Click Entertainment, Inc. v. JYP Entertainment Company, Ltd. et al

Filing 482

ORDER ADOPTING MAGISTRATE JUDGE'S FINDINGS AND RECOMMENDATION AS MODIFIED for 475 . Signed by JUDGE ALAN C KAY on 05/31/2012. (eps) -- the Court adopts Magistrate Judge Chang's Findings & Recommendations as modified. Once this Order becomes nonappealable, JYP's escrow agent is authorized to release the $400,000 held in escrow for JYP, plus any interest that may have accrued, to JYP. Once this Order becomes nonappealable, the Clerk of the Court is instructed to release the $400,000 held for Rain, plus any interest that may have accrued, to Rain. The Court's order, however, is not effective until the Court has received, reviewed, and issued an order approving of the verification of payment by JY P to Park in the full amount of the Korean Court orders CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
CLICK ENTERTAINMENT,
INC.,
a Hawaii Corporation,
Plaintiff(s),
vs.
JYP ENTERTAINMENT
COMPANY, LTD., a Korean
Limited Company; STAR M.
ENTERTAINMENT, a Korean
Company; BEOM CHANG KANG;
REVOLUTION ENTERTAINMENT;
SE HYUN YUN; JIHOON
JEONG, aka RAIN; JOHN
DOES 1-25; JANE DOES
1-25; DOE ENTITIES 1-20,
Defendant(s).
_________________________

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CIVIL

NO. 07-00342 ACK-KSC

ORDER ADOPTING MAGISTRATE JUDGE’S
FINDINGS AND RECOMMENDATION AS MODIFIED
BACKGROUND
The parties tried this breach of contract and tort
action related to a cancelled concert in Honolulu, Hawaii, before
a jury in March 2009.

See Doc. Nos. 272-285.

On March 19, 2009,

the jury returned a verdict in favor of Plaintiff Click
Entertainment, Inc. (“Click” or “Plaintiff”) against, inter alia,
JYP Entertainment Company, Ltd. (“JYP”) and Ji-Hoon Jung (“Rain”)
(collectively, “Defendants”).

Doc. No. 290.

After the Court

entered judgment, the parties entered into a written settlement

agreement (the “Settlement Agreement”).

Doc. No. 402. Pursuant

to this agreement, the Court vacated the judgment against JYP and
Rain.

Id.

The Settlement Agreement called for JYP and Rain to

each make two payments to Click.

See Doc. No. 395, ¶ 1.

The

parties made the first payment in accordance with the agreement.
The Settlement Agreement required that the parties each pay the
second payment of $500,000 by February 2, 2010.

Id.

Meanwhile, in the District Court for the Central
District of Seoul in the Republic of Korea (the “Korean Court”),
Dae-Geun Park brought an action against Click.

On July 20, 2009,

the Korean Court issued a provisional seizure order (the
“Provisional Seizure Order”) that seized Click’s right to receive
the second payment from JYP and Rain on the grounds that Click
was allegedly liable to Park in an amount greater than the
combined amounts Defendants currently owe to Click.

See Doc. No.

443, Ex. A.
In light of the Provisional Seizure Order, the parties
negotiated supplemental agreements.

JYP and Rain entered into

separate agreements with Click, under which JYP and Rain agreed
to pay $100,000 each of their remaining debt to Click’s counsel
personally as attorney fees, for JYP to hold its remaining
$400,000 in an escrow account with the law firm Akin Gump Strauss
Hauer & Feld LLP as escrow agent, and for Rain to deposit its
remaining $400,000 with the Clerk of the Court.

See Doc. No. 443

(the “JYP Stipulation”), at 2-3; Doc. No. 445 (the “Rain
Stipulation”).

On April 5, 2010, the Court issued orders
2

approving both stipulations.

Doc. Nos. 442 & 444.

The JYP stipulation requires Click’s principal SeungSoo Lee, Click, Click’s counsel, and JYP to “cooperate with each
other so that JYP and the JYP Escrow Agent . . . shall be able to
comply with an order or orders of a court or courts with
jurisdiction over it/them.”

Doc. No. 443, at 4.

The JYP

Stipulation further provides that the Escrow Agent may disburse
funds “pursuant to orders, which become final, binding and
nonappealable, from this Court and the Korean Court.”

Id.

The Rain Stipulation required that Click use its best
efforts to resolve the Korean claims that formed the basis of the
Provisional Seizure Order.

Doc. No. 445, at 2.

In the event the

claims were not resolved, the Rain Stipulation required the
parties to work together to reach a stipulation that would
control the payment of the remaining $400,000.

Id. at 3.

The Korean Court resolved the Korean litigation, issuing
three relevant orders.

On December 13, 2011, the Korean Court

approved a mediation statement between Park, Lee, and Click in
which Lee and Click agreed that they shall pay KRW 3 billion plus
simple interest at an annual interest rate of 20%.
Ex. A (“Mediation Statement”).

Doc. No. 459,

The Mediation Statement resolved

Park’s claim related to his investment in the cancelled Hawaii
concert that is the subject of this action.
Statement.

See Mediation

On January 12, 2011, the Korean Court issued an order

converting the Provisional Seizure Order into a permanent
official seizure order.

Doc. No. 459, Ex. B (“Official Seizure
3

Order”).

The Official Seizure Order seized approximately KRW 1

billion plus accrued interest.

Id.

The order further provided

that Rain and JYP shall not pay the debt to Click, that Click
shall not dispose of or receive the debt, and authorized Park to
collect the debt.

Id.

On February 1, 2012, the Korean Court

issued a judgment against JYP and Rain ordering them to each pay
KRW 524,109,580 (over U.S. $450,000) plus interest to Park.
No. 459, Ex. C (“Final Judgment”).

Doc.

This amount is greater than

the $400,000 at issue that JYP has in escrow and the $400,000 at
issue that Rain has deposited with the Clerk of Court.

After

Park acted upon the Official Seizure Order to attach real
property belonging to Rain, Rain paid Park KRW 631,637,727 (which
represents KRW 524,109,580 plus accrued interest).

See Doc. No.

461, Declaration of Park Sung Girl ¶¶ 4-6; Doc. No. 459, Exs. D &
E.
Upon Click’s request, Magistrate Judge Chang held a
status conference on February 29, 2012, to discuss the resolution
of the Korean litigation and the release of the funds deposited
with the Court and in escrow.

See Doc. Nos. 456-457.

Thereafter, on March 13, 2012, Click’s counsel moved for leave to
withdraw as counsel.

Doc. No. 458.

As grounds for the

withdrawal, Click’s counsel stated that he was unable to verify
Click’s position that the Korean orders are either inaccurate or
fraudulent and that he could not make a “credible” presentation
to the Court on these issues.
Seitz ¶¶ 7-8.

Id. at Declaration of Eric A.

Click’s counsel further asserted that after
4

advising Lee of his position, Lee “strongly expressed an opinion”
that Click’s counsel was not representing Click’s interests
aggressively enough, stated that he would seek other counsel in
this matter, and stated that he intends to seek recourse from
Click’s counsel for any delays, costs and fees, or loss of
settlement proceeds that may have resulted from or been related
to Park’s claims.

Id. ¶ 9.

Also on March 13, 2012, JYP and Rain filed a motion for
release of funds held in escrow so that they could satisfy the
Korean Court judgment (“Defendants’ Release Motion”).
459.

Doc. No.

Defendants simultaneously filed an ex parte motion to

shorten the time to hear their motion.

Doc. No. 460.

On March

15, 2012, non-party KBFD-TV filed a notice of lien on any
settlement or judgment in this matter for advertising that it
provided to Click in connection with the cancelled Hawaii
concert, in the amount of $7,958.10.

Doc. No. 465.

Magistrate Judge Chang granted the motion to shorten
time and set Defendants’ Release Motion for hearing on March 22,
2012.

Doc. No. 464.

On March 19, 2012, Click filed an ex parte

motion to continue the hearing on Defendants’ Release Motion to
enable Click to obtain new counsel and non-party Lee (Click’s
principal) to make arrangements to attend the hearing.
467.

Doc. No.

On March 20, 2012, Magistrate Judge Chang held a status

conference regarding the scheduling of Defendants’ Release Motion
and the motion to withdraw by Click’s counsel.

Doc. No. 471.

Counsel for JYP, Rain, and Click participated in the status
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conference.

See id.

After considering the comments of counsel

at the conference, Magistrate Judge Chang continued the hearing
for Defendants’ Release Motion and the motion to withdraw by
Click’s counsel to March 28, 2012.

Id.

Magistrate Judge Chang

ordered that any documents or other evidence and any opposition
to Defendants’ Release Motion be filed by March 26, 2012.

Id.

Click did not file an opposition nor any other documents before
the hearing.
On March 28, 2012, Magistrate Judge Chang granted
Click’s counsel motion to withdraw subject to Plaintiff obtaining
new counsel no later than April 4, 2012.1

Doc. No. 473.

On

March 29, 2012, Magistrate Judge Chang issued a findings and
recommendation (the “F&R”) to grant Defendants’ Release Motion.
Doc. No. 475.

Magistrate Judge Chang found that pursuant to a

valid, final, nonappealable and binding judgment by the Korean
Court, JYP and Rain are obligated to pay Park an amount in excess
of the $400,000 that each has placed in escrow or with this
Court, in lieu of payment to Click.

F&R at 10.

He further found

that the Korean orders are entitled to recognition by the Court
as a matter of comity and JYP and Rain are entitled to the relief
requested in their motion.

Id. at 11.

Particularly, by paying

in excess of $400,000 to Park in satisfaction of the Korean
judgment, JYP shall have discharged in full its debt to Click
under the Settlement agreement and by paying in excess of

1

Click’s counsel filed Click’s responses and is still
representing Click at this time.
6

$400,000 to Park in satisfaction of the Korean judgment, Rain has
discharged its debt in full under the Settlement Agreement.

Id.

Accordingly, he recommended that (1) JYP’s escrow agent (Akin
Gump, Strauss Hauer & Feld LLP) be authorized to release to Park
so much of the $400,000 held in escrow that is necessary to
satisfy JYP’s obligation to Park and that the remainder be
released to JYP, and (2) that the Clerk of Court release the
$400,000 held for Rain, plus any accrued interest, to Rain.2

Id.

at 12.
On April 2, 2012, non-party KBFD-TV filed an objection
the F&R (“KBFD-TV’s Objection”).

Doc. No. 476.

On April 11,

2012, Click filed an objection to the F&R (“Click’s Objection”).
Doc. No. 477.

On April 13, 2012, KBFD-TV filed a joinder to

Click’s Objection.

Doc. No. 478.

On April 19, 2012, Defendants

filed a response to KBFD-TV’s Objection (“Defs.’ Response to
KBFD-TV”).

Doc. No. 479.

On April 30, 2012, Defendants filed a

response to Click’s Objection (“Defs.’ Response to Click”).
No. 480.

Doc.

In Defendants’ Response to Click’s Objection, JYP

stated that after Magistrate Judge Chang issued the F&R, JYP paid
Park in full.

Defs.’ Resp. to Click at 3 n.1.

The Court issued

an order stating that it needed verification from JYP of the
amount of JYP’s payment to Park and whether it constitutes
payment in full satisfaction of the Korean Court orders before

2

The Court notes, however, that the F&R overlooks that the
JYP stipulation requires a valid, final, and nonappealable order
by this Court and the Korean Court for the release of the funds
held in escrow. See Doc. No.443, at 4.
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the Court issues an order releasing the escrow funds.
481.

Doc. No.

JYP has not yet filed such verification.
STANDARD OF REVIEW
A district court reviews de novo those portions of a

magistrate judge’s findings and recommendation to which an
objection is made and may accept, reject, or modify, in whole or
in part, the findings and recommendation made by the magistrate
judge.

28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b); D. Haw.

Local Rule 74.2.

The district court may accept those portions of

the findings and recommendation that are not objected to if it is
satisfied that there is no clear error on the face of the record.
Stow v. Murashige, 288 F. Supp. 2d 1122, 1127 (D. Haw. 2003).
The district court may receive further evidence or recommit the
matter to the magistrate judge with instructions.
§ 636(b)(1).

28 U.S.C.

It may also consider the record developed before

the magistrate judge.

D. Haw. Local Rule 74.2.

The district

court must arrive at its own independent conclusions about those
portions of the magistrate judge’s report to which objections are
made, but a de novo hearing is not required.

United States v.

Remsing, 874 F.2d 614, 618 (9th Cir. 1989).
The Court finds that a hearing in this matter is
neither necessary nor appropriate.

See D. Haw. Local

Rule 7.2(d).
DISCUSSION
I.

KBFD-TV’s Objection
KBFD-TV’s Objection states that it previously filed a
8

notice of lien with the Court and requests payment of that lien
from the funds presently held.

KBFD-TV’s Obj. at 2.

KBFD-TV did

not object to any particular finding or conclusion contained in
the F&R.

Furthermore, KBFD-TV did not state why it is entitled

to appear in this action, what the legal status of the purported
lien is, or cite any authority supporting enforcement of its lien
in this action.

Thus, KBFD-TV’s Objection provides no basis for

the Court to modify or reject the F&R.
Alternatively, KBFD-TV did not oppose Defendants’
Release Motion before Magistrate Judge Chang.
represented by counsel.

KBFD-TV is

KBFD-TV does not make any arguments or

cite any evidence that was not available to it before Magistrate
Judge Chang issued the F&R.

KBFD-TV set forth no reason for its

failure to file an opposition to Defendants’ Release Motion.

In

these circumstances, the Court exercise its discretion to decline
to consider KBFD-TV’s Objection.3

See United States v. Howell,

231 F.3d 615, 621-22 (9th Cir. 2000) (holding that in considering
an objection to a magistrate judge’s recommendation, a district

3

As another alternative for declining to consider KBFD-TV’s
Objection, Federal Rule of Civil Procedure 72(b) provides that
within fourteen days of being served a copy of a magistrate
judge’s findings and recommendations, “a party may serve and file
specific written objections to the proposed findings and
recommendations.” Local Rule 74.2 provides that “[a]ny party may
object to a magistrate judge’s . . . findings or recommendations
. . . within fourteen (14) days after being served with a copy of
the magistrate judge’s . . . findings, or recommendations.”
KBFD-TV has made no argument and there is nothing in the record
to suggest that the Court should consider non-party KBFD-TV’s
objection. KBFD-TV has not even made specific objections to the
F&R, and the Court declines to consider its purported objection
in these circumstances.
9

court has discretion to decline to consider evidence not
presented to the magistrate judge); Williams v. McNeil, 557 F.3d
1287, 1290 (11th Cir. 2009) (holding that a district court has
discretion to decline to consider arguments raised for the first
time in an objection to a magistrate judge’s report and
recommendation); Marshall v. Chater, 75 F.3d 1421, 1426 (10th
Cir. 1996) (“Issues raised for the first time in objections to
the magistrate judge’s recommendation are deemed waived.”).
II.

Click’s Objection
Click’s Objection states it is objecting to the F&R for

the following seven reasons: (1) Defendants have never
established the authenticity or legitimacy of the Korean Court
documents at issue; (2) the Korean Court’s “supposed ‘provisional
attachment’ of debts and obligations . . . evidences a high
degree of disrespect for this Court”; (3) the Korean proceedings
involved a corporation identified as “Click Entertainment, Ltd.,
which is distinct from and is not the Plaintiff in this case”;
(4) there is an appearance of collusive activities in Korea
between Defendants and Park; (5) Lee can adduce testimony and
evidence that Park’s claims are fraudulent and false; (6) Click
will never be able to recover any portion of its judgment and
settlement in this litigation if the funds are dispersed to
parties in Korea; and (7) the Court should order those monies be
interpleaded and require all interested parties appear in this
Court to assert and prove their claims.

Click’s Obj. at 2-3.

As with KBFD-TV, Click did not file an opposition to
10

Defendants’ Release Motion.

On March 20, 2012, after the status

conference, Magistrate Judge Chang issued a minute order stating,
inter alia, that Click should file any documents or other
evidence or any memoranda or declarations in opposition to
Defendants’ Release Motion by March 26, 2012.

Doc. No. 471.

Click did not make any such filings or request an extension of
time to do so.

In its Objection, Click does not state any

reasons for failure to oppose Defendants’ Release Motion.

The

arguments made in Click’s objection were available to it before
Magistrate Judge Chang issued the F&R.

The Court therefore

exercises its discretion to decline to consider Click’s
See Howell, 231 F.3d at 621-22; Williams, 557 F.3d at

Objection.

1290; Marshall, 75 F.3d at 1426.
Alternatively, Click’s arguments fail on the merits.
The Court will address each assertion in turn.
A.

Authenticity of the Korean Documents

The Court finds that the Defendants have established
the authenticity and legitimacy of the Korean documents at issue.
Sharon v. Lovejoy, attorney for Rain, declared under penalty of
perjury that the Korean documents attached to Defendants’ Release
See Doc. No. 459-3, Declaration of

were true and correct copies.

Sharon V. Lovejoy (“Lovejoy Declaration”) ¶¶ 4-7.

Each document

contains a notarial certificate on the document itself, a copy of
the Korean Court’s order, and an English translation with a
notarial certificate reflecting that it is a true translation.
See Doc. No. 459, Exs. A-C.

Furthermore, in the settlement
11

stipulation with JYP, Click acknowledged the validity of the
Korean Court’s Provisional Seizure Order.

See Doc. No. 443.

Defendants also point out that the enforceability of the orders
has been confirmed by Park’s attachment of real property
belonging to Rain.
Declaration ¶ 10.

See Defs.’ Response to Click at 7; Lovejoy
There is nothing in the record to suggest

these documents are not authentic.

Accordingly, Click’s first

argument presents no basis for rejecting the F&R.
B.

Purported Disrespect for this Court

Second, the Korean Court’s order do not contravene an
order of this Court.

In fact, the JYP and Rain stipulations with

Click that this Court approved recognize that the Korean action
affects the funds at issue here.

There is nothing to suggest

that the Korean orders evidence a “high degree of disrespect for
this Court.”
C.

Click’s Identity

The Court rejects Click’s suggestion that it is not the
corporation identified in the Korean Court orders.

The English

translation of the Korean Court orders refer to “Click
Entertainment Ltd.,” and lists its address as Kapiolani Blvd.,
Ste. 500, Honolulu, Hawaii 96814, U.S.A.

The Plaintiff in this

case, “Click Entertainment, Inc.,” is registered with the State
of Hawaii at the same address.

See State of Hawaii, Dep’t of

Commerce & Consumer Affairs, Business Registration Division,
http://hbe.ehawaii.gov/documents/business.html?

12

fileNumber=217123D1 (last visited on May 24, 2012).4
Furthermore, Click stipulated to the fact that the Provisional
Seizure Order, which also lists “Click Entertainment Ltd.” with
the foregoing address as a party, was a true and correct copy.
Click also stipulated that the Provisional Seizure Order was
issued by the Korean Court based on Park’s allegations that Click
owed Park KRW 500 million.

See Doc. No. 443, at 2.

Finally, the

Korean Court orders list Lee Seung-Soo as Click Entertainment,
Ltd.’s Representative Director.

See Doc. No. 459, Exs. A-B.

Consequently, the Court finds that Plaintiff Click is the same
corporation identified as “Click Entertainment Ltd.” in the
Korean Court orders.
D.

Purported Collusive Activities

The Court likewise rejects Click’s conclusory statement
that there is an “appearance of collusive activities” between
Defendants and Park.

There is nothing in the record or argued by

Click that supports this claim.
E.

Potential New Evidence

Click further states that Lee can adduce testimony and
present evidence that Park’s claims are fraudulent and false.
First, as a matter of comity, this Court will not relitigate the
4

The Court may take judicial notice of Click’s registration
because it is a matter of public record listed in the State of
Hawaii, Business Registration Division’s database. See See Fed
R. Evid. 201 (providing that courts may sua sponte take judicial
notice of facts that are “capable of accurate and ready
determination by resort to sources whose accuracy cannot
reasonably be questioned”); Krakauer v. IndyMac Mortg. Servs.,
Civ. No. 09-00518 ACK-BMK, 2010 WL 5174380, at *9 n.21 (D. Haw.
Dec. 14, 2010).
13

Korean case between Park and Click.

See United States v.

Kashamu, 656 F.3d 679, 683 (7th Cir. 2011) (“[A] U.S. court
should generally give preclusive effect to the foreign court's
finding as a matter of comity.”); Paramedics Electromedicina
Comercial, Ltda v. GE Medical Sys. Info. Techs., Inc., 369 F.3d
645, 654 (2d Cir. 2004) (“United States courts may choose to give
res judicata effect to foreign judgments on the basis of
comity.”) (internal quotations omitted).
Second, Click had the opportunity to submit evidence to
Magistrate Judge Chang before he issued the F&R, but choose not
to do so.

Despite the fact that Magistrate Judge Chang continued

the hearing for six days upon Click’s request, Click did not file
an opposition to Defendants’ Release Motion nor file any other
documents before the hearing on the motion.

“A district judge

has discretion to consider new evidence or legal arguments made
only in the objections to the magistrate judge’s report.”

United

States v. Song Ja Cha, 597 F.3d 995, 1003 (9th Cir. 2010).

Click

has not identified what potential evidence supports its claims or
who can provide testimony in support of the claims.
Consequently, the Court declines to exercise its discretion to
allow Click an opportunity to present any evidence not presented
prior to Magistrate Judge Chang’s F&R.
F.

Click’s Recovery of Money

Click’s next argument is that it will never be able to
recover its settlement in this litigation if the funds are
dispersed to parties in Korea.

Click has not presented any
14

reason or argument as to why this would support the Court
declining to recognize and enforce the Korean Court orders.

This

is not a situation where this Court’s order will subject Click to
conflicting obligations.

Rather, by paying Park, Rain and JYP

have satisfied a portion of Click’s debt owed to Park.

Click’s

argument is without merit.
F.

Interpleader Action

Finally, Click argues the Court should order the money
at issue be interpleaded and require all interested parties
appear in this Court to assert and prove their claims.

Again,

Click has provided no support or authority for this conclusory
assertion.

There is no basis for allowing an interpleader action

in this case.
In sum, Click has presented no credible evidence or
argument, and the Court has found none, as to why the Court
should not recognize the Korean Court orders or reject any
portion of the F&R.5

The Court concludes that in light of the

stipulations and by JYP and Rain each paying in excess of
$400,000 to Park in satisfaction of the Korean judgment, JYP and
Rain discharged in full their debts to Click under the Settlement
Agreement.

The Court therefore adopts the F&R as modified.
CONCLUSION

5

With the qualification that the F&R overlooks that JYP’s
stipulation requires a final, binding, and nonappealable order by
this Court and the Korean Court before funds may be released.
The Court finds it appropriate that the Rain escrow agent, being
the Clerk of this Court, should likewise not distribute the
escrow funds until this Court’s order is nonappealable.
15

For the foregoing reasons, the Court adopts Magistrate
Judge Chang’s Findings & Recommendations as modified.

Once this

Order becomes nonappealable, JYP’s escrow agent is authorized to
release the $400,000 held in escrow for JYP, plus any interest
that may have accrued, to JYP.

Once this Order becomes

nonappealable, the Clerk of the Court is instructed to release
the $400,000 held for Rain, plus any interest that may have
accrued, to Rain.
The Court’s order, however, is not effective until the
Court has received, reviewed, and issued an order approving of
the verification of payment by JYP to Park in the full amount of
the Korean Court orders.

IT IS SO ORDERED.
DATED: Honolulu, Hawaii, May 31, 2012.

________________________________
Alan C. Kay
Sr. United States District Judge

Click Entertainment, Inc. v. JYP Entertainment Co., et al. , Civ. No. 07-00342
ACK-KSC: Order Adopting F&R As Modified.

16