2009-00054045-CU-BC
Tri-Tool Inc vs. Copeland Properties Three LP
Nature of Proceeding:
Filed By:
Motion to File Amended Complaint
Peterson, Rollie A.
Plaintiff Tri Tool Inc.’s (“Tri Tool”) motion for leave to file a third amended complaint is
GRANTED.

Background Facts/Procedure

This case, which commenced in 2009, arises from Tri Tool’s purchase of a commercial
property from Defendant Copeland Properties Three, L.P. (“CP3”). The purchase
touched upon a complex series of transactions encompassing loans and assignments
between and among CP3-affiliated entities. Multiple individuals associated with CP3
are named as defendants well.

The crux of Tri Tool’s case is that CP3 failed to pay on a $200,000 promissory note,
payment on which was conditioned upon CP3’s failure timely to remove an
encumbrance on the property Tri Tool acquired. Tri Tool alleges that CP3 failed to
remove the encumbrance, it failed to pay on the note, and guarantors Charles
Copeland (“C. Copeland”) and Donald E. Copeland failed to pay as well. Tri Tool
further contends that other entities and individuals played a role in CP3’s failures by
facilitating the wrongful transfer of funds that could have been used to pay on the note.
In November 2012, this court granted Tri Tool’s motion for summary judgment against
CP3. Because of joint and several liability, Tri Tool has not reduced the order to a
judgment. (See Moving Memo. at 5:4-5 and fn. 1.)

In 2011, the federal government took action against C. Copeland and two entities, Copeland Wealth Management, a Financial Advisory (“CWM”) and Copeland Wealth
Management, a Real Estate Corporation (“Copeland Realty”), on grounds of securities
violations. In October 2011, a federal judge in the Central District of California entered
a permanent injunction against the three, appointed a receiver and enjoined all
creditors and others from “directly or indirectly” suing the two entities or their
“subsidiaries and affiliates” while the receivership is pending. (There is no dispute that
the receivership continues today.) In March 2012, the federal judge entered an order
clarifying that CP3 is such an affiliate.

By the instant motion, Tri Tool seeks to add factual allegations about the fraudulent
transfers that it contends deprived it of payments on the note. Tri Tool also seeks
leave to add as defendants individuals and trusts who/that are limited partners of CP3-
affiliate CP18. Tri Tool does not seek leave to proceed against CWM or Copeland
Realty.

Trial is set to commence in December 2014.

Discussion

The motion is granted under the liberal policy favoring amendments of pleadings.
(See, e.g., Mabie v. Hyatt (1998) 61 Cal.App.4th 581, 695.) The court discerns no
prejudice that defeats this liberal policy.

The parties’ real dispute is whether Tri Tool’s motion violates the federal injunction.
That is not a question for this court to decide. The injunction does not bar this court
from entertaining the motion. Rather, the injunction is aimed at others. Whether Tri
Tool has violated the injunction, and whether any other party is entitled to a remedy
based on such a violation, are issues for the court that entered the injunction.

Conclusion

The motion is granted.

No later than April 14, 2014, Tri Tool may file and serve the proposed TAC;
Defendants to file and serve their responsive pleading(s) within 10 days thereafter, 15
days if the TAC is served by mail. (Although not required by any statute or rule of
court, Tri Tool is requested to attach a copy of the instant minute order to the TAC to
facilitate the filing of the pleading.)

Note that the court clerk will not file the proposed TAC attached to the moving
papers as an exhibit.

Counsel for moving party is advised that the Sacramento County Superior Court’s
Local Rules were revised and renumbered as of 01/01/13. When giving notice of the
court’s tentative ruling system, counsel should cite Local Rule 1.06, not former Local
Rule 3.04.

The minute order is effective immediately. No formal order pursuant to CRC 3.1312 or
further notice is required.