Sona & Jim Chu, Resps v. Hyun Seo-jeong, Apps. ( 2014 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION ONE
SONA CHU and JIM CHUNG-SIK CHU, No. 69605-0-1
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Appellants. FILED: January 21, 2014
Verellen, J. — Sona Chu and Jim Chung-Sik Chu (Chu) sued Hyun H. Seo-
Jeong and Myung Chul Seo (Seo-Jeong) claiming breach of a settlement agreement.
Because Seo-Jeong presented no genuine issue of material fact for trial, we affirm
summary judgment in favor of Chu.
FACTS
In 1995, Seo-Jeong opened Cafe Arizona, a casino and restaurant in Federal
Way. The business experienced financial difficulties and Seo-Jeong sought additional
capital. In 2001, Chu lent $200,000 to Seo-Jeong.
In 2005, Chu sued Seo-Jeong for breach of contract due to Seo-Jeong's failure
to repay the loan as agreed. On February 1, 2008, following mediation, the parties
No. 69605-0-1/2
entered into a settlement agreement pursuant to Civil Rule 2A (CR 2A).1 The
settlement agreement, signed by Jim Chung-Sik Chu and Myung Chul Seo, their
respective attorneys and the mediator, provided, in relevant part:
This agreement made and entered into this 1st day of February,
2008 between the parties named above to resolve issues between them
arising out the action brought herein, including any cross-claims, counter
claims, set-offs or affirmative defenses. The agreement attached hereto
constitutes a fair and full settlement of all issues brought herein. The
parties stipulate pursuant to Civil Rule 2[A] this is a binding agreement
between the parties. The parties agree they have met in settlement
conference/mediation and have voluntarily, without coercion, and of their
own free will entered into the agreement attached hereto and understand
this agreement and settlement is fully enforceable by the court [sic] by
either party.
8. All defendants shall have 24 months from 2/1/08 to sell license
for casino.
9. Upon sale or opening of casino, all defendants will pay plaintiffs
$200,000.00 (not a [percentage] of ownership or other consideration).
10. If the $200,000.00 is not paid by the end of the 24th month,
then starting on the 25th month [payments] in the amount of
$4,167.00/month will be paid by defendants to plaintiffs for 4 years (48
months) until the $200,000 is paid in full. No interest.
11. All aspects of all dealings between the parties will remain
strictly confidential.
12. All documents shall reflect this deal was always a personal
loan to Hyung Seo-Jeong, not a casino investment/loan.[l
1CR 2A provides that "[n]o agreement or consent between parties or attorneys in
respect to the proceedings in a cause, the purport of which is disputed, will be regarded
by the court unless the same shall have been made and assented to in open court on
the record, or entered in the minutes, or unless the evidence thereof shall be in writing
and subscribed by the attorneys denying the same."
2Clerk's Papers at 18-21.
No. 69605-0-1/3
It is undisputed that Seo-Jeong defaulted on the payments required by the
settlement agreement. On February 14, 2012, Chu sued Seo-Jeong for breach of
contract under the settlement agreement.
Chu moved for summary judgment. In opposition to the motion, Seo-Jeong
argued that the settlement agreement was unenforceable because it was the product of
duress. Seo-Jeong claimed that Chu agreed to lend the $200,000 as part of a
"confidential investment agreement" that the parties were not permitted to disclose to
anyone.3 Seo-Jeong knew that the failure to report Chu's loan to the Washington State
Gambling Commission could result in the loss of their casino license.4 As a result, Seo-
Jeong asserted, they had "no choice but to agree" to the settlement agreement.5
The trial court determined that the settlement agreement was "a knowing,
voluntary and intelligent final decision embodied and evidenced per CR 2A in writing by
both parties and that each party had the benefit and representation of their individual
legal counsel before entering into said final agreement."6 The trial court also concluded
that Seo-Jeong breached the agreement by failing to make the necessary payments.
3Appellant's Br. at 7.
4WAC 230-06-107 requires the holder of a casino license to "report any change
in ownership when the change would result in any person or organization becoming a
substantial interest holder" to the Washington State Gambling Commission. A
"substantial interest holder" is a person who has actual or potential influence over the
management or operation of the gambling entity. WAC 230-03-045. Evidence of
"substantial interest" may include indirect ownership of the entity or "[providing ten
percent or more of cash, goods, or services for the start up of operations or the
continuing operation of the business during any calendar year or fiscal year."
WAC 230-03-045(2)(a), (h). Failure to provide the Gambling Commission with the
necessary information may result in the suspension or revocation of a casino license.
WAC 230-03-085.
5Appellant's Br. at 8.
6Clerk's Papers at 66.
No. 69605-0-1/4
The trial court granted summary judgment in favor of Chu and entered a final judgment
against Seo-Jeong. Seo-Jeong appeals.
DISCUSSION
On appeal, Seo-Jeong claims that the trial court erred in granting summary
judgment in favor of Chu because a genuine issue of material fact existed as to whether
the settlement agreement was invalid due to duress.
We review both a grant of summary judgment and an action to enforce a CR 2A
settlement agreement de novo.7 "When a moving party relies on affidavits or
declarations to show that a settlement agreement is not genuinely disputed, the trial
court proceeds as if considering a motion for summary judgment."8 We consider all
facts and reasonable inferences in the light most favorable to the nonmoving party, and
affirm only if, from all the evidence, reasonable minds could reach but one conclusion.9
The party moving to enforce a settlement agreement has the burden of proving there is
no genuine dispute as to the material terms ofthe agreement.10 If the moving party
meets its burden, "the nonmoving party must respond with affidavits, declarations, or
otherevidence to show there is a genuine issue of material fact."11
"Settlement agreements are governed by general principles of contract law."12
Duress is an affirmative defense in an action to enforce a contract.13 The party raising
7 Laviqne v. Green, 106 Wn. App. 12, 16, 23 P.3d 515 (2001).
8 Brinkerhoff v. Campbell. 99 Wn. App. 692, 696, 994 P.2d 911 (2000).
9 In re the Marriage of Ferree. 71 Wn. App. 35, 44, 856 P.2d 706 (1993).
10 Brinkerhoff. 99 Wn. App. at 696-97.
11 Patterson v. Taylor. 93 Wn. App. 579, 584, 969 P.2d 1106 (1999) (citing
Ferree. 71 Wn. App. at 44).
12 Laviqne. 106 Wn. App. at 20.
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an affirmative defense has the burden of proving the elements of thatdefense at trial.14
Therefore, to defeat Chu's motion for summary judgment, Seo-Jeong has the burden of
demonstrating the existence of a genuine issue of material fact as to whether the
settlement agreement was procured under duress.
To establish duress, a party must demonstrate that it was deprived of its free will
by the wrongful or oppressive conduct ofthe other party.15 The "mere fact that a
contract is entered into under stress or pecuniary necessity is insufficient" to prove
duress.16 "[T]here must be proof of more than reluctance to accept or financial
embarrassment."17 Furthermore,
"[i]t is the well-established general rule that it is not duress to institute or
threaten to institute civil suits, or take proceedings in court, or for any
person to declare that he intends to use the courts wherein to insist upon
what he believes to be his legal rights. It is never duress to threaten to do
that which a party has a legal right to do, and the fact that a threat was
made of a resort to legal proceedings to collect a claim which was at least
valid in part constitutes neither duress nor fraud such as will avoid liability
on a compromise agreement."1181
Chu met their burden to establish that Seo-Jeong breached the settlement
agreement. Seo-Jeong does not dispute their failure to make the payments required by
the settlement agreement. Rather, Seo-Jeong reiterates their argument below that they
executed the settlement agreement under duress because they feared they would
13 Retail Clerks Health & Welfare Trust Funds v. Shopland Supermarket. Inc.. 96
Wn.2d 939, 944, 640 P.2d 1051 (1982).
14 August v. U.S. Bancorp. 146 Wn. App. 328, 343, 190 P.3d 86 (2008).
15 Retail Clerks. 96 Wn.2d at 944-45.
16 id, at 944.
17 Id,
18 Doernbecher v. Mutual Life Ins. Co. of New York. 16 Wn.2d 64, 73-74, 132
P.2d 751 (1943) (quoting 17 Am. Jur. 892).
No. 69605-0-1/6
otherwise lose their casino license for failing to report the sum of money they received
to the Gambling Commission. This is insufficient to establish a genuine issue of
material fact as to the alleged affirmative defense of duress. Seo-Jeong's acceptance of
Chu's loan and the failure to report the loan to the Gambling Commission was of Seo-
Jeong's own volition. Chu wanted to maintain the confidentiality of the source of the
$200,000. Seo-Jeong offered no evidence that Chu knew that the loan could potentially
jeopardize their casino license, nor that Chu attempted to use this knowledge to force
Seo-Jeong to sign the settlement agreement. In addition, because Seo-Jeong failed to
repay Chu, Chu was entitled to bring legal action to enforce the settlement agreement,
and such action did not constitute duress. The trial court appropriately granted
summary judgment.
Seo-Jeong also claims that the trial court erred in considering a copy of the
settlement agreement on summary judgment. The settlement agreement contained the
following language: "The parties agree they have met in settlement
conference/mediation and have voluntarily, without coercion, and of their own free will
entered into the agreement attached hereto."19 Seo-Jeong argues that because this
was used to prove the truth of the matter asserted, i.e., that Seo-Jeong did not enter
into the settlement agreement under duress, it is inadmissible hearsay. But Seo-Jeong
cites no authority that an admission contained in a recitation in a contract signed by a
party to the pending dispute is somehow impacted by the hearsay rule. "If a party fails
to object or bring a motion to strike deficiencies in affidavits or other documents in
19
Clerk's Papers at 18.
No. 69605-0-1/7
support ofa motion for summary judgment, the party waives any defects."20 Because
Seo-Jeong did not raise this issue below, we decline to review it.
Chu requests attorney fees and costs incurred in defending this appeal.
However, Chu fails to cite authority warranting such an award. A request for attorney
fees on appeal requires a party to include a separate section in his or her brief devoted
to the request; this requirement is mandatory.21 A"bald request for attorney fees on
appeal" is insufficient; rather, argument and citation to authority are required under the
rule to advise this court of the appropriate grounds for an award of attorney fees and
costs.22 As such, we deny Chu's request.
Affirmed.
WE CONCUR:
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20 Bonneville v. Pierce County. 148 Wn. App. 500, 509, 202 P.3d 309 (2008).
21 RAP 18.1(b); Phillips Bldg. Co. v. An, 81 Wn. App. 696, 705, 915 P.2d 1146(1996).
22 Thweatt v. Hommel. 67 Wn. App. 135, 148, 834 P.2d 1058 (1992); Austin v.
U.S. Bank of Wash.. 73 Wn. App. 293, 313, 869 P.2d 404 (1994).