United States District Court, D. Arizona
Jes Solar Co., Ltd., a South Korean Corporation; Airpark Co., Ltd., a South Korean Corporation; and Hankook Technology, Inc., a South Korean Corporation, Plaintiffs,
Matinee Energy, Inc., a Nevada Corporation; Samsun, L.L.C., a Virginia LLC., S. Chin Kim; John S. Lee; Chun Rae Kim; Paul Jeoung; Tong Soo Chung, Defendants,
DAVID C. BURY, District Judge.
The Court has repeatedly described the circumstances of this case, including the delay in the case up-front because Defendants evaded service, failed to answer and appear until after default was entered against them, then filed motions to set aside the defaults, followed by motions for reconsideration. The Court refused to set aside the defaults as to: Defendant Matinee Energy, Inc. (Matinee) and S. Chin Kim, Paul Jeoung, and Tong Soo Chung, who were acting individually and within the course of their employment with Defendant Matinee, and Defendant Samsun, LLC (Samsun) and Defendant John S. Lee, who acted individually and within the course of his employment with Defendant Samsun. The Court granted Chun Rae Kim's motion and set aside the default, and he filed his Answer on August 7, 2013. (Answer (Doc. 74)).
The Court issued a case management Scheduling Order on September 18, 2013, setting a deadline for discovery on December 31, 2013, with dispositive motions due February 17, 2014. On February 26, 2014, the Court granted a 30 day extension of discovery for the sole purpose of allowing Plaintiffs to answer Defendant's discovery requests, which he had served on them 15 days before the end of discovery. (Order (Doc. 99)). The Court granted the extension to afford Plaintiffs 30 days to respond as provided for under Fed.R.Civ.P. 33(b)(2). Discovery closed on March 26, 2014.
The parties both filed dispositive motions. On February 18, 2014, Plaintiffs filed a Motion for Partial Summary Judgment and a Motion for Leave to File a Second Amended Complaint. On February 19, 2014, the Defendant filed a Motion for Summary Judgment or, in the Alternative to Dismiss for Forum Non Conveniens. Additionally, Defendant challenges the Plaintiffs reliance on facts deemed admitted due to Defendant's alleged failure to timely object; Defendant seeks to withdraw the admission that Chun Rae Kim "prepared or caused to be prepared" an agreement between [Plaintiff] Hankook and Samsun." (Response to Ps, MPSJ (Doc. 162) at 2-5.) Plaintiffs charge that Chun Rae Kim spoliated critical evidence in the case and seeks sanctions, including preclusion of any evidence negating his relationship with or financial interest in Samsun and J&A Solar Inc. (J&A Solar) and/or an adverse inference instruction at trial. (Motion for Spoliation (Doc. 168)). All motions are fully briefed and ready for disposition.
For the reasons explained below, the Court grants the Motion to Amend to add facts in support of Plaintiffs' claim of civil conspiracy against Defendant Chun Rae Kim. The Court denies the Plaintiffs' Motion for Partial Summary Judgment on the civil conspiracy claim because there are material questions of fact in dispute regarding Defendant Chun Rae Kim's involvement in the alleged fraudulent conspiracy. Likewise, the Court denies the Defendant's Motion for Summary Judgment. The Court allows the Defendant to withdraw his admissions, which were deemed admitted pursuant to Fed.R.Civ.P. 36(a). The Court denies the motion for sanctions for spoliation of evidence. The Court will set the case for trial.
1. Chun Rae Kim's Motion to Dismiss for Forum Non Conveniens
Normally, this Court would have to weigh numerous private and public interest factors to determine whether to dismiss a case for forum non conveniens: "dismissal will ordinarily be appropriate where trial in the plaintiff's chosen forum imposes a heavy burden on the defendant or the court, and where the plaintiff is unable to offer any specific reasons of convenience supporting his choice." Piper Aircraft Co. v. Reyno, 454 U.S. 235, 249 (1981). The parties' private interests include "relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive." Id. at 241, n. 6. Public-interest factors may include "the administrative difficulties flowing from court congestion; the local interest in having localized controversies decided at home; [and] the interest in having the trial of a diversity case in a forum that is at home with the law." Id.
But when venue is putatively governed by a valid forum selection clause, the considerations change in three ways. Atlantic Marine Constr. Co., Inc. v. United States District Court, 134 S.Ct. 568, 581 (2013). The Court may not accord any weight to the plaintiff's chosen forum. Id. The Court may not consider the parties' private interests. Id. at 582. Where there is a valid forum selection clause, the Court may only consider public interest factors. Id. "In all but the most unusual cases, therefore, the interest of justice is served by holding parties to their bargain." Id. at 583.
This is the most unusual of circumstances. Here, there is a forum selection clause in the Samsun-Jes Solar agreement. The parties agreed to a "competent court" to resolve disputes, not settled by the parties, which "shall be governed by the court where "A" [Jes Solar] is located, " which is South Korea. (D's MSJ,  SOF Exhibits (Doc. 147) at Ex. 5: Collaborative Construction Agreement ¶ 2.) Enforcing the forum selection clause will split Jes Solar's civil conspiracy case. Jes Solar alleges that Defendant Matinee Energy and its employees conspired with each other and with Defendant Samsun and its employees, who likewise conspired with each other and Matinee and its employees, to defraud the Plaintiffs by inducing Plaintiffs to enter into several contracts, with Defendants never intending to fulfil their contractual obligations related to the construction of the solar power plant. Money paid by Plaintiffs, pursuant to the Samsun contract, was funneled to Defendant Matinee.
Plaintiffs would be forced to proceed piecemeal. Except for Samsun, Plaintiffs could proceed, here, against all Defendants, including Chun Rae Kim, assuming that as he asserts he has no affiliation with Samsun. If not separated from Samsun, dismissing the claims against Chun Rae Kim, one of two Samsun employees, would contravene federal policy favoring "efficient resolution of controversies." See Frigate Ltd. v. Damia, 2007 WL 127996 *3 (Calif. Jan. 12, 2007) (identifying a "plethora" of legal rules and doctrines designed to promote efficient resolution of cases, such as Fed.R.Civ.P. 18-20 and Rule 22 for joinder of claims and persons); Curwood Inc. v. Prodo-Pak Corp., 2008 WL 644884 (E.D. Wis. March 7, 2008) (citing Frigate ). Given default is entered against Samsun and John S. Lee, forum non conveniens would split the claims against Chun Rae Kim-Samsun out to be brought in South Korea and leave the Samsun and John S. Lee-Samsun claims here. This would not serve the interests of justice and would not be judicially economical.
2. Chun Rae Kim's Motion for Summary Judgment on all Counts; Plaintiffs' Motion for Partial Summary Judgment against Chun Rae Kim for Civil Conspiracy.
"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). In determining whether to grant summary judgment, a court views the facts and inferences from these facts in the light most favorable to the non-moving party. Matsushita Elec. Co. v. Zenith Radio Corp., 475 U.S. 574, 577 (1986). A material fact is any factual dispute that might effect the outcome of the case under the governing substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute is genuine if the evidence is such that a reasonable jury could resolve the dispute in favor of the non-moving party. Id.
The moving party is under no obligation to negate or disprove matters on which the non-moving party bears the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323-325 (1986). Rather, the moving party need only demonstrate that there is an absence of evidence to support the non-moving party's case. Id. If the moving party meets its burden, it then shifts to the non-moving party to "designate specific facts showing that there is a genuine issue for trial.'" Id. at 324 (quoting Fed.R.Civ.P. 56(e)). To carry this burden, the party opposing a motion for summary judgment cannot rest upon mere allegations or denials in the pleadings or papers. Anderson, 477 U.S. at 252. The non-moving party must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586. "The mere existence of a scintilla of evidence... will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving party]." Anderson, 477 U.S. at 252.
This trilogy of 1986 cases opened the door for the district courts to rely on summary judgment to weed out frivolous lawsuits and avoid wasteful trials. Rand v. Rowland, 154 F.3d 952, 956-957 (9th Cir. 1998);10A Charles A Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure, § 2727, at 468 (1998). As explained in Celotex: "the plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322.
The Judge's role on a motion for summary judgment is not to determine the truth of the matter or to weigh the evidence, or determine credibility, but to determine whether there is a genuine issue for trial. Anderson, 477 U.S. at 252.
Chun Rae Kim asserts that there are no genuine issues of fact in dispute and no evidence to support any of Plaintiffs' claims against him. In response, Plaintiffs "clarify their claims against Mr. Kim.... [T]he primary count, among others, that Plaintiffs claim as to Mr. Kim, is civil conspiracy to commit a tort-fraud and conversion." (Ps' Response to D's MSJ (Doc. 167) at 2.) Plaintiffs seek partial summary judgment against Chun Rae Kim for civil conspiracy. "Additionally, as to Mr. Kim, Plaintiffs claim breach of contract and unjust enrichment in conjunction with their alter ego theory." Id.
By default, the following allegations in the Plaintiffs' First Amended Complaint (FAC) have been established. Defendants represented to Plaintiffs that they had initiated a solar power plant construction project with a project budget of more than $5 billion in the States of California, Arizona and Nevada (the "Matinee Project") (First Amended Complaint (FAC) (Doc. 25) ¶¶ 24, 43.) Defendants represented that the Matinee Project was funded by a U.S. government subsidy and financing from JP Morgan Chase in the amounts ...