Opinion
E066865
08-17-2018
KOREA DEPOSIT INSURANCE CORPORATION, as Trustee in Bankruptcy, etc., Plaintiff and Respondent, v. DEBBIE A. SUH, Defendant and Appellant.
John A. Messina, Jr., and Mary E. Gram for Defendant and Appellant. Fierstadt & Mans and David A. Mans for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super.Ct.No. MCC1401619) OPINION APPEAL from the Superior Court of Riverside County. Raquel A. Marquez, Judge. Reversed. John A. Messina, Jr., and Mary E. Gram for Defendant and Appellant. Fierstadt & Mans and David A. Mans for Plaintiff and Respondent.
Defendant and appellant Debbie A. Suh appeals from a judgment entered in a California court to enforce a foreign judgment obtained against her by plaintiff and respondent Korea Deposit Insurance Corporation, or the KDIC. Among other things, Ms. Suh contends that the judgment must be reversed because the KDIC failed to prove an essential element of its cause of action. We agree, and we will reverse the judgment. Because we find this issue dispositive, we need not address the other issues raised on appeal.
FACTUAL AND PROCEDURAL HISTORY
On May 15, 2008, a loan contract was entered into, ostensibly between Tomato Savings Bank in the Republic of Korea and Ms. Suh. The loan was guaranteed by Ms. Suh's father, Dr. Jung Sun Suh, who was an officer or director of the bank. The loan was for 500 million Korean won and was used to purchase shares in a securities fund. Ms. Suh purchased 600,000 shares and Dr. Suh purchased 257,143 shares. The shares were used to secure the loan. The contract was signed by the Suhs using their personal seals. Such seals, also called "chops," are personalized ink stamps that are commonly used in Korea to serve as a signature. Each seal is unique, and the seals are issued only through the Korean government. The loan application package included copies of the certificate of seal, dated May 8, 2008, provided by the Korean government office that issues personal seals, her certificate of domestic residence issued by the same government office, Ms. Suh's graduation certificate from a university located in Naju City, Korea, her United States passport, and her California driver's license.
As we discuss post, Ms. Suh denies that she entered into the contract or authorized her father to enter into it on her behalf.
The loan had not been repaid, even in part, when Tomato Savings Bank went bankrupt. The KDIC was appointed trustee for the bank. The KDIC brought an action in Korea against the Suhs to recover the money owed on the loan. On August 26, 2013, the Suhs filed an objection to the suit, stating that Dr. Suh was the responsible party and that Ms. Suh had no involvement in the loan. The objection did not contest the court's jurisdiction over Ms. Suh. The seals of both Ms. Suh and Dr. Suh appear on the objection. On November 21, 2013, following a trial, the KDIC obtained a judgment in Korea in the amount of 956,166,827 won.
On December 15, 2014, KDIC filed an action in the Superior Court of Riverside County to enforce the foreign judgment against Ms. Suh, who is a United States citizen and a resident of Riverside County, under the Uniform Foreign-Country Money Judgments Recognition Act. The operative second amended complaint was filed on June 17, 2015. (Code Civ. Proc., § 1713 et seq.)
Ms. Suh testified at trial. Although she had lived in the United States most of her life, she attended a Korean university in Naju, in the southern part of Korea. She left Korea on May 15, 2008. She denied any knowledge of the loan and denied having provided any of the documents included in the loan application or having placed her seal on any of the loan documents. She testified that she had not requested or obtained the registered seal used on the loan documents. She testified that in his deposition, her father had said that he had had the seal issued and that it was in his possession. She testified that she first learned about the loan when she was served with the summons and complaint in the Riverside County action. She called her father to ask what the suit was about. He told her, "This is my loan. This is nothing you have to worry about. I'll take care of everything." She testified that she did not receive any of the loan proceeds. On May 15, 2008, she was a student and had only about $1,000 in her checking account. She did not own any property on that date.
Ms. Suh also denied any knowledge of the Korean lawsuit until she was served with the Riverside County action. She denied having affixed her seal to the objection to the Korean suit or giving her father permission to do so on her behalf. She testified that she was in the United States in August 2013, when her father submitted the objection to the Korean lawsuit.
Ms. Suh acknowledged that she was in Korea on May 15, 2008, the date the loan documents were executed, but testified that she left Korea that day to return to the United States, and she did not meet with her father that day. She testified that she was in Naju, about a four- to five-hour drive from the airport, and she arrived at the airport at least three or four hours before her flight departed. On cross-examination, Ms. Suh acknowledged that although the airport is four or five hours from Naju, Naju is only about 1.5 to 2 hours from Seoul, where the loan transaction took place.
In August 2012, Ms. Suh and her husband bought a house in Murrieta. The grant deed, dated August 23, 2012, granted title to the husband, "a married man, as his sole and separate property." On August 24, 2012, Ms. Suh executed an interspousal transfer, relinquishing all interest in the property to her husband. Suh testified that this was done on the recommendation of their realtor, in order for them to qualify for the loan on the property.
Ms. Suh testified that they bought the house in 2013. The recorded documents contradict her testimony.
Dr. Suh's testimony was submitted by means of the transcript of a deposition he gave in this matter on February 4, 2016. In his deposition, Dr. Suh testified that his daughter did not know anything about the loan or the Korean lawsuit. He testified that the loan was "his" loan, not hers. The bank knew that Ms. Suh was a college student without assets, and it would not have issued her a loan. The bank relied on his credit; he had a "huge amount of U.S. real estate." (He had previously stated that he did not own property in the United States.) The purpose of the loan was to purchase securities. He "signed" the loan papers using his seal and Ms. Suh's seal. A bank employee saw him do this. He was not able to identify any bank employee who could testify that Ms. Suh was not present, however.
Dr. Suh testified that in Korea, it is a "pretty common" practice to apply for a loan in the name of another person because there is a limit to the number of loans a person can have. At the time of this loan, he did not qualify for a new loan. He had done this before, with the bank's knowledge and consent.
When Dr. Suh received the complaint (called an application for payment order), he immediately filed the objection, to which he affixed his daughter's seal without her knowledge. He did not appeal the judgment.
LEGAL ANALYSIS
1.
THERE IS NO EVIDENCE TO SUPPORT THE CONCLUSION THAT THE KOREAN
JUDGMENT WAS FINAL, CONCLUSIVE AND ENFORCEABLE AS OF THE DATE
OF ENTRY OF THE CALIFORNIA JUDGMENT
Under the Uniform Foreign-Country Money Judgments Recognition Act, Code of Civil Procedure section 1713 et seq. (the recognition act), a foreign judgment is entitled to recognition only if it grants or denies recovery of a sum of money and is final, conclusive, and enforceable "under the law of the foreign country where rendered." (§ 1715, subd. (a)(1), (a)(2).) The party seeking recognition has the burden of proving that the foreign judgment is entitled to recognition. (§ 1715, subd. (c).) If the party seeking recognition of a foreign money judgment meets its burden under section 1715, subdivision (a), the burden shifts to the party resisting recognition of the judgment to establish the existence of a mandatory or discretionary ground for nonrecognition, as stated in subdivisions (b) and (c) of former section 1716. (Former § 1716, subd. (d); Stats 2009, ch. 579, § 2, eff. Jan. 1, 2010.)
All further statutory citations refer to the Code of Civil Procedure unless another code is specified.
Former section 1716 was in effect when this matter was tried in 2016. As amended effective January 1, 2018 (Stats. 2017, ch. 168, § 5), section 1716, subdivision (e), provides that the burden of proof shifts to the opponent if the party seeking recognition has met its burden of establishing that the foreign judgment is recognizable pursuant to section 1715, subdivision (c).
Ms. Suh contends that the KDIC did not meet its burden of proof under section 1715, subdivision (a)(2), that the Korean judgment is final, conclusive and enforceable. We agree.
In order to meet its burden of proof, a plaintiff must present substantial evidence as to each element of its cause of action: "Whatever plaintiff is obligated to plead, plaintiff is obligated to prove." (Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 654; see Evid. Code, § 500 ["party has the burden of proof as to each fact the existence or nonexistence of which is essential to the claim for relief or defense that he is asserting"].) Proof requires substantial evidence, i.e., evidence that is of ponderable legal significance, reasonable in nature, credible, and of solid value. (Roddenberry, at p. 651.) It must actually be substantial proof of the essentials which the law requires. (Ibid.) Any inferences drawn from the evidence must be a product of logic and reason. (Moran v. Foster Wheeler Energy Corp. (2016) 246 Cal.App.4th 500, 517-518.) Inferences based on speculation cannot support a judgment. (People v. Perez (1992) 2 Cal.4th 1117, 1133.) On review, we view the record in the light most favorable to the prevailing party. (Moran v. Foster Wheeler Energy Corp. at p. 517.) We resolve all conflicts in the evidence in favor of the judgment and indulge every reasonable inference the trier of fact could draw from the evidence. (Ibid.) However, when the evidence is undisputed, it is a question of law whether the evidence is sufficient proof of the essentials which the law requires. (Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 799. We review the sufficiency of undisputed evidence independently. (Ibid.)
Here, it is undisputed that there was no testimony that directly addressed the issue of what constitutes a final, conclusive, and enforceable judgment under the laws of the Republic of Korea. There was no testimony by an expert on Korean law, nor was the trial court asked to take judicial notice of the pertinent laws. (Evid. Code, § 452, subd. (f).) Different countries have different rules about the finality and enforceability of judgments. The California Supreme Court addressed this in Manco Contracting Co. (W.L.L.) v. Bezdikian (2008) 45 Cal.4th 192 (Manco Contracting). It noted, for example, that while English law regards a judgment as final even though it is subject to appeal or "subsequent modification," i.e., collateral attack, Japanese law provides that lodging a notice of appeal prevents a judgment from becoming final. (Id. at p. 202.) The court also noted that although under California law a judgment is not final while an appeal is pending, "the federal rule is contrary." (Ibid.) Because different jurisdictions take different views of finality, the fact that the judgment in this case was "provisionally" enforceable is not sufficient to establish that it was also final in the sense that it was not appealable or subject to modification. Accordingly, in order to establish the finality of a foreign judgment, there must be evidence establishing the law of the country that rendered the judgment. There simply was none in this case.
In Manco Contracting, supra, 45 Cal.4th 192, the issue before the court was whether former section 1713.2 required courts in recognition proceedings to apply the law of California or the law of the foreign jurisdiction to determine whether a judgment is final, conclusive and enforceable. (Manco Contracting, at p. 200.) Former section 1713.2 was repealed effective January 1, 2008. (Stats. 2007, ch. 212, § 1.) It was replaced by section 1715, which omits the ambiguity the court addressed in Manco Contracting.
On June 21, 2018, while this appeal was pending, Ms. Suh filed a motion asking this court to consider additional evidence and to make factual findings on appeal. She asserted it would show that the Korean judgment is not yet final. On the same date, she filed a request for judicial notice of documents purporting to show that she had initiated some type of review proceeding in Korea in December 2017. She refers to it as an appeal, but does not provide any evidence that her ability to file the proceeding means that the judgment is final under Korean law. The judgment could conceivably be final even if it is still subject to appeal and/or collateral attack, as is the case in England. (Manco Contracting, supra, 45 Cal.4th at p. 202.) The declaration of Ms. Suh's Korean attorney, which she submitted in support of her request for judicial notice, does not address the question that is pertinent here, i.e., whether the judgment was considered final in February 2016, when the trial was held in California and 10 months before she filed her "appeal" in Korea. In any event, because we have determined that the KDIC failed to meet its burden of proof at trial, the outcome of Ms. Suh's current appeal or collateral attack on the judgment in Korea is a moot point.
For these reasons, both the motion to consider additional evidence and make factual findings on appeal and the request for judicial notice are denied.
The KDIC contends that it established that the judgment was final by virtue of Dr. Suh's testimony that he was served with a copy of the judgment and did not appeal it, and by virtue of the testimony of Sung Kon Kim, an employee of the KDIC. In the absence of any evidence regarding Korean law concerning finality of judgments, Dr. Suh's testimony that he did not appeal the judgment has no tendency in reason to support the inference that the judgment was final, and is therefore not substantial evidence on that point. Mr. Kim's testimony is similarly nonprobative. Mr. Kim merely identified the judgment as the judgment the KDIC was seeking to enforce. He did not testify as to whether the judgment was final under Korean law. Nor was it established that he had the expertise to testify as to the finality of the judgment in any event.
The only other evidence that pertains to the finality of the judgment is the judgment itself. The text of the judgment reads: "1. Defendants are jointly and severally hereby ordered to pay to plaintiff 956,166,827 won, with a 25% interest for 470,576,109 won of such amount from June 18, 2013 until date of full payment. . . . [¶] 2. Cost of litigation shall be borne by the defendant. [¶] 3. Clause 1 may be provisionally enforced." The statement that clause 1 may be "provisionally enforced" indicates that the judgment was enforceable when issued, but this language does not provide any basis for determining whether the judgment was final under Korean law at the time of the recognition proceeding. (Cf. Manco Contracting, supra, 45 Cal.4th at p. 202.)
The KDIC relies on Korea Water Resources Corporation v. Lee (2004) 115 Cal.App.4th 389 (Korea Water Resources) in support of its contention that the judgment is final, conclusive, and enforceable. It summarizes the holding of that case as follows: "[A] provisionally enforceable Korean money judgment was not 'conclusive' within [the] meaning of [the] California statute governing recognition of foreign money judgments, and thus [the] Korean corporation was not entitled to recognition of such judgment, where [the] Korean Supreme Court had issued a ruling removing the legal underpinning supporting [the] judgment and remanding [the] case for [a] trial de novo, such that [the] judgment was no longer based on [the] calculated damages amount." In contrast to that case, the KDIC argues, the judgment in this case is final because it has not been questioned or revised by a Korean appellate court or remanded to a Korean trial court, and there is no indication that the Korean court retained any continuing jurisdiction over the case. Korea Water Resources has been superseded by statute, however. (Manco Contracting, supra, 45 Cal.4th at p. 203.) In Korea Water Resources, the Court of Appeal interpreted former section 1713.2, stating: "'This chapter applies to any foreign judgment that is final and conclusive and enforceable where rendered even though an appeal therefrom is pending or it is subject to appeal.' (Italics added.)" (Korea Water Resources, supra, 115 Cal.App.4th at p. 393.) As noted ante, former section 1713.2 was repealed in 2008. (Stats. 2007, ch. 212, § 1.) It was replaced by section 1715, which, as also discussed ante, unequivocally provides that a foreign money judgment is recognizable if, "[u]nder the law of the foreign country where rendered, [it] is final, conclusive, and enforceable." (§ 1715, subd. (a)(2).) Because section 1715 rather than former section 1713.2 governs this proceeding, Korea Water Resources is inapposite in that regard.,
Korea Water Resources, supra, 115 Cal.App.4th 389, was also disapproved with respect to its analysis of former section 1713.2. (Manco Contracting, supra, 45 Cal.4th at pp. 203-204.)
In Korea Water Resources, supra, 115 Cal.App.4th 389, the court cited article 471(1) of the Korea Code of Civil Procedure, which states, "A judgment shall not become final and conclusive during the period in which an appeal may be filed or when a lawful appeal has been filed within the prescribed period." (Korea Water Resources, at p. 399.) The case does not state what "the prescribed period" prescribed by the Korea Code of Civil Procedure is.
2.
THE CONTENTION IS NOT WAIVED
The KDIC contends that Ms. Suh waived any contention that the evidence is insufficient to show that the Korean judgment is final because she did not explicitly contest its finality at trial. However, Ms. Suh's general denial of the second amended complaint put all of the material allegations in the complaint in issue, including the allegation that the Korean judgment was final, conclusive, and enforceable. (Advantec Group, Inc. v. Edwin's Plumbing Co., Inc. (2007) 153 Cal.App.4th 621, 627.) It was the KDIC's burden to prove affirmatively that the judgment was final. (§ 1715, subd. (a).) In the absence of evidence on that issue, it was not Ms. Suh's burden to refute it. The burden would have shifted to her only if the KDIC had presented legally sufficient evidence that the judgment was final, conclusive and enforceable. (§ 1715, subd. (c).) Moreover, unless one of a few recognized exceptions applies, the sufficiency of the evidence may be raised for the first time on appeal, even in the absence of an express contention of insufficiency in the trial court. (Tahoe National Bank v. Phillips (1971) 4 Cal.3d 11, 23, fn. 17.)
Exceptions include failure to provide an adequate record to permit review of the evidence (Aguilar v. Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121, 132) and failure to set forth all of the material evidence, including evidence harmful to the appellant's position, in the opening brief (Estate of Bonzi (2013) 216 Cal.App.4th 1085, 1107, fn. 7).
The KDIC also contends that Ms. Suh's contention is waived because she failed to object to the trial court's statement of decision with respect to its finding that the Korean judgment was final. It contends that the doctrine of implied findings applies and precludes her from arguing the insufficiency of the evidence. We disagree.
In a bench trial, when the trial court issues a statement of decision, a party must bring to the court's attention any ambiguities or omissions in the factual findings of the statement of decision. If the party does so, "it shall not be inferred on appeal . . . that the trial court decided in favor of the prevailing party as to those facts or on that issue." (§ 634.) On the other hand, if the party fails to bring any such ambiguities or omissions to the trial court's attention, the party waives the right to claim on appeal that the statement was deficient in those respects, and the appellate court will infer that the trial court made any necessary factual findings to support the judgment, including the omitted or ambiguously resolved issues. (Fladeboe v. American Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 59-60, citing In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133-1134.)
Here, the trial court's statement of decision states that Ms. Suh did not dispute the finality of the judgment. It made no other factual findings with respect to finality. Ms. Suh did not object or seek correction of the statement of decision. Accordingly, the KDIC is correct that Ms. Suh's failure to object to the trial court's erroneous finding that she did not dispute the finality of the Korean judgment means that we must infer that the trial court made all necessary factual findings on that point. However, what the KDIC ignores is that even in the absence of an objection to the statement of decision, the party may still assert on appeal the insufficiency of the evidence to support the implied factual findings. The appellate court then reviews the implied factual findings under the substantial evidence standard. (Fladeboe v. American Isuzu Motors Inc., supra. 150 Cal.App.4th at p. 60.)
Here, the trial court's actual finding, that Ms. Suh did not dispute finality, is unsupported by the record. As stated ante, Ms. Suh did contest the assertion that the judgment was final by virtue of her general denial, which put all of the material allegations in the complaint in issue, including the allegation that the Korean judgment was final, conclusive, and enforceable. (Advantec Group, Inc. v. Edwin's Plumbing Co., Inc., supra, 153 Cal.App.4th at p. 627.) Nowhere in the record is there a subsequent concession by Ms. Suh that the judgment was final. Accordingly, substantial evidence does not support that finding. And, assuming that Ms. Suh's failure to object to the trial court's actual finding means that we must also infer that the trial court made necessary factual findings as to the judgment's finality pursuant to Korean law, those findings are not supported by substantial evidence, for the reasons stated ante. Accordingly, the judgment must be reversed.
DISPOSITION
The judgment is reversed. Costs on appeal are awarded to defendant and appellant Debbie A. Suh.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
McKINSTER
J. We concur: RAMIREZ
P. J. MILLER
J.