Citation. 136Misc.2d 38, 517 N.Y.S.2d 854 (N.Y. City Ct. 1987)
Law Students: Don’t know your Studybuddy Pro login? Register here Brief Fact Summary.
Two parties were participants in an illegal "chain distribution game". The Plaintiff brought suit against the Defendant who convinced her to participate in the game.
Synopsis of Rule of Law.
"[A] party to an illegal contract cannot ask a court of law to help him [her] carry out his [her] illegal object, nor can such a person plead or prove in any court a case in which he [she], as a basis for his [her] claim, must show forth his [her] illegal purpose."
Facts.
The Plaintiff, Cochran (the "Plaintiff"), and the Defendant, Dellfava (the "Defendant"), participated in an "airplane game". An airplane game is a "chain distribution game" as defined by the General Business Law 359 –fff(2) ("GBL"). A chain distribution game "is a sales device whereby a person, upon condition that he make an investment, is granted a license or right to solicit or recruit for profit or economic gain one or more additional persons who are also granted such license or right upon condition of making an investment and may further perpetuate the chain of persons who are granted such license or right upon such condition." The Defendant convinced the Plaintiff to pay $2,200 to play the game despite the fact the Plaintiff knew it was illegal. The Plaintiff requested her money back from the Defendant and another individual, but they both refused.
Issue.
Due to the illegality of the game the Plaintiff participated in, does she have a right to bring an action in civil court to recover her monies?
Held.
No. The court first recognized the illegality of the game the Plaintiff agreed to play by citing GBL 359-fff(1) making it a crime to "promote offer or grant participation in a chain distribution scheme." The court then lays out the general principle, which in short forbids an individual involved in an illegal contract from pursuing a remedy in court. However, there are certain exceptions to the general rule, but those exceptions all involve situations where the parties were "not in pari delicto." Specifically, in these situations, the plaintiff "either acted under duress, undue influence or out of good will." Here, the court found that the Plaintiff was promoting the airplane game in violation of GBL 359-fff(1). Since the Plaintiff was promoting the game, the court concluded she had "larceny in her heart." The Plaintiff's goal was to make a substantial profit and the court refused to "become a referee among thieves."
Discussion.
It is interesting to read this case concerning im pari delicto alongside the Supreme Court of the United States' decision in [Bateman Eichler].
