Power systems do not always operate under fully balanced conditions because of unbalanced loads and untransposed transmission lines. Under such conditions, commonly used positive sequence equivalent will no longer be valid. On the other hand, use of full three-phase model will add significant computational burden for the considered application. This paper describes a simple approach to address this issue for the specific application of state estimation. The main idea is to exploit the linearity of the estimation problem when the system is measured solely by phasor measurements. The linear problem lends itself to decoupling via modal transformation unlike the nonlinear formulation with SCADA measurements. A further improvement is introduced via the use of the least absolute value (LAV) estimator, which has the desirable property of automatic bad-data rejection. The paper illustrates how a robust LAV estimator designed for a positive sequence model can be efficiently used for the solution of an unbalanced three-phase state estimation problem.