Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 1 of 82 Page ID #:151 1 2 3 4 Shab D. ` Kerendian, Esq., State Bar No. 183057 Shab@kalawcorp.com Edrin Shamtob, Esq., State Bar No. 301562 Edrin@kalawcorp.com 7 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, California 90025 Phone: (310) 914-4143 Fax: (310) 914-5441 8 Counsel for Plaintiff, STEPHEN MATTEO 5 6 9 UNITED STATES DISTRICT COURT KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION STEPHEN MATTEO, an individual, Plaintiff, Case No. 2:19-cv-01223-JAK-SK FIRST AMENDED COMPLAINT FOR: vs. CHASE METALS SERVICE CORPORATION, a Delaware corporation; METALS.COM, an unknown entity; DAVID H. WOLAN, an individual; LUKE MCCAIN, an individual; JONATHAN SACHS, an individual; CHASE METALS, an unknown entity; CHASEMETALS.COM, an unknown entity; CHASE METALS, LLC, a Wyoming limited liability company; CHASE METALS, INC., a Wyoming corporation; TEM INC., a Wyoming corporation; and TMTE INC., a Wyoming corporation, Defendants. 1. BREACH OF CONTRACT; 2. FRAUD; 3. NEGLIGENT MISREPRESENTATION; 4. FRAUDULENT INDUCEMENT; 5. FINANCIAL ELDER ABUSE; 6. CONVERSION; 7. COMMON COUNTS; 8. UNFAIR AND DECEPTIVE BUSINESS PRACTICES [CAL. B&P 17200, ET SEQ.]; 9. VIOLATION OF PENAL CODE § 496(a); 10. CIVIL CONSPIRACY; 11. RESCISSION BASED ON UNILATERAL MISTAKE; 12. RESCISSION BASED ON FRAUD; 13. RESCISSION BASED ON Page 1 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 2 of 82 Page ID #:152 NEGLIGENT MISREPRESENTATION; 14. RESCISSION BASED ON LACK OF CONSIDERATION; 15. RESCISSION BASED ON ILLEGALITY & PUBLIC INTEREST; 16. CANCELLATION OF INSTRUMENTS [CIVIL CODE § 3412]; 17. RESTITUTION (UNJUST ENRICHMENT); 18. ACCOUNTING; 19. CIVIL RICO – SECTION 1962(c); and 20. CIVIL RICO – SECTION 1962(d). 1 2 3 4 5 6 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 11 12 13 14 DEMAND FOR A JURY TRIAL 15 16 Plaintiff, Stephen Matteo, alleges the following: 17 18 19 20 21 22 23 PARTIES 1. Plaintiff, Stephen Matteo (“Plaintiff”), is, and at all times mentioned herein was, a resident of the City of Kapaa, County of Kauai, State of Hawaii. 2. Plaintiff alleges that defendant, Chase Metals, is, and at all relevant times mentioned herein was, an unknown entity incorporated in the State of Wyoming, 24 having its principal place of business in Cheyenne, Wyoming and conducting 25 business in New York, Wyoming, and the City of Beverly Hills, County of Los 26 27 Angeles, State of California. 28 Page 2 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 3 of 82 Page ID #:153 1 2 3. Plaintiff alleges that defendant, ChaseMetals.com, is, and at all relevant times mentioned herein was, an unknown entity incorporated in the State of Wyoming, 3 4 5 6 having its principal place of business in Cheyenne, Wyoming and conducting business in New York, Wyoming, and the City of Beverly Hills, County of Los Angeles, State of California. 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 4. Plaintiff alleges that defendant, Metals.com, is, and at all relevant times mentioned herein was, an unknown entity incorporated in the State of Wyoming, having its principal place of business in Cheyenne, Wyoming and conducting 11 12 13 14 business in New York, Wyoming, and the City of Beverly Hills, County of Los Angeles, State of California. 5. Plaintiff alleges that defendant, Chase Metals, LLC, is, and at all times mentioned 15 16 17 18 herein was, a Wyoming limited liability company having its principal place of business in Cheyenne, Wyoming and conducting its business in New York, Wyoming, and the City of Beverly Hills, County of Los Angeles, State of 19 20 21 22 California through the following trade names or fictitious business names: Chase Metals; Chasemetals.Com; and/or Metals.Com. 6. Plaintiff alleges that defendant, Chase Metals, Inc., is, and at all times mentioned 23 24 25 26 herein was, a Wyoming corporation having its principal place of business in Cheyenne, Wyoming and conducting its business in New York, Wyoming, and the City of Beverly Hills, County of Los Angeles, State of California through the 27 28 Page 3 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 4 of 82 Page ID #:154 1 2 following trade names or fictitious business names: Chase Metals; Chasemetals.Com; and/or Metals.Com. 3 4 5 6 7. Plaintiff alleges that defendant, TEM, Inc., is, and at all times mentioned herein was, a Wyoming corporation having its principal place of business in Cheyenne, Wyoming and conducting its business in New York, Wyoming, and the City of 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 Beverly Hills, County of Los Angeles, State of California through the following trade names or fictitious business names: Chase Metals; Chasemetals.Com; and/or Metals.Com. 11 12 13 14 8. Plaintiff alleges that defendant, TMTE, Inc., is, and at all times mentioned herein was, a Wyoming corporation having its principal place of business in Cheyenne, Wyoming and conducting its business in New York, Wyoming, and the City of 15 16 17 18 Beverly Hills, County of Los Angeles, State of California through the following trade names or fictitious business names: Chase Metals; Chasemetals.Com; and/or Metals.Com. 19 20 21 22 9. Defendants, Chase Metal, Chasemetals.Com, Metals.Com, Chase Metals, LLC, Chase Metals, Inc., TEM, Inc. and TMTE, Inc., are sometimes referred to herein collectively as “Corporate Defendants”. 23 24 25 26 10. Plaintiff alleges that defendant, David H. Wolan (“Wolan”), is, and at all times mentioned herein was, a resident of the County of Los Angeles, California, and conducting business on behalf of the Corporate Defendants in the County of Los 27 28 Angeles, California. Page 4 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 5 of 82 Page ID #:155 1 2 11. Plaintiff alleges that defendant, Luke McCain (“McCain”), is, and at all times mentioned herein was, a resident of the County of Los Angeles, California, and 3 4 5 6 conducting business on behalf of the Corporate Defendants in the County of Los Angeles, California. 12. Plaintiff alleges that defendant, Jonathan Sachs (“Sachs”), is, and at all times 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 mentioned herein was, a resident of the County of Los Angeles, California, and conducting business on behalf of the Corporate Defendants in the County of Los Angeles, California. 11 12 13 14 13. The defendant, Chase Metals Service Corporation, is a Delaware corporation with its principal place of business in New York, Wyoming, and the City of Beverly Hills, County of Los Angeles, State of California. Plaintiff is informed, believes, 15 16 17 18 and thereon alleges that Chase Metals Service Corporation is registered and doing business in California as a company engaging in the trade of precious metals, including coins and Bullions. 19 20 21 22 14. Plaintiff alleges that at all times mentioned herein, each defendant was the agent and employee of each and all of the other defendants and were acting in the course of such agency and/or employment. Further, upon information and belief, 23 24 25 26 Plaintiff alleges that all of the acts and/or omissions by each of the defendants were ratified by each of the other defendants. All defendants are sometimes referred to herein collectively as “Defendants”. 27 28 Page 5 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 6 of 82 Page ID #:156 1 2 15. Plaintiff alleges that at all times mentioned herein, each defendant was the alter ego of one another, acted in concert, and acted in a conspiracy and thus, are 3 4 5 6 jointly and severally responsible for the conduct of one another. JURISDICTION AND VENUE 16. Plaintiff incorporates by reference each and every allegation of the above 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 paragraphs as though set forth fully herein. 17. Pursuant to 28 U.S.C. § 1332, this Court has subject matter jurisdiction over the matters alleged herein based on diversity jurisdiction where Plaintiff and 11 12 13 14 Defendants are citizens of different States and the amount in controversy, exclusive of interests and costs, is in excess of seventy-five thousand ($75,000) dollars. Additionally, this Court has subject matter jurisdiction over this action 15 16 17 18 pursuant to the civil RICO remedies at 18 U.S.C. § 1964, thereby giving this Court jurisdiction over this action under 28 U.S.C. § 1331 (federal question). 18. Pursuant to 28 U.S.C. § 1391(b), venue is proper in this judicial district because 19 20 21 22 the County of Los Angeles, California is the location where a substantial part of the events or omissions giving rise to the claim occurred. FACTS COMMON TO ALL CAUSES OF ACTION 23 24 25 26 19. Plaintiff incorporates by reference each and every allegation of the above paragraphs as though set forth fully herein. 20. Plaintiff was born on April 15, 1946. Plaintiff was married to Barbara Jean 27 28 Matteo who was born on or about January 18, 1949. On or about July 8, 2017, Page 6 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 7 of 82 Page ID #:157 1 2 Barbara passed away at the age of 68 years old on the island of Kauai, Hawaii. Plaintiff had about $465,000 as his life savings. At the time of his wife’s death, 3 4 5 6 the Plaintiff was retired, and he was relying on his life savings for the remainder of his life. As such, the Plaintiff wanted to invest his life savings for the remainder of his life in a safe investment vehicle where he could grow and use the 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 funds from his life savings to cover his living expenses. 21. In or around mid-2017, Plaintiff heard Defendants’ radio advertisement about Defendants’ investment offer and/or opportunity (“Investment Opportunity”). 11 12 13 14 Plaintiff called and explained his retirement situation and goals, as stated above, to Defendants. During multiple telephone conversations from in or about August of 2017, Plaintiff spoke with defendants, Wolan, McCain, and Sachs, and other 15 16 17 18 representatives of the Defendants about Defendants’ Investment Opportunity. Plaintiff explained to defendants, Wolan and McCain, that his wife had recently passed in July of 2017 and that the money he would like to invest was his entire 19 20 21 22 life savings and his retirement money. Plaintiff also explained that he was retired and thus, relied on his life savings to make ends meet on a monthly basis, but did not have enough money to support himself. 23 24 25 26 22. During these multiple telephone conversations, defendants, Wolan and McCain, would repeatedly ensure Plaintiff that Defendants’ Investment Opportunity was safe and had no risk of losing money. Defendants, Wolan and McCain, both 27 28 repeatedly represented to Plaintiff that the dollar loses value while Defendants’ Page 7 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 8 of 82 Page ID #:158 1 2 Investment Opportunity, involving, among other things, investments in precious metals, was a safe and no-risk investment. During the multiple communications 3 4 5 6 with defendants, Wolan and McCain, Plaintiff told them multiple times that he could not afford to lose any part of his life savings and retirement funds. Wolan and McCain understood and assured Plaintiff that his funds would be safe during 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 those conversations. Wolan and McCain used the stock market as an example, and told Plaintiff that unlike the stock market, owning precious metals is a safe investment, protects Plaintiff, goes up over time, and protects against inflation and 11 12 13 14 the dollar losing value. During those conversations, Wolan and McCain repeatedly assured Plaintiff that the money he invests in precious metals with them will not be reduced or lose value. 15 16 17 18 23. Defendants, Wolan and McCain, including other representatives of Defendants represented and ensured Plaintiff that Defendants’ Investment Opportunity was safe and his investment with Defendants will only increase in value as the dollar 19 20 21 22 is going to lose strength causing precious metals to increase in value. Further, Defendants, particularly, defendants, Wolan and McCain, repeatedly represented to Plaintiff that: he would be purchasing precious metals from Defendants at fair 23 24 25 26 market value on the day of purchase; that he would be able to sell and/or Defendants would buy back any part or the whole investment of the precious metals at any time, without any penalty, for no less than the same price he 27 28 purchased them; and that the precious metals would be kept by a third-party on Page 8 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 9 of 82 Page ID #:159 1 2 his behalf. Based on Defendants repeated representations and assurances, Plaintiff understood that Defendants’ Investment Opportunity was safe, risk-free and that 3 4 5 6 he would have access to his investment funds at any time if he needed money. 24. In reasonable and justifiable reliance on the aforementioned representations and assurances by Defendants, particularly, defendants, Wolan and McCain, about 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 Defendants’ Investment Opportunity, Plaintiff decided to buy into Defendants’ Investment Opportunity and purchase precious metals from Defendants with his life savings and retirement funds. On or about August 7, 2017, Plaintiff 11 12 13 14 electronically received and signed a one-page document from Defendants in order to participate in Defendants’ Investment Opportunity (“Contract”), and a copy was not provided to Plaintiff at the time of signing. A true and correct copy of the 15 16 17 18 Contract is attached hereto as Exhibit “1” and fully incorporated herein by this reference. 25. Thereafter, in August of 2017, in reasonable and justifiable reliance on the 19 20 21 22 aforementioned representations and assurances by the Defendants, the Plaintiff purchased thousands of precious metals, including coins, from Defendants. Plaintiff paid Defendants, based on their invoice dated August 7, 2017, the 23 24 25 26 amount of $367,530.00. In addition, Plaintiff paid Defendants, based on their invoice dated August 23, 2017, the amount of $94,282.50. True and correct copies of the August 7, 2017, and August 23, 2017 invoices are attached hereto, 27 28 collectively, as Exhibit “2” and fully incorporated herein by this reference. Page 9 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 10 of 82 Page ID #:160 1 2 26. No other pages or documents were provided by Defendants or signed by Plaintiff when Plaintiff received and signed the Contract electronically, nor when the 3 4 5 6 Plaintiff made the purchases of precious metals from Defendant in August of 2017. 27. In or around October 2017, Plaintiff received a statement from Strata Trust 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 Company which reflected the value of his investment with Defendants. To Plaintiff’s shock and surprise, unlike what he was promised, the value of his investment with Defendants had decreased. Within about two months’ time, the 11 12 13 14 Plaintiff’s $461,812.50 investment with Defendants had lost about $250,000.00 in value. 28. Plaintiff then asked defendant, Wolan, about his investment and asked for an 15 16 17 18 explanation as to why his investment had dropped approximately $250,000.00 in value. Defendants, Wolan, McCain, and Sachs, during different phone conversations, informed Plaintiff that an “agreement” he signed explained his 19 20 21 22 duties and obligations (“Agreement”). Apparently, over the next few months after signing of the one-page Contract and making the aforementioned investment purchases with Defendants, Defendants provided Plaintiff with additional pages, 23 24 25 26 which the Defendants claimed were the Agreement for Plaintiff’s investment with Defendants. For the first time, Defendants claimed that the Plaintiff signed the socalled Agreement, which explained terms about Defendants’ Investment 27 28 Opportunity that was completely different than what was directly and repeatedly Page 10 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 11 of 82 Page ID #:161 1 2 represented to Plaintiff by Defendants. A true and correct copy of the so-called Agreement is attached hereto as Exhibit “3” and fully incorporated herein by this 3 4 5 6 reference. Plaintiff did not sign nor ever agree to the Agreement and did not understand any of the verbiages in the Agreement or what happened with life savings and retirement funds he used to invest in Defendants’ Investment 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 Opportunity. 29. Moreover, Defendants, particularly, defendants, Wolan, McCain, and Sachs, told Plaintiff that the statements from Strata Trust Company did not represent the 11 12 13 14 accurate value of Plaintiff’s investment with the Defendants because the coins in question were minted in Canada specifically for Defendants, which had a higher value than Strata Trust Company was reflecting on the statements. As a result, 15 16 17 18 Defendants, particularly, defendants, Wolan, McCain, and Sachs, would continuously tell Plaintiff that he needed to be patient, wait, and not take any action. 19 20 21 22 30. Plaintiff informed the Defendants of his intention to sell the precious metals and for the Defendants to buy them back for the same price the Plaintiff paid for them as Defendants had repeatedly promised. Defendants, however, refused to do so 23 24 25 26 and instead told Plaintiff that they could not repurchase them for another three to five years all while continuing to represent to Plaintiff that he had not lost any money because the precious metals that he bought from Defendants were worth as 27 28 much as he paid for them. They told Plaintiff that there was nothing for him to do, Page 11 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 12 of 82 Page ID #:162 1 2 and that everything was in order, and that Plaintiff’s investment was at the initial value and was on its way to gain money. Plaintiff relied on these representations 3 4 5 6 to his detriment. 31. Although Plaintiff waited in reliance on the Defendants’ continuing representation that Plaintiff had not lost any money, Plaintiff continued receiving 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 statements that showed his investment continued to lose value. Ultimately, and as time passed, Plaintiff was forced to engage others to sell his investments with Defendants because Defendants continued to refuse to sell or buy back any part of 11 12 13 14 the precious metals they had sold to him. Plaintiff was only able to recover about $158,000.00 of what Plaintiff invested with the Defendants. 32. As a factual and legal result of Defendants’ wrongful conduct as described herein 15 16 17 18 and above, Plaintiff has been damaged for an amount, in excess of $75,000, to be proven at the time of the trial together with the interest thereon. 33. Additionally, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff 19 20 21 22 is entitled to recover from Defendant in accordance with the terms of the agreements alleged herein or as may be provided by law. FIRST CAUSE OF ACTION FOR BREACH OF CONTRACT 23 24 25 26 (Plaintiff against All Defendants) 34. Plaintiff incorporates by reference each and every allegation of the above paragraphs as though set forth fully herein. 27 28 Page 12 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 13 of 82 Page ID #:163 1 2 35. As alleged herein and above, defendants, Wolan and McCain, including other representatives of Defendants represented and ensured Plaintiff that Defendants’ 3 4 5 6 Investment Opportunity was safe and his investment with Defendants will only increase in value as the dollar is going to lose strength causing precious metals to increase in value. Additionally, Defendants, particularly, defendants, Wolan and 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 McCain, repeatedly represented to Plaintiff that: he would be purchasing precious metals from Defendants at fair market value on the day of purchase; that he would be able to sell and/or Defendants would buy back any part or the whole 11 12 13 14 investment of the precious metals at anytime, without any penalty, for no less than the same price he purchased them; and that the precious metals would be kept by a third-party on his behalf. Based on Defendants repeated representations and 15 16 17 18 assurances, Plaintiff understood that Defendants’ Investment Opportunity was safe, risk-free, and that he would have access to his investment funds at any time if he needed money. 19 20 21 22 36. As a result of the repeated representations and assurances by Defendants, particularly, defendants, Wolan and McCain, about Defendants’ Investment Opportunity, as set forth herein and above, Plaintiff agreed to purchase precious 23 24 25 26 metals from Defendants. To facilitate Plaintiff’s purchase of the precious metals from Defendants, Plaintiff received and signed a one-page Contract from Defendants in order to participate in Defendants’ Investment Opportunity, which 27 28 Plaintiff believed was based on Defendants’ representations and assurances to Page 13 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 14 of 82 Page ID #:164 1 2 Plaintiff about Defendants’ Investment Opportunity. See Exhibit “1” (i.e., Contract) attached hereto and fully incorporated herein by this reference. 3 4 5 6 37. Thereafter, in August of 2017, in reasonable and justifiable reliance on the aforementioned representations and assurances by the Defendants, the Plaintiff purchased thousands of precious metals, including coins, from Defendants. 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 Plaintiff paid Defendants, based on their invoice dated August 7, 2017, the amount of $367,530.00. Additionally, Plaintiff paid Defendants, based on their invoice dated August 23, 2017, the amount of $94,282.50. See Exhibit “2” (i.e., 11 12 13 14 the two August 2017 invoices) attached hereto and fully incorporated herein by this reference. 38. Accordingly, Plaintiff has, at all times herein mentioned, fully complied with and 15 16 17 18 performed and/or stand ready, able, and willing to comply and perform all terms of the agreement with Defendants, except as to those which were excused, waived, and/or prevented by Defendant’s conduct. 19 20 21 22 39. However, Defendants is, and at all times mentioned herein were, in breach of their promises to Plaintiff, as alleged herein and above, and thereby breached the Contract. 23 24 25 26 40. Plaintiff has fully performed all his obligations pursuant to the agreement mentioned herein and has performed to the extent not prevented by the Defendants. Plaintiff has made good faith attempts to resolve the dispute, but 27 28 Defendants refused and continues to refuse to comply with the Contract. Page 14 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 15 of 82 Page ID #:165 1 2 41. As a factual and legal result of Defendant’s breaches as alleged herein and above, Plaintiff has been damaged for an amount, in excess of $500,000.00, to be proven 3 4 5 6 at the time of the trial together with the interest thereon. 42. Additionally, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff is entitled to recover from Defendant in accordance with the terms of the 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 agreements alleged herein or as may be provided by law. SECOND CAUSE OF ACTION FOR FRAUD (Plaintiff against All Defendants) 11 12 13 14 15 16 17 18 43. Plaintiff incorporates by reference each and every allegation of the above paragraphs as though set forth fully herein. 44. As alleged herein and above, defendants, Wolan and McCain, including other representatives of Defendants represented and ensured Plaintiff that Defendants’ Investment Opportunity was safe and his investment with Defendants will only increase in value as the dollar is going to lose strength causing precious metals to 19 20 21 22 increase in value. Additionally, Defendants, particularly, defendants, Wolan and McCain, repeatedly represented to Plaintiff that: he would be purchasing precious metals from Defendants at fair market value on the day of purchase; that he would 23 24 25 26 be able to sell and/or Defendants would buy back any part or the whole investment of the precious metals at anytime, without any penalty, for no less than the same price he purchased them; and that the precious metals would be kept by 27 28 a third-party on his behalf. Based on Defendants repeated representations and Page 15 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 16 of 82 Page ID #:166 1 2 assurances, Plaintiff understood that Defendants’ Investment Opportunity was safe, risk-free, and that he would have access to his investment funds at any time 3 4 5 6 7 45. In reliance on the repeated representations and assurances by Defendants, particularly, defendants, Wolan and McCain, about Defendants’ Investment 8 Opportunity, as set forth herein and above, Plaintiff agreed to purchase precious 9 metals from Defendants. To facilitate Plaintiff’s purchase of the precious metals 10 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 if he needed money. 11 from Defendants, Plaintiff received and signed a one-page Contract from 12 Defendants in order to participate in Defendants’ Investment Opportunity, which 13 Plaintiff believed was based on Defendants’ representations and assurances to 14 15 16 17 18 19 Plaintiff about Defendants’ Investment Opportunity. See Exhibit “1” (i.e., Contract) attached hereto and fully incorporated herein by this reference. 46. Thereafter, in August of 2017, in reasonable and justifiable reliance on the aforementioned representations and assurances by the Defendants, Plaintiff 20 purchased thousands of precious metals, including coins, from Defendants. 21 Plaintiff paid Defendants, based on their invoice dated August 7, 2017, the 22 23 amount of $367,530.00. Additionally, Plaintiff paid Defendants, based on their 24 invoice dated August 23, 2017, the amount of $94,282.50. See Exhibit “2” (i.e., 25 the two August 2017 invoices) attached hereto and fully incorporated herein by 26 27 this reference. 28 Page 16 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 17 of 82 Page ID #:167 1 2 47. At the time that Defendants made the aforementioned representations and assurances, Defendants knew that they were false. 3 4 5 6 48. Defendants made the aforementioned representations and assurances with the intention to defraud and persuade the Plaintiff to buy into Defendants’ Investment Opportunity and buy precious metals from Defendants as part of the Investment 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 Opportunity. 49. Plaintiff reasonably and justifiably relied on Defendants’ false representations and assurances. 11 12 13 14 50. Had Plaintiff known the falsity of Defendants’ representations and assurances, Plaintiff would not have agreed to buy into Defendants’ Investment Opportunity or buy precious metals from Defendants as part of the Investment Opportunity or 15 16 17 18 entered into the aforementioned Contract to effectuate the same. 51. As a factual and legal result of Defendant’s misconduct, as alleged herein and above, Plaintiff has been damaged for an amount, in excess of $500,000.00, to be 19 20 21 22 proven at the time of the trial together with the interest thereon. 52. Additionally, Defendants’ conduct was willful and malicious and without regard for the well-being of the Plaintiff, thus entitling Plaintiff to an award of punitive 23 24 25 26 damages pursuant to Civ. Code § 3294 in excess of $7,000,000.00. 53. Moreover, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff is entitled to recover from Defendant in accordance with the terms of the agreements 27 28 alleged herein or as may be provided by law. Page 17 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 18 of 82 Page ID #:168 1 THIRD CAUSE OF ACTION FOR NEGLIGENT MISREPRESENTATION 2 (Plaintiff against All Defendants) 3 4 5 6 7 paragraphs as though set forth fully herein. 55. As alleged herein and above, defendants, Wolan and McCain, including other 8 representatives of Defendants represented and ensured Plaintiff that Defendants’ 9 Investment Opportunity was safe and his investment with Defendants will only 10 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 54. Plaintiff incorporates by reference each and every allegation of the above 11 increase in value as the dollar is going to lose strength causing precious metals to 12 increase in value. Additionally, Defendants, particularly, defendants, Wolan and 13 McCain, repeatedly represented to Plaintiff that: he would be purchasing precious 14 15 metals from Defendants at fair market value on the day of purchase; that he would 16 be able to sell and/or Defendants would buy back any part or the whole 17 investment of the precious metals at anytime, without any penalty, for no less than 18 19 the same price he purchased them; and that the precious metals would be kept by 20 a third-party on his behalf. Based on Defendants repeated representations and 21 assurances, Plaintiff understood that Defendants’ Investment Opportunity was 22 23 24 25 26 27 28 safe, risk-free, and that he would have access to his investment funds at any time if he needed money. 56. In reliance on the repeated representations and assurances by Defendants, particularly, defendants, Wolan and McCain, about Defendants’ Investment Opportunity, as set forth herein and above, Plaintiff agreed to purchase precious Page 18 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 19 of 82 Page ID #:169 1 2 metals from Defendants. To facilitate Plaintiff’s purchase of the precious metals from Defendants, Plaintiff received and signed a one-page Contract from 3 4 5 6 Defendants in order to participate in Defendants’ Investment Opportunity, which Plaintiff believed was based on Defendants’ representations and assurances to Plaintiff about Defendants’ Investment Opportunity. See Exhibit “1” (i.e., 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 Contract) attached hereto and fully incorporated herein by this reference. 57. Thereafter, in August of 2017, in reasonable and justifiable reliance on the aforementioned representations and assurances by the Defendants, Plaintiff 11 12 13 14 purchased thousands of precious metals, including coins, from Defendants. Plaintiff paid Defendants, based on their invoice dated August 7, 2017, the amount of $367,530.00. Additionally, Plaintiff paid Defendants, based on their 15 16 17 18 invoice dated August 23, 2017, the amount of $94,282.50. See Exhibit “2” (i.e., the two August 2017 invoices) attached hereto and fully incorporated herein by this reference. 19 20 21 22 58. Defendants’ representations and assurances to Plaintiff were not true. 59. While Defendants may have believed their representations and assurances to Plaintiff were true, Defendants had no reasonable grounds for believing the 23 24 25 26 27 28 representations and assurances were true when Defendants made them. 60. Defendants intended that Plaintiff relies on their representations and assurances. 61. Plaintiff reasonably and justifiably relied on Defendants’ representations and assurances. Page 19 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 20 of 82 Page ID #:170 1 2 3 Plaintiff would not have agreed to buy into Defendants’ Investment Opportunity 4 or buy precious metals from Defendants as part of the Investment Opportunity or 5 entered into the aforementioned Contract to effectuate the same. 6 7 63. As a factual and legal result of Plaintiff’s reliance on Defendant’s representations 8 and assurances, as alleged herein and above, Plaintiff has been damaged for an 9 amount, in excess of $500,000.00, to be proven at the time of the trial together 10 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 62. Had Plaintiff known the falsity of Defendants’ representations and assurances, 11 with the interest thereon. 12 64. Moreover, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff is 13 entitled to recover from Defendant in accordance with the terms of the agreements 14 15 16 17 18 19 20 21 22 23 alleged herein or as may be provided by law. FOURTH CAUSE OF ACTION FOR FRAUDULENT INDUCEMENT (Plaintiff against All Defendants) 65. Plaintiff incorporates by reference each and every allegation of the above paragraphs as though set forth fully herein. 66. As alleged herein and above, defendants, Wolan and McCain, including other representatives of Defendants represented and ensured Plaintiff that Defendants’ 24 Investment Opportunity was safe and his investment with Defendants will only 25 increase in value as the dollar is going to lose strength causing precious metals to 26 27 28 increase in value. Additionally, Defendants, particularly, defendants, Wolan and McCain, repeatedly represented to Plaintiff that: he would be purchasing precious Page 20 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 21 of 82 Page ID #:171 1 2 metals from Defendants at fair market value on the day of purchase; that he would be able to sell and/or Defendants would buy back any part or the whole 3 4 5 6 investment of the precious metals at anytime, without any penalty, for no less than the same price he purchased them; and that the precious metals would be kept by a third-party on his behalf. Based on Defendants repeated representations and 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 11 assurances, Plaintiff understood that Defendants’ Investment Opportunity was safe, risk-free, and that he would have access to his investment funds at any time if he needed money. 12 67. In reliance on the repeated representations and assurances by Defendants, 13 particularly, defendants, Wolan and McCain, about Defendants’ Investment 14 15 Opportunity, as set forth herein and above, Plaintiff agreed to purchase precious 16 metals from Defendants. To facilitate Plaintiff’s purchase of the precious metals 17 from Defendants, Plaintiff received and signed a one-page Contract from 18 19 Defendants in order to participate in Defendants’ Investment Opportunity, which 20 Plaintiff believed was based on Defendants’ representations and assurances to 21 Plaintiff about Defendants’ Investment Opportunity. See Exhibit “1” (i.e., 22 23 Contract) attached hereto and fully incorporated herein by this reference. 24 68. Thereafter, in August of 2017, in reasonable and justifiable reliance on the 25 aforementioned representations and assurances by the Defendants, the Plaintiff 26 27 28 purchased thousands of precious metals, including coins, from Defendants. Plaintiff paid Defendants, based on their invoice dated August 7, 2017, the Page 21 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 22 of 82 Page ID #:172 1 2 amount of $367,530.00. Additionally, Plaintiff paid Defendants, based on their invoice dated August 23, 2017, the amount of $94,282.50. See Exhibit “2” (i.e., 3 4 5 6 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 the two August 2017 invoices) attached hereto and fully incorporated herein by this reference. 69. At the time that Defendants made the aforementioned representations and assurances, Defendants knew that they were false. 70. Defendants made the aforementioned representations and assurances with the intention to defraud and induce Plaintiff to buy into Defendants’ Investment 11 12 13 14 Opportunity and buy precious metals from Defendants as part of the Investment Opportunity. 71. Plaintiff reasonably and justifiably relied on Defendants’ false representations and 15 16 17 18 assurances. 72. Had Plaintiff known the falsity of Defendants’ representations and assurances, Plaintiff would not have agreed to buy into Defendants’ Investment Opportunity 19 20 21 22 or buy precious metals from Defendants as part of the Investment Opportunity or entered into the aforementioned Contract to effectuate the same. 73. As a factual and legal result of Defendant’s misconduct, as alleged herein and 23 24 25 above, Plaintiff has been damaged for an amount, in excess of $500,000.00, to be proven at the time of the trial together with the interest thereon. 26 27 28 Page 22 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 23 of 82 Page ID #:173 1 2 74. Additionally, Defendants’ conduct was willful and malicious and without regard for the well-being of the Plaintiff, thus entitling Plaintiff to an award of punitive 3 4 5 6 damages pursuant to Civ. Code § 3294 in excess of $7,000,000.00. 75. Moreover, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff is entitled to recover from Defendant in accordance with the terms of the agreements 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 alleged herein or as may be provided by law. FIFTH CAUSE OF ACTION FOR FINANCIAL ELDER ABUSE (Welf. & Inst. Code §§ 15610.30, 15657.5) 11 12 13 14 15 (Plaintiff against All Defendants) 76. Plaintiff incorporates by reference each and every allegation of the above paragraphs as though set forth fully herein. 16 77. At all times mentioned herein, Plaintiff was older than 65 years of age. 17 78. Defendants appropriated and retained Plaintiffs’ life savings and retirement funds. 18 19 As alleged herein and above, defendants, Wolan and McCain, including other 20 representatives of Defendants represented and ensured Plaintiff that Defendants’ 21 Investment Opportunity was safe and his investment with Defendants will only 22 23 increase in value as the dollar is going to lose strength causing precious metals to 24 increase in value. Additionally, Defendants, particularly, defendants, Wolan and 25 McCain, repeatedly represented to Plaintiff that: he would be purchasing precious 26 27 28 metals from Defendants at fair market value on the day of purchase; that he would be able to sell and/or Defendants would buy back any part or the whole Page 23 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 24 of 82 Page ID #:174 1 2 investment of the precious metals at anytime, without any penalty, for no less than the same price he purchased them; and that the precious metals would be kept by 3 4 5 6 a third-party on his behalf. Based on Defendants repeated representations and assurances, Plaintiff understood that Defendants’ Investment Opportunity was safe, risk-free, and that he would have access to his investment funds at any time 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 11 if he needed money. 79. In reliance on the repeated representations and assurances by Defendants, particularly, defendants, Wolan and McCain, about Defendants’ Investment 12 Opportunity, as set forth herein and above, Plaintiff agreed to purchase precious 13 metals from Defendants. To facilitate Plaintiff’s purchase of the precious metals 14 15 from Defendants, Plaintiff received and signed a one-page Contract from 16 Defendants in order to participate in Defendants’ Investment Opportunity, which 17 Plaintiff believed was based on Defendants’ representations and assurances to 18 19 20 21 22 23 Plaintiff about Defendants’ Investment Opportunity. See Exhibit “1” (i.e., Contract) attached hereto and fully incorporated herein by this reference. 80. Thereafter, in August of 2017, in reasonable and justifiable reliance on the aforementioned representations and assurances by the Defendants, the Plaintiff 24 purchased thousands of precious metals, including coins, from Defendants. 25 Plaintiff paid Defendants, based on their invoice dated August 7, 2017, the 26 27 28 amount of $367,530.00. Additionally, Plaintiff paid Defendants, based on their invoice dated August 23, 2017, the amount of $94,282.50. See Exhibit “2” (i.e., Page 24 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 25 of 82 Page ID #:175 1 2 the two August 2017 invoices) attached hereto and fully incorporated herein by this reference. 3 4 5 6 81. In or around October 2017, Plaintiff received a statement from Strata Trust Company which reflected the value of his investment with Defendants. To Plaintiff’s shock and surprise, unlike what he was promised, the value of his 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 investment with Defendants had decreased. Within about two months’ time, the Plaintiff’s $461,812.50 investment with Defendants had lost about $250,000.00 in value. 11 12 13 14 82. Defendants, particularly, defendants, Wolan, McCain, and Sachs, told Plaintiff that the statements from Strata Trust Company did not represent the accurate value of Plaintiff’s investment with the Defendants because the coins in question 15 16 17 18 were minted in Canada specifically for Defendants, which had a higher value than Strata Trust Company was reflecting on the statements. As a result, Defendants, particularly, defendants, Wolan, McCain, and Sachs, would continuously tell 19 20 21 22 Plaintiff that he needed to be patient, wait, and not take any action. 83. Nevertheless, Plaintiff informed the Defendants of his intention to sell the precious metals and for the Defendants to buy them back for the same price the 23 24 25 26 Plaintiff paid for them as Defendants had repeatedly promised. Defendants, however, refused to do so and instead told Plaintiff that they could not repurchase them for another three to five years all while continuing to represent to Plaintiff 27 28 Page 25 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 26 of 82 Page ID #:176 1 2 that he had not lost any money because the precious metals that he bought from Defendants were worth as much as he paid for them. 3 4 5 6 84. Notwithstanding Defendants’ continuing representation that Plaintiff had not lost any money, Plaintiff continued receiving statements that showed the value of his investment kept on losing value. Ultimately, in an effort to preserve what was left 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 of his life savings and retirement funds, Plaintiff was forced to engage others to sell his investments with Defendants because Defendants continued to refuse to sell or buy back any part of the precious metals they had sold to him. Plaintiff was 11 12 13 14 only able to recover about $158,000.00 of what Plaintiff invested with the Defendants. 85. Defendants appropriated and retained the Plaintiff’s life savings and retirement 15 16 17 18 funds for wrongful use, with the intent to defraud, and/or by undue influence. Defendants engaged in such misconduct either directly, or assisted each other in such misconduct. 19 20 21 22 86. As a result of Defendants’ misconduct, as alleged herein and above, the Plaintiff was harmed and Defendants’ misconduct was a substantial factor in causing Plaintiff’s harm. 23 24 87. As a factual and legal result of Defendant’s misconduct, as alleged herein and 25 above, Plaintiff has been damaged for an amount, in excess of $500,000.00, to be 26 27 proven at the time of the trial together with the interest thereon. 28 Page 26 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 27 of 82 Page ID #:177 1 2 88. Additionally, Defendants’ conduct was willful and malicious and without regard for the well-being of the Plaintiff, thus entitling Plaintiff to an award of punitive 3 4 5 6 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 11 12 13 14 15 damages pursuant to Civ. Code § 3294 in excess of $7,000,000.00. 89. Moreover, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff is entitled to recover from Defendant in accordance with the terms of the agreements alleged herein or as may be provided by law (e.g., Welf. & Inst. Code §15657.5). SIXTH CAUSE OF ACTION FOR CONVERSION (Plaintiff against All Defendants) 90. Plaintiff incorporates by reference each and every allegation of the above paragraphs as though set forth fully herein. 91. At all times relevant herein, Plaintiff had an ownership interest in his life savings 16 and retirement funds, including without limitation, all amounts of money paid to 17 Defendants in connection with Defendant’s Investment Opportunity. 18 19 20 21 22 23 92. Defendants are in possession of all the money the Plaintiff paid in connection with Defendant’s Investment Opportunity. 93. Despite multiple demands by Plaintiff for the return of his money, Defendants have refused to pay back the money and continue to hold such money belonging 24 to Plaintiff without his consent in converting the same to Defendants’ own use. 25 94. As a factual and legal result of Defendant’s misconduct, as alleged herein and 26 27 28 above, Plaintiff has been damaged for an amount, in excess of $500,000.00, to be proven at the time of the trial together with the interest thereon. Page 27 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 28 of 82 Page ID #:178 1 2 95. Additionally, Defendants’ conduct was willful and malicious and without regard for the well-being of Plaintiff, thus entitling Plaintiff to an award of punitive 3 4 5 6 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 11 damages pursuant to Civ. Code § 3294 in excess of $7,000,000.00. 96. Moreover, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff is entitled to recover from Defendant in accordance with the terms of the agreements alleged herein or as may be provided by law. SEVENTH CAUSE OF ACTION FOR COMMON COUNT (MONEY HAD AND RECEIVED) 12 (Plaintiff against All Defendants) 13 97. Plaintiff incorporates by reference each and every allegation of the above 14 15 paragraphs as though set forth fully herein. 16 98. Defendants received amounts of money that were intended for Plaintiff’s benefit, 17 including without limitation, payments Plaintiff made to Defendants in connection 18 19 20 21 22 23 with Defendant’s Investment Opportunity. 99. Despite multiple demands by Plaintiff for the return of his money, Defendants have refused to pay back the money and continue to hold said money. 100. As a factual and legal result of Defendant’s misconduct, as alleged herein and 24 above, Plaintiff has been damaged for an amount, in excess of $500,000.00, to be 25 proven at the time of the trial together with the interest thereon. 26 27 28 Page 28 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 29 of 82 Page ID #:179 1 2 101. Moreover, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff is entitled to recover from Defendant in accordance with the terms of the 3 4 5 agreements alleged herein or as may be provided by law. EIGHTH CAUSE OF ACTION FOR UNFAIR AND DECEPTIVE 6 BUSINESS PRACTICES CAL. B & P § 17200, ET. SEQ. 7 (Plaintiff against All Defendants) 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 102. Plaintiff incorporates by reference each and every allegation of the above paragraphs as though set forth fully herein. 11 12 13 14 103. Business and Professions Code § 17200 states, in pertinent part: “...unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act 15 16 17 18 prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the Business and Professions Code” and allows an aggrieved party to seek restitution and relief from the court enjoining such unfair and fraudulent acts and 19 20 21 22 practices. 104. At all times mentioned herein, Defendants engaged in “unlawful”, “unfair”, and “fraudulent” business practices because its conduct was immoral, unethical, 23 24 25 26 oppressive, unscrupulous and substantially damaging to Plaintiff. Specifically, and without limitation, the particular offensive conduct includes Defendants’ representations and assurances to Plaintiff that: Defendants’ Investment 27 28 Opportunity was safe and his investment with Defendants will only increase in Page 29 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 30 of 82 Page ID #:180 1 2 value as the dollar is going to lose strength causing precious metals to increase in value; Defendants, particularly, defendants, Wolan and McCain, repeatedly 3 4 5 6 representing that Plaintiff would be purchasing precious metals from Defendants at fair market value on the day of purchase; that Plaintiff would be able to sell and/or Defendants would buy back any part or the whole investment of the 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 precious metals at anytime, without any penalty, for no less than the same price Plaintiff purchased them; and that the precious metals would be kept by a thirdparty on his behalf; when, in fact, Plaintiff’s investment with Defendants lost 11 12 13 14 almost all of its value; Defendants refused and continues to refuse to sell or buy back any of the precious metals Plaintiff bought from Defendants in connection with Defendants’ Investment Opportunity at the prices Plaintiff bought them from 15 16 17 18 Defendants. 105. At all times mentioned herein, Defendants engaged in “fraudulent” business practices because members of the public are likely to be deceived as a result of 19 20 21 22 the conduct alleged herein and above. 106. As a factual and legal result of Defendant’s misconduct, as alleged herein and above, Plaintiff has been damaged for an amount, in excess of $500,000.00, to be 23 24 25 26 proven at the time of the trial together with the interest thereon. Plaintiff therefore seeks restitution from Defendants. 107. Defendants’ conduct, as alleged herein and above, was willful and malicious 27 28 and without regard for the well-being of Plaintiff, thus entitling Plaintiff to an Page 30 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 31 of 82 Page ID #:181 1 2 award of punitive damages pursuant to Civ. Code § 3294 in excess of $7,000,000.00. 3 4 5 6 108. Moreover, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff is entitled to recover from Defendant in accordance with the terms of the agreements alleged herein or as may be provided by law. 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 109. Additionally, Defendants’ conduct has caused, and unless enjoined will continue to cause, irreparable injury to, including harm to the public especially the elderly whom, are targeted by the Defendants, for which money cannot 11 12 13 14 adequately compensate. Plaintiff has no adequate remedy at law for these wrongs and injuries. Plaintiff is, therefore, entitled to a preliminary and permanent injunction restraining and enjoining Defendants and their agents, servants, and 15 16 17 18 employees, and all persons acting thereunder, in concert with, or on their behalf, from further acts of unfair competition, including (a) engaging in additional misappropriation of others; (b) engaging in acts which would be harmful to the 19 20 21 22 public, including selling products, including without limiation, Defendants’ Investment Opportunity, under the same type of misrepresentations; (c) any actions which are fraudulent, including continuing to make misrepresentations to 23 24 25 prospective customers as they had done to Plaintiff; and (d) engaging in selfdealing, including usurping opportunities. 26 27 28 Page 31 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 32 of 82 Page ID #:182 1 NINTH CAUSE OF ACTION FOR VIOLATION OF PENAL CODE § 496(a) 2 (Plaintiff against All Defendants) 3 4 5 6 110. Plaintiff incorporates by reference each and every allegation of the above paragraphs as though set forth fully herein. 111. Penal Code § 496(a) states that “Every person who buys or receives any 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 property that has been stolen or that has been obtained in any manner constituting theft or extortion, knowing the property to be so stolen or obtained, or who conceals, sells, withholds, or aids in concealing, selling, or withholding any 11 12 13 14 property from the owner, knowing the property to be so stolen or obtained, shall be punished by imprisonment in a state prison, or in a county jail for not more than one year.” 15 16 17 18 112. Penal Code § 496© states that “Any person who has been injured by a violation of subdivision (a) or (b) may bring an action for three times the amount of actual damages, if any, sustained by the plaintiff, costs of suit, and reasonable 19 20 21 22 attorney’s fees.” 113. As alleged herein and above, Defendants induced Plaintiff under false pretenses to use Plaintiff’s life savings and retirement funds to buy into 23 24 25 26 Defendants’ Investment Opportunity and to purchase precious metals from Defendants in connection with the Investment Opportunity. 114. As alleged herein and above, defendants, Wolan and McCain, including other 27 28 representatives of Defendants represented and ensured Plaintiff that Defendants’ Page 32 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 33 of 82 Page ID #:183 1 2 Investment Opportunity was safe and his investment with Defendants will only increase in value as the dollar is going to lose strength causing precious metals to 3 4 5 6 increase in value. Additionally, Defendants, particularly, defendants, Wolan and McCain, repeatedly represented to Plaintiff that: he would be purchasing precious metals from Defendants at fair market value on the day of purchase; that he would 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 be able to sell and/or Defendants would buy back any part or the whole investment of the precious metals at any time, without any penalty, for no less than the same price he purchased them; and that the precious metals would be 11 12 13 14 kept by a third-party on his behalf. Based on Defendants repeated representations and assurances, Plaintiff understood that Defendants’ Investment Opportunity was safe, risk-free, and that he would have access to his investment funds at any time 15 16 17 18 if he needed money. 115. In reliance on the repeated representations and assurances by Defendants, particularly, defendants, Wolan and McCain, about Defendants’ Investment 19 20 21 22 Opportunity, as set forth herein and above, Plaintiff agreed to purchase precious metals from Defendants. To facilitate Plaintiff’s purchase of the precious metals from Defendants, Plaintiff received and signed a one-page Contract from 23 24 25 26 Defendants in order to participate in Defendants’ Investment Opportunity, which Plaintiff believed was based on Defendants’ representations and assurances to Plaintiff about Defendants’ Investment Opportunity. See Exhibit “1” (i.e., 27 28 Contract) attached hereto and fully incorporated herein by this reference. Page 33 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 34 of 82 Page ID #:184 1 2 116. Thereafter, in August of 2017, in reasonable and justifiable reliance on the aforementioned representations and assurances by the Defendants, Plaintiff 3 4 5 6 purchased thousands of precious metals, including coins, from Defendants. Plaintiff paid Defendants, based on their invoice dated August 7, 2017, the amount of $367,530.00. Additionally, Plaintiff paid Defendants, based on their 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 invoice dated August 23, 2017, the amount of $94,282.50. See Exhibit “2” (i.e., the two August 2017 invoices) attached hereto and fully incorporated herein by this reference. 11 12 13 14 117. In or around October 2017, Plaintiff received a statement from Strata Trust Company which reflected the value of his investment with Defendants. To Plaintiff’s shock and surprise, unlike what he was promised, the value of his 15 16 17 18 investment with Defendants had decreased over $211,000.00. Within about two months’ time, the Plaintiff’s $461,812.50 investment with Defendants had lost about $250,000.00 in value. 19 20 21 22 118. Defendants, particularly, defendants, Wolan, McCain, and Sachs, told Plaintiff that the statements from Strata Trust Company did not represent the accurate value of Plaintiff’s investment with the Defendants because the coins in question 23 24 25 26 were minted in Canada specifically for Defendants, which had a higher value than Strata Trust Company was reflecting on the statements. As a result, Defendants, particularly, defendants, Wolan, McCain, and Sachs, would continuously tell 27 28 Plaintiff that he needed to be patient, wait, and not take any action. Page 34 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 35 of 82 Page ID #:185 1 2 119. Nevertheless, Plaintiff informed the Defendants of his intention to sell the precious metals and for the Defendants to buy them back for the same price the 3 4 5 6 Plaintiff paid for them as Defendants had repeatedly promised. Defendants, however, refused to do so and instead told Plaintiff that they could not repurchase them for another three to five years all while continuing to represent to Plaintiff 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 that he had not lost any money because the precious metals that he bought from Defendants were worth as much as he paid for them. 120. Notwithstanding Defendants’ continuing representation that Plaintiff had not 11 12 13 14 lost any money, Plaintiff continued receiving statements that showed the value of his investment kept on losing value. Ultimately, in an effort to preserve what was left of his life savings and retirement funds, Plaintiff was forced to engage others 15 16 17 18 to sell his investments with Defendants because Defendants continued to refuse to sell or buy back any part of the precious metals they had sold to him. Plaintiff was only able to recover about $158,000.00 of what Plaintiff invested with the 19 20 21 22 Defendants. 121. As a factual and legal result of Defendant’s misconduct, as alleged herein and above, Plaintiff has been damaged for an amount, in excess of $1,500,000.00, to 23 24 25 26 be proven at the time of the trial together with the interest thereon. 122. Additionally, Defendants’ conduct was willful and malicious and without regard for the well-being of Plaintiff, thus entitling Plaintiff to an award of 27 28 punitive damages pursuant to Civ. Code § 3294 in excess of $7,000,000.00. Page 35 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 36 of 82 Page ID #:186 1 2 123. Moreover, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff is entitled to recover from Defendant in accordance with the terms of the 3 4 5 6 agreements alleged herein or as may be provided by law (e.g., Penal Code § 496©). TENTH CAUSE OF ACTION FOR CIVIL CONSPIRACY 7 (Plaintiff against All Defendants) 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 124. Plaintiff incorporates by reference each and every allegation of the above paragraphs as though set forth fully herein. 11 12 13 14 125. Defendants and each of them knowingly and willfully conspired and agreed among themselves to perpetrate a fraud on Plaintiff to steal his life savings and retirement funds for Defendants’ own benefit. Defendants conspired to violate 15 16 17 18 Plaintiff’s rights for all the causes of action alleged in this pleading. 126. Defendants and each of them did the acts and things alleged herein and above pursuant to, and in furtherance of, the conspiracy and above-alleged conspiracy 19 20 21 22 agreement. 127. As a factual and legal result of Defendant’s misconduct, as alleged herein and above, Plaintiff has been damaged for an amount, in excess of $500,000.00, to be 23 24 25 26 proven at the time of the trial together with the interest thereon. 128. Additionally, Defendants’ conduct was willful and malicious and without regard for the well-being of Plaintiff, thus entitling Plaintiff to an award of 27 28 punitive damages pursuant to Civ. Code § 3294 in excess of $7,000,000.00. Page 36 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 37 of 82 Page ID #:187 1 2 129. Moreover, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff is entitled to recover from Defendant in accordance with the terms of the 3 4 5 agreements alleged herein or as may be provided by law. ELEVENTH CAUSE OF ACTION FOR RESCISSION BASED ON 6 UNILATERAL MISTAKE 7 (Plaintiff against All Defendants) 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 130. Plaintiff incorporates by reference each and every allegation of the above paragraphs as though set forth fully herein. 11 12 13 14 131. Plaintiff entered into the Investment Opportunity with the Defendants based upon Plaintiff’s understanding of Defendant’s Investment Opportunity as a stated herein and above. 15 16 17 18 132. As result of Defendants’ representations and assurances, as alleged herein and above, Plaintiff was mistaken in believing that Defendants’ Investment Opportunity was safe and his investment with Defendants will only increase in 19 20 21 22 value as the dollar is going to lose strength causing precious metals to increase in value; that Plaintiff would be purchasing precious metals from Defendants at fair market value on the day of purchase; that Plaintiff would be able to sell and/or 23 24 25 26 Defendants would buy back any part or the whole investment of the precious metals at any time, without any penalty, for no less than the same price he purchased them; and that the precious metals would be kept by a third-party on 27 28 his behalf. Page 37 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 38 of 82 Page ID #:188 1 2 133. Plaintiff’s mistake was not caused by any neglect of a legal duty. 134. Defendants knew of Plaintiff’s mistaken belief and used Plaintiff’s mistake to 3 4 5 6 take advantage of Plaintiff by inducing Plaintiff to enter into the Contract to buy into Defendant’s Investment Opportunity and to purchase precious metals from Defendants in connection with the Investment Opportunity. 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 11 135. Indeed, in August of 2017, in reasonable and justifiable reliance on the aforementioned representations and assurances by the Defendants, Plaintiff agreed to purchase precious metals from Defendants. To facilitate Plaintiff’s 12 purchase of the precious metals from Defendants, Plaintiff received and signed a 13 one-page Contract from Defendants in order to participate in Defendants’ 14 15 Investment Opportunity, which Plaintiff believed was based on Defendants’ 16 representations and assurances to Plaintiff about Defendants’ Investment 17 Opportunity. See Exhibit “1” (i.e., Contract) attached hereto and fully 18 19 incorporated herein by this reference. 20 136. Plaintiff purchased thousands of precious metals, including coins, from 21 Defendants. Plaintiff paid Defendants, based on their invoice dated August 7, 22 23 2017, the amount of $367,530.00. Additionally, Plaintiff paid Defendants, based 24 on their invoice dated August 23, 2017, the amount of $94,282.50. See Exhibit 25 “2” (i.e., the two August 2017 invoices) attached hereto and fully incorporated 26 27 herein by this reference. 28 Page 38 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 39 of 82 Page ID #:189 1 2 3 Company which reflected the value of his investment with Defendants. To 4 Plaintiff’s shock and surprise, unlike what he was promised, the value of his 5 investment with Defendants had decreased. Within about two months’ time, 6 7 8 9 10 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 137. In or around October 2017, Plaintiff received a statement from Strata Trust 11 Plaintiff’s $461,812.50 investment with Defendants had lost about $250,000.00 in value. 138. Defendants later claimed that the terms of Plaintiff’s investment with Defendants were different than the terms of Plaintiff’s mistaken belief. 12 139. Despite Plaintiff’s notice to Defendants that the Contract was rescinded and 13 offer to restore to Defendants the precious metals Defendants sold to him on 14 15 condition that Defendants restore to Plaintiff all of the consideration Plaintiff paid 16 to Defendants for the precious metals, Defendants refused and continues to refuse 17 to do so. 18 19 140. Notwithstanding the aforementioned notice, Plaintiff intends service of 20 summons of this complaint to serve as notice of rescission of the Contract and 21 hereby offers to restore all consideration furnished by Defendants under said 22 23 24 25 26 27 Contract, on condition that Defendants restore to Plaintiff the consideration furnished by Plaintiff. 141. Plaintiff will suffer irreparable and substantial harm if consideration furnished by Plaintiff, with interest thereon at the maxim legal rate from the date of 28 Page 39 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 40 of 82 Page ID #:190 1 2 rescission, is not restored, in that the consideration was Plaintiff’s entire life savings. 3 4 142. Moreover, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff 5 is entitled to recover from Defendant in accordance with the terms of the 6 7 8 TWELFTH CAUSE OF ACTION FOR RESCISSION 9 BASED ON FRAUD & FRAUDULENT INDUCEMENT 10 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 agreements alleged herein or as may be provided by law. 11 12 13 14 15 (Plaintiff against All Defendants) 143. Plaintiff incorporates by reference each and every allegation of the above paragraphs as though set forth fully herein. 144. As alleged herein and above, defendants, Wolan and McCain, including other 16 representatives of Defendants represented and ensured Plaintiff that Defendants’ 17 Investment Opportunity was safe and his investment with Defendants will only 18 19 increase in value as the dollar is going to lose strength causing precious metals to 20 increase in value. Additionally, Defendants, particularly, defendants, Wolan and 21 McCain, repeatedly represented to Plaintiff that: he would be purchasing precious 22 23 metals from Defendants at fair market value on the day of purchase; that he would 24 be able to sell and/or Defendants would buy back any part or the whole 25 investment of the precious metals at anytime, without any penalty, for no less than 26 27 28 the same price he purchased them; and that the precious metals would be kept by a third-party on his behalf. Based on Defendants repeated representations and Page 40 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 41 of 82 Page ID #:191 1 2 assurances, Plaintiff understood that Defendants’ Investment Opportunity was safe, risk-free, and that he would have access to his investment funds at any time 3 4 5 6 7 145. In reliance on the repeated representations and assurances by Defendants, particularly, defendants, Wolan and McCain, about Defendants’ Investment 8 Opportunity, as set forth herein and above, Plaintiff agreed to purchase precious 9 metals from Defendants. To facilitate Plaintiff’s purchase of the precious metals 10 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 if he needed money. 11 from Defendants, Plaintiff received and signed a one-page Contract from 12 Defendants in order to participate in Defendants’ Investment Opportunity, which 13 Plaintiff believed was based on Defendants’ representations and assurances to 14 15 16 17 18 19 Plaintiff about Defendants’ Investment Opportunity. See Exhibit “1” (i.e., Contract) attached hereto and fully incorporated herein by this reference. 146. Thereafter, in August of 2017, in reasonable and justifiable reliance on the aforementioned representations and assurances by the Defendants, the Plaintiff 20 purchased thousands of precious metals, including coins, from Defendants. 21 Plaintiff paid Defendants, based on their invoice dated August 7, 2017, the 22 23 amount of $367,530.00. Additionally, Plaintiff paid Defendants, based on their 24 invoice dated August 23, 2017, the amount of $94,282.50. See Exhibit “2” (i.e., 25 the two August 2017 invoices) attached hereto and fully incorporated herein by 26 27 this reference. 28 Page 41 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 42 of 82 Page ID #:192 1 2 147. At the time that Defendants made the aforementioned representations and assurances, Defendants knew that they were false. 3 4 5 6 148. Defendants made the aforementioned representations and assurances with the intention to defraud and induce Plaintiff to buy into Defendants’ Investment Opportunity and buy precious metals from Defendants as part of the Investment 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 Opportunity. 149. Plaintiff reasonably and justifiably relied on Defendants’ false representations and assurances. 11 12 13 14 150. Had Plaintiff known the falsity of Defendants’ representations and assurances, Plaintiff would not have agreed to buy into Defendants’ Investment Opportunity or buy precious metals from Defendants as part of the Investment Opportunity or 15 16 17 18 entered into the aforementioned Contract to effectuate the same. 151. Despite Plaintiff’s notice to Defendants that the Contract was rescinded and offer to restore to Defendants the precious metals Defendants sold to him on 19 20 21 22 condition that Defendants restore to Plaintiff all of the consideration Plaintiff paid to Defendants for the precious metals, Defendants refused and continues to refuse to do so. 23 24 25 26 152. Notwithstanding the aforementioned notice, Plaintiff intends service of summons of this complaint to serve as notice of rescission of the Contract and hereby offers to restore all consideration furnished by Defendants under said 27 28 Page 42 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 43 of 82 Page ID #:193 1 2 Contract, on condition that Defendants restore to Plaintiff the consideration furnished by Plaintiff. 3 4 5 6 7 above, Plaintiff will suffer irreparable and substantial harm if consideration furnished by Plaintiff, with interest thereon at the maxim legal rate from the date 8 of rescission, is not restored, in that the consideration was Plaintiff’s entire life 9 savings. 10 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 153. As a factual and legal result of Defendant’s misconduct, as alleged herein and 11 154. Additionally, Defendants’ conduct was willful and malicious and without 12 regard for the well-being of Plaintiff, thus entitling Plaintiff to an award of 13 punitive damages pursuant to Civ. Code § 3294 in excess of $7,000,000.00. 14 15 155. Moreover, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff 16 is entitled to recover from Defendant in accordance with the terms of the 17 agreements alleged herein or as may be provided by law. 18 19 THIRTEENTH CAUSE OF ACTION FOR RESCISSION 20 BASED ON NEGLIGENT MISREPRESENTATION 21 (Plaintiff against All Defendants) 22 23 24 25 26 27 28 156. Plaintiff incorporates by reference each and every allegation of the above paragraphs as though set forth fully herein. 157. As alleged herein and above, defendants, Wolan and McCain, including other representatives of Defendants represented and ensured Plaintiff that Defendants’ Investment Opportunity was safe and his investment with Defendants will only Page 43 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 44 of 82 Page ID #:194 1 2 increase in value as the dollar is going to lose strength causing precious metals to increase in value. Additionally, Defendants, particularly, defendants, Wolan and 3 4 5 6 McCain, repeatedly represented to Plaintiff that: he would be purchasing precious metals from Defendants at fair market value on the day of purchase; that he would be able to sell and/or Defendants would buy back any part or the whole 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 investment of the precious metals at anytime, without any penalty, for no less than the same price he purchased them; and that the precious metals would be kept by a third-party on his behalf. Based on Defendants repeated representations and 11 12 13 14 assurances, Plaintiff understood that Defendants’ Investment Opportunity was safe, risk-free, and that he would have access to his investment funds at any time if he needed money. 15 16 17 18 158. In reliance on the repeated representations and assurances by Defendants, particularly, defendants, Wolan and McCain, about Defendants’ Investment Opportunity, as set forth herein and above, Plaintiff agreed to purchase precious 19 20 21 22 metals from Defendants. To facilitate Plaintiff’s purchase of the precious metals from Defendants, Plaintiff received and signed a one-page Contract from Defendants in order to participate in Defendants’ Investment Opportunity, which 23 24 25 26 Plaintiff believed was based on Defendants’ representations and assurances to Plaintiff about Defendants’ Investment Opportunity. See Exhibit “1” (i.e., Contract) attached hereto and fully incorporated herein by this reference. 27 28 Page 44 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 45 of 82 Page ID #:195 1 2 159. Thereafter, in August of 2017, in reasonable and justifiable reliance on the aforementioned representations and assurances by the Defendants, Plaintiff 3 4 5 6 purchased thousands of precious metals, including coins, from Defendants. Plaintiff paid Defendants, based on their invoice dated August 7, 2017, the amount of $367,530.00. Additionally, Plaintiff paid Defendants, based on their 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 invoice dated August 23, 2017, the amount of $94,282.50. See Exhibit “2” (i.e., the two August 2017 invoices) attached hereto and fully incorporated herein by this reference. 11 12 13 14 160. Defendants’ representations and assurances to Plaintiff were not true. 161. While Defendants may have believed their representations and assurances to Plaintiff were true, Defendants had no reasonable grounds for believing the 15 16 17 18 19 20 21 22 23 representations and assurances were true when Defendants made them. 162. Defendants intended that Plaintiff rely on their representations and assurances. 163. Plaintiff reasonably and justifiably relied on Defendants’ representations and assurances. 164. Had Plaintiff known the falsity of Defendants’ representations and assurances, Plaintiff would not have agreed to buy into Defendants’ Investment Opportunity 24 or buy precious metals from Defendants as part of the Investment Opportunity or 25 entered into the aforementioned Contract to effectuate the same. 26 27 28 165. Despite Plaintiff’s notice to Defendants that the Contract was rescinded and offer to restore to Defendants the precious metals Defendants sold to him on Page 45 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 46 of 82 Page ID #:196 1 2 condition that Defendants restore to Plaintiff all of the consideration Plaintiff paid to Defendants for the precious metals, Defendants refused and continues to refuse 3 4 5 6 to do so. 166. Notwithstanding the aforementioned notice, Plaintiff intends service of summons of this complaint to serve as notice of rescission of the Contract and 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 hereby offers to restore all consideration furnished by Defendants under said Contract, on condition that Defendants restore to Plaintiff the consideration furnished by Plaintiff. 11 12 13 14 15 167. As a factual and legal result of Defendant’s misconduct, as alleged herein and above, Plaintiff will suffer irreparable and substantial harm if consideration furnished by Plaintiff, with interest thereon at the maxim legal rate from the date 16 of rescission, is not restored, in that the consideration was Plaintiff’s entire life 17 savings. 18 19 168. Moreover, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff 20 is entitled to recover from Defendant in accordance with the terms of the 21 agreements alleged herein or as may be provided by law. 22 23 FOURTEENTH CAUSE OF ACTION FOR RESCISSION 24 BASED ON LACK OF CONSIDERATION 25 (Plaintiff against All Defendants) 26 27 28 169. Plaintiff incorporates by reference each and every allegation of the above paragraphs as though set forth fully herein. Page 46 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 47 of 82 Page ID #:197 1 2 170. As a result of Defendants’ breach of contract, fraud, negligent misrepresentation, and fraudulent inducement upon Plaintiff with respect to 3 4 5 6 Defendants’ Investment Opportunity, as alleged herein and above, the consideration for Plaintiffs’ obligation completely fails, thereby rendering it entirely void. 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 171. Despite Plaintiff’s notice to Defendants that the Contract was rescinded and offer to restore to Defendants the precious metals Defendants sold to him on condition that Defendants restore to Plaintiff all of the consideration Plaintiff paid 11 12 13 14 to Defendants for the precious metals, Defendants refused and continues to refuse to do so. 172. Notwithstanding the aforementioned notice, Plaintiff intends service of 15 16 17 18 summons of this complaint to serve as notice of rescission of the Contract and hereby offers to restore all consideration furnished by Defendants under said Contract, on condition that Defendants restore to Plaintiff the consideration 19 20 21 22 23 furnished by Plaintiff. 173. As a factual and legal result of Defendant’s misconduct, as alleged herein and above, Plaintiff will suffer irreparable and substantial harm if consideration 24 furnished by Plaintiff, with interest thereon at the maxim legal rate from the date 25 of rescission, is not restored, in that the consideration was Plaintiff’s entire life 26 27 savings. 28 Page 47 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 48 of 82 Page ID #:198 1 2 174. Moreover, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff is entitled to recover from Defendant in accordance with the terms of the 3 4 agreements alleged herein or as may be provided by law. FIFTEENTH CAUSE OF ACTION FOR RESCISSION 5 6 BASED ON ILLEGALITY & PUBLIC INTEREST 7 (Plaintiff against All Defendants) 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 175. Plaintiff incorporates by reference each and every allegation of the above paragraphs as though set forth fully herein. 11 12 13 14 176. As a result of Defendants’ financial elder abuse, unfair and deceptive business practices, and violation of Penal Code § 496(a) against Plaintiff with respect to Defendants’ Investment Opportunity, as alleged herein and above, the Contract 15 16 17 18 alleged herein is unlawful and its enforcement would be prejudicial to the public interest. 177. Despite Plaintiff’s notice to Defendants that the Contract was rescinded and 19 20 21 22 offer to restore to Defendants the precious metals Defendants sold to him on condition that Defendants restore to Plaintiff all of the consideration Plaintiff paid to Defendants for the precious metals, Defendants refused and continues to refuse 23 24 25 26 to do so. 178. Notwithstanding the aforementioned notice, Plaintiff intends service of summons of this complaint to serve as notice of rescission of the Contract and 27 28 hereby offers to restore all consideration furnished by Defendants under said Page 48 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 49 of 82 Page ID #:199 1 2 Contract, on condition that Defendants restore to Plaintiff the consideration furnished by Plaintiff. 3 4 5 6 7 above, Plaintiff will suffer irreparable and substantial harm if consideration furnished by Plaintiff, with interest thereon at the maxim legal rate from the date 8 of rescission, is not restored, in that the consideration was Plaintiff’s entire life 9 savings. 10 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 179. As a factual and legal result of Defendant’s misconduct, as alleged herein and 11 180. Additionally, Defendants’ conduct was willful and malicious and without 12 regard for the well-being of the Plaintiff, thus entitling Plaintiff to an award of 13 punitive damages pursuant to Civ. Code § 3294 in excess of $7,000,000.00. 14 15 181. Moreover, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff 16 is entitled to recover from Defendant in accordance with the terms of the 17 agreements alleged herein or as may be provided by law. 18 19 SIXTEENTH CAUSE OF ACTION FOR CANCELLATION OF 20 INSTRUMENTS (CIVIL CODE § 3412) 21 (Plaintiff against All Defendants) 22 23 24 25 26 27 28 182. Plaintiff incorporates by reference each and every allegation of the above paragraphs as though set forth fully herein. 183. As a result of Defendants’ breach of contract, fraud, negligent misrepresentation, fraudulent inducement, financial elder abuse, unfair and deceptive business practices, and violation of Penal Code § 496(a) against Page 49 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 50 of 82 Page ID #:200 1 2 Plaintiff with respect to Defendants’ Investment Opportunity, as alleged herein and above, the consideration for Plaintiffs’ obligation completely fails, thereby 3 4 5 6 rendering the Contract allege herein entirely void, voidable, subject to rescission, and/or otherwise invalid. 184. Plaintiff is under a reasonable apprehension that the Contract may cause 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 serious injury to Plaintiff if left outstanding where Defendants have refused and continues to refuse to sell or buy back the precious metals Plaintiff bought from Defendants for the same price Plaintiff paid for them. 11 12 13 14 185. Accordingly, Plaintiff requests that the Contract be adjudged as void, voidable, subject to rescission, and/or otherwise invalid and thereby ordered canceled. 186. Moreover, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff 15 16 17 18 is entitled to recover from Defendant in accordance with the terms of the agreements alleged herein or as may be provided by law. SEVENTEENTH CAUSE OF ACTION 19 20 21 22 FOR RESTITUTION (UNJUST ENRICHMENT) (Plaintiff against All Defendants) 187. Plaintiff incorporates herein by reference each and every allegation of the 23 24 25 26 above paragraphs as though set forth fully herein. 188. At all times relevant herein, Plaintiff had an ownership interest in his life savings and retirement funds, including without limitation, all moneys paid to 27 28 Defendants in connection with Defendant’s Investment Opportunity. Page 50 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 51 of 82 Page ID #:201 1 2 189. Defendants are in possession of all the money Plaintiff paid in connection with Defendant’s Investment Opportunity. 3 4 5 6 190. Despite multiple demands by Plaintiff for the return of his money, Defendants have refused to pay back the money and continue to hold such money belonging to Plaintiff. 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 191. As result of Defendants’ failure and refusal to pay all moneys belonging to Plaintiff, Defendants, at all times relevant herein, have been and continues to be unjustly enriched at the expense of Plaintiff. 11 12 192. As a factual and legal result of Defendant’s misconduct, as alleged herein and 13 above, Plaintiff has been damaged for an amount, in excess of $500,000.00, to be 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 proven at the time of the trial together with the interest thereon. Plaintiff therefore seeks restitution from Defendants. 193. Moreover, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff is entitled to recover from Defendant in accordance with the terms of the agreements alleged herein or as may be provided by law. EIGHTEENTH CAUSE OF ACTION FOR ACCOUNTING (Plaintiff against All Defendants) 194. Plaintiff incorporates herein by reference each and every allegation of the above paragraphs as though set forth fully herein. 195. As alleged herein and above, defendants, Wolan and McCain, including other representatives of Defendants represented and ensured Plaintiff that Defendants’ Page 51 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 52 of 82 Page ID #:202 1 2 Investment Opportunity was safe and his investment with Defendants will only increase in value as the dollar is going to lose strength causing precious metals to 3 4 5 6 increase in value. Additionally, Defendants, particularly, defendants, Wolan and McCain, repeatedly represented to Plaintiff that: he would be purchasing precious metals from Defendants at fair market value on the day of purchase; that he would 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 be able to sell and/or Defendants would buy back any part or the whole investment of the precious metals at anytime, without any penalty, for no less than the same price he purchased them; and that the precious metals would be kept by 11 12 13 14 a third-party on his behalf. Based on Defendants repeated representations and assurances, Plaintiff understood that Defendants’ Investment Opportunity was safe, risk-free, and that he would have access to his investment funds at any time 15 16 17 18 19 if he needed money. 196. In reliance on the repeated representations and assurances by Defendants, particularly, defendants, Wolan and McCain, about Defendants’ Investment 20 Opportunity, as set forth herein and above, Plaintiff agreed to purchase precious 21 metals from Defendants. To facilitate Plaintiff’s purchase of the precious metals 22 23 from Defendants, Plaintiff received and signed a one-page Contract from 24 Defendants in order to participate in Defendants’ Investment Opportunity, which 25 Plaintiff believed was based on Defendants’ representations and assurances to 26 27 28 Plaintiff about Defendants’ Investment Opportunity. See Exhibit “1” (i.e., Contract) attached hereto and fully incorporated herein by this reference. Page 52 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 53 of 82 Page ID #:203 1 2 197. Thereafter, in August of 2017, in reasonable and justifiable reliance on the aforementioned representations and assurances by the Defendants, the Plaintiff 3 4 5 6 purchased thousands of precious metals, including coins, from Defendants. Plaintiff paid Defendants, based on their invoice dated August 7, 2017, the amount of $367,530.00. Additionally, Plaintiff paid Defendants, based on their 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 invoice dated August 23, 2017, the amount of $94,282.50. See Exhibit “2” (i.e., the two August 2017 invoices) attached hereto and fully incorporated herein by this reference. 11 12 13 14 198. In or around October 2017, Plaintiff received a statement from Strata Trust Company which reflected the value of his investment with Defendants. To Plaintiff’s shock and surprise, unlike what he was promised, the value of his 15 16 17 18 investment with Defendants had decreased over $211,000.00. Within about two months’ time, Plaintiff’s $461,812.50 investment with Defendants had lost about $250,000.00 in value. 19 20 21 22 199. In light of that, Plaintiff informed the Defendants of his intention to sell the precious metals and for the Defendants to buy them back for the same price Plaintiff paid for them as Defendants had repeatedly promised. Defendants, 23 24 25 26 however, refused to do so and instead told Plaintiff that they could not repurchase them for another three to five years all while continuing to represent to Plaintiff that he had not lost any money because the precious metals that he bought from 27 28 Defendants were worth as much as he paid for them. Page 53 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 54 of 82 Page ID #:204 1 2 200. Accordingly, Plaintiff demands an accounting of all payments received by Defendants pursuant to the Contract in connection with the aforementioned 3 4 5 6 Investment Opportunity. 201. Moreover, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff is entitled to recover from Defendant in accordance with the terms of the 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 agreements alleged herein or as may be provided by law. NINETEENTH CAUSE OF ACTION FOR CIVIL RICO – SECTION 1962© (Plaintiff against All Defendants) 11 12 13 14 202. Plaintiff incorporates herein by reference each and every allegation of the above paragraphs as though set forth fully herein. 203. Corporate Defendants, including defendants, Wolan, McCain, and Sachs 15 16 17 18 (collectively, “RICO Defendants”), comprises an enterprise that is engaged in and whose activities affect interstate commerce. The RICO Defendants are employed by or associated with the enterprise. 19 20 21 22 204. RICO Defendants agreed to and did conduct and participate in the conduct of the enterprise’s affairs through a pattern of racketeering activity and for the unlawful purpose of intentionally defrauding Plaintiff. 23 24 25 26 205. Pursuant to and in furtherance of their fraudulent scheme, RICO Defendants committed the following multiple related acts: RICO Defendants repeatedly represented and assured Plaintiff that: the Investment Opportunity was safe and 27 28 had no risk of losing money; the Investment Opportunity was safe and his Page 54 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 55 of 82 Page ID #:205 1 2 investment with Defendants will only increase in value as the dollar is going to lose strength causing precious metals to increase in value; Plaintiff would be 3 4 5 6 purchasing precious metals from the RICO Defendants at fair market value on the day of purchase; that Plaintiff would be able to sell and/or RICO Defendants would buy back any part or the whole investment of the precious metals at any 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 time, without any penalty, for no less than the same price Plaintiff purchased them; and that the precious metals would be kept by a third-party on his behalf; when, in fact, Plaintiff’s investment with RICO Defendants lost almost all of its 11 12 13 14 value; the RICO Defendants refused and continue to refuse to sell or buy back any of the precious metals Plaintiff bought from RICO Defendants in connection with the Investment Opportunity at the prices Plaintiff bought them from the RICO 15 16 17 18 Defendants. 206. The acts set forth above constitute a pattern of racketeering activity pursuant to 18 U.S.C. § 1961(5). 19 20 21 22 207. The RICO Defendant(s) have directly and indirectly conducted and participated in the conduct of the enterprise’s affairs through the pattern of racketeering and activity described above, in violation of 18 U.S.C. § 1962©. 23 24 25 26 208. As a factual and legal result of RICO Defendants’ racketeering activities and violations of 18 U.S.C. § 1962©, as alleged herein and above, Plaintiff has been damaged for an amount, including treble damages pursuant to 18 U.S.C. § 1964©, 27 28 Page 55 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 56 of 82 Page ID #:206 1 2 in excess of $2,000,000.00, to be proven at the time of the trial together with the interest thereon. 3 4 5 6 209. Moreover, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff is entitled to recover from RICO Defendant in accordance with the terms of the agreements alleged herein or as may be provided by law (e.g., 18 U.S.C. § 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 1964©). TWENTIETH CAUSE OF ACTION FOR CIVIL RICO – SECTION 1962(d) (Plaintiff against All Defendants) 11 12 13 14 210. Plaintiff incorporates herein by reference each and every allegation of the above paragraphs as though set forth fully herein. 211. As set forth above, the RICO Defendants agreed and conspired to violate 18 15 16 17 18 U.S.C. § 1962©. Specifically, Defendants have intentionally conspired and agreed to conduct and participate in the conduct of the affairs of the enterprise through a pattern of racketeering activity to perpetrate a fraud on Plaintiff to steal his life 19 20 21 22 savings and retirement funds for the RICO Defendants’ own benefit. 212. The RICO Defendants knew that their predicate acts were part of a pattern of racketeering activity and agreed to the commission of those acts to further the 23 24 25 26 schemes described above. That conduct constitutes a conspiracy to violate 18 U.S.C. § 1962©, in violation of 18 U.S.C. § 1962(d). 213. As a factual and legal result of RICO Defendants’ conspiracy, the overt acts 27 28 taken in furtherance of that conspiracy, and violations of 18 U.S.C. § 1962(d), as Page 56 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 57 of 82 Page ID #:207 1 2 alleged herein and above, Plaintiff has been damaged for an amount, including treble damages pursuant to 18 U.S.C. § 1964©, in excess of $2,000,000, to be 3 4 5 6 proven at the time of the trial together with the interest thereon. 214. Moreover, Plaintiff has incurred attorney’s fees and costs, all of which Plaintiff is entitled to recover from RICO Defendant in accordance with the terms of the 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 agreements alleged herein or as may be provided by law (e.g., 18 U.S.C. § 1964©). PRAYER FOR RELIEF 11 12 13 14 WHEREFORE, Plaintiff prays for relief as follows: 1. That Plaintiff is awarded judgment in this action; 2. That Plaintiff is awarded compensatory damages, including general damages, 15 16 17 18 special damages, statutory damages, punitive or treble damages, and such other relief as provided by agreement or statutes cited herein and above; 3. That Plaintiff is awarded compensatory damages, including general damages, 19 20 21 22 special damages, statutory damages, treble damages, and such other relief as provided by the civil RICO remedies cited herein and above; 4. Pre-judgment and post-judgment interest on such monetary relief; 23 24 25 26 5. Equitable relief in the form of an injunction prohibiting the misconduct described herein and above against Plaintiff and all those similarly situated to the extent allowed by law; 27 28 Page 57 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 58 of 82 Page ID #:208 6. Declaratory relief determining the rights and obligations of the parties on any 1 2 contract that may exist among the parties; a determination that the alleged 3 Agreement of Defendants is null and void; a declaration that only the one page 4 Plaintiff signed is the Contract; that the subsequent pages of the Agreement 5 6 were never a part of the Agreement; that the arbitration provision of the alleged 7 agreement was not agreed to by the Plaintiff, is not applicable, and is null and 8 void; that the Plaintiff never agreed to anything beyond the first page, or 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 alternatively the front and back, as right above the signature of Plaintiff it is 11 stated that the Plaintiff is agreeing only “to the terms set forth on the front and 12 back of this Agreement[.]”; prohibiting the misconduct described herein and 13 14 above; 15 7. The recession of the agreement and all relevant documents for reasons stated 16 above; 17 18 8. For constructive trust over the funds of Plaintiff and all those funds made using 19 the funds of the Plaintiff to the extent allowed by law; 20 9. An accounting as described herein and above; 21 22 10. That Plaintiff is awarded reasonable attorney fees; 23 11. That Plaintiff is awarded costs of suit incurred herein; and 24 12. For such other and further relief as the court may deem just and proper. 25 26 \\\ 27 28 \\\ Page 58 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 59 of 82 Page ID #:209 1 2 DEMAND FOR JURY TRIAL Plaintiff demands a jury trial on all issues which can be tried by a jury. 3 4 5 April 4 DATED: ____________, 2019 KERENDIAN & ASSOCIATES, INC. 6 7 8 9 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 10 ____________________________ By: Shab D. Kerendian, Esq., Edrin Shamtob, Esq., Counsel for Plaintiff. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Page 59 FIRST AMENDED COMPLAINT FOR DAMAGES Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 60 of 82 Page ID #:210 EXHIBIT 1                            EXHIBIT 1  Case Document 17 Filed 04/04/19 Page 61 of 82 Page ID #:211 SHIPPING AND TRANSACTION AGREEMENT Stephen Matteo . tut-t. .1 1828 Puukaa Street try -, 808.482.0121 i Kapaa. HI. 96746 By Signing below. i acknowledge that I have read. understand. and hereby agree to the term We front and back oi this Agreement 3 08/07/2017 (rmlializlnq the space prowded. and by your on this agreement you helm; expressly authorize CM lo smut/31% telephone you at lire nur?IbE'ls) crowned above, nl wirctlier or not yam telephone number appears sr 't-e ?Rational no Registry 16 and (it) Chase Metals (and its af?liates) (collectively, and the individual identi?ed above (?Customer") agree that the following terms of this Shipping and Transaction Agreement (?Agreement?) shall govern the pending and all future transactions between the parties involving all precious metals, in any form, that is the subject of all transactions between CM and Customer, and shall include, but is not limited to. bull on bars and coins, semi-Numismatic coins and bars. Numismatic coins and bars, "junk silver," and bags (and partial bags) of coins (collectively ?Precious Metals?) This Agreement shall apply to all purchases from and sales to CM involving Customer, present and future. CM is not an investment advisor. consultancy, licensed brokerage. or banking institution. 1. Delivery of Precious Metals Purchased: Customer must deliver funds suf?cient to cover the entirety of Customer's purchase from CM within five (5) business days of Customer's placement of the order ("Purchase Funds?). Purchase Funds may be delivered by check, credit card. or wire transfer. With the limited exception noted in Paragraph 8a. all sales, including credit card sales. are ?nal the Precious Metals cannot be exchanged or returned for a refund). Checks may be made out to Chase Metals (For wire transfer instructions, please contact your CM sales representative.) CM shall deliver the Precious Metals speci?ed in Customer's order to a suitable delivery service for delivery to Customer no more than twenty-eight (28) days after CM veri?es that the Purchase Funds provided are backed by good funds. (Please note that it may take 12 business days to verify personal checks.) If Customer fails to provide the Purchase Funds within five (5) business days of Customefs placement of the order. CM may exercise the rights set forth in Paragraph 4, below. 2. Delivery of Precious Metals: CM shall cause all Precious Metals purchased and paid for to be delivered to Customer's address set forth above. CM only uses reputable, nationally recognized delivery services to deliver its Precious Metals. If, however, Customer's order is lost prior to delivery, Customer is instructed to notify CM, in writing. immediately. Notice of any such alleged loss should be sent to: Chase Metals, Attention: Customer Service. 330 8 Center St, suite 407 Casper. WY 82601. If the delivery service veri?es that Customer's Precious Metals were never delivered. CM shall, within forty-?ve (45) days of such veri?cation, in its sole discretion. either refund to Customer the full purchase price for such undelivered Precious Metals or replace such Precious Metals with other Precious Metals of the same denomination/type and grade. CM assumes no responsibility for Precious Metals lost. damaged. stolen. or othenuise subject to casualty after delivery to Customer. CM assumes no risk of loss for any Precious Metals purchased from a Customer until such materials are delivered to and accepted by an authorized representative of CM. Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 62 of 82 Page ID #:212 EXHIBIT 2                            EXHIBIT 2  Case" Dobu ment 17 1 Filed 04/0419 4 Page 63 of 82" Page ID #:213 August. 7. 2017 1 a cu AS "433 N. Camden Dr, Suite 970 - . .7 . a Steve Matteo .P?one 800-463-1326 . 'h . .. Purchasejnvome 20173-36035 i neui?rsa?r ADDRESS: BILLING 3963.555: 4 Chase Metals Deiaware DepositoryServices Co. 43} Camden Dr, Suite 970 3601 North Markeft Street . BEVERLY HILLS CA 90210 \Mlmington, DE @802; -. - a Comments or spemal Instructions: I A Quantity u?it?P?ce enoum' s- i 102 Sliv'er Maple Leaf Coin 'h 100 $18 $1,800 1 1.50; Siiver cagadian '_Bear 8: Cub Coin -6,450_ $56 $361,200 502 America the Beautiful Silver Coin 1?0 $102 $1,020.00 102 Silver Maple Leaf-Coin .9999 100 $13 1? 1007. Generic Silver Bars, 1 10 $171 1,710 TOTAL RISK DISCLOSURE AND AGREEMENT SIGNED AND UNDERSTOOD, mg). is handed to hem: may be reli any otherwmten, We: on] making my immanent decisions. please consult with the appropmne legal, tax. and in'ves'u'nem for advice. 9. 3 i ednlemwarmadviw, Case Document 17 Filed 04/04/19 Page 64 of 82 Page ID #214; August 23. 2017 INVOICE ?i?giini?i?iuf??y I Steven Matteo Phone 800-463-4326 Email: CORPORATE Purchase Invalce SDIRA Acct# 2017-36035 BILLING ADDRESS: DELIVER-Y ADDRESS: Chase Metals Delaware Depository Services Co. 433 Camden Dr, Suite 970 3601 North Market Street BEVERLY HILLS, CA 90210 Wilmington, DE 19802 Comments or special instructions: DESCRIPTIOR Quantity Unit Price AMOUNT 102 Silver Canadian Maple Leaf Coin 50 $18.73 $936.50 1.502 Silver Canadian Polar Bear Cub Coin 1600 $56.00 $89,600.00 102 Silver Canadian Maple Leaf Coin 200 $18.73 $3,746.00 TOTAL $94,282.50 RISK DISCLOSURE AND ACCOUNT AGREENEENT SIGNED AND UNDERSTOOD, WW does not provide legal, lax, or investment advice. Nothing of the foregoing, or of any other wrinen, demonic or oral statement 0: comuuimzion by Chase Metals or its representatives, is imended to be. or may be relied a legal, tax or investment advice. statements, opinions or predictions. Prim- to making any investment decisions, please causal! with the appropriate legal. tax, and Semen: professionals for advice, Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 65 of 82 Page ID #:215 EXHIBIT 3                            EXHIBIT 3  Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 66 of 82 Page ID #:216 08/07/2017 Document Ref: K6RMM-UDJKD-XEM3Q-RKEJY Page 1 of 8 Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 67 of 82 Page ID #:217 3. Purchase Price: a. Sales: The purchase price Customer has been quoted and agreed to pay includes CM operating margin on the transaction. Within the Precious Metals industry, the difference between CM cost on the day of the purchase (for the Precious Metals Customer has agreed to buy) and the retail price quoted to Customer is known as the "Spread." Spreads vary significantly - by Precious Metal, by customer, and over time. For Customer to make a profit, Customer must be able to sell the Precious Metals in the future for a price high enough to cover Customer's initial investment, including Spreads. Spreads may be subject to negotiation, and Spreads charged to Customer in a specific transaction may be more or less than the Spread charged to others in similar transactions or charged to Customer in prior or future transactions. At the time this Transaction Agreement was transmitted for Customer's signature, (i) CM’s Spread on bullion (i.e., coins and bars that generally move in tandem with the spot price for the relevant commodity) is generally between one percent and five percent (1 to 5%), and (ii) CM’s Spread on semi-Numismatic and Numismatic coins and bars is generally between seventeen percent and thirty-three percent (17 to 33%). Spreads for semiNumismatic and Numismatic coins and bars are often in the range of approximately twenty-nine percent (29%). These numbers, however, are only general ranges and approximations, which are subject to change for a variety of reasons. The actual Spread on any particular transaction could be any amount within those ranges (or even possibly outside those ranges). For example, if a bullion coin or bar was quoted by CM at $400, and included a ten percent (10%) spread, CM’s cost for the bullion coin or bar would be $360. Similarly, if CM quoted a Numismatic coin or bar at $400, and included a twenty-five percent (25%) spread, CM’s cost for that coin would be $300. CM’s Spread range may be different (higher and/or lower), and the Spread CM charges may be higher or lower, at the time of and for any given transaction. Customer acknowledges that the spot prices of Precious Metals do not necessarily move in tandem with the Precious Metals the Customer purchases. That means that the spot price and the liquidation value of the Precious Metals purchased by the Customer under this Agreement may perform differently from one another. b. IRA Sales: Individual retirement account ("IRA") transactions are more expensive to process and can require CM to assume certain investment risk in connection with the transaction. As such, notwithstanding the general ranges set forth in Paragraph 3a, at the time this Agreement was transmitted for Customer's signature, CM’s Spread on IRA Precious Metals transactions varies between two percent and thirty-three percent (2% to 33%). These numbers, however, are only general ranges and approximations, which are subject to change for a variety of reasons. The actual Spread on any particular transaction could be any amount within that range (or even possibly outside that range). Moreover, CM’s Spread range may be different (higher and/or lower), and the Spread CM charges may be higher or lower, at the time of and for any given transaction. For example, a bullion coin or bar that ordinarily would be quoted by CM (outside an IRA) at $400, with a ten percent (10%) Spread, might be quoted at $480, with a twenty-five percent (25%) Spread, if the bullion coin or bar is purchased as an IRA investment. In both those examples, however, CM’s cost for the bullion coin or bar would be $360. CM makes no representations regarding the tax consequences of holding Precious Metals as an investment in an Individual retirement account (“IRA”). Client expressly acknowledges that Client has been advised to seek independent tax advice, from a qualified professional, regarding the tax consequences of such an investment. Further, please note that holding Precious Metals as an investment in an IRA may result in additional fees charged by third parties, not CM, such as depositary and custodial fees that would be charged directly to the Client by such third parties. CM makes no opinions, statements, or recommendations in regards to how much or what percentage of Client’s retirement account should be invested in precious metals. c. Re-purchases: CM is prohibited by law from guaranteeing to repurchase Precious Metals that it sells. CM may, at its sole discretion, elect to re-purchase the Precious Metals that CM sells, and CM does not guarantee that it will repurchase Precious Metals that Customer purchases from CM. In the event Customer seeks to sell its Precious Metals to CM, Customer understands and acknowledges that CM’s re-purchase offer may be raised or lowered on a daily, even hourly or more basis, depending upon various market conditions, inventory needs, and the price and availability of comparable Precious Metals. CM does not guarantee that any re-purchase offer will equal the price that CM would pay to acquire the same denomination/type and grade of Precious Metal from a wholesaler, or that any offer made will be higher or equal to what someone else might offer for the same Precious Metals. d. Certification: Customers who are selling Precious Metals to CM declare under penalty of perjury pursuant to 28 U.S.C. §1746 that (i) Customer either deals in such articles or otherwise by Customer’s respective occupation or as a result of Customer’s avocations as collector, speculator, or investor has and holds him or herself out as having knowledge or skill peculiar to such articles or the practices involved in the sale of such articles, and (ii) any sale to CM of coins, hallmark bars, registered ingots, and other items as Numismatic objects is for their Numismatic value. Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 68 of 82 Page ID #:218 Customers who are buying Precious Metals from CM declare under penalty of perjury pursuant to 28 U.S.C. §1746 that (i) Customer either deals in such articles or otherwise by Customer’s respective occupation or as a result of Customer’s avocations as collector, speculator, or investor has and holds him or herself out as having knowledge or skill peculiar to such articles or the practices involved in the purchaser of such articles, and (ii) any purchase from CM of coins, hallmark bars, registered ingots, and other items as Numismatic objects is for their Numismatic value. e. Quotes on Customer's Holdings: Customers may request a quote on their holdings at any time. When requesting a quote, please specify whether you are looking to purchase additional Precious Metals or sell your existing holdings as CM’s bid (buy from customer) and ask (sell to customer) quotes will vary. CM bases such quotes on a variety of factors, which are not necessarily tied or related to the prices quoted by, or factors considered by, its competitors. f. Classification as Bullion, semi-Numismatic, or Numismatic: Whether a Precious Metal is classified as Bullion, semiNumismatic, or Numismatic may turn on a number of objective and subjective factors, including the age of the Precious Metal, its condition, the number of known copies, the likelihood of additional minting, the originating country, relevant historical events or owners (e.g., shipwreck; royalty), relevance to the formation of various Precious Metal collections, and an investor's personal attraction to the piece. CM’s classification of Precious Metals is only an opinion and may change over time (e.g., if additional quantities of the Precious Metal are discovered). In addition, given the subjective nature of the classification process, other dealers or investors may classify the same coin differently. CM’s prices and spreads are based on its classification determination. g. Customer Assumes Investment Risk; Investment Decisions. Customer acknowledges that purchases and sales of Precious Metals involve considerable risk. Market prices are at times volatile and may be affected by a variety of factors including, among others, general economic conditions, political events, monetary policies of various countries, fluctuations in production and demand, stock-piles, speculative activity and the degree of concern people have about these matters. It is impossible to forecast accurately how or to what degree these or other factors will affect prices. Customer acknowledges and agrees that Customer assumes the risk of all investment decisions regarding any and all Precious Metals the Customer purchases from CM and CM makes no guarantee or representation regarding Customer’s ability to profit (or avoid loss) from any purchase or any representation regarding any tax implications of any purchase and the decision to purchase or sell Precious Metals. Any purchases from CM are made subject to Customer’s own prudence, judgment and ultimate decision. Customer expressly acknowledges and agrees to hold CM harmless for any damages arising out of the performance by CM of this Agreement. Customer understands that past performance cannot be an indicative of future results. 4. Remedy for Customer's Failure to Perform: If Customer refuses to accept delivery of the Precious Metals ordered or fails to make payment when due, CM, in its sole discretion, may cancel the transaction and resell such Precious Metals on a wholesale basis. If the proceeds from such resale are less than the contract price with Customer, CM shall be entitled to recover from Customer the difference between the resale price and Customer's contract price, plus any incidental damages occasioned by Customer's breach. If the proceeds from such resale are more than the contract price with Customer, CM shall be entitled to keep the excess amount to cover CM’s incidental damages. 5. Investment Objectives; Holding Period; Investment Risk; No Advice; Commissioned Sales Representatives: a. CM is a seller and purchaser of Precious Metals. While CM is always prepared to compare and contrast the different Precious Metals that are available for purchase or that CM is willing to purchase, Customer acknowledges and agrees that (i) no fiduciary relationship exists between CM and Customer, (ii) the decision to purchase or sell Precious Metals, and which Precious Metals to purchase or sell, are the Customer's decision alone, and (iii) purchases or sales are made subject to Customer's own prudence and judgment. b. In CM’s opinion, Precious Metals should be considered a long-term investment. Customer should be prepared to hold any Precious Metals purchased - whether from CM or elsewhere - for at least a three to five year period, and preferably five to ten years, to maximize the potential for gains. In CM’s opinion, Customer should only invest capital that can be held for at least this period of time. However, Precious Metals, like all investments, carry capital risk. Precious Metals may appreciate, depreciate, or stay the same depending on a variety of factors. CM cannot guarantee, and makes no representation, that the Precious Metals will appreciate at all or appreciate sufficiently to make Customer a profit at the expiration of this or any other period of time. Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 69 of 82 Page ID #:219 c. In CM’s opinion, Customer should not invest more than twenty percent (20%) of Customer's available investment funds in Precious Metals. Moreover, Precious Metals do not yield income and thus are not an appropriate investment vehicle for investors seeking current or future income. d. The success of an investment in Precious Metals is dependent, in part, upon extrinsic economic forces including but not limited to supply, demand, international monetary conditions, and inflation or the expectation of inflation. The impact of these forces on the values of Precious Metals in general or any particular Precious Metal cannot be predicted. Customer acknowledges that the Precious Metals market can be volatile and that Precious Metal prices may rise or fall over time. Customer further acknowledges that past performance is no guarantee of future performance. e. CM does not provide tax, investment, or legal advice or advisory services, and no one associated with CM is authorized to provide any such advice or services. Any written or oral statements by CM, its officers, agents, sales representatives, or other representatives relating to future events or the attributes of certain Precious Metals are opinions only. Such statements, if any, are not representations of fact. Customer agrees, acknowledges, and represents that Customer has not, at any time, sought or been provided with tax, investment, or legal advice or advisory services, of any kind or nature from CM or any of its, affiliates, assigns, successors, agents, employees, contractors or other representatives. f. CM’s sales representatives are commissioned salespersons - i.e., their salary is based, at least in part, on the amount and profit margin of the Precious Metals they sell. In addition, from time to time, CM’s sales representatives may receive other compensation tied to sales activity - e.g., sales contests; bonuses tied to the sale of certain denominations/types or grades of Precious Metals. CM’s sales representatives are not licensed brokers and their knowledge of Precious Metals and the Precious Metals marketplace varies markedly. g. CM makes no representations regarding the tax consequences of holding Precious Metals as an investment in an IRA. Customer expressly acknowledges that Customer has been advised to seek independent tax advice, from a qualified professional, regarding the tax consequences of such an investment. Any written or oral statements by CM, its officers, agents, account executives, or other representatives relating to future events or the attributes of certain Precious Metals are opinions only. Such statements, if any, are not representations of fact. h. Customer understands, agrees, and acknowledges that CM records telephone calls with potential customers and/or including Customer, to avoid and/or prevent fraud, for purposes of verifying Customer’s assent to the terms and conditions of the purchase from CM, for quality control and/or other reasons. Customer consents to all such recordings of Customer by CM to the extent consent is required under any state or federal laws or statutes. 6. Grades: a. CM is not a grading service. CM purchases Precious Metals for re-sale to its customers. CM is not a grading service. CM does not independently assess the Precious Metals it purchases for re-sale, but relies upon the opinions and assessments of independent grading services such as Professional Coin Grading Service, Inc., Numismatic Guaranty Corporation of America, and ANACAS, or others. Grading is a subjective process and it is not uncommon for grading services, or individual examiners within the same grading service, to reach different conclusions regarding the appropriate grade for a particular Precious Metal. Moreover, grading standards are constantly evolving. CM does not guarantee that the Precious Metals it sells will achieve the same grades in the future. In selling graded Precious Metals, CM warrants that the Precious Metal is genuine (i.e., not a counterfeit) and states that the grade is as opined by the grading service when graded by that service, if graded. b. Grading is subjective. Grading is a subjective determination. While numerical grading may give the impression of precision, the numbers in fact represent a nuanced opinion that even experts cannot consistently and systematically agree upon. The grade reflects the opinion of the cataloger (or grader) as to the state of preservation, method of strike, and overall appearance of a particular Precious Metal or lot. c. Terminology. The term "proof" or "specimen" is used to describe a method of manufacture. Those terms do not connote a grade, condition or attribution. Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 70 of 82 Page ID #:220 d. Cleaning/Toning. CM does not represent that a Precious Metal has or has not been cleaned, that any toning is natural or artificial, that a Precious Metal has a particular provenance or pedigree, that a Precious Metal is struck or not struck, that a Precious Metal is produced or not produced in a particular manner or style, and/or that a different grading service (or even a different grader within the same grading service) would assign the same grade now or in the future to the same Precious Metal. e. Acknowledgment. Where CM sells a Precious Metal that is encapsulated by a grading service and bears the grade or condition ascribed to it by the grading service, Customer acknowledges and agrees that other grading services or knowledgeable purchasers might reach a different conclusion as to the item’s grade. Customer further acknowledges that CM has provided the grader’s description for the customer’s information and makes no warranty as to its accuracy or the standards used to determine that grade. 7. Representation/Warranty; Sales Representatives Not Authorized To Make Other Representations or Warranties: CM represents and warrants that, upon the delivery of Purchase Funds (as provided for in Paragraph 1), and subject to the other terms and restrictions set forth in this Transaction Agreement, CM will cause to be delivered to Customer the denomination/type and grade of Precious Metals specified in Customer's order, as classified and/or graded by one of the following independent grading services: Professional Coin Grading Service, Inc. (PCGS), Numismatic Guaranty Corporation of America (NGC), ANACAS, or any other independent grading service of similar standing. The only representation and warranty that Customer may rely upon in purchasing Precious Metals from or selling Precious Metals to CM is the representation set forth in this Paragraph 7. Neither CM, nor any of its officers, agents, employees, sales representatives, or other representatives are authorized to make any other representations or warranties concerning any Precious Metals that CM is selling or purchasing under this Transaction Agreement. 8. Exchange/Refund Policy: a. Replacement of Semi-Numismatic or Numismatic Coins Where Grade Disputed: Customer agrees to inspect each delivery carefully upon receipt. If, for any reason whatsoever, Customer is dissatisfied with the quality of a semiNumismatic or Numismatic coin or bar (specific kinds of Precious Metals) purchased from CM, Customer should immediately notify CM. If Customer notifies CM of its dissatisfaction within fifteen (15) days of delivery of the semiNumismatic or Numismatic coin or bar and the original holder in which the semi-Numismatic or Numismatic coin or bar in question was delivered has not been opened, removed, or tampered with in any respect, CM shall replace the semi-Numismatic or Numismatic coin or bar in question with another semi-Numismatic or Numismatic coin or bar (as appropriate) of the same denomination/type and grade. CM, in its sole discretion, may permit Customer to upgrade to a higher value semi-Numismatic or Numismatic coin or bar (either in denomination/type or grade) as part of this replacement process, provided Customer pays the difference between the contract price of the semi-Numismatic or Numismatic coin or bar previously purchased and CM’s current sale price for the higher value semi-Numismatic or Numismatic coin(s) or bar(s) to be substituted. If CM determines, in its sole discretion, that another semi-Numismatic or Numismatic coin or bar of the same denomination/type and grade is not reasonably, commercially available, CM may elect, at its sole option, to replace the semi-Numismatic or Numismatic coin or bar purchased with a reasonably comparable semi-Numismatic or Numismatic coin or bar, even though of a different denomination/type and grade. b. Cancellation Period; Certain States’ Rights. With the exceptions noted in Paragraph 8a and the Addendum attached hereto (certain state residents only), CM offers Customers a seven (7) day right to request cancellation of their purchase with CM for semi-Numismatic or Numismatic coin or bar purchases. Because Precious Metals, including all other purchases other than semi-Numismatic or Numismatic coin or bars, are subject to price fluctuations outside of CM’s control, the CM is unable to rescind, cancel, refund, or exchange Customer’s order or this Agreement for all purchases other than semi-Numismatic or Numismatic coin or bars, other than as noted herein, in Paragraph 8a above, and as set forth in the attached Addendum. 9. Disclaimer of Express and Implied Warranties: EXCEPT AS SET FORTH IN PARAGRAPH 7, THE PRECIOUS METALS SOLD BY CM PURSUANT TO THIS TRANSACTION AGREEMENT ARE SOLD ON AN "AS IS" BASIS AND CM MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AND SPECIFICALLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY AND OR FITNESS FOR A PARTICULAR PURPOSE. 10. No Liability for Consequential Damages; Limitation of Liability: IN NO EVENT SHALL CM HAVE ANY Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 71 of 82 Page ID #:221 OBLIGATION OR LIABILITY (WHETHER IN TORT, CONTRACT, WARRANTY, OR OTHERWISE, AND NOTWITHSTANDING ANY FAULT, NEGLIGENCE, OR STRICT LIABILITY), FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES SUSTAINED OR ARISING FROM OR RELATED TO ANY TRANSACTION COVERED BY THIS TRANSACTION AGREE- MENT, EVEN IF CM IS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. FURTHER, CM’s LIABILITY TO CUSTOMER FOR ANY REASON AND UPON ANY CLAIMS SHALL AT ALL TIMES BE LIMITED TO THE AMOUNT ACTUALLY PAID BY CUSTOMER FOR THE PRECIOUS METALS IN DISPUTE. 11. Application to Future Transactions: This Transaction Agreement shall control all transactions between CM and Customer unless and until such time as it is amended by CM. Customer agrees that CM may amend this Transaction Agreement at any time and from time to time, that CM may give notice to Customer of any amendment by mailing a copy of the amended Transaction Agreement to the address set forth above (or any updated address provided by Customer in the interim), and that following such mailing, the amended Transaction Agreement shall govern succeeding transactions and any interaction with CM. 12. Force Majeure: Neither CM nor Customer shall be liable for any failure or delay in its or their performance under this Transaction Agreement due to any cause beyond its or their respective reasonable control, including acts of war, terrorism, acts of God, earthquake, flood, embargo, riot, sabotage, labor shortage or dispute, governmental act or failure of the Internet including, but not limited to, any disruption, failure and/or error in or of CM’s internal computer systems, or any disruption, failure and/or error in or of any third-party Internet service providers as CM may use from time to time. 13. Arbitration of Disputes; Waiver of Jury Trial: ANY DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING TO THIS TRANSACTION AGREEMENT OR THE BREACH, TERMINATION, ENFORCEMENT, INTERPRETATION OR VALIDITY THEREOF, INCLUDING THE DETERMINATION OF THE SCOPE OR APPLICABILITY OF THIS AGREEMENT TO ARBITRATE, OR ANY OTHER DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF ANY INTERACTION BETWEEN CM AND CUSTOMER, SHALL BE BROUGHT AND BE DETERMINED BY ARBITRATION IN LOS ANGELES, CALIFORNIA, BEFORE ONE ARBITRATOR. THE ARBITRATION SHALL BE ADMINISTERED BY ADR SERVICES, INC. CUSTOMER AND CM WAIVE THEIR RIGHTS, IF ANY, TO BRING ANY CLAIM THAT IS SUBJECT TO THIS ARBITRATION PROVISION AS A CLASS ACTION, “MASS” ACTION, OR OTHERWISE ON A REPRESENTATIVE BASIS. JUDGMENT ON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT OF COMPETENT JURISDICTION. THIS CLAUSE SHALL NOT PRECLUDE PARTIES FROM SEEKING PROVISIONAL INJUNCTIVE REMEDIES IN AID OF ARBITRATION FROM A COURT OF APPROPRIATE JURISDICTION. 14. Choice of Law: The substantive law of California shall govern all claims brought by or against CM in connection with this Transaction Agreement or otherwise arising out of any interaction between CM and Customer, without any regard for conflict of law principles. 15. Limitation on Time to Bring Any Claim: Except where the law prescribes a shorter applicable statute of limitation, or prohibits shortening the otherwise applicable longer statute of limitations, any claim or legal action of any kind arising in connection with or relating in any way Customer’s purchases from CM, CM, or in any way relating to CM or this Agreement, must be brought within one year after the purchase or sale or other event giving rise to the claim or legal action. If this clause is determined to be unenforceable as to any particular claim or claims under the law of the applicable jurisdiction, it shall remain fully enforceable as to all other claims. 16. Jurisdiction: Jurisdiction and venue for any dispute, claim or controversy arising out of or in any way relating to this Transaction Agreement or the breach, termination, enforcement, interpretation or validity thereof, or any other interaction between CM and Customer, shall be in Los Angeles, California, and any party making a claim against CM in whatever form hereby submits to personal jurisdiction in that forum for any and all purposes. By entering into this Agreement, Customer agrees to be subject to the personal jurisdiction of the State of California, agreeing and acknowledging that entering into this Agreement shall constitute sufficient minimum contacts with the State of California to confer both general and specific personal jurisdiction. 17. Finality; Integration Clause: This Agreement is intended by CM and Customer as a final expression of their agreement concerning the matters set forth herein, and is also intended as a complete and exclusive statement of the Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 72 of 82 Page ID #:222 terms of their agreement. This Agreement supersedes any oral or written statements made prior to, contemporaneous with, or in the future regarding this Agreement or the transactions covered hereunder. Customer shall not rely upon any statement made by or on behalf of CM that is inconsistent with this Transaction Agreement. 18. Severability: If any provision of this Transaction Agreement is determined by any court of competent jurisdiction or arbitrator to be invalid, illegal, or unenforceable to any extent, that provision shall, if possible, be construed as though more narrowly drawn, if a narrower construction would avoid such invalidity, illegality, or unenforceability or, if that is not possible, such provision shall, to the extent of such invalidity, illegality, or unenforceability, be severed, and the remaining provisions of this Agreement shall remain in full force and effect. ADDENDUM OF STATE-SPECIFIC PROVISIONS Alaska. CM provides all customers the right to receive a full refund for the return of undamaged and unused metals or coins, provided the customer gives CM timely notice of the return within seven (7) calendar days after the date the customer receives the merchandise. Timely notice is given if the return request is made in person within the seven (7) days or if the return or request is mailed, properly addressed and postmarked, postage prepaid, within the seven (7) days. Receipt of metals or coins is deemed to occur at the earliest of: (a) the date the customer receives actual possession of the metals or coins; or (b) the date the customer receives written confirmation that the metals or coins have been deposited on the customer’s behalf in an independent depository. CM, upon written notice of cancellation and receipt of the merchandise in the same condition as delivered, issue a full refund within thirty (30) calendar days from the date of cancellation or, where merchandise has been delivered, the returned merchandise is received by CM, whichever is later. Connecticut, Nebraska, Maryland, Louisiana, Kansas. CM provides all first time customers the right to a refund for the return of undamaged and unused metal or coins, provided that Chase Metals receive written notice of cancellation within seven (7) calendar days after the date you receive the merchandise. Your “receipt” of metals or coins is deemed to occur at the earliest of: (a) the date that you receive actual possession of the metals or coins; or (b) the date that you receive written confirmation that the metals or coins have been deposited on your behalf in an independent depository. CM shall, upon written notice of cancellation and receipt of the merchandise in the same condition as delivered, issue a full refund within thirty (30) calendar days from the date of cancellation or, where merchandise has been delivered, the returned merchandise is received by CM, whichever is later. Hawaii, Mississippi, West Virginia, Arizona, Colorado, Montana, Oklahoma, Utah, Texas (credit card purchases only), Oregon, Nevada. CM provides you the right to receive a full refund for the return of undamaged and unused metals or coins, provided that CM receive written notice of the return within seven (7) calendar days after the date that you receive the merchandise. Your “receipt” of metals or coins is deemed to occur at the earliest of: (a) the date that you receive actual possession of the metals or coins; or (b) the date that you receive written confirmation that the metals or coins have been deposited on your behalf in an independent depository. CM shall, upon written notice of cancellation and receipt of the merchandise in the same condition as delivered, issue a full refund within thirty (30) calendar days from the date of cancellation or, where merchandise has been delivered, the returned merchandise is received by CM, whichever is later. Indiana, Pennsylvania, Vermont, Wyoming, South Dakota. CM provides you the right to receive a full refund for the return of undamaged and unused metals or coins, provided that CM receive written notice of the return within ten (10) calendar days after the date that you receive the merchandise. Your “receipt” of metals or coins is deemed to occur at the earliest of: (a) the date that you receive actual possession of the metals or coins; or (b) the date that you receive written confirmation that the metals or coins have been deposited on your behalf in an independent depository. CM shall, upon written notice of cancellation and receipt of the merchandise in the same condition as delivered, issue a full refund within thirty (30) calendar days from the date of cancellation or, where merchandise has been delivered, the returned merchandise is received by CM, whichever is later. Michigan, Virginia, Arkansas. CM provides all customers the right to a full refund provided that Chase Metals receive written notice of cancellation (see notice provided with your trade confirmation) within three (3) business days after the date that you sign this Agreement. CM shall, upon written notice of cancellation, issue a full refund Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 73 of 82 Page ID #:223 within ten (10) calendar days from the date you send us the notice of cancellation (notice of cancellation, if given by mail, is given when it is deposited in a mailbox properly addressed and postage prepaid.) If you decide to cancel, return all items shipped to you (if any) in substantially as good condition as when received to the address that appears on the form, ATTN: Operations Dept. North Dakota. CM provides you the right to receive a full refund for the return of undamaged and unused metals or coins, provided that CM receive written notice of the return within fifteen (15) calendar days after the date that you receive the merchandise. Your “receipt” of metals or coins is deemed to occur at the earliest of: (a) the date that you receive actual possession of the metals or coins; or (b) the date that you receive written confirmation that the metals or coins have been deposited on your behalf in an independent depository. CM shall, upon written notice of cancellation and receipt of the merchandise in the same condition as delivered, issue a full refund within thirty (30) calendar days from the date of cancellation or, where merchandise has been delivered, the returned merchandise is received by CM, whichever is later. Maine. CM provides all first time customers the right to a refund, provided that Chase Metals receive written notice of cancellation within seven (7) calendar days after the date your trade confirmation is mailed to you (based upon the postmark) or delivered to a third-party carrier such as FedEx. (Prior purchasers have the right to receive a full refund provided that CM receive written notice of the cancellation within three (3) business days after the date your trade confirmation is mailed or delivered, as above.) CM shall, upon written notice of cancellation, issue a full refund within fifteen (15) calendar days from the date you send us the notice of cancellation (notice of cancellation, if given by mail, is given when it is deposited in a mailbox properly addressed and postage prepaid.) If you decide to cancel, return all items shipped to you (if any) in substantially as good condition as when received to the address that appears on the form, ATTN: Operations Dept. West Virginia. CM provides you the right to receive a full refund for the return of undamaged and unused metals or coins, provided that CM receive written notice of the return within seven (7) calendar days after the date that you receive the merchandise. Your “receipt” of metals or coins is deemed to occur at the earliest of: (a) the date that you receive actual possession of the metals or coins; or (b) the date that you receive written confirmation that the metals or coins have been deposited on your behalf in an independent depository. For purposes of this subsection, it will be presumed that goods were received seven days after they were mailed unless it can be clearly demonstrated that the goods were not received or received at a later date. CM shall, upon written notice of cancellation and receipt of the merchandise in the same condition as delivered, issue a full refund within thirty (30) calendar days from the date of cancellation or, where merchandise has been delivered, the returned merchandise is received by CM, whichever is later. CM will provide a cash refund for a cash purchase or issuing a credit for a credit purchase, which credit is applied to the account to which the purchase was debited in connection with the return of its unused and undamaged merchandise or canceled services. Wisconsin. CM provides all customers the right to a full refund provided that CM receive written notice of cancellation (see notice provided with your trade confirmation) within three (3) business days after the date that you sign the Addendum to this Trade Confirmation. CM shall, upon written notice of cancellation and receipt of the merchandise in the same condition as delivered, issue a full refund within thirty (30) calendar days from the date of cancellation or, where merchandise has been delivered, the returned merchandise is received by CM whichever is later. (Notice of cancellation, if given by mail, is given when it is deposited in a mailbox properly addressed and postage prepaid.) Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 74 of 82 Page ID #:224 3. Purchase Price: a. Sales: The purchase price Customer has been quoted and agreed to pay includes CM operating margin on the transaction. Within the Precious Metals industry, the difference between CM cost on the day of the purchase (for the Precious Metals Customer has agreed to buy) and the retail price quoted to Customer is known as the "Spread." Spreads vary significantly - by Precious Metal, by customer, and over time. For Customer to make a profit, Customer must be able to sell the Precious Metals in the future for a price high enough to cover Customer's initial investment, including Spreads. Spreads may be subject to negotiation, and Spreads charged to Customer in a specific transaction may be more or less than the Spread charged to others in similar transactions or charged to Customer in prior or future transactions. At the time this Transaction Agreement was transmitted for Customer's signature, (i) CM’s Spread on bullion (i.e., coins and bars that generally move in tandem with the spot price for the relevant commodity) is generally between one percent and five percent (1 to 5%), and (ii) CM’s Spread on semi-Numismatic and Numismatic coins and bars is generally between seventeen percent and thirty-three percent (17 to 33%). Spreads for semiNumismatic and Numismatic coins and bars are often in the range of approximately twenty-nine percent (29%). These numbers, however, are only general ranges and approximations, which are subject to change for a variety of reasons. The actual Spread on any particular transaction could be any amount within those ranges (or even possibly outside those ranges). For example, if a bullion coin or bar was quoted by CM at $400, and included a ten percent (10%) spread, CM’s cost for the bullion coin or bar would be $360. Similarly, if CM quoted a Numismatic coin or bar at $400, and included a twenty-five percent (25%) spread, CM’s cost for that coin would be $300. CM’s Spread range may be different (higher and/or lower), and the Spread CM charges may be higher or lower, at the time of and for any given transaction. Customer acknowledges that the spot prices of Precious Metals do not necessarily move in tandem with the Precious Metals the Customer purchases. That means that the spot price and the liquidation value of the Precious Metals purchased by the Customer under this Agreement may perform differently from one another. b. IRA Sales: Individual retirement account ("IRA") transactions are more expensive to process and can require CM to assume certain investment risk in connection with the transaction. As such, notwithstanding the general ranges set forth in Paragraph 3a, at the time this Agreement was transmitted for Customer's signature, CM’s Spread on IRA Precious Metals transactions varies between two percent and thirty-three percent (2% to 33%). These numbers, however, are only general ranges and approximations, which are subject to change for a variety of reasons. The actual Spread on any particular transaction could be any amount within that range (or even possibly outside that range). Moreover, CM’s Spread range may be different (higher and/or lower), and the Spread CM charges may be higher or lower, at the time of and for any given transaction. For example, a bullion coin or bar that ordinarily would be quoted by CM (outside an IRA) at $400, with a ten percent (10%) Spread, might be quoted at $480, with a twenty-five percent (25%) Spread, if the bullion coin or bar is purchased as an IRA investment. In both those examples, however, CM’s cost for the bullion coin or bar would be $360. CM makes no representations regarding the tax consequences of holding Precious Metals as an investment in an Individual retirement account (“IRA”). Client expressly acknowledges that Client has been advised to seek independent tax advice, from a qualified professional, regarding the tax consequences of such an investment. Further, please note that holding Precious Metals as an investment in an IRA may result in additional fees charged by third parties, not CM, such as depositary and custodial fees that would be charged directly to the Client by such third parties. CM makes no opinions, statements, or recommendations in regards to how much or what percentage of Client’s retirement account should be invested in precious metals. c. Re-purchases: CM is prohibited by law from guaranteeing to repurchase Precious Metals that it sells. CM may, at its sole discretion, elect to re-purchase the Precious Metals that CM sells, and CM does not guarantee that it will repurchase Precious Metals that Customer purchases from CM. In the event Customer seeks to sell its Precious Metals to CM, Customer understands and acknowledges that CM’s re-purchase offer may be raised or lowered on a daily, even hourly or more basis, depending upon various market conditions, inventory needs, and the price and availability of comparable Precious Metals. CM does not guarantee that any re-purchase offer will equal the price that CM would pay to acquire the same denomination/type and grade of Precious Metal from a wholesaler, or that any offer made will be higher or equal to what someone else might offer for the same Precious Metals. d. Certification: Customers who are selling Precious Metals to CM declare under penalty of perjury pursuant to 28 U.S.C. §1746 that (i) Customer either deals in such articles or otherwise by Customer’s respective occupation or as a result of Customer’s avocations as collector, speculator, or investor has and holds him or herself out as having knowledge or skill peculiar to such articles or the practices involved in the sale of such articles, and (ii) any sale to CM of coins, hallmark bars, registered ingots, and other items as Numismatic objects is for their Numismatic value. Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 75 of 82 Page ID #:225 Customers who are buying Precious Metals from CM declare under penalty of perjury pursuant to 28 U.S.C. §1746 that (i) Customer either deals in such articles or otherwise by Customer’s respective occupation or as a result of Customer’s avocations as collector, speculator, or investor has and holds him or herself out as having knowledge or skill peculiar to such articles or the practices involved in the purchaser of such articles, and (ii) any purchase from CM of coins, hallmark bars, registered ingots, and other items as Numismatic objects is for their Numismatic value. e. Quotes on Customer's Holdings: Customers may request a quote on their holdings at any time. When requesting a quote, please specify whether you are looking to purchase additional Precious Metals or sell your existing holdings as CM’s bid (buy from customer) and ask (sell to customer) quotes will vary. CM bases such quotes on a variety of factors, which are not necessarily tied or related to the prices quoted by, or factors considered by, its competitors. f. Classification as Bullion, semi-Numismatic, or Numismatic: Whether a Precious Metal is classified as Bullion, semiNumismatic, or Numismatic may turn on a number of objective and subjective factors, including the age of the Precious Metal, its condition, the number of known copies, the likelihood of additional minting, the originating country, relevant historical events or owners (e.g., shipwreck; royalty), relevance to the formation of various Precious Metal collections, and an investor's personal attraction to the piece. CM’s classification of Precious Metals is only an opinion and may change over time (e.g., if additional quantities of the Precious Metal are discovered). In addition, given the subjective nature of the classification process, other dealers or investors may classify the same coin differently. CM’s prices and spreads are based on its classification determination. g. Customer Assumes Investment Risk; Investment Decisions. Customer acknowledges that purchases and sales of Precious Metals involve considerable risk. Market prices are at times volatile and may be affected by a variety of factors including, among others, general economic conditions, political events, monetary policies of various countries, fluctuations in production and demand, stock-piles, speculative activity and the degree of concern people have about these matters. It is impossible to forecast accurately how or to what degree these or other factors will affect prices. Customer acknowledges and agrees that Customer assumes the risk of all investment decisions regarding any and all Precious Metals the Customer purchases from CM and CM makes no guarantee or representation regarding Customer’s ability to profit (or avoid loss) from any purchase or any representation regarding any tax implications of any purchase and the decision to purchase or sell Precious Metals. Any purchases from CM are made subject to Customer’s own prudence, judgment and ultimate decision. Customer expressly acknowledges and agrees to hold CM harmless for any damages arising out of the performance by CM of this Agreement. Customer understands that past performance cannot be an indicative of future results. 4. Remedy for Customer's Failure to Perform: If Customer refuses to accept delivery of the Precious Metals ordered or fails to make payment when due, CM, in its sole discretion, may cancel the transaction and resell such Precious Metals on a wholesale basis. If the proceeds from such resale are less than the contract price with Customer, CM shall be entitled to recover from Customer the difference between the resale price and Customer's contract price, plus any incidental damages occasioned by Customer's breach. If the proceeds from such resale are more than the contract price with Customer, CM shall be entitled to keep the excess amount to cover CM’s incidental damages. 5. Investment Objectives; Holding Period; Investment Risk; No Advice; Commissioned Sales Representatives: a. CM is a seller and purchaser of Precious Metals. While CM is always prepared to compare and contrast the different Precious Metals that are available for purchase or that CM is willing to purchase, Customer acknowledges and agrees that (i) no fiduciary relationship exists between CM and Customer, (ii) the decision to purchase or sell Precious Metals, and which Precious Metals to purchase or sell, are the Customer's decision alone, and (iii) purchases or sales are made subject to Customer's own prudence and judgment. b. In CM’s opinion, Precious Metals should be considered a long-term investment. Customer should be prepared to hold any Precious Metals purchased - whether from CM or elsewhere - for at least a three to five year period, and preferably five to ten years, to maximize the potential for gains. In CM’s opinion, Customer should only invest capital that can be held for at least this period of time. However, Precious Metals, like all investments, carry capital risk. Precious Metals may appreciate, depreciate, or stay the same depending on a variety of factors. CM cannot guarantee, and makes no representation, that the Precious Metals will appreciate at all or appreciate sufficiently to make Customer a profit at the expiration of this or any other period of time. Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 76 of 82 Page ID #:226 c. In CM’s opinion, Customer should not invest more than twenty percent (20%) of Customer's available investment funds in Precious Metals. Moreover, Precious Metals do not yield income and thus are not an appropriate investment vehicle for investors seeking current or future income. d. The success of an investment in Precious Metals is dependent, in part, upon extrinsic economic forces including but not limited to supply, demand, international monetary conditions, and inflation or the expectation of inflation. The impact of these forces on the values of Precious Metals in general or any particular Precious Metal cannot be predicted. Customer acknowledges that the Precious Metals market can be volatile and that Precious Metal prices may rise or fall over time. Customer further acknowledges that past performance is no guarantee of future performance. e. CM does not provide tax, investment, or legal advice or advisory services, and no one associated with CM is authorized to provide any such advice or services. Any written or oral statements by CM, its officers, agents, sales representatives, or other representatives relating to future events or the attributes of certain Precious Metals are opinions only. Such statements, if any, are not representations of fact. Customer agrees, acknowledges, and represents that Customer has not, at any time, sought or been provided with tax, investment, or legal advice or advisory services, of any kind or nature from CM or any of its, affiliates, assigns, successors, agents, employees, contractors or other representatives. f. CM’s sales representatives are commissioned salespersons - i.e., their salary is based, at least in part, on the amount and profit margin of the Precious Metals they sell. In addition, from time to time, CM’s sales representatives may receive other compensation tied to sales activity - e.g., sales contests; bonuses tied to the sale of certain denominations/types or grades of Precious Metals. CM’s sales representatives are not licensed brokers and their knowledge of Precious Metals and the Precious Metals marketplace varies markedly. g. CM makes no representations regarding the tax consequences of holding Precious Metals as an investment in an IRA. Customer expressly acknowledges that Customer has been advised to seek independent tax advice, from a qualified professional, regarding the tax consequences of such an investment. Any written or oral statements by CM, its officers, agents, account executives, or other representatives relating to future events or the attributes of certain Precious Metals are opinions only. Such statements, if any, are not representations of fact. h. Customer understands, agrees, and acknowledges that CM records telephone calls with potential customers and/or including Customer, to avoid and/or prevent fraud, for purposes of verifying Customer’s assent to the terms and conditions of the purchase from CM, for quality control and/or other reasons. Customer consents to all such recordings of Customer by CM to the extent consent is required under any state or federal laws or statutes. 6. Grades: a. CM is not a grading service. CM purchases Precious Metals for re-sale to its customers. CM is not a grading service. CM does not independently assess the Precious Metals it purchases for re-sale, but relies upon the opinions and assessments of independent grading services such as Professional Coin Grading Service, Inc., Numismatic Guaranty Corporation of America, and ANACAS, or others. Grading is a subjective process and it is not uncommon for grading services, or individual examiners within the same grading service, to reach different conclusions regarding the appropriate grade for a particular Precious Metal. Moreover, grading standards are constantly evolving. CM does not guarantee that the Precious Metals it sells will achieve the same grades in the future. In selling graded Precious Metals, CM warrants that the Precious Metal is genuine (i.e., not a counterfeit) and states that the grade is as opined by the grading service when graded by that service, if graded. b. Grading is subjective. Grading is a subjective determination. While numerical grading may give the impression of precision, the numbers in fact represent a nuanced opinion that even experts cannot consistently and systematically agree upon. The grade reflects the opinion of the cataloger (or grader) as to the state of preservation, method of strike, and overall appearance of a particular Precious Metal or lot. c. Terminology. The term "proof" or "specimen" is used to describe a method of manufacture. Those terms do not connote a grade, condition or attribution. Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 77 of 82 Page ID #:227 d. Cleaning/Toning. CM does not represent that a Precious Metal has or has not been cleaned, that any toning is natural or artificial, that a Precious Metal has a particular provenance or pedigree, that a Precious Metal is struck or not struck, that a Precious Metal is produced or not produced in a particular manner or style, and/or that a different grading service (or even a different grader within the same grading service) would assign the same grade now or in the future to the same Precious Metal. e. Acknowledgment. Where CM sells a Precious Metal that is encapsulated by a grading service and bears the grade or condition ascribed to it by the grading service, Customer acknowledges and agrees that other grading services or knowledgeable purchasers might reach a different conclusion as to the item’s grade. Customer further acknowledges that CM has provided the grader’s description for the customer’s information and makes no warranty as to its accuracy or the standards used to determine that grade. 7. Representation/Warranty; Sales Representatives Not Authorized To Make Other Representations or Warranties: CM represents and warrants that, upon the delivery of Purchase Funds (as provided for in Paragraph 1), and subject to the other terms and restrictions set forth in this Transaction Agreement, CM will cause to be delivered to Customer the denomination/type and grade of Precious Metals specified in Customer's order, as classified and/or graded by one of the following independent grading services: Professional Coin Grading Service, Inc. (PCGS), Numismatic Guaranty Corporation of America (NGC), ANACAS, or any other independent grading service of similar standing. The only representation and warranty that Customer may rely upon in purchasing Precious Metals from or selling Precious Metals to CM is the representation set forth in this Paragraph 7. Neither CM, nor any of its officers, agents, employees, sales representatives, or other representatives are authorized to make any other representations or warranties concerning any Precious Metals that CM is selling or purchasing under this Transaction Agreement. 8. Exchange/Refund Policy: a. Replacement of Semi-Numismatic or Numismatic Coins Where Grade Disputed: Customer agrees to inspect each delivery carefully upon receipt. If, for any reason whatsoever, Customer is dissatisfied with the quality of a semiNumismatic or Numismatic coin or bar (specific kinds of Precious Metals) purchased from CM, Customer should immediately notify CM. If Customer notifies CM of its dissatisfaction within fifteen (15) days of delivery of the semiNumismatic or Numismatic coin or bar and the original holder in which the semi-Numismatic or Numismatic coin or bar in question was delivered has not been opened, removed, or tampered with in any respect, CM shall replace the semi-Numismatic or Numismatic coin or bar in question with another semi-Numismatic or Numismatic coin or bar (as appropriate) of the same denomination/type and grade. CM, in its sole discretion, may permit Customer to upgrade to a higher value semi-Numismatic or Numismatic coin or bar (either in denomination/type or grade) as part of this replacement process, provided Customer pays the difference between the contract price of the semi-Numismatic or Numismatic coin or bar previously purchased and CM’s current sale price for the higher value semi-Numismatic or Numismatic coin(s) or bar(s) to be substituted. If CM determines, in its sole discretion, that another semi-Numismatic or Numismatic coin or bar of the same denomination/type and grade is not reasonably, commercially available, CM may elect, at its sole option, to replace the semi-Numismatic or Numismatic coin or bar purchased with a reasonably comparable semi-Numismatic or Numismatic coin or bar, even though of a different denomination/type and grade. b. Cancellation Period; Certain States’ Rights. With the exceptions noted in Paragraph 8a and the Addendum attached hereto (certain state residents only), CM offers Customers a seven (7) day right to request cancellation of their purchase with CM for semi-Numismatic or Numismatic coin or bar purchases. Because Precious Metals, including all other purchases other than semi-Numismatic or Numismatic coin or bars, are subject to price fluctuations outside of CM’s control, the CM is unable to rescind, cancel, refund, or exchange Customer’s order or this Agreement for all purchases other than semi-Numismatic or Numismatic coin or bars, other than as noted herein, in Paragraph 8a above, and as set forth in the attached Addendum. 9. Disclaimer of Express and Implied Warranties: EXCEPT AS SET FORTH IN PARAGRAPH 7, THE PRECIOUS METALS SOLD BY CM PURSUANT TO THIS TRANSACTION AGREEMENT ARE SOLD ON AN "AS IS" BASIS AND CM MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AND SPECIFICALLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY AND OR FITNESS FOR A PARTICULAR PURPOSE. 10. No Liability for Consequential Damages; Limitation of Liability: IN NO EVENT SHALL CM HAVE ANY Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 78 of 82 Page ID #:228 OBLIGATION OR LIABILITY (WHETHER IN TORT, CONTRACT, WARRANTY, OR OTHERWISE, AND NOTWITHSTANDING ANY FAULT, NEGLIGENCE, OR STRICT LIABILITY), FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES SUSTAINED OR ARISING FROM OR RELATED TO ANY TRANSACTION COVERED BY THIS TRANSACTION AGREE- MENT, EVEN IF CM IS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. FURTHER, CM’s LIABILITY TO CUSTOMER FOR ANY REASON AND UPON ANY CLAIMS SHALL AT ALL TIMES BE LIMITED TO THE AMOUNT ACTUALLY PAID BY CUSTOMER FOR THE PRECIOUS METALS IN DISPUTE. 11. Application to Future Transactions: This Transaction Agreement shall control all transactions between CM and Customer unless and until such time as it is amended by CM. Customer agrees that CM may amend this Transaction Agreement at any time and from time to time, that CM may give notice to Customer of any amendment by mailing a copy of the amended Transaction Agreement to the address set forth above (or any updated address provided by Customer in the interim), and that following such mailing, the amended Transaction Agreement shall govern succeeding transactions and any interaction with CM. 12. Force Majeure: Neither CM nor Customer shall be liable for any failure or delay in its or their performance under this Transaction Agreement due to any cause beyond its or their respective reasonable control, including acts of war, terrorism, acts of God, earthquake, flood, embargo, riot, sabotage, labor shortage or dispute, governmental act or failure of the Internet including, but not limited to, any disruption, failure and/or error in or of CM’s internal computer systems, or any disruption, failure and/or error in or of any third-party Internet service providers as CM may use from time to time. 13. Arbitration of Disputes; Waiver of Jury Trial: ANY DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING TO THIS TRANSACTION AGREEMENT OR THE BREACH, TERMINATION, ENFORCEMENT, INTERPRETATION OR VALIDITY THEREOF, INCLUDING THE DETERMINATION OF THE SCOPE OR APPLICABILITY OF THIS AGREEMENT TO ARBITRATE, OR ANY OTHER DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF ANY INTERACTION BETWEEN CM AND CUSTOMER, SHALL BE BROUGHT AND BE DETERMINED BY ARBITRATION IN LOS ANGELES, CALIFORNIA, BEFORE ONE ARBITRATOR. THE ARBITRATION SHALL BE ADMINISTERED BY ADR SERVICES, INC. CUSTOMER AND CM WAIVE THEIR RIGHTS, IF ANY, TO BRING ANY CLAIM THAT IS SUBJECT TO THIS ARBITRATION PROVISION AS A CLASS ACTION, “MASS” ACTION, OR OTHERWISE ON A REPRESENTATIVE BASIS. JUDGMENT ON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT OF COMPETENT JURISDICTION. THIS CLAUSE SHALL NOT PRECLUDE PARTIES FROM SEEKING PROVISIONAL INJUNCTIVE REMEDIES IN AID OF ARBITRATION FROM A COURT OF APPROPRIATE JURISDICTION. 14. Choice of Law: The substantive law of California shall govern all claims brought by or against CM in connection with this Transaction Agreement or otherwise arising out of any interaction between CM and Customer, without any regard for conflict of law principles. 15. Limitation on Time to Bring Any Claim: Except where the law prescribes a shorter applicable statute of limitation, or prohibits shortening the otherwise applicable longer statute of limitations, any claim or legal action of any kind arising in connection with or relating in any way Customer’s purchases from CM, CM, or in any way relating to CM or this Agreement, must be brought within one year after the purchase or sale or other event giving rise to the claim or legal action. If this clause is determined to be unenforceable as to any particular claim or claims under the law of the applicable jurisdiction, it shall remain fully enforceable as to all other claims. 16. Jurisdiction: Jurisdiction and venue for any dispute, claim or controversy arising out of or in any way relating to this Transaction Agreement or the breach, termination, enforcement, interpretation or validity thereof, or any other interaction between CM and Customer, shall be in Los Angeles, California, and any party making a claim against CM in whatever form hereby submits to personal jurisdiction in that forum for any and all purposes. By entering into this Agreement, Customer agrees to be subject to the personal jurisdiction of the State of California, agreeing and acknowledging that entering into this Agreement shall constitute sufficient minimum contacts with the State of California to confer both general and specific personal jurisdiction. 17. Finality; Integration Clause: This Agreement is intended by CM and Customer as a final expression of their agreement concerning the matters set forth herein, and is also intended as a complete and exclusive statement of the Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 79 of 82 Page ID #:229 terms of their agreement. This Agreement supersedes any oral or written statements made prior to, contemporaneous with, or in the future regarding this Agreement or the transactions covered hereunder. Customer shall not rely upon any statement made by or on behalf of CM that is inconsistent with this Transaction Agreement. 18. Severability: If any provision of this Transaction Agreement is determined by any court of competent jurisdiction or arbitrator to be invalid, illegal, or unenforceable to any extent, that provision shall, if possible, be construed as though more narrowly drawn, if a narrower construction would avoid such invalidity, illegality, or unenforceability or, if that is not possible, such provision shall, to the extent of such invalidity, illegality, or unenforceability, be severed, and the remaining provisions of this Agreement shall remain in full force and effect. ADDENDUM OF STATE-SPECIFIC PROVISIONS Alaska. CM provides all customers the right to receive a full refund for the return of undamaged and unused metals or coins, provided the customer gives CM timely notice of the return within seven (7) calendar days after the date the customer receives the merchandise. Timely notice is given if the return request is made in person within the seven (7) days or if the return or request is mailed, properly addressed and postmarked, postage prepaid, within the seven (7) days. Receipt of metals or coins is deemed to occur at the earliest of: (a) the date the customer receives actual possession of the metals or coins; or (b) the date the customer receives written confirmation that the metals or coins have been deposited on the customer’s behalf in an independent depository. CM, upon written notice of cancellation and receipt of the merchandise in the same condition as delivered, issue a full refund within thirty (30) calendar days from the date of cancellation or, where merchandise has been delivered, the returned merchandise is received by CM, whichever is later. Connecticut, Nebraska, Maryland, Louisiana, Kansas. CM provides all first time customers the right to a refund for the return of undamaged and unused metal or coins, provided that Chase Metals receive written notice of cancellation within seven (7) calendar days after the date you receive the merchandise. Your “receipt” of metals or coins is deemed to occur at the earliest of: (a) the date that you receive actual possession of the metals or coins; or (b) the date that you receive written confirmation that the metals or coins have been deposited on your behalf in an independent depository. CM shall, upon written notice of cancellation and receipt of the merchandise in the same condition as delivered, issue a full refund within thirty (30) calendar days from the date of cancellation or, where merchandise has been delivered, the returned merchandise is received by CM, whichever is later. Hawaii, Mississippi, West Virginia, Arizona, Colorado, Montana, Oklahoma, Utah, Texas (credit card purchases only), Oregon, Nevada. CM provides you the right to receive a full refund for the return of undamaged and unused metals or coins, provided that CM receive written notice of the return within seven (7) calendar days after the date that you receive the merchandise. Your “receipt” of metals or coins is deemed to occur at the earliest of: (a) the date that you receive actual possession of the metals or coins; or (b) the date that you receive written confirmation that the metals or coins have been deposited on your behalf in an independent depository. CM shall, upon written notice of cancellation and receipt of the merchandise in the same condition as delivered, issue a full refund within thirty (30) calendar days from the date of cancellation or, where merchandise has been delivered, the returned merchandise is received by CM, whichever is later. Indiana, Pennsylvania, Vermont, Wyoming, South Dakota. CM provides you the right to receive a full refund for the return of undamaged and unused metals or coins, provided that CM receive written notice of the return within ten (10) calendar days after the date that you receive the merchandise. Your “receipt” of metals or coins is deemed to occur at the earliest of: (a) the date that you receive actual possession of the metals or coins; or (b) the date that you receive written confirmation that the metals or coins have been deposited on your behalf in an independent depository. CM shall, upon written notice of cancellation and receipt of the merchandise in the same condition as delivered, issue a full refund within thirty (30) calendar days from the date of cancellation or, where merchandise has been delivered, the returned merchandise is received by CM, whichever is later. Michigan, Virginia, Arkansas. CM provides all customers the right to a full refund provided that Chase Metals receive written notice of cancellation (see notice provided with your trade confirmation) within three (3) business days after the date that you sign this Agreement. CM shall, upon written notice of cancellation, issue a full refund Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 80 of 82 Page ID #:230 within ten (10) calendar days from the date you send us the notice of cancellation (notice of cancellation, if given by mail, is given when it is deposited in a mailbox properly addressed and postage prepaid.) If you decide to cancel, return all items shipped to you (if any) in substantially as good condition as when received to the address that appears on the form, ATTN: Operations Dept. North Dakota. CM provides you the right to receive a full refund for the return of undamaged and unused metals or coins, provided that CM receive written notice of the return within fifteen (15) calendar days after the date that you receive the merchandise. Your “receipt” of metals or coins is deemed to occur at the earliest of: (a) the date that you receive actual possession of the metals or coins; or (b) the date that you receive written confirmation that the metals or coins have been deposited on your behalf in an independent depository. CM shall, upon written notice of cancellation and receipt of the merchandise in the same condition as delivered, issue a full refund within thirty (30) calendar days from the date of cancellation or, where merchandise has been delivered, the returned merchandise is received by CM, whichever is later. Maine. CM provides all first time customers the right to a refund, provided that Chase Metals receive written notice of cancellation within seven (7) calendar days after the date your trade confirmation is mailed to you (based upon the postmark) or delivered to a third-party carrier such as FedEx. (Prior purchasers have the right to receive a full refund provided that CM receive written notice of the cancellation within three (3) business days after the date your trade confirmation is mailed or delivered, as above.) CM shall, upon written notice of cancellation, issue a full refund within fifteen (15) calendar days from the date you send us the notice of cancellation (notice of cancellation, if given by mail, is given when it is deposited in a mailbox properly addressed and postage prepaid.) If you decide to cancel, return all items shipped to you (if any) in substantially as good condition as when received to the address that appears on the form, ATTN: Operations Dept. West Virginia. CM provides you the right to receive a full refund for the return of undamaged and unused metals or coins, provided that CM receive written notice of the return within seven (7) calendar days after the date that you receive the merchandise. Your “receipt” of metals or coins is deemed to occur at the earliest of: (a) the date that you receive actual possession of the metals or coins; or (b) the date that you receive written confirmation that the metals or coins have been deposited on your behalf in an independent depository. For purposes of this subsection, it will be presumed that goods were received seven days after they were mailed unless it can be clearly demonstrated that the goods were not received or received at a later date. CM shall, upon written notice of cancellation and receipt of the merchandise in the same condition as delivered, issue a full refund within thirty (30) calendar days from the date of cancellation or, where merchandise has been delivered, the returned merchandise is received by CM, whichever is later. CM will provide a cash refund for a cash purchase or issuing a credit for a credit purchase, which credit is applied to the account to which the purchase was debited in connection with the return of its unused and undamaged merchandise or canceled services. Wisconsin. CM provides all customers the right to a full refund provided that CM receive written notice of cancellation (see notice provided with your trade confirmation) within three (3) business days after the date that you sign the Addendum to this Trade Confirmation. CM shall, upon written notice of cancellation and receipt of the merchandise in the same condition as delivered, issue a full refund within thirty (30) calendar days from the date of cancellation or, where merchandise has been delivered, the returned merchandise is received by CM whichever is later. (Notice of cancellation, if given by mail, is given when it is deposited in a mailbox properly addressed and postage prepaid.) Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 81 of 82 Page ID #:231 Signature Certificate Document Ref.: K6RMM-UDJKD-XEM3Q-RKEJY Document signed by: Steven Matteo Verified E-mail: barbandsteve@att.net IP: 72.130.144.52 Date: 07 Aug 2017 22:25:18 UTC Document completed by all parties on: 07 Aug 2017 22:25:18 UTC Page 1 of 1 Signed with PandaDoc.com Send, track, annotate and sign documents online in a fast, secure and professional way. Case 2:19-cv-01223-JAK-SK Document 17 Filed 04/04/19 Page 82 of 82 Page ID #:232 PROOF OF SERVICE 1 2 I, the undersigned, am over age 18, not a party to this action, and am 3 employed in the County of Los Angeles at Kerendian & Associates, Inc., 11755 Wilshire Blvd., 15th Floor, Los Angeles, California 90025. On the date stated below, I 4 served foregoing document(s): 5 6 7 8 FIRST AMENDED COMPLAINT FOR DAMAGES Together with a copy of this Proof of Service, on the following parties and sent as follows: Daniel B. Spitzer dspitzer@spitzeresq.com 10 KERENDIAN & ASSOCIATES, INC. 11755 Wilshire Blvd., 15th Floor Los Angeles, CA 90025 9 11 [ ] BY MAIL: By placing a true copy thereof enclosed in a sealed envelope(s) with postage fully prepaid. I am readily familiar with this firm's practice 13 for collection and processing of correspondence for mailing with the United States 14 Postal Service and, in the ordinary course of business, the correspondence would be deposited with the United States Postal Service on the day on which it is collected at 15 the business. 12 16 [ ] BY FACSIMILE: I transmitted the document(s) listed above by facsimile transmission to the facsimile number(s) as indicated above. Such transmission was 18 reported as complete without error. 17 19 [X ] BY EMAIL: I transmitted the document(s) listed above by email to the 20 email address(es) as indicated below. Such transmission was reported as complete without error. 21 22 23 24 I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on APRIL 04, 2019 at Los Angeles, California. 25 26 Rozita Levy 27 28 Page 60 FIRST AMENDED COMPLAINT FOR DAMAGES