INDONG ADVANCED MATERIALS, INC vs GREEN ENERGY GLOBAL, INC, AN ARIZONA CORPORATION, et al.

23CV005172: INDONG ADVANCED MATERIALS, INC vs GREEN ENERGY GLOBAL, INC, AN ARIZONA CORPORATION, et al. 06/06/2024 Hearing on Motion to Dismiss in Department 53

Tentative Ruling

NOTICE:

Consistent with Local Rule 1.06(B), any party requesting oral argument on any matter on this calendar must comply with the following procedure:

To request limited oral argument, on any matter on this calendar, you must call the Law and Motion Oral Argument Request Line at (916) 874-2615 by 4:00 p.m. the Court day before the hearing and advise opposing counsel. At the time of requesting oral argument, the requesting party shall leave a voice mail message: a) identifying themselves as the party requesting oral argument; b) indicating the specific matter/motion for which they are requesting oral argument; and c) confirming that it has notified the opposing party of its intention to appear and that opposing party may appear via Zoom using the Zoom link and Meeting ID indicated below. If no request for oral argument is made, the tentative ruling becomes the final order of the Court.

Unless ordered to appear in person by the Court, parties may appear remotely either telephonically or by video conference via the Zoom video/audio conference platform with notice to the Court and all other parties in accordance with Code of Civil Procedure §367.75. Although remote participation is not required, the Court will presume all parties are appearing remotely for non-evidentiary civil hearings. The Department 53/54 Zoom Link is https://saccourt-cagov.zoomgov.com/my/sscdept53.54 and the Zoom Meeting ID is 161 4650 6749. To appear on Zoom telephonically, call (833) 568-8864 and enter the Zoom Meeting ID referenced above. NO COURTCALL APPEARANCES WILL BE ACCEPTED.

Parties requesting services of a court reporter will need to arrange for private court reporter services at their own expense, pursuant to Government code §68086 and California Rules of Court, Rule 2.956. Requirements for requesting a court reporter are listed in the Policy for Official Reporter Pro Tempore available on the Sacramento Superior Court website at https://www.saccourt.ca.gov/court-reporters/docs/crtrp-6a.pdf. Parties may contact Court- Approved Official Reporters Pro Tempore by utilizing the list of Court Approved Official Reporters Pro Tempore available at https://www.saccourt.ca.gov/court-reporters/docs/crtrp- 13.pdf.

A Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) is required to be signed by each party, the private court reporter, and the Judge prior to the hearing, if not using a reporter from the Court’s Approved Official Reporter Pro Tempore list.

Once the form is signed it must be filed with the clerk. If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing

23CV005172: INDONG ADVANCED MATERIALS, INC vs GREEN ENERGY GLOBAL, INC, AN ARIZONA CORPORATION, et al. 06/06/2024 Hearing on Motion to Dismiss in Department 53

or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will forward the form to the Court Reporter’s Office and an official reporter will be provided.

TENTATIVE RULING: Defendant Victoria Choi’s and Jeffrey Thoreson’s motion to dismiss for failure to join indispensable parties pursuant to CCP § 389 is denied.

In this action, Plaintiff Indong Advanced Materials, Inc. alleges that Defendant Green Energy Global, Inc. (“GEGI”) purported to assign Plaintiff mining rights to 900,000 metric tons of lithium in Bolivia. Plaintiff alleges that GEGI never had the mining rights, fraudulently induced the subject contracts and stole $10 million from Plaintiff. Plaintiff alleges causes of action against GEGI and numerous other defendants for breach of contract, fraud, unjust enrichment, professional negligence, and declaratory relief. In addition to GEGI, Plaintiff named GEC Exploration, Inc. (“GEC”), and Donald Demery as Trustee of Quantum Trust (“Quantum”), Muhammed Khan, moving Defendants, Lucia Kim, Rollie Peterson, Tae Joo Yi, Kwon Do Kang, and Bae, Kim & Lee, LLC (“BKL”) as defendants.

The breach of contract claim, which alleged a breach of a Mining License Agreement (“MLA”), is alleged against GEGI, GEC, and Quantum. The fraud claim is against all defendants except Yi, Kang, and BKL. The unjust enrichment claim is against all defendants. The professional negligence claim is against Kang and BKL, attorneys alleged to have represented Plaintiff in connection with the mining rights deal. The declaratory relief claim is against GEGI, GEC, and Quantum and seeks a declaration of rights with respect to the MLA and related amendments.

Plaintiff’s breach of contract claim is premised on an alleged breach of the MLA, and the associated amendments of the MLA. (Comp. ¶¶ 45-53.) The parties to the MLA and the related amendments are alleged to be Plaintiff, GEGI, GEC, and Quantum. (Id.) Plaintiff alleged that GEGI/GEC were to assign or license two mining rights to Plaintiff under the MLA but that they failed to do so and failed to provide proof that they have any rights despite claiming they had such rights. Plaintiffs alleged that after the parties entered into the MLA on July 27, 2022, Defendant Khan presented Plaintiff with an “Acuerdo de Empressa Conjunta Minera” (Mining Joint Venture Agreement).

The document which is in Spanish, is attached as exhibit C to the complaint. Plaintiff refers to Exhibit C as the ACUERDO in the complaint but Defendants refer to it in the instant motion as the JVA. The Court will do the same in this ruling. Plaintiff alleges that Defendant Khan presented it with the JVA in late August 2022, as “purported evidence” that GEGI/GEC actually had the lithium mining rights. (Comp. ¶¶ 24-29.) Plaintiff alleged that it wired $10 million to GEGI in reliance on the representations that

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV005172: INDONG ADVANCED MATERIALS, INC vs GREEN ENERGY GLOBAL, INC, AN ARIZONA CORPORATION, et al. 06/06/2024 Hearing on Motion to Dismiss in Department 53

GEGI/GEC had the mining rights but later learned that Yacimeintos de Litios Bolivianos (“YLB”), the Bolivian government agency in charge of mining activities, announced that the YLB did not have any signed agreements for lithium extraction in Bolivia. (Id. ¶¶ 33- 35.) Plaintiff alleges that its investigation revealed that the JVA was fabricated because certain signatures by the YLB were affixed to it without knowledge or consent. (Id. ¶ 41.) Plaintiff alleges that in January 2023, the President of Bolivia announced that the mining rights had been awarded to a Chinese consortium. (Id. ¶ 43.)

Moving Defendants are alleged to be officers, shareholders, and directors of GEGI. They now move to dismiss the complaint pursuant to CCP § 389 on the basis that Plaintiff failed to join Sung Woon Yoo, Universidad Mayor de San Simon, of Cochabamba, Bolivia (“UMSS”), the Bolivian Ministry of Hydrocarbon and Energy, the Bolivian Vice Ministry of Energy Technologies, and “seven tribes of indigenous peoples of the Plurinational State of Bolivia.” (Mot. 1:9-21.) According to the moving defendants, these parties are either parties to the JVA, or are intended beneficiaries of the JVA. Moving defendants assert that the JVA is the gravamen of the complaint. As explained below, the Court disagrees with that construction of the complaint.

A failure to join an indispensable party may be raised by way of a motion to dismiss. (E.g. Union Carbide Corp. v. Superior Court (1984) 36 Cal.3d 15, 22.)

CCP § 389(a) provides that “[a] person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest. If he has not been so joined, the court shall order that he be made a party.” (CCP § 389(a).)

“If a person as described in paragraph (1) or (2) of subdivision (a) cannot be made a party, the court shall determine whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed without prejudice, the absent person being thus regarded as indispensable. The factors to be considered by the court include: (1) to what extent a judgment rendered in the person’s absence might be prejudicial to him or those already parties; (2) the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; (3) whether a judgment rendered in the person’s absence will be adequate; (4) whether the plaintiff or cross-complainant will have an adequate remedy if the action is dismissed for nonjoinder.” (CCP § 389(b).)

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV005172: INDONG ADVANCED MATERIALS, INC vs GREEN ENERGY GLOBAL, INC, AN ARIZONA CORPORATION, et al. 06/06/2024 Hearing on Motion to Dismiss in Department 53

The Court must first note that Defendants’ motion is organized in a manner that is difficult to follow and many times appears to repeat their analysis of the same arguments. Defendants’ moving papers contain page after page of legal citation to cases discussing CCP § 389 and its federal counterpart, but do very little to apply that repeated citation to Plaintiff’s complaint. Moreover, in analyzing the whether the parties Defendants argue should be named in this action, they attempt to set forth a version of the lawsuit which is not reflected in Plaintiff’s complaint.

In attempting to establish that the missing parties meet the definitions in CCP § 389(a), because they are either parties who in their absence complete relief cannot be accorded among the present parties, or parties claiming an interest relating to the subject matter, Defendants focus almost exclusively on the JVA which they claim is central to this case. Defendants indicate that Plaintiff has alleged in the complaint that JVA was falsified and seeks to declare it void. As noted, Defendants argue that the JVA was signed by certain of the parties who have not been named in the complaint and also that under the JVA, those unnamed parties contracted with GEGI for public works projects and would lose the benefits of obligations GEGI owes under the JVA.

First, in order to even reach the question of whether the case could be dismissed pursuant to CCP § 389(b), the Court first has to determine whether the non-named parties are considered necessary parties under CCP § 389(a). “If a person is determined to qualify as a ‘necessary’ party under [CCP § 389(a)], courts then determine if the party is also ‘indispensable.’” (City of San Diego v. San Diego City Employees' Retirement System (2010) 186 Cal. App. 4th 69, 83.) Only if a finding is made that a non-named party is necessary will the Court proceed to analyze whether a case may be dismissed. “It is under subdivision (b) of section 389 that a court must decide whether a party is truly indispensable; if a party is found, under subdivision (a), to be necessary to the action but cannot be made a party, the court ‘shall determine whether in equity and good conscience the action should proceed among the parties before it’ or whether the action should be dismissed, ‘the absent person being thus regarded as indispensable.’ In making this determination the court should consider the four factors listed in the statute.” (People ex rel.

Lungren v. Cmty. Redevelopment Agency (1997) 56 Cal. App. 4th 868, 879-880.)

Here, the Court finds that Defendants have not shown that the non-named parties are necessary under CCP § 389(a).

Complete Relief

First, Defendants have not demonstrated that in their absence “complete relief cannot

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV005172: INDONG ADVANCED MATERIALS, INC vs GREEN ENERGY GLOBAL, INC, AN ARIZONA CORPORATION, et al. 06/06/2024 Hearing on Motion to Dismiss in Department 53

be accorded among those already parties.” (CCP § 389(a)(1).) Defendants attempt to argue that Plaintiff has alleged that the JVA is false and seeks a declaration in that regard. They argue that before the MLA, and the related documents can be declared void, the Court must first find the JVA void. Not only do Defendants fail to provide any legal support for that proposition, but it relies upon a construction of the complaint of which the complaint is not susceptible. Indeed, Defendants do not attempt to actually address the allegations of the complaint and the individual causes of action to demonstrate how in the absence of any parties to the JVA, or any supposed beneficiaries of the JVA, that complete relief cannot be “accorded among those already parties.” Indeed, Plaintiff’s breach of contract claim is premised on an alleged breach of the MLA, and the associated amendments of the MLA, not the JVA. (Comp. ¶¶ 45- 53.)

The parties to the MLA and the related amendments are alleged to be Plaintiff, GEGI, GEC, and Quantum. (Id.) All of these parties are named. Plaintiff alleged that GEGI/GEC were to assign or license two mining rights to Plaintiff under the MLA but that they failed to do so and failed to provide proof that they have any rights despite claiming they had such rights. Plaintiffs alleged that after the parties entered into the MLA on July 27, 2022, Defendant Khan presented Plaintiff with the JVA in late August 2022, as “purported evidence” that GEGI/GEC actually had the lithium mining rights. (Comp. ¶¶ 24-29.)

Plaintiff alleged that it wired $10 million to GEGI in reliance of the representations but later learned that YLB,, announced that it did not have any signed agreements for lithium extraction in Bolivia. (Id. ¶¶ 33-35.) Plaintiff alleges that its investigation revealed that the JVA was fabricated because certain signatures by the YLB were affixed to it without knowledge or consent. (Id. ¶ 41.)

Despite the references in the complaint to the JVA, Plaintiff is not asserting any rights under the JVA, to which it is not a party, nor is Plaintiff seeking to obtain a declaration that the JVA is void. The only allegations in the complaint alleging that any document is void are the allegations that the MLA and associated amendments are void. (Comp. ¶¶ 49, 55, 81.) In the declaratory relief cause of action Plaintiff only seeks a declaration that the “MLA, the Amendment and Substitution of Parties, the Second Addendum, the Promissory Note, and the guarantee and related security documents” are void. (Id. ¶ 81.)

Nowhere in the complaint does Plaintiff seek to have the JVA declared void. While Plaintiff cites to the JVA as an evidentiary fact to support the allegations that Defendants were falsely representing that they in fact had mining rights when they did not, contrary to Defendants’ assertion in the motion, the gravamen of the complaint is not that the JVA is a false document. The gravamen of the complaint is that Defendants allegedly induced Plaintiff to enter the MLA and pay them $10 million based on representations that they had certain mining rights in Bolivia.

The JVA was allegedly prepared after the MLA was executed and was an alleged ruse to assure Plaintiff that Defendants in fact had the mining rights which the MLA covered. The absence of the non-named parties does not in any manner preclude the Court from according complete

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV005172: INDONG ADVANCED MATERIALS, INC vs GREEN ENERGY GLOBAL, INC, AN ARIZONA CORPORATION, et al. 06/06/2024 Hearing on Motion to Dismiss in Department 53

relief to the parties already named. Defendants also argue that if Plaintiff were successful in having the JVA declared false then GEGI will face a multi million dollar judgment by the unnamed parties. Defendants argue that GEGI, would have to go to Bolivia to sue UMSS because UMSS was responsible for obtaining signatures in the JVA. This argument does not in any manner show that complete relief cannot be accorded to the parties already named, again because Plaintiff is not seeking to have the JVA declared void.

Even indulging that argument and assuming that Plaintiff obtained a factual finding in this action that Defendants made an intentional misrepresentation by way of the JVA, this still does not show that complete relief cannot be afforded to the parties here. Joinder is only required “when the absentee’s nonjoinder precludes the court from rendering complete justice among those already joined Properly interpreted, [the ‘complete relief’ clause] is not invoked simply because some absentee may cause future litigation.

The effect of a decision in the present case on the absent party is immaterial under the ‘complete relief’ clause. The fact that the absentee might later frustrate the outcome of the litigation does not by itself make the absentee necessary for complete relief. The ‘complete relief’ clause does not contemplate other potential defendants, or other possible remedies.” (Countrywide Home Loans, Inc. v. Superior Court (1999) 69 Cal.App.4th 785, 794.) “Simply put, the term complete relief refers only ‘to relief as between the persons already parties, and not as between a party and the absent person whose joinder is sought.’’ (Id. [emphasis added].)

While Defendants suggest that GEGI will defend this action by asserting that the JVA was not forged, this does not change the analysis. Whether or not that defense is or is not raised, it does not require the presence of any non-named parties.

Defendants also argue that complete relief cannot be afforded in the absence of Sung Woon Yoo, who is Plaintiff’s president, because he is alleged to have signed a personal guarantee of the MLA which Plaintiff seeks to have declared void. But even in his absence complete relief among the parties named can be accorded. This is true because Plaintiff seeks to void the MLA based on Defendants’ misrepresentations to Plaintiff regarding their ownership of mining rights. The personal guarantee is simply an associated document which will rise or fall depending on whether the MLA is declared void.

Even if assumed that Plaintiff could not seek to void the guarantee in Yoo’s absence, complete relief in the form of damages for a breach of the MLA and for fraud, and declarations voiding the MLA can be obtained. Plaintiff’s president’s presence in this lawsuit as a named party is not necessary in order to accord complete relief among the parties named.

Defendants attempt to argue in reply that the MLA provides royalty payments to the non-named parties. Defendants suggest that Plaintiff failed to address this argument in its opposition, but as noted above, the instant motion was difficult to follow, and it is not clear that Defendants raised this argument in the moving papers. Nevertheless, this

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV005172: INDONG ADVANCED MATERIALS, INC vs GREEN ENERGY GLOBAL, INC, AN ARIZONA CORPORATION, et al. 06/06/2024 Hearing on Motion to Dismiss in Department 53

point has no bearing on whether complete relief can be afforded among the parties already present. Again, any effect a decision in this case has on any absent parties is not relevant to the complete relief provision in CCP § 389(a)(1).

Further, the Court must also note that there are causes of action for professional negligence and unjust enrichment which Defendants do not analyze.

Quite simply, the presence of the non-named parties is not required to allow complete relief to be afforded amongst the parties already named.

Interests of Non-Named Parties

Nor have Defendants shown that the non-named parties are necessary under either CCP § 389(a)(2)(i) or (ii). Again, these subdivisions relate to one claiming “an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest. If he has not been so joined, the court shall order that he be made a party.” (CCP § 389(a).) No such showing has been made here.

A threshold requirement under this subdivision is that an absent person claim an actual interest in the subject matter of the action. The interest must be one that is “directly and immediately” impacted by the outcome of the instant action. (Countrywide Home Loans, Inc., supra, 69 Cal.App.4th at 794.) Defendants’ argument in this regard that the signatories to the JVA and the claimed beneficiaries under the JVA claim an interest in this action rests again on the fundamentally incorrect premise that the gravamen of the complaint is the JVA.

The Court has already rejected that construction above. This case is about the MLA between Plaintiff and GEGI/GEC/Quantum. All of the parties to the MLA are named in the complaint. There can be no argument that the non-named parties have any interest in contracts to which they are not parties. Again, Plaintiff does not, as Defendants incorrectly contend, seek to have the JVA declared void. First, there is no actual showing that any disposition in this action will in any manner impair the interests of any non-named party, much less “directly and immediately”.

Indeed, if Plaintiff prevails on its breach of contract claim against GEGI/GEC/Quantum, it will recover damages based on a breach of the MLA, a contract to which the non-named parties are not signatories or third party beneficiaries. If Plaintiff prevails on a fraud claim based on its allegations that Defendants falsely represented they had certain mining rights as represented in the MLA, Plaintiff will be entitled to damages, but again this has nothing to do with the non-named parties. The same is true with the other causes of action.

Defendants’ assertion that this action will somehow lead to the non-

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV005172: INDONG ADVANCED MATERIALS, INC vs GREEN ENERGY GLOBAL, INC, AN ARIZONA CORPORATION, et al. 06/06/2024 Hearing on Motion to Dismiss in Department 53

parties being deprived of rights is entirely speculative and not untethered to the actual allegations of the complaint.

In addition, if as alleged, Defendants falsely created the JVA in order to assure Plaintiff that they had the mining rights which were the subject of the MLA, than the absent parties would certainly welcome a determination that the JVA was false. Thus, even indulging Defendants’ argument that this case has anything to do with the JVA, at the very most, parties to the JVA could be said to be a proper party but “not a necessary party because as a practical matter his ability to protect his interest was not impaired or impeded.” The same holds true with respect to any argument that the MLA required royalty payments to the non-named parties.

This is true because any party to the JVA, or any party potentially entitled to royalty payments under the MLA (an agreement premised on alleged false representations by Defendants), not named in the complaint would have their interest adequately represented either by Plaintiff in asserting that the JVA was false, or Defendants arguing it was not. (Citizens Assn. for Sensible Development of Bishop Area v. County of Inyo (1985) 172 Cal. App. 3d 151, 161.)

The same is true with respect to Yoo. As discussed above, his interests are adequately protected by Plaintiff.

Nor have Defendants shown that any of the non-named parties are required under CCP § 389(a)(2)(ii). First, the threshold requirement that the absent party claims an interest in the subject matter of the action has been rejected. In any event, this subdivision requires a showing that in the absence of the non-named parties, this lawsuit will expose Defendants to a “substantial risk of incurring double, multiple, or otherwise inconsistent obligations.” (CCP § 389(a)(2)(ii).) However, “‘substantial risk’ means more than a theoretical possibility of the absent party’s asserting a claim that would result in multiple liability.

The risk must be substantial as a practical matter.” (Countrywide Home Loans, Inc., supra, 69 Cal.App.4th at 796.) At the very most Defendants have posited a theoretical possibility that somehow in this action the JVA will be declared void and the GEGI will be faced with another lawsuit from the nonnamed parties for obligations promised to them under the JVA. But again, Plaintiff does not seek to have the JVA declared void. Defendants present no actual argument that the actual allegations in the complaint seeking damages for breach of the MLA and a declaration that the MLA and associated documents (not the JVA) are void presents a “substantial risk of incurring double, multiple, or otherwise inconsistent obligations.” (CCP § 389(a)(2)(ii).)

There is no such risk. Further, the Court would again note that even if the JVA were at issue in this case, any interest that the non-named parties would have in the JVA, either to have it declared void, or valid, are adequately protected by the parties in this action. Once again, “where existing and absent parties' interests are sufficiently aligned such that the absent party's rights will not be affected or impaired

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV005172: INDONG ADVANCED MATERIALS, INC vs GREEN ENERGY GLOBAL, INC, AN ARIZONA CORPORATION, et al. 06/06/2024 Hearing on Motion to Dismiss in Department 53

by the judgment or proceeding, the absent party need not be joined.” (City of San Diego v. San Diego City Employees' Retirement System (2010) 186 Cal. App. 4th 69, 84.)

Defendants have not shown that any of the non-named parties are necessary parties under CCP § 389(a)(2)(ii).

In short, Defendants have failed to show that the non-named parties are necessary parties under CCP § 389(a). As a result, the Court need not and does not reach the question under CCP § 389(b) of whether the non-named parties cannot be made a party, and if so, the related inquiry of “whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed without prejudice, the absent person being thus regarded as indispensable.” Again, that inquiry is only made when there is a showing that that the absent parties are necessary under CCP § 389(a).

Given the above, the Court need not consider Plaintiff’s argument in opposition related to GEGI being in default and whether or not Defendants can raise any arguments on its behalf.

Defendants’ motion is denied.

The minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or other notice is required.