Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-04470/USCOURTS-cand-3_06-cv-04470-10/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition For Removal--Other Contract

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United States District Court

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

Philips Medical Capital, LLC, a

Delaware limited liability company,

 Plaintiff,

 v.

Medical Insights Diagnostics

Centers, Inc., a California

corporation, et al., 

 Defendants.

_____________________________/

and related cross action 

_____________________________/

No. C-06- 4470 JSW (WDB)

REPORT AND

RECOMMENDATION RE SETTING

UNDERTAKING FOR WRIT OF

POSSESSION

On October 11, 2006, we issued our Report and Recommendation re

Applications for Writs of Attachment and Writ of Possession. On January 26,

2007, the District Court adopted that Report and Recommendation in its entirety. 

Right to Attach Order and Order for Issuance of Writ of Attachment; Order

Granting Writ of Possession and Staying Redelivery, filed January 26, 2007

(“Right to Attach Order”). The Court ruled that plaintiff is entitled to a writ of

possession to obtain possession of the MRI equipment that is the subject of the

parties’ contract. However, the District Court’s Order permitted defendants to

keep possession of the MRI equipment if, by February 6, 2007, defendants posted

an undertaking in the amount $375,000.00. Right to Attach Order, at 13. In the

Case 3:06-cv-04470-JSW Document 83 Filed 03/21/07 Page 1 of 4
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event defendants failed to post the requisite undertaking, the Court authorized

plaintiff to promptly move the Court for a determination about plaintiff’s

obligation, if any, to file an undertaking in order to obtain issuance of a writ of

possession.

Defendants have not posted an undertaking. Accordingly, on February 9,

2007, plaintiff filed its Motion for Determination of the Amount of Plaintiff’s

Undertaking Required Pursuant to CCP §515.010 (“Motion”). On February 12,

2007, Judge White referred plaintiff’s Motion to the undersigned. In its Motion,

plaintiff asks the Court to waive the requirement that plaintiff file an undertaking. 

On February 28, 2007, defendants filed their Opposition to plaintiff’s request.

On March 14, 2007, this court conducted a hearing in connection with

plaintiff’s Motion. 

On March 20, 2007, defendants filed their Withdrawal of Defendants’

Opposition to Motion for Determination of the Amount of Plaintiff’s Undertaking. 

Defendants no longer oppose plaintiff’s request that the Court waive the

requirement that it file an undertaking.

Accordingly, the court makes the following REPORT AND

RECOMMENDATION.

I. Plaintiff’s Undertaking

Section 515.010 of the California Code of Civil Procedure provides:

(a) Except as provided in subdivision (b), the court shall not issue . . .

a writ of possession until the plaintiff has filed an undertaking with

the court. The undertaking shall provide that the sureties are bound to

the defendant for the return of the property to the defendant, if return of the property is ordered, and for the payment to the defendant of any sum recovered against the plaintiff. The undertaking shall be in an

amount not less than twice the value of the defendant’s interest in the

property or in a greater amount. The value of the defendant’s interest

in the property is determined by the market value of the property less

the amount due and owing on any conditional sales contract or

security agreement and all liens and encumbrances on the property,

Case 3:06-cv-04470-JSW Document 83 Filed 03/21/07 Page 2 of 4
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and any other factors necessary to determine the defendant’s interest

in the property.

(b) If the court finds that the defendant has no interest in the property, the court shall waive the requirement of the plaintiff’s undertaking

and shall include in the order for the issuance of the writ the amount

of the defendant’s undertaking sufficient to satisfy the requirements of

subdivision (b) of Section 515.020.

Plaintiff contends that the value of ‘defendants’ interest in the property’

refers essentially to defendants’ equity interest in the MRI equipment. In our

October 11th Report and Recommendation we recommended that the District

Court find that plaintiff had proffered evidence that would support a finding that

the current (“forced sale”) market value of the property is $375,000.00. Plaintiff

also proffered evidence that defendants owe more than $2.8 million under the

parties’ contract. Declaration of Ray Crouse, at ¶23. Because defendants appear to

owe plaintiff more than the value of the MRI equipment, the evidence supports a

finding that defendants have no equity in the equipment. Plaintiff, therefore, asks

us to waive the undertaking requirement pursuant to Cal. C.C.P. §515.010(b). 

Defendants now do not oppose this request. Because the request is

unopposed and because the evidence supports a finding that defendants have no

interest in the MRI equipment, we RECOMMEND that the District Court WAIVE

the requirement that plaintiff file an undertaking to obtain a writ of possession in

accordance with Cal. Code Civ. Proc. §515.010(b).

II. Defendants’ Undertaking

Section 515.010(b) directs the Court to “include in the order for the issuance

of the writ the amount of the defendant’s undertaking sufficient to satisfy the

requirements of subdivision (b) of Section 515.020.” For the reasons stated in the

October 11th Report and Recommendation, we RECOMMEND that the District

Court find that the amount of defendants’ undertaking necessary to regain

possession of the property should remain $375,000.00.

Case 3:06-cv-04470-JSW Document 83 Filed 03/21/07 Page 3 of 4
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CONCLUSION

We RECOMMEND that the District Court find that (1) the Clerk of the

Court should promptly issue the writ of possession for the MRI equipment, (2)

plaintiff’s requirement to file an undertaking is waived, and (3) defendants may file

an undertaking in the amount $375,000.00 in order to keep or regain possession of

the MRI equipment.

IT IS SO REPORTED AND RECOMMENDED.

Dated: March 21, 2007

 

WAYNE D. BRAZIL

United States Magistrate Judge

Copies to: 

parties, 

JSW, wdb, stats

Case 3:06-cv-04470-JSW Document 83 Filed 03/21/07 Page 4 of 4