Court Opinion

ID: 4464286
Source: CourtListenerOpinion
Date Created: 2019-12-13 21:00:29.992055+00
Date Added: 2024-06-11T14:28:06.991080
License: Public Domain

NOT FOR PUBLICATION                         FILED
                    UNITED STATES COURT OF APPEALS                       DEC 13 2019
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                             FOR THE NINTH CIRCUIT

RENO-TAHOE SPECIALTY, INC.,                     No.    18-56411

                Plaintiff,                      D.C. No.
                                                2:16-cv-00663-GHK-AGR
and

MICHAEL CHANG,                                  MEMORANDUM*

                Creditor-Appellant,

 v.

MUNGCHI, INC.; RICKY NOH,

                Defendants-Appellees,

and

TOP DESIGN; KYUNG SU LEE; MC
CREW, LTD.; THE STYLE N, INC.;
SILLA AMERICA, INC.; DBDE, INC.; I
LOVE P&A, LTD.,

                Defendants.

                   Appeal from the United States District Court
                       for the Central District of California
                   Virginia A. Phillips, District Judge, Presiding

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
                                                                          Page 2 of 5

                          Submitted December 11, 2019**
                              Pasadena, California

Before: N.R. SMITH and WATFORD, Circuit Judges, and KORMAN,*** District
Judge.

      1. Ricky Noh argues that this court lacks jurisdiction because Michael

Chang failed to file a timely notice of appeal. We disagree. Chang filed a timely

notice of appeal from the district court’s September 19, 2018 order denying

Chang’s renewed motion to amend the Nevada judgment to add Noh as a judgment

debtor. That order is the final judgment in this matter because the district court

had earlier refused to rule on Chang’s renewed motion to amend the Nevada

judgment until he sought relief in the district court for the District of Nevada.

Chang complied with the court’s order but was unable to obtain relief in the

Nevada district court. At that point, he returned to the California Central district

court with this suit, and, in the court’s September 19, 2018 order, Chang’s renewed

motion to amend the Nevada judgment was finally denied.

      2. The district court denied Chang’s renewed motion to amend the Nevada

judgment, finding that Chang failed to meet his burden of establishing the

      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      ***
             The Honorable Edward R. Korman, United States District Judge for
the Eastern District of New York, sitting by designation.
                                                                           Page 3 of 5

necessary element of control. We review for clear error the district court’s

findings on whether a party is properly added to a previous judgment. See Katzir’s

Floor & Home Design, Inc. v. M-MLS.COM, 394 F.3d 1143, 1148 (9th Cir. 2004).

Under governing California law, a plaintiff seeking to amend a judgment to add a

defendant must prove that (1) the defendant is “the alter ego of the old party,” and

(2) the defendant “controlled the litigation” that gave rise to the judgment. Triplett

v. Farmers Ins. Exch., 29 Cal. Rptr. 2d 741, 743 (Ct. App. 1994). The second

element protects a defendant’s due process right to present a defense before being

held to account for a monetary judgment. See id. The plaintiff bears the burden of

proving both elements by a preponderance of the evidence. Wollersheim v. Church

of Scientology Int’l, 81 Cal. Rptr. 2d 896, 897 (Ct. App. 1999).

      In the present appeal, the parties dispute only whether Chang failed to

demonstrate by a preponderance of the evidence that Noh controlled the Nevada

litigation. To assess whether a plaintiff has carried the burden of proving a

defendant’s “[c]ontrol of the [underlying] litigation sufficient to overcome due

process objections,” courts properly consider a “combination of factors, usually

including the [defendant’s] financing of the litigation, . . . hiring of attorneys, and

control over the course of the litigation.” NEC Elecs. Inc. v. Hurt, 256 Cal. Rptr.
441, 446 (Ct. App. 1989). The district court did not clearly err by denying Chang’s

renewed motion to amend the Nevada judgment.
                                                                            Page 4 of 5

      Chang provided no evidence that Noh funded the Nevada litigation. Chang

supplied only some evidence tending to prove that Noh hired Mungchi’s counsel.

Evidence proving that Noh hired Mungchi’s counsel is insufficient, standing alone,

to establish the level of control required to address due process concerns. See

Minton v. Cavaney, 364 P.2d 473, 476 (Cal. 1961).

      Chang also provided evidence that Noh oversaw all aspects of Mungchi’s

business, served as Mungchi’s business deponent, was Mungchi’s only

representative at the settlement conference, and testified at trial. These facts show

merely that Noh fulfilled the roles that any corporation’s president would likely

fulfill, even if he did not control the course of the litigation. As courts have noted,

“[i]t is not sufficient that . . . [a defendant] appears as a witness or cooperates

without having control.” Minton, 364 P.2d at 476 (internal quotation marks

omitted). In other words, these facts do not compel the conclusion that Noh

controlled the course of the Nevada litigation.1 Cf. Alexander v. Abbey of the

Chimes, 163 Cal. Rptr. 377, 380 (Ct. App. 1980); Bank of Montreal v. SK Foods,

LLC, 476 B.R. 588, 601 (N.D. Cal. 2012), aff’d sub nom. Bank of Montreal v.

1
  Chang also supplied a declaration from John Krieger, the attorney who
represented Reno-Tahoe in the Nevada litigation, which stated that, based on his
“personal observations,” Krieger believed “Ricky Noh . . . was in control of the
lawsuit.” Krieger’s declaration failed to specify the “personal observations” that
provided the foundation for his conclusory statement that Noh controlled the
Nevada litigation. As a result, the district court correctly accorded it no weight.
                                                                          Page 5 of 5

Salyer, 599 F. App’x 706 (9th Cir. 2015). Based on this evidence, we are not “left

with the definite and firm conviction” that the district court made a mistake

denying Chang’s renewed motion to amend the Nevada judgment.2 Easley v.

Cromartie, 532 U.S. 234, 242 (2001).

      AFFIRMED.

2
  Without conducting an evidentiary hearing to assess credibility, the district court
appeared to credit the two declarations submitted by Noh to show that he did not
control the course of the Nevada litigation. Because Chang attacks the veracity of
the declarations, we agree with him that the district court erred insofar as it gave
the declarations any weight without first making a credibility determination
following an evidentiary hearing. Nonetheless, even giving no weight to Noh’s
declarations, we are still unable to find clear error in the district court’s denial of
Chang’s renewed motion to amend the Nevada judgment. Chang supplied
evidence tending to prove only that Noh hired Mungchi’s counsel and that he
participated in the litigation as any company’s president likely would.