Judgment entered for unsatisfied purchase order amount

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Where a telecommunications systems provider delivered equipment to the defendant pursuant to a purchase order, the defendant did not pay for the equipment and never responded to the suit, a judgment in the amount of $485,592 was awarded to the telecom provider.

Background

On April 6, 2020, Compunetix Inc. filed the instant action against Federal Transaction Services Inc., or FTS. The complaint alleges that defendant failed to pay Compunetix for equipment and services Compunetix provided to defendant under a purchase order. A responsive pleading was due April 28, 2020; however, defendant failed to file a responsive pleading in a timely manner. Accordingly, the clerk of court filed an entry of default on May 22, 2020.

On June 12, 2020, the plaintiff filed a motion for default judgment. In lieu of a hearing, the court issued an order directing that any objections to plaintiffs’ motion be filed with the clerk’s office by Friday, July 19, 2020, by 5 p.m. No objections were filed.

Report and recommendation

Diversity jurisdiction exists under 28 U.S.C. §1332 because the parties are citizens of different states and the amount in controversy exceeds the sum or value of $75,000. Venue is proper because defendant FTS is a corporation with its principle place of business in this judicial district.

Having examined the record, the undersigned finds that the well-pled allegations of fact contained in the complaint and supported by the plaintiff’s motion for default judgment establish plaintiff is entitled to default judgment in its favor and to the requested relief as detailed below.

As an initial matter, the plaintiff correctly notes that Pennsylvania law governs this action. The purchase order at issue contains no choice of law provision. However, under “Virginia choice of law, the law of the place of performance governs questions concerning performance of a contract.” Since FTS was required to make its payment to plaintiff, whose principal place of business is in Pennsylvania, the law of Pennsylvania shall govern the contract claim here.

Plaintiff has properly plead a claim for breach of contract under Pennsylvania law. FTS’s purchase order constituted an offer, which was accepted and performed by Compunetix when it delivered the equipment. FTS breached its duty under the contract by not paying Compunetix for the $485,592 in equipment provided.

Because Compunetix did not perform the in-site installation services valued at $7,741.00 in the purchase order, that amount should be deducted from the calculation of damages. Therefore, the loss of $485,592 in compensation for equipment is the sum total of Compunetix’s damages under the agreement. Accordingly, plaintiff is entitled to an award of damages in the amount of $485,592 because of defendant’s breach of contract.

District court opinion

Having fully reviewed the report, case file and plaintiff’s motion for default judgment, the court adopts the findings of fact and conclusions of law contained in the report as its own. Plaintiff having adequately alleged a breach of contract claim against defendant, plaintiff’s motion for default judgment is granted and it is hereby ordered that judgment be and is entered in favor of plaintiff Compunetix Inc. against defendant Federal Transaction Services Inc. in the amount of $485,592.

Plaintiff’s motion for default judgment granted.

Compunetix Inc. v. Federal Transaction Services Inc., Case No. 20-cv-371, Aug. 24, 2020. EDVA at Alexandria (Brinkema). VLW 020-3-434. 7 pp.