New York Probate and Estate Administration Lawyer Blog
A New York Probate Lawyer said this probate proceeding, objectant moves for an order disqualifying counsel, the petitioner and nominated executor under the will of the decedent. The lawyer crossmoves for sanctions on for making a frivolous motion.
A New York Will Lawyer said that the motion was brought in connection with the contested probate of an instrument. The decedent died in January 2007, survived by three children. A petition for probate was filed and an SCPA 1404 examination was conducted. Objections were subsequently filed by herein objectant. In connection with the depositions and objections, the lawyer, the nominated executor, is represented by of counsel t. Depositions were concluded thereafter.
The motion for disqualification arises out of legal representation of the Company, which has four shareholders who each own 25% of the corporation. The shareholders are objectant, her husband, her brother, and brother’s wife. In 2000, the company commenced two actions one of which, against the brother, remains open. The company is now in bankruptcy proceedings. Objectant seeks disqualification as counsel to executor in the probate proceeding on the grounds that they cannot represent executor, whose interests are adverse to the interests of its former client, objectant.
A Westchester County Probate Lawyer said in response, the lawyer notes that his representation of executor is limited to (1) the depositions of her prior counsel and his associate, who may be material witnesses in the probate matter, and (2) the objections to probate filed by objectant. More significantly, the lawyer points out, company represented another company, and not the objectant, in the proceedings in Supreme Court. Accordingly, the lawyer argues, objectant was never a client and therefore lacks standing to seek disqualification of the firm in the probate matter. Counsel further argues that even if the court determines that objectant is a former client of the firm, disqualification of the firm would not be appropriate in the probate matter, as no substantial relationship exists between the Supreme Court action filed on behalf of company and this probate proceeding, which would be a prerequisite for disqualification. Simultaneously, the lawyer brought a cross-motion for monetary sanctions, arguing that the motion for disqualification is frivolous, dilatory and not in good faith.
Suffolk County Probate Lawyers said the ethical obligation of an attorney who wishes to represent a client with interests adverse to those of a former client is set out in Rule 1.9 of the Rules of Professional Conduct,1 which provides, in part: “A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing”.
Applying this standard, the Court of Appeals developed a tripartite test to determine whether an attorney should be disqualified on the basis of adverse client interests. The first part requires the individual who seeks disqualification of an opponent’s attorney to prove that he or she has a prior attorney/client relationship with said attorney. The second part of the test requires a showing that the matters in the two proceedings are substantially related. Lastly, the movant must show that the interests of the two clients are materially adverse. If a party seeking to disqualify an adversary’s attorney is able to prove all three parts of this test, such proof “gives rise to an irrebuttable presumption of disqualification”.
Where an attorney has an ongoing relationship with one client, and concurrently represents a second party whose interests are adverse to those of the first client, whether or not in the same proceeding, the courts apply a much stricter standard to determine whether the attorney’s representation of the second party is improper. It is virtually axiomatic that it would be ethically inappropriate for an attorney to bring a lawsuit against his or her current client, barring the most extraordinary circumstances. It is, perhaps, not quite as clear when the representation of two clients with adverse interests involves two completely separate matters. Even so, the “simultaneous representation of, even though on unrelated matters, is at best unseemly”. What is frequently referred to as the “prima facie” or “per se” rule was first delineated in a case as follows: “Where the relationship is a continuing one, adverse representation is prima facie improper and the attorney must be prepared to show, at the very least, that there will be no actual or apparent conflict in loyalties or diminution in the vigor of his representation”. This standard shifts the inquiry away from the substantiality of the relationship between the two matters being handled by the attorney, and instead focuses on the attorney’s responsibility to provide his or her client with absolute loyalty. The attorney opposing disqualification bears a heavy burden of proof to show the court that his or her concurrent representation of the second client will not create a conflict in loyalties or diminish the vigor of the attorney’s representation of the first client.
“It is well settled that a corporation’s attorney represents the corporate entity, not its shareholders or employees “. As a general rule, “[a]n attorney does not represent a co-shareholder simply by reason of his or her representation of the corporation, unless he or she affirmatively assumes that duty”. However, a court may find the existence of an attorney/client relationship where a shareholder “reasonably believed [that the corporate attorney] was acting as his counsel”. In this case, cited by the attorney in his reply affirmation, corporate counsel undertook the representation of one 50% shareholder suing the other 50% shareholder, who then moved to disqualify plaintiff’s counsel. “Although, in the ordinary corporate situation, corporate counsel does not necessarily become counsel for the corporation’s shareholders and directors … where, as here, the corporation is a close corporation consisting of only two shareholders with equal interests in the corporation, it is indeed reasonable for each shareholder to believe that the corporate counsel is in effect his own individual attorney”. The court then notes “the general proposition that in a close corporation, the issue of corporate versus individual representation must be decided on a case by case basis” A determination as to whether a fiduciary relationship exists between a client and an attorney must be very fact-specific
In the proceeding before this court, objectant claims to be a client of the firm by virtue of her status as a 25% shareholder in Acme. At first glance, this fact might appear to align this case with the case discussed above. However, that case involved two active shareholders, both of whom treated the company as though it were a partnership, and both of whom attended meetings with the corporate attorney together and separately seeking legal advice on behalf of the corporation. In contrast, an affidavit filed by the brother affirms that objectant is a non-participatory non-voting shareholder in company who plays no role in its management. Objectant does not dispute brother’s statement or assert that she ever met with any member of the firm, nor does she claim that she has any basis to believe that the firm represented her individually.
Objectant has not established that she is or ever was a client of the firm. “[A] party who is neither a present or former client of an attorney has no standing to complain about the attorney’s representation” The court therefore denies objectant’s motion for disqualification. The cross-motion for sanctions is also denied.
An Estate of a decedent should be divided in accordance with the provisions of law. Here in Stephen Bilkis and Associates, we advocate fairness and justice in so far as we ensure that justice is rendered. We have our Nassau County Probate lawyers who will represent the executor for the proper settling of the estate of the deceased. Communicate with our Nassau County Estate lawyer now and be advised on how to partition ones estate depending on the properties left.