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.
OPINION & ORDER
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
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.
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).
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).
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).
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.
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).
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).
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).
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).
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 ...