PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 200 Park Avenue, 38th Floor New York, New York 10166
Matter No.: 1012-00005
MEMORANDUM
To: Samuel Eklund, Responsible Partner; Patrick Gallagher, Lead Associate
From: Simone Laroche, Associate
Date: August 11, 2023
Re: Deposition Summary and Analysis — Sandra Milescu, Chief Operating Officer, Vantor Holdings Corp. / Vantor Transport Services LLC
Case: Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.)
This memorandum provides a comprehensive summary and analytical assessment of the deposition of Sandra Milescu, Chief Operating Officer of Vantor Holdings Corp. and Vantor Transport Services LLC, taken on August 4, 2023, in the above-captioned matter. The memorandum is organized by subject matter, identifies key admissions and their significance to Stonefield's defense, assesses witness credibility, and sets forth recommendations for next steps, including use at summary judgment, coordination with expert witnesses, and preparation for the remaining Vantorovich deposition.
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I. Deposition Overview
Witness: Sandra Milescu, Chief Operating Officer, Vantor Holdings Corp. and Vantor Transport Services LLC
Date of Deposition: August 4, 2023
Location: Offices of Caldwell Royce & Shapiro LLP, 1 Liberty Plaza, 22nd Floor, New York, New York 10006
Duration: Approximately seven (7) hours (full day session; commenced at approximately 10:00 a.m. and concluded at approximately 5:30 p.m., with a one-hour lunch break and two shorter breaks of approximately 15 minutes each)
Examining Counsel (Defendant Stonefield Logistics Group Inc.): Patrick Gallagher, Calderwood & Harkness LLP
Defending Counsel (Plaintiff Vantor Holdings Corp. / Vantor Transport Services LLC): Jason Whitford and Alina Petrov, Caldwell Royce & Shapiro LLP
Court Reporter: To be confirmed upon receipt of the final certified transcript.
Videographer: The deposition was videotaped. A videographer was present throughout the proceeding, and the full-day session was recorded on video.
Transcript Status: A rough transcript was received from the court reporting service on August 8, 2023. The final certified transcript remains pending and is expected within approximately two to three weeks. All page references contained in this memorandum are to the rough transcript and should be treated as approximate; they will be updated upon receipt of the certified version. Citations herein are provided for internal reference purposes only.
Exhibits Used: Twenty-two (22) exhibits were marked during the course of the deposition. The most significant exhibits included: the November 12, 2021 email from Sandra Milescu to Nikolai Vantorovich (Bates-stamped VHC-008417, marked as Exhibit 7); VTS fleet deployment records from the supplemental production (Bates range VHC-029001 through VHC-033218, spanning Exhibits 8 through 10 and portions of Exhibits 12 through 18); the Transportation Services Agreement dated March 15, 2019 (TSA Contract Reference No. SLG-VTS-2019-0315, marked as Exhibit 1); the Cure Notice dated January 18, 2022 (Exhibit 5); Vantor's February 14, 2022 response letter (Exhibit 6); and VTS's internal Q4 2021 Performance Report (Exhibit 11). A complete list of all exhibits marked during the deposition is set forth in Section XIII of this memorandum.
II. Witness Background and Role
A. Professional Background
Milescu testified that she has served as the Chief Operating Officer of Vantor Holdings Corp. since 2016 and has simultaneously served as the senior operational officer for Vantor Transport Services LLC since VTS's formation as a wholly-owned operating subsidiary of Vantor Holdings Corp. She holds this role on a full-time basis and is principally responsible for the day-to-day operations of VTS, which is the entity through which Vantor conducts its asset-based trucking and transportation services business.
Prior to joining Vantor Holdings Corp. in 2016, Milescu testified she held operational management positions at several regional trucking and fleet management companies. She described her career as encompassing approximately twenty-two (22) years in the transportation and logistics industry, with experience in fleet operations, dispatch management, driver recruitment, equipment maintenance, and customer account performance. She did not testify to having any formal legal training or background in contract administration, though she acknowledged familiarity with the principal terms of VTS's major customer contracts.
Milescu testified that she reports directly to Nikolai Vantorovich, the Chief Executive Officer and Founder of Vantor Holdings Corp. She described her reporting relationship as involving weekly or near-weekly meetings with Vantorovich on operational and strategic matters, with more frequent communication during periods of operational disruption or significant business developments.
B. Responsibilities. Milescu described her role as encompassing the full range of day-to-day operational oversight for Vantor Transport Services LLC. She testified that her core responsibilities include fleet management (including decisions regarding the allocation, deployment, and repositioning of tractor and trailer equipment across customer accounts and geographic regions), driver recruitment and retention, dispatch operations, equipment maintenance scheduling and compliance, and the monitoring of customer account performance against applicable service level commitments.
Critically, Milescu testified that she had what she described as "ultimate operational authority" over fleet deployment decisions, including the assignment and reassignment of specific tractors and trailers to specific customer accounts. This testimony is particularly significant in the context of the fleet redeployment discussed at length below, as it establishes that Milescu personally possessed the authority to authorize the reassignment of tractors from the Stonefield dedicated fleet to other customer accounts and was not merely carrying out instructions from others.
Milescu acknowledged that she was the primary VTS executive responsible for ensuring compliance with the service level obligations set forth in the Transportation Services Agreement with Stonefield Logistics Group Inc. She described this responsibility as including the review of periodic performance reports, the identification of service deficiencies, and the implementation of corrective measures when VTS performance fell below contractual thresholds.
With respect to the division of responsibilities on the Stonefield account, Milescu testified that Derek Pruitt, VTS's Vice President of Business Development, handled the commercial and relationship aspects of the Stonefield account — including rate negotiations, contract renewals, and commercial communications with Stonefield personnel — while Milescu herself was responsible for the operational execution of VTS's commitments under the TSA. This division of labor is relevant to the question of why certain communications (or the absence thereof) to Stonefield regarding fleet capacity were or were not made, as discussed in greater detail in Section III below.
C. Familiarity with the TSA
Milescu confirmed that she was familiar with the Transportation Services Agreement dated March 15, 2019 (TSA Contract Reference No. SLG-VTS-2019-0315) between Stonefield Logistics Group Inc. and Vantor Transport Services LLC. She testified that she was present during certain portions of the contract negotiation process, though she indicated that the principal negotiations were conducted by Pruitt and, on Stonefield's side, by Janet Kirkwood (Senior Vice President, Supply Chain, Stonefield) and Raymond Hess (Director, Contract Compliance, Stonefield).
Milescu acknowledged awareness of the specific Service Level Obligations ("SLOs") set forth in the TSA, which she confirmed included the following performance thresholds:
• On-time pickup rate: ≥95%
• On-time delivery rate: ≥93%
• Tender acceptance rate: ≥90%
• Cargo claims ratio: ≤0.5%
• Equipment availability compliance: ≥85% of committed fleet capacity of 400 tractors and 1,200 trailers
Milescu testified that she received periodic performance reports — typically on a monthly or quarterly basis — tracking VTS's actual performance against these SLO thresholds. She stated that these reports were generated by VTS's internal operations analytics group and were circulated to her, Pruitt, and Vantorovich, among others. She acknowledged that these reports constituted VTS's internal assessment of its own performance and were not independently audited or verified by Stonefield.
III. Fleet Redeployment — The Central Issue
A. The November 12, 2021 Email (VHC-008417)
This line of examination constituted the most significant and consequential portion of the deposition. Gallagher spent approximately ninety (90) minutes examining Milescu on the November 12, 2021 email and the surrounding fleet redeployment decisions, and the testimony elicited during this segment produced the most damaging admissions obtained from any Vantor witness to date in this litigation.
Milescu was shown Exhibit 7, which had been previously produced by Vantor in response to document requests and bears the Bates stamp VHC-008417. The exhibit is an email from Sandra Milescu to Nikolai Vantorovich, dated November 12, 2021, with the subject line "Fleet Update — SLG/NW." The body of the email contained the following statement, which Gallagher read aloud on the record:
"We've pulled 85 tractors off the SLG dedicated lanes to cover [redacted] commitments. SLG won't notice until January."
The redaction in the produced version of the email had been the subject of a prior meet-and-confer and a motion regarding privilege and relevance objections. At the deposition, Milescu was asked to identify the redacted content, which she did, as discussed below.
Key Admissions:
Milescu made the following admissions during this segment of the examination, each of which is discussed in greater detail in the subsections that follow:
1. Milescu confirmed that she authored the email and that it was sent on November 12, 2021, to Nikolai Vantorovich in his capacity as CEO of Vantor Holdings Corp.
2. She confirmed that the reference to "85 tractors" referred to eighty-five (85) tractor units that had been assigned to the Stonefield dedicated fleet under the TSA and were being used to service Stonefield's designated lanes.
3. She confirmed that the referenced tractors were reassigned — i.e., physically redeployed from Stonefield-designated lanes — to serve a different customer account, and that this reassignment was an affirmative operational decision, not a consequence of equipment failure, accident, or other involuntary event.
4. When pressed by Gallagher on the identity of the "[redacted]" customer referenced in the email, Milescu identified the customer as Northwind Distribution Co., a regional distribution company with operations in the Northeast corridor. She testified that Northwind was an existing VTS customer with a separate transportation services contract.
5. She confirmed that the reassignment of the 85 tractors occurred in October 2021, approximately one month before the date of the email itself, with the redeployment taking place over a period of approximately two weeks in early-to-mid October 2021.
6. She acknowledged that the reassignment reduced VTS's available fleet capacity for the Stonefield account from approximately 333 tractors — itself already below the 400-tractor commitment under the TSA — to approximately 248 tractors. This represented only approximately 62% of the 400-tractor fleet capacity commitment set forth in the TSA, a shortfall of 152 tractors or 38 percentage points below the contractual commitment.
B. Milescu's Explanation for the Reassignment
Having confirmed the factual predicate of the fleet reassignment, Milescu offered several justifications for the decision. She characterized the reassignment as "temporary" in nature and testified that it was driven by "commercial necessity."
Milescu testified that the Northwind Distribution Co. account required surge capacity for a seasonal peak period coinciding with the Q4 2021 holiday season. She stated that Northwind had experienced a significant increase in distribution volume due to heightened consumer demand and had communicated to VTS that it required additional tractor capacity to meet its delivery commitments. According to Milescu, Northwind had threatened to terminate its contract with VTS if additional capacity was not provided promptly, and VTS viewed the preservation of the Northwind relationship as a business priority.
Milescu further testified that the decision to reallocate SLG-dedicated tractors — as opposed to sourcing additional capacity from VTS's general fleet or the spot market — was made because Stonefield's freight volume had, in her words, "declined significantly" in 2021, and she believed the tractors dedicated to Stonefield's lanes were "underutilized" given the actual volume being tendered by Stonefield. She stated: "We were trying to keep our overall fleet productive. The SLG volumes weren't there to justify 400 dedicated units."
In support of this justification, Milescu attributed the purported decline in Stonefield volume to Stonefield's own alleged failure to tender the Annual Committed Volume ("ACV") of $43.2 million under the TSA. She claimed that Stonefield had been "well below" its minimum volume commitments and that this volume shortfall had left VTS's dedicated SLG fleet significantly underutilized, creating economic pressure on VTS to redeploy the equipment to productive uses. Milescu's characterization of Stonefield's volume performance is addressed in greater detail in Section VI of this memorandum, including the force majeure adjustment for Contract Year 2 that materially undermines Vantor's volume shortfall narrative.
C. Critical Failure: No Notification to Stonefield
Perhaps the most damaging aspect of Milescu's testimony concerned the complete absence of any notification to Stonefield regarding the fleet reassignment. Milescu could not explain why Stonefield was not notified of the fleet reassignment, and her testimony on this point was halting and unconvincing.
Gallagher asked directly whether anyone at Vantor or VTS — including Milescu herself, Pruitt, Vantorovich, or any other VTS employee — informed Stonefield that eighty-five tractors were being pulled from the dedicated SLG fleet and reassigned to the Northwind account. Milescu responded: "I don't believe we sent a formal notification, no." When asked whether any informal notification was provided — by telephone, in person, or otherwise — Milescu stated she "did not recall" any such communication but could not categorically deny one occurred. She could not identify any specific individual at Stonefield who was informed of the reassignment.
When Gallagher asked whether Milescu believed the TSA required VTS to maintain 400 tractors available for Stonefield's use, she acknowledged: "That was the contractual commitment, yes." She further acknowledged that the commitment was a material term of the TSA and that VTS had negotiated the rate structure in part based on the dedicated fleet size.
Gallagher then directed Milescu's attention to Section 7.4 of the TSA (marked as Exhibit 3), which requires VTS to "provide substitute equipment or surge capacity in the event of any reduction in available fleet capacity" and to "promptly notify the Shipper-Broker of any capacity constraints that may affect the Service Provider's ability to meet the Service Level Obligations." Milescu was asked whether she complied with the notification requirement in Section 7.4 with respect to the October 2021 fleet reassignment. She admitted she did not recall providing any such notification. She was further asked whether VTS arranged for any substitute equipment or surge capacity to replace the reassigned tractors, and she stated that no substitute arrangements were made.
The examination then turned to the phrase "SLG won't notice until January" in the November 12, 2021 email. Gallagher read the phrase aloud and asked Milescu what she meant by it. Milescu attempted to characterize the statement as "shorthand" meaning that the operational impact of the tractor reassignment on Stonefield's service levels would not be felt or become apparent until January 2022 because, she claimed, SLG's Q4 freight volumes were historically low and the reduced fleet would still be adequate to handle the actual volume being tendered. Gallagher pressed her on whether the phrase reflected an intent on her part — or on VTS's part — to conceal the fleet reassignment from Stonefield, or at a minimum, an awareness that Stonefield was not being told about the reassignment and would discover it on its own for several months. Milescu responded: "That was not my intent. I was just communicating an operational reality."
CRS's Jason Whitford objected to the characterization of the email language as reflecting an "intent to conceal," arguing that Gallagher was putting words in the witness's mouth, but ultimately allowed the witness to answer after a brief colloquy on the record.
Milescu could not identify any written communication — whether email, letter, memorandum, or otherwise — to Stonefield, Janet Kirkwood, Raymond Hess, or any other SLG representative disclosing the tractor reassignment at any point prior to the January 18, 2022 Cure Notice. Nor could she identify any oral communication or meeting at which the reassignment was discussed with Stonefield personnel. The first time Stonefield became aware of the specific nature and scope of the fleet reduction was, in effect, through the discovery process in this litigation.
D. Northwind Distribution Co. Contract
Milescu testified that VTS had a separate transportation services contract with Northwind Distribution Co. that predated the Stonefield TSA. She described the Northwind relationship as one of VTS's "significant" customer accounts and confirmed that VTS had been providing dedicated and spot transportation services to Northwind for several years.
She confirmed that Northwind was a regional distribution company with operations concentrated in the Northeast corridor, including distribution centers in New Jersey, Connecticut, and Pennsylvania. She testified that Northwind's Q4 2021 volume surge was driven by seasonal demand patterns and that VTS had a contractual obligation to provide additional capacity to Northwind during peak periods, though she did not identify the specific contractual provision requiring such surge capacity.
Milescu declined to provide specific revenue figures for the Northwind account during the deposition, referring counsel to financial records that had already been produced in discovery. She stated that the revenue information was contained in VTS's financial statements and customer account records that had been produced in Vantor's document productions.
Documents from the supplemental production, specifically fleet deployment logs bearing Bates stamps VHC-029015 through VHC-029042 (portions of which were marked as Exhibits 8 through 10), confirmed the movement of eighty-five (85) tractor units from lanes designated for Stonefield service to lanes designated for Northwind Distribution Co. service. The deployment logs reflect that the reassignment occurred between approximately October 5, 2021 and October 18, 2021, a period of approximately two weeks. The logs identify each reassigned tractor by unit number and record the originating lane (SLG-designated) and destination lane (Northwind-designated) for each unit. These documents provide independent documentary corroboration of Milescu's testimonial admissions regarding the timing, scope, and direction of the fleet redeployment.
E. "Temporary" Characterization
Gallagher challenged the "temporary" characterization that Milescu repeatedly applied to the fleet reassignment. This challenge yielded further significant admissions.
Milescu admitted that by the time Stonefield issued the Cure Notice on January 18, 2022, the eighty-five tractors had not been returned to SLG-dedicated service. This represented a period of approximately three months from the date of the reassignment in October 2021 — well beyond any reasonable definition of a "temporary" operational adjustment. Gallagher walked Milescu through the timeline month by month: the tractors were reassigned in October 2021; they remained on Northwind lanes in November 2021 (as confirmed by Exhibit 9, the November fleet deployment log); they remained on Northwind lanes in December 2021 (as confirmed by Exhibit 10); and they remained on Northwind lanes at the time Stonefield issued the Cure Notice in January 2022.
Milescu testified that VTS "intended" to return the tractors to SLG-dedicated service after the conclusion of the Northwind holiday season peak period but that VTS was "unable to do so" because of ongoing driver retention issues and because the Northwind commitment extended into Q1 2022. She stated that Northwind's volume did not decline as expected after the holiday season and that VTS could not remove the tractors from Northwind service without risking a breach of its obligations to Northwind.
When Gallagher asked Milescu directly whether the 85 tractors were ever returned to Stonefield-dedicated service at any point before the TSA was terminated on March 4, 2022, Milescu conceded that they were not. The tractors remained on Northwind lanes from the date of their reassignment in October 2021 through and beyond the date of TSA termination on March 4, 2022 — a period of approximately five months. This concession effectively demolishes the "temporary" characterization and supports a finding that the fleet reassignment constituted a permanent and material reduction in VTS's committed fleet capacity for the Stonefield account.
IV. Q4 2021 Service Level Performance
A. Acknowledgment of Performance Failures
Milescu was shown VTS's internal Q4 2021 Performance Report, which was marked as Exhibit 11. This document is an internally generated report produced by VTS's operations analytics group and was circulated to senior VTS management, including Milescu, Pruitt, and Vantorovich. Milescu confirmed that she had seen the report prior to the deposition and that she was familiar with its contents.
Milescu confirmed the following actual performance metrics for VTS's service to Stonefield during Q4 2021 (October through December 2021), as reflected in the internal performance report:
Milescu acknowledged that VTS was below all four of the above metric thresholds during Q4 2021. She did not dispute the accuracy of the figures in VTS's own internal report, though she noted that the report was an internal management tool and not a formal contractual compliance report prepared for Stonefield.
With respect to the cargo claims ratio — the fifth SLO category — Milescu testified that she was "not directly involved" in cargo claims administration and that the cargo claims function was managed by VTS's risk management department. She stated she was aware, in general terms, of "elevated" claims activity during November and December 2021 but had not personally reviewed the individual claims files. She did not dispute the sixteen (16) claims totaling $387,400 identified in the Cure Notice or the resulting claims ratio of approximately 1.07% (against the ≤0.5% SLO threshold), though she qualified her non-dispute by stating she had not personally verified those specific figures. Given that the figures are drawn from VTS's own claims records and are consistent with the internal performance report, her equivocation on this point carries limited weight.
B. Causation of Performance Failures
Milescu attributed the Q4 2021 performance failures to three principal factors, each of which she testified contributed to VTS's inability to meet the SLO thresholds:
1. Nationwide driver shortage. Milescu testified that VTS was unable to recruit and retain sufficient qualified drivers throughout 2021. She described the driver shortage as an industry-wide phenomenon affecting all major carriers and stated that VTS's driver turnover exceeded 85% on an annualized basis during 2021. She testified that the driver shortage affected VTS's ability to staff its fleet at full capacity, resulting in reduced dispatch availability and lower on-time performance metrics.
2. Stonefield's volume shortfalls. Milescu reiterated her position that Stonefield failed to tender the full Annual Committed Volume of $43.2 million under the TSA, which she claimed reduced VTS's revenue on the SLG account and rendered it economically infeasible for VTS to maintain the full 400-tractor fleet commitment. She characterized Stonefield's volume performance as a material contributing factor to VTS's inability to sustain the dedicated fleet at contractual levels.
3. Supply chain disruptions. Milescu referenced general supply chain and equipment availability issues that affected the transportation industry throughout 2021, including delays in the delivery of new equipment, shortages of replacement parts, and extended equipment downtime due to supply chain bottlenecks. She testified that these disruptions reduced VTS's effective fleet capacity across all customer accounts.
Notably, Milescu did not volunteer the tractor reassignment to Northwind Distribution Co. as a contributing factor to the performance failures. When listing the causes of VTS's SLO shortfalls, she identified only the three factors described above — the driver shortage, Stonefield's volume shortfalls, and supply chain disruptions. It was only when Gallagher specifically asked whether the removal of eighty-five tractors from SLG-dedicated service contributed to the decline in performance metrics that Milescu acknowledged the fleet reassignment was a factor. Even then, she characterized the reassignment as "one of several factors" contributing to the performance decline and maintained it was "not the primary cause."
Analytical Observation: This is a significant point warranting emphasis. The fleet redeployment to Northwind, which Milescu herself authorized in her capacity as the individual with "ultimate operational authority" over fleet deployment decisions, directly and demonstrably reduced VTS's equipment availability for the Stonefield account from approximately 83% (333 tractors out of the 400-tractor commitment, reflecting a pre-existing shortfall) to approximately 62% (248 tractors out of 400). This reduction of approximately 21 percentage points in equipment availability would necessarily have cascading effects on the other SLO metrics: with fewer tractors available for Stonefield's dedicated lanes, on-time pickups would decline (because insufficient equipment would be available at origin points), on-time deliveries would decline (because loads would be delayed awaiting available tractors or routed through suboptimal configurations), and tender acceptance rates would decline (because VTS would lack the equipment to accept tendered loads). The internal Q4 2021 Performance Report corroborates a step-function decline in all measured SLO metrics beginning in late October 2021, which is temporally coincident with the fleet reassignment as documented in the fleet deployment logs. The correlation between the fleet reassignment and the performance decline is striking and will be a central element of our summary judgment presentation and expert analysis.
V. Cure Notice and Cure Period
A. Receipt and Response
Milescu confirmed that she received the Cure Notice dated January 18, 2022, which was issued by Raymond Hess, Director of Contract Compliance at Stonefield Logistics Group Inc. The Cure Notice was addressed directly to Milescu at VTS's principal offices and was transmitted by both email and certified mail. Milescu testified that she reviewed the Cure Notice upon receipt and understood it to constitute a formal notice of breach under the TSA.
She acknowledged that the Cure Notice identified specific metric failures across all five SLO categories, including the actual performance figures achieved by VTS and the corresponding contractual thresholds. She confirmed that the figures set forth in the Cure Notice were consistent with VTS's own internal performance data, as reflected in the Q4 2021 Performance Report (Exhibit 11).
Milescu further testified that she participated in preparing VTS and Vantor's response to the Cure Notice. The response was a letter dated February 14, 2022, sent under Derek Pruitt's signature to Janet Kirkwood at Stonefield. Milescu testified she worked with Pruitt and Vantor's legal team to draft the response and reviewed the final version before it was transmitted.
B. Cure Efforts
Gallagher devoted considerable time to questioning Milescu about the specific steps VTS took during the thirty-day cure period (January 18 through February 17, 2022, as measured under Section 13.1(a) of the TSA) to cure the identified breaches. Milescu's testimony on this critical subject was vague, largely unsubstantiated, and conspicuously lacking in specificity.
When asked to describe the cure measures VTS implemented, Milescu offered the following general responses:
• She stated that VTS "increased driver recruitment efforts" during the cure period but could not identify any specific recruitment initiatives that were launched or expanded during this timeframe. She could not provide the names of any recruitment firms engaged, the number of drivers hired or offered positions, or any specific timeline for the recruitment ramp-up. She acknowledged that she could not identify any documents reflecting these purported recruitment efforts.
• She stated that VTS "began the process of returning equipment to SLG lanes" during the cure period. However, when pressed, she acknowledged that no tractors were actually returned to SLG-dedicated service during the thirty-day cure period. She testified that VTS had "initiated discussions" about returning equipment but conceded that the discussions did not result in the physical redeployment of any tractors from Northwind lanes back to Stonefield lanes before the cure period expired.
• She referenced "discussions with dispatching teams" about prioritizing Stonefield loads in the dispatch queue. When asked whether these discussions were documented in any written directive, memorandum, or email, Milescu stated she could not point to any such document. She acknowledged that she could not identify any specific change to dispatch protocols or procedures that was implemented during the cure period as a result of these discussions.
• She could not identify any specific, measurable improvement in any of the five SLO metrics during the cure period (January 18 through February 17, 2022). When asked directly whether on-time pickup rates, on-time delivery rates, tender acceptance rates, equipment availability, or the cargo claims ratio improved during the cure period relative to Q4 2021 levels, Milescu stated she "did not have those specific figures available" but believed "some improvement" had occurred. She could not quantify the improvement or identify any data source supporting her belief.
Analytical Observation: Milescu's inability to identify concrete, documented, or measurable cure measures taken during the thirty-day cure period is highly significant. It is consistent with Stonefield's position that VTS failed to cure the identified breaches within the cure period specified by Section 13.1(a) of the TSA, and it directly supports the validity and enforceability of Stonefield's March 4, 2022 termination for Cause. The absence of any documentary evidence of cure efforts — no recruitment plans, no equipment redeployment orders, no dispatch directives, no performance data showing improvement — creates a strong inference that VTS made no meaningful effort to cure and instead treated the cure period as a formality while continuing to service the Northwind account with Stonefield's dedicated equipment.
C. The February 14, 2022 Response Letter
Milescu testified that she reviewed and approved the substantive content of the February 14, 2022 response letter before it was transmitted to Stonefield. She acknowledged that the letter was a significant document in the parties' contractual correspondence and understood its importance in the context of the cure period process.
Milescu confirmed that the response letter did not dispute the specific performance metric figures cited in the Cure Notice. The letter did not contend that VTS's on-time pickup rate was higher than 78.2%, that its on-time delivery rate was higher than 81.6%, that its tender acceptance rate was higher than 71.4%, that its equipment availability was higher than approximately 62%, or that its cargo claims ratio was lower than 1.07%. Instead, the letter adopted a different tactic: it attributed the performance failures to Stonefield's own conduct, including what the letter characterized as Stonefield's failure to tender the ACV, Stonefield's alleged diversion of freight to competing carriers, and market conditions beyond VTS's control.
When Gallagher asked whether the February 14 response letter disclosed the Northwind tractor reassignment — i.e., whether the letter informed Stonefield that VTS had affirmatively removed 85 tractors from SLG-dedicated service and redeployed them to serve Northwind Distribution Co. — Milescu confirmed that the letter did not contain any such disclosure. The letter attributed VTS's reduced fleet capacity to market conditions and driver shortages but did not mention the Northwind reassignment. This omission is consistent with the pattern of concealment evidenced by the November 12, 2021 email and reinforces the inference that VTS deliberately withheld information about the fleet reassignment from Stonefield throughout the relevant period.
VI. Stonefield Volume Shortfalls — Milescu's Testimony
A. Contract Year 2 (April 2020 – March 2021)
Milescu testified at some length regarding Stonefield's volume performance during Contract Year 2, which she characterized as a period of significant underperformance by Stonefield against its ACV commitment of $43.2 million. She testified that Stonefield tendered "significantly less" than the ACV during this period and that the volume shortfall adversely affected VTS's operations and financial performance on the SLG account.
However, on examination by Gallagher, Milescu's testimony on this point was substantially undermined by the force majeure adjustment applicable to Contract Year 2. Milescu acknowledged on cross-examination that she was aware of Stonefield's invocation of the force majeure provision under Section 12.1 of the TSA for the period April 2020 through September 2020, which Stonefield invoked due to the significant COVID-19-related impacts on freight demand during that six-month period. She confirmed she was aware of this invocation at the time it was made and understood its import.
When confronted with the arithmetic implications of the force majeure adjustment — specifically, that if the force majeure provision relieved Stonefield of its volume commitment for six of the twelve months of Contract Year 2, the adjusted ACV for the non-force-majeure portion of the year would be $21.6 million ($43.2 million × 6/12), and that Stonefield's actual tenders of approximately $31.8 million during the non-force-majeure months of Contract Year 2 exceeded the adjusted ACV by approximately $10.2 million — Milescu maintained her position that VTS's operational planning was based on the full $43.2 million ACV and that the force majeure adjustment was, in her view, "unilateral" on Stonefield's part.
CRS's Jason Whitford objected at this point and instructed the witness that the legal validity of Stonefield's force majeure invocation under Section 12.1 was a legal question to be determined by the Court, not an operational determination within Milescu's purview. This objection effectively curtailed further questioning on the legal effect of the force majeure clause, but the factual record was established: Stonefield's actual volume during the operative portion of Contract Year 2 exceeded the pro-rated ACV, and Milescu could not testify that Stonefield was in breach of its volume commitment once the force majeure adjustment is taken into account.
B. Contract Year 3 (April 2021 – January 2022)
With respect to Contract Year 3, Milescu testified that Stonefield's actual tenders during the ten-month period from April 2021 through January 2022 (at which point the Cure Notice was issued and the cure/termination process was initiated) totaled approximately $36.5 million. She characterized this as a "clear shortfall" against the full-year ACV of $43.2 million and testified that the declining volumes "forced VTS to find productive uses for its fleet elsewhere."
Milescu's testimony on this point, while superficially supportive of Vantor's position, has limited value for several reasons. First, the $36.5 million figure represents only ten months of volume against a twelve-month ACV; on a pro-rated basis, the ten-month ACV would be approximately $36.0 million ($43.2 million × 10/12), meaning Stonefield's actual volume of $36.5 million was approximately $500,000 above the pro-rated commitment for the period in question. Second, and more significantly, Milescu could not provide a specific date on which VTS determined that SLG's volume was insufficient to justify the full dedicated fleet. She could not point to any internal analysis, memorandum, or communication documenting such a determination prior to the fleet reassignment in October 2021. Third, she could not identify any written communication to Stonefield raising the volume shortfall as a concern at any point prior to the February 14, 2022 response letter — meaning that VTS never gave Stonefield the opportunity to address the purported volume issue before VTS unilaterally reduced fleet capacity.
The significance of this gap cannot be overstated: Vantor's central counterclaim narrative is that Stonefield's volume shortfalls excused VTS's performance failures, yet VTS never raised the volume issue with Stonefield during the operative period and instead secretly diverted fleet capacity to a competing customer account.
VII. Freight Diversion by Stonefield
A. Knowledge of Alternative Carriers
Milescu testified that she became aware during mid-to-late 2021 that Stonefield was using alternative carriers, including Cascade Freight Systems Inc. and Briarwood Trucking Co., for certain transportation lanes. She stated that VTS learned of this through "driver reports" — i.e., reports from VTS drivers who observed Cascade and Briarwood equipment at Stonefield's distribution facilities — and through "industry contacts" who communicated that Cascade and Briarwood had secured business from Stonefield.
Milescu characterized Stonefield's use of alternative carriers as a violation of what she described as the exclusivity provisions contained in Schedule C to the TSA. She testified that it was her understanding that VTS had exclusive rights to provide transportation services on certain designated lanes and that Stonefield's engagement of Cascade and Briarwood on those lanes constituted a breach of the TSA.
B. Lane Specificity
The value of Milescu's testimony on this issue was substantially diminished, however, when Gallagher examined her on the specific lanes allegedly subject to the exclusivity provisions.
Gallagher showed Milescu Schedule C to the TSA (marked as Exhibit 2) and asked her to identify which specific lanes she believed were subject to the exclusivity provisions. Milescu identified the fourteen (14) "Primary Lanes" designated in Schedule C, Section 2(a), and confirmed that her understanding was that VTS had exclusive rights to provide transportation services on these lanes.
However, when Gallagher asked whether Milescu had evidence that Cascade Freight Systems or Briarwood Trucking operated on any of the fourteen Primary Lanes identified in Schedule C, Section 2(a) — as distinguished from the Secondary Lanes listed in Schedule C, Section 2(b) — Milescu's testimony became uncertain. She stated that she "believed" Cascade and Briarwood had operated on Primary Lanes but could not identify any specific Primary Lane origin-destination pair that was served by either carrier. She could not name the origin or destination terminals, the geographic corridors, or the specific freight volumes at issue.
She further acknowledged that she had not personally reviewed the contracts or freight records of Cascade Freight Systems or Briarwood Trucking and that her knowledge of their operations on Stonefield lanes was based entirely on secondhand driver reports and industry contacts. She could not identify the names of the VTS drivers who provided the reports or the industry contacts who relayed the information.
Analytical Observation: This testimony is helpful for Stonefield's defense that its use of Cascade and Briarwood was limited to Secondary Lanes (Lanes 8 through 14 as designated in Schedule C), which are expressly excluded from the exclusivity restrictions under Schedule C, Section 2(b). Section 2(b) provides that VTS does not have exclusive rights to Secondary Lanes and that Stonefield retains the right to engage alternative carriers for transportation services on those lanes. Milescu's inability to identify any specific Primary Lane usage by Cascade or Briarwood materially weakens Vantor's exclusivity violation claim and suggests that Vantor may be unable to prove this element of its counterclaim at summary judgment or trial.
VIII. Termination and Post-Termination Period
A. Receipt of Termination Letter
Milescu confirmed that she was aware of the termination letter dated March 4, 2022, which was sent by Tobias Wren, General Counsel of Stonefield Logistics Group Inc., to Vantor Holdings Corp. and Vantor Transport Services LLC. The letter terminated the TSA for Cause pursuant to Section 13.1(a), citing VTS's failure to cure the breaches identified in the January 18, 2022 Cure Notice within the thirty-day cure period.
Milescu testified that she disagreed with the termination and believed it was "unjustified" and "pretextual." She stated her belief that Stonefield had seized upon the performance issues as a pretext for terminating a contract that Stonefield no longer wished to honor due to the pending rate adjustment.
B. Motive for Termination
Milescu testified that she believed Stonefield's true motive for terminating the TSA was to avoid paying higher per-mile transportation rates under the contractual rate adjustment scheduled to take effect in April 2022. She referenced the Rate Adjustment Mechanism set forth in Section 5.3 of the TSA (marked as Exhibit 20), which provides for periodic adjustments to the per-mile rate based on specified indices, including fuel cost indices and driver compensation benchmarks.
According to Milescu, application of the Rate Adjustment Mechanism would have increased the weighted average per-mile rate under the TSA from $2.87 to approximately $3.28 — a 14.3% increase. She estimated that this rate increase would have added approximately $6.2 million in annual transportation costs for Stonefield, based on the projected freight volume for Contract Year 4.
When Gallagher asked how Milescu knew the projected rate increase figure, she testified that Derek Pruitt had calculated the rate adjustment based on the applicable indices and had shared the projection with Milescu and Vantorovich in early 2022, prior to the termination. She could not identify the specific date of Pruitt's calculation or the specific document in which it was memorialized, though she believed Pruitt had prepared a memorandum or spreadsheet reflecting the analysis.
Critically, Milescu acknowledged that she had no direct evidence — such as an internal Stonefield email, memorandum, board presentation, or other document — demonstrating that rate avoidance was Stonefield's motive for terminating the TSA. Her testimony on motive was entirely inferential, based on the timing of the termination relative to the rate adjustment effective date. While the timing is suggestive, the absence of documentary support significantly limits the evidentiary value of this testimony.
C. Post-Termination Mitigation
Gallagher devoted a significant segment of the deposition to questioning Milescu about the steps VTS took to replace the Stonefield volume and mitigate its damages following the March 4, 2022 termination. Milescu's testimony on mitigation efforts was markedly limited and lacking in specificity.
When asked what specific actions VTS undertook to secure replacement freight volume after the termination, Milescu offered the following general responses:
• She stated that VTS "reached out to existing customers" for additional volume, but she could not identify which customers were contacted, when the outreach occurred, or what the outcome of such outreach was. She acknowledged she could not identify any specific communication reflecting such outreach efforts.
• She testified that VTS "explored new business opportunities" with potential new customers, but she acknowledged that no significant replacement contract was secured in the six months following the termination of the Stonefield TSA. She could not identify the names of any prospective customers with whom VTS engaged in negotiations or to whom VTS submitted proposals.
• She acknowledged, when asked by Gallagher, that the freight market in Q1 and Q2 of 2022 was "strong," with elevated spot market rates reflecting high demand for transportation capacity. She conceded that spot rates during this period were significantly above historical averages. However, she stated that VTS's capacity was "not configured" for spot market operations and that VTS's business model was built around dedicated fleet contracts rather than spot market participation. She did not explain why VTS could not have adapted its operations to participate in the spot market, at least on an interim basis, to mitigate its losses.
• She could not identify any specific written business development plans, sales proposals, marketing materials, or other documented efforts directed at replacing the Stonefield volume. When asked whether VTS had a formal mitigation plan or business continuity plan in place for the loss of a major customer account, Milescu testified that VTS's approach was "organic" and based on "relationship-driven" business development rather than formal documented plans.
Analytical Observation: This testimony strongly supports Stonefield's failure-to-mitigate defense. Under applicable law, the injured party has a duty to take reasonable steps to mitigate its damages following a breach. The undisputed evidence is that the freight market was robust in early-to-mid 2022, with spot rates approximately 35% above historical averages, yet VTS — by Milescu's own account — made no documented effort to replace the SLG volume, did not pursue spot market opportunities, did not engage in formal business development efforts, and did not secure any significant replacement business in the six months following termination. This evidence calls into serious question the actual extent and recoverability of Vantor's claimed losses and provides a strong basis for a mitigation-based reduction or elimination of Vantor's damages.
IX. Workforce Reduction
Milescu confirmed that VTS implemented a significant workforce reduction in the months following the termination of the Stonefield TSA. She testified that VTS laid off approximately 180 employees, including both drivers and support staff (dispatchers, fleet coordinators, administrative personnel, and maintenance technicians), over a period of several months beginning in approximately April 2022.
She estimated the total severance payments and unemployment insurance costs associated with the layoffs at approximately $2.87 million. She characterized these costs as a "direct consequence" of Stonefield's termination of the TSA and testified that VTS would not have implemented the layoffs but for the loss of the Stonefield account.
When Gallagher asked whether any of the laid-off drivers had been among those reassigned from Stonefield-dedicated lanes to the Northwind Distribution Co. account in October 2021, and whether any such drivers were subsequently laid off when the Northwind contract also experienced a volume decline in 2022, Milescu stated she "could not recall the specific employment histories" of individual drivers. She did not deny the possibility but was unable to confirm or rule it out, which suggests that VTS either did not track this information or chose not to prepare the witness on this point.
Milescu further acknowledged that VTS's total headcount declined from approximately 1,900 employees at the beginning of 2022 to approximately 1,720 employees by year-end 2022, a net reduction of approximately 180 employees. She acknowledged that the headcount reduction was attributable to multiple factors, including general market softening in the second half of 2022 in addition to the loss of the Stonefield contract. This acknowledgment that factors other than the loss of the Stonefield contract contributed to the workforce reduction is relevant to the question of causation and the proper allocation of VTS's layoff-related costs between Stonefield's termination and other market forces.
X. Relationship with Caldwell Royce & Shapiro LLP
Milescu was asked general questions during the deposition about Vantor's relationship with its litigation counsel, Caldwell Royce & Shapiro LLP ("CRS"). CRS's Jason Whitford promptly instructed the witness not to answer any questions regarding attorney-client communications or the substance of legal advice received from CRS, and Milescu complied with this instruction.
Milescu did confirm, however, that there had been "some disagreements" between Vantor's management and CRS regarding "litigation strategy." She declined to elaborate on the nature or substance of these disagreements, citing the advice of counsel and the attorney-client privilege. She further confirmed that Nikolai Vantorovich, as CEO and Founder of Vantor Holdings Corp., made all final decisions regarding the litigation on behalf of Vantor, including decisions about settlement posture, discovery strategy, and witness preparation.
Note for the File: CRS filed a Motion to Withdraw as counsel of record approximately two months after this deposition, on or about October 3, 2023, citing "irreconcilable differences" with the client regarding the conduct of the litigation. Press reporting and filings in the matter indicate that unpaid legal invoices totaling approximately $870,000 were a significant contributing factor in CRS's decision to seek withdrawal. Milescu's oblique reference to "disagreements" during her deposition may foreshadow this development and suggests that the attorney-client relationship was already strained at the time of the deposition. The potential change of counsel for Vantor could significantly affect the litigation timeline, Vantor's litigation posture, and the scheduling of the Vantorovich deposition completion, among other matters.
XI. Demeanor and Credibility Assessment
Milescu was generally composed and articulate throughout the course of the seven-hour deposition. She presented as knowledgeable about VTS's operations, corporate structure, and customer relationships, and she appeared to have been well prepared by CRS for the examination. Her answers during the initial background segments and the later segments on Stonefield's volume performance and the rate adjustment motive were delivered confidently and with apparent fluency.
However, Milescu's testimony regarding the fleet redeployment to Northwind Distribution Co. was noticeably less confident than the balance of her testimony. She paused frequently and for extended periods before answering questions in this segment, qualified her responses heavily with phrases such as "I believe," "to the best of my recollection," and "I don't recall specifically," and appeared visibly uncomfortable — including shifting in her seat and avoiding eye contact with the examining attorney — when confronted with her own November 12, 2021 email. The contrast between her demeanor during this segment and her demeanor during other portions of the deposition was marked and would likely be apparent to a factfinder viewing the deposition video.
Her explanation of the phrase "SLG won't notice until January" as merely an "operational reality" observation — rather than evidence of an intent to conceal the fleet reassignment from Stonefield or, at minimum, an awareness that the reassignment was being undertaken without Stonefield's knowledge — was not persuasive. The explanation appeared rehearsed and did not withstand scrutiny when Gallagher pressed her on the plain meaning of the language. A factfinder presented with the email, the surrounding testimony, and the absence of any notification to Stonefield would likely draw the inference that the phrase reflected awareness of concealment, regardless of Milescu's post hoc characterization.
Milescu's inability to identify any concrete cure measures during the thirty-day cure period further undermines her overall credibility. Her assertion that VTS had "substantially cured" the identified breaches is contradicted by her own inability to identify what VTS actually did during the cure period and by the absence of any documentary evidence of cure efforts.
Similarly, Milescu's vagueness on mitigation efforts following the TSA termination was a notable area of weakness. Her inability to identify specific replacement customers, sales proposals, business development initiatives, or even internal discussions about mitigation suggests either that no meaningful mitigation occurred or that VTS chose not to prepare its witness to address this issue — neither of which reflects favorably on Vantor's position.
On the defense-favorable side, from Vantor's perspective, Milescu was firm in her testimony regarding Stonefield's volume shortfalls and the rate adjustment motive. She delivered this testimony with conviction and apparent sincerity. However, these portions of her testimony were largely conclusory and unsupported by documentary evidence she could identify at the deposition. She could not point to specific documents, analyses, or communications supporting her assertions about Stonefield's motive, which limits the weight a factfinder would likely assign to these claims.
On redirect examination by Whitford (defending on behalf of Vantor), Milescu provided more fluid and expansive responses emphasizing the nationwide driver shortage, difficult market conditions in 2021, and Stonefield's alleged volume failures. Whitford's redirect was competent but did not meaningfully rehabilitate Milescu on the core fleet redeployment and concealment issues. The redirect did not address the November 12, 2021 email in any substantive way, did not elicit any new information about cure efforts, and did not explain the absence of notification to Stonefield. The failure to address these issues on redirect may reflect a strategic decision by CRS to avoid further highlighting the damaging testimony, but the result is that Milescu's admissions on these points stand unrebutted.
XII. Key Admissions — Summary Table
The following table summarizes the key admissions obtained during the Milescu deposition, with approximate transcript page references and an assessment of each admission's significance to Stonefield's defense:
XIII. Exhibits Marked During Deposition
The following twenty-two (22) exhibits were marked during the Milescu deposition:
Exhibit 1: Transportation Services Agreement (TSA), dated March 15, 2019, Contract Reference No. SLG-VTS-2019-0315, between Stonefield Logistics Group Inc. and Vantor Transport Services LLC.
Exhibit 2: Schedule C to the TSA — Primary and Secondary Lane Designations.
Exhibit 3: Section 7.4 of the TSA — Substitute Equipment and Surge Capacity Obligations.
Exhibit 4: Section 13.1 of the TSA — Termination for Cause.
Exhibit 5: Cure Notice, dated January 18, 2022, from Raymond Hess (Director, Contract Compliance, Stonefield Logistics Group Inc.) to Sandra Milescu (COO, Vantor Transport Services LLC).
Exhibit 6: Vantor Response Letter, dated February 14, 2022, from Derek Pruitt (VP, Business Development, VTS) to Janet Kirkwood (SVP, Supply Chain, Stonefield Logistics Group Inc.).
Exhibit 7: Email, dated November 12, 2021, from Sandra Milescu to Nikolai Vantorovich, subject line "Fleet Update — SLG/NW" (Bates No. VHC-008417).
Exhibit 8: VTS Fleet Deployment Log, October 2021 (Bates No. VHC-029015).
Exhibit 9: VTS Fleet Deployment Log, November 2021 (Bates No. VHC-029028).
Exhibit 10: VTS Fleet Deployment Log, December 2021 (Bates No. VHC-029033).
Exhibit 11: VTS Q4 2021 Performance Report (internal VTS document).
Exhibits 12 through 18: Various VTS internal emails and memoranda regarding fleet capacity planning, equipment allocation, and the Northwind Distribution Co. account, drawn from the supplemental production bearing Bates numbers within the VHC-029001 through VHC-033218 range. These exhibits include communications among VTS operations personnel, dispatch directives, and equipment status reports for the October 2021 through January 2022 period.
Exhibit 19: Stonefield Termination Letter, dated March 4, 2022, from Tobias Wren (General Counsel, Stonefield Logistics Group Inc.) to Vantor Holdings Corp. and Vantor Transport Services LLC.
Exhibit 20: Section 5.3 of the TSA — Rate Adjustment Mechanism.
Exhibit 21: Schedule B to the TSA — Rate Structure by Lane.
Exhibit 22: Section 12.1 of the TSA — Force Majeure.
All exhibits have been cross-referenced to the master document index maintained in the case file and are available on the Pinnacle Forensics litigation support platform.
XIV. Recommendations and Next Steps
A. Use at Summary Judgment
Milescu's deposition testimony produced a substantial body of admissions that are highly favorable to Stonefield's defense and should be prominently featured in any summary judgment filing. The admissions regarding the fleet redeployment to Northwind Distribution Co., the deliberate concealment of that redeployment from Stonefield, VTS's failure to cure the identified breaches during the thirty-day cure period, and VTS's failure to mitigate its damages following the termination collectively provide a strong factual basis for Stonefield's dispositive motions.
The November 12, 2021 email (VHC-008417), combined with Milescu's deposition testimony confirming the email's authorship, its meaning, and the factual circumstances surrounding the fleet reassignment, constitutes powerful evidence supporting Stonefield's position that VTS committed the first material breach of the TSA by unilaterally and secretly reducing its committed fleet capacity below contractual levels. The email's plain language — "SLG won't notice until January" — combined with Milescu's inability to credibly explain the statement as anything other than an acknowledgment of concealment, will be among the most compelling pieces of evidence at summary judgment and, if necessary, at trial.
We recommend preparing a comprehensive "Statement of Undisputed Material Facts" section for the summary judgment brief that draws heavily on Milescu's deposition admissions. The following facts, among others, should be included as undisputed based on Milescu's testimony:
(1) VTS reassigned 85 tractors from SLG-dedicated service to Northwind Distribution Co. in Octobe