TierPoint, LLC v. Gibraltar IT, LLC
1:18-cv-02104
M.D. Penn.May 29, 2019Background
- TierPoint acquired Windstream Hosted Solutions and assumed its contracts with Gibraltar, including Sales Orders governed by Windstream Terms and Conditions.
- Gibraltar purchased IT services from TierPoint, fell delinquent on payments beginning in 2016, and entered a repayment plan paying $7,000/week through December 12, 2017, then ceased payments.
- TierPoint sent notices invoking contract provisions allowing suspension/termination for nonpayment, suspended services May 1, 2018, and demanded payment; by June 2018 it asserted an unpaid balance of $567,373.86 (exclusive of interest).
- TierPoint sued Gibraltar (breach of contract) on October 30, 2018; Gibraltar was served but did not respond, and the Clerk entered default on January 23, 2019.
- TierPoint moved for default judgment; the Court found the motion unopposed, concluded the complaint’s well‑pleaded facts establish breach of contract, and granted default judgment on liability but deferred entry of monetary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether default judgment should be entered after clerk’s entry of default | TierPoint: default appropriate because Gibraltar failed to answer and owes unpaid invoices and termination fees | Gibraltar: no defense presented (did not appear) | Court granted default judgment as to liability (three‑factor test satisfied) |
| Whether the complaint states a valid breach of contract claim | TierPoint: Sales Orders + Terms and Conditions form enforceable contract; TierPoint performed; Gibraltar breached by nonpayment | Gibraltar: no response/argument | Court held the well‑pleaded factual allegations suffice to state a breach of contract under Pennsylvania law |
| Whether damages are sufficiently proven to enter a money judgment | TierPoint: seeks $567,373.86 plus 6% interest and costs (supported by affidavit) | Gibraltar: no response/argument | Court declined to enter judgment on damages; deferred pending detailed damages calculation and support |
| Whether interest and other charges are authorized and calculated properly | TierPoint: asserts 6% per annum interest and liquidated/termination fees per contract | Gibraltar: no response/argument | Court found plaintiff failed to show basis or calculation for interest/fees and ordered supplementation before entering monetary judgment |
Key Cases Cited
- Emcasco Ins. Co. v. Sambrick, 834 F.2d 71 (3d Cir.) (default‑judgment decisions are within district court’s discretion)
- Chamberlain v. Giampapa, 210 F.3d 154 (3d Cir.) (three‑factor test for default judgment: prejudice, meritorious defense, culpability)
- United States v. $55,518.05 in U.S. Currency, 728 F.2d 192 (3d Cir.) (further articulation of default judgment factors)
- Comdyne I, Inc. v. Corbin, 908 F.2d 1142 (3d Cir.) (court must not accept plaintiff’s unsupported damages calculations in default context)
- Ins. Co. of Greater N.Y. v. Fire Fighter Sales & Serv. Co., 120 F. Supp. 3d 449 (W.D. Pa.) (elements of Pennsylvania breach of contract claim)
- Tristrata Tech., Inc. v. Med. Skin Therapy Research, Inc., 270 F.R.D. 161 (D. Del.) (court may grant default judgment on liability but defer damages when plaintiff’s submissions do not establish amount with certainty)