Office of Lawyer Regulation v. Thomas O. Mulligan ( 2015 )

2015 WI 96SUPREME COURT OF WISCONSIN
CASE NO.: 2013AP2742-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against Thomas O. Mulligan, Attorney at Law:
Office of Lawyer Regulation,
Complainant-Respondent,
v.
Thomas O. Mulligan,
Respondent-Appellant.
DISCIPLINARY PROCEEDINGS AGAINST MULLIGAN
OPINION FILED: October 8, 2015
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
CONCURRED: ABRAHAMSON, J., concurs. (Opinion filed.)
DISSENTED:
NOT PARTICIPATING: BRADLEY, ZIEGLER, J.J., did not participate.
ATTORNEYS:
2015 WI 96NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2013AP2742-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings
Against Thomas O. Mulligan, Attorney at Law:
Office of Lawyer Regulation, FILED
Complainant-Respondent,
OCT 8, 2015
v.
Diane M. Fremgen
Clerk of Supreme Court
Thomas O. Mulligan,
Respondent-Appellant.
ATTORNEY disciplinary proceeding. Attorney's license
suspended.
¶1 PER CURIAM. Attorney Thomas O. Mulligan appeals a
report filed by Referee Robert E. Kinney, concluding that
Attorney Mulligan engaged in professional misconduct and
recommending that this court suspend his license to practice law
in Wisconsin for a period of 18 months, order Attorney Mulligan
to make restitution to a client, and impose full costs, which
total $17,720.02 as of May 12, 2015. Attorney Mulligan asserts
No. 2013AP2742-D
that his admitted ethical violations are de minimus and do not
warrant restitution, license suspension, or full costs.
¶2 Having considered the referee's report and the
parties' briefs and oral argument on appeal, we conclude that
the referee's relevant findings of fact are supported by
satisfactory and convincing evidence and we accept his
conclusion that Attorney Mulligan committed the eight counts of
misconduct alleged in the Office of Lawyer Regulation's (OLR)
complaint. We conclude, however, that Attorney Mulligan's
misconduct warrants a nine-month suspension of his license to
practice law in this state, and we direct Attorney Mulligan to
attend a trust account seminar and, upon reinstatement, to
submit to trust account monitoring. We decline to order
restitution to R.W. for the reasons stated herein. Finally, we
impose the full costs of this proceeding on Attorney Mulligan.
¶3 Attorney Mulligan was licensed to practice law in
Wisconsin in 1985. He lives and practices in Spooner,
Wisconsin, where he is a general practitioner.
¶4 Attorney Mulligan has previously been disciplined for
misconduct. In 1997, Attorney Mulligan received a private
reprimand for failing to properly communicate with his client,
failing to return a client's file, failing to refund unearned
fees upon termination of representation, and failing to
communicate the basis or rate of his fee within a reasonable
time after commencing the representation. Private Reprimand
No. 1997-25. In 2005, Attorney Mulligan received a private
reprimand for failing to timely refund an advanced payment of a
2
No. 2013AP2742-D
fee that had not been earned. Private Reprimand No. 2005-10.
In 2009, Attorney Mulligan received a public reprimand for
failing to consult with his client regarding his intent to
proceed with an appeal without obtaining trial transcripts and
failing to consult with his client regarding his decision to
seek only de novo review of a contract. In re
Disciplinary Proceedings Against Attorney Mulligan, 2009 WI 12,
315 Wis. 2d 605, 759 N.W.2d 766.
¶5 The OLR filed the complaint giving rise to this
proceeding on December 12, 2013, alleging eight counts of
professional misconduct committed in two client matters and
trust account anomalies. Attorney Mulligan retained counsel and
filed an answer. Referee Kinney was appointed. The parties
filed a comprehensive stipulation of facts. The referee
conducted a one-day hearing in July 2014, and both parties filed
post-hearing briefs and proposed findings of fact and
conclusions of law. The referee issued his report and
recommendation on October 24, 2014. This appeal followed. The
court heard oral argument on April 22, 2015.
¶6 When reviewing a referee's report and recommendation,
we affirm the referee's findings of fact unless they are clearly
erroneous. In re Disciplinary Proceedings Against Inglimo,
2007 WI 126, ¶5, 305 Wis. 2d 71, 740 N.W.2d 125. We review the
referee's conclusions of law de novo. In re Disciplinary
Proceedings Against Alia, 2006 WI 12, ¶39, 288 Wis.2d 299,
709 N.W.2d 399. We determine the appropriate level of
discipline to impose given the particular facts of each case,
3
No. 2013AP2742-D
independent of the referee's recommendation, but benefitting
from it. In re Disciplinary Proceedings Against Widule,
2003 WI 34, ¶44, 261 Wis. 2d 45, 660 N.W.2d 686.
R.W. Matter
¶7 Attorney Mulligan does not contest that he committed
the misconduct alleged in connection with his representation of
R.W. but deems the infractions de minimus. The facts will be
summarized because the admitted misconduct is relevant to our
assessment of appropriate discipline and because the referee's
evaluation of this matter will require some discussion when we
assess discipline.
¶8 R.W. was a teen with drug and alcohol issues who faced
81 criminal charges in Washburn and Burnett Counties,
consolidated into one Washburn County case filed on January 8,
2008. In July 2008, Attorney Mulligan assumed R.W.'s
representation. No fee agreement was executed. At the
beginning of Attorney Mulligan's representation, R.W.'s father
gave Attorney Mulligan a $5,000 check. This initial $5,000
payment was deposited into Attorney Mulligan's business account
rather than his trust account.
¶9 The district attorney sought forfeiture of R.W.'s
entire $10,000 bond for bail jumping, but eventually agreed to
release $5,000 to Attorney Mulligan's trust account in return
for a $5,000 forfeiture to Washburn County. The Washburn County
Clerk of Court issued a $5,000 check to Attorney Mulligan's
trust account; it was deposited on January 13, 2009. Attorney
4
No. 2013AP2742-D
Mulligan and R.W. agreed that Attorney Mulligan was to deposit
$500 from the $5,000 refund into R.W.'s county jail account.
¶10 On January 14, 2009, Attorney Mulligan transferred the
$5,000 in refunded bail money from his trust account to his
business account. Two weeks later, on January 29, 2009,
Attorney Mulligan mailed a $500 check to R.W.'s county jail
account. R.W. later requested an accounting. No accounting was
provided until R.W. threatened to file a grievance.
¶11 The OLR's complaint alleged that "[b]y accepting
$5,000 to represent [R.W.] in numerous criminal matters, and
failing to enter into a written fee agreement with [R.W.] or
[his father], [Attorney] Mulligan violated [Supreme Court Rule
(SCR)] 20:1.5(b)(1) and (2)"1 (Count One).
1
SCR 20:1.5(b)(1) and (2) provide:
(1) The scope of the representation and the basis
or rate of the fee and expenses for which the client
will be responsible shall be communicated to the
client in writing, before or within a reasonable time
after commencing the representation, except when the
lawyer will charge a regularly represented client on
the same basis or rate as in the past. If it is
reasonably foreseeable that the total cost of
representation to the client, including attorney's
fees, will be $1000 or less, the communication may be
oral or in writing. Any changes in the basis or rate
of the fee or expenses shall also be communicated in
writing to the client.
(2) If the total cost of representation to the
client, including attorney's fees, is more than $1000,
the purpose and effect of any retainer or advance fee
that is paid to the lawyer shall be communicated in
writing.
5
No. 2013AP2742-D
¶12 The complaint alleged further that "[b]y failing to
deposit the initial $5,000 advanced fee payment into his trust
account, without providing the written notices required under
SCR 20:1.15(b)(4m) or otherwise indicating a proper basis or
intent to utilize the alternative advanced fee placement
measures stated in SCR 20:1.15(b)(4m), [Attorney] Mulligan
violated SCR 20:1.15(b)(4)"2 (Count Two).
¶13 The complaint alleged further that "[b]y withdrawing
$5,000 bail return money from his trust account and promptly
transferring the funds into his general account, when $500 of
that amount belonged to [R.W.], pursuant to a written agreement,
[Attorney] Mulligan violated SCR 20:1.15(b)(l)"3 (Count Three).
¶14 Again, Attorney Mulligan does not contest these
charges and we accept the referee's conclusion that Attorney
2
SCR 20:1.15(b)(4) provides:
Except as provided in par. (4m), unearned fees
and advanced payments of fees shall be held in trust
until earned by the lawyer, and withdrawn pursuant to
sub. (g). Funds advanced by a client or 3rd party for
payment of costs shall be held in trust until the
costs are incurred.
3
SCR 20:1.15(b)(1) provides:
A lawyer shall hold in trust, separate from the
lawyer's own property, that property of clients and
3rd parties that is in the lawyer's possession in
connection with a representation. All funds of
clients and 3rd parties paid to a lawyer or law firm
in connection with a representation shall be deposited
in one or more identifiable trust accounts.
6
No. 2013AP2742-D
Mulligan committed the misconduct, as alleged, in connection
with the matter of R.W.
A.B. Matter
¶15 Attorney Mulligan does not contest the misconduct
alleged in connection with his representation of A.B. but deems
the infractions de minimus.
¶16 In September 2009, A.B. hired Attorney Mulligan to
represent her in a divorce. The parties executed a fee
agreement dated September 23, 2009. A.B. gave Attorney Mulligan
$1,750 on September 24, 2009, as an advanced fee in
contemplation of future legal services.
¶17 Attorney Mulligan did not place the advanced fee into
his trust account; the fee agreement did not contain the notices
required under SCR 20:1.15(b)(4m) that would allow for the
placement of the advanced fee into an account other than
Attorney Mulligan's trust account.
¶18 The OLR's complaint alleged that "[b]y failing to
deposit [A.B.'s] advanced fee payment into his trust account
without providing the written notices required under
SCR 20:1.15(b)(4m) or otherwise indicating a proper basis or
intent to utilize the alternative advanced fee placement
measures stated in SCR 20:1.15(b)(4m), [Attorney] Mulligan
violated SCR 20:1.15(b)(4)" (Count Four).
¶19 Again, Attorney Mulligan does not contest this charge
and we accept the referee's conclusion that he committed the
misconduct as alleged.
7
No. 2013AP2742-D
Trust Account Anomalies
¶20 Attorney Mulligan does not dispute that he violated
certain trust account rules. He does dispute that he committed
misconduct in violation of SCR 20:8.4(c),4 as alleged in Count
Six of the OLR's complaint.
¶21 During the OLR's investigation, the OLR discovered
systemic trust account anomalies. On December 1, 2011, the OLR
sent Attorney Mulligan a letter requesting copies of his trust
account records for the years 2008 through 2011, inclusive.
Attorney Mulligan provided the requested copies but did not
provide client ledgers or monthly reconciliation statements
because he did not maintain them. Attorney Mulligan's check
stubs did not show a running balance, did not show the source
for all deposits, and did not consistently show the identity of
the client for whom funds were deposited or disbursed.
¶22 The OLR reconstructed Attorney Mulligan's trust
account and, according to the complaint, between December 17,
2007 and December 31, 2011, Attorney Mulligan and his wife, the
only authorized signatories to the trust account, deposited
personal funds totaling $45,380.57 into the trust account.
During the same period, Attorney Mulligan disbursed $54,869.01
from the trust account for personal obligations, including
income taxes, property taxes, and attorney fees. The
4
SCR 20:8.4(c) provides that it is professional misconduct
for a lawyer to "engage in conduct involving dishonesty, fraud,
deceit or misrepresentation."
8
No. 2013AP2742-D
disbursements from Attorney Mulligan's trust account included
some $6,593 in cash withdrawals, which are specifically
prohibited by SCR 20:1.15(e)(4)a.
¶23 The opening balance of Attorney Mulligan's trust
account in December 2007 was $2,774.88. Assuming some of these
funds may have belonged to Attorney Mulligan, between
December 17, 2007 and December 31, 2011, Attorney Mulligan
disbursed from his trust account at least $6,313.56 and as much
as $9,088.44 more for personal matters than he had on deposit
during this time period.
¶24 The OLR's complaint alleged that "[b]y depositing
$45,380.57 of personal funds into his trust account between
December 17, 2007 and December 31, 2011, thereby commingling
personal funds with trust account funds, [Attorney] Mulligan
violated SCR 20:1.15(b)(3)"5 (Count Five).
¶25 The complaint alleged further:
By disbursing from his trust account, and by
allowing his wife to make disbursements from his trust
account, totaling at least $6,713.56 and as much as
$9,488.446 more for personal matters than he had on
5
SCR 20:1.15(b)(3) provides that "[n]o funds belonging to
the lawyer or law firm, except funds reasonably sufficient to
pay monthly account service charges, may be deposited or
retained in a trust account."
6
It was later confirmed by an OLR investigator that the
figures used in the complaint ($6,713.56 and $9,488.44) were
incorrect. The referee subsequently also used these figures in
parts of his report. It is undisputed that this is a
typographical error on the referee's part. The correct numbers
are $6,313.56 and $9,088.44.
9
No. 2013AP2742-D
deposit between December 17, 2007 and December 31,
2011, [Attorney] Mulligan failed to hold in trust and
converted a net total of between $6,713.56 and
$9,488.44 of client or third party funds for his
personal use; and by disbursing funds for personal
matters on numerous occasions when he did not have
sufficient personal funds on deposit in the trust
account to cover such disbursements, [Attorney]
Mulligan violated [] SCR 20:1.15(b)(1), and current
SCR 20:8.4(c) [(Count Six)].
¶26 The complaint alleged further that "[b]y failing to
maintain a complete transaction register, subsidiary client
ledgers, and monthly reconciliation statements, [Attorney]
Mulligan violated the trust account record keeping requirements
of SCR 20:1.15(f)(1)"7 (Count Seven).
7
SCR 20:1.15(f)(1) provides:
Complete records of a trust account that is a
draft account shall include a transaction register;
individual client ledgers for IOLTA accounts and other
pooled trust accounts; a ledger for account fees and
charges, if law firm funds are held in the account
pursuant to sub. (b)(3); deposit records; disbursement
records; monthly statements; and reconciliation
reports, subject to all of the following:
a. Transaction register. The transaction
register shall contain a chronological record of all
account transactions, and shall include all of the
following:
1. the date, source, and amount of all deposits;
2. the date, check or transaction number, payee
and amount of all disbursements, whether by check,
wire transfer, or other means;
3. the date and amount of every other deposit or
deduction of whatever nature;
4. the identity of the client for whom funds were
deposited or disbursed; and
(continued)
10
No. 2013AP2742-D
5. the balance in the account after each
transaction.
b. Individual client ledgers. A subsidiary
ledger shall be maintained for each client or 3rd
party for whom the lawyer receives trust funds that
are deposited in an IOLTA account or any other pooled
trust account. The lawyer shall record each receipt
and disbursement of a client's or 3rd party's funds
and the balance following each transaction. A lawyer
shall not disburse funds from an IOLTA account or any
pooled trust account that would create a negative
balance with respect to any individual client or
matter.
c. Ledger for account fees and charges. A
subsidiary ledger shall be maintained for funds of the
lawyer deposited in the trust account to accommodate
monthly service charges. Each deposit and expenditure
of the lawyer's funds in the account and the balance
following each transaction shall be identified in the
ledger.
d. Deposit records. Deposit slips shall identify
the name of the lawyer or law firm, and the name of
the account. The deposit slip shall identify the
amount of each deposit item, the client or matter
associated with each deposit item, and the date of the
deposit. The lawyer shall maintain a copy or
duplicate of each deposit slip. All deposits shall be
made intact. No cash, or other form of disbursement,
shall be deducted from a deposit. Deposits of wired
funds shall be documented in the account's monthly
statement.
e. Disbursement records.
1. Checks. Checks shall be pre-printed and pre-
numbered. The name and address of the lawyer or law
firm, and the name of the account shall be printed in
the upper left corner of the check. Trust account
checks shall include the words "Client Account," or
"Trust Account," or words of similar import in the
account name. Each check disbursed from the trust
account shall identify the client matter and the
reason for the disbursement on the memo line.
(continued)
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No. 2013AP2742-D
2. Canceled checks. Canceled checks shall be
obtained from the financial institution. Imaged
checks may be substituted for canceled checks.
3. Imaged checks. Imaged checks shall be
acceptable if they provide both the front and reverse
of the check and comply with the requirements of this
paragraph. The information contained on the reverse
side of the imaged checks shall include any
endorsement signatures or stamps, account numbers, and
transaction dates that appear on the original. Imaged
checks shall be of sufficient size to be readable
without magnification and as close as possible to the
size of the original check.
4. Wire transfers. Wire transfers shall be
documented by a written withdrawal authorization or
other documentation, such as a monthly statement of
the account that indicates the date of the transfer,
the payee, and the amount.
f. Monthly statement. The monthly statement
provided to the lawyer or law firm by the financial
institution shall identify the name and address of the
lawyer or law firm and the name of the account.
g. Reconciliation reports. For each trust
account, the lawyer shall prepare and retain a printed
reconciliation report on a regular and periodic basis
not less frequently than every 30 days. Each
reconciliation report shall show all of the following
balances and verify that they are identical:
1. the balance that appears in the transaction
register as of the reporting date;
2. the total of all subsidiary ledger balances
for IOLTA accounts and other pooled trust accounts,
determined by listing and totaling the balances in the
individual client ledgers and the ledger for account
fees and charges, as of the reporting date; and
3. the adjusted balance, determined by adding
outstanding deposits and other credits to the balance
in the financial institution's monthly statement and
(continued)
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No. 2013AP2742-D
¶27 Finally, the complaint alleged that "[b]y making the
cash disbursements totaling $6,593.00 from the trust account,
[Attorney] Mulligan violated SCR 20:1.15(e)(4)a."8 (Count Eight).
¶28 Attorney Mulligan does not contest the violations
alleged in Counts Five, Seven, and Eight, and we accept the
referee's conclusion that Attorney Mulligan committed this
misconduct, as alleged. However, Attorney Mulligan challenges
the referee's conclusion that he violated SCR 20:8.4(c) (Count
Six).
¶29 Attorney Mulligan asserts that his conduct did not
involve dishonesty, fraud, deceit, or misrepresentation and thus
did not violate SCR 20:8.4(c). Attorney Mulligan argues that:
(1) there is no evidence of any intentional cover up of personal
expenditures; (2) "no clients complained that they did not
receive funds they were entitled to from Attorney Mulligan;"
(3) "OLR provided no specific evidence regarding the conversion
of any particular client funds;" and (4) Attorney Mulligan
personally engaged in a good faith effort to always ensure that
sufficient personal funds were available for payment of personal
expenses from the trust account. Attorney Mulligan seeks to
distinguish his conduct from cases in which this court has ruled
that a lawyer violated SCR 20:8.4(c). See, e.g., In re
subtracting outstanding checks and other deductions
from the balance in the monthly statement.
8
SCR 20:1.15(e)(4)a. provides that "[n]o disbursement of
cash shall be made from a trust account or from a deposit to a
trust account, and no check shall be made payable to 'Cash.'"
13
No. 2013AP2742-D
Disciplinary Proceedings Against Carroll, 2001 WI 130, ¶15,
248 Wis. 2d 662, 636 N.W.2d 718 (lawyer set in motion the
fraudulent conduct in violation of SCR 20:8.4(c)); see also
In re Disciplinary Proceedings Against Usow, 214 Wis. 2d 596,
600-01, 571 N.W.2d 162 (1997) (attorney submitted accounting
that "contained duplicative, speculative and inflated charges"
due to carelessness, neglect, and his failure to properly
supervise office staff).
¶30 A lawyer must hold the property of others with the
care required of a professional fiduciary. SCR 20:1.15
(Wisconsin Comment). A finding of wrongful intent is not
necessary to prove a violation of SCR 20:8.4(c). A violation of
SCR 20:8.4(c) can be based on an attorney's "carelessness and
neglect." See, e.g., Carroll, 248 Wis. 2d 662; Usow,
214 Wis. 2d 596. Similarly, an attorney's claim of good faith
does not preclude a determination of misconduct in violation of
SCR 20:8.4(c). See, e.g., In re Disciplinary Proceedings
Against Edgar, 230 Wis. 2d 205, 601 N.W.2d 284 (1999).
¶31 The referee was not convinced by Attorney Mulligan's
reasoning that he did not commit misconduct in violation of
SCR 20:8.4(c) because "no clients complained that they did not
receive funds they were entitled to from Attorney Mulligan." At
the evidentiary hearing, Attorney Mulligan was questioned
extensively about specific "unaccounted-for" balances on various
client accounts. Attorney Mulligan asserted that the
"unaccounted-for" balances existing at year-end were fees earned
by him. The OLR trust account investigator was asked about the
14
No. 2013AP2742-D
client ledger, noting that many of those client ledgers result
in a zero balance.
Q Just based on those numbers, is it true that there
was ample unaccounted for client funds in trust to
cover the personal expenditure overage by
Mr. Mulligan?
A Yes.
¶32 The referee was troubled by a bookkeeping strategy
that basically deemed anything left over as "fees." The
evidence supports the referee's findings that Attorney Mulligan
not only comingled his own money with client funds, but also
used client funds for his own purposes. The referee explained
it well:
It may well be, once again giving [Attorney Mulligan]
the benefit of the doubt, that [Attorney] Mulligan did
not know whose funds he was withdrawing. The record
clearly shows, however, that the money he withdrew was
not all his own. It is not seriously contested that
he withdrew more money than the personal money he
deposited. It is not necessary for the OLR to prove
whose money he withdrew on any given day. We know the
list of possibilities. . . . . That [Attorney
Mulligan] permitted this situation to exist is a sad
state of affairs, and it is one for which he is
answerable in this proceeding.
(Emphasis added.) The referee explained why this is wrong:
The problem is that "inadequate trust account records"
are themselves a form of wrongdoing. The seriousness
of such wrongdoing is highlighted by the facts of this
case. Under the circumstances, to the extent there is
any lack of clarity, it is entirely the responsibility
of [Attorney Mulligan].
15
No. 2013AP2742-D
¶33 Comingling funds is not a trivial or technical rule
violation. The Law of Lawyering, Third Addition, Geoffrey C.
Hazard, Jr., 2014 Supplement, at 19-9, states:
In most jurisdictions, disciplinary authorities
treat violations of the rule against commingling trust
funds and personal funds extremely seriously.
. . . even where the client or third party suffers no
loss, harsh sanctions usually follow as a prophylactic
warning that comingling cannot be tolerated.
¶34 Attorney Mulligan's assertion that the OLR failed to
show "specific evidence regarding the conversion of any
particular client funds" is unavailing particularly where, as
here, Attorney Mulligan's inability to produce the trust account
records required by the rules of professional responsibility is
part of the reason it is now difficult to discern "with
specificity" which client funds kept Attorney Mulligan's trust
account afloat. In In re Trust Estate of Martin,
39 Wis. 2d 437, 441-42, 159 N.W.2d 660 (1968), we explained:
A trustee is not handling his own funds but funds of
others and he must always be able to make a full
accounting of his stewardship. When a trustee's
accounts are not clear and accurate, all presumptions
are against him and the obscurities and doubts are to
be taken adversely against him.
¶35 This rationale applies in the attorney regulatory
context. In re Disciplinary Proceedings Against Weigel,
2012 WI 124, ¶41, 345 Wis. 2d 7, 823 N.W.2d 798. Here, the
record reflects that between December 2007 and December 2011,
Attorney Mulligan deposited over $45,000 of personal funds into
his trust account and withdrew at least $6,313.56 and as much as
$9,088.44 more for personal expenditures than he deposited for
16
No. 2013AP2742-D
personal expenses during that period of time. The OLR trust
account investigator testified:
We were able to determine that based upon the running
balance in the account, it appeared on several
occasions the balance of Mr. Mulligan's personal
account went negative when he made disbursements.
Therefore, he must have used other funds, other client
or third-party funds, that were deposited in the
account in order to cover those disbursements.
¶36 Conversion has been described as:
[T]he unauthorized use of a client's funds for the
lawyer's own purpose. It includes temporary use, and
it extends to use that does not result in personal
gain or benefit to the lawyer. Paying one client out
of money due another, keeping an unearned advance fee,
holding on to unused escrow funds, and applying client
funds to the client's bill are all examples of
conversion.
Weigel, 345 Wis. 2d 7, ¶41 (quoting ABA/BNA Lawyers' Manual on
Professional Conduct § 45:503 (2007)). Thus, the fact that the
OLR has not identified "specific" examples of conversion does
not preclude a determination that a lawyer engaged in
conversion, constituting misconduct.
¶37 Attorney Mulligan clearly believes that because he
sought to ensure that sufficient personal funds were available
to avoid overdraft, this excuses his trust account violations.
The record evidence, however, demonstrates that by extensive
commingling of personal and client monies, Attorney Mulligan
misrepresented the balance of client funds in his trust account
at any given point in time. See, e.g., Attorney Grievance
Comm'n of Md. v. Glenn, 671 A.2d 463, 487 (Md. Ct. App. 1996)
(rejecting a lawyer's claim that his own deposits into a trust
17
No. 2013AP2742-D
account cured any trust account violation, observing that "a
trust account is a trust account, not one dependent on
discretionary infusions of money from another source").
Attorney Mulligan's trust account so inextricably comingled
client and personal funds that it is impossible to know which or
whose funds were being used at any particular time. The record
here supports the referee's findings and conclusions that the
trust account anomalies at issue rose to the level of misconduct
under SCR 20:8.4(c).
¶38 We turn to the question of appropriate discipline.
The referee recommends an 18-month suspension together with
$7,500 in restitution to R.W. and full costs. Attorney Mulligan
appeals, objecting to restitution and full costs, and asserting
that a reprimand should suffice for what he maintains is de
minimus misconduct.
¶39 In assessing a proper sanction, we consider the
following factors: (1) the seriousness, nature, and extent of
the misconduct; (2) the level of discipline needed to protect
the public, the courts, and the legal system from repetition of
the attorney's misconduct; (3) the need to impress upon the
attorney the seriousness of the misconduct; and (4) the need to
deter other attorneys from committing similar misconduct. In re
Disciplinary Proceedings Against Hammis, 2011 WI 3, ¶39,
331 Wis. 2d 19, 793 N.W.2d 884. In addition, we follow the
concept of progressive discipline. In re Disciplinary
Proceedings Against Brandt, 2012 WI 8, ¶21, 338 Wis. 2d 524, 808
18
No. 2013AP2742-D
N.W.2d 687; In re Disciplinary Proceedings Against Nussberger,
2006 WI 111, ¶27, 296 Wis. 2d 47, 719 N.W.2d 501.
¶40 The referee recommends that Attorney Mulligan be
ordered to pay $7,500 in restitution to R.W. as reimbursement
for unearned fees. The OLR did not seek restitution in the
complaint or during the disciplinary litigation, stating that it
"could not ascertain a reasonable amount to be refunded."
Nothing precludes a referee from making or this court from
accepting a sua sponte recommendation regarding restitution.
See In re Disciplinary Proceedings Against Din, 2015 WI 4,
360 Wis. 2d 274, 858 N.W.2d 654 (referee overruled parties'
stipulation to restitution totaling $13,250, instead
recommending $14,250 total restitution, and we adopted the
referee's recommendation). We are not persuaded that Attorney
Mulligan lacked a sufficient opportunity to address the
referee's findings and recommendation regarding restitution.
Attorney Mulligan appealed the report and has argued his case
extensively in his appellate briefs and at oral argument.
¶41 The referee's recommendation was based on the
referee's review, primarily, of two exhibits Attorney Mulligan
offered at the evidentiary hearing: Exhibit D, an itemization
of Attorney Mulligan's work performed for R.W.; and Exhibit E,
24 pages of printouts documenting court activity in R.W.'s
criminal cases from the Wisconsin Court System Circuit Court
Access (WCCA) website. Attorney Mulligan presented this
evidence in support of his theory that, although he failed to
provide a fee agreement, R.W. received the legal services he
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No. 2013AP2742-D
paid for; Attorney Mulligan maintains that the $9,500 fee he
received from R.W. was reasonable.
¶42 The referee's assessment of this itemization is
scathing. He deemed the itemization a faulty, error-riddled
document generated after the fact; indeed, he refers to it as a
"fabrication" and opined that several of the itemized events
either did not take place or could not have taken the time the
itemization asserts.
¶43 We conclude, however, that the evidence fails to
support a $7,500 restitution order. We agree with the OLR's
original assessment that this record does not permit us to
ascertain a reasonable amount, if any, to be refunded, and we
decline to impose restitution in this matter.
¶44 Attorney Mulligan expresses concern about what he
perceives to be extraneous investigation, findings, and
conclusions in the referee's report. As noted, the report does
contain an extensive and largely negative characterization of
Attorney Mulligan's professional efforts on behalf of R.W.
Attorney Mulligan contends that the referee's commentary
pertaining to the fee itemization, his review of WCCA records,
and his post-hearing review of Attorney Mulligan's trust account
records were improper.
¶45 While the referee pursued this inquiry with unusual
zeal, we need not explore whether his efforts transcend
propriety. The referee is the ultimate arbiter of the facts and
credibility of witnesses. His observations inform our review
and we discern no reason to deem his findings clearly erroneous.
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No. 2013AP2742-D
The findings are germane, primarily, to the referee's
restitution recommendation, which we have declined to adopt. We
are mindful, moreover, that the OLR did not allege a lack of
competent representation under SCR 20:1.1 or a lack of diligence
under SCR 20:1.3. The discipline we impose today is based on
the eight counts of misconduct alleged in the OLR complaint.
¶46 We agree with Attorney Mulligan that the disciplinary
cases cited by the OLR generally reflect more egregious
misconduct than occurred here and thus provide limited guidance.
See In re Disciplinary Proceedings Against Evans, 2000 WI 124,
239 Wis. 2d 279, 618 N.W.2d 873 (lawyer with disciplinary
history suspended for two years, for conversion of client funds,
failure to provide the client with an accounting, and
misrepresentations to cover her inability to pay the balance);
Edgar, 230 Wis. 2d 205 (lawyer suspended for two years for
conversion of $11,000 from an escrow account,
misrepresentations, and failure to maintain required records).
¶47 However, Attorney Mulligan's effort to characterize
his misconduct as trivial is similarly unpersuasive. The record
demonstrates that between 2007 and 2011, Attorney Mulligan
failed to properly maintain trust account records, deposited
personal money into his trust account, disbursed money from his
trust account for personal expenses, and regularly deposited
client funds into his business account. Attorney Mulligan's
actions are not mere "technical deficiencies." The record
before us also reveals a persistent pattern of failure to abide
by the requirements of our rules of professional conduct.
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No. 2013AP2742-D
¶48 We find useful guidance in In re Disciplinary
Proceedings Against Schuster, 2006 WI 21, 289 Wis. 2d 23,
710 N.W.2d 458, where a lawyer was suspended for nine months for
significant and pervasive trust account violations, including
comingling of personal and trust accounts. Upon consideration
of the relevant facts and misconduct, we conclude that a nine-
month suspension of Attorney Mulligan's license to practice law
is appropriate and warranted by the facts and by the principle
of progressive discipline.
¶49 As in Schuster, some conditions are appropriate to
foster Attorney Mulligan's compliance with trust account
requirements. We direct him to attend an OLR trust account
seminar and, following reinstatement, Attorney Mulligan shall
submit to OLR trust account monitoring for a period of three
years, or until such time as the OLR moves this court for an
order ending monitoring.
¶50 Finally, we consider Attorney Mulligan's repeated
objections to the costs of this proceeding. Attorney Mulligan
argues that some of the counts in the OLR's complaint are
technicalities and some are duplicative, that he cooperated in
the proceedings, and that the referee engaged extraneous and
irrelevant findings. 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 OLR, upon the
respondent. We perceive nothing in this record to justify
deviating from our usual policy of imposing full costs. We
decline to reduce costs on the theory that the referee
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No. 2013AP2742-D
scrutinized evidence too closely. We assess the full costs of
this proceeding against Attorney Mulligan.
¶51 IT IS ORDERED that the license of Thomas O. Mulligan
to practice law in Wisconsin is suspended for a period of nine
months, effective November 7, 2015.
¶52 IT IS FURTHER ORDERED that within 60 days of the date
of this order, Thomas O. Mulligan shall pay to the Office of
Lawyer Regulation the costs of this proceeding, which are
$17,720.02.
¶53 IT IS FURTHER ORDERED that Thomas O. Mulligan 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.
¶54 IT IS FURTHER ORDERED that, as a condition of any
reinstatement of his license to practice law in Wisconsin,
Thomas O. Mulligan shall attend and successfully complete an
Office of Lawyer Regulation trust account seminar and shall pay
the related participation fees.
¶55 IT IS FURTHER ORDERED that, upon reinstatement of his
license to practice law, Thomas O. Mulligan's trust account
shall be subject to monitoring by the Office of Lawyer
Regulation for three years or until further order of this court.
¶56 IT IS FURTHER ORDERED that compliance with all
conditions of this order is required for reinstatement. See
SCR 22.29(4)(c).
¶57 ANN WALSH BRADLEY, J., and ANNETTE KINGSLAND ZIEGLER,
J., did not participate.
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No. 2013AP2742-D.ssa
¶58 SHIRLEY S. ABRAHAMSON, J. (concurring). OLR sought
a two-year suspension. The referee recommended an 18-month
suspension. After a contested proceeding, the court imposes a
nine-month suspension for repeated significant violations of
trust accounting rules (not merely "technical" violations).
¶59 This is Attorney Mulligan's fourth brush with OLR. In
1997, Attorney Mulligan received a private reprimand. In 2005,
he received a private reprimand. In 2009, he received a public
reprimand.
¶60 Attorney James T. Runyon also violated substantive
trust accounting rules. OLR v Runyon, 2015 WI 95,
___ Wis. 2d ___, ___ N.W.2d ___. He has had two prior brushes
with OLR. In 1988, his license was suspended for one year. In
2006, he received a private reprimand.
¶61 I have difficulty reconciling the significantly
different levels of discipline imposed in these two trust
accounting cases.
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