Missouri Supreme Court puts Kansas City lawyer Allison Bergman on probation

The Missouri Supreme Court on Tuesday placed the law license of prominent Kansas City lawyer Allison Bergman on two years of probation for violations of professional conduct while she represented Kansas City Terminal Railway.

In disciplining Bergman, the court stopped short of accepting the Missouri Chief Disciplinary Counsel’s recommendation of indefinite suspension of her law license with no prospect of reinstatement for at least two years.

Bergman had done legal work for Kansas City Terminal Railway starting in 1999 and ending abruptly on February 15, 2012, when an internal investigation found, among several things, that Bergman had for years been in an undisclosed romantic and sexual relationship with KCT’s then-president, Chuck Mader.

Mader was fired the same day. The investigation also found that Bergman had assisted Mader in purchasing a private railcar that involved KCT funds, had helped Mader form a business entity that bought and refurbished property across the street from Bergman’s Union Hill residence, and had helped Mader find consulting work with the city of Newton, Kansas, both possible violations of a corporate prohibition on top executives having outside business interests.

Her firing triggered an investigation by the Missouri Chief Disciplinary Counsel, which governs rules of professional conduct for lawyers licensed to practice in the Show-Me State. 

Bergman was not immediately available for comment on Tuesday.

Bergman started working for Lathrop & Gage, one of Kansas City’s largest corporate law firms, in 1998. Lathrop & Gage had represented KCT since the company formed, in 1906. Since 2001, the firm billed KCT an average of about $400,000 a year for legal services.

KCT owns and manages 100 miles of railroad in the Kansas City area; it makes about $35 million in revenue a year and distributes it to its five shareholders, all major rail companies — Union Pacific, BNSF, Kansas City Southern, Norfolk Southern and Canadian Pacific.

By 2007, the company named Bergman its corporate secretary and outside legal counsel. Prior to that, she had been KCT’s assistant outside legal counsel since 2003.

Known to very few, and not disclosed to KCT’s board of directors, was that Bergman had been in a personal and at times sexual relationship with Mader since 2002. The board may have wanted to know that in 2007, when she helped the company form a business relationship with a contractor named Interlocker LC, which was wholly owned by Mader.

The KCT board may also have wanted to know about the relationship when it asked Bergman later in 2007 to prepare an employment contract with Mader to make him a full-time employee with the company, starting with a $150,000 salary.

The KCT board may have wanted to know about the relationship when Bergman helped organize a company called Tallgrass Railcars, in December 2007, a joint venture between Mader, then-KCT president Bill Somervell and Watco (a major vendor to KCT) to purchase and refurbish a passenger railcar. KCT later discovered that Lathrop & Gage had billed the company for legal work to help Tallgrass purchase this railcar.

Mader started work with KCT as a vice president that year, but supervised Bergman’s legal work for the company.

The KCT board may have wanted to know about the relationship when Bergman lobbied the board’s executive committee for a 9 percent salary increase in 2009 and a $40,000 year-end bonus in 2008, as spelled out by the disciplinary counsel’s report.

The KCT board may have wanted to know about the relationship when Mader was promoted president of the company, in effect becoming the top executive.

For her part, Bergman argues in a brief before the Missouri Supreme Court that her relationship with Mader predated his employment at KCT and that former KCT president Somervell knew about their feelings for one another. She also views the company’s president, Somervell and later Mader, as her client, rather than KCT’s board of directors, thus she didn’t feel like they needed to know.

As for Tallgrass, she described KCT’s payment for legal costs associated with Tallgrass’s purchase of a railcar as a mere billing error. She also didn’t believe that Mader’s work for Newton, Kansas, and on the apartments near her house distracted him from his full-time work at KCT.

The Missouri Supreme Court’s order on Tuesday says that if she breaks the terms of her probation during the next two years, her law license will be revoked for at least two years.

Bergman separated from Lathrop & Gage shortly after KCT fired her. She now works at the Hardwick Law Firm.