Patricia Hardy Johnson was the mother of three daughters: Kathy Wolens, Deirdre Mistri, and Carol Alexander. Prior to her death, Patricia Johnson maintained several investment accounts with Citibank worth nearly $850,000 that were managed by Morgan Stanley Smith Barney (MSSB).

Ten years ago when she fell ill, Ms. Johnson sent a typewritten letter to her account manager at MSSB requesting that they change her individual accounts to joint accounts with her daughter, Deirdre. Consequently, upon Patricia Johnson’s death four months later, Deirdre had the right of survivorship in the funds.

Upon her mother’s death, Kathy filed a lawsuit against both MSSB, and her mother’s account manager, William Gibson, claiming that the defendants owed a duty to her, even though she was not a customer of the financial institution. She alleged that the defendants improperly converted her mother’s account to joint accounts based solely on a letter addressed to Gibson. Kathy claimed that the authenticity of the letter was questionable, and she argued that it did not explicitly state that a right of survivorship would be conveyed to her sister.

The account manager testified that it was MSSB’s usual protocol, when a customer asks to create a joint account, to contact and obtain the signatures of both parties on the new account agreement. Mr. Gibson did not have a recollection as to whether such an agreement was signed by the parties in this matter. In presenting her case, Kathy’s entire assertion rested on the fact that MSSB deviated from its own internal policies and procedures.

To learn the outcome of the case, how the whole situation could have been avoided, and why we meet with parents alone, click the "Read more" button below.