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Long v. Barrett

United States District Court, D. New Jersey

September 6, 2018

EUGENE J. LONG and YVETTE LONG, Plaintiffs,
v.
RUBEN M. BARRETT, ERICH C. HANS, ATHENA MATA, MARIA L. MATA, LOGISTIC OIL LTD, INC., JOHN DOES #1-5, Defendants.

          OPINION & ORDER

          KEVIN MCNULTY, U.S.D.J.

         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 L. 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 failed 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 duty of care, fraud, civil conspiracy, and intentional infliction of emotional distress.

         In a prior Opinion (ECF no. 27) and Order (ECF no. 28) I granted the motion of defendant Erich Hans, a tribal official, to dismiss the complaint on grounds of sovereign immunity. Now before the court is the plaintiffs' motion for a default judgment (ECF no. 32) as to the other defendants, who are not tribal officials and who have not appeared or answered the Complaint. As to those other defendants, Ruben Barrett, Athena Mata, Maria L. Mata, and Logistic Oil Ltd, Inc., the clerk has entered default. For the reasons stated herein, the motion for a default judgment against those four defendants will be granted.

         I. THE COMPLAINT

         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 L. Mata ("Maria," to distinguish her from Athena Mata) sought a loan from the Longs. (Compl. ¶ 19). Maria is a Florida resident and is die actual or beneficial owner of Logistic Oil, Ltd, Inc. ("Logistic Oil") (Compl. ¶¶ 9 10). Maria 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 stated that the loan would be secured by strong collateral. (Compl. ¶ 21). Athena Mata ("Athena"), the daughter of Maria, is President of Logistic Oil (and apparently a resident of the Polk County Jail in Bartow, Florida, at the time of service). Athena 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 the 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 at the time 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).

         Defendant Erich Hans ("Hans"), a California resident, is or was 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, Maria, and Logistic Oil. (Compl. ¶ 41).

         Athena, Maria, 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).

         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. U 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 made excuses, including a statement that "Mr. Barrett told me the matter had been settled." (Compl. ¶ 57). Hans later stated that he had never received a letter from Barrett authorizing voluntary garnishment. (Compl. ¶ 62). Eugene Long telephoned Barrett, who gave reasons why he would not pay, including that the guarantee had expired. (Compl. ¶¶ 64 65).

         On April 10, 2013, Hans wrote an email to the Longs stating that "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 ...


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