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

In Part 1 of this series I introduced you to a case involving 2 siblings charging claims of Undue Influence on a financial advisory firm. With only a note from their mother they were able to have her bank accounts changed to joint accounts just prior to her death. In Part 2 I will be discussing the legal aspects of this case.

As a general proposition, the case law of New Jersey does not impose upon a financial institution a legal duty to protect injured third parties who are not their customers unless a statute, regulation or other lawful provision imposes such a duty, or where a contractual or “special relationship” has been established between the non-customer third party and the financial institution.

The court stated,

“We recognized that even where a financial institution, such as a bank, has complied with a statutory obligation, such as the UCC, “such compliance does not necessarily immunize it form ordinary tort liability. However, a fundamental requisite for tort liability is the existence of a duty owing from defendant to plaintiff.” Such a duty does not arise in the absence of a contract of “special” circumstances.”

The court held that “absent a contractual duty, a bank has no obligation to manage, supervise, control or monitor the financial activity of its debtor-depositor and is not liable to its depositor in negligence for failing to uncover a major theft.

The Supreme Court has endorsed these principles noting that “in the unique context of whether a bank owes a duty to a non-customer, it is clear that ‘absent a special relationship, courts will typically bar claims of non-customers against banks’”.

To discuss your NJ Estate Probate 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.