Judge Upinder S. Kalra, Case Number: 22STCV11220, Date: 2025-04-07 Tentative Ruling

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2. Summary Adjudication of the Seventh and Eighth Causes of Action in Defendant Erina Gilerman’s favor.

1. The court GRANTS Gilerman’s motion for summary adjudication on the Seventh Cause of Action as to Plaintiff Israel Yagudaev only. It is DENIED in all other respects.

2. The court GRANTS Gilerman’s motion for summary adjudication as to the Eighth Cause of Action.

On April 4, 2022, Defendants D-Mas, LLC, Israel Yagudaev, and Mairam Yagudaev (Plaintiffs) filed a complaint against Defendants AFI Financial Inc., Alexander Gudis, Igor Okhman, Erina Gilerman, Galina Blank, Larissa (Lora) Shor, Vladimir Keslin (Defendants.) The complaint alleges eleven causes of action based on breach of contract, fraud, conspiracy, and professional negligence. Plaintiffs allege that they loaned Defendant AFI $2.5 million. However, Defendant AFI began defaulting on the terms of the Promissory Note.

On July 5, 2022, Defendants filed a Demurrer and Motion to Strike, which was SUSTAINED, with leave to amend.

On February 7, 2023, Defendants AFI Financial Inc., Igor Okhman, Erina Gilerman and Larissa Shor filed a Demurrer with Motion to Strike, which was SUSTAINED, in part, and OVERRULED, in part.

On May 9, 2023, Plaintiffs filed a Third Amended Complaint (TAC) and a request for dismissal as to Galena Blank only.

On June 1, 2023, Defendants AFI Financial Inc., Igor Okhman, Erina Gilerman and Larissa Shor filed a Demurrer with Motion to Strike, which was SUSTAINED, in part, and OVERRULED, in part.

On July 14, 2023, Cross-Complainant AFI Financial Inc. (Cross-Complainant) filed a Cross-Complaint against Cross-Defendants [Israel] Yagudaev[1] (Yagudaev), Mairam Yagudaev (Mairam), and D-Mas, LLC (D-MAS) (collectively, Cross-Defendants) with six causes of action for: (1) Fraud – Promissory Fraud; (2) Fraud – Intentional Misrepresentation; (3) Fraud – Concealment; (4) Constructive Fraud; (5) Breach of Fiduciary Duty; and (6) Tort of Another Doctrine.

According to the Cross-Complaint, Cross-Defendants promised to lend Cross-Complainant $10 million related to building Cross-Complainant’s auto-flooring business. Cross-Complainant further alleges that Cross-Defendants first invested $300 thousand over a series of months to monitor the business and then secured Promissory Notes from Cross-Complainant for $2.2 million in December 2019. After that time, Cross-Complainant alleges that Cross-Defendants had full access to Cross-Complainant’s business, including proprietary information. Cross-Complainant further alleges that Cross-Defendants kept promising to fund the remaining $7.5 million to Cross-Complainant so the business would not fail but allege that Cross-Defendants intentionally drove Cross-Complainants business down to coerce an unfair sale. Cross-Complainant’s business closed in June 2022.

On July 17, 2023, Defendants AFI Financial Inc., Igor Okhman, Erina Gilerman, and Larissa Shor filed an Answer to the TAC.

On August 16, 2023, Cross-Defendants filed a demurrer and motion to strike which the court SUSTAINED with leave to amend and DENIED.

On February 29, 2024, AFI Financial Inc. filed a First Amended Cross-Complaint (FACC).

On January 15, 2025, Defendant Erina Gilerman (Gilerman) filed the instant motion for summary judgment, or alternatively, summary adjudication (MSJ). On March 18, 2025, Plaintiffs filed an opposition.[2] On March 27, 2025, Gilerman filed a reply.

In reviewing a motion for summary judgment, courts must apply a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent’s claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.”¿ (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.)¿

“[T]he initial burden is always on the moving party to make a prima facia showing that there are no triable issues of material fact.”¿ (Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519.)¿ A defendant moving for summary judgment or summary adjudication “has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action . . . cannot be established, or that there is a complete defense to the cause of action.”¿ (Code Civ. Proc., § 437c, subd. (p)(2).)¿ A moving defendant need not conclusively negate an element of plaintiff’s cause of action.¿ (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854.)¿

To meet this burden of showing a cause of action cannot be established, a defendant must show not only “that the plaintiff does not possess needed evidence” but also that “the plaintiff cannot reasonably obtain needed evidence.”¿ (Aguilar, supra, 25 Cal.4th at p. 854.)¿ It is insufficient for the defendant to merely point out the absence of evidence.¿ (Gaggero v. Yura (2003) 108 Cal.App.4th 884, 891.)¿ The defendant “must also produce evidence that the plaintiff cannot reasonably obtain evidence to support his or her claim.”¿ (Ibid.)¿ The supporting evidence can be in the form of affidavits, declarations, admissions, depositions, answers to interrogatories, and matters of which judicial notice may be taken.¿ (Aguilar, 25 Cal.4th at p. 855.)¿

“Once the defendant … has met that burden, the burden shifts to the plaintiff … to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.”¿ (Code Civ. Proc., § 437c, subd. (p)(2).)¿ The plaintiff may not merely rely on allegations or denials of its pleadings to show that a triable issue of material fact exists, but instead, “shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action.”¿ (Ibid.)¿ “If the plaintiff cannot do so, summary judgment should be granted.”¿ (Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal.App.4th 463, 467.)¿

The court must “liberally construe the evidence in support of the party opposing summary judgment and resolve all doubts concerning the evidence in favor of that party,” including “all inferences reasonably drawn therefrom.”¿ (Yanowitz v. L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1037; Aguilar, supra, 25 Cal.4th at pp. 844-45.)¿ “On a summary judgment motion, the court must therefore consider what inferences favoring the opposing party a factfinder could reasonably draw from the evidence.¿ While viewing the evidence in this manner, the court must bear in mind that its primary function is to identify issues rather than to determine issues.¿ [Citation.]¿ Only when the inferences are indisputable may the court decide the issues as a matter of law.¿ If the evidence is in conflict, the factual issues must be resolved by trial.” (Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 839.)¿ “Put another way, have defendants conclusively negated a necessary element of the [plaintiff’s] case or demonstrated that under no hypothesis is there a material issue of fact that requires the process of trial?” (Jeld-Wen, Inc. v. Superior Court (2005) 131 Cal.App.4th 853, 860 [cleaned up].) Further, “the trial court may not weigh the evidence in the manner of a factfinder to determine whose version is more likely true.¿ [Citation.]¿ Nor may the trial court grant summary judgment based on the court’s evaluation of credibility.¿ [Citation.]”¿ (Id. at p. 840; see also Weiss v. People ex rel. Department of Transportation (2020) 9 Cal.5th 840, 864 [“Courts deciding motions for summary judgment or summary adjudication may not weigh the evidence but must instead view it in the light most favorable to the opposing party and draw all reasonable inferences in favor of that party”].)¿

a. Objection Nos. 1, 3, 4, 5, 6, 7, 10, 14, 15, 16, 17, 18, 19, 20: OVERRULE as the court did not rely on these in its analysis.

The elements of a cause of action for breach of fiduciary duty are: (1) the existence of a fiduciary relationship, (2) its breach, and (3) damage proximately caused by that breach.” (O’Neal v. Stanislaus County Employees’ Retirement Assn. (2017) 8 Cal.App.5th 1184, 1215.)

Gilerman contends that summary judgment is proper because Plaintiffs Israel and Mairam lack standing since they did not proceed via a derivative action on behalf of AFI. Israel and Mairam argue this court has already adjudicated their standing and that they otherwise provided ample evidence of standing.[3]

“A minority shareholder may bring a cause of action for breach of fiduciary duty against majority shareholders as an individual claim or as a derivative claim, depending on the circumstances.” (Schrage v. Schrage (2021) 69 Cal.App.5th 126, 149 (Schrage).) “But where a cause of action seeks to recover for harms to the corporation, the shareholders have no direct cause of action . . . .” (Ibid.) “The stockholder's individual suit, on the other hand, is a suit to enforce a right against the corporation which the stockholder possesses as an individual.” (Id. at p. 150.) “If the injury is one to the plaintiff as a stockholder and to him individually, and not to the corporation, as where the action is based on a contract to which he is a party, or on a right belonging severally to him, or on a fraud affecting him directly, it is an individual action.” (Ibid.) “The same injury may affect a substantial number of shareholders. If the injury is not incidental to an injury to the corporation, an individual cause of action exists.” (Ibid.) “[W]here conduct, including mismanagement by corporate officers, causes damage to the corporation, it is the entity that must bring suit; the individual shareholder may not bring an action for indirect personal losses (i.e., decrease in stock value) sustained as a result of the overall harm to the entity.” (Id. at p. 153.)

Here, Gilerman met her initial burden as to Israel but not as to Mairam. First, Gilerman points out that the TAC, which frames the issues at summary judgment, identifies the following alleged breaches:

“a. Caused AFI to send its funds directly to Okhman’s, Gudi’s and Gilerman’s bank accounts and/or to bank accounts of other business entities solely owned and managed by them, and/or to bank accounts for them;

b. Causing AFI to use AFI funds for their personal expenses that were unrelated to the business of AFI;

c. entering false entries into AFI’s financial books and records in order to conceal misappropriations;

d. issuing payments without the consent of shareholders and/or in excess of the amount authorized by D-Mas Note;

e. using AFI’s credit for their benefit to pay for personal expenses and not in furtherance of AFI’s business;

f. contacting AFI’s clients and instructed them to pay Okhman, Gudis, Gilerman and Shor in certified funds and cash instead of paying AFI so that Okhman, Gudis, and Gilerman could receive the funds that belonged to AFI and claim that AFI was attempting to collect on bad debts in order to hide their redirections and misappropriations;

g. commingling money from AFI’s accounts with those of Okhman, Gudis, Gilerman and Shor and/or business entities solely owned and managed by them in part in order to obstruct and/or prevent tracing of AFI’s funds and to conceal their wrongful conduct;

h. opening new bank accounts and failing to provide Plaintiffs with access to the financial books and records of the AFI despite written request, and restricting and barring Plaintiffs access to AFI books and records; [and]

i. misrepresented and concealing AFI profits and expenses from Mairam and Israel; and misrepresented the alleged capital contributions they made to AFI.”

In Schrage, the Court of Appeal found that the plaintiff’s claim was derivative because “[his] primary complaint was that his brothers’ mismanagement (including by driving him out of the Sage Automotive Group) squandered the Sage Automotive Group’s assets and ultimately led to its demise.” (Schrage, supra, 69 Cal.App.5th at p. 153.) The Court of Appeal additionally found that none of the ten injuries identified by the plaintiff were not really discrete injuries. (Id. at pp. 153-154.) Instead, the Court of Appeal concluded that those injuries, such as excluding him from operational decisions and falsifying carious corporate records, created incidental injuries to the plaintiff.[4] (Ibid.) The injuries alleged in Schrage closely resemble those alleged here. Second, Gilerman provided evidence in the form of verified discovery responses by Israel identifying the alleged financial misconduct committed by all Defendants, not just Gilerman. (SSUMF No. 34; Exhibit G.) However, Gilerman did not provide discovery responses, or other evidence, pertaining to Mairam. Thus, the burden shifts to Israel only.

Here, Israel did not meet his burden. Notably, Israel’s challenge to Gilerman’s facts is to expand the basis of the breach of fiduciary duty claim to include “commingling of funds, funds used for personal expenses, failure to obtain shareholder consent when other shareholders were paid.” (SSUMF No. 33.) There is no other evidence of discrete injury to Israel that challenges Gilerman’s evidence that this is a derivative claim.[5]

Accordingly, the court GRANTS Gilerman’s motion for summary adjudication on the Seventh Cause of Action as to Plaintiff Israel Yagudaev only.

Here, Gilerman met her burden that she did not owe a fiduciary duty. First, she provides evidence that she did not ask to be a director of AFI, did not participate in such a vote, did not know she was elected to a board position with AFI, and did not act as a director of AFI. (SSUMF Nos. 8-19.) Mairam, however, also met her burden that there is a factual dispute that Gilerman was a director and officer of AFI. Notably, Mairam produced Minutes of Organizational Meeting of Directors of AFI which indicate that Gilerman was present and accepted her appointment as a director and that she was also elected as the Chief Financial Officer.[6] (SSUMF No. 13; Yagudaev Decl. ¶ 7, 33, 34, 38, 40, 44, 59; Exhibit 4, 18.[7]) Indeed, on reply Gilerman concedes that “there is no question AFI’s paperwork was sloppy and false with respect to certain issues.” (Reply 6:11-12.) The court has rarely been presented with a clearer factual dispute.

As before, Gilerman met her initial burden that she did not breach any fiduciary duty. First, she provides evidence that she had no involvement in the decision to make the alleged improper payments. (SSUMF Nos. 41-48, 54, 62, 64, 67, 73, 75, 79.) Second, she provides evidence that the transfers were not improper, money is not missing or used for improper purposes. (SSUMF Nos.47-48, 50, 51, 66, 77, 78, 81, 82, 83.) Also as before, Mairam met her burden that there are triable factual disputes concerning the nature of the alleged improper transactions. Notably, Mairam identifies transactions to Gilerman totaling $171,848.58, $185,729 to Pulsar Motors, $250,000 to Mr. Keslin (a minority shareholder), $250,000 to Mr. Vinnik (minority shareholder), and $301,250 to a Ms. Presman (no interest in AFI). (Yagudaev Decl. ¶¶ 46, 47, 50, 52, 53, 54, 55, 56.) That Gilerman replies to challenge what these transactions truly were shows a factual dispute.

Accordingly, the court DENIES Gilerman’s motion for summary adjudication on the Seventh Cause of Action as to Plaintiff Mairam Yagudaev only.

Gilerman contends that since there are no torts alleged against her, this claim should be summarily adjudicated in her favor. Additionally, Gilerman contends that this claim fails because she is an alleged joint tortfeasor with Defendants Gudis and Okhman. Israel and Mairam argue that this claim is proper because Gilerman aided and abetted fraud by Defendants Okhman and Gudis. Gilerman replies that Israel and Mairam did not really address this claim.

“The tort of another doctrine holds that “[a] person who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third person is entitled to recover compensation for the reasonably necessary loss of time, attorney’s fees, and other expenditures thereby suffered or incurred.” (Mega RV Corp. v. HWH Corp. (2014) 225 Cal.App.4th 1318, 1337.) “The doctrine allows a plaintiff to recover attorney’s fees if he is required to employ counsel to prosecute or defend an action against a third party because of the tort of defendant.” (Behniwal v. Mix (2005) 133 Cal.App.4th 1027, 1043.)

Here, Gilerman met her initial burden. First, Plaintiffs have not filed any other action related to AFI. (SSUMF No. 36.) Second, Gilerman is an alleged joint tortfeasor. It necessarily follows that the tort of another doctrine does not apply because Israel and Mairam seek liability against Gilerman for her alleged misconduct in this action. Indeed, Israel and Mairam did not meet their burden that a factual dispute exists on this claim. Their factual disputes are legal arguments. (See, e.g., SSUMF No. 89.)

Accordingly, the court GRANTS Gilerman’s motion for summary adjudication as to the Eighth Cause of Action.

1. The court GRANTS Gilerman’s motion for summary adjudication on the Seventh Cause of Action as to Plaintiff Israel Yagudaev only. It is DENIED in all other respects.

2. The court GRANTS Gilerman’s motion for summary adjudication as to the Eighth Cause of Action.

[1] There appears to be a typo in the caption. The parties allegations indicate this is Israel Yagudaev.

[2] The court will refer to the Plaintiffs as Israel and Mairam for clarity.

[3] The court has reviewed the prior rulings on the various demurrers and there is no discussion on standing. As such, this motion is the first time the parties argue whether Israel and Mairam have standing to bring the breach of fiduciary duty claim against Gilerman. The court therefore rejects Israel and Mairam’s argument that this has already been adjudicated.

[4] Other claimed injuries were not pertinent to the damages discussion. (Schrage, supra, 69 Cal.App.5th at p. 154.) The court therefore declines to address them all.

[5] Israel’s reliance on Jara v. Suprema Meats, Inc. (2004) 121 Cal.App.4th 1238 (Jara) is misplaced. First, Jara concerned excessive dividend payments by majority shareholders to themselves which violated their duties to minority shareholders. (Id. at pp. 1257-1258.) Here, by contrast, the claims are against Gilerman as a director and officer, not as a majority shareholder. (SSUMF No. 38.) What is more, the claims concern commingling funds, using funds for personal expenses, and paying other shareholders (not majority shareholders) without consent of all shareholders. (SSUMF No. 33.) This case is too dissimilar for Jara to apply.

[6] The court is not persuaded by Gilerman’s argument that she was a nominal officer as the CFO.

[7] Exhibit 18 is a notarized form signed by Gilerman whereby she verified under penalty of perjury that the statements in the Statement of Identity and Questionnaire, which includes that she is the CFO/Treasurer of AFI Financial, Inc. from March 14, 2019 to Present. This is clearly a disputed issue.