Grace Jeon, et al. v. Xingchen Li, et al.

(Pomona Courthouse South: Dept. O) August 26, 2026 DEPARTMENT O LAW AND MOTION RULINGS The Court may change tentative rulings at any time. Therefore, attorneys are advised to check this website to determine if any changes or updates have been made to the tentative ruling. Counsel may submit on the tentative rulings by calling the clerk in Dept. O at 909-802-1126 before 8:30 the morning of the hearing. Submission on the tentative does not bind the court to adopt the tentative ruling at the hearing should the opposing party appear and convince the court of further modification during oral argument. The Tentative Ruling is not an invitation, nor an opportunity, to file any further documents relative to the hearing in question. No such filing will be considered by the Court in the absence of permission first obtained following ex-parte application therefore.

(1) NOTICE OF DEMURRER AND DEMURRER OF AION MINING LLC TO THIRD AMENDED COMPLAINT is OVERRULED. (2) NOTICE OF DEMURRER AND DEMURRER OF AION VENTURES LLC TO THIRD AMENDED COMPLAINT is OVERRULED. (3) NOTICE OF DEMURRER AND DEMURRER OF YING XUE TO THIRD AMENDED COMPLAINT is OVERRULED. (4) NOTICE OF DEMURRER AND DEMURRER OF XINGCHEN LI TO THIRD AMENDED COMPLAINT is OVERRULED.

Background

This case involves an alleged Ponzi scheme modernized by representations of a "20x" return on an e-commerce venture and promises of weekly distributions of 3-6% on a cryptocurrency exchange service. On December 30, 2024, Plaintiffs GRACE JEON and DENISE STRAESSLER, filed suit against Defendants XINGCHEN LI, an individual; YING XUE, an individual; AION GLOBAL LLC, AION MINING LLC, AION VENTURES LLC, AION HUB LLC for the following causes of action (COAs): 1-7. Violation Of Cal. Corporations Code Sec.25110, Et Seq.

8. Breach Of Fiduciary Duty (Jeon Tik Tok) 9. Breach Of Fiduciary Duty (Straessler Tik Tok 10. Breach Of Fiduciary Duty (Jeon Titan) 11. Breach Of Fiduciary Duty (Straessler Titan) 12. Breach Of Fiduciary Duty (Jeon Bh) 13. Breach Of Fiduciary Duty (Straessler Bh) 14. Breach Of Fiduciary Duty (Straessler Aa) 15. Conversion (Jeon)

16. Conversion (Straessler) 17. Penal Code 496(C) 18. Accounting 19. Declaratory Relief (Jeon) 20. Declaratory Relief (Straessler) On May 15, 2026, a third amended complaint (3AC) was filed asserting 26 COAs: 1-7. Violation of cal. Corporations code Sec.25110, et seq.

8. Breach of fiduciary duty (jeon tiktok) 9. Breach of fiduciary duty (straessler tik tok) 10. Breach of fiduciary duty (jeon titan) 11. Breach of fiduciary duty (straessler titan) 12. Breach of fiduciary duty (jeon bh) 13. Breach of fiduciary duty (straessler bh) 14. Breach of fiduciary duty (straessler aa) 15. Conversion (jeon) 16. Conversion (straessler) 17. Penal code 496(c) 18. Accounting 19. Declaratory relief (jeon) 20. Declaratory relief (straessler) 21. Fraudulent transfer - actual fraud (civil code Sec.3439.04) (alteri) 22.

Fraudulent transfer - constructive fraud (civil code Sec.3439.05) (yc lp) 23. Fraudulent transfer - actual fraud (civil code Sec.3439.04) (property) 24. Fraudulent transfer - constructive fraud (civil code Sec.3439.04) (alteri) 25. Fraudulent transfer - constructive fraud (civil code Sec.3439.04 (yc lp) 26. Fraudulent transfer - constructive fraud (civil code Sec.3439.04) (property) On June 22, 2026, the instant demurrers were filed. [1] On June 30, 2026, Plaintiffs filed their oppositions to two of the demurrers (to Li and Xue's demurrers).

On August 12, 2026, Plaintiffs filed their oppositions to the remaining demurrers (Aion Venture and Aion Mining). To date, as of Friday, August 21, 2026, no reply has been filed (Due 5 court days before the hearing, Wed., 8/19).

Discussion [2] Re: Aion Mining Defendant AION MINING LLC demurs to the 18 th COA for Accounting and the 19 th and 20 th COAs for declaratory relief pursuant to Code of Civil Procedure sections 430.10(e) and (f). For reasons to be discussed, the court overrules the demurrer in its entirety.

18 th COA: Defendant demurs to this COA on the grounds that "an accounting requires a fiduciary or quasi-fiduciary relationship between the plaintiff and the specific defendant, or facts establishing that the defendant received and held funds belonging to the plaintiff such that the amount due cannot be ascertained without the defendant's records." (Demurrer p. 2.) However, while Defendant cites to Teselle v. McLoughlin (2009) 173 Cal.App.4th 156 to support its position, that case actually holds the contrary: "a fiduciary relationship between the parties is not required to state a cause of action for accounting.

All that is required is that some relationship exists that requires an accounting." (Id. at p. 179.) And here, as explained in opposition, some relationship is alleged: Aion Mining is the entity through which Li represented he acquired an Oklahoma mining site with Titan investor funds (TAC P.P. 33, 46); Aion Mining is alleged to have held a partial ownership interest in that site, the sale of which generated a $267,386.63 distribution that Li was obligated to pay over to Titan investors and Aion Mining is alleged to be one of the commingled "AION ENTITIES" that are the alter egos of Li (TAC P.P. 25-26).

Plaintiffs, as Titan investors, were promised a percentage of a collective 49% interest in the assets and earnings of Aion Ventures, which LI represented owned 100% of Aion Mining. (Opp. p. 7, citing TAC P.P. 46, 49, 127, 131.) Accordingly, Plaintiffs have alleged that Aion Mining holds money that it is obliged to surrender to Plaintiffs such that an accounting COA is viable considering t he accounts are so complicated that an ordinary legal action demanding a fixed sum is impracticable. (See Opp. p. 7, quoting Jolley v.

Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 910.) No reply has been filed to address the foregoing.

Declaratory Relief COAs: Defendant demurs on the grounds that "the twenty-three other causes of action in the TAC covering rescission, breach of fiduciary duty, conversion, accounting, and fraudulent transfer" sufficiently address the rights of the parties Such that these COAs are duplicative. However, as noted in opposition, this argument refuted by the pleading alone. For one, Aion Mining is named as a defendant in only three causes of action in the entire TAC: the Eighteenth (accounting)1 and the Nineteenth and Twentieth (declaratory relief).

It is not named in any of the rescission, breach of fiduciary duty, conversion, Penal Code section 496(c), or fraudulent transfer causes of action the demurrer invokes. Plus, while the accounting claim in the 18th COA names Aion Mining, the remedy sought there, which is a determination of the amounts owed, is distinct from the remedy of declaratory relief. In contrast, the declaratory relief claims seek to establish the ownership basis under which any amounts determined in an accounting would be due. (Opp. p. 10, fn. 1.)

What is more, to support its argument that " A demurrer to a duplicative declaratory relief claim is properly sustained," Defendant cites California Ins. Guarantee Assn. v. Superior Court (1991) 231 Cal.App.3d 1617. However, as correctly observed in opposition, that case provides no such rule. That case involved the California Insurance Guarantee Association ("CIGA") seeking a writ of mandate directing the trial court to vacate its order staying the trial of a declaratory relief action commenced by CIGA to determine issues of coverage under a liability policy issued by a now insolvent insurer. (Id. at p. 1620.)

No reply has been filed to address the foregoing. Thus, in sum, as the arguments in demurrer are neither supported by the allegations--which the court must take as true--nor the legal authority, the court OVERRULES the entirety of Aion Mining's demurrer.

Re: Aion Ventures LLC Defendant demurs to the 3 rd and 4 th COAs for Recission and 18 th -20 th COAs. The 3 rd and 4 th COAs for RESCISSION UNDER CORPORATIONS CODE Sec.25110 (JEON TITAN INVESTMENT) and RESCISSION UNDER CORPORATIONS CODE Sec.25110 (STRAESSLER TITAN INVESTMENT), respectively, allege the following: Defendants LI and/or AION VENTURES offered for a sum two NFTs which Defendant LI alleged in writing represented a 2% interest in an investment which defendants referred to as "Project Titan" or "Aion Dao"; Defendant LI represented that Aion Dao would own 49% of the assets and earnings of LI's entity, AION VENTURES, which LI represented owned 100% of AION MINING; his sale constituted an issuer transaction in that it was an initial offering of a Security for capitalization purposes; at the time of Plaintiffs' acquisition, the sale was not qualified as any kind of securities transaction with the Commissioner of Financial Protection and Innovation; LI provided wire instructions for AION GLOBAL LLC to investors for the Titan project; "As AION GLOBAL's bank account was designated for receiving Titan investment funds and LI was managing AION GLOBAL during this period, AION GLOBAL served as an issuer or co-issuer of the Titan investment securities." (3AC pp. 45-48.)

Defendant demurs to these two COAs on the grounds that Corporations Code section 25110 provides a right of rescission against the issuer of an unqualified security i.e., the entity that either offers the securities, receives investment proceeds, or undertakes some obligation to investors but here, "[n]ot one dollar of [Plaintiffs'] Titan consideration was paid to Aion Ventures" such that Aion Ventures is not an insurer. (Demurrer p. 8.) However, as correctly argued in opposition, the demurrer incorrectly assumes that liability turns on which entity received the investment consideration. (Opp. p. 6.)

Section 25503 expressly provides that, in addition to the seller, "[a]ny person on whose behalf an offering is made . . . shall be jointly and severally liable under this section." (Corp. Code, Sec. 25503.) Plus, the legislature has intended on expanding liability to various participants in the transaction. (See generally Moss v. Kroner (2011) 197 Cal.App.4th 860.) Here, it is alleged that the Titan offering was made on behalf of Aion Ventures: the NFTs were sold as a 49% interest in Aion Ventures' assets and earnings, in the form of "a unit representing the division of assets of . . .

AION VENTURES." (TAC P.P. 46, 49, 127, 128, 131.) Accordingly, for purposes of the demurrer, Aion Ventures appears liable under section 25503 whether or not the purchase money passed through its own account. (Opp. p. 6.) (The court need not address Plaintiffs' other arguments such as alter ego and single-enterprise allegations to support liability.) No reply has been filed to address the foregoing.

As for the declaratory relief COAs, as explained above, no fiduciary relationship is required. Plaintiffs, as Titan investors, are alleged to own a collective 49% interest in the assets and earnings of Aion Ventures (TAC P.P. 46, 49, 127, 131); Aion Ventures is alleged to have held those assets, including its ownership of Aion Mining and the mining operations, and to have generated distributable revenue, such as the $267,386.63 distribution from the Oklahoma operation (TAC P. 54); and the amount due to Plaintiffs "cannot be ascertained without an accounting" given Li's pervasive commingling of funds among the AION ENTITIES (TAC P.P. 25, 237). As for the declaratory relief COAs, as stated above, Defendant has not provided authority to suggest duplicative COAs are subject to a demurrer. [3] Thus, the court overrules Aion Venture's demurrer in its entirety.

Re: Defendant Xue Defendant demurs to the 1 st and 2 nd COA for rescission of TikTok Project investments under Corporations Code section 25110. Xue's liability is premised on Corporations Code section 25504. In turn, Corporations Code section 25504 provides, in its entirety, the following: "Every person who directly or indirectly controls a person liable under Section 25501 or 25503, every partner in a firm so liable, every principal executive officer or director of a corporation so liable, every person occupying a similar status or performing similar functions, every employee of a person so liable who materially aids in the act or transaction constituting the violation, and every broker-dealer or agent who materially aids in the act or transaction constituting the violation, are also liable jointly and severally with and to the same extent as such person, unless the other person who is so liable had no knowledge of or reasonable grounds to believe in the existence of the facts by reason of which the liability is alleged to exist." (emphasis added.)

Plaintiffs allege the following: she is the Managing Member of AION GLOBAL LLC; she personally signed a Statement of Information filed with the California Secretary of State for AION; "This filing listed XUE as the sole manager/member of AION GLOBAL. Under AION GLOBAL's Articles of Organization, "The LLC will be managed by all limited liability company member." Since XUE was the only member listed from formation through September 27, 2024 she had management authority over all corporate decisions during that entire period"; and "A s XUE was the sole managing member of AION GLOBAL at the time the investments were made she had control of the entity and, as alleged herein, had knowledge of the investments." (3AC pp. 2-5; p. 43.)

Here, Xue argues that the entire 3AC is premised on actions/statements by Li, not Xue. "Xue's name does not appear in any investor communication, any offering document, any fund-receipt record, or any distribution decision described in the TAC." (Demurrer p. 7.) The court does not that Plaintiffs' focus on Xue's status as a managing member misses how the statue requires that the individual, regardless of if a director or office, must materially aid in the violation. (And Plaintiffs' recitation of the statute omits that crucial language.) [4] That said, Xue's demurrer is tacitly attempting to adjudicate an affirmative defense.

The only escape is the statute's good-faith defense--available to a secondary actor who "had no knowledge of or reasonable grounds to believe in the existence of the facts" giving rise to liability (Corp. Code, Sec. 25504)--which is an affirmative defense that cannot be adjudicated on demurrer and which the TAC affirmatively negates by alleging Xue knew of the investments (TAC P.P. 31, 118, 122). No reply has been filed. Thus, the court overrules the entirety of Xue's demurrer.

Re: Li Defendant Li demurs to the 15 th and 16 th for conversion and the 19 th and 20 th COA for declaratory relief. As for the declaratory relief COAs, for reasons explained above, the demurrer is overruled. As for the conversion COAs, both Plaintiffs seek return of their monies ($764,994/Jeon and $800,049/Straessler) by knowingly knowingly and intentionally taking possession of the funds without giving access to the respective investments and returns. The conversion challenge rests on the premise that commingled investment funds can never be the subject of conversion because they are not a "specific, identifiable sum."

But as noted in opposition, California law is to the contrary, and so are the very cases the demurrer cites. Indeed, as the demurrer's own lead authority holds, "California cases permitting an action for conversion of money typically involve those who have misappropriated, commingled, or misapplied specific funds held for the benefit of others," where "the amount of money converted was readily ascertainable." (PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384, 396.)

No reply has been filed. Thus, as commingling by the wrongdoer does not immunize him from a conversion claim, the court overrules the entirety of this demurrer.

Conclusion

Based on the foregoing, all four demurrers are overruled. [1] It appears moving defendants reserved hearings for demurrers and two motions to strike, but no motions to strike are on file. [2] The parties filed a stipulation to file a TAC to address deficiencies raised during meet and confer efforts. However, it is unclear whether the parties met and conferred with respect to these demurrers as Plaintiffs advance various arguments and authorities and the lack of reply but suggests the lack of merit with the demurrers. [3] Plaintiffs also argue that whether a declaration is "necessary or proper at the time under all the circumstances" is committed to the trial court's discretion under section 1061. (Opp. p. 9, citing Meyer v.

Sprint Spectrum L.P. (2009) 45 Cal.4th 634.) [4] Notwithstanding, on a demurrer, Plaintiffs are entitled to reasonable inferences in their favor. (See Bank of New York Mellon v. Citibank, N.A. (2017) 8 Cal.App.5th 935, 952 ["On demurrer, we draw all reasonable inferences in favor of the plaintiff."].) Accordingly, here, the TAC's allegations that Xue as LI's spouse and as "a participant in the Aion Ventures Discord community" who "was aware of the nature of the investments described herein" (TAC P. 31) raises an inference that at at the time the investments were made, Xue had control of the entity and had knowledge of the investments and is therefore liable.