ING Bank, fsb v. Ahn et al

Filing 74

ORDER Signed by Judge Thelton E. Henderson Granting re 52 Motion for Summary Judgment. (tehlc4, COURT STAFF) (Filed on 5/13/2010)

1 2 3 4 5 6 7 8 9 10 ING BANK, fsb, Plaintiff, v. CHANGSEOB AHN and SOOKHEE AHN, Defendants. NO. C09-00995 TEH ORDER GRANTING COUNTERCLAIMANTS' MOTION FOR SUMMARY JUDGMENT IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA

United States District Court

11
For the Northern District of California

12 13 14 15 16 17 18 19 20 21 This matter is before the Court on the motion for summary judgment filed by CHANGSEOB AHN and SOOKHEE AHN, Counterclaimants, v. ING BANK, fsb and BONA FINANCIAL GROUP, Inc. Counterdefendants.

22 Defendants and Counterclaimants Changseob Ahn and Sookhee Ahn ("the Ahns"). The 23 Court, finding oral argument unnecessary, VACATES the motion hearing currently 24 scheduled for May 17, 2010.1 This motion requires the Court to resolve a single question: 25 whether Counterdefendant Bona Financial Group, Inc. ("Bona") violated California Civil 26 Code section 1632 by failing to furnish the Ahns with a Korean translation of a loan 27 agreement that had been negotiated entirely in Korean. For the reasons set forth below, the 28
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The matter remains on calendar for a case management conference at 10:00am.

1 Court answers that question in the affirmative, and the Ahns' motion is therefore 2 GRANTED. 3 4 BACKGROUND 5 In 2007, the Ahns refinanced two mortgages on their single-family house at 2917

6 Spanish Bay Drive in Brentwood, California with a loan from Plaintiff and Counterdefendant 7 ING Bank, FSB ("ING"). They negotiated the loan with Bona, a loan broker, and had no 8 direct contact with ING during the negotiation. Negotiations were conducted in Korean 9 between the Ahns and Kathy Park, a loan officer with Bona. Korean is the Ahns' first 10 language; they chose Bona as their loan broker because of its Korean-language capabilities.

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11 On April 27, 2007, the Ahns executed an adjustable rate note for $728,000 in favor of ING,
For the Northern District of California

12 secured by a deed of trust on the property. The loan documents were all in English, and no 13 Korean translations were provided. 14 The Ahns ceased making loan payments in October 2008, and went into default. ING

15 filed suit on March 6, 2009, alleging that the Ahns made fraudulent misrepresentations in 16 their loans applications by overstating their income and declaring an intent to reside in the 17 house as their principal residence when they meant in fact to "flip" the house for a profit.2 18 The loan documents listed the Ahns' joint monthly income as $14,600, or $175,200 annually. 19 ING alleges that their true income was less than 60 percent this amount in 2006, and less 20 than half the stated amount the following year. 21 The Ahns filed a counterclaim against ING and Bona on May 15, 2009, alleging

22 violations of California Civil Code section 1632 and California's unfair competition law. 23 Although the Ahns admit that their income was misstated, they claim that Bona inflated their 24 income on the loan documents after receiving accurate income disclosures from the Ahns. 25 They also allege that Bona violated section 1632 by failing to provide them with Korean26 language translations of the loan documents. 27
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28 complaint.

ING filed a first amended complaint on March 20, 2009, which is the currently operative

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The Ahns moved for summary judgment on January 20, 2010, on the limited question

2 of whether Bona violated California Civil Code section 1632. After continuing the motion 3 hearing to allow for settlement negotiations, the parties stipulated to a May 17, 2010 hearing 4 date. The Court has vacated that hearing and now considers the motion on the papers. 5 6 LEGAL STANDARD 7 Summary judgment is appropriate when there is no genuine dispute as to material

8 facts and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). 9 Material facts are those that may affect the outcome of the case. Anderson v. Liberty Lobby, 10 Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is "genuine" if there is

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11 sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. Id. The
For the Northern District of California

12 Court may not weigh the evidence and must view the evidence in the light most favorable to 13 the nonmoving party. Id. at 255. 14 A party seeking summary judgment bears the initial burden of informing the court of

15 the basis for its motion, and of identifying those portions of the pleadings and discovery 16 responses that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. 17 Catrett, 477 U.S. 317, 323 (1986). Where the moving party will have the burden of proof at 18 trial, it must affirmatively demonstrate that no reasonable trier of fact could find other than 19 for the moving party. Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). 20 However, on an issue for which its opponent will have the burden of proof at trial, the 21 moving party can prevail merely by "pointing out . . . that there is an absence of evidence to 22 support the nonmoving party's case." Celotex, 477 U.S. at 325. If the moving party meets 23 its initial burden, the opposing party must then "set out specific facts showing a genuine 24 issue for trial" to defeat the motion. Fed. R. Civ. P. 56(e)(2); Anderson, 477 U.S. at 256. 25 Questions of law are "suitable to disposition on summary judgment." Thrifty Oil Co. v. Bank 26 of Am. Nat'l Trust & Sav. Ass'n, 310 F.3d 1188, 1194 (9th Cir. 2002). 27 // 28 // 3

1 DISCUSSION 2 California Civil Code section 1632 requires "[a]ny person engaged in a trade or

3 business who negotiates primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, 4 orally or in writing," to provide the other party to the agreement with "a translation of the 5 contract or agreement in the language in which the contract or agreement was negotiated." 6 Cal. Civ. Code § 1632(b). Section 1632 applies only to the negotiation of certain types of 7 contracts and loans. See id. § 1632(b)(1)-(7). Although loans secured by real property are 8 generally excluded from the statute, id. § 1632(b)(2), real property loans negotiated by a 9 broker and "for use primarily for personal, family or household purposes" are covered, id. § 10 1632(b)(4) (extending statute's protection to loans subject to section 10240 of the California

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11 Business and Professions Code, which includes real property loans negotiated by real estate
For the Northern District of California

12 brokers); see also Alvara v. Aurora Loan Servs., Inc., No. C09-1512 SC, 2009 U.S. Dist. 13 LEXIS 50365, at *9-10 (N.D. Cal. June 15, 2009) ("Put simply, real property transactions are 14 excluded by Section 1632(b)(2), but brought back into the statute by Section 1632(b)(4), so 15 long as they are negotiated by a broker."). 16 Bona does not dispute that the transaction was negotiated by a broker in Korean, and

17 acknowledges that the Ahns were not provided Korean-language translations of the loan 18 documents. Section 1632 is therefore applicable here. However, Bona attempts to invoke an 19 exception for loans negotiated through an interpreter. Section 1632 "does not apply to any 20 person engaged in a trade or business who negotiates primarily in a language other than 21 English" if "the party with whom he or she is negotiating . . . receives a loan or extension of 22 credit, . . . [and] negotiates the terms of the contract, lease, or other obligation through his or 23 her own interpreter." Cal. Civ. Code § 1632(h). To qualify as an interpreter, one must be 24 "able to speak fluently and read with full understanding both the English language" and the 25 language in which the contract was negotiated. Id. 26 Bona presents evidence of Mr. Ahn's fluency in English ­ including an excerpt from

27 his Ph.D. dissertation in English and deposition testimony regarding his interest in 28 simultaneous English-Korean translation ­ to argue that the interpreter exception applies 4

1 here. However, a party's fluency in English is irrelevant to section 1632, which makes no 2 reference to a party's English-language proficiency. Section 1632 is triggered by the 3 language in which a contract is negotiated, and applies here because the refinancing was 4 negotiated in Korean. The interpreter exception requires one to act as an interpreter ­ i.e. to 5 translate "from one language to another." Black's Law Dictionary 838 (8th ed. 2004). 6 However, there is no evidence that Mr. Ahn acted as an interpreter. To the contrary, the 7 Ahns and Park attested that the negotiations occurred entirely in Korean, facts to which Bona 8 has stipulated. 9 The Ahns have carried their burden for summary judgment, and Bona has failed to

10 show a genuine issue for trial regarding its violation of section 1632. Bona's evidence

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11 demonstrates Mr. Ahn's high degree of proficiency in English, but not his service as an
For the Northern District of California

12 interpreter. If the California legislature had sought to create exceptions to section 1632 based 13 on a party's fluency in English, it could have done so. The fact that Mr. Ahn may be fluent 14 in English is of no consequence where ­ as here ­ the negotiations occurred in Korean and he 15 did not act as an interpreter. Bona's failure to provide Korean-language translations of the 16 loan documents therefore violated section 1632. 17 18 CONCLUSION 19 As the Court finds that Bona violated section 1632 of the California Civil Code, the

20 Ahns' motion for summary judgment on this narrow question is therefore GRANTED. The 21 parties shall appear for case management conference on Monday, May 17, 2010, at 22 10:00am. 23 24 IT IS SO ORDERED. 25 26 27 28 5 Dated: 5/13/10

THELTON E. HENDERSON, JUDGE UNITED STATES DISTRICT COURT