MALEK vs NASRAWI, et al.

In July 2019, Clear View purchased an interest of nineteen and a half percent (19.5%) of Capital Green One. Around that time, Capital Green One executed a lease as tenant for the Warehouse with Capital Green as the landlord.

24CV005885: MALEK vs NASRAWI, et al. 07/07/2026 Hearing on Motion for Leave to File First Amended Complaint in Department 16C

In August 2020, Hoang Bai (“Bai”), the only other managing member of the Capital Green Entities resigned, leaving Plaintiff and Nasrawi as the two managing members of the Capital Green Entities. In July 2021, Bai, Plaintiff, and Nasrawi agreed that Bai would give part of his membership interests back to Plaintiff and Nasrawi. Orchard’s and Clear View’s interests were not affected.

In April 2022, Capital Green One received a temporary certificate of occupancy for cannabis operations. owever, due to Nasrawi’s poor oversight and planning, the buildout took longer than projected. Plaintiff alleges that through 2022, the Capital Green Entities continued to have no income. However, the Warehouse had increased in value since it was purchased in 2017, and Capital Green had significant equity in its investment property. Plaintiff alleges that Nasrawi used the accretions in value of Capital Green to pay for Capital Green One’s expenses, which effectively benefited Clear View and Bsharah.

Plaintiff alleges that Nasrawi improperly shifted expenses between the two companies as a tit-for-tat exchange for Bsharah’s cooperation and assistance with Nasrawi’s scheme to cheat Plaintiff. He also alleges that Capital Green One’s avoidance of lease payments significantly benefited Bsharah.

In October 2022, Nasrawi unilaterally demanded that all members (except Clear View) make loans to the Capital Green Entities on the threat of ouster and forfeiture of their interest in the companies.

Plaintiff alleges that Capital Green One did not pay any rent through December 2022 when he was wrongfully ousted from the Capital Green Entities. Plaintiff alleges that on December 22, 2022, Nasrawi conducted a sham members meeting, in which Defendants had already conspired to wrongfully vote and created a false record claiming that there was an ‘unanimous vote’ to remove Plaintiff. In February 2023, Nasrawi and Orchard fraudulently and without authority executed a Short Form Deed of Trust and Assignment of Rents (“2023 Deed of Trust”), which deprived Plaintiff of the equity that had accumulated in the Warehouse.

Capital Green One is now growing and selling cannabis and earning millions of dollars in revenue. Capital Green enjoys a lucrative long-term lease with Capital Green One and receives sixty thousand dollars ($60,000.00) in rent per month.

Plaintiff filed his complaint on March 27, 2024.

The complaint asserts causes of action for: (1) California Penal Code Section 496 Claim for Civil Theft, (2) Breach of Fiduciary Duties, (3) Breach of Capital Green Operating Agreement, (4) Breach of Capital Green One Operating Agreement, (5) Breach of Contract against Capital Green for Failure to Pay Management Fee, (6) Breach of Contract against Capital Green One for Failure to Pay Management Fee, (7) Quantum Meruit against Capital Green (8) Quantum Meruit

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV005885: MALEK vs NASRAWI, et al. 07/07/2026 Hearing on Motion for Leave to File First Amended Complaint in Department 16C

against Capital Green One, (9) Accounting, (10) Appointment of Receiver, (11) Violation of California Corporations Code Section 17704.10: Failure to Provide Company Information against Capital Green, (12) Violation of California Corporations Code Section 17704.10: Failure to Provide Company Information against Capital Green One, (13) Declaratory Relief, and (14) Temporary Restraining Order and Preliminary and Permanent Injunction.

Trial is currently scheduled for July 14, 2026.

Plaintiff moves for leave to file a first amended complaint to:

1. Drop the 7th, 8th, 9th, 10th, and 14th causes of action, 2. Add Capital Green and Capital Green One as defendants to the respective Breach of Operating Agreement causes of action.

3. Add two new causes of action for Conversion of Membership Interests and Conspiracy to Commit Conversion against Nasrawi, Orchard, Clear View, Bsharah, and DOES 1-10.

4. Revise the Declaratory Relief cause of action to narrow the scope to the procedural validity of the October 24, 2022 “emergency cash call” and the December 22, 2022 special meeting under the governing Operating Agreements.

5. Correct the title of the Second cause of action.

6. Update the attorney block to reflect the firm’s current address and email of record.

According to Plaintiff’s counsel, the facts supporting the two new causes of action for conversion and conspiracy were already pleaded in the original complaint. However, it was not until January 2026 that the “factual record was confirmed.” (Declaration of B. Irving Pollack (“Pollack Decl.”), ¶ 10.) Specifically, the depositions of the Capital Green Entities’ person most qualified on January 14-15, 2026, “confirmed the taking of Plaintiff’s membership interests and the elements of conversion.” (Declaration of B. Irving Pollack (“Pollack Decl.”), ¶ 10.) Additionally, Orchard’s deposition taken on January 12, 2026, “confirmed the disposition of Plaintiff’s former membership interests.” (Ibid.) Plaintiff’s counsel indicates that following the January 2026 depositions and the March 18, 2026 second mediation, he conducted legal research:

on (i) the application of conversion doctrine to a California limited liability company membership interest under Corporations Code section 17705.01; (ii) the substantive viability of a separately pleaded civil conspiracy count and the independent-duty and individual-financial-advantage exceptions to the agent’s- immunity rule; (iii) the entity-bound doctrine under Corporations Code section 17701.11(a) supporting the addition of the Capital Green entities as defendants on the Operating Agreement-breach Causes; (iv) the transferee-capacity standing for the surviving section 17704.10 information-rights Causes; and (v) the substantive viability of a narrowly scoped declaratory-relief Cause directed at the procedural

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV005885: MALEK vs NASRAWI, et al. 07/07/2026 Hearing on Motion for Leave to File First Amended Complaint in Department 16C

validity of the 2022 corporate actions.

(Id., ¶ 11.)

Plaintiff’s counsel completed his research in late May 2026. (Ibid.) Plaintiff adds that granting leave will not require reopening discovery, will not add new witnesses, and will not affect the July 14, 2026 trial date. He explains that Defendants have been on notice of the factual narrative of conversion and conspiracy since the complaint was filed.

Defendants have filed an opposition. Defendants oppose the addition of the two new causes of action, arguing that Plaintiff has not explained his delay and that they will be substantially prejudiced.[2] Defendants observe that the proposed amended complaint is not based on any newly discovered facts, and that “Plaintiff admits that the FAC merely reincorporates the same factual allegations verbatim from the original Complaint.” (Opposition, 2:4-5.) They contend that despite being premised on the same factual allegations, Plaintiff provides no excuse for waiting until the eve of trial to assert the new claims.

Defendants further claim that they will be severely prejudiced because “Plaintiff seeks to inject two new causes of action after the close of discovery, the completion of all depositions, and the conclusion of expert discovery, at a time when trial is set to begin in less than a month from the date of filing this opposition.” (Opposition, 5:5-9.) Defendants explain that the addition of the new claims for conversion and conspiracy “necessarily introduces new issues that Defendants need to address” and that they:

have prepared their case based on the causes of action asserted for over two years. Defendants have conducted discovery, prepared experts, and developed their trial strategy based solely on the claims asserted in the original Complaint. Allowing Plaintiff to change the theory of the case at this late stage would force Defendants to reevaluate their entire litigation strategy without any meaningful opportunity to conduct additional discovery.

(Opposition, 5:15-19.)

Courts apply a policy of great liberality in permitting amendments to the complaint “at any stage of the proceedings, up to and including trial,” absent prejudice to the adverse party. (Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761; see also Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 487 (no abuse of discretion in denying motion for leave to amend on eve of trial where the new cause of action would have greatly expanded the case after the “trial date was set, the jury [was] about to be impaneled, counsel, the parties, the trial court, and the witnesses [had] blocked the time, and the only way to avoid prejudice to the opposing party is to continue the trial date to allow further discovery...”].)

However, absent prejudice, delay alone is not a ground for denying a motion for leave to amend. If delay in seeking the amendment has not misled or prejudiced the other side, the liberal policy

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV005885: MALEK vs NASRAWI, et al. 07/07/2026 Hearing on Motion for Leave to File First Amended Complaint in Department 16C

of allowing amendments prevails. (Higgins v. Del Faro (1981) 123 Cal.App.3d 558, 564-565.) Indeed, it is an abuse of discretion to deny leave to amend where the opposing party was not misled or prejudiced by the amendment. (Kittredge Sports Co. v. Sup Ct. (1989) 213 Cal.App.3d 1045, 1048 [citing Higgins v. Del Faro, supra, 123 Cal.App.3d at pp. 564-565].)

The Court recognizes that trial is one week from the hearing date. The Court also agrees with Defendants that Plaintiff appears to have delayed seeking leave to amend. Defendants, however, did not submit any declarations in opposition to the motion to make any showing of prejudice, only making arguments in the opposition to the motion. Arguments of counsel are not evidence. (Porterville Citizens for Responsible Hillside Development v. City of Porterville (2007) 157 Cal.App.4th 885, 895, fn. 9 [“It is axiomatic that arguments of counsel are not evidence”].)

Defendants have not shown with evidence, that additional discovery will need to be taken, additional costs will be incurred, new expert witnesses will need to be retained, or that trial will need to be continued. Defendants may suggest that the new causes of action “necessarily introduces new issues that Defendants need to address” (Opposition, 5:13-14), but Defendants provide no analysis regarding the “new issues” that they will need to address, and have not explained how they will need to change their trial or litigation strategy based on the new causes of action.

Given that Defendants have made no showing of prejudice, the motion is GRANTED.

Plaintiff shall file and serve his first amended complaint by no later than July 8, 2026.

This minute order is effective immediately. No formal order or other notice is required. (Code Civ. Proc. §1019.5; CRC Rule 3.1312.)

NOTICE:

Consistent with Local Rule 1.06(B), any party requesting oral argument on any matter on this calendar must comply with the following procedure:

To request limited oral argument, on any matter on this calendar, you must call the Law and Motion Oral Argument Request Line at (916) 874-2615 by 4:00 p.m. the Court day before the hearing and advise opposing counsel. At the time of requesting oral argument, the requesting party shall leave a voice mail message: a) identifying themselves as the party requesting oral argument; b) indicating the specific matter/motion for which they are requesting oral argument; and c) confirming that it has notified the opposing party of its intention to appear and that opposing party may appear via Zoom using the Zoom link and Meeting ID indicated below. If no request for oral argument is made, the tentative ruling becomes the final order of the Court.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV005885: MALEK vs NASRAWI, et al. 07/07/2026 Hearing on Motion for Leave to File First Amended Complaint in Department 16C

Unless ordered to appear in person by the Court, parties may appear remotely either telephonically or by video conference via the Zoom video/audio conference platform with notice to the Court and all other parties in accordance with Code of Civil Procedure §367.75. Although remote participation is not required, the Court will presume all parties are appearing remotely for non-evidentiary civil hearings.

The Department 16C Zoom Link is https://saccourt-ca-gov.zoomgov.com/j/16030877014 To appear on Zoom telephonically, call (833) 568-8864 and enter the Zoom Meeting ID 16030877014. NO COURTCALL APPEARANCES WILL BE ACCEPTED.

Parties requesting services of a court reporter will need to arrange for private court reporter services at their own expense, pursuant to Government code §68086 and California Rules of Court, Rule 2.956. Requirements for requesting a court reporter are listed in the Policy for Official Reporter Pro Tempore available on the Sacramento Superior Court website at https://www.saccourt.ca.gov/court-reporters/docs/crtrp-6a.pdf.

Parties may contact Court-Approved Official Reporters Pro Tempore by utilizing the list of Court Approved Official Reporters Pro Tempore available at https://www.saccourt.ca.gov/courtreporters/docs/crtrp-13.pdf.

A Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) is required to be signed by each party, the private court reporter, and the Judge prior to the hearing, if not using a reporter from the Court’s Approved Official Reporter Pro Tempore list.

Once the form is signed it must be filed with the clerk. If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will forward the form to the Court Reporter’s Office and an official reporter will be provided. [1] Naji Bsharah is alleged to be the owner and/or managing member of Clear View only. Alan Orchard, Naji

Bsharah, and Clear View Enterprises, Inc. are collectively referred to herein as the “Capital Green Members.” Nasrawi, the Capital Green Entities, and the Capital Green Members are collectively referred to herein as “Defendants.” [2] Defendants do not oppose Plaintiff’s removal of the five causes of action or narrowing the

scope of the declaratory relief cause of action.