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Current Developments in the Commercial Divisions of the
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Posted: November 6, 2015

Dismissal Based on In Pari Delicto Doctrine Upheld

On October 28, 2015, the Second Department issued a decision in CRC Litigation Trust v. Marcum, LLP, 2015 NY Slip Op. 07811, dismissing an action based on the in pari delicto doctrine, explaining:

In addition to the expiration of the statute of limitations as to the accounting malpractice causes of action against [the accountant defendant], the Supreme Court properly concluded that all of the plaintiff’s claims, against both defendants, were barred by the doctrine of in pari delicto, which mandates that the courts will not intercede to resolve a dispute between two wrongdoers. Contrary to the plaintiff’s contention, the allegations of the complaint do not implicate the adverse interest exception to the doctrine, because the allegations do not support a finding that the corporate insiders who allegedly committed the wrongdoing totally abandoned the corporation’s interests and acted entirely on their own.

(Internal quotations and citations omitted).

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