Poulard v. Delphin

Background

Reginal Poulard sued Guy-Max Delphin, Delphin Investments, LLC, and Amitie Alternative Capital Partners, LLC (AACP). Poulard alleged that Delphin induced him to invest in Delphin’s companies by representing that the money would be used to purchase equities, that Poulard would receive quarterly distributions, and that he would have a guaranteed exit from the investment. Poulard signed an agreement to invest $250,000 in AACP, but alleged that he ultimately paid $210,000. He further alleged that the money was not transferred to AACP or used to purchase the represented equities, and that most of it was used for other purposes, including expenses he characterized as Delphin’s personal expenses.

Poulard asserted nine claims: common-law fraud, fraudulent inducement, fraudulent concealment, breach of contract, breach of fiduciary duty, misrepresentations and omissions, breach of the duty of good faith and fair dealing, conversion, and unjust enrichment. The court had previously granted Defendants’ motion to dismiss the First Amended Complaint and allowed Poulard to amend to allege facts supporting timely claims. Poulard then filed the Second Amended Complaint, and Defendants moved to dismiss it.

Statute-of-Limitations Rulings

The court held that all nine claims were barred by the applicable statutes of limitations, which are legal time limits for filing claims. For the fraud claims, New York’s discovery rule allowed filing within two years after Poulard discovered the fraud or could have discovered it with reasonable diligence, even though the claims otherwise accrued more than six years earlier. The court held that Poulard was placed on inquiry notice, at the latest, when he emailed Delphin on November 8, 2020 and expressed concern about the missing distributions and his investment.

The court rejected Poulard’s argument that the limitations period began only when he received Defendants’ bank statements in January 2022. The court held that, by November 9, 2020, Poulard knew he had not received distributions and had been told that a buyout depended on Delphin Investments being profitable. The court also held that Poulard did not show reasonable diligence concerning how his money had been used. His calls to the Securities and Exchange Commission, late-2021 inquiry to the Financial Industry Regulatory Authority, and communications with Defendants did not establish that he could not have discovered the alleged fraud earlier. The court also rejected tolling based on fraudulent concealment because Poulard had not shown the required diligence.

For Counts 4 through 9, Poulard argued that Defendants should be prevented from relying on the time limits because they repeatedly promised to return his investment. The court rejected that argument, holding that equitable estoppel was unavailable because Poulard had timely information placing him under a duty to investigate but did not plead sufficient diligence. The court therefore held that those claims were also untimely.

Pleading Rulings

The court separately held that Counts 1, 2, and 3 failed to plead fraud with the particularity required by Federal Rule of Civil Procedure 9(b). The court found that most of the Second Amended Complaint repeated allegations from the First Amended Complaint and that the few new allegations did not provide the required additional detail about the allegedly fraudulent statements.

The court also held that Count 4 failed to state a claim for breach of contract. Poulard did not adequately connect two of the alleged breaches to contractual provisions, and the agreement itself did not require that his investment be used to purchase equities. Counts 8 and 9, for conversion and unjust enrichment, also failed to state claims because Poulard had not cured the defects identified in the earlier ruling. In particular, he did not cite authority showing that the alleged misappropriation supported conversion, and the valid contract between the parties precluded the unjust-enrichment claim on the facts pleaded.

Disposition

The court granted Defendants’ motion to dismiss Poulard’s Second Amended Complaint. The order does not state that the dismissal was with or without prejudice. The Clerk was directed to terminate the motions and close the case.