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Federal Deposit Insurance Corporation v. Hyun

United States District Court, Ninth Circuit

June 26, 2013



PAUL S. GREWAL, Magistrate Judge.

Plaintiff Federal Deposit Insurance Corporation, in its capacity as the receiver for Innovative Bank ("FDIC-R"), moves for summary judgment against Defendants Dr. David Hyun ("Hyun") and Cardiografix, Inc. ("Cardiografix") (collectively "Defendants"). Defendants have not opposed the motion. Having considered FDIC-R's motion, the court GRANTS summary judgment in favor of the FDIC-R and against Defendants.


On August 7, 2007, Innovative Bank loaned Hyun $1, 400, 000.00 pursuant to a promissory note.[1] The note provided that the debt would be payable in monthly payments sufficient to amortize the note in twenty-five years, and bearing interest on unpaid principal from the date of the note at the rate of 0.75 percent per annum above the prime rate, after an initial rate of 9% percent per annum, adjusted quarterly.[2] As part of the same loan transaction, Cardiografix made and delivered its written guaranty of this debt.[3] On Friday, April 16, 2010, Innovative Bank was closed by the California Department of Financial Institutions, and FDIC-R was named Receiver.[4]

As receiver for Innovative Bank, FDIC-R succeeded to all rights, titles, powers, and privileges of Innovative Bank under the Note and the Business Loan Agreement, and is entitled and obliged to collect moneys due and owing to Innovative Bank under the note.[5] Hyun has defaulted by failing to make payment as required by the note, and resulting in a debt to FDIC-R in the principal amount of $1, 375, 709.25, plus accrued interest in the amount of $185, 853.05 through August 22, 2012, plus late fees of $17, 539.65 through August 22, 2012.[6] After that date, interest has continued to accrue on the unpaid principal at the rate of $150.76 per diem, and will continue to accrue at that rate until time of judgment.[7]

FDIC-R filed its complaint on September 11, 2012 and based on the facts above alleged four causes of action against Defendants: (1) enforcement of the note against Hyun; (2) indebtedness against Hyun; (3) account stated against Hyun; and (4) enforcement of the guaranty against Cardiografix.[8] Although Defendants answered FDIC-R's complaint and denied several of its allegations, Defendants admit that "certain funds are due and owing pursuant to the" note, [9] admitted other facts in response to FDIC-R's requests for admission, [10] have not opposed FDIC-R's summary judgment, and have not presented evidence disputing these facts.


Summary judgment is proper if there is "no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."[11] The moving party bears the initial burden of identifying those portions of the pleadings, discovery and affidavits which demonstrate the absence of a triable issue of material fact.[12] If the moving party meets its initial burden, then the non-moving party must set forth specific facts showing that there is a genuine issue for trial.[13] A genuine issue for trial exists if there is sufficient evidence for a reasonable jury, viewing the evidence in the light most favorable to the non-moving party, to return a verdict for the nonmoving party.[14] If the nonmoving party fails to make the requisite showing, "the moving party is entitled to judgment as a matter of law."[15]


A. Enforcement of the Promissory Note

"A promissory note is a contract in writing."[16] Accordingly, to prove its first cause of action, FDIC-R must prove "(1) the existence of a contract between the parties; (2) the plaintiff's performance or excuse for nonperformance; (3) the defendant's failure to perform (breach); and (4) resulting damages."[17]

Both Defendants concede the existence of the debt and that the note is genuine.[18] Accordingly, FDIC-R establishes the first element of this cause of action. FDIC-R also presents admissible evidence that its predecessor, Innovative Bank, performed its obligation under the Note by disbursing borrowed funds in the amount of $1, 400, 000.00 to Dr. Hyun.[19] Both Defendants have implicitly admitted this by admitting the resulting debt, [20] as well as by executing the note and the guaranty. FDIC-R thereby establishes the second element of this cause of action.

Both Defendants admit that Hyun defaulted on the Note by failing to make required payments[21] that Hyun is indebted for amounts due, [22] and that Hyun owes unpaid principal, unpaid interest, and late fees.[23] The note requires Hyun to make monthly payments, [24] which both Defendants admit he has not made.[25] Both Defendants also admit that they received FDIC-R's notice of acceleration on or about August 29, 2012.[26]

FDIC-R has presented with admissible evidence that the principal amount due from Dr. Hyun is $1, 375, 709.25, that the unpaid interest due as of August 22, 2012 was $185, 853.05, that the unpaid late fees due as of that date were $17, 539.65, and that interest has continued to accrue on the unpaid balance since August 22, 2012 at the rate of $150.76 per diem.[27] The total of ...

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