MARGARET A. DONLEAVY et al. v. MICHAEL R. CASEY, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1378-05T11378-05T1

MARGARET A. DONLEAVY and

BARBARA E. DONLEAVY,

Plaintiffs-Appellants,

v.

MICHAEL R. CASEY; FRANCES PRIMIANO

CASEY; DMC PROPERTIES, LTD.; JFC, LTD.;

MICHAEL R. CASEY ASSOCIATES TAX CONSULTANTS;

MIDAS FINANCIAL PLANNERS OF AMERICA, INC.;

MIDAS FINANCIAL PLANNING SERVICES GROUP

f/k/a MIDAS FINANCIAL SERVICES GROUP; MIDAS

INVESTMENT FUND; MIDAS NO-LOAD FUNDS, INC.;

MIDAS PARK RIDGE TENANTS IN COMMON (f/k/a

295 SPRING VALLEY ROAD ASSOCIATES); MIDAS

REALTY CORPORATION OF AMERICA, INC.; MIDAS

REALTY DEVELOPMENT CORPORATION; MIDAS

SECURITIES I, L.P.; MIDAS SECURITY INVESTORS

OF NEW JERSEY (f/k/a SECURITY INVESTORS OF

NEW JERSEY) (f/k/a MICHAEL CASEY ENTERPRISES);

MIDAS TRADING; MIDAS WANTAGE TOWNSHIP L.P.;

MIDAS WORKING CAPITAL FUND, G.P.; MIDAS

1031 CORPORATION; REAL ESTATE INVESTMENTS, INC.;

53 GRIST MILL LANE; 126 FRANKLIN AVENUE

ASSOCIATES; 126 FRANKLIN AVENUE ASSOCIATES

TENANTS IN COMMON; 140 WEST ENGLEWOOD AVENUE

TENANTS IN COMMON; 300 EAST HOMESTEAD AVENUE

ASSOCIATES TENANTS IN COMMON; 329 TENANTS IN

COMMON; 1266 TEANECK ROAD ASSOCIATES; 1266

TEANECK ROAD ASSOCIATES TENANTS IN COMMON;

RETIREMENT ACCOUNTS, INC., a subsidiary of

Fiserv, Inc.,

Defendants,

and

INTERCHANGE BANK,

Defendant-Respondent.

_______________________________________

 

Argued October 12, 2006 - Decided December 26, 2006

Before Judges Wefing and C.S. Fisher.

On appeal from Superior Court of New

Jersey, Law Division, Bergen County,

No. L-11128-04.

Joseph A. Venti argued the cause for

appellants.

Albert L. Cohn argued the cause for

respondent (Cohn Lifland Pearlman

Herrmann & Knopf, attorneys; Mr.

Cohn, of counsel; Audra DePaolo, on

the brief).

PER CURIAM

Plaintiff Margaret A. Donleavy appeals from a trial court order granting summary judgment to defendant Interchange Bank. After reviewing the record in light of the contentions advanced on appeal, we have concluded that the order under review must be affirmed.

Mrs. Donleavy was introduced to defendant Michael R. Casey by her daughter, plaintiff Barbara E. Donleavy for whom he had prepared tax returns. Ms. Donleavy introduced Mr. Casey to her mother following the death of her father in 1995 because she believed her mother, a sixty-eight-year-old widow with a high school education, needed a financial advisor. Mrs. Donleavy's relationship with Mr. Casey proceeded uneventfully for several years. In 2002, however, he suggested to her that she obtain a loan to assist her with certain repairs to her house and for her daughter's anticipated wedding. Mrs. Donleavy demurred at first, saying she did not have the ability to repay a loan. He eventually prevailed upon her, however, assuring her that her income would be sufficient.

Mr. Casey submitted the loan application to Interchange Bank. Mrs. Donleavy's only relationship with Interchange was that she had opened a one thousand dollar certificate of deposit some years earlier when it had opened a local branch. In the first application prepared by Mr. Casey, the requested loan was $150,000. After reviewing Mrs. Donleavy's income and assets, the bank declined the loan but stated it would lend her $50,000. Mr. Casey, together with certain bank personnel, revised the loan application by "grossing up" Mrs. Donleavy's income. Mr. Casey also included in the application a statement that Mrs. Donleavy intended to take an annual withdrawal of $15,000 a year from an Individual Retirement Account she maintained. This, however, was not accurate; Mrs. Donleavy had no such intent. The result of these changes was to indicate that Mrs. Donleavy had a significantly greater income stream available to her than was in fact the case. In addition, rather than requesting a loan for $50,000, which the bank had indicated it would approve, Mr. Casey sought a loan of $100,000.

Mrs. Donleavy, who trusted Mr. Casey based upon his prior work for her, signed the loan application papers he had prepared. She had no direct dealings with the bank and was not aware of the contents of the application. Based upon the revised application, Interchange Bank approved a loan of $100,000, secured by Mrs. Donleavy's residence in River Vale, and forwarded the proceeds to Mr. Casey. Mrs. Donleavy, under his direction, signed the funds over to entities under his control. Approximately one year after the loan closed, Mrs. Donleavy learned that the Attorney General of New Jersey had commenced an action against Mr. Casey, alleging he had violated New Jersey's securities laws. Mrs. Donleavy, who has not recovered her money and remains obligated to Interchange Bank, commenced this action, in which she has obtained a default judgment against Mr. Casey.

Two of the complaint's eight counts sought relief against Interchange. In the Sixth Count, plaintiff alleged that the bank was negligent in the manner in which it had handled and approved the loan request Mr. Casey had submitted on her behalf, and it sought damages. In the Seventh Count, plaintiff sought rescission of the home equity loan, alleging that because of the inaccuracies and misrepresentations contained in the loan application, the loan was a product of a material mistake on the bank's part.

After a period of discovery, the bank moved for summary judgment on these two counts. Plaintiff has appealed from the trial court order granting the bank's motion. She contends on appeal that the trial court erred in dismissing her claim of negligence against Interchange Bank. She makes no assertion on appeal relating to the contract claim she pled below, and we thus deem that claim to be abandoned. Triffin v. Mellon PSFS, 372 N.J. Super. 221, 226 (App. Div. 2004); Jones v. Aluminum Shapes, Inc., 339 N.J. Super. 412, 415 n.1 (App. Div. 2001).

In our judgment, it is clear that despite plaintiff's best efforts to demonstrate to the contrary, under the state of the law in New Jersey, plaintiff does not have a cognizable claim of negligence against Interchange Bank.

Any negligence claim is premised upon an alleged breach of duty, a departure from the standard of care owed to another. "To recover under a negligence theory, it is paramount that a defendant first owe the plaintiff a duty." Kernan v. One Washington Park Urban Renewal Assoc., 154 N.J. 437, 445 (1998); Globe Motor Car v. First Fidelity, 273 N.J. Super. 388, 393 (Law Div. 1993) ("Generally, to establish a negligence claim there must be a finding that the defendant owed some duty to the party complaining and a breach of that duty."), aff'd, 291 N.J. Super. 428 (App. Div.), certif. denied, 147 N.J. 263 (1996).

The relationship between plaintiff and the bank, however, was that of debtor and creditor, and they thus dealt with each at arms' length. We have recognized that the interests of the parties on the opposite side of a loan transaction are inherently adversarial: the lender wishes to obtain the greatest security and the highest interest rate while the borrower seeks to obtain the greatest amount of money at the lowest cost.

"[I]t would be anomalous to require a lender to act as a fiduciary for interests on the opposite side of the negotiating table because their respective positions are essentially adversarial." United Jersey Bank v. Kensey, 306 N.J. Super. 540, 553 (App. Div. 1997) (citations omitted) (holding that plaintiff bank had no duty to disclose to defendant appraisals valuing assets at significantly less than the amount at which defendant purchased them). "[I]mposing a duty on a bank that would obligate it to be responsible for its depositor's financial affairs would be impractical as a matter of public policy." Globe Motor, supra, 273 N.J. Super. at 394.

In United Jersey Bank, supra, Judge Baime, writing for the court, noted the three contexts in which a duty to disclose may arise: where the parties have a fiduciary relationship; where special circumstances necessarily imply the presence of trust and confidence; and contracts which are "intrinsically fiduciary" in nature. 306 N.J. Super. at 551. None of those three circumstances exist in the present matter.

Further, in all of his dealings with Interchange, Mr. Casey was acting as plaintiff's agent, not the agent of Interchange. There is nothing in the record before us which would warrant a conclusion that Interchange should be held responsible for Casey's actions.

The order under review is affirmed.

 

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A-1378-05T1

December 26, 2006