Korean American Association of Greater New York, Inc. v. Min

Background

The Korean American Association of Greater New York, Inc. (KAAGNY) sued Sung Ki Min under New York law for breach of contract, breach of fiduciary duty, and conversion. The case followed a dispute over KAAGNY’s presidency. Min had been elected president, was later impeached, and continued to hold himself out as president until the dispute over control was resolved. The court conducted a two-day bench trial, meaning the judge decided the facts and the legal claims without a jury.

KAAGNY alleged that Min violated written campaign affidavits and incorporated bylaws requiring the elected president to be responsible for financial liabilities incurred during the presidency and not transfer those liabilities to a successor. KAAGNY also alleged that Min mismanaged its finances by transferring money from a building account to an operating account, failing to pay property-related expenses, failing to file required tax forms, and using building-account funds for legal expenses related to the impeachment and related state-court proceedings.

Findings and legal analysis

The court found that KAAGNY’s performance—allowing Min to participate in the 2013 and 2015 presidential elections—provided consideration for Min’s promises and formed a contract. Min breached that contract by allowing KAAGNY’s debt to pass to his successor. The court rejected Min’s argument that his impeachment created an exception to his financial obligations. It awarded KAAGNY $319,095.56 in contract damages, representing the outstanding debt, interest, and fees that KAAGNY had to address after Min left office.

The court also found that Min owed KAAGNY fiduciary duties, including a duty to exercise the care of a reasonably prudent person in a similar position. It found that Min repeatedly and unreasonably transferred building-account funds for non-building expenses, failed to pay overdue property expenses, and failed to file necessary tax forms. Those actions caused $61,106.33 in interest and late fees. The court further found that $50,000 used for legal services after Min’s impeachment provided no benefit to KAAGNY. But it found that other challenged spending, including the January 2015 gala and pre-impeachment legal services, had not been shown to cause compensable damages. Because KAAGNY could not recover the same $50,000 twice, the court limited its net recovery for the fiduciary-duty claim to $50,000 after accounting for the contract award.

For conversion, a claim involving unauthorized control over specifically identifiable property, the court found that Min converted $50,000 from KAAGNY’s building account by using it for legal services after his impeachment. The court found that Min still had authority over the account for the pre-impeachment payment, but lacked authority for the post-impeachment payments. Because the same $50,000 loss was also included in the fiduciary-duty damages, the court allowed only a net total of $50,000 for both claims.

Ruling and disposition

Judge Richard J. Sullivan concluded that KAAGNY had proved that Min breached his contractual obligations, violated his duty of care by misusing building-account funds and mishandling property-related obligations, and converted building-account funds by paying legal expenses after his impeachment. The court awarded $319,095.56 for breach of contract and an additional $50,000 for breach of fiduciary duty and conversion, for a total of $369,095.56 before prejudgment interest.

The court did not itself state a final judgment amount in the opinion. Instead, it ordered KAAGNY to submit a proposed judgment by January 17, 2020, including proposed prejudgment interest, and allowed Min to respond by January 31, 2020.