The opinion of the court was delivered by: Honorable Ronald S.W. Lew Senior, U.S. District Court Judge
RULING AND ORDER RE COURT TRIAL
On May 3, 2011, Plaintiff Joint Base Limited ("Plaintiff") filed a Complaint against Defendant Saehan Bank ("Defendant") alleging conversion, declaratory relief, and money had and received . On June 5, 2012, the Court commenced a court trial and heard arguments from both Parties. Having received, reviewed, and considered the evidence presented, as well as the Parties' arguments at trial, the Court makes the following ruling:
A. Vision Network International's Loan History
1. On June 11, 2007, Vision Network International Corporation ("Vision") borrowed $400,000 from Defendant. The loan was for one year, i.e., Vision was to repay Defendant no later than June 11, 2008.
2. The terms of the $400,000 loan were embodied in a Promissory Note (Ex. 18), a Business Loan Agreement (Ex. 19), a Commercial Security Agreement (Ex. 20), a Commercial Guaranty (Ex. 21), and a Deed of Trust (Ex. 22) executed by Vision's owner and president, Han Song ("Song").
3. On October 15, 2008, Saehan Bank and Vision agreed to a Change In Terms Agreement which: (1) reduced the principal amount of the $400,000 Promissory Note to $300,000; and (2) renewed the maturity date of the $300,000 Promissory Note for another 180 days, to March 11, 2009. Ex. 24.
4. Also on October 15, 2008, Vision executed a new separate Promissory Note with Defendant for $100,000 repayable by October 15, 2009. Ex. 25. The terms of the $100,000 loan were embodied in the $100,000 Promissory Note, a Business Loan Agreement (Ex. 26), a Commercial Security Agreement (Ex. 27), a Commercial Guaranty (Ex. 28), and a Deed of Trust (Ex. 29) executed by Song.
5. On April 3, 2009, Defendant agreed to allow Vision to execute a Change In Terms Agreement for the $300,000 loan. This Change in Terms Agreement extended the maturity date of the $300,000 loan to September 11, 2009. Ex. 30.
6. On February 16, 2010, Defendant agreed with Vision to another Change In Terms Agreement to further extend the maturity date of the $300,000 loan to March 11, 2011. Ex. 31.
B. Vision Network's Default on the Loans
7. According to the terms of both the $300,000 Promissory Note and the $100,000 Promissory Note, the Borrower is in default when it "fails to make any payment due under this Note." Exs. 18, 25.
8. During the first six months of 2010, Vision was late on its monthly payments three times.
9. When Vision missed its December 2010 and January 2011 payments, Song promised Defendant that Vision would resolve its outstanding payments and become current on its loan by the end of January 2011. Vision, however, did not become current on its loan.
10. By February 1, 2011, Vision was in default on both its $300,000 loan and its $100,000 loan. On the $300,000 loan, Vision had failed to make its monthly payments of accrued interest due on December 11, 2010 and January 11, 2011. On its $100,000 loan, Vision had failed to make its monthly payments of principal and accrued interest due on December 15, 2010 and January 15, 2011. Thus, as of February 1, 2011, it was 52 days late on its $300,000 loan and 48 days late on its $100,000 loan. Exs. 33, 34.
11. On February 1, 2011, Defendant sent Vision two "Demand Of Cure" letters, one for each loan. Ex. 33, 34. Each letter warned Vision that it was "currently in default." Each letter warned Vision that "[i]f we do not receive the demanded amount from you by 5:00 p.m. 02/09/2011, we will have no alternative but to initiate appropriate legal actions against you."
12. February 9, 2011 passed without Vision making any payment on either loan.
13. The $300,000 Promissory Note would have matured March ...