Stastny v. Bhanti, 1:22-cv-06852

Four investors pooled $593,000 into Dropmints, Inc. via three SAFTE agreements executed by plaintiff Stastny, after defendant Bhanti promoted Dropmints as a ready-to-launch NFT minting platform with prominent creator partnerships and rapid minting features.
Plaintiffs allege Bhanti misrepresented company facts (e.g., creator deals, a live launch app, an NYC office) and diverted investor funds to lavish personal spending, then became evasive and missed scheduled status calls.
In September 2022 Plaintiffs sued in Delaware; Bhanti emailed an offer to pay the full amount plus interest and fees to settle. Plaintiffs’ counsel accepted by email on September 14, specifying a payment method; Bhanti did not pay.
SAFTEs contained a Delaware choice-of-law clause and a one-sentence no-reliance clause; SAFTEs were drafted by counsel for defendants.
Plaintiffs amended to add claims for fraud, unjust enrichment, conversion, and breach of the September 14 settlement agreement; defendants moved to dismiss under Rule 12(b)(6) arguing (inter alia) the no-reliance clauses bar fraud, the settlement was unenforceable/conditioned, plaintiffs’ counsel violated ethics rules, and fraud claims lack particularity.
The court denied the motion to dismiss in full, holding plaintiffs adequately pleaded breach of the settlement agreement, fraud (surviving the no-reliance defense at the pleading stage), and related unjust enrichment and conversion claims.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Enforceability of Sept. 14 settlement	Bhanti offered to pay full amount; plaintiffs accepted in writing; failure to pay is breach	Offer was conditional ("This Twitter stuff needs to stop") and counsel violated Rule 4.2 New York ethics	Settlement plausibly formed; plaintiffs alleged they satisfied conditions and reasonably believed Bhanti unrepresented; Count IV survives dismissal
Effect of SAFTE no-reliance clause on fraud claim	No-reliance clause does not preclude fraud where signatories may not have understood clause or lacked counsel	No-reliance clause bars reliance element; dismiss fraud claim	Court declines to enforce no-reliance clause at pleading stage; fraud not dismissed
Adequacy of fraud pleading under Rule 9(b)	Plaintiffs alleged who, what, when, where, and how for multiple misrepresentations that induced investments	Plaintiffs’ allegations are conclusory / lack particularity	Court finds fraud pleaded with sufficient particularity; Rule 9(b) satisfied
Unjust enrichment & conversion	Torts flow from alleged misappropriation of investor funds; survive if fraud survives	Barred by SAFTE or duplicative of fraud	Court allows these claims to proceed at pleading stage, since fraud survives and no alternative basis for dismissal was shown

Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (plausibility standard for Rule 12(b)(6))
O'Boyle v. Real Time Resolutions, Inc., 910 F.3d 338 (Seventh Circuit discussion of pleading standard at motion to dismiss)
Pirelli Armstrong Tire Corp. Retiree Med. Benefits Tr. v. Walgreen Co., 631 F.3d 436 (Rule 9(b) who/what/when standard for fraud pleadings)
Extra Equipamentos E Exportacao Ltda. v. Case Corp., 541 F.3d 719 (no-reliance / 'big boy' clause enforceability concerns)
Sgouros v. TransUnion Corp., 817 F.3d 1029 (mutual assent and contract formation under Illinois law)
Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (federal courts apply forum state choice-of-law rules)
Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (accept well-pleaded allegations and draw inferences for pleading-stage motions)