1012-00005 · Stonefield Logistics Group · Depositions

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PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT PREPARED IN ANTICIPATION OF LITIGATION

This document constitutes attorney work product prepared in anticipation of litigation and is protected from disclosure by the attorney work product doctrine, the attorney-client privilege, and all other applicable privileges. This document is not to be disclosed, disseminated, distributed, or copied to any person other than those identified in the distribution list below without the prior written consent of Calderwood & Harkness LLP. Any inadvertent disclosure does not constitute a waiver of any applicable privilege.

CALDERWOOD & HARKNESS LLP 200 Park Avenue, 38th Floor New York, New York 10166

I. Preliminary Instructions and Ground Rules

Gallagher opened the session at approximately 10:00 AM by reviewing the standard deposition preparation guidelines with Hess. Gallagher explained the general format and purpose of a deposition under the Federal Rules of Civil Procedure and provided Hess with an overview of what to expect during the proceeding on July 27, 2023.

Gallagher reminded Hess to listen carefully to each question posed by opposing counsel before formulating his answer. Gallagher emphasized that Hess should answer only the specific question asked and should not volunteer information beyond what is directly responsive to the question. If opposing counsel asks a "yes or no" question, a "yes or no" answer is generally sufficient, followed by a brief explanation only if necessary to avoid being misleading. Hess was cautioned against the common tendency to provide lengthy narratives or to anticipate follow-up questions and answer them preemptively.

Gallagher instructed Hess to wait for the full question to be completed before beginning his answer. Hess was told that pausing briefly — approximately two to three seconds — before responding serves two purposes: it gives Hess time to formulate a clear and accurate answer, and it allows counsel to interpose an objection if necessary before the answer is given. If Gallagher begins to state an objection, Hess should stop and listen to the objection before proceeding.

Gallagher explained the role of objections at deposition. Under federal practice, objections at a deposition are typically limited to objections as to the form of the question — that is, objections relating to the phrasing, leading nature, compound structure, or assumption embedded in the question. Most other objections, including those based on relevance, are generally preserved and need not be stated at the deposition. Gallagher explained that when an objection is made, Hess should continue to answer the question unless Gallagher specifically instructs him not to answer. Gallagher noted that instructions not to answer are limited under Rule 30(c)(2) to instances involving privilege, a court-ordered limitation, or the need to present a motion to terminate or limit the examination. Hess confirmed his understanding of this instruction.

Gallagher reminded Hess that all testimony given at a deposition is under oath and carries the same legal weight as testimony given at trial. Hess acknowledged that he understands the seriousness of providing sworn testimony and the obligation to testify truthfully. Gallagher noted that the deposition transcript may be used at trial for any purpose permitted under the Federal Rules of Evidence and the Federal Rules of Civil Procedure, including impeachment and substantive evidence.

Gallagher advised Hess that if he does not recall something, it is entirely appropriate to say "I don't recall" or "I don't remember." Hess should not guess or speculate in order to provide an answer. If Hess has an approximate recollection but is not certain of the precise details, he may say so — for example, "My best recollection is..." or "I believe it was approximately..." — but Hess should avoid presenting speculation as definitive fact. Gallagher emphasized that there is no obligation to recall every detail, and that an honest statement of non-recollection is far preferable to an inaccurate answer that could be used for impeachment later.

Gallagher further advised Hess that if a document is shown to him during the deposition — whether a document he has previously seen or one he is seeing for the first time — Hess should take the time to read the entire document carefully before answering any questions about it. Hess should not feel pressured by opposing counsel to rush through a document. If the document is lengthy, Hess should ask for sufficient time to read it completely. Gallagher noted that opposing counsel may attempt to direct Hess's attention to a particular paragraph or sentence, but Hess should insist on reading the document in full context before testifying about any portion of it.

Finally, Gallagher reminded Hess that the preparation session itself is privileged attorney work product and should not be disclosed to anyone outside of counsel. If asked during the deposition whether he met with counsel to prepare, Hess may acknowledge that he did — there is nothing improper about witness preparation, and attempting to conceal it would be counterproductive — but Hess should not disclose the substance of what was discussed, the specific questions asked, or the advice given during the session. If opposing counsel presses for the substance of the preparation, Gallagher will assert the attorney work product privilege. Hess confirmed his understanding of all preliminary instructions.

II. Background on Hess's Role and Responsibilities

Gallagher and Laroche next reviewed Hess's professional background, current role, and responsibilities at Stonefield Logistics Group Inc. to confirm the foundation for his anticipated testimony.

Hess confirmed his current title: Director, Contract Compliance, Stonefield Logistics Group Inc. He reports directly to Carlos Medina, Senior Vice President of Operations. Hess has held this position since June 2018, which means he assumed the role approximately one year before the Transportation Services Agreement ("TSA") at issue in this litigation was executed. Hess noted that he was brought into the role in part because of Stonefield's desire to build out a more formalized contract compliance function as its carrier relationships grew in number and complexity.

Hess described his role as encompassing several core areas of responsibility. First, he is responsible for monitoring carrier performance metrics on an ongoing basis, ensuring that carriers are meeting the service level obligations specified in their respective agreements with Stonefield. Second, he oversees compliance with contractual requirements more broadly, including equipment commitments, insurance and safety certifications, reporting obligations, and other operational terms. Third, Hess manages the cure notice and escalation procedures when performance deficiencies are identified, including the preparation and issuance of formal cure notices under the applicable contract provisions. Fourth, he serves as a liaison with Stonefield's legal department — specifically the office of General Counsel, Tobias Wren — on contract enforcement matters that may require legal analysis or external counsel involvement.

Hess oversees a team of four contract compliance analysts who assist with data compilation, performance report generation, and routine carrier correspondence. Hess supervises the work of these analysts and is the final reviewer for all compliance-related communications issued by his department.

With respect to the TSA at issue in this case (Contract Reference No. SLG-VTS-2019-0315), Hess confirmed that he was involved in the initial implementation of the agreement after its execution on March 15, 2019. Although Hess was not involved in the negotiation of the TSA — that was handled primarily by Janet Kirkwood (VP, Carrier Relations) and Tobias Wren (General Counsel) with the assistance of outside counsel — Hess was responsible for operationalizing the agreement on the compliance side. Specifically, Hess worked with his team to set up the performance monitoring dashboards, reporting protocols, and data integration processes that would be used to track VTS's performance against the Service Level Obligations defined in the TSA.

Hess confirmed that he had periodic interaction with Vantor/VTS personnel during the life of the TSA. His primary points of contact were Sandra Milescu, Chief Operating Officer of Vantor/VTS, and Derek Pruitt, Vice President of Business Development. These interactions related primarily to performance reporting — for example, quarterly performance reviews and discussions about specific metrics — and were generally conducted via email, with occasional conference calls. Hess noted that his interactions with Vantor personnel were professional and business-oriented; he did not have a personal relationship with any of the Vantor individuals.

III. Review of Cure Notice Drafting Process

A. Genesis of the Cure Notice

Gallagher and Laroche spent significant time reviewing the factual background and timeline leading to the issuance of the January 18, 2022 Cure Notice. This is anticipated to be a central area of inquiry at the deposition, and Hess's testimony regarding the genesis and motivations for the Cure Notice will be important.

Hess confirmed that performance concerns with VTS had been escalating throughout calendar year 2021, with the issues particularly accelerating in the third and fourth quarters of 2021. Hess noted that the performance deficiencies were not sudden or unexpected; rather, they reflected a progressive deterioration that became increasingly apparent over the course of the year.

Hess stated that he began flagging VTS performance issues to Carlos Medina (SVP, Operations) and Janet Kirkwood (VP, Carrier Relations) as early as August 2021. The initial flagging was informal in nature — Hess raised the concerns via email communications and during the regularly scheduled weekly operations meetings that he attended with Medina's team. Hess recalled that his August 2021 concerns related primarily to declining tender acceptance rates and a noticeable increase in late pickups on certain dedicated lanes. At that time, Hess recommended increased monitoring but did not yet recommend formal cure proceedings.

By December 2021, the performance deficiencies had become significantly more pronounced and systemic. Hess prepared a formal internal performance summary for VTS reflecting the full Q4 2021 period (October, November, and December 2021). This summary documented failures across all five of the Service Level Obligations ("SLOs") established under the TSA. Hess circulated this summary to Medina and Kirkwood, and it became the basis for the discussions that ultimately led to the issuance of the Cure Notice.

Hess stated that in early January 2022, he participated in discussions regarding the possibility of issuing a formal cure notice to VTS under Section 13.1(a) and Section 13.2 of the TSA. These discussions included Tobias Wren, General Counsel of Stonefield, and Lorraine Beckwith, a Partner in the Commercial Contracts group at Ashford Meridian LLP, which served as Stonefield's outside commercial counsel. Hess confirmed that Beckwith and the Ashford Meridian team provided legal guidance on the drafting of the Cure Notice, including the level of specificity required to satisfy the "reasonable particularity" standard set forth in Section 13.2 of the TSA. Hess recalled that Beckwith advised that the Cure Notice should identify each specific SLO that had been breached, the contractual threshold for each SLO, and the actual performance figure for the relevant period, so that VTS would have clear notice of what needed to be cured and by when.

B. Metric Compilation and Verification

Gallagher spent considerable time reviewing the process by which the performance metrics cited in the Cure Notice were compiled and verified. This is a critical area of anticipated testimony because Vantor's counsel (Caldwell Royce & Shapiro LLP, "CRS") is expected to challenge the accuracy and reliability of the metrics.

Hess confirmed that he independently verified all Q4 2021 performance metrics using VTS's own Carrier Performance Portal ("CPP") data. This is a critical point. The CPP was VTS's proprietary reporting system — a system that VTS itself maintained and controlled — and both parties had access to it under the terms of the TSA. The metrics cited in the Cure Notice were therefore sourced from VTS's own system, not solely from Stonefield's internal records.

Hess explained the CPP in detail. The CPP was a web-based platform maintained by VTS that tracked, in real time, a comprehensive array of operational data, including shipment status, tender acceptance and rejection events, pickup and delivery timestamps, equipment assignments, and cargo claims. The CPP served as the primary shared data repository between VTS and Stonefield for purposes of performance monitoring under the TSA. Stonefield had read-only access to the CPP under Section 8.2 of the TSA, which was titled "Reporting and Transparency." This section required VTS to provide Stonefield with continuous access to the CPP and to maintain the accuracy and completeness of the data contained therein.

Hess stated that he personally extracted the Q4 2021 data from the CPP on or about January 10 through January 12, 2022. He downloaded the relevant reports for the October, November, and December 2021 periods across all five SLO categories. He then cross-referenced the CPP data against Stonefield's internal Transportation Management System ("TMS") records. The TMS is Stonefield's proprietary logistics management platform, which independently tracks shipment data, carrier performance, and operational events.

The specific metrics cited in the Cure Notice, as compiled and verified by Hess, were as follows:

Hess stated that the CPP data and Stonefield's TMS data were consistent, with only minor discrepancies of less than 0.3% across the relevant metrics. Hess attributed these minor discrepancies to timing differences in data entry — for example, a delivery event might be logged in the CPP a few hours before or after it was recorded in the TMS due to differences in how the two systems processed carrier status updates. Hess stated that the discrepancies were immaterial and did not affect the overall performance picture in any respect.

Hess confirmed that he prepared a written data reconciliation memorandum documenting the comparison between the CPP data and the TMS data. This memorandum was shared with Tobias Wren (General Counsel, Stonefield) and Lorraine Beckwith (Ashford Meridian LLP) prior to the issuance of the Cure Notice. Hess stated that the reconciliation memo was prepared to ensure that the metrics cited in the Cure Notice could withstand scrutiny and that Stonefield could demonstrate the reliability and accuracy of the underlying data if challenged.

C. Cure Notice Issuance

The Cure Notice was dated January 18, 2022. Hess confirmed that he was the author and signatory of the Cure Notice. The Cure Notice was sent to Sandra Milescu, Chief Operating Officer of Vantor/VTS, via two methods: email and certified mail with return receipt requested. Hess confirmed that both methods of delivery were used to ensure documented receipt, consistent with the notice provisions of the TSA.

The Cure Notice specified each of the five SLO failures in detail, including the relevant contractual threshold for each SLO and the actual Q4 2021 performance figure as determined from the CPP data and verified against the TMS records. In addition to the five SLO failures, the Cure Notice also cited VTS's chronic failure to provide substitute equipment or surge capacity as required under Section 7.4 of the TSA. Section 7.4 imposed an obligation on VTS to arrange for substitute carrier capacity or surge equipment when its dedicated fleet fell below committed levels, and Hess confirmed that VTS had made no such arrangements despite the equipment availability dropping to approximately 62% of committed levels.

Hess stated that the Cure Notice was reviewed and approved by both Tobias Wren (General Counsel, Stonefield) and Lorraine Beckwith (Partner, Ashford Meridian LLP) before it was transmitted to VTS. The review process involved multiple drafts and revisions to ensure that the Cure Notice satisfied the "reasonable particularity" standard of Section 13.2 and was legally sufficient to initiate the cure period under the TSA.

The Cure Notice specified a cure period of 30 calendar days from the date of receipt by VTS, consistent with the cure period set forth in Section 13.1(a) of the TSA. Based on the date of certified mail receipt, the cure deadline was February 17, 2022.

IV. Vantor's Response to Cure Notice

Gallagher next reviewed with Hess the response that Stonefield received from Vantor following the issuance of the Cure Notice.

Hess confirmed receipt of Vantor's response letter dated February 14, 2022. The letter was sent by Derek Pruitt, Vice President of Business Development at Vantor, and was addressed to Janet Kirkwood, Vice President of Carrier Relations at Stonefield. Hess noted that this was somewhat unusual in that the Cure Notice had been sent by Hess (as Director of Contract Compliance) to Sandra Milescu (COO of Vantor/VTS), but the response came from a different Vantor representative and was directed to a different Stonefield contact.

Hess reviewed the February 14, 2022 response letter at Gallagher's request during the preparation session and made the following observations:

First, the letter acknowledged that VTS had experienced "operational challenges" during the Q4 2021 period. However, the letter did not present any specific cure actions that VTS had taken during the 30-day cure period, nor did it provide any metrics or data demonstrating that VTS's performance had improved or was improving. The letter was, in Hess's assessment, general and nonspecific in its characterization of VTS's response to the Cure Notice.

Second, the letter asserted that the performance deficiencies identified in the Cure Notice were caused by three factors outside of VTS's control: (i) a nationwide driver shortage affecting the entire transportation industry; (ii) Stonefield's own alleged failure to tender minimum committed volumes under the TSA, which VTS claimed impacted VTS's ability to maintain dedicated fleet capacity; and (iii) Stonefield's alleged instructions to divert freight volume to lower-cost spot market carriers, which VTS claimed undermined the economic basis for VTS's dedicated fleet commitment. The letter presented these factors as mitigating circumstances that should be considered in evaluating VTS's performance.

Third, and critically, the letter did not dispute the specific Q4 2021 performance figures cited in the Cure Notice. Hess emphasized this point during the preparation session: VTS did not challenge the accuracy of any of the metrics that Stonefield had cited — not the on-time pickup rate, not the on-time delivery rate, not the tender acceptance rate, not the equipment availability figure, and not the cargo claims ratio. The February 14 response implicitly accepted the accuracy of those figures by failing to contest them and instead focusing on purported justifications and mitigating factors. Gallagher noted this is a strong point for Hess's testimony.

Following the expiration of the cure period on February 17, 2022, Hess reviewed post-cure-period performance data from both the CPP and Stonefield's TMS for the late February and early March 2022 timeframe. Hess confirmed that VTS's metrics had not materially improved during the cure period. In fact, Hess noted that the tender acceptance rate actually declined further in February 2022, dropping to approximately 68%, down from the 71.4% figure cited in the Cure Notice for Q4 2021. This continued deterioration further confirmed that VTS had not undertaken meaningful remedial action during the cure period.

V. Termination Letter

Gallagher reviewed with Hess his involvement in the termination of the TSA and the circumstances surrounding the termination letter.

Hess confirmed that he was involved in providing the factual support for the termination letter, specifically by compiling and presenting the performance data demonstrating that VTS had not cured the material breaches identified in the Cure Notice within the 30-day cure period. However, Hess was not the signatory of the termination letter. The termination letter was dated March 4, 2022, and was signed by Tobias Wren, General Counsel of Stonefield Logistics Group Inc.

Hess confirmed that the termination letter stated, in substance, that VTS had "failed to cure the material breaches" identified in the January 18, 2022 Cure Notice within the 30-calendar-day cure period specified in Section 13.1(a) of the TSA. The termination letter further stated that, as a consequence of VTS's failure to cure, Stonefield was exercising its right to terminate the TSA effective immediately, pursuant to Section 13.1(a). Hess confirmed that the termination letter referenced the specific SLO failures and the continued post-cure deterioration in performance.

Gallagher then raised a topic that is anticipated to be a significant area of inquiry at the deposition: the April 2022 rate adjustment. Gallagher asked Hess whether anyone discussed the upcoming April 2022 rate adjustment as a factor in the decision to terminate the TSA. Hess stated that he was aware of the rate adjustment mechanism contained in Section 5.3 of the TSA, which provided for an annual rate adjustment based on a contractually specified formula. However, Hess stated that his involvement in the termination process was limited to his contract compliance monitoring role and the cure process — specifically, identifying the performance failures, compiling the data, drafting the Cure Notice, and assessing whether cure had been achieved. Hess stated clearly that he was not involved in any business-level decisions about the economic impact of the rate adjustment on the termination decision. Those decisions would have been made at a level above his role, potentially involving Medina, Kirkwood, and senior leadership.

Hess stated affirmatively that the decision to pursue the cure process and ultimately to support the termination was driven entirely by VTS's sustained and uncured service failures. Hess reiterated that the performance deficiencies were severe, systemic, and well-documented, and that VTS had failed to take meaningful corrective action during the cure period.

VI. Key Document Review — Anticipated Exhibits

Gallagher and Laroche walked Hess through several key documents that are likely to be introduced as exhibits during the deposition. The purpose of this review was to familiarize Hess with the documents, confirm his ability to authenticate them and testify about their contents, and identify any potential issues or areas of concern.

A. Cure Notice (January 18, 2022)

Gallagher walked Hess through the Cure Notice line by line. Hess reviewed each section of the notice, including the recitation of the contractual provisions invoked (Sections 13.1(a), 13.2, and 7.4 of the TSA), the specification of each SLO failure, the identification of the contractual threshold and actual performance figure for each SLO, and the statement of the cure period and deadline. Hess confirmed that each metric cited in the Cure Notice was accurate and that he could identify the source of each figure. Hess is comfortable testifying that every figure was derived from VTS's own Carrier Performance Portal data and was independently verified against Stonefield's Transportation Management System records. Hess confirmed that he authored the notice and signed it on behalf of Stonefield's Contract Compliance department.

B. Vantor's February 14, 2022 Response

Hess reviewed the February 14, 2022 response from Derek Pruitt in full during the preparation session. Hess is prepared to testify that the response did not demonstrate that actual cure of the identified performance deficiencies had been achieved or was in progress. Hess noted that the response was addressed to Janet Kirkwood (VP, Carrier Relations, Stonefield), not to Hess, despite the fact that the Cure Notice had been issued by Hess and directed to Sandra Milescu. Hess stated that he did not have any direct communications with any Vantor personnel following the February 14, 2022 response. Any subsequent communications regarding the cure process or the termination would have gone through Wren's office or Ashford Meridian.

C. VTS Q4 2021 Performance Report (Internal VTS Document)

Hess reviewed a document titled "VTS Q4 2021 Performance Report," which was an internal VTS document produced by Vantor during the document production phase of this litigation. Hess confirmed that VTS's own internal performance report showed actual metrics that were materially below the SLO thresholds across all five categories. The figures in VTS's own internal report were consistent with the figures cited in the Cure Notice. Gallagher noted that this document further supports Hess's testimony that the CPP data was accurate and that the metrics in the Cure Notice were reliable — indeed, VTS's own internal assessment of its performance confirmed the deficiencies that Stonefield identified.

D. Milescu-to-Vantorovich Email (November 12, 2021) — VHC-008417

Gallagher showed Hess the email from Sandra Milescu (COO, Vantor/VTS) to Nikolai Vantorovich (CEO, Vantor Holdings Corp.) dated November 12, 2021, bearing Bates number VHC-008417. The email states, in pertinent part: "We've pulled 85 tractors off the SLG dedicated lanes to cover [redacted] commitments. SLG won't notice until January."

Hess stated that he first saw this email during the litigation discovery process. He was not aware of this email or its contents during the course of the contract relationship. This is a significant point: the email reflects that VTS deliberately and covertly redeployed 85 tractors — representing a substantial portion of the committed fleet — from Stonefield's dedicated lanes to serve other customers, and that VTS anticipated Stonefield would not discover this redeployment until January 2022. Hess stated that had he been aware of this email or the underlying fleet redeployment at the time it occurred, he would have immediately escalated the matter as a breach of Section 7.4 of the TSA (equipment availability and substitute capacity obligations) and the related SLO requirements. The redeployment of 85 tractors from a committed fleet of 400 would have reduced availability by over 21 percentage points, which would alone account for much of the equipment availability decline that Stonefield observed in Q4 2021.

Hess confirmed that no notification from VTS was ever received regarding the redeployment of the 85 tractors from SLG dedicated lanes. Section 7.4 of the TSA required VTS to notify Stonefield and arrange substitute capacity in the event that dedicated equipment was temporarily or permanently reassigned; VTS did neither.

Gallagher instructed Hess to be prepared to testify about this email if CRS raises it during the deposition, but Hess should not volunteer it or bring it up proactively. Hess should wait for opposing counsel to introduce the document and should then respond to questions about it truthfully and specifically. Hess confirmed his understanding of this instruction.

E. Kirkwood-to-Medina Email (September 22, 2021)

Gallagher discussed with Hess a potentially adverse document: an email from Janet Kirkwood (VP, Carrier Relations, Stonefield) to Carlos Medina (SVP, Operations, Stonefield) dated September 22, 2021. The email states, in pertinent part: "VTS is a mess. We're already moving volume to Cascade and Briarwood on Lanes 8–14. If VTS doesn't get its act together by Q1 I think we pull the plug on the whole contract."

Gallagher identified the risk that CRS may use this email to argue that Stonefield had already decided to terminate the TSA before the Cure Notice was ever issued, and that the volume diversion to Cascade Freight Systems Inc. and Briarwood Trucking Co. reflects Stonefield's own actions contributing to VTS's performance decline by reducing the volume available to VTS.

Hess confirmed that he was not a recipient of the September 22, 2021 email and was not copied on it. The email was sent from Kirkwood to Medina, and Hess was not included. Hess stated that he had no knowledge of volume diversion to Cascade Freight Systems Inc. or Briarwood Trucking Co. in the context of his contract compliance role. Carrier selection — including the decision to route freight to particular carriers on particular lanes — was handled by Kirkwood's Carrier Relations team, not by Hess's Contract Compliance department. Hess's responsibilities related to monitoring the performance of existing contractual carriers, not to making decisions about which carriers would receive particular shipments.

Gallagher instructed Hess that if he is asked about this email at deposition, he should state clearly that he was not involved in carrier selection decisions, was not a party to or aware of the email until it surfaced during the litigation, and cannot speak to the business rationale behind any volume allocation decisions made by the Carrier Relations team. Hess confirmed his understanding.

F. Communications with Ashford Meridian LLP During Cure Period

Gallagher raised the issue of privileged communications that may be the subject of inquiry at the deposition. Vantor has challenged seven entries on Stonefield's privilege log — specifically, Entries 312 through 318 — which cover communications between Hess and Lorraine Beckwith of Ashford Meridian LLP during the January through February 2022 cure period. These communications constitute privileged attorney-client communications in which Hess sought and received legal advice from Beckwith regarding the cure process, the interpretation and application of Section 13.2's "reasonable particularity" requirements, and the legal sufficiency of VTS's response to the Cure Notice.

Hess was instructed that if he is asked at deposition about any communications with Ashford Meridian, he should identify them as communications with counsel in which he was seeking or receiving legal advice. Hess should not disclose the substance of those communications. Gallagher will assert the attorney-client privilege and instruct Hess not to answer if opposing counsel presses for the content of the communications. Hess confirmed his understanding of this instruction and the basis for the privilege assertion.

VII. Anticipated Lines of Questioning by CRS

Gallagher and Laroche reviewed with Hess the lines of questioning that CRS is most likely to pursue at the deposition, based on Vantor's pleadings, discovery responses, and the arguments advanced in the case to date. For each anticipated topic, the team discussed Hess's expected testimony and the key points to emphasize.

A. Accuracy and Source of Performance Metrics

Gallagher anticipated that CRS will challenge whether Stonefield's metrics were accurate, reliable, or selectively compiled to support a predetermined conclusion. This is a natural line of attack given the centrality of the performance data to Stonefield's termination defense.

Hess is prepared to testify that all metrics cited in the Cure Notice were sourced from VTS's own Carrier Performance Portal — the system that VTS itself maintained and was contractually obligated to keep accurate under Section 8.2 of the TSA. The data was not compiled from Stonefield's records alone; it was derived from VTS's proprietary platform. Hess independently verified the CPP data against Stonefield's TMS records and found the two sources to be consistent, with immaterial discrepancies of less than 0.3%.

Hess is further prepared to testify that VTS never disputed the accuracy of the metrics cited in the Cure Notice. VTS's February 14, 2022 response did not challenge any of the specific performance figures — not the on-time pickup rate, not the on-time delivery rate, not the tender acceptance rate, not the equipment availability figure, and not the cargo claims ratio. VTS did not dispute these metrics at any time prior to the commencement of this litigation. If CRS now challenges the accuracy of the metrics, Hess can point to VTS's own silence at the time and to VTS's own internal Q4 2021 Performance Report, which confirmed the same performance picture.

B. Adequacy of Cure Period / Substantial Cure Argument

Gallagher anticipated that CRS may argue that the 30-day cure period was insufficient for VTS to cure the breadth and severity of the performance failures cited in the Cure Notice. CRS may further argue that VTS achieved "substantial cure" even if not full cure, and that Stonefield should have extended the cure period or accepted partial improvement.

Hess is prepared to testify that the 30-day cure period was the cure period contractually specified in Section 13.1(a) of the TSA. This cure period was negotiated and agreed to by both parties at the time the TSA was executed. Stonefield did not impose an arbitrary or shortened cure period; it applied the period that the contract itself provided.

Hess can further testify that even after the cure period expired on February 17, 2022, VTS's performance did not improve. To the contrary, performance continued to deteriorate. Specifically, the tender acceptance rate in February 2022 fell to approximately 68%, down from the already-deficient 71.4% figure for Q4 2021 that had been cited in the Cure Notice. This continued decline undermines any argument that VTS was making progress toward cure or that additional time would have resulted in meaningful improvement.

C. Whether Cure Notice Was Pretextual

Gallagher identified the pretext argument as perhaps the most significant line of attack that CRS is likely to pursue. CRS may argue that the Cure Notice was not a genuine exercise of Stonefield's contractual rights but rather a pretext — a manufactured basis for terminating the TSA in order to avoid the April 2022 annual rate adjustment under Section 5.3. Under the rate adjustment formula, VTS's rates were projected to increase by approximately 14.3%, from a weighted average of $2.87 per mile to $3.28 per mile, adding approximately $6.2 million in annualized costs to Stonefield.

Hess is prepared to testify clearly and consistently on this point. His role was limited to contract compliance monitoring. He identified genuine, documented performance failures using VTS's own data. The decision to pursue the cure process and ultimately to support termination was driven entirely by those documented failures, not by any desire to avoid the rate adjustment. Hess should state that his compliance work was data-driven and objective, and that he would have flagged the same performance deficiencies regardless of the rate environment.

Hess should further state that he was not involved in and was not aware of any discussions about the economic impact of the April 2022 rate adjustment on the termination decision. Those discussions, if they occurred, would have taken place at a different level of the organization and were outside the scope of his compliance monitoring responsibilities.

If pressed, Hess may acknowledge general awareness that rates adjust annually under Section 5.3 of the TSA — this is not something he needs to deny, as it is a basic feature of the contract. However, Hess should emphasize clearly that the rate adjustment mechanism was not a factor in his compliance work, in his decision to issue the Cure Notice, or in his assessment that VTS had failed to cure the identified deficiencies.

D. Stonefield's Volume Shortfalls / Annual Committed Volume (ACV)

CRS may attempt to elicit testimony that Stonefield itself was in breach of the TSA by failing to tender the Annual Committed Volume ("ACV") of $43.2 million per contract year. This argument, if successful, could support a defense of mutual breach or could undermine Stonefield's standing to invoke the termination provisions.

Hess is prepared to testify that volume tendering was not within his area of responsibility. His role in contract compliance focused on monitoring carrier-side performance — that is, whether VTS was meeting its obligations to Stonefield under the TSA. He did not monitor shipper-side obligations, including Stonefield's own volume commitments, as part of his compliance function.

If pressed on the specifics of the volume dispute, Hess is aware of the following facts but should note that they fall outside his primary area of responsibility. For Contract Year 2 (approximately April 2020 through March 2021), Stonefield invoked the force majeure provision under Section 12.1 of the TSA for the COVID-19 period spanning April through September 2020. This invocation adjusted the Contract Year 2 minimum ACV downward to $21.6 million. Actual CY2 tenders were approximately $31.8 million, which exceeded the adjusted ACV by $10.2 million. For Contract Year 3 (approximately April 2021 through the termination in January 2022, a partial year), Hess is aware that there is a dispute between the parties over whether the partial-year tenders of approximately $36.5 million met the prorated ACV obligation. However, Hess should emphasize that this dispute was not part of his compliance monitoring scope and that he is not the appropriate witness to address the ACV calculations in detail.

E. Section 7.4 — Substitute Equipment / Surge Capacity

CRS may challenge whether the Section 7.4 obligation was clearly triggered during the relevant period and whether Stonefield provided adequate notice to VTS that it expected substitute equipment or surge capacity to be arranged.

Hess is prepared to testify that the Cure Notice specifically cited VTS's chronic failure to provide substitute equipment or surge capacity when its dedicated fleet fell below committed levels, as required under Section 7.4 of the TSA. Section 7.4 imposed an affirmative obligation on VTS to arrange for alternative capacity, and this obligation was triggered whenever equipment availability fell below the committed threshold. Hess can confirm that equipment availability had dropped to approximately 62% of committed levels — 248 of 400 committed tractors — in Q4 2021, and that VTS made no arrangements whatsoever for substitute capacity. No substitute carriers were engaged, no surge equipment was sourced, and no notification was provided to Stonefield regarding the shortfall or any remedial plans. The Milescu-to-Vantorovich email (VHC-008417) further demonstrates that the equipment shortfall was not the result of market conditions but of VTS's deliberate decision to redeploy committed equipment to other customers without notice.

VIII. Practice Examination

Following the document review and discussion of anticipated questioning, Gallagher conducted a practice examination of Hess lasting approximately 90 minutes. The practice examination was designed to simulate the conditions of the actual deposition as closely as possible, including the pacing, tone, and adversarial nature of opposing counsel's questioning.

Gallagher conducted the initial portion of the practice examination in the role of defending counsel, asking Hess foundational and background questions similar to those that CRS is likely to use at the beginning of the deposition. Laroche then assumed the role of opposing counsel for substantial portions of the practice examination, asking Hess questions in the more confrontational and probing style that CRS is expected to employ. The practice examination covered all of the major anticipated topics identified above, including the accuracy and sourcing of performance metrics, the cure notice process, Vantor's response, the adequacy of the cure period, the pretext argument and the rate adjustment, Stonefield's volume tendering, and the Section 7.4 substitute equipment issue.

Hess performed well overall during the practice examination. His answers were generally clear, concise, and responsive to the specific question asked. He demonstrated a strong command of the relevant facts, dates, and documents, and did not volunteer unnecessary information in most instances. His demeanor was calm, professional, and credible.

Areas for improvement were noted as follows:

First, Hess had a tendency to explain the "why" behind VTS's performance failures — for example, speculating about the impact of the nationwide driver shortage on VTS's ability to maintain tender acceptance rates and fleet capacity. While these are contextual factors that may or may not be relevant, Hess's role at the deposition is to testify about the data, not to offer explanations for VTS's operational shortcomings. Gallagher instructed Hess to stick to the data and let the metrics speak for themselves. If CRS asks Hess why VTS's performance declined, Hess should state that he can speak to the performance data but cannot speculate about the internal operational reasons for VTS's failures, as those are within VTS's knowledge, not his.

Second, Hess initially referenced a conversation with Lorraine Beckwith of Ashford Meridian LLP when asked about the cure notice drafting process. This occurred when Laroche, in the role of opposing counsel, asked Hess a general question about who was involved in deciding to issue the Cure Notice. Hess began to describe his communications with Beckwith regarding the legal requirements of Section 13.2 before catching himself. Gallagher stopped the practice examination and reminded Hess of the critical importance of pausing before answering any question that could implicate attorney-client communications. If a question appears to call for information about communications with Beckwith or any other attorney, Hess should pause, and Gallagher will assert the privilege and, if necessary, instruct Hess not to answer. Hess acknowledged this instruction and committed to being more careful about this issue.

Third, on the topic of the April 2022 rate adjustment, Hess initially responded to a question by stating: "I knew the rates were going up, but that wasn't the reason." While this answer is substantively helpful, Gallagher noted that the phrasing could be sharpened. By saying "that wasn't the reason," Hess implicitly assumes the framing that he had decision-making authority over the termination, which could open additional lines of questioning about the termination decision. Gallagher coached Hess to separate two distinct points: (a) Hess's general awareness of the annual rate adjustment mechanism, which is a basic contractual provision that anyone involved in the TSA would be aware of, and (b) the termination decision, which was not Hess's to make and which Hess was not involved in at the strategic or business level. Hess should clarify that his role was compliance monitoring, not business strategy, and that the compliance work he performed was entirely driven by the documented performance failures. Hess accepted this coaching and practiced revised formulations.

IX. Document Preparation

Hess was provided with two binders containing copies of key documents that are likely to be used as exhibits during the July 27, 2023 deposition. The binders were organized chronologically and by document category, with tabbed dividers for ease of reference.

The documents included in the binders are as follows:

• Transportation Services Agreement (Contract Reference No. SLG-VTS-2019-0315), dated March 15, 2019, with all amendments and schedules

• Cure Notice, dated January 18, 2022, from Raymond Hess to Sandra Milescu

• Vantor response letter, dated February 14, 2022, from Derek Pruitt to Janet Kirkwood

• Termination letter, dated March 4, 2022, from Tobias Wren to Sandra Milescu

• VTS Q4 2021 Performance Report (internal VTS document produced in discovery)

• Sandra Milescu to Nikolai Vantorovich email, dated November 12, 2021 (Bates No. VHC-008417)

• Relevant internal Stonefield emails and memoranda, including Hess's Q4 2021 performance summary and data reconciliation memorandum

• Relevant performance dashboards and data extracts from both the CPP and Stonefield's TMS

Hess was instructed to review these documents carefully over the next two days prior to his deposition on July 27, 2023. Gallagher emphasized that Hess should familiarize himself with the documents so that he can identify and discuss them fluently at the deposition. However, Gallagher specifically instructed Hess not to annotate, mark, highlight, or write notes on any of the documents, as any notes, annotations, or markings could potentially be discoverable and could be used by opposing counsel to probe the substance of the preparation session. If Hess wishes to make notes for himself, he should do so on a separate pad that is clearly labeled as attorney work product and that can be collected and retained by counsel.

Hess confirmed that he understood these instructions and stated that he would review the documents at his hotel on the evening of July 26 and the morning of July 27 prior to the pre-deposition check-in at Calderwood & Harkness.

X. Logistics for July 27 Deposition

The following logistical arrangements for the July 27, 2023 deposition were confirmed:

Deposition Date: July 27, 2023

Location: Caldwell Royce & Shapiro LLP, 1 Liberty Plaza, 22nd Floor, New York, NY 10006

Estimated Duration: Up to seven (7) hours of examination time, consistent with the default time limitation under Federal Rule of Civil Procedure 30(d)(1)

Pre-Deposition Check-In: Hess is to arrive at Calderwood & Harkness LLP, 200 Park Avenue, 38th Floor, New York, NY 10166, by 8:00 AM on July 27 for a brief pre-deposition check-in with Gallagher. The check-in will cover any final questions Hess may have, a brief review of key reminders, and any updates regarding the deposition logistics or scope.

Court Reporter and Videographer: The court reporter and videographer have been arranged by CRS (plaintiff's counsel). The deposition will be recorded by both stenographic and video means, as is standard in this matter.

Defending Counsel: Gallagher will attend the deposition as defending counsel for Hess. Laroche will attend as second chair and will be responsible for tracking exhibits, noting objections, and monitoring the examination for any issues requiring real-time attention.

Travel Arrangements: Hess confirmed that he will be flying from Fort Worth, Texas, to New York on the evening of July 26, 2023. He has made hotel arrangements in Manhattan. Hess confirmed his availability for the deposition and stated that he does not anticipate any scheduling conflicts.

XI. Follow-Up Items

The following follow-up items were identified during the preparation session:

1. Gallagher will send Hess a final reminder email on July 26, 2023, with logistical details for the deposition, including the exact address and floor of the CRS offices, the check-in time at Calderwood & Harkness, and contact information for the litigation team in case of any issues on the morning of July 27.

2. Laroche will prepare a one-page bullet-point summary of key reminders for Hess to review on the morning of the deposition. This summary will cover the core deposition guidelines (listen to the question, answer only what is asked, do not volunteer, pause before answering, do not speculate, read documents fully, protect the privilege). The summary is for Hess's review at the Calderwood & Harkness offices before departing for CRS — Hess should not bring the summary into the deposition room.

3. Tsao will coordinate Hess's travel reimbursement with Stonefield's CFO office, specifically with Priya Ramachandran, to ensure that Hess's airfare, hotel, and incidental travel expenses are processed in a timely manner.

4. Gallagher noted that he may schedule a brief telephone check-in with Hess on the evening of July 26, 2023, after Hess arrives in New York, time permitting. The purpose of this call would be to address any last-minute questions and to confirm the morning logistics.

The preparation session concluded at approximately 1:30 PM on July 24, 2023.

Prepared by: Helen Tsao, Senior Paralegal, Calderwood & Harkness LLP

Date Finalized: July 24, 2023

Distribution: Patrick Gallagher, Simone Laroche, Samuel Eklund (file copy)

Filing: Matter No. 1012-00005, Category VI (Depositions), Document No. 76

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT DO NOT DISTRIBUTE WITHOUT AUTHORIZATION OF COUNSEL

Matter:	Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.)
Matter No.:	1012-00005
Document Title:	Witness Preparation Session Notes — Raymond Hess
Date of Session:	July 24, 2023
Prepared By:	Helen Tsao, Senior Paralegal, Calderwood & Harkness LLP
Attorneys Present:	Patrick Gallagher, Lead Associate; Simone Laroche, Working Associate
Witness:	Raymond Hess, Director, Contract Compliance, Stonefield Logistics Group Inc.
Location:	Calderwood & Harkness LLP, 200 Park Avenue, 38th Floor, New York, NY 10166 (Conference Room 38-C)
Session Duration:	Approximately 3.5 hours (10:00 AM – 1:30 PM ET)
Purpose:	Preparation of Raymond Hess for anticipated deposition by Caldwell Royce & Shapiro LLP (plaintiff's counsel for Vantor Holdings Corp.), scheduled for July 27, 2023
Service Level Obligation	SLO Threshold (per TSA)	Actual Q4 2021 Performance	Variance
On-time pickup rate	95%	78.2%	-16.8 points
On-time delivery rate	93%	81.6%	-11.4 points
Tender acceptance rate	90%	71.4%	-18.6 points
Equipment availability (committed fleet)	85% (of 400 tractors)	62% (approx. 248 tractors)	-23 points
Cargo claims ratio	≤ 0.5%	Approx. 1.07% (16 claims totaling $387,400 in Nov.–Dec. 2021)	+0.57 points

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT PREPARED IN ANTICIPATION OF LITIGATION
This document constitutes attorney work product prepared in anticipation of litigation and is protected from disclosure by the attorney work product doctrine, the attorney-client privilege, and all other applicable privileges. This document is not to be disclosed, disseminated, distributed, or copied to any person other than those identified in the distribution list below without the prior written consent of Calderwood & Harkness LLP. Any inadvertent disclosure does not constitute a waiver of any applicable privilege.
CALDERWOOD & HARKNESS LLP 200 Park Avenue, 38th Floor New York, New York 10166
I. Preliminary Instructions and Ground Rules
Gallagher opened the session at approximately 10:00 AM by reviewing the standard deposition preparation guidelines with Hess. Gallagher explained the general format and purpose of a deposition under the Federal Rules of Civil Procedure and provided Hess with an overview of what to expect during the proceeding on July 27, 2023.
Gallagher reminded Hess to listen carefully to each question posed by opposing counsel before formulating his answer. Gallagher emphasized that Hess should answer only the specific question asked and should not volunteer information beyond what is directly responsive to the question. If opposing counsel asks a "yes or no" question, a "yes or no" answer is generally sufficient, followed by a brief explanation only if necessary to avoid being misleading. Hess was cautioned against the common tendency to provide lengthy narratives or to anticipate follow-up questions and answer them preemptively.
Gallagher instructed Hess to wait for the full question to be completed before beginning his answer. Hess was told that pausing briefly — approximately two to three seconds — before responding serves two purposes: it gives Hess time to formulate a clear and accurate answer, and it allows counsel to interpose an objection if necessary before the answer is given. If Gallagher begins to state an objection, Hess should stop and listen to the objection before proceeding.
Gallagher explained the role of objections at deposition. Under federal practice, objections at a deposition are typically limited to objections as to the form of the question — that is, objections relating to the phrasing, leading nature, compound structure, or assumption embedded in the question. Most other objections, including those based on relevance, are generally preserved and need not be stated at the deposition. Gallagher explained that when an objection is made, Hess should continue to answer the question unless Gallagher specifically instructs him not to answer. Gallagher noted that instructions not to answer are limited under Rule 30(c)(2) to instances involving privilege, a court-ordered limitation, or the need to present a motion to terminate or limit the examination. Hess confirmed his understanding of this instruction.
Gallagher reminded Hess that all testimony given at a deposition is under oath and carries the same legal weight as testimony given at trial. Hess acknowledged that he understands the seriousness of providing sworn testimony and the obligation to testify truthfully. Gallagher noted that the deposition transcript may be used at trial for any purpose permitted under the Federal Rules of Evidence and the Federal Rules of Civil Procedure, including impeachment and substantive evidence.
Gallagher advised Hess that if he does not recall something, it is entirely appropriate to say "I don't recall" or "I don't remember." Hess should not guess or speculate in order to provide an answer. If Hess has an approximate recollection but is not certain of the precise details, he may say so — for example, "My best recollection is..." or "I believe it was approximately..." — but Hess should avoid presenting speculation as definitive fact. Gallagher emphasized that there is no obligation to recall every detail, and that an honest statement of non-recollection is far preferable to an inaccurate answer that could be used for impeachment later.
Gallagher further advised Hess that if a document is shown to him during the deposition — whether a document he has previously seen or one he is seeing for the first time — Hess should take the time to read the entire document carefully before answering any questions about it. Hess should not feel pressured by opposing counsel to rush through a document. If the document is lengthy, Hess should ask for sufficient time to read it completely. Gallagher noted that opposing counsel may attempt to direct Hess's attention to a particular paragraph or sentence, but Hess should insist on reading the document in full context before testifying about any portion of it.
Finally, Gallagher reminded Hess that the preparation session itself is privileged attorney work product and should not be disclosed to anyone outside of counsel. If asked during the deposition whether he met with counsel to prepare, Hess may acknowledge that he did — there is nothing improper about witness preparation, and attempting to conceal it would be counterproductive — but Hess should not disclose the substance of what was discussed, the specific questions asked, or the advice given during the session. If opposing counsel presses for the substance of the preparation, Gallagher will assert the attorney work product privilege. Hess confirmed his understanding of all preliminary instructions.
II. Background on Hess's Role and Responsibilities
Gallagher and Laroche next reviewed Hess's professional background, current role, and responsibilities at Stonefield Logistics Group Inc. to confirm the foundation for his anticipated testimony.
Hess confirmed his current title: Director, Contract Compliance, Stonefield Logistics Group Inc. He reports directly to Carlos Medina, Senior Vice President of Operations. Hess has held this position since June 2018, which means he assumed the role approximately one year before the Transportation Services Agreement ("TSA") at issue in this litigation was executed. Hess noted that he was brought into the role in part because of Stonefield's desire to build out a more formalized contract compliance function as its carrier relationships grew in number and complexity.
Hess described his role as encompassing several core areas of responsibility. First, he is responsible for monitoring carrier performance metrics on an ongoing basis, ensuring that carriers are meeting the service level obligations specified in their respective agreements with Stonefield. Second, he oversees compliance with contractual requirements more broadly, including equipment commitments, insurance and safety certifications, reporting obligations, and other operational terms. Third, Hess manages the cure notice and escalation procedures when performance deficiencies are identified, including the preparation and issuance of formal cure notices under the applicable contract provisions. Fourth, he serves as a liaison with Stonefield's legal department — specifically the office of General Counsel, Tobias Wren — on contract enforcement matters that may require legal analysis or external counsel involvement.
Hess oversees a team of four contract compliance analysts who assist with data compilation, performance report generation, and routine carrier correspondence. Hess supervises the work of these analysts and is the final reviewer for all compliance-related communications issued by his department.
With respect to the TSA at issue in this case (Contract Reference No. SLG-VTS-2019-0315), Hess confirmed that he was involved in the initial implementation of the agreement after its execution on March 15, 2019. Although Hess was not involved in the negotiation of the TSA — that was handled primarily by Janet Kirkwood (VP, Carrier Relations) and Tobias Wren (General Counsel) with the assistance of outside counsel — Hess was responsible for operationalizing the agreement on the compliance side. Specifically, Hess worked with his team to set up the performance monitoring dashboards, reporting protocols, and data integration processes that would be used to track VTS's performance against the Service Level Obligations defined in the TSA.
Hess confirmed that he had periodic interaction with Vantor/VTS personnel during the life of the TSA. His primary points of contact were Sandra Milescu, Chief Operating Officer of Vantor/VTS, and Derek Pruitt, Vice President of Business Development. These interactions related primarily to performance reporting — for example, quarterly performance reviews and discussions about specific metrics — and were generally conducted via email, with occasional conference calls. Hess noted that his interactions with Vantor personnel were professional and business-oriented; he did not have a personal relationship with any of the Vantor individuals.
III. Review of Cure Notice Drafting Process
A. Genesis of the Cure Notice
Gallagher and Laroche spent significant time reviewing the factual background and timeline leading to the issuance of the January 18, 2022 Cure Notice. This is anticipated to be a central area of inquiry at the deposition, and Hess's testimony regarding the genesis and motivations for the Cure Notice will be important.
Hess confirmed that performance concerns with VTS had been escalating throughout calendar year 2021, with the issues particularly accelerating in the third and fourth quarters of 2021. Hess noted that the performance deficiencies were not sudden or unexpected; rather, they reflected a progressive deterioration that became increasingly apparent over the course of the year.
Hess stated that he began flagging VTS performance issues to Carlos Medina (SVP, Operations) and Janet Kirkwood (VP, Carrier Relations) as early as August 2021. The initial flagging was informal in nature — Hess raised the concerns via email communications and during the regularly scheduled weekly operations meetings that he attended with Medina's team. Hess recalled that his August 2021 concerns related primarily to declining tender acceptance rates and a noticeable increase in late pickups on certain dedicated lanes. At that time, Hess recommended increased monitoring but did not yet recommend formal cure proceedings.
By December 2021, the performance deficiencies had become significantly more pronounced and systemic. Hess prepared a formal internal performance summary for VTS reflecting the full Q4 2021 period (October, November, and December 2021). This summary documented failures across all five of the Service Level Obligations ("SLOs") established under the TSA. Hess circulated this summary to Medina and Kirkwood, and it became the basis for the discussions that ultimately led to the issuance of the Cure Notice.
Hess stated that in early January 2022, he participated in discussions regarding the possibility of issuing a formal cure notice to VTS under Section 13.1(a) and Section 13.2 of the TSA. These discussions included Tobias Wren, General Counsel of Stonefield, and Lorraine Beckwith, a Partner in the Commercial Contracts group at Ashford Meridian LLP, which served as Stonefield's outside commercial counsel. Hess confirmed that Beckwith and the Ashford Meridian team provided legal guidance on the drafting of the Cure Notice, including the level of specificity required to satisfy the "reasonable particularity" standard set forth in Section 13.2 of the TSA. Hess recalled that Beckwith advised that the Cure Notice should identify each specific SLO that had been breached, the contractual threshold for each SLO, and the actual performance figure for the relevant period, so that VTS would have clear notice of what needed to be cured and by when.
B. Metric Compilation and Verification
Gallagher spent considerable time reviewing the process by which the performance metrics cited in the Cure Notice were compiled and verified. This is a critical area of anticipated testimony because Vantor's counsel (Caldwell Royce & Shapiro LLP, "CRS") is expected to challenge the accuracy and reliability of the metrics.
Hess confirmed that he independently verified all Q4 2021 performance metrics using VTS's own Carrier Performance Portal ("CPP") data. This is a critical point. The CPP was VTS's proprietary reporting system — a system that VTS itself maintained and controlled — and both parties had access to it under the terms of the TSA. The metrics cited in the Cure Notice were therefore sourced from VTS's own system, not solely from Stonefield's internal records.
Hess explained the CPP in detail. The CPP was a web-based platform maintained by VTS that tracked, in real time, a comprehensive array of operational data, including shipment status, tender acceptance and rejection events, pickup and delivery timestamps, equipment assignments, and cargo claims. The CPP served as the primary shared data repository between VTS and Stonefield for purposes of performance monitoring under the TSA. Stonefield had read-only access to the CPP under Section 8.2 of the TSA, which was titled "Reporting and Transparency." This section required VTS to provide Stonefield with continuous access to the CPP and to maintain the accuracy and completeness of the data contained therein.
Hess stated that he personally extracted the Q4 2021 data from the CPP on or about January 10 through January 12, 2022. He downloaded the relevant reports for the October, November, and December 2021 periods across all five SLO categories. He then cross-referenced the CPP data against Stonefield's internal Transportation Management System ("TMS") records. The TMS is Stonefield's proprietary logistics management platform, which independently tracks shipment data, carrier performance, and operational events.
The specific metrics cited in the Cure Notice, as compiled and verified by Hess, were as follows:
Hess stated that the CPP data and Stonefield's TMS data were consistent, with only minor discrepancies of less than 0.3% across the relevant metrics. Hess attributed these minor discrepancies to timing differences in data entry — for example, a delivery event might be logged in the CPP a few hours before or after it was recorded in the TMS due to differences in how the two systems processed carrier status updates. Hess stated that the discrepancies were immaterial and did not affect the overall performance picture in any respect.
Hess confirmed that he prepared a written data reconciliation memorandum documenting the comparison between the CPP data and the TMS data. This memorandum was shared with Tobias Wren (General Counsel, Stonefield) and Lorraine Beckwith (Ashford Meridian LLP) prior to the issuance of the Cure Notice. Hess stated that the reconciliation memo was prepared to ensure that the metrics cited in the Cure Notice could withstand scrutiny and that Stonefield could demonstrate the reliability and accuracy of the underlying data if challenged.
C. Cure Notice Issuance
The Cure Notice was dated January 18, 2022. Hess confirmed that he was the author and signatory of the Cure Notice. The Cure Notice was sent to Sandra Milescu, Chief Operating Officer of Vantor/VTS, via two methods: email and certified mail with return receipt requested. Hess confirmed that both methods of delivery were used to ensure documented receipt, consistent with the notice provisions of the TSA.
The Cure Notice specified each of the five SLO failures in detail, including the relevant contractual threshold for each SLO and the actual Q4 2021 performance figure as determined from the CPP data and verified against the TMS records. In addition to the five SLO failures, the Cure Notice also cited VTS's chronic failure to provide substitute equipment or surge capacity as required under Section 7.4 of the TSA. Section 7.4 imposed an obligation on VTS to arrange for substitute carrier capacity or surge equipment when its dedicated fleet fell below committed levels, and Hess confirmed that VTS had made no such arrangements despite the equipment availability dropping to approximately 62% of committed levels.
Hess stated that the Cure Notice was reviewed and approved by both Tobias Wren (General Counsel, Stonefield) and Lorraine Beckwith (Partner, Ashford Meridian LLP) before it was transmitted to VTS. The review process involved multiple drafts and revisions to ensure that the Cure Notice satisfied the "reasonable particularity" standard of Section 13.2 and was legally sufficient to initiate the cure period under the TSA.
The Cure Notice specified a cure period of 30 calendar days from the date of receipt by VTS, consistent with the cure period set forth in Section 13.1(a) of the TSA. Based on the date of certified mail receipt, the cure deadline was February 17, 2022.
IV. Vantor's Response to Cure Notice
Gallagher next reviewed with Hess the response that Stonefield received from Vantor following the issuance of the Cure Notice.
Hess confirmed receipt of Vantor's response letter dated February 14, 2022. The letter was sent by Derek Pruitt, Vice President of Business Development at Vantor, and was addressed to Janet Kirkwood, Vice President of Carrier Relations at Stonefield. Hess noted that this was somewhat unusual in that the Cure Notice had been sent by Hess (as Director of Contract Compliance) to Sandra Milescu (COO of Vantor/VTS), but the response came from a different Vantor representative and was directed to a different Stonefield contact.
Hess reviewed the February 14, 2022 response letter at Gallagher's request during the preparation session and made the following observations:
First, the letter acknowledged that VTS had experienced "operational challenges" during the Q4 2021 period. However, the letter did not present any specific cure actions that VTS had taken during the 30-day cure period, nor did it provide any metrics or data demonstrating that VTS's performance had improved or was improving. The letter was, in Hess's assessment, general and nonspecific in its characterization of VTS's response to the Cure Notice.
Second, the letter asserted that the performance deficiencies identified in the Cure Notice were caused by three factors outside of VTS's control: (i) a nationwide driver shortage affecting the entire transportation industry; (ii) Stonefield's own alleged failure to tender minimum committed volumes under the TSA, which VTS claimed impacted VTS's ability to maintain dedicated fleet capacity; and (iii) Stonefield's alleged instructions to divert freight volume to lower-cost spot market carriers, which VTS claimed undermined the economic basis for VTS's dedicated fleet commitment. The letter presented these factors as mitigating circumstances that should be considered in evaluating VTS's performance.
Third, and critically, the letter did not dispute the specific Q4 2021 performance figures cited in the Cure Notice. Hess emphasized this point during the preparation session: VTS did not challenge the accuracy of any of the metrics that Stonefield had cited — not the on-time pickup rate, not the on-time delivery rate, not the tender acceptance rate, not the equipment availability figure, and not the cargo claims ratio. The February 14 response implicitly accepted the accuracy of those figures by failing to contest them and instead focusing on purported justifications and mitigating factors. Gallagher noted this is a strong point for Hess's testimony.
Following the expiration of the cure period on February 17, 2022, Hess reviewed post-cure-period performance data from both the CPP and Stonefield's TMS for the late February and early March 2022 timeframe. Hess confirmed that VTS's metrics had not materially improved during the cure period. In fact, Hess noted that the tender acceptance rate actually declined further in February 2022, dropping to approximately 68%, down from the 71.4% figure cited in the Cure Notice for Q4 2021. This continued deterioration further confirmed that VTS had not undertaken meaningful remedial action during the cure period.
V. Termination Letter
Gallagher reviewed with Hess his involvement in the termination of the TSA and the circumstances surrounding the termination letter.
Hess confirmed that he was involved in providing the factual support for the termination letter, specifically by compiling and presenting the performance data demonstrating that VTS had not cured the material breaches identified in the Cure Notice within the 30-day cure period. However, Hess was not the signatory of the termination letter. The termination letter was dated March 4, 2022, and was signed by Tobias Wren, General Counsel of Stonefield Logistics Group Inc.
Hess confirmed that the termination letter stated, in substance, that VTS had "failed to cure the material breaches" identified in the January 18, 2022 Cure Notice within the 30-calendar-day cure period specified in Section 13.1(a) of the TSA. The termination letter further stated that, as a consequence of VTS's failure to cure, Stonefield was exercising its right to terminate the TSA effective immediately, pursuant to Section 13.1(a). Hess confirmed that the termination letter referenced the specific SLO failures and the continued post-cure deterioration in performance.
Gallagher then raised a topic that is anticipated to be a significant area of inquiry at the deposition: the April 2022 rate adjustment. Gallagher asked Hess whether anyone discussed the upcoming April 2022 rate adjustment as a factor in the decision to terminate the TSA. Hess stated that he was aware of the rate adjustment mechanism contained in Section 5.3 of the TSA, which provided for an annual rate adjustment based on a contractually specified formula. However, Hess stated that his involvement in the termination process was limited to his contract compliance monitoring role and the cure process — specifically, identifying the performance failures, compiling the data, drafting the Cure Notice, and assessing whether cure had been achieved. Hess stated clearly that he was not involved in any business-level decisions about the economic impact of the rate adjustment on the termination decision. Those decisions would have been made at a level above his role, potentially involving Medina, Kirkwood, and senior leadership.
Hess stated affirmatively that the decision to pursue the cure process and ultimately to support the termination was driven entirely by VTS's sustained and uncured service failures. Hess reiterated that the performance deficiencies were severe, systemic, and well-documented, and that VTS had failed to take meaningful corrective action during the cure period.
VI. Key Document Review — Anticipated Exhibits
Gallagher and Laroche walked Hess through several key documents that are likely to be introduced as exhibits during the deposition. The purpose of this review was to familiarize Hess with the documents, confirm his ability to authenticate them and testify about their contents, and identify any potential issues or areas of concern.
A. Cure Notice (January 18, 2022)
Gallagher walked Hess through the Cure Notice line by line. Hess reviewed each section of the notice, including the recitation of the contractual provisions invoked (Sections 13.1(a), 13.2, and 7.4 of the TSA), the specification of each SLO failure, the identification of the contractual threshold and actual performance figure for each SLO, and the statement of the cure period and deadline. Hess confirmed that each metric cited in the Cure Notice was accurate and that he could identify the source of each figure. Hess is comfortable testifying that every figure was derived from VTS's own Carrier Performance Portal data and was independently verified against Stonefield's Transportation Management System records. Hess confirmed that he authored the notice and signed it on behalf of Stonefield's Contract Compliance department.
B. Vantor's February 14, 2022 Response
Hess reviewed the February 14, 2022 response from Derek Pruitt in full during the preparation session. Hess is prepared to testify that the response did not demonstrate that actual cure of the identified performance deficiencies had been achieved or was in progress. Hess noted that the response was addressed to Janet Kirkwood (VP, Carrier Relations, Stonefield), not to Hess, despite the fact that the Cure Notice had been issued by Hess and directed to Sandra Milescu. Hess stated that he did not have any direct communications with any Vantor personnel following the February 14, 2022 response. Any subsequent communications regarding the cure process or the termination would have gone through Wren's office or Ashford Meridian.
C. VTS Q4 2021 Performance Report (Internal VTS Document)
Hess reviewed a document titled "VTS Q4 2021 Performance Report," which was an internal VTS document produced by Vantor during the document production phase of this litigation. Hess confirmed that VTS's own internal performance report showed actual metrics that were materially below the SLO thresholds across all five categories. The figures in VTS's own internal report were consistent with the figures cited in the Cure Notice. Gallagher noted that this document further supports Hess's testimony that the CPP data was accurate and that the metrics in the Cure Notice were reliable — indeed, VTS's own internal assessment of its performance confirmed the deficiencies that Stonefield identified.
D. Milescu-to-Vantorovich Email (November 12, 2021) — VHC-008417
Gallagher showed Hess the email from Sandra Milescu (COO, Vantor/VTS) to Nikolai Vantorovich (CEO, Vantor Holdings Corp.) dated November 12, 2021, bearing Bates number VHC-008417. The email states, in pertinent part: "We've pulled 85 tractors off the SLG dedicated lanes to cover [redacted] commitments. SLG won't notice until January."
Hess stated that he first saw this email during the litigation discovery process. He was not aware of this email or its contents during the course of the contract relationship. This is a significant point: the email reflects that VTS deliberately and covertly redeployed 85 tractors — representing a substantial portion of the committed fleet — from Stonefield's dedicated lanes to serve other customers, and that VTS anticipated Stonefield would not discover this redeployment until January 2022. Hess stated that had he been aware of this email or the underlying fleet redeployment at the time it occurred, he would have immediately escalated the matter as a breach of Section 7.4 of the TSA (equipment availability and substitute capacity obligations) and the related SLO requirements. The redeployment of 85 tractors from a committed fleet of 400 would have reduced availability by over 21 percentage points, which would alone account for much of the equipment availability decline that Stonefield observed in Q4 2021.
Hess confirmed that no notification from VTS was ever received regarding the redeployment of the 85 tractors from SLG dedicated lanes. Section 7.4 of the TSA required VTS to notify Stonefield and arrange substitute capacity in the event that dedicated equipment was temporarily or permanently reassigned; VTS did neither.
Gallagher instructed Hess to be prepared to testify about this email if CRS raises it during the deposition, but Hess should not volunteer it or bring it up proactively. Hess should wait for opposing counsel to introduce the document and should then respond to questions about it truthfully and specifically. Hess confirmed his understanding of this instruction.
E. Kirkwood-to-Medina Email (September 22, 2021)
Gallagher discussed with Hess a potentially adverse document: an email from Janet Kirkwood (VP, Carrier Relations, Stonefield) to Carlos Medina (SVP, Operations, Stonefield) dated September 22, 2021. The email states, in pertinent part: "VTS is a mess. We're already moving volume to Cascade and Briarwood on Lanes 8–14. If VTS doesn't get its act together by Q1 I think we pull the plug on the whole contract."
Gallagher identified the risk that CRS may use this email to argue that Stonefield had already decided to terminate the TSA before the Cure Notice was ever issued, and that the volume diversion to Cascade Freight Systems Inc. and Briarwood Trucking Co. reflects Stonefield's own actions contributing to VTS's performance decline by reducing the volume available to VTS.
Hess confirmed that he was not a recipient of the September 22, 2021 email and was not copied on it. The email was sent from Kirkwood to Medina, and Hess was not included. Hess stated that he had no knowledge of volume diversion to Cascade Freight Systems Inc. or Briarwood Trucking Co. in the context of his contract compliance role. Carrier selection — including the decision to route freight to particular carriers on particular lanes — was handled by Kirkwood's Carrier Relations team, not by Hess's Contract Compliance department. Hess's responsibilities related to monitoring the performance of existing contractual carriers, not to making decisions about which carriers would receive particular shipments.
Gallagher instructed Hess that if he is asked about this email at deposition, he should state clearly that he was not involved in carrier selection decisions, was not a party to or aware of the email until it surfaced during the litigation, and cannot speak to the business rationale behind any volume allocation decisions made by the Carrier Relations team. Hess confirmed his understanding.
F. Communications with Ashford Meridian LLP During Cure Period
Gallagher raised the issue of privileged communications that may be the subject of inquiry at the deposition. Vantor has challenged seven entries on Stonefield's privilege log — specifically, Entries 312 through 318 — which cover communications between Hess and Lorraine Beckwith of Ashford Meridian LLP during the January through February 2022 cure period. These communications constitute privileged attorney-client communications in which Hess sought and received legal advice from Beckwith regarding the cure process, the interpretation and application of Section 13.2's "reasonable particularity" requirements, and the legal sufficiency of VTS's response to the Cure Notice.
Hess was instructed that if he is asked at deposition about any communications with Ashford Meridian, he should identify them as communications with counsel in which he was seeking or receiving legal advice. Hess should not disclose the substance of those communications. Gallagher will assert the attorney-client privilege and instruct Hess not to answer if opposing counsel presses for the content of the communications. Hess confirmed his understanding of this instruction and the basis for the privilege assertion.
VII. Anticipated Lines of Questioning by CRS
Gallagher and Laroche reviewed with Hess the lines of questioning that CRS is most likely to pursue at the deposition, based on Vantor's pleadings, discovery responses, and the arguments advanced in the case to date. For each anticipated topic, the team discussed Hess's expected testimony and the key points to emphasize.
A. Accuracy and Source of Performance Metrics
Gallagher anticipated that CRS will challenge whether Stonefield's metrics were accurate, reliable, or selectively compiled to support a predetermined conclusion. This is a natural line of attack given the centrality of the performance data to Stonefield's termination defense.
Hess is prepared to testify that all metrics cited in the Cure Notice were sourced from VTS's own Carrier Performance Portal — the system that VTS itself maintained and was contractually obligated to keep accurate under Section 8.2 of the TSA. The data was not compiled from Stonefield's records alone; it was derived from VTS's proprietary platform. Hess independently verified the CPP data against Stonefield's TMS records and found the two sources to be consistent, with immaterial discrepancies of less than 0.3%.
Hess is further prepared to testify that VTS never disputed the accuracy of the metrics cited in the Cure Notice. VTS's February 14, 2022 response did not challenge any of the specific performance figures — not the on-time pickup rate, not the on-time delivery rate, not the tender acceptance rate, not the equipment availability figure, and not the cargo claims ratio. VTS did not dispute these metrics at any time prior to the commencement of this litigation. If CRS now challenges the accuracy of the metrics, Hess can point to VTS's own silence at the time and to VTS's own internal Q4 2021 Performance Report, which confirmed the same performance picture.
B. Adequacy of Cure Period / Substantial Cure Argument
Gallagher anticipated that CRS may argue that the 30-day cure period was insufficient for VTS to cure the breadth and severity of the performance failures cited in the Cure Notice. CRS may further argue that VTS achieved "substantial cure" even if not full cure, and that Stonefield should have extended the cure period or accepted partial improvement.
Hess is prepared to testify that the 30-day cure period was the cure period contractually specified in Section 13.1(a) of the TSA. This cure period was negotiated and agreed to by both parties at the time the TSA was executed. Stonefield did not impose an arbitrary or shortened cure period; it applied the period that the contract itself provided.
Hess can further testify that even after the cure period expired on February 17, 2022, VTS's performance did not improve. To the contrary, performance continued to deteriorate. Specifically, the tender acceptance rate in February 2022 fell to approximately 68%, down from the already-deficient 71.4% figure for Q4 2021 that had been cited in the Cure Notice. This continued decline undermines any argument that VTS was making progress toward cure or that additional time would have resulted in meaningful improvement.
C. Whether Cure Notice Was Pretextual
Gallagher identified the pretext argument as perhaps the most significant line of attack that CRS is likely to pursue. CRS may argue that the Cure Notice was not a genuine exercise of Stonefield's contractual rights but rather a pretext — a manufactured basis for terminating the TSA in order to avoid the April 2022 annual rate adjustment under Section 5.3. Under the rate adjustment formula, VTS's rates were projected to increase by approximately 14.3%, from a weighted average of $2.87 per mile to $3.28 per mile, adding approximately $6.2 million in annualized costs to Stonefield.
Hess is prepared to testify clearly and consistently on this point. His role was limited to contract compliance monitoring. He identified genuine, documented performance failures using VTS's own data. The decision to pursue the cure process and ultimately to support termination was driven entirely by those documented failures, not by any desire to avoid the rate adjustment. Hess should state that his compliance work was data-driven and objective, and that he would have flagged the same performance deficiencies regardless of the rate environment.
Hess should further state that he was not involved in and was not aware of any discussions about the economic impact of the April 2022 rate adjustment on the termination decision. Those discussions, if they occurred, would have taken place at a different level of the organization and were outside the scope of his compliance monitoring responsibilities.
If pressed, Hess may acknowledge general awareness that rates adjust annually under Section 5.3 of the TSA — this is not something he needs to deny, as it is a basic feature of the contract. However, Hess should emphasize clearly that the rate adjustment mechanism was not a factor in his compliance work, in his decision to issue the Cure Notice, or in his assessment that VTS had failed to cure the identified deficiencies.
D. Stonefield's Volume Shortfalls / Annual Committed Volume (ACV)
CRS may attempt to elicit testimony that Stonefield itself was in breach of the TSA by failing to tender the Annual Committed Volume ("ACV") of $43.2 million per contract year. This argument, if successful, could support a defense of mutual breach or could undermine Stonefield's standing to invoke the termination provisions.
Hess is prepared to testify that volume tendering was not within his area of responsibility. His role in contract compliance focused on monitoring carrier-side performance — that is, whether VTS was meeting its obligations to Stonefield under the TSA. He did not monitor shipper-side obligations, including Stonefield's own volume commitments, as part of his compliance function.
If pressed on the specifics of the volume dispute, Hess is aware of the following facts but should note that they fall outside his primary area of responsibility. For Contract Year 2 (approximately April 2020 through March 2021), Stonefield invoked the force majeure provision under Section 12.1 of the TSA for the COVID-19 period spanning April through September 2020. This invocation adjusted the Contract Year 2 minimum ACV downward to $21.6 million. Actual CY2 tenders were approximately $31.8 million, which exceeded the adjusted ACV by $10.2 million. For Contract Year 3 (approximately April 2021 through the termination in January 2022, a partial year), Hess is aware that there is a dispute between the parties over whether the partial-year tenders of approximately $36.5 million met the prorated ACV obligation. However, Hess should emphasize that this dispute was not part of his compliance monitoring scope and that he is not the appropriate witness to address the ACV calculations in detail.
E. Section 7.4 — Substitute Equipment / Surge Capacity
CRS may challenge whether the Section 7.4 obligation was clearly triggered during the relevant period and whether Stonefield provided adequate notice to VTS that it expected substitute equipment or surge capacity to be arranged.
Hess is prepared to testify that the Cure Notice specifically cited VTS's chronic failure to provide substitute equipment or surge capacity when its dedicated fleet fell below committed levels, as required under Section 7.4 of the TSA. Section 7.4 imposed an affirmative obligation on VTS to arrange for alternative capacity, and this obligation was triggered whenever equipment availability fell below the committed threshold. Hess can confirm that equipment availability had dropped to approximately 62% of committed levels — 248 of 400 committed tractors — in Q4 2021, and that VTS made no arrangements whatsoever for substitute capacity. No substitute carriers were engaged, no surge equipment was sourced, and no notification was provided to Stonefield regarding the shortfall or any remedial plans. The Milescu-to-Vantorovich email (VHC-008417) further demonstrates that the equipment shortfall was not the result of market conditions but of VTS's deliberate decision to redeploy committed equipment to other customers without notice.
VIII. Practice Examination
Following the document review and discussion of anticipated questioning, Gallagher conducted a practice examination of Hess lasting approximately 90 minutes. The practice examination was designed to simulate the conditions of the actual deposition as closely as possible, including the pacing, tone, and adversarial nature of opposing counsel's questioning.
Gallagher conducted the initial portion of the practice examination in the role of defending counsel, asking Hess foundational and background questions similar to those that CRS is likely to use at the beginning of the deposition. Laroche then assumed the role of opposing counsel for substantial portions of the practice examination, asking Hess questions in the more confrontational and probing style that CRS is expected to employ. The practice examination covered all of the major anticipated topics identified above, including the accuracy and sourcing of performance metrics, the cure notice process, Vantor's response, the adequacy of the cure period, the pretext argument and the rate adjustment, Stonefield's volume tendering, and the Section 7.4 substitute equipment issue.
Hess performed well overall during the practice examination. His answers were generally clear, concise, and responsive to the specific question asked. He demonstrated a strong command of the relevant facts, dates, and documents, and did not volunteer unnecessary information in most instances. His demeanor was calm, professional, and credible.
Areas for improvement were noted as follows:
First, Hess had a tendency to explain the "why" behind VTS's performance failures — for example, speculating about the impact of the nationwide driver shortage on VTS's ability to maintain tender acceptance rates and fleet capacity. While these are contextual factors that may or may not be relevant, Hess's role at the deposition is to testify about the data, not to offer explanations for VTS's operational shortcomings. Gallagher instructed Hess to stick to the data and let the metrics speak for themselves. If CRS asks Hess why VTS's performance declined, Hess should state that he can speak to the performance data but cannot speculate about the internal operational reasons for VTS's failures, as those are within VTS's knowledge, not his.
Second, Hess initially referenced a conversation with Lorraine Beckwith of Ashford Meridian LLP when asked about the cure notice drafting process. This occurred when Laroche, in the role of opposing counsel, asked Hess a general question about who was involved in deciding to issue the Cure Notice. Hess began to describe his communications with Beckwith regarding the legal requirements of Section 13.2 before catching himself. Gallagher stopped the practice examination and reminded Hess of the critical importance of pausing before answering any question that could implicate attorney-client communications. If a question appears to call for information about communications with Beckwith or any other attorney, Hess should pause, and Gallagher will assert the privilege and, if necessary, instruct Hess not to answer. Hess acknowledged this instruction and committed to being more careful about this issue.
Third, on the topic of the April 2022 rate adjustment, Hess initially responded to a question by stating: "I knew the rates were going up, but that wasn't the reason." While this answer is substantively helpful, Gallagher noted that the phrasing could be sharpened. By saying "that wasn't the reason," Hess implicitly assumes the framing that he had decision-making authority over the termination, which could open additional lines of questioning about the termination decision. Gallagher coached Hess to separate two distinct points: (a) Hess's general awareness of the annual rate adjustment mechanism, which is a basic contractual provision that anyone involved in the TSA would be aware of, and (b) the termination decision, which was not Hess's to make and which Hess was not involved in at the strategic or business level. Hess should clarify that his role was compliance monitoring, not business strategy, and that the compliance work he performed was entirely driven by the documented performance failures. Hess accepted this coaching and practiced revised formulations.
IX. Document Preparation
Hess was provided with two binders containing copies of key documents that are likely to be used as exhibits during the July 27, 2023 deposition. The binders were organized chronologically and by document category, with tabbed dividers for ease of reference.
The documents included in the binders are as follows:
• Transportation Services Agreement (Contract Reference No. SLG-VTS-2019-0315), dated March 15, 2019, with all amendments and schedules
• Cure Notice, dated January 18, 2022, from Raymond Hess to Sandra Milescu
• Vantor response letter, dated February 14, 2022, from Derek Pruitt to Janet Kirkwood
• Termination letter, dated March 4, 2022, from Tobias Wren to Sandra Milescu
• VTS Q4 2021 Performance Report (internal VTS document produced in discovery)
• Sandra Milescu to Nikolai Vantorovich email, dated November 12, 2021 (Bates No. VHC-008417)
• Relevant internal Stonefield emails and memoranda, including Hess's Q4 2021 performance summary and data reconciliation memorandum
• Relevant performance dashboards and data extracts from both the CPP and Stonefield's TMS
Hess was instructed to review these documents carefully over the next two days prior to his deposition on July 27, 2023. Gallagher emphasized that Hess should familiarize himself with the documents so that he can identify and discuss them fluently at the deposition. However, Gallagher specifically instructed Hess not to annotate, mark, highlight, or write notes on any of the documents, as any notes, annotations, or markings could potentially be discoverable and could be used by opposing counsel to probe the substance of the preparation session. If Hess wishes to make notes for himself, he should do so on a separate pad that is clearly labeled as attorney work product and that can be collected and retained by counsel.
Hess confirmed that he understood these instructions and stated that he would review the documents at his hotel on the evening of July 26 and the morning of July 27 prior to the pre-deposition check-in at Calderwood & Harkness.
X. Logistics for July 27 Deposition
The following logistical arrangements for the July 27, 2023 deposition were confirmed:
Deposition Date: July 27, 2023
Location: Caldwell Royce & Shapiro LLP, 1 Liberty Plaza, 22nd Floor, New York, NY 10006
Estimated Duration: Up to seven (7) hours of examination time, consistent with the default time limitation under Federal Rule of Civil Procedure 30(d)(1)
Pre-Deposition Check-In: Hess is to arrive at Calderwood & Harkness LLP, 200 Park Avenue, 38th Floor, New York, NY 10166, by 8:00 AM on July 27 for a brief pre-deposition check-in with Gallagher. The check-in will cover any final questions Hess may have, a brief review of key reminders, and any updates regarding the deposition logistics or scope.
Court Reporter and Videographer: The court reporter and videographer have been arranged by CRS (plaintiff's counsel). The deposition will be recorded by both stenographic and video means, as is standard in this matter.
Defending Counsel: Gallagher will attend the deposition as defending counsel for Hess. Laroche will attend as second chair and will be responsible for tracking exhibits, noting objections, and monitoring the examination for any issues requiring real-time attention.
Travel Arrangements: Hess confirmed that he will be flying from Fort Worth, Texas, to New York on the evening of July 26, 2023. He has made hotel arrangements in Manhattan. Hess confirmed his availability for the deposition and stated that he does not anticipate any scheduling conflicts.
XI. Follow-Up Items
The following follow-up items were identified during the preparation session:
1. Gallagher will send Hess a final reminder email on July 26, 2023, with logistical details for the deposition, including the exact address and floor of the CRS offices, the check-in time at Calderwood & Harkness, and contact information for the litigation team in case of any issues on the morning of July 27.
2. Laroche will prepare a one-page bullet-point summary of key reminders for Hess to review on the morning of the deposition. This summary will cover the core deposition guidelines (listen to the question, answer only what is asked, do not volunteer, pause before answering, do not speculate, read documents fully, protect the privilege). The summary is for Hess's review at the Calderwood & Harkness offices before departing for CRS — Hess should not bring the summary into the deposition room.
3. Tsao will coordinate Hess's travel reimbursement with Stonefield's CFO office, specifically with Priya Ramachandran, to ensure that Hess's airfare, hotel, and incidental travel expenses are processed in a timely manner.
4. Gallagher noted that he may schedule a brief telephone check-in with Hess on the evening of July 26, 2023, after Hess arrives in New York, time permitting. The purpose of this call would be to address any last-minute questions and to confirm the morning logistics.
The preparation session concluded at approximately 1:30 PM on July 24, 2023.
Prepared by: Helen Tsao, Senior Paralegal, Calderwood & Harkness LLP
Date Finalized: July 24, 2023
Distribution: Patrick Gallagher, Simone Laroche, Samuel Eklund (file copy)
Filing: Matter No. 1012-00005, Category VI (Depositions), Document No. 76
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT DO NOT DISTRIBUTE WITHOUT AUTHORIZATION OF COUNSEL
Matter: | Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.)
Matter No.: | 1012-00005
Document Title: | Witness Preparation Session Notes — Raymond Hess
Date of Session: | July 24, 2023
Prepared By: | Helen Tsao, Senior Paralegal, Calderwood & Harkness LLP
Attorneys Present: | Patrick Gallagher, Lead Associate; Simone Laroche, Working Associate
Witness: | Raymond Hess, Director, Contract Compliance, Stonefield Logistics Group Inc.
Location: | Calderwood & Harkness LLP, 200 Park Avenue, 38th Floor, New York, NY 10166 (Conference Room 38-C)
Session Duration: | Approximately 3.5 hours (10:00 AM – 1:30 PM ET)
Purpose: | Preparation of Raymond Hess for anticipated deposition by Caldwell Royce & Shapiro LLP (plaintiff's counsel for Vantor Holdings Corp.), scheduled for July 27, 2023
Service Level Obligation | SLO Threshold (per TSA) | Actual Q4 2021 Performance | Variance
On-time pickup rate | 95% | 78.2% | -16.8 points
On-time delivery rate | 93% | 81.6% | -11.4 points
Tender acceptance rate | 90% | 71.4% | -18.6 points
Equipment availability (committed fleet) | 85% (of 400 tractors) | 62% (approx. 248 tractors) | -23 points
Cargo claims ratio | ≤ 0.5% | Approx. 1.07% (16 claims totaling $387,400 in Nov.–Dec. 2021) | +0.57 points

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT PREPARED IN ANTICIPATION OF LITIGATION

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