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Pak v. Kim

COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT
Dec 14, 2017
No. F073740 (Cal. Ct. App. Dec. 14, 2017)

Opinion

F073740

12-14-2017

HASONG PAK et al., Plaintiffs and Respondents, v. JUNG HAN KIM, Defendant and Appellant.

LloydWinter, P.C. and Jody L. Winter for Defendant and Appellant. Pape & Shewan and Scott R. Shewan for Plaintiffs and Respondents.


NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 15CECG01772)

OPINION

APPEAL from a judgment of the Superior Court of Fresno County. Kristi Culver Kapetan, Judge. LloydWinter, P.C. and Jody L. Winter for Defendant and Appellant. Pape & Shewan and Scott R. Shewan for Plaintiffs and Respondents.

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Defendant Jung Han Kim appeals from an order denying his motion to vacate a California judgment entered on an Oregon judgment obtained by default in 2009. The Oregon judgment held Kim liable for approximately $1.8 million. After accrued interest, the California judgment totaled over $2.7 million.

Kim asserts the Oregon court never had personal jurisdiction over him because he was never served. The trial court considered Kim's testimony and that of the process server who claimed to have personally served Kim at an address in Fresno on August 26, 2008. The court stated the testimony of each was equally believable, concluded Kim failed to carry his burden of proof, and denied his motion to vacate the California judgment.

The standard of review plays a large role in the outcome of this appeal. The specific standard of review applicable in this case is tailored to the trial court's determination that the appellant failed to carry his burden of proof. A failure-of-proof determination will be upheld by the reviewing court unless the evidence compels a finding in favor of the appellant as a matter of law. A finding is compelled when the appellant's evidence is (1) uncontradicted and unimpeached and (2) of such a character and weight as to leave no room for a judicial determination that it was insufficient to support a finding. (Dreyer's Grand Ice Cream, Inc. v. County of Kern (2013) 218 Cal.App.4th 828, 838 (Dreyer's).) In this case, the evidence supporting Kim's version of events was not uncontradicted and unimpeached. Kim's testimony was contradicted by the testimony of the process server and Kim's prior inconsistent statements impeached aspects of his testimony at the hearing on the motion to vacate. Consequently, the trial court's determination that Kim failed to prove the absence of service of process must stand because Kim did not show a finding in his favor was compelled as a matter of law.

As to Kim's procedural argument about the trial court's failure to provide a written explanation for rejecting relief on equitable grounds, we conclude the court was not required to explicitly address those grounds because Kim did not request a statement of decision. As to the equitable grounds themselves, we conclude the trial court did not abuse its discretion when it impliedly rejected those grounds as a basis for setting aside the California judgment.

We therefore affirm the judgment.

FACTS AND PROCEEDINGS

Kim first met plaintiffs Hasong J. Pak and Jin Yung Pak (the Paks) in 2003 when Kim was working as a stockbroker for Paulson Investment Company, a firm based in Portland, Oregon. Kim left Paulson Investment Company in 2004, worked for Vision Securities, Inc. for approximately a year, and then began working for GLB Trading, Inc. At that time, GLB Trading, Inc. was handling a private offering by Nanodynamics, Inc. Kim testified that the Paks participated in the Nanodynamics private offering and, in fact, visited its headquarters in Buffalo, New York as part of their due diligence.

Information about this company, its failed aspirations to become publicly traded, and the voluntary Chapter 7 bankruptcy it filed on July 27, 2009, is available in published decisions of the bankruptcy court. (See In re Nanodynamics, Inc. (Bankr. W.D.N.Y. 2014) 523 B.R. 406, 409; In re Nanodynamics, Inc. (Bankr. W.D.N.Y. 2012) 474 B.R. 422, 423.)

On September 27, 2006, Kim (as borrower) and Hasong J. Pak (as lender) executed a loan/pledge agreement, stating Kim pledged 10,000 warrants of financial securities in Nanodynamics, Inc. to Pak as collateral for $70,000 Kim borrowed from Pak, at 12 percent interest for the term of the loan. The agreement did not clearly define a repayment schedule or due date, but the default section of the agreement stated "if [Kim] defaults in repaying the Loan within 365 days under this Agreement, then the Lender may declare the principal amount owing under this Agreement at that time to be due in 30 days and payable." A letter of the same day, written on stationery of GLB Trading, Inc. from Kim to Pak stated, "we are seeking a short-term note for $70,000, which will allow us to finalize the acquisition of a new Broker Dealer." The letter stated the note was for 360 days and would "bear 12 percent interest along with 1000 warrants of NanoDynamics, Inc. stock."

Kim testified Nanodynamics filed bankruptcy sometime after the recession began in 2007 and the clients who had invested their money in its private offering lost all of the money they invested.

In early 2007, Kim lived in Vancouver, Washington and worked as a broker for GLB Trading, Inc. In the summer of 2007, his father-in-law suffered a stroke and Kim traveled back and forth between Vancouver and his in-law's home in Fresno. Around October 2007, Kim and his family moved to Fresno and lived in the house of his wife's parents to help care for her father. The house was located on East Hampton Way in Fresno. In the fall of 2008, Kim and his family moved into an apartment located in Fresno. Oregon Lawsuit

On August 8, 2008, the Paks filed a lawsuit in the circuit court of the State of Oregon for the County of Multnomah against Kim and Washington Mutual Bank. The first claim alleged Kim breached his contract by failing to repay the $70,000 loan. The second through fifth claims (breach of fiduciary duty, misrepresentation, conversion, and elder abuse) related to a line of credit the Paks had with Washington Mutual Bank. The Paks alleged Kim wrongfully took advances on the line of credit between September 2006 and October 2007 and converted approximately $250,000 for his own benefit. Service of Process

In January 2009, the Paks filed a corrected second amended complaint that included a negligence cause of action against Washington Mutual Bank and a cause of action for declaratory relief against JPMorgan Chase Bank, N.A., the successor in interest to Washington Mutual Bank. The Paks alleged Washington Mutual Bank negligently advanced money to Kim under the line of credit and failed to advise them of the advances. They also alleged the assets of Washington Mutual Bank, including the line of credit, were transferred to JPMorgan Chase Bank, N.A. and JPMorgan Chase Bank should not be allowed to collect amounts due under the line for credit from them.
"In September 2008, Wa[shington Mutual Bank] was seized by the Office of Thrift Supervision and the Federal Deposit Insurance Corporation (FDIC) was appointed as a receiver for Wa[shington Mutual Bank]. That same day, the FDIC, in its capacity as receiver, sold the assets and liabilities of Wa[shington Mutual Bank] to defendant JPMorgan Chase Bank, N.A., (JP Morgan). This transaction was documented by a 'PURCHASE AND ASSUMPTION AGREEMENT WHOLE BANK' (boldface and underscoring omitted) between the FDIC and JP Morgan dated as of September 25, 2008." (Glaski v. Bank of America (2013) 218 Cal.App.4th 1079, 1085.)

On Tuesday, August 26, 2008, the service of the summons and complaint contested by Kim purportedly took place. Robert Joseph Higuera, a process server, completed the proof of service filed in the Oregon lawsuit. The proof of service stated Higuera personally delivered the summons and complaint on August 26, 2008, at 3:05 p.m. to an individual he believed was Kim at 4053 East Hampton Way in Fresno, Kim's admitted residence. The proof of service described the person served as "Asian, Male, 40 Years Old, Bald Hair, Brown Eyes, 5 Feet 5 Inches, 130 Pounds."

Kim testified he did not receive the summons and complaint. He supported his argument that he did not match the physical description in the proof of service by testifying he had a crewcut, was five feet eight inches tall, weighed 170 pounds, and was 36 or 37 at the time of the purported service. Kim also stated no one at his residence ever told him they had been served with documents on his behalf.

Kim's testimony addressed the possibility that another male at the residence had been served with the papers. They included his brother-in-law David Sok and his nephews Joey and Jeffrey Sok. Kim testified David was approximately five feet seven or eight inches tall, was bald and weighed about 150 to 160 pounds at the time. Kim described Joey as about the same size as David with "a bald hair as well." Kim described Jeffrey as "approximately five-four, five-five, about 120, 130 pounds" with a crewcut.

Kim also testified he and his wife had a falling out with David over money that Kim's father-in-law had set aside for his funeral expenses and David had used for his own personal expenses. When Kim's father-in-law died, the money was not available for the funeral. As result, Kim and David did not speak to each other. Kim presented the dispute with David as a reason why David would not have informed him about the summons and complaint.

Kim offered an explanation for his absence from the home at the time of service by testifying that his children were attending Reagan Elementary School in Clovis and their final bell was at 2:56 p.m. Kim stated the drive between the school and the house on Hampton Way was about 15 to 18 minutes. Thus, it was possible that Kim and his wife were picking up their children from school at the time of service. Oregon Default and Judgment

In January 2009, the Oregon court entered a default as to Kim. In March 2009, JPMorgan Chase Bank filed a motion to dismiss or, in the alternative, for summary judgment. After an April 2009 hearing, the Oregon court filed an order granting JPMorgan Chase Bank's motion to dismiss.

On June 12, 2009, the Paks' claims against Kim were presented to the court. Kim, who was in default, did not appear. The Paks presented evidence in the form of testimony and exhibits. On July 2, 2009, the court filed a judgment awarding the Paks (1) $70,000 on their claim for breach of the promissory note; (2) $440,751 in damages on the claims for breach of fiduciary duty, misrepresentation, conversion and elder abuse, which was three times the principal amount of $146,917; (3) noneconomic damages in the amount of $300,000; (4) punitive damages in the amount of $987,668; and (4) attorney fees and costs in the amounts of $9,065 and $529, respectively. The total amount of the judgment exceeded $1.8 million.

In September 2010, the Oregon court filed a stipulated order dismissing with prejudice the Paks' claims against Washington Mutual Bank and its receiver, the FDIC. As a result, the Oregon lawsuit was deemed closed. California Proceedings

Six years later, in June 2015, the Paks filed an application for entry of judgment on sister-state judgment in Fresno County Superior Court. The clerk of court entered a clerk's judgment on the sister-state judgment in the amount of $2.77 million plus interest at the rate of 10 percent from the date of the California judgment. Later in June 2015, Kim was served with a notice of entry of judgment informing him of the California judgment.

In July 2015, Kim filed a motion to vacate the judgment, contending he never heard of the Oregon lawsuit or 2009 judgment until he received notice of entry of the California judgment. The motion asserted Kim had not been personally served in the Oregon lawsuit and never received service by mail.

The court took evidence on February 3, 2016, and March 18, 2016. Kim testified at the February hearing and both Kim and Higuera (the process server) testified in March.

On April 21, 2016, the trial court signed and filed an order denying the motion to vacate the judgment. The order identified the legal standard for vacating a judgment entered on a sister state judgment, stated the sole issue presented was whether Kim was properly served with process in the Oregon action, and stated the burden of proving the absence of service was on Kim. The order described the testimony of Kim and the testimony of the process server. The order evaluated that testimony as follows:

"On balance, the court finds both stories equally believable. Both witnesses have some credibility issues (Kim with changing his testimony about his whereabouts that day and Higuera admitting to signing blank proofs of service for cases that are outside the Fresno/Clovis area). Therefore, because [Kim] has the burden of proof, the motion must be denied. He has failed to meet his burden of demonstrating it was more likely than not he was not served. The judgment will not be vacated."

In May 2016, Kim filed a notice of appeal challenging the judgment entered in Fresno County Superior Court.

DISCUSSION

I. BASIC LEGAL PRINCIPLES

A. Sister State Judgments

1. Entry of a Judgment in California

Article IV, section 1 of the United States Constitution provides: "Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State." To comply with the obligations imposed by the full faith and credit clause, the California Legislature enacted the Sister State and Foreign Money Judgments Act (Code Civ. Proc., § 1710.10 et seq.), which allows a judgment creditor who has obtained a money judgment in another state to obtain an enforceable judgment in California. Under the procedures specified in the statute, a litigant who has obtained a sister state judgment must file an application for entry of a judgment in a California superior court. (§§ 1710.15, 1710.20.) Once a properly completed application is filed, the superior court clerk must enter a judgment for the total amount remaining unpaid under the sister state judgment plus the amount of interest accrued on that judgment, as well as the filing fee for the application. (§ 1710.25; Conseco Marketing, LLC v. IFA & Ins. Services, Inc. (2013) 221 Cal.App.4th 831, 838 ["entry of a sister state judgment by the clerk is a ministerial, not a judicial, act"].)

All unlabeled statutory references are to the Code of Civil Procedure.

After the clerk has entered the judgment, the judgment creditor must promptly serve notice of entry of judgment on the judgment debtor. (§ 1710.30, subd. (a).) Notice must be served in the same manner as a summons, and proof of service must be filed with the court. (Ibid.) The notice must inform the judgment debtor that he or she has 30 days within which to bring a motion to vacate the judgment. (Ibid.) If a motion to vacate the judgment is filed within the 30-day period, the judgment debtor must provide written notice of the motion to the judgment creditor. (§ 1710.40, subd. (b).)

2. Vacating the Judgment

A judgment based on a sister state judgment "may be vacated on any ground which would be a defense to an action in this state on the sister state judgment." (§ 1710.40, subd. (a).) The statute does not identify the available defenses. However, a common defense is that the sister state judgment was rendered in excess of jurisdiction. (Wells Fargo Bank, NA v. Baker (2012) 204 Cal.App.4th 1063, 1068 (Baker); Fidelity Creditor Service, Inc. v. Browne (2001) 89 Cal.App.4th 195, 202.) A judgment rendered in excess of jurisdiction includes a judgment entered by a court lacking personal jurisdiction over a party. (Baker, supra, at p. 1068; Bank of America v. Jennett (1999) 77 Cal.App.4th 104, 114-115 & fn. 8.) Here, Kim sought to vacate the California judgment by asserting the Oregon court lacked personal jurisdiction over him because he was never served.

3. Burden of Proof

The party moving under section 1710.40 to vacate a judgment based on a sister state judgment has the burden of proving he or she is entitled to relief. (Tsakos Shipping & Trading, S.A. v. Juniper Garden Town Homes, Ltd. (1993) 12 Cal.App.4th 74, 88 (Tsakos).) The standard of proof is the preponderance of the evidence. (Ibid.) Here, the trial court correctly identified and applied this burden of proof to Kim's motion to vacate.

B. Standard of Review

As a general principle, the ruling on a motion to vacate a judgment under section 1710.40 is committed to the discretion of the trial court. (Tsakos, supra, 12 Cal.App.4th at p. 88.) Thus, appellate courts often state the ruling will be set aside only if a clear abuse of discretion is demonstrated by the appellant. (Id. at pp. 88-89.) However, our description of the standards governing our review of the trial court's order does not end there. According to our Supreme Court: "The abuse of discretion standard is not a unified standard; the deference it calls for varies according to the aspect of a trial court's ruling under review." (Haraguchi v. Superior Court (2008) 43 Cal.4th 706, 711.) When the trial court's resolution of a question of law is challenged, its legal conclusion is reviewed de novo. (Id. at pp. 711-712.) When the trial court's findings of fact are challenged, the findings are reviewed for substantial evidence. (Id. at p. 711.)

Accordingly, when reviewing a trial court's determinations of in personam jurisdiction in connection with a motion to vacate a judgment under section 1710.40, the appellate court will not disturb factual findings by the trial court that are supported by substantial evidence. (Baker, supra, 204 Cal.App.4th at p. 1068.) In this case, the parties presented a factual dispute over whether Kim was personally served. Although the dispute relates to a question of fact, the substantial evidence standard does not apply. The trial court's written order did not make an explicit findings of fact about whether Kim was personally served. Instead, the trial court framed its determination by stating Kim had not carried his burden of proof. It is this failure-of-proof determination that we review for error. In this decade, the Fifth District has addressed the standard of appellate review applicable to a trial court's failure-to-prove determination in a variety of contexts and published three such cases. (See Wells Fargo Bank, N.A. v. 6354 Figarden General Partnership (2015) 238 Cal.App.4th 370, 390; Dreyer's, supra, 218 Cal.App.4th at p. 838; Valero v. Board of Retirement of Tulare County Employees' Assn. (2012) 205 Cal.App.4th 960, 965.)

"'In the case where the trier of fact has expressly or implicitly concluded that the party with the burden of proof did not carry the burden and that party appeals, it is misleading to characterize the failure-of-proof issue as whether substantial evidence supports the judgment.... [¶] Thus, where the issue on appeal turns on a failure of proof at trial, the question for a reviewing court becomes whether the evidence compels a finding in favor of the appellant as a matter of law. [Citations.] Specifically, the question becomes whether the appellant's evidence was (1) "uncontradicted and unimpeached" and (2) "of such a character and weight as to leave no room for a judicial determination that it was insufficient to support a finding."'" (Dreyer's, supra, 218 Cal.App.4th at p. 838.)

Based on our earlier decisions, we conclude the finding-compelled-as-a-matter-of-law standard applies to the trial court's determination that Kim failed to carry his burden of proof. Thus, the references in Kim's appellate briefing to an abuse of discretion and the requirement that findings of fact be supported by substantial evidence do not provide a complete picture of the standards governing our review in this particular case. II. KIM'S CLAIMS OF ERROR

A. Determination Relating to the Burden of Proof

Kim contends the trial court erred in finding he did not sustain his burden of proof. He acknowledges he bore the burden of proof in the trial court and asserts that burden was the lowest applied in civil law—that is, a preponderance of the evidence. Kim, however, has not recognized that to affirmatively demonstrate trial court error, he must show the trial court was compelled as a matter of law to find he was not served. Under this standard, his evidence must be (1) uncontradicted and unimpeached and (2) of such a character and weight as to leave no room for a judicial determination that it was insufficient to support a finding in his favor. (Dreyer's, supra, 218 Cal.App.4th at p. 838.) The arguments Kim has presented undertake a reweighing of the evidence, which included the court docket from the Oregon case, the process server's testimony, the possible involvement of Kim's estranged brother-in-law, David Sok, and Kim's testimony about where he was at the time of service.

Based on our review of the appellate record, we conclude the evidence favoring Kim is not uncontradicted and unimpeached. Kim's testimony that he was not served is contradicted by the testimony of the process server. As to impeachment, the trial court noted Kim's testimony had been undermined in part by Kim "changing his testimony about his whereabouts that day"—that is, the day of the purported service. Therefore, we conclude Kim has not demonstrated the trial court was compelled as a matter of law to find that he had not been served with the summons and complaint in the Oregon lawsuit.

B. Failure to Address or State Reasons for Rejecting Equitable Grounds

1. Kim's Contentions

Kim contends he argued equitable grounds as an alternate basis for setting aside the judgment and the trial court's order utterly failed to address the issue. Kim contends (1) section 1710.40 required the trial court to set forth its findings of fact and reasoning as to those grounds and (2) an order entered without findings on all material issues raised by the pleadings and supported by substantial evidence must be reversed. He argues this court cannot assume the trial court found against him on the issue of equitable relief and, thus, the court's failure to rule is a sufficient basis for reversing the order.

2. Statutory Text

The second sentence of subdivision (c) of section 1710.40 provides:

"The decision of the court on the motion to vacate the judgment shall be given and filed with the clerk of court in the manner provided in Sections 632, 634, and 635, except that the court is not required to make any written findings and conclusions if the amount of the judgment as entered under Section 1710.25 does not exceed one thousand dollars ($1,000)."

An examination of whether the trial court gave its decision "in the manner provided in Sections 632, 634 and 635," begins with an identification of the requirements of those provisions. Of particular interest in this appeal is the requirement that the trial "court shall issue a statement of decision explaining the factual and legal basis for its decision as to each of the principal controverted issues at trial upon the request of any party appearing at the trial." (§ 632, italics added.) The request "shall specify those controverted issues as to which the party is requesting a statement of decision." (§ 632.)

3. Application of Statutory Requirements to this Case

Here, Kim's opening and reply briefs do not address section 632 and the requirement for a request. As a result, Kim has provided no citations to the record showing he requested a statement of decision in the manner set forth in section 632. Furthermore, our review of the reporter's transcript of the hearings on the motion to vacate did not uncover any oral request for a statement of decision.

Without such a request, the trial court is under no statutory duty or obligation to provide a statement of decision addressing specific controverted issues. (§ 632; see In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133-1134 [under §§ 632 and 634, a party must request a statement of decision as to specific issues to avoid implied findings favorable to the judgment].) The fact that the trial court provided a written explanation of its evaluation of the evidence regarding service and its determination as to the burden of proof does not negate the statutory requirement for a request specifying the issues to be addressed in a statement of decision. Therefore, Kim has not shown the trial court violated the requirement in section 1710.40, subdivision (c) relating to written findings and conclusions.

Consequently, the trial court's silence on the equitable arguments raised by Kim is dealt with by the presumption of correctness that is a fundamental rule of appellate procedure. Under the presumption, the reviewing court must indulge all intendments and presumptions that support the trial court's order. (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) Thus, when an order is silent on a matter, the reviewing court presumes the trial court decided the matter in a way that supports the order. Applying the presumption in this case, we conclude the trial court considered and impliedly rejected the equitable grounds raised by Kim.

C. Equitable Grounds for Vacating the Judgment

1. Kim's Contentions

As an alternative to his claim the written order was defective, Kim argues any implied ruling that his equitable arguments lacked sufficient merit to vacate the judgment is in error. In Kim's view, we should remedy the error by (1) overturning the order denying his motion and (2) instructing the trial court to vacate the judgment against him. To accurately describe the equitable grounds put forth by Kim, we quote his opening brief:

"The Oregon case involved three named defendants, all accused of misdeeds in connection with a single event. Two of the three named defendants appeared in the matter and were found to owe no liability to the plaintiffs/respondents. Kim had judgment entered against him on a default basis. The judgment is for millions of dollars and includes punitive damages.
"To allow entry of such a massive judgment under such suspect conditions would be patently unfair. The more just course of action would be to set aside the entry of the sister-state judgment and allow plaintiffs/respondents to bring their case anew against Kim in the trial court and litigate it on the merits."

Kim's reply brief cites Cottle v. Superior Court (1992) 3 Cal.App.4th 1367 for the proposition that the trial court has a broad and inherent power to control the matters before it and, pursuant to this power, it may vacate a sister state judgment on equitable grounds. (Id. at p. 1377; see §§ 128, 187.) In Cottle, the appellate court concluded the trial court acted within its authority in issuing an order excluding certain evidence at trial. (Cottle, supra, at p. 1371.) Thus, Cottle did not involve a motion to vacate under section 1710.40 and is not direct authority for the principle that equitable grounds may justify granting such a motion.

Despite the absence of cited authority, we assume for purposes of this appeal that the inherent authority of trial courts empower them to grant a motion to vacate a judgment under section 1710.40 on equitable grounds. Restating in statutory terms, we assume the equitable grounds raised by Kim constitute a "ground which would be a defense to an action in this state on a sister state judgment" within the meaning of subdivision (a) of section 1710.40.

2. Analysis of Kim's Equitable Grounds

The first step in analyzing Kim's equitable argument is to identify the appropriate standard of review. Usually, the resolution of an issue based on fairness and equity involves the consideration of the facts and circumstances of the particular case. (E.g., Cleveland v. Johnson (2012) 209 Cal.App.4th 1315, 1330 [issue of successor liability is an equitable issue examined on the unique facts of the case; imposition of successor liability depends on all the facts and circumstances]; Carian v. Department of Fish & Wildlife (2015) 235 Cal.App.4th 806, 815 [in deciding element of private attorney general doctrine, trial court exercises its equitable discretion in light of all relevant circumstances].) Based on this precedent from other legal contexts, we conclude an analysis of equitable grounds for relief involves the consideration of all the relevant facts and circumstances of the particular case. Furthermore, we conclude the abuse of discretion standard of review applies to the trial court's implied determination that the equities of this case do not justify vacating the judgment. Our conclusion is in accord with the general principle that the ruling on a motion to vacate a judgment under section 1710.40 is committed to the discretion of the trial court. (Tsakos, supra, 12 Cal.App.4th at p. 88.) We do not resort to the more specific standards of review applicable to factual findings or the resolution of legal questions because the evaluation of the facts and circumstances of a particular case to determine whether equitable relief is warranted necessarily involves balancing and weighing a variety of factors. "[W]hen the challenged determination involves the trial court's weighing of the interrelated factors, the result of that weighing process generally will be upheld on appeal so long as the trial court did not exceed the bounds of reason or contravene the uncontradicted evidence." (County of Kern v. T.C.E.F., Inc. (2016) 246 Cal.App.4th 301, 315-316 [abuse of discretion standard applied to ruling on application for preliminary injunction].)

As explained below, we conclude the trial court's implied rejection of the equitable grounds raised by Kim did not exceed the bounds of reason or contravene the uncontradicted evidence. Therefore, Kim has not established an abuse of discretion warranting a reversal of the order denying his motion to vacate.

The balancing of the equitable considerations in this case would extend to the facts involving Mr. Pak's age (in 2009, he was over the age of 70) and his cause of action for payment under the promissory note for $70,000. Perhaps the trial court would have balanced the equities differently if Kim had presented some evidence of an attempt either to repay the loan after it became due or to contact the Paks to address the issues created when the loan became due in September 2007. At the hearing on the motion to vacate, Kim acknowledged he signed the loan/pledge agreement dated September 27, 2006, and his signature was notarized. He did not raise any grounds as why he was not liable to the Paks for the amount borrowed. Also, he did not explain why he left Oregon in 2007 without contacting the Paks about his obligation under the agreement. A fundamental maxim of equity jurisprudence states a party must "do equity" to obtain equity from a court. (Vanderkous v. Conley (2010) 188 Cal.App.4th 111, 120; see 30 Cal.Jur.3d (2013) Equity, § 31, p. 578 ["one who seeks equity must also do equity"].) Here, the trial court reasonably could conclude Kim did not act with equity and fairness towards the Paks after the loan was made. Therefore, equitable grounds do not justify overturning the order denying Kim's motion to vacate.

We recognize that over half of the Oregon judgment represents punitive damages and the judgment was imposed by default. These facts raise a concern about the fairness of the punitive damage award and, thus, the amount of the judgment. However, Kim has not developed a colorable argument that would result in a California court reducing or eliminating a recovery of punitive damages from the judgment entered in California. For instance, the appellate record does not include a copy of the original version of the complaint from the Oregon lawsuit and, therefore, we cannot determine if that complaint requested punitive damages against Kim. The register of actions from the Oregon lawsuit includes an entry from September 11, 2008, describing a hearing on a motion for leave to amend the complaint to add punitive damages, but the information provided is too sparse to tell if the request relates to the damages requested from Kim or to the damages claimed from the other defendants. This entry supports the inference that the version of the complaint purportedly served on Kim did not request punitive damages and, therefore, the judgment entered against him should not have awarded punitive damages. Despite these concerns, Kim bore the burden of proof and did not present the trial court or this court with sufficient information to determine whether the award of punitive damages was vulnerable to attack. Thus, the mere possibility that the award of punitive damages might not have complied with applicable rules of procedure and might have violated Kim's due process rights does not affirmatively establish the equities favor vacating all or part of the judgment. A stronger showing is required than simply stating the judgment is unfair because of the award of punitive damages.

In Wiley v. Rhodes (1990) 223 Cal.App.3d 1470, the court concluded a general allegation of entitlement to punitive damages did not apprise the defendant of the potential financial liability for punitive damages if judgment was taken by default and, thus, the default judgment entered should not have awarded punitive damages. In 1995, the Legislature responded to the court's due process concerns by enacting subdivision (b) of section 425.115, which allowed a plaintiff to seek punitive damages on a default judgment by serving the defendant with a statement of the amount of punitive damages sought. (See Stats. 1995, ch. 796, § 3.)

DISPOSITION

The judgment is affirmed. Respondents shall recover their costs on appeal.

/s/_________

FRANSON, Acting P.J. WE CONCUR: /s/_________
PEÑA, J. /s/_________
SMITH, J.


Summaries of

Pak v. Kim

COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT
Dec 14, 2017
No. F073740 (Cal. Ct. App. Dec. 14, 2017)
Case details for

Pak v. Kim

Case Details

Full title:HASONG PAK et al., Plaintiffs and Respondents, v. JUNG HAN KIM, Defendant…

Court:COURT OF APPEAL OF THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT

Date published: Dec 14, 2017

Citations

No. F073740 (Cal. Ct. App. Dec. 14, 2017)