Medical Corporations, the East Cancer Foundation

A bankrupt medical corporation, the bankruptcy trustee of the Cancer Medical Foundation

Assistant Intervenor (Law Firm Barun, Attorneys Kim Don-ro, Counsel for defendant-appellant)

Defendant (Attorney Jin-sik et al., Counsel for the defendant-appellant)

October 27, 2017

Incheon District Court Decision 2016Gahap103391 Decided June 28, 2017

1. The judgment of the court of first instance is modified as follows.

A. The plaintiff's lawsuit of this case is dismissed.

B. The request for taking over the lawsuit is dismissed by the applicant.

2. The part arising between the Plaintiff and the Defendant out of the total cost of the lawsuit is borne by the Plaintiff, the requester for the lawsuit and the Defendant, and the part arising from the intervention is borne by the Intervenor, respectively.

The judgment of the first instance shall be revoked.

On March 25, 2015 between the defendant and the supplementary intervenor, it is confirmed that there is no obligation of the plaintiff to pay the acquisition amount ( principal 1,399,735,000 won and interest interest interest thereon) to the defendant according to the claim transfer and takeover contract between the defendant and the supplementary intervenor.

1. Facts of recognition;

The following facts are clearly acknowledged on the records of this case, or on the records of Gap's evidence 1 through 4, 8 (including the number of pages 1 to 8), Gap's evidence 1, and Eul's evidence 1 to 6, as a whole, together with the purport of all pleadings.

[1]

On April 7, 2011, 201, ○○ Intervenor (○○○) lent KRW 1,100,000 to the Plaintiff (the East Cancer Foundation, a medical corporation) at the interest rate of KRW 2.5% per month and June 7, 2011.

On May 2, 2012, 2012, the Intervenor and the Plaintiff agreed to determine the interest in arrears in the past as KRW 300,000,000 and to additionally lend it on July 1, 2012.

○ Around July 2012, the Intervenor filed a lawsuit against the Plaintiff and sought payment of KRW 449,735,000,000 after deducting KRW 950,000,000, which was partially repaid from the total amount of the above loans, from the total amount of KRW 1,30,000,00, and the judgment accepting the claim was rendered on December 14, 2012 and became final and conclusive around January 2013 (Seoul Central District Court 2012Ga58185).

On March 25, 2015, 2015, ○○ Intervenor and Defendant (△△△△△) drafted a contract for the transfer and takeover of claims (hereinafter “instant contract for the transfer of claims”) stating that the Intervenor’s loan or unjust enrichment return claims against the Plaintiff and claims based on the final and conclusive judgment are transferred to the Defendant. Around that time, the Intervenor notified the Plaintiff of the said transfer of claims.

[2]

The creditors, including the defendant, filed a petition for bankruptcy with the plaintiff around April 2015 (Seoul Rehabilitation Court 2015Hahap45, 71).

On December 5, 2016, the Plaintiff submitted to the court of first instance the instant complaint seeking confirmation of the absence of an obligation owed by the Plaintiff against the Defendant based on the instant contract for assignment of claims.

○ After that, the Plaintiff was declared bankrupt on December 14, 2016. On the other hand, the duplicate of the instant complaint was served on the Defendant on January 2, 2017.

○ The Plaintiff’s trustee in bankruptcy (Plaintiff’s trustee in bankruptcy) filed an application to resume a lawsuit following the Plaintiff’s status on February 7, 2017 regarding the instant lawsuit, and the Intervenor filed an application to intervene in the instant lawsuit on April 17, 2017.

○ Meanwhile, in the above bankruptcy proceedings against the Plaintiff, the Defendant filed a report on the claim against the Plaintiff as a bankruptcy claim based on the instant claim assignment contract, and the Defendant raised an objection against the claimant (the trustee in bankruptcy of the Plaintiff) and filed a final claim inspection judgment.

2. Suspension of proceedings and request for continuation of proceedings;

(1) According to the Civil Procedure Act, the proceedings relating to the bankrupt estate shall be interrupted when a party is declared bankrupt (Article 239).

According to the Debtor Rehabilitation and Bankruptcy Act (hereinafter “ Debtor Rehabilitation Act”), a lawsuit pending in a court as at the time bankruptcy is declared against any property belonging to the bankrupt estate may be taken over by the trustee in bankruptcy or the other party (Article 347(1))).

On the other hand, pending litigation takes place when a duplicate of complaint was served (see Supreme Court Decision 94Da12517, 12524 delivered on November 25, 1994, etc.).

According to the facts found earlier, on March 25, 2015, the supplementary intervenor and the Defendant prepared a contract for the assignment of the instant claim and transferred the claim against the Plaintiff of the supplementary intervenor to the Defendant. On December 5, 2016, the Plaintiff submitted the instant complaint to the court of first instance seeking confirmation of the non-existence of the obligation owed by the Plaintiff against the Defendant based on the instant contract for the assignment of claims. On December 14, 2016, the Plaintiff was declared bankrupt on December 14, 2016, and a duplicate of the instant complaint was served on the Defendant on January 2, 2017, and the request for the continuation of the lawsuit (the Plaintiff’s trustee in bankruptcy) was filed on February 7, 2017.

If so, at the time the Plaintiff was declared bankrupt on December 14, 2016, the duplicate of the instant complaint was not served on the Defendant, and thereafter, on January 2, 2017, when the duplicate of the instant complaint was served on the Defendant, the instant lawsuit was not pending in the court at the time of the said declaration of bankruptcy, and there was no lawsuit suspending this.

Therefore, the applicant for taking over the lawsuit of this case (the plaintiff's trustee in bankruptcy) is unable to take over the lawsuit of this case, and the application for taking over the lawsuit of this case shall be dismissed due to the lack of justifiable grounds.

B. Meanwhile, according to the Debtor Rehabilitation Act, all property owned by the debtor at the time of the declaration of bankruptcy belongs to the bankruptcy estate (Article 382(1)), and the right to manage and dispose of the bankruptcy estate belongs to the bankruptcy trustee (Article 384).

In addition, according to the Debtor Rehabilitation Act, any bankruptcy claim shall not be exercised without resorting to bankruptcy procedures (Article 424), and when a trustee in bankruptcy raises an objection against any reported bankruptcy claim, the bankruptcy creditor holding the objection may file a final claim inspection judgment with the court (Article 462), and any person who is dissatisfied with the final claim inspection judgment may file a lawsuit of objection (Article 463).

According to the above, on December 5, 2016, prior to the Plaintiff’s declaration of bankruptcy, the Plaintiff submitted the instant complaint seeking confirmation of the absence of an obligation owed by the Plaintiff against the Defendant based on the instant contract for assignment of claims, but was declared bankrupt on December 14, 2016, and thereafter served a duplicate of the instant complaint on January 12, 2017 to the Defendant.

In addition, in the bankruptcy proceedings against the plaintiff, the defendant filed a report on the claim against the plaintiff as bankruptcy claim on the basis of the transfer contract of this case, and the fact that the claimant (the trustee in bankruptcy of the plaintiff) raises an objection and the defendant filed a final claim inspection judgment.

Therefore, at the time when a duplicate of the complaint of this case was served to the defendant, the plaintiff was disqualified as a party to the lawsuit seeking confirmation of non-existence of an obligation. As seen earlier, the plaintiff's trustee in bankruptcy (the plaintiff's trustee in bankruptcy) cannot take over the lawsuit of this case, leading to the plaintiff's status as to the lawsuit of this case. Whether the lawsuit of this case is non-existent is confirmed by the final claim inspection judgment filed by the defendant, and therefore, the plaintiff's lawsuit of this case is dismissed.

3. Conclusion

The judgment of the court of first instance, when indicating the applicant for taking over (the plaintiff's trustee in bankruptcy) as a party to the lawsuit, is illegal as it does not exist subject to taking over the lawsuit. The lawsuit of this case is not only a lawsuit claiming a bankruptcy claim but also a general civil lawsuit, and the plaintiff (the East Cancer Medical Foundation, a medical corporation), has no right to manage and dispose of the bankruptcy claim, and dismissed the lawsuit of this case.

However, as seen earlier, the request for taking over the lawsuit by the plaintiff (the trustee in bankruptcy of the plaintiff) is dismissed as it is without merit, and the lawsuit of this case filed by the plaintiff (the East Cancer Foundation, a medical corporation) is dismissed as it is unlawful and thus, it is modified as above.

Judge Cho Young-young (Presiding Judge)