Poulard v. Delphin

Background

Reginal Poulard sued Guy-Max Delphin, Delphin Investments, LLC, and Amitie Alternative Capital Partners, LLC, concerning an investment that Poulard alleged was fraudulently induced. Poulard alleged that Delphin represented that his $210,000 investment would be used to purchase equities, would generate regular distributions, and would receive a guaranteed buyout. Poulard instead signed an agreement to invest in AACP and received non-voting shares. He alleged that the money was sent to a Delphin Investments account, was not transferred to AACP or used to purchase the promised equities, and was spent for Delphin’s personal benefit.

Poulard brought claims for common-law fraud, fraudulent inducement, fraudulent concealment, breach of contract, breach of fiduciary duty, negligent misrepresentation, breach of the duty of good faith and fair dealing, conversion, and unjust enrichment. The opinion notes that the complaint had no fifth count. Defendants moved to dismiss the action in its entirety.

Statute-of-Limitations Rulings

The court applied New York law because the parties made their arguments under New York law, even though the agreement stated that Connecticut law governed. The court held that the three fraud-related claims were barred by New York’s limitations rule, which allows the longer of six years from accrual or two years from when the fraud was discovered, or reasonably could have been discovered.

The court rejected Poulard’s argument that he first discovered the fraud when he received bank statements in January 2022. The agreement showed that his investment was an equity financing of AACP and did not state that his funds would be used to purchase equities. The court also concluded that the missed distributions, the communications beginning in 2018 and 2019 about the investment, and Poulard’s own November 2020 email expressing concern about the missing payments gave him reason to investigate. Because Poulard did not allege that he investigated until January 2022, the court imputed knowledge of the alleged fraud to him no later than November 8, 2020. His January 31, 2023 complaint therefore was filed after the two-year discovery period.

The court also held that the remaining contract and tort claims—Counts 4 and 6 through 10—were untimely. Poulard argued that Defendants should be prevented from asserting a limitations defense because their representations delayed his lawsuit. The court rejected that equitable-estoppel argument because Poulard had inquiry notice of possible wrongdoing but did not timely investigate.

Pleading Rulings

The court separately ruled that the fraud claims failed to satisfy Federal Rule of Civil Procedure 9(b), which requires fraud to be pleaded with particularity, including the allegedly false statements, who made them, where and when they were made, and why they were fraudulent.

The breach-of-contract claim was also inadequately pleaded. The court found that Poulard did not explain how the alleged breaches violated contractual provisions, and that the agreement did not require his investment funds to be used to purchase equities. Poulard could not add a new contract theory for the first time in his opposition to the motion.

The court did not decide Defendants’ arguments concerning the negligent-misrepresentation claim because it had already held that the claim was time-barred. The court dismissed the conversion claim because Poulard did not cite authority showing that the alleged misappropriation stated conversion rather than merely breach of contract. It dismissed the unjust-enrichment claim because the existence of a valid contract generally precludes an indistinguishable unjust-enrichment claim. Defendants’ argument that Delphin and Delphin Investments were not parties to the agreement was treated as abandoned after Defendants did not address it in their reply.

Fees, Amendment, and Disposition

Defendants withdrew their request for attorneys’ fees under the agreement. The court awarded no fees to either side because Defendants withdrew their request and Poulard cited no authority supporting his request.

The court granted Defendants’ motion to dismiss. It also granted Poulard leave to amend, explaining that this was the first opportunity to identify the pleading defects and that amendment might not be futile if Poulard could show timely investigative efforts or another basis for tolling. Poulard was required to file an amended complaint by February 9, 2024; otherwise, the case would be closed.