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Thompson v. Farah

A-2957-06T3 (N.J. Super. App. Div. 2008) (Unpublished)

BANKS; PARTNERSHIPS — When a bank opens a joint account in the name of two individuals and never receives any instructions or knows of any restrictions as to who can make withdrawals or perform transactions, then, absent an express requirement that two signatures are required, either joint account holder can withdraw funds from the account.

A claimant filed suit seeking damages against a partner based upon an alleged investment agreement in which the partner absconded with monies deposited by the claimant in a specific joint bank account. The claimant was permitted to file an amended complaint against the bank which had opened a joint bank account for the two partners, claiming that the bank breached a duty to the claimant. The claimant stated that the bank was negligent in permitting the partner to open the joint account in a manner inconsistent with his partnership agreement and contrary to customary banking practices. The lower court granted summary judgment to the bank, primarily because of its finding that no actionable breach of duty by the bank was in dispute. An appeal was taken to the Appellate Division.

The Appellate Division affirmed the lower court’s ruling based upon a record insufficient to prove bank negligence. The Court noted that the bank manager opened the joint account in both individual’s names, and certified that he never received any special instructions or knew of any restrictions as to who could make withdrawals or perform transactions. The manager testified that the account he opened required only one signature to authorize withdrawals or other transactions. More relevant testimony was provided by the assistant bank manager, who testified that the claimant inquired about the joint account and whether two signatures were required for any account activity. She certified that she advised the claimant that no passbook had been issued for the account, and only one signature was necessary to conduct any business from the account. The partner had also placed a certification into evidence in which he claimed the account specifically provided for either signatory to transact business, and that both he and the claimant had equal authority to deposit and withdraw monies as they wished. Based upon that record, the lower court granted summary judgment in favor of the bank. The Appellate Division affirmed the ruling, noting that the claimant never moved to supplement the record in opposition to such testimony. The Court found that the claimant failed to affirmatively assert any fact that might have disclosed that additional discovery mattered, prior to summary judgment disposition. It was satisfied that the claimant failed to establish a record of a material factual dispute in support of a claim of bank negligence, so as to survive summary judgment disposition. The Court also held that the claimant failed to establish that the bank owed him any duty other than that associated with a joint deposit account. Under those terms, the Court concluded that the bank owed no obligation to obtain any authorization from the claimant before permitting his partner to withdraw funds.

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