JOHN CURLEY v. T. HARRY LANG

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2330-05T12330-05T1

JOHN CURLEY,

Plaintiff-Respondent,

v.

T. HARRY LANG,

Defendant-Appellant.

_______________________________________

 

Submitted July 24, 2006 - Decided August 14, 2006

Before Judges C.S. Fisher and Grall.

On appeal from Superior Court of New

Jersey, Law Division, Morris County,

L-3100-03.

Hugh M. Blair, attorney for the

appellant.

Wronko & Wronko, attorneys for respondent

(Matthew C. Wronko, of counsel and on the

brief).

PER CURIAM

On November 14, 2003, plaintiff John Curley filed a complaint to collect $35,000 due and owing on a loan to defendant T. Harry Lang. The interest-free loan was secured by a promissory note dated June 4, 2000, which required payment on or about September 1, 2000. In February 2004, defendant filed a counterclaim. Liberally construed, the counterclaim asserts that defendant lost $100,000 as a consequence of plaintiff's breach of a duty to give defendant competent investment advice about his stock investments. Defendant demanded damages in the amount of $100,000 to be offset against any debt he owed to plaintiff on the loan. Defendant now appeals from a final order entering summary judgment in favor of plaintiff in the amount of $35,000 and dismissing his counterclaim.

We consider the evidential materials submitted on the motion in the light most favorable to defendant, who opposed the motion. See R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). Plaintiff and defendant were friends; they met through a mutual friend in 1998. In 2000 defendant was in the process of closing on a contract to purchase a residence. Upon learning that defendant was at risk of losing his deposit on the transaction, plaintiff offered to loan defendant $35,000. On June 4, 2000, defendant executed a note promising repayment on or about September 1, 2000. Defendant explained their agreement about the loan as follows: "The agreement was he was loaning me $35,000 to finalize the balance of the money needed to close on the house and I would pay him back in September." He admitted that he had not paid the loan.

At the time of the loan, plaintiff was the managing partner of Pattern Recognition Funds, a hedge fund. In that job, he made short and long term investments on behalf of investors who had agreements with the fund. Defendant was not one of those investors. Plaintiff acknowledged that when defendant or other friends asked for his opinion on stocks, he responded. According to plaintiff, defendant followed some but not all of his advice. Defendant did not claim otherwise.

Defendant has a Bachelor of Science Degree in economics and is a licensed insurance producer. He has worked in the areas of estate and pension planning.

Defendant considered himself to be involved in a business relationship with plaintiff as an investment advisor. He could not say when that relationship commenced and said there were no written documents memorializing the relationship. According to defendant, he and plaintiff had conversations during which plaintiff would tell him "[w]hat the fund was buying, what was moving, might want to get involved in this, this is a good stock, this is what we're looking at, something along those lines." Defendant did not pay for the advice in any way, and he admitted that plaintiff never said he would forego calling in the loan because of advice he was giving. Defendant made his stock purchases through a broker recommended by plaintiff. He was not aware of plaintiff receiving any fee or commission in connection with the transactions the broker completed for him.

According to defendant, plaintiff was helping him make money on his investments so that plaintiff could repay the loan. He acknowledged that "[t]he idea was to make money in the account" so that he could pay off his debts. Defendant admitted that there were occasions on which he made a profit by following plaintiff's advice.

Defendant submitted an unsigned "expert report" that listed his trades in columns showing number of shares, name of stock, purchase date, final transaction date, proceeds and profit or loss. The earliest purchase date shown is September 25, 2000.

According to the report, defendant's net loss was $43,376.01. The unnamed expert concluded:

Rapid trading combined with investment in largely unprofitable and unproven companies in a declining market was a recipe for disaster. They resulted in $43,376.01 in net losses. The asset base from which Mr. Lang was operating along with his advance age made the investments unsuitable for his account. In addition, unprofitable investments were ignored and allowed to continue to depreciate in value while profits were taken almost immediately.

Defendant suffers from bipolar disorder. Plaintiff was aware of his friend's condition.

Judge Dumont found no dispute of material fact relevant to the debt defendant owed plaintiff on the loan and note and entered judgment in plaintiff's favor in the amount of $35,000. With respect to defendant's defenses and counterclaim, Judge Dumont concluded that its essence was an allegation of professional negligence. He granted summary judgment on the ground that the evidence did not support a finding of a relationship that would give rise to a duty.

We agree that there is no basis for imposition of a duty disclosed by the evidence submitted on the motion in this case. "It is well settled that the existence of a duty is a question of law to be determined by the court as a matter of fairness and policy and by 'weighing the relationship of the parties, the nature of the risk, and the public interest in the proposed solution.'" Ranier v. Frieman, 294 N.J. Super. 182, 189 (App. Div. 1996) (quoting Strachan v. John F. Kennedy Mem'l Hosp., 109 N.J. 523, 529 (1988)).

Defendant provides no legal authority that would support imposition of a duty on the facts of this case. He relies on this court's decision in Ranier to argue that we should find a duty to give sound investment advice based on the relationship and position of the parties -- plaintiff's employment in the investment field, his friendship with defendant, his knowledge of defendant's disorder and his prior loan to defendant. In Ranier we held that "a physician retained . . . to examine a claimant for . . . disability benefits has a duty to the examinee to exercise reasonable professional care in rendering a diagnosis . . . at least with respect to the symptoms and complaints on which the examinee has based the disability claim." Id. at 184. We see no comparison between the circumstances we addressed in Ranier and this case. Here there is no evidence that plaintiff rendered any professional service or opinion in connection with defendant's investments.

We decline to consider defendant's claim that the judge erred in excluding his expert report. That report, which purported to address defendant's losses and the quality of advice that those losses reflected, is irrelevant to the question whether plaintiff owed defendant a duty.

Affirmed.

 

The complaint included additional counts that were dismissed. Because plaintiff has not filed a cross-appeal, we do not discuss them.

(continued)

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A-2330-05T1

August 14, 2006