Ethics Opinions

Opinion No. 92-2

February 1992

Summary: Representation of Y, as executor, will be regarded as representation of Y, individually, for conflict of interest purposes when Y is virtually the sole beneficiary of the estate. Therefore, an attorney who represents Y as executor in such circumstances may not advise selectmen about their ability to revoke the liquor licenses of A, B, and C for nonpayment of taxes when Y, in his individual capacity, is in the same position, unless the attorney advises only about issues that are not relevant to Y's situation. Consent of both Y and the selectmen would not change our advice because it is not obvious that the attorney may adequately represent the interest of each client in such a situation.

Facts: An attorney inquires about a problem arising out of "representation of the Estate of X." The executor is X's son, Y, and under the will Y is to receive the estate's only remaining asset, her residence. The will made minor bequests to other children, which have been distributed.
After the attorney undertook this representation, Y obtained a liquor license in Town Z where the attorney is town counsel. The attorney did not represent Y in that regard. Moreover, the attorney has disclosed his representation of the estate of X to the selectmen and has not participated in Y's dealings with the town.
The board of selectmen is about to take action against several liquor licensees, including Y, who have not paid their taxes and the board proposes to hold a hearing to consider whether these liquor licenses should be revoked. The attorney wants to know what limitations may exist with respect to his ability to represent the board in these proceedings. In particular, the attorney wants to know whether he may advise the board with respect to its proceedings against licensees other than Y. He believes that advising the board in some matters may enable it to proceed against the others on its own.
Discussion: The first question relates to the nature of the attorney's representation of Y. The general rule is that a lawyer may not represent, and be adverse to, a client at the same time, at least not without consent of both clients after full disclosure of the possible effects of the multiple representation on the independence of the lawyer's professional advice. The McCourt Co., Inc. v. FPC Properties Inc., 386 Mass. 145 (1982). Even with consent, taking an adverse position to a current client is not permitted unless it is "obvious that the lawyer can adequately represent the interests of each." DR 5-105(C).
The attorney's inquiry relates to a factual situation that is different in two respects from that presented in the general rule. The attorney represents Y only in a fiduciary capacity. (Although the attorney refers to representing "the estate," in fact he represents Y as executor for the estate.) Moreover, the assumed facts involve representing the board concerning the interests of other licensees, not Y.
There is an issue whether representation of an individual as executor should be regarded as representation of the individual for purposes of the conflict rules. The executor exists for purposes of distributing the estate in accordance with the will and the law, and often an executor who happens to be an individual is not acting for his individual benefit. The person as executor could therefore be regarded as a different legal entity from the person as individual. On the other hand, the lawyer representing an executor, especially an executor who is an individual and not an organization, is dealing with a flesh and blood client whom he has an obligation to advise and keep out of trouble. A relationship of trust and confidence is built up with executor that is difficult to ignore when another client proposes to take action against that person as an individual.
Whatever the correct outcome in the usual case, see Hazard, Triangular Lawyer Relationships, 1 Geo. J. Leg. Ethics 15 (1987), this situation is different. Y, the executor, is the principal beneficiary of the estate and, aside from his obligation to pay the debts of the estate, is acting essentially for himself. At least in these circumstances, our advice is to regard Y the individual as a client for purposes of DR 5-105.
With respect to the proposed hearing, if the general or particular advice that the attorney gives with respect to the other licensees is directly relevant to Y's situation, then the attorney falls within the prohibition in DR 5-105(A). If the advice requested with respect to the other licensees concerns an issue that will not arise in Y's hearing, then there is no problem. Since the hearings will focus on licensees with unpaid taxes, however, and Y falls in that category, it is hard to see how he will not be affected by the advice the attorney gives. Even if the advice relates only to the factors that might justify leniency, the advice with respect to one licensee is likely to set a pattern with respect to the others. Since the lawyer's advice with respect to some of these matters may let the board handle others on its own, that advice is likely to have a direct impact on Y.
The nature of the problem is not changed much if the attorney's advice helps Y's situation. First, the form of the hearing is adverse. More importantly, the whole thrust of the rule is that multiple representation should not be such that it may affect "the independence of [the lawyer's] professional judgment." That refers to the attorney's judgment on behalf of both clients. If the issue with respect to the other licensees has a direct bearing on Y's case, the attorney is put in a very awkward situation with respect to both clients. It is that awkwardness that the rules are designed to prevent.
To summarize our conclusions:
(l) Based on the above discussion, the attorney may not represent the board in its dealings with Y's liquor license even in the unlikely event that both consent after full disclosure of the effect of multiple representation on the attorney's independent professional judgment.
(2) The attorney may not represent the Board in connection with Y's liquor license even if the attorney now closes out the estate. In Opinion 84-4, we adopted the general rule set forth in Unified Seweraqe Authority v. Jelco, Inc., 646 F.2d 1339, 1345 n.4 (9th Cir. 1981) that the policy reasons for DR 5-105 require that ability to represent multiple parties be decided as of the time when the conflict arises and that a prohibited conflict may not be cured by withdrawing from representation of a party or by finishing the work for one of the parties. Whether exceptions might be justified in some cases for reasons of insubstantiality or the like, see N. Sacca & Sons Inc. v. East Coast Excavators (Mass. Dist. Ct. pp. Div. 1992), this does not seem to us to be such a case because the liquor license matter arose while the estate matter was still active.

Permission to publish granted by the Board of Delegates on June 5, 1992. As stated in the Rules of the Committee on Professional Ethics, this advice is that of a committee without official governmental status.