In re Bergman

• Decision Date: 28 October 2016
• Docket Number: No. 115,448,115,448
• Citation: 382 P.3d 455
• Parties: In the Matter of Allison L. Bergman, Respondent.
• Court: Kansas Supreme Court

382 P.3d 455

In the Matter of Allison L. Bergman, Respondent.

No. 115,448

Supreme Court of Kansas.

Opinion filed October 28, 2016.

Kate F. Baird, Deputy Disciplinary Administrator, argued the cause, and Stanton A. Hazlett, Disciplinary Administrator, was with her on the formal complaint for the petitioner.

James L. Eisenbrandt, of Berkowitz Oliver Williams Shaw & Eisenbrandt LLP, of Kansas City, Missouri, argued the cause, and Allison L. Bergman, respondent, argued the cause pro se.

ORIGINAL PROCEEDING IN DISCIPLINE

Per Curiam:

This is an original proceeding in discipline filed by the office of the Disciplinary Administrator against the respondent, Allison L. Bergman, of Kansas City, Missouri, an attorney admitted to the practice of law in Kansas in 1998.

On December 4, 2015, the office of the Disciplinary Administrator filed a formal complaint against the respondent, alleging violations of the Kansas Rules of Professional Conduct (KRPC). The respondent filed an answer on December 23, 2015. A joint stipulation was entered into on January 22, 2016, in which respondent stipulated to the violations charged in the formal complaint. A hearing was held on the complaint before a panel of the Kansas Board for Discipline of Attorneys on January 22, 2016, where the respondent was present and was represented by counsel. The hearing panel determined that respondent violated KRPC 1.7(a)(2) (2015 Kan. Ct. R. Annot. 519) (conflict of interest); 1.8(k) (2015 Kan. Ct. R. Annot. 530) (sexual relationship with client); 1.13(b) and (d) (2015 Kan. Ct. R. Annot. 550) (organization as client); and 8.4(c) (2015 Kan. Ct. R. Annot. 672) (engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation).

Upon conclusion of the hearing, the panel made the following findings of fact and conclusions of law, together with its recommendation to this court:

“Findings of Fact

....

“7. On May 26, 2015, the Missouri Supreme Court found that the respondent violated Rule 4–1.7, 4–1.8(j), 4–1.13(b), 4–1.13(d), and 4–8.4(c) of the Missouri Rules of Professional Conduct. [Footnote: Missouri Rule of Professional Conduct 4–1.8(j) corresponds to KRPC 1.8(k). The other Missouri rules related directly to the Kansas rules with the corresponding numbers.] The Missouri Supreme Court issued an order suspending the respondent's license to practice law in Missouri indefinitely, but stayed the imposition of the suspension and placed the respondent on probation for a period of 2 years. The respondent remains on probation in Missouri.

“8. A hearing panel in Missouri entered a final hearing report which set forth the factual basis for the discipline imposed in Missouri, as follows:

‘7. Kansas City Terminal Railway Co. (“KCT”) is a Missouri corporation formed in 1906.

‘8. KCT is a joint entity owned by five Class One railroads that come into Kansas City: the Union Pacific, BNSF, Kansas City Southern, Norfolk Southern and Canadian Pacific Railways. KCT's main function is to dispatch those roads/trains through Kansas City, as well as to maintain the approximately 100 miles of railroad that KCT owns and to serve 30 local customers in Kansas City.

‘9. Pursuant to KCT's bylaws, the corporation's property, business and affairs are controlled and managed by the KCT board of directors. KCT's bylaws specify that the corporation's president shall have the general care, supervision, and control of the corporation's business and operation in all departments subject to the direction of the board of directors.

‘10. KCT has annual revenues of $35,000,000–$40,000,000.

‘11. Since its formation in 1906, KCT had continuously utilized Lathrop & Gage LLP (“Lathrop”) as its general counsel law firm.

‘12. Beginning in 1998, Respondent was employed as an attorney at Lathrop.

‘13. Respondent began performing legal work for KCT in 1999.

‘14. Respondent became a partner at Lathrop in 2005 and served on Lathrop's Executive Committee from July 1, 2007 to February 1, 2012.

‘15. Lathrop attorney Scott Long served as general counsel and corporate secretary for KCT from approximately 2002 to 2007.

‘16. By March 2003, Respondent became outside assistant general counsel and assistant secretary for KCT.

‘17. In 2007, Respondent was appointed to serve as outside general counsel for KCT. Respondent likewise was appointed to hold the office of corporate secretary for KCT. Respondent was secretary and general counsel for KCT from June 2007 to February 2012.

‘18. Charles Mader (“Mader”) is a professional engineer who specialized in railway design engineering. Until early 2007, Mader performed work for KCT through his employer, TranSystems Corp. In 2007, Mader was terminated from TranSystems Corp.

‘19. William Somervell (“Somervell”) was president of KCT and a member of its board of directors when Mader was hired. Somervell retired from KCT in 2009.

‘20. Mader formed Interlocker LLC (“Interlocker”) at the direction of Somervell in 2007 to provide civil engineering services solely to KCT.

‘21. Respondent admits that in 2007, when Mader was terminated by TranSystems, KCT's president, Somervell stated to Respondent and Bradley E. Peek (“Peek”), then the chief financial officer of KCT, that Somervell was furious with TranSystems for firing Mader, and Somervell wanted Mader to continue to provide chief engineering services to KCT. Respondent admits that Somervell advised the KCT board of directors that Mader had been fired from TranSystems and that Mader was going to continue to providing [sic ] engineering services to KCT through Mader's entity, Interlocker.

‘22. Respondent admits that she was directed by KCT's board of directors to prepare a continuous services agreement for Mader's engagement. Respondent delegated the drafting of Mader's employment agreement to another Lathrop attorney, but admitted that she reviewed the employment agreement to confirm that salient points were contained therein and Respondent presented the Mader employment agreement to the board of directors.

‘23. In October 2007, Mader was hired as an actual full-time employee by KCT, initially as general manager and vice-president of engineering. He became president and chairman of the board of KCT in 2009 (after Somervell retired) and Mader continued in that capacity until he was terminated by the board of directors in 2012.

‘24. From 2002 until January 2012, Respondent and Mader were in a personal, close relationship. At times the relationship was romantic and sexual. At all times from 2002 to January 2012, the relationship between Mader and Respondent was a very close, deep, meaningful, sustained, loving, caring, intimate and special friendship with frequent social and personal interactions with each other.

‘25. The sexual relations between Respondent and Mader did not exist prior to the 1999 beginning of the attorney-client relationship between Respondent and her client, KCT.

‘26. Respondent admits that she did not at any time inform the KCT board of directors of her ongoing personal relationship with Mader. She admits she did not inform the board of directors at any time prior to or during: her preparation of Mader's employment contract with KCT; Mader's initial employment providing engineering services for KCT; Mader becoming and serving as general manager and vice-president of KCT; or Mader's appointment to as [sic ] serving as president and chairman of the board of directors of KCT.

‘27. Brad Peek, current general manager and former president of KCT testified that Respondent did not but should have disclosed her personal, close, sexual relationship with Mader to KCT and its board of directors: when Mader was hired in 2007; when he became and served as general manager; and when he was appointed to and served as president and chairman of the board of KCT.

‘28. Peek testified that had he known that Respondent and Mader were involved in an intimate, close, personal, and sexual relationship from the moment Mader was hired in September 2007 until his termination by the board of directors [in] 2012, Peek would have reported that situation to the board of directors.

‘29. Douglas Banks, long-time and current KCT board of director [sic ], testified similarly. He was not aware of Respondent's relationship with Mader until 2012 (when allegations of impropriety surfaced regarding Mader) and had the board known earlier, the board would have had no choice but to [e]nd Respondent's role as general counsel and secretary.

‘30. Banks considered the relationship between Respondent and Mader to be a conflict of interest that resulted in a loss of trust and reliability by KCT as to Respondent as its general counsel and secretary, because Respondent did not disclose the relationship.

‘31. Banks testified that Respondent put the legal interests of KCT at risk by failing to disclose her relationship with Mader and he believed that beginning in September 2007, when Mader began employment with KCT, there was a significant risk that Respondent's representation of KCT would be materially limited by her personal interest in maintaining her relationship with Mader.

‘32. Both Peek and Banks testified that when allegations of misconduct arose regarding Mader in 2012, the personal relationship with Respondent and Mader was first discovered, and KCT was harmed in not being able to rely on and trust Respondent as general counsel to guide KCT on matters involving Mader and his alleged misconduct and on issues relating to and involving Mader's employment agreement with KCT.

‘33. Banks testified that upon learning of the personal relationship between Respondent and Mader, and upon learning of the ownership interest and Respondent's billing of legal fees for the Tallgrass Railcar, infra , the Board felt that the conflict of interest and resultant loss of trust and reliability left no choice for KCT other than to terminate Respondent as general counsel and secretary and to terminate KCT's long-standing relationship with Lathrop.

‘34. Banks testified that the board members, upon learning of the

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