Summary
holding that stipulation of settlement agreement was enforceable, despite tax fraud committed by the parties
Summary of this case from Globaltex Group Ltd. v. Trends Sportswear LTDOpinion
July 14, 1997
Appeal from the Supreme Court, Suffolk County (Gowan, J.).
Ordered that the appeal from the order is dismissed; and it is further,
Ordered that the judgment is affirmed; and it is further,
Ordered that the plaintiff is awarded one bill of costs.
The appeal from the intermediate order must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action ( see, Matter of Aho, 39 N.Y.2d 241, 248). The issues on appeal from the order are brought up for review and have been considered on the appeal from the judgment (CPLR 5501 [a] [1]).
In 1988 the parties executed a stipulation of settlement which, among other things, delineated their rights and obligations with respect to a condominium they jointly owned. Pursuant to the agreement, the parties were to continue sharing all expenses associated with ownership of the condominium "without limitation". After the defendant failed to pay his share of expenses, the plaintiff brought this action to recover damages for breach of the stipulation.
Contrary to the defendant's contention, the doctrine of laches is inapplicable here. That doctrine, which bars recovery where a plaintiff's inaction has prejudiced the defendant and rendered recovery inequitable, has no application in actions at law ( see, Matter of County of Rockland v. Homicki, 227 A.D.2d 477; Gonzalez v. Chalpin, 159 A.D.2d 553, affd 77 N.Y.2d 74).
Furthermore, the defendant's reliance on the doctrine of in pari delicto is also without merit. An agreement which is "lawful on its face and which does not contemplate or necessarily entail unlawful conduct in its performance is enforcible by the promisee even though he engages in unlawful activity in the agreement's performance" ( Dodge v. Richmond, 10 A.D.2d 4, 14, affd 8 N.Y.2d 829), provided the promisee does not require the aid of the illegal transaction to make out his case ( see, McConnell v. Commonwealth Pictures Corp., 7 N.Y.2d 465, 471; Ferkin v. Board of Educ., 278 N.Y. 263, 268). Clearly, the contract at issue here is lawful on its face and there is no implication that it was entered into with fraudulent design. Furthermore, any alleged tax fraud committed by the parties was wholly collateral to and independent of the contract's performance.
The defendant's remaining contentions are without merit.
Bracken, J. P., Copertino, Santucci and McGinity, JJ., concur.