Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_02-cv-00886/USCOURTS-caed-2_02-cv-00886-5/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

DAVID C. HOBSON and D.C.

HOBSON, DDS, MS, a

professional corporation,

Plaintiffs, NO. CIV. S-02-0886 WBS PAN

 NO. CIV. S-06-1805 WBS EFB

CONSOLIDATED

v.

ORDER

ORTHODONTIC CENTERS OF

AMERICA, INC. and ORTHODONTIC

CENTERS OF CALIFORNIA, INC.,

Defendants.

_____________________________

ORTHODONTIC CENTERS OF

CALIFORNIA, INC.,

Plaintiff,

v.

DAVID C. HOBSON, D.D.S., M.S.

and D.C. HOBSON, D.D.S., M.S., 

a professional corporation, 

Defendants.

----oo0oo----

Case 2:02-cv-00886-WBS-PAN Document 381 Filed 08/30/07 Page 1 of 4
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The court adopts the calculation in Exhibit J to the 1

Declaration of Matthew C. Bradford for the interest on the

judgment in Case No. Civ S-02-0886 through August 6, 2007. As of

2

Hobson is entitled to recover the full amount of the

judgment in his breach of contract action against OCA and OCC. 

In return, OCA is entitled to recover the amounts owed by Hobson

on the three underlying promissory notes. Hobson has always

acknowledged liability on the notes and has asked only that the

amounts due on the notes be applied as a setoff against his

recovery for the breach of contract.

OCA and OCC have steadfastly refused Hobson’s offers to

offset their claims on the promissory notes against his judgment

in the breach of contract action. Instead, OCC filed a complaint

to recover on the promissory notes in the California Superior

Court in San Joaquin County. Then OCC filed bankruptcy, and

while the automatic stay prevented Hobson from asserting his

offset, OCC moved for summary judgment in the state case. Before

the state court could dispose of this matter, OCC removed the

case to this court on the grounds that it is a “core proceeding”

in the bankruptcy. OCC then filed a motion to transfer venue of

this case to the United States Bankruptcy Court for the Eastern

District of Louisiana, which this court denied on January 9,

2007. (January 9, 2007 Order 5.)

OCA and OCC’s goal in throwing all of these procedural

hurdles in the way of Hobson’s efforts to offset these claims is

transparent. The $270,360 bond posted by OCA in Case No. Civ. S02-0886 would be insufficient to satisfy Hobson’s total judgment

for $444,538.88. OCA and OCC hope to satisfy their own judgment 1

Case 2:02-cv-00886-WBS-PAN Document 381 Filed 08/30/07 Page 2 of 4
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August 6, 2007, the judgment owed the Hobson’s in Case No. Civ.

02-0886 was $443,323.69. 

28 U.S.C. § 1961 provides that “interest shall be

calculated from the date of the entry of the judgment, at a rate

equal to the weekly average 1-year constant maturity Treasury

yield, as published by the Board of Governors of the Federal

Reserve System, for the calendar week preceding the date of the

judgment.” The interest rates for the relevant period are

4.78% for the week ending August 10, 2007

4.44% for the week ending August 17, 2007

4.16% for the week ending August 24, 2007. 

Applying the Federal Reserve rate on the following

schedule 4.78% for 4 days, 4.44% for 7 days, and 4.16% for 12

days, the average daily interest rate for these twenty-three days

is 4.35%, resulting in a daily increase of Hobson’s judgment in

Case No. Civ. 02-0886 of $52.83 or an increase of $1,215.19. 

The court adopts the calculation in Exhibit H to the 2

Declaration of Matthew C. Bradford for the interest on the

promissory notes through August 6, 2007. The combined interest

on the promissory notes due OCC is $21.02 per day. The court

accordingly awards a further $483.46 on the promissory notes to

account for the twenty-three extra days from August 6, 2007 to

the date of this order. 

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for $104,662.45 on the notes by levying on Dr. Hobson’s assets, 2

and then force him to find a way to satisfy the balance due on

his judgment against them – a task which they obviously intend to

make as difficult as possible. 

Fairness and equity dictate that these claims be offset

against each other. The claims arise out of the same set of

underlying facts and contractual obligations and are due to and

from the same parties. The gamesmanship must end sometime, and

that time is now. OCA and OCC are cautioned against making any

futile motions for reconsideration of this order. It is the

considered judgment of this court, after considering all of the

arguments raised by counsel. If OCA and OCC believe it is

entered in error, they of course may exercise their right of

appeal. 

Case 2:02-cv-00886-WBS-PAN Document 381 Filed 08/30/07 Page 3 of 4
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4

IT IS THEREFORE ORDERED that:

(1) Cases No. Civ. S-02-0886 and S-06-1805 are hereby

CONSOLIDATED.

(2) Hobson’s motion for summary judgment in Case No.

Civ. S-06-1805 is GRANTED, and judgment shall be entered against

Hobson in amount of $104,662.45 in that action. 

(3) Hobson’s request to offset the judgment against him

in Case No. Civ. S-06-1805 against the judgment in Case No. Civ.

S-02-0886 in which OCA and OCC are the judgment debtors and

Hobson is the judgment creditor is GRANTED. The $104,662.45

judgment in Case No. S-06-1805 is ordered off-set against the

$444,538.88 judgment in Case No. Civ. S-02-0886. The resulting

net judgment in favor of Hobson in these consolidated actions is

therefore $339,876.43.

(4) plaintiffs’ motion for enforcement of judgment

against security in Case No. Civ. S-02-0886 is hereby GRANTED.

LET JUDGMENT BE ENTERED ACCORDINGLY.

DATED: August 29, 2007

Case 2:02-cv-00886-WBS-PAN Document 381 Filed 08/30/07 Page 4 of 4