In Pari Delicto Defense Doctrine in Florida
The common law defense of in pari delicto refers to "the principle that a plaintiff who has participated in wrongdoing may not recover damages resulting from the wrongdoing." Black's Law Dictionary 806 (8th ed. 2004).
This principle is based on the relative circumstances of the parties at the time of the execution or performance of the contract and generally may be raised in an action at law or in equity. O'Halloran v. Pricewaterhousecoopers LLP, 969 So. 2d 1039, 1044 (Fla. 2d DCA 2007) ("The defense of in pari delicto 'is both an affirmative defense and an equitable defense'. . . that prohibits plaintiffs from recovering damages resulting from their own wrongdoing." (quoting Nisselson v. Lernout, 469 F.3d 143, 151 (1st Cir. 2006))); see also 22 Fla. Jur. 2d Equity 76 (2005).
The defense of in pari delicto, however, does not require simply that both parties be to some degree wrongdoers. Rather, the parties must participate in the same wrongdoing. O'Halloran, 969 So. 2d at 1044 (citing Memorex Corp. v. Int'l Bus. Machs. Corp., 555 F.2d 1379, 1382 (9th Cir. 1977)).
And they must be "equally at fault." Black's Law Dictionary at 806. The Supreme Court explained this principle as follows:
The common-law defense . . . derives from the Latin, in pari delicto potior est conditio defendentis: "In a case of equal or mutual fault . . . the position of the defending party . . . is the better one." The defense is grounded on two premises: first, that courts should not lend their good offices to mediating disputes among wrongdoers; and second, that denying judicial relief to an admitted wrongdoer is an effective means of deterring illegality. In its classic formulation, the in pari delicto defense was narrowly limited to situations where the plaintiff truly bore at least substantially equal responsibility for his injury, because "in cases where both parties are in delicto, concurring in an illegal act, it does not always follow that they stand in pari delicto; for there may be, and often are, very different degrees in their guilt." Bateman Eichler, Hill Richards, Inc. v. Berner, 472 U.S. 299, 306-07, 105 S. Ct. 2622, 86 L. Ed. 2d 215 (1985) (alteration in original); see Kirkpatrick v. Parker, 136 Fla. 689, 187 So. 620, 625 (Fla. 1939) (acknowledging but rejecting on the facts the claim that a party to an illegal seduction may not be "in pari delicto with the defendant but only in delicto").
Accordingly, that both plaintiff and defendant may be wrongdoers does not mean that the parties stand in pari delicto. By definition, if the wrong of the party seeking to enforce the contract is not substantially equivalent to the wrong of the defendant, the defense of in pari delicto does not defeat the cause of action.
Finally, "the defense of in pari delicto is not woodenly applied in every case where illegality appears somewhere in the transaction; since the principle is founded on public policy, it may give way to a supervening public policy." Kulla v. E.F. Hutton & Co., Inc., 426 So. 2d 1055, 1057 n.1 (Fla. 3d DCA 1983).
"And where to allow the in pari delicto defense to prevail would be to defeat some legislatively declared policy, the defense will not prevail." Id.