Contract analysis

I. Purpose of This Memorandum This memorandum has been prepared to assist you in preparing for your deposition, which has been noticed by the defendants in the above-captioned insurance coverage action. The deposition was noticed by Fendowell Rourke & Stanton LLP on behalf of Ironclad Indemnity Corporation ("Ironclad") and Pinnacle Surplus Lines Inc. ("Pinnacle"). Counsel for the remaining defendants — Delvecchio & K

II. General Deposition Guidelines The following guidelines apply to all depositions and are designed to help you present accurate, truthful, and effective testimony. We will review each of these principles in detail during our preparation sessions on August 12–13, but it is important that you familiarize yourself with them in advance. A. Fundamental Rules of Testimony

1. Listen to the full question before answering. Wait until the examining attorney has finished speaking before you begin your response. This gives you time to absorb the question and gives defending counsel an opportunity to interpose an objection if necessary.

2. Answer only the question asked — do not volunteer information. Your obligation is to provide truthful, responsive answers, not to educate opposing counsel. If a question calls for a "yes" or "no," give that answer. If additional explanation is necessary and appropriate, counsel will provide an opportunity for you to clarify during redirect or at a break. Resist the temptation to fill silences or to offer context t

3. If you do not understand a question, ask for clarification. There is no obligation to answer a question you do not understand. You may say, "I'm not sure I understand the question — could you rephrase it?" or "Could you clarify what you mean by [term]?" This is entirely appropriate and should not cause you any concern.

4. If you do not know or do not remember, say so — do not guess. You are under oath, and guessing creates the risk of inaccurate testimony. "I don't recall" and "I don't know" are perfectly acceptable answers if they are truthful. Do not allow opposing counsel to pressure you into speculating or reconstructing events from incomplete memory.

5. Take your time. There is no rush. You may pause to think before answering. A thoughtful pause does not look bad on the record — in fact, it reflects care and diligence. Take a breath between the question and your answer.

6. Beware of compound questions. If an attorney asks a question that contains multiple parts or embeds multiple assumptions, you have every right to ask that the question be broken into its component parts. For example: "Isn't it true that you received the policy in August and reviewed it that same week?" contains two separate factual predicates. You may say, "I'd like to answer those one at a time."

7. Do not speculate about documents you have not seen or conversations you were not part of. If you are asked about the contents of a document you have not reviewed, say so. If you are asked about what another person said, thought, or intended, and you do not have personal knowledge, state that you do not know. Your testimony should be limited to facts within your personal knowledge.

8. Be careful with absolutes. Words like "never," "always," "every time," and "without exception" can be used against you if any contrary evidence exists. Use qualifiers when appropriate: "To the best of my recollection," "Generally," "In the usual course."

9. Do not argue with examining counsel. Even if you believe a question is unfair, misleading, or based on a false premise, remain calm and professional. If a question is improper, defending counsel will object. Your role is to be a truthful witness, not an advocate.

10. Do not joke, use sarcasm, or make off-the-record comments. Everything you say while the court reporter is present is on the record, including comments made during pauses, transitions, and even some sidebar remarks. Treat every moment as if it will be read by a judge or jury. B. Objections and Privilege Defending counsel — Tiffany Rosenthal — will be present throughout the deposition and will assert objections as

III. Background on Sandra Pellegrini's Role and Anticipated Scope of Examination A. Ms. Pellegrini's Position and Responsibilities Sandra Pellegrini currently serves as Vice President of Risk Management at Verimark Hospitality Group Inc. In this role, Ms. Pellegrini reports dually to Diane Calder, VHG's Chief Financial Officer, and Nathaniel Driscoll, VHG's General Counsel. Ms. Pellegrini's tenure at VHG should be co

1. The design and renewal of VHG's property/business-interruption insurance program, including the critical July 2022 renewal of the Ironclad primary policy and the placement of the excess tower.

2. Communications with Tidewater Risk Advisors regarding the July 2022 renewal, including the negotiations concerning the windstorm sub-limit — the most heavily contested coverage issue in this case.

3. Notice of loss procedures following Hurricane Callista, including the timing and content of VHG's initial loss notification to Ironclad and the preparation and submission of the sworn statement in proof of loss.

4. Mitigation and restoration decision-making, including the scope and pace of VHG's efforts to repair its damaged properties and resume business operations after Hurricane Callista.

5. Communications with Ironclad, Arbor Claims Services LLC, and other insurers and their representatives during the claims process, including the receipt and response to reservation of rights letters and formal coverage denials. Defendants' deposition of Ms. Pellegrini is designed to develop facts supporting their four principal coverage defenses: (a) Windstorm Sub-Limit: Ironclad contends the primary policy contains

IV. Anticipated Topic Areas and Preparation Notes The following sections address the principal topic areas on which Ms. Pellegrini is likely to be examined. For each topic area, we have provided background facts, anticipated questions, and guidance on how to approach the examination. This guidance is not a script — Ms. Pellegrini must testify truthfully in her own words. Rather, it is intended to help her organize he

V. Key Documents for Review Prior to Deposition Ms. Pellegrini should review the following documents prior to her deposition on August 14, 2023. Copies of these documents will be assembled and provided at the preparation session on August 12–13, 2023. Ms. Pellegrini should review each document carefully, as opposing counsel may present any of them as exhibits during the deposition.

1. Ironclad primary policy (Policy No. IIC-PRP-2022-07541), with particular attention to the following provisions: the business-interruption insuring agreement; the definition of "period of restoration"; the named-windstorm provisions (including Endorsement No. 14); the flood exclusion; the concurrent-causation clause; the notice-of-loss provisions; the proof-of-loss requirements; the mitigation obligations; and any

2. Excess policies: Pinnacle Surplus Lines Inc. (Policy No. PSL-XS1-2022-3390); Montclair Assurance Company (Policy No. MAC-XS2-2022-09817); and Sovereign Re Ltd. (Policy No. SRL-XS3-2022-5102). Ms. Pellegrini should review at least the follow-form provisions, any manuscript endorsements, and any provisions that deviate from the Ironclad primary form.

3. July 2022 renewal correspondence between Tidewater Risk Advisors (Franklin Orde) and Ironclad's underwriting team regarding the windstorm sub-limit deletion, including any emails, binders, coverage summaries, quotation sheets, or other written communications that bear on the parties' agreement to delete the sub-limit.

4. VHG's initial notice of loss to Ironclad, dated September 22, 2022.

5. Ironclad's reservation of rights letter, dated October 12, 2022.

6. VHG's sworn statement in proof of loss, claiming $60 million in BI losses, dated November 15, 2022.

7. Ironclad's formal coverage denial, dated February 3, 2023.

8. Pinnacle's follow-form denial, dated February 10, 2023.

9. Ms. Pellegrini's own emails and correspondence regarding the insurance claim, the insurance program design and renewal, mitigation efforts, and the restoration process for each property. Ms. Pellegrini should be particularly familiar with any emails she sent or received during the September 2022 through February 2023 period.

10. VHG's hurricane preparedness plan and property-specific emergency protocols for Grand Key, Harborview, and Sunset Shores.

11. Contractor and restoration company engagement records for each property, including contracts, work orders, invoices, and progress reports.

12. Any internal memos or reports authored by Ms. Pellegrini regarding hurricane damage assessments, the restoration timeline, claims status, or mitigation efforts. Caution regarding document review: Ms. Pellegrini should be aware that opposing counsel may ask at the deposition what documents she reviewed to prepare for her testimony. She may be asked to identify specific documents or categories of documents. She sho

VI. Potential Difficult Questions and Suggested Approaches The following are questions that Ms. P