The state Second Appellate Court has found “special circumstances” to uphold a $1.9 million judgment for legal malpractice against former Rockland County attorney Arnold W. Blatt.
A panel of four justices ruled on Dec. 28 that Debra Betz could recover damages from Blatt for mishandling her father’s estate.
Blatt, of New City, had drafted a will for Carmelo Carbone of Mount Kisco, filed it in 2004 when Carbone died, and represented the estate until he was replaced in 2009.
Carbone’s brother, Michael, served as estate executor until 2011 when Betz, Carmelo’s daughter, replaced him.
Then Betz sued Blatt for legal malpractice, accusing him of “flagrant conflict of interest” and turning a blind eye to fraudulent activities when her uncle was executor.
Blatt failed to dissuade Michael Carbone from “serving his self-interest at the expense of the estate,” according to Betz’s lawsuit, and instead became an active participant in “depleting and wasting the assets of the estate.”
The primary asset was Colonial River Farms, a 125-acre tract of land in Putnam County that Carmelo Carbone had used as a tax write-off.
The land was supposed to be sold as soon as practicable after Carbone’s death, according to court records, but instead Michael Carbone used the farm for his own purposes.
Michael Carbone also misrepresented his daughter as an accountant for reconstructing is brother’s financial history, according to Betz’s lawsuit.
Blatt appealed the 2019 lower court judgment by Justice Gerald E. Loehr that he had committed legal malpractice.
But the appellate court found that Blatt admitted he was “not competent to do accounting,” yet did not arrange for a professional accounting.
He knew that the accounting he circulated was “terrible,” but did not alert the court.
He was aware that Michael Carbone had engaged in self-dealing to himself and his children, but “took no action other than providing advice to the former executor … that he knew would be ignored.”
He testified that Michael Carbone’s conduct was “shocking,” but continued to disburse funds to the former executor.
Generally, an attorney representing the executor of an estate does not represent the estate itself, the justices observed, and therefore is not liable to the beneficiaries of the estate.
But when fraud, collusion, malicious acts or other special circumstances exist, the attorney may be held liable for harm caused by professional negligence.
Blatt knew that the former executor was engaged in self-dealing and looting, according to the appellate court, fostered the misconduct and failed to notify surrogate court or withdraw as counsel.
Betz “presented ample evidence establishing both her damages and the defendant’s contribution to them,” the justices ruled.
The appellate court had suspended Blatt from the practice of law in 2021, in an unrelated matter, for misappropriating client funds. Efforts to contact him for comment were unsuccessful.
Blatt represented himself in the appellate case. Betz was represented by White Plains attorneys Gary E. Bashian and Andrew Frisenda.
