Republic of Korea v. Ahn CA2/4 ( 2021 )

Filed 3/15/21 Republic of Korea v. Ahn CA2/4
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF
CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
REPUBLIC OF KOREA, B302454
Plaintiff and Appellant,
(Los Angeles County
v. Super. Ct. No. EC065866)
JOHN AHN et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of
Los Angeles County, John J. Kralik, Judge. Vacated and
remanded with directions.
Fox Rothschild, John J. Shaeffer and Rom Bar-Nissim
for Plaintiff and Appellant.
Raines Feldman, Howard K. Alperin and Robert M.
Shore for Defendants and Respondents.
INTRODUCTION
The Republic of Korea (ROK) obtained two judgments
in Korean courts against respondent John Ahn. Together,
the judgments awarded the ROK more than $2 million, plus
20 percent per year in post-judgment interest under Korean
law. The ROK then brought this action in California to
recognize the Korean judgments under our state’s Uniform
Foreign-Country Money Judgments Recognition Act (Code
Civ. Proc., §§ 1713-1724; the Act).1 It also sought to avoid
allegedly fraudulent transfers of Ahn’s assets.
Following discovery, the ROK moved for summary
adjudication on its claim for recognition of the Korean
judgments, and the trial court (Judge Benny Osorio) granted
the motion. The matter then proceeded to a bench trial
before another judge (Judge John Kralik) on the fraudulent
conveyance claims. Following trial, the court determined
that Ahn had engaged in fraudulent conveyances.
The trial court nevertheless believed that the Korean
post-judgment interest rate was excessive and violative of
the California Constitution’s usury provisions. A then-
recent Court of Appeal decision in Hyundai Securities Co.,
Ltd. v. Lee (2015) 232 Cal.App.4th 1379 (Hyundai) had
already considered whether the Korean post-judgment
interest rate was repugnant to public policy under section
1716 -- a finding that would have supported non-recognition
of that element of the foreign judgment -- and determined it
1 Undesignated statutory references are to the Code of Civil
Procedure.
2
was not. The trial court nevertheless concluded it had
discretion to refuse to recognize the Korean post-judgment
interest rate and declined to apply it to the judgment.
On appeal, the ROK argues that Hyundai required the
trial court to recognize the Korean post-judgment interest
rate. It further asserts that Judge Kralik had no power to
reconsider Judge Osorio’s grant of its motion for summary
adjudication, which recognized the Korean judgments in
their entirety.
Ahn contends the ROK has waived its right to appeal
by accepting the benefits of the judgment (his payment of the
trial court’s judgment and an injunction the trial court had
issued against him). He further argues the trial court
properly exercised its discretion to reduce the Korean
post-judgment interest rate as repugnant to public policy,
and alternatively, that the court could have found that
substantial doubt about the Korean court’s integrity
warranted non-recognition.
Initially, we conclude the ROK has not waived its right
to appeal. We further conclude the trial court erred in
refusing to recognize the Korean post-judgment interest
rate, and hold: (1) whether a judgment is repugnant to
public policy is a question of law; (2) the Korean post-
judgment interest rate did not meet this demanding
standard; and (3) the trial court did not find, and could not
have found, that substantial doubt about the Korean court’s
integrity warranted non-recognition. Accordingly, we vacate
the judgment and remand with instructions to recognize and
apply the Korean post-judgment interest rate.
3
BACKGROUND
A. The Korean Actions
In 1999 and 2000, the ROK entered into contracts with
Allied-Tech Systems, Inc. and Paragon Systems, LLC, two
American companies controlled by Ahn, for the purchase of
certain supplies. Ahn jointly guaranteed the companies’
obligations under the contracts. The ROK subsequently
discovered defects in the goods delivered, applied for
arbitration with the Korean Commercial Arbitration Board,
and obtained separate damages awards against the
companies. The awards were partly conditioned on the
ROK’s return of the defective goods. The ROK then
instituted separate actions in the Seoul Central District
Court against Ahn as a joint surety of the contracts between
the ROK and the two companies.
1. The First Korean Judgment
In the action concerning Ahn’s guarantee of Paragon’s
obligations, the Seoul Central District Court found in favor
of the ROK and awarded it damages. However, the court
accepted Ahn’s argument that the ROK’s right to payment
should be conditioned on its return of the relevant goods to
Paragon.
In April 2013, the Seoul High Court affirmed the
judgment with modifications. Among other changes, the
appellate court ruled that the ROK was entitled to payment
even without returning the goods, viewing Ahn’s contrary
contention as an “abuse of right” and merely an attempt to
evade his obligations. The court found that return of the
4
goods by the ROK would be difficult and costly, that the
goods would be of minimal benefit to Paragon because they
were defective and could not be used for their intended
purposes, and that Paragon had failed to cooperate with the
ROK to facilitate the goods’ return. The court further
rejected an apparently new argument by Ahn. Ahn noted
that one of his relevant surety agreements originally listed
an amount of only about $31,000 and that a Korean official
later amended the amount to about $1.2 million (the amount
of the relevant contract). He asserted this was done without
his consent or knowledge and claimed he should be liable
only for the original amount. Based on its review of the
evidence, the Seoul High Court concluded the amount was
corrected with Ahn’s actual or constructive consent.
As modified by the appellate court, the first Korean
judgment required Ahn to pay the ROK: (a) about $1.7
million in damages; (b) about $120,000 in pre-judgment
interest; and (c) 20 percent per year in post-judgment
interest from the date of the modified judgment until it was
paid in full.2 In July 2015, the Supreme Court of Korea
rejected Ahn’s final appeal on the merits.
2. The Second Korean Judgment
The ROK’s second case, concerning Ahn’s guarantee of
Allied’s obligations, followed a similar track. The Seoul
2 The post-judgment interest rate was apparently imposed
under the Korean “‘Special Law regarding Litigation
Acceleration,’” which subjected judgments issued after May 2003
to an interest rate of 20 percent per year. (Hyundai, supra, 232
Cal.App.4th at 1386.)
5
Central District Court found in favor of the ROK and
awarded it damages. It rejected Ahn’s claim that the ROK
would be entitled to payment only upon its return of the
relevant goods to Allied. For essentially the same reasons
the Seoul High Court provided in the first case, the Seoul
Central District Court concluded Ahn’s claim was an “abuse
of right” and an attempt to evade his obligations.
In October 2014, the Seoul High Court affirmed the
judgment with modifications. The modified judgment
required Ahn to pay the ROK: (a) about $227,000 in
damages; (b) about $23,700 in pre-judgment interest; and (c)
20 percent per year in post-judgment interest from the date
of the modified judgment until it was paid in full. In July
2015, the Supreme Court of Korea rejected Ahn’s final
appeal on the merits.
B. The ROK’s California Action
1. The ROK’s Complaint and the Grant of Summary
Adjudication on the Claim for Recognition of the
Korean Judgments
In November 2016, the ROK filed this California
action, seeking recognition of the Korean judgments under
the Act. It also alleged that Ahn had engaged in fraudulent
conveyances of his assets to evade payment, and sought
6
avoidance of the transfers and an injunction preventing
further transfers of the assets.3
Following discovery, the ROK moved for summary
adjudication of its claim for recognition of the Korean
judgments under the Act. Ahn opposed the motion, arguing
the Act did not apply to those judgments because they were
unenforceable fines or penalties for purposes of section 1715.
Alternatively, Ahn contended the court should not recognize
the Korean judgments because grounds for non-recognition
existed under section 1716, subdivisions (c)(1)(F) and (G).4
He did not challenge the rate of post-judgment interest
under the judgments.
The trial court (Judge Osorio) granted the ROK’s
motion for summary adjudication, concluding the Korean
judgments were entitled to recognition under the Act. The
court found the judgments did not represent fines or
3 “‘A fraudulent conveyance is a transfer by the debtor of
property to a third person undertaken with the intent to prevent
a creditor from reaching that interest to satisfy its claim.’”
(Kirkeby v. Superior Court (2004) 33 Cal.4th 642, 648.) A creditor
who successfully asserts a fraudulent-conveyance claim may
obtain “[a]voidance of the transfer or obligation to the extent
necessary to satisfy the creditor’s claim.” (Civ. Code, § 3439.07,
subd. (a)(1).)
4 Section 1716, subdivision (c)(1)(F) concerns judgments
“rendered in circumstances that raise substantial doubt about the
integrity of the rendering court with respect to the judgment.”
Subdivision (c)(1)(G) deals with judgments arising from
proceedings that were “not compatible with the requirements of
due process of law.”
7
penalties, and found no evidence raising doubts about the
Korean courts’ impartiality or lack of due process in the
Korean proceedings that would trigger the relevant grounds
for non-recognition under section 1716.
2. The Bench Trial on the Fraudulent Conveyance
Claims
Following Judge Osorio’s retirement, the matter
proceeded to a bench trial before Judge Kralik on the ROK’s
fraudulent conveyance claims. During Ahn’s testimony at
trial, he recounted that a company he owned had been
involved in litigation against Lockheed Martin concerning
the latter’s alleged use of bribery and sexual favors to win
(and deprive his company of) a large Korean government
contract. According to Ahn, Lockheed ultimately agreed to
pay his company $15 million. Other testimony presented at
trial is not pertinent to this appeal. Following trial, the
court found that Ahn had engaged in fraudulent conveyances
of his assets with the intent to delay the ROK’s recovery as a
creditor.
3. Briefing on the Korean Post-Judgment Interest
Notwithstanding Judge Osorio’s prior grant of
summary adjudication on the ROK’s claim for recognition of
the Korean judgments, Judge Kralik sua sponte expressed
concern over the judgments’ post-judgment interest rate (20
percent per year), which was higher than the applicable
8
California rate of 10 percent per year.5 The court then
solicited briefing on whether the Korean rate was
enforceable.
The ROK’s briefing argued the Korean post-judgment
interest rate was compatible with due process and that the
Hyundai court had expressly held that the Korean 20
percent post-judgment interest rate was not repugnant to
public policy.6 The ROK further contended Judge Osorio had
already recognized this component of the Korean judgments
when he granted its motion for summary adjudication of
both judgments.
Ahn’s briefing argued, inter alia, that notwithstanding
the holding in Hyundai, the trial court had discretion to
reduce the Korean post-judgment interest rate to match
California’s rate, and provided various reasons the court
should exercise that discretion, including: (1) California law
capped the rate at 10 percent; (2) California has a strong
anti-usury policy; and (3) the Korean judgments were of
“questionable validity.”
Following a hearing, the trial court concluded that
even under Hyundai, it had discretion to refuse to recognize
5 The California Constitution allows the Legislature to set
the post-judgment interest rate “at not more than 10 percent per
annum” (Cal. Const., art. XV, § 1), and section 685.010,
subdivision (a) sets the applicable rate at 10 percent.
6 As discussed below, section 1716, subdivision (c)(1)(C)
provides a ground for non-recognition of a foreign judgment if the
judgment is “repugnant to the public policy of this state or of the
United States.”
9
the Korean post-judgment interest rate. 7 Believing that “20
percent is unseemly for a government to apply to its own
citizens,” the court declined to apply the Korean rate.
4. The Trial Court’s Judgment
In September 2019, the trial court entered its
judgment, ordering Ahn to pay the amount of the Korean
judgments but applying a 10 percent interest rate up to the
date of its judgment, rather than the Korean rate.8 The
judgment permitted the ROK to collect from any asset
fraudulently conveyed and included an injunction that
precluded additional transfers of Ahn’s assets until he
satisfied the judgment.
5. The Trial Court’s Statement of Decision
In October 2019, the trial court issued a tentative
statement of decision, and the parties filed their objections.
On November 15, the ROK filed its notice of appeal from the
7 The trial court expressed its disagreement with Hyundai’s
holding that the Korean post-judgment interest rate was not
repugnant to public policy, but acknowledged the case as binding
precedent.
8 The trial court applied California’s post-judgment interest
rate from the date of its judgment. The ROK does not challenge
this aspect of the judgment. (See Hyundai, supra, 232
Cal.App.4th at 1392 [where court recognizes foreign judgment,
California post-judgment interest rate applies from date of
California judgment].)
10
judgment. The trial court issued its final statement of
decision the following week.
As to the Korean post-judgment interest rate, the trial
court noted Hyundai’s holding that it was not repugnant to
public policy, but stated that it nevertheless believed it had
discretion to refuse to enforce the Korean rate. Attempting
to distinguish Hyundai, the trial court reasoned that
because the ROK is “a government,” the Korean post-
judgment interest rate was “more akin to a penalty or a tax.”
It stated that the Korean rate was meant to “‘accelerat[e]’”
litigation, and “[w]hile it may not be a penalty of a nature
that requires non-recognition [of] the judgment, the interest
operates as a penalty against those who appeal from
judgments.” According to the trial court, “a further
downward trend in the cost of funds to governmental
entities” from the time of the decision in Hyundai made the
Korean post-judgment interest rate “more akin to a penalty.”
The trial court further stated that “certain inequitable
aspects of the [first Korean] judgment” influenced its
decision to deny enforcement of the Korean post-judgment
interest rate. Pointing to the Korean appellate courts’
decision that the ROK was entitled to payment regardless of
its failure to return the defective goods to Paragon, the court
stated this ruling relied “on only a claim that Paragon had
not responded to a demand for arrangements . . . .” The
court opined: “It is unclear why Paragon should have borne
the ROK’s cost of complying with the ROK’s obligations
under the judgment. Certainly, the original judgment on its
terms provided only for contingent payment. Under such
11
circumstances, accrual of interest is fundamentally unjust.”
The court then pointed to the Korean courts’ finding that
Ahn actually or constructively agreed to the correction of the
amount of his surety agreement. Disapproving of this
finding, the court stated: “From the Seoul High Court’s
opinion[,] it appears that the evidence on which this
inference is based was speculative, and would not be
sufficient to establish the terms of a contract in a system of
justice based on rules of evidence derived from English
common law.”
6. Ahn’s Satisfaction of the Judgment
By late December 2019, Ahn had paid the full amount
of the judgment, and the ROK accepted his payments. Ahn
then filed an ex parte application, requesting that the trial
court acknowledge his satisfaction of the judgment and
discharge the injunction it had issued. Relying on Heacock
v. Ivorette-Texas, Inc. (1993) 20 Cal.App.4th 1665, 1670
(Heacock), he claimed that acknowledging satisfaction of the
judgment could not lead to the ROK’s waiver of its right to
appeal because the appeal “d[id] not jeopardize the amount
already collected under the Judgment.” The ROK opposed
Ahn’s application, asserting it could not voluntarily
acknowledge Ahn’s satisfaction of the judgment without
risking a waiver of its right to appeal the denial of the post-
judgment interest sought. Over the ROK’s opposition, the
trial court granted Ahn’s application and acknowledged his
satisfaction of the judgment.
12
DISCUSSION
The ROK challenges the trial court’s refusal to
recognize the Korean post-judgment interest rate. Noting
the Hyundai court’s holding that the post-judgment interest
rate applicable to Korean judgments is not repugnant to
public policy under the Act, the ROK argues the trial court
erred in concluding it had discretion to refuse to enforce that
part of the judgments.
Ahn counters that the ROK waived its right to appeal
by accepting the benefits of the judgment. He argues the
trial court properly exercised its discretion to reduce the
Korean post-judgment interest rate as repugnant to public
policy; alternatively, Ahn suggests the court could have
found that substantial doubt about the Korean court’s
integrity warranted non-recognition. As explained below, we
conclude that the ROK has not waived its right to appeal,
and that the trial court erred in refusing to recognize the
Korean post-judgment interest rate.9
A. The Act
The Act was enacted in 2007 to replace our state’s
Uniform Foreign Money-Judgments Recognition Act.
9 In light of our conclusion, we need not address the ROK’s
argument that Judge Kralik was bound by Judge Osorio’s
summary-adjudication ruling. We observe, however, that under
the general rule, “‘one trial judge cannot reconsider and overrule
an order of another trial judge.’” (People v. Quarterman (2012)
202 Cal.App.4th 1280, 1293.)
13
(Manco Contracting Co. (W.L.L.) v. Bezdikian (2008) 45
Cal.4th 192, 195 & fn. 1 (Manco); Ohno v. Yasuma (9th Cir.
2013) 723 F.3d 984, 990 (Ohno).) It was modeled on the
2005 Uniform Foreign-Country Money Judgments
Recognition Act (2005 Uniform Act) drafted by the National
Conference of Commissioners on Uniform State Laws.10
(Hyundai, supra, 232 Cal.App.4th at 1386; Ohno, supra, at
990.) The 2005 Uniform Act’s drafters believed that uniform
and predictable foreign-judgment recognition statutes would
satisfy foreign reciprocity concerns and encourage
recognition of American judgments abroad. (13 pt. II West’s
U. Laws Ann. (2005) U. Foreign-Country Money Judgments
Recognition Act, Prefatory Note; see also Manco, supra, at
198 [stating similarly regarding 1962 Uniform Act]; Bank of
Montreal v. Kough (N.D.Cal. 1977) 430 F.Supp. 1243, 1249
(Bank of Montreal) [purpose of Act’s predecessor was to
encourage foreign nations to recognize California judgments
by “informing the[m] . . . of particular situations in which
their judgments would definitely be recognized”].)
10 The 2005 Uniform Act was produced to update the 1962
Uniform Foreign Money-Judgments Recognition Act (1962
Uniform Act), on which California’s Uniform Foreign
Money-Judgments Recognition Act was based. (AO Alfa-Bank v.
Yakovlev (2018) 21 Cal.App.5th 189, 198.) As of February 2021,
24 states and the District of Columbia have enacted some version
of the 2005 Uniform Act. (13 pt. II West’s U. Laws Ann. (2005) U.
Foreign-Country Money Judgments Recognition Act, Table of
Jurisdictions.) The enacted versions do not vary substantially
from state to state. (Ohno, supra, 723 F.3d at 990, fn. 8.)
14
The Act applies to foreign-country money judgments
that are final, conclusive, and enforceable where rendered,
and are not for taxes, for fines or other penalties, or in
connection with domestic relations. (§ 1715, subd. (a) & (b).)
The party seeking recognition of the foreign judgment has
the burden to establish the judgment meets these conditions.
(§ 1715, subd. (c).)
If the Act applies to the foreign judgment, the court
must recognize and enforce the judgment unless a specified
ground for non-recognition under section 1716 applies.
(§ 1716, subd. (a).) As particularly relevant here, section
1716, subdivision (c)(1) lists several presumptive grounds for
non-recognition, including that “[t]he 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” or that “[t]he judgment was rendered in
circumstances that raise substantial doubt about the
integrity of the rendering court with respect to the
judgment.” (§ 1716, subds. (c)(1)(C) & (F).)
Under a former version of the Act, if a ground for non-
recognition under subdivision (c) existed, the decision
whether to recognize the judgment was a purely
discretionary matter for the court. (See former § 1716, subd.
(c) [“A court of this state is not required to recognize a
foreign-country judgment if any of the following apply”].) In
2017, the Legislature amended the Act to make a judgment
presumptively unenforceable if one of the grounds under
current subdivision (c)(1) exists. (See Sen. Com. on
Judiciary, Analysis of Assem. Bill No. 905 (2017-2018 Reg.
15
Sess.) p. 10 [noting specified grounds’ tendency to involve
“problematic elements that upset central principles of our
justice system,” and stating, “The amendments would create
a presumption of nonrecognition when these circumstances
exist. However, judicial discretion would still be retained for
those circumstances where good cause exists”].) Under the
current version of the Act, if one of the grounds listed in
subdivision (c)(1) applies, the court “shall not recognize” the
foreign judgment (§ 1716, subd. (c)(1)), unless “the party
seeking recognition . . . demonstrates good reason to
recognize the judgment that outweighs the ground for
nonrecognition” (§ 1716, subd. (c)(2)). The party asserting
that a specified ground for non-recognition applies has the
burden of establishing it. (§ 1716, subd. (e).) If a court
concludes that a foreign money judgment is entitled to
recognition under the Act, the judgment’s money award (or
its denial of an award) is conclusive between the parties as
would be a sister state’s judgment that is entitled to full
faith and credit, and is enforceable as a judgment rendered
in this state. (§ 1719.)
B. 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
16
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.’” (Jarman v. HCR ManorCare, Inc. (2020) 10 Cal.5th
375, 381.)
C. The ROK’s Standing to Appeal
Initially, Ahn contends the ROK waived its right to
appeal by obtaining a permanent injunction against
transfers by Ahn and the other defendants until the trial
court’s judgment was satisfied, and by later accepting his
payment in satisfaction of the judgment. “As a general rule,
a party impliedly waives the right to appeal by voluntarily
‘accepting the benefits’ of the judgment. The theory is that
the right to accept the benefits of a judgment and the right
to appeal are inconsistent, so that an election of the former
must be deemed a renunciation of the latter.” (Eisenberg et
al., Cal. Practice Guide: Civil Appeals & Writs (The Rutter
Group 2020) ¶ 2:331, citing Lee v. Brown (1976) 18 Cal.3d
110, 114; American Alternative Energy Partners II v.
Windridge, Inc. (1996) 42 Cal.App.4th 551, 557.) We
conclude this rule does not preclude the ROK’s appeal.
The ROK’s acceptance of Ahn’s payment falls under a
recognized exception to the general waiver rule. Under the
relevant exception, a party who accepts payment of a money
judgment does not waive its right to appeal if the party “is
17
simply attempting to augment the judgment and the relief
sought would not jeopardize the amount already collected.”
(Heacock, supra, 20 Cal.App.4th at 1670; accord, Eisenberg
et al., Cal. Practice Guide Civil Appeals & Writs, supra,
¶ 2:331 [“Where the judgment clearly establishes appellant’s
right to recover a money judgment but the amount is less
than he or she is seeking, appellant may accept payment and
still claim the larger amount on appeal”].) The ROK
accepted sums to which it was indisputably entitled under
the trial court’s judgment, and the relief it seeks on appeal --
application of the Korean judgments’ post-judgment interest
rate -- does not jeopardize those sums. Thus, the ROK’s
acceptance of Ahn’s payment does not imply a waiver of its
right to appeal. (See Heacock, supra, at 1670.) Indeed, in
seeking the trial court’s recognition of his satisfaction of the
judgment, Ahn conceded that the ROK’s planned appeal
“d[id] not jeopardize the amount already collected under the
Judgment.”
Ahn now asserts -- contrary to the position he took
below -- that the ROK’s appeal does jeopardize its
entitlement to the sums it already accepted. First, Ahn
contends that some of his arguments in defense of the trial
court’s ruling, if found meritorious, would require reversal of
the entire judgment. Not so. “In deciding whether the
[ROK’s] appeal is inconsistent with having accepted the
benefits of the judgment, we focus solely on the relief sought
by the [ROK] . . . .” (Heacock, supra, 20 Cal.App.4th at 1670,
18
fn. 3.)11 We do not focus on the arguments raised by Ahn,
who never appealed the trial court’s summary adjudication
granting recognition of the Korean judgments, and who
conceded below that the principal amount of the judgments
was not in jeopardy.12 As noted, there is nothing
inconsistent between the ROK’s requested relief --
enforcement of the Korean post-judgment interest rate -- and
the ROK’s collection of the principal amount of the
judgments.
11 In Heacock, the appellant claimed the trial court had erred
in reducing a punitive damages award and sought reinstatement
of the jury’s verdict. (Heacock, supra, 20 Cal.App.4th at 1670.)
Because the appellant was “not asking for a new trial on the
punitive damage issue[,] which would call into question the
amount of the judgment,” the Court of Appeal held her prior
collection of the full amount of the judgment was not inconsistent
with her appeal. (Ibid.) It appears Ahn recognized the
significance of Heacock’s holding below, as he cited it in support
of his concession that the ROK’s collection on the judgment did
not preclude its appeal.
12 Ahn cites Satchmed Plaza Owners Assn. v. UWMC Hosp.
Corp. (2008) 167 Cal.App.4th 1034, in which the court held that a
party who had exercised an option to purchase certain office units
under the judgment could not appeal the judgment’s denial of an
option to purchase an assignment of lease interests in other
units. (Id. at 1037-1038.) Satchmed, however, did not involve
the money-judgment exception. Nor did it involve an unappealed
summary adjudication ruling entitling the appellant to the
accepted benefit or a prior concession by the respondent that the
accepted benefit was not in jeopardy. Satchmed is therefore
inapposite.
19
Additionally, Ahn argues that section 1716 requires
enforcement of foreign judgments on an “‘all-or-nothing
basis,’” meaning that if we conclude that the ROK’s appeal is
meritorious, we would be required to reverse the entire
judgment. Again, Ahn’s premise is unsupported. Nothing in
the statute expressly mandates either wholesale
enforcement or wholesale rejection of a judgment containing
a single severable allegedly noxious component, and we
decline to read such a requirement into it. Such an approach
would lead to unpredictable denials of recognition for
judgments otherwise entitled to enforcement, contrary to the
Act’s purpose to provide certainty and encourage reciprocal
recognition of domestic judgments by foreign nations. (See
13 pt. II West’s U. Laws Ann., supra, U. Foreign-Country
Money Judgments Recognition Act, Prefatory Note; Manco,
supra, 45 Cal.4th at 198; Bank of Montreal, supra, 430
F.Supp. at 1249.) Not surprisingly, caselaw does not support
Ahn’s proposed approach. (See, e.g, Hyundai, supra, 232
Cal.App.4th at 1390-1391 [considering whether post-
judgment interest rate portion of Korean judgment was
unenforceable as repugnant to public policy]; L’Institute
Nat’l De L’Audiovisuel v. Kultur Int’l Films, Ltd. (D.N.J. Jan.
31, 2012, No. 11-6309) 2012 U.S.Dist.LEXIS 12206, at *13
[considering whether attorney fees portion of French
judgment was unenforceable as against public policy under
New Jersey’s version of 2005 Uniform Act].)
Ahn’s contention that the ROK waived its right to
appeal by obtaining an injunction as part of the judgment is
similarly unsound. As noted, the general waiver rule applies
20
when a party voluntarily accepts the benefit of a judgment in
renunciation of the party’s right to appeal the judgment. A
prohibitory injunction, like the one the trial court issued, is
“self-executing” (Food & Grocery Bureau v. Garfield (1941)
18 Cal.2d 174, 177); it requires no acceptance by the
opposing party to have effect. A court’s grant of partial relief
to a party, injunctive or otherwise, does not deprive the
party of its right to appeal other aspects of the judgment.
Again, Ahn offers no authority for his suggestion, and we are
aware of none.
Moreover, the injunction the trial court issued was
merely a means to ensure the satisfaction of the judgment.
It afforded the ROK no substantive right and provided it no
tangible benefit. (See Eisenberg et al., Cal. Practice Guide
Civil Appeals & Writs, supra, ¶ 2:336 [no waiver of right to
appeal where appellant’s action “does not result in receipt of
anything of tangible value”]; Menges v. Robinson (1933) 132
Cal.App. 647, 651 [recording abstract of judgment did not
waive right to appeal because it provided no tangible value,
but only security for enforcement].) The injunction therefore
does not preclude the ROK’s appeal.
D. Refusal to Enforce the Korean Post-Judgment
Interest Rate
“Section 1719, subdivision (a) provides that recognition
of a foreign-country money judgment has the same
conclusive effect as does entry of a sister state judgment.
Upon entry of a sister state money judgment, that judgment
includes the amount of interest accrued on the judgment
21
‘computed at the rate of interest applicable to the judgment
under the law of the sister state.’” (Hyundai, supra, 232
Cal.App.4th at 1390, quoting § 1710.25, subd. (a)(2).) As
noted, the Korean judgments included an award of
post-judgment interest at a rate of 20 percent per year, in
accordance with Korean law. Accordingly, the trial court
was required to recognize this portion of the Korean
judgments, unless one of the statutory grounds for
non-recognition existed. We discuss below the ground the
trial court apparently relied on (repugnancy to public policy)
and the additional ground Ahn advances on appeal
(substantial doubt about the Korean courts’ integrity). We
conclude neither ground supported non-recognition.
1. The Public Policy Ground for Non-Recognition
a. Governing Principles
Under section 1716, subdivision (c)(1)(C), a judgment
presumptively should not be recognized if “[t]he judgment or
the cause of action or claim for relief on which the judgment
is based is repugnant to the public policy of California or of
the United States.” (Ibid.) “California courts have set a
high bar for repugnancy under the Uniform Act. The
standard, rooted in the public policy exception to the comity
doctrine at common law, . . . measures not simply whether
the foreign judgment or cause of action is contrary to our
public policy, but whether either is ‘so offensive to our public
policy as to be “prejudicial to recognized standards of
morality and to the general interests of the citizens.”’”
22
(Ohno, supra, 723 F.3d at 1002, quoting Java Oil Ltd. v.
Sullivan (2008) 168 Cal.App.4th 1178, 1189 (Java Oil).)
“Put another way, the public policy exception codified at
[section] 1716 . . . does not apply unless a foreign-country
judgment or the law on which it is based is ‘so antagonistic
to California [or federal] public policy interests as to
preclude the extension of comity.’” (Ohno, supra, at 1002,
quoting Crockford’s Club v. Si-Ahmed (1988) 203 Cal.App.3d
1402, 1406.)
The California standard is consistent with the intent of
the 2005 Uniform Act’s drafters and the standards applied
by other jurisdictions in assessing foreign money judgments,
which suggest the test of the public policy ground for non-
recognition is demanding and rarely satisfied. (See 13 pt. II
West’s U. Laws Ann., supra, U. Foreign-Country Money
Judgments Recognition Act, § 4 com. 8 [2005 Uniform Act
retains predecessor’s “stringent test” for public policy
violation, under which “[p]ublic policy is violated only if
recognition or enforcement of the foreign-country judgment
would tend clearly to injure the public health, the public
morals, or the public confidence in the administration of law,
or would undermine ‘that sense of security for individual
rights, whether of personal liberty or of private property,
which any citizen ought to feel’”]; Sung Hwan Co., Ltd. v.
Rite Aid Corp. (2006) 7 N.Y.3d 78, 82 (Sung Hwan) [applying
New York’s version of 1962 Uniform Act; “[t]he public policy
inquiry rarely results in refusal to enforce a judgment unless
it is ‘inherently vicious, wicked or immoral, and shocking to
the prevailing moral sense’”]; British Midland Airways, Ltd.
23
v. International Travel, Inc. (9th Cir. 1974) 497 F.2d 869,
871 (British Midland Airways) [applying common law comity
doctrine; “[i]t has long been the law that unless a foreign
country’s judgments are the result of outrageous departures
from our own motions of ‘civilized jurisprudence,’ comity
should not be refused”].)
Whether a judgment or cause of action is repugnant to
public policy is a question of law we review de novo. (See
Ohno, supra, 723 F.3d at 1002 [trial court’s determination
under section 1716 that neither judgment nor underlying
cause of action was repugnant to public policy was legal
conclusion subject to de novo review]; People for Ethical
Operation of Prosecutors etc. v. Spitzer (2020) 53 Cal.App.5th
391, 409 (Spitzer) [“Courts of Appeal typically review
important questions of public policy de novo because the
appellate process is better suited to deciding such questions:
We have more justices looking at the question with more
time to review it”]; cf. Ling v. P.F. Chang’s China Bistro, Inc.
(2016) 245 Cal.App.4th 1242, 1252 [“In determining whether
an arbitration award contravenes public policy, we review
the trial court’s decision de novo”]; Bickel v. Sunrise Assisted
Living (2012) 206 Cal.App.4th 1, 9 [“the issue of whether the
waiver of statutory rights [in an arbitration agreement]
violated public policy presents a legal issue that we review
de novo”]; Tunstall v. Wells (2006) 144 Cal.App.4th 554, 561
[“we review de novo whether the Trust’s no contest clause
violates public policy”].) The trial court’s discretion applies
only in the next stage of the inquiry: if the judgment or
underlying cause of action is repugnant to public policy, the
24
court may nevertheless recognize the judgment if “the party
seeking recognition . . . demonstrates good reason to
recognize the judgment that outweighs the ground for
nonrecognition.” (§ 1716, subd. (c)(2).)
b. Analysis
Whether the Korean 20 percent post-judgment interest
rate is repugnant to public policy is not a novel question. In
Hyundai, supra, 232 Cal.App.4th at 1390-1392, our
colleagues in Division Five considered the issue under the
previous version of section 1716 and held that the Korean
rate did not “fit within the stringent test set forth by the
uniform law for a public policy violation.” Like the ROK, the
plaintiff company in Hyundai sought enforcement of a
Korean judgment carrying a 20 percent per year
post-judgment interest rate. (Id. at 1384.) The trial court
granted the plaintiff’s motion for summary judgment,
recognizing the judgment. (Id. at 1385.) On appeal, the
defendant argued that the Korean rate violated public policy,
and that the court was therefore required to reduce it to 10
percent (the California rate). (Id. at 1392.) By contrast, the
plaintiff contended the decision whether to recognize the
post-judgment interest rate was a matter for the trial court’s
discretion. (Id. at 1390.)
After describing the “‘stringent test for finding a public
policy violation,’” the court determined that “a usurious
postjudgment interest rate does not fit this description of a
law repugnant to the public policy of this state.” (Hyundai,
supra, 232 Cal.App.4th at 1391.) In support, the court
25
described precedent examining whether a usurious
contractual interest rate violated California public policy
such that it should not be enforced despite the contract’s
choice-of-law provision: “For example, in Ury v. Jewelers
Acceptance Corp. (1964) 227 Cal.App.2d 11, 20, the court
said that ‘California does not have such a strong public
policy against any and all contracts which would be usurious
if they were made and to be performed here. . . .’ The court
noted that the California Constitution (now art. XV, § 1)
exempts certain institutions from the usury laws and gives
the Legislature the right to prescribe maximum limits for
exempted lenders. [Citation.] ‘A strong public policy, based
on a settled concept of justice or morality would not be
meshed with such alterable rates as the Legislature might
choose to impose.’” (Ibid.)
The Hyundai court concluded: “It is true that the
California Constitution limits the postjudgment interest rate
to 10 percent. But the concept of a higher rate presented by
a foreign law does not fit within the stringent test set forth
by the uniform law for a public policy violation.” (Hyundai,
supra, 232 Cal.App.4th at 1391.) The court added: “It is not
clear if the trial court exercised discretion in applying the
postjudgment interest rate. But [the defendant] has not
argued that the trial court failed to exercise its discretion or
abused its discretion. Instead, he argued that the trial court
was legally compelled to reduce the postjudgment interest
rate to 10 percent. We reject this contention.” (Id. at
1391-1392.)
26
We agree with Hyundai that the Korean 20 percent
post-judgment interest rate is not “repugnant to public
policy.” While it is significantly higher than the rate allowed
in this state, we cannot say that the Korean rate is “‘so
offensive to our public policy as to be “prejudicial to
recognized standards of morality and to the general interests
of the citizens”’” (Ohno, supra, 723 F.3d at 1002, quoting
Java Oil, supra, 168 Cal.App.4th at 1189), is “‘inherently
vicious, wicked or immoral, and shocking to the prevailing
moral sense’” (Sung Hwan, supra, 7 N.Y.3d at 82),
represents an “outrageous departure[] from our own motions
of ‘civilized jurisprudence’” (British Midland Airways, supra,
497 F.2d at 871), or meets any other accepted articulation of
the standard for repugnancy to public policy.
Pointing to Hyundai’s statement that the defendant
had not faulted the trial court’s exercise of discretion or lack
thereof, Ahn claims the trial court here retained discretion to
find the Korean post-judgment interest rate was repugnant
to public policy. We disagree. As noted, whether a judgment
is repugnant to public policy presents a legal question we
review de novo. (See Ohno, supra, 723 F.3d at 1002; Spitzer,
supra, 53 Cal.App.5th at 409.) Hyundai’s relevant language
may have referenced the plaintiff’s argument that
recognizing the Korean post-judgment interest rate was a
matter for the trial court’s discretion, which argument
presumably relied on the trial court’s discretion to enforce a
27
judgment despite its being repugnant to public policy.13
Regardless, the Hyundai court was clear that the Korean
post-judgment interest rate “d[id] not fit within the stringent
test . . . for a public policy violation” (Hyundai, supra, 232
Cal.App.4th at 1391), and as discussed, we agree.
The justifications the trial court offered in support of
its decision to deny recognition to the Korean post-judgment
interest rate are unpersuasive. First, the court stated that
because the ROK is “a government,” the Korean
post-judgment interest rate was “more akin to a penalty or a
tax,” that the rate was meant to “‘accelerat[e]’” litigation,
and that “[w]hile it may not be a penalty of a nature that
requires non-recognition [of] the judgment, the interest
operates as a penalty against those who appeal from
judgments.” The court also stated that “a further downward
trend in the cost of funds to governmental entities” from the
time of the Hyundai decision made the Korean post-
judgment interest rate “more akin to a penalty.”
Yet the ROK obtained the Korean judgments against
Ahn as a party to a contract, not as a sovereign, and received
the same post-judgment interest rate to which a private
plaintiff would have been entitled -- indeed, the same rate
the plaintiff company in Hyundai received. While the
Korean post-judgment interest rate serves to incentivize
prompt payment of the judgment, so too does California’s
13 The version of section 1716 applicable at the time
instructed that if a foreign judgment was repugnant to public
policy, the court was “not required” to recognize it. (Former
§ 1716, subd. (c).)
28
post-judgment interest rate. (See California Fed. Savings &
Loan Assn. v. City of Los Angeles (1995) 11 Cal.4th 342, 350
[“the judgment rate of interest is a ‘judicial tool’ for enforcing
judgments because it reduces the incentive to delay
payment”].) And like California’s post-judgment interest
rate, the Korean rate does not depend on the cost of funds to
the particular plaintiff. (See Code Civ. Proc., § 685.010,
subd. (a) [“Interest accrues at the rate of 10 percent per
annum on the principal amount of a money judgment
remaining unsatisfied”].)
Second, the trial court stated that “certain inequitable
aspects of the [first Korean] judgment” influenced its
decision to deny enforcement of the Korean post-judgment
interest rate. The court pointed to the Seoul High Court’s
ruling that the ROK’s right to payment would not be
conditioned on its return of the defective goods to Paragon,
and asserted that the ruling relied “on only a claim that
Paragon had not responded to a demand for arrangements
. . . .” Disapproving of the ruling, the trial court stated,
“Under such circumstances, accrual of interest is
fundamentally unjust.”14 The court pointed additionally to
the Korean courts’ finding that Ahn actually or
constructively agreed to the correction of the amount of his
surety agreement, and opined that it was unsupported by
the evidence.
14 As noted, the Korean post-judgment interest ran from the
date of the Seoul High Court’s modified judgment.
29
None of these purportedly inequitable aspects of the
first Korean judgment justified rejecting the Korean
post-judgment interest. The trial court’s analysis amounts
to mere disagreement with the Korean courts’ rulings.
Whether right or wrong in a California court’s view, foreign
judgments are entitled to recognition unless they meet a
statutory ground for non-recognition. (See Pariente v. Scott
Meredith Literary Agency, Inc. (S.D.N.Y. 1991) 771 F.Supp.
609, 617 [applying New York’s version of 1962 Uniform Act;
“‘the courts are not free to refuse to enforce a foreign right at
the pleasure of the judges, to suit the individual notion of
expediency or fairness’”]; cf. Bank of America v. Jennett
(1999) 77 Cal.App.4th 104, 118 [“a sister state judgment is
entitled to full faith and credit ‘even as to matters of law or
fact erroneously decided’”].)
Moreover, the matters the trial court identified in the
first judgment have no clear relationship to the
post-judgment interest element of that judgment and thus
cannot inform whether that component was repugnant to
public policy.15 Finally, we observe that in ruling that the
ROK’s right to payment would not be contingent on its
return of the defective goods, the Korean courts did not rely
solely on a claim that Paragon had not responded to a
demand for arrangements. Instead the Korean courts
concluded that in light of the cost to the ROK of returning
15 The integrity of the Korean proceedings had been litigated
before Judge Osorio, who found no evidence raising doubts about
the Korean courts’ impartiality. Judge Kralik did not purport to
disturb Judge Osorio’s ruling.
30
the defective goods, the negligible benefit to Paragon of
receiving goods of minimal value, and Paragon’s lack of
cooperation, Ahn’s insistence on simultaneous performance
was an “abuse of right” and merely an attempt to evade his
own obligations.
Ahn argues that delay in the enforcement of the
Korean judgments due to the ROK’s “litigation tactics”
supported the trial court’s refusal to enforce the Korean
post-judgment interest rate. He asserts the ROK
unreasonably delayed filing its recognition action and
unnecessarily combined it with fraudulent conveyance
claims against him. Initially, we observe that Ahn did not
raise this argument below, and the trial court did not rely on
it. Moreover, we see nothing unreasonable in the 16-month
interval between the finality of the Korean judgments and
the ROK’s California action, especially given the ROK’s need
to investigate the condition of Ahn’s assets amid his
attempts to shield them from enforcement. Nor was it
unreasonable for the ROK to concentrate its enforcement
efforts in a single action. It was Ahn, not the ROK, who
delayed the payment of the Korean judgments through his
(permissible) litigation efforts to avoid their recognition and
his (impermissible) efforts to delay or avoid his obligations
through fraudulent transfers. In short, the Korean
post-judgment interest rate was not repugnant to public
policy.
31
2. Substantial Doubt About Foreign Court’s
Integrity as Ground for Non-Recognition
A court should presumptively refuse to recognize a
foreign judgment if it “was rendered in circumstances that
raise substantial doubt about the integrity of the rendering
court with respect to the judgment.” (§ 1716, subd. (c)(1)(F).)
According to the drafters of the 2005 Uniform Act, this
ground “requires a showing of corruption in the particular
case that had an impact on the judgment that was
rendered.” (13 pt. II West’s U. Laws Ann., supra, U.
Foreign-Country Money Judgments Recognition Act, § 4
com. 11.)
Ahn argues the trial court could have relied on this
ground to refuse enforcement of the Korean post-judgment
interest rate. He claims the evidence supported a finding
that the ROK wanted to obtain “revenge” against him
because he had embarrassed it with his company’s prior
lawsuit against Lockheed Martin.16 We are unpersuaded.
The trial court did not rely on this ground in denying
enforcement of the Korean post-judgment interest. Neither
in his comments at the hearing nor in his statement of
decision did Judge Kralik cite this ground as a reason to
refuse enforcement. Moreover, in granting summary
16 The parties do not directly address whether section 1716,
subdivision (c)(1)(F)’s ground for non-recognition presents a
question of fact or law. For purposes of this discussion, we will
assume it presented a question of fact for the trial court, as Ahn
appears to suggest.
32
adjudication, Judge Osorio expressly rejected Ahn’s
argument regarding the integrity of the Korean courts,
finding no evidence raising doubts about their impartially.
Ahn nevertheless urges us to infer the trial court relied
on this ground in refusing to enforce the pjudgment interest
rate. Noting that the court filed its statement of decision
after the ROK filed its notice of appeal, he argues the court
was therefore without jurisdiction to file the statement of
decision. Ahn argues we should thus disregard the
statement of decision and apply the implied findings
doctrine. Under that doctrine, an appellate court must infer
that the trial court made all factual findings necessary to
support the judgment. (Fladeboe v. American Isuzu Motors
Inc. (2007) 150 Cal.App.4th 42, 58.) “The question then
becomes whether substantial evidence supports the implied
factual findings.” (Ibid.)
Even disregarding the trial court’s statement of
decision, however, the implied findings doctrine is of no
benefit to Ahn. The doctrine requires that we infer findings
necessary to support the judgment. We need not -- and will
not -- infer a finding contradicted by the judgment. The trial
court’s judgment recognized and enforced the foreign
judgments, save for their post-judgment interest component.
A finding that the Korean courts lacked integrity because
they might have been intentionally assisting the Korean
government in retaliating against Ahn would have placed
the entire judgment in question. Under no circumstances
would it have justified rejecting only the Korean statutory
33
post-judgment interest rate. The implied findings doctrine is
therefore inapplicable to Ahn’s contentions.
Moreover, Ahn’s proposed finding would have been
unsupported. The Korean judicial system is generally
considered to be fair. (See Samyang Food Co. v. Pneumatic
Scale Corp. (N.D.Ohio Oct. 21, 2005, No. 5:05-CV-636) 2005
U.S.Dist.LEXIS 25374, at *17 [“The Korean judicial system
provides substantially the same substantive and procedural
due process protections as those afforded by Ohio”]; LG
Display Co., LTD. v. Obayashi Seikou Co., LTD (D.D.C.
2013) 919 F.Supp.2d 17, 32 [“U.S. courts routinely enforce
judgments rendered by Korean courts”].) Ahn’s theory --
that due to his prior embarrassment of the ROK’s
government, the government enlisted three levels of its
judiciary to exact revenge on him in two separate cases -- is
unsupported speculation. To the extent Ahn relies on
certain rulings by the Korean courts -- e.g., ordering that the
ROK’s right to payment would not be conditioned on its
return of the defective goods and finding that Ahn had
actually or constructively consented to the correction of the
amount of his surety agreement -- his disagreement does not
create substantial doubt about the integrity of the Korean
courts. (See De Fontbrune v. Wofsy (N.D.Cal. 2019) 409
F.Supp.3d 823, 845 [rejecting lack-of-integrity ground under
§ 1716; “‘[T]his Court will not attempt to insert itself into the
shoes of the [French] court and usurp its decision-making’”].)
Ahn offers no other ground for non-recognition of the
Korean post-judgment interest rate; nor did the trial court
offer any other ground in support of its decision.
34
Accordingly, we conclude the trial court was required to
apply that component of the Korean judgments.
35
DISPOSITION
The judgment is vacated and the matter remanded to
the trial court with instructions to apply the Korean
judgments’ post-judgment interest rate up to the date of the
original California judgment. The ROK is awarded its costs
on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL
REPORTS
MANELLA, P. J.
We concur:
WILLHITE, J.
COLLINS, J.
36