Contract analysis

I. Executive Summary This memorandum presents my review and assessment of the draft forensic engineering report prepared by Jeffrey Caldwell, PE, of Caldwell Engineering Associates Inc. (7900 NW 25th Street, Suite 210, Doral, FL 33122). Mr. Caldwell was retained by Calderwood & Harkness on behalf of our client, Verimark Hospitality Group Inc. ("VHG"), pursuant to an expert retention letter dated April 22, 2023. The p

II. Scope of Caldwell's Engagement Mr. Caldwell was retained by Calderwood & Harkness on behalf of VHG pursuant to an expert retention letter dated April 22, 2023. A detailed scope memorandum was transmitted from the undersigned to Mr. Caldwell on May 1, 2023, further delineating the parameters of the engagement and the specific issues upon which opinions were requested. Under the terms of his retention, Mr. Caldwell

III. Summary of Hurricane Callista Meteorological Data Used by Caldwell Mr. Caldwell's report devotes substantial attention to the meteorological characteristics of Hurricane Callista, which forms the factual foundation for his cause-of-loss analysis. The key meteorological data points set forth in the report are summarized below. Hurricane Callista was first named by the National Hurricane Center ("NHC") on Septembe

IV. Property-by-Property Analysis of Draft Report Conclusions A. Verimark Grand Key Resort — Mile Marker 48, Marathon, FL 33050 Grand Key Resort is a 312-room luxury resort and marina facility located at Mile Marker 48 in Marathon, Florida. The property consists of a main hotel building, four ancillary guest accommodation structures, a full-service marina, pool and recreation areas, and various support structures. Th

V. Assessment of Strengths of Draft Report Mr. Caldwell's draft report exhibits several significant strengths that I believe will be effective both in motion practice and at trial. Methodology. Mr. Caldwell's methodology is sound and well-documented. The report reflects a comprehensive approach combining on-site inspections and physical evidence examination, engineering analysis of failure modes at each damaged build

VI. Identified Weaknesses and Recommended Revisions While the draft report is strong overall, I have identified several areas where revisions or additions would strengthen the report and reduce its vulnerability to anticipated defense attacks. Each area is discussed below with specific recommendations. A. Grand Key Storm Surge Analysis — Potential Vulnerability The 28% storm surge allocation at Grand Key Resort is th

VII. Coordination with Dr. Vasquez's Expert Report (Meridian Forensic Economics) As noted above, Dr. Isabella Vasquez of Meridian Forensic Economics has prepared a separate draft expert report quantifying VHG's business-interruption losses at the three properties. The review of Dr. Vasquez's draft report is being conducted separately by David Rosenthal, and a memorandum analyzing that report was prepared and circulat

VIII. Anticipated Defense Expert Rebuttal The defense has retained Dr. Warren Birk of Graystone Consulting Group LLC (150 N. Michigan Avenue, Suite 2600, Chicago, IL 60601) as its damages and coverage expert. Dr. Birk's engagement was disclosed in the defense's expert witness designation filed on August 15, 2023. As of the date of this memorandum, the defense has not yet identified its forensic engineering expert, th

IX. Recommended Next Steps and Timeline Based on my review of the draft report and the analysis set forth in this memorandum, I recommend the following next steps and timeline:

1. September 11, 2023: Transmit this memorandum's recommended revisions to Mr. Caldwell, with an accompanying cover letter summarizing the requested changes and the rationale for each. Allow Mr. Caldwell sufficient time to review and incorporate the revisions before the September 15 service deadline.

2. September 12, 2023: Schedule and conduct a conference call between the undersigned, David Rosenthal, and Mr. Caldwell to discuss the recommended revisions in detail, address any questions Mr. Caldwell may have regarding the requested changes, and confirm the timeline for delivery of the revised report.

3. September 12–13, 2023: Mr. Caldwell to correct the Harborview conference center square footage discrepancy, changing the erroneous "38,000 sq. ft." reference to "40,000 sq. ft." throughout the report, and to address any other internal inconsistencies identified during the revision process.

4. September 12–14, 2023: Mr. Caldwell to add the failure-to-mitigate rebuttal section and the comparative restoration-timeline analysis recommended in Sections VI.B and VI.C of this memorandum.

5. September 13–14, 2023: Coordinate the cross-review between the Caldwell report and the Vasquez report to ensure consistency in closure dates, restoration timelines, and property descriptions. David Rosenthal, who is leading the review of Dr. Vasquez's report, should facilitate this cross-review and resolve any inconsistencies before both reports are finalized.

6. September 14, 2023: Delivery of the revised Caldwell report to Calderwood & Harkness for final review by Elaine Forsythe before service.

7. September 15, 2023: Service of the final Caldwell report and the final Vasquez report on defense counsel in compliance with the expert report service deadline.

8. Post-September 15, 2023: After service, prepare for potential defense rebuttal reports (due October 2, 2023). Upon receipt of defense rebuttal reports, provide them to Mr. Caldwell for review and commence deposition preparation for Mr. Caldwell.

X. Conclusion Mr. Caldwell's draft forensic engineering report provides a strong foundation for VHG's causation position in this litigation. The report directly supports VHG's claim that wind — a covered peril under the Ironclad all-risk commercial property policy — was the predominant cause of physical damage at all three of VHG's resort properties. The wind-damage percentages at each property (72% at Grand Key, 85%