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Long v. Barrett

United States District Court, D. New Jersey

April 3, 2018



          KEVIN McNULTY United States District Judge.

         Plaintiffs Eugene J. Long and Yvette Long sue defendants Ruben Barrett, Erich Hans, Athena Mata, Maria Mata, and Logistic Oil regarding a loan agreement. The Longs allegedly lent Athena Mata, Maria Mata, and Logistic Oil $25, 000. Barrett, who receives monthly dividends from his tribe, allegedly pledged his monthly dividends as collateral for the loan. Erich Hans, the tribe's Director of Treasury, allegedly agreed to process the assignment of Barrett's dividends for that purpose. The Longs have not been repaid and have not received any dividends by assignment from Barrett. The Complaint asserts claims of breach of contract, unjust enrichment, conversion, breach of fiduciary duty, breach of duly of care, fraud, civil conspiracy, and intentional infliction of emotional distress. Now before the court is the motion of defendant Erich Hans to dismiss for lack of personal jurisdiction, lack of subject matter jurisdiction, and improper venue.

         I. BACKGROUND[1]

         Plaintiffs Eugene J. Long and Yvette Long ("the Longs") of New Jersey sue defendants regarding a loan agreement. (Compl. ¶¶ 1-2). In around September 2012, defendant Maria Mata sought a loan from the Longs. (Compl. ¶ 19). Maria Mata is a Florida resident and is the actual or beneficial owner of Logistic Oil, Ltd, Inc. ("Logistic Oil") (Compl. ¶¶ 9-10). Maria Mata represented that she needed $25, 000 for a short period of time to conduct a series of oil trading transactions expected to result in substantial profits. (Compl. ¶¶ 19-21). Maria Mata stated that the loan would be secured by strong collateral. (Compl. ¶ 21). Athena Mata, the daughter of Maria Mata, is a Florida resident and President of Logistic Oil. She allegedly made the same representations. (Compl. ¶¶ 7-8, 25).

         The Longs withdrew Yvette Long's entire IRA account to make the loan to Logistic Oil. (Compl. ¶¶ 23-26). The Longs had no other savings or liquid assets or income besides Social Security. (Compl. ¶ 26). They relied on the promises of Maria, Athena, and Logistic Oil that die money would be returned quickly and that collateral would secure the payment of the principal and dividend. (Compl. ¶¶ 25-26). The Longs needed the loan paid back quickly to avoid taxes and penalties for withdrawing from the IRA account. (Compl. ¶ 25). The Longs represented that they "could not afford to take any risk" with this money. (Compl. ¶ 36).

         Defendant Ruben Barrett ("Barrett"), currently a North Carolina resident, agreed to provide the collateral for the loan agreement. (Compl. ¶¶ 3, 28, 30). Barrett is an enrolled member of the Viejas Band of Kumeyaay Indians. (Compl. ¶ 4). The tribe disburses monthly dividend income to tribe members, including Barrett, from its casino revenues. (Compl. ¶ 32). Barrett stated that tribe members routinely assign their tribal dividend income as additional collateral for car loans, mortgages, and other credit purchases. (Compl. ¶ 34).

         The loan agreement provided that Yvette Long would lend Logistic Oil $25, 000. (Compl. ¶ 27). The essential terms of the agreement, documented in a promissory note and escrow agreement, provided the following: (a) full payment of the principal and dividend within 28 days; (b) a $10, 000 dividend to Yvette Long; (c) a $10, 000 increase in the dividend if the loan were not repaid within 28 days; (d) the loan funds and repayment would flow through the Escrow Agent's trust account; (e) the Escrow Agent would be compensated $5, 000 from Logistic Oil; (f) the collateral would be provided by Barrett by the assignment of his monthly tribal income; (g) Barrett was the guarantor of the payments to Yvette Long and the Escrow Agent, Anthony Sposaro; (h) Barrett pledged and assigned $4, 017.50 per month from his dividend income to be paid to the Escrow Agent and Yvette Long if the loan defaulted; (i) in case of default, the $5, 000 Escrow-Agent fee would reduce Yvette Long's return; and (j) in case of loan default, the Escrow Agent could arrange payment of Barrett's tribal dividend income with the Viejas's Directory of Treasury. (Compl. ¶¶ 28, 30). The loan agreement did not include a default interest rate. (Compl. ¶ 29). A separate agreement provided that Barrett would be compensated $10, 000 for providing the collateral. (Compl. ¶ 31).

         Erich Hans ("Hans"), a California resident, is the Director of Treasury for the Viejas Band of Kumeyaay Indians. (Compl. ¶¶ 5-6). Barrett and Hans allegedly prepared the assignment that was attached to the Escrow Agreement. (Compl. ¶ 35). Barrett produced a letter from Hans that reported Barrett's monthly tribal income in 2011 and 2012. (Compl. ¶ 38). Barrett also produced an email from Hans stating that Hans would give the Viejas Tribal Council notice of the assignment. (Compl. ¶ 39).

         The Longs withdrew $25, 000 from Yvette Long's IRA account and deposited it with the Escrow Agent. (Compl. ¶ 40). On October 3, 2012, the Escrow Agent was in possession of Yvette Long's funds, the signed promissory note, and the signed escrow agreement. (Compl, ¶ 41). Documentation of the assignment of the collateral was provided to Athena Mata, Maria Mata, and Logistic Oil. (Compl. ¶ 41).

         Athena Mata, Maria Mata, and Logistic Oil did not repay the loan within 28 days as required by the promissory note. (Compl. ¶ 42). Yvette Long provided a formal notice of default to them in a letter dated February 5, 2013 and provided a copy of the letter to the Escrow Agent. (Compl. ¶ 43). The Escrow Agent then notified Hans of the circumstances and sent Hans instructions for forwarding Barrett's tribal dividend income. (Compl. ¶¶ 44-45).

         Hans did not respond to the Escrow Agent and Hans did not forward Barrett's tribal dividend income. (Compl. ¶ 46). Hans did not respond to multiple phone calls and emails from the Escrow Agent. (Compl. ¶¶ 47-48). During this time period, Barrett told the Longs that the payments would be forthcoming soon. (Compl. ¶ 49). Barrett said that Hans had not responded because tribal elections were in process and no one could process the assignment until the new Director of Treasury was appointed. (Compl. ¶ 50). Barrett represented that the payments would be forthcoming by late March. (Compl. ¶¶ 49, 51).

         When the Longs did not receive payments in March, Eugene Long called the Viejas Tribal Council. (Compl. ¶ 54). Hans answered the phone and stated that he was still the tribe's Director of Treasury. (Compl. ¶ 54). Hans said no transition had taken place or had ever been planned. (Compl. ¶ 54). Eugene Long asked Hans why he had not responded to the Escrow Agent. (Compl. ¶ 57). Hans replied, "Mr. Barrett told me the matter had been settled." (Compl. ¶ 57). Hans stated that he would contact the Escrow Agent. (Compl. ¶¶ 58-59).

         As of April 9, 2013, Hans had not contacted the Escrow Agent. (Compl. ¶¶ 59-60). On that day, Yvette Long called the Viejas Tribal Council and spoke with Hans. (Compl. ¶ 60). On this phone call, Hans stated that he had not received any voluntary garnishment letter from Barrett. (Compl. ¶ 62). Later that afternoon, Eugene Long sent Hans an email reporting the contents of Yvette Long's conversation with Hans. (Compl. ¶ 63). Eugene Long then called Barrett about this matter, but Barrett stated reasons why he would not pay, including that the guarantee had expired. (Compl. ¶¶ 64-65).

         The next day, April 10, 2013, Hans responded to the Longs' email. (Compl. ¶ 66). Long stated, "When I informed Mr. Barrett of the reported default, I asked him if I should initiate the per capita garnishment as indicated in his voluntary garnishment letter. He (Barrett) stated that the reported default was erroneous, and that I was not to initiate the per capita garnishment." (Compl. ¶ 67).

         The Longs and the Escrow Agent have not received payment. (Compl. ¶¶ 79-80). Since Yvette Long was not repaid in a timely fashion, she incurred a $10, 000 fine from the IRS for withdrawing and not replacing funds in her IRA account. (Compl. ¶ 81). The Longs lost their home in foreclosure and have been unable to pay their bills. (Compl. ¶¶ 82, 85). The default and the accompanying problems have caused the Longs anxiety, depression, strife, and other problems. (Compl. ¶¶ 84, 86).

         On August 3, 2017, Eugene and Yvette Long filed a complaint against Barrett, Hans, Logistic Oil, Athena Mata, Maria Mata, and John Does #1-5. (ECF No. 1). ...

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