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Young v. Son

United States District Court, D. Kansas

July 28, 2017

STEVE YOUNG and EUN YOUNG, Plaintiffs,
v.
KI OK SON, Individually, HYE JIN SON a/k/a HYE JIN HA, Individually, and ACROSS CONSTRUCTION CORPORATION, Defendants.

          MEMORANDUM AND ORDER

          J. THOMAS MARTEN, JUDGE

         This matter came before the court on June 13, 2017, for a bench trial. At the conclusion of the evidence, the court granted the parties additional time to brief their respective positions. Those briefs have now been filed and the court is prepared to rule.

         I. Introduction.

         The plaintiffs Steve Young and Eun Young are husband and wife. The defendants Ki Ok Son (referred to as “Jack Son”) and Hye Jin Son (“Hye”) are also husband and wife. Hye is the sister of Steve, meaning Steve and Jack are brothers-in-law.

         As will be discussed more fully herein, the evidence at trial focused on two events. The first involved Steve giving a $215, 000 check to Jack. Both sides agree Steve deposited a $215, 000 check in an account controlled by Jack, and defendants later returned $50, 000 to Steve, but defendants refused to return the remaining $165, 000. The second event includes allegations of improper bank transfers in South Korea and promissory notes allegedly signed by plaintiffs. Defendants contend Steve made several unauthorized withdrawals from Hye's accounts in Korea and, as a result, Steve and Eun later executed a $200, 000 promissory note in Hye's favor. Defendants argue they are entitled to keep the $165, 000 received from Steve as an offset to Steve's unpaid debt on the promissory note.

         II. Findings of fact.

         Deposit of $215, 000 check. Steve Young graduated from the Naval Academy in the Republic of Korea (South Korea) and served in that country's navy for six years. He then came to the U.S., where he ran several businesses, including a grocery market and a cleaning company. In 2010, Steve opened a sushi restaurant called Wasabi near downtown Wichita. He opened a second Wasabi in Wichita later in 2010.

         In early 2013, Steve had accumulated $215, 000 to purchase equipment and to pay operating expenses for a third Wasabi, which was to be located on Wichita's west side. Steve and Eun were having marital difficulties at the time. As a result, Steve was concerned that his wife might take the funds for the restaurant. He spoke to his brother-in-law, Jack, and the two agreed Steve should deposit the funds in the bank account of Across Construction Corporation, to which Jack had access. Steve explained the money was to fund the restaurant, and Jack said he would return it whenever Steve needed it. Steve obtained a cashier's check for $215, 000 and deposited it in the Across Construction account at Bank of America in Wichita on March 4, 2013. Exh. 5.

         Steve subsequently requested that Jack return the $215, 000. Jack sent payments totaling $50, 000. He refused to return the additional $165, 000 that Steve had given him.

         Promissory notes. Back in early 2010, according to plaintiffs' evidence, Steve and Jack discussed the possibility of Jack and Hye investing in the initial Wasabi restaurant. Jack said before he would invest, he would need a legal document. As a result, on May 6, 2010, Steve emailed Jack several copies of a proposed promissory note. See Exh. 2. The proposals were hand and type-written in Korean. Translated, one note states that Steve borrowed $200, 000 from Hye to open the Wasabi Restaurant on East Douglas [the first Wasabi] and that until Steve pays off this debt, he gives Hye rights as first and primary creditor, and if the restaurant is sold Hye will receive her funds first. Exh. 2, p.3. A handwritten version by Steve, which was faxed by him to Jack and Hye, appears at Exh. 2, page SON013. The fax indicates it was sent on May 8, 2010.

         Exhibit 6, a promissory note emailed by Steve to Jack on May 6, 2010, bears apparent signatures of Steve and Eun Young and of Hye Jin Son. A handwritten description of Steve and Eun as “Debtor[s], ” and their apparent signatures dated March 4, 2013, appear at the bottom of Exhibit 6. A description of Hye as “Creditor” and her signature dated March 19, 2013, also appear at the bottom. Similar signatures appear on the bottom of the May 8, 2010, fax sent by Young. Defendants contend plaintiffs signed these notes on March 4, 2013, when Jack came from California to help Steve. Among other things, Jack bailed Steve out of jail after Steve was accused of domestic violence. Steve and Eun each testified they did not sign this or any other promissory note. They also testified that neither Jack nor Hye loaned them $200, 000 or any lesser amount to construct a Wasabi restaurant.

         Defendants' version of events was that Steve contacted Hye in April 2010, and told her she might be contacted by a bank inspector. According to her, Steve said he had had transferred funds out of her account without her permission and with the assistance of Hee Do Oh, a Korean bank employee. Steve and Hye both had accounts at Hana Bank in South Korea. Both of their accounts were managed by Hee Do Oh, who had known Steve since their days together in the navy. Hee also worked with Steve's wife Eun at Hana Bank. Hee knew Hye and Jack, having been introduced to them by Steve around the year 2000.

         According to Hye, Steve told her Hee would get fired and the Wasabi restaurant would have trouble if she didn't say she had authorized the transfers. Hye testified that when the bank subsequently contacted her, she told them she had authorized the transfers. She testified Steve drafted the $200, 000 promissory note as a result of having transferred these funds out of her account. She testified that when she found out about the $215, 000 check Steve had deposited into the Across Construction account, she thought it was repayment for the funds taken. She testified she returned $50, 000 of the $215, 000 to Steve upon his request.

         Hye conceded that receipts showing money transfers to Eun Young or Wasabi restaurant during the relevant time totaled at most $117, 000, but she testified Steve made a promissory note for $200, 000 because Jack had spent additional funds helping Steve, because defendants had suffered damages in a car accident, and because Steve felt guilty and wanted to make up for what he had done. Jack testified he came to Wichita at Steve's request to bail him out of jail and help him ...


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