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Attorneys Represent the Administrators Individually and Not the Estate Itself/Therefore an Estate May Seek Restitution of Attorney’s Fees Paid from the Estate for the Representation of an Executor Who Defrauded the Estate

After it had bee determined the first executor (Carbone) had looted the estate, the new executor sued the law firm which defended the first executor.  The Second Department determined that the law firm could not be sued by the estate for legal malpractice because the retainer agreement with the first executor did not encompass “administration of the estate.”  Therefore, absent allegations of fraud and collusion with the first executor, the law firm, which was not in privity with the estate, could not be sued for malpractice with respect to the estate.  However the cause of action for restitution, which alleged the payment of lawyers’ fees for the representation of the first executor from the estate, could go forward:

This Court has held that “an attorney represents the administrators individually and not the estate itself” … . Accordingly, an attorney may recover fees from the estate only where the services rendered benefit the estate … . Where a plaintiff asserts a cause of action for restitution, the ” essential inquiry'” is ” whether it is against equity and good conscience to permit the defendant to retain what is sought to be recovered'” … . In determining whether this equitable remedy is warranted, a court should ” look to see if a benefit has been conferred on the defendant under mistake of fact or law, if the benefit still remains with the defendant, if there has been otherwise a change of position by the defendant, and whether the defendant’s conduct was tortious or fraudulent'” … .Here, the plaintiff alleged that the [attorney’s] fees for representing Carbone were paid from estate assets even though those services were not beneficial to the estate and were, in fact, adverse to it. Thus, the plaintiff has pleaded facts sufficient to assert a cause of action for restitution … . Betz v Blatt, 2014 NY Slip Op 02554, 2nd Dept 4-16-14

 

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