Eng v. Banta

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BARTON ENG and WENDEE ENG, Plaintiffs, v. TYLER BANTA, et al., Defendants.

Civil No. 22-00309 JAO-WRP

United States District Court, D. Hawaii

June 30, 2023

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT EWELL D. MILLER'S MOTION FOR SUMMARY JUDGMENT

JILL A. OTAKE UNITED STATES DISTRICT JUDGE

Plaintiffs Barton and WenDee Eng (collectively, “Plaintiffs” or “the Engs”) commenced this action against a number of defendants including: James Conaway and Lorraine Conaway (collectively, “the Conaways”); STL 100 LLC (“STL”); Tycon Yorba 151, LLC (“Tycon 151”); Tyler Banta (“Banta”); Tycon Properties, Inc.; Bert Miller; Shelby Holdings, LLC (“Shelby Holdings”); New Paradigm Financial, Inc. (“NPF”); St. Louis Redevelopment Company, LLC; GM Realty, Inc.; GM Realty Management, Inc.; and Giro Katsimbrakis (“Katsimbrakis”). Defendant Ewell D Miller (“Miller”), identified in the caption as Bert Miller, seeks summary judgment on all claims against him on the ground that no genuine issue of material fact exists as to his affirmative defense of lack of personal jurisdiction. For the following reasons, the Court GRANTS the Motion in part and DENIES it in part.

I. BACKGROUND

For the purposes of this Order, the Court recites only the facts pertinent to the claims against Miller and the entities for which he is alleged to have served as a president or member. Generally, Plaintiffs allege that Miller swindled money from them by making false promises related to, among other things, borrowing money from Plaintiffs, selling properties to Plaintiffs without transferring title to them, and promoting himself as part of a real estate investment team with his codefendants.

A. Facts

Unless otherwise indicated, the following facts are undisputed.

Miller resides in Tennessee and is the President of Defendant GM Realty, Inc., a Tennessee corporation that sometimes does business as GM Realty Property Management. ECF No. 87 (Miller's Concise Statement of Facts (“MCSF”)) at 2 ¶¶ 1-2; ECF No. 91 (Plaintiffs' Concise Statement of Facts (“PCSF”)) at 2 ¶¶ 1-2. He is also a member of Defendant Shelby Holdings, which has its principal office in Tennessee. MCSF at 2 ¶ 3; PCSF at 2 ¶ 3.

1. The Loans and Related Promissory Notes

It is unclear from the record how Miller and Barton Eng first met, but the parties agree that Miller met with Barton Eng in Tennessee sometime in 2016. PCSF at 3 ¶ 13; ECF No. 95 (Miller's Concise Statement of Facts in Reply (“MRCSF”)) at 4 ¶ 13. Thereafter, Miller signed two promissory notes (“the Notes”), which detailed money payments that would be made to an IRA account belonging to Barton Eng, presumably in exchange for loans. MCSF at 4 ¶ 13; ECF No. 18-1 at 2. The parties dispute whether Miller signed the Notes in his individual capacity or on behalf of Shelby Holdings. MRCSF at 4 ¶ 12. In any event, the notations “Unsecured Note,” “Straight Note,” and “State of Hawaii” appear at the top of each of the Notes, one of which is for $200,000 and the other for $130,000; both Notes were dated June 11, 2017. See ECF No. 18-1 at 2; id. at 18-2 at 2. Miller avers that on or about September 5, 2017, Shelby Holdings made a $20,000 payment in connection with the Notes. MCSF at 4 ¶ 20. Plaintiffs refute this statement, contending that “[they] never received a single payment on either Note.” PCSF at 4 ¶ 20.

Plaintiffs also state that Barton Eng executed the Notes in Hawai‘i and then transmitted the Notes by email to Miller. See ECF No. 91-7 at 2. Plaintiffs allege that Barton Eng executed the Notes in Hawai‘i pursuant to the overall client “plan” for the Plaintiffs. PCSF at 4 ¶ 13. Miller refutes these allegations, counter alleging that “he did not sign contract [sic] with Plaintiffs in his individual capacity and is unaware of and played no role in any ‘plan' concerning Plaintiffs,” MRCSF at 4 ¶ 13, and that Mr. Eng “emailed the signed notes to Defendant Banta, not Miller,” Id. at 5 ¶ 17. Based on these statements, it is unclear if Miller refutes that Barton Eng executed the Notes in Hawai‘i, but both parties agree that neither Miller nor Shelby Holdings prepared the Notes. PCSF at 4 ¶ 18.

2. The Property Management Agreement

Miller and Plaintiffs also signed a Property Management Agreement (“PMA”) on October 10, 2017. MCSF at 5 ¶ 23; PCSF at 4 ¶ 23. The parties dispute the genesis of the agreement.

According to Miller, sometime after signing the Notes, Barton Eng contacted him regarding GM Realty, Inc.'s property management services because Barton Eng was looking for someone to manage his properties in Missouri. MCSF at 4 ¶ 21. But Barton Eng asserts, “[t]his property management by Miller of Plaintiff's [sic] properties was part of a ‘plan' developed by Defendant Tyler Banta on behalf of the ‘team,' which included Miller.” PCSF at 4 ¶ 21. In any event, it is undisputed that, pursuant to the PMA, Defendant GM Realty, Inc. provided property management services for Plaintiffs' investment properties in St. Louis. MCSF at 4 ¶ 24; PCSF at 4 ¶ 24. It is also undisputed that Miller was not involved in the sale of any of the investment properties to Plaintiffs. MCSF at 5 ¶ 25; PCSF at 5 ¶ 25.

3. Miller's Hawai'i Trips

Miller traveled to Hawai‘i on three occasions-first, in May 2015, he visited the islands for pleasure, and in September 2017 and October 2019, he visited “in connection with presentations by Miller to potential investors concerning investment property opportunities outside of Hawaii.” MCSF at 2 ¶ 4; PCSF at 2 ¶ 4. Miller did not meet or converse with Plaintiffs during any of these trips. MCSF at 2 ¶ 6; PCSF at 2 ¶ 6.

Miller and Plaintiffs dispute the nature of Miller's involvement with a team of people who traveled to Hawai‘i to offer investment opportunities involving real estate. Plaintiffs aver that Miller's travel to Hawai‘i “was because he and his companies were an integral part of a ‘turnkey team' actively obtaining and soliciting business at events here in Hawaii.” PCSF at 2 ¶ 4. Miller denies being part of any “turnkey team” with the co-defendants in this case, but acknowledges that he had past business relationships with them. MRCSF at 2 ¶ 4.

Regarding the “team,” the parties at least agree that Miller attended an event at a hotel in Hawai‘i on October 5, 2019, along with several other co-defendants. PCSF at 2 ¶¶ 5, 7; MRCSF at 2 ¶¶ 4, 7. They also appear to agree that Miller himself did not say anything during the event about being part of the team; rather, Plaintiffs assert that “Miller did appear with members of the ‘team' and others so represented. However, he was already known to Plaintiffs as a partner in the ‘turnkey team.'” PCSF at 2 ¶ 7 (emphasis added). Miller denies ever representing that he was involved in any venture with the co-defendants. MRCSF at 2 ¶ 7.

B. Allegations in the Second Amended Complaint

In all but one of the claims, the SAC primarily alleges a series of torts, the gist of which involved all the defendants tricking Plaintiffs into investing their money to purchase rental properties in St. Louis for which Plaintiffs never actually received title and from which they received no benefit. Plaintiffs assert that they suffered their injuries in Hawai‘i:

Plaintiffs suffered injuries in the City and County of Honolulu, State of Hawaii from the tortious conduct of these Defendants in their breaches of fiduciary duties, negligence, and fraud conducted either in Hawaii or outside of Hawaii. Thus, Defendants committed torts either in Hawaii or outside of Hawaii that caused injuries in the State of Hawaii, and the Court has personal jurisdiction over these Defendants.

ECF No. 18 at 7 ¶ 36; see also id. at 7 ¶ 30 (“The injuries to Plaintiffs as alleged herein occurred in the State of Hawaii.”). In the one claim sounding in contract, Plaintiffs allege that Defendants Miller and Shelby Holdings failed to pay the Notes that had been executed between Barton Eng and Defendants Miller and Shelby Holdings. Id. at 12 ¶¶ 63-65.

More specifically, the SAC alleges the following claims against Miller:

Third Cause of Action: Enforcement of a Promissory Note. Plaintiffs here allege that Defendants Banta and Miller “persuaded Plaintiff Barton Eng to withdraw $330,000 in funds out of his self-directed IRA and lend those funds to Defendant Shelby Holdings” and he did so “[i]n early June of 2017.” Id. at 12 ¶¶ 59, 62.

Fourth Cause of Action: Misrepresentation. Plaintiffs do not indicate when the events occurred that give rise to this claim, but, with regard to Miller, Plaintiffs accuse him and Defendants GM Realty and GM Realty Management of representing to Plaintiffs that they had rehabbed Plaintiffs' property located at “4425 Michigan,” when they had not. Id. at 13 ¶ 70. Plaintiffs also accuse him, “GM Realty and/or GM Realty Management,” Defendant Katsimbrakis, and “St. Louis Redevelopment” of selling Plaintiffs a property at “3100 Mt Pleasant,” but failing to deliver title and falsely representing that the home was rehabbed, or would be rehabbed by GM Realty and/or GM Realty Management. Plaintiffs further accuse that group of Defendants of providing Plaintiffs with a “Scope of Work” document that related to a different property, along with pictures of the alleged rehabbed property only, and not of the property in its original condition. And Plaintiffs allege that the property was never rehabbed as represented to them. Id. at 13-14 ¶¶ 71-73.

Fifth Cause of Action: Fraud. Plaintiffs-again without offering a date for any of these events-assert in this claim that Miller along with Defendants GM Realty, GM Realty Management, Katsimbrakis, St. Louis Redevelopment, Tycon Properties, Tycon 151, STL, and NPF engaged in fraudulent conduct and made false statements to them. Id. at 17 ¶¶ 86-87. It...