Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-01458/USCOURTS-caed-2_05-cv-01458-1/pdf.json

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

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

PROMETRIX CORPORATION, d/b/a

TRUCKEE PRECISION, INC., a

Nevada Corporation, 

Plaintiff,

v.

SIERRA NEVADA GAMING, INC., a

California Corporation 

Defendant. 

No. Civ. 05-1458 DFL KJM

MEMORANDUM OF OPINION AND 

 ORDER

Plaintiff Prometrix Corporation, d/b/a Truckee Precision,

Inc. (“Truckee”) seeks a Writ of Attachment. The court heard

oral argument on the motion on October 5, 2005. At the hearing,

the court expressed the tentative opinion that the motion for a

writ should be denied because of numerous factual disputes. 

However, upon further review of the record, prompted by the

argument of counsel at the hearing, the court now grants

Truckee’s Application for a Right to Attach Order and for Writ of

Attachment for the sum of $192,961.92. 

I.

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Plaintiff Truckee manufactures custom parts for slot

machines. (Compl. ¶ 5.) Defendant Sierra is the exclusive

gaming distributor for Truckee’s parts. (Borelli Aff. ¶ 8.) In

June 2004, Truckee and Sierra orally agreed that Truckee would

sell its slot machine parts to Sierra and Sierra would sell the

manufactured slot machines to third party buyers. (Id. ¶ 9.) 

Truckee alleges that it shipped parts to Sierra, but Sierra has

not paid the $286,201.92 balance due on these orders. (Compl. ¶

6.) Truckee has sued Sierra for $286,201.92 on three theories:

(1) breach of contract; (2) quantum valebant; and (3) damages on

account stated. 

In response to Truckee’s claims, Sierra argues that Truckee

supplied defective slot machine parts which failed to meet

industry standards. (Answer to Compl. at 3.) Sierra claims that

it sold approximately 190 slot machines with Truckee’s parts to

Maxima Worldwide Gaming Corporation (“Maxima”). (Borelli Aff. ¶

11.) Because the first fifteen machines were defective, Truckee

agreed to replace them for free. (Id.) The remaining machines

were also defective and Maxima’s customer returned them. (Id.)

Sierra invoiced Maxima $193,240 for all 190 machines. However,

Maxima has only agreed to pay Sierra $100,000 because of the

defects. (Id.)

In addition, Sierra claims that Truckee owes it $900,000.

Sierra alleges that it orally contracted with Truckee to purchase

only Truckee’s machines and to market those machines to customers

worldwide. (Answer to Compl. at 3.) In exchange, Truckee

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allegedly agreed to pay $75,000 per month for a year but has

failed to do so. (Id.) 

Sierra argues that the maximum it could owe Truckee is

$175,755.47 because: (1) Sierra has paid $493,900.00 of the

$669,655.47 Truckee has charged it; and (2) Sierra has issued a

credit memo to Truckee for $31,840.00. (Id. ¶ 12.) However, 

Sierra argues that the $175,755.47 must be reduced by the $93,240

that Maxima refuses to pay and the $900,000 for the marketing

agreement. (Id. ¶ 13.) 

Chet Mallory admits in his reply affidavit that Truckee

agreed to pay $75,000 per month, but only to fund a separate

company that the parties planned to form together. (Mallory Aff.

¶ 3.) However, according to Mallory, the parties never formed

the company. (Id.) As a result, Mallory argues that Sierra is

not entitled to a $900,000 offset. (Id.) Mallory also argues

that, despite Sierra’s claims of defective manufacturing, Sierra

still accepted the machines, shipped them to Maxima, and accepted

Maxima’s payment. (Id. ¶ 4.) Therefore, Mallory claims that

Sierra owes $286,201.92.

II.

Under Fed. R. Civ. P. 64, a federal court applies the

attachment law of the state in which it sits. California

attachment law therefore applies to Truckee’s motion. See Cal.

Civ. Proc. Code § 482.010.

To obtain a Right to Attach Order under California law, the

plaintiff has the burden to prove the probable validity of its

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claim. Cal. Civ. Proc. Code § 484.090. A claim has “probable

validity” where “it is more likely than not that the plaintiff

will obtain a judgment against the defendant on that claim.”

Cal. Civ. Proc. Code § 481.190. In making this determination, a

court must review the evidence before it and “consider the

relative merits of the positions of the respective parties and

make a determination of the probable outcome of the litigation.” 

Loeb & Loeb v. Beverly Glen Music, Inc., 212 Cal.Rptr. 830, 837

(1985). The court must consider all affidavits in support of and

in opposition to the motion. Id. The court may also receive and

consider additional evidence at the hearing. Cal. Civ. Proc.

Code § 484.090(d). 

Here, the Court must determine whether Truckee’s claim

against Sierra has “probable validity,” which requires a finding

that it is more likely than not that Truckee will prevail in its

litigation. Truckee argues that Sierra has breached the terms of

its contract by refusing to pay $286,201.92 as reflected in the

invoices. Conversely, Sierra claims that it does not have a duty

to pay $286,201.92 because: (1) Truckee miscalculated the balance

owed on the parts; (2) Truckee has failed to pay Sierra $900,000

under the oral marketing agreement; and (3) Maxima refuses to pay

Sierra $93,243.00 due to Truckee’s manufacturing defects. 

A. Truckee’s Alleged Miscalculation

The parties dispute the amount that Sierra owes Truckee for

the parts. Truckee claims that Sierra owes it $286,201.92. To

support this claim, Truckee provides twelve invoices for the

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machine parts. In contrast, Sierra claims that, at most, it

owes $175,755.47 because it has paid $493,900 of the $669,655.47

that Truckee has invoiced it from the beginning of their

relationship. However, Sierra presents no documentation to

support this claim. In response to the Court’s inquiry, counsel

did not offer any additional evidence. Given that Truckee

submitted copies of its invoices to Sierra, it was incumbent on

Sierra to reply with evidence of comparable reliability rather

than mere assertion. Therefore, the court finds that it is more

likely than not that Truckee’s calculations are correct.

B. The $900,000 Marketing Agreement

The amount of money attached by a writ “must be reduced by .

. . [a]ny claim asserted as a defense in the answer upon which a

writ of attachment could issue.” Cal. Civ. Proc. Code §

483.015. Sierra asserts in its answer that it orally contracted

with Truckee to purchase only Truckee’s machines and to market

those machines to customers worldwide. In exchange, Truckee

allegedly agreed to pay $75,000 per month for a year. Therefore,

Sierra claims that it deserves an offset for $900,000. However,

Sierra provides little evidence to support a finding that such a

contract exists. Moreover, at the hearing, Sierra could not

point to any additional evidence to support its claim. Nor has

Sierra offered any legal authority demonstrating the binding

effect of apparently vague oral promises. On this record, the

court cannot find that the alleged oral marketing contract is

enforceable. 

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C. Maxima’s $93,243.00 Balance

 Sierra argues, “There has been a failure of consideration

for the contracts . . . [because] the slot machines supplied by

[Truckee] were defective and failed to perform as required or to

meet the standard of the industry.” (Opp’n at 4.) To support

this claim, Sierra has submitted letters it exchanged with Maxima

demonstrating that Maxima refused to pay for Truckee’s defective

machines. (Opp’n Ex. A.) Ultimately, Maxima agreed to pay

$100,000 of the $193,243.00 invoice when Sierra threatened Maxima

with a suit. (Opp’n Ex. C.) Sierra claims that it is entitled

to offset its debt to Truckee by $93,243.00 because it was

Truckee’s fault that Sierra could only collect $100,000 from

Maxima. (Opp’n at 4.) As opposed to Sierra’s other contentions,

this argument is supported by a record that suggests that it may

be entitled to an offset from Truckee in the amount of

$93,243.00. The court will decrease the attachment sum from

$286,201.92 to $192,961.92.

III.

For the above-stated reasons, the Court GRANTS plaintiff

Truckee’s Application for a Right to Attach Order and Writ of

Attachment for the sum of $192,961.92. 

IT IS SO ORDERED.

Dated: October 17, 2005.

 /s/ David F. Levi 

DAVID F. LEVI

United States District Judge 

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