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Estate of Russick v. Koenig

United States District Court, D. New Jersey

April 23, 2018



          BENJAMIN A. ANDERSEN POWELL TRACHTMAN, P.C., On behalf of Defendant Tom Koenig


          NOEL L. HILLMAN, U.S.D.J.

         Presently before the Court is the motion of Defendant Tom Koenig for summary judgment in his favor on Plaintiffs' claim that he is responsible for an unpaid loan. For the reasons expressed below, Defendant's motion will be denied.


         Defendants Tom Koenig (“Koenig”) and Anna Marie Koenig (collectively “the Koenigs”), as husband and wife, obtained $188, 000.00 from Anna Marie Koenig's parents in New Jersey in order to build a home in Tennessee.[1] Anna Marie Koenig's father passed away, and her mother, Gail Russick, as executrix of James Russick's estate, filed suit against the Koenigs[2] to recover the balance of what she considers to be a loan, which was financed by a home equity loan on the Russick's New Jersey home.[3]

         Tom Koenig has moved for summary judgment in his favor, arguing that not only did he have no involvement in obtaining the money from the Russicks, discovery has revealed that Mr. Russick unilaterally gifted his daughter the money without any expectation of repayment, other than his daughter's payment of the monthly interest. Koenig further contends that when Anna Marie Koenig stopped paying the interest payments, her parents never sought to enforce the monthly interest payments, which evidences the purported loan was actually a gift, and otherwise constitutes a waiver of any claim to subsequent interest payments.

         In contrast to Tom Koenig's position, Plaintiffs contend that disputed issues of material fact preclude summary judgment on Plaintiffs' claim that the money was a loan and not a gift, and that there was no waiver of Plaintiffs' contractual rights against the defendants.[4] To support their position, Plaintiffs point to Anna Marie Koenig's testimony about her conversations with her father and her husband about the loan and intentions that the $188, 000 was to be repaid, as well as Gail Russick's understanding of the agreement. Plaintiffs also show the monthly payments of the loan interest to James Russick as part of the terms of the loan, and Tom Koenig's three written statements acknowledging the loan and his and his wife's obligation to repay it.


         A. Subject matter jurisdiction

         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.

         B. Standard for Summary Judgment

         Summary judgment is appropriate where the Court is satisfied that the materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations, admissions, or interrogatory answers, demonstrate that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986); Fed.R.Civ.P. 56(a).

         An issue is “genuine” if it is supported by evidence such that a reasonable jury could return a verdict in the nonmoving party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is “material” if, under the governing substantive law, a dispute about the fact might affect the outcome of the suit. Id. In considering a motion for summary judgment, a district court may not make credibility determinations or engage in any weighing of the evidence; instead, the non-moving party's evidence “is to be believed and all justifiable inferences are to be drawn in his favor.” Marino v. Industrial Crating Co., 358 F.3d 241, 247 (3d Cir. 2004)(quoting Anderson, 477 U.S. at 255).

         Initially, the moving party has the burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has met this burden, the nonmoving party must identify, by affidavits or otherwise, specific facts showing that there is a genuine issue for trial. Id. Thus, to withstand a properly supported motion for summary judgment, the nonmoving party must identify specific facts and affirmative evidence that contradict those offered by the moving party. Anderson, 477 U.S. at 256-57. A party opposing summary judgment must do more than just rest upon mere allegations, general denials, or vague statements. Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001).

         C. Analysis

         With regard to the issue of whether the $188, 000 was a loan or a gift, there are three elements of a valid and irrevocable gift: (1) actual or constructive delivery; (2) donative intent; and (3) acceptance. Bhagat v. Bhagat, 84 A.3d 583, 593 (N.J. 2014) (citations omitted). The burden of proving an inter vivos gift is on the party who asserts the claim, and the recipient must show by “clear, cogent and persuasive” evidence that the donor intended to make a gift. Id. at 594 (citations omitted). The exception to this burden is when the transfer is from a parent to a child. In that case, a presumption arises that the transfer is a gift, and the initial burden of proof on the party claiming a gift is slight. Id. (citations omitted).

         This parent-child gift presumption is rebuttable by evidence of a contrary intent. Such evidence must meet the clear and convincing evidence standard of proof to rebut the presumption, and it must be “antecedent to, contemporaneous with, or immediately following the transfer.” Id. at 597. “In addition, a party seeking to rebut the presumption may also adduce ...

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