Plaintiff and appellant Raul Galaz, having successfully defrauded owners of a television program of a large amount of royalty payments, entered into an illegal moneylaundering contract with defendant and respondent Julian Jackson. Under their oral agreement, Galaz would give Jackson $59,000 in illicit royalty proceeds, which Jackson would place in an offshore bank account and return the funds in untraceable cash to Galaz, less a five percent commission for himself. Jackson, however, eschewed the commission and kept the cash. Galaz, aggrieved to find so little honor among thieves, sued Jackson for rescission and fraud. Following a bench trial, the court denied relief and ruled in favor of Jackson. The court refused to grant any relief under the illegal contract, and found Galaz’s unclean hands precluded the equitable remedy of rescinding the illegal contract. Alternatively, the court found that Galaz’s actions on the oral contract and for fraud were barred by the applicable two- and three-year statutes of limitation.
In his timely appeal, Galaz contends (1) the trial court erred in refusing to rescind the illegal contract, and (2) his claims were not barred by the statutes of limitations. We disagree with the first contention and, therefore, have no reason to reach the second. As ur courts have long recognized, an illegal contract may not serve as the foundation of any action, either in law or in equity. This state’s courts are not in the business of helping criminals recover the proceeds of their fraudulent schemes.
Put that in your pipe and smoke it.