ESTATE OF JAMES A. RUSSICK et al v. KOENIG et al

Filing 24

OPINION filed. Signed by Judge Noel L. Hillman on 12/23/2015. (drw)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
ESTATE OF JAMES A. RUSSICK,
GAIL RUSSICK, Executrix
on behalf of the
Estate of James A. Russick,
and GAIL RUSSICK,
individually,
Plaintiffs,
v.
TOM KOENIG and
ANNE MARIE KOENIG,
Defendants.

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Civ. A. No. 13-7773(NLH)(AMD)

OPINION

APPEARANCES
RICHARD T FAUNTLEROY
RICHARD T. FAUNTLEROY, P.C.
1525 SOUTH MAIN ST.
PLEASANTVILLE, NJ 08232
On behalf of plaintiffs
MICHAEL W. KULAKOWSKI
POWELL, TRACHTMAN, LOGAN, CARRLE & LOMBARDO, P.C.
1814 EAST ROUTE 70
SUITE 350
CHERRY HILL, NJ 08003
On behalf of defendant Tom Koenig
HILLMAN, District Judge
Defendants Tom Koenig and Anne Marie Koenig are spouses who
obtained a loan, in the amount of $188,000.00, from Mrs.
Koenig’s parents in New Jersey in order to build a home in
Tennessee.

Mrs. Koenig’s father passed away, and Mrs. Koenig’s
1

mother, Gail Russick, as executrix of James Russick’s estate,
has filed this instant action against Mr. and Mrs. Koenig to
recover the balance of the unpaid loan, which was financed by a
home equity loan on the Russick’s New Jersey home. 1

Mr. Koenig

disclaims that he had any involvement whatsoever with Mrs.
Koenig obtaining the loan, or agreeing to any repayment terms.
Because of his purported lack of involvement, Mr. Koenig filed a
motion to dismiss the complaint against him for lack of personal
jurisdiction.

The Court denied that motion without prejudice,

directed the parties to undertake a limited period of
jurisdictional discovery, and permitted Mr. Koenig to refile his
motion.

Presently before the Court is Mr. Koenig’s renewed

motion to dismiss for lack of jurisdiction.
The Court finds that the jurisdictional discovery and
subsequent briefing does not significantly alter the Court’s
analysis in its prior Opinion. (Docket No. 11.)

There, the

Court noted that legally married spouses maintain a special

This Court has jurisdiction over this matter pursuant to 28
U.S.C. § 1332 because there is complete diversity of citizenship
between the parties and the amount in controversy exceeds
$75,000. Plaintiffs, Gail Russick and her late husband James
Russick, are citizens of New Jersey, see 28 U.S.C. § 1332(c)(2)
(the legal representative of the estate of a decedent is deemed
to be a citizen of the same state as the decedent), and
defendants Anna Marie Koenig and Tom Koenig are citizens of
Tennessee.
2
1

status as a single unit in many areas of the law, and the
actions of a husband and wife cannot be separated from one
another as concretely as unrelated people or entities.
15-16.)

(Id. at

The Court also noted that Mr. Koenig’s affidavit

disclaiming any involvement with the loan could be considered
self-serving.

(Id. at 14.)

The Court recognized, however, that

Mrs. Koenig had not appeared in the case, and she did not
provide an affidavit regarding her version of events to counter
Mr. Koenig’s assertions.
In opposition to Mr. Koenig’s renewed motion, Mrs. Koenig
provides an affidavit to demonstrate her recollection of Mr.
Koenig’s involvement in the loan and his resulting connections
with New Jersey.

(Docket No. 21 at 18-20.)

Mrs. Koenig states,

“My contacts with my parents to borrow the money was with Tom’s
instruction and for the benefit of both of us to have the
construction of our home completed.”

(Id. at 20 ¶ 11.)

The

result of the jurisdictional discovery and supplemental briefing
is dueling affidavits, each with a self-interest to establish –
or refute – Mr. Koenig’s contacts with New Jersey.
As the Court set-forth in the prior Opinion, “[o]nce
challenged, the plaintiff bears the burden of establishing
personal jurisdiction.”

O’Connor v. Sandy Lane Hotel Co., Ltd.,

496 F.3d 312, 316 (3d Cir. 2007) (citing Gen. Elec. Co. v. Deutz
3

AG, 270 F.3d 144, 150 (3d Cir. 2001)).

In deciding a motion to

dismiss for lack of personal jurisdiction, the Court must
“accept all of the plaintiff’s allegations as true and construe
disputed facts in favor of the plaintiff.”

Carteret Sav. Bank

v. Shushan, 954 F.2d 141, 142 n.1 (3d Cir.), cert. denied, 506
U.S. 817 (1992) (citations omitted).
Gail Russick claims in her complaint that both Koenigs
requested the loan in New Jersey, they received the proceeds
from New Jersey, and they made payments to New Jersey.

Even

accepting as true Mr. Koenig’s position that he had no
involvement with the particulars of the loan agreement or the
disbursement of the proceeds of the loan, the loan was obtained
- by “purposeful availment” - from New Jersey and used for the
benefit of building a marital home for him to share with his
wife. 2

That Mr. Koenig claims that he was threatened by Mrs.

Koenig into building the home, and blames Mrs. Koenig for the
deterioration of their marriage as a result of the construction

2

Mr. Koenig relates that Mrs. Koenig threatened him with divorce
unless he constructed her dream home, and he describes the
marital problems that arose as a result of their financial
problems relating to the construction of the new home. (Docket
No. 18-9.) Mr. Koenig states that he and Mrs. Koenig are now
separated. At the time the loan was obtained and the subsequent
following years, Mr. and Mrs. Koenig were, and have remained,
legally married.
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of the home, cannot negate the fact that the construction was a
joint venture by legally married spouses. 3
Exercising personal jurisdiction over Mr. Koenig under
these circumstances cannot be found to offend “‘traditional
notions of fair play and substantial justice.’”

Int’l Shoe Co.

v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v.
Meyer, 311 U.S. 457, 463 (1940)).

Moreover, the exercise of

personal jurisdiction over Mr. Koenig in New Jersey satisfies
the shared interest of interstate judicial systems to not permit
a marital dispute to supplant the Federal Rules and Supreme
Court precedent with regard to contracts formed in one state for
the benefit received in another state.

Fed. R. Civ. P.

4(k)(1)(A) (a defendant is subject to the jurisdiction of a
United States district court if the defendant “is subject to the
jurisdiction of a court of general jurisdiction in the state
where the district court is located”); Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 477 (1985). 4

3

As the Court pointed out in the prior Opinion, Mr. Koenig has
advanced a kind of “innocent spouse” argument similar to the
defense in marital tax delinquency cases, but a high burden is
placed on a spouse to prove such an “innocent spouse” defense.
4

See, e.g., Essex Eng'g Co. v. Credit Vending, Inc., 732 F.
Supp. 311, 315 (D. Conn. 1990) (finding that the court could
exercise personal jurisdiction over Mrs. Merrill, explaining,
“As the spouse who took the much more active role in the
[marital] community's financial and business dealings, Merrill
5

Accordingly, in supplement to the Opinion issued on Mr.
Koenig’s first motion to dismiss, the Court will again deny Mr.
Koenig’s second motion to dismiss for lack of personal
jurisdiction.

The Court is hopeful that the parties can now

move forward to efficiently resolve this contract dispute that
has unfortunately pitted mother against daughter and son-in-law,
and husband against wife. 5
An appropriate Order will be entered.

Date: December 23, 2015
At Camden, New Jersey

s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.

acted as his wife's agent with respect to their community
property. Although wife did not take an active role in the
negotiations in issue, she was aware of them both individually
and as a director of CVI and stood to benefit, as a member of
the [marital] community, from the business venture if
successful. Mr. Merrill conducted the business in question for
and on behalf of the [marital] community and for its benefit.
As part of the [marital] community, wife stood to benefit by the
enhancement of the [marital] community's property. Thus, Mr.
Merrill was acting for her benefit and thus on her behalf in his
conduct of the business in issue.”).
5

Plaintiffs are suing Mr. and Mrs. Koenig jointly and severally.
Whether Mr. Koenig will ultimately be responsible for the loan
if judgment is entered in plaintiffs’ favor will be determined
in a family court proceeding. See, e.g., Alford v. Alford, 120
S.W.3d 810, 813 (Tenn. 2003) (holding that “marital debts” are
all debts incurred by either or both spouses during the course
of the marriage up to the date of the final divorce hearing, and
guidelines in the equitable distribution of marital debt insure
the fairest possible allocation of debt, and protect the spouse
who did not incur the debt from bearing responsibility for debts
that are the result of personal excesses of the other spouse).
6