By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Probate Estate Litigation Attorney

A recent published case involved a plaintiff’s claim that a financial advisory firm and their agent acted negligently and improperly in carrying out a written request to have the mother’s investments changed from accounts solely in her name to joint accounts with just one of plaintiff’s sisters. An appellate court dismissed the case because the plaintiffs failed to show that the defendants breached any legal duties to the mother, as she was neither their customer nor a person known to them and with whom they had any established contractual or special relationship.

The case involved the plaintiff and two sisters. Their mother maintained several investment accounts with Citibank managed by Morgan Stanley. The defendant individual was the personal manager on those accounts.

The manager received a one-page typewritten letter signed by the mother which read as follows: “Please take my individual accounts and make them a joint account with my daughter. Thank you.”

Defendants thereafter converted her two Citibank accounts, as requested, to joint accounts with the sisters. As a joint account holders, the daughters consequently obtained a right of survivorship in the funds when their mother predeceased them.

Soon after the change, mom died. Because of the account change, the Citibank investments were treated as non-probate assets and were transferred to the sisters free of probate. Plaintiff contested the transfer, arguing that the bank and its manager had been the subject of undue influence by the sister.

Plaintiff filed the lawsuit claiming that the defendants owed her a legal duty of care and protection even though she was not a customer of the financial institution. She alleged that defendants acted negligently in allowing the account to be changed without adhering to the protocol prescribed by Morgan Stanley’s internal policies and procedures.

Plaintiff alleged that Morgan Stanley was negligent in the handling of the matter “deprived her of the value of those accounts following her mom’s death.” Plaintiff demanded compensatory and punitive damages, plus attorney’s fees and costs.

In this case the plaintiff did not provide an expert report from a financial expert supporting her allegations of negligence and breach of duty by Citibank. In addition, she did not identify any federal or state statute, regulation, or other codified provision, nor any written industry guideline, that was breached. Instead, her contention rested entirely upon the asserted deviations from Morgan Stanley’s own internal policies and procedures, which, viewing the record in a light most favorable to plaintiff, was correct. I’ll further discuss this case in my next post.

To discuss your NJ Probate Estate Litigation matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at  Please ask us about our video conferencing consultations if you are unable to come to our office.