                     NOT FOR PUBLICATION WITHOUT THE
                    APPROVAL OF THE APPELLATE DIVISION

                                          SUPERIOR COURT OF NEW JERSEY
                                          APPELLATE DIVISION
                                          DOCKET NO. A-1028-15T1

KATHLEEN WOLENS,
                                            APPROVED FOR PUBLICATION
      Plaintiff-Appellant,
                                               February 21, 2017
v.
                                               APPELLATE DIVISION
MORGAN STANLEY SMITH BARNEY, LLC
and WILLIAM GIBSON,

     Defendants-Respondents.
____________________________________

            Telephonically argued February           8,   2017   –
            Decided February 21, 2017

            Before Judges Sabatino, Nugent and Currier.

            On appeal from Superior Court of New Jersey,
            Law Division, Essex County, Docket No.
            L-6244-13.

            Paul V. Fernicola argued the cause for
            appellant (Paul V. Fernicola & Associates,
            LLC, attorneys; Mr. Fernicola, of counsel
            and on the brief).

            Nikolas S. Komyati argued the cause for
            respondents   (Bressler,   Amery   &   Ross,
            attorneys; Mr. Komyati and Boris Peyzner, on
            the brief).

      The opinion of the court was delivered by

SABATINO, P.J.A.D.

      Plaintiff Kathleen Wolens appeals the trial court's October

9,   2015   order    granting   summary   judgment    and   dismissing   her
complaint     against       her        deceased        mother's      former       investment

company, Morgan Stanley Smith Barney ("Morgan Stanley"), and its

account manager, co-defendant William Gibson.                            The essence of

plaintiff's    claims       is    that       defendants        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    one        of   plaintiff's        sisters.          We    affirm

because it has not been shown that defendants owed or breached

any legal duties to plaintiff, as she was neither their customer

nor a person known to them with whom they had any established

contractual or special relationship.

                                              I.

    Although the focus of our analysis necessarily centers on

pivotal    legal    issues        of    alleged        duty,    we   briefly       note      the

following pertinent facts, allegations and procedural history.

We consider the factual record in a light most favorable to

plaintiff, who was the non-moving party on the summary judgment

motion.     R. 4:46-2; Brill v. Guardian Life Ins. Co. of Am., 142

N.J. 520, 540 (1995); see also W.J.A. v. D.A., 210 N.J. 229,

237-38    (2012)    (applying          de    novo     on   appeal      the   same      summary

judgment standards).

    Plaintiff's present lawsuit is essentially a follow-up to

previous litigation she brought concerning the estate of her




                                                 2                                     A-1028-15T1
mother,   Patricia         Hardy   Johnson.        Plaintiff    has    two    sisters,

Deirdre Mistri and Carol Alexander.                       Their mother maintained

several investment accounts with Citibank that were managed by

Morgan Stanley.            Gibson was the individual manager on those

accounts.

    On February 8, 2008, Gibson received a one-page typewritten

letter signed by "Patricia Johnson" and dated February 3, 2008.

The letter read as follows:               "Please take my individual accounts

[account numbers omitted], and make them a joint [sic] with my

daughter Deirdre I. Mistri[.]               Thank you."

    Defendants         thereafter         converted       Johnson's    two    Citibank

accounts,   as     requested,        to    joint    accounts    with    Johnson       and

Mistri.     As    a   joint       account    holder   with     her    mother,    Mistri

consequently obtained a right of survivorship in the funds if

her mother predeceased her.

    Johnson died a few months later in May 2008.                            Because of

the account change, the Citibank investments were treated as

non-probate assets and were transferred to Mistri.                           Plaintiff

contested   the       transfer,      arguing       that    Johnson    had    been     the

subject of undue influence by Mistri.

    Plaintiff consequently sued both Mistri and Alexander in a

probate   action      in    the    Chancery     Division     (Docket    ESX-CP-0013-

2011).    After discovery, defendants in the probate case moved




                                            3                                   A-1028-15T1
for   summary     judgment.          The        Chancery    Judge,     Hon.     Walter

Koprowski, Jr., issued a lengthy written opinion on June 25,

2012 granting summary judgment on certain issues and denying

summary judgment on other issues.                Subsequently, that litigation

settled, with plaintiff receiving approximately $450,000 from

Mistri, Alexander, or both.1

      Plaintiff     then    filed    the        present     lawsuit    in     the     Law

Division against both Morgan Stanley and Gibson, claiming that

these defendants owed a duty to her even though she was not a

customer     of   the    financial     institution.            She    alleges       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 rested her contentions of negligence and breach

of    alleged     duty     upon   testimony         Gibson     provided        at     his

deposition.       Gibson testified that, in general, he monitored

Johnson's investment positions, recommended investments for her

when appropriate, transferred funds between her bank and her

investment accounts, and answered any questions that she might

raise about securities.           He acknowledged that he received the




1
   The record does not disclose the portions                           respectively
contributed to the settlement by the sisters.



                                           4                                   A-1028-15T1
February    3,   2008    letter    requesting     the   change    in    Johnson's

accounts and took steps to carry out that request.

     As described by Gibson, Morgan Stanley's usual protocol is

that when a customer asks to create a joint account, typically

the firm "contact[s] the parties to get additional information"

if it is needed.        The firm then obtains the signatures of both

parties on a new accounts agreement, which the parties send back

to   Morgan      Stanley.         Gibson    did   not    have     a     "specific

recollection" as of the time of his 2011 deposition whether he

had seen such a new accounts form signed by Johnson and Mistri,

nor did he know where such a form, if it existed, was presently

kept.

     Gibson further explained Morgan Stanley's internal process

for opening joint accounts, stating that the firm "required" a

letter of authorization and personal and financial information

from the new party.         Gibson did have a "specific recollection"

that Morgan Stanley obtained personal and financial information

from Mistri.      He also testified that, had the firm not obtained

Mistri's    driver's     license    when    changing    the     accounts,    "the

account    [change]     would   have   been   blocked    by   [the     company's]

compliance [unit]."

     Gibson initially noted that he had telephone communications

with Johnson when she added Mistri to the accounts, but admitted




                                        5                                A-1028-15T1
that he did not maintain any notes from those conversations.                                  He

later acknowledged that he lacked a "specific recollection" of

such    a     conversation.         However,          he   did    attest       that    he     had

explained       to     Johnson      what    "right         of    survivorship"             meant,

although       he    could   not    recall       exactly        what   he     said     to    her.

Gibson acknowledged that if Morgan Stanley had received only the

February 2008 letter from Johnson, a change in the accounts to

joint       accounts    with     rights     of    survivorship              would    not     have

complied with the firm's internal requirements.

       In her Law Division complaint, plaintiff focused upon the

two accounts, totaling $847,162 in value, which represented the

bulk of her mother's estate.                 She alleged that those accounts

had    been    improperly       converted        to    joint     accounts       with    Mistri

based solely on the February 2008 letter addressed to Gibson.

Plaintiff       claimed      that   the    authenticity           of    that        letter   was

questionable.          She also noted that the letter did not explicitly

state that a right of survivorship would be conveyed to Mistri.

       Plaintiff alleged that both Morgan Stanley and Gibson were

thereby       negligent        in   their        handling        of     the     matter       and

negligently          misrepresented        the        accounts         to     her,     thereby

"depriv[ing] [her] of the income from those accounts and the use

thereof since Johnson's death, when a portion of the [a]ccounts

rightfully became hers upon the Probate of Mrs. Johnson's Last




                                             6                                         A-1028-15T1
Will       and     Testament."          Plaintiff      demanded      compensatory       and

punitive damages, plus attorneys fees and costs.

       Plaintiff has not provided an expert report from a financial

expert supporting her allegations of negligence and breach of

duty.       In addition, she has not identified any federal or state

statute,         regulation,       or    other      codified    provision,       nor    any

written industry guideline, that was breached.                               Instead, her

contentions rest entirely upon asserted deviations from Morgan

Stanley's own internal policies and procedures, which, viewing

the       record    in   a     light    most    favorable      to    plaintiff,    Gibson

acknowledged to some extent at his deposition.

          In granting summary judgment to defendants, the trial court

determined that plaintiff had not established a viable legal

basis for her claims.              The motion judge, Hon. Garry J. Furnari,

noted in his oral opinion that "it is clear or appears to be

clear that . . . no agreement[,] undertaking[,] or even contract

.     .     .    existed       between        [plaintiff]      and    the     defendants.

[Plaintiff]          admits      that     she       never   even     spoke     with     the

defendants."             The    judge    additionally       found     that    plaintiff's

argument that "Morgan Stanley owed her a duty merely because she

stood      to    inherit       under    the    decedent's    will"     was    "untenable"

under applicable case law.                    In this regard, the judge cited to

Pennsylvania National Turf Club, Inc. v. Bank of West Jersey,




                                                7                                 A-1028-15T1
158 N.J. Super. 196 (App. Div. 1978) and Globe Motor Car Co. v.

First Fidelity Bank, N.A., 273 N.J. Super. 388 (App. Div. 1993),

which     rejected        imposing     a     legal        duty   upon     a    financial

institution    to    a     non-customer          unless    "special     circumstances"

justify imposing such a duty on the company.                            The judge also

observed    that     "a    defendant's       internal       policy      standing      alone

cannot demonstrate the applicable standard of care."

    In addition, Judge Furnari determined that plaintiff could

not establish the legal requirement of proximate cause for her

alleged    damages.         As   the   judge       observed,     "[p]resumably,        the

[alleged] undue influence exerted by [Mistri] would have been

just as effective to persuade her mother to sign a new account

agreement as it was to have her sign the letter [to Gibson]."

The judge therefore reasoned that, regardless of whether or not

Morgan Stanley adhered to its internal policies, "the accounts

would   have   been       changed,     the       probate    litigation        would   have

followed."

    The judge also           dismissed plaintiff's claims                 of   negligent

misrepresentation, noting that she had not addressed that claim

in her summary judgment brief, and, moreover, there was no proof

of such misrepresentation in the record.                         Lastly, the judge

rejected plaintiff's contention that defendants had failed to

comply with discovery requests, observing that the discovery end




                                             8                                   A-1028-15T1
date had been extended several times and that plaintiff had not

timely moved for sanctions or other relief when defendants did

not supply the discovery she wanted.

                                      II.

    On appeal, plaintiff contends that (1) the trial court erred

in dismissing her claims against both Morgan Stanley and Gibson

as a matter of law, (2) the case was not ripe for summary

judgment, and (3) defendants' conduct in processing the account

changes should make them liable to her for damages.                     We reject

these arguments, substantially for the sound reasons articulated

in Judge Furnari's bench opinion.                We add several comments by

way of amplification.

    As a general proposition, the case law in our state has not

recognized that a financial institution owes a legal duty to

injured   third   parties    who    are    not    their   customers     unless    a

statute, regulation or other codified provision imposed such a

duty, or where a contractual or "special relationship" has been

established    between      the    non-customer      third    party     and    the

financial institution.

    This principle was illustrated long ago by this court in

Pennsylvania   National     Turf    Club,    a    case    which   has   not   been

overruled or questioned.          In that case, the Club, which operated

a racetrack, provided a check cashing service for its owners and




                                       9                                 A-1028-15T1
trainers.       Supra, 158 N.J. Super. at 199.                         Zeek, a trainer at

the club, used this check cashing service.                             Ibid.      However, he

established      with    his    own        bank,       the    Bank    of   West    Jersey,   an

"unusual" way of covering checks written to the Club.                                  Id. at

200.     Specifically, Zeek would send funds to cover any overdraft

from the previous day's checks.                        Id. at 199. When Zeek did not

cover several of his checks cashed by the Club in accordance

with this arrangement, the defendant Bank returned twenty-nine

of   those     checks    to    the     Federal          Reserve      Bank.     Id.    at    200.

Twenty    of    those        checks        were        returned      after   the     so-called

"midnight dishonor" deadline specified in the Uniform Commercial

Code     ("UCC")    codified          at     N.J.S.A.          12A:4-301     and     12A:4-302

(imposing duties upon payor banks to be "accountable" for not

returning      checks        before        "midnight          of     the   banking    day    of

receipt").      Id. at 201.           By contrast, the remaining nine checks

were     returned       by    the     Bank        before       the     statutory      midnight

deadline.       Ibid.        Zeek, meanwhile, fled to a Caribbean island.

Ibid.

       Under    these         circumstances,                 the     defendant       Bank    in

Pennsylvania National Turf Club                         did not oppose the entry of

summary judgment in the plaintiff's favor for the balance due on

the twenty checks that had been returned after the midnight

deadline had expired.            Ibid.        However, the Bank denied liability




                                                  10                                  A-1028-15T1
for the nine checks that were timely returned in compliance with

the statutory deadline.           Ibid.     The plaintiff countered that the

Bank had a legal duty to pay the plaintiff for losses stemming

from these nine additional checks, and that the Bank's alleged

"mismanagement" of the overall arrangements with Zeek justified

the recognition of such a duty.             Id. at 202.    We disagreed.

      In   our   analysis    in    Pennsylvania       National   Turf   Club,   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 from ordinary

tort liability."      Id. at 203.          "However, a fundamental requisite

for   tort   liability      is    the     existence   of   a   duty   owing   from

defendant to plaintiff."            Ibid.       (internal citations omitted).

As Judge Larner explained, such a duty does not arise in the

absence of a contract or "special" circumstances, which were not

present in that case:

             In the context of the record facts herein,
             the bank owed no general duty to Turf Club
             by way of warning or other notice, merely
             because the latter undertook to cash its
             depositor's checks, which turned out to be
             dishonored for insufficient funds.   Beyond
             the   duty  relating  to   return  of   the
             instruments, the drawee bank herein had no
             duty arising out of a relationship to the
             holder of the checks which could ripen into
             tort liability.  In the absence of evidence
             of any agreement, undertaking or contact
             between plaintiff and defendant from which
             any special duty can be derived, the



                                           11                            A-1028-15T1
            improper handling of the Zeek account cannot
            in the abstract serve as a stepping stone
            for liability to plaintiff.

            [Ibid. (emphasis added).]

We further observed that, despite the wrongful acts of Zeek that

had produced the diversion of funds, "[p]laintiff cannot recoup

[its losses] by attempting to shift responsibility to the bank

which had no relationship with it."            Ibid.

    Similar    principles      were     recognized     and   applied     in   Globe

Motor, supra, another key case relied upon by Judge Furnari.                      In

Globe Motor, one of the plaintiff company's employees, Gallo,

was embezzling money from the company. Supra, 273 N.J. Super. at

391. The company's loan provider, First Fidelity Bank, and the

defendant    accountants       failed    to   recognize      the   embezzlement,

despite on-site inspections by First Fidelity and reviews by the

accountants.        Id. at 392.         Globe Motor sued the defendants,

alleging    that    they   were   "negligent    in     failing     to    detect    or

prevent    Gallo's    criminal     spree."      Ibid.        The   Law    Division

observed that "creditor-debtor relationships" rarely create a

fiduciary duty.       Id. at 393 (internal citations omitted).                    The

court held that "[a]bsent 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




                                        12                                 A-1028-15T1
its   depositor      in   negligence     for   failing   to   uncover   a   major

theft."     Id. at 395.

      The Supreme Court has endorsed these principles.                See, e.g.,

Brunson v. Affinity Fed. Credit Union, 199 N.J. 381, 400 (2009)

(rejecting a non-customer's claims against a credit union for

negligence and malicious prosecution, noting that "in the unique

context of whether a bank owes a duty to a non-customer, it is

clear      that    '[a]bsent    a   special      relationship,    courts     will

typically bar claims of non-customers against banks'") (citing

City Check Cashing, Inc. v. Mfrs. Hanover Trust Co., 166 N.J.

49, 60 (2001)).

      Here, there plainly was no contractual relationship between

plaintiff and the defendants who managed her mother's investment

accounts.         Defendants had no written or oral agreements with

plaintiff, a non-customer.             Indeed, there is no proof in the

record that they even knew her identity before her mother's

death.

      As   both    parties'    counsel    have    represented    to   us,   their

research has identified no federal or state statute, regulation,

or codified provision that imposes such a duty owed to a non-

customer in these circumstances.               Nor does plaintiff point to

any published industry standard or expert support for such an

obligation.




                                         13                             A-1028-15T1
      Instead, plaintiff exclusively relies on Morgan Stanley's

own   internal    procedures,       which    might    not    have   been   strictly

followed here when the decedent's accounts were converted to

joint accounts with Mistri.             However, such a proven departure

from a company's internal guidelines is immaterial if there is

no contractual or "special" relationship established that could

support a legal duty to a non-customer and a cause of action for

negligence or breach.

      During     oral      argument    on     appeal,       defendants'     counsel

acknowledged that a special duty to a non-customer may arise in

some circumstances where, for example, the firm removes a named

beneficiary from an account.                But plaintiff was never such a

named beneficiary.         She had no legal relationship with the firm,

nor any reasonable basis to enforce duties it may have owed to

her   mother    as   the    sole   account-holder       until    her   sister    was

added.

      In the absence of a statutory or regulatory mandate, we

decline    to    alter      the    course    of   established       precedent     by

recognizing a novel duty in this case.                   Such a duty arguably

might impose undue burdens on financial institutions, and invite

meddlesome interference with the relationships between investors

and those who manage their accounts.                 Of course, nothing in our

existing case law or in this opinion restricts Congress, the




                                        14                                 A-1028-15T1
Legislature       or   regulatory       agencies      from    imposing       such

obligations.        We leave those policy issues for consideration

elsewhere.

    We further agree with the trial court that, even if a duty

were recognized here, and a breach of it were established at

trial,     plaintiff    cannot   prove       proximate    causation    for    her

losses.     See Camp v. Jiffy Lube No. 114, 309 N.J. Super. 305,

309-11 (App. Div.), certif. denied, 156 N.J. 386 (1998).                 If, in

fact, plaintiff's mother was indeed the subject of her sister's

undue influence, presumably the account changes would have been

made anyway at her behest.          Plaintiff's appropriate remedy was

in the estate litigation, through which she has already derived

a substantial recovery in settlement.

    The     balance    of   plaintiff's        arguments,    including       those

relating     to    discovery,    lack        sufficient   merit   to     warrant

discussion.       R. 2:11-3(e)(1)(E).

    Affirmed.




                                        15                             A-1028-15T1
