WILSHIRE BANK v. CHON et al

Filing 282

OPINION. Signed by Chief Judge Jose L. Linares on 03/11/2019. (sms)

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

BANK OF HOPE,

CIVIL ACTION NO. 14-1770 (JLL)

Plaintiff,

OPINION

V.

MIYE CHON, et a!.,
Defendants.

SUK JOON RYU,
Counterclaim Plaintiff,
V.

BANK OF HOPE,
Counterclaim Defendant.

LINARES, Chief District Judge

The plaintiff, Bank of Elope (hereinafter, “the Bank”), alleges that the defendant
Suk Joon Ryu (hereinafter, “Ryu”). who was employed as an officer by the Bank. and
other defendants embezzled in excess of one million dollars from the Bank by facilitating
unauthorized withdrawals from several customer accounts. (ECF No. 92.) The Bank has
brought—

among

other claims

claims against Ryu: (1) related to that alleged

embezzlement for conversion, fraud, breach of fiduciary duty, and unjust enrichment
(hereinafter “the Embezzlement Claims”); and (2) for conversion based upon allegations
that Ryu removed two of the Bank’s computers (hereinafter, “the Two Computers”) from
the Bank’s premises without permission (hereinafter, “the Computer Conversion
Claims”). (Id. at 11—14.)
Ryu has brought

among other counterclaims

a counterclaim against the

Bank for breach of the deposit agreement between them (hereinafter, “the Breach
Counterclaim”). (ECF No. 111 at 46—47.) Specifically, Ryu alleges that the Bank
wrongfully withheld about $54,000 of his funds from January 2014 through October
2015 that he had deposited in his personal account at the Bank. (Id.)
Ryu now moves pursuant to Federal Rule of Civil Procedure 56 (hereinafter,
“Rule 56”) for summary judgment in his favor on the Embezzlement Claims, the
Computer Conversion Claims, and the Breach Counterclaim. (ECF No. 253 through ECF
No. 253-2; ECf No. 254; ECF No. 255; ECF No. 256 through ECF No. 256-15; ECF No.
257-1 through ECF No. 257-15; ECF No. 258 through ECF No. 258-5; ECf No. 267.)
The Bank opposes the motion. (ECF No. 263; ECF No. 264; ECF No. 264-1; ECF No.
265 through ECF No. 2 65-6; ECF No. 266.)
The Court resolves the motion upon a review of the papers and without oral
argument. See L. Civ. R. 78.1(b). The Court presumes that the parties are familiar with
the factual context and the procedural history of this action. (See, e.g., ECf No. 137 at

1—12

(a previous

Opinion

from

the Court, entered

on .]anuary

4, 2017, addressing a

motion to dismiss); ECF No. 191 at 1—9 (a previous Order from the Court, entered on
February 13, 2018, addressing an appeal from a Decision issued by the
Judge).) For the

following reasons,

the Court will deny the motion in its entirety.

I.
A.

Magistrate

BACKGROUND

Clion and Ryu
The defendant Miye Chon (hereinafter, “Chon”) and Ryu, who was Chon’s

supervisor, were employed at certain New Jersey locations of the Bank as officers. (ECF
No. 254 at 3.)’ Ryu voluntarily left his position at the Bank in October 2013 after

a

merger, and he took a new position with another banking institution. (ECF No. 137 at 3.)

B.

Embezzlement Is Discovered
In January 2014, the Bank discove]ed that large unauthorized withdrawals were

made from several customer accounts between 2010 and 2013. (Id.) The Bank’s
investigation pointed to Chon as being the main culprit, and the Bank notified law
enforcement. (Id.)
C.

Chon’s Deposition Testimony From June 2016

Upon being questioned by the Bank and federal agents in 2014 concerning the

The name of the Bank has changed several times over the course of this litigation due to
mergers with other banking institutions, e.g., BankAsiana and Wilshire Bank. Those
name changes are not relevant to the Court’s disposition of this motion.

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unauthorized withdrawals from customer accounts at the Bank, Chon confessed to the
following, which she reiterated in the testimony that she provided in her deposition in
June 2016 (see ECF No. 256-9 at 10—14, 19—20, 23—25, 28—29):
(1) she had made those withdrawals in order to pay off the debts that had been
incurred by her husband;
(2) she knew she was behaving in an illegal manner;
(3) Ryu discovered that Chon was embezzling funds, and thereupon asked Chon to
embezzle funds for his benefit as well;
(4) she made several unauthorized withdrawals for the express purpose of giving
Ryu money approximately ten times between 2010 and 2013 at Ryu’s request each time;
(5) she would put cash in an interoffice envelope and then personally deliver $100
bills in amounts between $20,000 and $100,000 to Ryu;
(6) she embezzled approximately $700,000 to give to Ryu during that time period;
and
(7) Ryu told Chon that in return he would eventually compensate her or help her in
his role as Chon’s supervisor at the Bank.
The General Counsel for the Bank confirmed in her own deposition testimony that
Chon had indeed admitted to these things when Chon was questioned by the Bank. (See
ECF No. 265-5 at 146—47.)

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Chon testified that she accomplished her acts of embezzlement by manipulating
the Bank’s computer system in order to make unauthorized withdrawals from the
accounts of certain customers of the Bank. (ECF No. 256-9 at 8—10.) In addition. Chon
testified that she exploited the Bank’s failure to enforce its own pi-otocols for overseeing
and controlling transactions. (Id.)
Chon further testified that she had heard from other Bank employees that Ryu had
incurred large debts related to business activities that were separate from his employment
at the Bank. (Id. at 30—31; see also ECF No. 256-14 at 10 and ECF No. 265-5 at 19 (the
Bank’s General Counsel testifying in her depositions in July 2017 and August 2017 that
Ryu “was in such desperate need of money” because “[a]pparently, he had a lot of debts,”
and that “a lot of employees said [Ryu] was asking around to employees, both his
superiors as well as people that reported to him for personal loans and that lie was
basically pretty desperate”); ECF No. 258-5 at 2 (Chon’s statement to federal agents that
Ryu had gone into debt due to failed business ventures, and that Ryu asked Chon to
embezzle money for him after lie found out about Chon’s scheme).)

D.

Criminal Matter
Chon’s embezzlement scheme ultimately came to light when one of the affected

customers complained to the Bank about a discrepancy in an account. (ECf No. 265-5 at
10-11.) As a result. Chon: (1) was criminally charged in relation to the embezzlement;
(2) “pleaded guilty to bank fraud, embezzlement of funds by a bank employee, and

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aggravated identity theft”; and (3) was sentenced to a term of imprisonment and
“$1,351,090 in restitution.” United States v. Chon, 725 F. App’x 125, 126 (3d Cir. 2018)
(affirming the sentence issued by the District Court).

E.

Chon’s Deposition Testimony From March 2018
Chon was deposed again in March 201 8 while she was serving her sentence in

prison, which was almost two years after her initial deposition in June 20 1 6. (ECF No.
256-12 at 2; ECf No. 256-13 at 2.) However, when Chon was asked during that March
201 8 deposition to either clarify or confirm her testimony from her June 201 6 deposition,
she repeatedly responded with “1 don’t recall” and variations thereof. (See generally 25612; ECf No. 256-13.) Nevertheless, Chon testified in that March 2018 deposition in
reference to her embezzling conduct that Ryu “forced [her] to do it.” (ECF No. 256-12 at
6; see also id. at 10 (testifying to the same).)

F.

Interactions Between The Bank And Ryu After The Embezzlement
Was Discovered
As discussed above, Chon claimed that Ryu took part in the embezzlement scheme

when she was questioned by the Bank and by federal agents. However, Ryu was neither
arrested nor criminally charged in relation to the embezzlement, and he has denied having
any involvement in the embezzlement scheme. (ECF No. 137 at 4.)
Ryu took the Two Computers, which he used during the course of his employment
at the Bank, with him for his personal use as he left the Bank in 2013. (ECF No. 255 at

6

24.) The Bank thereafter wanted to review items that had been stored on the Two
Computers as part of its embezzlement investigation, and the Bank demanded that Ryu
return the Two Computers soon after it commenced that investigation. (ECF No. 257-1

at 2—3 (the Bank’s written demand to Ryu for the return of the Two Computers).) Ryu
complied with the Bank’s demand in February 2014. (ECF No. 255 at 24.) Ryu claims
that the president of the Bank in 2013 gave him permission to keep the Two Computers
when he left (ECF No. 265 at 8; ECF No. 265-3 at 3—4), whereas the Bank asserts that
Ryu removed the Two Computers from the Bank’s premises without

permission.

(ECF

No. 263 at 15—16.)
Ryu also had a personal account at the Bank, which contained approximately
$54,000 and which Ryu kept open even after Ryci left his job at the Bank in 2013. (ECF
No. 255 at 21.) Upon being informed by Chon of Ryu’s alleged involvement in the
embezzlement, the Bank froze Ryu’s account from January 2014 through October 2015
while it investigated whether Ryu was indeed involved with Chon in embezzling funds.
(Id.)

II.
A.

DISCUSSION

Rule 56

It is not necessary for the Court to restate the standard for resolving a motion for
sumrnaryjudgment made pursuant to Rule 56, because that standard has been already

enunciated. See fed. R. Civ. P. 56(a) (providing for an award of summary judgment if

7

there is no genuine dispute of material fact and the movant is entitled to judgment as
matter of law); Anderson v. Ltheutv Lobby, Inc., 477 U.S. 242, 247—48 (1986) (setting
forth the standard): United Stcttes cx rd. Kosenke v. Carlisle JIMA, Inc., 554 f.3d 82, 94
(3d Cir. 2009) (setting forth the standard).

B.

The Embezzlement Claims

Ryu argues that he is entitled to summary judgment in his favor on the Bank’s
Embezzlement Claims because: (1) the viability of those claims hinges solely upon
Chon’s assertions concerning his alleged involvement in the embezzlement scheme; (2)
Chon testified in her March 201 8 deposition that she no longer recalled the extent of
Ryu’s alleged involvement in the embezzlement scheme, thereby diminishing the value
of her detailed June 2016 deposition testimony on that subject; and (3) no reasonable jury
could find him liable as to the Embezzlement Claims as a result. (ECF No. 255 at 19—20,
27; see also ECF No. 267 at II (Ryu arguing that “Bank of Hope has no evidence
implicating Ryu as a participant in the embezzlement other than Chon’s testimony”).)
Indeed, the Bank’s General Counsel testified at her own deposition that the Bank’s basis
for bringing the Embezzlement Claims against Ryu was based on the information that
Chon relayed to the Bank. (See ECF No. 256-10 at 4 (when asked “So essentially as for
what we’re calling direct evidence here [about Ryu’s conduct], it was the word of.
Chon, right?”, the General Counsel answered, “Primarily, yes.”).)

$

Ryu argues further that “[b]ecause Chon has without a dotibt lied at least once
already about Ryu’s alleged role in the embezzlement, her testimony is the only evidence
linking Ryu to the crime, and she has not been subject to cross-examination about her
prior testimony and

cannot

he subject to cross-examination at trial, there is no way for a

rational jury to decide whether Ryu is liable or not without engaging in speculation.”
(ECF No. 267 at 12; see also ECF No. 255 at 2$ (Ryu arguing that “Chon is obviously
lying about her lack of recollection” in the March 2018 deposition).)
In contrast, the Bank argues that summary judgment should be denied because: (1)
despite Chon’s professed lack of recall in March 2018, Chon did not alter her detailed
June 2016 deposition testimony that Ryu had asked her to embezzle money for him on
ten occasions and that she gave him approximately $700000 overall; (2) Chon simply
testified that

she could not recall what had

occurred four years prior to testifying in

March 2018; and (3) it is within the province of the jury to weigh the relative value of
Chon’s June 2016 deposition testimony against her March 2018 deposition testimony.
(ECf No. 263 at 9—li.)

The Court agrees with the Bank and concludes that genuine issues of fact remain
as to the merits of the Embezzlement Claims. It is true that in contrast to the detailed
testimony that Chon provided in her June 2016

deposition.

Chon’s March 2018

deposition testimony is lacking in the details concerning Ryu’s involvement with the
embezzlement. However, Chon did testify in March 2018 that Ryu forced her to

9

embezzle funds for his benefit, which is consistent with her detailed June 2016 deposition

testimony that Ryu asked her to procure funds for him after he discovered her embezzling
conduct.
Furthermore. it is for a jury to determine whether Chon’s June 2016 deposition
testimony, which was provided closer in time to the alleged events at issue, is to be
believed in view of her March 2018 deposition testimony, which was provided while
Chon was in prison more than four years after the alleged events at issue. See La3eatt v.
Rentzis, No. 08-6300, 2010 WL 2521764, at *4 (D.N.J. June 14, 2010) (holding in a
contract dispute that insofar as a party’s inconsistent statements

were concerned,

“[ut will

be for the jury to determine the credibility of [the witness’s] testimony in light of these
inconsistencies, not this Court”).
This matter presents issues concerning Chon’s credibility that must be weighed by
a jury, and nothing prevents Ryu from challenging Chon’s credibility on

cross—

examination before a jury. See Mest v. Ccthoc Corp., 449 F.3d 502, 514 (3d Cir. 2006)
(holding that while the credibility of contradictory deposition testimony may be disputed,

the summary judgment standard requires the District Court to look at all facts in the light
most favorable to the non-moving party and reserve the issues of credibility for a jury);
see ct/so Briniozzi

i.

Crossmctrk, Inc.. No. 13-4585, 2016 WL 112455, at *4 (D.N.J. Jan.

11, 2016) (holding, in a case to recover damages for failure to pay overtime wherein the

plaintiff employee provided “inconsistent deposition testimony” about the s urrounchng

10

circumstances, that the defendant employer “is not entitled to summary judgment on the
basis of [plaintiffs] conflicting deposition testimony,” because “[w]hile the conflicting
testimony undercuts [plaintifr s] credibility,” determining “[w] hich portions of
[plaintiffs] deposition testimony are truthful is ajob for the jury and not this Court”).
Therefore, the part of Ryu’s motion wherein he seeks summary judgment in his favor on
the Embezzlement Claims is denied.

C

The Computer Conversion Claims
Ryu argues that he is entitled to summary judgment in his favor on the Computer

Conversion Claims. In support, Ryu argues that the president of the Bank at the time of
his voluntary departure gave Ryu permission to keep the Two Computers for his personal
use regardless of whether Ryu continued his employment with the Bank, and that he
stored personal information on the Two Computers as a result. (ECf No. 255 at 24; see
ct/so ECf No. 265 at 8 (Ryu testifying in his deposition that the Bank’s president gave
him permission oi several occasions to take the Two Computers when he left his
employment at the Bank).) Ryu also argues that the Bank has not suffered any damages
as a result of the alleged conversion. since he gave the Two Computers back to the Bank.
(ECf No. 267 at 12: see ct/so ECF No. 255 at 32.)
In contrast, the Bank argues that the Two Computers were not for Ryu to keep,
and that Ryu did not have permission to remove them from the Bank’s premises when he

left the Bank’s employment in 2013 because the Two Computers contained the Bank’s

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confidential and proprietary information. (ECF No. 263 at 14—16.) In addition, the Bank
argues that Ryu’s alleged conversion of the Two Computers prevented the Bank from

using them for the four-month period that they were in Ryu’s possession, and that the
Bank expended effort in locating the Two Computers once it realized that they were
gone, and thus the Bank suffered damages thereby. (Id. at 11; see ct/so ECf No. 264 at 4,
6 (declaration of Bank’s General Counsel asserting the same).)
It is apparent from the Court’s recitation of the parties’ arguments that genuine
issues of fact remain as to whether Ryu converted the Two Computers and whether the
Bank suffered any damages as a result of the alleged conversion. Furthermore, the Court

notes upon its review of the record that the president of the Bank at the time of Ryu’s
departure testified in his deposition that he did not give Ryu permission to take the Two
Computers for his personal use, thereby adding to the Court’s conclusion that issues of
fact remain to be weighed by a jury. (ECF No. 265-4 at 3 (when asked, “Did you give
[Ryu] permission to take that computer?”, the former Bank president answered, “No.”).)
In addition, it appears that the determination of whether the Bank was justified in
demanding the return of the Two Computers to aid in its embezzlement investigation
could be dependent upon the resolution of the Embezzlement Claims that are asserted

against Ryu. See Metex Mf. Corp. v. Manson, No. 05-294$, 200$ WL $77$70, at *13
n.4 (D.N.J. Mar. 2$, 200$) (denying summary judgment on a damages claim in a breach
of contract case, because “depending on how the jury resolves whether [the plaintiff] took

12

reasonable steps to mitigate its damages, [the plaintiffs] recovery of incidental damages
may be altered by the jury to reflect its finding”) Grenci v. Ocean Cottnt, No. 04-5806,
2006 WL 2376914. at ‘7 (D.NJ. Aug. 15, 2006) (denying summary judgment on an
excessive force claim ‘[i]n light of the varying accounts, and not yet decided invasion of
privacy claim”).
Furthermore, the Bank may ultimately recover on its Computer Conversion
Claims even if its damages are minimal. See City Select Auto Sciles, Inc. v. Drn’id
RanclallAssocs., Inc., No. 1 1-2658, 2014 WL 4755487, at *8 (D.N.J. Sept. 24, 2014)
(holding that a conversion claim may proceed for only nominal damages concerning the
degree to which the property at issue was allegedly converted). Therefore, the pail of
Ryu’s motion wherein he seeks summary judgment on the Computer Conversion Claims
is denied.

D.

The Breach Counterclaim
Ryu argues that he is entitled to summary judgment in his favor on the Breach

Counterclaim. In support, Ryu argues that the Bank breached the relevant account
agreement that it has with its depositors by freezing the personal account that he kept at
the Bank containing approximately $54,000 without justification in January 2014, and by
not returning the money to him until October 2015. (ECF No. 255 at 2 1—24.)
However, the Baik argues in opposition that it was expressly authorized to freeze
Ryu’s account under the terms of the account agreement while it investigated whether

13

Ryu had embezzled funds. (ECF No. 263 at 19—21.) As Ryu himself alleges in support
of the Breach Counterclaim, that agreement provides that if the Bank is “uncertain
regarding the legality of any transaction, we may

.

.

.

freeze the amount in question while

we investigate further.” (ECF No. ill at 30; ECf No. 255 at 21; see also ECF No. 257-7
at 27—28 (the relevant portion of the account agreement).) In addition, the Bank argues
that part of the delay in releasing Ryu’s account funds was attributable to the fact that
discovery had been stayed in this action from February 201 5 through June 2015 pending
the disposition of Chon’s criminal matter. (ECf No. 263 at 21.) Also, the General
Counsel for the Bank pointed out that it was difficult to try to trace the origin of the funds
in Ryu’s account, as “[m]oney can be layered to go through multiple accounts,”
particularly in view of Ryu’s banking expertise. (ECF No. 256-14 at 4.)
The Court concludes that genuine issues of triable fact remain as to whether the
Bank acted appropriately in exercising its authority to freeze Ryu’s account when the
Bank suspected that the funds contained therein originated from the alleged
embezzlement scheme. For example, there is a triable issue of fact as to whether the
Bank should have frozen Ryti’s account based on Chon’s statements that Ryu was
involved in the scheme, and based on the Bank’s belief that Ryu needed funds because
Ryu suffered from tremendous personal debt and that he had been seeking personal loans
from other employees. (ECF No. 265 at 17.) Furthermore, as the Court has held
concerning the resolution of the Computer Conversion Claims, it appears that the

14

________

resolution of the Breach Counterclaim could be dependent

upon

the resolution of the

Embezzlement Claims. Therefore, the part of Ryu’s motion wherein he seeks summary
judgment on the Breach Counterclaim is denied.

III.

CONCLUSION

Ryu’s motion for summary judgment is denied, as there are triable issues of fact

concerning the Embezzlement Claims, the Computer Conversion Claims, and the Breach
Counterclaim. The Court will enter an appropriate Order.

Date: March

,

Jogl.LI ARES
34Judge, United States District Court

2019

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