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[*1]


Decided on May 12, 2005
Supreme Court, Nassau County

4778-04
Counsel for Plaintiff Littler, Mendelson, P.C. 885 Third Avenue New York, New York 10022-4843 Counsel for Defendant (for Vincenzi) Steven Cohn, P.C.
One Old Country Road
Carle Place, New York 11514
(for Winston)
Berger & Webb, LLP
900 Third Avenue
New York, New York 10022-4775
Leonard B. Austin, J.
BACKGROUND
Plaintiff Greystone Staffing, Inc. ("Greystone"), moves for an order vacating the parties' Stipulation of Settlement dated April 27, 2004 in its entirety and reinstating this action in full; imposing financial sanctions on Defendants and awarding Greystone its costs and attorneys' fees; directing expedited discovery; and appointing a Special Master at Defendants' expense.
In this action commenced on or about April 7, 2004, Greystone sought to recover, among other things, for the breach of her employment contract and fiduciary duties as well as for unfair competition, trade secret violations and tortious interference with actual and prospective contractual and business relations by its former employee, Defendant Jennifer Vincenzi ("Vincenzi"). The action is predicated upon the alleged misappropriation of Greystone's confidential information by Vincenzi and her current employer, Defendant Winston Staffing Services, LLC ("Winston Staffing").
By Order to Show Cause dated April 14, 2004, Greystone sought a preliminary injunction enjoining Vincenzi and Winston from utilizing Greystone's documents and confidential information in her new employment. Defendants categorically denied any misconduct and, via counsel, represented to this Court that they did not have any Greystone documents or confidential information. Based upon such representation, a Stipulation of Settlement was entered into on or about April 27, 2004 whereby the Defendants agreed to a permanent injunction enjoining them from using or disclosing Greystone's financial information and data. The injunction enjoined Vincenzi from using or disclosing either directly or indirectly through a third party Greystone's information and data and from communicating with Greystone's clients except for those existing customers of Winston whose identity could be readily ascertained by public sources or those whose contacts are a result of her memory. [*2]Vincenzi agreed to cease and desist from making negative or derogatory statements about Greystone and all Defendants agreed to immediately return Greystone's confidential information.
The Stipulation of Settlement stated that "each Defendant severally represents and warrants . . . that they do not have in their possession any documents or records belonging to Plaintiff." Vincenzi specifically represented "that her Affidavit sworn to on April 12, 2004, is true and correct in all material respects." In that affidavit, Vincenzi stated that since she left her employment with Winston Staffing, she attempted to obtain business utilizing only publicly available resources and her own memory. While she admitted to sending letters to former clients of Greystone, she attested that the names of those companies were all based on her recollection and that she did not refer to any documents other than the Super Yellow Pages to obtain their addresses. She stated "I did not retain nor did I ever have financial information concerning the fees generated or charged by Greystone to any of [those] clients." She further represented "[t]here is nothing that I need from Greystone in order to compete fairly. But more importantly,
however, I did not take anything with me when I started at my new job. Nor did I retain any files of Greystone's. I simply have nothing." (Emphasis added.)
The Stipulation of Settlement provided that "In the event that any of the Defendants have made any misrepresentations to Greystone herein or commit any other breach of this Stipulation or injunction, Greystone may file a motion seeking the entry of a judgment for actual damages against the offending Defendants incurred as a result of those misrepresentations or breach of the injunction, which may include 100% of the gross profits with respect to each breach, and if successful in such motion, including reasonable attorneys' fees in making such motion."
In seeking vacatur of the Stipulation of Settlement, Greystone relies on the affidavit of Jennifer Toomey ("Toomey"), a former employee of Winston Staffing, who contacted Greystone's President and CEO on or about August 25, 2004, to inform him of conduct which she found offensive and believed to be unethical.
Toomey attests that she was employed by Winston Staffing when Vincenzi was hired and that she learned that Vincenzi was using Greystone's proprietary information on Winston Staffing's behalf. In fact, she specifically identified computer-generated reports consisting of (i) "Greystone New York Currently Filled Work Order Reports", (ii) "Greystone New York Customer Rep Reports", and (iii) "Computer Contact" lists, all of which contain a list of Greystone's clients with names, addresses and telephone numbers; and (iv) Greystone New York Summary Gross Profit Reports, which contains clients, bill rates and gross profits. In all, Toomey identified 40 pages of Greystone documents dated October through December, 2004, which she says she saw Vincenzi utilizing while working at Winston Staffing. Toomey further states that she "firmly believes" that Winston Staffing's President Gregg Kaye ("Kaye") was made aware of this. She claims that she was at meetings with Kaye and Vincenzi and "voiced [her] opinion with respect to Jennifer Vincenzi's actions," but no action was taken. The relationship between Toomey and Vincenzi soured. Kaye told her if she could not get over Vincenzi's behavior, then she could not work for Winston Staffing. Toomey was ultimately fired.
In her affidavit in opposition to the vacatur of the Stipulation, Vincenzi states that "it was never made clear to me that by signing the stipulation I was confirming the representations made in the April 12, 2004 affidavit. I believed that I was representing that I no longer possessed the Greystone documents." [*3]
Kaye previously swore that "Jennifer has not provided Winston, nor do I believe that she has utilized, any documents or information from Greystone in attempting to compete in the staffing market." He now attests " I stand by this statement . . . to the extent that if Vincenzi utilized any documents or information belonging to Greystone, I was unaware of it." He denies ever discussing Greystone or its records with Toomey.
DISCUSSION
"Stipulations of Settlement are favored by the courts and not lightly cast aside (citations omitted)." Hallock v. State, 64 NY2d 224, 230 (1984). "Only where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation." Hallock v. State, supra, citing Matter of Frutiger, 29 NY2d 143, 149-150 (1971). See also, Meaders v. Jones, 15 AD3d 490 (2nd Dept. 2005).
Vincenzi's representation in the Stipulation that her April 12, 2004 affidavit was true and correct has been proven false. That is, Vincenzi's representation in her April 12, 2004 Affidavit that she took nothing from Greystone and that she had none of their files was not truthful. There is no question that Greystone relied on that representation in entering into the Stipulation of Settlement and it is entitled to its vacatur as against Vincenzi. Ruby Development Corp. v. Charrim Development Corp., 160 AD2d 928 (2nd Dept. 1990). Vincenzi's attempt to avoid vacatur of the Stipulation of Settlement premised upon her alleged misunderstanding of it fails. "One who enters into a plain and unambiguous contract cannot avoid the obligation by merely stating that [s]he erred in understanding its terms." Aventine Investment Mgt., Inc. v. Canadian Imperial Bank of Commerce, 265 AD2d 513, 514 (2nd Dept. 1999); Touloumis v. Chalem, 156 AD2d 230, 232 (1st Dept. 1989). See also, Freda v McNamara, 254 AD2d 251, 252 (2nd Dept. 1998).
As to the Winston Defendants, whether Kaye himself was actually aware of Vincenzi's possession and/or use of Greystone's documents is not clear. Nevertheless, "[t]he general rule is that knowledge acquired by an agent acting within the scope of his agency is imputed to his principal and the latter is bound by such knowledge although the information is never actually communicated to it (citations omitted)." Center v. Hampton Affiliates, Inc., 66 NY2d 782, 784 (1985). See, Restatement [Second] of Agency

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