Bae v. Park
Posted on Categories Court Decisions, Securities Arbitration

By Ben Suter

The Court finds that the defendant failed to demonstrate that the plaintiffs procured an arbitration award by corruption, fraud, or other undue means, and affirms the trial court’s decision to affirm the award.

Bae vs. Park, No. B284995, Cal. App. Unpub. LEXIS 2491 (Cal. App., 2Dist., 4/10/19).

The Court affirms the trial court’s order confirming an arbitration award in favor of plaintiffs, holding that the defendant failed to show that (i) the arbitration award was secured by undue means; or (ii) that the arbitration award was secured by extrinsic fraud.

Plaintiffs Jung H. Bae, Eun Lee, and Young Oh (collectively “Plaintiffs”) sued Chris Kang (“Kang”), Nam Ho Park (“Park”), ZB Trading, Zenith Bridge, LLC (Nevada), and Zenith Bridge, LLC (California). Plaintiffs alleged that Kang and Park made misrepresentations about investments in foreign currency trading and that, in reliance on those misrepresentations, they invested money with their companies and lost their investments. Plaintiffs alleged Kang and Park were “partners” in and alter egos of the three entity defendants. The trial court ordered the parties to binding arbitration pursuant to a written agreement. Park was unable to attend the arbitration hearing due to a pre-planned trip to Korea. According to Park, Kang assured him he would take care of the arbitration and that Kang’s attorneys would also represent Park. At the arbitration hearing Kang agreed to settle for $85,000. Kang’s attorneys called Park, who declined to settle the claims against him. The arbitration then resumed as to Park. Kang failed to make the required payments to Plaintiffs, and the arbitrator issued his award, finding that Park was liable for the losses that Plaintiffs had incurred. Plaintiffs subsequently filed a petition to confirm the arbitration award, and Park opposed the motion and filed a motion to vacate. The trial court confirmed the award, and Park appealed.

The Court first addresses Park’s argument that the arbitration award was secured by undue means because his attorney had an actual conflict of interest. Park argued that during the arbitration his attorney learned that Kang had falsified documents to implicate Park and then remained silent and protected Kang at Park’s expense. The Court finds that Park failed to demonstrate a conflict of interest because he relied on inadmissible hearsay in support of his argument, and likewise failed to establish that the supposed conflict had a substantial impact on the arbitrator’s decision. Turning to Park’s argument that the arbitration award was secured by extrinsic fraud, the Court finds that Park had not established that the conduct of his attorneys denied him a fair hearing. Park argued his attorneys “repeatedly put Kang’s interests over Park’s interests,” prevented Park from attending the arbitration, and negotiated a settlement that left Park “open to huge exposure.” The Court finds that Park relied on unsupported assertions in the arbitration brief that necessarily must be disregarded. Moreover, Park failed to show that he had a satisfactory excuse for not attending the arbitration hearing, and declined to participate in the settlement discussions telephonically. Finally, the Court notes that Park’s petition to vacate and opposition to the petition to confirm were both untimely. Accordingly, the Court affirms the trial court’s confirmation of the award.

(B. Suter)

(SOLA Ref. No. 2019-19-01)

NOTICE: The court decision synopsis published above represents an abbreviated description of the actual decision and is re-printed here for its educational value. The author's effort is to report concisely the substance of the decision or a selected portion of the decision; commentary or analysis is generally reserved for the italicized section at the bottom of the summary. Subscribers to SAC's Online Litigation Alert (SOLA), from which this synopsis is excerpted, have immediate access to the full decision, in addition to the synopsis. 

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