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In the future, Fairfield, Conn., attorney Samuel L. Braunstein might want to stick solely to the practice of law to avoid legal squabbles like the one he’s currently in against a former client to whom Braunstein extended a $150,000 line of credit as president of Sotavento Corp., a licensed brokerage firm. On Aug. 9, both sides in the dispute, Sotavento Corp. v. Morningside Partners, filed motions to reargue the case before Bridgeport Superior Court Judge Thomas L. Nadeau. Morningside says the question of whether “the fiduciary relationship of a lawyer to his client extends to business relationships where a lawyer loans money to his client” is an issue without precedent in Connecticut, and therefore deserves further judicial consideration. The controversy stems from Braunstein’s bid to recoup money that Sotavento, a Fairfield mortgage bank that he principally owns, lent to Morningside, a limited partnership that Braunstein, as an attorney, represented in the sale of a Fairfield office building. STANDARD OF PROOF Morningside general partner Charles P. LeMieux sought Braunstein’s legal services in 1995, but did not have the funds to pay the Fairfield lawyer’s retainer, according to Nadeau’s factual findings in his July 19 decision in the case. As a solution, the pair discussed the possibility of Sotavento lending Morningside money for the payment of legal services and other related costs. On Oct. 26, 1995, the parties entered into a revolving credit agreement for $150,000, secured by a promissory note and a second mortgage on the office building that Morningside owned. LeMieux, the judge wrote, discharged Braunstein, of Braunstein & Todisco, as Morningside’s lawyer on July 11, 1996. Upon the sale of the Morningside property, Sotavento received roughly $38,000 as consideration for the brokerage firm’s release of the mortgage on the property. Sotavento subsequently sued Morningside, claiming it is still owed $112,000 plus interest and attorney’s fees. The defendant, however, argued that Braunstein’s fiduciary relationship as Morningside’s lawyer extended to Sotavento as Morningside’s lender and banker. Thus, it contended, Sotavento should be held to a higher “clear and convincing evidence” standard of proof, rather than a “fair preponderance of the evidence,” in proving its claim. In addition, Morningside alleged that Braunstein violated his fiduciary duty to the limited partnership and attorney ethics rules by acting as both its attorney and lender. Ruling in Sotavento, Nadeau found that, despite the “close connection” between Sotavento and Braunstein’s law practice, the brokerage firm didn’t have a fiduciary relationship with Morningside. “At issue in the present case is the amount of money loaned by Sotavento to Morningside under the revolving credit agreement, not Braunstein’s role as attorney for Morningside,” the judge wrote. Nadeau therefore applied the ordinary standard of proof, a fair preponderance of the evidence. HEARSAY EVIDENCE Despite ruling in Sotavento’s favor on the standard-of-proof issue, Nadeau ruled against the brokerage firm on two key evidentiary issues. First, the judge rejected the admission of an affidavit of LeMieux in which he confirmed the legitimacy of the amount allegedly due to Sotavento. Morningside objected to the affidavit’s admission as hearsay. But Sotavento contended that, as a “statement by a party opponent,” it constituted an exception to the hearsay rule under the Connecticut Code of Evidence. Nadeau, however, found LeMieux’s affidavit was not so against his own pecuniary interest to qualify as an exception to the hearsay rule. The judge also refused to admit Sotavento’s summary of receipts and disbursements made on Morningside’s behalf. The most reliable evidence in support of the debt owed by Morningside, Nadeau ruled, was sets of authorizations for advances and receipts for advances issued under the revolving credit agreement. Using them, he found Sotavento met its burden of proof as to just $49,176 of the amount in question. Represented by Edward V. O’Hanlan, of Cummings & Lockwood’s Stamford, Conn., office, Sotavento moved Aug. 9 to have Nadeau reconsider his decision regarding LeMieux’s affidavit. Bernard Green, of Bridgeport’s Green and Gross, is representing Morningside in the matter.

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