Filed 8/23/23 WVJP 2018-3 LP v. SR Capital CA2/3

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on 

opinions not certified for publication or ordered published, except as specified by rule 8.1115(a). This 

opinion has not been certified for publication or ordered published for purposes of rule 8.1115(a). 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION THREE

WVJP 2018-3 LP,

Plaintiff and Appellant,

v.

SR CAPITAL LLC et al.,

Defendants and Respondents.

B317658

Los Angeles County

Super. Ct. No.

21STCV06658

APPEAL from a judgment of the Superior Court of Los

Angeles County, Michael L. Stern, Judge. Affirmed.

Aires Law Firm, Timothy Carl Aires for Plaintiff and 

Appellant.

The Wagner Firm, Avi N. Wagner, Charissa Morningstar, 

and Jennifer N. Hinds for Defendants and Respondents.

_______________________________________
2

INTRODUCTION

Plaintiff and appellant WVJP 2018-3 LP (plaintiff), an 

assignee of a judgment against Robert Rechnitz, appeals from a 

judgment of dismissal entered after the trial court sustained 

without leave to amend the demurrer jointly filed by defendants 

and respondents Shlomo Rechnitz1 and SR Capital LLC (SR 

Capital) (together, the SR defendants). Plaintiff claimed that 

Shlomo, through SR Capital, of which Shlomo is the sole owner 

and manager, transferred funds belonging to Robert to a bank 

account intended to hold the money beyond the reach of Robert’s 

creditors. In its second amended complaint (SAC), plaintiff 

asserted a cause of action for conspiracy to hinder, delay, or 

defraud creditors. The court sustained the SR defendants’ 

demurrer on the ground that plaintiff had inadequately pleaded 

facts supporting that Robert had any interest in the money 

transferred by the SR defendants and denied plaintiff leave to 

further amend. 

We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff is an assignee of a $787,919.17 judgment against 

Robert. Before filing this lawsuit, plaintiff examined Shlomo, 

Robert’s nephew, in connection with the action in which the 

judgment was entered against Robert. Shlomo also produced 

documents in response to a subpoena served on him by plaintiff. 

1 Shlomo Rechnitz’s first name is also spelled as Schlomo in the 

appellate record. We use Shlomo in this opinion. Because Robert and 

Shlomo share a last name, we refer to them by their first names. No 

disrespect is intended.
3

Plaintiff filed its original complaint against the SR 

defendants, Marlene Springer Savage, Stanley Treitel, and 

Robert in February 2021. The complaint asserted one cause of 

action for conspiracy to hinder, delay, and defraud creditors. The 

court sustained a demurrer filed by the SR defendants but 

granted plaintiff leave to file a first amended complaint, following 

plaintiff’s representation that it had obtained “records . . .

pertaining to the [HWP Account], as well as evidence from other 

sources” that would permit it to sufficiently allege a claim. In 

May 2021, plaintiff filed its first amended complaint. The SR 

defendants again demurred, arguing that the first amended 

complaint, like the original complaint, failed to allege any 

fraudulent transfer by Robert, any injury suffered by plaintiff, or 

the elements of a civil conspiracy as to the SR defendants. 

Plaintiff again contended that, if the demurrer were sustained, 

leave to amend should be granted because it had “obtained 

various records . . . pertaining to the [HWP account], as well as 

evidence from other sources” and thus “ha[d] access to ample 

facts sufficient to allege a common law tort arising out of [a] 

scheme to hinder, delay, or defraud creditors.” The court 

sustained the demurrer to the first amended complaint but again 

granted plaintiff leave to amend. 

In September 2021, plaintiff filed the SAC, the operative 

complaint on appeal. The SAC alleges that plaintiff is an assignee 

to a judgment creditor and has a claim against Robert, as debtor, 

based upon a civil judgment entered in August 2016 and 

amended in December 2016 in the Los Angeles Superior Court, in 

the sum of $787,919.17, with interest accruing at the rate of 

$215.81 per day. Robert is the uncle of Shlomo, who is the only 
4

officer, director, member, and manager with any actual or real 

authority over SR Capital. 

In September 2016, Treitel and Savage (together, the HWP 

defendants) opened a checking account under the fictitious name 

Highland Wilshire Properties (the HWP account). The SAC 

alleges that, by the express agreement of the defendants, the 

purpose of the account was “to hold money in which [Robert] had 

an interest beyond the reach of his creditors in order to pay his 

personal expenses from time to time at his special instance and 

request.” After the HWP account was opened, the HWP 

defendants, acting at Robert’s direction, “received money in 

which [Robert] had an interest from entities controlled by 

[Shlomo], including, without limitation, [SR Capital],” and then 

used these funds to pay Robert’s personal expenses. The HWP 

account was intended by the defendants to permit Robert “to use 

and enjoy money in which he had an interest while at the same 

time avoiding execution levy by Plaintiff . . . since the HWP 

[a]ccount was not a deposit account standing in the name of 

[Robert],” and in fact permitted him to do so. 

The SAC alleges that, between December 2016 and 

November 2020, SR Capital transferred over $1.5 million to the 

HWP account via 66 transactions in amounts ranging from 

$5,000 to $250,000. The day before each of the transfers was 

made, Robert and Shlomo “agreed that [SR Capital] would 

transfer [the relevant amount] of [Robert’s] money, which [SR 

Capital] held for his benefit with the knowledge and consent of its 

Manager, [Shlomo], to the HWP Account . . . for the express 

purpose of aiding [Robert] in an effort to hinder, delay, or defraud 

his creditors.” The SR defendants had notice of the pendency of 

the judgment no later than October 22, 2019, by virtue of a Code 
5

of Civil Procedure section 708.120 examination order and civil 

subpoena duces tecum, but nevertheless continued to participate 

in the alleged conspiracy. 

The SAC further alleges that, between January and 

November 2020, approximately $166,000 was withdrawn from 

the HWP account, via 237 transactions in amounts ranging from 

$3.14 to $9,620.75, for Robert’s benefit. Among other things, the 

withdrawals went towards medical care, credit card bills, utilities

bills, and insurance payments. Certain withdrawals also went to 

individuals, including Savage and others not named in this 

action, while others were made in cash. 

The SAC alleges that the money laundering scheme does 

not have any indicia of a bona fide loan or series of loans because 

there is no promissory note or other instrument evidencing a 

promise to repay, no interest has been charged, no fixed schedule 

of repayments has been established, no collateral was given, no 

repayments have been made, Robert has no reasonable prospect 

of repaying any loans, and the parties have not conducted 

themselves as if the transactions were loans. It further alleges 

that the transactions were not gifts because, at his September 22, 

2019, examination, Shlomo acknowledged that they were not 

gifts.2

2 The SAC alleges that Shlomo also carries a $240,000 payment made 

in December 2019 to the Correction Officers’ Benevolent Association, 

Inc. on the books of YTR Capital LLC, an entity he dominates and 

controls, “as a loan receivable due and payable by [Robert] even though 

any such payment to Correction officers’ Benevolent Association Inc. 

provided no reasonably equivalent value to [Robert].” It contends that 

this “was more probably than not another money laundering scheme” 

designed by Robert and Shlomo to benefit Robert’s son, Jona, in 

connection with a criminal restitution order against Jona in the 
6

The SAC does not plead facts explaining how Robert had an

interest in or right to the money held by SR Capital and 

subsequently transferred to the HWP account, notwithstanding 

that Shlomo was the sole owner and manager of SR Capital.

3

The SAC asserts four causes of action: (1) damages for 

conspiracy to hinder, delay, or defraud creditors against all 

defendants; (2) “Relief Against Fraudulent Transactions Under 

the Uniform Voidable Transactions Act, Civil Code §3439 et seq.”

(UVTA) against all defendants; (3) “Creditor’s Suit in Aid of 

Enforcement of Judgment Under Code of Civil Procedure 

§708.210 et seq.” against the SR defendants; and (4) “Quia Timet 

[Constructive Trust, Equitable Lien, Resulting Trust, Injunction, 

Appointment Of Monitor]” against the SR defendants and Robert.

With respect to the first cause of action for conspiracy to 

defraud, plaintiff alleges: “Even assuming, without admission, 

that the money transferred through the Money Laundering 

Scheme was property of someone other than Defendant Robert 

Rechnitz before those transfers were made, once the money 

transfers were made, the money became the property exclusively 

of Defendant Robert Rechnitz since it was held in the HWP 

Southern District of New York. Plaintiff does not appear to allege that 

this transaction was part of the conspiracy alleged against the SR 

defendants in this action.

3 The original complaint and first amended complaint do not contain 

the allegation that the money transferred by SR Capital to the HWP 

account was Robert’s. Rather, both complaints alleged that, even if the 

money belonged to someone else before it was transferred to the HWP 

account, it became Robert’s property after the transfers were made 

because it was held in the HWP Account exclusively for his use and 

benefit. 
7

Account exclusively for his use and benefit.” The SAC further 

alleges that, but for the defendants’ actions, “the money in the 

HWP Account would have been subject to execution levy using 

traditional methods of judgment enforcement.” 

The SR defendants again demurred, arguing that the SAC 

did not remedy the failures of the prior complaints with respect 

to the first cause of action and that the additional causes of 

action impermissibly exceed the scope of the court’s order 

granting leave to amend. Plaintiff argued that, if the demurrer 

was sustained, it should be given leave to amend the complaint a 

third time. However, plaintiff did not identify any new facts that 

would permit it to plead any of the causes of action asserted. 

While the demurrer was pending, plaintiff filed a motion 

seeking leave to file a third amended complaint. The motion did 

not allege any new facts, but included the three causes of action 

that had been added to the SAC without prior leave of court and 

added a cause of action for “[a]ccounting.” Plaintiff argued that 

these causes of action arose out of the same common nucleus of 

operative facts pleaded in the SAC and would “address this 

Court’s concerns regarding lack of particularity in pleading, 

together with additional prayers for relief.” 

Several days later, the court issued its order sustaining the 

SR defendants’ demurrer to the SAC. The court found that, 

although plaintiff alleged “numerous instances of money going 

out of the HWP account, by date, payee (credit card company, 

utility company etc.) and amount from January 2020 to 

December 2020” and “ ‘an express agreement to use the account 

for Robert,’ ” plaintiff did not attach any writing substantiating 

any such agreement to the complaint. The court further found 

that “there continue to be inadequately pleaded facts how Robert 
8

‘had an interest’ in the money that was placed in [the HWP] 

account” and that plaintiff continued to fail to properly plead a 

cause of action against the SR defendants for conspiracy to 

defraud. The court noted that it “had admonished plaintiff not to 

amend the Complaint to supplement with additional causes of 

action without obtaining leave of court” and that plaintiff had 

failed to seek any such leave before adding the other causes of 

action. The court dismissed all claims against the SR defendants

with prejudice.

In the order of dismissal, the court indicated that it was 

dismissing the action with prejudice as to “SR Capital LLC, et 

al.” but did not indicate that it was dismissing the entire action. 

Plaintiff timely appealed.

DISCUSSION

Plaintiff contends that the court erred in sustaining the 

demurrer on several grounds. Plaintiff first argues that the court 

incorrectly required that its conspiracy to hinder, delay, or 

defraud cause of action be pleaded with particularity, as the 

cause of action does not sound in traditional fraud and deceit. 

Plaintiff also asserts that the court erred in holding that the 

absence of a written agreement evidencing the alleged conspiracy 

rendered the SAC insufficient. 

Plaintiff contends that leave to amend should have been 

granted and identifies purportedly new facts that it contends 

adequately state a claim. Plaintiff further asserts that the 

allegations of the SAC and the new facts identified in its briefing 

support the theories of liability alleged without leave of court in 

the SAC and a civil cause of action under the Racketeer 

Influenced and Corrupt Organizations Act (18 U.S.C. § 1961 et 

seq.) (RICO).
9

Finally, plaintiff argues that, even if we otherwise affirm, 

we should remand the matter with directions to correct the 

judgment of dismissal, which plaintiff contends is unclear as to 

which parties were dismissed. 

For the reasons discussed herein, we affirm the court’s 

order sustaining the demurrer without leave to amend and 

decline to remand the matter with instructions to correct the 

judgment.

1. Standards of Review

We independently review a trial court’s order sustaining a 

demurrer to determine whether the operative complaint alleges 

facts sufficient to state a cause of action. (Ivanoff v. Bank of 

America, N.A. (2017) 9 Cal.App.5th 719, 725.) We assume the 

truth of all properly pled factual allegations and matters that are 

judicially noticeable. (Ibid.) “An order sustaining a demurrer 

without leave to amend may be affirmed on any ground stated in 

the demurrer, even if the trial court did not act on that ground.” 

(Association for Los Angeles Deputy Sheriffs v. County of Los 

Angeles (2019) 42 Cal.App.5th 918, 934.)

When a demurrer is sustained without leave to amend, we 

decide whether there is a reasonable possibility that the plaintiffs 

can amend their complaint to cure the defect. (Blank v. Kirwan

(1985) 39 Cal.3d 311, 318.) If the defect can be cured, “the trial 

court has abused its discretion and we reverse; if not, there has 

been no abuse of discretion and we affirm.” (Ibid.) “The burden of 

proving such reasonable possibility is squarely on the plaintiff.” 

(Ibid.) 
10

2. The court properly sustained the demurrer to the SAC.

2.1. Plaintiff’s conspiracy to hinder, delay, or defraud 

cause of action sounded in fraud and was 

required to be pleaded with particularity.

Plaintiff concedes that, “[o]f course, where fraud and deceit 

is alleged to be the object of a conspiracy, the claim must be 

pleaded with particularity,” but contends that “neither conspiracy 

to hinder, delay, or defraud creditors nor the tort of aiding and 

abetting a debtor in concealing their assets sound in traditional 

fraud and deceit.”4 (Italics added.) We disagree.

“ ‘[I]n California, fraud must be pled specifically; general 

and conclusory allegations do not suffice. [Citations.] “Thus ‘ “the 

policy of liberal construction of the pleadings . . . will not 

ordinarily be invoked to sustain a pleading defective in any 

material respect.” ’ [Citation.] [¶] This particularity requirement 

necessitates pleading facts which ‘show how, when, where, to 

whom, and by what means the representations were tendered.’ ” ’ 

[Citation.]” (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 

Cal.4th 979, 993.) Similarly, “[c]oncealment is a species of fraud, 

and . . . ‘must be pleaded with specificity.’ [Citation.]” (Blickman 

Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 

Cal.App.4th 858, 878.)

“[I]t is well settled that ‘there is no separate tort of civil 

conspiracy, and there is no civil action for conspiracy to commit a 

recognized tort unless the wrongful act itself is committed and 

damage results therefrom.’ [Citations.]” (Kerr v. Rose (1990) 216 

4 As the SR defendants note, no cause of action for aiding and abetting 

a debtor in concealing assets was pleaded in the SAC.
11

Cal.App.3d 1551, 1564.) In Patrick v. Alacer Corp. (2008) 167 

Cal.App.4th 995, 1016, the plaintiff asserted “conspiracy to 

defraud” as its first cause of action. The court concluded that the 

cause of action was “mislabeled.” (Ibid., fn. 11.) “ ‘Conspiracy is 

not a cause of action, but a legal doctrine that imposes liability on 

persons who, although not actually committing a tort themselves, 

share with the immediate tortfeasors a common plan or design in 

its perpetration.’ [Citation.] The cause of action here is for fraud.” 

(Ibid.)

Courts have long held that a conspiracy to defraud must be 

pleaded with particularity. (See Ross v. New Amsterdam 

Casualty Co. (1922) 56 Cal.App. 254, 258 [demurrer properly 

sustained where complaint fell “far short of alleging a conspiracy 

to defraud the plaintiff entered into between the defendant[s] . . . 

and entirely fails to measure up to that degree of particularity 

requisite in actions for damages for fraud and deceit”]; Favila v. 

Katten Muchin Rosenman LLP (2010) 188 Cal.App.4th 189, 211 

[“because fraud was the object of the conspiracy alleged . . . the 

claim must be pleaded with specificity”]; Prakashpalan v. 

Engstrom, Lipscomb & Lack (2014) 223 Cal.App.4th 1105, 1136 

[“Where fraud is alleged to be the object of the conspiracy, the 

claim must be pleaded with particularity.”].)

Neither Aghaian v. Minassian (2020) 59 Cal.App.5th 447

(Aghaian) nor Taylor v. S & M Lamp Co. (1961) 190 Cal.App.2d 

700 (Taylor) support plaintiff’s assertion that a cause of action for 

conspiracy to hinder, delay, or defraud creditors does not sound 

in traditional fraud and deceit and does not need to be pleaded 

with particularity. 

In Aghaian, the plaintiffs, beneficiaries of a trust, sued the 

defendants, Shahen, Alice and Arthur, in connection with 
12

Shahen’s management of the trust properties. (Aghaian, supra, 

59 Cal.App.5th at p. 452.) Shahen and Alice had been married for 

over 50 years and owned two homes as joint tenants. (Ibid.) The 

plaintiffs alleged that Shahen, Alice, and their son, Arthur, who 

was also their attorney, “ ‘concocted’ a ‘scheme . . . to hinder, 

delay or defraud Shahen’s creditors, particularly [the] [p]laintiffs, 

by putting [the couple’s] two houses . . . into Alice’s name only, 

and thereby making it more difficult for [the p]laintiffs to levy on 

them.’ ” (Ibid.) In furtherance of this scheme, Shahen and Alice 

filed a fraudulent petition for marital dissolution even though 

they had never separated, and, with Arthur acting as Shahen’s 

guardian ad litem, stipulated to a judgment in the dissolution 

action under which ownership of the houses was awarded to 

Alice, and Shahen was assigned the obligation to pay any 

judgment that might thereafter be entered in the plaintiffs’

pending lawsuit. (Id. at pp. 452–453.)

On appeal, the court concluded that the plaintiffs had 

adequately pleaded that “Shahen made the subject transfers with 

‘ “an actual intent to hinder, delay or defraud any creditor of the 

debtor,” ’ within the meaning of the UVTA, and alleged with 

particularity the existence of several badges of fraud: Shahen

made the transfers to an ‘insider[]’ . . . ; he ‘retained control of the 

two properties after the transfers’; the plaintiffs had sued Shahen

before he made the transfers; and Shahen ‘did not receive 

reasonabl[y] equivalent value . . . for his transfer of the two 

properties.’ ” (Aghaian, supra, 59 Cal.App.5th at p. 456, italics 

added.) With respect to the cause of action for aiding and abetting

Shahen’s fraudulent transfer asserted against Arthur, the court 

noted that the “plaintiffs alleged that Arthur ‘provided 

substantial assistance to Shahen and Alice in order to hinder, 
13

delay and defraud Shahen’s creditors, including [p]laintiffs,’ ” 

including by “ ‘orchestrat[ing] the “divorce strategy” which he 

knew was a sham’ ” and “ ‘sign[ing] the quitclaim deeds as 

Shahen’s “attorney-in-fact” to transfer title of the [Sherman Oaks 

properties] to Alice,’ ” and concluded that these allegations were

“sufficient to state a cause of action for aiding and abetting a 

fraudulent transfer.” (Id. at p. 459.) 

The Aghaian court did not expressly state that a cause of 

action for aiding and abetting fraud must be pleaded with 

particularity. However, as with a conspiracy to defraud, “there 

can be no aiding and abetting liability absent the commission of 

an underlying tort.” (Nasrawi v. Buck Consultants LLC (2014) 

231 Cal.App.4th 328, 343, fn. 7, citing Richard B. LeVine, Inc. v. 

Higashi (2005) 131 Cal.App.4th 566, 574.) Since the court had 

already concluded that the underlying tort of fraud was pleaded 

with particularity, it did not need to restate this requirement 

when considering whether the complaint adequately alleged that 

Arthur had aided and abetted in that fraud. Thus, Aghaian does 

not persuade us that the fraud underlying a cause of action or 

conspiracy to defraud need not be pleaded with particularity.

In Taylor, the question before the court was whether the 

complaint, filed in propria persona, stated a cause of action.

(Taylor, supra, 190 Cal.App.2d at p. 703.) The complaint sought 

damages for conversion of personal property belonging to plaintiff

and alleged that the defendant removed the locks from the 

plaintiff’s business, “caused the equipment, supplies, books and 

records of [plaintiff’s business] to be removed from the premises, 

and has refused to account to plaintiff for same.” (Id. at p. 704.) 

The court observed that “ ‘no particular form of words is essential 

in averring a conversion, provided the fact of the conversion is 
14

sufficiently stated.’ . . . [Citation.]” (Ibid.) “The failure of the 

complaint to use such terms as ‘fraud,’ ‘to defraud creditors,’ 

‘unlawfully,’ or ‘wrongfully’ does not render the pleading defective 

where, as here, such conduct and intent is implied from the 

ultimate facts alleged,” including that “the removal of the 

plaintiff’s property was carried out ‘surreptitiously.’ ” (Id. at 

p. 705.) The court concluded that the plaintiff had adequately 

alleged a cause of action for conversion. (Ibid.) The court also 

concluded that the complaint stated a cause of action based on 

allegations that the defendant had assisted individuals against 

whom the plaintiff had a judgment in concealing their assets and 

thus in preventing plaintiff from collecting the judgment. (Ibid.) 

“[A] debtor and those who conspire with him to conceal his assets 

for the purpose of defrauding creditors are guilty of committing a 

tort and each is liable in damages.” (Id. at p. 706.) The Taylor

court did not discuss the pleading standard for this second cause 

of action. 

Plaintiff relies on the Taylor court’s discussion of the 

pleading standard for conversion in arguing that particularity is 

not required, but does not argue that the SAC asserts a 

conversion cause of action under a mistaken label. “Conversion is 

a species of strict liability in which questions of good faith, lack of 

knowledge and motive are ordinarily immaterial.” (City of Los 

Angeles v. Superior Court (1978) 85 Cal.App.3d 143, 149.) “[I]f 

plaintiff’s ownership of the property is properly alleged and there 

is an averment that the defendant converted the same, a cause of 

action [for conversion] is sufficiently stated [citation].” “[N]o 

particular form of words is essential in averring a conversion, 

provided the fact of the conversion is sufficiently stated . . . .” 

(Baird v. Olsheski (1929) 102 Cal.App. 452, 454.) In contrast, 
15

“ ‘[f]raud is an intentional tort’ ” requiring a knowledge of falsity 

and intent to defraud. (Intrieri v. Superior Court (2004) 117 

Cal.App.4th 72, 85.) Further, in the absence of any express 

statement by the Taylor court that the relaxed pleading standard 

for conversion also applied to the conspiracy to defraud cause of 

action, and in light of the many cases holding that a conspiracy to 

defraud must be pleaded with particularity, we reject plaintiff’s 

contention that Taylor supports that it was only required to plead 

ultimate conclusions in order to state a cause of action for 

conspiracy to defraud.

In sum, the gravamen of the SAC is that the SR defendants 

conspired to defraud plaintiff by concealing assets belonging to 

Robert. The court correctly concluded that plaintiff’s cause of 

action for conspiracy to hinder, delay, or defraud must be pleaded 

with particularity.

2.2. The SAC failed to plead any underlying act of 

fraud with particularity.

We next consider whether the SAC stated a cause of action 

for conspiracy to hinder, delay, or defraud with particularity. To 

adequately plead a claim for civil conspiracy, plaintiffs must 

plead facts to support three elements: “(1) the formation and 

operation of the conspiracy, (2) wrongful conduct in furtherance 

of the conspiracy, and (3) damages arising from the wrongful 

conduct.” (Kidron v. Movie Acquisition Corp. (1995) 40 

Cal.App.4th 1571, 1581.) Here, as discussed, the wrongful act 

alleged was fraud. “ ‘The elements of fraud . . . are (a) 

misrepresentation (false representation, concealment, or 

nondisclosure); (b) knowledge of falsity (or “scienter”); (c) intent 

to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) 
16

resulting damage.’ ” (Lazar v. Superior Court (1996) 12 Cal.4th 

631, 638.)

The SAC alleges that the money that was transferred from 

SR Capital to the HWP account, which the HWP defendants used 

to pay for Robert’s personal expenses, was Robert’s money before 

any transfer took place, and that the defendants thus conspired 

to keep money that should have been used to satisfy the 

judgment out of plaintiff’s reach. Alternatively, the SAC alleges 

that, even if the money was not Robert’s before SR Capital 

transferred it to the HWP account, it belonged to Robert once in 

that account because the HWP defendants agreed to use it for his 

sole benefit. We consider whether the SAC adequately alleges 

fraud under both theories in turn.

2.2.1. The SAC fails to plead with particularity that 

the money transferred from SR Capital to the 

HWP account belonged to Robert. 

As a preliminary matter, the SR defendants contend that 

the allegation that money transferred from SR Capital to the 

HWP account was Robert’s should be disregarded as a sham 

pleading. “Under the sham pleading doctrine, plaintiffs are 

precluded from amending complaints to omit harmful allegations, 

without explanation, from previous complaints to avoid attacks 

raised in demurrers or motions for summary judgment. 

[Citations.] . . . ‘Allegations in the original pleading that rendered 

it vulnerable to demurrer or other attack cannot simply be 

omitted without explanation in the amended pleading. The policy 

against sham pleadings requires the pleader to explain

satisfactorily any such omission.’ [Citation.]” (Deveny v. Entropin, 

Inc. (2006) 139 Cal.App.4th 408, 425–426, fn. omitted.) The 

doctrine is not intended to prevent honest complainants from 
17

correcting erroneous allegations or to prevent the correction of 

ambiguous facts, but to enable courts to prevent an abuse of 

process. (Id. at p. 426.)

In the original complaint, plaintiff alleged that, regardless 

of “the nature of the money transfers . . . before those transfers 

were made . . . once the money transfers were made the money 

became the property exclusively of [Robert].” In the operative 

complaint, plaintiff instead alleges that the transfers from SR 

Capital consisted “of Defendant Robert Rechnitz’s money.” 

We disagree with the SR defendants’ contention that these 

two allegations are necessarily inconsistent. The original 

complaint did not appear to affirmatively allege that the funds 

belonged to someone other than Robert, but that it did not matter 

what the source of the funds was because they were eventually 

used for Robert’s benefit. Indeed, plaintiff continued to allege in 

the SAC that, even if the money was not Robert’s to begin with, it 

became his property once it was held in the HWP account for his 

benefit. Thus, the SAC did not simply remove an unhelpful 

allegation. The further allegation that the funds transferred to 

the HWP account belonged to Robert could be characterized as 

correcting a fact initially left ambiguous. 

Nevertheless, we conclude that plaintiff failed to plead any 

specific facts supporting that the money transferred by SR 

Capital to the HWP account was Robert’s. There are dozens of 

allegations concerning the circumstances surrounding the 

transfers from SR Capital to the HWP account, and hundreds 

concerning how funds in the HWP account were used for Robert’s 

benefit, but there are none addressing whether, when, and how 

Robert transferred funds to SR Capital, the amount of any such 

transfers, or whether any consideration received by Robert for 
18

such transfers was reasonably equivalent to the value of any

asset transferred or the amount of the obligation incurred. The 

allegation that the SR defendants’ transfers “greatly reduced” the 

apparent value of Robert’s estate is unsupported by any specific 

allegations.

Plaintiff argues that it need not allege any fraudulent 

transfer of Robert’s assets to plead a conspiracy to defraud, citing 

Taylor, supra, 190 Cal.App.2d at page 705. The Taylor court held 

that a conspiracy to defraud had been adequately alleged where 

the plaintiff pleaded “a concealment of [the judgment debtors’] 

assets for the purpose of defrauding their principal creditor.” 

(Ibid.) It is possible that plaintiff could allege a conspiracy to 

defraud by pleading the existence of an agreement to conceal the 

debtor’s assets, or to assist the debtor in concealing them.

However, plaintiff has pleaded no specific facts supporting that 

the SR defendants assisted Robert in concealing assets that 

belonged to him to keep them beyond the reach of his creditors. 

The term “conceal” does not appear anywhere in the SAC. 

Further, if the money SR Capital transferred to the HWP account 

was Robert’s, as the SAC repeatedly alleges, the implication is 

that Robert transferred that money to SR Capital or Shlomo at 

some earlier point in time. Taylor does not relieve plaintiff of the 

obligation to plead the circumstances of any such transfer.

Plaintiff further alleges and contends that this is a 

standard “piggy bank” case but fails to address the fundamental 

differences between the cases on which it relies and the 

circumstances alleged in the SAC. 

In Curci Investments, LLC v. Baldwin (2017) 14 

Cal.App.5th 214, 217 (Curci), the creditor sought to add a limited 

liability company (LLC) created by the debtor, a real estate 
19

developer, as a judgment debtor. The LLC in question was 

formed for the sole purpose of holding the debtor’s and his wife’s 

cash balances. (Id. at p. 218.) The LLC had two members: the 

debtor, who had a 99 percent member interest, and his wife, who 

had a 1 percent member interest. (Ibid.) Thus, the debtor 

determined when, if at all, the LLC would make monetary 

distributions to its members. (Ibid.) Two years after forming the 

LLC, the debtor, in an individual capacity, borrowed $5.5 million 

from the creditor, to be repaid in full by January 2009. (Ibid.) 

Shortly thereafter, the debtor, through the LLC, settled eight 

family trusts and loaned a total of approximately $42.6 million to 

three general partnerships formed for estate planning purposes.

(Ibid.) When the debtor did not repay the $5.5 million loan, the 

creditor filed an action and sought judgment, which was entered 

in the creditor’s favor. (Id. at p. 219.) Despite having made no 

payments on the judgment, in 2014, the debtor, as manager of 

the LLC, chose to execute amendments to the $42.6 million loan 

to extend the terms by five years without requiring any 

consideration for the extension. (Ibid.) The creditor sought a 

charging order against the LLC and other business entities in 

which the debtor had an interest, which was granted in 2014.

(Ibid.) The creditor received no money as a result of the charging 

order. (Ibid.) Although the LLC had distributed $176 million to 

the debtor and his wife from 2006 to 2012, no distributions were 

made since the entry of judgment against the debtor. (Ibid.) The 

creditor therefore sought to make the LLC a judgment debtor

under the outside reverse veil piercing doctrine. (Ibid.) The Curci 

court concluded that the doctrine was available in the case and 

remanded to allow the trial court to engage in the required factdriven analysis in the first instance. (Id. at p. 224.)
20

In In re Hamm (Bankr. S.D.Fla. 2006) 356 B.R. 263, 267

(Hamm), the debtors, a husband and wife, brought an adversary 

proceeding seeking a determination that their federal income tax 

liabilities were discharged in their underlying chapter 7 case. The 

court concluded that the debtors’ tax liabilities survived their 

bankruptcy and could be enforced by the government. (Ibid.) As is 

relevant here, the husband, who was a plastic surgeon, operated 

his practice as a corporation and later as an LLC, with separate 

accounts from the debtors’ personal accounts. (Id. at pp. 273–

274.) However, he withdrew an average of $80 per day from his 

practice’s account for personal expenses, such as handymen, 

parking valets, and cash wires for the debtors’ children. (Id. at 

p. 274.) The court “conclude[d] that the [d]ebtors used the 

business account to the extent of their personal-use withdrawals 

as a kind of personal piggy bank upon which the Internal 

Revenue Service could not easily levy.” (Id. at p. 281.)

Thus, in both Curci and Hamm (neither of which was 

decided on a demurrer to a claim of fraud or conspiracy to 

defraud), the debtors controlled the LLCs they used as piggy 

banks for personal expenses. Here, the SAC alleges that money 

held by SR Capital was Robert’s money but does not explain how 

Robert had any interest in or right to funds that were held by a 

company controlled completely by Shlomo.

Plaintiff also relies heavily on Nagel v. Westen (2021) 59 

Cal.App.5th 740 (Nagel), both for the proposition that the law 

will not be interpreted in a way that frees up debtors to devise 

new and more creative ways to circumvent valid obligations and 

in support of its claim that the court placed too high a pleading 

burden on plaintiff. Nagel concerned a claim brought under the 

UVTA. (Id. at p. 744.) In Nagel, the plaintiff purchased a house 
21

from defendants that turned out to have extensive, undisclosed 

water damage. (Ibid.) When it had become apparent that the 

arbitrator would rule in plaintiff’s favor, the defendants designed 

and implemented an asset protection plan, which included the 

purchase of a house in Texas, which they improved with the 

balance of their sale proceeds. (Id. at p. 745.) Defendants 

promptly moved to Texas upon receiving the arbitrator’s 

preliminary award so they could invoke the state’s unlimited 

homestead exemption to shield the new house from creditors.

(Ibid.) The defendants argued that the plaintiff could not 

maintain a cause of action for fraudulent transfer without 

identifying a third party transferee who received their assets and 

the trial court agreed. (Id. at p. 746.)

On appeal, the court concluded that the plaintiff had 

adequately alleged a transfer under the UVTA where she alleged 

that defendants “moved their personal belongings and financial 

assets, including a portion of the . . . sale proceeds, to a foreign 

jurisdiction” and that “they used the . . . sale proceeds to buy and 

improve foreign real estate for the purpose of shrinking the 

corpus of assets available for collection.” (Nagel, supra, 59 

Cal.App.5th at p. 749.) It held that “physically relocating 

personal property and transmitting or transporting sale proceeds 

out of state, then transmuting them into a different legal form, 

may constitute a direct or indirect mode of parting with assets or 

one’s interest in those assets” and that “the UVTA does not limit 

its enforcement measures to third parties.” (Id. at pp. 749–750.)

Nagel does not assist plaintiff any more than Curci or 

Hamm. The issue in Nagel was whether transmuting property 

without transferring it to a third party could support a claim 

under the UVTA. The plaintiff in Nagel alleged that the 
22

defendants, upon realizing that the outcome of the arbitration 

would not be favorable, used the proceeds from the fraudulent 

sale of their home to the plaintiff and purchased and improved a 

house in Texas for the express purpose of shielding that money 

from collection. Here, there are no specific allegations supporting 

that Robert transferred or transmuted any property in order to 

shield it from his creditors; there is only the conclusory allegation 

that money held by SR Capital and later transferred to the HWP 

account belonged to Robert. 

Plaintiff contends that its allegations that the transfers

made by SR Capital were neither gifts nor bona fide loans was 

sufficient to plead that the money transferred belonged to Robert. 

We disagree. As noted, to adequately plead fraud, a plaintiff must 

allege facts showing “ ‘ “ ‘how, when, where, to whom, and by 

what means’ ” ’ ” the fraud was committed. (Robinson Helicopter 

Co., Inc. v. Dana Corp., supra, 34 Cal.4th at p. 993.) Allegations 

that the transfers from SR Capital were not gifts or bona fide 

loans to Robert are not an adequate substitute for pleading with 

specificity that assets moved from SR Capital to the HWP 

account were Robert’s and thus would have been available to 

satisfy the judgment if not for the defendants’ actions in 

concealing them.

Chen v. Berenjian (2019) 33 Cal.App.5th 811, on which 

plaintiff relies, is of little assistance to plaintiff. In Chen, the 

plaintiff obtained two judgments against the debtor, Shazad, who 

entered into an agreement with his brother, Sharmad, that

Sharmad would file a lawsuit against Shazad, Shazad would 

allow a default judgment to be taken against him, and Sharmad 

would obtain title to or a lien against all of Shazad’s assets in 

order to create a shield against the plaintiff and other creditors.
23

(Id. at p. 815.) The plaintiff alleged that Sharmad made no 

genuine effort to enforce the judgment or obtain assets from 

Shazad in satisfaction of the judgment. (Id. at p. 816.) However, 

when plaintiff attempted to enforce the judgment against 

Shazad, Sharmad would levy on the property to defeat plaintiff’s 

efforts. (Ibid.) For example, Sharmad levied on stereo speakers 

that Shazad had sold to the plaintiff and which were the basis of 

plaintiff’s lawsuit against Shazad to defeat plaintiff’s claim. 

(Ibid.) Shazad also transferred other assets to Sharmad without 

reasonable consideration to conceal them from the plaintiff. 

(Ibid.) The primary issue in Chen was whether the litigation 

privilege barred the plaintiff’s claim under the UVTA (id. at 

pp. 817–822), which has no bearing here. The court also held that 

the trial court had erred in sustaining the demurrer on grounds 

of uncertainty because plaintiff alleged that the speakers 

belonged to the business owned by Shazad, which was not a 

named defendant. (Id. at p. 822.) The Court of Appeal concluded 

that the complaint had adequately alleged that the speakers were 

owned by Shazad. (Ibid.)

Thus, the sole uncertainty identified by the trial court in 

Chen was not whether a fraudulent transfer by the debtor had 

been alleged, but whether the speakers belonged to Shazad or his 

business. Unlike here, the complaint in Chen alleged multiple 

transfers from Shazad to his brother that were intended to 

frustrate the plaintiff’s attempts to enforce his judgment against 

Shazad and identified specific assets involved in those transfers.

Nothing in the opinion indicates that, where a transfer from an 

individual to a debtor is alleged to be neither a gift nor a bona 

fide loan, the plaintiff has adequately alleged an earlier 

fraudulent transfer from the debtor to that individual. 
24

Plaintiff contends that it may be relieved of the obligation 

to plead fraud with particularity if facts supporting the claim lie 

more within the defendant’s knowledge than plaintiff’s. However,

as the SR defendants point out, plaintiff did not argue that this 

exception applied below and has therefore waived this argument. 

(See Ochoa v. Pacific Gas & Electric Co. (1998) 61 Cal.App.4th 

1480, 1488, fn. 3 [“It is axiomatic that arguments not asserted 

below are waived and will not be considered for the first time on 

appeal”].) Even if plaintiff had not forfeited this contention, the 

cases plaintiff relies on recognize that “ ‘[l]ess 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,” ’ ” which, for example, 

can relieve the plaintiff of pleading the names of employees who 

made misrepresentations. (Miles v. Deutsche Bank National 

Trust Co. (2015) 236 Cal.App.4th 394, 403.) Plaintiff does not cite 

any cases supporting that it may carry its burden of pleading a 

cause of action sounding in fraud without alleging any facts 

supporting that fraud took place and merely alleging the result of 

the purported fraud—i.e., that the funds transferred by SR 

Capital to the HWP account consisted of Robert’s money.

2.2.2. The SAC fails to allege that there was any 

underlying fraud if the money was not Robert’s 

prior to the defendants’ acts.

The SAC alleges that, even if the money transferred by SR 

Capital to the HWP account was not initially Robert’s, it became 

his because it was held exclusively in the account for his use and 

benefit. However, even if that is the case, it is unclear how the

transfer of the funds from SR Capital to the HWP account 

delayed, hindered, or defrauded creditors.
25

Although we “treat[] the demurrer as admitting all 

material facts properly pleaded,” we do not “assume the truth of 

contentions, deductions or conclusions of law.” (Aubry v. Tri-City 

Hospital Dist. (1992) 2 Cal.4th 962, 967.) Thus, we are not 

required to accept the conclusion that, even if Robert had no right 

to this money beforehand, “[b]ut for the Money Laundering 

Scheme, the money in the HWP account would have been subject 

to execution levy using traditional methods of judgment 

enforcement.” Rather, taking the facts alleged as true, plaintiff

could not levy on funds held by the SR defendants. If the HWP 

defendants used the funds transferred to that account for 

purposes other than paying for Robert’s expenses, plaintiff could 

not claim that those funds belonged to Robert, since the SAC 

alleges that the account was controlled by the HWP defendants. 

In other words, if the money was not Robert’s before the 

defendants’ actions, the only way money deposited in the HWP 

account could arguably be available to satisfy the judgment 

against him is because the SR defendants made the transfers and 

the HWP defendants agreed to use the account to cover Robert’s 

personal expenses. 

The SAC does not explain how the SR defendants’ acts, 

which created a new source of funds allegedly belonging to 

Robert, rather than concealing funds already belonging to him, 

hindered, delayed, or defrauded plaintiff. Plaintiff does not 

identify a single case where a transfer made to a judgment debtor 

or funding an account to cover the debtor’s personal expenses was 

held to be sufficient to plead fraud or a conspiracy to defraud 

against the transferor.

Assuming for the sake of argument that the SR defendants 

acted with fraudulent intent, the SAC fails to allege how 
26

defendants’ actions injured plaintiff if the money was not Robert’s 

before it was transferred to the HWP account. If the alleged 

damages would have resulted even in the absence of the fraud, 

“ ‘causation cannot be alleged and a fraud cause of action cannot 

be sustained.’ [Citation.]” (Rossberg v. Bank of America, N.A.

(2013) 219 Cal.App.4th 1481, 1499; see also Berger v. Varum

(2019) 35 Cal.App.5th 1013, 1020 [to plead common law 

fraudulent transfer, “ ‘ “[m]ere intent to delay or defraud is not 

sufficient; injury to the creditor must be shown affirmatively . . . 

[and] prejudice to the plaintiff is essential” ’ ”].) The SAC alleges 

that “[p]laintiff has been damaged by . . . not being able to apply 

the money placed in the HWP account from time to time in 

satisfaction of the judgment.” However, this theory of damages 

presumes that the money was Robert’s, and thus available to 

satisfy the judgment before it was moved to the HWP account. 

Plaintiff was also required to allege how the defendants’ acts

resulted in harm to plaintiff that it would not have otherwise 

suffered even if the money was not Robert’s in the first place.

Plaintiff has failed to do so. “A well-established principle of 

the law of fraudulent transfers is . . . [that] ‘[i]t cannot be said 

that a creditor has been injured unless the transfer puts beyond 

[its] reach property [it] otherwise would be able to subject to the 

payment of [the] debt.’ [Citations.]” (Mehrtash v. Mehrtash (2001) 

93 Cal.App.4th 75, 80.)5 Plaintiff does not allege any facts 

supporting that the money SR Capital transferred to the HWP 

5 Although Mehrtash v. Mehrtash, supra, 93 Cal.App.4th 75 was an 

action brought under the UVTA, the principles set forth in such cases 

are instructive when considering a common law claim premised on a 

fraudulent transfer. (See Berger v. Varum, supra, 35 Cal.App.5th at 

p. 1020.)
27

account would otherwise have been available to satisfy the 

judgment. Shlomo is not the judgment debtor, and the SAC does 

not allege that Robert has any ownership or member interest in 

SR Capital. Thus, plaintiff would not be in any better position to 

obtain satisfaction of the judgment if the alleged bad acts had not 

taken place.

Rice v. Downs (2021) 73 Cal.App.5th 213 (Rice) does not 

assist plaintiff. In that case, the debtor, Rice, was the founder 

and sole managing member of Triton Community Development 

LLC (Triton). (Id. at p. 219.) Downs was Rice’s attorney and, after 

their relationship deteriorated, Downs obtained an arbitration 

award against Rice for hundreds of thousands of dollars in 

attorney fees and costs. (Id. at pp. 218–219.) Judgment was 

entered and the court granted Downs’s motion for a charging 

order directing various limited liability companies of which Rice 

was a member, including Triton, to pay any distributions to 

which Rice was entitled directly to Downs until the judgment was 

satisfied. (Id. at p. 220.)

Rice filed for Chapter 11 bankruptcy and disclosed that, 

after the charging order was entered, Triton had paid Glaser 

Weil Fink Howard Avchen & Shapiro, LLC (Glaser Weil), the 

firm that represented him in his action against Downs, $450,000. 

(Rice, supra, 73 Cal.App.5th at p. 220.) Downs argued that this 

transfer violated the charging order and argued that the trial 

court should order this payment disgorged from Glaser Weil. 

(Ibid.) Rice contended that months before Downs moved for the 

charging order, Triton had entered into an agreement with 

Glaser Weil under which Triton became a co-obligor on Rice’s 

debt to the law firm and that the payment to Glaser Weil was not 

a distribution to Rice subject to the charging order, but rather “a 
28

payment made by Triton to satisfy its own debt” as co-obligor on 

Rice’s debt. (Id. at pp. 220–221.) Rice also argued that “Glaser 

Weil had a ‘perfected security interest in those funds which was 

senior to Downs’[s] lien arising from the charging order’ ” because 

he had granted Glaser Weil a security interest in his membership 

in Triton, which Glaser Weil had perfected. (Id. at p. 221.) The 

trial court granted the enforcement motion and, when Rice stated 

he could not pay, agreed with Downs’s suggestion that it should 

be disgorged from Glaser Weil. (Id. at p. 223.) The court later 

issued its written order, in which it concluded that Triton was an 

alter ego of Rice and amended the charging order to make Triton 

equally liable jointly and severally liable for the sums owed to 

Downs. (Id. at p. 224.) It further held that the payment to Glaser 

Weil was improper and “ ‘a windfall in light of a valid order from 

this Court that the monies should have been used to satisfy that 

charging order[,]’ ” and ordered Glaser Weil to pay Downs 

$450,000. (Id. at p. 225.) Glaser Weil appealed. (Ibid.) 

On appeal, the court rejected the argument that the 

$450,000 payment was not a distribution subject to the charging 

order. (Rice, supra, 73 Cal.App.5th at p. 225.) The court 

concluded that “it is clear that had Rice disbursed the $450,000 to 

himself to pay his legal bills, that disbursement would constitute 

a distribution;” that “Rice acknowledged in his declaration that 

he was ‘the founder and sole Managing Member’ of Triton”; and 

that “[t]his evidence supports the trial court’s finding that . . . 

Rice had full control over Triton’s distributions.” (Id. at p. 227.)

Further, “[e]ven if Triton made the payment pursuant to its own 

contractual obligation to Glaser Weil . . . the payment was 

‘pursuant to the obligation [Triton] had undertaken to Glaser 

Weil,’ referring to the agreement ‘under which Triton became a 
29

co-obligor with [Rice] for past and future fees charged by the 

firm[,]’ ” which “establishe[d] that Triton paid not because Glaser 

Weil provided services to Triton, but because Triton had agreed 

to become ‘co-obligor’ on Rice’s obligation.” (Ibid.) “Thus, although 

Triton may have been paying for the obligation it had assumed, 

the result was that Rice personally was relieved of a portion of 

his debt.” (Id. at pp. 227–228.) Further, Glaser Weil failed to

challenge the trial court’s conclusion that Triton was Rice’s alter 

ego. “The fact that as a technical matter it was Triton that made 

the payment pursuant to its own purported obligations was 

immaterial because Triton and Rice were effectively one and the

same.” (Id. at p. 228.) The court nevertheless concluded that 

Glaser Weil’s perfected security interest had priority over the 

charging order. (Id. at p. 229.)

Rice did not address whether Rice or Triton were liable for 

a fraudulent transfer. Whether a payment made by a company 

totally owned and controlled by a judgment debtor was a 

distribution subject to a charging order has little relevance here, 

where the SAC alleges that the SR defendants used money 

within their control to fund an account to pay the debtor’s 

personal expenses. Nor are we concerned with whether the HWP 

account can be reached by Robert’s creditors because the 

payments made by the HWP defendants on Robert’s behalf 

“effectively [were] money in [Robert’s] pocket.” (Rice, supra, 73 

Cal.App.5th at p. 228.)6 The sole issue before us is whether the 

6 It appears from the record that a court has already held that the 

HWP account “constitutes property in which [Robert] has an interest 

and shall be applied in satisfaction of the Judgment” against him. 
30

allegations, if accepted as true, support that the SR defendants 

conspired to defraud plaintiff.

We hold that plaintiff has failed to meet its burden of 

pleading fraud, and thus has necessarily failed to allege a 

conspiracy to commit fraud against the SR defendants. Thus, the 

demurrer was properly sustained.

3. The court did not abuse its discretion in denying 

plaintiff leave to amend its complaint a third time.

Having concluded that the trial court did not err in 

sustaining the demurrer, we consider whether the plaintiff has 

demonstrated that the defects in the SAC may be cured by 

amendment, such that the denial of leave to amend was an abuse 

of discretion. 

Plaintiff identifies both new facts and new causes of action 

that it contends satisfy its burden of demonstrating that 

amendment would not be futile. “Contrary to long-standing rules 

generally precluding a party from changing the theory of the case 

on appeal [citations], a plaintiff may propose new facts or 

theories to show the complaint can be amended to state a cause of 

action, thereby showing the trial court ‘abused its discretion’ 

[citation] in not granting leave to amend.” (Connerly v. State of 

California (2014) 229 Cal.App.4th 457, 460.) “The plaintiff ‘must 

show in what manner he can amend his complaint and how that 

amendment will change the legal effect of his pleading.’ 

[Citations.]” (Ibid.)

We conclude that the new legal theories and facts on which 

plaintiff relies do not remedy the defects of the SAC.
31

3.1. Plaintiff fails to identify any new facts 

supporting that it could adequately plead a cause 

of action against defendants.

In arguing that it can allege facts supporting a cause of 

action against the SR defendants, plaintiff relies on documents 

attached to its motion to file a third amended complaint, which it 

concedes was mooted by its appeal. Nevertheless, we may

consider these facts in determining whether plaintiff could cure 

the defects in the SAC. 

Plaintiff identifies 10 checks drawn from the HWP account, 

which indicate on their face that they were for Robert’s benefit. 

However, as the SR defendants point out, the amounts, dates, 

and recipients of these checks were all alleged in the SAC.7 These 

facts are not new, nor do they assist plaintiff in pleading that the 

money in the HWP account belonged to Robert before it was 

deposited there, or that plaintiff was injured by the SR 

defendants’ act of transferring money to the HWP account for 

Robert’s benefit. 

Plaintiff further claims that sworn testimony Shlomo gave 

in 2019 supports the alleged money laundering scheme. The 

testimony indicates that Shlomo paid bills on Robert’s behalf and 

paid money to the HWP account, facts already alleged in the 

SAC. The testimony does not support that Shlomo assisted in a 

scheme to keep money that belonged to Robert out of the reach of 

7 The SAC alleges that a check in the amount of $700 was signed by 

Marlene Savage and tendered to Facey Medical Foundation for 

Robert’s benefit on May 4, 2020. Plaintiff’s opening brief includes a

check image to the same recipient on the same date indicating that the 

amount paid was $57.90. 
32

Robert’s creditors. Similarly, plaintiff cites testimony given by 

Robert at a postjudgment examination which establishes that:

Savage worked for Robert, handling “paperwork, technical 

matters, things like that”; Robert did not believe that Savage 

paid his mortgage; and Robert did not know whether his 

mortgage was paid in December 2019 or January 2020. Plaintiff 

fails to explain how this testimony assists it in pleading a 

conspiracy to defraud or any other cause of action against the SR 

defendants. 

Plaintiff also relies on a document showing that the HWP 

account was not in Robert’s name, but in Treitel’s. However, the 

SAC already alleges that the HWP account was opened by Treitel 

and Savage, not by Robert. This fact is neither new nor of 

assistance in remedying the deficiencies in the SAC. 

Finally, plaintiff cites a judgment entered in an action 

brought against Banner Bank, Robert, and various LLCs, in 

which the court held that “[t]he express purpose of Defendant 

Banner Bank Account Nos. 58406003828 [the HWP account] and 

58406006076 was to hold money in which Defendant Robert 

Rechnitz had an interest beyond the reach of his creditors.” As to 

all defendants but Banner Bank, the judgment was by default. 

The action in question did not name the SR defendants as parties

and the mere fact that judgment was entered does not establish 

that plaintiff has or could adequately allege that the SR

defendants engaged in a conspiracy to defraud plaintiff.8

8 Plaintiff suggests that the judgment has collateral estoppel effect as 

to the SR defendants. The SR defendants correctly contend that the 

doctrine of collateral estoppel only applies if “the party against whom 

the plea is asserted was a party, or in privity with a party, to the 

previous suit.” (Producers Dairy Delivery Co. v. Sentry Ins. Co. (1986) 
33

In sum, none of the facts identified indicate that plaintiff 

could cure the deficiencies of the SAC with respect to the SR 

defendants.

3.2. Plaintiff fails to demonstrate the possible 

viability of any new causes of action. 

Plaintiff contends that the second through fourth causes of 

action advanced in the SAC were not new causes of action but 

“new theories of liability based on the same common nucleus of 

facts,” and that the court should therefore have granted plaintiff 

leave to amend the complaint to plead them. To satisfy its burden 

of proving there is a reasonable possibility of amendment, 

plaintiff was required to “clearly and specifically set forth the 

‘applicable substantive law’ [citation] and the legal basis for 

amendment, i.e., the elements of the cause of action and 

authority for it. Further, plaintiff must set forth factual 

allegations that sufficiently state all required elements of that 

cause of action.” (Rakestraw v. California Physicians’ Service

(2000) 81 Cal.App.4th 39, 43.) “Where the appellant offers no 

allegations to support the possibility of amendment and no legal 

authority showing the viability of new causes of action, there is 

no basis for finding the trial court abused its discretion when it 

sustained the demurrer without leave to amend.” (Id. at p. 44.) 

Plaintiff fails to explain the requirements for pleading the

additional causes of action (or theories of liability) identified in 

the SAC, nor does it identify “ ‘specific facts showing the 

complaint can be amended to state’ ” them. (Roe v. Hesperia 

41 Cal.3d 903, 910.) Plaintiff advances no facts or arguments 

supporting that the SR defendants were in privity with any party to 

the action in which the judgment was entered.
34

Unified School District (2022) 85 Cal.App.5th 13, 24.) Plaintiff 

merely asserts that a reasonable trier of fact could find 

defendants liable for damages and that plaintiff therefore “has 

available theories of liability” under the UVTA, a creditor’s suit 

in aid of enforcement of judgment, quia timet, and accounting. 

This was not sufficient to carry plaintiff’s burden.

Although Plaintiff makes a more robust attempt at arguing 

that it could maintain a RICO cause of action against the SR 

defendants, it nevertheless fails to establish a reasonable 

possibility that this cause of action remedies the defects in the 

SAC.

The elements of a civil RICO claim are: “ ‘(1) conduct (2) of 

an enterprise (3) through a pattern (4) of racketeering activity 

(known as “predicate acts”) (5) causing injury to the plaintiff’s

“business or property.” ’ [Citation.]” (Living Designs, Inc. v. E.I. 

Dupont de Nemours and Co. (9th Cir. 2005) 431 F.3d 353, 361.) 

“ ‘ “[R]acketeering activity” is any act indictable under several 

provisions of Title 18 of the United States Code, and includes the 

predicate acts of mail fraud, wire fraud and obstruction of 

justice.’ [Citation.]” (Sanford v. MemberWorks, Inc. (9th Cir. 

2010) 625 F.3d 550, 557.) “A fraud claim under both federal and 

state law requires (1) a representation or failure to disclose a 

material fact, (2) falsity, (3) knowledge of falsity, (4) intent to 

deceive, (5) reliance, and (6) damage arising from the reliance. 

[Citations.] Mail and wire fraud requires an additional element—

‘the existence of a scheme which was reasonably calculated to 

deceive persons of ordinary prudence and comprehension.’ 

[Citation.]” (Globe Internat., Inc. v. Superior Court (1992) 9 

Cal.App.4th 393, 399.) Like common law fraud under California 

law, mail and wire fraud under RICO must be pleaded with 
35

particularity, including “the time, place, and specific content of 

the false representations as well as the identities of the parties to 

the misrepresentation.” (Moore v. Kayport Package Exp., Inc. (9th 

Cir. 1989) 885 F.2d 531, 541.)

Plaintiff contends that the SR defendants have engaged in 

wire fraud, relying on the same allegations we have held fail to 

allege fraud with specificity in arguing that it states a cause of 

action for RICO. Presenting the same allegations under a new 

title does not remedy the fundamental deficiencies previously 

identified.

Plaintiff quotes Smagin v. Yegiazaryan (9th Cir. 2022) 37 

F.4th 562 (Smagin) at great length and asserts that the conduct 

alleged with respect to the defendants is comparable to the acts of 

the defendants in that case. Plaintiff’s reliance is misplaced. In 

Smagin, the defendant and others used a series of fraudulent 

transactions to steal the plaintiff’s shares in a joint real estate 

investment in Russia, and the defendant was indicted by Russian 

authorities but fled to California. (Id. at pp. 564–565.) The 

plaintiff obtained an arbitration award in London and a 

California district court judge confirmed the award, entered 

judgment against the defendant and entered a temporary 

protective order freezing the defendant’s assets. (Id. at p. 565.) 

The protective order specifically referenced assets that the 

defendant might receive in a pending arbitration proceeding. 

(Ibid.) The defendant ultimately settled the arbitration for $168 

million and the plaintiff alleged that, in order to avoid paying the 

judgment, “ ‘create[d] a web of offshore entities and a complex 

ownership structure to secret the [arbitration] settlement 

proceeds and avoid [the district] court’s reach.’ ” (Ibid.) Many of 

the alleged components of this scheme took place outside the 
36

United States,9 but the plaintiff also alleged numerous RICO 

activities involving domestic entities and property in the United 

States. (Ibid.) The district court dismissed the complaint on the 

grounds that the plaintiff failed to plead a domestic injury. (Id. at 

p. 566.) Thus, the only issue before the Ninth Circuit in that case 

was “whether the alleged injuries to a judgment obtained by 

Plaintiff from a United States district court in California are 

domestic injuries such that Plaintiff has statutory standing 

under RICO.” (Id. at p. 564.) It concluded that the judgment 

existed as property in California and that the plaintiff’s injuries 

were domestic. (Id. at p. 567.) 

Even if the court in Smagin had found the allegations in 

that case sufficient to plead fraud for purposes of RICO (a 

question that was not before it), we see little similarity between 

the facts there and those present here. The plaintiff in Smagin

alleged that he had a judgment against the defendant, who 

created various foreign entities to keep money that could be used 

to satisfy the judgment out of the plaintiff’s hands. Here, the 

judgment debtor, Robert, is not alleged to have done anything

beyond agreeing to the SR defendants’ and HWP defendants’ 

acts. In support of the RICO cause of action, plaintiff continues to 

rely on the bald assertion that Robert had an interest in money 

9 “For example, [the] plaintiff [in Smagin] allege[d] that [defendant] 

received the [arbitration award] through his attorneys in London; 

established a trust in Lichtenstein to hold proceeds from the 

[arbitration award] (‘the Alpha Trust’); purchased a business 

incorporated in Nevis to create additional layers of complexity; 

established a bank account in Monaco with Defendant CMB Bank for 

that Nevis corporation; and then moved the funds from the Alpha 

Trust to that bank account.” (Smagin, supra, 37 F.4th at p. 565.)
37

transferred by SR Capital to the HWP account but fails to argue 

any facts that would permit us to conclude that is the case. 

Plaintiff therefore fails to carry its burden of establishing a 

reasonable possibility that it could state a RICO claim against 

the SR defendants.

4. We decline to remand the matter with instructions to 

correct the judgment.

Finally, plaintiff contends that, if the judgment is affirmed, 

we should remand the matter with instructions to correct the 

judgment of dismissal. Plaintiff contends that the purported use 

of “etc.” in the judgment is erroneous and suggests that the action 

is dismissed as to Robert and the HWP defendants.10

“The court may, upon motion of the injured party, or its 

own motion, correct clerical mistakes in its judgment or orders as 

entered, so as to conform to the judgment or order directed . . . .” 

(Code Civ. Proc., § 473, subd. (d).) “The test which distinguishes 

clerical error from possible judicial error is simply whether the 

challenged portion of the judgment was entered inadvertently 

(which is clerical error) versus advertently (which might be 

judicial error, but is not clerical error).” (Tokio Marine & Fire Ins. 

Corp. v. Western Pacific Roofing Corp. (1999) 75 Cal.App.4th 110, 

117; Burch v. CertainTeed Corporation (2019) 34 Cal.App.5th 

341, 346 [“[a] clerical error results when the order or judgment 

misstates the court’s actual intent”].) “Section 473 is addressed to 

10 The judgment of dismissal does not include the term “etc.”, as 

plaintiff states (without citation to the record), but orders the action 

dismissed with prejudice as to “SR Capital LLC, et al.” However, the 

court’s minute order sustaining the demurrer was clear that the court 

was dismissing the action as to the SR defendants only.
38

the sound discretion of the trial court and the trial court’s order 

will not be disturbed absent a showing of clear abuse of 

discretion. [Citation.] Whether the error was clerical in nature is 

a matter for the trial court to determine.” (Conservatorship of 

Tobias (1989) 208 Cal.App.3d 1031, 1035.)

The record before us does not indicate that plaintiff raised

this issue with the trial court, which has “the authority and the 

power to correct” clerical errors even “after a judgment or decree 

has become final.” (In re Estate of Goldberg (1938) 10 Cal.2d 709, 

714.) Plaintiff fails to identify any authority supporting that this 

court may correct a clerical error in a judgment when no motion 

was made to the trial court under Code of Civil Procedure section 

473, subdivision (d). We therefore decline to remand with 

directions to correct the judgment.
39

DISPOSITION

The judgment is affirmed. Shlomo and SR Capital shall

recover their costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

LAVIN, Acting P.J.

WE CONCUR:

EGERTON, J.

HEIDEL, J.*

* Judge of the Los Angeles Superior Court, assigned by the Chief 

Justice pursuant to article VI, section 6 of the California Constitution.