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Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Business Law
Satisfied Customers: 9707
Experience:  30 years of corporate, litigation and international law
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Question:A private lender made to a loan to a CA corporation.

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A private lender made to a loan to a CA corporation. The lender “called” the loan before the due date and is now suing the borrower for the return of the borrowed money. The borrower was current all payments at the time the loan was called. The interest rate was usurious by statute. The lender was not licensed (as required in CA) to make the commercial business loan. There are no personal guarantees attached to the loan.

My wife and I are the shareholders of the CA corp. We did not co-sign or borrow any money from the lender. The Corp is the sole borrower.

The lender is suing the CA corp, myself, and my wife for breach of contract and conversion. Breach of contract saying we didn’t pay back the loan when they demanded it and conversion saying we used the money for personal use and benefit…..this is speculation as they have no evidence.

They have filed a subpoena now demanding that the CA corp, myself, and my wife turn over all records associated with all business and personal bank accounts, brokerage accounts, all personal contracts….mortgage loans credit card statements etc…..huge amount of gathering.

In order to quash the subpoena I have to file a motion…..what is my best defense to turning over all very private business and personal records?
If the loan agreement was illegal due to usury and lender being unlicensed is that an adequate defense to pursue to quash the subpoena?

Hello and thank you for your question. You are in the Real Estate law category was the loan for a mortgage on real property?
Customer: replied 3 years ago.

That is odd. I entered the question in the business law section....the system must have moved it or something.

Not a mortgage collateral.

I will let the category moderator know to switch the category. I will also opt out.
Customer: replied 3 years ago.


Hello, I will try to help you. Please remember I just report or interpret the law, so the outcome may not be what you hoped for.

I am a business law expert. Have you filed an answer to the complaint? Have you retained an attorney for the corporation? Was the subpoena served prior to the time your answer was due?
Customer: replied 3 years ago.

An answer has been filed for the complaint. Over 1 year ago.

An Attorney (more than one) has been retained for the corp and myself and my wife.

The subpoena was filed just the other day, Feb 27, 2013

The reason I'm posting this question is I'm looking for a source to help validate the actions of my attorney(s).

I'm looking for input based on legal theory.


I have a couple of questions? Have you filed a motion to dismiss as to you and your wife? If yes and it was denied on what basis were you kept in the case? Did you make a motion to dismiss based on usury and if so what was the outcome?
Customer: replied 3 years ago.

My lawyers haven't filed any motions....which may be part of my issue. That is why I suspect a need a source to validate their behavior.

The subpoena is for discovery. If you have taken no action to get out of the lawsuit, for example on the basis that you and your wife are not on the note, then the other side is entitled to discovery on issues related to you and your wife. The standard for discovery is that the requested information is either admissible evidence or calculated to lead to admissible evidence. That is a very broad standard so unless there is a basis for calling it oppressive or seeking confidential information there is no basis for objecting. You need to move to dismiss yourself and you wife from the case. If you win that, then there is no basis for seeking your information.

If I have answered your question please rate my answer excellent as that is how I am compensated. If you have more questions let me know. Finally, if the answer was especially helpful you can provide a bonus. If I can be of further assistance or you have other questions in the future you can ask for me and reach me at this site.
Customer: replied 3 years ago.

So on the subpoena where it says in order to quash I need to file a motion (to avoid the production of records) that would be a "motion to dismiss myself and my wife"?

And on the corp side it would be a motion to dismiss based on the illegal nature of the lending agreement (usury and absence of lending license)?


Will the filing of these motions delay the need to produce the documents until the motion is decided on?


This is helping....I just need a specific strategy so I can manage my lawyers.....which I'm definitely not good at and they definitely resist.

Here is the process. You would make a motion to quash on the basis that neither you nor your spouse a liable on the note nor alter egos of the corporation. In support of that motion you will rely on the points made in the motion to dismiss filed by you, your wife and your corporation. The motion to quash will stop the obligation to respond to discovery until the motion is determined. However, you need to file the motion to dismiss at the same time you file the motion to quash.

If I have answered all your questions, please rate my answer excellent as that is how I am compensated. If you have more questions, please let me know.
Richard - Bizlaw, Attorney
Category: Business Law
Satisfied Customers: 9707
Experience: 30 years of corporate, litigation and international law
Richard - Bizlaw and 3 other Business Law Specialists are ready to help you
Customer: replied 3 years ago.

Thank you.

You are welcome and thank you for the excellent rating and the bonus. If you have more questions in the future on this or any other matter, please ask for me, Bizlaw. Good luck.

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