Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_07-cv-05795/USCOURTS-cand-5_07-cv-05795-0/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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28 This disposition is not designated for publication and may not be cited. 1

Case No. 07-05795-JF

ORDER GRANTING PLAINTIFF’S APPLICATION FOR ORDER OF WRIT OF ATTACHMENT

(JFEX2)

**E-Filed 2/11/2008**

NOT FOR CITATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

EVERFLOW TECHNOLOGY CORPORATION,

incorporated under the laws of the Republic of

China (Taiwan),

 Plaintiff,

 v.

MILLENIUM ELECTRONICS, INC., a California

corporation,

 Defendant.

Case Number 07-05795-JF

ORDER GRANTING PLAINTIFF’S 1

APPLICATION FOR ORDER OF

WRIT OF ATTACHMENT

Plaintiff, Everflow Technology Corp. (“Plaintiff”) moves for an Order granting a Writ of

Attachment pursuant to § 483.010 of the California Code of Civil Procedure. The motion is

opposed by Defendant Millenium Electronics, Inc. (“Defendant”). The Court has considered the

moving and responding papers and the presentations at the hearing on February 8, 2008. For the

reasons set forth below, Plaintiff’s application will be granted without prejudice to a future

application by Defendant to reduce the amount of the attachment.

Case 5:07-cv-05795-LHK Document 19 Filed 02/11/08 Page 1 of 6
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Case No. 07-05795-JF

ORDER GRANTING PLAINTIFF’S APPLICATION FOR ORDER OF WRIT OF ATTACHMENT

(JFEX2)

I. BACKGROUND

Plaintiff is a specialized fan manufacturer located in Taiwan. The fans manufactured by

Plaintiff are used by large computer manufacturers that incorporate them into computers, which

are sold retail. Defendant is a California corporation located in San Jose, California. It markets

cooling systems directly to computer assembly companies for incorporation into the individual

personal computer designs sold by those companies. 

Defendant used Plaintiff’s fans as part of Defendant’s cooling systems. Plaintiff entered

into a series of agreements to deliver computer cooling products to Defendant. Defendant

allegedly agreed to wire payment for each shipment of goods within forty-five (45) days. 

Plaintiff claims that Defendant ordered goods from Plaintiff and took delivery, but that

Defendant has failed to pay in excess of $2,000,000 owed to Plaintiff. 

II. LEGAL STANDARD

Fed. R. Civ. P. 64 provides that “[a]t the commencement of and throughout an action,

every remedy is available that, under the law of the state where the court is located, provides for

seizing a person or property to secure satisfaction of the potential judgment. The remedies

available under this rule include . . . attachment . . .” Fed. R. Civ. P. 64. “The effect of Rule 64

is to incorporate state law to determine the availability of prejudgment remedies for seizure of

property to secure satisfaction of a judgment ultimately entered.” Post-A-Traction, Inc. v.

Kelley-Springfield Tire Co., 112 F.Supp2d 1178, 1181 (C.D. Cal. 2000). 

California Code of Civil Procedure § 481.010 et seq. provides the procedures and

grounds for obtaining orders granting prejudgment writs of attachment. An order of attachment

may be issued only in an action for a claim of money, based upon an express or implied contract,

in which said claim is for a fixed or readily ascertainable amount not less than $500, exclusive of

cost, interest, and attorney’s fees. C.C.P. § 483.010(a). The claim may not be secured, C.C.P. §

483.010(b), and must be a commercial claim. C.C.P. § 483.010(c). Before an order for

attachment is issued, the Court must find all of the following: (1) the claim upon which the

Case 5:07-cv-05795-LHK Document 19 Filed 02/11/08 Page 2 of 6
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Case No. 07-05795-JF

ORDER GRANTING PLAINTIFF’S APPLICATION FOR ORDER OF WRIT OF ATTACHMENT

(JFEX2)

attachment is based is one upon which attachment may be issued; (2) the plaintiff has established

the probable validity of the claim upon which the attachment is based; (3) the attachment is not

sought for a purpose other than the recovery on the claim upon which the attachment is based;

and (4) the amount to be secured by the attachment is greater than zero. C.C.P. § 484.090(a). 

The burden is on the moving party to establish grounds for an order of attachment. Loeb and

Loeb v. Beverly Glen Music, Inc., 166 Cal.App.3d 1110, 1116 (1985). 

III. DISCUSSION

In the instant case each of the requirements of § 483.010 of the California Code of Civil

Procedure is satisfied. First, Plaintiff has an express contract with Defendant. The contract is a

wholesale commercial contract wherein Plaintiff has promised to supply Defendant with goods

on credit, and Defendant has promised to pay Plaintiff within forty-five (45) days for all goods

received. Second, the invoices supplied by Plaintiff show a total outstanding debt of

$1,894,176.27, showing that there is a readily ascertainable amount due and owed. Plaintiff has

requested a writ of attachment in this amount, as opposed to the total amount of damages alleged

in the complaint, because it recognizes that the alleged additional debt, which is comprised of

cancellation charges and retooling charges, is not readily ascertainable. Third, the amount

sought, exclusive of cost, interest, and attorney’s fees, far exceeds the statutory minimum. 

Fourth, the claim is unsecured. Fifth and finally, the attachment is being issued for a claim

arising out of the conduct by the defendant of a business, thereby making it a commercial claim.

Plaintiff also has met each of the requirements of § 484.090. The second requirement of

§ 484.090(a), that the plaintiff must establish the probable validity of the claim upon which the

attachment is based, merits brief discussion. If the validity of Plaintiff’s claim is opposed by

Defendant “the court must 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., 166 Cal.App. 3d 1110, 1120 (1985). 

As detailed above, Plaintiff asserts that it contracted with Defendant to supply goods on

credit. Thereafter, Plaintiff would bill Defendant for the goods provided and Defendant would

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Case No. 07-05795-JF

ORDER GRANTING PLAINTIFF’S APPLICATION FOR ORDER OF WRIT OF ATTACHMENT

(JFEX2)

pay the invoice within forty-five (45) days of its receipt. Plaintiff alleges that it shipped

Defendant goods for over a two year period and that Defendant has failed to pay a majority of the

invoices associated with those goods. Defendant contends that the products in question were not

timely shipped, which resulted in losses to Defendant and its customers, that Plaintiff is

withholding services for which Defendant has already paid, that Plaintiff is making claims for

products that were never shipped, and that the amount that Plaintiff alleges in its application for

order of writ of attachment is incorrect.

Plaintiff provides specific information with respect to the contractual relationship

between the parties as well as detailed allegations with respect to Plaintiff’s services and

Defendant’s subsequent breach. Plaintiff has submitted extensive documentation in the form of

purchase orders, invoices, and a list of all outstanding debts.

In contrast, Defendant’s assertions with respect to the merits are notably sparse. 

Defendant’s opposition brief is sex sentences in length. The supporting evidence is weak and

subject to numerous evidentiary objections. The declaration of Defendant’s president provides

few, if any, specific details. While Defendant claims that shipments of goods were delayed, the

declaration does not state which shipments were delayed, or for how long, nor does it state the

type and amount of losses suffered. Defendant also claims that Plaintiff withheld certain

services, but it provides no evidence to that effect. Finally, Defendant asserts that the amount

that Plaintiff claims it is owed is incorrect. But an exhibit Defendant attaches to its opposition

brief indicates that Plaintiff is owed at least $1,420,897.12. 

Plaintiff properly objects that the declaration provided by Defendant lacks foundation

because it does not allege that the declarant has personal knowledge of facts contained therein. 

Plaintiff also properly objects to Defendant’s open invoice as undeniable hearsay. Because

Defendant provides no information on how the document was created, who created, where it

came from, what it purports to prove, or even what it is, it may not be admitted under the

business record exception to the hearsay rule. 

 Pursuant to the above discussion, and in light of Plaintiff’s uncontested assertion that

Defendant’s failure to pay its bills may be an indication of ill financial health that may impair

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Case No. 07-05795-JF

ORDER GRANTING PLAINTIFF’S APPLICATION FOR ORDER OF WRIT OF ATTACHMENT

(JFEX2)

Plaintiff’s ability to collect damages in the event that it prevails at trial, it is appropriate that a

writ of attachment be ordered in the amount requested by Plaintiff.

IV. ORDER

For the reasons set forth above, this Court GRANTS Plaintiff’s application for a writ of

attachment. An order of attachment in the amount of $1,894,176.27 shall be issued without

prejudice to a future application by Defendant to modify the amount of the attachment. Plaintiff

shall post the statutory bond prior to issuance of the writ. IT IS SO ORDERED.

DATED: February 11, 2008

 

JEREMY FOGEL

United States District Judge

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Case No. 07-05795-JF

ORDER GRANTING PLAINTIFF’S APPLICATION FOR ORDER OF WRIT OF ATTACHMENT

(JFEX2)

This Order has been served upon the following persons:

Counsel for Plaintiff

Mfang@MarkFangAPC.com

Counsel for Defendant

mrf@structurelaw.com

Case 5:07-cv-05795-LHK Document 19 Filed 02/11/08 Page 6 of 6