Hyundai Sec. Co. v. Lee

232 Cal.App.4th 1379

182 Cal.Rptr.3d 264

HYUNDAI SECURITIES CO., LTD., Plaintiff and Respondent,

v.Ik Chi LEE, Defendant and Appellant.

B257276

Court of Appeal, Second District, Division 5, California.

Filed January 13, 2015

As Modified January 14, 2015

Kim, Park, Choi & Yi, Tony K. Kim, Michael Yi, and Michael Schillaci, Culver City, for Defendant and Appellant.

Lim, Ruger & Kim, Richard M. Ruger, Lisa J. Yang, and George T. Busu, Los Angeles, for Plaintiff and Respondent.

MOSK, ACTING P.J.

INTRODUCTION

We hold that under California's "Uniform Foreign–Country Money Judgments Recognition Act" ( Code Civ. Proc., §§ 1713 – 1724 (the Act))¹ , a trial court may recognize (i) a foreign judgment for indemnification of a criminal penalty paid by plaintiff to an agency of the foreign government and (ii) a 20 percent postjudgment interest rate on a foreign judgment, as provided by the law of the foreign state; but the trial court, in recognizing a foreign judgment, may not enter a California judgment imposing postjudgment interest on the California judgment at a rate greater than 10 percent as provided by California law. Thus, we affirm the trial court's judgment recognizing the foreign judgment, but reverse the imposition of a 20 percent postjudgment rate of interest on the California judgment recognizing the foreign judgment.

BACKGROUND²

Defendant and appellant Ik Chi Lee (Lee) was the chief executive officer of plaintiff Hyundai Securities Co., Ltd. (Hyundai), from 1996 to 2000. Several individual shareholders of Hyundai brought in Korea 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 in 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 of 26,538,718,051 Korean Won (KRW) or approximately US $24,000,000,³ plus prejudgment and postjudgment interest. (Korean Judgment) A component of the damages was KRW7 billion for a criminal fine paid by Hyundai in Korea for the acts of Lee. The Korean Judgment also provided for prejudgment interest at 5 percent per annum and postjudgment interest at the Korean statutory rate of 20 percent per annum.

Lee appealed the Korean Judgment to the Seoul Court of Appeals, which court "dismissed" the appeal. Lee then appealed the Seoul Court of Appeals decision to the Korean Supreme Court, which court 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 Superior Court of the State of California, County of Los Angeles, 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 owed Hyundai a sum of money plus interest. The trial court entered judgment in favor of Hyundai after granting a petition for entry of judgment pursuant to the Act. In a prior appeal, we reversed the judgment on the ground that recognition of a foreign-country money judgment could not be obtained by petition, but rather had to be based upon a duly noticed motion for summary judgment, judgment on the pleadings, or trial. ( Hyundai Securities, Co., Ltd v. Lee, supra, 215 Cal.App.4th 682, 155 Cal.Rptr.3d 678.)

Upon remand, Hyundai filed a motion for summary judgment seeking recognition of the unpaid portion of the Korean Judgment, ($5,031,231—which included indemnification for the fine paid by Hyundai—plus prejudgment interest of $3,652,353 and daily interest accruing after the date of the hearing, or $2,756 per day. Hyundai acknowledged it had been compensated for portions of the judgment. Lee asserted that the trial court could not recognize the KRW7 billion portion of the judgment as it was a penalty or fine and could not award prejudgment or postjudgment interest at the rate of 20 percent because such a rate was contrary to the law and public policy of California.

The trial court granted Hyundai's motion for summary judgment and awarded Hyundai the principal sum of $5,031,231, interest in the amount of $3,787,397, daily interest of $2,756 per day from May 27, 2014, until entry of judgment, and postjudgment interest on the California judgment at the rate of 20 percent per annum "on the outstanding principal amount of $5,031,231 from the date of entry of this judgment until paid in full." Lee appeals.⁴

DISCUSSION

A. Standard of Review

A summary judgment, having been given as a matter of law, is reviewed de novo. ( Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476, [110 Cal.Rptr.2d 370, 28 P.3d 116].) The parties do not contend there are any triable issues of fact. Questions of law regarding the application of statutes, such as the Act, are reviewed de novo. (See People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 432, [101 Cal.Rptr.2d 200, 11 P.3d 956] ; Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 799-801, [35 Cal.Rptr.2d 418, 883 P.2d 960] ; MacIsaac v. Waste Management Collection & Recycling, Inc. (2005) 134 Cal.App.4th 1076, 1081-1082, .) A determination of whether to recognize a foreign-country money judgment under the public policy provision of the Act (§ 1716, subd. (c)(3)) is discretionary (see 13, pt. II West's U. Laws Ann. (2014 supp.) Uniform Foreign-Country Money Judgments Recognition Act, § 4, pp. 28-29 (Uniform Laws Annotated ), which determination is reviewed for an abuse of discretion—i.e. whether the trial court "exceeded the bounds of reason." ( Shamblin v. Brattain (1988) 44 Cal.3d 474, 478-479, [243 Cal.Rptr. 902, 749 P.2d 339].) As discussed, Lee does not contend there was an abuse of discretion but rather argues that the trial court was required by law not to recognize an element of the foreign-country money judgment because it was contrary to the public interest. Moreover, in a case such as this one, based on uncontradicted facts, we could determine as a matter of law whether or not there was an abuse of discretion. (Cf. GuideOne Mutual Ins. Co. v. Utica National Ins. Group (2013) 213 Cal.App.4th 1494, 1501, .)

B. The Act

The Act, which is based on the Uniform Foreign–Country Money Judgments Recognition Act (U. Laws Ann., supra, at p. 23; § 1713 ), applies to foreign-country judgments that grant or deny recovery of a sum of money and that are final, conclusive, and enforceable under the law of the foreign country. (§§ 1715, subd. (a), 1724.) The Act allocates the burden of proof for establishing whether a foreign-country money judgment is within the scope of the Act and whether there is any ground for not recognizing the existence of the judgment. (§§ 1715, subd. (c), 1716, subd. (d).) The party seeking recognition of a foreign-country money judgment has the burden to establish entitlement to recognition under the Act, while the party resisting recognition has the burden of establishing a specified ground for nonrecognition. (§§ 1715, subd. (c), 1716, subd. (d). ) The Act specifies that if the trial court finds that a foreign-country money judgment is entitled to recognition in California then, to the extent the judgment grants or denies recovery of a sum of money, it is conclusive between the parties to the same extent as the judgment of a sister state entitled to full faith and credit in this state would be conclusive, and the foreign-country money judgment is enforceable in the same manner and to the same extent as a judgment rendered in this state. (§ 1719.)

The Act provides for various defenses if the foreign-country money judgment is final, conclusive, and enforceable where rendered. Thus, under section 1716, subdivision (c), "A court of this state is not required to recognize a foreign-country judgment if any of the following apply: [¶] ... [¶] (3) The judgment or the cause of action or claim for relief on which the judgment is based is repugnant to the public policy of this state or of the United States." The Act "does not apply to a foreign-country judgment, even if the judgment grants or denies recovery of a sum of money, to the extent that the judgment is [¶] ... [¶] (2) A fine or other penalty." (§ 1715, subd. (b).) Unless one of the specified defenses applies, a court of this state "shall recognize a foreign-country judgment to which [the Act] applies." (§ 1716, subd. (a).)

C. Rules of Interpretation

"Our fundamental task in interpreting a statute is to determine the Legislature's intent so as to effectuate the law's purpose. We first examine the statutory language, giving it a plain and commonsense meaning. We do not examine that language in isolation, but in the context of the statutory framework as a whole in order to determine its scope and purpose and to harmonize the various parts of the enactment. If the language is clear, courts must generally follow its plain meaning unless a literal interpretation would result in absurd consequences the Legislature did not intend. If the statutory language permits more than one reasonable interpretation, courts may consider other aids, such as the statute's purpose, legislative history, and public policy. [Citations.]" ( Coalition of Concerned Communities, Inc. v. City of Los Angeles (2004) 34 Cal.4th 733, 737, [21...