Do you remember this story? Two Korean businessmen swore out a blood oath back in 2004 over a $170,000 deal. One didn't repay, the other decided to take him to court to enforce the promise, and lost. He appealed, and now an appellate court has upheld the lower court, ruling that, well, a blood oath isn't worth the paper it's dripped on. Here's a little more from Fox News. Here's a link to the opinion, Kim v. Son.
Here's an excerpt from the court's ruling.
Kim raises two issues on appeal: (1) Did the trial court erroneously fail to consider or apply Kim's forbearance as consideration of Son's blood agreement? and (2) Did the statement of decision adequately address the forbearance issue?
...“Consideration may be forbearance to sue on a claim, extension of time, or any other giving up of a legal right, in consideration of some promise. ... “The slightest forbearance will suffice: ‘Even though the forbearance is for one day only, there is sufficient consideration as the law does not weigh the quantum.’ [Citations.]” ...Moreover, “The compromise of a claim, either valid, doubtful, or disputed (but not void) is good consideration, the claimant giving up his or her asserted right to recover the whole amount as consideration for a promise to pay a lesser amount. [Citations.]” ...
“However, if the forbearance has no value, it will not suffice....And relevant to this case, “If a claim is wholly invalid, neither forbearance to sue nor a compromise thereof can be good consideration....Here, the purported forbearance to sue cannot be good consideration because Kim's claims against Son were wholly invalid. As determined by the trial court, any claim Son personally owed Kim money was invalid. The statement of decision noted it was undisputed the corporations (MJ and Netouch) were valid separate corporate entities and those businesses received Kim's loans and investment money. The court concluded Son did not guarantee the money on behalf of the two corporations. He did not personally receive any of Kim's money. And, Kim does not dispute a shareholder/owner generally is not personally liable for the debts of a corporation.... Consequently, any debt collection or breach of contract claim Kim may have had against the corporations, could not be legally imputed to Son, individually. In other words, Kim's forbearance in filing a meritless lawsuit cannot supply adequate consideration for Son's gratuitous promise.
Moreover, Kim does not dispute the trial court's conclusion credible evidence established Son was not liable for fraud. Accordingly, his alleged forbearance to sue on the clearly unfounded tort claim would not constitute valuable consideration. We conclude the trial court properly decided Kim's lawsuit was based entirely on a gratuitous unenforceable promise, and as such, the court did not need to address the immaterial issue of forbearance.
Code of Civil Procedure section 632 states in relevant part: “In superior courts, upon the trial of a question of fact by the court, written findings of fact and conclusions of law shall not be required. The court shall issue a statement of decision explaining the factual and legal basis for its decision as to each of the principal controverted issues at trial upon the request of any party appearing at the trial.... The request for a statement of decision shall specify those controverted issues as to which the party is requesting a statement of decision. After a party has requested the statement, any party may make proposals as to the content of the statement of decision....”
“A trial court rendering a statement of decision under Code of Civil Procedure section 632 is required only to state ultimate rather than evidentiary facts. A trial court is not required to make findings with regard to detailed evidentiary facts or to make minute findings as to individual items of evidence. Only where a trial court fails to make findings as to a material issue which would fairly disclose the determination by the trial court would reversible error result. Even though a court fails to make a finding on a particular matter, if the judgment is otherwise supported, the omission is harmless error unless the evidence is sufficient to sustain a finding in favor of the complaining party which would have the effect of countervailing or destroying other findings. A failure to find on an immaterial issue is not error....In issuing a statement of decision, the trial court need not address each question listed in a party's request. All that is required is an explanation of the factual and legal basis for the court's decision regarding such principal controverted issues at trial as are listed in the request....Here, the trial court's statement of decision sufficiently delineated the factual and legal basis of the court's ultimate decision Kim failed to show the blood agreement was an enforceable contract or that Son defrauded him. As noted previously, the court determined Son, while extremely intoxicated, made a gratuitous unenforceable promise to repay what the corporations owed “to the best of [his] ability.” The court also made the specific finding there was no evidence Son had personally guaranteed the debt or showing Son received any of the money. Given this lack of evidence, there was no basis upon which to consider the issue of forbearance as a substitute form of consideration. If a claim is invalid, forbearance is immaterial. The court's failure to specifically discuss and reject the forbearance claim did not render the statement of decision inadequate.
The judgment is affirmed. Respondent shall recover his costs on appeal.
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