Defendants' motion for leave to amend; Counsel for Defendants' motion to be relieved as counsel
Case No:
Hearing Date: May 19, 2026 Calendar Number: 1 Defendants Alex Reyter and Tudor Capital LLC move for leave to file an amended answer. David E. Azar, Counsel for Defendants Hills Group LLC, Jay Rifkin, Rebel Holdings LLC, Paul Fiore, and One Eleven Advisors LLC moves to be relieved as counsel.
Defendants’ motion for leave to amend is GRANTED. Defendants are ordered to file the proposed amended complaint attached as Exhibit B to the motion within 10 days of this order. Counsel for Defendants’ motion is DENIED without prejudice.
Background
Plaintiffs Pacific Green, LLC and Big Tree Holdings, LLC filed this action on December 20, 2021. On June 24, 2024, Plaintiffs filed the fifth amended complaint (“FAC”), against Paul Fiore, Jay Rifkin, Alex Reyter, One Eleven Advisors, LLC, Rebel Holdings, LLC, Tudor Capital, LLC, and Hills Group, LLC.
The FAC alleging causes of action for (1) fraud and deceit; (2) negligent misrepresentations; (3) fraudulent inducement; (4) breach of contract (against Hills Group); (5) negligence as a derivative claim (against Hills Group); (6) conversion (against Fiore, Rifkin, Reyter, and Hills Group); and (7) aiding and abetting torts.
Plaintiffs allege that Defendants Fiore, Rifkin, and Reyter began work on an enterprise to raise money ostensibly to start a business featuring CBD (cannabidiol’ a derivative of the cannabis plant which was not prohibited under federal law). Plaintiffs allege Defendants did not have the experience, connections or other resources to succeed in the cannabis or CBD industries, and they represented themselves falsely as being highly experienced and well connected in the CBD industry, well financed, and competent and capable to grow a business in order to exploit the confidence of potential investors and financial backers to raise money. Plaintiffs allege that as a direct result of Defendants’ fraudulent scheme, Plaintiffs delivered at least $4.7 million to Defendants.
On March 6, 2026, Defendants Alex Reyter and Tudor Capital LLC filed this motion for leave to amend. No opposition has been filed. On March 26, 2026, Defendants Hills Group LLC, Jay Rifkin, Rebel Holdings LLC, Paul Fiore, One Eleven Advisors LLC?s counsel David E. Azar filed a motion to be relieved as counsel. No opposition has been filed.
Legal Standard
California Code of Civil Procedure section¿473, subdivision¿(a)(1) provides, in relevant part: “The court may, in furtherance of justice, and on any terms as may be proper, allow a party¿to amend any pleading or proceeding by adding or striking out the name of any party, or by correcting a mistake in the name of a party, or a mistake in any other respect; and may, upon like terms, enlarge the time for answer or demurrer.¿ The court may likewise, in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading or proceeding in other particulars; and may upon like terms allow an answer to be made after the time limited by this code.”¿
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“This discretion should be exercised liberally in favor of amendments, for judicial policy favors resolution of all disputed matters in the same lawsuit.”¿¿(Kittredge Sports Co. v. Superior Court ¿(1989) 213 Cal.App.3d 1045, 1047.)¿ Ordinarily, the court will not consider the validity of the proposed amended pleading in ruling on a motion for leave since grounds for a demurrer or motion to strike are premature.¿ The court, however, does have discretion to deny leave to amend where a proposed amendment fails to state a valid cause of action as a matter of law and the defect cannot be cured by further amendment.¿¿(See¿ California Casualty General Ins. Co. v. Superior Court¿ (1985) 173 Cal.App.3d 274, 281¿(overruled on other grounds by¿ Kransco¿v. American Empire Surplus Lines Ins. Co. ¿(2000) 23 Cal.4th 390).)¿
??[I]t is an abuse of discretion to deny leave to amend where the opposing party was not misled or prejudiced by the amendment.” (Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 759-761.) Prejudice exists where the amendment would require delaying the trial, resulting in loss of critical evidence, or added costs of preparation such as an increased burden of discovery. (Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 486-488.)
Under¿California Rules of Court¿Rule 3.1324(a), a motion to amend a pleading shall (1) include a copy of the proposed amendment or amended pleading, which must be serially numbered to differentiate it from previous pleadings or amendments; (2) state what allegations in the previous pleading are proposed to be deleted, if any, and where, by page, paragraph and line number, the deleted allegations are located; and (3) state what allegations are proposed to be added to the previous pleading, if any,¿and where, by page, paragraph, and line number, the additional allegations are located.¿
Under¿California Rule of Court¿Rule 3.1324(b), a separate declaration must accompany the motion and must specify (1) the effect of the amendment; (2) why the amendment is necessary and proper; (3) when the facts giving rise to the amended allegations were discovered; and (4)¿the reasons why the request for amendment was not made earlier.¿
Discussio n
Leave to Amend
Defendants Reyter and Tudor Capital move for leave to file an amended answer to add the affirmative defense of illegality. They argue that they recently became aware that Plaintiffs’ investments are tinged with illegal conduct. Defendants contend that the newly discovered evidence reveals that almost all of the funds at issue were wired to Plaintiffs’ bank accounts through what appears to be scheme of regulatory evasion and violations of one or more laws governing anti-money laundering, banking, securities laws, and/or anti-tax evasion laws.
Defendants argue that in view of this evidence, the funds Plaintiffs seek to recover from Defendants constitute unlawful consideration within the meaning of Cal. Civ. Code § 1667, which defines unlawful as: “1. Contrary to an express provision of law; 2. Contrary to the policy of express law, though not expressly prohibited; or, 3. Otherwise contrary to good morals.”
Defendants have complied with CRC Rule 3.1324 by filing a separate declaration and including a copy of the proposed amended complaint, which indicates what allegations are proposed to be added. (Wagner Decl., Ex. B.) Defendants also explain that they only discovered this information one before the motion was filed. This is sufficient to explain the effect of the amendment, why the amendment is necessary and proper, when the facts giving rise to the amended allegations were discovered, and why it was not made earlier.
No party has opposed, or argued they would be prejudiced by this amendment. Based on the foregoing and in view of the well-established liberality with which amendments are to be allowed, the motion is GRANTED. Defendants are ordered to file the proposed amended complaint attached as Exhibit B to the motion within 10 days of this order.
Relieved as Counsel
David E. Azar, Counsel for Defendants Hills Group, Rifkin, Rebel Holdings, Fiore, and One Eleven Advisors moves to be relieved as counsel. Counsel has not listed the reasons why he needs to withdraw in the declaration under item 2 but indicates in item 7 there has been a breakdown in the attorney-client relationship, which is sufficient. Counsel’s declaration has outdated hearing dates listed. The proposed order cannot be blank. The motion is DENIED without prejudice.
Case Number: 23STCV13274 Hearing Date: May 19, 2026 Dept: 731 MORDCHAI BRAFMAN, Plaintiff, v. SEAN BENAROYA, et al. Defendants.