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Tribe Members Can’t Shake Contract Suit

(CN) - Organizers of an alleged coup against the president of an American Indian tribe must face claims that they used Facebook to disparage one of his purported cohorts, a federal judge ruled.

The dispute involves agreements Robert Magyar signed to serve as the operating manager and interim CEO of two Delaware Nation-owned limited liability companies, Unami Solar and Lenape Lighting and Manufacturing, respectively.

Magyar claimed in a federal complaint that the tribe's vice president, Cleanan Watkins, and treasurer, Clifford Peacock, constructively destroyed his contracts in June 2012 when they staged a "coup d'état, ousting the tribe's president, Kerry Holton."

The first hint about dissatisfaction with Magyar's work occurred in August 2012 when he was told his contracts had been terminated. Magyar said Jerry Kennedy, the tribe's executive director, CEO and controller of the Delaware Nation Economic Development Authority LLC (DNEDA), made the call.

In the October 2012 suit he filed, Magyar blamed Watkins, Peacock and Kennedy for his subsequent income loss of more than $11,000 per month.

Peacock allegedly greeted the lawsuit by using his Facebook page to disparage the former consultant, accusing him of bribing and providing kickbacks to Holton.

Magyar then filed a second amended complaint in Philadelphia, alleging intentional interference with contractual relations against all defendants, and defamation and trade libel against Peacock.

The defendants moved to dismiss the interference claim, arguing that, as leaders being sued in their official capacities, they have sovereign immunity.

Magyar countered that the trio acted beyond the scope of their authority by failing to secure a majority vote of the Tribal Executive Committee or the Lenape Board of Directors prior to ending his contracts, as required by the tribe's constitution.

The defendants said the tribe gave the DNEDA - and therefore, Kennedy - the authority to terminate contracts and make payroll decisions.

Senior U.S. District Judge John Padova refused to dismiss Magyar's claim in Philadelphia on Wednesday.

"Since defendants have not - either in their motion or during the Nov. 5, 2013 hearing - pointed to any part of the second amended complaint or its exhibits that contradict the allegations in the second amended complaint that a majority vote of the Executive Committee is required to terminate plaintiff's contract, and because we must accept the allegations of the second amended complaint as true, we conclude that the second amended complaint alleges that defendants acted outside the scope of their authority as officers of the tribe when they terminated the Unami agreement and stopped paying plaintiff pursuant to that agreement," Padova wrote.

The judge also tossed aside the claim that Magyar "told the DNEDA Board of Directors that he would be paid by a Bureau of Indian Affairs grant through the end of June 2012," and that the Board and Executive Committee voted to end the Lenape contract last July and August.

The defendants' arguments "rely on facts not found in the second amended complaint and its exhibits," Padova wrote. "Accordingly, we cannot consider those facts. As a result, we conclude that the second amended complaint alleges that defendants acted outside the scope of their authority when they terminated the Lenape agreement and refused to pay plaintiff for the services he rendered for Lenape in June 2012."

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