Judge Michael E. Whitaker, Case Number: 24SMCV02452, Date: 2024-10-02 Tentative Ruling

Judge: Michael E. Whitaker, Case: 24SMCV02452, Date: 2024-10-02 Tentative Ruling

On May 22, 2024, Plaintiffs Mikhail Siretskiy and Marina Siretskiy (“Plaintiffs”) filed suit against Defendant Marina Khavilova (“Defendant”) alleging thirteen causes of action for (1) breach of contract; (2) breach of implied contract; (3) detrimental reliance and promissory estoppel; (4) restitution from transferee; (5) fraud/misrepresentation; (6) negligent misrepresentation; (7) negligence; (8) declaratory relief; (9) intentional infliction of emotional distress; (10) negligent infliction of emotional distress; (11) violation of Penal Code section 496; (12) loss of consortium; and (13) defamation.

Defendant now demurs to all causes of action on the grounds that they fail to state facts sufficient to constitute a cause of action pursuant to Code of Civil Procedure section 430.10, subdivision (e). The demurrer is unopposed.

“It is black letter law that a demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) In testing the sufficiency of a cause of action, a court accepts “[a]s true all material facts properly pled and matters which may be judicially noticed but disregard contentions, deductions or conclusions of fact or law. [A court also gives] the complaint a reasonable interpretation, reading it as a whole and its parts in their context.” (290 Division (EAT), LLC v. City & County of San Francisco (2022) 86 Cal.App.5th 439, 450 [cleaned up]; Hacker v. Homeward Residential, Inc. (2018) 26 Cal.App.5th 270, 280 [“in considering the merits of a demurrer, however, “the facts alleged in the pleading are deemed to be true, however improbable they may be”].)

Further, in ruling on a demurrer, a court must “liberally construe” the allegations of the complaint “with a view to substantial justice between the parties.” (See Code Civ. Proc., § 452.) “This rule of liberal construction means that the reviewing court draws inferences favorable to the plaintiff, not the defendant.” (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238.)

In summary, “[d]etermining whether the complaint is sufficient as against the demurrer on the ground that it does not state facts sufficient to constitute a cause of action, the rule is that if on consideration of all the facts stated it appears the plaintiff is entitled to any relief at the hands of the court against the defendants the complaint will be held good although the facts may not be clearly stated, or may be intermingled with a statement of other facts irrelevant to the cause of action shown, or although the plaintiff may demand relief to which he is not entitled under the facts alleged.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.)

“To prevail on a cause of action for breach of contract, the plaintiff must prove (1) the contract, (2) the plaintiff's performance of the contract or excuse for nonperformance, (3) the defendant's breach, and (4) the resulting damage to the plaintiff.” (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.)

“To state a cause of action for breach of contract, it is absolutely essential to plead the terms of the contract either in haec verba or according to legal effect.” (Twaite v. Allstate Ins. Co. (1989) 216 Cal.App.3d 239, 252.)

Further, the complaint must clearly indicate whether the contract at issue is written, oral, or implied by conduct. (Code Civ. Proc., § 430.10, subd. (g).)

98. In or about December 2021 – May 2022. Plaintiffs were induced by Defendant Khavilova into entering into an oral agreement (hereinafter referred to as the “Agreement”), whereby Plaintiffs agreed to invest money with Monika. In exchange for the foregoing, Monika was to repay to Plaintiffs all investment monies totaling approximately $1,400,000+/-, plus profits because no one invests for free, profits exceeding $1,000,000, plus certain contingent compensation and bonuses based on the performance of the investment.

99. On information and belief, there was an agreement between Defendant Khavilova and Monika whereby Monika would give Defendant Khavilova a financial return in exchange for inducing Plaintiffs into investing with Monika.

100. Plaintiffs performed all the covenants, conditions, and obligations that were required on their part to be performed under the Agreement, except insofar as such performance was waived, prevented, or excused by the acts or omissions of Defendants, or any of them.

101. The Agreement also contained an implied covenant of good faith and fair dealing. This covenant required that each party to the Agreement act with fairness and good faith towards the other, and that neither party take any action to prevent the other from reaping the benefits of the relationship.

102. Defendants, and each of them, have breached the express and/or implied terms of the aforementioned Agreement by, among other things:

c. Failing and refusing to execute a formal agreement in connection with the foregoing, despite their repeated promises to do so;

d. Arbitrarily increasing the amount of investment money that needed to be paid;

e. Attempting to unilaterally change material provisions of the Agreement to be contingent on the payment of further money;

103. In addition, Plaintiffs are informed and believe and based upon such information and belief, allege that Defendants, and each of them, have materially breached the express terms of the Agreement, as well as the implied covenant of good faith and fair dealing, by other acts or omissions. Plaintiffs will seek leave of Court to amend this Complaint at such time as Plaintiffs discovers the other acts or omissions of Defendants, or any of them, constituting such a breach.

104. As a direct and proximate result of the aforementioned breaches by Defendants, and each of them, as alleged herein, Plaintiffs have been damaged in an amount that has yet to be ascertained, including consequential and incidental damages, which amount of the principle exceeded a million dollars $1.4 million, plus profit that was promised by Monika, together with interest thereon at the legal rate of ten percent (10%) per annum. When Plaintiffs ascertain the exact amount of said damages, they will seek leave of Court to amend this Complaint to set forth said amount.

Although the Complaint alleges there was an oral contract between Plaintiffs and Monika, and “on information and belief” there may have been a contract between Defendant and Monika whereby Monika agreed to pay Defendant kickbacks on investment referrals Defendant made to Monika, there is no allegation that any written, oral, or implied-by-conduct contract existed as between Plaintiffs and Defendant.

At best, the Complaint alleges that Defendant induced Plaintiffs to enter into an oral contract with Monika by recommending her as a resource regarding elderly housing programs and vouching for her trustworthiness. But this is insufficient to establish the existence, form (written, oral, or implied by conduct), or essential terms of any agreement between Plaintiffs and Defendant.

Thus, the Complaint fails to allege facts sufficient to constitute a cause of action for breach of contract by Plaintiffs against Defendant.

106. Plaintiffs submitted payments to Monika pursuant to the Agreement, an implied term of which was that Monika would disclose all relevant details and information regarding the investments, which they failed to do.

107. In addition, a further implied term of such oral agreement was that, if any monies were made based on the investment, Plaintiffs would be further compensated in proportion to their increased investment amounts.

108. Plaintiffs are informed and believes, and based upon such information and belief, alleges that Defendants, and each of them, have actually taken Plaintiffs’ investment money for their own use, effectively embezzling it from the investment.

109. Plaintiffs performed all of the covenants, conditions, and obligations that were required on their part to be performed under the Agreement, except insofar as such performance was waived, prevented, or excused by the acts or omissions of Defendants, or any of them.

110. As a direct and proximate result of the aforementioned breaches by Defendants, and each of them, as alleged herein, Plaintiffs have been damaged in an amount that has yet to be ascertained, including consequential and incidental damages, which amount is at least $1.4 million, together with interest thereon at the legal rate of ten percent (10%) per annum. When Plaintiffs ascertains the exact amount of said damages, they will seek leave of Court to amend this Complaint to set forth said amount.

As discussed above, the Complaint does not allege the existence, form, or terms of any contract as between Plaintiffs and Defendant. Therefore, the Court similarly sustains Defendant’s demurrer to the second cause of action.

iii. Third Cause of Action – Detrimental Reliance and Promissory Estoppel

“The elements of a promissory estoppel claim are (1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) the reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance.” (Jones v. Wachovia Bank (2014) 230 Cal.App.4th 935, 945.)

11. On or about December 2021, the Plaintiffs were looking for elderly programs for Plaintiff Marina’s elderly relatives and consulted with Defendant Marina Khavilova (hereinafter “Defendant Khavilova”), whom the Plaintiffs have known for over ten years and trusted her judgment. Plaintiff Marina asked Defendant Khavilova if she knew of any programs for the elderly that elderly relatives could apply for. Defendant Khavilova responded that she currently did not.

12. Shortly thereafter, Defendant Khavilova called persistently until Plaintiff Marina eventually picked up. Defendant Khavilova, stated in an excited voice, that she knows an important person, who she trusts, is very credible, and can provide more information. Defendant Khavilova directed Plaintiffs to Monika Norashkharyan, and, on information and belief, did so for her own financial gain.

13. According to Defendant Khavilova, the Defendant could help them with information and guidance regarding programs in Los Angeles due to her employment at the Los Angeles Housing Department (LAHD).

17. Plaintiffs were convinced of Monika’s credibility, honesty, and good faith on multiple basis. First, the introduction from Defendant Khavilova, who spoke highly of Monika and repeated that her and her ex-husband have had many successful investments with her. Second, the fact that Monika invited Plaintiff Marina to her home. Third, that Monika represented to Plaintiffs that her and her relatives are high level government officials. Finally, the representations that Monika worked for the LAHD, and emphasized this by having Plaintiffs Marina and Mikhail pick up the Monika from her supposed place of work.

18. The representation by Defendant Khavilova that Monika was trustworthy was a significant factor informing Plaintiffs’ belief that Monika was a compliant, law-abiding citizen, with a high degree of credibility.

21. Monika emphasized she had a “unique” and “special” opportunity that was only available to the Plaintiffs because of their referral from Marina Khavilova, and that Marina Khavilova, her ex-husband and many other people that she knows, had also invested a lot of money with Monika, creating the appearance of legitimacy.

22. Monika offered to invest in different projects as well as the purchase of cars on very favorable terms with the implementation period of the projects to be several months, at the latest.

23. Mrs. Siretskiy had no doubts about Monika’s honest since she knew Marina Khavilova for many years and trusted her very much, also understanding that if she recommended Monika, then this was a person in whom Plaintiffs could place their trust.

28. Plaintiffs, acting in reliance on Monika’s representations, withdrew a lot of money from bank accounts, crypto, family members, from investments, to invest with starting from December 2021 – May 2022.

29. From December 2021 to May 2022, Plaintiff Marina & Mikhail Siretskiy, brought Monika large sums of money on a weekly (and sometimes daily) basis, with the confidence that Monika, her family, and her friends, were trustworthy people.

30. In order to reassure Plaintiffs of their venture’s legitimacy, Monika would repeatedly mention that her family members and friends, having previously invested their cash for many years into many of Monika’s endeavors, and that no one has ever lost money with her. However, Plaintiffs now know that this was a lie, and that Monika has left behind a long list of prior “investor” victims who had all lost their money to Monika and were threatened when they demanded repayment.

31. However, once Plaintiffs made their initial investment, Monika demanded more. Monika manipulated, demanded, cried, made up many stories, called 20-40 times per day, day and night, and did everything she could to take money, and even that was not enough. Monika created URGENT stories and stated that she needed URGENT CASH or else Plaintiffs risked losing their entire investment.

40. On or about February 5, 2022, Monika frantically called Plaintiffs a dozen times asking for “urgent help” as she borrowed $50,000 and the debt needed to be paid urgently, which Plaintiffs did with the understanding and promise from Monika that they would quickly be paid back.

113. Here, Defendant Khavilova reasonably expected to induce reliance on the part of the Plaintiffs, repeatedly assuring Plaintiffs that Monika was a trustworthy person with whom they could safely invest money.

114. Plaintiffs’ reliance was both reasonable and foreseeable in light of Defendant's statements, and as a result Defendant’s statements had the intended effect of causing Plaintiffs to provide additional funds to their detriment.

115. "[A] cause of action for promissory estoppel . . . substitutes reliance on a promise for consideration . . . . [i]f actual consideration was given by the promisee, promissory estoppel does not apply." (ECF No. 62 at 14 (quoting Fleet v. Bank of Am., N.A. (2014) 178 Cal. Rptr. 3d 18, 26-27.)

116. Since detrimental reliance is an essential feature of promissory estoppel, that doctrine cannot be invoked where the promisee's reliance was bargained for, the law of consideration being applicable in such a case; it is only where the promisee's reliance was unbargained for that there is room for the application of the doctrine. (Healy v. Brewster, (1963) 59 Cal. 2d 455, 463.)

117. Whether or not an individual transfer was bargained for or not, the twin doctrines of Detrimental Reliance and Promissory Estoppel stand for the proposition that Defendants cannot accept the performance of Plaintiffs under the Agreement without giving them the benefit of the bargain.

Although the Complaint outlines various promises made by Monika, the only “promise” Defendant is alleged to have made is that Defendant trusts Monika, that Monika is credible, and that Monika can help Plaintiffs find a housing program for their elderly relatives because of Monika’s employment with the Los Angeles Housing Department (“LAHD.”) (Complaint ¶¶ 11-13.) The Court does not find that this constitutes a promise that is clear and unambiguous in its terms sufficient to constitute a cause of action for promissory estoppel against Defendant.

Further, the Complaint alleges only that Defendant referred Plaintiffs to Monika to help Plaintiffs find a housing program for their elderly relatives. (Complaint ¶¶ 11-13.) It does not allege Plaintiffs commented as to any investment opportunities at all, or Monika’s trustworthiness/capability with managing investments. Rather, the Complaint alleges it was Monika who brought up investment topics beyond the scope of finding a housing program for the elderly once Plaintiffs contacted Monika. (Complaint ¶ 20.) Thus, in context, it was not reasonable or foreseeable that Plaintiffs would invest money with Monika in reliance upon Defendant’s referral to Monika regarding elderly housing and support programs.

Therefore, the Complaint fails to allege facts sufficient to constitute a cause of action for promissory estoppel against Defendant.

“Under the law of restitution, an individual is required to make restitution if he or she is unjustly enriched at the expense of another. A person is enriched if the person receives a benefit at another's expense.” (McBride v. Boughton (2004) 123 Cal.App.4th 379, 389 [cleaned up.]) “However, the fact that one person benefits another is not, by itself, sufficient to require restitution. The person receiving the benefit is required to make restitution only if the circumstances are such that, as between the two individuals, it is unjust for the person to retain it.” (Ibid.) Here, Plaintiffs allege:

121. Defendants, each of them, must restore to Plaintiffs money that Defendants received from Monika, but that really should belong to Plaintiffs, as Defendants knew, or reasonably should have known, that Monika embezzled or otherwise misappropriated the money from Plaintiffs.

122. Here, Defendants have received money from Monika which came from Plaintiffs. To allow Defendants to keep this money would be unjust enrichment.

123. Courts have applied California Penal Code section 496 in a civil case where a refused to repay his loan when the lender asked for her money back. The Monika thus “withheld” stolen funds, constituting a violation of subdivision (a) and triggering civil liability under subdivision (c). The fact that he was never convicted criminally did not matter. (Bell v. Feibush (2013) 212 Cal.App.4th 1041.)

124. When Plaintiffs asked for the benefits of their investment and/or the return of their investment funds, Defendants refused.

125. Defendant has therefore withheld stolen funds pursuant to section 496 and is liable for embezzlement, treble damages, and attorney’s fees.

Therefore, the Complaint adequately alleges that Defendant wrongfully received and kept money Defendant knew Monika embezzled from Plaintiffs. Whether that actually occurred is a factual issue to be resolved at later stages of the litigation.

v. Fifth Cause of Action – Fraud, Deceit, Misrepresentation and Sixth Cause of Action – Negligent Misrepresentation

The elements for fraudulent misrepresentation are “(1) the defendant represented to the plaintiff that an important fact was true; (2) that representation was false; (3) the defendant knew that the representation was false when the defendant made it, or the defendant made the representation recklessly and without regard for its truth; (4) the defendant intended that the plaintiff rely on the representation; (5) the plaintiff reasonably relied on the representation; (6) the plaintiff was harmed; and (7) the plaintiff's reliance on the defendant's representation was a substantial factor in causing that harm to the plaintiff.” (Graham v. Bank of America, N.A. (2014) 226 Cal.App.4th 594, 605–606.)

“In a promissory fraud action, to sufficiently alleges [sic] defendant made a misrepresentation, the complaint must allege (1) the defendant made a representation of intent to perform some future action, i.e., the defendant made a promise, and (2) the defendant did not really have that intent at the time that the promise was made, i.e., the promise was false.” (Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1060.)

“The essential elements of a count for negligent misrepresentation are the same [as intentional misrepresentation] except that it does not require knowledge of falsity but instead requires a misrepresentation of fact by a person who has no reasonable grounds for believing it to be true.” (Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 230-231 (hereafter Chapman).) Like intentional misrepresentation, causes of action for negligent misrepresentation sound in fraud, and must also, therefore, be pleaded with particularity. (Ibid.)

“In California, fraud must be pled specifically; general and conclusory allegations do not suffice.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) “This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.” (Ibid.)

“One of the purposes of the specificity requirement is notice to the defendant, to furnish the defendant with certain definite charges which can be intelligently met.” (Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384.) As such, less specificity is required “when it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy[.]” (Ibid.) “Even under the strict rules of common law pleading, one of the canons was that less particularity is required when the facts lie more in the knowledge of the opposite party.” (Ibid.)

13. According to Defendant Khavilova, the Defendant could help them with information and guidance regarding programs in Los Angeles due to her employment at the Los Angeles Housing Department (LAHD).

127. As stated above, Defendant Khavilova misrepresented to Plaintiffs that Monika was a government worker of high status, that Monika could use her position at the LAHD to get help Plaintiffs and obtain advantageous investments, and that Defendant Khavilova and others had successfully invested in this venture before.

128. Defendant persuaded Plaintiff through these representations to provide Monika with their personal funds under the guise of and ‘investment.’

129. Defendant had no reasonable grounds to believe that these misrepresentations were true. Defendant had full knowledge of Monika’s duplicitous nature and that Plaintiffs’ investment was not going to the purchase of cars which could be sold for profit as promised by Monika.

130. Plaintiffs were justified in relying upon Defendant’s representations because Defendant of the longtime relationship of trust between Plaintiffs and Defendant Khavilova.

131. Defendant intended to induce Plaintiffs to rely on her misrepresentations. Defendant knew that because of her representation that Plaintiffs would be harmed, and were harmed, by the loss of their funds and reputation within the community where they live and work.

Although paragraph 127 characterizes the representations Defendant made to Plaintiffs as including representations that “Monika could use her position at the LAHD to get help Plaintiffs and obtain advantageous investments, and that Defendant Khavilova and others had successfully invested in this venture before,” Plaintiff appears to conflate the representations allegedly made by Monika, concerning the investment opportunity, with the representations allegedly made by Defendant, which are only that (1) Defendant trusts Monika, (2) Monika works for the LAHD and (3) Monika can help Plaintiffs find a housing program for their elderly relatives. (Complaint ¶¶ 11-13.)

Of those three representations, the only one alleged to be untrue is that Monika works for the LAHD. (See Complaint ¶ 16 [“Plaintiffs would later learn that this was a false representation”]). But the Complaint does not allege any specific facts demonstrating or suggesting that Defendant either knew that Monika did not in fact work for the LAHD or had no reasonable grounds to believe that she did at the time Defendant made this representation to Plaintiffs. Further, as discussed above, it was not reasonable or foreseeable for Plaintiffs to rely on a representation that Monika worked for the LAHD in connection for a referral for elder housing services, by investing large sums of money with her.

Therefore, the Court sustains the demurrer as to the fifth and sixth causes of action.

“The elements of a negligence cause of action are the existence of a legal duty of care, breach of that duty, and proximate cause resulting in injury.” (Castellon v. U.S. Bancorp (2013) 220 Cal.App.4th 994, 998, citation omitted.) Here, Plaintiffs allege:

138. Defendants had a legal duty of care to Plaintiffs to use due care in not providing Plaintiffs with scams or false investments.

139. Monika negligently failed to invest and manage trust assets as a prudent investor would.

140. Defendant Khavilova knew, or reasonably should have known, that Monika would misappropriate Plaintiffs’ investments.

141. Defendant breached this duty to protect Plaintiffs investments in various ways, including spending money given to Monika by Plaintiffs to repay other debts, buy personal property for herself or her family, and by failing to account for where the money was going when confronted by Plaintiffs.

142. Plaintiff were harmed because they lost their investment money, which would have been used to repay a loan on their family house, thereby depriving Plaintiffs and their children of a home.

143. Defendant’s breach was a direct and proximate cause of Plaintiffs’ resulting harm

Thus, the Complaint alleges Defendant owed a duty of care to not provide Plaintiffs with scams or false investments, which Defendant allegedly breached by recommending Monika and vouching for her trustworthiness, which caused Plaintiffs to invest money with Monika, resulting in Plaintiffs’ damages. As such, the Complaint sufficiently alleges “ultimate facts” to allege a cause of action for negligence.

Therefore, the Court overrules Defendant’s demurrer as to the seventh cause of action for negligence.

To qualify for declaratory relief, a plaintiff must show their action presents two essential elements: “(1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the rights or obligations of a party.” (Lee v. Silveira (2016) 6 Cal.App.5th 527, 546.) Here, the Complaint alleges:

147. An actual controversy has arisen between Plaintiffs and Defendants, and DOES 1-10, and each of them, in that Plaintiffs contend and Defendants denies, that Plaintiff is owed no monies, and that Defendant owes nothing in exchange for the hundreds of thousands of dollars that Plaintiffs transferred to Monika between December 24, 2021 to December 1, 2022.

a. There was a valid and enforceable contract for investment of monies between the Plaintiffs and Monika;

b. Defendant Khavilova, and DOES 1-10, each of them who received money from Monika, have received stolen/embezzled money from Monika;

While the Court agrees with Defendant that whether there was a valid and enforceable contract between Plaintiffs and Monika is irrelevant to this lawsuit against Defendant, Plaintiffs have alleged sufficient “ultimate facts” that Defendant knowingly received and kept money Monika embezzled from Plaintiffs[1].

Therefore, the Court overrules Defendant’s demurrer to the eighth cause of action for declaratory relief.

viii. Ninth Cause of Action – Intentional Infliction of Emotional Distress

To prevail on the Intentional Infliction of Emotional Distress (“IIED”) cause of action, a plaintiff must prove: “(1) extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress; (2) the plaintiff’s suffering severe or extreme emotional distress; and (3) actual and proximate causation of the emotional distress by the defendant’s outrageous conduct.” (Hughes v. Pair (2009) 46 Cal.4th 1035, 1050-1051.) A defendant’s conduct is outrageous when “it is so extreme as to exceed all bounds of that usually tolerated in a civilized community.” (Ibid. [cleaned up].) Further, the defendant’s conduct must be “intended to inflict injury or engaged in with the realization that injury will result.” (Id. at p. 1051 [cleaned up].)

33. During this time period, Plaintiff Marina was approximately 8 months pregnant, which leveraged to obtain additional personal information from Plaintiffs (including the aforementioned copies of their ID’s), introductions to Plaintiff’s friends and family, to convince them to “invest” as well.

35. Taking advantage of the fact that Mrs. Siretskiy was in the last weeks of pregnancy and could not rationally assess the situation, Monika continued to manipulate her to obtain new funds, by creating fake stories and pushing serious urgency.

36. On February 2, 2022, the day that Plaintiff Marina went into labor, Monika called Plaintiffs to extort another $25,000 under the pretext of risking a deal failure unless they made the payment within a few hours. On information and belief, Monika took this action to create artificial fear and uncertainty, circumventing Plaintiffs’ better judgement.

37. Fearing the loss of the whole venture along with their existing investment and additional threats made by Monika, Plaintiff Mikhail drove to meet with Monika to provide her yet another envelope of cash, and as a result of Monika’s extortion, Plaintiffs suffered severe emotional distress and Plaintiff Mikhail missed the birth of his son, as he was forced to meet with Monika for this urgent meeting that she created for her benefit. To Plaintiffs it seemed that nothing was more important to Monika at that moment than to extort money immediately.

41. Monika begged for help and swore by her children that her sister’s friend Marina (unrelated to Plaintiff Marina) and her husband were coming to her house with threats and demanding money since Marina’s mother and brother were in Mexico, and she needed to pay her lawyer to take them to USA. However, Plaintiffs later learned that this was untrue.

42. Plaintiff Mikhail, wanting to help Monika took out a loan in the amount of $50,000 under a contract in his name from many people who trusted him. Shortly after, he transferred this amount to Monika so she could solve this problem.

43. At this point a lot of Cash has been given to Monika, and everyone was very worried about all the investments made, but receiving nothing but empty promises, delays, and fake stories from Monika and her group.

44. When pressed, Monika vowed in tears that soon they would get their investments back, and that they would be able to pay back to the people the money under the contracts, and the ones who gave their money without a contract.

45. A few days later, Monika called again saying that due to the delay in payment, the debt had risen to $100,000, and that additional money was required to pay it. She also stated that Arnold Khavilov (Marina Khavilova’s ex-husband), was also helping her to resolve this urgent matter, and she expects Plaintiffs to do the same. Plaintiffs would later learn that this was another fake story, created with the sole intention of extorting more money out of Plaintiffs through false urgency.

46. The financial strain on the Plaintiffs escalated as they, along with their relatives, secured substantial loans and resorted to selling valuable assets, borrowing from people, to fulfill Monika’s increasing demands and threats.

47. These additional demands were ostensibly to cover additional costs attributed to issues arising from another investor, leading the Plaintiffs to contribute additional hundredths of thousands of dollars.

48. On information and belief, this and other emergencies were fabricated by in order to extort additional funds from the Plaintiffs under the guise of helping the and her family out of trouble.

49. As time passed, Plaintiffs and their friends and family who had invested with Monika began to demand their money back because they needed the money for their own projects and investments.

50. Further, when the return of funds was being demanded by many supposed investors, Monika would urgently run to the emergency room with false complaints about poor health condition. Every time Plaintiff Marina or other investors demanded their money back, Monika urgently ended up in the Hospital or was unable to communicate due to her “poor health. She would make every excuse in the book to avoid the subject or returning of the funds.

51. Monika, fully aware of the dire circumstances facing Plaintiffs’ family, ––including homelessness, loss of the property that they were building into their family home, multiple hospitalizations, and a pregnancy with complications––persisted in her demands for money, exacerbating the stress and fear within the Plaintiff’s family.

52. This harassment extended to unannounced visits to their home, 20-40 calls per day (day and night), further intensifying their anxiety for their personal safety, as evidenced by suspicious activities around their residence and their children's school, including being followed by a guy in a white Tesla with the California license plate 8FPM676.

53. Over the following months, Monika continued to prey upon Plaintiffs’ trust and emotional vulnerability to extract more money from them.

54. At the same time Monika insisted that she needed money desperately in order to keep the investments from failing, in July 2022, Monika's husband, Gevorg Norashkaryan, began driving a new Mercedes S 580 that he uses as a personal car, and this car is registered to a third party, as the house in which Monika lives.

55. On information and belief, the money Plaintiffs invested was unlawfully embezzled by Defendants, and co-conspirators, and went into buying this car and other expensive property which Monika hid.

56. After the birth of the Plaintiffs’ third child and endless sleepless nights, Plaintiff Marina was very tired and vulnerable, and it was this position that Monika skillfully used, continuing to manipulate her professionally using special techniques, blackmail, and intimidation, referring to an example of people who “disappeared” or went to jail after her brother and his group “dealt with” their victims.

57. In April 2022, Monika again, in tears and panic, began to call Plaintiff Marina 20 times a day begging for help. This time, she had to urgently return $40,000 to one investor who was standing in front of Monika’s workplace with a poster stating, “MONA IS SCAMMER”, and demanded to urgently return the debt that Monika had taken from her earlier.

58. Monika begged Mrs. Siretskiy to help her and swore once again by the lives of her children that this problem must be urgently solved, because the employees are scared, and she is afraid of losing the loyalty of her supervisor.

59. Once again, in a state of complete emotional depression, and disorientation created by Monika, Plaintiff Marina requested her husband to help Monika solve the financial issue, and he again took the money under a contract on his name so that Monika could get out of this situation, so they and their friends could get back the money invested.

60. Plaintiff Marina feared for her family, because she understood that if they insistently demanded their money back, then Monika’s brother (Shawn) and his group, will do something bad to them because, Monika told Plaintiffs very often how her brother “dealt” with people, namely by setting them up and breaking their lives.

61. Plaintiff Marina was very scared because, on the one hand, they invested a lot of money together with friends, family, and acquaintances and they did not want to lose the money invested, but on the other hand, she understood that anyone who would interfere with Monika could disappear , as Monika had stated and implied anytime someone demanded their money back.

62. Plaintiff Marina’s husband began to worry very seriously about the money that they gave to Monika, the contracts they took to pay Monika’s debts, and a Hard Money Loan for the development of his personal home, which would be put to auction if not repaid.

72. Monika could call Plaintiff Marina 20-40+ times during the day and night, accusing Plaintiff Marina and demanding urgent money to resolve the issues related to Malkov, and again threatening the Siretskiy family every step of the way.

73. Monika kept crying and repeating that her brother was very angry and that if something happened to her, it would be very bad for everyone, and he would make sure that all the people causing problems would eventually be “dealt with.”

74. While Monika was crying and screaming, she also assured the Siretskiy Family, that she would return ALL money, so the Siretskiy family could re-pay their loans, contracts, and people they took money from, that went to her during her extortion.

75. Despite her promises, Plaintiffs’ family home project was transferred to the Hard Money Lender and auctioned. Monika took advantage of Plaintiffs’ desperate situation and offered to get their development project in Calabasas back with the help of her family lawyer and brothers' connections, due to their high authority.

76. Later Mrs. Siretskiy found out, that Monika had made Plaintiffs’ relatives take out large loans and borrowed money from everyone they knew to “help” the Plaintiffs, going so far as to pawn personal jewelry including diamond wedding rings, Mr. Siretskiy’s childhood neck chain, and much more.

77. Through this fraud, the Siretskiy family and many others, ended up giving Monika hundredths of thousands more because she constantly invented urgent stories regarding the investment, changed the amounts, and added various expenses that Plaintiff Marina had to reimburse her for the problems caused by Malkov.

78. Monika knew that the Plaintiffs’ families were in dire straits, and their children were left without a roof over their heads. She knew that Mrs. Siretskiy was in the hospital 5 times in critical condition and knew that Mrs. Siretskiy was pregnant with her fourth child, but she continued to harass Mrs. Siretskiy and extort more money.

79. Monika came to the Siretskiys several times early in the morning in a panic and tears, she also came at night and stood near their house when Mrs. Siretskiy did not pick up the phone. She reproached Mrs. Siretskiy for the situation that happened because of Malkov and shouted that Mrs. Siretskiy has no right to think about her children, house and family, until Monika solves this problem, or no one will get the money back, or worse, will be “dealt with.”

80. Plaintiff Marina was scared for her life, for the lives of her husband, and her children. The threats and lies kept escalating, and Monika was not shy about saying that people’s lives were at risk. The escalation of worry continued, as they now weren’t sure who they are dealing with.

81. Plaintiff Marina noticed strange people and cars came to the school of her eldest son, who followed them in the place where they lived. Mr. Siretskiy a few times spotted someone who, on information and belief, he believes to have been Mr. Malkov and his friends, following their family too.

82. The Plaintiffs also spotted a suspicious white Tesla (California license plate 8FPM676) which followed their family and children.

83. After Malkov opened a lawsuit against Monika, she knelt in front of him, kissed his hands, and begged him to withdraw the lawsuit against her. Monika later stated to Plaintiff Marina, that the main thing is that Malkov withdraws the lawsuit against her, and then her brother will “deal” with him, just like with all other people who invested money and aggressively demanded a return on the investment.

84. Monika would scream and berate Plaintiff Marina that because of Malkov, and the problems associated with him, all her relatives took hard money loans to help her, so she was losing $ 6,000,000, thereby saying that the Plaintiffs would not get their money back.

85. Monika also claimed that they were tapping people’s phones, and eavesdropping on the Siretskiys’ phone conversations, and phones of other investors. Monika implied and threatened that she had their bank financial information, and other private personal information.

86. In one of the private telephone conversations between Mr. & Mrs. Siretskiy, Mrs. Siretskiy's husband became very indignant and said that they urgently needed to take the money back. Monika recounted in detail the conversation between Mrs. Siretskiy and her husband and added at the end: “We know everything what you are talking about and that's why your husband will be dealt with immediately.”

87. On March 16, 2023, Plaintiff Mikhail texted Monika: “You have robbed us and many other people, you put down everyone and you must return the money back, otherwise we will have no choice and we will have to escalate this matter.”

88. In response, Monika came to Plaintiffs’ house in tears and panic, saying she would commit suicide. At the same time Monika received endless calls from people Mrs. Siretskiy had never known before, demanding refunds.

89. At this point, seeing that Monika had not merely failed to repay the Plaintiffs, but a host of other “investors,” Plaintiff Marina finally began to realize that Monika was not a reliable person, but a profession scammer.

90. On the same day, Monika called Mrs. Siretskiy again and said: “Do you hear? My brother is talking to someone on the phone and calling your last name, he said that now he does not know how Mikhail Siretsky can stay alive and safe, and now nothing will help him.” After that, a series of very serious setups for Mrs. Siretskiy’s husband began.

91. After Plaintiff Marina informed Monika that her children had lost their roof over their heads because of her, Monika became heavily upset. She lost her temper, started yelling, venting that she is not afraid of anything or anyone, she said exactly what was on her mind with no hesitation, cursing them and claimed that Plaintiff’s entire family would burn in hell.

92. From this point, Monika’s threats against the Siretskiy family became so frequent and specific as to put them in genuine fear for their lives. Plaintiffs were afraid to go outside, take the kids to school, or buy groceries because they were afraid of being attacked, as Monika’s stated goal was now to ruin their lives.

93. Monika has stated many times that she is not afraid of anyone, because she knows who is backing her up, and who will deal with any person who causes problems. Overstepping all legal and moral boundaries, Monika and her group have made it clear many times, that they will not let anyone in their way. Monika constantly told stories, about how her brother and his team ruthlessly send people “to places from which no one returns”.

94. Since the beginning of 2022, Monika and her group stole and extorted well over a million dollars from the Siretskiy family and the people who gave her money because of their reputation. Monika extracted dry the Siretskiy family but also reached many others through the reputation of the Siretskiy family.

95. Monika and her accomplices contacted the Siretskiy contacts, business partners, and clients, destroying their business relationships and spreading lies. Monika and her accomplices met with many face-to-face, to get them working against the Plaintiffs.

150. Defendant Khavilova acted intentionally as detailed above to deprive Plaintiffs of their money, to cause Plaintiffs emotional distress in order to make Plaintiffs give Monika additional money, and to cause Plaintiffs emotional distress in an attempt to dissuade them from pursuing Monika via legal recourse.

151. As a direct and proximate result of Defendants’ conduct, Plaintiff has suffered and continues to suffer emotional distress.

152. Defendants’ conduct was a substantial factor in causing Plaintiff’s severe emotional distress.

153. Defendants conduct was malicious, oppressive and fraudulent warranting punitive damages.

But all of this extreme and outrageous conduct is alleged on the part of Monika, not Defendant.

Therefore, the Court sustains Defendant’s demurrer to the ninth cause of action.

ix. Tenth Cause of Action – Negligent Infliction of Emotional Distress

“The law of negligent infliction of emotional distress in California is typically analyzed by reference to two ‘theories' of recovery: the ‘bystander’ theory and the ‘direct victim’ theory.” (Spates v. Dameron Hospital Assn. (2003) 114 Cal.App.4th 208, 213 (hereafter Spates).) “[T]he negligent causing of emotional distress is not an independent tort but the tort of negligence. The traditional elements of duty, breach of duty, causation, and damages apply.” (Eriksson v. Nunnink (2015) 233 Cal.App.4th 708, 729 [cleaned up.])

“The bystander theory recognizes a duty in the limited class of cases where a plaintiff “(1) is closely related to the injury victim, (2) is present at the scene of the injury-producing event at the time it occurs and is then aware that it is causing injury to the victim and, (3) as a result suffers emotional distress beyond that which would be anticipated in a disinterested witness.” (Spates, supra, 114 Cal.App.4th at p. 213.)

By contrast, “[d]irect victim theory involves a duty owed directly to the plaintiff that is assumed by the defendant or imposed on the defendant as a matter of law, or that arises out of a relationship between the two.”) (Spates, supra, 114 Cal.App.4th at p. 213.)

156. As a direct and proximate result of Defendants conduct, Plaintiff has suffered and continues to suffer emotional distress.

157. Defendants’ conduct was a substantial factor in causing Plaintiff’s severe emotional distress.

158. Defendants conduct was malicious, oppressive and fraudulent warranting punitive damages.

Here, the Complaint alleges a direct victim theory, not a bystander theory of negligent infliction of emotional distress. However, a direct victim theory requires that Defendant owe a special duty to the victim, either one that the Defendant assumed, or is imposed on Defendant as a matter of law, or that arises out of a special relationship between the two. As discussed above, Plaintiffs’ negligence cause of action against Defendant relies solely on the general duty of care. Although Plaintiffs allege they entrusted their investments to Monika to manage, which may have created a special duty of care as to Monika with respect to the management of their investment funds, no such allegations giving rise to a special duty are alleged as to Defendant.

Therefore, the Complaint fails to state a cause of action for negligent infliction of emotional distress against Defendant.

Section 496 of the Penal Code applies to “Every person who buys or receives any property that has been stolen or that has been obtained in any manner constituting theft or extortion, knowing the property to be so stolen or obtained, or who conceals, sells, withholds, or aids in concealing, selling, or withholding any property from the owner, knowing the property to be so stolen or obtained” and provides, “Any person who has been injured by a violation of subdivision (a) or (b) may bring an action for three times the amount of actual damages, if any, sustained by the plaintiff, costs of suit, and reasonable attorney’s fees.”

As discussed above, Plaintiffs allege sufficient “ultimate facts” that Defendant knowingly obtained some of Plaintiffs’ investment money from Monika that Monika embezzled from Plaintiffs.

Therefore, the Court overrules Defendant’s demurrer to the eleventh cause of action.

The elements for loss of consortium are “(1) a valid and lawful marriage between the plaintiff and the person injured at the time of the injury; (2) a tortious injury to the plaintiff's spouse; (3) loss of consortium suffered by the plaintiff; and (4) the loss was proximately caused by the defendant's act.” (LeFiell Manufacturing Co. v. Superior Court (2012) 55 Cal.4th 275, 284–285.)

The Complaint does not allege any of these elements. Instead, the Complaint merely alleges:

164. In California each spouse has a cause of action for loss of consortium, as defined herein, caused by a negligent or intentional injury to the other spouse by a third party.” (Rodriguez v. Bethlehem Steel Corp. (1974) 12 Cal.3d 382, 408 [115 Cal. Rptr. 765, 525 P.2d 669]). Further, the California Supreme Court in Rodriguez, supra, 12 Cal.3d at page 409, expressly recognized the right to recover damages for the ‘loss or impairment’ of the plaintiff’s rights of consortium, and we see no basis to conclude that a loss of consortium must be so extensive as to be considered complete in order to be compensable. Instead, a partial loss, or diminution, of consortium is compensable (Mealy v. BMobile, Inc. (2011) 195 Cal. App. 4Th 1218, 1224 [124 Cal. Rptr. 3d 804]).

165. Further, the concept of consortium includes not only loss of support or services; it also embraces such elements as love, companionship, comfort, affection, society, the moral support each spouse gives the other through the triumph and despair of life, and the deprivation of a spouse’s physical assistance in operating and maintaining the family home.” (Ledger v. Tippitt (1985) 164 Cal. App.3d 625, 633 [210 Cal. Rptr. 814], disapproved of on other grounds in Elden v. Sheldon (1988) 46 Cal.3d 267, 277 [250 Cal. Rptr. 254, 758 P.2d 582]). Also, loss of future consortium is recoverable, including loss of consortium because of reduced life expectancy. (See Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 799-800 [108 Cal. Rptr. 3d 806, 230 P.3d 342].) In such a case, this instruction may need to be modified. Future noneconomic damages should not be reduced to present value. (See Salgado v. County of L.A. (1998) 19 Cal.4th 629, 646-647 [80 Cal.Rptr.2d 46, 967 P.2d 585]).

Therefore, the Court sustains Defendant’s demurrer to the twelfth cause of action.

“The elements of a defamation claim are (1) a publication that is (2) false, (3) defamatory, (4) unprivileged, and (5) has a natural tendency to injure or causes special damage.” (J-M Manufacturing Co., Inc. v. Phillips & Cohen LLP (2016) 247 Cal.App.4th 87, 97.) Here, Plaintiffs allege:

167. Plaintiff is informed and believes Defendants, and each of them, by the herein described acts, conspired to, and in fact, did negligently, recklessly, and intentionally cause external statements of defamation, of and concerning Plaintiff, to third persons and to the community.

168. The defamatory statements consisted of oral, knowingly false, and unprivileged communications, intending directly to injure Plaintiff and Plaintiff’s personal, business, and professional reputation. These statements included the following false and defamatory statements (in violation of Civil Code §§ 45, 45a and 46(3)(5)) with the meaning and/or substance as follows: that Plaintiffs are untrustworthy, that Plaintiffs do not repay their loans, that Plaintiffs prey upon the community. These false and defamatory statements included express and implied statements that portrayed Plaintiffs falsely.

169. Plaintiff is informed, believes, and fears that these false and defamatory per se statements will continue to be made by Defendants, and each of them, and will be foreseeably recirculated by their recipients, all to the ongoing harm and injury to Plaintiff’s business, professional, and personal reputations. Plaintiff also seeks redress in this action for all foreseeable statements, including his own compelled self-publication of these defamatory statements.

170. The defamatory meaning of all of the above-described false and defamatory statements, and their reference to Plaintiff, were understood by these above-referenced third person recipients and other members of the community who are known to Defendants, and each of them, but unknown to Plaintiff at this time.

171. Each of these false defamatory per se statements (as set forth above) were negligently, recklessly, and intentionally published in a manner equaling malice and abuse of any alleged conditional privilege (which Plaintiff denies existed), since the statements, and each of them, were made with hatred, ill will, and an intent to vex, harass, annoy, and injure Plaintiff in order to justify the illegal and cruel actions of Defendants, and each of them, to cause further damage to Plaintiff’s professional and personal reputation, and to cause him to be turned down and/or fired from future employment, especially in Los Angeles, California.

172. As a proximate result of the publication and republication of these defamatory statements by Defendants, and each of them, Plaintiff has suffered injury to his personal, business, and professional reputation including suffering embarrassment, humiliation, severe emotional distress, shunning, anguish, fear, loss of employment, and employability, and significant economic loss in the form of lost wages and future earnings, all to Plaintiff’s economic, emotional, and general damage in an amount according to proof.

173. Defendants, and each of them, committed the acts alleged herein recklessly, maliciously, fraudulently, and oppressively, with the wrongful intention of injuring Plaintiff, for an improper and evil motive amounting to malice (as described above), and which abused and/or prevented the existence of any conditional privilege, which in fact did not exist, and with a reckless and conscious disregard of Plaintiff’s rights. All actions of Defendants, and each of them, their agents and employees, herein alleged were known, ratified and approved by the Defendants, and each of them. Plaintiff thus is entitled to recover punitive and exemplary damages from Defendants, and each of them, for these wanton, obnoxious, and despicable acts in an amount based on the wealth and ability to pay according to proof at time of trial.

174. Defendant’s defamatory statements were a substantial factor in causing Plaintiff harm. Plaintiff has been damaged in an amount in excess of the jurisdictional limits of this Court.

Thus, Plaintiff has sufficiently pleaded “ultimate facts” to withstand demurrer. Defendant argues that these statements were all true. However, whether these statements were in fact true is a factual issue to be resolved at later stages of the litigation.

Therefore, the Court overrules Defendant’s demurrer to the thirteenth cause of action for defamation.

A plaintiff has the burden of showing in what manner the complaint could be amended and how the amendment would change the legal effect of the complaint, i.e., state a cause of action. (See The Inland Oversight Committee v. City of San Bernardino (2018) 27 Cal.App.5th 771, 779; PGA West Residential Assn., Inc. v. Hulven Int'l, Inc. (2017) 14 Cal.App.5th 156, 189.) A plaintiff must not only state the legal basis for the amendment, but also the factual allegations sufficient to state a cause of action or claim. (See PGA West Residential Assn., Inc. v. Hulven Int'l, Inc., supra, 14 Cal.App.5th at p. 189.) Moreover, a plaintiff does not meet his or her burden by merely stating in the opposition to a demurrer or motion to strike that “if the Court finds the operative complaint deficient, plaintiff respectfully requests leave to amend.” (See Major Clients Agency v Diemer (1998) 67 Cal.App.4th 1116, 1133; Graham v. Bank of America (2014) 226 Cal.App.4th 594, 618 [asserting an abstract right to amend does not satisfy the burden].)

Here, Plaintiffs has failed to meet this burden as they did not oppose the demurrer and therefore do not address whether leave should be granted if the demurrer is sustained.

For the reasons stated, the Court sustains without leave to amend Defendant’s demurrer to the first, second, third, fifth, sixth, ninth, tenth, and twelfth; but overrules Defendant’s demurrer to the fourth cause of action for restitution, seventh cause of action for negligence, eighth cause of action for declaratory relief, eleventh cause of action for violation of Penal Code section 496, and thirteenth cause of action for defamation.

Defendant shall file and serve an answer to the Complaint on or before October 23, 2024.

Further, on the Court’s own motion, the Court continues the Case Management Conference to February 20, 2025 at 8:30 A.M. in Department 207. All parties shall comply with California Rules of Court, rules 3.722, et seq., regarding Initial and Further Case Management Conferences. In particular, all parties shall adhere to the duty to meet and confer (Rule 3.724) and to the requirement to prepare and file Case Management Statements (Rule 3.725).

Defendant shall provide notice of the Court’s ruling and file the notice with a proof of service forthwith.

[1] Ultimate facts are those “constituting the cause of action” or those upon which liability depends, e.g., duty of care, breach of the duty and causation (damages). (See Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550.) “[T]he term ultimate fact generally refers to a core fact, such as an essential element of a claim. Ultimate facts are distinguished from evidentiary facts and from legal conclusions.” (Central Valley General Hosp. v. Smith (2008) 162 Cal.App.4th 501, 513 [cleaned up]; see also Rodriguez v. Parivar, Inc. (2022) 83 Cal.App.5th 739, 750–751 [“The elements of a cause of action constitute the essential or ultimate facts in a civil case”].)

DEPARTMENT	207
HEARING DATE	October 2, 2024
CASE NUMBER	24SMCV02452
MOTION	Demurrer
MOVING PARTY	Defendant Marina Khavilova
OPPOSING PARTY	none