STATEWIDE GRIEVANCE COMMITTEE

Robert Buenger, Jr., Complainant vs. Salvatore Diglio, Respondent

PROPOSED DECISION

Pursuant to Practice Book '27J, the undersigned, duly-appointed reviewing committee of the Statewide Grievance Committee, conducted a hearing at the Superior Court, 1061 Main Street, Bridgeport, Connecticut on January 8, 1997. The hearing addressed the record of the complaint filed on March 25, 1996, and the probable cause determination filed by the New Haven Judicial District, Geographical Areas 7 & 8 Grievance Panel on August 27, 1996, finding that there existed probable cause that the Respondent violated Rule 1.8(a)(2) of the Rules of Professional Conduct.

Notice of the hearing was mailed to the Complainant and to the Respondent on November 27, 1996. The Complainant and the Respondent each appeared and gave testimony. Attorney Richard Lamere represented the Complainant.

This reviewing committee makes the following findings by clear and convincing evidence:

In 1989, the Respondent represented a partnership, Octagon Associates ("Octagon") as a buyer and Enterprise Park Group ("Enterprise") as seller in a commercial transaction. The Respondent was a major investor in Enterprise. The Respondent's partner in Enterprise was Stephen R. Barbara, who was also a partner in Octagon. Mr. Barbara had authority to act on behalf of Octagon in connection with the commercial transaction. The Respondent dealt almost exclusively with Mr. Barbara in his representation of Octagon. The Complainant was a general partner of Octagon.

The Respondent did not advise the individual partners of Octagon in writing that they should consider seeking the advice of independent counsel in the transaction. The Respondent did not advise the individual partners of Octagon in writing of his interest in Enterprise. An owner's title insurance policy was not purchased at the time of the closing. In 1996, the town of Hamden initiated foreclosure proceedings against Octagon, the Complainant and other defendants in connection with sewer liens on the premises.

The reviewing committee also considered the following:

The Complainant claimed that the Respondent failed to disclose the full extent of his involvement in the transaction; the option to purchase a title insurance policy; and the existence of sewer liens on the premises. The Respondent essentially contended that the partners of Octagon were aware of both his participation as a principle in Enterprise and his legal representation of Enterprise prior to the closing. The Respondent asserted that the option to purchase an owner's title insurance policy was discussed with Mr. Barbara who declined to purchase it on behalf of Octagon. The Respondent further asserted that information was furnished to the Octagon partners concerning the existence of the sewer lien.

At the hearing before this reviewing committee, the Complainant testified that he learned about the sewer liens in 1995 in connection with a summons received from the town of Hamden. The Respondent indicated that he did not advise the Octagon partners in writing of any potential conflict of interest.

This reviewing committee finds the following violation of the Rules of Professional Conduct by clear and convincing evidence:

This reviewing committee concludes that the Respondent's conduct in representing Octagon and Enterprise in a business transaction involving the purchase of commercial condominiums represented a conflict of interest in violation of the Rules of Professional Conduct. The Respondent failed to notify the individual partners in writing that they should seek the advice of independent counsel in the transaction in violation of Rule 1.8(a)(2) of the Rules of Professional Conduct. The reviewing committee noted that the Respondent was a principle investor in Enterprise along with Mr. Barbara. The reviewing committee further noted that the Respondent did not disclose his interest in Enterprise in writing to the partners of Octagon. The Respondent's conduct breached ethical standards. We recommend that the Statewide Grievance Committee reprimand the Respondent.

Attorney David A. Curry

Attorney Robert J. Kor

Ms. Mary Ellen Smith