict of interest. A concurrent conflict 
of interest exists if:  
No. 
2018AP1176-D   
 
12 
 
¶36 The second client matter detailed in the OLR's complaint 
involved Attorney Reilly's representation of J.D'A. in a divorce 
action.  The divorce was filed in 2010.  J.D'A. and her husband 
filed a stipulated marital settlement agreement in 2011, and a 
divorce judgment was entered.  The divorce judgment required the 
husband to pay child support arrears, child support, maintenance, 
attorney fees, and other expenses. 
¶37 In January 2012, J.D'A.'s prior attorney filed a motion 
for contempt based on J.D'A.'s ex-husband's failure to comply with 
the court order support and maintenance payments.  The ex-husband 
ultimately stipulated to a finding of contempt.  A family court 
commissioner withheld entering a finding of contempt, and the 
parties stipulated to dates by which the ex-husband was to meet 
his payment obligations to purge the contempt.  The family court 
commissioner found the ex-husband in contempt in March 2013 and 
ordered him to serve 90 days in jail, but the court stayed the 
sentence for 24 months if the ex-husband made payments for child 
support arrears, child support, and maintenance payments.   
¶38 J.D'A. hired Attorney Reilly to represent her in the 
family matter in May 2013.  She signed a written legal 
representation agreement which provided that Attorney Reilly's 
legal services would be billed at $300 per hour.  She paid Attorney 
                                                 
 . . .  
(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. 
2018AP1176-D   
 
13 
 
Reilly an advanced fee of $2,500.  The circuit court entered an 
order substituting Attorney Reilly as counsel of record on June 4, 
2013.   
¶39 On June 14, 2013, counsel for J.D'A.'s ex-husband sent 
a letter to the family court commissioner, copying Attorney Reilly, 
saying that the ex-husband had a bankruptcy proceeding pending so 
all enforcement/contempt proceedings should be stayed by operation 
of the automatic stay in 11 U.S.C. § 362.  The bankruptcy matter 
was subsequently dismissed because the ex-husband failed to file 
required documents. 
¶40 J.D'A.'s ex-husband filed a second bankruptcy petition 
in September 2013.  On that date the bankruptcy court clerk issued 
a notice of bankruptcy case filing which stated, "In most 
instances, the filing of the bankruptcy case automatically stays 
certain collection and other actions against the debtor and the 
debtor's property."  Also on that date, the ex-husband's attorney 
sent a letter to Attorney Reilly advising him to the bankruptcy 
filing. 
¶41 On September 30, 2013, counsel for J.D'A.'s ex-husband 
faxed a letter to the family court commissioner and counsel, 
including Attorney Reilly, saying that it is a violation of the 
automatic stay provision in 11 U.S.C. § 362 to proceed with the 
contempt action after a bankruptcy case has been filed.   
¶42 On September 30, 2013, the family court commissioner 
held a hearing regarding the earlier contempt order.  The 
commissioner ordered that the family matter would be stayed as a 
result of the bankruptcy filing. 
No. 
2018AP1176-D   
 
14 
 
¶43 The next hearing regarding the contempt matter was 
scheduled for January 13, 2014.  On that date, Attorney Reilly 
sent a letter to the family court commissioner regarding the 
bankruptcy case and said he was prepared to proceed with the 
contempt hearing.  Counsel for J.D'A.'s ex-husband filed a letter 
with the family court commissioner saying that the bankruptcy 
trustee had not yet determined what was and was not property of 
the bankruptcy estate.   
¶44 The family court commissioner held a hearing on the 
contempt motion on January 13, 2014.  An attorney from Attorney 
Reilly's law firm appeared on behalf of J.D'A. and argued that the 
contempt was ongoing and that there did not need to be a new 
finding of contempt for the period of time after the bankruptcy 
was filed.  The family court commissioner made an oral ruling 
stating she believed the court had the authority to lift the stay 
and impose the contempt sanction and gave J.D'A.'s ex-husband until 
January 31, 2014 to purge the contempt by paying $15,000. 
¶45 On January 21, 2014, J.D'A.'s ex-husband commenced an 
adversary case in bankruptcy court by filing a debtor's complaint 
for willful violation of the automatic stay with respect to the 
action to enforce the support order in the family matter during 
the time the automatic stay was in effect.  Attorney Reilly was 
represented in the adversary case by an attorney from his law firm.  
The bankruptcy judge held a hearing in the adversary case on 
January 30, 2014 and ruled that the family court commissioner's 
January 13, 2014 oral ruling was void and that the defendants in 
the adversary case were enjoined from taking any action to enforce 
No. 
2018AP1176-D   
 
15 
 
the family court commissioner's oral ruling or to reduce the oral 
ruling to writing. 
¶46 On March 4, 2014, Attorney Reilly's law firm opened a 
new client billing matter entitled "Client:  201407603M [D'A.] – 
Reilly."  A subsequent report on that billing matter reflected 
that the billing included work by Attorney Reilly's law firm dating 
back to January 10, 2014.  
¶47 Attorney Reilly and J.D'A. did not have a separate 
written legal representation agreement for Attorney Reilly or his 
law firm to represent her in the adversary case. 
¶48 The bankruptcy judge granted a motion for summary 
judgment and dismissed the adversary complaint as to Attorney 
Reilly with prejudice in July 2014.  On July 29, 2014, J.D'A. and 
her ex-husband entered into a stipulation in the adversary case 
stating that J.D'A. may be dismissed from the action with prejudice 
and without costs or fees.  The bankruptcy court approved the 
stipulation and dismissed J.D'A. with prejudice.  The bankruptcy 
court also dismissed the complaint and closed the adversary case. 
¶49 On February 16, 2016, Attorney Lani L. Williams sent 
Attorney Reilly an email advising that J.D'A. had requested that 
Attorney Williams take over representation of J.D'A. in the family 
matter.   
¶50 Attorney Williams met with Attorney Reilly at Attorney 
Reilly's office on February 26, 2016 to discuss the case and review 
the file.  At the meeting, Attorney Reilly gave Attorney Williams 
a billing summary, dated February 8, 2016, for work that Attorney 
Reilly and his law firm had performed defending J.D'A. in the 
No. 
2018AP1176-D   
 
16 
 
family matter and a Detail Work-in-Progress report dated February 
8, 2016 for work that Attorney Reilly and his law firm billed for 
defending Attorney Reilly personally in the adversary case in 
bankruptcy court. 
¶51 During the February 26, 2016 meeting, Attorney Williams 
requested that Attorney Reilly give her J.D'A.'s entire client 
file in the family matter.  Attorney Reilly told Attorney Williams 
he would only turn over the original file so she could make a copy 
of it and that Attorney Williams had to return the original client 
file to Attorney Reilly's office.  Attorney Reilly refused to have 
his office staff copy the file, saying it would cost hundreds of 
dollars and hours of staff time to complete.  Attorney Williams 
agreed to copy the file and return it to Attorney Reilly in one 
week. 
¶52 Attorney Williams reviewed the client file and noted 
that it contained no notes and almost no written or electronic 
communications or memos between Attorney Reilly and the staff at 
his law firm.  Other documents were also missing from the file, 
including over 80 pages of notes and memos relating to the 
bankruptcy and post-divorce proceedings and a transcript of a 
hearing in the family matter. 
¶53 On March 2, 2016, Attorney Reilly's office sent, via 
electronic mail, a "Request, Consent and Order for Substitution of 
Attorneys and Judgment for Attorney Fees," with the caption of the 
family matter.  The proposed consent and order contained a separate 
consent to judgment for attorney fees in favor of Attorney Reilly 
and against J.D'A. in the amount of $31,127.26.  J.D'A. did not 
No. 
2018AP1176-D   
 
17 
 
sign the proposed consent and order containing the judgment for 
attorney fees. 
¶54 Attorney Williams returned J.D'A.'s original file in the 
family matter to Attorney Reilly's office on March 4, 2016.  
¶55 In a letter to Attorney Reilly dated April 14, 2016, 
Attorney Williams advised Attorney Reilly that J.D'A. would not be 
paying the $23,690.45 in fees and expenses that Attorney Reilly 
and his law firm billed for work in defending Attorney Reilly 
personally in the adversary case. 
¶56 On May 25, 2016, J.D'A. filed a request for substitution 
of attorneys in the family matter, substituting Attorney Williams 
in place of Attorney Reilly.  The circuit court signed the order 
of substitution that same day. 
¶57 On November 15, 2017, Attorney Reilly sent a letter to 
J.D'A. stating that his law firm "wrote off and absorbed" the 
$23,690.45 in fees and expenses related to J.D'A.'s ex-husband's 
"ancillary tactical bankruptcy action." 
¶58 The OLR's complaint alleged the following counts of 
misconduct with respect to Attorney Reilly's representation of 
J.D'A.: 
Count Four:  By billing his client for his own personal 
defense as an individually named defendant in an 
adversary case in the United States Bankruptcy Court for 
the Eastern District of Wisconsin, Attorney Reilly 
violated SCR 20:1.5(a).4 
                                                 
4 SCR 20:1.5(a) provides:   
(a) A lawyer shall not make an agreement for, 
charge, 
or 
collect 
an 
unreasonable 
fee 
or 
an 
unreasonable amount for expenses. The factors to be 
No. 
2018AP1176-D   
 
18 
 
Count Five:  By failing to deliver the original case 
file to his client's successor counsel, and then by only 
allowing successor counsel to borrow the original case 
file on the condition that she copy the file at her own 
expense, Attorney Reilly violated SCR 20:1.16(d).5 
¶59 Attorney Reilly filed an answer to the complaint on 
August 3, 2018.  On January 3, 2019, the parties filed a 
                                                 
considered in determining the reasonableness of a fee 
include the following:  
(1) the time and labor required, the novelty and 
difficulty of the questions involved, and the skill 
requisite to perform the legal service properly;  
(2) the likelihood, if apparent to the client, that 
the acceptance of the particular employment will 
preclude other employment by the lawyer;  
(3) the fee customarily charged in the locality for 
similar legal services;  
(4) the amount involved and the results obtained;  
(5) the time limitations imposed by the client or 
by the circumstances;  
(6) the nature and length of the professional 
relationship with the client;  
(7) the experience, reputation, and ability of the 
lawyer or lawyers performing the services; and  
(8) whether the fee is fixed or contingent. 
5 SCR 20:1.16(d) provides:   
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 or expense that has not been earned or incurred.  
The lawyer may retain papers relating to the client to 
the extent permitted by other law. 
No. 
2018AP1176-D   
 
19 
 
stipulation whereby Attorney Reilly withdrew his answer to the 
complaint and admitted all of the facts and allegations contained 
in the complaint.  The stipulation did not contain an agreement as 
to the proposed discipline.  The stipulation detailed the various 
amounts that Attorney Reilly paid to the conservator and other 
parties in the E.M. case.  Attorney Reilly agreed to satisfy any 
remedial sanctions that might be assessed by the circuit court in 
the E.M. case. 
¶60 The hearing on the appropriate sanction to impose for 
Attorney Reilly's admitted misconduct was held on January 4, 2019.  
The referee issued his report and recommendation on April 29, 2019.  
The referee found, by virtue of the stipulation, the OLR had proved 
by clear, satisfactory, and convincing evidence that Attorney 
Reilly committed the five counts of misconduct alleged in the OLR's 
complaint. 
¶61 With respect to Attorney Reilly's representation of 
E.M., the referee said that Attorney Reilly justified his actions 
by suggesting he was acting only on his client's behalf in making 
the disbursements.  The referee disagreed, saying since the 
disbursements were used to make payments on debts not included in 
the divorce judgment, Attorney Reilly was enabling his client to 
violate the circuit court's order.  The referee also said Attorney 
Reilly used some of the funds to pay his own fees and in the case 
of the proceeds from the car sale, he provided his law firm with 
a $25,000 retainer to represent E.M. in her criminal matter.  The 
referee said, "Absolute compliance with a court's decisions and 
orders is at the foundation of our legal system.  Neither litigants 
No. 
2018AP1176-D   
 
20 
 
nor attorneys can pick and choose which court orders they decide 
to follow and which they do not." 
¶62 With respect to Attorney Reilly's representation of 
J.D'A., the referee said since Attorney Reilly was aware of 
J.D'A.'s financial situation, it was highly inappropriate for him 
to present her with a bill which he knew she could not pay when 
she retained new counsel.  The referee said the only explanation 
for presenting the bill was that Attorney Reilly wanted to harass 
J.D'A. for purposes of retaliation because he was angry that she 
obtained a new attorney.  The referee also said: 
Additionally, Reilly must have known that it would be 
inappropriate for [J.D'A.] to pay for Reilly's own 
defense in the adversary case.  It was Reilly's own 
disregard for the power of the Automatic Stay that got 
Reilly in trouble with the Bankruptcy Court.  Therefore, 
Reilly was responsible for his own representation. 
¶63 The referee said there was no question that all of the 
acts of misconduct in both cases were intentional.  The referee 
said Attorney Reilly knew he should comply with the court order in 
the E.M. case and deliver the funds he had received to the 
conservator, but he intentionally chose not to do so.  The referee 
said Attorney Reilly also knew the provisions of the divorce 
judgment and he chose to disregard them.  The referee further said 
that Attorney Reilly knew he could not represent both himself and 
E.M. at the same time in the same case, yet he did not withdraw 
from representing E.M. as was required.  With respect to Attorney 
Reilly's representation of J.D'A., the referee said that Attorney 
Reilly knew he had no right to retain his client's file when she 
hired a new attorney, and he also knew he could not charge his 
No. 
2018AP1176-D   
 
21 
 
client for the time he spent defending himself in the adversary 
case in bankruptcy court. 
¶64 The referee said Attorney Reilly appeared to minimize 
the extent of injury caused by his actions in both cases and his 
theory seems to be he provided good legal representation to both 
clients.  The referee said Attorney Reilly also says he returned 
the money to E.M.'s marital estate after the contempt finding, and 
he did not try to collect the money that he claimed J.D'A. owed 
him so little or no harm was done to either client.  The referee 
said: 
Reilly is mistaken.  First of all, by depleting the 
[E.M.'s] marital estate on unauthorized expenditures 
(including payments to himself) he prevented the proper 
payment of the martial debts thereby exposing [M.M.] to 
a variety of credit problems.  Additionally, there is no 
way to know what effect Reilly's cavalier attitude 
toward the family court's orders had upon [E.M.'s] 
bizarre behavior and her own disregard for the authority 
of the court.  In any case, Reilly was far from a shining 
example for his client. 
By giving [J.D'A.] the excessive bill in retaliation for 
getting a new attorney and by asking her to sign a 
consent for entry of judgment for the bill, Reilly 
obviously caused [J.D'A.] to have considerable concern 
over how she was going to either pay the bill or fight 
its payment in court.  Even though Reilly asserted later 
that he was not serious about the bill, neither [J.D'A.] 
nor her attorney knew this to be the case at the time. 
Also, by failing to promptly turn over her divorce file, 
Reilly impeded William's ability to best represent her 
client in her efforts to collect needed child support.  
Though Williams finally did get the file, after being 
harassed by Reilly, the file was incomplete.  This meant 
extra work for Williams and, perhaps, a delay in getting 
the support payments. 
No. 
2018AP1176-D   
 
22 
 
¶65 The referee noted that Attorney Reilly has two prior 
reprimands, a private reprimand in 1985 and a public reprimand in 
2004.  The referee said Attorney Reilly improperly used some of 
E.M.'s funds to pay his law firm's fees in excess of the amount 
due and to pay a retainer to his own law firm in E.M.'s criminal 
case.  The referee said Attorney Reilly's violation of the M. 
divorce judgment was ongoing and ended only when the circuit court 
intervened and found Attorney Reilly in contempt.  The referee 
said although Attorney Reilly admitted to all of the allegations 
contained in the OLR's complaint, it was clear he still felt some 
of his behavior in the E.M. case was justified.  The referee said 
while it is not clear that E.M. was a "victim" in the traditional 
sense, there is no question E.M. was very vulnerable given her 
mental condition, and it is presumed E.M. relied on Attorney Reilly 
to make good legal decisions on her behalf.  The referee said 
J.D'A. was certainly economically vulnerable when Attorney Reilly 
sought to collect his bill in an inappropriate manner and for an 
inappropriate amount.  The referee noted that Attorney Reilly had 
actively practiced law for 53 years and was a founding member of 
his law firm, so he had substantial practice in the law. 
¶66 As mitigating factors, the referee said Attorney Reilly 
was cooperative throughout the OLR proceeding.  The referee noted 
Attorney Franklyn Gimbel testified on behalf of Attorney Reilly at 
the sanctions hearing and according to Attorney Gimbel, who has 
known Attorney Reilly for 50 years, Attorney Reilly is an 
outstanding lawyer with a reputation for taking hard cases and he 
has served on the Committee for the Revision of the Code of 
No. 
2018AP1176-D   
 
23 
 
Professional Responsibility of the Wisconsin Bar Association.  The 
referee also noted that after Attorney Reilly was found to be in 
contempt of court, his law firm did repay over $61,000 to E.M.'s 
marital estate.  The referee said that Attorney Reilly is obviously 
sorry he finds himself in the situation he is now in and says he 
regrets his behavior in both matters.  
¶67 The referee ultimately recommended a 60-day license 
suspension.  He said it is very important that Attorney Reilly 
realize that disregarding the circuit court's authority, as he did 
in the E.M. case, cannot be tolerated if our legal system is to 
properly function.  The referee also said that Attorney Reilly 
must realize he cannot let his temper get the best of him in his 
dealings with his clients and his fellow attorneys.   
¶68 The referee said even if Attorney Reilly perceived 
himself poorly used by J.D'A.'s act of hiring a new attorney, he 
had no right to harass his client and her new attorney, to withhold 
parts of the file, or to threaten his client using questionable 
debt collection practices.  In addition, the referee said the 
sanction imposed on Attorney Reilly must deter other attorneys 
from acting improperly in the practice of law.  The referee said, 
"Consistent with the concept of progressive discipline and 
consistent with the seriousness of the offenses outlined in the 
Complaint, a loss of practice privileges is required."  The referee 
said a 60-day suspension was reasonable and would meet the goals 
of educating both the offending lawyer and other lawyers of the 
need to fully comply with the Rules of Professional Conduct for 
attorneys.  The referee further recommended that Attorney Reilly 
No. 
2018AP1176-D   
 
24 
 
pay the full costs of the proceeding and that he be ordered to 
fully comply with the circuit court's order in the E.M. case. 
¶69 In his appeal, Attorney Reilly argues that a suspension 
is an excessive sanction for his admitted misconduct and that a 
public reprimand is an appropriate and sufficient level of 
discipline.  Attorney Reilly accuses the referee of unfairly 
extending the factual record to fit his view that Attorney Reilly 
is "a bad actor."  Attorney Reilly says he never set out to commit 
misconduct.  He says with respect to the E.M. case, E.M. was an 
unusually troublesome client.  He notes Judge Malloy opined that 
E.M. has serious mental health issues.  Attorney Reilly said that 
E.M. went on a $74,000 shopping spree, forged checks, was jailed 
multiple times for contempt, and finally tried to arrange for 
someone to harm both her ex-husband and Judge Malloy.   
¶70 Attorney Reilly says 
while the divorce judgment 
attempted to bring some order to E.M.'s financial life by 
prioritizing certain debts, allocating money to address them, and 
appointing Scribner Cohen to manage her money, the judgment of 
divorce could not have anticipated E.M.'s criminal conduct.  
Attorney Reilly said, "Suddenly, [E.M.] was in need of criminal 
defense, and Attorney Reilly had to think creatively about how to 
fund it.  Attorney Reilly believed at the time that selling the 
Land Rover was an acceptable course of action, though ultimately 
this proved not to be the case."  Attorney Reilly said the 
situation was chaotic, and although he does not contest the fact 
that his actions were inconsistent with the express terms of the 
judgment of divorce, he says the disbursements he made were 
No. 
2018AP1176-D   
 
25 
 
legitimate expenses and his actions "were the product of having to 
respond to urgent, bizarre, and unforeseeable circumstances, and 
the actions he took were for [E.M.'s] benefit.  They were 
misconduct, but without malicious intent." 
¶71 With respect to J.D'A., Attorney Reilly said he knew 
very well she was in dire financial straits.  He again agrees he 
did not handle the matter properly, and he says he did not expect 
the invoice he presented to Attorney Williams to be paid.  He says, 
his "effort to collect an unreasonable fee was half-hearted, at 
most, and caused no harm to the client."  Attorney Reilly also 
admits he did not turn over J.D'A.'s file as he should have when 
Attorney Williams requested it, and he agrees he should have borne 
the cost of copying the file.   
¶72 Attorney Reilly argues that although he has previously 
received two reprimands, those events are far in the past and 
concern conduct unrelated to the present matter.  He disagrees 
with the referee that he acted with a dishonest or selfish motive, 
and he disputes the fact that his actions amounted to a continuing 
pattern of misconduct. 
¶73 Attorney Reilly agrees that E.M. is vulnerable, but he 
says he worked on her behalf and for her benefit and says she is 
not his victim.  He says that to the extent there is a victim in 
this case, it is J.D'A. "who was the recipient of a piece of 
passive-aggressive correspondence from Attorney Reilly.  She was 
certainly financially vulnerable, but she was victimized only to 
the extent that she received a request to consent to fees.  She 
did not consent, and therefore suffered no financial harm." 
No. 
2018AP1176-D   
 
26 
 
¶74 Attorney Reilly says there are numerous mitigating 
factors in this case, including his timely good faith effort to 
rectify the consequences of his misconduct; his cooperation 
throughout the proceeding; his character, reputation, and history 
of service to the State Bar; the fact he has already been 
sanctioned in the E.M. matter in the form of a contempt order; the 
fact that he is remorseful for his misconduct; and the fact that 
15 years have passed since he received his last reprimand.   
¶75 Based on all these factors, Attorney Reilly argues that 
a public reprimand would be an appropriate level of discipline.  
In support of this argument, he points to In re Disciplinary 
Proceedings Against Tjader, 2018 WI 96, 384 Wis. 2d 51, 918 
N.W.2d 418, in which an attorney with substantial experience in 
the practice of law and two prior reprimands received a public 
reprimand after stipulating to six counts of misconduct involving 
three clients.   
¶76 The OLR argues that the 60-day suspension recommended by 
the referee is an appropriate level of discipline.  The OLR 
acknowledges that the referee's report contains some minor 
mistakes of fact in a very fact intensive case.  For instance, the 
OLR notes the referee stated that the Ameritrade funds were applied 
to pay items not listed in the divorce judgment and did not pay 
any of the items that were listed, when in fact, some of the 
Ameritrade funds were used to pay some of the debts listed in the 
divorce judgment.  The OLR says the important point the referee 
was making was that many of the expenses not in the divorce 
No. 
2018AP1176-D   
 
27 
 
judgment were paid by Attorney Reilly, leaving a number of debts 
specified in the judgment of divorce unpaid.   
¶77 The OLR says the referee properly considered the nature 
of Attorney Reilly's misconduct and considered both aggravating 
and mitigating factors.  The OLR says Attorney Reilly disobeyed a 
court order on multiple occasions, ignored a conflict of interest, 
tried to collect an unreasonable fee, and failed to turn over a 
client's file.  The OLR says that Attorney Reilly's conduct is 
analogous to that In re Disciplinary Proceedings Against Marchan, 
2018 WI 30, 380 Wis. 2d 598, 910 N.W.2d 531 in which an attorney 
received a six-month suspension for, among other things, 
attempting to collect an unreasonable fee after not having 
previously 
billed 
the 
client 
and, 
upon 
termination 
of 
representation, refusing to give the client the file unless the 
client agreed to make a copy for Attorney Marchan at the client's 
expense. 
¶78 The OLR says whatever sanction this court imposes should 
impress upon Attorney Reilly the seriousness of his misconduct and 
should deter other attorneys from committing similar misconduct.  
The OLR says the record supports the referee's recommendation of 
a 60-day suspension and a requirement that Attorney Reilly be 
ordered to fully comply with the trial court's order in the E.M. 
case regarding the amount to be repaid by Attorney Reilly to E.M.'s 
estate. 
¶79 In his reply brief, Attorney Reilly appeals to this 
court's sense of proportionality.  He again notes that he 
stipulated to all of the counts in the complaint.  He says to the 
No. 
2018AP1176-D   
 
28 
 
extent money was to be repaid, it has been.  He says the lasting 
effects of his misconduct, to the extent they exist, truly are 
minimal.  He says he acknowledges his actions were wrongful.  He 
says his prior discipline is remote in time.  He says the referee's 
and the OLR's allegations of selfish motive are at best attenuated.  
He says under the particular circumstances presented here, a 60-
day suspension is excessive and a public reprimand would be an 
appropriate level of discipline. 
¶80 A referee's findings of fact are affirmed unless 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.  The court may impose whatever sanction 
it sees fit, regardless of the referee's recommendation.  See In 
re Disciplinary Proceedings Against Widule, 2003 WI 34, ¶44, 261 
Wis. 2d 45, 660 N.W.2d 686. 
¶81 There has been no challenge to any of the referee's 
findings of fact, and accordingly we adopt them.  We further agree 
with the referee's conclusions of law that Attorney Reilly violated 
the Supreme Court Rules set forth above. 
¶82 Turning to the appropriate level of discipline, we 
conclude that the 60-day suspension recommended by the referee is 
an appropriate sanction for Attorney Reilly's misconduct.   
¶83 Although no two disciplinary proceedings are identical, 
we find this case to be somewhat analogous to In re Disciplinary 
Proceedings Against Hudec, 2019 WI 39, 386 Wis. 2d 371, 925 
N.W.2d 540.  In that case, an attorney with 40 years of experience 
who had a series of private and public reprimands received a 60-
No. 
2018AP1176-D   
 
29 
 
day suspension after stipulating to six counts of misconduct 
arising out of two client matters.  The misconduct included failing 
to act with reasonable diligence and promptness in representing a 
client; failing to keep a client reasonably informed about the 
status of the matter; and failing to make a reasonably diligent 
effort to comply with discovery requests. 
¶84 This court has long adhered to the concept of progressive 
discipline in attorney regulatory cases.  See In re Disciplinary 
Proceedings Against Netzer, 2014 WI 7, ¶49, 352 Wis. 2d 310, 841 
N.W.2d 820.  Even though Attorney Reilly has not been disciplined 
since 2004, this is his third disciplinary proceeding.  The 
misconduct at issue here is serious and involved Attorney Reilly 
intentionally disregarding a circuit court divorce judgment and 
disregarding the automatic stay in a bankruptcy case.  Imposing 
another reprimand would unduly depreciate the seriousness of the 
misconduct at issue.   
¶85 We also agree with the referee that Attorney Reilly 
should be required to fully comply with any future circuit court 
orders in the E.M. case and should be required to satisfy any 
additional financial obligations that may be ordered.  As is our 
usual custom, we find it appropriate to assess the full costs of 
the proceeding against Attorney Reilly. 
¶86 IT IS ORDERED that the license of Richard E. Reilly to 
practice law in Wisconsin is suspended for a period of 60 days, 
effective April 2, 2020. 
No. 
2018AP1176-D   
 
30 
 
¶87 IT IS FURTHER ORDERED that Richard E. Reilly shall be 
required to satisfy any additional financial obligations that may 
be ordered by the circuit court in the E.M. case. 
¶88 IT IS FURTHER ORDERED that Richard E. Reilly shall comply 
with the provisions of SCR 22.26 concerning the duties of a person 
whose license to practice law in Wisconsin has been suspended. 
¶89 IT IS FURTHER ORDERED that within 60 days of the date of 
this order, Richard E. Reilly shall pay to the Office of Lawyer 
Regulation the costs of this proceeding, which are $15,830.87 as 
of September 5, 2019. 
¶90 IT IS FURTHER ORDERED that compliance with all 
conditions of this order is required for reinstatement.  See 
SCR 22.28(2). 
 
 
No.  2018AP1176-D.akz 
 
1 
 
 
¶91 ANNETTE KINGSLAND ZIEGLER, J.   (dissenting).  While I 
agree that Attorney Reilly's conduct warrants more than a public 
reprimand, I would impose a 30-day suspension.  In In re 
Disciplinary Proceedings Against Schnitzler, 140 Wis. 2d 574, 412 
N.W.2d 124 (1987), this court adopted the policy of imposing a 
minimum 60-day period of suspension, in large part because it 
concluded a 30-day suspension period was not sufficient time for 
an attorney to notify clients, courts, administrative agencies, 
and attorneys for opposing parties of the suspension.  The advent 
of electronic communications has largely obviated this concern.  
Adhering to the policy of 60-day minimum suspension deprives the 
court of the ability to impose an appropriate level of discipline 
commensurate with the particular facts of each case.   
¶92 Accordingly, I respectfully dissent. 
¶93 I am authorized to state that Justice REBECCA GRASSL 
BRADLEY joins this dissent. 
 
 
No.  2018AP1176-D.akz 
 
 
 
1