We agree with the district court that Valley Paving failed to introduce evidence necessary to establish damages for its professional-negligence claim, which requires concrete evidence of both (1) what the plaintiff would have done but for the negligence and (2) what those actions reasonably would have produced. Christians v. Grant Thornton, LLP, 733 N.W.2d 803, 812-13 (Minn. App. 2007), review denied (Minn. Sept. 18, 2007).
State by Head v. AAMCO Automatic Transmissions, Inc., 199 N.W.2d 444, 448 (Minn. 1972); see also Christians v. Grant Thornton, LLP, 733 N.W.2d 803, 810 (Minn. Ct. App. 2007) ("In pari delicto operates to bar suits between two wrongdoers who are at equal fault."). The Trustee does not contest that the in pari delicto doctrine is properly asserted against him, standing in the Funds' shoes.
In evaluating but-for causation in the transactional setting, the Court "must envision what would have occurred but for the negligent conduct." Schmitz, 783 N.W.2d at 741 (quoting Christians v. Grant Thornton, LLP, 733 N.W.2d 803, 812 (Minn. Ct. App. 2007)). A plaintiff cannot prevail simply by "[s]howing that 'many positive things could have occurred' but for the [at-issue] conduct."
3. In Pari Delicto Doctrine The doctrine of in pari delicto, an “equitable defense,” “operates to prevent wrongdoers at equal fault from recovering against one another and ‘is based upon judicial reluctance to intervene in disputes between [wrongdoing] parties.’ ” Christians v. Grant Thornton, LLP, 733 N.W.2d 803, 814 (Minn.Ct.App.2007) (alteration in original) (quoting State by Head v. AAMCO Automatic Transmissions, Inc., 293 Minn. 342, 199 N.W.2d 444, 448 (1972)). “[E]quitable decisions are discretionary.” Id. at 815. “A paramount public interest ... may call for judicial intervention in favor of one wrongdoer against the other in order to effectuate the enforcement of a public policy which overrides considerations of a benefit inuring to a wrongdoer.”
The doctrine of in pari delicto, an “equitable defense,” “operates to prevent wrongdoers at equal fault from recovering against one another and ‘is based upon judicial reluctance to intervene in disputes between [wrongdoing] parties.’ ” Christians v. Grant Thornton, LLP, 733 N.W.2d 803, 814 (Minn.Ct.App.2007) (alteration in original) (quoting State by Head v. AAMCO Automatic Transmissions, Inc., 293 Minn. 342, 199 N.W.2d 444, 448 (1972)). “[E]quitable decisions are discretionary.” Id. at 815. “A paramount public interest ... may call for judicial intervention in favor of one wrongdoer against the other in order to effectuate the enforcement of a public policy which overrides considerations of a benefit inuring to a wrongdoer.”
It is an equitable defense that "is based upon judicial reluctance to intervene in disputes between [wrongdoing] parties." Christians v. Grant Thornton, LLP, 733 N.W.2d 803, 814 (Minn. Ct. App. 2007) (citation and internal quotation marks omitted). Judicial intervention may be warranted, however, if a "paramount public interest" supports "the enforcement of a public policy which overrides considerations of a benefit inuring to the wrongdoer."
Regarding but-for causation, courts "must envision what would have occurred but for the negligent conduct." Christians v. Grant Thornton, LLP, 733 N.W.2d 803, 812 (Minn. App. 2007), review denied (Minn. Sept. 18, 2007).
"When applying the `but for' test, we must envision what would have occurred but for the negligent conduct." Christians v. Grant Thornton, LLP, 733 N.W.2d 803, 812 (Minn.App. 2007), review denied (Minn. Sept. 18, 2007).
Merrimack's claims against KPMG are therefore barred by the doctrine of in pari delicto . See, e.g., Baena v. KPMG, supra (applying Massachusetts law); Peterson v. McGladrey, LLP, 792 F.3d 785, 788 (7th Cir. 2015) (applying Illinois law); Christians v. Grant Thornton, LLP, 733 N.W.2d 803, 814-15 (Minn.Ct.App. 2007) Kirschner v. KPMG, supra (applying New York law). Merrimack cannot avoid summary judgment on the ground that there is a disputed issue as to whether Mordach committed intentional fraud.
See, e.g., Seitz v. Detweiler, Hershey Assocs., P.C. (In re CitX Corp.), 448 F.3d 672, 678 (3d Cir. 2006) ("[t]he deepening of a firm's insolvency is not an independent form of corporate damage. Where an independent cause of action gives a firm a remedy for the increase in its liabilities, the decrease in fair asset value, or its lost profits, then the firm may recover, without reference to the incidental impact upon the solvency calculation") (citing Sabin Willett, The Shallows of Deepening Insolvency, 60 Bus. Law. 549, 552-57 (2005)); Joseph v. Frank, et al. (In re Troll Comm., LLC), 385 B.R. 110, 122 (Bankr.D.Del. 2008) (deepening insolvency is not a valid cause of action or theory of damages under Delaware law); Coroles v. Sabey, 79 P.3d 974, 983 (Utah Ct.App. 2003) (declining to recognize deepening insolvency as sufficient damages); Christians v. Grant Thornton, LLP, 733 N.W.2d 803, 812 (Minn.Ct.App. 2007) (deepening insolvency is not a recognized form of corporate damage in Minnesota); Comm. Fin. Servs., Inc. v. J.P. Morgan Securities, Inc., 152 P.3d 897, 900 (Okla.Civ.App. 2006) (deepening insolvency is not a recognized measure of damages in Oklahoma).See In re CitX Corp., 448 F.3d at 677.