By: Rob Harris

Last Spring, we discussed a federal appellate court’s opinion that determined a claim for fraud could be asserted against Jack Nicklaus by a couple who lost $1.5 million in a golf course development that went bust. Although the real “evil doer” was the developer, the couple alleged that Nicklaus should be held accountable based upon statements in promotional literature that he was “so impressed with the club and its management team that I became a founding charter member.” The plaintiffs alleged that this statement was false in that it failed to reveal that Nicklaus’ received his founding membership gratis.

Armed with the preliminary decision that it could assert the claim, the plaintiffs returned to the federal trial court, where they were met with a motion for summary judgment which asserted that plaintiffs claims should be dismissed as untimely, in that they waited more than three years to assert them. On July 18, 2016, the court granted the motion, entering judgment in favor of Nicklaus. As the court observed,

on January 11, 2008, eleven days after investing $1.5 million in the project, [plaintiffs] discovered that Marc Jenson, known to them at the time as a “principal” of the Mount Holly Club”’was a “fraudster” with a “checkered criminal past.” …They also admit that on this date they were shocked to learn that Jenson had “past bankruptcies, civil cases, criminal cases, and a pending criminal case,” and became concerned that they had been “duped” into investing in a “fraudulent project.” … Plaintiffs admit that this discovery caused them to begin a further investigation into their investment in the Mount Holly Club. …  Based on these admissions, it is undisputed that the Donners discovered another misrepresentation or omission alleged in their cause of action for fraud against defendants by January 11, 2008; it is further undisputed that on this date, the Donners actually began investigating their investment.

Against this background, the court concluded that plaintiffs’ subsequent discovery of Nicklaus’ statements about being a founding member of the club would not afford them a reprieve of the requirement that they assert their fraud claim within three years. Accordingly, the court entered judgment in favor of Nicklaus, with no need to explore the substantive merits of the plaintiffs’ claim.