1007-00004 · Nakamura Lozano & Pratt LLP · Correspondence

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PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION — ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP Attorneys at Law

633 West Fifth Street, Suite 4400 Los Angeles, California 90071

Telephone: (213) 488-7200 Facsimile: (213) 488-7201

Email: rvasquez@calderwoodharkness.com

August 25, 2025

Via Email and U.S. Mail

Neil Pemberton, AVP – Complex Claims Ridgeway National Insurance Company 100 Constitution Plaza Hartford, CT 06103

Re: Initial Defense Cost Budget and Litigation Plan

Insured: Vantage Mobility Systems Corp.

Policy No.: EPL-VMS-2024-07821

Policy Period: July 1, 2024 – July 1, 2025

Claim/Matter: Gloria Reyes, individually and on behalf of all others similarly situated, and on behalf of the State of California v. Vantage Mobility Systems Corp., Case No. CIVSB-2025-04781, Superior Court of California, County of San Bernardino

C&H Matter No.: 1007-00004

Dear Mr. Pemberton:

1. Introduction and Purpose

Calderwood & Harkness LLP ("C&H" or "the Firm") serves as defense counsel for the insured, Vantage Mobility Systems Corp. ("VMS" or "Vantage"), in the above-referenced matter. The undersigned, Renata Vasquez, is the Responsible Partner overseeing all aspects of the defense. Bernard Crawford is the Billing Partner responsible for invoice management and fee coordination. Both Ms. Vasquez and Mr. Crawford are partners in the Firm's Labor & Employment Practice Group.

We write in connection with Ridgeway National Insurance Company's ("Ridgeway" or "Ridgeway National") Reservation of Rights letter dated August 18, 2025, pursuant to which Ridgeway has agreed to fund defense costs in the above-captioned matter, subject to the terms and conditions of Employment Practices Liability Policy No. EPL-VMS-2024-07821 (the "Policy"), the reservations of rights set forth therein, and the requirement that VMS's $500,000 self-insured retention ("SIR") erode before Ridgeway's obligation to fund defense costs attaches. We acknowledge receipt of that letter and are proceeding in accordance with its terms while preserving all of VMS's rights as set forth more fully below.

The purpose of this letter is threefold. First, we provide an initial defense cost budget covering the anticipated phases of litigation through trial. Second, we present a summary litigation plan outlining our proposed defense strategy, key factual and legal issues, anticipated milestones, and staffing. Third, we request written confirmation of Ridgeway's continued defense cost funding, a copy of Ridgeway's litigation management guidelines, and an estimated timeline for Ridgeway's coverage determination on the issues reserved in the August 18, 2025 Reservation of Rights letter.

We recognize that this matter presents significant exposure and complexity, and we are committed to working cooperatively with Ridgeway to manage defense costs effectively while pursuing the most favorable outcome achievable for VMS. We welcome the opportunity to discuss any aspect of this letter at your convenience.

2. Case Summary

2.1 Parties and Claims

Plaintiff. Gloria Reyes is a former Production Associate (Trim Line B) who was employed at VMS's Fontana Plant, located at 11780 Cherry Avenue, Fontana, California 92337. Ms. Reyes was employed by VMS from approximately March 12, 2021 through January 19, 2025. During her tenure, she was assigned to the second shift, which runs from 2:00 PM to 10:30 PM. Her hourly wage at the time of her separation was $22.75 per hour. Ms. Reyes brings this action individually, on behalf of a putative class of all others similarly situated, and on behalf of the State of California under the Private Attorneys General Act ("PAGA").

Defendant. Vantage Mobility Systems Corp. is a Delaware corporation headquartered at 4200 Industrial Parkway, Auburn Hills, Michigan 48326. VMS is registered to do business in both California and Michigan. The company specializes in automotive manufacturing, specifically specialty vehicle modifications for commercial and consumer markets. VMS is a wholly owned portfolio company of Ashgrove Equity Partners Industrial Partners, LP. The Fontana Plant at issue in this litigation is VMS's primary West Coast manufacturing facility.

Plaintiff's Counsel. Plaintiff is represented by Nakamura Lozano & Pratt LLP, located at 350 South Grand Avenue, Suite 2800, Los Angeles, California 90071. The lead attorneys are Victor Lozano (Partner) and Michelle Tran (Associate). Nakamura Lozano & Pratt is a prominent California plaintiff-side employment class action firm with a well-established track record. The firm has secured eight-figure settlements in manufacturing and logistics sector meal-and-rest-break cases, including several class actions against large employers in the Inland Empire region. We expect the firm to prosecute this matter aggressively and with substantial resources.

Putative Class. Plaintiff seeks to represent a putative class of approximately 3,550 current and former non-exempt hourly production employees at the Fontana Plant over a four-year class period beginning August 4, 2021 (four years preceding the filing of the Complaint). The class definition encompasses employees across all production lines and both shifts who were subject to VMS's timekeeping policies and practices during the relevant period.

2.2 Causes of Action

The Complaint sets forth seven causes of action, each of which is summarized below:

1. First Cause of Action — Meal Period Violations (Cal. Lab. Code §§ 226.7, 512): Plaintiff alleges that VMS maintained a policy and practice of failing to provide lawful, uninterrupted, off-duty meal periods of not less than 30 minutes for every five hours worked, and failed to pay premium wages of one additional hour of pay at each employee's regular rate of compensation for each workday on which a compliant meal period was not provided.

2. Second Cause of Action — Rest Period Violations (Cal. Lab. Code § 226.7): Plaintiff alleges that VMS failed to authorize and permit compliant rest periods of not less than 10 minutes for every four hours worked, or major fraction thereof, and failed to pay the corresponding premium wages for each workday on which a compliant rest period was not authorized or permitted.

3. Third Cause of Action — Unpaid Wages (Cal. Lab. Code §§ 204, 1194): Plaintiff alleges that VMS's timekeeping rounding policy and automatic meal period deductions resulted in systematic underpayment of wages owed for time actually worked, including straight-time and overtime wages.

4. Fourth Cause of Action — Inaccurate Wage Statements (Cal. Lab. Code § 226): Plaintiff alleges that, as a consequence of the foregoing violations, VMS issued wage statements that failed to accurately reflect, among other things, total hours worked, gross wages earned, and applicable hourly rates, in violation of the detailed requirements of Section 226.

5. Fifth Cause of Action — Waiting Time Penalties (Cal. Lab. Code § 203): Plaintiff alleges that VMS willfully failed to pay all wages due upon termination or within 72 hours of resignation, thereby subjecting VMS to waiting time penalties of up to 30 days' wages for each affected former employee.

6. Sixth Cause of Action — Unfair Business Practices (Cal. Bus. & Prof. Code § 17200 et seq.): Plaintiff alleges that VMS's conduct constitutes unlawful, unfair, and/or fraudulent business practices under California's Unfair Competition Law, entitling the putative class to restitution and injunctive relief.

7. Seventh Cause of Action — PAGA Penalties (Cal. Lab. Code § 2698 et seq.): Plaintiff brings representative PAGA claims on behalf of the State of California seeking civil penalties of $100 per employee per pay period for the initial violation and $200 per employee per pay period for each subsequent violation. The PAGA notice was served on the California Labor and Workforce Development Agency ("LWDA") on May 22, 2025, and assigned LWDA Case No. LWDA-CM-2025-831447. The 65-day statutory cure period expired on July 26, 2025, with no investigation initiated by the LWDA, thereby exhausting the administrative prerequisite and permitting the filing of the PAGA claims in court.

2.3 Central Factual Allegations

The factual core of the Complaint centers on VMS's timekeeping practices at the Fontana Plant during the relevant period. The principal allegations are as follows:

Automatic Meal Period Deductions. From approximately January 2020 through March 15, 2024, VMS utilized an automatic 30-minute meal period deduction feature in its ApexTime 6.2 timekeeping system, a commercial workforce management platform provided by Apex Workforce Solutions, Inc. Under the auto-deduction configuration, if an employee did not affirmatively clock out and back in for a meal period, the system automatically deducted 30 minutes from the employee's recorded hours worked, regardless of whether a meal break was actually taken. Plaintiff alleges that the auto-deduction policy systematically under-recorded compensable working time and operated to deny premium wages that should have been paid when compliant meal periods were not provided.

Denied and Shortened Meal and Rest Breaks. Plaintiff alleges that she was routinely required to remain at her workstation during scheduled meal periods due to production quotas and staffing constraints, particularly during periods of high-volume production. Similarly, Plaintiff alleges that rest breaks were shortened or denied entirely during what are referred to internally as "surge" periods — intervals of accelerated production driven by customer delivery deadlines. Plaintiff contends that these practices were widespread and applied uniformly across production lines and shifts.

Time Rounding Policy. The ApexTime system was configured to round employee clock-in and clock-out punches to the nearest six-minute (0.1 hour) increment. Plaintiff alleges that the rounding policy, as applied, systematically shaved compensable time from employee records, resulting in underpayment of wages. While neutral rounding policies are permissible under California law in certain circumstances, Plaintiff alleges that VMS's implementation was not neutral in practice and consistently operated to the detriment of employees.

discontinuation of Auto-Deduction. The automatic meal period deduction was discontinued effective March 15, 2024, following an internal Human Resources audit. The audit was memorialized in a memorandum dated February 8, 2024, authored by Sandra Olsen, VMS's Vice President of Human Resources. A subsequent corrective action memorandum dated March 10, 2024, directed the implementation of a manual clock-out/clock-in requirement for all meal periods at the Fontana Plant. While the corrective action is a favorable fact for the defense, it also constitutes a potential admission of the deficiencies in the prior system. We address this issue further in the litigation plan below.

Fontana Plant Operations. The Fontana Plant operates two shifts: a First Shift running from 5:00 AM to 1:30 PM and a Second Shift running from 2:00 PM to 10:30 PM. During overtime or "surge" periods, shifts are frequently extended to 12 hours. The plant operates six production lines: Body Line A, Body Line B, Trim Line A, Trim Line B, Paint, and Final Assembly/Quality Control. The facility employs approximately 1,450 non-exempt hourly production employees at any given time and experiences an annual turnover rate of approximately 38%, which contributes to the large size of the putative class over the four-year class period.

2.4 Procedural Status

The procedural posture of the case is as follows:

• August 1, 2025: Complaint filed in the Superior Court of California, County of San Bernardino, assigned Case No. CIVSB-2025-04781.

• August 12, 2025: VMS served with the Summons and Complaint via CT Agents, Inc. (Sacramento, California), VMS's registered agent for service of process in California.

• September 11, 2025: Deadline for VMS to file a responsive pleading (answer, demurrer, or motion to strike).

• Late October 2025 (estimated): Anticipated initial Case Management Conference.

• Q1 2026 (estimated): Anticipated filing of Plaintiff's motion for class certification.

• August 4, 2025: C&H matter opened.

• August 5, 2025: Litigation hold notice issued to VMS management, IT department, and relevant custodians directing preservation of all potentially relevant documents and electronically stored information ("ESI").

The case has been assigned to Department S-24 of the San Bernardino County Superior Court. We do not yet have a specific judicial assignment. We will advise Ridgeway of the assigned judge promptly upon receiving that information, along with any relevant background on the judge's tendencies in employment class action matters.

2.5 Exposure Summary

We have conducted a preliminary assessment of the maximum theoretical aggregate exposure across all causes of action. This assessment is necessarily based on assumptions about the size of the putative class, the applicable violation rates, the average hourly rate across the class, and the number of workdays and pay periods at issue. These figures are presented for planning purposes and represent the high end of theoretical exposure, not a prediction of likely outcome.

Maximum Theoretical Aggregate Exposure: Approximately $65,000,000+ (including overlapping and duplicative categories). The principal components are as follows:

• Meal Period Premiums: Approximately $23,819,760. This figure is calculated based on 3,550 putative class members × 480 workdays over the class period × an assumed 65% violation rate × $21.40 average hourly rate × 1 hour of premium pay per violation day. The 65% violation rate is an estimate based on Plaintiff's allegations and our preliminary review of the ApexTime data; the actual rate may be significantly lower.

• Rest Period Premiums: Approximately $10,993,440. This figure is calculated based on 3,550 putative class members × 480 workdays × an assumed 30% violation rate × $21.40 average hourly rate × 1 hour of premium pay per violation day.

• Waiting Time Penalties (Cal. Lab. Code § 203): Approximately $10,814,400. This figure assumes approximately 2,100 former employees during the class period × 30 days × 8 hours per day × $21.40 average hourly rate.

• Wage Statement Penalties (Cal. Lab. Code § 226): Approximately $7,100,000. Statutory penalties are $50 per employee for the initial violation and $100 per employee for each subsequent violation, subject to a statutory cap of $4,000 per employee. The aggregate cap across the putative class could reach as high as $14,200,000, though recovery in the $7,100,000 range is more realistic based on prevailing judicial practices.

• PAGA Penalties: Approximately $5,500,000. PAGA penalties are calculated at $100 per employee per pay period for the initial violation and $200 per employee per pay period for each subsequent violation. Seventy-five percent of PAGA penalties are payable to the LWDA, with the remaining 25% distributed to aggrieved employees.

• UCL Restitution (Cal. Bus. & Prof. Code § 17200): Restitutionary relief under the UCL is largely duplicative of the premium pay claims and is not additive to the overall exposure calculation.

Realistic Settlement Range. Based on our experience with comparable California meal-and-rest-break class actions in the manufacturing sector, our preliminary assessment of the merits, and discounts for certification risk, litigation defenses, and individualized issues that may preclude or limit class treatment, we estimate a realistic settlement range of $8,500,000 to $18,700,000, with a midpoint of approximately $13,600,000. This range reflects a number of variables, including the strength of VMS's policy-based defenses, the impact of the March 2024 corrective action on the class period, and the individualized nature of certain claims (particularly the rest break claims, which vary significantly by production line and supervisor). We will refine this estimate as discovery progresses and additional data becomes available.

Policy Limits Consideration. We note that the realistic settlement range may exceed the $10,000,000 per-occurrence limit under the Policy when combined with defense costs, which erode the policy limits on a defense-within-limits basis. This is an important consideration for both defense strategy and settlement planning, and we address it further in the budget section below.

3. Defense Team and Billing Rates

C&H has assembled a defense team with deep experience in California wage-and-hour class action litigation, including class certification practice in state court and complex employment data analytics. The core engagement team and their current standard billing rates are as follows:

Ms. Vasquez will serve as the Responsible Partner with overall supervisory authority over the defense. Mr. Crawford will serve as the Billing Partner and will be available for substantive work as needed, particularly during the class certification and trial preparation phases. Mr. Underwood, a seventh-year associate with significant experience in California meal-and-rest-break class action defense, will serve as the Lead Associate responsible for day-to-day case management, discovery, and motion practice. Mr. Archer, a fourth-year associate, will support the team on document review, research, written discovery, and deposition preparation.

Local Counsel. We have retained Whitfield Garza LLP as local counsel for San Bernardino County Superior Court filings and appearances as needed. The firm's contact partner is Elena Garza. Whitfield Garza is located at 290 North D Street, Suite 510, San Bernardino, California 92401. Their billing rates will be provided to Ridgeway separately under cover of a supplemental correspondence. We anticipate that local counsel involvement will be limited to court appearances, filing logistics, and consultation on local rules and practices.

Defense Expert. We have retained Dr. Kenneth Proulx of Veltrano Analytics LLC, located at 155 South Lake Avenue, Suite 800, Pasadena, California 91101, as a defense expert in statistical analysis and econometrics. Dr. Proulx has extensive experience analyzing time-punch data in California wage-and-hour class actions. He has been retained for the purposes of (i) conducting a comprehensive statistical analysis of the ApexTime time-punch records for the approximately 3,550 putative class members, (ii) preparing an expert declaration and/or report in support of VMS's opposition to class certification, and (iii) rebutting the analysis of Plaintiff's retained expert, Dr. Anita Bhargava of Lakeshore Economic Consulting Group (Berkeley, California), whom we expect to offer opinions in support of class certification regarding alleged systematic break violations and aggregate damages. Dr. Proulx's rate schedule and anticipated fees are included within the Phase 2 and Phase 3 budget estimates set forth below.

Billing Arrangement. This engagement operates under a standard hourly billing arrangement. No alternative fee arrangement is currently in place. Monthly invoices will be submitted with task-based billing codes in accordance with Ridgeway's litigation management guidelines (once received). All invoices will be presented in a format that permits Ridgeway to track costs by litigation phase and task category.

4. Summary Litigation Plan

Set forth below is a phased summary litigation plan covering the anticipated course of the defense from the responsive pleading stage through trial, if necessary. Each phase includes a description of the contemplated work, the strategic objectives, and an estimated cost range. These estimates are based on current information and will be refined as the case develops. We will promptly advise Ridgeway of any material changes in the litigation plan or budget.

Phase 1: Responsive Pleadings (August – September 2025)

Objective. File a comprehensive responsive pleading by the September 11, 2025 deadline that preserves all affirmative defenses and, where appropriate, challenges the legal sufficiency of certain of Plaintiff's claims at the outset.

Answer and Affirmative Defenses. We will file an answer to the Complaint asserting the following affirmative defenses, among others:

• Statute of Limitations: Certain claims are time-barred to the extent they seek recovery for conduct occurring outside the applicable limitations periods, including the three-year statute of limitations for meal and rest break premium claims and the one-year statute of limitations for wage statement penalties.

• Good-Faith Compliance with Cal. Lab. Code § 512: VMS maintained written meal and rest break policies (Employee Handbook, Section 4.3, June 2022 revision) that facially complied with California law by providing employees with the opportunity to take compliant breaks. Under Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, an employer satisfies its obligation if it provides the meal period and does not impede or discourage employees from taking it.

• Voluntary Meal Period Waivers: To the extent employees voluntarily chose not to take meal periods, such waivers, if properly documented, negate liability for meal period premium pay.

• Individual Variations Precluding Class Treatment: The claims at issue require individualized inquiries into each employee's specific break practices, supervisory oversight, production line assignment, and shift schedule, rendering class treatment inappropriate.

• Remedial Measures: VMS voluntarily discontinued the auto-deduction practice effective March 15, 2024, and implemented corrective measures, limiting the scope and duration of any alleged violations.

• Neutral Rounding Policy: VMS's rounding policy rounds time punches to the nearest six-minute increment and, when properly applied, does not systematically favor either the employer or the employee. Neutral rounding policies are permissible under California law. See's Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889.

• Failure to Exhaust Administrative Remedies / PAGA Standing: Plaintiff's individual claims may not support representative standing for all alleged violations, particularly to the extent that certain PAGA claims are premised on violations that Plaintiff did not personally experience.

• Safe Harbor Defense: To the extent applicable, VMS took affirmative steps to cure alleged violations within the meaning of the UCL's safe harbor provisions.

Demurrer and Motion to Strike. Contemporaneously with the answer, we will file a demurrer and motion to strike challenging the following:

(i) PAGA Standing: We will challenge Plaintiff's standing to bring representative PAGA claims for violations she did not personally experience, relying on recent appellate authority addressing the scope of PAGA standing, including Huff v. Securitas Security Services USA, Inc. (2018) 23 Cal.App.5th 745 and subsequent developments in the law.

(ii) Sufficiency of the UCL Cause of Action: We will demur to the Sixth Cause of Action on the grounds that the UCL claim, as pleaded, fails to identify a sufficient basis for relief independent of the underlying Labor Code violations, and that the alleged facts do not support the "unfair" or "fraudulent" prongs of Section 17200.

(iii) Class Allegations Relating to Rest Break Claims: We will move to strike the class allegations as they pertain to the rest break claims on the grounds that the Complaint fails to allege facts demonstrating commonality and typicality sufficient to sustain class treatment across the varying shift lengths, production lines, and supervisory structures at the Fontana Plant.

We recognize that demurrers and motions to strike in class action cases are not always granted, and courts may defer resolution of class-related issues to the certification stage. Nevertheless, filing these challenges at the outset serves important strategic functions: it narrows the scope of discovery, forces Plaintiff to articulate her theories more precisely, and creates a record of VMS's legal arguments for later use at the certification and summary judgment stages.

Estimated Cost for Phase 1: $75,000 – $120,000.

Phase 2: Case Management and Early discovery (October 2025 – Q1 2026)

Objective. Establish a favorable litigation schedule, commence fact discovery, and develop the evidentiary record necessary to oppose class certification.

Case Management Conference. We anticipate that the Court will schedule an initial Case Management Conference in late October 2025. At the conference, we will seek a reasonable discovery schedule that provides adequate time for expert analysis of the voluminous time-punch data and oppose any attempt by Plaintiff to set an early class certification hearing before meaningful discovery has been completed.

Written discovery. We will propound initial written discovery on Plaintiff, including interrogatories and requests for production of documents concerning her employment history, break practices, compensation, communications with other putative class members, and the factual basis for her claims. We will also respond to Plaintiff's anticipated discovery requests seeking production of VMS policies, ApexTime configuration records, time-punch data, payroll records, shift schedules, overtime authorization logs, supervisor communications, and other categories of documents.

Key Document Collection and Review. We will coordinate with VMS's in-house legal team and IT department to collect and review the following key documents and categories of ESI:

• ApexTime 6.2 configuration records, including the auto-deduction settings and rounding parameters, for the period January 2020 through March 15, 2024, and subsequent manual clock-out/clock-in configuration from March 15, 2024 to the present;

• The internal HR audit memorandum dated February 8, 2024, authored by Sandra Olsen, VP of Human Resources;

• The corrective action memorandum dated March 10, 2024, directing implementation of the manual clock-out/clock-in requirement;

• The VMS Employee Handbook (June 2022 revision), including Section 4.3 (Meal and Rest Break Policy);

• Supervisor training materials related to meal and rest break compliance (last updated September 2023);

• The personnel file for Gloria Reyes, including performance evaluations, disciplinary records, separation documentation, and any meal period waiver forms;

• Production scheduling records, overtime authorization logs, and "surge" period documentation for the Fontana Plant.

Third-Party discovery. We will coordinate with Apex Workforce Solutions, Inc. for the extraction of electronic time records and payroll data for the putative class members over the relevant period. This will require close coordination to ensure that the data extraction is comprehensive and in a format suitable for statistical analysis by our expert.

Plaintiff's Deposition. We will depose the named Plaintiff, Gloria Reyes, with a focus on her individual break practices, her knowledge of VMS's policies, the circumstances under which she allegedly missed or had shortened breaks, her interactions with supervisors regarding breaks, her relationship with counsel, and her capacity to serve as a class representative.

Expert Work. We will engage Dr. Kenneth Proulx to begin his statistical analysis of the time-punch data for the approximately 3,550 putative class members. The analysis will assess the frequency and duration of meal and rest break deviations, variability in break compliance across production lines and shifts, the net impact of the rounding policy on employee compensation, and the extent to which individual factors (such as voluntary break waivers and varying supervisory practices) preclude class-wide inferences. Dr. Proulx's preliminary findings will inform our opposition to class certification and our assessment of exposure.

Estimated Cost for Phase 2: $250,000 – $400,000.

This estimate includes C&H attorney fees, local counsel fees, Dr. Proulx's initial expert fees, third-party data extraction costs, court reporting fees for Plaintiff's deposition, and related litigation expenses.

Phase 3: Class Certification Opposition (Q1 – Q2 2026)

Objective. Defeat or substantially narrow class certification, which is the single most significant litigation milestone in this case.

We anticipate that Plaintiff will file a motion for class certification under California Code of Civil Procedure § 382 in the first quarter of 2026. We will oppose that motion vigorously. Under Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004 and its progeny, the trial court must rigorously analyze whether the requirements of an ascertainable class, a well-defined community of interest (commonality, typicality, and adequacy of representation), and substantial benefits from class treatment are satisfied.

Our principal arguments in opposition to class certification will include the following:

• Individualized Inquiries Predominate. The determination of whether each putative class member was denied a compliant meal or rest period requires an individualized inquiry into each employee's specific circumstances, including production line assignment, shift schedule, supervisor practices, voluntary break decisions, and workload on any given day. These individual issues predominate over any common questions, rendering class treatment inappropriate.

• Named Plaintiff Is Atypical. Ms. Reyes worked exclusively on Trim Line B during the second shift. Her experience is not representative of employees on the other five production lines (Body Line A, Body Line B, Trim Line A, Paint, and Final Assembly/QC) or on the first shift, where break practices, supervisory oversight, and production demands differed materially.

• Two Distinct Sub-Periods. The discontinuation of the auto-deduction feature on March 15, 2024, creates two distinct sub-periods within the class period — one in which the auto-deduction was operative (August 4, 2021 through March 15, 2024) and one in which the manual clock-out/clock-in requirement was in effect (March 15, 2024 to the present). The factual issues, legal theories, and defenses applicable to each sub-period differ significantly, undermining the coherence of a single class.

• Statistical Evidence of Compliance. Dr. Proulx's analysis is expected to demonstrate that a significant percentage of employees consistently took compliant meal and rest breaks during the class period, including during the auto-deduction period. This evidence will support the argument that VMS's policies were effective in providing breaks and that any alleged violations were the result of individual circumstances rather than a uniform policy or practice.

• Manageability Concerns. Certifying a class of approximately 3,550 members over a four-year period, encompassing six production lines, two shifts, and varying supervisory structures, would present insurmountable manageability challenges for the Court.

In support of the opposition, we will prepare and file:

• Dr. Kenneth Proulx's expert declaration and/or report, presenting the results of his statistical analysis of the time-punch data;

• Supporting declarations from VMS management, including Marcus Gutierrez (Plant Manager, Fontana Plant) and Sandra Olsen (VP of Human Resources), addressing VMS's meal and rest break policies, the implementation and enforcement of those policies, the circumstances leading to the discontinuation of the auto-deduction, and the corrective measures implemented;

• Any additional depositions of shift supervisors and production line leads as necessary to develop the factual record regarding individualized break practices across the Fontana Plant.

If the Court grants class certification in whole or in part, we will promptly evaluate whether to seek interlocutory appellate review by writ petition to the California Court of Appeal. If the Court denies certification in whole or in part, we will assess the appropriate path forward, including potential settlement of individual and/or PAGA claims.

Estimated Cost for Phase 3: $300,000 – $500,000.

This estimate includes C&H attorney fees for the class certification opposition briefing, supporting declarations, expert report preparation and filing, additional depositions, and related litigation expenses.

Phase 4: Post-Certification Proceedings / Mediation (Q2 – Q4 2026)

Objective. Resolve the matter on the most favorable terms achievable, whether through settlement following denial of certification or through mediated resolution following certification.

The strategy for Phase 4 is contingent on the outcome of the class certification motion:

If Class Certification Is Denied (in whole or in part): A denial of class certification would dramatically reduce VMS's exposure and create substantial leverage for a favorable settlement of Plaintiff's individual claims and the PAGA representative claims. We would pursue settlement negotiations on terms that reflect the significantly diminished value of the remaining claims. The estimated incremental cost for this scenario is $50,000 – $100,000.

If Class Certification Is Granted (in whole or in part): We would propose early mediation before a retired California Superior Court judge with expertise in employment class action matters. Prior to mediation, we would develop a comprehensive settlement model incorporating the time-punch data analysis, class size, violation rates, and applicable discounts. We would negotiate within the realistic settlement range of $8,500,000 to $18,700,000, with the objective of achieving a resolution at or below the midpoint. The estimated cost for the mediation phase in this scenario is $75,000 – $150,000.

Estimated Cost for Phase 4: $75,000 – $250,000 (range dependent on the outcome of the class certification motion).

Phase 5: Trial Preparation and Trial (if necessary, 2027)

Objective. In the event that settlement is not achieved, prepare for and try the case to the most favorable verdict achievable.

If the matter proceeds to trial, the defense will entail full merits discovery (including any remaining fact depositions and completion of the written discovery record), expert discovery (including the deposition of Plaintiff's expert, Dr. Anita Bhargava, and rebuttal of her damages analysis), pre-trial motions (including motions in limine and any dispositive motions), trial preparation (including witness preparation, exhibit organization, and jury instructions), and trial. Given the size and complexity of the putative class, and the volume of time-punch data at issue, trial preparation would be extensive.

Estimated Incremental Cost for Phase 5 (beyond Phases 1–4): $1,000,000 – $1,800,000.

Total Estimated Defense Costs Summary

The following table summarizes the estimated defense costs across all phases:

The Phases 1–3 subtotal of $800,000 – $1,200,000 includes C&H attorney fees, local counsel fees (Whitfield Garza LLP), and expert costs (Dr. Kenneth Proulx, Veltrano Analytics LLC).

Policy Limits Implications. We note that on a defense-within-limits basis, the defense costs erode the SIR first ($500,000) and then the per-occurrence limit ($10,000,000). Combining the estimated through-trial defense costs of $2,500,000 – $3,800,000 with any settlement or judgment in the realistic range of $8,500,000 – $18,700,000 could result in combined expenditures that approach, meet, or exceed the per-occurrence limit. We recommend that this issue be discussed in connection with Ridgeway's coverage determination and settlement strategy, and we are available to participate in such discussions at Ridgeway's convenience.

5. Self-Insured Retention Erosion and Cost Allocation

As set forth in the Policy and confirmed in the Reservation of Rights letter, VMS's $500,000 SIR must erode before Ridgeway's obligation to fund defense costs attaches. We understand that the SIR erodes on a first-dollar basis as defense costs and loss are incurred.

Based on the Phase 1 and early Phase 2 budget estimates, C&H anticipates that the SIR will be substantially eroded or fully exhausted during the responsive pleadings and early discovery phases, which we estimate will occur approximately in the fourth quarter of 2025. The principal cost drivers during this period will be the preparation of the answer, demurrer, and motion to strike; the collection and review of key VMS documents; the initiation of written discovery; and the commencement of coordination with Apex Workforce Solutions, Inc. for data extraction.

To ensure transparency and facilitate the transition to direct Ridgeway funding, C&H will implement the following procedures:

• Monthly invoices will track cumulative defense costs incurred to date against the remaining SIR balance.

• C&H will promptly notify Ridgeway when cumulative defense costs approach the SIR threshold (e.g., when approximately 80% of the SIR has been expended) so that Ridgeway can prepare to begin direct funding of defense costs.

• Initial invoices will be submitted to VMS for payment against the SIR, with courtesy copies provided to Ridgeway concurrently for tracking and auditing purposes.

• Upon exhaustion of the SIR, invoices will be submitted directly to Ridgeway for payment, with copies to VMS, in accordance with Ridgeway's litigation management guidelines and invoice submission procedures.

We request that Ridgeway confirm the procedures outlined above or provide alternative instructions for SIR tracking and the transition to direct funding.

6. Requests to Ridgeway National

6.1 Confirmation of Continued Defense Funding

We respectfully request that Ridgeway provide written confirmation that it will continue to fund defense costs in the above-referenced matter under the terms of the Reservation of Rights letter dated August 18, 2025, subject to the requirement that the SIR erode before Ridgeway's payment obligation attaches and subject to the reservations of rights set forth therein.

We note, and wish to make clear for the record, that VMS expressly reserves all rights under the Policy, including but not limited to the right to challenge the applicability of the reservations identified in the Reservation of Rights letter. Specifically, VMS reserves its rights with respect to the following reserved issues: (i) the applicability of the wage-and-hour exclusion to the claims asserted in this matter; (ii) the coverage of PAGA penalties under the Policy; and (iii) the applicability of the "knowing" violation and/or intentional acts exclusion. VMS's continued acceptance of the defense provided under the Reservation of Rights letter does not constitute a waiver of any of these rights and shall not be construed as agreement with or acquiescence to the reservations asserted.

6.2 Litigation Management Guidelines

We further request that Ridgeway provide its current litigation management guidelines applicable to this matter, including the following categories of information:

• Requirements for pre-approval of costs exceeding specified dollar thresholds, including but not limited to expert witness fees and expenses, deposition costs, third-party vendor costs (e.g., data extraction, e-discovery hosting, forensic analysis), and travel expenses;

• Required format and task-based billing code requirements for monthly invoices, including whether Ridgeway requires the use of UTBMS (Uniform Task-Based Management System) codes, LEDES (Legal Electronic Data Exchange Standard) invoice format, or other standardized billing formats;

• Reporting frequency and content requirements, including whether Ridgeway requires monthly, quarterly, or milestone-based status reports, and the specific content elements required in each report;

• Any panel counsel rate limitations, billing rate caps, or fee schedule requirements applicable under the Policy or Ridgeway's standard litigation management practices;

• Requirements regarding settlement authority and the process for obtaining pre-approval of mediation proposals, settlement offers, and settlement agreements, including any dollar thresholds above which Ridgeway's prior written consent is required.

Prompt receipt of these guidelines will enable C&H to structure its invoicing and reporting to comply with Ridgeway's requirements from the outset and will minimize the need for subsequent invoice revisions or resubmissions.

6.3 Coverage Determination Timeline

Finally, we request that Ridgeway provide an estimated timeline for its coverage determination on the three issues reserved in the August 18, 2025 Reservation of Rights letter: (i) the wage-and-hour exclusion, (ii) PAGA penalty coverage, and (iii) the "knowing" violation/intentional acts exclusion.

The coverage determination is material to VMS's defense strategy and settlement planning. In particular, the question of whether PAGA penalties (estimated exposure of approximately $5,500,000) are covered under the Policy has significant implications for the overall resolution strategy and for the allocation of any settlement between covered and potentially non-covered components. Additionally, the interplay between the per-occurrence limit of $10,000,000 and the realistic settlement range of $8,500,000 – $18,700,000, when combined with defense costs, makes an early coverage determination essential for informed decision-making by all parties.

We understand that coverage determinations of this nature require careful analysis and may take time to complete. We respectfully ask, however, that Ridgeway provide an estimated timeline so that VMS and C&H can plan accordingly.

7. Monthly Reporting Commitment

C&H commits to providing Ridgeway with comprehensive monthly status reports throughout the duration of this engagement. Each monthly report will include the following elements:

• A narrative summary of all significant activities performed during the reporting period, including court appearances, discovery conducted or received, depositions taken or defended, motions filed or opposed, and material case developments;

• A detailed accounting of professional fees and expenses incurred during the reporting period, presented with task-based coding in accordance with Ridgeway's litigation management guidelines;

• Cumulative defense costs incurred to date, together with a comparison of actual costs to the applicable phase budget, including identification and explanation of any material variances;

• The current SIR balance remaining, or, if the SIR has been exhausted, cumulative costs funded by Ridgeway;

• An updated assessment of exposure and case developments, including any changes in the estimated realistic settlement range or maximum theoretical exposure;

• Identification of upcoming significant events, including scheduled hearings, deposition dates, discovery deadlines, motion filing deadlines, and other material dates;

• Any changes in strategic recommendations or adjustments to the litigation plan, together with the reasons for such changes.

The first monthly report will cover the period from the opening of the C&H matter (August 4, 2025) through the end of September 2025 and will be submitted to Ridgeway by October 15, 2025. Subsequent reports will follow on a monthly cadence unless Ridgeway's litigation management guidelines specify a different reporting schedule.

8. Enclosures

For your convenience, enclosed with this letter please find copies of the following documents:

1. Complaint, Gloria Reyes, individually and on behalf of all others similarly situated, and on behalf of the State of California v. Vantage Mobility Systems Corp., Case No. CIVSB-2025-04781, filed August 1, 2025, Superior Court of California, County of San Bernardino;

2. Summons issued in connection with the above-captioned action;

3. Proof of Service dated August 12, 2025, confirming service of the Summons and Complaint on VMS via CT Agents, Inc. (Sacramento, California);

4. PAGA notice served on the California Labor and Workforce Development Agency, dated May 22, 2025, LWDA Case No. LWDA-CM-2025-831447; and

5. Calderwood & Harkness LLP's engagement letter with Vantage Mobility Systems Corp. (provided for reference regarding billing rates, staffing, and scope of engagement).

Please advise if you require additional copies of any of the foregoing documents or if there are additional materials you would like us to provide.

9. Closing

We respectfully request a prompt response regarding (i) continued defense funding under the terms of the Reservation of Rights letter, (ii) Ridgeway's litigation management guidelines, and (iii) any applicable cost pre-approval thresholds, so that we may structure our defense activities and billing in accordance with Ridgeway's requirements from the outset.

As noted above, VMS's responsive pleading deadline is September 11, 2025, which is now less than three weeks away. Defense costs are being incurred currently in connection with the preparation of the answer, affirmative defenses, demurrer, and motion to strike, as well as the issuance of the litigation hold and initial document collection. Timely confirmation of the defense funding arrangement and receipt of the litigation management guidelines will facilitate an orderly and cost-effective transition as the SIR erodes.

We are prepared to schedule a telephone conference or in-person meeting at your earliest convenience to discuss the litigation plan and budget in further detail, answer any questions you may have, and establish a working protocol for ongoing communication between C&H and Ridgeway's claims team.

Please do not hesitate to contact the undersigned or James Underwood with any questions or requests:

Renata Vasquez Partner, Labor & Employment Direct Telephone: (213) 488-7215

Email: rvasquez@calderwoodharkness.com

James Underwood Lead Associate, Labor & Employment Direct Telephone: (213) 488-7342

Email: junderwood@calderwoodharkness.com

We appreciate Ridgeway National's cooperation in this matter and look forward to working with you.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Renata Vasquez Partner, Labor & Employment 633 West Fifth Street, Suite 4400 Los Angeles, CA 90071

Enclosures (5)

cc: Priya Nandakumar, General Counsel, Vantage Mobility Systems Corp.

cc: Bernard Crawford, Billing Partner, Calderwood & Harkness LLP

PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION — ATTORNEY WORK PRODUCT This correspondence and any attachments are protected by the attorney-client privilege and/or the attorney work-product doctrine. This communication is intended solely for the use of the addressee(s) identified above. If you have received this communication in error, please notify the sender immediately and destroy all copies.

Team Member	Role	Rate
Renata Vasquez	Responsible Partner, Labor & Employment	$1,150/hour
Bernard Crawford	Billing Partner, Labor & Employment	$1,150/hour
James Underwood	Lead Associate, Labor & Employment	$825/hour
Devon Archer	Working Associate, Labor & Employment	$675/hour
Phase	Description	Estimated Cost Range
Phase 1	Responsive Pleadings	$75,000 – $120,000
Phase 2	Case Management / Early discovery	$250,000 – $400,000
Phase 3	Class Certification Opposition	$300,000 – $500,000
Subtotal: Through Class Certification	Phases 1–3	$800,000 – $1,200,000
Phase 4	Post-Certification / Mediation	$75,000 – $250,000
Phase 5	Trial Preparation and Trial	$1,000,000 – $1,800,000
Total: Through Trial	Phases 1–5	$2,500,000 – $3,800,000

PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION — ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP Attorneys at Law
633 West Fifth Street, Suite 4400 Los Angeles, California 90071
Telephone: (213) 488-7200 Facsimile: (213) 488-7201
Email: rvasquez@calderwoodharkness.com
August 25, 2025
Via Email and U.S. Mail
Neil Pemberton, AVP – Complex Claims Ridgeway National Insurance Company 100 Constitution Plaza Hartford, CT 06103
Re: Initial Defense Cost Budget and Litigation Plan
Insured: Vantage Mobility Systems Corp.
Policy No.: EPL-VMS-2024-07821
Policy Period: July 1, 2024 – July 1, 2025
Claim/Matter: Gloria Reyes, individually and on behalf of all others similarly situated, and on behalf of the State of California v. Vantage Mobility Systems Corp., Case No. CIVSB-2025-04781, Superior Court of California, County of San Bernardino
C&H Matter No.: 1007-00004
Dear Mr. Pemberton:
1. Introduction and Purpose
Calderwood & Harkness LLP ("C&H" or "the Firm") serves as defense counsel for the insured, Vantage Mobility Systems Corp. ("VMS" or "Vantage"), in the above-referenced matter. The undersigned, Renata Vasquez, is the Responsible Partner overseeing all aspects of the defense. Bernard Crawford is the Billing Partner responsible for invoice management and fee coordination. Both Ms. Vasquez and Mr. Crawford are partners in the Firm's Labor & Employment Practice Group.
We write in connection with Ridgeway National Insurance Company's ("Ridgeway" or "Ridgeway National") Reservation of Rights letter dated August 18, 2025, pursuant to which Ridgeway has agreed to fund defense costs in the above-captioned matter, subject to the terms and conditions of Employment Practices Liability Policy No. EPL-VMS-2024-07821 (the "Policy"), the reservations of rights set forth therein, and the requirement that VMS's $500,000 self-insured retention ("SIR") erode before Ridgeway's obligation to fund defense costs attaches. We acknowledge receipt of that letter and are proceeding in accordance with its terms while preserving all of VMS's rights as set forth more fully below.
The purpose of this letter is threefold. First, we provide an initial defense cost budget covering the anticipated phases of litigation through trial. Second, we present a summary litigation plan outlining our proposed defense strategy, key factual and legal issues, anticipated milestones, and staffing. Third, we request written confirmation of Ridgeway's continued defense cost funding, a copy of Ridgeway's litigation management guidelines, and an estimated timeline for Ridgeway's coverage determination on the issues reserved in the August 18, 2025 Reservation of Rights letter.
We recognize that this matter presents significant exposure and complexity, and we are committed to working cooperatively with Ridgeway to manage defense costs effectively while pursuing the most favorable outcome achievable for VMS. We welcome the opportunity to discuss any aspect of this letter at your convenience.
2. Case Summary
2.1 Parties and Claims
Plaintiff. Gloria Reyes is a former Production Associate (Trim Line B) who was employed at VMS's Fontana Plant, located at 11780 Cherry Avenue, Fontana, California 92337. Ms. Reyes was employed by VMS from approximately March 12, 2021 through January 19, 2025. During her tenure, she was assigned to the second shift, which runs from 2:00 PM to 10:30 PM. Her hourly wage at the time of her separation was $22.75 per hour. Ms. Reyes brings this action individually, on behalf of a putative class of all others similarly situated, and on behalf of the State of California under the Private Attorneys General Act ("PAGA").
Defendant. Vantage Mobility Systems Corp. is a Delaware corporation headquartered at 4200 Industrial Parkway, Auburn Hills, Michigan 48326. VMS is registered to do business in both California and Michigan. The company specializes in automotive manufacturing, specifically specialty vehicle modifications for commercial and consumer markets. VMS is a wholly owned portfolio company of Ashgrove Equity Partners Industrial Partners, LP. The Fontana Plant at issue in this litigation is VMS's primary West Coast manufacturing facility.
Plaintiff's Counsel. Plaintiff is represented by Nakamura Lozano & Pratt LLP, located at 350 South Grand Avenue, Suite 2800, Los Angeles, California 90071. The lead attorneys are Victor Lozano (Partner) and Michelle Tran (Associate). Nakamura Lozano & Pratt is a prominent California plaintiff-side employment class action firm with a well-established track record. The firm has secured eight-figure settlements in manufacturing and logistics sector meal-and-rest-break cases, including several class actions against large employers in the Inland Empire region. We expect the firm to prosecute this matter aggressively and with substantial resources.
Putative Class. Plaintiff seeks to represent a putative class of approximately 3,550 current and former non-exempt hourly production employees at the Fontana Plant over a four-year class period beginning August 4, 2021 (four years preceding the filing of the Complaint). The class definition encompasses employees across all production lines and both shifts who were subject to VMS's timekeeping policies and practices during the relevant period.
2.2 Causes of Action
The Complaint sets forth seven causes of action, each of which is summarized below:
1.  First Cause of Action — Meal Period Violations (Cal. Lab. Code §§ 226.7, 512): Plaintiff alleges that VMS maintained a policy and practice of failing to provide lawful, uninterrupted, off-duty meal periods of not less than 30 minutes for every five hours worked, and failed to pay premium wages of one additional hour of pay at each employee's regular rate of compensation for each workday on which a compliant meal period was not provided.
2.  Second Cause of Action — Rest Period Violations (Cal. Lab. Code § 226.7): Plaintiff alleges that VMS failed to authorize and permit compliant rest periods of not less than 10 minutes for every four hours worked, or major fraction thereof, and failed to pay the corresponding premium wages for each workday on which a compliant rest period was not authorized or permitted.
3.  Third Cause of Action — Unpaid Wages (Cal. Lab. Code §§ 204, 1194): Plaintiff alleges that VMS's timekeeping rounding policy and automatic meal period deductions resulted in systematic underpayment of wages owed for time actually worked, including straight-time and overtime wages.
4.  Fourth Cause of Action — Inaccurate Wage Statements (Cal. Lab. Code § 226): Plaintiff alleges that, as a consequence of the foregoing violations, VMS issued wage statements that failed to accurately reflect, among other things, total hours worked, gross wages earned, and applicable hourly rates, in violation of the detailed requirements of Section 226.
5.  Fifth Cause of Action — Waiting Time Penalties (Cal. Lab. Code § 203): Plaintiff alleges that VMS willfully failed to pay all wages due upon termination or within 72 hours of resignation, thereby subjecting VMS to waiting time penalties of up to 30 days' wages for each affected former employee.
6.  Sixth Cause of Action — Unfair Business Practices (Cal. Bus. & Prof. Code § 17200 et seq.): Plaintiff alleges that VMS's conduct constitutes unlawful, unfair, and/or fraudulent business practices under California's Unfair Competition Law, entitling the putative class to restitution and injunctive relief.
7.  Seventh Cause of Action — PAGA Penalties (Cal. Lab. Code § 2698 et seq.): Plaintiff brings representative PAGA claims on behalf of the State of California seeking civil penalties of $100 per employee per pay period for the initial violation and $200 per employee per pay period for each subsequent violation. The PAGA notice was served on the California Labor and Workforce Development Agency ("LWDA") on May 22, 2025, and assigned LWDA Case No. LWDA-CM-2025-831447. The 65-day statutory cure period expired on July 26, 2025, with no investigation initiated by the LWDA, thereby exhausting the administrative prerequisite and permitting the filing of the PAGA claims in court.
2.3 Central Factual Allegations
The factual core of the Complaint centers on VMS's timekeeping practices at the Fontana Plant during the relevant period. The principal allegations are as follows:
Automatic Meal Period Deductions. From approximately January 2020 through March 15, 2024, VMS utilized an automatic 30-minute meal period deduction feature in its ApexTime 6.2 timekeeping system, a commercial workforce management platform provided by Apex Workforce Solutions, Inc. Under the auto-deduction configuration, if an employee did not affirmatively clock out and back in for a meal period, the system automatically deducted 30 minutes from the employee's recorded hours worked, regardless of whether a meal break was actually taken. Plaintiff alleges that the auto-deduction policy systematically under-recorded compensable working time and operated to deny premium wages that should have been paid when compliant meal periods were not provided.
Denied and Shortened Meal and Rest Breaks. Plaintiff alleges that she was routinely required to remain at her workstation during scheduled meal periods due to production quotas and staffing constraints, particularly during periods of high-volume production. Similarly, Plaintiff alleges that rest breaks were shortened or denied entirely during what are referred to internally as "surge" periods — intervals of accelerated production driven by customer delivery deadlines. Plaintiff contends that these practices were widespread and applied uniformly across production lines and shifts.
Time Rounding Policy. The ApexTime system was configured to round employee clock-in and clock-out punches to the nearest six-minute (0.1 hour) increment. Plaintiff alleges that the rounding policy, as applied, systematically shaved compensable time from employee records, resulting in underpayment of wages. While neutral rounding policies are permissible under California law in certain circumstances, Plaintiff alleges that VMS's implementation was not neutral in practice and consistently operated to the detriment of employees.
discontinuation of Auto-Deduction. The automatic meal period deduction was discontinued effective March 15, 2024, following an internal Human Resources audit. The audit was memorialized in a memorandum dated February 8, 2024, authored by Sandra Olsen, VMS's Vice President of Human Resources. A subsequent corrective action memorandum dated March 10, 2024, directed the implementation of a manual clock-out/clock-in requirement for all meal periods at the Fontana Plant. While the corrective action is a favorable fact for the defense, it also constitutes a potential admission of the deficiencies in the prior system. We address this issue further in the litigation plan below.
Fontana Plant Operations. The Fontana Plant operates two shifts: a First Shift running from 5:00 AM to 1:30 PM and a Second Shift running from 2:00 PM to 10:30 PM. During overtime or "surge" periods, shifts are frequently extended to 12 hours. The plant operates six production lines: Body Line A, Body Line B, Trim Line A, Trim Line B, Paint, and Final Assembly/Quality Control. The facility employs approximately 1,450 non-exempt hourly production employees at any given time and experiences an annual turnover rate of approximately 38%, which contributes to the large size of the putative class over the four-year class period.
2.4 Procedural Status
The procedural posture of the case is as follows:
•  August 1, 2025: Complaint filed in the Superior Court of California, County of San Bernardino, assigned Case No. CIVSB-2025-04781.
•  August 12, 2025: VMS served with the Summons and Complaint via CT Agents, Inc. (Sacramento, California), VMS's registered agent for service of process in California.
•  September 11, 2025: Deadline for VMS to file a responsive pleading (answer, demurrer, or motion to strike).
•  Late October 2025 (estimated): Anticipated initial Case Management Conference.
•  Q1 2026 (estimated): Anticipated filing of Plaintiff's motion for class certification.
•  August 4, 2025: C&H matter opened.
•  August 5, 2025: Litigation hold notice issued to VMS management, IT department, and relevant custodians directing preservation of all potentially relevant documents and electronically stored information ("ESI").
The case has been assigned to Department S-24 of the San Bernardino County Superior Court. We do not yet have a specific judicial assignment. We will advise Ridgeway of the assigned judge promptly upon receiving that information, along with any relevant background on the judge's tendencies in employment class action matters.
2.5 Exposure Summary
We have conducted a preliminary assessment of the maximum theoretical aggregate exposure across all causes of action. This assessment is necessarily based on assumptions about the size of the putative class, the applicable violation rates, the average hourly rate across the class, and the number of workdays and pay periods at issue. These figures are presented for planning purposes and represent the high end of theoretical exposure, not a prediction of likely outcome.
Maximum Theoretical Aggregate Exposure: Approximately $65,000,000+ (including overlapping and duplicative categories). The principal components are as follows:
•  Meal Period Premiums: Approximately $23,819,760. This figure is calculated based on 3,550 putative class members × 480 workdays over the class period × an assumed 65% violation rate × $21.40 average hourly rate × 1 hour of premium pay per violation day. The 65% violation rate is an estimate based on Plaintiff's allegations and our preliminary review of the ApexTime data; the actual rate may be significantly lower.
•  Rest Period Premiums: Approximately $10,993,440. This figure is calculated based on 3,550 putative class members × 480 workdays × an assumed 30% violation rate × $21.40 average hourly rate × 1 hour of premium pay per violation day.
•  Waiting Time Penalties (Cal. Lab. Code § 203): Approximately $10,814,400. This figure assumes approximately 2,100 former employees during the class period × 30 days × 8 hours per day × $21.40 average hourly rate.
•  Wage Statement Penalties (Cal. Lab. Code § 226): Approximately $7,100,000. Statutory penalties are $50 per employee for the initial violation and $100 per employee for each subsequent violation, subject to a statutory cap of $4,000 per employee. The aggregate cap across the putative class could reach as high as $14,200,000, though recovery in the $7,100,000 range is more realistic based on prevailing judicial practices.
•  PAGA Penalties: Approximately $5,500,000. PAGA penalties are calculated at $100 per employee per pay period for the initial violation and $200 per employee per pay period for each subsequent violation. Seventy-five percent of PAGA penalties are payable to the LWDA, with the remaining 25% distributed to aggrieved employees.
•  UCL Restitution (Cal. Bus. & Prof. Code § 17200): Restitutionary relief under the UCL is largely duplicative of the premium pay claims and is not additive to the overall exposure calculation.
Realistic Settlement Range. Based on our experience with comparable California meal-and-rest-break class actions in the manufacturing sector, our preliminary assessment of the merits, and discounts for certification risk, litigation defenses, and individualized issues that may preclude or limit class treatment, we estimate a realistic settlement range of $8,500,000 to $18,700,000, with a midpoint of approximately $13,600,000. This range reflects a number of variables, including the strength of VMS's policy-based defenses, the impact of the March 2024 corrective action on the class period, and the individualized nature of certain claims (particularly the rest break claims, which vary significantly by production line and supervisor). We will refine this estimate as discovery progresses and additional data becomes available.
Policy Limits Consideration. We note that the realistic settlement range may exceed the $10,000,000 per-occurrence limit under the Policy when combined with defense costs, which erode the policy limits on a defense-within-limits basis. This is an important consideration for both defense strategy and settlement planning, and we address it further in the budget section below.
3. Defense Team and Billing Rates
C&H has assembled a defense team with deep experience in California wage-and-hour class action litigation, including class certification practice in state court and complex employment data analytics. The core engagement team and their current standard billing rates are as follows:
Ms. Vasquez will serve as the Responsible Partner with overall supervisory authority over the defense. Mr. Crawford will serve as the Billing Partner and will be available for substantive work as needed, particularly during the class certification and trial preparation phases. Mr. Underwood, a seventh-year associate with significant experience in California meal-and-rest-break class action defense, will serve as the Lead Associate responsible for day-to-day case management, discovery, and motion practice. Mr. Archer, a fourth-year associate, will support the team on document review, research, written discovery, and deposition preparation.
Local Counsel. We have retained Whitfield Garza LLP as local counsel for San Bernardino County Superior Court filings and appearances as needed. The firm's contact partner is Elena Garza. Whitfield Garza is located at 290 North D Street, Suite 510, San Bernardino, California 92401. Their billing rates will be provided to Ridgeway separately under cover of a supplemental correspondence. We anticipate that local counsel involvement will be limited to court appearances, filing logistics, and consultation on local rules and practices.
Defense Expert. We have retained Dr. Kenneth Proulx of Veltrano Analytics LLC, located at 155 South Lake Avenue, Suite 800, Pasadena, California 91101, as a defense expert in statistical analysis and econometrics. Dr. Proulx has extensive experience analyzing time-punch data in California wage-and-hour class actions. He has been retained for the purposes of (i) conducting a comprehensive statistical analysis of the ApexTime time-punch records for the approximately 3,550 putative class members, (ii) preparing an expert declaration and/or report in support of VMS's opposition to class certification, and (iii) rebutting the analysis of Plaintiff's retained expert, Dr. Anita Bhargava of Lakeshore Economic Consulting Group (Berkeley, California), whom we expect to offer opinions in support of class certification regarding alleged systematic break violations and aggregate damages. Dr. Proulx's rate schedule and anticipated fees are included within the Phase 2 and Phase 3 budget estimates set forth below.
Billing Arrangement. This engagement operates under a standard hourly billing arrangement. No alternative fee arrangement is currently in place. Monthly invoices will be submitted with task-based billing codes in accordance with Ridgeway's litigation management guidelines (once received). All invoices will be presented in a format that permits Ridgeway to track costs by litigation phase and task category.
4. Summary Litigation Plan
Set forth below is a phased summary litigation plan covering the anticipated course of the defense from the responsive pleading stage through trial, if necessary. Each phase includes a description of the contemplated work, the strategic objectives, and an estimated cost range. These estimates are based on current information and will be refined as the case develops. We will promptly advise Ridgeway of any material changes in the litigation plan or budget.
Phase 1: Responsive Pleadings (August – September 2025)
Objective. File a comprehensive responsive pleading by the September 11, 2025 deadline that preserves all affirmative defenses and, where appropriate, challenges the legal sufficiency of certain of Plaintiff's claims at the outset.
Answer and Affirmative Defenses. We will file an answer to the Complaint asserting the following affirmative defenses, among others:
•  Statute of Limitations: Certain claims are time-barred to the extent they seek recovery for conduct occurring outside the applicable limitations periods, including the three-year statute of limitations for meal and rest break premium claims and the one-year statute of limitations for wage statement penalties.
•  Good-Faith Compliance with Cal. Lab. Code § 512: VMS maintained written meal and rest break policies (Employee Handbook, Section 4.3, June 2022 revision) that facially complied with California law by providing employees with the opportunity to take compliant breaks. Under Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, an employer satisfies its obligation if it provides the meal period and does not impede or discourage employees from taking it.
•  Voluntary Meal Period Waivers: To the extent employees voluntarily chose not to take meal periods, such waivers, if properly documented, negate liability for meal period premium pay.
•  Individual Variations Precluding Class Treatment: The claims at issue require individualized inquiries into each employee's specific break practices, supervisory oversight, production line assignment, and shift schedule, rendering class treatment inappropriate.
•  Remedial Measures: VMS voluntarily discontinued the auto-deduction practice effective March 15, 2024, and implemented corrective measures, limiting the scope and duration of any alleged violations.
•  Neutral Rounding Policy: VMS's rounding policy rounds time punches to the nearest six-minute increment and, when properly applied, does not systematically favor either the employer or the employee. Neutral rounding policies are permissible under California law. See's Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889.
•  Failure to Exhaust Administrative Remedies / PAGA Standing: Plaintiff's individual claims may not support representative standing for all alleged violations, particularly to the extent that certain PAGA claims are premised on violations that Plaintiff did not personally experience.
•  Safe Harbor Defense: To the extent applicable, VMS took affirmative steps to cure alleged violations within the meaning of the UCL's safe harbor provisions.
Demurrer and Motion to Strike. Contemporaneously with the answer, we will file a demurrer and motion to strike challenging the following:
(i) PAGA Standing: We will challenge Plaintiff's standing to bring representative PAGA claims for violations she did not personally experience, relying on recent appellate authority addressing the scope of PAGA standing, including Huff v. Securitas Security Services USA, Inc. (2018) 23 Cal.App.5th 745 and subsequent developments in the law.
(ii) Sufficiency of the UCL Cause of Action: We will demur to the Sixth Cause of Action on the grounds that the UCL claim, as pleaded, fails to identify a sufficient basis for relief independent of the underlying Labor Code violations, and that the alleged facts do not support the "unfair" or "fraudulent" prongs of Section 17200.
(iii) Class Allegations Relating to Rest Break Claims: We will move to strike the class allegations as they pertain to the rest break claims on the grounds that the Complaint fails to allege facts demonstrating commonality and typicality sufficient to sustain class treatment across the varying shift lengths, production lines, and supervisory structures at the Fontana Plant.
We recognize that demurrers and motions to strike in class action cases are not always granted, and courts may defer resolution of class-related issues to the certification stage. Nevertheless, filing these challenges at the outset serves important strategic functions: it narrows the scope of discovery, forces Plaintiff to articulate her theories more precisely, and creates a record of VMS's legal arguments for later use at the certification and summary judgment stages.
Estimated Cost for Phase 1: $75,000 – $120,000.
Phase 2: Case Management and Early discovery (October 2025 – Q1 2026)
Objective. Establish a favorable litigation schedule, commence fact discovery, and develop the evidentiary record necessary to oppose class certification.
Case Management Conference. We anticipate that the Court will schedule an initial Case Management Conference in late October 2025. At the conference, we will seek a reasonable discovery schedule that provides adequate time for expert analysis of the voluminous time-punch data and oppose any attempt by Plaintiff to set an early class certification hearing before meaningful discovery has been completed.
Written discovery. We will propound initial written discovery on Plaintiff, including interrogatories and requests for production of documents concerning her employment history, break practices, compensation, communications with other putative class members, and the factual basis for her claims. We will also respond to Plaintiff's anticipated discovery requests seeking production of VMS policies, ApexTime configuration records, time-punch data, payroll records, shift schedules, overtime authorization logs, supervisor communications, and other categories of documents.
Key Document Collection and Review. We will coordinate with VMS's in-house legal team and IT department to collect and review the following key documents and categories of ESI:
•  ApexTime 6.2 configuration records, including the auto-deduction settings and rounding parameters, for the period January 2020 through March 15, 2024, and subsequent manual clock-out/clock-in configuration from March 15, 2024 to the present;
•  The internal HR audit memorandum dated February 8, 2024, authored by Sandra Olsen, VP of Human Resources;
•  The corrective action memorandum dated March 10, 2024, directing implementation of the manual clock-out/clock-in requirement;
•  The VMS Employee Handbook (June 2022 revision), including Section 4.3 (Meal and Rest Break Policy);
•  Supervisor training materials related to meal and rest break compliance (last updated September 2023);
•  The personnel file for Gloria Reyes, including performance evaluations, disciplinary records, separation documentation, and any meal period waiver forms;
•  Production scheduling records, overtime authorization logs, and "surge" period documentation for the Fontana Plant.
Third-Party discovery. We will coordinate with Apex Workforce Solutions, Inc. for the extraction of electronic time records and payroll data for the putative class members over the relevant period. This will require close coordination to ensure that the data extraction is comprehensive and in a format suitable for statistical analysis by our expert.
Plaintiff's Deposition. We will depose the named Plaintiff, Gloria Reyes, with a focus on her individual break practices, her knowledge of VMS's policies, the circumstances under which she allegedly missed or had shortened breaks, her interactions with supervisors regarding breaks, her relationship with counsel, and her capacity to serve as a class representative.
Expert Work. We will engage Dr. Kenneth Proulx to begin his statistical analysis of the time-punch data for the approximately 3,550 putative class members. The analysis will assess the frequency and duration of meal and rest break deviations, variability in break compliance across production lines and shifts, the net impact of the rounding policy on employee compensation, and the extent to which individual factors (such as voluntary break waivers and varying supervisory practices) preclude class-wide inferences. Dr. Proulx's preliminary findings will inform our opposition to class certification and our assessment of exposure.
Estimated Cost for Phase 2: $250,000 – $400,000.
This estimate includes C&H attorney fees, local counsel fees, Dr. Proulx's initial expert fees, third-party data extraction costs, court reporting fees for Plaintiff's deposition, and related litigation expenses.
Phase 3: Class Certification Opposition (Q1 – Q2 2026)
Objective. Defeat or substantially narrow class certification, which is the single most significant litigation milestone in this case.
We anticipate that Plaintiff will file a motion for class certification under California Code of Civil Procedure § 382 in the first quarter of 2026. We will oppose that motion vigorously. Under Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004 and its progeny, the trial court must rigorously analyze whether the requirements of an ascertainable class, a well-defined community of interest (commonality, typicality, and adequacy of representation), and substantial benefits from class treatment are satisfied.
Our principal arguments in opposition to class certification will include the following:
•  Individualized Inquiries Predominate. The determination of whether each putative class member was denied a compliant meal or rest period requires an individualized inquiry into each employee's specific circumstances, including production line assignment, shift schedule, supervisor practices, voluntary break decisions, and workload on any given day. These individual issues predominate over any common questions, rendering class treatment inappropriate.
•  Named Plaintiff Is Atypical. Ms. Reyes worked exclusively on Trim Line B during the second shift. Her experience is not representative of employees on the other five production lines (Body Line A, Body Line B, Trim Line A, Paint, and Final Assembly/QC) or on the first shift, where break practices, supervisory oversight, and production demands differed materially.
•  Two Distinct Sub-Periods. The discontinuation of the auto-deduction feature on March 15, 2024, creates two distinct sub-periods within the class period — one in which the auto-deduction was operative (August 4, 2021 through March 15, 2024) and one in which the manual clock-out/clock-in requirement was in effect (March 15, 2024 to the present). The factual issues, legal theories, and defenses applicable to each sub-period differ significantly, undermining the coherence of a single class.
•  Statistical Evidence of Compliance. Dr. Proulx's analysis is expected to demonstrate that a significant percentage of employees consistently took compliant meal and rest breaks during the class period, including during the auto-deduction period. This evidence will support the argument that VMS's policies were effective in providing breaks and that any alleged violations were the result of individual circumstances rather than a uniform policy or practice.
•  Manageability Concerns. Certifying a class of approximately 3,550 members over a four-year period, encompassing six production lines, two shifts, and varying supervisory structures, would present insurmountable manageability challenges for the Court.
In support of the opposition, we will prepare and file:
•  Dr. Kenneth Proulx's expert declaration and/or report, presenting the results of his statistical analysis of the time-punch data;
•  Supporting declarations from VMS management, including Marcus Gutierrez (Plant Manager, Fontana Plant) and Sandra Olsen (VP of Human Resources), addressing VMS's meal and rest break policies, the implementation and enforcement of those policies, the circumstances leading to the discontinuation of the auto-deduction, and the corrective measures implemented;
•  Any additional depositions of shift supervisors and production line leads as necessary to develop the factual record regarding individualized break practices across the Fontana Plant.
If the Court grants class certification in whole or in part, we will promptly evaluate whether to seek interlocutory appellate review by writ petition to the California Court of Appeal. If the Court denies certification in whole or in part, we will assess the appropriate path forward, including potential settlement of individual and/or PAGA claims.
Estimated Cost for Phase 3: $300,000 – $500,000.
This estimate includes C&H attorney fees for the class certification opposition briefing, supporting declarations, expert report preparation and filing, additional depositions, and related litigation expenses.
Phase 4: Post-Certification Proceedings / Mediation (Q2 – Q4 2026)
Objective. Resolve the matter on the most favorable terms achievable, whether through settlement following denial of certification or through mediated resolution following certification.
The strategy for Phase 4 is contingent on the outcome of the class certification motion:
If Class Certification Is Denied (in whole or in part): A denial of class certification would dramatically reduce VMS's exposure and create substantial leverage for a favorable settlement of Plaintiff's individual claims and the PAGA representative claims. We would pursue settlement negotiations on terms that reflect the significantly diminished value of the remaining claims. The estimated incremental cost for this scenario is $50,000 – $100,000.
If Class Certification Is Granted (in whole or in part): We would propose early mediation before a retired California Superior Court judge with expertise in employment class action matters. Prior to mediation, we would develop a comprehensive settlement model incorporating the time-punch data analysis, class size, violation rates, and applicable discounts. We would negotiate within the realistic settlement range of $8,500,000 to $18,700,000, with the objective of achieving a resolution at or below the midpoint. The estimated cost for the mediation phase in this scenario is $75,000 – $150,000.
Estimated Cost for Phase 4: $75,000 – $250,000 (range dependent on the outcome of the class certification motion).
Phase 5: Trial Preparation and Trial (if necessary, 2027)
Objective. In the event that settlement is not achieved, prepare for and try the case to the most favorable verdict achievable.
If the matter proceeds to trial, the defense will entail full merits discovery (including any remaining fact depositions and completion of the written discovery record), expert discovery (including the deposition of Plaintiff's expert, Dr. Anita Bhargava, and rebuttal of her damages analysis), pre-trial motions (including motions in limine and any dispositive motions), trial preparation (including witness preparation, exhibit organization, and jury instructions), and trial. Given the size and complexity of the putative class, and the volume of time-punch data at issue, trial preparation would be extensive.
Estimated Incremental Cost for Phase 5 (beyond Phases 1–4): $1,000,000 – $1,800,000.
Total Estimated Defense Costs Summary
The following table summarizes the estimated defense costs across all phases:
The Phases 1–3 subtotal of $800,000 – $1,200,000 includes C&H attorney fees, local counsel fees (Whitfield Garza LLP), and expert costs (Dr. Kenneth Proulx, Veltrano Analytics LLC).
Policy Limits Implications. We note that on a defense-within-limits basis, the defense costs erode the SIR first ($500,000) and then the per-occurrence limit ($10,000,000). Combining the estimated through-trial defense costs of $2,500,000 – $3,800,000 with any settlement or judgment in the realistic range of $8,500,000 – $18,700,000 could result in combined expenditures that approach, meet, or exceed the per-occurrence limit. We recommend that this issue be discussed in connection with Ridgeway's coverage determination and settlement strategy, and we are available to participate in such discussions at Ridgeway's convenience.
5. Self-Insured Retention Erosion and Cost Allocation
As set forth in the Policy and confirmed in the Reservation of Rights letter, VMS's $500,000 SIR must erode before Ridgeway's obligation to fund defense costs attaches. We understand that the SIR erodes on a first-dollar basis as defense costs and loss are incurred.
Based on the Phase 1 and early Phase 2 budget estimates, C&H anticipates that the SIR will be substantially eroded or fully exhausted during the responsive pleadings and early discovery phases, which we estimate will occur approximately in the fourth quarter of 2025. The principal cost drivers during this period will be the preparation of the answer, demurrer, and motion to strike; the collection and review of key VMS documents; the initiation of written discovery; and the commencement of coordination with Apex Workforce Solutions, Inc. for data extraction.
To ensure transparency and facilitate the transition to direct Ridgeway funding, C&H will implement the following procedures:
•  Monthly invoices will track cumulative defense costs incurred to date against the remaining SIR balance.
•  C&H will promptly notify Ridgeway when cumulative defense costs approach the SIR threshold (e.g., when approximately 80% of the SIR has been expended) so that Ridgeway can prepare to begin direct funding of defense costs.
•  Initial invoices will be submitted to VMS for payment against the SIR, with courtesy copies provided to Ridgeway concurrently for tracking and auditing purposes.
•  Upon exhaustion of the SIR, invoices will be submitted directly to Ridgeway for payment, with copies to VMS, in accordance with Ridgeway's litigation management guidelines and invoice submission procedures.
We request that Ridgeway confirm the procedures outlined above or provide alternative instructions for SIR tracking and the transition to direct funding.
6. Requests to Ridgeway National
6.1 Confirmation of Continued Defense Funding
We respectfully request that Ridgeway provide written confirmation that it will continue to fund defense costs in the above-referenced matter under the terms of the Reservation of Rights letter dated August 18, 2025, subject to the requirement that the SIR erode before Ridgeway's payment obligation attaches and subject to the reservations of rights set forth therein.
We note, and wish to make clear for the record, that VMS expressly reserves all rights under the Policy, including but not limited to the right to challenge the applicability of the reservations identified in the Reservation of Rights letter. Specifically, VMS reserves its rights with respect to the following reserved issues: (i) the applicability of the wage-and-hour exclusion to the claims asserted in this matter; (ii) the coverage of PAGA penalties under the Policy; and (iii) the applicability of the "knowing" violation and/or intentional acts exclusion. VMS's continued acceptance of the defense provided under the Reservation of Rights letter does not constitute a waiver of any of these rights and shall not be construed as agreement with or acquiescence to the reservations asserted.
6.2 Litigation Management Guidelines
We further request that Ridgeway provide its current litigation management guidelines applicable to this matter, including the following categories of information:
•  Requirements for pre-approval of costs exceeding specified dollar thresholds, including but not limited to expert witness fees and expenses, deposition costs, third-party vendor costs (e.g., data extraction, e-discovery hosting, forensic analysis), and travel expenses;
•  Required format and task-based billing code requirements for monthly invoices, including whether Ridgeway requires the use of UTBMS (Uniform Task-Based Management System) codes, LEDES (Legal Electronic Data Exchange Standard) invoice format, or other standardized billing formats;
•  Reporting frequency and content requirements, including whether Ridgeway requires monthly, quarterly, or milestone-based status reports, and the specific content elements required in each report;
•  Any panel counsel rate limitations, billing rate caps, or fee schedule requirements applicable under the Policy or Ridgeway's standard litigation management practices;
•  Requirements regarding settlement authority and the process for obtaining pre-approval of mediation proposals, settlement offers, and settlement agreements, including any dollar thresholds above which Ridgeway's prior written consent is required.
Prompt receipt of these guidelines will enable C&H to structure its invoicing and reporting to comply with Ridgeway's requirements from the outset and will minimize the need for subsequent invoice revisions or resubmissions.
6.3 Coverage Determination Timeline
Finally, we request that Ridgeway provide an estimated timeline for its coverage determination on the three issues reserved in the August 18, 2025 Reservation of Rights letter: (i) the wage-and-hour exclusion, (ii) PAGA penalty coverage, and (iii) the "knowing" violation/intentional acts exclusion.
The coverage determination is material to VMS's defense strategy and settlement planning. In particular, the question of whether PAGA penalties (estimated exposure of approximately $5,500,000) are covered under the Policy has significant implications for the overall resolution strategy and for the allocation of any settlement between covered and potentially non-covered components. Additionally, the interplay between the per-occurrence limit of $10,000,000 and the realistic settlement range of $8,500,000 – $18,700,000, when combined with defense costs, makes an early coverage determination essential for informed decision-making by all parties.
We understand that coverage determinations of this nature require careful analysis and may take time to complete. We respectfully ask, however, that Ridgeway provide an estimated timeline so that VMS and C&H can plan accordingly.
7. Monthly Reporting Commitment
C&H commits to providing Ridgeway with comprehensive monthly status reports throughout the duration of this engagement. Each monthly report will include the following elements:
•  A narrative summary of all significant activities performed during the reporting period, including court appearances, discovery conducted or received, depositions taken or defended, motions filed or opposed, and material case developments;
•  A detailed accounting of professional fees and expenses incurred during the reporting period, presented with task-based coding in accordance with Ridgeway's litigation management guidelines;
•  Cumulative defense costs incurred to date, together with a comparison of actual costs to the applicable phase budget, including identification and explanation of any material variances;
•  The current SIR balance remaining, or, if the SIR has been exhausted, cumulative costs funded by Ridgeway;
•  An updated assessment of exposure and case developments, including any changes in the estimated realistic settlement range or maximum theoretical exposure;
•  Identification of upcoming significant events, including scheduled hearings, deposition dates, discovery deadlines, motion filing deadlines, and other material dates;
•  Any changes in strategic recommendations or adjustments to the litigation plan, together with the reasons for such changes.
The first monthly report will cover the period from the opening of the C&H matter (August 4, 2025) through the end of September 2025 and will be submitted to Ridgeway by October 15, 2025. Subsequent reports will follow on a monthly cadence unless Ridgeway's litigation management guidelines specify a different reporting schedule.
8. Enclosures
For your convenience, enclosed with this letter please find copies of the following documents:
1.  Complaint, Gloria Reyes, individually and on behalf of all others similarly situated, and on behalf of the State of California v. Vantage Mobility Systems Corp., Case No. CIVSB-2025-04781, filed August 1, 2025, Superior Court of California, County of San Bernardino;
2.  Summons issued in connection with the above-captioned action;
3.  Proof of Service dated August 12, 2025, confirming service of the Summons and Complaint on VMS via CT Agents, Inc. (Sacramento, California);
4.  PAGA notice served on the California Labor and Workforce Development Agency, dated May 22, 2025, LWDA Case No. LWDA-CM-2025-831447; and
5.  Calderwood & Harkness LLP's engagement letter with Vantage Mobility Systems Corp. (provided for reference regarding billing rates, staffing, and scope of engagement).
Please advise if you require additional copies of any of the foregoing documents or if there are additional materials you would like us to provide.
9. Closing
We respectfully request a prompt response regarding (i) continued defense funding under the terms of the Reservation of Rights letter, (ii) Ridgeway's litigation management guidelines, and (iii) any applicable cost pre-approval thresholds, so that we may structure our defense activities and billing in accordance with Ridgeway's requirements from the outset.
As noted above, VMS's responsive pleading deadline is September 11, 2025, which is now less than three weeks away. Defense costs are being incurred currently in connection with the preparation of the answer, affirmative defenses, demurrer, and motion to strike, as well as the issuance of the litigation hold and initial document collection. Timely confirmation of the defense funding arrangement and receipt of the litigation management guidelines will facilitate an orderly and cost-effective transition as the SIR erodes.
We are prepared to schedule a telephone conference or in-person meeting at your earliest convenience to discuss the litigation plan and budget in further detail, answer any questions you may have, and establish a working protocol for ongoing communication between C&H and Ridgeway's claims team.
Please do not hesitate to contact the undersigned or James Underwood with any questions or requests:
Renata Vasquez Partner, Labor & Employment Direct Telephone: (213) 488-7215
Email: rvasquez@calderwoodharkness.com
James Underwood Lead Associate, Labor & Employment Direct Telephone: (213) 488-7342
Email: junderwood@calderwoodharkness.com
We appreciate Ridgeway National's cooperation in this matter and look forward to working with you.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Renata Vasquez Partner, Labor & Employment 633 West Fifth Street, Suite 4400 Los Angeles, CA 90071
Enclosures (5)
cc: Priya Nandakumar, General Counsel, Vantage Mobility Systems Corp.
cc: Bernard Crawford, Billing Partner, Calderwood & Harkness LLP
PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION — ATTORNEY WORK PRODUCT This correspondence and any attachments are protected by the attorney-client privilege and/or the attorney work-product doctrine. This communication is intended solely for the use of the addressee(s) identified above. If you have received this communication in error, please notify the sender immediately and destroy all copies.
Team Member | Role | Rate
Renata Vasquez | Responsible Partner, Labor & Employment | $1,150/hour
Bernard Crawford | Billing Partner, Labor & Employment | $1,150/hour
James Underwood | Lead Associate, Labor & Employment | $825/hour
Devon Archer | Working Associate, Labor & Employment | $675/hour
Phase | Description | Estimated Cost Range
Phase 1 | Responsive Pleadings | $75,000 – $120,000
Phase 2 | Case Management / Early discovery | $250,000 – $400,000
Phase 3 | Class Certification Opposition | $300,000 – $500,000
Subtotal: Through Class Certification | Phases 1–3 | $800,000 – $1,200,000
Phase 4 | Post-Certification / Mediation | $75,000 – $250,000
Phase 5 | Trial Preparation and Trial | $1,000,000 – $1,800,000
Total: Through Trial | Phases 1–5 | $2,500,000 – $3,800,000

PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION — ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP

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