Former KCMBA president James Wirken accused of receiving loans from clients

Scott Lauck//July 30, 2012//

Listen to this article

A prominent small-firm lawyer in Kansas City is denying that he committed professional misconduct in a series of financial transactions with clients.

In an information filed in January, the Office of Chief Disciplinary Counsel alleges that Jim Wirken had clients loan him hundreds of thousands of dollars, in one instance resulting in a judgment against him for more than $940,000.

The OCDC also alleges that Wirken withdrew money from client trust accounts “in order to pay financial obligations he owed to others.”

In a written answer to the OCDC’s charges, Wirken admitted the details of the loans from his clients but denied that the terms were unfair and unreasonable. He also denied that there was any dishonesty involved.

Wirken did not return messages left at his office and on his cellphone. His assistant said he was out of town for several weeks and couldn’t be reached.

According to the OCDC, one client, Jimmie Lee Taylor, had at Wirken’s request loaned Wirken $250,000 from a trust that Taylor controlled. Wirken allegedly said the money would be repaid from contingency fee cases that would settle by the end of 2007.

Wirken also had Taylor loan more than $260,000 to a company called Longview Village Development Co. Wirken represented the company, which owed him money. Wirken allegedly failed to disclose that Longview would pay him a commission for finding lenders.

The loans went into default. Taylor sued, and a Jackson County circuit judge in 2010 entered a judgment totaling $940,845, comprising the amount of the loans plus interest.

According to the judgment, however, there was no evidence that Wirken deliberately misled Taylor. Instead, the court ruled, the evidence indicated that Wirken “misjudged the likelihood and timing of the settlement” of the contingency cases from which Taylor was to be repaid.

In 2010, Wirken borrowed more than $270,000 from other clients, either directly or from their trust accounts. Wirken admitted to the loans but said all of them were with his clients’ permission.

One client, Chris Pulley, loaned Wirken more than $120,000. The OCDC alleges that Wirken failed to repay those loans, though Wirken denied that charge.

Another client, Charles Bauer, allowed Wirken to borrow $133,333 from a trust account in 2010. Wirken said he was in the process of repaying Bauer.

The OCDC also alleged that on several occasions Wirken withdrew a total of $19,500 from client accounts and transferred them to himself. Some of those clients were allegedly repaid in part using money from other clients’ accounts, though Wirken denied that charge.

OCDC points out that, at the time of the various loans and transfers, Wirken was “hundreds of thousands of dollars in default” on the loans from Taylor. But Wirken said that he and Taylor had previously reached an agreement that Taylor would not go after Wirken’s personal or firm assets if Wirken would not fight the lawsuit. Wirken also argued that the court judgment shouldn’t prevent him from relitigating the facts of that case in his discipline matter.

Wirken, a former Kansas City Metropolitan Bar Association president, has been a member of the bar since 1970. According to the OCDC’s filing, he was formally admonished for rule violations in 1985 and in 2006.

At the time of the transactions, Wirken ran his own law practice, The Wirken Law Group. He closed that practice in late 2010 and briefly joined the 34-attorney firm of McDowell, Rice, Smith & Buchanan in Kansas City. He left after only six months and returned to solo practice.

Wirken’s withdrawal from McDowell Rice coincided with a bank’s lawsuit alleging overdrafts on his prior firm’s trust accounts, but Wirken said at the time that the alleged financial issues had nothing to do with it.

Lebanon lawyer Eric Hutson admits to having sex with student on mock trial team

St. Peters attorney Frank Conard admits to conflict in Marion County foreclosure case

Colorado ‘settlement’ prompts professional negligence accusation against KC lawyer

Clayton lawyer admits making improper sexual suggestion to client

The list: 35 Missouri attorneys answer to allegations of wrongdoing