Amended November 8, 2016 Iowa Supreme Court Attorney Disciplinary Board v. Michael Gerard Reilly

CourtSupreme Court of Iowa
DecidedSeptember 2, 2016
Docket05–1365
StatusPublished

This text of Amended November 8, 2016 Iowa Supreme Court Attorney Disciplinary Board v. Michael Gerard Reilly (Amended November 8, 2016 Iowa Supreme Court Attorney Disciplinary Board v. Michael Gerard Reilly) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Amended November 8, 2016 Iowa Supreme Court Attorney Disciplinary Board v. Michael Gerard Reilly, (iowa 2016).

Opinion

IN THE SUPREME COURT OF IOWA No. 05–1365

Filed September 2, 2016

Amended November 8, 2016

IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD,

Complainant,

vs.

MICHAEL GERARD REILLY,

Respondent.

On review of the report of the Grievance Commission of the

Supreme Court of Iowa.

A former attorney whose license to practice law we previously

revoked submitted an application for reinstatement of his license to

practice law in Iowa. APPLICATION FOR REINSTATEMENT

PROVISIONALLY GRANTED SUBJECT TO THE CONDITIONS SET

FORTH IN THIS OPINION.

Tara van Brederode and Wendell J. Harms, Des Moines, for

complainant.

Michael G. Reilly, Council Bluffs, pro se. 2

PER CURIAM.

Ten years ago, we revoked the respondent’s license to practice law.

This matter comes before us on the respondent’s application for

reinstatement of his license to practice law under Iowa Court Rule

34.25(9). We provisionally grant the respondent’s application for

reinstatement of his law license subject to the conditions set forth in this

opinion.

I. Background Facts and Proceedings.

We admitted respondent Michael G. Reilly to practice law in Iowa

in June 1981, and the Nebraska Supreme Court admitted him to

practice law in Nebraska in September 1982. In 2006, we revoked his

license to practice law in Iowa. See Iowa Supreme Ct. Att’y Disciplinary

Bd. v. Reilly, 708 N.W.2d 82, 82 (Iowa 2006). Thereafter, the Nebraska

Supreme Court disbarred him in a reciprocal disciplinary proceeding.

State ex rel. Counsel for Discipline of Neb. Supreme Ct. v. Reilly, 712

N.W.2d 278, 278–79 (Neb. 2006) (per curiam). Prior to the revocation of

his law licenses, Reilly engaged in the private practice of law at a law firm

in Council Bluffs, Iowa. He had an excellent reputation as a diligent and

skilled trial attorney.

We revoked Reilly’s license to practice law in Iowa because he

misappropriated client funds. In November 2000, Reilly obtained a

settlement of $137,500 on behalf of the parents of a child who sustained

a serious eye injury and caused a conservatorship to be opened for the

child. Reilly, 708 N.W.2d at 83. Upon receiving the settlement funds,

Reilly deposited them in his firm’s trust account. Id. In addition to the

checks issued from the trust account to cover the contingent fee and

expenses associated with the case, Reilly deposited additional checks

totaling the remaining balance of the settlement funds in his personal 3

bank account rather than the conservatorship account in December

2000 and January 2001. Id. At the time, Reilly had an active gambling

addiction that caused him to be constantly in need of funds. Id. at 85.

In August and September 2001, after he unsuccessfully attempted

to secure a loan from a friend to repay the misappropriated funds, Reilly

wrote a series of kited checks between his personal accounts attempting

to float a check to the conservatorship account to replace the

misappropriated funds. Id. at 83. Eventually, a bank associated with

one of Reilly’s personal accounts honored a check he wrote to the

conservatorship account after a bank associated with another one of his

personal accounts honored a kited check he had written. Id. The

account with the second bank ended up $96,000 overdrawn because the

bank was unable to cash another check Reilly had written from yet

another account with insufficient funds. Id. By the time Reilly repaid

the bank the following year, it had already notified federal authorities.

Id.

After our client security and disciplinary commissions received a

letter from the United States Attorney recounting these events and the

Iowa Supreme Court Attorney Disciplinary Board conducted an

investigation confirming them, the Grievance Commission of the

Supreme Court of Iowa recommended we suspend Reilly from the

practice of law for three years. Id. at 82, 83–84. Instead, we concluded

consistency with our past decisions addressing misappropriation of client

funds and the protection of the public warranted a harsher sanction. In

January 2006, we revoked Reilly’s license to practice law in Iowa. Id. at

85.

In January 2009, Reilly filed an application for reinstatement of his

license to practice law in Iowa based on the progress he had made in 4

addressing his gambling addiction. The Board opposed reinstatement,

noting the Iowa Court Rules contained no provision addressing

reinstatement following a license revocation as opposed to a license

suspension. Though the Board acknowledged we had reinstated a

revoked license in the past, it insisted the standard for assessing

whether reinstatement was appropriate was set forth in Committee on

Professional Ethics & Conduct v. Brodsky, 487 N.W.2d 674 (Iowa 1992),

in which we stated,

License revocations are ordinarily permanent in Iowa. Indeed our rules spell out no special procedure for applying for readmission by a lawyer whose license has been revoked.

On occasion we nevertheless consider such applications under our inherent power and, in extremely rare cases, have granted them. These rare cases have arisen where, in long retrospect, it appears the need for permanent revocation was debatable, and where there has been a demonstrated reformation on the part of the lawyer so that the public interest would not be compromised by readmission.

Id. at 675. Following a hearing, we issued an order in which we rejected

the application for reinstatement. In the order, we concluded Reilly had

not “carried his heavy burden of showing that the need for permanent

revocation was debatable and that he has undergone such a reformation

that the public interest would not be threatened by readmitting him to

the practice of law.”

In May 2015, following a period of public comment, we amended

Iowa Court Rule 35.14 to renumber existing provisions within the rule

and incorporate new provisions setting forth a procedure by which an

individual whose license to practice law has been revoked may apply for

its reinstatement. The amendments became effective September 1, 2015.

By subsequent amendment shortly thereafter, we moved the provisions 5

addressing reinstatement to Iowa Court Rule 34.25. 1 The purpose of the

amendment was to allow an attorney who has rehabilitated him or

herself the opportunity to petition the court for reinstatement and prove

to the court he or she has good moral character, is fit to practice law,

and is in all respects worthy of readmission to the Iowa bar.

Reinstatement under the rule is not meant to be automatic.

In November 2015, Reilly filed his second application for

reinstatement of his license to practice law in the State of Iowa with this

court. Prior to submitting the application, Reilly submitted a request for

preparation of a character and fitness report by the National Conference

of Bar Examiners (NCBE) and paid an administrative fee to the Iowa

Board of Law Examiners as required by Iowa Court Rule 34.25(8). In his

application for reinstatement, Reilly first reported that we admitted him

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