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Ife Share Collateral Holdings, LLC v. Strauss

United States District Court, Eighth Circuit

May 31, 2013

LIFE SHARE COLLATERAL HOLDINGS, LLC, Plaintiff,
v.
MARLENE STRAUSS, an Individual, Defendant.

Adam M. Simon, The Simon Law Firm PC and Thomas H. Schaefer, Erstad & Riemer PA, Counsel for Plaintiff.

Kelly K. Pierce, Ross & Orenstein LLC and Tab K. Rosenfeld, Rosenfeld & Kaplan LLP, Counsel for Defendant.

MEMORANDUM OF LAW & ORDER

MICHAEL J. DAVIS, Chief District Judge.

I. INTRODUCTION

This matter is before the Court on Defendant Marlene Strauss's motion to dismiss under Federal Rule of Civil Procedure 12(b)(2). [Docket No. 7] The Court heard oral argument on March 22, 2013. For the reasons articulated below, the Court denies Defendant's motion to dismiss.

II. BACKGROUND

A. Factual Background

1. Parties

Plaintiff Life Share Collateral Holdings ("LSCH") is a limited liability company organized under the laws of the state of Delaware. (Compl. ¶ 2.) LSCH's principal place of business is Chicago, Illinois. (Id.) David B. Simon is the sole member of LSCH and is domiciled and resides in Chicago, Illinois. (Id. at ¶ 3.) LSCH is the successor-in-interest to the original lender of the finance loans at issue in this case. (Id. at ¶ 4.) The original lender is Life Share Financial, LLC. (Id.)

Defendant Marlene Strauss is domiciled and resides in Palm Beach, Florida. (Id. at ¶ 5.) On November 7, 2008, Strauss formed the Marlene Strauss Irrevocable Trust (the "Strauss Trust"). (Id. at ¶ 8.) The Strauss Trust was formed in the state of Minnesota and is governed by the laws of the state of Minnesota. (Id.) Wells Fargo Bank, N.A. is the Trustee of the Strauss Trust, and the Trustee's principle place of business is in Minneapolis, Minnesota. (Id.)

2. The Loan Documents

On January 8, 2009, the Strauss Trust, as Borrower, entered into a Loan Agreement with Life Share Financial, LLC, as Lender. (Id. at ¶ 11.) Strauss also executed the Loan Agreement. (Id.) On the same day, Strauss”in her individual capacity”executed a personal guaranty (the "Guaranty") in favor of Life Share Financial in order to induce Life Share Financial to make the Loan to the Strauss Trust. (Id. at ¶ 12.)

The Loan Agreement contains a "Consent to Jurisdiction" clause that states:

All judicial proceedings brought against Borrower arising out of or relating to this Agreement or any other Loan Document, or any of the obligations of Borrower hereunder or thereunder, may be brought in any state or federal court of competent jurisdiction in the State of Minnesota. By executing and delivering this Agreement, Borrower, for itself and in connections with its properties, irrevocably (a) accepts generally and unconditionally the nonexclusive jurisdiction and venue of such courts; (b) waives any defense of forum non conveniens; (c) agrees that service of all process in any such proceeding in any such court may be made by registered or certified mail, return receipt requested, to Borrower at its address provided in accordance with Section 10.1; (d) agrees that service as provided in clause (c) above is sufficient to confer personal jurisdiction over Borrower in any such proceeding in any such court and otherwise constitutes effective and binding service in every respect; and (e) agrees that Lender retains the right to serve process in any other manner permitted by law or to bring proceedings against Borrower in the courts of any other jurisdiction.

(Ex. 1 to Simon Aff., Loan and Security Agreement at § 10.12.) The Loan Agreement also contains a clause stating that Minnesota laws shall govern the parties:

This Agreement and the rights and obligations of the parties hereunder shall be governed by, and shall be construed and enforced in accordance with, the laws of the State of Minnesota.

(Id. at § 10.11.)

The Guaranty signed by Strauss contains no clause consenting to Minnesota jurisdiction. The Guaranty does include a clause stating that the rights and obligations of the parties are governed by the laws of Minnesota:

This Personal Guaranty shall be interpreted and the rights and liabilities of the parties hereto determined in accordance with the internal laws and decisions of the State of Minnesota.

(Ex. 2 to Simon Aff., Personal Guaranty at 4.)

The Loan was meant to provide financing for the payment of a life insurance policy that the Strauss Trust purchased on the life of Strauss on December 26, 2008. (Compl. at ¶¶ 9, 11.) The insurance policy was issued to the Strauss Trust in ...


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