Naftali Elya, et al. v. Yanni Azran Raz, et al.

not at the office at 2:43 P.M., the time service was purportedly e ffect ed. Rather, Gov attests that he was on a project site on Bassett Avenue. (Gov decl., P.P. 4-9.)

Gov's account of his whereabouts on November 7, 2024, is corroborated by the declaration testimony of a foreman working for LG at the time. (See Gonzalez decl., P.P. 1-5.)

Gov attests that the person at the Varna office on that date was Laura Harris, who could not have reasonably been mistaken for Gov, a male.

Gov attests that he never received service at the Varna office address or otherwise. (Go v decl., P.P. 4-9.)

Defendants also submit Ms. Harris' declaration, wherein Ms. Harris attest s that she did not receive papers on November 7, 2024. (Harris decl., P.P. 1-5.)

The Court finds the defense declarations highly suspicious. Few people could recall with precision where they were on a date 18 months earlier.

In opposition to the motion, Plaintiff presents testimony by Sam Nehoray (" Nehoray "), the registered process server who served Defendants on November 7, 2024.

Nehoray attests that Gov was, in fact, personally served at the Varna office address on November 7, 2024, as reflected in Plaintiff 's proofs of service and contrary to Gov's representations. (Nehoray decl., P.P. 1-7.)

In its tentative ruling dated April 29, 2026, the Court determined that based on the evidence it appeared Defendants simply ignored the summons and complaint.

The Court accepts the truth of the facts as stated in Nehoray's declaration. Defendants were properly served at the Varna office address on November 7, 2024, by Nehoray leaving papers with Gov personally.

As to Defendants' position that the proofs of service improperly omitted the suite number at the Varna office address, Defendants are simply incorrect. Both proofs of service filed on November 18, 2024, document that service occurred at Suite H. This matches Gov's declaration testimony, which also identifies Suite H as the proper suite number for the Varna office address. (See Gov dec l., P. 5.)

In their reply brief filed on August 11, 2026, which Defendants submitted after the Court already issued its original tentative ruling, Defendants provide no additional evidence to support their position that service was defective. Nor do Defendants directly respond to the defects in their evidence identified in the Court's earlier tentative ruling. Defendants merely restate their position that " it is clear that process was never properly effectuated, personal jurisdiction over either of the defendants via this erroneous service, was never obtained " (Reply, p. 2:14-15) without providing additional evidence or reasoning.

In sum, Defendants were personally served with notice of the filing of this action on November 7, 2024. They admit they had actual notice of th e default as of July 10, 2025.

The Court declines to reward Defendants' calculated inaction. Defendan ts ' motion was not filed within 180 days of Defendants' actual notice of their defaults as required under Code of Civil Procedure section 473.5. Defendants are not entitled to relief from entry of default. The motion is denied.

CONCLUSION

Defendants LG Builders, Inc. and Lior Gov's motion to vacate and set aside the Clerk's entr ies of their defaults dated February 3, 2025, is DENIED. Plaintiff Melody Campbe l l is ORDERED to give notice.

DATED: A ugust 18, 2026 _____________________ Lee S. Arian Judge of the Superior Court Case Number: 26VECV00016 Hearing Date: August 18, 2026 Dept: U SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES - NORTHWEST DISTRICT NAFTALI ELYA, an individual; and ORIT ELYA, an individual, Plaintiff s, vs.

YANNI AZRAN RAZ, an individual; HML INVESTMENTS, a California corporation; RAZ RAZLA, an individual; RAZ INVESTMENTS, INC. d/b/a LION SERVICING, a California corporation; RED DRAGON INVESTMENTS, a Nevada corporation; HERTZ INVESTMENT COMPANY LLC, a California corporation; AMNON MESILOT CORPORATION, a Delaware corporation; SHIMON RABBANI, an individual; SELA YAJR DELAWARE INC., a Delaware corporation; and DOES 1-50, inclusive, Defendants. |)))))))))))) | CASE NO: 26VECV00016 [TENTATIVE] RULING RE: PLAINTIFFS' DEMURRER TO THE ANSWER OF DEFENDANTS RED DRAGON INVESTMENTS, HERTZ INVESTMENT COMPANY LLC, AMNON MESILOT CORPORATION, SHIMON RABBANI, AND SELA YAJR DELAWARE INC. Dept. U 8:30 a.m. August 18, 2026 |

BACKGROUND

This case is an action to stop foreclosure filed by Plaintiff s Naftali Elya ("Naftali") and Orit Elya ("Orit") against Defendants Yanni Azran Raz ("Yanni"); HML Investments ("HML"); Raz Razla (" Razla "); Raz Investments, Inc. d/b/a Lion Servicing ("Raz Investments"); Red Dragon Investments ("Red Dragon"); Hertz Investment Company LLC ("Hertz"); Amnon Mesilot Corporation ("Amnon"); Shimon Rabbani ("Rabbani"); and Sela Yajr Delaware Inc. ("Sela").

On January 5, 2026, Plaintiffs filed their complaint against Defendants, seeking/alleging: (1) breach of fiduciary duty; (2) aiding and abetting breach of fiduciary duty; (3) violation of The Rosenthal Fair Debt Collection Practices Act; (4) violation of The Homeowner Bill of Rights; (5) violation of the unfair competition law: fraudulent, unlawful, and unfair business practices; (6) declaratory relief; (7) slander of title; and (8) cancellation of instruments.

On February 11, 2026, the Court granted Plaintiffs' application for a preliminary injunction. Also o n February 11, 2026, Red Dragon, Hertz, Amnon, Rabbani, and Sela (hereafter, "Defendants") filed their answer to the complaint, alleging 48 affirmative defenses.

On April 23, 2026, Defendants filed their cross-complaint against Plaintiffs.

On June 10, 2026, Plaintiffs filed their demurrer to Defendants' answer to the complaint.

On August 5, 2026, Defendants filed their opposition brief.

On August 11, 2026, Plaintiffs filed their reply brief.

RULING

The demurrer is sustained, without leave to amend, as to affirmative defense #1. The demurrer is sustained, with leave to amend, as to affirmative defenses #2-48.

LEGAL STANDARD

A demurrer to an answer may be brought on one of three (3) grounds: (1) failure to state facts sufficient to constitute a defense; (2) uncertainty; and (3) failure to state whether the contract alleged in the answer is written or oral. Code Civ. Proc., Sec. 430.20.

Affirmative defenses should be relevant to a plaintiff's legal claims and averred carefully, with as much detail as the facts constituting the corresponding causes of action in the complaint. FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 384.

DISCUSSION

Plaintiffs demur to Defendants' answer to the complaint.

Review of Allegations in the Complaint

Plaintiffs plead they immigrated from Israel to the United States in 2017 and are not proficient in the English language. Plaintiffs plead they purchased residential property located at 23227 Burbank Boulevard in Woodland Hills (the "Property") . Plaintiffs obtained a purchase loan from Selene Finance LP ("Selene") . Plaintiffs pl anned to demolish and reconstruct the Property. D emolition began on November 21, 2022. (Complaint, P.P. 17-22.)

Plaintiffs plead they were introduced to Raz in March of 2024. Plaintiffs plead that in 2019, Raz pled guilty to making false statements to a grand jury. Plaintiffs plead that in April of 2024, Raz represented to Plaintiffs that he was a loan broker and could help Plaintiffs obtain the necessary loan to complete construction on the Property. Plaintiffs plead they told Raz they only wanted to borrow $350,000.00 to complete construction. (Complaint, P.P. 23-31.)

Plaintiffs allege Raz told Plaintiffs Yanni was offering Plaintiffs a $400,000.00 loan with a 12% interest rate and payments of $23,000.00/month so long as Yanni could pay off Plaintiffs' first position loan with Selene and incorporate it into Plaintiffs' loan. Plaintiffs plead they did not wa nt to do as Raz suggested because it would increase their interest rate, but Raz assu r ed Plaintiffs they would only need to make three payments before refinancing. (Complaint, P.P. 32-35.)

Plaintiffs plead that on April 19, 2025, Raz directed Naftali to go to an address in Burbank where Naftali met with an agent who did not speak Hebrew, Naftali's native language. Naftali was instructed to sign a pile of documents written in English even though he had only been communicating with Raz in Hebrew. One of the documents Naftali signed falsely indicates that Naftali is fluent in the English language. Plaintiffs plead Naftali left when he saw there was a loan origination fee of $150,000.00. (Complaint, P.P. 36-43.)

Plaintiffs plead Raz reassured Plaintiffs the loan would soon be refinanced within three months, and the onerous loan terms were "just paper" and would not actually apply to Plaintiffs' loan. Raz directed Naftali to drive back to the Burbank office to sign the loan documents. N obody at the office spoke Hebrew. Plaintiffs plead the $150,000.00 up-front fee was reduced to $100,000.00. Naftali was never informed the loan was for a one-year term and there would be a $2.2 million balloon payment due in twelve months. Plaintiffs plead that had Naftali understood the true loan terms, they would n ot have agreed to the loan. (Complaint, P.P. 44-50.)

Plaintiffs plead that on May 8, 2025, Naftali received a letter from Yanni and Raz falsely indicating Plaintiffs had no intention to reside at the Property. Plaintiffs plead they expressed concerns to Raz about the document's veracity, but they were instructed by Raz to sign the document anyway. Plaintiffs plead Raz directed Plaintiffs to stop paying their mortgage payments to Selene. (Complaint, P.P. 51-56.)

O n May 14, 2024, Yanni, Raz, and HML recorded a deed of trust on the Property's title and wired funds to Naftali. Plaintiffs plead they later discovered they had defaulted on their payment obligations to Selene. Plaintiffs moved into the Property and made payments to Defendants as required under the loan. Plaintiffs plead Raz told Plaintiffs to stop making payments to Selene, but Plaintiffs continued making monthly payments out of caution. Plaintiffs plead they were informed Raz was having trouble refinancing the loan because of Plaintiffs' late payments to Selene. (Complaint, P.P. 57-76.)

Plaintiffs plead that in December of 2024, Yanni recorded a notice of default du e to Plaintiffs' failure to pay the loan. Plaintiffs plead they were served with a notice of default on March 31, 2025. Plaintiffs plead they lost contact with Raz. Plaintiffs plead Yanni eventually informed Plaintiffs a $2.2 million payment would soon be due. Yanni sought payment from Plaintiffs to cover a notice of default that had been wrongfully recorded. (Complaint, P.P. 77-95.)

Plaintiffs plead that on August 25, 2025, Defendants recorded a notice of default on the Property's title. O n December 12, 2025, Defendants recorded a notice of trustee's sale. Plaintiffs plead Defendants acted fraudulently, maliciously, and oppressively. (Complaint, P.P. 96-101.)

The demurrer is sustained, without leave to amend, as to affirmative defense #1 because it is not properly an affirmative defense. Plaintiffs demur to affirmative defenses #1 (failure to state a cause of action) on grounds that it is not properly an affirmative defense. The Court agrees. Failure to state a cause of action is grounds for a demurrer or a motion for judgment on the pleadings and is not properly an affirmative defense. The demurrer is sustained, without leave to amend, as to affirmative defense #1.

The demurrer is otherwise sustained, with leave to amend, on grounds of sufficiency. Plaintiffs demur to Defendants' 47 remaining affirmative defenses on several grounds, including they are not technically affirmative defenses, the defenses lack supportive factual allegations, and the defenses fail to specify to which causes of action they apply.

As to Plaintiffs' argument that several of Defendants' affirmative defenses are not technically affirmative defenses, Plaintiffs are being hyper-technical. While Plaintiffs may be correct that, e.g., some of the affirmative defenses only attac k a single element of a cause of action rather than advance an affirmative defense (e.g.: affirmative defense #28: no actual knowledge; affirmative defense #41: disputing proximate cause), the Court disagrees that this is improper for purposes of a demurrer. It is natural that Defendants would want to state their denial of specific elements of Plaintiffs' causes of action, and the Court sees no harm in allowing such denials to proceed at this preliminary stage of the case.

As to Plaintiffs' argument that Defendants' affirmative defenses lack supportive factual allegations, the Court agrees with Plaintiffs. All the affirmative defenses in Defendants' answer are asserted as boilerplate defenses. None of the affirmative defenses include any factual allegations at all. Nor do any of the defenses specify to which causes of action they apply, as required under Code of Civil Procedure section 431.30 (g) . Because Defendants do not allege their affirmative defenses with the same level of particularity included in the complaint, and because Defendants fail to specify which defenses apply to which causes of action, Plaintiffs' demurrer is appropriate. The demurrer is sustained, with leave to amend, as to affirmative defenses #2-48.

CONCLUSION

Plaintiffs Naftali Elya and Orit Elya's demurrer to the Answer filed by Defendants Red Dragon Investments, Hertz Investment Company LLC, Amnon Mesilot Corporation, Shimon Rabbani, and Sela Yajr Delaware Inc. is SUSTAINED, with out leave to amend, as to affirmative defense #1.

Plaintiffs Naftali Elya and Orit Elya's demurrer to the Answer filed by Defendants Red Dragon Investments, Hertz Investment Company LLC, Amnon Mesilot Corporation, Shimon Rabbani, and Sela Yajr Delaware Inc. is SUSTAINED, with leave to amend, as to affirmative defenses #2-48.

Defendants Red Dragon Investments, Hertz Investment Company LLC, Amnon Mesilot Corporation, Shimon Rabbani, and Sela Yajr Delaware Inc. are ORDERED to file their First Amended Answer within ten (10) days. See Cal. Rules of Court, Rule 3.1320 (g) .

Plaintiffs Naftali Elya and Orit Elya are ORDERED to give notice.

DATED: August 18, 2026