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"Grissom vs. DSC"



03/05/2009 - 8:30 AM DEPT. 07






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Great Job Kody

Call me if you need help I have depositions on John Wick.

818 749 3288

A. Court May Strike False or Improper Matter.

The court may, on timely motion to strike by any party, or at any time in its discretion, strike from any pleading any false or improper matter (Code Civ. Proc. § 436(a)[Deering's]).

DSC’s SACC broadly alleges that Grissom and MOES (Moe Cross-Defendants 1 through 20 inclusive) caused damages to DSC. DSC then alleges that the true names and capacities of each MOE is unknown to DSC, however DSC’s own pleadings, and attached contract incorporated into complaint, states that Dealer Services Corporation has Power of Attorney for Grissom, to act with full power and authority to encumber Grissom with debts of unknown third parties without Grissom’s knowledge or consent.

DSC alleges it used its agency Power of Attorney to advance funds to third parties on Grissom’s behalf: “DSC advanced funds to Grissom and American Family Auto and to certain third parties on Grissom’s behalf for the purchase of retail inventory as Collateral pursuant to the terms of the Contract” (SACC ¶ 18).

Although an agent can never have authority, either actual or ostensible, to do an act which is, and is known or suspected by person with whom he deals, to be a fraud upon principal (Civil Code § 2306), DSC states in their SACC, Paragraph...

DSC’s SACC Allegations Violate California Statutes And Laws

A. DSC Requires the Aid of its Illegal Contract to Establish its Case Against Grissom and thereby Fails to State any Legally Cognizable Causes of Action

Whether a contract is illegal is a question of law to be determined from the circumstances of each particular case (Kashani v. Tsann Kuen China Enterprise Co., Ltd. (App. 2 Dist. 2004) 13 Cal.Rptr.3d 174, 118 Cal.App.4th 531. Courts will not enforce a contract to perform an act prohibited by statute or by ordinance (Timney v. Lin (App. 1 Dist. 2003) 131 Cal.Rptr.2d 387, 106 Cal.App.4th 1121.

The test whether demand connected with an illegal transaction is capable of being enforced is whether plaintiff requires aid of the illegal transaction to establish his case, and, if plaintiff cannot establish his case without showing that he has broken the law, the court will not assist him whatever his claim in justice may be upon defendant (Hooper v. Barranti (App. 1 Dist. 1947) 81 Cal.App.2d 570, 184 P.2d 688).

1. DSC’s Cross-Complaint Omits Essential Allegation that DSC was Licensed as a Financial Lender as Required Under California Financial Code § 22100

A motion for judgment on the pleadings may properly be granted if an essential allegation is absent (Fraker v. Sentry Life Ins. Co. (1993) 19 Cal. App. 4th 276, 28 5&286, 15 Cal. Rptr. 2d 1144).

DSC omits to allege it was licensed as a Finance Lender in the state of California where they chose to do business. The essential allegation of proper licensure that is omitted by DSC conflicts with California’s fundamental policy that a violation of statute constitutes an unlawful business practice. (Podolsky v. First Healthcare Corp. (1996) 50 Cal.App.4th 632, 647.)

DSC’s allegations reveal nothing remotely suggesting that DSC was licensed as a lender under the California Financial Code Section 22100, or are exempt there from. The SACC alleges that “Cross-Complainant is, and at all times herein mentioned was, a corporation duly organized and existing under and by virtue of the laws of the State of Delaware, and qualified to conduct business in the State of California” (SACC Page 2, ¶ 2).

However, DSC engaged in the business of a money lender, requiring that DSC obtain a California Finance Lenders License, which DSC lacked at all times relevant in this action. California has evidenced a strong public policy to protect California borrowers when it enacted the California Finance Lenders Law (CFLL), a comprehensive statutory scheme designed to regulate consumer and commercial loans in the State. The CFLL is to “be liberally construed and applied to promote its underlying purposes and policies.” (Fin.Code, § 22001(a).) One of the purposes of the CFLL is “[t]o protect borrowers against unfair practices by some lenders.” (Fin.Code § 22001(a)(4).) Finance lenders must be licensed in order to engage in the business of making consumer loans or commercial loans in the State. (Fin.Code § 22100.)

DSC alleges it made 37 loans to Grissom in the single month of September, 2006. A "Finance lender" includes any person who is engaged in the business of making consumer loans or making commercial loans (Fin.Code § 22007) and makes more than a single loan per year (Fin.Code § 22502).

The fundamental and unwaivable character of the CFLL states in §22750 that “contracts made in willful violation of the Finance Lenders Law, including in particular violation of the requirement that a lender have a license issued by the commissioner, are void”.

DSC made a willful choice to be unlicensed when they made loans to Grissom. DSC made a willful choice to apply for a lenders license on March 1, 2008 (JNR xxxx). DSC made a willful choice to allege that “at all times herein mentioned” that they were “qualified to conduct business in the State of California” (SACC Page 2 ¶ 2), despite contradicting public records evidencing that DSC did not obtain a California Finance Lenders License until May 27, 2009, more than three years after making loans to Grissom (JNR xx Licenses)

DSC chose to be an unlicensed California lender, in violation of California statutes that prohibit a person from practicing without a license (Business & Profession Code § 16240; Practicing without license, registration, or certificate).

2. DSC’s Contract is Unconscionable

The issue of unconscionability, like illegality and public policy, is a question of law [Flores v. Transamerica HomeFirst, Inc. (2001) 93 CA4th 846, 851, 113 CR2d 376]. DSC’s Contract is one of adhesion and is procedurally unconscionable. An adhesion contract is a form contract in which one party cannot negotiate terms (Little v. Auto Stiegler, Inc. (2003) 29 C4th 1064, 1071, 130 CR2d 892, 63 P3d 979). It is often a contract that is entered into between unequal bargaining partners, such as when an individual is given a contract by a representative of a foreign corporation. A contract of adhesion is typically drafted by the party having superior bargaining strength and relegates to the subscribing party only the opportunity to adhere to the contract or reject it (Armendariz v. Foundation Health Psychcare Servs., Inc. (2000) 24 C4th 83, 113, 99 CR2d 745, 6 P3d 669).

DSC alleges that the “Promissory Note & Security Agreement” (the “Contract”) was entered into by Grissom and DSC on August 22, 2006 (SACC Page 3). The contract was unconscionable at the time it was made [CC § 1670.5(a)[Deering's]]. Subsequent evidence of unconscionability is not considered [Coast Plaza Doctors Hosp. v. Blue Cross of Cal. (2000) 83 CA4th 677, 688 & 689, 99 CR2d 809].

DSC’s Contract is a procedurally unconscionable device in which clever phrasing and false impressions are so wanton that misinterpretation is the intent. Grissom had indentured himself without the prerequisite knowledge or consent. A contract is procedurally unconscionable if it contains elements of surprise (in which supposedly agreed terms are hidden in a contract’s other terms) or oppression (in which an inequality of bargaining power results in an absence of meaningful choice) for the weaker party [Stirlen v. Supercuts, Inc. (1997) 51 CA4th 1519, 1532, 60 CR2d 138; Morris v. Redwood Empire Bancorp (2005) 128 CA4th 1305, 1319 & 1322, 27 CR3d 797].

“Substantive unconscionability” refers to oppressively one-sided or harsh terms of a contract, and generally involves cases where courts have determined the price to be unduly excessive or where the terms of the contract unduly limit a buyer's remedies. Substantive unconscionability is demonstrated by overly harsh or one-sided results [Donovan v. RRL Corp. (2001) 26 C4th 261, 291, 109 CR2d 807, 27 P3d 702]. A substantively unconscionable contract is one that no sensible man would make and such as no honest and fair man would accept.

DSC’s Contract consists of approximately seventeen pages containing phrases such as “this Note matures upon issuance” and; “The decision to make an Advance to Dealer is the exclusive right of DSC and Dealer understands that DSC may refuse to make an advance, with or without cause.” (Exhibit 2, page 3 ¶ 4) and; DSC irrevocably appoints itself as Grissom’s lawful attorney-in-fact “to act with or without the occurrence of an Event of Default and with or without notice to Dealer”.

3. DSC’s Complaint Fails to State it has a Legal Right of Action to Enforce Thirty-Seven Loans That Are Usurious and Therefore Unlawful

A complaint for damages fails to state facts sufficient to constitute a cause of action when it fails to set forth facts showing a legal duty is applicable and owed by defendant (Smiley v. Citibank (1995) 11 Cal. 4th 138, 165, 44 Cal. Rptr. 2d 441, 900 P.2d 690).

The basis for DSC's SACC is their allegation that it made thirty seven (37) advances to Grissom (which Grissom vehemently denies) between September 1, 2006 and September 29, 2006 for $123,398.61 (SACC Page 8, ¶ 47). However, California law defines a “loan” as "a contract by which one delivers a sum of money to another, and the latter agrees to return at a future time a sum equivalent to that which he borrowed." Cal. Civil Code § 1912. It is irrelevant what name DSC chooses to entitle the loans.

As DSC expressly alleges (SACC Page 3 ¶ 6) and as the Contract contemplates, the executed Contract signed by Grissom on August 22, 2006 is an agreement to make loans. The Contract is not a loan itself, and Grissom had no access or authority to obtain any funds, despite the Contract collateralizing all Grissom’s current and future assets. Grissom’s illusory benefit upon executing the Contract was that he might be allowed to apply for an advance, at DSC’s sole discretion, for an individual loan on a single vehicle. If an advance was granted it would be additionally secured by a Purchase Money Security Interest and the vehicle’s title would be in the possession of DSC.

DSC alleges that thirty seven “advances” made to Grissom were for “not less” than $123,398.61. DSC’s omits essential details regarding each of the thirty-seven loans, including the amount of each loan, the date each loan was funded, the amount of each loan, and any fees, charges and payments assessed and/or collected by DSC for each loan. The Contract states, and which DSC’s SACC omits, that “All Dealers requests for loans must include a copy of the bill of sale indicating the actual purchase price of vehicle” (Exhibit 2-4 ¶ 4(b)).

DSC alleges that Grissom refused to pay the principal balance due of $123,398.61, plus “other charges” allowed under the Contract and Agreements. However, all terms and charges pertaining to advances by DSC to Grissom are defined by the Contract which states: ‘“Advance” shall mean all loans or payments pursuant to this note made by DSC to Dealer or on Dealer’s behalf to any third party” (Exhibit 2-1 ¶ 1(a)).

a. Elements of Usury

The four essential elements of usury include a loan or forbearance, interest exceeding the statutory maximum, absolute repayability of loan and interest, and a lender with a willful intent to enter into a usurious transaction. West's Ann. Cal. Const. Art. 15, § 1. Jones v. Wells Fargo Bank, 112 Cal. App. 4th 1527, 5 Cal. Rptr. 3d 835 (2d Dist. 2003);

The elements of usury are generally, “[t]he California Constitution sets a maximum annual interest rate of seven percent on loans and forbearances, but allows parties by written contract to set the interest rate at up to 10 percent, or at the level of the Federal Reserve’s discount rate plus 5 percent, on loans or forebearances involving real property. (Cal. Const., art. XV, § 1, subds. (1)-(2).)” (Jones v. Wells Fargo Bank (2003) 112 Cal.App.4th 1527, 1534-1535 (Jones).) To be usurious, a contract “must in its inception require a payment of usury”; subsequent events do not render a legal contract usurious. (Sharp v. Mortgage Security Corp. (1932) 215 Cal. 287, 290; Strike v. Trans-West Discount Corp. (1979) 92 Cal.App.3d 735, 745.) The essential elements of a claim of usury are: “(1) The transaction must be a loan or forbearance; (2) the interest to be paid must exceed the statutory maximum; (3) the loan and interest must be absolutely repayable by the borrower; and (4) the lender must have a willful intent to enter into a usurious transaction.” As our Supreme Court has explained, "[t]he element of intent is narrow. '[T]he intent sufficient to support the judgment [of usury] does not require a conscious attempt, with knowledge of the law, to evade it. The conscious and voluntary taking of more than the legal rate of interest constitutes usury and the only intent necessary on the part of the lender is to take the amount of interest which he receives; if that amount is more than the law allows, the offense is complete.' (Ghirardo v. Antonioli, supra, 8 Cal.4th at p. 798.)

The Contract states: (1) Each transaction by DSC was a loan, as an ““Advance” shall mean all loans or payments pursuant to this note made by DSC to Dealer or on Dealer’s behalf to any third party”; (2) The interest to be paid for each loan exceeded the statutory maximum by adding charges for each loan that included: a “Floorplan Fee” of $65.00 per loan that was required to be paid within 48 hours after sale of collateral for the loan, but no later than the forty-fifth day (45th day) from date of loan; interest calculated at 12.00% (and based on the rate published in the Wall Street Journal of 8.25% plus 3.75% assessed by DSC). and charged on both the loan balance and the $65.00 floorplan fee; charging a “Late Fee” of $15.00 per week on any loan that was seven days past due. (3) The loans and interest were absolutely repayable by Grissom as the Contract entitled DSC to remove all Collateral from Dealer’s premises (Exhibit 2-6 ¶ 6) and to act with general authority as Grissom’s lawful attorney-in-fact with respect to all Dealer’s personal property and to endorse checks, drafts or any payment and deposit the same in DSC’s account; and (4) the lender must have a willful intent to enter into a usurious transaction.” Intent to exact a usurious rate of interest is conclusively presumed from a note or instrument that clearly shows on its face that it is usurious, and no evidence of intent or lack of intent is required (Wilson v. Wilson, 54 Cal. 2d 264, 5 Cal. Rptr. 317, 352 P.2d 725 (1960) cf.: Denny v. Hartley, 154 Cal. App. 2d 304, 315 P.2d 893 (2d Dist. 1957).

A person who willfully makes or negotiates a usurious interest rate and who is neither specially licensed to make or to negotiate loans nor exempted from the licensing or usury laws is

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We are very small dealer and "Goliath" took it upon himself to be judge, jury and executioner.Due to procedural and a clerical compounded with an investigator that was intimidated by Goliath, the last four and one half years have been *** BUT the bullying, has not paid off because we have stood our ground.

Keep up the good work!At 73 I will keep on fighting !


On July 3rd 2009 Grissom is holding a Press Conference at the Burbank Media Center. Grissom filed a law suit against the Department of Corporation.

Officials at the California Department of Corporations (DOC) knew for year that Dealer Services Corporation (DSC) was allegedly providing commercial Floor Plan loans to California Auto dealers without obtaining a California lenders license. As a result California mom and pop auto dealers were subject to usurious rates up to 500% by DSC.

Mr. Michael Grissom residence of Burbank, California and owner of American Family Auto (a small used car dealership in San Bernardino, CA) filed a lawsuit against Preston Dufauchard the commissioner of California Department of Corporations. Mr. Grissom made many attempts to file an internal complaint against the Los Angeles DOC after being denied access to public records received by the DOC from DSC.

Grissom contacted the DOC by phone over 100 times since November of 2008, and made seven attempts to walk in to demand these public records.

On January 27th 2009 Department of Corporation Los Angeles Office received (Statement of Identity and Questionnaire) SIQ from Claudia Susana Ponce Rogers these document were requested by Mr. Grissom once in DOC Los Angeles, California in person, and twice by phone, this document pertains to the Riverside case RIC 475298 filed July 11 2007 by Mr. Grissom.



Game Over...

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On March 3, 2009, Dealer Services Corporation (“DSC”) successfully eliminated frivolous claims of 189 million dollars and a request for punitive damages filed by failed used car dealer Michael Grissom, who previously did business as American Family Auto. The California Riverside County Superior Court granted DSC’s motion to strike Grissom’s spurious allegations for punitive and exemplary damages, as well as his claim for 189 million dollars, as improper and without any factual basis.

Plaintiff Michael Grissom borrowed approximately $200,000 from DSC in order to finance his inventory of used cars, but when his partnership with Alfred King failed, Grissom cynically turned against his partner, lenders, suppliers, and their employees, and filed suit in Riverside County Superior Court blaming everyone but himself.

The Court threw out four previous complaints filed by Grissom, as wholly insufficient, including his spurious claims of breach of fiduciary duty, breach of duty of loyalty, breach of the implied covenant of good faith and fair dealing, and conspiracy. In his final opportunity, the Court has allowed only claims for breach of contract and negligence, and disallowed his $189 million claim and his request for an award of punitive damages. More particularly, the Court...

Indicative of his baseless claims, Grissom is on his third set of attorneys and his fifth complaint and now must defend against DSC’s cross-complaint seeking recovery of $370,195.83 in treble damages, plus attorney fees and costs.

DSC vigorously responds to claims by fly-by-night dealerships who borrow money, fail at their business, and attempt to blame DSC and others for their own shortcomings. For further information contact Prenovost, Normandin Bergh & Dawe, a Professional Law Corporation, (714) 547-2444.

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Part 1

Congratulation to our youngest son U.S. Marine Lance Corporal M. Grissom is shipping out to Iraq next week, “we love you son” God Bless you and the many Marines that accompany you, on your mission, to restore equality and protection to all of us here in America.

Your Mother and I will hold the fort down with the fight against DSC as I ‘am a man of my word you will have that Auto dealership that I promised you and C.J.

Mom and I are truly Bless to have you.


Dealer Services Corporation (DSC/ “Discover DSC”) is being investigated by The California Department of Corporation. Dealer Services Corporation provides commercial inventory financing for car dealers across the nation. Apparently, since 2005 DSC has been loaning money to thousands of California auto dealers without procuring a California Lenders License. This is a direct violation of the California Financial Code. It seems that DSC is a Delaware Corporation conducting business nationwide. They operate in the State of California with 6 regional offices located in; San Jose, San Diego, Sacramento, Riverside, Norwalk, and Glendale. John Fuller’s unfair business practice could cost DSC investors Million of dollars, in fines,...

By Michael Grissom California Auto Dealers 04/26/2009

American Family Auto, principle Michael Grissom, was contacted by Southern California Auto Dealers to head a Class Action law suit against Indiana flooring plan lender Dealer Services Corporation. Apparently Grissom discovered during his investigation of DSC, had more to hide than the 11 counts alleged against the corporation. Grissom filed Breach of Contract on July 11, 2007 against DSC just after DMV investigator exonerated American Family Auto. The investigator stated that DMV was dropping the fraudulent report filed by Claudia Ponce (DSC Field Service Manager in Riverside, California).

Marquez DMV said that Floor Plan Lender often used his department to collect against dealers out of trust (default), during his investigation against American Family Auto Marquez discover Mark White one of the defendants also named in legations against DSC was walking titles directly into DSC and collected $ 73,000 on Grissom line of credit Marquez confirmed White

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