April 19, 1991
A lawyer hired by co-personal representatives of a decedent's estate is the lawyer for the co-personal representatives and not the estate.
Where a decedent's will is unclear as to whether a college or contingent beneficiaries are entitled to receive monies under the will, and the lawyer is currently employed by the college, the lawyer's representation of the co-personal representatives would be materially limited by the lawyer's relationship with the college. Since a disinterested lawyer could not reasonably believe the representation would not be adversely affected, client consent would not cure the conflict.
References: MRPC 1.7, 1.7(b), 1.9; R-10; CI-1174.
A lawyer inquires whether it is ethically permissible to continue representing the personal representatives of the estate of a person who died leaving an estate valued at approximately $1,100,000 and a will drafted by a different lawyer.
The will leaves a bequest in trust which is ambiguous and which could be interpreted to give to a college either $500,000, or $250,000, or nothing. The will specifies that this bequest shall be distributed to the college for the construction of a building if the college commences construction within 5 years following the testator's death. The will further specifies that if this condition is not satisfied, the gift fails and the money shall be distributed to a church and to nine individuals.
The will nominates three individuals as co-personal representatives and co-trustees, and directs that they shall determine (1) whether the college satisfies the construction conditions and, if so, (2) what amount, if any, the college shall receive from the estate.
The lawyer is currently an employee and faculty member of the college which may receive up to $500,000 of the estate, depending upon determinations made by personal representatives and/or by interpretations made by the court. The lawyer has represented the college as legal counsel "on other unrelated matters, such as real estate sales or acquisitions, contracts, etc. . . . ."
Moreover, the lawyer has previously represented three of the residuary beneficiaries who stand to take a different percentage of the estate depending on what amount of money, if any, is distributed to the college.
In R-10, the Committee was presented with the issue who is the client of a lawyer hired by the personal representative of an estate in a wrongful death case. The Committee concluded that the personal representative is the lawyer's client. R-10 is quoted here at length on the identity of the client issue because of its applicability to this inquiry:
"In order to determine whether the lawyer may undertake the representation proposed, we must first determine whom the lawyer currently represents and to whom the lawyer owes duties of loyalty, confidentiality, accountability, and independent professional judgment. In short, the question is 'who is the lawyer's client?'
"A personal representative has broad statutory authority to hire professional assistance as needed to enable the personal representative to fulfill duties regarding administration, settlement of claims, accounting and distribution of estate assets, MCL 700.543. Funds of the estate, which are the fiduciary responsibility of the personal representative, may be used to hire such professionals, MCL 700.543, MCR 8.303.
"The weight of authority, although not unanimous, holds that the personal representative of the estate is the lawyer's client. See C-75; Wright v. Estate of Treichel, 36 Mich App 33 (1971); Stover v. Wayne County Probate Judge, 219 Mich 566 (1922); Becht v. Miller, 279 Mich 629 (1937); ABA i1017; ABA Model Code of Professional Responsibility, EC 5-18 . . . .
"When considering 'who is the client' for purposes of ethics duties of loyalty, confidentiality and conflicts, however, a different result must be reached. The existence of an attorney-client relationship is not determined merely by who pays the bill; parents frequently pay for legal representation for children, insurers pay for insureds, employers pay for employees, yet the lawyer owes no duties to the payor . . . .
"A conclusion that a lawyer retained by a fiduciary represents the fiduciary, and not the beneficiaries or heirs, is supported by the entire scheme of the Michigan Probate Code, which makes clear that a fiduciary has obligations to the beneficiaries who, in turn, have rights against the fiduciary. See, MCL 700.544, liability of fiduciary for wrongdoing; 700.563, duty of fiduciary to file accounting and close estate; 700.552, beneficiary may object to a fiduciary continuing a business held by the estate; 700.572, beneficiary may file petition requiring fiduciary to settle estate."
This logic applies equally well to the situation involving an estate without a wrongful death suit. The Committee believes that when a lawyer is hired by a personal representative of an estate, the client is the personal representative, or in this case co-personal representatives, as fiduciaries.
Having reached that conclusion we then apply the general conflict rule MRPC 1.7. Paragraph (a) of this rule applies where the lawyer has two or more clients whose interest may conflict. That is not the situation presented to this Committee. The clients here are the co-personal representatives and there is no apparent conflict between them.
The lawyer's former representation of the college and three residual beneficiaries on unrelated matters would not, of itself, create an impermissible conflict, assuming that the information on which the lawyer proceeds does not involve reliance upon confidential communications or secrets imparted to the lawyer by former clients. MRPC 1.9.
MRPC 1.7(b) states:
"(b) A lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests, unless;
"(1) the lawyer reasonably believes the representation will not be adversely affected; and
"(2) the client consents after consultation. When representation of multiple clients in a single matter is undertaken, the consultation shall include explanation of the implications of the common representation and the advantages and risks involved."
The issue then focuses on the lawyer's current position as an employee and faculty member of the college. Applying MRPC 1.7(b)(1), if a disinterested lawyer could not reasonably conclude that representation of the personal representatives would not be adversely affected by the lawyer's responsibilities to the college, the lawyer may not undertake the representation. The lawyer must make an independent determination in this regard.
In the present case, the lawyer's representation of the estate will require the lawyer to advise the personal representatives on whether the college is entitled to any bequest under the will and, if so, the amount of that bequest. Depending on the lawyer's advice and the positions taken by the clients, the college could receive $500,000, $250,000, or nothing; the church could receive $50,000 or nothing; and the nine contingent beneficiaries could receive up to $450,000, or no part of the $450,000.
It has been proposed that the co-personal representatives leave the resolution of this issue up to the Probate Court. This resolution would not cure the conflict, since the lawyer is obligated to advocate the resolution selected by the clients to the best of the lawyer's ability, and the lawyer's ability to do so would be adversely affected by the lawyer's current employment at the college. Client consent under MRPC 1.7(b)(2) cannot be used to cure a situation in which the representation will be adversely affected.
This same result was reached in CI-1174, which had a similar fact scenario. That opinion was based on provisions of the Michigan Code of Professional Responsibility which were precursors to current provisions of the MRPC. The Committee, in CI-1174, held that it was unethical for a lawyer to "represent a decedent's testate estate when that attorney is a current employee of one will beneficiary who holds a position adverse to other will beneficiaries." This conclusion was reached based MCPR DR 5-105, which offered guidelines on forbidden multiple representations when the lawyer's independent professional judgment in behalf of a client would be or is likely to be adversely affected by representation of the other. So although the language of the former Rule is different from that of the current MRPC, the result reached in that opinion is consistent with the conclusion reached herein.