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Sung Hwan Co., Ltd. v. Rite Aid Corp.

Supreme Court of New York, New York County

August 14, 2013

SUNG HWAN CO., LTD., Plaintiff,
RITE AID CORPORATION, Defendant. No. 112444/2001.

Editorial Note:

This decision has been referenced in a table in the New York Supplement.

Herzfeld & Rubin, P.C., for plaintiff.

Weir & Schmutz PLLC, for defendant.


This is a 2001 case. Conceptually, this case is not complicated. Plaintiff Sung Hwan Co., Ltd. seeks to enforce a South Korean judgment against defendant Rite Aid Corporation (Rite Aid) under Article 53 of the CPLR. However, this case has reached the Appellate Division at least three times, was the subject of a decision by the Court of Appeals, and now has been assigned to this court for trial. The purpose of this order is to clarify what issues are to be tried.

Procedural History

In an order dated June 12, 2003, Justice Lowe dismissed the case on jurisdictional grounds. Sung Hwan Co. v. Rite Aid Corp., 2003 WL 25754180 (Sup Ct, N.Y. County 2003). The dismissal was affirmed by the Appellate Division in an order dated November 30, 2004. Sung Hwan Co. v. Rite Aid Corp., 12 A.D.3d 325 (1st Dept 2004). The Court of Appeals reversed on June 6, 2006, holding that the Korean court's exercise of jurisdiction was consistent with New York's long-arm statute. Sung Hwan Co. v. Rite Aid Corp., 7 N.Y.3d 78 (2006). The Court of Appeals, however, did not rule on the viability of the three issues plaintiff now alleges should be tried-Rite Aid's purported liability based on ownership, agency and/or its subsidiary being a mere department of it (alter ego).

The action was then remanded to Justice Lowe, discovery was conducted, and dispositive motions were filed. In an order dated May 1, 2007, Justice Lowe granted summary judgment to plaintiff. Sung Hwan Co. v. Rite Aid Corp., 16 Misc.3d 1104(A) (Sup Ct, N.Y. County 2007). The Appellate Division reversed. Sung Hwan Co. v. Rite Aid Corp., 46 A.D.3d 288 (1st Dept 2007). The case was again remanded to Justice Lowe, further discovery occurred, and another round of summary judgment motions were briefed. In an order dated January 30, 2011 (not published), Justice Lowe granted summary judgment to defendant, Rite Aid, and dismissed the case ruling that there was no jurisdiction based either on agency or alter ego. In an order dated April 12, 2012, Justice Lowe was reversed. Sung Hwan Co. v. Rite Aid Corp., 94 A.D.3d 524 (1st Dept 2012). However, the Appellate Division neither considered the agency nor the alter ego arguments raised below and in the briefs. Instead it granted reversal on an argument made for the first time on appeal-whether there is " a triable issue of fact whether defendant [Rite Aid] owned the ice cream plant that manufactured and sold listeria-tainted ice cream to the plaintiff, which would provide a basis for Korea's exercise of personal jurisdiction over defendant." Id. at 525. The order granting summary judgment was vacated.

At the pre-trial, on April 3, 2013, when the court was ruling in limine on the admissible evidence, plaintiff argued, for the first time, that the court must try ownership, agency and alter ego since Justice Lowe's decision as to alter ego and agency was vacated without any ruling as to their viability. The court adjourned the pre-trial conference and scheduled a hearing on which of the three issues (ownership, alter ego, and agency) are properly before the court. At the hearing, held on April 10, 2013, it was clarified that this action was set for a bench trial, not a jury trial. The parties then proceeded to argue the viability of the issues without having submitted any substantive briefing. The court concluded that no determination should be made until the parties submitted briefing on: (1) which issues are still in play (i.e., had any issue been dismissed by an order of the Appellate Division, which would bind this court); and (2) of the remaining issues, which are legally viable.

On May 8, 2013, plaintiff filed the instant motion, in which it asks the court to issue an in limine order confirming that all three issues will be tried. Plaintiff's supporting papers contain a recitation of the procedural history of the case, including what can only be described as a rant about its frustration with Justice Lowe's prior orders and its general frustrations with Rite Aid. Plaintiff did not file papers that could in any way be considered a record upon which summary judgment can be granted.

In opposition, Rite Aid set forth its own rant about plaintiff and arguments about whether this court is procedurally permitted to make summary judgment rulings at this juncture. Plaintiff's reply papers are more of the same. After a hearing was held on August 1, 2013, the court reserved judgment.


The court has two options: (1) rule now, go to trial, and run the risk of a retrial if the Appellate Division determines that certain issues ( were improperly precluded; or (2) try everything, so that any potential reversal on appeal would not result in a second trial.

As for the issues to be tried, the first, ownership, must be allowed since the Appellate Division has specifically ruled that questions of fact as to ownership preclude summary judgment. The second issue, alter ego,[1] was raised before this court at the parties' first appearance and is an issue that the court always intended to try. The third issue, agency, was raised before Justice Lowe and although he applied Delaware, not New York, law, this court believes it was rightly ...

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