1012-00005 · Stonefield Logistics Group · Pleadings & Court Filings

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CALDERWOOD & HARKNESS LLP LITIGATION DEPARTMENT — GENERAL LITIGATION

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT This memorandum is protected by the attorney-client privilege and the work product doctrine. It is intended solely for use by attorneys and staff of Calderwood & Harkness LLP working on the referenced matter. Do not forward or distribute without authorization from the Responsible Partner.

MEMORANDUM

TO: Patrick Gallagher, Lead Associate, Litigation (General)

FROM: Simone Laroche, Working Associate, Litigation (General)

DATE: February 1, 2023

RE: Analysis of Vantor's Answer to Defendant's Counterclaim — Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.)

MATTER NO.: 1012-00005

CLIENT: Stonefield Logistics Group Inc.

I. Purpose and Summary

This memorandum analyzes the Answer to Defendant Stonefield Logistics Group Inc.'s Counterclaim (the "Answer") filed by Plaintiff Vantor Holdings Corp. ("Vantor") on January 27, 2023. The Answer was filed on the docket by counsel at Caldwell Royce & Shapiro LLP ("CRS"), specifically by Harrison Caldwell and Jason Whitford, on behalf of both Vantor Holdings Corp. and its wholly owned subsidiary, Vantor Transport Services LLC ("VTS"). The purpose of this memorandum is to identify any new factual allegations, legal theories, or strategic developments introduced by the Answer, assess the strength of each affirmative defense raised, and determine whether any adjustments to our litigation strategy are warranted.

By way of background, Stonefield's counterclaim was filed on January 13, 2023. The counterclaim seeks a declaratory judgment on three grounds: (1) that Stonefield's termination of the Transportation Services Agreement dated March 15, 2019 (the "TSA," Contract Ref. No. SLG-VTS-2019-0315) was valid and for Cause under Section 13.1 of the TSA; (2) that no liquidated damages are owed by Stonefield to Vantor or VTS under Section 14.2 of the TSA; and (3) that any material breach of the TSA was committed by VTS, not by Stonefield. The counterclaim was a central component of our litigation strategy, as discussed at length in the Litigation Strategy Memorandum dated December 15, 2022, and its filing was anticipated as a natural consequence of Vantor's Amended Complaint (filed December 2, 2022), which alleged wrongful termination and sought enforcement of the TSA's liquidated damages provision.

Bottom-line assessment: Vantor's Answer contains no surprises. The paragraph-by-paragraph responses follow a predictable pattern of admitting uncontested background facts while denying all material allegations that form the substantive basis for Stonefield's counterclaim. The twelve affirmative defenses asserted by Vantor are, without exception, predictable and largely mirror the allegations and legal theories already advanced in Vantor's Amended Complaint. No new factual allegations or legal theories were introduced in the Answer. Accordingly, the filing does not alter our litigation strategy, risk assessment, or timeline in any meaningful respect. There is one area of potential tactical opportunity—Vantor's qualified denials regarding the specific Q4 2021 performance metrics cited in Stonefield's counterclaim—which is discussed in detail below.

II. Overview of Vantor's Responsive Pleading

Vantor filed a combined Answer to Stonefield's Counterclaim, which consists of two principal components:

(a) Paragraph-by-paragraph responses to the forty-seven numbered paragraphs of the counterclaim, comprising admissions, denials, and qualified denials; and

(b) Twelve separately enumerated affirmative defenses.

The Answer was filed on behalf of both Vantor Holdings Corp. and Vantor Transport Services LLC. This is consistent with the pattern established in Vantor's Amended Complaint, in which both entities were named as plaintiffs and asserted claims jointly. We note that the Answer does not draw any distinction between the positions of Vantor Holdings Corp. and VTS, nor does it address the corporate relationship between the two entities in any new or substantively different way than the Amended Complaint. The decision to file a joint answer on behalf of both entities suggests that CRS does not intend to pursue any argument based on corporate separateness at this stage, though this remains a possibility as the case develops.

The Answer was timely filed. Under Federal Rule of Civil Procedure 12(a)(1)(B), a party must serve an answer to a counterclaim within 21 days after being served with the pleading that states the counterclaim. Our counterclaim was served on January 13, 2023, making the response deadline February 3, 2023. The Answer was filed on January 27, 2023, seven days before the deadline. No extensions of time were requested or granted. This punctuality is unremarkable but confirms that CRS is managing the docket calendar competently and that no procedural arguments regarding timeliness are available.

The Answer does not include any counterclaims against Stonefield beyond those already asserted in Vantor's Amended Complaint. Vantor's affirmative claims for relief remain as previously pleaded: breach of contract (Counts I and II of the Amended Complaint), breach of the implied covenant of good faith and fair dealing (Count III), and enforcement of the liquidated damages provision under Section 14.2 (Count IV).

III. Analysis of Admissions and Denials

A. Admitted Facts

Vantor admitted the following facts in its paragraph-by-paragraph responses to the counterclaim. These admissions are uncontested, consistent with positions taken in Vantor's Amended Complaint, and largely relate to background and procedural matters that are not in genuine dispute:

1. Existence and execution of the TSA. Vantor admitted the existence and execution of the Transportation Services Agreement dated March 15, 2019, entered into between Stonefield Logistics Group Inc. (acting in the capacity of "Shipper-Broker") and Vantor Transport Services LLC (acting in the capacity of "Carrier-Provider"). This admission was expected and is consistent with Vantor's own reliance on the TSA as the basis for its affirmative claims in the Amended Complaint.

2. TSA drafting counsel. Vantor admitted that the TSA was drafted by Ashford Meridian LLP on behalf of Stonefield. This fact is relevant to any future contra proferentem arguments Vantor may raise regarding ambiguous contractual provisions, though no such argument has been advanced to date.

3. Governing law and forum selection. Vantor admitted that the governing law of the TSA is the law of the State of New York, and that the forum selection clause in Section 16.3 of the TSA designates the United States District Court for the Southern District of New York or the Supreme Court of the State of New York, New York County, as the exclusive forums for disputes arising under or related to the TSA. This admission is consistent with both parties' conduct throughout the litigation; Vantor filed its original complaint in this Court, and neither party has challenged personal or subject matter jurisdiction.

4. Contract term. Vantor admitted that the TSA provides for a five-year term commencing on April 1, 2019 and ending on March 31, 2024, subject to early termination provisions set forth in Article XIII of the TSA.

5. Annual Committed Volume. Vantor admitted that the TSA establishes an Annual Committed Volume ("ACV") of $43.2 million in transportation charges per contract year, and that the total five-year minimum commitment under the TSA is $216 million. This admission is significant because it establishes the baseline for any ACV shortfall calculations and is consistent with Vantor's own assertions in the Amended Complaint regarding Stonefield's alleged failure to meet ACV minimums.

6. Issuance of the Cure Notice. Vantor admitted that Stonefield sent a Cure Notice dated January 18, 2022, from Raymond Hess, Director of Contract Compliance at Stonefield, to Sandra Milescu, Chief Operating Officer of Vantor and VTS. Vantor admitted that the Cure Notice identified specific alleged performance failures by VTS during the fourth quarter of 2021 ("Q4 2021") and demanded cure within the contractual cure period.

7. Vantor's response to the Cure Notice. Vantor admitted that it responded to the Cure Notice on February 14, 2022, by letter from Derek Pruitt, Vice President of Business Development at Vantor, to Janet Kirkwood, Vice President of Carrier Relations at Stonefield. Vantor's admission regarding the existence and timing of this response is important; the content of the response is discussed in the context of the qualified denials and the Fifth Affirmative Defense below.

8. Issuance of the Termination Letter. Vantor admitted that Stonefield sent a formal termination letter dated March 4, 2022, from Tobias Wren, General Counsel of Stonefield, to Vantor Holdings Corp. and VTS. Vantor admitted receipt of the termination letter but denied that the termination was valid or for Cause (as discussed below).

9. Existence of the 30-day cure period. Vantor admitted that the TSA contains a 30-day cure period for material breach under Section 13.2, pursuant to which a party receiving a Cure Notice must cure the identified breach within 30 calendar days of receipt or the non-breaching party may proceed with termination for Cause.

10. Existence of the liquidated damages provision. Vantor admitted that the TSA contains a liquidated damages provision in Section 14.2. Vantor's admission of the provision's existence is distinct from its affirmative assertion (in the Eleventh Affirmative Defense) that the provision is enforceable—a position Stonefield disputes.

These admissions narrow the factual disputes in the case and confirm that the key contested issues center on the interpretation and application of the TSA's termination-for-Cause provisions, the sufficiency of VTS's cure, the enforceability of the liquidated damages clause, and the relative fault of the parties for any performance shortfalls.

B. Denied Facts

Vantor denied all material allegations forming the substantive core of Stonefield's counterclaim. These denials track the positions Vantor has taken throughout the litigation, both in its original complaint and in the Amended Complaint. The principal denials are as follows:

1. Vantor denied that VTS committed any material breach of the TSA. This is the fundamental factual dispute in the case and was fully expected.

2. Vantor denied that VTS's Q4 2021 performance failures constituted "Cause" for termination under Section 13.1(a) of the TSA. Section 13.1(a) defines "Cause" to include, among other things, a material breach of a party's Service Level Obligations ("SLOs") as set forth in Schedule B to the TSA. Vantor's denial of this allegation is the linchpin of its defense against Stonefield's counterclaim and its affirmative claim that the termination was wrongful.

3. Vantor denied that VTS failed to cure the identified deficiencies within the 30-day cure period prescribed by Section 13.2. In its denial, Vantor asserted—consistent with the Amended Complaint and the Fifth Affirmative Defense—that VTS "substantially cured" the deficiencies identified in the Cure Notice and/or that the deficiencies were caused by Stonefield's own conduct, thereby excusing VTS's performance. This is a two-pronged denial: the first prong invokes the doctrine of substantial cure, and the second invokes the defense of causation. Both are analyzed in the context of the relevant affirmative defenses below.

4. Vantor denied that Stonefield's termination of the TSA on March 4, 2022 was valid and for Cause. This denial flows directly from Vantor's position that VTS did not commit a material breach and that any performance issues were attributable to Stonefield.

5. Vantor denied that no liquidated damages are owed under Section 14.2. Vantor's position, as set forth in the Amended Complaint, is that Stonefield's termination was wrongful and without Cause, thereby triggering the liquidated damages provision, which Vantor contends entitles it to $67.23 million in damages (calculated as the ACV for the remaining term of the TSA, as discussed in connection with the Eleventh Affirmative Defense below).

6. Vantor denied that VTS was the "first-to-breach" or the breaching party under the TSA. This denial supports Vantor's affirmative theory—advanced in the Second Affirmative Defense and in Counts I and II of the Amended Complaint—that Stonefield committed the first material breach of the TSA by failing to meet ACV minimums and by diverting freight to competing carriers in violation of the exclusivity provisions.

None of these denials are new or unexpected. Each tracks directly to positions Vantor has taken since the inception of this litigation. The denials frame the central issues for dispositive motion practice and, if necessary, trial.

C. Qualified Denials / Responses Requiring Further Scrutiny

Vantor issued qualified responses to several paragraphs of the counterclaim that merit particular attention. These qualified denials fall into two categories: (i) responses regarding VTS's specific Q4 2021 performance metrics, and (ii) a response regarding the scope of the Service Level Obligations in the TSA.

Q4 2021 Performance Metrics. In response to paragraphs 18 through 23 of the counterclaim, which set forth VTS's specific performance metrics during Q4 2021, Vantor stated that it "lacked sufficient knowledge or information to form a belief as to the truth of the allegations" contained in those paragraphs. The specific metrics cited by Stonefield in the counterclaim—and as to which Vantor claims insufficient knowledge—are:

• On-time pickup rate: 78.2% (compared to the SLO threshold of 95%)

• On-time delivery rate: 81.6% (compared to the SLO threshold of 97%)

• Tender acceptance rate: 71.4% (compared to the SLO threshold of 90%)

• Equipment availability rate: 62% (compared to the SLO threshold of 85%)

• Cargo claims ratio: 1.07% (compared to the SLO threshold of 0.5%)

This qualified denial warrants scrutiny for several reasons. First, Vantor's position is inconsistent with its own Amended Complaint, which does not dispute the accuracy of these metrics. Rather, the Amended Complaint acknowledges that VTS experienced performance challenges during Q4 2021 but attributes those challenges entirely to Stonefield's conduct—specifically, Stonefield's alleged failure to tender committed volumes and its alleged diversion of freight to competing carriers. By asserting a lack of knowledge as to the metrics themselves, Vantor appears to be hedging its position, potentially preserving an argument that the metrics are inaccurate without committing to that assertion.

Second, Vantor's claimed lack of knowledge is inconsistent with VTS's own internal records. VTS maintained detailed performance dashboards and quarterly performance reports, which tracked each of the metrics identified in the counterclaim. The Q4 2021 Performance Report, which we anticipate will be produced (or has already been produced) in Vantor's document production, should contain the relevant data. It would be remarkable for Vantor to genuinely lack knowledge of its own subsidiary's performance metrics during a quarter that is central to this litigation.

Third, the February 14, 2022 letter from Derek Pruitt (VP, Business Development, Vantor) to Janet Kirkwood (VP, Carrier Relations, Stonefield)—the existence and timing of which Vantor has admitted—acknowledged "operational challenges" during Q4 2021 rather than disputing the underlying data. While the letter did not expressly confirm the specific percentages cited in the Cure Notice, its general acknowledgment of performance difficulties is difficult to reconcile with a claim of insufficient knowledge as to the precise metrics.

We should consider using these qualified denials as a basis for targeted Requests for Admission under Federal Rule of Civil Procedure 36. Indeed, our Requests for Admission served on March 6, 2023 include specific RFAs on each of these performance metrics. If Vantor denies the accuracy of the metrics in its RFA responses (due in April 2023), we will have a basis for seeking costs of proof under Rule 37(c)(2) at trial or summary judgment. Alternatively, if Vantor admits the metrics in its RFA responses, the qualified denials in the Answer will serve as useful impeachment material, demonstrating that Vantor has been evasive and inconsistent in its pleading positions. Either outcome is favorable to Stonefield.

Scope of Service Level Obligations. Vantor also gave a qualified denial to paragraph 14 of the counterclaim, which described the scope and content of the Service Level Obligations set forth in Schedule B to the TSA. In its response, Vantor asserted that "the document speaks for itself" and therefore neither admitted nor denied the allegations in that paragraph. This is a standard boilerplate response commonly encountered in paragraph-by-paragraph answers and does not reflect any substantive dispute regarding the contractual language. The TSA and Schedule B are part of the record, and the Court will interpret their terms independently. This qualified denial does not warrant further action at this time.

IV. Analysis of Affirmative Defenses

Vantor asserts twelve affirmative defenses in its Answer. Each is summarized below with an assessment of its strength, its relationship to the theories already advanced in the Amended Complaint, and any strategic implications for Stonefield.

First Affirmative Defense: Failure to State a Claim

Summary. Vantor asserts that Stonefield's counterclaim fails to state a claim upon which relief can be granted.

Assessment. This is a boilerplate affirmative defense routinely asserted in virtually every responsive pleading and carries no independent merit in this case. Stonefield's declaratory judgment counterclaim is well-pleaded under the standards of Federal Rule of Civil Procedure 8(a) and the Declaratory Judgment Act, 28 U.S.C. § 2201. The counterclaim identifies the specific contractual provisions at issue (Sections 13.1, 13.2, and 14.2 of the TSA), sets forth the factual bases supporting Stonefield's position that termination was for Cause, and requests specific declaratory relief. Vantor has not filed a motion to dismiss the counterclaim under Rule 12(b)(6), and the deadline for such a motion has passed. This defense is unlikely to be pressed in any substantive fashion and can be disregarded for purposes of litigation strategy.

Second Affirmative Defense: Stonefield's Prior Material Breach

Summary. Vantor asserts that Stonefield committed the first material breach of the TSA by failing to tender the Annual Committed Volume minimums during Contract Year 2 ("CY2," April 2020 through March 2021) and Contract Year 3 ("CY3," April 2021 through January 2022, the month prior to the Cure Notice). Specifically, Vantor alleges that Stonefield tendered only approximately $31.8 million in transportation charges during CY2, compared to the ACV of $43.2 million—a shortfall of approximately $11.4 million. For CY3, Vantor alleges Stonefield tendered only approximately $36.5 million (through January 2022), compared to the full-year ACV of $43.2 million—a shortfall of approximately $6.7 million on a full-year basis.

Assessment. This defense directly mirrors Counts I and II of the Amended Complaint and has been analyzed at length in prior memoranda. The principal response to the CY2 shortfall argument is Stonefield's force majeure defense under Section 12.1 of the TSA. Section 12.1 provides that neither party shall be liable for failure to perform its obligations under the TSA to the extent such failure is caused by a Force Majeure Event, which is defined in Section 1.21 to include, among other things, "pandemic, epidemic, or public health emergency." The COVID-19 pandemic resulted in a significant reduction in Stonefield's transportation needs during the period from approximately April 2020 through September 2020, a six-month window representing one-half of CY2. If the ACV is adjusted on a pro rata basis to exclude the six-month force majeure period, the adjusted ACV for CY2 is reduced to approximately $21.6 million. Stonefield's actual tenders of $31.8 million during CY2 exceeded the adjusted ACV by approximately $10.2 million, thereby negating the claim of a volume shortfall during that period.

The CY3 shortfall argument is analytically weaker on its face because it involves a comparison of actual tenders through January 2022 (ten months) against the full twelve-month ACV. Vantor's calculation appears to assume that Stonefield would not have met the full ACV even if the contract had remained in effect through March 2022, but this involves a projection rather than an established fact. Additionally, to the extent VTS's own performance failures during Q4 2021 caused Stonefield to divert volume to backup carriers in order to meet its own customer commitments—as Stonefield contends—the volume shortfall during CY3 is attributable to VTS's breach rather than to Stonefield's independent decision to reduce volume. These arguments have been developed in prior memoranda and need not be repeated here.

Third Affirmative Defense: Exclusivity Violation

Summary. Vantor asserts that Stonefield breached the exclusivity provisions in Schedule C of the TSA by diverting freight to Cascade Freight Systems Inc. ("Cascade") and Briarwood Trucking Co. ("Briarwood") during the term of the TSA.

Assessment. This defense mirrors the allegations in the Amended Complaint and has been thoroughly analyzed in the Memorandum re Exclusivity Analysis — Schedule C Lanes, dated September 30, 2022. Our analysis concludes that Stonefield's use of Cascade and Briarwood was limited to Lanes 8 through 14, which are classified as "Secondary Lanes" under Section 2(b) of Schedule C. The exclusivity restriction in Section 2(a) of Schedule C applies only to the fourteen designated "Primary Lanes" (Lanes 1 through 7, each with origin-destination pairs specified in Exhibit C-1). The TSA explicitly permits Stonefield to use alternative carriers on Secondary Lanes, subject only to a right of first refusal for VTS, which Stonefield contends was complied with. To the extent Vantor's discovery responses or deposition testimony reveal any usage of Cascade or Briarwood on Primary Lanes, this defense would require reassessment, but no such evidence has surfaced to date.

Fourth Affirmative Defense: Pretextual Termination / Lack of Good Faith

Summary. Vantor asserts that Stonefield's termination of the TSA was pretextual, motivated not by genuine concern over VTS's performance failures but by a desire to avoid the projected 14.3% rate increase under the Rate Adjustment Mechanism set forth in Section 5.3 of the TSA. Vantor alleges that the rate increase, which was scheduled to take effect on April 1, 2022, would have increased the weighted average per-mile rate from $2.87 to $3.28, representing approximately $6.2 million in additional annual transportation costs for Stonefield.

Assessment. This defense mirrors the theory advanced in Count III of the Amended Complaint (breach of the implied covenant of good faith and fair dealing) and has been analyzed in the Memorandum re Pretext and Good Faith in Termination for Cause, dated October 7, 2022. As discussed in that memorandum, New York law does not generally inquire into the subjective motivation behind a party's exercise of an express contractual right, including a termination-for-Cause right, where the objective contractual grounds for the exercise of that right are satisfied. See, e.g., Dalton v. Educational Testing Serv., 87 N.Y.2d 384 (1995); 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144 (2002). If Stonefield can establish that VTS committed a material breach of its SLOs and failed to cure within the 30-day cure period, Stonefield's subjective motivation for termination is legally irrelevant.

However, this defense does interact with certain documentary evidence that presents a litigation risk. Specifically, the internal email from Janet Kirkwood (VP, Carrier Relations, Stonefield) to Daniela Medina (SVP, Supply Chain Operations, Stonefield), dated September 22, 2021 (Bates No. SLG-002187), contains the statement: "If we can build a case for performance default, we should seriously consider whether now is the time to pull the plug on the whole contract before the April rate reset kicks in." This email, which predates VTS's Q4 2021 performance failures by approximately three months, could be characterized by Vantor as evidence that Stonefield was seeking a pretext for termination rather than genuinely enforcing its contractual rights. The strategic implications of this email have been addressed in the prior memorandum and will be further analyzed in the Memorandum re Anticipated April 2022 Rate Adjustment — Motive Evidence, which is currently under development and is expected to be completed by March 28, 2023. The email remains one of the most significant litigation risks in this case, and we should continue to develop the factual record around its context and the circumstances of the Cure Notice.

Fifth Affirmative Defense: Substantial Cure

Summary. Vantor asserts that VTS substantially cured the alleged breaches identified in the January 18, 2022 Cure Notice prior to the expiration of the 30-day cure period on February 17, 2022.

Assessment. This defense mirrors the theory advanced in the Amended Complaint and is supported by Vantor's February 14, 2022 letter from Derek Pruitt to Janet Kirkwood, which outlined certain steps VTS had taken or planned to take in response to the Cure Notice. Our analysis of this defense is set forth in the Memorandum re Sufficiency of Cure / "Substantial Cure" Doctrine, dated November 1, 2022. That memorandum concludes that Vantor's cure was insufficient for two principal reasons. First, the Pruitt letter acknowledged "operational challenges" and described remedial plans (including driver recruitment initiatives, fleet redeployment, and enhanced dispatch protocols) but did not demonstrate that actual remediation had been achieved as of the date of the letter—three days before the cure period expired. Second, post-cure-period performance data for the period from February 18, 2022 through March 4, 2022 (the date of termination) showed continued SLO failures across multiple metrics, undermining the claim of substantial cure. Under New York law, substantial cure requires the breaching party to demonstrate that it has, in fact, remedied the breach to a degree sufficient to satisfy the essential purpose of the relevant contractual obligation. A plan to cure is not the same as actual cure, and ongoing performance failures after the cure deadline are strong evidence that cure was not achieved.

This defense is not new and does not require further analysis at this time.

Sixth Affirmative Defense: Causation / Performance Failures Attributable to Stonefield

Summary. Vantor asserts that VTS's Q4 2021 performance failures were not attributable to VTS's own conduct but were caused by external and Stonefield-created factors, specifically: (i) the nationwide driver shortage affecting the trucking industry generally during the relevant period; (ii) Stonefield's own failure to tender the committed volumes under the TSA, which deprived VTS of the revenue necessary to maintain its dedicated fleet; and (iii) Stonefield's alleged instructions to VTS to divert volume to spot market carriers, which further reduced VTS's revenue and forced VTS to redeploy its fleet assets to other commitments.

Assessment. This defense mirrors the causation theory advanced in the Amended Complaint and has been the subject of extensive factual investigation. While the nationwide driver shortage is a real and well-documented phenomenon, its relevance to this case is limited by the fact that VTS's performance failures were not uniform across its carrier operations but were concentrated on the Stonefield-dedicated lanes—a fact pattern more consistent with deliberate resource reallocation than with industry-wide market forces.

More importantly, this defense is significantly undermined by a key piece of documentary evidence: the internal email from Sandra Milescu (COO, Vantor/VTS) to Anton Vantorovich (CEO, Vantor Holdings Corp.), dated November 12, 2021 (Bates No. VHC-008417). In that email, Milescu stated: "We've pulled 85 tractors off the SLG dedicated lanes to cover [redacted] commitments. SLG won't notice until January." This email demonstrates that VTS's fleet reduction on the Stonefield-dedicated lanes was a unilateral business decision made by Vantor/VTS management without notice to Stonefield, not a reactive response to Stonefield's volume shortfalls or instructions. The email directly contradicts Vantor's assertion that the performance failures were caused by Stonefield's conduct, and it establishes that VTS's senior management was aware that the fleet reduction would result in service degradation but chose to proceed in the belief—ultimately mistaken—that the impact would not be detected until January 2022.

This email is among the strongest pieces of evidence in Stonefield's case and will be central to our summary judgment motion. The causation defense has been addressed in prior memoranda and does not require further analysis at this time.

Seventh Affirmative Defense: Waiver

Summary. Vantor asserts that Stonefield waived its right to terminate the TSA for Cause by tolerating VTS's performance below SLO thresholds in quarters prior to Q4 2021 without issuing a Cure Notice or taking any other contractual remedial action.

Assessment. This is a standard waiver defense that requires factual development. The implicit factual premise is that VTS's performance was below SLO thresholds in one or more quarters prior to Q4 2021 and that Stonefield was aware of the shortfalls but took no action. To evaluate this defense, we need to assess: (a) whether VTS's performance was, in fact, below SLO thresholds in prior quarters; (b) whether Stonefield was aware of any such shortfalls; and (c) whether Stonefield's inaction, if any, constitutes a waiver under applicable law.

As an initial matter, the TSA almost certainly contains a standard "no waiver" provision—a clause providing that the failure of either party to enforce any provision of the TSA shall not constitute a waiver of that party's right to enforce such provision in the future. Such provisions are standard in commercial contracts of this nature and are generally enforceable under New York law. We should confirm the existence and precise language of such a provision against the TSA itself as part of our summary judgment preparation.

Even absent a contractual no-waiver clause, New York law generally disfavors implied waiver of express contractual rights in commercial agreements between sophisticated parties. Waiver requires a clear, unequivocal, and deliberate abandonment of a known right, and courts are reluctant to find waiver based solely on a party's failure to act in a particular instance. See, e.g., Fundamental Portfolio Advisors, Inc. v. Tocqueville Asset Mgmt., L.P., 7 N.Y.3d 96, 104 (2006). The fact that Stonefield may not have issued a Cure Notice in response to prior quarters' performance is unlikely, standing alone, to constitute waiver, particularly where the Q4 2021 failures were substantially more severe than any prior performance issues.

This defense should be addressed during summary judgment preparation, and we should develop the factual record regarding VTS's performance in prior quarters during the remaining fact discovery period.

Eighth Affirmative Defense: Estoppel

Summary. Vantor asserts that Stonefield is estopped from terminating the TSA because Stonefield's own conduct—specifically, its alleged volume shortfalls and lane diversions—induced VTS's reliance and fleet redeployment.

Assessment. This defense substantially overlaps with the Sixth Affirmative Defense (causation) and does not carry independent analytical weight. Equitable estoppel under New York law requires proof that: (i) the party to be estopped made a misrepresentation or engaged in conduct amounting to a concealment of material facts; (ii) the other party relied on that conduct; (iii) the reliance was reasonable; and (iv) the relying party suffered injury as a result. See, e.g., BWA Corp. v. Alltrans Express U.S.A., Inc., 112 A.D.2d 850, 852 (1st Dep't 1985). Vantor's estoppel theory rests on the same factual assertions as its causation defense—that Stonefield's volume shortfalls and lane diversions caused VTS to reallocate fleet resources—and is undermined by the same evidence, particularly the Milescu-to-Vantorovich email (VHC-008417), which demonstrates that VTS's fleet redeployment was a unilateral business decision rather than conduct induced by Stonefield.

Moreover, equitable estoppel is an affirmative defense that requires proof of specific detrimental reliance—a showing that VTS took particular actions to its detriment in reliance on specific conduct by Stonefield. The Amended Complaint does not identify any such specific reliance, and the Answer adds nothing new. This defense is unlikely to succeed absent significantly stronger factual support than Vantor has identified to date.

Ninth Affirmative Defense: Setoff

Summary. Vantor asserts a right of setoff for any amounts owed by Stonefield for ACV shortfalls against any damages Stonefield might recover in connection with the counterclaim.

Assessment. This defense is procedurally permissible but of limited practical impact in the context of this litigation. Stonefield's counterclaim seeks declaratory relief—specifically, declarations that the termination was valid, that no liquidated damages are owed, and that VTS was the breaching party. The counterclaim does not seek monetary damages against Vantor. Accordingly, there is no monetary award against which a setoff could be applied. To the extent the Court were to find that Stonefield committed an ACV shortfall breach, Vantor's claim for damages arising from that breach is already being pursued through Counts I and II of the Amended Complaint, and any recovery would be determined in the context of those claims. The setoff defense is essentially defensive posturing—a reassertion of Vantor's affirmative claims in the guise of a defense to the counterclaim—and does not alter the analysis of the counterclaim itself.

Tenth Affirmative Defense: Unclean Hands

Summary. Vantor asserts that Stonefield acted with unclean hands by diverting freight to competing carriers, withholding committed volumes, and terminating the TSA to avoid the scheduled rate increase under Section 5.3.

Assessment. This is an equitable defense that is largely duplicative of the exclusivity violation (Third Affirmative Defense), prior material breach (Second Affirmative Defense), and pretextual termination (Fourth Affirmative Defense) theories already asserted by Vantor. The defense of unclean hands would be applicable only to the extent Stonefield seeks equitable relief—i.e., the declaratory judgment component of the counterclaim—rather than monetary damages.

Under New York law, unclean hands requires a showing that the party invoking the defense engaged in "unconscionable, immoral, or inequitable conduct" that is directly related to the matter in litigation. See, e.g., National Distillers & Chem. Corp. v. Seyopp Corp., 17 N.Y.2d 12, 15–16 (1966). This is a high bar, particularly in the context of a commercial contract dispute between two sophisticated corporate entities. The conduct Vantor identifies—volume shortfalls, lane diversions, and termination motivated by economic self-interest—falls well within the range of ordinary commercial behavior and does not rise to the level of unconscionability or immorality required to invoke unclean hands. This defense is unlikely to succeed.

Eleventh Affirmative Defense: Enforceability of Liquidated Damages Clause

Summary. Vantor affirmatively asserts that the liquidated damages clause in Section 14.2 of the TSA is enforceable and constitutes a valid measure of damages for Stonefield's alleged breach. Vantor contends that the clause entitles it to $67.23 million in liquidated damages, calculated as follows: the ACV of $43.2 million multiplied by two full remaining contract years (CY4 and CY5, April 2022 through March 2024), totaling $86.4 million, reduced by the 25% discount factor specified in Section 14.2(b), yielding $64.8 million, plus $2.43 million for the 27-day partial period remaining in CY3 (March 5, 2022 through March 31, 2022), for a total of $67.23 million.

Assessment. This defense is a restatement of Vantor's affirmative claim for liquidated damages under Count IV of the Amended Complaint. Stonefield's position, as developed in the Memorandum re Enforceability of Liquidated Damages Clause Under NY Law, dated September 19, 2022, is that the Section 14.2 liquidated damages clause is an unenforceable penalty under New York law. Our principal arguments are: (a) the clause bears no reasonable relationship to the probable loss anticipated at the time of contracting, given that it calculates damages based on gross ACV rather than net profits or avoided costs; (b) actual damages for wrongful termination of a transportation services agreement are readily calculable and do not require a liquidated damages provision; and (c) the clause produces a windfall that is disproportionate to any actual harm Vantor could suffer.

We assess a "moderate" chance of success on this argument. New York courts have historically been reluctant to override freely negotiated commercial terms between sophisticated parties, particularly where both parties were represented by counsel during the negotiation of the agreement. See, e.g., Kestrel Corporation, 4 N.Y.3d 373 (2005); Northpoint Holdings v. Purdy Corp., 41 N.Y.2d 354 (1977). The fact that the TSA was drafted by Ashford Meridian LLP on behalf of Stonefield may cut against Stonefield's argument that the clause is unconscionable—since Stonefield's own counsel drafted the provision, Vantor will argue that Stonefield cannot now disavow it. This issue will require careful briefing and will be a central component of dispositive motion practice.

Twelfth Affirmative Defense: Reservation of Rights

Summary. Vantor reserves the right to assert additional affirmative defenses as discovery continues and additional facts are developed.

Assessment. This is a standard boilerplate reservation of rights included in virtually all responsive pleadings. It has no substantive impact on the current state of the litigation. To the extent Vantor seeks to assert additional affirmative defenses at a later stage, it would need to amend its Answer pursuant to Federal Rule of Civil Procedure 15, which would require either Stonefield's consent or leave of Court. We would oppose any such amendment if it were prejudicial or untimely.

V. Notable Absences and Observations

In addition to analyzing what Vantor's Answer contains, it is worth noting what the Answer does not contain, as these absences provide useful information about the scope and direction of Vantor's defense:

1. No new factual allegations or legal theories. Vantor did not assert any new factual allegations or legal theories beyond those already presented in the Amended Complaint filed on December 2, 2022. The Answer is entirely backward-looking, reasserting previously known positions rather than introducing new arguments. This strongly suggests that CRS has not identified any additional grounds for defense during the initial discovery and pleading period.

2. No standing challenge. Vantor did not raise a standing challenge to Stonefield's counterclaim, nor did it challenge the Court's jurisdiction over the declaratory judgment claim. Both parties agree on the forum selection clause and governing law provisions of the TSA, and Vantor itself selected this forum by filing its original complaint in the Southern District of New York. Any standing or jurisdictional challenge would have been inconsistent with Vantor's own litigation posture.

3. No statute of limitations or laches defense. Vantor did not assert a statute of limitations or laches defense. This is consistent with the timeline of the case: the TSA was terminated on March 4, 2022, and Stonefield's counterclaim was filed on January 13, 2023—less than one year after the termination. New York's six-year statute of limitations for breach of contract claims (CPLR § 213(2)) is plainly satisfied, and laches would be inapplicable given the short interval between the events at issue and the filing of the counterclaim.

4. No challenge to declaratory judgment as a vehicle. Vantor did not challenge the propriety of a declaratory judgment as a vehicle for Stonefield's counterclaim. Vantor did not argue, for example, that the case is not ripe, that declaratory relief is inappropriate in light of the pending affirmative claims, or that the counterclaim is duplicative of the defenses Stonefield has raised to Vantor's Amended Complaint. This omission suggests that CRS does not view the declaratory judgment format as a viable basis for attacking the counterclaim and is prepared to litigate the merits of Stonefield's termination-for-Cause argument on the substance.

5. Counsel identification. The Answer was signed by Harrison Caldwell and Jason Whitford of Caldwell Royce & Shapiro LLP, 1 Liberty Plaza, 22nd Floor, New York, NY 10006. The same attorneys have signed all prior filings on behalf of Vantor in this case. There is no indication of any counsel-client issues at this stage. We note for the record that CRS's motion to withdraw as counsel of record was not filed until October 3, 2023, approximately eight months after the filing of the Answer. The circumstances of CRS's withdrawal are not relevant to the analysis of the Answer itself but may become relevant in subsequent memoranda addressing the post-withdrawal period.

VI. Impact on Litigation Strategy

The Answer does not alter our strategic approach to this litigation. The affirmative defenses asserted by Vantor are predictable and have been addressed in prior legal memoranda or are under development. The denials track the positions Vantor has maintained since the inception of this case, and no new factual allegations or legal theories have been introduced.

The one area of tactical opportunity presented by the Answer relates to the qualified denials regarding VTS's specific Q4 2021 performance metrics, as discussed in Section III.C above. If Vantor ultimately attempts to dispute the accuracy of the metrics themselves—rather than merely their attribution to Stonefield's conduct—we can use the Requests for Admission served on March 6, 2023 (which include specific RFAs on each of the five Q4 2021 performance metrics) to pin down Vantor's position. Vantor's RFA responses are due in April 2023 and should clarify whether the qualified denial in the Answer is a genuine factual dispute or merely a procedural hedging strategy. If Vantor denies the metrics in its RFA responses, the inconsistency between those denials and VTS's own internal records (including the Q4 2021 Performance Report and the Pruitt letter) will provide strong impeachment material at summary judgment or trial. If Vantor admits the metrics, the qualified denial in the Answer will have been effectively mooted, and the factual dispute will be narrowed to the question of causation and attribution.

No new issues have been raised by the Answer that require additional legal research or client communication at this time. The Answer does not affect our assessment of the strengths and weaknesses of Stonefield's position, which remains as set forth in the Litigation Strategy Memorandum dated December 15, 2022, and the Risk Assessment Memorandum dated January 3, 2023.

Recommendation: No further action is required on this filing beyond filing this memorandum in the work product file and proceeding with the discovery and case management schedule established at the Initial Pretrial Conference held on February 10, 2023, before the Honorable Margaret T. Calloway, United States District Judge, and memorialized in the Case Management Order entered February 17, 2023. The key dates in the Case Management Order are as follows:

• Fact discovery deadline: September 29, 2023

• Expert discovery deadline: January 12, 2024

• Dispositive motions deadline: March 1, 2024

We will continue to prepare for fact discovery, including depositions of Sandra Milescu, Derek Pruitt, and other key Vantor/VTS personnel, and will coordinate with the client regarding upcoming document productions and interrogatory responses.

cc: Samuel Eklund, Responsible Partner File: Matter No. 1012-00005

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT. This memorandum has been prepared by attorneys at Calderwood & Harkness LLP in connection with their representation of Stonefield Logistics Group Inc. in the above-referenced matter. This memorandum contains mental impressions, conclusions, opinions, and legal theories of the attorneys, and is protected from disclosure by the attorney-client privilege and the attorney work product doctrine. This memorandum is not intended for distribution to any person or entity other than attorneys and staff of Calderwood & Harkness LLP working on the referenced matter, unless authorized in writing by the Responsible Partner.

CALDERWOOD & HARKNESS LLP LITIGATION DEPARTMENT — GENERAL LITIGATION
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT This memorandum is protected by the attorney-client privilege and the work product doctrine. It is intended solely for use by attorneys and staff of Calderwood & Harkness LLP working on the referenced matter. Do not forward or distribute without authorization from the Responsible Partner.
MEMORANDUM
TO: Patrick Gallagher, Lead Associate, Litigation (General)
FROM: Simone Laroche, Working Associate, Litigation (General)
DATE: February 1, 2023
RE: Analysis of Vantor's Answer to Defendant's Counterclaim — Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.)
MATTER NO.: 1012-00005
CLIENT: Stonefield Logistics Group Inc.
I. Purpose and Summary
This memorandum analyzes the Answer to Defendant Stonefield Logistics Group Inc.'s Counterclaim (the "Answer") filed by Plaintiff Vantor Holdings Corp. ("Vantor") on January 27, 2023. The Answer was filed on the docket by counsel at Caldwell Royce & Shapiro LLP ("CRS"), specifically by Harrison Caldwell and Jason Whitford, on behalf of both Vantor Holdings Corp. and its wholly owned subsidiary, Vantor Transport Services LLC ("VTS"). The purpose of this memorandum is to identify any new factual allegations, legal theories, or strategic developments introduced by the Answer, assess the strength of each affirmative defense raised, and determine whether any adjustments to our litigation strategy are warranted.
By way of background, Stonefield's counterclaim was filed on January 13, 2023. The counterclaim seeks a declaratory judgment on three grounds: (1) that Stonefield's termination of the Transportation Services Agreement dated March 15, 2019 (the "TSA," Contract Ref. No. SLG-VTS-2019-0315) was valid and for Cause under Section 13.1 of the TSA; (2) that no liquidated damages are owed by Stonefield to Vantor or VTS under Section 14.2 of the TSA; and (3) that any material breach of the TSA was committed by VTS, not by Stonefield. The counterclaim was a central component of our litigation strategy, as discussed at length in the Litigation Strategy Memorandum dated December 15, 2022, and its filing was anticipated as a natural consequence of Vantor's Amended Complaint (filed December 2, 2022), which alleged wrongful termination and sought enforcement of the TSA's liquidated damages provision.
Bottom-line assessment: Vantor's Answer contains no surprises. The paragraph-by-paragraph responses follow a predictable pattern of admitting uncontested background facts while denying all material allegations that form the substantive basis for Stonefield's counterclaim. The twelve affirmative defenses asserted by Vantor are, without exception, predictable and largely mirror the allegations and legal theories already advanced in Vantor's Amended Complaint. No new factual allegations or legal theories were introduced in the Answer. Accordingly, the filing does not alter our litigation strategy, risk assessment, or timeline in any meaningful respect. There is one area of potential tactical opportunity—Vantor's qualified denials regarding the specific Q4 2021 performance metrics cited in Stonefield's counterclaim—which is discussed in detail below.
II. Overview of Vantor's Responsive Pleading
Vantor filed a combined Answer to Stonefield's Counterclaim, which consists of two principal components:
(a) Paragraph-by-paragraph responses to the forty-seven numbered paragraphs of the counterclaim, comprising admissions, denials, and qualified denials; and
(b) Twelve separately enumerated affirmative defenses.
The Answer was filed on behalf of both Vantor Holdings Corp. and Vantor Transport Services LLC. This is consistent with the pattern established in Vantor's Amended Complaint, in which both entities were named as plaintiffs and asserted claims jointly. We note that the Answer does not draw any distinction between the positions of Vantor Holdings Corp. and VTS, nor does it address the corporate relationship between the two entities in any new or substantively different way than the Amended Complaint. The decision to file a joint answer on behalf of both entities suggests that CRS does not intend to pursue any argument based on corporate separateness at this stage, though this remains a possibility as the case develops.
The Answer was timely filed. Under Federal Rule of Civil Procedure 12(a)(1)(B), a party must serve an answer to a counterclaim within 21 days after being served with the pleading that states the counterclaim. Our counterclaim was served on January 13, 2023, making the response deadline February 3, 2023. The Answer was filed on January 27, 2023, seven days before the deadline. No extensions of time were requested or granted. This punctuality is unremarkable but confirms that CRS is managing the docket calendar competently and that no procedural arguments regarding timeliness are available.
The Answer does not include any counterclaims against Stonefield beyond those already asserted in Vantor's Amended Complaint. Vantor's affirmative claims for relief remain as previously pleaded: breach of contract (Counts I and II of the Amended Complaint), breach of the implied covenant of good faith and fair dealing (Count III), and enforcement of the liquidated damages provision under Section 14.2 (Count IV).
III. Analysis of Admissions and Denials
A. Admitted Facts
Vantor admitted the following facts in its paragraph-by-paragraph responses to the counterclaim. These admissions are uncontested, consistent with positions taken in Vantor's Amended Complaint, and largely relate to background and procedural matters that are not in genuine dispute:
1. Existence and execution of the TSA. Vantor admitted the existence and execution of the Transportation Services Agreement dated March 15, 2019, entered into between Stonefield Logistics Group Inc. (acting in the capacity of "Shipper-Broker") and Vantor Transport Services LLC (acting in the capacity of "Carrier-Provider"). This admission was expected and is consistent with Vantor's own reliance on the TSA as the basis for its affirmative claims in the Amended Complaint.
2. TSA drafting counsel. Vantor admitted that the TSA was drafted by Ashford Meridian LLP on behalf of Stonefield. This fact is relevant to any future contra proferentem arguments Vantor may raise regarding ambiguous contractual provisions, though no such argument has been advanced to date.
3. Governing law and forum selection. Vantor admitted that the governing law of the TSA is the law of the State of New York, and that the forum selection clause in Section 16.3 of the TSA designates the United States District Court for the Southern District of New York or the Supreme Court of the State of New York, New York County, as the exclusive forums for disputes arising under or related to the TSA. This admission is consistent with both parties' conduct throughout the litigation; Vantor filed its original complaint in this Court, and neither party has challenged personal or subject matter jurisdiction.
4. Contract term. Vantor admitted that the TSA provides for a five-year term commencing on April 1, 2019 and ending on March 31, 2024, subject to early termination provisions set forth in Article XIII of the TSA.
5. Annual Committed Volume. Vantor admitted that the TSA establishes an Annual Committed Volume ("ACV") of $43.2 million in transportation charges per contract year, and that the total five-year minimum commitment under the TSA is $216 million. This admission is significant because it establishes the baseline for any ACV shortfall calculations and is consistent with Vantor's own assertions in the Amended Complaint regarding Stonefield's alleged failure to meet ACV minimums.
6. Issuance of the Cure Notice. Vantor admitted that Stonefield sent a Cure Notice dated January 18, 2022, from Raymond Hess, Director of Contract Compliance at Stonefield, to Sandra Milescu, Chief Operating Officer of Vantor and VTS. Vantor admitted that the Cure Notice identified specific alleged performance failures by VTS during the fourth quarter of 2021 ("Q4 2021") and demanded cure within the contractual cure period.
7. Vantor's response to the Cure Notice. Vantor admitted that it responded to the Cure Notice on February 14, 2022, by letter from Derek Pruitt, Vice President of Business Development at Vantor, to Janet Kirkwood, Vice President of Carrier Relations at Stonefield. Vantor's admission regarding the existence and timing of this response is important; the content of the response is discussed in the context of the qualified denials and the Fifth Affirmative Defense below.
8. Issuance of the Termination Letter. Vantor admitted that Stonefield sent a formal termination letter dated March 4, 2022, from Tobias Wren, General Counsel of Stonefield, to Vantor Holdings Corp. and VTS. Vantor admitted receipt of the termination letter but denied that the termination was valid or for Cause (as discussed below).
9. Existence of the 30-day cure period. Vantor admitted that the TSA contains a 30-day cure period for material breach under Section 13.2, pursuant to which a party receiving a Cure Notice must cure the identified breach within 30 calendar days of receipt or the non-breaching party may proceed with termination for Cause.
10. Existence of the liquidated damages provision. Vantor admitted that the TSA contains a liquidated damages provision in Section 14.2. Vantor's admission of the provision's existence is distinct from its affirmative assertion (in the Eleventh Affirmative Defense) that the provision is enforceable—a position Stonefield disputes.
These admissions narrow the factual disputes in the case and confirm that the key contested issues center on the interpretation and application of the TSA's termination-for-Cause provisions, the sufficiency of VTS's cure, the enforceability of the liquidated damages clause, and the relative fault of the parties for any performance shortfalls.
B. Denied Facts
Vantor denied all material allegations forming the substantive core of Stonefield's counterclaim. These denials track the positions Vantor has taken throughout the litigation, both in its original complaint and in the Amended Complaint. The principal denials are as follows:
1. Vantor denied that VTS committed any material breach of the TSA. This is the fundamental factual dispute in the case and was fully expected.
2. Vantor denied that VTS's Q4 2021 performance failures constituted "Cause" for termination under Section 13.1(a) of the TSA. Section 13.1(a) defines "Cause" to include, among other things, a material breach of a party's Service Level Obligations ("SLOs") as set forth in Schedule B to the TSA. Vantor's denial of this allegation is the linchpin of its defense against Stonefield's counterclaim and its affirmative claim that the termination was wrongful.
3. Vantor denied that VTS failed to cure the identified deficiencies within the 30-day cure period prescribed by Section 13.2. In its denial, Vantor asserted—consistent with the Amended Complaint and the Fifth Affirmative Defense—that VTS "substantially cured" the deficiencies identified in the Cure Notice and/or that the deficiencies were caused by Stonefield's own conduct, thereby excusing VTS's performance. This is a two-pronged denial: the first prong invokes the doctrine of substantial cure, and the second invokes the defense of causation. Both are analyzed in the context of the relevant affirmative defenses below.
4. Vantor denied that Stonefield's termination of the TSA on March 4, 2022 was valid and for Cause. This denial flows directly from Vantor's position that VTS did not commit a material breach and that any performance issues were attributable to Stonefield.
5. Vantor denied that no liquidated damages are owed under Section 14.2. Vantor's position, as set forth in the Amended Complaint, is that Stonefield's termination was wrongful and without Cause, thereby triggering the liquidated damages provision, which Vantor contends entitles it to $67.23 million in damages (calculated as the ACV for the remaining term of the TSA, as discussed in connection with the Eleventh Affirmative Defense below).
6. Vantor denied that VTS was the "first-to-breach" or the breaching party under the TSA. This denial supports Vantor's affirmative theory—advanced in the Second Affirmative Defense and in Counts I and II of the Amended Complaint—that Stonefield committed the first material breach of the TSA by failing to meet ACV minimums and by diverting freight to competing carriers in violation of the exclusivity provisions.
None of these denials are new or unexpected. Each tracks directly to positions Vantor has taken since the inception of this litigation. The denials frame the central issues for dispositive motion practice and, if necessary, trial.
C. Qualified Denials / Responses Requiring Further Scrutiny
Vantor issued qualified responses to several paragraphs of the counterclaim that merit particular attention. These qualified denials fall into two categories: (i) responses regarding VTS's specific Q4 2021 performance metrics, and (ii) a response regarding the scope of the Service Level Obligations in the TSA.
Q4 2021 Performance Metrics. In response to paragraphs 18 through 23 of the counterclaim, which set forth VTS's specific performance metrics during Q4 2021, Vantor stated that it "lacked sufficient knowledge or information to form a belief as to the truth of the allegations" contained in those paragraphs. The specific metrics cited by Stonefield in the counterclaim—and as to which Vantor claims insufficient knowledge—are:
• On-time pickup rate: 78.2% (compared to the SLO threshold of 95%)
• On-time delivery rate: 81.6% (compared to the SLO threshold of 97%)
• Tender acceptance rate: 71.4% (compared to the SLO threshold of 90%)
• Equipment availability rate: 62% (compared to the SLO threshold of 85%)
• Cargo claims ratio: 1.07% (compared to the SLO threshold of 0.5%)
This qualified denial warrants scrutiny for several reasons. First, Vantor's position is inconsistent with its own Amended Complaint, which does not dispute the accuracy of these metrics. Rather, the Amended Complaint acknowledges that VTS experienced performance challenges during Q4 2021 but attributes those challenges entirely to Stonefield's conduct—specifically, Stonefield's alleged failure to tender committed volumes and its alleged diversion of freight to competing carriers. By asserting a lack of knowledge as to the metrics themselves, Vantor appears to be hedging its position, potentially preserving an argument that the metrics are inaccurate without committing to that assertion.
Second, Vantor's claimed lack of knowledge is inconsistent with VTS's own internal records. VTS maintained detailed performance dashboards and quarterly performance reports, which tracked each of the metrics identified in the counterclaim. The Q4 2021 Performance Report, which we anticipate will be produced (or has already been produced) in Vantor's document production, should contain the relevant data. It would be remarkable for Vantor to genuinely lack knowledge of its own subsidiary's performance metrics during a quarter that is central to this litigation.
Third, the February 14, 2022 letter from Derek Pruitt (VP, Business Development, Vantor) to Janet Kirkwood (VP, Carrier Relations, Stonefield)—the existence and timing of which Vantor has admitted—acknowledged "operational challenges" during Q4 2021 rather than disputing the underlying data. While the letter did not expressly confirm the specific percentages cited in the Cure Notice, its general acknowledgment of performance difficulties is difficult to reconcile with a claim of insufficient knowledge as to the precise metrics.
We should consider using these qualified denials as a basis for targeted Requests for Admission under Federal Rule of Civil Procedure 36. Indeed, our Requests for Admission served on March 6, 2023 include specific RFAs on each of these performance metrics. If Vantor denies the accuracy of the metrics in its RFA responses (due in April 2023), we will have a basis for seeking costs of proof under Rule 37(c)(2) at trial or summary judgment. Alternatively, if Vantor admits the metrics in its RFA responses, the qualified denials in the Answer will serve as useful impeachment material, demonstrating that Vantor has been evasive and inconsistent in its pleading positions. Either outcome is favorable to Stonefield.
Scope of Service Level Obligations. Vantor also gave a qualified denial to paragraph 14 of the counterclaim, which described the scope and content of the Service Level Obligations set forth in Schedule B to the TSA. In its response, Vantor asserted that "the document speaks for itself" and therefore neither admitted nor denied the allegations in that paragraph. This is a standard boilerplate response commonly encountered in paragraph-by-paragraph answers and does not reflect any substantive dispute regarding the contractual language. The TSA and Schedule B are part of the record, and the Court will interpret their terms independently. This qualified denial does not warrant further action at this time.
IV. Analysis of Affirmative Defenses
Vantor asserts twelve affirmative defenses in its Answer. Each is summarized below with an assessment of its strength, its relationship to the theories already advanced in the Amended Complaint, and any strategic implications for Stonefield.
First Affirmative Defense: Failure to State a Claim
Summary. Vantor asserts that Stonefield's counterclaim fails to state a claim upon which relief can be granted.
Assessment. This is a boilerplate affirmative defense routinely asserted in virtually every responsive pleading and carries no independent merit in this case. Stonefield's declaratory judgment counterclaim is well-pleaded under the standards of Federal Rule of Civil Procedure 8(a) and the Declaratory Judgment Act, 28 U.S.C. § 2201. The counterclaim identifies the specific contractual provisions at issue (Sections 13.1, 13.2, and 14.2 of the TSA), sets forth the factual bases supporting Stonefield's position that termination was for Cause, and requests specific declaratory relief. Vantor has not filed a motion to dismiss the counterclaim under Rule 12(b)(6), and the deadline for such a motion has passed. This defense is unlikely to be pressed in any substantive fashion and can be disregarded for purposes of litigation strategy.
Second Affirmative Defense: Stonefield's Prior Material Breach
Summary. Vantor asserts that Stonefield committed the first material breach of the TSA by failing to tender the Annual Committed Volume minimums during Contract Year 2 ("CY2," April 2020 through March 2021) and Contract Year 3 ("CY3," April 2021 through January 2022, the month prior to the Cure Notice). Specifically, Vantor alleges that Stonefield tendered only approximately $31.8 million in transportation charges during CY2, compared to the ACV of $43.2 million—a shortfall of approximately $11.4 million. For CY3, Vantor alleges Stonefield tendered only approximately $36.5 million (through January 2022), compared to the full-year ACV of $43.2 million—a shortfall of approximately $6.7 million on a full-year basis.
Assessment. This defense directly mirrors Counts I and II of the Amended Complaint and has been analyzed at length in prior memoranda. The principal response to the CY2 shortfall argument is Stonefield's force majeure defense under Section 12.1 of the TSA. Section 12.1 provides that neither party shall be liable for failure to perform its obligations under the TSA to the extent such failure is caused by a Force Majeure Event, which is defined in Section 1.21 to include, among other things, "pandemic, epidemic, or public health emergency." The COVID-19 pandemic resulted in a significant reduction in Stonefield's transportation needs during the period from approximately April 2020 through September 2020, a six-month window representing one-half of CY2. If the ACV is adjusted on a pro rata basis to exclude the six-month force majeure period, the adjusted ACV for CY2 is reduced to approximately $21.6 million. Stonefield's actual tenders of $31.8 million during CY2 exceeded the adjusted ACV by approximately $10.2 million, thereby negating the claim of a volume shortfall during that period.
The CY3 shortfall argument is analytically weaker on its face because it involves a comparison of actual tenders through January 2022 (ten months) against the full twelve-month ACV. Vantor's calculation appears to assume that Stonefield would not have met the full ACV even if the contract had remained in effect through March 2022, but this involves a projection rather than an established fact. Additionally, to the extent VTS's own performance failures during Q4 2021 caused Stonefield to divert volume to backup carriers in order to meet its own customer commitments—as Stonefield contends—the volume shortfall during CY3 is attributable to VTS's breach rather than to Stonefield's independent decision to reduce volume. These arguments have been developed in prior memoranda and need not be repeated here.
Third Affirmative Defense: Exclusivity Violation
Summary. Vantor asserts that Stonefield breached the exclusivity provisions in Schedule C of the TSA by diverting freight to Cascade Freight Systems Inc. ("Cascade") and Briarwood Trucking Co. ("Briarwood") during the term of the TSA.
Assessment. This defense mirrors the allegations in the Amended Complaint and has been thoroughly analyzed in the Memorandum re Exclusivity Analysis — Schedule C Lanes, dated September 30, 2022. Our analysis concludes that Stonefield's use of Cascade and Briarwood was limited to Lanes 8 through 14, which are classified as "Secondary Lanes" under Section 2(b) of Schedule C. The exclusivity restriction in Section 2(a) of Schedule C applies only to the fourteen designated "Primary Lanes" (Lanes 1 through 7, each with origin-destination pairs specified in Exhibit C-1). The TSA explicitly permits Stonefield to use alternative carriers on Secondary Lanes, subject only to a right of first refusal for VTS, which Stonefield contends was complied with. To the extent Vantor's discovery responses or deposition testimony reveal any usage of Cascade or Briarwood on Primary Lanes, this defense would require reassessment, but no such evidence has surfaced to date.
Fourth Affirmative Defense: Pretextual Termination / Lack of Good Faith
Summary. Vantor asserts that Stonefield's termination of the TSA was pretextual, motivated not by genuine concern over VTS's performance failures but by a desire to avoid the projected 14.3% rate increase under the Rate Adjustment Mechanism set forth in Section 5.3 of the TSA. Vantor alleges that the rate increase, which was scheduled to take effect on April 1, 2022, would have increased the weighted average per-mile rate from $2.87 to $3.28, representing approximately $6.2 million in additional annual transportation costs for Stonefield.
Assessment. This defense mirrors the theory advanced in Count III of the Amended Complaint (breach of the implied covenant of good faith and fair dealing) and has been analyzed in the Memorandum re Pretext and Good Faith in Termination for Cause, dated October 7, 2022. As discussed in that memorandum, New York law does not generally inquire into the subjective motivation behind a party's exercise of an express contractual right, including a termination-for-Cause right, where the objective contractual grounds for the exercise of that right are satisfied. See, e.g., Dalton v. Educational Testing Serv., 87 N.Y.2d 384 (1995); 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144 (2002). If Stonefield can establish that VTS committed a material breach of its SLOs and failed to cure within the 30-day cure period, Stonefield's subjective motivation for termination is legally irrelevant.
However, this defense does interact with certain documentary evidence that presents a litigation risk. Specifically, the internal email from Janet Kirkwood (VP, Carrier Relations, Stonefield) to Daniela Medina (SVP, Supply Chain Operations, Stonefield), dated September 22, 2021 (Bates No. SLG-002187), contains the statement: "If we can build a case for performance default, we should seriously consider whether now is the time to pull the plug on the whole contract before the April rate reset kicks in." This email, which predates VTS's Q4 2021 performance failures by approximately three months, could be characterized by Vantor as evidence that Stonefield was seeking a pretext for termination rather than genuinely enforcing its contractual rights. The strategic implications of this email have been addressed in the prior memorandum and will be further analyzed in the Memorandum re Anticipated April 2022 Rate Adjustment — Motive Evidence, which is currently under development and is expected to be completed by March 28, 2023. The email remains one of the most significant litigation risks in this case, and we should continue to develop the factual record around its context and the circumstances of the Cure Notice.
Fifth Affirmative Defense: Substantial Cure
Summary. Vantor asserts that VTS substantially cured the alleged breaches identified in the January 18, 2022 Cure Notice prior to the expiration of the 30-day cure period on February 17, 2022.
Assessment. This defense mirrors the theory advanced in the Amended Complaint and is supported by Vantor's February 14, 2022 letter from Derek Pruitt to Janet Kirkwood, which outlined certain steps VTS had taken or planned to take in response to the Cure Notice. Our analysis of this defense is set forth in the Memorandum re Sufficiency of Cure / "Substantial Cure" Doctrine, dated November 1, 2022. That memorandum concludes that Vantor's cure was insufficient for two principal reasons. First, the Pruitt letter acknowledged "operational challenges" and described remedial plans (including driver recruitment initiatives, fleet redeployment, and enhanced dispatch protocols) but did not demonstrate that actual remediation had been achieved as of the date of the letter—three days before the cure period expired. Second, post-cure-period performance data for the period from February 18, 2022 through March 4, 2022 (the date of termination) showed continued SLO failures across multiple metrics, undermining the claim of substantial cure. Under New York law, substantial cure requires the breaching party to demonstrate that it has, in fact, remedied the breach to a degree sufficient to satisfy the essential purpose of the relevant contractual obligation. A plan to cure is not the same as actual cure, and ongoing performance failures after the cure deadline are strong evidence that cure was not achieved.
This defense is not new and does not require further analysis at this time.
Sixth Affirmative Defense: Causation / Performance Failures Attributable to Stonefield
Summary. Vantor asserts that VTS's Q4 2021 performance failures were not attributable to VTS's own conduct but were caused by external and Stonefield-created factors, specifically: (i) the nationwide driver shortage affecting the trucking industry generally during the relevant period; (ii) Stonefield's own failure to tender the committed volumes under the TSA, which deprived VTS of the revenue necessary to maintain its dedicated fleet; and (iii) Stonefield's alleged instructions to VTS to divert volume to spot market carriers, which further reduced VTS's revenue and forced VTS to redeploy its fleet assets to other commitments.
Assessment. This defense mirrors the causation theory advanced in the Amended Complaint and has been the subject of extensive factual investigation. While the nationwide driver shortage is a real and well-documented phenomenon, its relevance to this case is limited by the fact that VTS's performance failures were not uniform across its carrier operations but were concentrated on the Stonefield-dedicated lanes—a fact pattern more consistent with deliberate resource reallocation than with industry-wide market forces.
More importantly, this defense is significantly undermined by a key piece of documentary evidence: the internal email from Sandra Milescu (COO, Vantor/VTS) to Anton Vantorovich (CEO, Vantor Holdings Corp.), dated November 12, 2021 (Bates No. VHC-008417). In that email, Milescu stated: "We've pulled 85 tractors off the SLG dedicated lanes to cover [redacted] commitments. SLG won't notice until January." This email demonstrates that VTS's fleet reduction on the Stonefield-dedicated lanes was a unilateral business decision made by Vantor/VTS management without notice to Stonefield, not a reactive response to Stonefield's volume shortfalls or instructions. The email directly contradicts Vantor's assertion that the performance failures were caused by Stonefield's conduct, and it establishes that VTS's senior management was aware that the fleet reduction would result in service degradation but chose to proceed in the belief—ultimately mistaken—that the impact would not be detected until January 2022.
This email is among the strongest pieces of evidence in Stonefield's case and will be central to our summary judgment motion. The causation defense has been addressed in prior memoranda and does not require further analysis at this time.
Seventh Affirmative Defense: Waiver
Summary. Vantor asserts that Stonefield waived its right to terminate the TSA for Cause by tolerating VTS's performance below SLO thresholds in quarters prior to Q4 2021 without issuing a Cure Notice or taking any other contractual remedial action.
Assessment. This is a standard waiver defense that requires factual development. The implicit factual premise is that VTS's performance was below SLO thresholds in one or more quarters prior to Q4 2021 and that Stonefield was aware of the shortfalls but took no action. To evaluate this defense, we need to assess: (a) whether VTS's performance was, in fact, below SLO thresholds in prior quarters; (b) whether Stonefield was aware of any such shortfalls; and (c) whether Stonefield's inaction, if any, constitutes a waiver under applicable law.
As an initial matter, the TSA almost certainly contains a standard "no waiver" provision—a clause providing that the failure of either party to enforce any provision of the TSA shall not constitute a waiver of that party's right to enforce such provision in the future. Such provisions are standard in commercial contracts of this nature and are generally enforceable under New York law. We should confirm the existence and precise language of such a provision against the TSA itself as part of our summary judgment preparation.
Even absent a contractual no-waiver clause, New York law generally disfavors implied waiver of express contractual rights in commercial agreements between sophisticated parties. Waiver requires a clear, unequivocal, and deliberate abandonment of a known right, and courts are reluctant to find waiver based solely on a party's failure to act in a particular instance. See, e.g., Fundamental Portfolio Advisors, Inc. v. Tocqueville Asset Mgmt., L.P., 7 N.Y.3d 96, 104 (2006). The fact that Stonefield may not have issued a Cure Notice in response to prior quarters' performance is unlikely, standing alone, to constitute waiver, particularly where the Q4 2021 failures were substantially more severe than any prior performance issues.
This defense should be addressed during summary judgment preparation, and we should develop the factual record regarding VTS's performance in prior quarters during the remaining fact discovery period.
Eighth Affirmative Defense: Estoppel
Summary. Vantor asserts that Stonefield is estopped from terminating the TSA because Stonefield's own conduct—specifically, its alleged volume shortfalls and lane diversions—induced VTS's reliance and fleet redeployment.
Assessment. This defense substantially overlaps with the Sixth Affirmative Defense (causation) and does not carry independent analytical weight. Equitable estoppel under New York law requires proof that: (i) the party to be estopped made a misrepresentation or engaged in conduct amounting to a concealment of material facts; (ii) the other party relied on that conduct; (iii) the reliance was reasonable; and (iv) the relying party suffered injury as a result. See, e.g., BWA Corp. v. Alltrans Express U.S.A., Inc., 112 A.D.2d 850, 852 (1st Dep't 1985). Vantor's estoppel theory rests on the same factual assertions as its causation defense—that Stonefield's volume shortfalls and lane diversions caused VTS to reallocate fleet resources—and is undermined by the same evidence, particularly the Milescu-to-Vantorovich email (VHC-008417), which demonstrates that VTS's fleet redeployment was a unilateral business decision rather than conduct induced by Stonefield.
Moreover, equitable estoppel is an affirmative defense that requires proof of specific detrimental reliance—a showing that VTS took particular actions to its detriment in reliance on specific conduct by Stonefield. The Amended Complaint does not identify any such specific reliance, and the Answer adds nothing new. This defense is unlikely to succeed absent significantly stronger factual support than Vantor has identified to date.
Ninth Affirmative Defense: Setoff
Summary. Vantor asserts a right of setoff for any amounts owed by Stonefield for ACV shortfalls against any damages Stonefield might recover in connection with the counterclaim.
Assessment. This defense is procedurally permissible but of limited practical impact in the context of this litigation. Stonefield's counterclaim seeks declaratory relief—specifically, declarations that the termination was valid, that no liquidated damages are owed, and that VTS was the breaching party. The counterclaim does not seek monetary damages against Vantor. Accordingly, there is no monetary award against which a setoff could be applied. To the extent the Court were to find that Stonefield committed an ACV shortfall breach, Vantor's claim for damages arising from that breach is already being pursued through Counts I and II of the Amended Complaint, and any recovery would be determined in the context of those claims. The setoff defense is essentially defensive posturing—a reassertion of Vantor's affirmative claims in the guise of a defense to the counterclaim—and does not alter the analysis of the counterclaim itself.
Tenth Affirmative Defense: Unclean Hands
Summary. Vantor asserts that Stonefield acted with unclean hands by diverting freight to competing carriers, withholding committed volumes, and terminating the TSA to avoid the scheduled rate increase under Section 5.3.
Assessment. This is an equitable defense that is largely duplicative of the exclusivity violation (Third Affirmative Defense), prior material breach (Second Affirmative Defense), and pretextual termination (Fourth Affirmative Defense) theories already asserted by Vantor. The defense of unclean hands would be applicable only to the extent Stonefield seeks equitable relief—i.e., the declaratory judgment component of the counterclaim—rather than monetary damages.
Under New York law, unclean hands requires a showing that the party invoking the defense engaged in "unconscionable, immoral, or inequitable conduct" that is directly related to the matter in litigation. See, e.g., National Distillers & Chem. Corp. v. Seyopp Corp., 17 N.Y.2d 12, 15–16 (1966). This is a high bar, particularly in the context of a commercial contract dispute between two sophisticated corporate entities. The conduct Vantor identifies—volume shortfalls, lane diversions, and termination motivated by economic self-interest—falls well within the range of ordinary commercial behavior and does not rise to the level of unconscionability or immorality required to invoke unclean hands. This defense is unlikely to succeed.
Eleventh Affirmative Defense: Enforceability of Liquidated Damages Clause
Summary. Vantor affirmatively asserts that the liquidated damages clause in Section 14.2 of the TSA is enforceable and constitutes a valid measure of damages for Stonefield's alleged breach. Vantor contends that the clause entitles it to $67.23 million in liquidated damages, calculated as follows: the ACV of $43.2 million multiplied by two full remaining contract years (CY4 and CY5, April 2022 through March 2024), totaling $86.4 million, reduced by the 25% discount factor specified in Section 14.2(b), yielding $64.8 million, plus $2.43 million for the 27-day partial period remaining in CY3 (March 5, 2022 through March 31, 2022), for a total of $67.23 million.
Assessment. This defense is a restatement of Vantor's affirmative claim for liquidated damages under Count IV of the Amended Complaint. Stonefield's position, as developed in the Memorandum re Enforceability of Liquidated Damages Clause Under NY Law, dated September 19, 2022, is that the Section 14.2 liquidated damages clause is an unenforceable penalty under New York law. Our principal arguments are: (a) the clause bears no reasonable relationship to the probable loss anticipated at the time of contracting, given that it calculates damages based on gross ACV rather than net profits or avoided costs; (b) actual damages for wrongful termination of a transportation services agreement are readily calculable and do not require a liquidated damages provision; and (c) the clause produces a windfall that is disproportionate to any actual harm Vantor could suffer.
We assess a "moderate" chance of success on this argument. New York courts have historically been reluctant to override freely negotiated commercial terms between sophisticated parties, particularly where both parties were represented by counsel during the negotiation of the agreement. See, e.g., Kestrel Corporation, 4 N.Y.3d 373 (2005); Northpoint Holdings v. Purdy Corp., 41 N.Y.2d 354 (1977). The fact that the TSA was drafted by Ashford Meridian LLP on behalf of Stonefield may cut against Stonefield's argument that the clause is unconscionable—since Stonefield's own counsel drafted the provision, Vantor will argue that Stonefield cannot now disavow it. This issue will require careful briefing and will be a central component of dispositive motion practice.
Twelfth Affirmative Defense: Reservation of Rights
Summary. Vantor reserves the right to assert additional affirmative defenses as discovery continues and additional facts are developed.
Assessment. This is a standard boilerplate reservation of rights included in virtually all responsive pleadings. It has no substantive impact on the current state of the litigation. To the extent Vantor seeks to assert additional affirmative defenses at a later stage, it would need to amend its Answer pursuant to Federal Rule of Civil Procedure 15, which would require either Stonefield's consent or leave of Court. We would oppose any such amendment if it were prejudicial or untimely.
V. Notable Absences and Observations
In addition to analyzing what Vantor's Answer contains, it is worth noting what the Answer does not contain, as these absences provide useful information about the scope and direction of Vantor's defense:
1. No new factual allegations or legal theories. Vantor did not assert any new factual allegations or legal theories beyond those already presented in the Amended Complaint filed on December 2, 2022. The Answer is entirely backward-looking, reasserting previously known positions rather than introducing new arguments. This strongly suggests that CRS has not identified any additional grounds for defense during the initial discovery and pleading period.
2. No standing challenge. Vantor did not raise a standing challenge to Stonefield's counterclaim, nor did it challenge the Court's jurisdiction over the declaratory judgment claim. Both parties agree on the forum selection clause and governing law provisions of the TSA, and Vantor itself selected this forum by filing its original complaint in the Southern District of New York. Any standing or jurisdictional challenge would have been inconsistent with Vantor's own litigation posture.
3. No statute of limitations or laches defense. Vantor did not assert a statute of limitations or laches defense. This is consistent with the timeline of the case: the TSA was terminated on March 4, 2022, and Stonefield's counterclaim was filed on January 13, 2023—less than one year after the termination. New York's six-year statute of limitations for breach of contract claims (CPLR § 213(2)) is plainly satisfied, and laches would be inapplicable given the short interval between the events at issue and the filing of the counterclaim.
4. No challenge to declaratory judgment as a vehicle. Vantor did not challenge the propriety of a declaratory judgment as a vehicle for Stonefield's counterclaim. Vantor did not argue, for example, that the case is not ripe, that declaratory relief is inappropriate in light of the pending affirmative claims, or that the counterclaim is duplicative of the defenses Stonefield has raised to Vantor's Amended Complaint. This omission suggests that CRS does not view the declaratory judgment format as a viable basis for attacking the counterclaim and is prepared to litigate the merits of Stonefield's termination-for-Cause argument on the substance.
5. Counsel identification. The Answer was signed by Harrison Caldwell and Jason Whitford of Caldwell Royce & Shapiro LLP, 1 Liberty Plaza, 22nd Floor, New York, NY 10006. The same attorneys have signed all prior filings on behalf of Vantor in this case. There is no indication of any counsel-client issues at this stage. We note for the record that CRS's motion to withdraw as counsel of record was not filed until October 3, 2023, approximately eight months after the filing of the Answer. The circumstances of CRS's withdrawal are not relevant to the analysis of the Answer itself but may become relevant in subsequent memoranda addressing the post-withdrawal period.
VI. Impact on Litigation Strategy
The Answer does not alter our strategic approach to this litigation. The affirmative defenses asserted by Vantor are predictable and have been addressed in prior legal memoranda or are under development. The denials track the positions Vantor has maintained since the inception of this case, and no new factual allegations or legal theories have been introduced.
The one area of tactical opportunity presented by the Answer relates to the qualified denials regarding VTS's specific Q4 2021 performance metrics, as discussed in Section III.C above. If Vantor ultimately attempts to dispute the accuracy of the metrics themselves—rather than merely their attribution to Stonefield's conduct—we can use the Requests for Admission served on March 6, 2023 (which include specific RFAs on each of the five Q4 2021 performance metrics) to pin down Vantor's position. Vantor's RFA responses are due in April 2023 and should clarify whether the qualified denial in the Answer is a genuine factual dispute or merely a procedural hedging strategy. If Vantor denies the metrics in its RFA responses, the inconsistency between those denials and VTS's own internal records (including the Q4 2021 Performance Report and the Pruitt letter) will provide strong impeachment material at summary judgment or trial. If Vantor admits the metrics, the qualified denial in the Answer will have been effectively mooted, and the factual dispute will be narrowed to the question of causation and attribution.
No new issues have been raised by the Answer that require additional legal research or client communication at this time. The Answer does not affect our assessment of the strengths and weaknesses of Stonefield's position, which remains as set forth in the Litigation Strategy Memorandum dated December 15, 2022, and the Risk Assessment Memorandum dated January 3, 2023.
Recommendation: No further action is required on this filing beyond filing this memorandum in the work product file and proceeding with the discovery and case management schedule established at the Initial Pretrial Conference held on February 10, 2023, before the Honorable Margaret T. Calloway, United States District Judge, and memorialized in the Case Management Order entered February 17, 2023. The key dates in the Case Management Order are as follows:
• Fact discovery deadline: September 29, 2023
• Expert discovery deadline: January 12, 2024
• Dispositive motions deadline: March 1, 2024
We will continue to prepare for fact discovery, including depositions of Sandra Milescu, Derek Pruitt, and other key Vantor/VTS personnel, and will coordinate with the client regarding upcoming document productions and interrogatory responses.
cc: Samuel Eklund, Responsible Partner File: Matter No. 1012-00005
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT. This memorandum has been prepared by attorneys at Calderwood & Harkness LLP in connection with their representation of Stonefield Logistics Group Inc. in the above-referenced matter. This memorandum contains mental impressions, conclusions, opinions, and legal theories of the attorneys, and is protected from disclosure by the attorney-client privilege and the attorney work product doctrine. This memorandum is not intended for distribution to any person or entity other than attorneys and staff of Calderwood & Harkness LLP working on the referenced matter, unless authorized in writing by the Responsible Partner.

CALDERWOOD & HARKNESS LLP LITIGATION DEPARTMENT — GENERAL LITIGATION

MEMORANDUM

MATTER NO.: 1012-00005

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