Courts Will Not Intercede to Resolve a Dispute Between Two Wrongdoers—“In Pari Delicto”

The Second Department explained the doctrine of in pari delicto, where a court will not resolve a dispute between two wrongdoers:

“The doctrine of in pari delicto mandates that the courts will not intercede to resolve a dispute between two wrongdoers. The doctrine survives because it serves important public policy purposes. First, denying judicial relief to an admitted wrongdoer deters illegality. Second, in pari delicto avoids entangling courts in disputes between wrongdoers” … . The evidence established that the plaintiff knew that the defendants were offering to sell what amounted to a franchise as defined by General Business Law § 681(3), to multiple persons at the same time that the plaintiff and the defendants entered into their agreement, and that the plaintiff was both aware of and complicit in the defendants’ violation of the Franchise Sales Act. Under the circumstances, the court properly applied the doctrine of in pari delicto, “not to favor [the]; defendant, but as a matter of public policy” … . Burgers Bar Five Towns LLC v Burger Holdings Corp, 2014 NY Slip Op 03870, 2nd Dept 6-4-14