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vending machines to AIC. When the MDFC lease occurred, AIC gave
the same 10 vending machines to Septech to sell to MDFC.
In 1986, MDFC sued petitioners and their corporations for
defaulting on the MDFC lease. On August 27, 1986, a settlement
favoring MDFC was entered by the California superior court.
Under the settlement, MDFC was to receive: (1) $199,000, (2)
possession of the 10 vending machines in question, and (3) a
second priority judgment lien on property owned by petitioners in
San Bernardino County. The $199,000 was payable $10,000 on or
before July 15, 1986, and $3,150 per month for 60 months,
beginning August 1, 1986. During October 1989, MDFC filed papers
in court reflecting full satisfaction of the settlement in the
California superior court.
On September 20, 1989, MDFC’s lawyers wrote to Arthur Handel
(Mr. Handel), petitioners’ attorney, indicating that upon the
payment of the personal property taxes escrow amounts, “your
client will be the owner of the Aqualator vending machines
originally leased.” On October 18, 1994, MDFC informed Mr.
Bowden by letter that he was entitled to possession of the 10
vending machines as part of the satisfaction of judgment between
MDFC and AIC. MDFC also stated that it did not take possession
of the vending machines. MDFC by an October 25, 1994, letter
advised respondent’s agents that MDFC’s judgment against AIC and
petitioners had been fully satisfied on September 6, 1989. As a
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