Legal Question in Civil Litigation in California

There is nothing wrong with telling someone that if they do not do something that you have the legal right to ask for from them that you will file a civil suit trying to get that reimbursement, damage, or activity. You can not ask them to do an illegal act, so something you are not entitled to get, or threaten to sue to force them to pay you money you are not entitled to. So you can not shake someone down. If you say you will report the person for criminal activity, even if they did commit that crime, unless you are paid something you are clearly owed, that could be considered extortion and a crime [and civil wrong they can sue you for].

I agree with Mr. Shers mostly. It is not extortion to demand something you are actually owed, under threat of filing a criminal complaint. It is an ethical violation for a lawyer to do so, under the rules of professional conduct, but it is not illegal. Where it gets tricky is if there is any dispute as to what you are owed. For example, if you think someone embezzled $100,000 from your company and you demand they repay it or you will file a criminal complaint, and they contend that they only embezzled $75,000, and the rest is sloppy bookkeeping, you better be sure they took the full $100,000, or you could be guilty of extortion for the extra $25,000. If you KNOW they only took $75,000 and you demand $100,000 or you go to the police, that is definitely extortion.

I said it "could" be considered unlawful, not that it necessarily "would" be unlawful to threaten to report someone. I guess that Mr. McCormick would not feel it criminal if you demanded just "the money you owe me" as that is not overstating the amount owed as you are not giving any figure. How often though, does a person who owes you something agree to the amount owed?

I understood your post to mean threatening filing a civil complaint as a lawsuit, not the bringing of criminal charges. There is no prohibition against you sending a copy of a proposed civil lawsuit, but it may be inadvisable from a tactical perspective.

I doubt they would be motivated to pay you based on a complaint you wrote yourself unless the amount involved is small. The implied threat is that you will sue them acting as your own attorney, which many people would find laughable. Suggest you pay an attorney to write a demand letter, which doesn't cost much and which might be taken more seriously.