Song

I. Factual Background

A. Song and Lee form two entities to jointly invest in Coffee Bean franchises Appellant Dong Yeoun Lee is the sole shareholder and CEO of appellant Creative Global Investment, Inc. (CGI), which owns Coffee Bean and Tea Leaf (Coffee Bean) franchises in Asia and California. Respondent Bryan Song is a businessman who owns and manages a liquor store and a karaoke cafe in Los Angeles. Lee and Song met each other in early 2015 through attending the same health club, began a friendly social relationship, and discussed investing in Coffee Bean franchises together. Lee and Song ultimately agreed that CGI and Song would jointly form two new companies, CGI Gaju, LLC (Gaju) and CGI Paramount, LLC (Paramount), to open new Coffee Bean franchises in Los Angeles (the Gaju location and the Paramount

3 location). Lee told Song that they would be co-owners of each franchise through the LLCs. When asked about income and profits, Lee represented to Song that Song “would be able to take at least 2 percent of [his] investment every month.” Lee told Song that he was very happy to have met someone like Song and suggested that they become “brothers,” meaning that they “would…