SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5064-11T2

JONG S. HONG,

Plaintiff-Respondent,

and

DANIEL KIM,

Plaintiff,

v.

SOON H. KIM and

YEO PYEONG YUN,

Defendants-Appellants.

Submitted March 22, 2017 – Decided

Before Judges Alvarez, Accurso, and Lisa.

On appeal from the Superior Court of New 

Jersey, Law Division, Bergen County, Docket 

No. L-8580-09.

Kimm Law Firm, attorneys for appellants 

(Michael S. Kimm, Sung H. Jang, and Adam 

Garcia, on the briefs).

Sukjin Henry Cho, attorney for respondent.

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." 

Although it is posted on the internet, this opinion is binding only on the 

parties in the case and its use in other cases is limited. R.1:36-3.

August 17, 2017
2 A-5064-11T2

PER CURIAM

This appeal, filed on June 11, 2012, was stayed for years as 

a result of plaintiff Jong Sul Hong and defendant Soon Hee Kim 

filing consecutive bankruptcy petitions. Soon Hee's1 bankruptcy 

discharged the $270,000 judgment that Hong obtained after a 

fourteen-day bench trial. We therefore do not reach the issues 

Soon Hee raises on appeal with regard to the judgment, as they are 

moot, and address only her argument, and that of her husband and 

co-defendant Yeo Pyeong Yun, 2 that their counterclaims were 

improperly dismissed. We agree, and remand for trial on Soon 

Hee's counterclaim for malicious prosecution, both Soon Hee and 

Yun's counterclaim for breach of fiduciary duty, and Yun's 

counterclaim for $75,000. The cause of action based on an alleged 

violation of the Fair Debt Collection Act, 15 U.S.C.A. § 1692a and 

§ 1692e, however, is not reinstated. 

Every witness except Hong required the services of an 

interpreter. The halts and interruptions natural to such a trial 

were exacerbated by the judge's frequent interjections, 

interruptions, and commentary. Instead of aiding in clarifying 

the testimony, the trial judge's questioning added to the 

 

1 We refer to Soon Hee Kim in this fashion to avoid confusion.

2 We will refer to Yeo Pyeong Yun as Yun to avoid confusion, and 

refer to Soon Hee and Yun collectively as defendants.
3 A-5064-11T2

confusion. This confusion was not alleviated by the judge's 104-

page written opinion. 

Hong, Soon Hee, and Yun were involved in lending circles, 

known as "kehs," rooted in Korean culture. Members of a keh pool 

their funds, and pay out principal and interest on a rotating 

basis.3 Kehs date back to farming villages in Korea in the 

sixteenth century. Lan Cao, Looking at Communities and Markets, 

74 Notre Dame L. Rev. 841, 874-84 (1999). 

From the trial testimony, we discern that Hong managed at 

least two kehs, one formed in 2006, the other in 2008, in which 

Soon Hee participated. As the administrator of the kehs, Hong 

paid no interest, and she claimed not to have kept any of the 

interest paid into them. At times, however, members would be paid 

the keh purse and relend the money to her. Although records of 

the kehs were demanded during discovery, none were produced. Hong 

testified that she kept records for the 2006 keh in a notebook, 

which she lost. Some Xeroxed pages, allegedly from this lost 

notebook, were introduced at trial. Hong also claimed records 

 

3 For example, in a twelve-month keh with twelve positions, 

requiring a $500 monthly principal payment, a monthly purse of 

$6000 is taken in the order designated by the keh manager. By the 

end of the twelve-month period, each position would have taken a 

$6000 pot while each member would have paid a minimum of $6000 

into the keh for each position, plus interest. The positions 

would be paid or receive more or less interest for the duration 

of the keh depending on their place in the rotation order. 
4 A-5064-11T2

regarding the 2008 keh were in the possession of an attorney no 

longer involved in the case. 

The monthly 2006 keh payment amount was $1500, and the monthly 

interest was $300. Due to the number of the participants in the 

keh, a total of $2.4 million in purses were paid. The 2008 keh 

required monthly payments of $2500, from each of forty positions, 

and interest of $500 on a pot totaling $100,000. The total purse 

came to $4 million. Soon Hee held multiple positions in both the 

2006 and 2008 kehs. Yun had four positions in the 2006 keh, and 

none in the 2008 keh. 

We need not repeat in detail the at-times garbled history of 

payments, checks, and other financial transactions, in addition 

to the kehs, between Hong and Soon Hee including loans in both 

directions, and Soon Hee's unexplained payment to at least one of 

Hong's relatives. Suffice it to say that Soon Hee gave certain 

blank and undated checks to Hong, who in turn gave them to Kim, 

because Hong owed him money. Kim never participated in any keh 

managed by Hong, but had lent her various sums totaling $205,000. 

From the written documents introduced during the trial, we assume 

few written records were generated as a result of these 

transactions. 

Kim did not know that Hong had been holding Soon Hee's checks, 

and did not know when they were delivered to Hong. He deposited 
5 A-5064-11T2

them because Hong advised him that it was "okay" to do so. Kim 

claimed that he warned Soon Hee that he was going to deposit the 

checks, and "there wasn't any response by her." On August 11, 

2009, while together, Hong and Kim deposited the five checks. Kim 

filled in the dates; all were dishonored.

After the checks were dishonored, Hong contacted her 

attorney. It is not clear from the record if counsel was aware 

of the history between the parties, either with regard to the kehs 

Hong managed, or the fact the checks were initially issued with 

the dates and payee in blank. Soon Hee testified the checks were 

not to be deposited without her explicit consent. 

Hong's attorney wrote to Soon Hee, putting her on notice that 

the issuance of the checks was a third-degree crime, and that if 

Soon Hee did not forward certified or bank checks in the amounts 

of $120,000 and $166,582 within ten days, the matter would be 

referred to the Bergen County Prosecutor. Hong, while testifying, 

seemed to acknowledge that the letter was inaccurate because Soon 

Hee had not filled in the dates on the checks.

On September 21, 2009, Hong and Kim filed a civil complaint 

against Soon Hee and Yun, alleging that Soon Hee sought "a shortterm, interest free loan in the amount of $300,000" from both 

plaintiffs. The complaint states:
6 A-5064-11T2

6. Based on the request by [d]efendant 

[Soon Hee], [p]laintiffs did then loan to 

[Soon Hee] the total sum of $287,040.00, of 

which $150,540.00 came from monies then 

possessed by . . . Hong, $120,000 came from 

monies then possessed by . . . Kim, and 

$16,500.00 came in the form of "cash advances" 

on credit cards maintained by . . . Hong.

7. Under the terms of the parties' 

agreement, the $287,040.00 which [d]efendant 

[Soon Hee] borrowed from . . . Hong and from 

. . . Kim was to be repaid in full within 

thirty (30) days of the date thereof. Based 

on the very short term of the loan and the 

long standing relationship of the parties, the 

parties agreed that the loan would not accrue 

interest, fees, or other charges during that 

thirty day term.

Additionally, the complaint stated that "[w]ithout the 

knowledge, consent, or permission of the [p]laintiffs," Soon Hee 

used the money to purchase a retail store, and that she refused 

to pay back the loan under the original terms of the agreement. 

According to the complaint, on an unspecified date, the 

parties renegotiated the loan terms. Soon Hee was to pay the 

principal in a lump sum within two years, and to pay $5400 per 

month in interest until that time. Soon Hee paid the interest 

from September 2007 until February 2009, when she asked for and 

received an additional $10,000 loan under the same terms. 

The complaint also alleged: "[a]s evidence of defendants' 

indebtedness to Plaintiffs on the said loan, on or about August 

11, 2009, defendant [Soon Hee] wrote a series of checks to the 
7 A-5064-11T2

[p]laintiffs[.]" The dishonored checks were described as follows: 

check number 1474 "was made payable to . . . Kim in the amount of 

$60,000"; check number 1475 "was made payable to . . . Kim in the 

amount of $60,000"; check number 1487 "was made payable to . . . 

Hong in the amount of $50,000"; check number 1488 "was made payable 

to . . . Hong in the amount of $50,000"; and check number 1489 

"was made payable to . . . Hong in the amount of $66,582.00."

At trial, Hong admitted that many of the allegations in the 

complaint, reiterated in her interrogatory responses, were 

incorrect. For example, she conceded that Soon Hee had not 

transferred her interest in the business or other real estate 

solely to render herself judgment proof; that plaintiffs sought 

repayment of more than just a single loan; that there was never 

an agreement to repay the loan within thirty days; that Kim had 

never loaned Soon Hee any money; and that Hong did not make the 

loans from her own funds.4 

Extensive testimony was elicited from Hong with regard to her 

management of the kehs. She acknowledged that she had "difficulty" 

with them. Hong had comingled the money from the two kehs by 

 

4 Kim also acknowledged that "everything [was] wrong" in the 

allegations in the complaint. He never lent Soon Hee or Yun money 

directly, nor had he received any checks from Soon Hee. In 

addition, "almost all" of the original answers he had provided to 

interrogatories through his former counsel were "incorrect." 
8 A-5064-11T2

using funds from one to meet the obligations of the other. She 

agreed that one person from the 2006 keh had not been paid, 

although she insisted that Yun had "received everything in full," 

but had nothing in writing to establish that.

From 2008 to 2009, Hong claimed she was approximately $800,000 

to $900,000 in debt, including the $300,000 Soon Hee allegedly 

owed her. However, she kept no notes and had no writing to 

evidence the debts, and was unsure whether the debts were cash 

debts.

During Soon Hee's testimony as a hostile witness in Hong's 

case, she denied borrowing "even a single dollar" from Hong. She 

claimed that she had participated in seven or eight of Hong's 

kehs, and that for more than ten years they had been passing money 

back and forth without maintaining records. At times Soon Hee 

received money from Hong, which Hong had borrowed from others, and 

Soon Hee loaned money from her keh purses to third parties through 

Hong. All of the transactions, Soon Hee claimed, were supposed to 

be recorded in Hong's lost notebook. 

Soon Hee said that it was impossible to separate the funds 

generated through the kehs from the loans. Although she owed 

$10,000 on the 2008 keh, she in turn was owed money from the 2006 

keh, and Yun continued to be owed $75,000 from that keh to be paid 

through her. She had lent Hong money at no interest, which had 
9 A-5064-11T2

not been repaid. Soon Hee agreed she had signed all five checks 

in blank and had written out other checks payable to plaintiff's 

aunts.

Soon Hee claimed it was Hong's practice in managing the kehs 

to hold personal checks in escrow and not use them until the draws 

were replenished. When Hong's last keh was breaking up, Hong 

needed the checks to show to others in addition to having financial 

needs herself. Soon Hee had agreed that when the keh accountings 

were completed, she and Hong would do the necessary calculations 

to determine precisely what was owed to whom. Because Soon Hee 

trusted Hong, she wrote the checks in Hong's presence, to be held 

in escrow pending further keh transactions. Hong allowed Soon Hee 

to charge heavily on her credit cards. 

Soon Hee said that only Hong knew the identity of all the 

members of the keh. She also testified that Hong would 

occasionally take two positions in her own keh, pay no interest, 

and then lend money privately to other keh members.

The precise nature of the multi-faceted financial 

relationship between the parties was unclear. Hong tape-recorded 

some conversations with Soon Hee, and the transcriptions, prepared 

by an acquaintance, were proffered and accepted as evidence. 

During those conversations, Hong appeared to agree that at least 
10 A-5064-11T2

some of the checks Soon Hee gave her represented Soon Hee's 

obligations as a participant in the kehs.

Yun testified that he did not participate in the 2005 or 2008 

kehs, but he had four spots in the 2006 keh: August and September 

2007, and March and April 2009. Yun received his payments through 

Soon Hee and otherwise "didn't get involved." His purse was 

$127,000, but he did not know if it had been paid in cash or 

checks; he believed that he was still owed $10,000, although it 

was unclear from which keh year. He testified that, at the time 

of trial, he had not received the $75,600 he was owed from the 

March and April 2009 purses in the 2006 keh. 

From March to August 2009, Yun "tried very hard to settle the 

money problems" between his wife and Hong but was unable to do so. 

He attempted to negotiate a resolution of the problem between Hong 

and Soon Hee, but they were not able to agree on a price. He 

fired Hong, who had worked in his store, after only two months. 

He found her claim that Soon Hee owed her $600,000, and repeated 

requests for a $100,000 loan, troublesome. 

On September 23, 2009, plaintiffs filed criminal charges 

against Soon Hee with the Fort Lee police. At trial, Hong said she 

went to the police after she heard nothing from Soon Hee in 

response to her attorney's demand letter. She said: "It was my 
11 A-5064-11T2

knowledge that once the checks were deposited and was bounced, 

returned, that . . . the criminal complaint may be filed."

Hong showed the checks to the police, who did not ask any 

questions about them. She did not tell them that it was her and 

Kim, not Soon Hee, who dated the checks and wrote the payee names, 

or that the money for the loans had come from others. Plaintiff 

said she "told the story" to her attorney and that he wrote 

documents she referred to as affidavits. 

Hong's affidavit stated that "2 years and few months ago" she 

had loaned Soon Hee "around $300,000" in a "short term loan"; that 

Soon Hee "gave me 5 checks for the money I have given it to her;" 

that Soon Hee "refused" to pay back the money; that her attorney 

had sent out a letter and received no response; and that she had 

deposited three of the checks on August 11, 2009, and they were 

returned. 

In a handwritten affidavit, Kim stated that he had "received 

2 checks at $60,000 each," that he deposited them on August 11, 

2009, and the checks were returned for insufficient funds. He 

stated that a letter had been sent to Soon Hee on September 1 

asking her "to make the checks good but no response." 

Kim's affidavit did not identify who gave him the checks. He 

testified at trial that the police never asked how he came into 
12 A-5064-11T2

possession of the checks or whether he had filled in the date and 

payee, and he never told the police that he had done so. 

After filing the charges, Hong spoke to someone at the 

prosecutor's office and went to the Superior Court about the case 

more than five times without telling anyone that the information 

in the affidavit was incorrect. When asked if she was concerned 

about the accuracy of her statement to the police, Hong responded: 

"I did it with just the purpose of getting the money." 

Kim said he had filed the criminal complaint only to ensure 

that he received his money; he did not want anyone to go to jail. 

If Soon Hee had called him to "make the resolution to make the 

check good," he would have withdrawn it. 

Detective Philip Ross of the Fort Lee Police Department 

arrested Soon Hee on November 19, 2009, on five charges of the 

indictable offense of passing bad checks in violation of N.J.S.A.

2C:21-5B. She surrendered in police headquarters at 9:40 a.m. on 

November 19, 2009, with her attorney. Soon Hee was fingerprinted, 

screened as a prisoner, pat-searched, photographed, and held 

pending arraignment. She was released after arraignment at 12:30 

p.m. that day. Her passport was seized as a condition of her 

release. 

Ross said the arrests were based on the affidavits, copies 

of the returned checks, and the complaints filed by Hong and Kim. 
13 A-5064-11T2

Ross was unaware that the checks had been given to plaintiff in 

March 2009, or that when delivered, they were undated. If he had 

known, he would not have taken any police action. The criminal 

complaint against Soon Hee was administratively dismissed on July 

15, 2010, eight months after her arrest. 

When the matter was being processed through the criminal 

court, Soon Hee "was really panicking[.]" She paid an attorney 

$5000 and filed an ethics complaint against Hong's attorneys who 

had sent the demand letters and filed the civil complaint. In her 

written statement to the ethics committee, Soon Hee stated as 

follows:

In April 2009, all five checks were give[n] 

by me to Ms. Jongsul Hong and she and I agreed 

that she will hold those checks until I repay 

her loan. Ms. Hong loaned money to me, which 

is current, for which those checks were to be 

held by her, and never to be cashed or 

deposited or given to any third-party. 

Ms. Hong and I have had [a] personal loan 

relationship since three years ago and I give

her interest monthly. The check was not to 

be used by anyone and it was not my payment 

for anything. It was only "to hold."

. . . . 

I never issued those checks to "Daniel 

Kim" and the check[s] were blank and they were 

not supposed to be deposited. Everyone knew 

that I did not have the funds and so even the 

dates were not written in.
14 A-5064-11T2

The trial judge rejected defendant's contention that Hong's 

role as a keh organizer and loan facilitator imposed a fiduciary 

duty upon her. He instead found that Soon Hee owed $270,000 to 

Hong, in addition to $16,582 for the use of Hong's credit card. 

He further found that Hong was "gullible and naïve," had borrowed 

money "from various third parties" at Soon Hee's request, and then 

loaned a minimum of $270,000 to Soon Hee to "put the loan money 

into an account so defendant could obtain a loan," believing the 

money would be returned. He added:

[t]he Court still has some difficulty which 

does leave questions of credibility that the 

plaintiff was only seeking to collect $270,000 

representing the balance of the loan of 

$310,000 since $40,000 has been repaid though 

no records have been presented by the 

plaintiff as to this payment of $40,000 where 

the Court had previously indicated that these 

payments would have corroborated the agreement 

between the parties that this was a loan and 

it was to be repaid and even possibly address 

the issue of interest. (Do the pleadings and 

subsequent arguments of the defendant claiming 

loan sharking acknowledge that they were 

paying interest yet it was usurious was their 

argument though little testimony involved on 

the issue of interest on the loan except to 

say it was the same interest as the keh being 

2% a month though there was no testimony as 

to how many payments were made.)

The judge observed that the checks Soon Hee had signed were 

"critical" to his determination. If, as Soon Hee had testified, 

"this is just the same as writing an IOU on a piece of paper and 
15 A-5064-11T2

is worthless," then "[w]hy write this indebtedness on your checking 

account?" He said: "[i]t would appear to be acknowledged by all 

the parties that giving a personal check to a lender is an 

acknowledgement of the debt being common practice. The Court 

questions what are you supposed to do with these checks if not 

cash them or negotiate them." Furthermore, Soon Hee acknowledged 

the debt in letters she wrote to the Bergen County Ethics Committee 

regarding Hong's attorneys. 

As well as rejecting the notion that Hong had a fiduciary 

duty, the court also dismissed defendants' counterclaim regarding 

violations of the Fair Debt Collection Practices Act. The judge 

concluded that Hong was not a debt collector as defined by that 

legislation: "a person who regularly collects or attempts to 

collect directly or indirectly debts owed or due or asserted to 

be owed or due another." The court said that "plaintiffs are not 

vicariously liable for their prior counsel['s] letter to the 

defendant and any allegations with regards to ethics violations 

have already been dismissed by the Ethics Committee."

Furthermore, the court dismissed defendants' claim of 

malicious prosecution because they had failed to prove that Hong's 

complaint to the police department "was done with malice." The 

fact that Hong acted on the advice of counsel "show[ed] good faith 

and is a valid affirmative defense." The judge opined that there 
16 A-5064-11T2

were no damages other than attorney fees because, although 

defendant "was briefly detained at the Fort Lee Police Department," 

and had her passport confiscated, "she never testified that this 

caused her any inconvenience let alone any emotional distress." 

Finally, the court said:

There was no counterclaim for any monies that 

the plaintiff [] Hong may owe the defendants 

[], there being no claim for a set off against 

the indebtedness found to be owed by the [Soon 

Hee] to the plaintiff [] Hong, therefore the 

Court will not nor can it consider any claims 

of the defendant which it may have referenced 

as set offs throughout this opinion.

I.

In an appeal from a bench trial, "[t]he scope of appellate 

review of a trial court's fact-finding function is limited." 

Seidman v. Clifton Sav. Bank, S.L.A., 205 N.J. 150, 169 (2011) 

(quoting Cesare v. Cesare, 154 N.J. 394, 411 (1998)). The factual 

findings and legal conclusions of the trial judge are not disturbed 

unless the reviewing court is "convinced that they are so 

manifestly unsupported by or inconsistent with the competent, 

relevant and reasonably credible evidence as to offend the 

interests of justice." In re Trust Created by Agreement Dated 

Dec. 20, 1961, ex rel Johnson, 194 N.J. 276, 284 (2008) (quoting 

Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 

484 (1974)). We owe no deference, however, to a trial court's 
17 A-5064-11T2

interpretation of the law and the legal consequences that flow 

from established facts. Gallenthin Realty Dev., Inc. v. Borough 

of Paulsboro, 191 N.J. 344, 358 (2007); Manalapan Realty, L.P. v. 

Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995). 

II.

The issue of whether a duty should be imposed is a question 

of law. It requires evaluation of the parties' relationship, the 

nature of the risk involved, and the related public interest. 

Frederick v. Smith, 416 N.J. Super. 594, 599 (App. Div. 2010), 

certif. denied, 205 N.J. 317 (2011). No deference is owed to the 

trial court's legal conclusion on the issue. Ibid.

A fiduciary relationship arises "when one person is under a 

duty to act for or give advice for the benefit of another on 

matters within the scope of their relationship." F.G. v. 

MacDonell, 150 N.J. 550, 563 (1997). It occurs when the parties' 

relationship involves a level of trust and confidence and one 

party is in a dominant or superior position. Ibid. 

The trial court here said that it found no fiduciary 

relationship existed between the parties because their

relationship involved "a straightforward loan between [] Hong to 

[Soon Hee]." (Da2271). Debtor-creditor relationships generally 

are not considered to be fiduciary because of their essentially 
18 A-5064-11T2

adversarial nature. N.J. Econ. Dev. Auth. v. Pavonia Rest., 319 

N.J. Super. 435, 446 (App. Div. 1998).

But the court's finding that the matter involved a 

straightforward loan was not supported by the evidence. This was 

the basis for the judge's dismissal of defendants' counterclaim 

that Hong had breached a fiduciary duty. There was nothing 

straightforward about Hong's constantly shifting testimony 

regarding the circumstances of the loans. She herself acknowledged 

a long-term financial relationship with Soon Hee and her management 

of the kehs in which Soon Hee and Yun were participants. The 

judge's factual findings were thus inconsistent with the 

reasonably credible evidence in the record, and were the sole 

support for his legal conclusion that the parties had a simple 

lender-borrower relationship and that therefore no fiduciary 

relationship existed.

In addition, it was undisputed that Hong served as Soon Hee 

and her husband's intermediary for hundreds of thousands of dollars 

in keh money that she collected, paid out to them in purses, and 

loaned for profit to others. In her role as the keh organizer, 

Hong collected and distributed enormous sums of money. She 

admittedly profited from the no-interest loans she received in 

that capacity and then re-lent to others with interest. 
19 A-5064-11T2

Soon Hee and Yun, and the other keh participants had to trust 

that Hong would distribute their money in accordance with the 

rules of the particular keh. Hong alone knew the identity of the 

dozens of keh participants, the order in which payouts were to be 

made, and funds distributed to the participants —— as well as to 

any individuals who were making loans separately from keh payments.

Hong may well have owed defendants the duty of loyalty and 

the duty to exercise reasonable skill and care that are encompassed 

within a fiduciary's obligations. See F.G. v. MacDonell, supra, 

150 N.J. at 564. The state of the record, however, permits no 

definitive conclusion on this point. These duties include a

fiduciary obligation to maintain records regarding distribution 

of keh funds. 

Despite Hong's testimony to the contrary, her statements in 

the April 2, 2009 telephone recordings she moved into evidence 

demonstrated that at least some of the obligations represented by 

the five checks were incurred as a regular part of the keh 

transactions. Despite this evidence, Hong did not explain why 

some of the check amounts coincided with Soon Hee's portion of the 

keh purses. The judge did not address these questions in his 

decision.

Soon Hee testified repeatedly that the records for the 2008 

keh, and Hong's lost notebook containing the record of all of the 
20 A-5064-11T2

loan transactions, would support her contention that the loan 

transactions went both ways, and that Hong also owed her money. 

The only evidence to the contrary was Hong's self-serving 

insistence at trial that the loans were entirely separate from the 

keh. In fact, it was not until December 2010, months after 

defendants made the discovery request regarding Hong's financial 

records, that Hong first claimed she had lost the notebook that 

contained records of her loan transactions. 

The discovery violations were not remedied or resolved before 

trial. Soon Hee and Yun may have been entitled to invoke the 

spoliation inference, a remedy for a litigant who becomes aware 

during litigation that evidence has been destroyed or concealed. 

Rosenblit v. Zimmerman, 166 N.J. 391, 401-02 (2001). The inference 

serves to level the playing field by allowing a factfinder to 

presume that the lost or concealed evidence would have been 

unfavorable to the spoliator. Ibid. When the issues were raised, 

the judge did "not concur with defendants analysis/arguments that 

by not providing books and records of these kehs that the 

aforementioned claims made by the defendant concerning monies owed 

to them by the plaintiff must be true." Nor did the trial judge's 

decision mention Hong's assertion that the 2008 keh records 

allegedly remained in the possession of Hong's other attorney. 
21 A-5064-11T2

In addition, without support in the record, the court found 

that defendants also had the notebook. Soon Hee had merely 

testified that she had seen Hong's notebook on multiple occasions. 

Thus defendants are correct that the trial court erred when it 

rejected out of hand their claim that Hong was in a fiduciary 

relationship with them, and when he did not draw an adverse 

inference from Hong's failure to produce documents that were 

critical to the parties' claims. The judge's conclusions were not 

supported by the record. Accordingly, we reinstate the 

counterclaim and remand the matter for a new trial on that issue. 

Should defendants wish to do so, they have the right to file a new 

motion pretrial regarding spoliation. Our decision on these issues 

results from the judge's reconstruction of the record, and is not 

intended to dictate the outcome.

III.

In his decision on the parties' cross-motions for summary 

judgment, another judge dismissed Yun's counterclaim for breach 

of fiduciary duty. That judge mistakenly believed that only Yun 

had asserted such a claim. In fact, both he and Soon Hee asserted 

the counterclaim in their original answer. The judge also 

mistakenly found that Yun had not been a member of any keh, and 

that if he had participated, it was only "indirectly" through Soon 

Hee.
22 A-5064-11T2

To the extent that defendants' breach of fiduciary duty 

counterclaim was deemed dismissed by that pretrial judge's order, 

it is hereby reversed. Yun was a member of the 2006 keh. The 

remand for a retrial on the extent of Hong's fiduciary duty is on 

the counterclaim made by both defendants. 

IV.

Yun also contends that he is entitled to damages for Hong's 

mismanagement of the 2006 keh in the amount he paid into the keh, 

$75,000. We reverse the dismissal of this claim, because the 

trial court's decision incorrectly stated no counterclaim had been 

made:

What about providing evidence of what the 

defendant[s] paid into the keh with their 

books and records? Wasn't Yun's participation 

in this keh through [Soon Hee], did she 

receive those monies, where did she deposit 

her keh monies, where are her records as to 

what she paid into the keh on Yun's behalf?

Nevertheless, in the last sentence of the "Conclusion" 

section of his decision, the judge said:

There was no counterclaim for any monies that 

the plaintiff [] Hong may owe the defendants 

Soon [Hee] or [] Yun, there being no claim for 

a set off against the indebtedness found to 

be owed by the defendant Soon [Hee] to the 

plaintiff [] Hong, therefore the Court will 

not nor can it consider claims of the 

defendant which it may have referenced as set 

offs throughout this opinion.
23 A-5064-11T2

Under the conflicting evidence presented at trial, the 

$75,000 claim could be viewed as part of the loan and repayment 

agreement between Hong and Soon Hee, or as an independent 

transaction between Hong and Yun. However, Yun is entitled to a 

disposition of the claim on remand, as his claim for $75,000 has 

not been decided in a fashion which comports with the record. 

V.

We agree that the Fair Debt Collection Act claims should have 

been dismissed. That cause of action would only be appropriate 

if Hong had been a debt collector within the meaning of the 

statute, which she was not.

The Act is intended "to eliminate abusive debt collection 

practices by debt collectors." 15 U.S.C.A. § 1692(e). It defines 

"debt collector" as 

any person who uses any instrumentality of 

interstate commerce or the mails in any 

business the principal purpose of which is the 

collection of any debts, or who regularly 

collects or attempts to collect, directly or 

indirectly, debts owed or due or asserted to 

be owed or due another. Notwithstanding the 

exclusion provided by clause (F) of the last 

sentence of this paragraph, the term includes 

any creditor who, in the process of collecting 

his own debts, uses any name other than his 

own which would indicate that a third person 

is collecting or attempting to collect such 

debts.

[15 U.S.C.A. § 1692a(6).]
24 A-5064-11T2

In addition to not coming within the definition, the conduct 

complained of was engaged in by Hong's former attorneys. Neither 

plaintiff can be held accountable for their actions.

VI.

We do not agree with the trial court's dismissal of 

defendants' counterclaim for malicious prosecution. The cause of 

action for malicious prosecution provides a civil remedy to 

plaintiffs who have been subjected to baseless criminal actions. 

LoBiondo v. Schwartz, 199 N.J. 62, 90 (2009). To sustain a claim 

for malicious prosecution, a plaintiff must prove the following 

four elements: "(1) a criminal action was instituted by this 

defendant against this plaintiff; (2) the action was motivated by 

malice; (3) there was an absence of probable cause to prosecute; 

and (4) the action was terminated favorably to the plaintiff." 

Ibid.

It is a complete defense to an action for malicious 

prosecution that the complainant acted on the advice of counsel 

that probable cause existed. Id. at 106; Weinstein v. Klitch, 106 

N.J.L. 408, 409 (E. & A. 1929). Notwithstanding a malicious motive, 

the showing that the complainant properly relied on the advice of 

counsel erases the "absence of probable cause" element and 

precludes recovery. LoBiondo, supra, 199 N.J. at 106.
25 A-5064-11T2

However, that defense requires a showing that "all of the 

material facts within [the complainant's] knowledge – that is 

those which would justify or negative the making of the complaint 

– are fully and truthfully stated to the attorney." Weinstein, 

supra, 106 N.J.L. at 409. The complainant must demonstrate that 

the attorney was provided with all of the facts necessary to make 

an informed decision on the probable cause issue. LoBiondo, supra, 

199 N.J. at 106. Where the evidence suggests that the material 

parts of the information conveyed to the attorney were knowingly 

false, it is up to a jury to decide whether probable cause was 

absent. Weinstein, supra, 106 N.J.L. at 409.

The court dismissed defendant's claim for malicious 

prosecution because it found that plaintiffs had acted on the 

advice of counsel, and that counsel was aware of the material 

facts, because they had written collection letters.

There is no support for these findings, however, because the 

collection letters do not indicate that plaintiffs' attorneys were 

aware that the checks had been provided to Hong months earlier, 

were undated, and that at least two of them had been written with 

no payee. To the contrary, the letters misstated that Soon Hee had 

issued the checks on August 11, 2009. Contrary to the attorneys' 

assertion, Hong testified she had received checks months earlier 

in March and April 2009.
26 A-5064-11T2

Thus the evidence does not support the court's finding that 

plaintiffs established lack of malice because they relied on the 

advice of counsel, and that counsel had been provided with all of 

the material facts. The court simply erred when it entered 

judgment in plaintiffs' favor on defendants' counterclaim for 

malicious prosecution. There were material issues of fact that 

remained to be decided on that issue, and those issues of fact 

arose from Hong's own testimony. 

Moreover, the court erred as to the proofs in the record when 

it found that Soon Hee had no viable damage claim. According to 

the court, she was neither inconvenienced nor distressed by her 

arrest, and incurred only $5000 in attorney fees. A plaintiff 

proving malicious prosecution is entitled to recover attorney fees 

and is not required to establish a minimum amount. Seidel v. 

Greenberg, 108 N.J. Super. 248, 271 (Law Div. 1969). Furthermore, 

Soon Hee testified that she was panicked by her arrest, especially 

as the criminal charges proceeded. She was arrested, 

fingerprinted, photographed, searched, and compelled to appear in 

court on several occasions. Her ability to travel was restricted 

because she was required to turn over her passport. The court 

improperly overlooked her testimony. We therefore remand for a 

new trial on this cause of action as well.
27 A-5064-11T2

Affirmed in part; reversed in part and remanded for a new 

trial on Soon Hee's counterclaim for malicious prosecution, both 

Soon Hee and Yun's counterclaim for breach of fiduciary duty, and 

Yun's counterclaim for $75,000. We express no opinion on the 

merits of the claims. 

Affirmed in part, reversed and remanded in part.