MEMORANDUM

MEMORANDUM
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
To: Patrick Gallagher, Senior Associate; Samuel Eklund, Responsible Partner
From: Simone Laroche, Associate
Date: November 1, 2022
Re: Sufficiency of Vantor's Cure Response — Analysis of "Substantial Cure" Doctrine Under New York Law
Matter: Stonefield Logistics Group Inc. — Defense of Breach of Contract Claim; Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.)
Matter No.: 1012-00005
I. Executive Summary
The purpose of this memorandum is to analyze whether the February 14, 2022 letter from Vantor Transport Services LLC ("VTS") constituted a sufficient "cure" of the material breaches identified in Stonefield Logistics Group Inc.'s ("Stonefield" or "SLG") January 18, 2022 Cure Notice, thereby rendering Stonefield's subsequent March 4, 2022 termination of the Transportation Services Agreement (the "TSA," Contract Reference No. SLG-VTS-2019-0315) wrongful. This question is central to the core defense in the above-captioned action: that Stonefield's termination was a valid termination for Cause under TSA Section 13.1(a), and that Vantor is accordingly entitled to no damages.
After reviewing the contractual provisions governing cure, the text and substance of Vantor's February 14, 2022 response, the applicable New York case law on cure and "substantial cure," and the available post-cure-period performance data, my central conclusion is as follows:
Vantor's February 14 response did not constitute a cure — whether measured under a strict contractual cure standard or a judicially developed "substantial cure" doctrine. The response acknowledged "operational challenges" during the fourth quarter of 2021 but did not demonstrate actual remediation of any of the five identified service level breaches. The letter contained no updated performance data, no remediation plan, no timeline for achieving compliance, and no commitment of resources to address the deficiencies. Instead, its substance was devoted to attributing fault for the breaches to external market conditions and to Stonefield's own conduct — arguments that, under New York law, go to the defense of excuse rather than the question of cure. Moreover, independently obtained post-cure-period performance data from Stonefield's own systems confirms that VTS's performance continued to fall materially below contractual service level obligation ("SLO") thresholds through the date of termination on March 4, 2022, corroborating the conclusion that no remediation occurred during the cure period.
The strategic significance of this analysis is substantial. It strengthens Stonefield's core defense — that the March 4, 2022 termination was a valid termination for Cause under TSA Section 13.1(a) — and should be incorporated into any summary judgment briefing on that defense. If the Court concludes that the termination was for Cause, Stonefield's primary defense theory yields zero dollars in damages owed to Vantor.
This memorandum should be read in conjunction with the separate memoranda addressing the material breach standard (dated September 16, 2022), the adequacy of the Cure Notice (dated October 20, 2022), pretext and good faith (dated October 7, 2022), and the forthcoming memoranda on the first-to-breach doctrine and mitigation of damages.
II. Factual Background
A. The Transportation Services Agreement
On March 15, 2019, Stonefield Logistics Group Inc. (acting as "Shipper-Broker") and Vantor Transport Services LLC (acting as "Carrier-Provider") entered into the Transportation Services Agreement, Contract Reference No. SLG-VTS-2019-0315 (the "TSA"). The TSA was drafted by Ashford Meridian LLP on behalf of Stonefield and is governed by New York law pursuant to Section 18.3 of the agreement.
The TSA has a five-year term, running from April 1, 2019 through March 31, 2024. Under the TSA, VTS agreed to provide dedicated and on-demand truckload transportation services across specified lanes in the Northeast, Mid-Atlantic, and Southeast corridors as set forth in Schedule A to the agreement. VTS committed to maintaining a minimum fleet capacity of 400 tractors and 1,200 trailers for SLG freight, a commitment that was integral to VTS's ability to perform its obligations under the agreement.
In exchange, Stonefield committed to tender a minimum annual freight volume of $43.2 million in transportation charges to VTS per contract year (the "Annual Committed Volume" or "ACV"). This mutual commitment structure — dedicated fleet capacity in exchange for guaranteed volume — was the essential commercial bargain underlying the TSA and shaped the negotiation of the service level obligations discussed below.
The TSA was a negotiated commercial agreement between two sophisticated parties. Stonefield is one of the largest third-party logistics providers in the United States, and Vantor Holdings Corp. — the parent of VTS — is a diversified transportation and logistics conglomerate. Both parties were represented by counsel throughout the negotiation process. These facts are relevant to the enforceability of the cure provisions discussed in Part III below, as New York courts give particular deference to negotiated contractual terms between sophisticated commercial actors.
B. Service Level Obligations (SLOs) — TSA Section 8
TSA Section 8, titled "Service Level Obligations and Performance Standards," establishes five core SLOs that VTS was required to meet on a continuous basis throughout the term of the agreement. These SLOs, and their respective contractual thresholds, are as follows:
1.  On-Time Pickup Rate ≥ 95%. VTS was required to complete pickup of tendered loads within the scheduled pickup window (as defined in Section 8.1(a)) for at least 95% of all load tenders accepted by VTS in any given measurement period.
2.  On-Time Delivery Rate ≥ 93%. VTS was required to deliver loads within the scheduled delivery window (as defined in Section 8.1(b)) for at least 93% of all loads picked up by VTS in any given measurement period.
3.  Cargo Claims Ratio ≤ 0.5% of Gross Revenue. The total dollar value of all cargo damage, loss, or shortage claims attributable to VTS in any given measurement period was not to exceed 0.5% of gross revenue for VTS transportation services during that period.
4.  Tender Acceptance Rate ≥ 90%. VTS was required to accept at least 90% of all load tenders submitted by Stonefield through the electronic tendering system specified in Section 6.2.
5.  Equipment Availability Compliance ≥ 85% of Committed Fleet Capacity. VTS was required to maintain available and operational equipment (tractors and trailers) at a level equal to or exceeding 85% of the committed fleet capacity (i.e., at least 340 of 400 tractors and a corresponding proportional trailer availability).
These SLOs were not aspirational targets — they were binding contractual obligations the breach of which could constitute grounds for termination under Section 13.1(a). The thresholds were specifically negotiated and reflected industry-standard performance benchmarks for dedicated truckload services.
C. The Cure Notice — January 18, 2022
On January 18, 2022, Raymond Hess, Director of Contract Compliance at Stonefield, sent a formal written Cure Notice to Sandra Milescu, Chief Operating Officer of Vantor/VTS. The Cure Notice was delivered via certified mail, return receipt requested, and via email, consistent with the notice provisions of TSA Section 18.1.
The Cure Notice identified the following material breaches based on VTS's performance data for the fourth quarter of 2021 (October 1 through December 31, 2021), as measured against the five SLO categories:
•  On-Time Pickup Rate: 78.2% (versus the 95% SLO threshold) — a shortfall of 16.8 percentage points. This represented a dramatic deterioration from prior quarters, during which VTS had generally maintained pickup rates above 90%.
•  On-Time Delivery Rate: 81.6% (versus the 93% SLO threshold) — a shortfall of 11.4 percentage points. Nearly one in five loads delivered by VTS during Q4 2021 arrived outside the contractual delivery window.
•  Tender Acceptance Rate: 71.4% (versus the 90% SLO threshold) — a shortfall of 18.6 percentage points. VTS was rejecting nearly three in ten load tenders from Stonefield, forcing Stonefield to scramble for alternative carrier capacity on short notice.
•  Equipment Availability: 62% of Committed Fleet (approximately 248 tractors available versus the 400 committed and the 340 required under the 85% threshold) — a shortfall of 23 percentage points below the SLO threshold. Approximately 152 tractors that should have been available for SLG freight were absent from the dedicated fleet.
•  Cargo Claims Ratio: Approximately 1.07% — based on 16 documented cargo claims in November and December 2021 alone, totaling $387,400 in claimed damages. This ratio was more than double the 0.5% contractual threshold.
In addition to the five SLO failures, the Cure Notice identified VTS's chronic failure to provide substitute equipment or surge capacity as required under TSA Section 7.4. Section 7.4 obligates VTS, when its equipment availability falls below the committed threshold, to arrange for substitute equipment or temporary surge capacity from approved subcontractors to ensure continuity of service. VTS had not done so during Q4 2021, leaving Stonefield without adequate carrier capacity on numerous dedicated lanes.
The Cure Notice invoked TSA Section 13.1(a), which permits termination for Cause upon a material breach that "remains uncured for thirty (30) calendar days after written notice specifying the breach." The notice stated that if VTS failed to cure the identified breaches within the 30-day cure period, Stonefield would exercise its right to terminate the TSA for Cause.
As analyzed in a separate memorandum dated October 20, 2022 (to which I refer the reader for full analysis), the Cure Notice satisfied the "reasonable particularity" requirement of TSA Section 13.2, specifying each SLO breach with reference to the applicable contractual threshold, the actual performance metric, and the magnitude of the shortfall.
The 30-day cure period commenced on January 18, 2022 — the date of delivery of the Cure Notice — and expired on February 17, 2022.
D. Vantor's February 14, 2022 Response
On February 14, 2022 — three days before the expiration of the 30-day cure period — Derek Pruitt, Vice President of Business Development at Vantor Holdings Corp., sent a letter to Janet Kirkwood, Vice President of Carrier Relations at Stonefield Logistics Group Inc. This letter constituted VTS's sole written response to the Cure Notice during the cure period.
The key content of the February 14, 2022 response is summarized below, and each element is significant for the cure analysis:
First, the letter acknowledged "operational challenges" during Q4 2021. This acknowledgment is notable because it concedes that VTS's performance was deficient, even if it stops short of conceding breach.
Second, the letter attributed performance deficiencies to three external or SLG-related causes: (i) a nationwide driver shortage affecting the entire trucking industry, which VTS characterized as a force majeure event; (ii) Stonefield's own alleged failure to tender the minimum committed volumes under the ACV commitment during Contract Year 2 (April 2020 – March 2021) and Contract Year 3 (April 2021 – March 2022), which VTS argued destabilized its fleet planning; and (iii) Stonefield's alleged instructions to divert freight volume to lower-cost spot market carriers, which VTS argued further undermined its economic position and fleet utilization.
Third, the letter asserted, in conclusory fashion, that VTS had "substantially cured the identified deficiencies." This assertion was stated without any supporting data, documentation, or detail.
Fourth, the letter disputed the accuracy of the cargo claims data referenced in the Cure Notice, asserting that certain claims had been incorrectly attributed to VTS. However, the letter did not provide alternative data, specify which claims were allegedly misattributed, or offer any documentation to support the dispute.
Critically, the February 14 response did not provide any of the following:
•  Any specific performance data, metrics, or evidence of remediation for any SLO category;
•  Any remediation plan with timelines, benchmarks, or milestones for achieving compliance;
•  Any commitment of resources to address the identified deficiencies (e.g., no commitment to restore tractors to the dedicated SLG fleet, no driver hiring plan, no plans to engage approved subcontractors for surge capacity);
•  Any discussion of, or response to, the equipment availability deficiency (62% versus 85%), or any explanation for why approximately 152 tractors were missing from the committed fleet;
•  Any discussion of, or response to, the failure to provide substitute equipment or surge capacity under Section 7.4.
The letter was signed by Derek Pruitt, a business development executive, rather than by Sandra Milescu (COO, and the addressee of the Cure Notice) or by any operational leadership with direct responsibility for VTS's transportation performance.
E. Post-Cure Period Performance Data
After the February 17, 2022 cure deadline, Stonefield continued to monitor VTS's performance through its internal systems. Additionally, Raymond Hess independently verified VTS's performance metrics through VTS's own Carrier Performance Portal — a web-based platform to which Stonefield had view-only access pursuant to TSA Section 8.3(b). Mr. Hess confirmed these facts during his deposition on July 27, 2023.
The specific post-cure metrics for the period February 18 through March 4, 2022 (the date of termination), as available from SLG systems and corroborated by VTS portal data, showed continued SLO failures across all categories:
These data points are corroborated by the VTS Q4 2021 Performance Report, an internal VTS document produced in discovery (Bates Nos. VHC-003102 through VHC-003147), and by the trajectory shown in VTS's supplemental document production of June 15, 2023. At most, the data shows marginal, statistically insignificant fluctuations in certain SLO categories — nowhere close to the improvement necessary to achieve even substantial compliance with the contractual thresholds.
A further piece of evidence is critically relevant to the cure analysis. In Vantor's April 28, 2023 document production, Stonefield obtained an internal email from Sandra Milescu to Nikolai Vantorovich (the CEO of Vantor Holdings Corp.) dated November 12, 2021 (Bates No. VHC-008417). In this email, Ms. Milescu confirms that VTS had pulled 85 tractors off SLG dedicated lanes to cover commitments to the Northwind Distribution Co. account — a separate VTS customer. The email states, in pertinent part: "SLG won't notice until January." This unilateral fleet reduction was never disclosed to Stonefield, was a principal cause of the equipment availability and SLO failures documented in the Cure Notice, and — critically — was not addressed, acknowledged, or cured in the February 14, 2022 response. There is no evidence in the record that any of the 85 tractors were returned to SLG-dedicated service at any point during or after the cure period.
F. Stonefield's March 4, 2022 Termination
On March 4, 2022 — fifteen days after the expiration of the 30-day cure period — Tobias Wren, General Counsel of Stonefield Logistics Group Inc., sent a formal written termination letter to both Vantor Holdings Corp. and VTS. The termination letter stated that VTS had "failed to cure the material breaches" identified in the January 18, 2022 Cure Notice within the 30-day cure period, and that Stonefield was exercising its right to terminate the TSA for Cause, effective immediately, pursuant to TSA Section 13.1(a).
At the time of termination, approximately 2 years and 27 days remained on the TSA term (March 4, 2022 through March 31, 2024). This remaining term is the basis for Vantor's damages claim, which seeks lost profits and other consequential damages for the unexpired portion of the agreement.
III. Legal Framework — Cure and "Substantial Cure" Under New York Law
A. Contractual Cure Provisions — General Principles
Under New York law, where a contract specifies a cure period and cure mechanism, the contractual terms control the analysis. Courts in New York consistently hold that the express provisions of a contract govern the parties' respective rights and obligations, and that where parties have negotiated specific procedures for the identification and cure of breaches, those procedures must be followed and will be enforced according to their terms. This principle is particularly robust where the agreement was negotiated at arms' length between sophisticated commercial parties with the assistance of counsel.
Here, the TSA was drafted by Ashford Meridian LLP on behalf of Stonefield and was the product of arms'-length negotiation between two major logistics industry participants. Both parties were represented by sophisticated legal counsel and had ample opportunity to negotiate the cure provisions. The resulting cure framework is found in two interrelated provisions:
TSA Section 13.1(a) establishes the substantive right to terminate for Cause. Under this provision, either party may terminate the agreement upon a material breach by the other party that "remains uncured for thirty (30) calendar days after written notice specifying the breach." The section thus creates a three-step framework: (1) identification of a material breach; (2) delivery of written notice specifying the breach; and (3) expiration of a 30-day cure period without the breach being cured.
TSA Section 13.2 establishes the procedural requirements for the written Cure Notice. The terminating party must deliver a written notice "specifying with reasonable particularity the alleged breach." As noted above, the adequacy of the January 18, 2022 Cure Notice under Section 13.2 was analyzed in a separate memorandum dated October 20, 2022, and was found to be sufficient.
Significantly, the TSA does not define the terms "cure" or "uncured." The agreement does not specify whether a cure must be complete (i.e., whether the breaching party must achieve full compliance with the applicable contractual standard within the cure period) or whether a "substantial" or partial cure may suffice. This silence creates an interpretive question that must be resolved by reference to New York case law on contractual cure provisions.
New York courts have generally taken a practical approach to interpreting cure provisions in commercial contracts. Where the contract is silent on the degree of cure required, courts look to the nature of the breach, the purpose of the cure provision, and the reasonable expectations of the parties as reflected in the agreement as a whole. As discussed in Part III.B below, this inquiry has given rise to a limited doctrine of "substantial cure" in certain circumstances. However, as analyzed in detail in Part IV, even under the most expansive formulation of that doctrine, Vantor's February 14 response falls far short of what is required.
B. The "Substantial Cure" Doctrine
New York courts have recognized, in certain contractual contexts, a doctrine of "substantial cure" or "substantial performance" that may be applied to the interpretation of cure provisions in commercial agreements. This doctrine is analogous to the broader and well-established doctrine of substantial performance in construction and services contracts, under which a party that has substantially — though not perfectly — performed its obligations may not be denied payment or subjected to termination on the basis of minor or trivial deficiencies.
Under the substantial cure doctrine, a party may be deemed to have cured a breach within the meaning of a contractual cure provision if it has taken meaningful, concrete steps that substantially address the identified deficiency, even if perfect compliance with the applicable contractual standard has not been achieved within the cure period. The rationale for this doctrine is rooted in the general contractual principle that forfeiture should be avoided where possible, and that the termination of a multi-year commercial agreement with significant economic value to both parties should not turn on de minimis or technical shortcomings in the cure process.
However, the substantial cure doctrine has significant limitations, and courts have been careful to circumscribe its application:
First, the doctrine applies primarily where the uncured deficiency is minor or trivial relative to the overall contractual performance. Where the breaches at issue are substantial — involving significant and widespread departures from contractual standards — the doctrine provides no safe harbor. A party that has failed to achieve anything approaching compliance with its obligations cannot invoke "substantial cure" as a shield against termination.
Second, the doctrine does not excuse a party from the obligation to actually demonstrate remediation. Mere promises of future compliance, expressions of intent to improve, or assertions that steps "are being taken" are insufficient to constitute substantial cure. Courts have consistently required evidence of concrete, affirmative remedial action — whether in the form of improved performance metrics, the commitment and deployment of additional resources, the implementation of documented corrective action plans, or other tangible steps that are commensurate with the nature and scope of the identified breaches.
Third, courts draw a sharp distinction between two categories of responses to a cure notice: (i) a response by a party that has taken concrete remedial action and achieved near-compliance with the contractual standard, and (ii) a response by a party that has merely acknowledged the problem, offered explanations for why the breach occurred, and made conclusory assertions of cure without supporting evidence. The substantial cure doctrine may protect parties in the first category; it does not protect parties in the second. As discussed in Part IV, Vantor's February 14, 2022 response falls squarely within the second category.
Fourth, the burden of establishing substantial cure rests on the breaching party. The non-breaching party is not required to demonstrate that it provided reasonable assistance or cooperation in the cure process (although interference with cure efforts might give rise to a separate defense). The breaching party must affirmatively show that it took steps sufficient to substantially remedy the identified deficiencies.
The doctrinal framework reflects a balancing of competing policy considerations. On the one hand, New York law disfavors forfeiture and recognizes that strict, literal compliance with every contractual obligation may not always be achievable or commercially reasonable. On the other hand, the law respects the parties' freedom to contract, and cure provisions exist precisely to give the breaching party a defined period in which to remedy its performance failures. Permitting a party to invoke "substantial cure" based on nothing more than rhetoric and excuse would render the cure mechanism meaningless and deprive the non-breaching party of the benefit of the bargain it negotiated.
C. Distinction Between Cure and Excuse
A critical distinction, often conflated in commercial litigation but well-established under New York law, is the distinction between cure and excuse. These are analytically separate concepts, and a response that addresses one does not necessarily address the other.
Cure refers to the breaching party's act of remedying the breach — that is, taking steps to bring its performance back into compliance with the contractual standard that was violated. Cure is forward-looking and remedial in nature. The question is whether the identified deficiency has been corrected or substantially corrected during the cure period.
Excuse refers to a defense that the breach should be forgiven because it was caused by factors beyond the breaching party's control, or because the non-breaching party's own conduct contributed to or caused the breach. Excuse is backward-looking and justificatory in nature. The question is whether the breaching party bears fault for the breach.
Vantor's February 14, 2022 response primarily offered explanations for why the SLO breaches occurred. It attributed the performance failures to three causes: (i) a nationwide driver shortage, which it characterized as an external market condition; (ii) Stonefield's alleged failure to tender minimum committed freight volumes under the ACV commitment; and (iii) Stonefield's alleged instructions to divert freight volume to lower-cost spot market carriers. Each of these arguments is, at its core, an argument that VTS's breaches should be excused — not an argument that the breaches have been cured.
Under New York law, a defense of excuse — whether grounded in force majeure, impossibility of performance, or the non-breaching party's prior material breach — is a separate legal theory that must be raised as an affirmative defense or, where applicable, as a counterclaim. Even if excuse could be established (and Stonefield disputes VTS's excuse arguments, as discussed in Part IV.D below), it would not constitute "cure" within the meaning of the TSA's cure provision. A party that has been excused from performance has not brought its performance into compliance with the contractual standard; it has merely demonstrated that the failure to perform should not be held against it for purposes of determining liability.
Vantor may also attempt to argue that the breaches were not "material" because they were caused by Stonefield's own conduct. This argument — which Vantor has previewed in its Amended Complaint and in interrogatory responses — is analytically distinct from a cure argument. Materiality is determined at the time of the breach, not at the time of the cure response, and the question of whether a breach is material depends on factors such as the extent of the departure from contractual standards, the likelihood that the breaching party will cure, and the adequacy of compensation available to the non-breaching party. The materiality analysis is addressed in the separate memorandum dated September 16, 2022.
D. Effect of Failure to Cure Within the Contractual Period
Under New York law, once the contractual cure period expires without the breaching party having cured the identified breaches, the non-breaching party's right to terminate ripens and becomes exercisable. This is a straightforward application of the contractual framework: Section 13.1(a) conditions the right to terminate on the breach "remaining uncured" for 30 days after notice. If the breach remains uncured at the end of the 30-day period, the condition is satisfied and the termination right vests.
Several principles follow from this framework:
First, the non-breaching party is not required to provide additional time or accept a late cure. Once the cure period has expired, the breaching party has no further right to cure unless the non-breaching party voluntarily extends the period or waives the deadline. New York courts have repeatedly held that cure deadlines are enforceable as written and that a non-breaching party acts within its rights by insisting on timely cure.
Second, the non-breaching party is not required to accept a partial cure. If the breaching party has cured some, but not all, of the identified breaches, the non-breaching party may still exercise its termination right with respect to the uncured breaches — provided that the remaining uncured breaches are material. Here, as discussed in Part IV.C, none of the breaches was cured, making the partial cure question academic.
Third, the non-breaching party retains discretion as to the timing of its termination after the cure period expires. In this case, Stonefield waited fifteen days after the expiration of the cure period (from February 17 to March 4, 2022) before delivering its termination letter. This delay does not constitute a waiver of the right to terminate. New York law is clear that a party's right to terminate for cause, once ripened, is not forfeited merely because the party does not exercise the right immediately upon expiration of the cure period. To hold otherwise would create a perverse incentive for non-breaching parties to terminate precipitously rather than taking reasonable time to assess the situation and consult counsel.
IV. Application — Vantor's February 14 Response Did Not Constitute Cure
A. The Response Was Argumentative, Not Remedial
Applying the legal framework set forth in Part III to the facts summarized in Part II, the threshold conclusion is clear: Vantor's February 14, 2022 response was fundamentally an argumentative communication, not a demonstration of remediation.
The letter devoted the overwhelming majority of its substance to disputing fault for the SLO failures and attributing the performance deficiencies to external market conditions and Stonefield's own alleged conduct. It offered three categories of excuses — the nationwide driver shortage, Stonefield's alleged ACV shortfalls, and Stonefield's alleged diversion of freight to spot market carriers — but provided no evidence that VTS had taken any concrete steps to address the performance failures that the Cure Notice identified.
The letter contained no performance data showing improvement in any of the five SLO categories. It did not include updated metrics for the period after issuance of the Cure Notice (January 18 through February 14, 2022) that might have demonstrated a positive trend or progress toward compliance. It did not reference any internal VTS reports, Carrier Performance Portal data, or other documentation that might have substantiated a claim of improvement.
The letter contained no remediation plan with timelines, milestones, or benchmarks for achieving SLO compliance. It did not identify specific operational changes that VTS had implemented or planned to implement — no driver recruitment initiatives, no equipment procurement, no revised dispatch procedures, no quality control measures to reduce cargo claims, no engagement of approved subcontractors for surge capacity.
The letter contained no commitment of resources — financial or operational — to address the identified deficiencies. There was no commitment to restore tractors to the SLG-dedicated fleet, no hiring plan for drivers, no budget allocation for corrective action. The absence of any such commitment is particularly telling in light of the magnitude of the equipment availability shortfall (approximately 152 tractors missing from the committed fleet).
The conclusory assertion that VTS had "substantially cured the identified deficiencies" was a bare legal conclusion unsupported by any factual detail or evidence. Under New York law, as discussed in Part III.B, a self-serving assertion of cure, without supporting documentation or data, is insufficient to establish even substantial cure.
In sum, the February 14 response reads as a prelude to litigation — a blame-shifting exercise designed to establish a record of contested causation — rather than as a good-faith effort to remedy the contractual deficiencies that threatened the commercial relationship. This characterization is reinforced by the fact that the letter was signed by Derek Pruitt, a business development executive whose role is client relationship management and commercial negotiation, rather than by Sandra Milescu (the COO, with operational authority and responsibility for transportation performance) or by any member of VTS's operations leadership.
B. Analysis by SLO Category
A category-by-category analysis confirms that Vantor's February 14 response failed to demonstrate cure — or any meaningful progress toward cure — with respect to any of the five SLO obligations identified in the Cure Notice.
1. On-Time Pickup Rate (78.2% vs. 95% SLO)
The January 18, 2022 Cure Notice identified that VTS's on-time pickup rate for Q4 2021 was 78.2%, falling 16.8 percentage points below the contractual threshold of 95%. This represented a fundamental failure of VTS's core transportation service obligation — the timely retrieval of freight from Stonefield's shipper customers' facilities.
The February 14, 2022 response did not provide any updated pickup rate data for any period. It did not identify a current pickup rate, a trend showing improvement, or a target date by which VTS expected to achieve 95% compliance. There is no evidence in the record that VTS implemented any operational changes during the cure period designed to improve pickup reliability — such as changes to dispatch protocols, driver scheduling, or lane coverage assignments.
Post-cure performance data from Stonefield's internal systems for the period February 18 through March 4, 2022 confirms that VTS's on-time pickup rate remained below 80%. This data demonstrates not merely a failure to cure, but a failure to make any discernible progress toward remediation.
A 16.8 percentage point shortfall is not a minor or trivial deficiency under any standard. The on-time pickup obligation is central to VTS's role as a dedicated carrier: when VTS fails to pick up loads on time, Stonefield's shipper customers experience service disruptions, Stonefield must scramble to arrange alternative carrier capacity (often at premium spot market rates), and Stonefield's own contractual obligations to its shipper customers are jeopardized. A pickup rate of 78.2% means that more than one in five scheduled pickups was late — a level of unreliability that is commercially unacceptable in dedicated truckload transportation.
2. On-Time Delivery Rate (81.6% vs. 93% SLO)
The Cure Notice identified an on-time delivery rate of 81.6% against a contractual threshold of 93% — an 11.4 percentage point shortfall. Like the pickup rate deficiency, this failure went to the core of VTS's service obligation.
No updated delivery rate data was provided in the February 14 response. VTS offered no evidence of operational changes targeted at improving delivery reliability, such as revised routing protocols, driver performance management, or monitoring of transit times. Post-cure data from SLG systems confirms that VTS's on-time delivery rate remained below 84% through the date of termination.
The on-time delivery rate directly impacts Stonefield's customer relationships and its own contractual obligations to the ultimate shippers. Stonefield's shipper customers depend on reliable, predictable delivery windows for inventory management, production scheduling, and downstream logistics. A delivery failure rate approaching 20% (i.e., 81.6% on-time) imposes significant costs on Stonefield's business, both in terms of direct financial penalties under its own shipper contracts and in terms of reputational harm and customer attrition.
3. Tender Acceptance Rate (71.4% vs. 90% SLO)
The Cure Notice identified a tender acceptance rate of 71.4% against a contractual threshold of 90% — the second-largest shortfall of any SLO category, at 18.6 percentage points below the required level. This deficiency meant that VTS was rejecting more than one in four load tenders submitted by Stonefield, forcing Stonefield to find alternative carriers on short notice and frequently at spot market rates that exceeded the contractual rates with VTS.
The February 14 response provided no updated tender acceptance data and no evidence of any steps taken to improve acceptance rates — such as expansion of driver availability, adjustment of fleet allocation, or operational changes to reduce capacity constraints on VTS's network.
Post-cure data from SLG systems confirms that VTS's tender acceptance rate remained below 75% through the date of termination. The failure to accept tenders at the contractual rate is particularly significant because it is an affirmative act — or, more precisely, an affirmative refusal — on VTS's part. Unlike delivery delays, which may result from road conditions, weather, or other intervening factors, tender rejections are discretionary decisions by VTS's dispatch operations. A sustained pattern of rejecting more than 25% of Stonefield's load tenders reflects a deliberate or systemic failure to allocate adequate capacity to the Stonefield account.
4. Equipment Availability (62% vs. 85% SLO)
The Cure Notice identified that VTS was maintaining equipment availability at approximately 62% of committed fleet capacity — meaning that only approximately 248 tractors were available for SLG freight, versus the 400 committed under the TSA and the 340 required to meet the 85% SLO threshold. This represented a deficit of approximately 152 tractors.
The February 14 response did not address the equipment availability deficiency at all. This silence is striking and, in the context of the cure analysis, is potentially dispositive. Equipment availability was the largest SLO shortfall (23 percentage points below the threshold) and was the most directly within VTS's control — fleet allocation is a management decision, not a function of external market conditions. The failure to even acknowledge this deficiency in the cure response, let alone to present a plan for restoring fleet capacity, is a powerful indicator that no cure occurred or was even attempted.
The significance of this omission is compounded by the Milescu November 12, 2021 email (VHC-008417), which reveals that 85 of the approximately 152 missing tractors were deliberately pulled from SLG-dedicated lanes and reassigned to the Northwind Distribution Co. account. This was a conscious, internal business decision by VTS — not a consequence of market conditions or Stonefield's conduct. The reassignment was never disclosed to Stonefield and was made in apparent disregard of VTS's contractual commitment to maintain minimum fleet capacity for SLG freight. Ms. Milescu's statement that "SLG won't notice until January" reflects an awareness that the reassignment would cause a breach of the TSA and a deliberate decision to proceed regardless.
There is no evidence in the record that any of the 85 tractors reassigned to the Northwind account were returned to SLG-dedicated service during the cure period, or at any time before termination. The February 14 response does not mention the Northwind reassignment, does not acknowledge the fleet reduction, and does not commit to restoring the missing tractors. This silence is both a factual failure of cure and a powerful piece of evidence for summary judgment.
5. Cargo Claims Ratio (1.07% vs. ≤ 0.5% SLO)
The Cure Notice identified a cargo claims ratio of approximately 1.07%, based on 16 documented cargo claims in November and December 2021 totaling $387,400 in claimed damages. This ratio was more than double the contractual threshold of 0.5% of gross revenue.
The February 14 response disputed the accuracy of the cargo claims data, asserting that certain claims had been incorrectly attributed to VTS. However, the letter did not provide alternative data, specify which of the 16 claims were allegedly misattributed, present any documentation supporting the dispute, or provide a corrected claims ratio calculation. A bare assertion that the data is wrong, without supporting evidence, is not a cure — and, even if accepted at face value, would at most reduce the number of claims, not eliminate the underlying deficiency.
Moreover, the response offered no evidence of corrective action designed to reduce cargo claims going forward — such as improved load securement procedures, enhanced driver training on cargo handling, inspection protocols for equipment condition, or other operational measures. The cargo claims threshold exists to ensure that VTS maintains appropriate standards of care in the handling, loading, transport, and delivery of Stonefield's freight. A claims ratio more than double the permitted threshold reflects systemic deficiencies in VTS's cargo handling operations that require affirmative remediation, not merely argument over data accuracy.
6. Substitute Equipment / Surge Capacity (Section 7.4)
The Cure Notice specifically identified VTS's chronic failure to provide substitute equipment or surge capacity as required under TSA Section 7.4. Under that provision, when VTS's equipment availability falls below the committed fleet threshold, VTS is obligated to arrange for substitute equipment or temporary surge capacity from approved subcontractors to ensure that Stonefield's freight needs are met without interruption.
The February 14, 2022 response did not address this issue. There is no evidence in the record that VTS engaged any subcontractors, arranged for substitute equipment, or took any steps to provide alternative capacity to Stonefield during the cure period. This failure is independently significant because Section 7.4 functions as a backstop obligation — it recognizes that equipment availability may fluctuate and provides a mechanism for the carrier to mitigate the impact of temporary fleet shortfalls. VTS's failure to invoke this mechanism, even as its fleet availability dropped to 62% of the committed level, compounds the breach and demonstrates a comprehensive failure to discharge its obligations under the TSA.
C. Even Under "Substantial Cure" Standard, Vantor Fails
Even applying the most generous formulation of the "substantial cure" doctrine available under New York law, Vantor cannot establish that VTS achieved a substantial cure of the breaches identified in the January 18, 2022 Cure Notice. Several factors compel this conclusion:
Breadth of the deficiencies. The SLO failures spanned all five service level categories simultaneously. This is not a case of a single, isolated shortfall in one performance metric — it is a case of comprehensive, across-the-board performance failure. The substantial cure doctrine, where it applies, contemplates a party that has substantially performed but has fallen short in a discrete or isolated respect. Where, as here, the breaching party has failed to meet any of its five core performance obligations, the doctrine is inapplicable.
Magnitude of the shortfalls. The individual shortfalls were significant, ranging from 11.4 percentage points (on-time delivery rate) to 23 percentage points (equipment availability) below the contractual thresholds. These are not marginal deviations or de minimis failures — they represent a fundamental breakdown in VTS's capacity to perform the transportation services for which it was engaged. A carrier that is 23 points below its equipment availability threshold, 18.6 points below its tender acceptance threshold, and 16.8 points below its pickup rate threshold is not performing its contractual obligations in any meaningful sense.
No concrete remedial action was demonstrated. The February 14 response contained no evidence of affirmative steps taken to remedy the identified deficiencies. The substantial cure doctrine requires, at a minimum, evidence that the breaching party took meaningful, concrete remedial action that resulted in measurable progress toward compliance. An unsupported assertion that deficiencies have been "substantially cured" — without data, without a plan, and without any commitment of resources — falls far short of this requirement.
Post-cure performance data confirms no improvement. The post-cure performance data available from Stonefield's systems for the period February 18 through March 4, 2022, shows that VTS's performance remained materially below SLO thresholds across all measured categories. This data independently corroborates the conclusion that no cure — substantial or otherwise — was achieved during the cure period.
A court applying the substantial cure doctrine to these facts would have no basis to conclude that VTS substantially cured the identified breaches. The combination of comprehensive, multi-category failures; significant shortfalls in every category; the complete absence of demonstrated remedial action; and the post-cure data confirming continued non-compliance places this case squarely outside the scope of the doctrine.
D. Vantor's Causation Arguments Do Not Convert Excuse into Cure
Vantor's February 14 response devoted considerable space to arguing that the SLO breaches were caused, in whole or in part, by Stonefield's own conduct — specifically, alleged ACV shortfalls in Contract Year 2 and Contract Year 3 and alleged diversion of freight to lower-cost spot market carriers. Even if these arguments were credited (and Stonefield disputes them, as discussed below), they would not establish cure.
As explained in Part III.C, cure and excuse are analytically distinct concepts under New York law. An argument that breaches were caused by the non-breaching party's conduct is a defense to liability — it may support a claim that the breaches should be excused, or that the non-breaching party was itself in prior material breach (the first-to-breach doctrine analyzed in a separate memorandum dated March 15, 2023). But it is not evidence that the identified performance deficiencies have been remedied. A carrier whose on-time pickup rate is 78.2% does not "cure" that deficiency by arguing that the low rate was caused by the shipper's volume shortfall. The deficiency persists regardless of who caused it; cure requires that the deficiency be fixed, not merely explained.
Moreover, Stonefield disputes the factual premises of Vantor's causation arguments:
ACV Shortfalls. Vantor claims that Stonefield failed to tender the minimum $43.2 million ACV in Contract Year 2 (April 2020 – March 2021) and had an emerging shortfall in Contract Year 3 (April 2021 – March 2022). With respect to CY2, Stonefield's position is that the ACV was adjusted to $21.6 million under the force majeure carve-out provision of TSA Section 12.1 for COVID-19 impacts during the period April through September 2020. Stonefield's actual CY2 tenders of $31.8 million exceeded the adjusted minimum by $10.2 million. There was accordingly no ACV shortfall in CY2 under Stonefield's reading of the force majeure provision. With respect to CY3, Vantor's claimed shortfall of $6.7 million is based on only 10 of 12 months of the contract year (April 2021 through January 2022), meaning that the full-year shortfall is, at minimum, disputed and cannot be assessed until the contract year is complete.
Freight Diversion. Vantor alleges that Stonefield diverted freight to Cascade Freight Systems Inc. and Briarwood Trucking Co. in violation of exclusivity provisions in Schedule C to the TSA. Stonefield's position is that its use of these alternative carriers was on Lanes 8 through 14, which are classified as "Secondary Lanes" under Schedule C, Section 2(b), and which are expressly excluded from the exclusivity restrictions that apply to "Primary Lanes" under Schedule C, Section 2(a). Accordingly, Stonefield's use of alternative carriers on these lanes did not violate the TSA.
In any event, even if Vantor's factual assertions regarding ACV shortfalls and freight diversion were accepted at face value, they would at most support affirmative defenses of excuse, prior material breach, or contributory breach — none of which constitutes cure. The cure analysis is concerned with whether the identified deficiencies were remediated during the cure period, not with the apportionment of fault for the deficiencies. Vantor's attempt to conflate excuse with cure should be anticipated and clearly rebutted in any summary judgment briefing.
V. Potential Counterarguments and Risk Assessment
This Part identifies the principal counterarguments that Vantor may raise in opposition to Stonefield's cure defense and assesses the risk that each argument poses.
A. Vantor May Argue the Cure Period Was Too Short
Vantor may argue that 30 days was insufficient time to cure the complex, multi-faceted operational deficiencies identified in the Cure Notice — particularly the equipment availability shortfall, which would require procurement or reassignment of approximately 152 tractors, and the driver shortage-related performance failures, which VTS attributed to market-wide conditions beyond its immediate control.
This argument is unlikely to succeed. The 30-day cure period is the contractual standard negotiated between the parties. Both Stonefield and VTS agreed to this period as part of the arm's-length negotiation of the TSA, and VTS had the opportunity to negotiate a longer cure period but did not do so. New York courts routinely enforce negotiated cure periods between sophisticated commercial parties, and 30 days is a standard — indeed, moderate — cure period in commercial transportation and logistics agreements. There is nothing unusual, commercially unreasonable, or unconscionable about a 30-day cure period, and VTS does not appear to have any basis for arguing that the period should be judicially extended.
Moreover, the argument that 30 days was insufficient time to cure is undercut by the nature of VTS's response. VTS did not present a remediation plan that was partially complete and required additional time; it did not request an extension of the cure period (which Stonefield might or might not have granted, but which VTS never sought); and it did not demonstrate that it had taken meaningful steps toward cure that were simply not yet complete. The argument that the cure period was too short is available only to a party that was diligently pursuing cure and ran out of time — it is not available to a party that, as far as the record shows, took no concrete remedial action at all.
Assessment: Low risk. This argument is unlikely to succeed on the facts or the law.
B. Vantor May Argue Stonefield Waived Strict Compliance
Vantor may argue that Stonefield's prior tolerance of performance shortfalls — before Q4 2021 — constituted a waiver of the right to insist on strict SLO compliance and a course of dealing that modified the parties' obligations. In particular, Vantor may point to earlier quarters in which VTS's performance fell below one or more SLO thresholds without Stonefield issuing a Cure Notice or invoking its termination rights.
This argument confronts several obstacles. First, the TSA almost certainly contains a non-waiver clause — such provisions are standard in commercial agreements drafted by Ashford Meridian LLP, and a review of the TSA should confirm the existence of such a clause. A non-waiver provision would preserve Stonefield's right to insist on strict compliance at any time, notwithstanding any prior failure to enforce.
Second, and independently, the issuance of a formal Cure Notice under TSA Section 13.2 is itself an act that reasserts the non-breaching party's right to strict compliance. The entire purpose of the cure mechanism is to provide a formal process by which the non-breaching party identifies specific performance failures and gives the breaching party a defined period to remedy them. A Cure Notice that specifies SLO thresholds and actual performance data is a clear signal that the non-breaching party is no longer willing to tolerate sub-standard performance and is invoking its contractual rights. Whatever tolerance Stonefield may have shown in earlier quarters was superseded by the January 18, 2022 Cure Notice.
Third, the severity and breadth of the Q4 2021 failures distinguish them from any prior shortfalls. Even if Stonefield had previously tolerated marginal SLO shortfalls (e.g., a pickup rate of 93% in a quarter where 95% was required), the Q4 2021 failures — spanning all five SLO categories with shortfalls ranging from 11.4 to 23 percentage points — represent a qualitatively different situation. A party's tolerance of minor deviations does not waive the right to enforce against major, systemic failures.
Assessment: Low risk, particularly given the severity and breadth of the Q4 2021 failures and the likely presence of a non-waiver clause.
C. Vantor May Argue Post-Cure Performance Is Irrelevant
Vantor may argue that the legally relevant inquiry is whether cure had been achieved as of February 17, 2022 — the last day of the contractual cure period — and that post-cure-deadline performance data (February 18 through March 4, 2022) is irrelevant to the analysis and should not be considered by the Court.
This argument has superficial appeal, as the contractual cure period does define the window within which cure must be accomplished. However, the argument does not change the outcome for several reasons:
First, Vantor did not demonstrate any cure even as of February 17, 2022. The February 14 response — sent three days before the deadline — provided no performance data, no evidence of remediation, and no facts from which cure (or progress toward cure) could be inferred. The post-cure data is relevant but supplementary; the cure analysis can be resolved on the basis of the February 14 letter alone.
Second, under New York law, post-cure-period evidence is admissible to corroborate or refute a claim that cure was achieved during the cure period. If a party claims that it cured a performance deficiency during a cure period, evidence that its performance continued to fall below the contractual standard immediately after the cure period is relevant to assess whether any cure actually occurred. Such evidence is particularly probative where, as here, the breaching party offers only a conclusory assertion of cure without supporting documentation.
Third, the absence of any improvement in the post-cure data corroborates the conclusion that no remedial steps were taken during the cure period. If VTS had genuinely taken concrete corrective action between January 18 and February 17, 2022, one would expect to see at least some improvement in its performance metrics in the days immediately following the cure period. The flat or declining performance shown in the post-cure data is consistent with a failure to take any corrective action.
Assessment: Moderate argument with limited practical significance. Even if the Court were to exclude post-cure data, the February 14 letter itself fails to demonstrate cure, and the analysis reaches the same conclusion.
D. Risk: Kirkwood September 22, 2021 Email and Rate Adjustment Motive
Vantor is likely to argue — as it has previewed in its interrogatory responses — that Stonefield's real reason for terminating the TSA was not VTS's performance failures but rather Stonefield's desire to avoid the contractual rate adjustment scheduled for April 2022. Under the TSA's rate escalation mechanism, VTS's weighted average rate was projected to increase from approximately $2.87 per mile to approximately $3.28 per mile — a 14.3% increase that would have added approximately $6.2 million to Stonefield's annual transportation costs. Vantor will argue that Stonefield seized upon Q4 2021 performance issues as a pretext to terminate the TSA before the rate increase took effect.
In support of this argument, Vantor will likely rely on an email from Janet Kirkwood to Carlos Medina (VP, Finance, Stonefield) dated September 22, 2021, in which Kirkwood wrote: "If VTS doesn't get its act together by Q1 I think we pull the plug on the whole contract." This email, written approximately four months before the Cure Notice, could be construed as evidence of a premeditated decision to terminate the TSA, with the Cure Notice serving as a mechanism to create a contractual justification for what was, in substance, a business-driven decision to exit an unfavorable contract.
This is a legitimate litigation risk that the team should take seriously. However, as analyzed in the separate memorandum on pretext and good faith dated October 7, 2022, New York law does not inquire into the subjective motive for termination when objective contractual grounds for Cause exist. The question under Section 13.1(a) is whether VTS was in material breach and whether the breach remained uncured after 30 days' notice — not whether Stonefield's internal motivation for enforcing its contractual rights was altruistic or commercial. A party that has valid grounds for termination is entitled to exercise that right regardless of whether it also had other reasons for wanting to exit the contract.
Moreover, the Kirkwood email is capable of a benign interpretation: Kirkwood was expressing frustration with VTS's deteriorating performance and anticipating the possibility that VTS might fail to improve — a perfectly reasonable internal communication for a senior executive responsible for carrier relationships. The email does not state that Stonefield intended to fabricate a basis for termination; it states that Stonefield was considering termination if VTS's performance did not improve, which is precisely what the cure mechanism is designed to address.
For purposes of the cure analysis specifically, the Kirkwood email and the rate adjustment motive are secondary considerations. The sufficiency of cure focuses on whether Vantor actually cured the identified breaches, not on why Stonefield chose to enforce its rights. Even if the Court were persuaded that Stonefield was motivated in part by the upcoming rate increase, this would not alter the conclusion that VTS failed to cure the SLO breaches.
Assessment: This is a litigation risk that goes to the Cause defense generally, not to the cure analysis specifically. It should be addressed in the context of the pretext defense and the summary judgment roadmap, and the team should develop a comprehensive strategy for managing the Kirkwood email, including through deposition preparation and briefing.
VI. Implications for Summary Judgment
The cure analysis set forth in this memorandum supports a motion for partial or full summary judgment on Stonefield's defense that the March 4, 2022 termination was a valid termination for Cause under TSA Section 13.1(a). The strength of the cure argument lies in the relative paucity of genuinely disputed facts on this issue.
Undisputed facts favoring summary judgment on the cure issue include:
1.  The Cure Notice was sent on January 18, 2022, specifying all five SLO failures with particular data points, calculated shortfalls, and specific reference to the applicable contractual thresholds. The adequacy of the Cure Notice under Section 13.2 is the subject of a separate analysis and, based on the October 20, 2022 memorandum, is well-supported.
2.  The 30-day cure period expired on February 17, 2022. There is no dispute as to the applicable cure period or the date of its expiration.
3.  Vantor's February 14, 2022 response acknowledged "operational challenges" but provided no performance data, no remediation plan, no evidence of any concrete corrective action, and no documentation of actual improvement in any SLO category. The content of the letter is a matter of documentary record and is not subject to genuine factual dispute.
4.  VTS did not dispute the underlying Q4 2021 performance metrics in its February 14 response. While VTS disputed the accuracy of the cargo claims data, it did not challenge the on-time pickup rate, on-time delivery rate, tender acceptance rate, or equipment availability figures cited in the Cure Notice. This is further confirmed by Raymond Hess's deposition testimony on July 27, 2023, in which Hess testified that VTS's own Carrier Performance Portal data reflected the same metrics cited in the Cure Notice.
5.  Post-cure performance data from SLG systems for the period February 18 through March 4, 2022, shows continued SLO non-compliance across all measured categories, with no meaningful improvement from the Q4 2021 figures.
6.  The termination letter was sent on March 4, 2022 — after the expiration of the 30-day cure period — in compliance with the procedural requirements of Section 13.1(a).
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