12/28/2016 2:26:55 PM

16CV42729

4
IN THE CIRCUIT COURT FOR THE STATE OF OREGON
5
FOR THE COUNTY OF MULTNOMAH
6

7 ANDREW HAMILTON, Case No.

8 Plaintiff, COMPLAINT
(Securities Fraud under ORS 59.115;
9 v. Securities Fraud under ORS 59.135; Common
Law Fraud; Breach of Fiduciary Duty; Request
10 TECTTONIC LLC, a Delaware Limited for Receivership; Attorney Fees)
Liability Company; ANTHONY
11 HUCKABA, an individual; and (Not subject to mandatory arbitration -
RAYMOND HUCKABA, an individual, prayer over $50,000)
12
Defendants. AMOUNT SOUGHT: $942,995
13
DEMAND FOR JURY TRIAL
14
FEE: ORS 21.160(1)(c); $531.00
15

16 Plaintiff Andrew Hamilton for his Complaint alleges as follows:

17 THE PARTIES
18
1.
19
Plaintiff Andrew Hamilton (“Hamilton”) is a resident of Josephine County, Oregon.
20
2.
21
Defendant Tecttonic LLC is a Delaware Limited Liability Company with its principal
22
place of business in Josephine County, Oregon. Tecttonic is sometimes referred to in this
23
complaint as the “Company.” Tecttonic was previously known as “Disruptive Mineral
24
Technologies” (“DMT”) and was solely owned by Anthony Huckaba. Today, the Plaintiff, along
25

26
Perkins Coie LLP
1120 N.W. Couch Street, 10th Floor
PAGE 1- COMPLAINT Portland, OR 97209-4128
Phone: 503.727.2000
123535-0001/133845855.1 Fax: 503.727.2222
1 with Defendants Anthony Huckaba, Raymond Huckaba, and third parties Lee Muhl and Akira

2 Hirai, are the only members of Tecttonic.

3 3.

4 Defendant Anthony Huckaba (“Anthony”) is a resident of Josephine County, Oregon.

5 4.

6 Defendant Raymond Huckaba (“Raymond”) is a resident of Douglas County, Oregon.

7 Collectively with his son, Anthony Huckaba, Raymond and Anthony are referred to in this

8 complaint as the “Huckabas.”

9 JURISDICTION AND VENUE

10
5.
11
Jurisdiction and venue are proper in this Court as all parties have consented to
12
jurisdiction and venue in Multnomah County, Oregon, pursuant to Section 14.2 of the Operating
13
Agreement of Tecttonic.
14
FACTS
15
Plaintiff’s Introduction to the Huckabas
16

17 6.

18 In or around 2012, Plaintiff Hamilton met Anthony Huckaba in Grants Pass, Oregon,

19 where they both lived. Plaintiff Hamilton had recently moved to town, while Anthony was a

20 life-long resident. Sometime shortly after their initial meeting, Anthony introduced Plaintiff

21 Hamilton to his father, Raymond, another longtime resident of Grants Pass.

22 7.

23 For a number of years, Plaintiff Hamilton has been a successful entrepreneur. Plaintiff’s

24 wealth was known by both Anthony and Raymond Huckaba when they initially met.

25

26
Perkins Coie LLP
1120 N.W. Couch Street, 10th Floor
PAGE 2- COMPLAINT Portland, OR 97209-4128
Phone: 503.727.2000
123535-0001/133845855.1 Fax: 503.727.2222
1 8.

2 Plaintiff Hamilton has long had a strong business interest in new and developing markets,

3 including health sciences and animal health. Plaintiff Hamilton, however, lacks expertise with

4 respect to mining, mineral rights, mining claims, or patents. These facts about Plaintiff

5 Hamilton’s interests and wealth were known by Anthony and Raymond Huckaba.

6 9.

7 On numerous occasions beginning in 2012, Anthony falsely represented to Plaintiff

8 Hamilton that he and his father Raymond owned a number of mines in Southern Oregon.

9 10.

10 At some point before January, 2015, Anthony and Raymond further represented to

11 Plaintiff Hamilton that their mines contained “Oregon Blue Clay,” a volcanic mineral with

12 antibacterial properties. Oregon Blue Clay has numerous potential commercial applications,

13 particularly as an animal feed additive.

14 Plaintiff Hamilton’s “Investments” with the Huckabas

15
11.
16
Beginning in January 2015, Anthony and Raymond began to solicit investments and
17
loans from Plaintiff Hamilton, ostensibly to purchase mining equipment and to fund the
18
commercialization of the Oregon Blue Clay.
19
12.
20
Throughout 2015, the Huckabas lied to Plaintiff Hamilton about the state of affairs with
21
their businesses, Oregon Mineral Technologies (“OMT”) and DMT. They deliberately obscured
22
the differences between unpermitted mining claims, permitted claims, and actual mines. They
23
led Plaintiff Hamilton to believe they had actual mines by providing him with samples of their
24
clay ostensibly dug up from the mines and by taking him to look at prospective mining
25
equipment for their business.
26
Perkins Coie LLP
1120 N.W. Couch Street, 10th Floor
PAGE 3- COMPLAINT Portland, OR 97209-4128
Phone: 503.727.2000
123535-0001/133845855.1 Fax: 503.727.2222
1 13.

2 In fact, at no time were Anthony and Raymond close to owning an actual mine. At most,

3 they possessed mere mining claims, which are themselves mostly worthless without the

4 necessary permits, expertise, and equipment. Furthermore, the claims supposedly held by the

5 Huckabas were of little value. Many were preempted or not properly filed. Others were held by

6 shell entities, such as OMT, where Anthony or Raymond had only a partial interest. At no point

7 was any of this disclosed to Plaintiff Hamilton, who was repeatedly led to believe that he was

8 funding an actual mining operation, or an operation close to ramping up to full production.

9 14.

10 In early 2015, Anthony and Raymond further falsely represented to Plaintiff Hamilton

11 that their companies had deals on the table to commercialize the Oregon Blue Clay with a third-

12 party partner. The Huckabas went so far as to manufacture misleading projections and business

13 plans containing outsized claims of commercial viability. These false claims overstated the

14 Huckabas sophistication, the status of the business, and the formality of their relationships with

15 vendors and potential buyers.

16 15.

17 Throughout 2015, Plaintiff Hamilton was continually solicited for funds by the

18 Huckabas, who led him on with grand tales of a business on the cusp of viability. He began by

19 investing $35,000 in early January 2015, and invested a total of $545,000 through the end of

20 2015.

21 16.

22 In reality, in this period the Huckabas spent Plaintiff Hamilton’s money on themselves, as

23 well as on the hiring of consultants and lawyers to sort out their own clouded rights to mining

24 claims. All of this was hidden from Plaintiff Hamilton.

25

26
Perkins Coie LLP
1120 N.W. Couch Street, 10th Floor
PAGE 4- COMPLAINT Portland, OR 97209-4128
Phone: 503.727.2000
123535-0001/133845855.1 Fax: 503.727.2222
1 The Formation of Tecttonic LLC

2
17.
3
In late 2015, the Huckabas sought to formalize their relationship with Plaintiff Hamilton,
4
and, again using Plaintiff Hamilton’s investment, paid their agents to draft an operating and a
5
subscription agreement for Tecttonic LLC (formally DMT).
6
18.
7
Pursuant to this new operating agreement, Plaintiff Hamilton was to be provided with
8
136,250 membership units in Tecttonic LLC in exchange for his initial $545,000 investment, or
9
2.4% of the Company. Pursuant to the separate subscription agreement, Plaintiff Hamilton
10
undertook to invest over time a further $2,455,000 in order to obtain a total of 15% of Tecttonic.
11
In contrast, the Huckabas themselves were to put in four mining claims and “intellectual
12
property”; a contribution the Operating Agreement valued at $15,000,000.
13
19.
14
Plaintiff Hamilton was informed by the Huckabas and their agents that he did not need to
15
hire sophisticated legal counsel. He was told that the new agreements were mere formalizations
16
of their prior arrangement and any difficult legal questions would be “handled” by company
17
lawyers. He was encouraged to sign the agreements as quickly as possible so that the Huckabas
18
would be able to claim the company’s enormous losses to date as passed-through tax deductions.
19
The final agreements reflect no input on the part of Hamilton and were designed to be unilateral
20
and oppressive.
21
20.
22
Unbeknownst to Plaintiff Hamilton, a fair portion of the money he invested was used to
23
sort out a complicated corporate mess which Raymond had created in his company, OMT.
24
Plaintiff Hamilton believed that the mining claims held by OMT would be transferred to the
25
company he was investing in. Instead, OMT elected to lease its mining claims at a profit to
26
Perkins Coie LLP
1120 N.W. Couch Street, 10th Floor
PAGE 5- COMPLAINT Portland, OR 97209-4128
Phone: 503.727.2000
123535-0001/133845855.1 Fax: 503.727.2222
1 Tecttonic. At the time this was finally disclosed to Plaintiff, there was nothing that he could do

2 except hope that the lease terms were not oppressive.

3 21.

4 Although the subscription agreement disclosed this along with number of other “risks”

5 assumed by Andrew at that point, for many of these, it was the first time that Plaintiff Hamilton

6 learned of their existence. Furthermore, the nature and magnitude of these risks were

7 substantially understated and obscured in order to deceive the Plaintiff. Plaintiff, who believed

8 that the Oregon Blue Clay was a once-in-a-lifetime financial opportunity, was further falsely

9 assured at this time by the Huckabas and their agents that his money was to be put to good use.

10 Operating Problems at Tecttonic

11
22.
12
After the agreements were signed, the Huckabas mostly relied on a consultant, Lee Muhl,
13
now styled as the CEO of Tecttonic, to run the business. They paid him a salary in excess of
14
$200,000, without informing Plaintiff Hamilton of this fact. Furthermore, Anthony drew a
15
similar salary as the “president” of Tecttonic, without performing any meaningful work for the
16
company. Since the company had no revenue and no other investors, all funds for these salaries
17
came from Plaintiff Hamilton’s investments.
18
23.
19
Anthony, in his role as president and in his role as manager and board member of
20
Tecttonic, continually failed to perform basic tasks necessary for the maintenance of the
21
business. Anthony was responsible for, among other things: pursuing the necessary testing to
22
allow the blue clay to be marketed as an animal feed additive; following-up on marketing and
23
partnership opportunities to sell the clay; doing preliminary tasks necessary to progress the
24
unpermitted mining claims to actual mines. He performed none of these tasks. As a result,
25

26
Perkins Coie LLP
1120 N.W. Couch Street, 10th Floor
PAGE 6- COMPLAINT Portland, OR 97209-4128
Phone: 503.727.2000
123535-0001/133845855.1 Fax: 503.727.2222
1 today, Tecttonic continues to be no closer to owning an actual mine or to selling the Oregon Blue

2 Clay than it was at the end of 2015.

3 24.

4 Throughout this period, Anthony and Raymond continued to mislead Plaintiff Hamilton

5 about the state of affairs at Tecttonic in order to ensure that Plaintiff Hamilton would continue

6 making his investments as scheduled under the Subscription Agreement. For example, Anthony

7 continued to imply that work was being done to market and test the clay and that the mining

8 claims were being moved along to mines. They falsely led Plaintiff Hamilton to believe that

9 patents on the use of the clay were being obtained, when in reality, only a provisional patent

10 filing was made. Meanwhile, Plaintiff Hamilton was continually pressured to make his

11 investments in a timely fashion.

12 25.

13 In late-summer 2016, the Huckabas had a falling out with Lee Muhl. They forced him to

14 resign and have to date made no arrangements to replace him or to assume his responsibilities.

15 As a result, today, Tecttonic is without meaningful guidance in an important time while testing

16 agreements, patent applications, and potential partners are left holding the bag. Plaintiff

17 Hamilton, despite owning a small share and having no management responsibilities under the

18 Operating Agreement, has attempted to assume these responsibilities but has been continually

19 obstructed by the Huckabas.

20 26.

21 In total, Plaintiff Hamilton has invested $942,995 since the beginning of 2015 in

22 Tecttonic and with the Huckabas. He has yet to receive any return whatsoever.

23

24

25

26
Perkins Coie LLP
1120 N.W. Couch Street, 10th Floor
PAGE 7- COMPLAINT Portland, OR 97209-4128
Phone: 503.727.2000
123535-0001/133845855.1 Fax: 503.727.2222
1 FIRST CLAIM FOR RELIEF
(Oregon Securities Fraud (ORS § 59.115))
2 (Against Defendant’s Anthony Huckaba and Ray Huckaba)

3
27.
4
Plaintiff incorporates paragraphs 1 - 26 above as if fully alleged herein.
5
28.
6
The Huckabas, both individually and through their agents, both on their own behalf and
7
on behalf of Tecttonic, sold securities in violation of ORS 59.115 by employing a scheme to
8
defraud Plaintiff Hamilton; by making innumerable false statements of material facts; by failing
9
to state material facts necessary to make their statements not misleading; and by engaging in a
10
course of business which operated as a fraud on Plaintiff.
11
29.
12
As a result of this fraud, Plaintiff has been damaged in an amount currently estimated at
13
$942,995.
14
SECOND CLAIM FOR RELIEF
15 (Oregon Securities Fraud (ORS § 59.135))
(Against All Defendants)
16

17 30.

18 Plaintiff incorporates paragraphs 1 - 29 above as if fully alleged herein.

19 31.

20 The Huckabas, both individually and through their agents, both on their own behalf and

21 on behalf of Tecttonic, sold securities in violation of ORS 59.135 by employing a scheme to

22 defraud Plaintiff Hamilton; by making innumerable false statements of material facts; by failing

23 to state material facts necessary to make their statements not misleading; and by engaging in a

24 course of business which operated as a fraud on Plaintiff.

25

26
Perkins Coie LLP
1120 N.W. Couch Street, 10th Floor
PAGE 8- COMPLAINT Portland, OR 97209-4128
Phone: 503.727.2000
123535-0001/133845855.1 Fax: 503.727.2222
1 32.

2 As a result of this fraud, Plaintiff has been damaged in an amount currently estimated at

3 $942,995.

4 THIRD CLAIM FOR RELIEF

(Common Law Fraud)
5 (Against All Defendants)
6
33.
7
Plaintiff incorporates paragraphs 1 - 32 above as if fully alleged herein.
8
34.
9
The Huckabas knowingly made innumerable false representations of material facts in the
10
course of their dealings with Plaintiff Hamilton, both in their own name and acting as agents of
11
Tecttonic.
12
35.
13
The Huckabas intended these false statements and omissions to deceive Plaintiff
14
Hamilton in order to convince him to invest money in their companies.
15
36.
16
Plaintiff Hamilton reasonably relied on the Huckabas statements. They falsely
17
represented themselves as experts on mining operations and used Plaintiff Hamilton’s money to
18
craft an ever-more-impressive façade of sophistication.
19
37.
20
As a result of this fraud, Plaintiff has been damaged in an amount currently estimated at
21
$942,995.
22
FOURTH CLAIM FOR RELIEF
23 (Breach of Fiduciary Duty)
(Against Defendant’s Anthony Huckaba and Ray Huckaba)
24

25 38.

26 Plaintiff incorporates paragraphs 1 - 37 above as if fully alleged herein.

Perkins Coie LLP
1120 N.W. Couch Street, 10th Floor
PAGE 9- COMPLAINT Portland, OR 97209-4128
Phone: 503.727.2000
123535-0001/133845855.1 Fax: 503.727.2222
1 39.

2 Anthony and Raymond Huckaba have fiduciary duties of loyalty and care to Plaintiff

3 Hamilton, first as an investor in DMT, then as a fellow member of Tecttonic.

4 40.

5 The Huckabas have repeatedly breached the duty of loyalty by routinely deceiving

6 Plaintiff Hamilton about the use of his investment and the state of their businesses. Further,

7 Raymond Huckaba had considerable conflicts of interest, through his ownership of OMT, which

8 were never disclosed or explained to Plaintiff Hamilton. Finally, Plaintiff Hamilton’s

9 investments, which were intended for business purposes, were frequently put toward the personal

10 benefit of Anthony and Raymond.

11 41.

12 Anthony and Raymond have breached their duty of care as fellow-members of Tecttonic,

13 and with respect to Anthony, as a board member and manager of the Company.

14 42.

15 In particular, Anthony has failed even to do the absolute minimum necessary to maintain

16 the business of Tecttonic or fulfill his responsibility as manager.

17 43.

18 As a result of these breaches, Plaintiff has been damaged in an amount currently

19 estimated at $942,995.

20 FIFTH CLAIM FOR RELIEF

(Appointment of a Receiver Under ORCP 80)
21 (Against Tecttonic LLC)
22
44.
23
Plaintiff incorporates paragraphs 1 - 43 above as if fully alleged herein.
24

25

26
Perkins Coie LLP
1120 N.W. Couch Street, 10th Floor
PAGE 10- COMPLAINT Portland, OR 97209-4128
Phone: 503.727.2000
123535-0001/133845855.1 Fax: 503.727.2222
1 45.

2 Today, Tecttonic has many pending deadlines due to deals negotiated with third parties

3 under Lee Muhl, who has resigned under intense pressure from the Huckabas.

4 46.

5 Anthony Huckaba is the only manager designated under the Operating Agreement and

6 has failed to meet basic responsibilities or follow-through with basic commitments in managing

7 Tecttonic.

8 47.

9 Because of the need to preserve the Company’s assets, Plaintiff is entitled to the

10 appointment of a receiver to protect and preserve those assets pursuant to Oregon Rule of Civil

11 Procedure 80.

12 ATTORNEY FEES
13
48.
14
Plaintiff incorporates paragraphs 1 - 47 above as if fully alleged herein.
15
49.
16
Plaintiff should be awarded reasonable attorney fees, litigation expenses and costs, and
17
expert witness fees against defendant pursuant to ORS 59.137.
18
PUNITIVE DAMAGES
19

20 50.

21 Plaintiff incorporates paragraphs 1 - 49 above as if fully alleged herein.

22 51.

23 Plaintiff intends to amend this complaint to include a request for punitive damages for

24 Defendants’ malicious and unlawful conduct.

25

26
Perkins Coie LLP
1120 N.W. Couch Street, 10th Floor
PAGE 11- COMPLAINT Portland, OR 97209-4128
Phone: 503.727.2000
123535-0001/133845855.1 Fax: 503.727.2222
1 REQUEST FOR RELIEF

2 WHEREFORE, Plaintiff respectfully requests as follows:

3 1. Compensatory damages for fraud on the Plaintiff in an amount currently

4 estimated as at least $942,995, along with interest from the dates of payments equal to the

5 statutory 9% rate;

6 2. Rescission of the Tecttonic Operating and Subscription agreements;

7 3. Plaintiff’s reasonable attorney fees and costs incurred in this action;

8 4. Appointment of a receiver to manage the company until such time as a competent

9 management team can be appointed pursuant to the Operating Agreement; and

10 5. That the Court award Plaintiff other such relief as the Court deems proper.

11 DATED: December 28, 2016 PERKINS COIE LLP

12
By: s/ Stephen F. English
13 Stephen F. English, OSB No. 730843
SEnglish@perkinscoie.com
14 Cody M. Weston, OSB No. 984290
CWeston@perkinscoie.com
15 Wilson C. Freeman, OSB No. 165491
WFreeman@perkinscoie.com
16 1120 N.W. Couch Street, 10th Floor
Portland, OR 97209-4128
17 Telephone: 503.727.2000
Facsimile: 503.727.2222
18
Attorneys for Plaintiff
19

20

21

22

23

24

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Perkins Coie LLP
1120 N.W. Couch Street, 10th Floor
PAGE 12- COMPLAINT Portland, OR 97209-4128
Phone: 503.727.2000
123535-0001/133845855.1 Fax: 503.727.2222