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Hyundai Securities Co. Ltd v. Ik Chi Lee

April 18, 2013

HYUNDAI SECURITIES CO. LTD., PLAINTIFF AND RESPONDENT,
v.
IK CHI LEE, DEFENDANT AND APPELLANT.



(Los Angeles County Super. Ct. No. BC456484) APPEAL from a judgment of the Superior Court of the County of Los Angeles, Alan S. Rosenfield, Judge.

The opinion of the court was delivered by: Mosk, J.

CERTIFIED FOR PUBLICATION

Reversed and remanded.

INTRODUCTION

We hold that a proceeding under California's "Uniform Foreign-Country Money Judgment Recognition Act" (Code Civ. Proc., §§ 1713-1724 (the Act))*fn1 , is an action and subject to the requirements applicable to all actions. Because the trial court in this case recognized the foreign-country money judgment upon a petition rather than upon a duly noticed motion for summary judgment, judgment on the pleadings, or trial, we reverse the judgment.

BACKGROUND

Defendant and appellant Ik Chi Lee (Lee) was the chief executive officer of Hyundai Securities Co., Ltd. (Hyundai) between the years 1996 and 2000. Several individuals who were shareholders of Hyundai brought a shareholders' derivative action in the Seoul Southern District Court against Lee, as an officer of Hyundai, for, among other things, securities fraud by Lee during his term as chief executive officer of Hyundai (the Korean Action). Lee appeared and defended the Korean Action.

In the Korean Action, the Seoul Southern District Court entered against Lee and in favor of Hyundai a judgment in the principal amount, which, when converted to United States dollars as of the time of entry of judgment, was approximately $18,839,155. The Korean Judgment also provided for prejudgment interest at five percent per annum and post judgment interest at the rate of 20 percent per annum, payable according to Korean law.

Lee appealed the Korean Judgment to the Seoul Court of Appeals, which "dismissed" the appeal. Lee then appealed the Seoul Court of Appeals decision to the Korean Supreme Court, which also "dismissed" the appeal. Both "dismissals" were based on the appeals lacking merit.

The Korean Supreme Court, by upholding the monetary portions of the Korean Judgment, rendered the Korean Judgment final, conclusive, and enforceable. There is no evidence that the monetary portions of the Korean Judgment were vacated, modified, or set aside, or that there could be any further appeal.

Hyundai filed an action in the Los Angeles Superior Court pursuant to the Act, seeking recognition of the Korean Judgment. Thereafter, Hyundai filed a first amended complaint in which Hyundai alleged the existence of the Korean Judgment that awarded money damages; that the Korean Judgment was final, conclusive, and enforceable in Korea; that Hyundai had already taken steps to execute, and did execute, the Korean Judgment against certain of Lee's real and personal properties in Korea; and that after the amount collected by Hyundai and with accrued interest, Lee owes Hyundai $40,785, 124.11 plus interest that continues to accrue by $12,926.01 each day.

In his answer, Lee alleged a general denial and asserted his affirmative defenses, some of which are those arguably covered by section 1716, subdivision (c) as permitted defenses to recognition of a foreign-country money judgment. Lee asserted that there is a conflicting judgment by which Hyundai was awarded all damages it seeks in this action, that the damages constitute a fine or penalty, and that the postjudgment award of 20 percent interest awarded in the Korean Judgment is unenforceable in California. He also challenged Hyundai's standing because the Korean action was a derivative action.

In its action, Hyundai filed a "Notice of Petition and Petition For Entry Of The California Judgment pursuant to the Uniform Foreign Country Money Judgments Recognition Act," along with declarations of Korean attorneys and its attorney in this action and points and authorities. In the "petition," Hyundai set forth the existence of the Korean Judgment showing it was compensatory in nature and that it was final, conclusive, and enforceable in Korea. Hyundai asserted that although it was not initially named as plaintiff in the Korean Action that was brought by Hyundai's shareholders as a shareholder derivative action, Hyundai was the judgment creditor under the Korean Judgment.

In opposition, Lee argued that judgment could not be entered on a "petition" rather than on a motion for summary judgment or trial. Lee also argued his affirmative defenses, and provided law and facts in support of his allegations. Among them, Lee asserted that he was entitled to an offset because Hyundai allegedly recovered a large sum of money in a separate Korean lawsuit in which Lee was not a party; Hyundai lacked standing; the Korean Judgment was not compensatory in nature, but rather was a fine or penalty arising out of securities violations--"the penal conduct for which Lee went to jail in Korea"--and therefore the judgment cannot be recognized under the Act; and the postjudgment interest rate of 20 percent awarded in ...


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