Opinion
February 2, 1990
Appeal from the Supreme Court, Erie County, Joslin, J.
Present — Dillon, P.J., Denman, Green, Balio and Lawton, JJ.
Order unanimously modified on the law and as modified affirmed without costs, in accordance with the following memorandum: ABC Meats, Inc. commenced this action for breach of contract and wrongful dishonor of checks in 1978. It merged into Shop the ABC Way, Inc. in 1981, and two years later, Buffalo and Western New York Wholesale Foods, Inc. (Wholesale Foods) purchased the assets of Shop the ABC Way, Inc. and another corporation. Defendant moved to substitute Wholesale Foods as plaintiff upon the ground that, by acquiring the assets of Shop the ABC Way, Inc., Wholesale Foods became the real party in interest. Plaintiff opposed the substitution, contending that the agreement did not specifically describe the action as an asset to be acquired and that the parties never intended the transfer to include the subject action.
We conclude that Supreme Court properly directed a substitution of parties. The 1983 agreement, reasonably construed, transferred all assets of Shop the ABC Way except accounts receivable.
The court erred, however, in imposing a conditional order of preclusion upon Wholesale Foods for two reasons. First, defendant did not seek to preclude Wholesale Foods; it sought to preclude ABC Meats based upon that party's failure to respond adequately to a second set of interrogatories. Second, the interrogatories were not served upon Wholesale Foods, and Wholesale Foods was not a party to the action. Wholesale Foods was not subject to a CPLR 3126 order of preclusion (see, Durst, Fuchsberg and Kleiner, Modern New York Discovery § 16:17).