Kathleen Wolens v. Morgan Stanley Smith Barney, LLC
155 A.3d 1
| N.J. Super. Ct. App. Div. | 2017Background
- Plaintiff, a non-customer, sues Morgan Stanley Smith Barney and its account manager Gibson over a 2008 request to convert two Citibank accounts from Johnson to joint accounts with her sister Mistri.
- Johnson’s February 3, 2008 letter requested the change; Morgan Stanley converted the accounts accordingly, giving Mistri survivorship rights.
- Johnson died in May 2008; the accounts became probate/ non-probate assets depending on the joint designation, prompting plaintiff’s challenge in probate court and a subsequent settlement.
- Plaintiff filed a Law Division action alleging negligence, misrepresentation, and breach of duty despite lacking any contractual relationship with Morgan Stanley or Gibson.
- The trial court granted summary judgment, holding no duty to a non-customer and no proximate causation; discovery issues were deemed insufficient for sanctions.
- On appeal, the Appellate Division affirmed, reiterating absence of a statutory/special duty to a non-customer and lack of proof of proximate causation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does a financial institution owe a duty to a non-customer? | Wolens asserts a duty exists due to potential special relationship or inheritance expectations. | Morgan Stanley/Gibson contends no duty absent contract/special relationship or statute. | No duty to non-customer recognized. |
| Is summary judgment proper where no contract or special relationship is shown? | Court should consider potential duties and policy arguments. | Absence of contract/special relationship defeats duty; no triable issue on duty. | Summary judgment affirmed; no viable duty or material facts for trial. |
| Can alleged breach of internal policies create a tort duty to a non-customer? | Deviations from internal procedures show breach and harm to plaintiff. | Internal policies do not establish legal duty absent contract/special relationship. | Internal policy deviation cannot create a duty absent other grounds. |
| Is proximate causation established for damages to plaintiff? | Damages resulted from mismanagement and misrepresentation. | Even with a duty, causation would have followed given undue influence; damages not proven. | Proximate causation not proven; damages not recoverable even if duty existed. |
Key Cases Cited
- Pennsylvania National Turf Club, Inc. v. Bank of West Jersey, 158 N.J. Super. 196 (App. Div. 1978) (no duty to non-customers without special circumstances)
- Globe Motor Car Co. v. First Fidelity Bank, N.A., 273 N.J. Super. 388 (App. Div. 1993) (creditor–debtor relationship rarely creates fiduciary duty)
- Camp v. Jiffy Lube No. 114, 309 N.J. Super. 305 (App. Div. 1998) (proximate causation required to prove damages in negligence claims)
- Brunson v. Affinity Fed. Credit Union, 199 N.J. 381 (2009) (non-customers typically have no duty against banks absent special relationship)
- City Check Cashing, Inc. v. Mfrs. Hanover Trust Co., 166 N.J. 49 (2001) (special relationship or statute required for duty to non-customers)