The plaintiff initially alleged that the construction contract at issue was a sham transaction and sought restitution on the basis of unjust enrichment.
On appeal, the plaintiff changed its legal theory and argued that the funds should instead be characterized as a loan subject to repayment.

Through a detailed analysis of the substance of the transaction, the flow of funds, the relationship between the parties, and the underlying legal arrangements, One Law Partners, LLC demonstrated that the defendant could not be held liable for either unjust enrichment or repayment of a loan. The courts accepted these arguments and dismissed all of the plaintiff’s claims. The Supreme Court subsequently dismissed the plaintiff’s appeal, thereby rendering the defendant company’s victory final and conclusive.
 

1. Case Overview

The plaintiff, the owner of certain land and factory buildings, entered into a construction contract in the name of the defendant company through A, who was both a relative of the plaintiff and an executive officer of the defendant company.
A issued tax invoices listing the defendant as the supplier, and the plaintiff transferred the construction payments to a bank account held in the name of the defendant company.

The plaintiff later alleged that the construction contract was merely a sham transaction entered into in collusion with A and filed a lawsuit against the defendant seeking the return of the construction payments.

At the trial level, the plaintiff asserted a claim for unjust enrichment based on the alleged falsity of the construction contract.
On appeal, the plaintiff abandoned that theory and instead argued that the funds constituted a loan made to the defendant under a loan agreement.

Neither argument was accepted by the courts. The plaintiff’s claims were rejected at both the trial and appellate levels, and the Supreme Court ultimately dismissed the plaintiff’s appeal, thereby finalizing judgment in favor of the defendant.
 

2. Key Issues

The principal issues in dispute were as follows:

• Whether the construction payments were actually received and retained by the defendant so as to establish unjust enrichment;

• Whether the plaintiff’s payment constituted the voluntary payment of a non-existent debt, thereby precluding restitution;

• Whether the loan agreement newly alleged on appeal could be established based on the evidence.

3. Legal Strategy

Attorneys Ok‑ja Jeong and Da‑ye Lee represented the defendant company and advanced the following key arguments.

- Emphasizing the Absence of Any Actual Benefit Received by the Defendant
According to the plaintiff’s own allegations, the disputed transaction was merely a sham arrangement between the plaintiff and A.
The attorneys argued that the defendant company neither actually acquired the funds nor obtained any economic benefit from the transaction. Accordingly, the essential element of benefit required for an unjust enrichment claim could not be established.

- Arguing That the Plaintiff’s Own Theory Established Voluntary Payment of a Non-Existent Debt
While alleging that the transaction had been fictitious from the outset, the plaintiff simultaneously sought repayment of the funds.
The attorneys argued that, even under the plaintiff’s own theory, the plaintiff was aware at the time of payment that no actual obligation existed. As a result, the payment constituted the voluntary payment of a non-existent debt, and restitution was therefore unavailable as a matter of law.

- Demonstrating the Lack of Evidence Supporting the Loan Theory
After the plaintiff amended the basis of its claim on appeal and asserted the existence of a loan agreement, the defense emphasized that there was no objective evidence establishing either the existence of a loan agreement between the plaintiff and the defendant or the making of any loan to the defendant.
The court agreed and concluded that the alleged loan agreement had not been proven.
 

4. Significance of the Case

This matter was not a simple dispute over construction payments. The case began with a payment order proceeding and evolved into a protracted dispute spanning the trial court, appellate court, and Supreme Court.

One Law Partners, LLC promptly filed an objection at the payment order stage, converting the matter into ordinary civil litigation. The firm then successfully defended against both the unjust enrichment claim and the subsequent loan repayment claim, securing victories for the defendant at every level of the judicial process.

In addition, after carefully analyzing the facts revealed during the litigation, the attorneys concluded that the case raised concerns regarding the possibility of fraudulent litigation. Accordingly, they pursued criminal remedies in parallel with the civil defense strategy.

As a result, the related criminal matter was referred to the prosecution with a recommendation for indictment following a police investigation, and the prosecutorial investigation remains ongoing.

This case is significant not only because of the complete victory obtained in the civil proceedings, but also because it demonstrates an effective multi-faceted strategy for protecting a client’s interests against unfounded and potentially fraudulent claims.
 

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Attorney Ok‑ja Jeong | ojjeong@onelawpartners.com
Attorney Da‑ye Lee | dylee@onelawpartners.com

Public Relations Team, One Law Partners, LLC | pr@onelawpartners.com