Count V alleges that Pace breached an express warranty to Prim and Fun Factory that its Island Fruit games were legal under Hawaii law....
Prim says that Pace “assured” Prim “that this game is skill based, and there shouldn’t be a problem with this game, at all, from the Vice squad.” Despite this assurance, the record also reveals that the parties also made jokes about being “locked up” because of these games....
On November 7, 2008, Pace and Prim entered into an agreement regarding an exclusive distributorship arrangement for certain “amusement devices.” While the agreement was in effect, Prim purchased electronic “Island Fruit” games and “fills” from Pace.
On October 18, 2010, Pace sent Prim a letter alleging that Prim was in default and terminating the exclusivity portion of the agreement between Pace and Prim.
On October 22, 2010, Prim filed (this) lawsuit.
On October 26, 2010, the court expressed concern that “Island Fruit,” one of the “amusement machines” that Pace sold to Prim, might qualify as an illegal gambling machine under Hawaii Revised Statutes. Pace sent Prim a letter saying that, “given the concerns that Judge Susan Mollway expressed about the legality of the Island Fruit game,” Pace “is withdrawing the sale of its skill-based amusement products from the State of Hawaii.”
Pace continued: “To the extent Prim disagrees with Pace’s conclusion and wants to continue operating the Island Fruit game in Hawaii at its own risk, Pace is willing to provide Prim with an unlimited fill for its existing games in Hawaii, at cost.”
On August 30, 2011, Prim filed its Second Amended Complaint....The breach of express warranty claim (Count V) alleges that Pace expressly warranted that the Island Fruit games were legal.
Before the Agreement Letter between Pace and Prim was executed, Nickels & Dimes had been purchasing amusement games and fills directly from Pace. In 2009, Pace informed Nickels & Dimes that Fun Factory, an entity related to Prim, would be the new supplier of fills for Island Fruit.
In October 2009, a Nickels & Dimes competitor reportedly operated an amusement machine similar to Island Fruit with a “Max Play Cost” higher than the “Max Play Cost” on Nickels & Dimes’ Island Fruit machines.
In response, Nickels & Dimes set its “Max Play Cost” at $4. Nickels & Dimes also alleges that a Fun Factory employee subsequently lowered the “Max Play Cost” for Nickels & Dimes’ Island Fruit games and refused to raise that amount back to $4. Nickels & Dimes further alleges that the lower “Max Play Cost” increased the price Nickels & Dimes had to pay for fills. Nickels & Dimes also alleges that Fun Factory required the “Max Play Cost” to be set at $1 for new purchases of fills at another Nickels & Dimes location.