Office of Lawyer Regulation v. Carl H. Creedy
2014 WI 114, 358 Wis. 2d 345, 854 N.W.2d 676 (2014)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
An attorney violates the rules of professional conduct by entering into a business transaction with a client, representing clients with a concurrent conflict of interest, or using a client's information to their disadvantage without obtaining the client's informed, written consent for each action.
Facts:
- Joseph Murphy, a non-lawyer, created a company to represent claimants in Social Security disability matters.
- Murphy entered into an unwritten business arrangement with Attorney Carl H. Creedy, whereby Creedy would also represent claimants so that fees could be paid directly from the Social Security Administration.
- Murphy, without Creedy's initial knowledge, began accepting unlawful advance fees from their shared clients.
- In March 2010, after being informed by another attorney that a claimant had paid an advance fee to Murphy and also had fees paid to Creedy by the government, Creedy confirmed the double payment and promptly refunded the fee.
- After refunding the fee, Creedy began dissolving his business arrangement with Murphy.
- While Murphy was the subject of a law enforcement investigation, Creedy, who also considered Murphy a client, voluntarily provided information adverse to Murphy to the authorities.
Procedural Posture:
- The Office of Lawyer Regulation (OLR) filed an eight-count disciplinary complaint against Attorney Carl H. Creedy in the state's highest court.
- The Wisconsin Supreme Court appointed a referee to preside over the matter.
- Creedy filed an answer to the complaint, and the referee conducted an evidentiary hearing.
- Following the hearing, the OLR voluntarily dismissed three full counts and parts of a fourth.
- Creedy then withdrew his answer and entered a plea of 'no contest' to the remaining allegations of misconduct.
- The referee issued a report finding Creedy had committed misconduct on three counts, recommending dismissal of two others, and suggesting a public reprimand as the appropriate discipline.
- The OLR sought full costs of the proceeding ($17,801.64), and Creedy filed an objection to the amount.
- The referee's report and the unresolved issue of costs were presented to the Wisconsin Supreme Court for final review and decision.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does an attorney violate the rules of professional conduct by entering a business partnership with a client without the required written disclosures and consent, representing clients with directly adverse interests without a written conflict waiver, and providing a client's information to law enforcement to the client's disadvantage without consent?
Opinions:
Majority - Per Curiam
Yes, the attorney's conduct violated several rules of professional conduct. The court adopted the referee's findings that Attorney Creedy committed three distinct ethical violations. First, he violated SCR 20:1.7(a) by representing a Social Security claimant in a manner directly adverse to his other client, his business partner Murphy, without obtaining informed, written consent from either party. This occurred when he agreed to refund the claimant's fee, an act that was against Murphy's financial interests. Second, Creedy violated SCR 20:1.8(a) by entering into a business transaction with his client, Murphy, without fully disclosing the terms in writing, advising Murphy in writing to seek independent legal counsel, and obtaining Murphy's written, informed consent to the transaction. The court noted that Murphy's business sophistication did not excuse Creedy's failure to comply with these formal requirements. Third, Creedy violated SCR 20:1.8(b) by using information related to his representation of Murphy to Murphy's disadvantage—specifically by providing adverse information to law enforcement—without Murphy's informed consent. Despite these violations, the court characterized them as 'technical' and the harm as 'de minimus,' justifying a public reprimand rather than suspension.
Analysis:
This case serves as a strong reminder of the strict, formal requirements governing attorney-client relationships, particularly concerning business transactions and conflicts of interest. The court's decision emphasizes that an attorney's good faith or subjectively proper actions, such as refunding an improper fee, cannot cure a failure to adhere to the explicit procedural safeguards mandated by the rules, like obtaining written consent. It reinforces that rules requiring written disclosures and waivers are not mere technicalities but are fundamental to protecting clients. The ruling also shows that courts may consider the practical harm caused when determining the severity of discipline, differentiating between technical rule violations and conduct that causes significant public or client injury.
