Moore v. Kopel
653 N.Y.S.2d 927, 237 A.D.2d 124, 1997 N.Y. App. Div. LEXIS 2214 (1997)
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Rule of Law:
A recital of a contract's general objectives in a 'Whereas' clause does not create a condition precedent to performance unless clear conditional language is used. The operative clauses of a contract, which specify the terms of performance and payment, control over general, introductory recitals.
Facts:
- Dr. Martin Kopel purchased the veterinary practice of Dr. Pasquale Campanile and found the income insufficient to meet the $20,000 monthly payments.
- Kopel hired attorney Thomas R. Moore to seek a reduction in the purchase price and certain tax liabilities.
- Kopel and Moore entered into a written agreement for a contingent fee of one-third of any savings Moore obtained.
- The agreement's introductory 'Whereas' clause stated that Moore was engaged to, among other things, 'increase Kopel's assets and income'.
- The contract's operative 'Now, therefore' clause specified that Moore's fee would be one-third of savings from reducing payments and from refunds or rebates obtained.
- Moore successfully obtained certain reductions in Kopel's liabilities.
- Kopel failed to pay Moore for his services, prompting the lawsuit.
Procedural Posture:
- Thomas R. Moore sued Martin Kopel in the Supreme Court, New York County (a trial-level court), to recover legal fees.
- Moore filed a motion for partial summary judgment on the issue of liability and for dismissal of Kopel's counterclaims.
- The trial court denied Moore's motion.
- Moore, as appellant, appealed the trial court's denial to the Supreme Court, Appellate Division, First Department.
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Issue:
Does a recital in a contract's 'Whereas' clause, stating a general objective to 'increase assets and income,' create a condition precedent to payment when the operative clause bases payment on specific, achieved reductions in liabilities?
Opinions:
Majority - Rubin, J.
No. A recital of a contract's general objectives in an introductory clause does not create a condition precedent to payment. The court reasoned that the agreement does not employ express language of condition. The phrase in the 'Whereas' clause regarding increasing assets and income is merely a recitation of one of the contract's objectives, not a prerequisite to payment. The basis for compensation is clearly and specifically defined in the operative 'Now, therefore' clause, which ties the fee to 'reducing Kopel's payments' and increasing assets 'through refunds or rebates'. The court also rejected the argument that the contract was ambiguous, stating that a party's subjective interpretation does not create ambiguity and that extrinsic evidence cannot be used to add a condition to a clear and complete written agreement, per the parol evidence rule.
Analysis:
This case reinforces the critical distinction between precatory language in contract recitals ('Whereas' clauses) and binding, operative language. It clarifies that for a term to function as a condition precedent, which would excuse a party's performance if not met, it must be stated with clear and unambiguous conditional language. This decision upholds the integrity of written agreements by applying the parol evidence rule to prevent parties from later introducing novel interpretations or adding conditions that were not explicitly part of the bargained-for exchange. It provides a clear guideline that courts will enforce the specific terms of compensation as written in the operative clauses over broad, aspirational goals stated in the preamble.
