Thursday, October 7, 2010

Northern District of California Judge orders MRI company to refund deposit

An MRI Machine, Photo courtesy of Wikimedia.

San Jose Judge Ronald M. Whyte granted judgment for Matt Malek Madison in an MRI machine sale after a bench trial week long bench trial at the end of August.  The judgment required Fonar Corp. to return Mr. Madison's $300k with prejudgment interest from 2006.

According to Court documents, Mr. Madison sought FONAR Corp. to purchase four MRI machines for installation in the Bay Area.  He provided a $300,000 deposit and the rest would be paid upon his finding a suitable location for the machines.  Mr. Madison "did little" to locate such a place, mostly because he could not find other investors to raise the capital.  He wrote FONAR and asked for his deposit back.  As Judge Whyte explains:
The parties disagree as to what was intended by the language: "After 90 days if we do not find any location, we will request full refund of the deposit (at any time before 12 months)." FONAR claims it meant that Madison was not entitled to a refund if he failed to request it within the twelve month period. Madison, on the other hand, submits the language was intended to provide that FONAR was to pay interest on his deposit from the date he requested a refund (at least 90 days after his deposit) to the date on which FONAR actually returned the deposit during the 12 month period. The language, according to Madison, did not require him to make a demand for the return of the deposit after 12 months because FONAR was obligated under FONAR’s Terms of Sale to return the deposit if locations were not found within the 12 month period.
Judge Whyte noted that the contract clause, most reasonably meant that Madison would receive his deposit back if the parties could not agree on a location for the MRI machines.  Accordingly, he granted judgment for Mr. Madison with prejudgment interest dating from the time FONAR refused to give the deposit back.

The Case is Madison v. FONAR Corp. No. C 07-4211 and the opinion is below the jump.

Madison v. Fonar Corp.

No comments:

Post a Comment