CALDERWOOD & HARKNESS LLP Attorneys at Law
Columbus Office 250 West Street, Suite 1800 Columbus, OH 43215 Telephone: (614) 555-7200 Facsimile: (614) 555-7201 www.calderwoodharkness.com
June 1, 2021
VIA ELECTRONIC MAIL AND FIRST CLASS MAIL
Mr. Harold Inman General Counsel Crestline Packaging Solutions LLC 4500 Needmore Road Dayton, OH 45424
Re: Engagement of Calderwood & Harkness LLP — Freight Invoice Dispute with Ridgeway Freight Services Inc. Matter No.: 1006-00005
Dear Mr. Inman:
Thank you for selecting Calderwood & Harkness LLP ("C&H" or the "Firm") to represent Crestline Packaging Solutions LLC ("CPS" or the "Company") in connection with the commercial dispute between CPS and Ridgeway Freight Services Inc. ("Ridgeway"). As we discussed in our meeting on May 24, 2021, this dispute arises from systematic overbilling by Ridgeway under the Master Transportation Services Agreement between CPS and Ridgeway dated April 15, 2019 (the "MTSA"). We are pleased to confirm our engagement and look forward to working with you and your team on this important matter.
The purpose of this letter is to set forth the terms and conditions under which C&H will provide legal services to CPS in connection with the above-referenced matter. We ask that you review these terms carefully and, if they accurately reflect your understanding of our agreement, countersign this letter in the space provided below and return it to me, together with the initial retainer payment described in Section 4 of this letter. This engagement letter will become effective upon receipt by C&H of the signed letter and the retainer payment.
1. Scope of Engagement
C&H will represent CPS in pursuing claims against Ridgeway for the recovery of overcharged freight invoices and related damages arising under or in connection with the MTSA. The scope of our engagement encompasses the following claim types and causes of action, to the extent supported by the facts and applicable law:
(a) breach of contract (including breach of the rate schedules, accessorial charge provisions, and billing reconciliation obligations set forth in the MTSA);
(b) money had and received;
(c) statutory fraud under applicable state law; and
(d) any related causes of action arising from the same operative facts, including but not limited to claims for unjust enrichment, negligent misrepresentation, or violations of applicable deceptive trade practices statutes.
Our representation will include the following phases and activities, as warranted by the circumstances of the dispute:
(a) Pre-Suit Demand and Negotiation. C&H will prepare and deliver a formal demand letter to Ridgeway and its counsel, and will engage in pre-suit negotiations aimed at achieving a favorable resolution without the necessity of litigation. This phase will include analysis of CPS's internal audit findings, review of the MTSA and applicable rate schedules, and preparation of a comprehensive damages summary.
(b) Litigation. If pre-suit negotiations do not result in a satisfactory resolution, C&H will file suit and prosecute CPS's claims against Ridgeway in the appropriate court of competent jurisdiction in Tarrant County, Texas, which is the exclusive forum designated under the forum selection clause set forth in Section 14.4 of the MTSA. Our litigation representation will include all phases of trial-level proceedings, including pleadings, discovery, motion practice, pretrial proceedings, trial, and post-trial motions.
(c) Mediation and Alternative Dispute Resolution. C&H will represent CPS in any mediation or other alternative dispute resolution proceedings that may be required under the MTSA or ordered by the court, or that the parties agree to pursue voluntarily.
Exclusions from Scope. The following matters are expressly excluded from the scope of this engagement and would require a separate engagement letter if CPS desires C&H's assistance:
(a) Appellate Representation. This engagement does not include representation of CPS in any appeal or appellate proceeding arising from the Ridgeway dispute. In the event that appellate representation becomes necessary or desirable, C&H and CPS will discuss the terms of a separate engagement at that time.
(b) Other Corporate Matters. This engagement does not cover advice regarding CPS's transition to a new logistics provider, any renegotiation or procurement of new transportation services agreements, regulatory compliance matters, or any other corporate, transactional, or advisory matter unrelated to the Ridgeway freight invoice dispute.
If, during the course of our representation, CPS identifies additional matters on which it would like C&H's assistance, we would be pleased to discuss the scope and terms of any such additional engagement separately.
2. Engagement Team
C&H has assembled the following team of attorneys to handle this matter on behalf of CPS:
Francesca Morano will serve as the Responsible Partner and will have overall supervisory responsibility for the engagement. Samuel Eklund, based in our Houston office, will serve as the Billing Partner and will be primarily responsible for billing matters and financial administration of the engagement. Given that any litigation will be venued in Tarrant County, Texas, Mr. Eklund will also contribute substantive legal expertise regarding Texas procedural and substantive law. Yuki Nakamura will serve as the Lead Associate and will be responsible for day-to-day management of the matter, including discovery, legal research, and motion practice. Carlos Espinoza will serve as a Working Associate and will assist with document review, factual investigation, and trial preparation.
From time to time, other attorneys and professional staff of the Firm — including paralegals, litigation support specialists, and attorneys with particular subject-matter expertise — may assist with the matter as the needs of the engagement require. We will inform you in advance of the involvement of any additional partners or senior counsel, and the billing rates of any such additional timekeepers will be provided upon request.
Primary Client Contact. Harold Inman, General Counsel of CPS, will serve as the primary client contact for all substantive and administrative matters relating to this engagement. All material communications regarding the matter, including reports on case status, strategic recommendations, and requests for approval, will be directed to Mr. Inman unless CPS designates an alternative contact in writing.
Day-to-Day Attorney Contacts. For day-to-day questions or communications, CPS personnel should contact Francesca Morano or Yuki Nakamura directly:
Francesca Morano: (614) 555-7218 / f.morano@calderwoodharkness.com Yuki Nakamura: (713) 555-4110 / y.nakamura@calderwoodharkness.com
3. Fees and Billing
(a) Hourly Rate Structure
C&H's fees for legal services rendered in connection with this matter will be based on the time spent by the attorneys and professional staff assigned to the engagement, billed in increments of one-tenth of an hour (six minutes), at their respective standard hourly rates. The current standard hourly rates for the members of the engagement team are as follows:
The hourly rates for any other attorneys or professional staff (including paralegals and litigation support specialists) who may work on the matter from time to time will be provided to CPS upon request. Paralegal rates currently range from $195.00 to $275.00 per hour, and litigation support specialist rates currently range from $150.00 to $225.00 per hour, depending on the experience and seniority of the individual.
C&H's standard hourly rates are subject to periodic adjustment, which typically occurs on an annual basis, effective January 1 of each calendar year. C&H will provide CPS with advance written notice of any rate adjustment at least thirty (30) days prior to the effective date of such adjustment. Any rate adjustment will apply only to time recorded on or after the effective date of the new rates.
(b) Courtesy discount
In recognition of this being the inaugural engagement between C&H and CPS, and with the hope that this matter will serve as the foundation for a lasting professional relationship, C&H is pleased to offer CPS a ten percent (10%) courtesy discount on all attorney fees incurred during the course of this engagement. The terms of this courtesy discount are as follows:
(i) The discount will be reflected on each monthly invoice as a separate line-item reduction, so that CPS can clearly track the value of the discount applied.
(ii) The discount applies to professional fees charged for attorney time only. The discount does not apply to disbursements, out-of-pocket expenses, third-party costs, or charges for paralegal or litigation support specialist time.
(iii) The discount will remain in effect for the entire duration of this matter, from the date of this engagement letter through the conclusion of the engagement (including any termination or withdrawal), subject to the other terms and conditions of this letter.
By way of illustration, attorney time billed at the standard hourly rates set forth above will be invoiced at the following effective rates after application of the courtesy discount:
(c) Disbursements and Expenses
In addition to professional fees, C&H will bill CPS for reasonable out-of-pocket expenses and disbursements incurred in connection with the matter. Such disbursements may include, without limitation, the following:
(i) court filing fees and service of process charges;
(ii) court costs and related litigation expenses;
(iii) fees and expenses of expert witnesses and consultants, including forensic accounting experts retained to analyze the overbilling patterns and quantify damages;
(iv) travel expenses (airfare, hotel, ground transportation, and meals) incurred in connection with depositions, court appearances, client meetings, and other matter-related travel, in accordance with C&H's standard travel policies;
(v) courier, overnight delivery, and messenger charges;
(vi) charges for computerized legal research services (e.g., Westmark Data Systems, Sundial Solutions);
(vii) document copying, printing, scanning, and reproduction costs;
(viii) long-distance telephone and videoconference charges;
(ix) court reporter and deposition transcript fees; and
(x) any other similar out-of-pocket disbursements reasonably incurred in the prosecution of CPS's claims.
Third-party vendor invoices, including invoices from forensic accountants, court reporters, expert witnesses, and similar service providers, will be billed to CPS at cost or passed through to CPS without markup. Where C&H advances payment of such third-party charges on CPS's behalf, the amounts advanced will be reflected on C&H's next monthly invoice. For any single third-party expenditure expected to exceed $10,000.00, C&H will obtain CPS's prior written approval before incurring such expense.
4. Retainer
CPS agrees to pay an initial evergreen retainer in the amount of Seventy-Five Thousand Dollars ($75,000.00) upon execution of this engagement letter. The retainer will be handled in accordance with the following terms:
(a) Deposit and Custodial Arrangements. The retainer will be deposited into and held in C&H's client trust account (an Interest on Lawyers' Trust Account, or "IOLTA" account) maintained in accordance with Rule 1.15 of the Ohio Rules of Professional Conduct and all other applicable rules governing client funds. The retainer will remain the property of CPS until applied against invoices as described below.
(b) Application Against Invoices. C&H will apply the retainer against monthly invoices as they are rendered. Following application of the retainer against an invoice, C&H will provide CPS with a statement reflecting the retainer balance remaining.
(c) Replenishment. CPS agrees to replenish the retainer to the full amount of $75,000.00 promptly, and in any event within fifteen (15) business days, upon written request by C&H. C&H will request replenishment when the retainer balance falls below $25,000.00 or at such other times as C&H reasonably determines that replenishment is warranted by the anticipated level of activity on the matter.
(d) Return of Unused Retainer. Upon conclusion of the engagement, whether by completion of the matter, mutual agreement, or termination pursuant to Section 8 of this letter, any unused portion of the retainer will be returned to CPS within thirty (30) days after application of the retainer against any outstanding final invoices.
5. Billing and Payment
C&H will submit monthly invoices to CPS for professional fees and disbursements incurred during the preceding calendar month. Each invoice will be itemized by timekeeper and will include a description of the work performed by each timekeeper, the time spent, the applicable hourly rate, and the total fees and disbursements for the billing period. The courtesy discount described in Section 3(b) will be shown as a separate line-item reduction on each invoice.
(a) Payment Terms. Payment of each invoice is due within thirty (30) days of the invoice date. Payments should be made by wire transfer or check payable to "Calderwood & Harkness LLP" and directed to the Firm's operating account as specified on the invoice.
(b) Late Payment Interest. Any invoice amount not paid within thirty (30) days of the invoice date will accrue interest at the rate of one percent (1%) per month (twelve percent (12%) per annum), calculated from the date of the invoice until the date of payment in full. The accrual of interest shall not limit or waive any other rights or remedies available to C&H with respect to unpaid invoices.
(c) Billing Inquiries and Disputes. CPS may raise any billing inquiry or dispute within thirty (30) days of receipt of an invoice by providing written notice to Francesca Morano or Samuel Eklund. C&H and CPS will work together in good faith to resolve any billing dispute promptly. Failure by CPS to raise an objection to any invoice within the thirty (30) day period shall constitute acceptance of the invoice as rendered.
(d) Invoice Delivery. Invoices will be directed to Harold Inman, General Counsel, at the address set forth at the beginning of this letter, or to such other person or address as CPS may designate in writing from time to time. Invoices may be delivered by electronic mail, first-class mail, or such other method as may be agreed by the parties.
6. Client Responsibilities
The success of this engagement depends in significant part on the cooperation and active involvement of CPS and its personnel. CPS agrees to the following responsibilities in connection with the representation:
(a) Full Cooperation. CPS agrees to cooperate fully with C&H in all aspects of the representation, including the investigation of facts, development of litigation strategy, and preparation for trial and other proceedings.
(b) Document and Data Access. CPS will provide C&H with timely access to all documents, records, and data relevant to the dispute, including but not limited to: (i) the MTSA and all amendments, exhibits, and schedules thereto; (ii) all Ridgeway freight invoices, billing statements, and supporting documentation; (iii) CPS's internal audit workpapers and reports relating to the identification and quantification of overbilling; (iv) payment records, accounts payable ledgers, and bank statements reflecting payments made to Ridgeway; and (v) all correspondence, emails, and other communications between CPS and Ridgeway (or their respective agents, employees, or representatives) relating to the MTSA, freight billing, or the dispute.
(c) Personnel Availability. CPS will make its personnel available for interviews, witness preparation sessions, depositions, and testimony as needed throughout the course of the engagement. We anticipate that the following individuals, among others, will be important witnesses and participants in this matter: Margaret Ashford (Vice President of Operations), Dennis Yurkovich (Director of Supply Chain), Patricia Sung (Controller), Harold Inman (General Counsel), and such other CPS employees as C&H may reasonably identify as having relevant knowledge. CPS will use reasonable efforts to ensure that these individuals are available in a timely manner when their participation is requested.
(d) Notification of Developments. CPS will keep C&H promptly informed of any material developments relating to the dispute, including but not limited to any communications received from Ridgeway or its counsel, any changes in the business relationship between CPS and Ridgeway, any new facts or documents that may bear on the claims, and any other developments that could reasonably be expected to affect the representation.
(e) Responsiveness. CPS will respond promptly to C&H's requests for information, documents, approvals, and decisions regarding litigation strategy and settlement authority. Delays in CPS's responses may adversely affect C&H's ability to meet court-imposed deadlines or otherwise prosecute the claims effectively.
7. Conflicts of Interest
C&H has performed a thorough conflicts check in accordance with the Firm's standard procedures and the applicable rules of professional conduct, and has identified no conflicts of interest that would prevent the Firm from undertaking the representation of CPS in this matter.
CPS acknowledges that C&H is a large, multi-office law firm with offices in New York, Chicago, Houston, and Columbus, and that the Firm represents a wide range of clients across many industries in a range legal matters. It is possible that C&H currently represents, or may in the future represent, other entities whose interests may differ from those of CPS in matters unrelated to this engagement.
CPS hereby consents to C&H's representation of other clients in matters that are not substantially related to the freight invoice dispute with Ridgeway and that do not involve CPS or Ridgeway as adverse parties. This consent applies to current and future representations by C&H, provided that no such representation involves a matter that is substantially related to the subject matter of this engagement or that would place C&H in a position of representing interests directly adverse to CPS in the same or a related transaction or proceeding.
If an actual conflict of interest arises during the course of the representation, C&H will promptly notify CPS and will take all steps required by applicable rules of professional conduct, including Rule 1.7 and Rule 1.9 of the Ohio Rules of Professional Conduct and the corresponding provisions of the Texas Disciplinary Rules of Professional Conduct, to address the conflict. Such steps may include seeking informed consent from all affected clients, implementing appropriate ethical screens, or, if necessary, withdrawing from the representation.
8. Termination
Either C&H or CPS may terminate this engagement at any time, with or without cause, upon written notice to the other party. In the event of termination:
(a) Fees and Expenses. CPS will remain responsible for the payment of all fees and expenses incurred by C&H through the date of termination, including any fees and expenses reflected on invoices rendered prior to termination and any unbilled fees and expenses for work performed through the date of termination. C&H will render a final invoice promptly following the effective date of termination.
(b) Transitional Obligations. Upon termination, C&H will take all steps reasonably necessary to protect CPS's interests, including: (i) providing reasonable advance notice of withdrawal, to the extent permitted by the circumstances; (ii) allowing CPS a reasonable period of time to retain substitute counsel; (iii) cooperating with successor counsel in transitioning the matter; and (iv) promptly delivering to CPS (or to its designated successor counsel) all of CPS's files, documents, and property in C&H's possession relating to the matter.
(c) Survival of Obligations. C&H's obligations to preserve client confidences and to maintain the attorney-client privilege with respect to all information received during the course of the engagement shall survive the termination of this engagement in perpetuity, regardless of the reason for termination.
In the event that C&H seeks to withdraw from the representation, C&H will comply with all applicable court rules and rules of professional conduct regarding withdrawal of counsel, including obtaining leave of court if required.
9. Governing Law
This engagement letter shall be governed by and construed in accordance with the laws of the State of Ohio, without giving effect to any choice-of-law or conflict-of-law principles that would result in the application of the laws of any other jurisdiction. Any dispute between C&H and CPS arising out of or relating to this engagement letter, the engagement, or the fees and expenses charged in connection with the engagement shall be resolved in accordance with applicable Ohio law and the Ohio Rules of Professional Conduct.
10. Miscellaneous Provisions
Entire Agreement. This engagement letter constitutes the entire agreement between C&H and CPS with respect to the terms and conditions of the engagement described herein. This letter supersedes all prior oral or written discussions, negotiations, understandings, and agreements between the parties relating to the subject matter hereof.
Amendment. This engagement letter may not be amended, modified, or supplemented except by a writing signed by both C&H and CPS. No oral modification of this letter shall be effective for any purpose.
Confidentiality. All information provided by CPS to C&H in connection with this engagement, including documents, data, communications, and other materials, will be treated as confidential and will be subject to the attorney-client privilege and the work product doctrine, to the fullest extent permitted by law and consistent with the Ohio Rules of Professional Conduct. C&H will not disclose CPS's confidential information to any third party without CPS's prior consent, except as required by law, court order, or applicable rules of professional conduct.
No Guarantee of Outcome. CPS acknowledges and agrees that C&H has made no promise, guarantee, or representation regarding the outcome of this matter. While C&H will exercise its best professional judgment in representing CPS's interests, the outcome of any legal proceeding is inherently uncertain. Any expressions of opinion by C&H's attorneys regarding the likelihood of success, the probable range of recovery, or the merits of particular claims or defenses are professional assessments based on available information and should not be construed as guarantees or warranties of any particular result.
Counterparts. This engagement letter may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Facsimile and electronically transmitted signatures shall be deemed to have the same force and effect as original signatures.
If the foregoing accurately reflects your understanding of the terms of our engagement, please sign and return the enclosed copy of this letter to my attention, together with the retainer payment of Seventy-Five Thousand Dollars ($75,000.00), made payable to "Calderwood & Harkness LLP Client Trust Account." A pre-addressed return envelope is enclosed for your convenience.
We are genuinely enthusiastic about the opportunity to work with you, Margaret Ashford, and the entire CPS team on this matter. We believe that CPS has strong claims against Ridgeway, and we are committed to pursuing the most favorable outcome for the Company. Please do not hesitate to contact me or Yuki Nakamura if you have any questions about this letter or the engagement.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Francesca Morano
Title: Partner
COUNTERSIGNATURE PAGE Engagement Letter dated June 1, 2021 Calderwood & Harkness LLP and Crestline Packaging Solutions LLC Matter No.: 1006-00005
AGREED AND ACCEPTED:
The undersigned, on behalf of Crestline Packaging Solutions LLC, hereby acknowledges receipt of the foregoing Engagement Letter, confirms that its terms accurately reflect the agreement between Crestline Packaging Solutions LLC and Calderwood & Harkness LLP regarding the engagement described herein, and agrees to be bound by such terms.
CRESTLINE PACKAGING SOLUTIONS LLC
By: ________
Name: Harold Inman
Title: General Counsel
Date: June 1, 2021
Enclosures: Return copy of Engagement Letter for countersignature; Pre-addressed return envelope cc: Samuel Eklund, Partner, Calderwood & Harkness LLP (Houston) Yuki Nakamura, Associate, Calderwood & Harkness LLP (Houston) Carlos Espinoza, Associate, Calderwood & Harkness LLP (Columbus)
| Attorney | Role | Office |
| Francesca Morano, Partner | Responsible Partner | Columbus, OH |
| Samuel Eklund, Partner | Billing Partner | Houston, TX |
| Yuki Nakamura, Associate | Lead Associate | Houston, TX |
| Carlos Espinoza, Associate | Working Associate | Columbus, OH |
| Timekeeper | Standard Hourly Rate | |
| Francesca Morano, Partner | $825.00 | |
| Samuel Eklund, Partner | $795.00 | |
| Yuki Nakamura, Associate | $475.00 | |
| Carlos Espinoza, Associate | $395.00 | |
| Timekeeper | Standard Rate | Effective Rate (after 10% discount) |
| Francesca Morano | $825.00/hr | $742.50/hr |
| Samuel Eklund | $795.00/hr | $715.50/hr |
| Yuki Nakamura | $475.00/hr | $427.50/hr |
| Carlos Espinoza | $395.00/hr | $355.50/hr |