United States District Court, D. New Jersey
EUGENE J. LONG and YVETTE LONG, Plaintiffs,
RUBEN M. BARRETT, ERICH C. HANS, ATHENA MATA, MARIA L. MATA, LOGISTIC OIL LTD, INC., JOHN DOES #1-5, Defendants.
McNULTY United States District Judge.
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
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. ¶¶
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).
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).
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).
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).
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).
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).
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).
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).
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.
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. ¶
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).
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). ...