NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
No. 22-2574
SUK JOON RYU, also known as James S. Ryu, Appellant
v.
BANK OF HOPE
On Appeal from the United States District Court for the District of New Jersey (D.C. No. 2:19-cv-18998) District Judge: Honorable Julien X. Neals
Submitted Under Third Circuit L.A.R. 34.1(a) on June 12, 2023
Before: PORTER, FREEMAN, and FISHER, Circuit Judges
(Opinion filed: August 3, 2023)
OPINION *
* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent. PORTER, Circuit Judge.
New Jersey recognizes claims for malicious prosecution in criminal actions. In the
civil context, New Jersey’s courts have repeatedly expressed concern that the analogous
tort for malicious use of process claims may chill potential plaintiffs from exercising their
right to submit claims to judicial resolution. They hedge against chilling by dismissing
this disfavored tort upon proof of a reasonable belief justifying the suit. Bank of Hope
sued Suk Joon “James” Ryu based on its belief he was involved in an embezzlement
scheme resulting in $1.4 million of losses. Because that belief was not baseless, the
District Court issued summary judgment in the bank’s favor. We will affirm.
I
Bank of Hope discovered that funds were missing from various client accounts. It
traced the losses to Miye “Karen” Chon. Two bank employees met with Chon to discuss
the discrepancies on January 22, 2014, and she confessed to embezzling funds. The next
day, the three of them reconvened, joined by a fourth employee. Chon maintained that
she embezzled funds, and she claimed for the first time that Ryu participated. The FBI
interviewed Chon two weeks later. Chon first said that Ryu was not involved in the theft,
but later recanted, implicating him in the scheme. The bank did not know about the
interview until over two years later.
Ryu meanwhile heard rumors that the bank was investigating his potential
involvement in the embezzlement scheme. He reached out to the bank’s chief legal
officer, Lisa Pai. Ryu assured Pai that he was not involved with Chon’s embezzlement
and agreed to meet with Pai and the bank’s outside counsel to discuss the matter. They
2 met on February 13. Ryu informed Pai of a recorded conversation between Chon and
him, which he was having transcribed and translated. He promised to turn over a copy of
the recording and transcript once finalized.
The next day, Pai met with Chon. Chon explained that she had embezzled money
for her own purposes, Ryu caught her, and she started delivering cash to Ryu. Chon
retained an attorney and refused to cooperate with the bank after that meeting. The bank’s
investigation uncovered no evidence of Ryu participating in the embezzlement. Still, Pai
believed Chon’s account of the embezzlement scheme.
The bank sued Chon and Ryu on March 19, 2014. It claimed they embezzled
money from customer accounts—without corroborating evidence, without the transcripts
Ryu offered of his conversation with Chon, and before it completed its own investigation.
Ryu and the bank settled the embezzlement claims in 2019, but the bank maintained its
position that Ryu was involved. Ryu initiated this case in October 2019. He raised a
claim for malicious use of process, and the District Court granted summary judgment on
that claim when the bank showed that it had probable cause for its embezzlement claim.
II
The District Court had diversity jurisdiction under 28 U.S.C. § 1332. It has entered
judgment on all counts, so this Court has jurisdiction under 28 U.S.C. § 1291.
Ryu appeals the summary judgment on his claim for malicious use of process.
This Court exercises plenary review over summary judgments. Thomas v. Tice, 948 F.3d
133, 137 (3d Cir. 2020). We review the District Court’s decision to enter summary
3 judgment without additional discovery for abuse of discretion. Pastore v. Bell Tel. Co. of
Pa., 24 F.3d 508, 510 (3d Cir. 1994).
III
Under New Jersey law, plaintiffs can bring claims for improperly invoking judicial
power. This family of torts includes malicious prosecution for baseless criminal actions,
malicious use of process for analogous civil actions, and malicious abuse of process when
employed in a manner not contemplated by law. LoBiondo v. Schwartz, 970 A.2d 1007,
1022 (N.J. 2009) (malicious prosecution and use of process); Tedards v. Auty, 557 A.2d
1030, 1034 (N.J. Super. Ct. App. Div. 1989) (malicious abuse of process). Ryu claims
Bank of Hope engaged in the malicious use of process when it initiated and then
maintained the embezzlement action against him based only on the testimony of a known
embezzler. As a result, he must show:
1. Bank of Hope instituted a civil action against him; 2. The bank was motivated by malice; 3. There was an absence of probable cause; 4. The action was terminated in his favor; and 5. He suffered a special grievance caused by the institution of the underlying civil action.
LoBiondo, 970 A.2d at 1022–23.
The bank moved for summary judgment on this claim. It argued that the
undisputed facts showed probable cause, that the underlying action was not favorably
terminated, and that Ryu did not suffer a special grievance. The District Court found that
the Bank proved its probable cause for the embezzlement action, so it was entitled to
judgment.
4 A
Probable cause for civil actions differs from that for criminal actions. LoBiondo,
970 A.2d at 1024. Civil probable cause is “rather elusive,” but it is not entirely undefined.
Id. Probable cause is the legal question “whether, in the prior suit, the facts supported the
actor’s ‘honest belief’ in the allegations.” Id. (citation omitted). An honest belief is “a
reasonable belief that there was a good or sound chance of establishing the claim to the
satisfaction of the court or the jury.” Id. (citation omitted). A plaintiff’s “reasonable belief
that he or she had probable cause will defeat the cause of action entirely.” Id. at 1025
(citation omitted). When the facts supporting that belief are disputed, the factfinder must
find facts. Id. at 1024. But whether the facts as found support probable cause remains a
legal question.
The New Jersey Supreme Court considers the totality of the circumstances of
probable cause to decide malicious prosecution claims. Brunson v. Affinity Fed. Credit
Union, 972 A.2d 1112, 1122 (N.J. 2009). In LoBiondo, it recognized malicious
prosecution and use of process as two members of “a group of closely related torts” that
are “essentially” analogous. 970 A.2d at 1022. Although there are “significant
differences” between them, the court did not contemplate different tests for probable
cause. Id. So we predict that the New Jersey Supreme Court would also consider the
totality of the circumstances for claims of malicious use of process.
Applying that standard here, we decide this case on the bank’s honest belief of
Chon’s account. In Paul v.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
No. 22-2574
SUK JOON RYU, also known as James S. Ryu, Appellant
v.
BANK OF HOPE
On Appeal from the United States District Court for the District of New Jersey (D.C. No. 2:19-cv-18998) District Judge: Honorable Julien X. Neals
Submitted Under Third Circuit L.A.R. 34.1(a) on June 12, 2023
Before: PORTER, FREEMAN, and FISHER, Circuit Judges
(Opinion filed: August 3, 2023)
OPINION *
* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent. PORTER, Circuit Judge.
New Jersey recognizes claims for malicious prosecution in criminal actions. In the
civil context, New Jersey’s courts have repeatedly expressed concern that the analogous
tort for malicious use of process claims may chill potential plaintiffs from exercising their
right to submit claims to judicial resolution. They hedge against chilling by dismissing
this disfavored tort upon proof of a reasonable belief justifying the suit. Bank of Hope
sued Suk Joon “James” Ryu based on its belief he was involved in an embezzlement
scheme resulting in $1.4 million of losses. Because that belief was not baseless, the
District Court issued summary judgment in the bank’s favor. We will affirm.
I
Bank of Hope discovered that funds were missing from various client accounts. It
traced the losses to Miye “Karen” Chon. Two bank employees met with Chon to discuss
the discrepancies on January 22, 2014, and she confessed to embezzling funds. The next
day, the three of them reconvened, joined by a fourth employee. Chon maintained that
she embezzled funds, and she claimed for the first time that Ryu participated. The FBI
interviewed Chon two weeks later. Chon first said that Ryu was not involved in the theft,
but later recanted, implicating him in the scheme. The bank did not know about the
interview until over two years later.
Ryu meanwhile heard rumors that the bank was investigating his potential
involvement in the embezzlement scheme. He reached out to the bank’s chief legal
officer, Lisa Pai. Ryu assured Pai that he was not involved with Chon’s embezzlement
and agreed to meet with Pai and the bank’s outside counsel to discuss the matter. They
2 met on February 13. Ryu informed Pai of a recorded conversation between Chon and
him, which he was having transcribed and translated. He promised to turn over a copy of
the recording and transcript once finalized.
The next day, Pai met with Chon. Chon explained that she had embezzled money
for her own purposes, Ryu caught her, and she started delivering cash to Ryu. Chon
retained an attorney and refused to cooperate with the bank after that meeting. The bank’s
investigation uncovered no evidence of Ryu participating in the embezzlement. Still, Pai
believed Chon’s account of the embezzlement scheme.
The bank sued Chon and Ryu on March 19, 2014. It claimed they embezzled
money from customer accounts—without corroborating evidence, without the transcripts
Ryu offered of his conversation with Chon, and before it completed its own investigation.
Ryu and the bank settled the embezzlement claims in 2019, but the bank maintained its
position that Ryu was involved. Ryu initiated this case in October 2019. He raised a
claim for malicious use of process, and the District Court granted summary judgment on
that claim when the bank showed that it had probable cause for its embezzlement claim.
II
The District Court had diversity jurisdiction under 28 U.S.C. § 1332. It has entered
judgment on all counts, so this Court has jurisdiction under 28 U.S.C. § 1291.
Ryu appeals the summary judgment on his claim for malicious use of process.
This Court exercises plenary review over summary judgments. Thomas v. Tice, 948 F.3d
133, 137 (3d Cir. 2020). We review the District Court’s decision to enter summary
3 judgment without additional discovery for abuse of discretion. Pastore v. Bell Tel. Co. of
Pa., 24 F.3d 508, 510 (3d Cir. 1994).
III
Under New Jersey law, plaintiffs can bring claims for improperly invoking judicial
power. This family of torts includes malicious prosecution for baseless criminal actions,
malicious use of process for analogous civil actions, and malicious abuse of process when
employed in a manner not contemplated by law. LoBiondo v. Schwartz, 970 A.2d 1007,
1022 (N.J. 2009) (malicious prosecution and use of process); Tedards v. Auty, 557 A.2d
1030, 1034 (N.J. Super. Ct. App. Div. 1989) (malicious abuse of process). Ryu claims
Bank of Hope engaged in the malicious use of process when it initiated and then
maintained the embezzlement action against him based only on the testimony of a known
embezzler. As a result, he must show:
1. Bank of Hope instituted a civil action against him; 2. The bank was motivated by malice; 3. There was an absence of probable cause; 4. The action was terminated in his favor; and 5. He suffered a special grievance caused by the institution of the underlying civil action.
LoBiondo, 970 A.2d at 1022–23.
The bank moved for summary judgment on this claim. It argued that the
undisputed facts showed probable cause, that the underlying action was not favorably
terminated, and that Ryu did not suffer a special grievance. The District Court found that
the Bank proved its probable cause for the embezzlement action, so it was entitled to
judgment.
4 A
Probable cause for civil actions differs from that for criminal actions. LoBiondo,
970 A.2d at 1024. Civil probable cause is “rather elusive,” but it is not entirely undefined.
Id. Probable cause is the legal question “whether, in the prior suit, the facts supported the
actor’s ‘honest belief’ in the allegations.” Id. (citation omitted). An honest belief is “a
reasonable belief that there was a good or sound chance of establishing the claim to the
satisfaction of the court or the jury.” Id. (citation omitted). A plaintiff’s “reasonable belief
that he or she had probable cause will defeat the cause of action entirely.” Id. at 1025
(citation omitted). When the facts supporting that belief are disputed, the factfinder must
find facts. Id. at 1024. But whether the facts as found support probable cause remains a
legal question.
The New Jersey Supreme Court considers the totality of the circumstances of
probable cause to decide malicious prosecution claims. Brunson v. Affinity Fed. Credit
Union, 972 A.2d 1112, 1122 (N.J. 2009). In LoBiondo, it recognized malicious
prosecution and use of process as two members of “a group of closely related torts” that
are “essentially” analogous. 970 A.2d at 1022. Although there are “significant
differences” between them, the court did not contemplate different tests for probable
cause. Id. So we predict that the New Jersey Supreme Court would also consider the
totality of the circumstances for claims of malicious use of process.
Applying that standard here, we decide this case on the bank’s honest belief of
Chon’s account. In Paul v. National Education Association, the parties disputed the
source of information that led to the action. 459 A.2d 1213, 1215 (N.J. Super. Ct. Law
5 Div. 1983), aff’d, 480 A.2d 213 (N.J. Super. Ct. App. Div. 1984). Under the plaintiff’s
version of the facts, “the only source of this information received by defendants . . . had
refused to sign an affidavit supporting his earlier statements and indicated . . . that his
earlier statements were based on rumor and speculation.” Id. at 1217. Yet the court
concluded that the defendants had sufficient probable cause to bring the underlying
action. Id.
The bank offered similar undisputed evidence of its probable cause. At the time it
filed its action, it knew Chon had been embezzling money, and Chon was the only known
source with personal knowledge of the embezzlement scheme. Chon told Pai that she
transferred over $700,000 of those funds to Ryu. Pai believed Chon and thought she was
cooperating with the bank’s investigation. The bank thought Ryu’s financial motive, his
opportunity to conspire with Chon, and his means of hiding embezzlement pointed to
Ryu’s involvement. These facts fall within Paul’s contours, so the undisputed record
shows that the bank had probable cause to initiate the embezzlement action. See also
Westhoff v. Kerr S.S. Co., 530 A.2d 352 (N.J. Super. Ct. App. Div. 1987) (probable cause
for suit against embezzler’s spouse when she benefitted from the wrongful proceeds and
jointly held property with the embezzler).
Ryu asked the District Court to deny summary judgment because the bank knew
of exculpatory evidence. Ryu contends that he produced evidence that “creates an issue
of triable fact on the issue of the Bank’s lack of probable cause.” Appellant’s Br. 41.
Taken literally, that argument fails because probable cause is a legal question. LoBiondo,
6 970 A.2d at 1024. But even if we read his argument as positing a genuine dispute of fact
material to that legal question, his argument still fails.
Ryu provides 14 purported facts of the bank’s knowledge and beliefs. None of
these facts is material to the bank’s probable cause when it filed the embezzlement
action; some had not occurred or were not known to the bank until after the action was
filed. The thrust of Ryu’s argument from these facts is that Chon utterly lacks credibility
such that the bank unreasonably relied on her statements. The District Court called that
evidence fodder for cross-examination. But it did not err by deciding that impeachment
evidence does not undermine the bank’s probable cause to sue.
We must then decide whether the bank needed probable cause to continue the suit.
Before LoBiondo, the New Jersey Supreme Court asked whether “the proceeding was
instituted without probable cause.” Earl v. Winne, 101 A.2d 535, 543 (N.J. 1953)
(emphasis added); see also Penwag Prop. Co. v. Landau, 388 A.2d 1265, 1266 (N.J.
1978) (plaintiff for malicious prosecution “must show that the suit was brought without
reasonable or probable cause” (emphasis added)). LoBiondo maintained that requirement
when it provided the elements of the claim. 970 A.2d at 1022. But the court went on to
say that “[m]alicious prosecution provides a remedy for harm caused by the institution or
continuation” of a baseless action. Id. (emphasis added). It then recognized malicious use
of process as “essentially the analog” claim for civil actions. Id.
We need not guess whether malicious use of process claims remediate harms
caused by the continuation of a baseless action. Even if they do, there is no case law
suggesting the bank should be liable here. The testimony of one witness can be enough to
7 provide probable cause for a suit. Paul, 459 A.2d at 1215. The jury decides whether that
testimony is credible; a plaintiff is not required to assume that the jury will disbelieve its
witnesses when deciding whether it has probable cause. From these principles, it should
follow that the bank’s probable cause to initiate the suit—testimony from someone with
personal knowledge of the embezzlement scheme—would persist until a jury decides that
person is not credible. Requiring the bank to dismiss its action at any other time would
demand an arbitrary line-drawing exercise. So, considering the totality of the
circumstances, we conclude that the bank had probable cause to maintain its
embezzlement action against Ryu.
B
In his final point, Ryu argues the District Court granted summary judgment
prematurely. This Court reviews that decision for an abuse of discretion. Pastore, 24 F.3d
at 510. We affirm unless the decision is “arbitrary, fanciful, or clearly unreasonable.”
Stecyk v. Bell Helicopter Textron, Inc., 295 F.3d 408, 412 (3d. Cir. 2002) (quoting Stich
v. United States, 730 F.2d 115, 118 (3d Cir. 1984)).
The bank moved for summary judgment on the third, fourth, and fifth elements of
malicious use of process. The District Court reviewed those elements, considered the
bank’s evidence, and determined more discovery was necessary for the fourth and fifth
elements. The Court concluded that the record showed the bank had probable cause and
that more discovery would be futile—the bank defeated Ryu’s motion for summary
judgment in the underlying suit after five years of litigation. Probable cause for civil
actions may be an elusive concept, but a party that survives summary judgment has it.
8 The District Court exercised reasoned judgment, so it did not abuse its discretion by
refusing additional discovery.
IV
For the reasons stated above, we will affirm.