GRISSOM VS DEALER SERVICES CORPORATION

5TH AMENDED COMPLAINT

IF YOU HAVE BEEN DAMAGES BY DSC CALL THE MAN WHO MADE DEALER SERVICES

COPRORATION “GET A CALIFORNIA FINANCE LICENSE”

MICHAEL GRISSOM 818 749-3288 IF YOU WOULD LIKE TO OFFER LEGAL ASSISTANCE OR

INFORMATION AGAINST DEALER SERVICES CORPORATION E MAIL YOU RESPONSE TO

supermgauto@charter.net

FACTS COMMON TO ALL

On March 10, 2006 Plaintiff Michael Grissom dba American Family Auto (AFA) acquired a retail
auto dealership lot at 1071 North E Street, also known as 1035A North E Street San Bernardino,
CA 92410. The said property was acquired through a lease-purchase agreement in the amount
of $1,300,000. See Exhibit (A)

On or about March 12, 2006 Plaintiff Michael Grissom met with Defendant Alfred King to discuss
and agree upon terms for Mr. King to supply vehicles to AFA. The terms of the relationship and
oral agreement were mutually agreed upon and were as follows:
(a) Mr. King at all times during the relationship would be an independent contractor. He
would not be a partner, dealer, employee, nor would he hold any interest stake in the
dealership AFA
(b)Mr. Grissom and Mr. King agreed that King would supply all inventory/vehicles on a
consignment basis from multiple vendors to AFA.
(c)Mr. Grissom and Mr. King agreed that King would receive a fee of $300 per sold vehicle
for his service.
(d) It was discussed and agreed that Vendors would be paid for vehicles supplied once cars
were sold and consumer bank financing paid to AFA.
(e) It was agreed that AFA had the first right of refusal for any and all vehicles presented to
the retail location by Mr. King from various vendors.
(f) It was an implied term of the overall agreement that both parties would act reasonably
and in good faith towards each other.
(g) Nothing else was expressed or implied under this verbal agreement.

The Plaintiff Mr. Grissom alleges that sometime during this meeting Defendant Alfred King
mentioned that he had a working relationship with a vendor, Defendant Mark White of Dial
Finance which would supply unlimited consigned vehicles. Mr. Grissom relied on this
information and went on to start a marketing campaign based on this knowledge.

On or about April, 2006 Plaintiff Mr. Grissom met with Defendants Mr. King and Mr. White to
evaluate AFA retail location where Dial Finance would supply vehicles. During this meeting the
terms of the relationship and mutual oral agreement were set forth as follows:
(a)Mark White stated “I can supply you with as many cars as need to fill your lot”
(b)Mr. White asked Mr. Grissom “how many cars do you think you can get on this lot”. Mr.
Grissom replied “approximately 160 cars”
(c)Mr. White requested that AFA obtain Bank Lenders for consumer purchase of vehicles
(d) Mr. Grissom explained that AFA was applying with multiple banks to secure consumer
lending for auto purchases
(e)Defendant Mark White and Plaintiff Mr. Grissom agreed that vehicles would be supplied
on a consignment basis only.
(f)It was agreed that AFA had the first right of refusal for any and all vehicles presented
to the retail location by Mr. White of Dial Finance.
(g)It was mutually agreed and understood that Mark White/Dial Finance could remove
supplied inventory without notice.
(h) Mr. Grissom and Mr. White agreed that Dial Finance would supply safety items (tires,
jacks, etc) to vehicles as needed.
(i) It was discussed and agreed that Dial Finance would be paid for vehicles supplied once
cars were sold and consumer bank financing paid to AFA.
(j)It was discussed and agreed that Mark White of Dial Finance would be independent of
AFA. He would merely be a vendor/supplier of inventory to AFA. He would not be a
partner, employee, nor hold any interest in the dealership known as AFA.
(k) It was an implied term of the overall agreement that both parties would act reasonably
and in good faith towards each other.
(l) Nothing else was expressed or implied under this verbal agreement.

On or about April 29, 2006 Defendant Mark White of Dial Finance started supplying Michael
Grissom/American Family Auto with vehicles for retail sale.
On May 5, 2006 American Family Auto received their license from California DMV as an Auto
Dealer/Broker.

On or about May, 2006 Mr. King spoke with Mr. Grissom and stated that Mark White had a “hook-
up” at a Flooring Finance Company out of Wichita, Kansas called DSC. He went on to explain
that Mr. White felt that if Mr. King would sign as the guarantor the loan (due to Mr. Grissom/AFA
low credit score) AFA would be approved for a $100,000 line of credit. At this time AFA did not
act on this offer due to existing agreements from vendors. AFA was supplied with consignment
vehicles without the added expense of daily interest and fees associated with Flooring Finance.
In addition Mr. Grissom had already applied for an $180,000 2 nd mortgage on his home to fund
AFA, and did not feel the credit line was needed.

On May 20, 2006 AFA received a faxed application from DCS Corporate office in Wichita, Kansas
for Flooring Finance Line of Credit. Mr. Grissom filed the application away and did not apply.
From on or about May 2006 to June 2006 AFA received cumulative inventory from Dial Finance
totaling over $375,000. By the end of July 2006 AFA TV commercials and advertising proved
successful. Sales were increasing and AFA had acquired multiple lenders for retail customer
financing. In the month of July AFA received approximately $650,000 of consignment vehicles
from Dial Finance alone.

On or about July 2006 Alfred King mentioned to Mrs. Stephanie Grissom that he was having
financial difficulty and was about to loose his home in Riverside, CA.

On July 13, 2006 Mr. King had a meeting with Mr. Grissom and revealed that Carlos Bosch of
Bosch Auto Group would supply AFA with $130,000 of inventory. Mr. Grissom and Mr. King went
to Bosch Fontana dealership to see the vehicles. A verbal agreement was entered into between
Carlos Bosch and Michael Grissom as follows (see exhibit b-e):
(a)Carlos Bosch of Bosch Auto Group would supply AFA with approximately $130,000 of
vehicles.
(b)It was agreed between Bosch and Grissom that AFA would pay slightly higher than
wholesale for the vehicles because $130,000 was not paid in advance.
(c)It was mutually agreed that Grissom would pay Bosch $10,000 per week until debt
paid.
(d) It was discussed and agreed that Carlos Bosch of Bosch Auto Group would be
independent of AFA. He would merely be a vendor/supplier of inventory and not
entitled to a portion of AFA profits once vehicles were sold. He would not be a partner,
employee, nor hold any interest in the dealership known as AFA.
(e) It was an implied term of the overall agreement that both parties would act reasonably
and in good faith towards each other.
(f) Nothing else was expressed or implied under this verbal agreement.
 On July 20, 2006 Michael Grissom and Carlos Bosch renegotiated the terms of the oral
agreement. Multiple vehicles received from Bosch needed costly repairs and left little to no
profit for AFA. Each party agreed that AFA would repair the vehicles and Bosch would adjust
the sales price to cover the cost of repairs. (see exhibit D). No other terms of the original
verbal agreement were changed.

It was understood between both parties that Bosch would supply all titles and documents
for vehicles as required by California DMV code and State laws. Grissom contacted Bosch on
multiple occasions for the title to a 1995 Dodge Intrepid paid for by AFA. (see exhibit c, line
3, Bosch Stock# C2623A). To date AFA has not received the title to this car and could not
sell it. Bosch admitted that he could not obtain the title and refused to refund AFA its full
purchase price of the vehicle. Causing Damages of lost profit, an storage fees.

Under the terms of renegotiated agreement between Bosch and Grissom, multiple cars
needed repairs and price adjusting, including but not limited to, Bosh stock numbers
U3659A, U3712A, C2523A and 7428A. (see exhibits b-d). Mr. Bosch was aware of the
condition of the vehicles as they were inspected by his service dept prior to selling them to
AFA. When the above listed cars were picked-up from Bosch Fontana, service hats were on
the vehicles, indicating inspection by Bosch.

On or about July 21, 2006 Mark White and Alfred King continued to urge Michael
Grissom/AFA to apply for the credit line with DSC. They went on to explain how the
Flooring Finance would help American Family Auto establish business credit and would be
helpful in the growth of AFA.

On July 31, 2006 at the directions of White, AFA received another faxed application for a
line of credit from DSC Corporate office in Wichita, KS. Mrs. Stephanie Grissom was
directed by Mr. Grissom to complete the application for a $200,000 line of credit; Michael
Grissom and Alfred King signed (see exhibit e). Under “Signor 1 Information” of DSC
application for credit, Michael Grissom clearly listed himself as the only “100%” owner of
AFA. “Signor 2 Information” of the application listed Alfred King as the guarantor only.

On or about August 22, 2006, defendant DSC contacted plaintiff Mr. Grissom and asked when he
and Mr. King would be available to sign the contract for a $200,000 credit line. Grissom stated
he and King could come in later that afternoon to sign. Mr. Grissom and
Mr. King met that same day at the Riverside DSC office. Mr. Grissom met with DSC Field Service
Manager Claudia Ponce, DSC appointed Dealer Rep Rosa Macias and Mr. Alfred King. Grissom
reviewed the contract independently before signing the agreement (see exhibit f). Grissom was
told that it takes about seven days for DSC corporate office to process the application.

At this meeting Claudia Ponce reviewed the contract with plaintiff Michael Grissom and
defendant Alfred King. Claudia explained to Grissom and King that Mr. King was to be the
guarantor of the line of credit within the meaning of the contract. She went on to explain
that Mr. Grissom was the owner of American Family Auto, meaning that Michael Grissom was
one hundred percent responsible for the vehicles placed on American Family Auto Credit Line.
Claudia further clarified the role of Mr. Alfred King by saying that if Michael Grissom defaulted
on his payments to DSC, Mr. ALFRED KING would be responsible as the guarantor of the loan.

Claudia Ponce asked Mr. Grissom to acknowledge and initial specific items of DSC contract
Term Sheet and Power of Attorney Sheet. Mr. King was excluded from signing the term sheet
and Power of Attorney. Mr. King was directed to acknowledge and sign the Individual Personal
Guaranty Sheet only.

During this same meeting on August 22, 2006 Claudia went on to say that “Mr. King could enter
vehicles …” on the Flooring Finance of AFA. The plaintiff Mr. Grissom objected to that
statement and at that time turned to defendant Rosa Macias (AFA’s Dealer rep at DSC) and
stated that “Mr. King is not a dealer, not an employee nor a partner of AFA, he has no interest
in the dealership…” DSC employee Rosa also stated that “Mr. King could put any vehicles …” on
the Flooring Finance and that “Mr. King was equal to Mr. .Grissom…” The plaintiff explained
again to Rosa that “Mr. King only supplied AFA vehicles on consignment for a fee”. Mr. Grissom
repeatedly objected to defendant Mr. King having access to AFA’S Flooring Finance. No portion
of the contract was pointed out or reviewed with Mr. Grissom that gave Mr. King, the guarantor,
access and or use of AFA’s line of credit. Finally, Mr. Grissom asked Rosa to contract him before
placing any vehicles on the Flooring Finance; she replied “I’ll try”.

On or about August 30, 2006 American Family Auto received a congratulatory letter from DSC
(dated August 29, 2006) for a $200,000 line of credit. Unbeknownst to AFA, this same day
defendant DSC started accepting titles against AFA Flooring Finance Credit Line without
Knowledge or consent of Michael Grissom/AFA. DSC continued to maliciously and carelessly
accept titles from defendants Mr. King, Bosch Auto Group and Mark White of Dial Finance. As to
conceal this transaction from Mr. Grissom, each of defendants’ where aware that industry
standards requires a letter of consent from the dealer to receive payment on any vehicle. DSC
Sole proprietor certificate require the name of all persons authorized to be listed to purchase
vehicles on the credit line, this document is the lenders letter of consent giving authorities by
the dealer to the lender, to carry out the dealer demands, by the contract. Without any of the
above mention a lender can not render any payments unless it first seeks approval from the
dealer or have in its possession a signed draft by the dealer. Plaintiff has received forged
documents presented by Bosch in its’ discovery that may have be given to DSC to collect on
these vehicles DSC has refused to release its’ copy’s of those document during its’ discovery. A
violate each were a misuse of AFA’s Flooring Finance, DSC paid legal tender directly to
defendants Bosch and Dial Finance converting funds drawn on AFA credit line. This action was
against DSC’s own “Term Sheet” and signed contract.

Within two (2) calendar days plaintiff Michael Grissom (AFA) owed DSC approximately $133,183
not including interest and Floorplan fees due to DSC’s reckless and blatant abuse of AFA’s credit
line. (See exhibit f). Furthermore, defendant Claudia Ponce independently and without prior
authorization or knowledge of Mr. Grissom, accepted and paid for titles on the following
vehicles already sold by AFA:
(a) DSC Stock # 1 - 1995 Jeep VIN # 784873 – Sold 08/17/2006 - Paid to Bosch 09/01/2006 (See exhibit g)
(b) DSC Stock # 15 -1999 Chevy VIN # 303579 - Sold 08/20/2006 - Paid to Bosch 09/01/2006 (See exhibit h)
(c) DSC Stock # 22 -1999 Lexus VIN # 041670 - Sold 08/07/2006 - Paid to Dial 09/07/2006 (See exhibit I)
(d) DSC Stock # 16 - 2005 Ford VIN # R10624 - Sold 08/20/2006 - Paid to Dial 09/01/2006(See exhibit j)

On or about October 26th 2006, AFA and DSC held a meeting. It was at this time that Claudia,
Rosa and DSC West Coast Regional Manager Troy Rogers walked the entire lot of AFA for the first
time to physically inspect all the cars now belonging to DSC. At this meeting, it was also
revealed that some of the vehicles accepted by Claudia on the flooring had already been sold.
As listed above. Claudia admitted that it was fraud for AFA to have cars on its Flooring Finance
that were already sold. Claudia asked why Grissom did not tell her that Alfred King was
committing fraud. Michael Grissom explained to Claudia that he had no knowledge that Alfred
King was committing fraud. Mr. Grissom picked-up the phone to dial the police to report the
fraud and Claudia said “hold on we can work something out”. Claudia stated that we could file
a report with DMV together against Mr. King. Grissom stated that he never requested an
advance for “Purchase Money Inventory” for the above listed sold vehicles that caused AFA to
be out of trust. Nor did he give authorization to DSC for the first twenty-five (25) vehicles that
were accepted onto the Flooring Finance Line of Credit. Finally Mr. Grissom reminded Claudia
that he requested multiple times, during and after the signing of the contract, not to let
anyone place vehicles on AFA’s flooring. Claudia and Rosa ignored Grissom’s protest and or
objections and continued to accept title after title from anyone who presented it to DSC for
payment without prior authorization from the dealer in violation of their own policies and
contract. At the end of this discussion/meeting Claudia, Rosa and Troy looked at each other and
Claudia said “let’s take a break”. During the break Claudia was on her cell phone and Mr.
Grissom spoke with Claudia’s manager Troy and reiterated that “I had nothing to do with nor
did give approval for those cars to be placed on AFA’s credit line”. Troy stated that it was
“Claudia’s decision to let you keep the cars”. The meeting resumed and Claudia stated that she
was going to repossess the cars on the Floor plan.

Claudia led Mr. Grissom to believe that DSC was filing a complaint in conjunction with AFA
against Mr. King. Instead she filed a DVM complaint against AFA for fraud.

Defendant Claudia Ponce working within the scope of her duty as a manager at DSC
called Plaintiff Mr. Grissom following the repossession of DSC vehicles asking for payments.
Grissom asked Claudia if there was someone who could provide him with more vehicles so that
he could continue to conduct business. Mr. Grissom was acting under DSC’s misrepresentation
that Mr. King could place vehicles on the Flooring Finance and that Mr. Grissom was responsible
for that debt. Claudia replied by saying “when I took your vehicles, I put you out of business.
People are saying it is just a matter of time before your doors are closed, and I do not know
any one that would touch you” Plaintiff is informed and believes that Claudia told AFA vendors
that she had closed down AFA. There was also a comment in the Riverside Auto Auction
computer about American Family Auto, in which it was alleged that Claudia stated that “these
people don’t pay” Mr. Grissom later found out that Claudia placed a nationwide stop on AFA
preventing Grissom from purchasing anymore vehicles from any auction. Claudia continued to
maliciously interfere with AFA business operations by directing several of AFA’s In-House
financed customers not to pay. She specifically told AFA customer, Miss Lisa Alverez who
purchased a 1999 Lexus RX3, not to pay AFA and that she should pay money directly to DSC as
they now hold the title after accepting the vehicle on Flooring without Grissom consent. Up
until the date of this filing Miss Alvarez has not made any payments to AFA. Continuing in her
destructive and willful manner, defendant Claudia went on to contact AFA’s consumer bank
lenders. Plaintiff believes and is informed that Claudia called AFA’s lenders and told them that
“she put AFA out of business”. She instructed these banks to forward payments directly to DSC
and not to pay AFA. As a result, AFA bank’s attempted to attach Grissoms’ bond, leaving AFA
business without consumer bank financing. As a result lenders sent AFA a demand letter for
titles of sold vehicles that defendants Bosh and Mark White of Dial finance had submitted to
DSC. Claudia’s’ interference with AFA’s contractual obligations to its lenders was unjust as she
knew Grissom did not place the above listed cars on the Flooring Finance.
The above mention actions, misrepresentations, repossession of inventory and interference
with business relationships by Defendants Claudia and Rosa of DSC did lead to the closing of
AFA. In addition Claudias’ ongoing and unfair dealings lead AFA consumer lenders to believe
that AFA was a risk and harmed potential future business with said lenders. She tarnished
Grissoms character and business reputation. Furthermore, Claudia and Rosa’s intentional
inflection of harm and or fraud, directly led to AFA’s loss of land in the amount of $1,300,000,
loss of inventory in the amount of $1,958,281; loss of customers, receivables, and future
business relationships. In addition the defendants Claudia and Rosas’ intentional, unfair and
negligent acts caused AFA cumulative and ongoing estimated damages of $9,798,503.73 plus
interest, to be proven at trial.

Defendants DSC by their conduct failed to audit and physically inspect each vehicle at the time
vehicles were placed on the floor plan by defendants Bosch, King and White of Dial Finance.
The Audit is an essential component of Credit Line maintenance. The Comptroller’s Handbook
for Floor Plan Loans state that “procedures for flooring verification must be in place…and
vehicles verified to be unsold and in the dealer’s possession (see exhibit k, page 2 paragraph
3). Instead, DSC continued to accept draft after draft from anyone who presented it to them
without prior authorization, knowledge or consent of the Dealer Michael Grissom in violation of
its own policies and contract.

Claudia failed to conduct due diligence which meant that Bosch and Mark White of Dial Finance
were walking vehicle titles to DSC and collecting payments made out on the credit line of AFA,
without the knowledge and consent of the owner Grissom. This allowed Bosch to breech an
existing oral contract with AFA and collect not less than $68,000. In addition Claudia’s direct
payment to Make White of Dial Finance, of no less than $73,000, without approval or
knowledge of Plaintiff Grissom, did breach AFA’s oral agreement with Mark White.

Plaintiff Mr. Grissom contacted DSC Carmel, Indiana Corporate office; because Claudia’s
manager Troy was offering no remedy for Claudia’s negligence of paying on titles without AFA’s
approval or knowledge and subsequent repossession of those vehicles. Grissom was referred to
Mark Cornelius and they spoke at length. Grissom asked what was DSC’s policy and procedure
for placing vehicles on a dealer Flooring Finance. He replied as follows:

(a) First, DSC contacts the dealer before placing vehicles on the line of credit for approval
(b) Second, DSC agents “book out” the vehicle value
(c) Third, collect the proper documents
 (d) Fourth, inspect the vehicle at the time of entering vehicle on the Floor Plan

Grissom told Cornelius that Claudia didn’t do those things, Cornelius went on to say that
Claudia was negligent if she didn’t do those things. Mr. Cornelius told Mr. Grissom that he would
check into things and call him back in a few days. Several days later Grissom called back to
follow-up and Mr. Cornelius was no longer with the company and was replaced by a Mr. Mark
Finley the Plaintiff believes the Mr. Cornelius was fired by DSC