POTTER, CLAYTON A. v. PADILLA, DONALD

SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department

723
CA 16-00042
PRESENT: WHALEN, P.J., CARNI, LINDLEY, DEJOSEPH, AND NEMOYER, JJ.

CLAYTON A. POTTER, PLAINTIFF-APPELLANT,

V MEMORANDUM AND ORDER

DONALD PADILLA, MICHAEL S. ZINK AND ROBERT F.
HYLAND & SONS, LLC, DEFENDANTS-RESPONDENTS.

FORSYTH, HOWE, O’DWYER, KALB & MURPHY, P.C., ROCHESTER (SANFORD R.
SHAPIRO OF COUNSEL), FOR PLAINTIFF-APPELLANT.

CALIHAN LAW PLLC, ROCHESTER (ROBERT B. CALIHAN OF COUNSEL), FOR
DEFENDANTS-RESPONDENTS.

Appeal from an order of the Supreme Court, Monroe County (Matthew
A. Rosenbaum, J.), entered October 20, 2015. The order, insofar as
appealed from, granted those parts of the motion of defendants seeking
to dismiss plaintiff’s first and second causes of action.

It is hereby ORDERED that the order so appealed from is
unanimously affirmed without costs.

Memorandum: Plaintiff commenced this action seeking, in his
first two causes of action, an accounting and money damages for breach
of contract, and to compel defendants to provide their records related
thereto. Defendants moved to dismiss the complaint, and Supreme Court
granted those parts of the motion seeking dismissal of the first two
causes of action. We affirm. To resolve prior litigation, the
parties executed an agreement under which plaintiff assigned to
defendant Robert F. Hyland & Sons, LLC (Hyland) all of his right,
title and interest in an “Assigned Membership Interest” in Hyland in
exchange for a specific payment. The “Assigned Membership Interest”
was defined in the agreement as plaintiff’s “entire membership
interest” in Hyland, including all of plaintiff’s “rights to and
claims for distributions” from Hyland “and all rights and remedies in
relation thereto.” Additionally, in the stipulation discontinuing the
prior litigation, the parties agreed that the discontinuance of the
litigation was “on the merits and with prejudice.”

Contrary to plaintiff’s contention, the court did not err in
referencing the definition of “Assigned Membership Interest” in
construing the agreement, even though the definition was found only in
the agreement’s “whereas” clause, because such recital paragraphs may
be used to “assist in determining the proper construction of a
contract” (Frenchman & Sweet v Philco Discount Corp., 21 AD2d 180,
 -2- 723
CA 16-00042

182; see Bintz v City of Hornell, 268 App Div 742, 747, affd 295 NY
628). Using that definition, the court properly concluded that
plaintiff, by executing the agreement and accepting the payment made
thereunder, assigned to Hyland the claims he makes in the first and
second causes of action in the instant case. In any event, because
plaintiff also agreed to discontinue the prior litigation “on the
merits and with prejudice,” and the claims he makes in the first and
second causes of action in the instant case could have been raised in
the prior litigation, the court also properly determined that those
causes of action are barred by the doctrine of res judicata (see
Incredible Invs. Ltd. v Grenga [appeal No. 2], 125 AD3d 1362, 1363).
Plaintiff has abandoned on appeal his contention that res judicata
does not apply because the individual defendants were not parties to
the prior litigation (see generally Ciesinski v Town of Aurora, 202
AD2d 984, 984).

Entered: October 7, 2016 Frances E. Cafarell
Clerk of the Court