Huawei Ma, Trustee of The Liu and Ma Family Trust vs. Li

Li also asserts that Plaintiff’s claims do not implicate any “unwaivable rights” under California law. Li thus contends that the Court should dismiss this case on forum non conveniens grounds, or alternatively, stay this litigation.

Plaintiff, Huawei Ma, as Trustee of The Liu and Ma Family Trust, derivatively on behalf of Breakthrough Genomics Inc. (“Plaintiff” or “Ma”) contends that Li failed to inform the Court that BTG is now a California corporation, having converted in 2025 and been recognized as such by the California Secretary of State pursuant to Corporations Code section 1153 and 1157(d). Plaintiff asserts that equitable estoppel and waiver bars BTG from denying it is a California Corporation as BTG: (1) designated California as the exclusive forum and governing law in Plaintiff’s 2020 Stock Purchase Agreement (“SPA”); (2) failed to provide Plaintiff with the 2017 Bylaws, which are not publicly available; (3) converted to a California corporation and has consistently held itself out as such before the California Secretary of State; and (4) represented itself as a California corporation in thirdparty contracts.

Plaintiff asserts that Plaintiff had no reasonable expectation of a Delaware forum clause; that BTG is not a publicly traded company and its Bylaws were never publicly available; that BTG did not provide Plaintiff with the 2017 Bylaws when she purchased her shares in California in 2020; and that the only agreement executed by both parties is the SPA which expressly designates California as the exclusive forum and governing law for disputes arising from Plaintiff’s stock purchase. Plaintiff also asserts that California Corporations Code section 2116 expressly authorizes claims for breach of fiduciary duty against directors of foreign corporations that conduct intrastate business be brought in this State; that Ma’s primary language is Mandarin Chinese; that Li knew that Ma’s English was limited; that Ma and Li communicated primarily in Mandarin; and that Ma heavily relied on Li during Plaintiff’s purchase of BTG stock.

Plaintiff additionally asserts that even if the forum selection clause in the 2017 Bylaws was valid, the Court should decline to enforce it as unreasonable and contrary to California public policy, as it would be unreasonable to force this derivative action into Delaware when BTG converted to a California corporation many months before this action was filed in October 2025; when BTG has maintained its principal place of business and operations in California since its inception; when a majority of its shareholders and Li are California residents; when California corporate governance rules apply since BTG is now a California corporation; and as California has a compelling public policy interest in regulating the internal affairs, fiduciary conduct, and shareholder protections of corporations formed and operating within its borders.

Plaintiff further asserts that Delaware lacks personal jurisdiction over indispensable parties including BTG which is headquartered in Irvine, California, Li who is a resident of Arcadia, California, and the other named Defendants who have no connection to Delaware – BTGenomics Professional Building LLC, Help Undiagnosed Children Foundation, BTinsight, John Buda, and Buda Law Group. Plaintiff contends that the other corporate Defendants in this litigation are all corporations formed and operating in California.

Finally, Plaintiff asserts that Plaintiff’s derivative Complaint seeks recovery of real property located in Irvine, California, and that Code of Civil Procedure section 392(a) requires that actions for the recovery of real property or interests therein be tried in the county where the property is situated such that a constructive trust imposed on the Irvine property must be litigated in California. Plaintiff contends only the Superior Court of Orange County has jurisdiction over both the indispensable parties and the real property at issue.

In reply, Li contends that Plaintiff’s opposition rests entirely on a false factual premise that BTG is now a California corporation whose internal affairs are governed exclusively by California law. Li asserts that the February 4, 2025 California conversion filing was an unauthorized error committed without board approval, and that Delaware has never recognized any change in BTG’s corporate status. Li also asserts that even assuming arguendo that the California filing had some legal effect, it cannot retroactively invalidate the 2017 Bylaws that governed BTG at the time of Plaintiff’s investment and during the alleged misconduct as all of the misconduct alleged in the Complaint that forms the basis of this derivative action occurred years before the February 4, 2025 conversion filing.

Li contends that Plaintiff’s arguments of equitable estoppel, the 2020 Stock Purchase Agreement’s forum clause, and public policy fail. Li asserts that Plaintiff had actual notice of BTG’s Delaware corporate status in 2020 and 2025; that the SPA’s forum selection clause govern disputes arising out of the contractual relationship between Plaintiff and BTG, but does not govern this derivative action. Li asserts that such claims are governed by the internal affairs doctrine and by BTG’s 2017 Bylaws, which contain a Delaware forumselection clause.

Li additionally argues that lack of jurisdiction over certain other defendants is for a matter for the Delaware court to address and does not render the forum selection clause in the Bylaws unreasonable, as well as that Plaintiff has not shown that the absence of personal jurisdiction over any particular defendant would defeat enforcement of the Bylaws as to the claims against Li and BTG. Lastly, Li asserts that Plaintiff’s reliance on Code of Civil Procedure section 392(a) is misplaced in this forum non conveniens motion as Section 392(a) addresses venue within California and does not speak to whether California or Delaware is the more appropriate forum for a derivative action governed by Delaware law.

The enforceability of a forum selection clause is properly raised by a motion to stay or dismiss for inconvenient forum under Code of Civil Procedure sections 410.30(a) and 418.10(a)(2). (Bushansky v. Soon-Shiong (2018) 23 Cal.App.5th 1000, 1005.)

“ ‘In California, the procedure for enforcing a forum selection clause is a motion to stay or dismiss for forum non conveniens . . ., but a motion based on a forum selection clause is a special type of forum non conveniens motion. The facts that apply generally to a forum non conveniens motion do not control in a case involving a mandatory forum selection clause.’ [Citation.]” (Richtek USA, Inc. v. uPI Semiconductor Corp. (2015) 242 Cal.App.4th 651, 661.) “When a case involves a mandatory forum selection clause, it will usually be given effect unless it is unfair or unreasonable. [Citation.] Moreover, a court will normally reject any claims that the chosen forum is unfair or inconvenient. [Citation.] Also, ‘[a] court will usually honor a mandatory forum selection clause without extensive analysis of factors relating to convenience.’ [Citation.]” (Ibid.)

“While still a matter of trial court discretion under the doctrine of forum non conveniens, ‘forum selection clauses are valid and may be given effect, in the court’s discretion and in the absence of a showing that enforcement of such a clause would be unreasonable.’ [Citation.]” (EpicentRx, Inc. v. Superior Court of San Diego County (2025) 18 Cal.5th 58, 73 (“EpicentRx”.) “[A] party resisting enforcement of a forum selection clause cannot carry its burden of demonstrating unreasonableness by relying on ‘the factors of inconvenience and expense’ of the selected forum. [Citation.] ‘ “Mere inconvenience or additional expense is not the test of unreasonableness since it may be assumed that the plaintiff received under the contract consideration for these things.’ ” [Citation.]” (Ibid.) “[A] California resident will normally be bound by a forum selection clause.” (Ibid.) “One exception to this general rule of enforceability is grounded in public policy.” (Id. at p. 74.)

Looking to the burden, “in cases with a contractual forum selection clause, the burden of proof is on the plaintiff, the party resisting the motion. [Citations.]” (Intershop Communications v. Superior Court (2002) 104 Cal.App.4th 191, 198.) “[B]oth the United States Supreme Court and the California Supreme Court have placed a heavy burden on a plaintiff seeking to defeat such a clause, requiring it to demonstrate that enforcement of the clause would be unreasonable under the circumstances of the case. [Citations.]” (Lu v.

Dryclean-U.S.A. of California, Inc. (1992) 11 Cal.App.4th 1490, 1493.) California law “presume[s] a contractual forum selection clause is valid and place[s] the burden on the party seeking to overturn the forum selection clause.” (Schlessinger v. Holland America, N.V. (2004) 120 Cal.App.4th 552, 558.) “The party opposing enforcement of a forum selection clause ordinarily ‘bears the “substantial” burden of proving why it should not be enforced.’ [Citations.]” (Verdugo v. Alliantgroup, L.P. (2015) 237 Cal.App.4th 141, 147.)

A showing that the enforcement of a forum selection clause would be unreasonable includes that the forum selected would be unavailable or unable to accomplish substantial justice, and that the choice of forum have some rational basis in light of the facts underlying the transaction. (Cal-State Business Products & Services, Inc. v. Ricoh (1993) 12 Cal.App.4th 1666, 1679.)

Here, there is no dispute that BTG’s bylaws, which were adopted on September 18, 2017, contain a mandatory forum selection bylaw. Article V of the Bylaws states:

Section 1 Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be a state or federal court located within the state of Delaware, in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article V.

(ROA 26, Declaration of Wenhui Laura Li (“Li Decl.”), ¶ 4, BTG Bylaws, at p. 11, Article V.)

Plaintiff does not dispute that her derivative action and claims here fall within the scope of this forum selection bylaw. Ma brings this action derivatively on behalf of BTG and asserts claims for (1) breach of fiduciary duty, (2) negligence, (3) aiding and abetting, (4) accounting, (5) imposition of constructive trust, and (6) unjust enrichment based on allegations that Li, with the assistance of the other defendants, caused BTG to engage in transactions which were self-interested and misappropriated funds, as well as failed to comply with various requirements under Delaware law. The Complaint alleges that Plaintiff invested $1,000,000 in BTG in exchange for 8,301,000 shares of common stock of the company. (Verified Complaint, ¶ 15.)

Plaintiff first argues that BTG is no longer a Delaware corporation as it converted into a California Corporation on February 4, 2025. However, Plaintiff does not cite to any authority or otherwise show that this conversion, regardless of whether this conversion was unauthorized or mistaken, automatically invalidates the 2017 Bylaws.

The issue of the forum selection bylaw’s validity is governed by Delaware law. (Drulias v. 1st Century Bancshares, Inc. (2018) 30 Cal.App.5th 696, 702 (“Drulias”).) A forum selection bylaw is facially valid under Delaware law. (Ibid. citing to Boilermakers Local 154 Retirement Fund v. Chevron Corp. (Del. 2013) 73 A.3d 934, 944.)

At issue is whether California law otherwise renders the forum selection bylaw unenforceable in this state. A forum selection clause need not be subject to negotiation to be enforceable. [Citations.]” (Drulias, supra, 30 Cal.App.5th 696, 707.) “[A] forum selection clause contained in a contract of adhesion, . . . is ‘enforceable absent a showing that it was outside the reasonable expectations of the weaker or adhering party or that enforcement would be unduly oppressive or unconscionable.’ [Citation.]” (Id. at p. 708.)

In Drulias, the Court of Appeal found that the forum selection bylaw was consistent with the plaintiff’s reasonable expectations at the time of purchasing stock where the plaintiff “knew or should have known that the company was a Delaware corporation, and that consistent with Delaware law, its certificate of incorporation empowered its directors to amend the corporate bylaws unilaterally, subject to subsequent shareholder repeal. [Citations.]” (Ibid.) The Court of Appeal stated that given this knowledge, the plaintiff consented to the board’s unilateral adoption of corporate bylaws by purchasing stock, and that plaintiff reasonably should have expected that the company would prefer to litigate in Delaware, such that the reasonable expectation a stockholder like plaintiff should have is that the company’s board may adopt a forum selection bylaw designating Delaware as the exclusive forum for intracorporate disputes. (Id. at pp. 708-709.)

The Court of Appeal further noted that the plaintiff did not show that enforcement of the bylaw would be unduly oppressive or unconscionable. (Id. at p. 709.)

Here, Ma provides that the only forum-selection clause disclosed to Plaintiff was in the parties’ SPA which expressly selects California as the exclusive forum and governing law for all disputes arising out of or relating to the investment; that BTG and Li did not provide any copy of BTG’s 2017 Bylaws or corporate governance documents in 2020; that BTG’s Bylaws are not publicly available; and that BTG is a closely held, private corporation, controlled and directed by Li, who is the sole director, sole officer, and majority shareholder. (ROA 98, Declaration of Huawei Ma, ¶¶ 3, 7-10.) Ma provides that she only obtained a copy of BTG’s Bylaws when they produced it in response to her demand for inspection of books and records in 2025. (Id., ¶ 11.)

In reply, Li does not dispute these assertions. Instead, Li submits a supplemental declaration which provides that, in or around March 2020, during the period when Ma was considering her investment in BTG, Li sent two Service Agreement Term Sheets via WeChat, which Term Sheets expressly identified BTG as “a Delaware corporation.” (Reply Declaration of Wenhui Laura Li (“Reply Li Decl.”), ¶¶ 12-15, Exs. G-I.)

Ma attempts to distinguish Drulias on the ground that the case enforced a bylaw forum selection clause in the context of a large, publicly traded Delaware corporation, and where the court found that stockholders had reasonable expectations that Delaware would serve as the exclusive forum. However, the Court of Appeal’s determination as to whether to enforce the bylaw forum selection clause did not consider whether the corporation was publicly traded or was a privately-held corporation. Additionally, the SPA expressly states that the agreement is “made by and between Breakthrough Genomics Inc., a Delaware corporation (the “Company”), and THE LIU AND MA FAMILY TRUST.” (Li Decl., ¶ 6, Ex. D, SPA at p. 1, Introductory Paragraph.)

Based on the above, Plaintiff knew or should have known that BTG was a Delaware corporation. Nevertheless, that does not mean that the forum selection bylaw is consistent with Plaintiff’s reasonable expectations at the time she purchased stock in BTG.

Plaintiff also provides that the existence of a forum selection bylaw designating Delaware courts as the exclusive forum for derivative actions was outside her reasonable expectations as when she purchased stock in 2020, she understood that BTG operated in Arcadia, California and had always operated in California, that BTG had never operated in Delaware, and that Li is a resident of Arcadia, California. (Ma Decl., ¶¶ 16-17, 22.)

Additionally, the forum selection clause contained in the SPA states, part:

8.3 Governing Law; Venue. This Agreement is to be construed in accordance with and governed by the internal laws of the State of California without giving effect to any conflicts of law principles. All disputes and controversies arising out of or in connection with this Agreement shall be resolved exclusively by the state and federal courts located in Los Angeles County, California, and each party hereto agrees to submit to the jurisdiction of said courts and agrees that venue shall lie exclusively with such courts.

(Li Decl., ¶ 6, Ex. D, SPA at p. 5, § 8.3, emphasis added.)

The forum selection clause in the SPA which designates that all disputes and controversies arising out of or in connection with the SPA shall be resolved exclusively by the state and federal courts located in Los Angeles County, California, also indicates that although BTG was a Delaware corporation, BTG did not necessarily prefer to litigate in Delaware.

Under these circumstances, the evidence indicates that Plaintiff did not have notice of the forum selection bylaw, and the forum selection bylaw is not consistent with the reasonable expectations a stockholder like Plaintiff should have, and Plaintiff would not necessarily reasonably expect that BTG may have a forum selection bylaw designating Delaware as the exclusive forum for its intracorporate disputes. (Carnival Cruise Lines, Inc. v. Superior Court (1991) 234 Cal.App.3d 1019, 1026-1027 [holding that a forum-selection clause in a cruise contract was unenforceable as to a plaintiff if the court determines that such plaintiff did not have sufficient notice of the forum-selection clause prior to entering into the contract].) Based on the foregoing, the Court finds that the enforcement of the forum selection bylaw would not be reasonable.

Li cites to Bushansky v. Soon-Shiong (2018) 23 Cal. App. 5th 1000, 1011 (“Bushansky”) as an example of a case upholding and enforcing forum selection clauses adopted by Delaware corporations in their founding documents. However, Bushansky did not involve whether the mandatory forum selection provision was unreasonable. (Bushansky, supra, 23 Cal.App.5th at p. 1011, fn. 7.) Thus, for that issue, it is inapplicable.

Bushansky is relevant for its interpretation of the forum selection provision which had a qualification that the Delaware courts shall be the sole and exclusive forum for a derivative action brought on behalf of a corporation, “in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants,” which is at present in the forum selection bylaw here. (Bushansky, supra, 23 Cal.App.5th at p. 1004.) The Court of Appeal in Bushansky determined that this clause was a condition precedent, and concluded that “a court properly declines to exercise jurisdiction based on a contractual forum selection clause like this one [that is silent as to when personal jurisdiction in Delaware must exist] when consent to jurisdiction in the alternate forum is provided within a reasonable period of time.” (Id., at pp. 1003, 1007-1008, 1011.)

In Bushansky, the plaintiff argued that the forum selection provision was never triggered because condition precent that requires Delaware courts to have personal jurisdiction over all indispensable parties named as defendants was not met because Delaware courts lacked jurisdiction over one of the defendants at the time the action was filed in California. (Id., at p. 1003.) The Court of Appeal found that the condition was satisfied within a reasonable amount of time where the one defendant consented to Delaware jurisdiction less than two months after the action was filed. (Id. at p. 1009.)

Here, Plaintiff Ma asserts that all co-defendants, BTG, BTG Professional Building LLC, Help Undiagnosed Children Foundation, BTinsight, John Buda, and Buda Law Group, are California corporations or California residents. (Opposition, 13:2-8; Exs. B-C and E-J to Plaintiff’s Request for Judicial Notice.) Defendant Li does not dispute this assertion, and argues that “[i]f Delaware lacks jurisdiction over certain defendants, that is a matter for the Delaware court to address,” as well as assert that this does not render the Delaware forum unreasonable for the claims against Defendants Li and BTG. (Reply, 6:27-7:1.) There is no authority cited for this proposition. This issue is the matter of satisfying a condition. There is no evidence showing that this condition has been met to trigger the forum selection bylaw as there was in Bushansky.

The Court DENIES Defendant Li’s motion to dismiss, or alternatively, stay the action.

The joinders filed by Specially Appearing Defendant, BTinsight (named as DOE 1) and Specially Appearing Defendant, Help Undiagnosed Children Foundation are likewise DENIED.

In light of the above, the Court need not, and declines to, address the issue of whether BTG is a California corporation and possible additional public policy grounds for denying the enforcement of the forum selection bylaw.

Li’s Request for Judicial Notice Li requests that the Court take judicial notice four documents: (1) BTG’s Bylaws; (2) BTG’s Certificate of Incorporation; (3) BTG’s Certificate of Good Standing; and (4) Common Stock Purchase Agreement dated March 30, 2020.

The request for judicial is GRANTED pursuant to Evidence Code section 452(c) and (h).

Evidence Code section 452(c), as records of “[o]fficial acts of the legislative, executive, and judicial departments of the United States and of any state of the United States.” “Official acts include records, reports and orders of administrative agencies.” (Rodas v. Spiegel (2001) 87 Cal.App.4th 513, 518.)

Courts may take judicial notice of the existence and recordation of real property records, including deeds of trust. (Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264.) Courts can take judicial notice of the existence, content and authenticity of public records and other specified documents, but do not take judicial notice of the truth of the factual matters asserted in those documents.” (Dominguez v. Bonta (2022) 87 Cal.App.5th 389, 400.) “ ‘Taking judicial notice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning.’ [Citation.]

While courts take judicial notice of public records, they do not take judicial notice of the truth of matters stated therein. [Citation.] ‘When judicial notice is taken of a document, . . . the truthfulness and proper interpretation of the document are disputable.’ [Citation.]” (Herrera v. Deutsche Bank Nat'l Trust Co. (2011) 196 Cal.App.4th 1366, 1375.)

Plaintiff’s Request for Judicial Notice Plaintiff requests that the Court take judicial notice of various public records including filings with the California Secretary of State (Exs. A, B, C, E, F, G, H, I, and J) and publicly recorded documents (Ex. D). The request for judicial notice is GRANTED pursuant to Evidence Code section 452(c) and (h).

Objection to Declaration of Huawei Ma In response to the Declaration of Huawei Ma filed in reply, Specially Appearing Defendant BTinsight filed objections.

The Court SUSTAINS both objections.

Plaintiff Ma to give notice.

9. 30-2025-01457060 1. Motion to Disqualify Attorney of Record

Chadwick Condominium Defendant Eric A. Helmle (“Defendant”) moves for an order disqualifying attorney Jay J. Association, Inc vs. Helmle Brown and Community Legal Advisors, Inc. (“CLA”) from further representing plaintiff Chadwick Condominium Association Inc. (“Plaintiff” or “Association”) in this action on the ground that Mr. Brown is a central fact witness to this litigation.

Defendant argues that disqualification is required under Rule 1.7 of the Model Rules of Professional Conduct of the American Bar Association because Mr. Brown’s representation of Plaintiff poses a conflict of interest. However, Rule 1.7 does not apply. Rule 1.7 relates to concurrent conflicts of interest, which exist when the representation of one client will be directly adverse to another client or there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.

Here, Plaintiff was never a client of CLA or Mr. Brown and there is no other client with an interest directly adverse to the Association being represented by them. Further, there is no risk that representation of the Association will be materially limited by Mr. Brown’s responsibilities to any third person, former client, or his own personal interests. As there is no concurrent conflict of interest in CLA and Mr. Brown’s representation of the Association, Defendant’s arguments regarding a non-waivable conflict fail.

Defendant also moves for disqualification pursuant to Rule 3.7. “Rule 3.7 provides, ‘A lawyer shall not act as an advocate in a trial in which the lawyer is likely to be a witness unless: [¶] (1) the lawyer's testimony relates to an uncontested issue or matter; [¶] (2) the lawyer's testimony relates to the nature and value of legal services rendered in the case; or [¶] (3) the lawyer has obtained informed written consent from the client.’ ” (Geringer v. Blue Rider Finance (2023) 94 Cal.App.5th 813, 821.) “ ‘In exercising its discretion to disqualify counsel under the advocate-witness rule, a court must consider: (1) “ ‘ “whether counsel's testimony is, in fact, genuinely needed” ’ ”; (2) “the possibility [opposing] counsel is using the motion to disqualify for purely tactical reasons”; and (3) “the combined effects of the strong interest parties have in representation by counsel of their choice, and in avoiding the duplicate expense and time-consuming effort involved in replacing counsel already familiar with the case.” ’ ” (Id. at p. 822.)