Otos Tech Co., Ltd v. Ogk America, Inc.

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 11-1078
_____________
OTOS TECH CO., LTD.
v.
OGK AMERICA, INC.; YALE KIM, a/k/a Youngil Kim
v.
OTOS OPTICAL CO., LTD; MOON YOUNG HUH
Otos Tech Co., Ltd.; Otos Optical Co., Ltd.; Moon
Young Huh,
Appellants
_____________
On Appeal from the United States District Court
for the District of New Jersey
(Civ. No. 2:03-01979)
District Judge: Hon. William H. Walls
Submitted Under Third Circuit LAR 34.1(a)
June 24, 2011
Before: CHAGARES, JORDAN, and GREENAWAY, JR.,
Circuit Judges.

-- 1 of 7 --

2
(Filed: August 9, 2011)
____________
OPINION
____________
CHAGARES, Circuit Judge.
Otos Tech. Co., Ltd., Otos Optical Co., Ltd., and
Moon Young Huh (collectively, “Otos”) appeal the District
Court’s denial of their request to enforce a judgment of the
Supreme Court of South Korea against OGK America, Inc.
and Yale Kim (collectively, “Kim”). For the reasons that
follow, we will affirm.
I.
This appeal involves two parallel litigations: one in
the United States, before the United States District Court for
the District of New Jersey, and one in South Korea. Otos
originally brought suit in the District of New Jersey in 2003,
asserting claims for breach of contract, conversion, and
embezzlement. These claims arose out of Kim’s retention of
three checks worth $587,775.05. Kim answered and asserted
counterclaims for breach of contract, breach of a settlement
agreement, and breach of the covenant of good faith and fair
dealing. Kim maintained that Otos wrongfully terminated his
employment contract and that he retained the three checks
pursuant to an agreement between the two parties to settle this
wrongful termination.

-- 2 of 7 --

3
While this lawsuit was still pending, Otos brought an
action against Kim in South Korea and asserted essentially
identical claims pertaining to the same three checks. On
December 16, 2005, a South Korean court entered judgment
in favor of Otos in the amount of 607,156,665 South Korean
Won, which was later reduced on appeal to 544,920,318
South Korean Won, an amount that was equivalent to
$587,755.05 (in U.S. dollars) at the time. Otos was also
awarded post-judgment interest on that amount. Kim
appealed the decision but the Supreme Court of Korea
affirmed on December 24, 2008.
Meanwhile, the litigation between Otos and Kim in the
District of New Jersey proceeded to a trial before a jury. On
August 11, 2006, after the conclusion of the trial, judgment
was entered in favor of Otos in the amount of $587,755.05 on
Otos’s conversion claim and in favor of Kim in the amount of
$910,000 on Kim’s counterclaim for breach of the covenant
of good faith and fair dealing. The District Court denied
Otos’s motion for a new trial, and both parties appealed. This
Court affirmed and remanded to the District Court for the
calculation of post-judgment interest. Otos Tech Co. v. OGK
Am., Inc., 295 F. App’x 514 (3d Cir. 2008).
After the conclusion of the trial, Otos embarked on a
campaign to seize Kim’s assets in Korea in order to satisfy
the Korean judgment. Based on the record before this Court,
Otos appears to have been successful in this endeavor. Kim
ultimately paid 807,619,134 in South Korean Won between
November 2006 and February 2009 to satisfy the Korean
judgment, an amount that includes forced sales of Kim’s
apartment and stocks as well as voluntary deposits made by
Kim. In an order dated February 16, 2009, the South Korean

-- 3 of 7 --

4
court rejected Otos’s latest application to seize Kim’s assets,
stating that “[i]t is clear that . . . the payment of the principal
and interest on late payment . . . was fully carried out.” Joint
Appendix (“JA”) 178 (emphasis added). Otos does not
challenge this conclusion on appeal.
Back in the United States, Kim filed a motion on
December 22, 2008 requesting that the District Court order
the turnover of funds from the accounts of one of Otos’s
customers in light of Otos’s failure to pay Kim any money in
satisfaction of the $910,000 judgment (plus interest) entered
in Kim’s favor on August 11, 2006. Otos objected, and also
argued that any turnover should be subject to a “setoff” in the
amount of its American judgment, $587,755.05. The District
Court granted Kim’s motion on July 29, 2009 and denied
Otos’s request for a setoff, holding that “[i]f that judgment is
set-off against [Kim’s] judgment here, a double recovery for
[Otos] may result since [Otos] could also recover the Korean
judgment entirely.” JA 96.
Otos appealed, and we affirmed. Otos Tech Co. v.
OGK Am., Inc., 393 F. App’x 5 (3d Cir. 2010). We held
“that the District Court was within its discretion to deny Otos
a setoff based on the possibility of a double recovery” given
that “it has not been established on the record when, where, to
whom, or in what amount the payments on the Korean
judgment have been made.” Id. at 10 & n.6. In other words,
it was unclear at the time whether granting Otos a setoff on its
American judgment may result in Otos impermissibly
recovering twice for the same harm: once in satisfaction of
its Korean judgment, and again by reducing Kim’s American
judgment. In light of the vagaries of the record, we
concluded by noting that, on remand, the District Court may

-- 4 of 7 --

5
“test[] the merits of the parties’ claims in order to avoid a
double recovery” by various means, depending on whether
Otos filed a motion to enforce the Korean judgment, Kim
filed a motion to declare Otos’s American judgment satisfied,
“or by some other means.” Id. at 10 n.6.
Otos elected to proceed by seeking to enforce the
Korean judgment. On September 16, 2010, Otos filed a
motion before the District Court seeking to satisfy the Korean
judgment and to “equalize” the Korean judgment with the
American judgment. Although Otos did not dispute that Kim
had satisfied the Korean judgment, Otos asserted that due to a
devaluation of the South Korean Won, Kim’s satisfaction of
the Korean judgment only amounted to an actual payment of
$382,215 (in U.S. dollars). As a result, Otos maintained that
the Korean judgment should be “equalized” with the
American judgment in the amount of $205,540.05, the
difference between the amount of the American judgment
($587,755.05) and the actual payments made by Kim after
being adjusted by currency devaluation ($382,215).
On December 16, 2010, the District Court denied
Otos’s motion, concluding that although the Korean judgment
was both valid and enforceable in American courts, it “has
been fully satisfied.” JA 26. This timely appeal followed.
II.
This is a diversity action governed by New Jersey law.
The District Court had jurisdiction over this action pursuant
to 28 U.S.C. § 1332(a)(2) and we have jurisdiction under 28
U.S.C. § 1291.

-- 5 of 7 --

6
We exercise de novo review over a district court’s
decision to grant full faith and credit to a foreign judgment.
See Barrows v. Barrows, 489 F.2d 661, 662-63 (3d Cir. 1974)
(conducting a de novo review in determining the
enforceability of a foreign judgment); see also Diorinou v.
Mezitis, 237 F.3d 133, 139 (2d Cir. 2001) (collecting cases
and noting that “domestic courts have not clearly articulated
the standard of appellate review of the decision whether to
enforce [a] foreign judgment, but appear to be applying a de
novo standard”).
III.
As an initial matter, we agree with the District Court’s
conclusion that the Korean judgment is both valid and
enforceable in American courts. “The Treaty of Friendship,
Commerce and Navigation Between the United States of
America and The Republic of Korea elevates a Korean
judgment to the status of a sister state judgment,” and “[i]n
New Jersey, sister state judgments by confession are entitled
to full faith and credit.” Choi v. Kim, 50 F.3d 244, 248 (3d
Cir. 1995) (citation omitted). None of the various exceptions
to the enforcement of such sister state judgments – such as
lack of personal or subject matter jurisdiction, or the failure to
provide adequate due process – are applicable to this case.
See id.
Notwithstanding this initial conclusion, we will affirm
the District Court’s denial of Otos’s motion to enforce the
Korean judgment. Put simply, Otos is attempting to enforce
the wrong judgment in this case. In our previous opinion in
this matter, we noted that the record was then unclear whether
Kim had satisfied the Korean judgment, and that accordingly,

-- 6 of 7 --

7
a setoff was inappropriate in light of the risk that Otos may
impermissibly recover twice for the same harm: once in
Korea, and then again by reducing Kim’s award by the value
of Otos’s American judgment. Otos Tech, 393 F. App’x at 10
& n.6.
The record now appears to be clear that Kim has
satisfied the Korean judgment. A Korean court has explicitly
held as much and Otos has not contested this fact below or on
appeal. As such, there is no merit in Otos’s attempt to satisfy
the Korean judgment for a second time in the District of New
Jersey. There is also no support for Otos’s novel proposition
that a previously satisfied foreign judgment is subject to some
kind of “equalization” in American courts in light of currency
devaluation. We therefore agree with the District Court’s
conclusion that the judgment in this case “has been fully
satisfied.” JA 26.
IV.
For the foregoing reasons, we will affirm.

-- 7 of 7 --