On the night of April 8–9, 1942 Bulkeley in PT-41 and Kelly in PT-34 engaged the Kuma off Cebu Island, firing several torpedoes, only one of which hit, but failed to explode. The next morning PT-34 was attacked by Japanese aircraft, forced to beach and then destroyed.[3] Kelly, who was wounded in the action, was awarded the Navy Cross and the Distinguished Service Cross for "distinguished conduct and extraordinary courage in combat."[2]
With the rank of commander, Kelly commanded the destroyer Irwin (DD-794) from June 1945 until her decommissioning on May 31, 1946,[4] seeing action during the battle of Okinawa,[2] and being awarded the Legion of Merit.[1]
Kelly retired in 1961 with the rank of captain. He worked for the Aerospace Division of Martin Marietta, and later as a counselor of vocational rehabilitation for the State of Maryland.[2]
MTB Squadron 3's exploits in the Philippines in 1941–42 were portrayed in the 1942 book They Were Expendable by William L. White, and the 1945 film of the same name, in which the character of "Rusty Ryan", played by John Wayne, was based on Kelly.[2]