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

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CONFIDENTIAL — ATTORNEY WORK PRODUCT / PRIVILEGED

Calderwood & Harkness LLP — C&H Matter No. 1012-00005

Prepared by: Patrick Gallagher and Simone Laroche For review by: Samuel Eklund, Responsible Partner

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

DEFENDANT STONEFIELD LOGISTICS GROUP INC.'S ANSWER TO PLAINTIFF'S AMENDED COMPLAINT, AFFIRMATIVE DEFENSES, AND COUNTERCLAIM FOR DECLARATORY JUDGMENT

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PRELIMINARY STATEMENT

Defendant Stonefield Logistics Group Inc. ("Stonefield" or "SLG"), a Delaware corporation headquartered at 4200 Commerce Parkway, Suite 800, Fort Worth, Texas 76102, by and through its attorneys Calderwood & Harkness LLP, hereby respectfully submits this Answer to the Amended Complaint filed by Plaintiff Vantor Holdings Corp. ("Vantor") on December 2, 2022 (Dkt. No. 28) (the "Amended Complaint"), together with its Affirmative Defenses and Counterclaim for Declaratory Judgment.

Stonefield denies all material allegations of wrongdoing asserted in the Amended Complaint. Stonefield denies that Vantor is entitled to any relief whatsoever — whether in damages, equitable relief, or otherwise — and respectfully submits that each of Vantor's claims fails as a matter of law and fact.

The undisputed record in this matter tells a straightforward story. Stonefield lawfully terminated the Transportation Services Agreement dated March 15, 2019 (the "TSA," Contract Ref. No. SLG-VTS-2019-0315) for Cause pursuant to Section 13.1(a) of the TSA after Vantor's wholly owned operating subsidiary, Vantor Transport Services LLC ("VTS"), committed sustained, severe, and uncured material breaches across all five Service Level Obligations ("SLOs") during the fourth quarter of 2021 and into the first quarter of 2022. VTS's performance failures were not the product of external market forces or any shortcoming on Stonefield's part. They were the direct and foreseeable result of VTS's own deliberate decision to reassign resources away from Stonefield's dedicated lanes in order to service a different shipper's account.

Specifically, in or about October 2021, VTS deliberately reassigned approximately 85 tractors from Stonefield's dedicated lanes to service another shipper, Northwind Distribution Co., without providing any notice to Stonefield. This unilateral and covert reallocation of fleet capacity resulted in catastrophic service failures across every measurable dimension of VTS's contractual obligations. During the fourth quarter of 2021, VTS's performance metrics fell dramatically below each of the five SLOs set forth in the TSA:

• On-Time Pickup Rate: 78.2% — versus the contractual SLO of ≥95%;

• On-Time Delivery Rate: 81.6% — versus the contractual SLO of ≥93%;

• Tender Acceptance Rate: 71.4% — versus the contractual SLO of ≥90%;

• Equipment Availability: 62% of committed fleet capacity (approximately 248 tractors available versus the 400 tractors required) — versus the contractual SLO of ≥85%;

• Cargo Claims Ratio: 1.07% (16 documented claims in November–December 2021, totaling $387,400) — versus the contractual SLO of ≤0.5%.

These were not marginal deviations from contractual benchmarks. They represented sustained, systematic, and severe underperformance — in many cases, failures of 15 to 25 percentage points below the contractually required minimums — across every service dimension that the parties had agreed would define satisfactory performance.

Stonefield acted prudently and in strict compliance with the TSA's termination procedures. On January 18, 2022, Raymond Hess, Director of Contract Compliance at Stonefield, delivered a detailed written Cure Notice to Sandra Milescu, Chief Operating Officer of Vantor and VTS, specifying each of the foregoing breaches with reasonable particularity as required by Section 13.2 of the TSA. The Cure Notice set forth the contractual standard for each SLO, identified VTS's actual performance against that standard, and specified the nature and extent of the deficiency. VTS was afforded the full 30-calendar-day cure period provided for under the TSA.

VTS did not cure. On February 14, 2022, Derek Pruitt, Vice President of Business Development at Vantor, sent a letter to Janet Kirkwood, Vice President of Carrier Relations at Stonefield, that acknowledged "operational challenges" but did not demonstrate — and could not have demonstrated — actual remediation. The letter disputed certain cargo claims data but did not contest the other performance metrics that formed the basis of the Cure Notice. The 30-day cure period expired on February 17, 2022 without VTS having remedied any of the identified material breaches.

Stonefield thereafter exercised its contractual right to terminate. On March 4, 2022, Tobias Wren, General Counsel of Stonefield, issued a formal termination letter to Vantor Holdings Corp. and Vantor Transport Services LLC, terminating the TSA effective immediately pursuant to Section 13.1(a). The termination was lawful, procedurally proper, and substantively justified.

Vantor's Amended Complaint is a meritless attempt to recover $95.4 million in alleged damages arising from VTS's own operational failures and deliberate breach of its fleet commitment obligations. Vantor's central narrative — that Stonefield's termination was "pretextual" and motivated by a desire to avoid the April 2022 rate adjustment under the TSA (projected at approximately 14.3%, representing an estimated $6.2 million in additional annual transportation costs) — is contradicted by the objective and undisputed record of VTS's service breakdowns. Even if Stonefield was aware of the forthcoming rate adjustment, New York law is clear that an inquiry into subjective motive is neither appropriate nor permissible where objective contractual grounds for termination exist and have been properly invoked.

In addition to the defenses set forth in this Answer, Stonefield asserts fourteen affirmative defenses, including that the TSA's liquidated damages clause (Section 14.2) is an unenforceable penalty under New York law, that Vantor failed to mitigate its damages, that VTS committed the first material breach of the TSA, and that Vantor comes before this Court with unclean hands. Stonefield also asserts a Counterclaim for Declaratory Judgment seeking declarations from this Court that (i) Stonefield's termination of the TSA was valid and for Cause, (ii) no liquidated damages are owed, and (iii) VTS committed the first material breach of the TSA.

PART I: ANSWER TO AMENDED COMPLAINT

Defendant Stonefield Logistics Group Inc. responds to each separately numbered paragraph of the Amended Complaint as follows. To the extent any paragraph of the Amended Complaint is not specifically addressed herein, it is deemed denied. Stonefield generally denies each and every allegation of the Amended Complaint that is not expressly admitted herein. Headings, titles, captions, characterizations, and legal conclusions contained in the Amended Complaint are not "allegations" requiring a response; to the extent they are deemed to require a response, they are denied except as specifically stated below.

A. Responses to Paragraphs Relating to the Parties (Paragraphs 1–10)

Paragraph 1. Stonefield admits that Vantor Holdings Corp. is a corporation organized under the laws of the State of New York with its principal place of business at 580 Eighth Avenue, 14th Floor, New York, New York 10018. Stonefield notes, however, that VTS — not Vantor Holdings Corp. — was the signatory counterparty to the TSA. Stonefield reserves all rights to challenge Vantor Holdings Corp.'s standing to bring claims under the TSA as a non-signatory parent entity, including under Federal Rule of Civil Procedure 17(a). Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 1.

Paragraph 2. Stonefield admits that Vantor Transport Services LLC is a limited liability company organized under the laws of the State of New York and is a wholly owned operating subsidiary of Vantor Holdings Corp. Stonefield admits that VTS was identified as the "Carrier-Provider" under the TSA. Stonefield admits that VTS operates an asset-based and asset-light trucking, warehousing, and regional distribution business, and that VTS's fleet includes approximately 650 owned tractors and 2,100 trailers. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 2.

Paragraph 3. Stonefield admits that Stonefield Logistics Group Inc. is a corporation organized under the laws of the State of Delaware with its principal place of business at 4200 Commerce Parkway, Suite 800, Fort Worth, Texas 76102. Stonefield admits that it is a mid-market freight brokerage, managed transportation, and supply chain solutions company operating across the continental United States and cross-border into Mexico and Canada, managing a carrier network of approximately 12,000 approved carriers and handling roughly 850,000 shipments annually. Stonefield admits that it was identified as the "Shipper-Broker" under the TSA. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 3.

Paragraph 4. Stonefield admits that Nikolai Vantorovich is the Chief Executive Officer and Founder of Vantor Holdings Corp. and that Mr. Vantorovich holds approximately 58% of the ownership interest in Vantor. Stonefield denies any other characterizations in Paragraph 4 to the extent they imply authority, responsibility, or involvement beyond what is expressly stated. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 4.

Paragraph 5. Stonefield admits that Marcus Denton is the Chief Executive Officer of Stonefield Logistics Group Inc. Stonefield admits that Mr. Denton participated in certain communications referenced in the Amended Complaint. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 5, including any characterizations regarding Mr. Denton's purported motives, intentions, or state of mind.

Paragraph 6. Stonefield admits the existence of the corporate entities described in Paragraph 6 to the extent that their existence can be confirmed by reference to publicly available records. Stonefield lacks sufficient knowledge or information to form a belief as to the truth of the remaining allegations in Paragraph 6 regarding Vantor's organizational structure and intercompany relationships beyond the VTS subsidiary relationship already admitted, and therefore denies them.

Paragraph 7. Stonefield admits that Tobias Wren serves as General Counsel of Stonefield Logistics Group Inc. and that Mr. Wren authored certain correspondence referenced in the Amended Complaint. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 7.

Paragraph 8. Stonefield admits that Janet Kirkwood serves as Vice President of Carrier Relations at Stonefield Logistics Group Inc. Stonefield admits that Ms. Kirkwood was involved in communications with VTS regarding operational performance under the TSA. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 8, including any characterizations of Ms. Kirkwood's statements, motives, or conduct that are inconsistent with the facts as set forth in this Answer.

> [Note to SAE: Kirkwood September 22, 2021 email ("pull the plug") — not affirmatively referenced in our filing but opposing counsel will use it. We address this in pretext defense rather than volunteering it.]

Paragraph 9. Stonefield admits that Raymond Hess serves as Director of Contract Compliance at Stonefield Logistics Group Inc. Stonefield admits that Mr. Hess prepared and transmitted the Cure Notice dated January 18, 2022. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 9.

Paragraph 10. To the extent Paragraph 10 contains factual allegations regarding the background and history of the parties' business relationship, Stonefield admits only those facts that are consistent with the written terms of the TSA and the facts as set forth in this Answer. Stonefield denies all characterizations, legal conclusions, and allegations regarding Stonefield's purported motives, intentions, or bad faith. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 10.

B. Responses to Paragraphs Relating to Jurisdiction and Venue (Paragraphs 11–15)

Paragraph 11. Stonefield admits that this Court has subject-matter jurisdiction over this action pursuant to 28 U.S.C. § 1332, as there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000, exclusive of interest and costs.

Paragraph 12. Stonefield admits that Vantor Holdings Corp. is a citizen of New York for purposes of diversity jurisdiction and that Stonefield Logistics Group Inc. is a citizen of Delaware and Texas for purposes of diversity jurisdiction.

Paragraph 13. Stonefield admits that venue is proper in the Southern District of New York. Section 16 of the TSA contains a forum selection clause pursuant to which the parties agreed to submit to the exclusive jurisdiction of 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, for the resolution of disputes arising under or relating to the TSA.

Paragraph 14. Stonefield admits that the TSA is governed by the laws of the State of New York, without regard to principles of conflicts of law, pursuant to the governing law provision set forth in Section 16 of the TSA.

Paragraph 15. To the extent Paragraph 15 contains additional jurisdictional or venue allegations, Stonefield admits only those facts consistent with the foregoing admissions. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 15.

C. Responses to Paragraphs Relating to the TSA (Paragraphs 16–35)

Paragraph 16. Stonefield admits that the TSA was executed on March 15, 2019 between Stonefield Logistics Group Inc., as "Shipper-Broker," and Vantor Transport Services LLC, as "Carrier-Provider." Stonefield admits that the TSA was drafted by Ashford Meridian LLP on behalf of Stonefield. The TSA speaks for itself, and Stonefield respectfully refers the Court to the full text of the TSA for a complete and accurate statement of its terms. Except as specifically admitted herein, Stonefield denies any characterizations or paraphrasing of the TSA's terms that are inconsistent with the actual language of the agreement.

Paragraph 17. Stonefield admits that the TSA provided for an initial term of five years, commencing on April 1, 2019 and expiring on March 31, 2024. Stonefield admits that the TSA included one automatic two-year renewal period, subject to either party providing 180 days' written notice of non-renewal prior to the expiration of the initial term. The TSA speaks for itself with respect to its renewal provisions. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 17.

Paragraph 18. Stonefield admits that under the TSA, VTS was to provide dedicated and on-demand truckload transportation services across specified lanes in the Northeast, Mid-Atlantic, and Southeast corridors, as more particularly described in the TSA and its Schedules. Stonefield admits that VTS committed to maintaining minimum fleet capacity of 400 tractors and 1,200 trailers available for Stonefield freight. The TSA and its Schedules speak for themselves. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 18.

Paragraph 19. Stonefield admits that the Annual Committed Volume ("ACV") under the TSA was $43.2 million per contract year, yielding a total five-year minimum commitment of $216 million over the initial term. Stonefield denies that it failed to satisfy the ACV in any contract year, and specifically denies any allegation of a volume shortfall after proper application of the force majeure provisions set forth in Section 12.1 of the TSA. The TSA speaks for itself regarding the ACV and related provisions. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 19.

Paragraph 20. Stonefield admits that rates under the TSA were set on a per-mile basis by lane as specified in Schedule B to the TSA, subject to annual adjustment pursuant to the Rate Adjustment Mechanism set forth in Section 5.3 of the TSA. Stonefield admits that the Rate Adjustment Mechanism was indexed to a blended formula consisting of 70% diesel fuel index and 30% Consumer Price Index for All Urban Consumers ("CPI-U"), with adjustments to take effect on each April 1 during the term. Stonefield denies that the April 2022 projected rate adjustment — estimated at an approximately 14.3% increase, which would have increased the weighted average per-mile rate from approximately $2.87 to approximately $3.28 — motivated Stonefield's termination of the TSA. The termination was for Cause based on VTS's sustained material breaches, and the timing of the termination bore no causal relationship to the forthcoming rate adjustment. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 20.

> [Note to SAE: Rate adjustment motive — we deny it in responses to Amended Complaint paragraphs but should we address more specifically? Per Laroche's March 28, 2023 memo [forthcoming], NY law supports position that objective Cause precludes motive inquiry.]

Paragraph 21. Stonefield admits that the TSA set forth five SLOs, which are as follows:

(a) On-Time Pickup: ≥95%;

(b) On-Time Delivery: ≥93%;

(d) Tender Acceptance: ≥90%; and

(e) Equipment Availability: ≥85% of committed fleet capacity.

Stonefield avers that VTS failed to meet each and every one of these SLOs during the fourth quarter of 2021, as detailed in the Cure Notice and in this Answer. The TSA speaks for itself. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 21.

Paragraph 22. Stonefield admits the existence of Section 14.2 of the TSA, which provides for liquidated damages equal to 75% of the ACV multiplied by the number of remaining full and partial contract years in the event that Stonefield terminates the TSA "other than for Cause." Stonefield denies that liquidated damages are owed because the termination was for Cause under Section 13.1(a). Stonefield further denies the enforceability of Section 14.2 and affirmatively asserts that the liquidated damages provision constitutes an unenforceable penalty under New York law, as more fully set forth in Stonefield's Second Affirmative Defense below. The TSA speaks for itself. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 22.

Paragraph 23. Stonefield admits the provisions of Section 13.1 of the TSA, which sets forth the grounds upon which either party may terminate the TSA for Cause, including:

(a) Subsection 13.1(a): material breach that remains uncured for 30 calendar days after written notice specifying such breach with reasonable particularity;

(b) Subsection 13.1(b): insolvency, bankruptcy, or similar proceedings;

(d) Subsection 13.1(d): material violation of applicable law, including regulations promulgated by the Department of Transportation and the Federal Motor Carrier Safety Administration.

The TSA speaks for itself. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 23.

Paragraph 24. Stonefield admits the provisions of Section 13.2 of the TSA, which requires that a terminating party deliver a written Cure Notice "specifying with reasonable particularity" the alleged breach and providing the applicable cure period. Stonefield avers that its January 18, 2022 Cure Notice fully complied with the requirements of Section 13.2. The TSA speaks for itself. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 24.

Paragraph 25. Stonefield admits the existence of the force majeure provision in Section 12.1 of the TSA. Stonefield avers that it properly and timely invoked the force majeure provision for the period April 2020 through September 2020 due to the unprecedented impact of the COVID-19 pandemic on freight demand across the national and regional markets. The TSA speaks for itself. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 25.

Paragraph 26. Stonefield admits the existence of the dispute resolution provision in Section 16 of the TSA, which includes a mandatory 30-day executive negotiation period prior to the commencement of litigation. Stonefield avers that it complied with this requirement. Following Vantor's demand letter dated April 8, 2022, Stonefield rejected the demand on April 29, 2022 and invoked the executive negotiation period. Executive-level meetings were held on May 16, 2022 (in person, attended by Marcus Denton, CEO of Stonefield, and Nikolai Vantorovich, CEO of Vantor) and June 3, 2022 (telephonic). No resolution was reached. The TSA speaks for itself. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 26.

Paragraph 27. Stonefield admits the existence of the mutual waiver of consequential damages set forth in Section 15.1 of the TSA. Stonefield avers that this provision bars Vantor's claims for stranded assets, workforce reduction costs, and mitigation costs, each of which constitutes consequential, special, or indirect damages within the meaning of Section 15.1. The TSA speaks for itself. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 27.

Paragraph 28. Stonefield admits that Schedule C to the TSA designated 14 lane-specific origin-destination pairs and that certain of those lanes were subject to exclusivity provisions under Section 2(b) of the TSA. Specifically, Stonefield admits that Lanes 1 through 7 were classified as "Primary Lanes" and were subject to exclusivity restrictions, while Lanes 8 through 14 were classified as "Secondary Lanes" and were expressly excluded from the exclusivity restrictions. Stonefield denies that it violated the exclusivity provisions of Schedule C. Stonefield avers that any use of Cascade Freight Systems Inc. (4700 Lakehurst Court, Columbus, Ohio 43016) and Briarwood Trucking Co. (1280 Jefferson Davis Highway, Suite 310, Arlington, Virginia 22202) was limited to Lanes 8 through 14, the Secondary Lanes, and was therefore fully consistent with and permitted under the terms of the TSA. The TSA and Schedule C speak for themselves. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 28.

Paragraphs 29–35. To the extent these paragraphs contain allegations regarding additional terms, provisions, or characterizations of the TSA, Stonefield respectfully refers the Court to the full text of the TSA for a complete and accurate statement of its terms. Stonefield admits those factual allegations that are consistent with the actual language of the TSA and with the facts as set forth in this Answer. Stonefield denies all characterizations, legal conclusions, and allegations in these paragraphs that are inconsistent with the foregoing admissions and with the actual terms of the TSA as written.

D. Responses to Paragraphs Relating to VTS Performance and Stonefield's Termination (Paragraphs 36–55)

Paragraph 36. Stonefield admits that VTS's performance during the fourth quarter of 2021 was the subject of the Cure Notice dated January 18, 2022. Stonefield specifically avers that VTS's Q4 2021 performance was materially deficient across all five SLOs, as follows:

(a) On-time pickup rate: 78.2%, which was 16.8 percentage points below the contractual SLO of ≥95%. Stonefield admits this figure and avers that this sustained and severe underperformance constitutes a material breach of the TSA.

(b) On-time delivery rate: 81.6%, which was 11.4 percentage points below the contractual SLO of ≥93%. Stonefield admits this figure and avers that this sustained and severe underperformance constitutes a material breach of the TSA.

(c) Tender acceptance rate: 71.4%, which was 18.6 percentage points below the contractual SLO of ≥90%. Stonefield admits this figure and avers that this sustained and severe underperformance constitutes a material breach of the TSA.

(d) Equipment availability: 62% of committed fleet capacity, representing approximately 248 tractors available versus the 400 tractors required under the TSA. This was 23 percentage points below the contractual SLO of ≥85%. Stonefield admits this figure and avers that this sustained and severe underperformance constitutes a material breach of the TSA.

(e) Cargo claims ratio: approximately 1.07%, based on 16 documented cargo claims in November and December 2021 totaling $387,400, against gross revenue for that period. This was more than double the contractual SLO of ≤0.5%. Stonefield admits these figures and avers that this performance constitutes a material breach of the TSA.

Stonefield further avers that VTS chronically failed to provide substitute equipment or surge capacity as required under Section 7.4 of the TSA during this period. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 36, including any attempt to characterize VTS's performance as satisfactory or to attribute VTS's failures to causes other than VTS's own operational decisions.

Paragraphs 37–40. To the extent these paragraphs set forth factual allegations regarding VTS's performance during Q4 2021 and the period leading up to the Cure Notice, Stonefield responds as set forth in its response to Paragraph 36 above. Stonefield admits the performance metrics stated in these paragraphs to the extent they are consistent with the figures set forth in the Cure Notice and in this Answer. Stonefield denies any characterization of VTS's performance as attributable to causes other than VTS's own operational decisions, including the deliberate reassignment of 85 tractors from Stonefield's dedicated lanes. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraphs 37 through 40.

Paragraph 41. Stonefield admits that on January 18, 2022, Raymond Hess, Director of Contract Compliance at Stonefield, sent a written Cure Notice to Sandra Milescu, Chief Operating Officer of Vantor and VTS. Stonefield avers that the Cure Notice specified each of the foregoing material breaches with reasonable particularity, as required by Section 13.2 of the TSA. The Cure Notice identified each SLO, stated VTS's actual performance against each SLO for the relevant period, quantified the magnitude of the deficiency, and specified the contractual provisions breached. Stonefield avers that the Cure Notice was proper, timely, and satisfied all contractual prerequisites to termination for Cause. The Cure Notice speaks for itself. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 41.

Paragraph 42. Stonefield admits that on February 14, 2022, Derek Pruitt, Vice President of Business Development at Vantor, sent a letter to Janet Kirkwood, Vice President of Carrier Relations at Stonefield. Stonefield denies that the February 14, 2022 letter constituted a cure of the identified material breaches. The letter acknowledged "operational challenges" but did not demonstrate actual remediation of any of the SLO failures identified in the Cure Notice. The letter disputed certain cargo claims data but notably did not contest VTS's on-time pickup rate, on-time delivery rate, tender acceptance rate, or equipment availability metrics — each of which, standing alone, constituted a material breach of the TSA. Stonefield denies that VTS's performance deficiencies were caused by a nationwide driver shortage, by Stonefield's alleged failure to tender minimum committed volumes, or by Stonefield's purported instructions to divert volume to spot market carriers. These assertions are factually unsupported and contradicted by VTS's own internal communications regarding the deliberate reassignment of tractors. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 42.

Paragraph 43. Stonefield avers that the 30-day cure period specified in Section 13.1(a) of the TSA expired on February 17, 2022 — 30 calendar days after delivery of the Cure Notice on January 18, 2022 — without VTS having cured any of the identified material breaches. VTS's performance metrics remained materially below the SLOs through the expiration of the cure period and beyond.

Paragraph 44. Stonefield admits that on March 4, 2022, Tobias Wren, General Counsel of Stonefield, sent a formal termination letter to Vantor Holdings Corp. and Vantor Transport Services LLC, terminating the TSA effective immediately pursuant to Section 13.1(a) for Cause. Stonefield admits that the termination letter reserved all of Stonefield's rights and remedies under the TSA and applicable law. Stonefield denies that the termination was wrongful, pretextual, or constituted a breach of the TSA or any other legal obligation. The termination letter speaks for itself. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 44.

Paragraph 45. Stonefield admits that approximately 2 years and 27 days remained on the initial term of the TSA at the time of termination (from March 4, 2022 through the scheduled expiration date of March 31, 2024). Stonefield denies that the duration of the remaining term has any relevance to the validity of the termination for Cause.

Paragraphs 46–55. To the extent these paragraphs contain additional factual allegations, characterizations, or legal conclusions regarding VTS's performance, the Cure Notice, VTS's response, the cure period, or the termination, Stonefield responds as set forth in its responses to Paragraphs 36 through 45 above. Stonefield denies all allegations in these paragraphs that are inconsistent with the facts and positions set forth in this Answer. Stonefield specifically denies any allegation that the termination was wrongful, pretextual, or motivated by improper considerations. Stonefield denies any allegation that VTS's performance failures were caused by Stonefield's conduct or that Stonefield failed to comply with any contractual prerequisite to termination.

E. Responses to Paragraphs Relating to Vantor's Breach-by-Stonefield Allegations (Paragraphs 56–75)

Paragraph 56. Stonefield denies that it failed to tender the ACV in any contract year. Specifically:

With respect to Contract Year 2 (April 2020 through March 2021): Stonefield properly and timely invoked the force majeure provision under Section 12.1 of the TSA for the period April 2020 through September 2020, due to the unprecedented impact of the COVID-19 pandemic on freight demand across the transportation industry. Under the force majeure provision, Stonefield's volume commitment obligations were suspended during this six-month period. The adjusted ACV for Contract Year 2, reflecting the six-month force majeure suspension, was $21.6 million (calculated as $43.2 million × 6/12). Stonefield's actual tenders during Contract Year 2 totaled $31.8 million, exceeding the adjusted minimum by $10.2 million. No volume shortfall occurred.

With respect to Contract Year 3 (April 2021 through the termination date): Stonefield's actual tenders during the period April 2021 through January 2022 (10 of 12 months of Contract Year 3) totaled $36.5 million. Stonefield denies that this figure constitutes a breach. Vantor's claim of a $6.7 million shortfall improperly attributes a full-year ACV obligation of $43.2 million to a period that was cut short by the termination — a termination that VTS's own material breaches necessitated. Stonefield cannot be held liable for a purported volume shortfall during a period in which the TSA was no longer in effect as a consequence of VTS's own breaches.

Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 56.

Paragraphs 57–60. To the extent these paragraphs contain additional allegations regarding volume shortfalls or Stonefield's alleged failure to meet the ACV, Stonefield responds as set forth in its response to Paragraph 56 above. Stonefield denies all such allegations.

Paragraph 61. Stonefield denies that it violated the exclusivity provisions of Schedule C to the TSA. Stonefield avers that all use of Cascade Freight Systems Inc. (4700 Lakehurst Court, Columbus, Ohio 43016) and Briarwood Trucking Co. (1280 Jefferson Davis Highway, Suite 310, Arlington, Virginia 22202) was limited to Lanes 8 through 14. Lanes 8 through 14 are classified as "Secondary Lanes" under Schedule C, Section 2(b), and are expressly excluded from the exclusivity restrictions that apply to the "Primary Lanes" (Lanes 1 through 7). Stonefield's use of alternative carriers on the Secondary Lanes was fully consistent with and permitted under the terms of the TSA. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 61.

Paragraphs 62–65. To the extent these paragraphs contain additional allegations regarding purported exclusivity violations, Stonefield responds as set forth in its response to Paragraph 61 above. Stonefield denies all such allegations.

Paragraph 66. Stonefield denies that the termination was pretextual. Stonefield denies that the termination was motivated by a desire to avoid the April 2022 rate adjustment under the TSA's Rate Adjustment Mechanism (projected at approximately 14.3%, representing an estimated increase from a weighted average of $2.87 per mile to $3.28 per mile, adding approximately $6.2 million in annual transportation costs). Stonefield avers that objective Cause for termination existed independently of any cost considerations, as demonstrated by VTS's sustained failures across all five SLOs in Q4 2021. Under well-established New York law, a party's subjective motivations are irrelevant where objective contractual grounds for the exercise of a contractual right have been demonstrated. See, e.g., Moran v. Erk, 11 N.Y.3d 452, 457 (2008) (where the terms of an agreement authorize a particular action, the court need not inquire into the party's motivations). Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 66.

Paragraphs 67–70. To the extent these paragraphs contain additional allegations regarding Stonefield's purported pretextual motive, Stonefield denies all such allegations and responds as set forth in its response to Paragraph 66 above.

Paragraph 71. Stonefield denies that VTS's performance failures were caused by Stonefield's alleged volume shortfalls, alleged exclusivity violations, or any other conduct of Stonefield. Stonefield avers that VTS's performance failures were caused by VTS's own deliberate decision to unilaterally reassign 85 tractors from Stonefield's dedicated lanes to service another shipper's account — specifically, that of Northwind Distribution Co. — in or about October 2021, without providing notice to Stonefield and in direct violation of VTS's fleet commitment obligations under the TSA. This deliberate reallocation of fleet resources is confirmed by VTS COO Sandra Milescu's November 12, 2021 internal email to CEO Nikolai Vantorovich, in which Ms. Milescu wrote: "We've pulled 85 tractors off the SLG dedicated lanes to cover [other] commitments. SLG won't notice until January." Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 71.

Paragraphs 72–75. To the extent these paragraphs contain additional allegations regarding causation, Stonefield responds as set forth in its response to Paragraph 71 above. Stonefield denies all allegations that attribute VTS's performance failures to Stonefield's conduct or to external market conditions. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraphs 72 through 75.

F. Responses to Paragraphs Relating to Damages (Paragraphs 76–90)

Paragraph 76. Stonefield denies that Vantor is entitled to liquidated damages in the amount of $67,230,000 or in any amount. The termination was for Cause pursuant to Section 13.1(a) of the TSA. Section 14.2 provides for liquidated damages only in the event of termination "other than for Cause." Because the termination was for Cause, Section 14.2 is inapplicable by its own terms.

In the alternative, Stonefield denies the enforceability of Section 14.2 and affirmatively asserts that it constitutes an unenforceable penalty under New York law. The formula in Section 14.2 — 75% of the ACV ($43.2 million) multiplied by the number of remaining full and partial contract years — produces a liquidated damages amount of $67,230,000 (consisting of $64,800,000 for two full remaining contract years and approximately $2,430,000 for the remaining 27-day partial year). This amount is grossly disproportionate to any actual harm Vantor could have suffered, and actual damages were readily ascertainable at the time of contracting given the defined rate structure, known volume commitments, and calculable margins. The provision fails the two-part test for enforceability of liquidated damages clauses under New York law. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 76.

Paragraph 77. Stonefield denies that Vantor is entitled to lost profits in the amount of $18,700,000 or in any amount. This claim is duplicative of the liquidated damages claim, as both seek to compensate Vantor for the same underlying harm — the value of the lost contract. Under New York's well-established prohibition on double recovery, Vantor cannot recover both liquidated damages and lost profits for the same breach. Additionally, Vantor's claimed 12% operating margin is inflated, speculative, and unsupported by the actual financial performance of VTS. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 77.

Paragraph 78. Stonefield denies that Vantor is entitled to recover $5,200,000 for alleged stranded assets. This claim — which purports to recover depreciation losses on tractors and trailers and lease termination costs — constitutes consequential, special, or indirect damages that are barred by the mutual waiver of consequential damages set forth in Section 15.1 of the TSA. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 78.

Paragraph 79. Stonefield denies that Vantor is entitled to recover $2,870,000 for alleged workforce reduction costs. This claim — which purports to recover severance payments and unemployment-related costs for approximately 180 drivers and support staff — constitutes consequential, special, or indirect damages that are barred by the mutual waiver of consequential damages set forth in Section 15.1 of the TSA. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 79.

Paragraph 80. Stonefield denies that Vantor is entitled to recover $1,400,000 in alleged mitigation costs. This claim — which purports to recover costs incurred in seeking replacement freight — constitutes consequential, special, or indirect damages barred by Section 15.1 of the TSA. Moreover, the relatively modest amount of $1.4 million that Vantor claims to have expended on mitigation efforts is itself evidence of Vantor's failure to meaningfully mitigate its damages, as more fully set forth in Stonefield's Third Affirmative Defense below. In a freight market in which spot rates were elevated approximately 35% above historical averages during Q1–Q2 2022, Vantor's minimal mitigation expenditures suggest that Vantor elected to sit on its hands rather than take the reasonable steps available to it to reduce or avoid the harm it now claims. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 80.

Paragraph 81. Stonefield denies that Vantor is entitled to total damages of $95,400,000 or any amount. Stonefield's rebuttal expert, Dr. Evelyn Rosser of Kensington Analytics Group LLC, has opined that Vantor's damages are $0 if the termination is found to be valid, or, in the alternative, a maximum of $8.2 million under an alternative lost-profits analysis assuming arguendo that the termination was wrongful, after adjusting for VTS's own material breaches, Vantor's failure to mitigate, and a proper market-based calculation of lost profits using VTS's actual (rather than inflated) operating margins. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 81.

Paragraphs 82–90. Stonefield denies that Vantor is entitled to attorneys' fees, prejudgment interest, postjudgment interest, or any other relief sought in the Amended Complaint. The TSA does not provide for the recovery of attorneys' fees, and no basis exists under applicable law for such an award. To the extent these paragraphs contain additional damages allegations, Stonefield responds as set forth in its responses to Paragraphs 76 through 81 above. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraphs 82 through 90.

G. Responses to Remaining Paragraphs

To the extent the Amended Complaint contains any additional paragraphs, allegations, or claims not specifically addressed in the foregoing responses, Stonefield denies each and every such allegation. Stonefield specifically denies any allegation that it acted in bad faith, with improper motive, or in breach of any contractual, statutory, or common law obligation. Stonefield denies that Vantor is entitled to any relief of any kind.

PART II: AFFIRMATIVE DEFENSES

Without assuming the burden of proof on any issue for which such burden properly rests with Plaintiff, and without waiving any defenses that may become available as a result of further investigation or discovery, Defendant Stonefield Logistics Group Inc. asserts the following affirmative defenses to the Amended Complaint:

FIRST AFFIRMATIVE DEFENSE: Valid Termination for Cause (Section 13.1(a))

Vantor's claims are barred, in whole or in part, because Stonefield validly terminated the TSA for Cause pursuant to Section 13.1(a) of the TSA. VTS committed sustained and material breaches of the SLOs during the fourth quarter of 2021, each of which independently constituted a material breach of the TSA and which, taken together, represented a pervasive and systemic failure to perform VTS's core obligations under the agreement.

Specifically, VTS's Q4 2021 performance fell below each of the five SLOs: on-time pickup at 78.2% (versus the 95% SLO); on-time delivery at 81.6% (versus the 93% SLO); tender acceptance at 71.4% (versus the 90% SLO); equipment availability at 62% of committed fleet capacity (versus the 85% SLO); and a cargo claims ratio of approximately 1.07% (versus the ≤0.5% SLO). These were not marginal deviations but severe and sustained failures, in many cases exceeding 15 to 25 percentage points below the contractually required minimums.

On January 18, 2022, Stonefield delivered a Cure Notice to VTS specifying each of the foregoing material breaches with reasonable particularity, in full compliance with the requirements of Section 13.2 of the TSA. VTS's February 14, 2022 response acknowledged "operational challenges" but did not demonstrate actual remediation of any of the identified breaches. The 30-day cure period expired on February 17, 2022 without cure. Stonefield's termination of the TSA on March 4, 2022 was lawful, procedurally proper, and substantively justified. Because the termination was for Cause, Vantor's claims for damages — including liquidated damages under Section 14.2, which applies only to termination "other than for Cause" — are without merit.

SECOND AFFIRMATIVE DEFENSE: Unenforceable Penalty (Liquidated Damages)

Vantor's claim for liquidated damages under Section 14.2 of the TSA is barred, in whole or in part, because the liquidated damages clause is unenforceable as a penalty under New York law.

The formula set forth in Section 14.2 — 75% of the ACV ($43.2 million) multiplied by the number of remaining full and partial contract years — produces a liquidated damages figure of $67,230,000 in this case. This amount is grossly disproportionate to any actual or reasonably anticipated harm that Vantor could suffer as a result of early termination of the TSA.

Under New York law, a liquidated damages provision is enforceable only if (1) the amount of liquidated damages is a reasonable estimate of the probable damages upon breach, and (2) actual damages were difficult to determine at the time of contracting. See Northpoint Holdings v. Purdy Corp., 41 N.Y.2d 354, 357 (1977); JMD Holding Corp. v. Cong. Fin. Corp., 4 N.Y.3d 373, 380 (2005). The liquidated damages formula in Section 14.2 fails both prongs of this test. First, the formula bears no reasonable relationship to the anticipated or actual harm from early termination; it effectively awards Vantor 75% of the gross contract value for the remaining term, without any adjustment for VTS's actual operating margins, saved costs, or mitigation opportunities. Second, actual damages were readily ascertainable at the time of contracting given the defined rate structure, known volume commitments, and calculable margins that characterized the TSA.

Regardless of the provision's recital that the parties "acknowledge and agree" the liquidated damages amount is a "reasonable estimate" of probable loss, New York courts consistently look beyond such boilerplate language to the substance of the provision and its operation in the specific circumstances of the case. The liquidated damages clause in Section 14.2 is an unenforceable penalty and cannot form the basis for Vantor's recovery.

THIRD AFFIRMATIVE DEFENSE: Failure to Mitigate Damages

Vantor's claims are barred or should be reduced, in whole or in part, because Vantor failed to take reasonable steps to mitigate its damages following the termination of the TSA on March 4, 2022.

Under New York law, a party claiming damages for breach of contract has a duty to take reasonable steps to minimize its losses. See Wilmot v. State, 32 N.Y.2d 164, 168-69 (1973). The freight market in the first and second quarters of 2022 was exceptionally robust, with spot rates elevated approximately 35% above historical averages. Vantor had approximately 248 tractors and associated trailer capacity available for redeployment following the termination. Despite these favorable market conditions, Vantor made no meaningful effort to secure replacement freight volume or to redeploy its available assets to alternative revenue-generating opportunities.

The inadequacy of Vantor's mitigation efforts is underscored by Vantor's own disclosure that it incurred only $1.4 million in mitigation-related costs. In a market characterized by significant excess demand for carrier capacity, this negligible level of mitigation expenditure demonstrates that Vantor failed to exercise reasonable diligence in seeking replacement business. Vantor's damages, to the extent any are found to exist, must be reduced by the amount that could have been avoided through the exercise of reasonable mitigation efforts.

FOURTH AFFIRMATIVE DEFENSE: Force Majeure (Section 12.1)

To the extent Vantor alleges that Stonefield failed to tender the ACV in Contract Year 2 (April 2020 through March 2021), Vantor's claim is barred, in whole or in part, because Stonefield properly and timely invoked the force majeure provision in Section 12.1 of the TSA.

The COVID-19 pandemic constituted a force majeure event within the meaning of Section 12.1, as it caused an unprecedented disruption to freight demand across the national and regional transportation markets during the period April 2020 through September 2020. Stonefield's invocation of the force majeure provision was timely and in compliance with the notice requirements of Section 12.1. During the force majeure period, Stonefield's volume commitment obligations under the TSA were suspended.

After adjustment for the six-month force majeure period, the ACV for Contract Year 2 was $21.6 million (calculated as $43.2 million × 6/12 active months). Stonefield's actual tenders during Contract Year 2 totaled $31.8 million, exceeding the adjusted minimum by $10.2 million, or approximately 47%. No volume shortfall occurred in Contract Year 2, and Vantor's allegations to the contrary are without factual or legal basis.

FIFTH AFFIRMATIVE DEFENSE: Unclean Hands

Vantor's claims are barred, in whole or in part, under the equitable doctrine of unclean hands. Vantor and its wholly owned subsidiary VTS come before this Court having engaged in the very conduct that gave rise to the dispute.

In or about October 2021, VTS deliberately and covertly reassigned approximately 85 tractors from Stonefield's dedicated lanes to service another shipper, Northwind Distribution Co., without providing any notice to Stonefield and in direct breach of VTS's fleet commitment obligations under the TSA. This deliberate diversion of resources was undertaken with full knowledge that it would degrade VTS's performance on Stonefield's account.

The intentional and concealed nature of VTS's conduct is confirmed by VTS COO Sandra Milescu's November 12, 2021 internal email to CEO Nikolai Vantorovich, in which Ms. Milescu stated: "We've pulled 85 tractors off the SLG dedicated lanes to cover [other] commitments. SLG won't notice until January." This communication demonstrates that VTS not only deliberately reduced its capacity on Stonefield's account, but also took steps to conceal that reduction from Stonefield for as long as possible, thereby depriving Stonefield of the opportunity to take timely corrective action.

Having deliberately created the conditions that led to its own performance failures — the very failures that constituted Cause for termination — Vantor cannot now be heard to complain that Stonefield exercised its contractual right to terminate. Vantor's inequitable conduct bars or limits its right to recovery.

SIXTH AFFIRMATIVE DEFENSE: Contributory Breach / Prior Material Breach (First-to-Breach Doctrine)

Vantor's claims are barred, in whole or in part, under the first-to-breach doctrine recognized by New York courts. Under this doctrine, when one party commits the first material breach of a contract, the other party is excused from further performance, and the breaching party cannot recover damages for the other party's subsequent nonperformance. See Ashgrove & Co. v. Camberwell Industries, 500 F.3d 171, 186 (2d Cir. 2007).

VTS committed the first material breach of the TSA by unilaterally reducing the fleet capacity dedicated to Stonefield's account in October 2021 — months before any alleged volume shortfall by Stonefield and months before the termination. VTS's deliberate reassignment of approximately 85 tractors from Stonefield's dedicated lanes to another shipper's account, in violation of VTS's fleet commitment obligations under the TSA, constituted a material breach that preceded and caused the service-level failures identified in the Cure Notice. VTS's prior material breach excused Stonefield's subsequent performance obligations under the TSA and bars Vantor's claims for damages arising from the termination.

SEVENTH AFFIRMATIVE DEFENSE: Waiver

Vantor's claims regarding alleged volume shortfalls and alleged exclusivity violations are barred, in whole or in part, because Vantor waived any right to assert such claims through its conduct.

Throughout the term of the TSA — including the periods during which the alleged volume shortfalls and alleged exclusivity violations are said to have occurred — Vantor and VTS continued to perform under the TSA without objection. Vantor and VTS did not deliver any written notice of breach to Stonefield regarding volume, exclusivity, or any other performance obligation at any point prior to the commencement of this litigation. Vantor's failure to raise these issues at the time of their alleged occurrence, and its continued performance notwithstanding its claimed awareness of such issues, constitutes a waiver of any right to assert these allegations as grounds for its claims in this action.

EIGHTH AFFIRMATIVE DEFENSE: Estoppel

Vantor is estopped from asserting that Stonefield's termination was wrongful. VTS's own conduct — specifically, its acknowledgment of "operational challenges" in its February 14, 2022 response to the Cure Notice, its failure to dispute the Q4 2021 performance metrics for on-time pickup, on-time delivery, tender acceptance, and equipment availability, and its failure to demonstrate actual remediation — induced Stonefield's reasonable reliance on the conclusion that VTS had failed to cure the identified material breaches within the 30-day cure period.

Stonefield relied on VTS's conduct and communications in determining that Cause existed to terminate the TSA. Vantor cannot now disclaim the very conduct and admissions that led to Stonefield's termination decision. Permitting Vantor to do so would be inequitable and would prejudice Stonefield, which acted in good faith and in reliance on VTS's own representations and conduct.

NINTH AFFIRMATIVE DEFENSE: Setoff / Recoupment

To the extent Vantor is found to be entitled to any damages arising from the termination of the TSA, Stonefield is entitled to a setoff or recoupment for the damages that Stonefield itself suffered as a direct and proximate result of VTS's material breaches of the TSA. Such damages include, but are not limited to:

(a) costs incurred by Stonefield to procure alternative carrier services on VTS's dedicated lanes during Q4 2021 and Q1 2022, at rates exceeding those provided under the TSA;

(b) payments made by Stonefield to its customers to resolve cargo claims attributable to VTS's service failures;

(c) operational disruption costs, including the costs of redirecting freight, rebidding lanes, and managing the transition to replacement carriers; and

(d) reputational harm suffered by Stonefield with its customers as a result of VTS's chronic service failures on Stonefield's account.

Stonefield reserves its right to quantify these damages more precisely as discovery proceeds.

TENTH AFFIRMATIVE DEFENSE: Consequential Damages Waiver (Section 15.1)

Vantor's claims for stranded assets ($5,200,000), workforce reduction costs ($2,870,000), and mitigation costs ($1,400,000) — totaling $9,470,000 — are barred by the mutual waiver of consequential damages set forth in Section 15.1 of the TSA.

Section 15.1 provides that neither party shall be liable to the other for any indirect, special, incidental, or consequential damages arising out of or relating to the TSA, regardless of whether such damages are based on contract, tort, strict liability, or any other theory. Vantor's claimed stranded assets (depreciation losses and lease termination costs), workforce reduction costs (severance and unemployment-related expenses for approximately 180 drivers and support staff), and mitigation costs (expenses incurred seeking replacement freight) are each consequential, special, or indirect in nature, as they represent downstream economic effects of the alleged breach rather than direct damages flowing naturally from the breach itself. These categories of damages are barred by Section 15.1 and must be excluded from any recovery.

ELEVENTH AFFIRMATIVE DEFENSE: Duplicative Recovery / No Double Recovery

Vantor cannot recover both liquidated damages ($67,230,000) and lost profits ($18,700,000), as these two categories of damages seek to compensate Vantor for the same underlying harm — namely, the value of the lost contract over the remaining term.

Under New York law, a plaintiff may not obtain a double recovery for the same injury. See Lama Holding Co. v. Smith Barney Inc., 88 N.Y.2d 413, 421 (1996). Liquidated damages and lost profits are alternative measures of the same loss. To the extent Vantor pursues both claims, it must elect between them; it cannot recover both. The award of both liquidated damages and lost profits would constitute an impermissible windfall.

TWELFTH AFFIRMATIVE DEFENSE: Failure to State a Claim / Insufficiency of Pleading

Certain claims asserted in the Amended Complaint fail to state a claim upon which relief can be granted. In particular, Vantor's lost profits claim is speculative and fails to plead damages with the requisite certainty required under New York law for the recovery of lost profits. Under New York law, lost profits must be established with a reasonable degree of certainty and may not be based on speculation, conjecture, or surmise. See Kenford Co. v. County of Erie, 67 N.Y.2d 257, 261 (1986). Vantor's claimed 12% operating margin is insufficiently supported and does not meet the heightened pleading and proof requirements for lost profits.

THIRTEENTH AFFIRMATIVE DEFENSE: Standing / Real Party in Interest

Vantor Holdings Corp. was not a signatory to the TSA. The TSA was executed between Stonefield Logistics Group Inc. and Vantor Transport Services LLC. To the extent that Vantor Holdings Corp. lacks standing to assert claims under the TSA, or is not the real party in interest under Federal Rule of Civil Procedure 17(a), its claims must be dismissed.

Stonefield reserves all rights to challenge Vantor Holdings Corp.'s standing to bring this action, including through appropriate motion practice, as discovery proceeds and additional facts are developed.

> [Note to SAE: Please review ¶¶ re standing defense — preserving argument per Laroche's December 8 memo re Vantor's Standing — Parent vs. Subsidiary but not leading with it per recommendation given likelihood Vantor could amend to add VTS if challenged.]

FOURTEENTH AFFIRMATIVE DEFENSE: Reservation of Rights

Stonefield reserves the right to assert additional affirmative defenses, and to amend or supplement this Answer and these Affirmative Defenses, as discovery proceeds and additional facts, circumstances, or legal bases are developed. Stonefield's assertion of the foregoing affirmative defenses does not constitute an admission that it bears the burden of proof on any issue for which such burden properly rests with Plaintiff.

> [Note to SAE: 14 affirmative defenses listed; please confirm we want to include all or prune. Reservation of rights (14th) is standard.]

PART III: COUNTERCLAIM FOR DECLARATORY JUDGMENT

Defendant and Counterclaim Plaintiff Stonefield Logistics Group Inc. ("Stonefield"), by and through its attorneys Calderwood & Harkness LLP, asserts the following Counterclaim for Declaratory Judgment against Plaintiff and Counterclaim Defendant Vantor Holdings Corp. ("Vantor").

> [Note to SAE: Counterclaim for DJ — per January 6 memo, this frames narrative and positions for SJ but need to confirm client sign-off from Tobias Wren before filing.]

Nature of Counterclaim

1. Stonefield asserts this Counterclaim against Vantor Holdings Corp. for declaratory judgment pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201. This Counterclaim seeks declarations from the Court resolving the central contractual disputes between the parties and confirming the validity and propriety of Stonefield's termination of the TSA.

Jurisdiction and Venue

2. This Court has subject-matter jurisdiction over this Counterclaim pursuant to 28 U.S.C. § 2201 (Declaratory Judgment Act) and 28 U.S.C. § 13

CONFIDENTIAL — ATTORNEY WORK PRODUCT / PRIVILEGED
Calderwood & Harkness LLP — C&H Matter No. 1012-00005
Prepared by: Patrick Gallagher and Simone Laroche For review by: Samuel Eklund, Responsible Partner
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
DEFENDANT STONEFIELD LOGISTICS GROUP INC.'S ANSWER TO PLAINTIFF'S AMENDED COMPLAINT, AFFIRMATIVE DEFENSES, AND COUNTERCLAIM FOR DECLARATORY JUDGMENT
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PRELIMINARY STATEMENT
Defendant Stonefield Logistics Group Inc. ("Stonefield" or "SLG"), a Delaware corporation headquartered at 4200 Commerce Parkway, Suite 800, Fort Worth, Texas 76102, by and through its attorneys Calderwood & Harkness LLP, hereby respectfully submits this Answer to the Amended Complaint filed by Plaintiff Vantor Holdings Corp. ("Vantor") on December 2, 2022 (Dkt. No. 28) (the "Amended Complaint"), together with its Affirmative Defenses and Counterclaim for Declaratory Judgment.
Stonefield denies all material allegations of wrongdoing asserted in the Amended Complaint. Stonefield denies that Vantor is entitled to any relief whatsoever — whether in damages, equitable relief, or otherwise — and respectfully submits that each of Vantor's claims fails as a matter of law and fact.
The undisputed record in this matter tells a straightforward story. Stonefield lawfully terminated the Transportation Services Agreement dated March 15, 2019 (the "TSA," Contract Ref. No. SLG-VTS-2019-0315) for Cause pursuant to Section 13.1(a) of the TSA after Vantor's wholly owned operating subsidiary, Vantor Transport Services LLC ("VTS"), committed sustained, severe, and uncured material breaches across all five Service Level Obligations ("SLOs") during the fourth quarter of 2021 and into the first quarter of 2022. VTS's performance failures were not the product of external market forces or any shortcoming on Stonefield's part. They were the direct and foreseeable result of VTS's own deliberate decision to reassign resources away from Stonefield's dedicated lanes in order to service a different shipper's account.
Specifically, in or about October 2021, VTS deliberately reassigned approximately 85 tractors from Stonefield's dedicated lanes to service another shipper, Northwind Distribution Co., without providing any notice to Stonefield. This unilateral and covert reallocation of fleet capacity resulted in catastrophic service failures across every measurable dimension of VTS's contractual obligations. During the fourth quarter of 2021, VTS's performance metrics fell dramatically below each of the five SLOs set forth in the TSA:
• On-Time Pickup Rate: 78.2% — versus the contractual SLO of ≥95%;
• On-Time Delivery Rate: 81.6% — versus the contractual SLO of ≥93%;
• Tender Acceptance Rate: 71.4% — versus the contractual SLO of ≥90%;
• Equipment Availability: 62% of committed fleet capacity (approximately 248 tractors available versus the 400 tractors required) — versus the contractual SLO of ≥85%;
• Cargo Claims Ratio: 1.07% (16 documented claims in November–December 2021, totaling $387,400) — versus the contractual SLO of ≤0.5%.
These were not marginal deviations from contractual benchmarks. They represented sustained, systematic, and severe underperformance — in many cases, failures of 15 to 25 percentage points below the contractually required minimums — across every service dimension that the parties had agreed would define satisfactory performance.
Stonefield acted prudently and in strict compliance with the TSA's termination procedures. On January 18, 2022, Raymond Hess, Director of Contract Compliance at Stonefield, delivered a detailed written Cure Notice to Sandra Milescu, Chief Operating Officer of Vantor and VTS, specifying each of the foregoing breaches with reasonable particularity as required by Section 13.2 of the TSA. The Cure Notice set forth the contractual standard for each SLO, identified VTS's actual performance against that standard, and specified the nature and extent of the deficiency. VTS was afforded the full 30-calendar-day cure period provided for under the TSA.
VTS did not cure. On February 14, 2022, Derek Pruitt, Vice President of Business Development at Vantor, sent a letter to Janet Kirkwood, Vice President of Carrier Relations at Stonefield, that acknowledged "operational challenges" but did not demonstrate — and could not have demonstrated — actual remediation. The letter disputed certain cargo claims data but did not contest the other performance metrics that formed the basis of the Cure Notice. The 30-day cure period expired on February 17, 2022 without VTS having remedied any of the identified material breaches.
Stonefield thereafter exercised its contractual right to terminate. On March 4, 2022, Tobias Wren, General Counsel of Stonefield, issued a formal termination letter to Vantor Holdings Corp. and Vantor Transport Services LLC, terminating the TSA effective immediately pursuant to Section 13.1(a). The termination was lawful, procedurally proper, and substantively justified.
Vantor's Amended Complaint is a meritless attempt to recover $95.4 million in alleged damages arising from VTS's own operational failures and deliberate breach of its fleet commitment obligations. Vantor's central narrative — that Stonefield's termination was "pretextual" and motivated by a desire to avoid the April 2022 rate adjustment under the TSA (projected at approximately 14.3%, representing an estimated $6.2 million in additional annual transportation costs) — is contradicted by the objective and undisputed record of VTS's service breakdowns. Even if Stonefield was aware of the forthcoming rate adjustment, New York law is clear that an inquiry into subjective motive is neither appropriate nor permissible where objective contractual grounds for termination exist and have been properly invoked.
In addition to the defenses set forth in this Answer, Stonefield asserts fourteen affirmative defenses, including that the TSA's liquidated damages clause (Section 14.2) is an unenforceable penalty under New York law, that Vantor failed to mitigate its damages, that VTS committed the first material breach of the TSA, and that Vantor comes before this Court with unclean hands. Stonefield also asserts a Counterclaim for Declaratory Judgment seeking declarations from this Court that (i) Stonefield's termination of the TSA was valid and for Cause, (ii) no liquidated damages are owed, and (iii) VTS committed the first material breach of the TSA.
PART I: ANSWER TO AMENDED COMPLAINT
Defendant Stonefield Logistics Group Inc. responds to each separately numbered paragraph of the Amended Complaint as follows. To the extent any paragraph of the Amended Complaint is not specifically addressed herein, it is deemed denied. Stonefield generally denies each and every allegation of the Amended Complaint that is not expressly admitted herein. Headings, titles, captions, characterizations, and legal conclusions contained in the Amended Complaint are not "allegations" requiring a response; to the extent they are deemed to require a response, they are denied except as specifically stated below.
A. Responses to Paragraphs Relating to the Parties (Paragraphs 1–10)
Paragraph 1. Stonefield admits that Vantor Holdings Corp. is a corporation organized under the laws of the State of New York with its principal place of business at 580 Eighth Avenue, 14th Floor, New York, New York 10018. Stonefield notes, however, that VTS — not Vantor Holdings Corp. — was the signatory counterparty to the TSA. Stonefield reserves all rights to challenge Vantor Holdings Corp.'s standing to bring claims under the TSA as a non-signatory parent entity, including under Federal Rule of Civil Procedure 17(a). Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 1.
Paragraph 2. Stonefield admits that Vantor Transport Services LLC is a limited liability company organized under the laws of the State of New York and is a wholly owned operating subsidiary of Vantor Holdings Corp. Stonefield admits that VTS was identified as the "Carrier-Provider" under the TSA. Stonefield admits that VTS operates an asset-based and asset-light trucking, warehousing, and regional distribution business, and that VTS's fleet includes approximately 650 owned tractors and 2,100 trailers. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 2.
Paragraph 3. Stonefield admits that Stonefield Logistics Group Inc. is a corporation organized under the laws of the State of Delaware with its principal place of business at 4200 Commerce Parkway, Suite 800, Fort Worth, Texas 76102. Stonefield admits that it is a mid-market freight brokerage, managed transportation, and supply chain solutions company operating across the continental United States and cross-border into Mexico and Canada, managing a carrier network of approximately 12,000 approved carriers and handling roughly 850,000 shipments annually. Stonefield admits that it was identified as the "Shipper-Broker" under the TSA. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 3.
Paragraph 4. Stonefield admits that Nikolai Vantorovich is the Chief Executive Officer and Founder of Vantor Holdings Corp. and that Mr. Vantorovich holds approximately 58% of the ownership interest in Vantor. Stonefield denies any other characterizations in Paragraph 4 to the extent they imply authority, responsibility, or involvement beyond what is expressly stated. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 4.
Paragraph 5. Stonefield admits that Marcus Denton is the Chief Executive Officer of Stonefield Logistics Group Inc. Stonefield admits that Mr. Denton participated in certain communications referenced in the Amended Complaint. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 5, including any characterizations regarding Mr. Denton's purported motives, intentions, or state of mind.
Paragraph 6. Stonefield admits the existence of the corporate entities described in Paragraph 6 to the extent that their existence can be confirmed by reference to publicly available records. Stonefield lacks sufficient knowledge or information to form a belief as to the truth of the remaining allegations in Paragraph 6 regarding Vantor's organizational structure and intercompany relationships beyond the VTS subsidiary relationship already admitted, and therefore denies them.
Paragraph 7. Stonefield admits that Tobias Wren serves as General Counsel of Stonefield Logistics Group Inc. and that Mr. Wren authored certain correspondence referenced in the Amended Complaint. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 7.
Paragraph 8. Stonefield admits that Janet Kirkwood serves as Vice President of Carrier Relations at Stonefield Logistics Group Inc. Stonefield admits that Ms. Kirkwood was involved in communications with VTS regarding operational performance under the TSA. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 8, including any characterizations of Ms. Kirkwood's statements, motives, or conduct that are inconsistent with the facts as set forth in this Answer.
> [Note to SAE: Kirkwood September 22, 2021 email ("pull the plug") — not affirmatively referenced in our filing but opposing counsel will use it. We address this in pretext defense rather than volunteering it.]
Paragraph 9. Stonefield admits that Raymond Hess serves as Director of Contract Compliance at Stonefield Logistics Group Inc. Stonefield admits that Mr. Hess prepared and transmitted the Cure Notice dated January 18, 2022. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 9.
Paragraph 10. To the extent Paragraph 10 contains factual allegations regarding the background and history of the parties' business relationship, Stonefield admits only those facts that are consistent with the written terms of the TSA and the facts as set forth in this Answer. Stonefield denies all characterizations, legal conclusions, and allegations regarding Stonefield's purported motives, intentions, or bad faith. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 10.
B. Responses to Paragraphs Relating to Jurisdiction and Venue (Paragraphs 11–15)
Paragraph 11. Stonefield admits that this Court has subject-matter jurisdiction over this action pursuant to 28 U.S.C. § 1332, as there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000, exclusive of interest and costs.
Paragraph 12. Stonefield admits that Vantor Holdings Corp. is a citizen of New York for purposes of diversity jurisdiction and that Stonefield Logistics Group Inc. is a citizen of Delaware and Texas for purposes of diversity jurisdiction.
Paragraph 13. Stonefield admits that venue is proper in the Southern District of New York. Section 16 of the TSA contains a forum selection clause pursuant to which the parties agreed to submit to the exclusive jurisdiction of 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, for the resolution of disputes arising under or relating to the TSA.
Paragraph 14. Stonefield admits that the TSA is governed by the laws of the State of New York, without regard to principles of conflicts of law, pursuant to the governing law provision set forth in Section 16 of the TSA.
Paragraph 15. To the extent Paragraph 15 contains additional jurisdictional or venue allegations, Stonefield admits only those facts consistent with the foregoing admissions. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 15.
C. Responses to Paragraphs Relating to the TSA (Paragraphs 16–35)
Paragraph 16. Stonefield admits that the TSA was executed on March 15, 2019 between Stonefield Logistics Group Inc., as "Shipper-Broker," and Vantor Transport Services LLC, as "Carrier-Provider." Stonefield admits that the TSA was drafted by Ashford Meridian LLP on behalf of Stonefield. The TSA speaks for itself, and Stonefield respectfully refers the Court to the full text of the TSA for a complete and accurate statement of its terms. Except as specifically admitted herein, Stonefield denies any characterizations or paraphrasing of the TSA's terms that are inconsistent with the actual language of the agreement.
Paragraph 17. Stonefield admits that the TSA provided for an initial term of five years, commencing on April 1, 2019 and expiring on March 31, 2024. Stonefield admits that the TSA included one automatic two-year renewal period, subject to either party providing 180 days' written notice of non-renewal prior to the expiration of the initial term. The TSA speaks for itself with respect to its renewal provisions. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 17.
Paragraph 18. Stonefield admits that under the TSA, VTS was to provide dedicated and on-demand truckload transportation services across specified lanes in the Northeast, Mid-Atlantic, and Southeast corridors, as more particularly described in the TSA and its Schedules. Stonefield admits that VTS committed to maintaining minimum fleet capacity of 400 tractors and 1,200 trailers available for Stonefield freight. The TSA and its Schedules speak for themselves. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 18.
Paragraph 19. Stonefield admits that the Annual Committed Volume ("ACV") under the TSA was $43.2 million per contract year, yielding a total five-year minimum commitment of $216 million over the initial term. Stonefield denies that it failed to satisfy the ACV in any contract year, and specifically denies any allegation of a volume shortfall after proper application of the force majeure provisions set forth in Section 12.1 of the TSA. The TSA speaks for itself regarding the ACV and related provisions. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 19.
Paragraph 20. Stonefield admits that rates under the TSA were set on a per-mile basis by lane as specified in Schedule B to the TSA, subject to annual adjustment pursuant to the Rate Adjustment Mechanism set forth in Section 5.3 of the TSA. Stonefield admits that the Rate Adjustment Mechanism was indexed to a blended formula consisting of 70% diesel fuel index and 30% Consumer Price Index for All Urban Consumers ("CPI-U"), with adjustments to take effect on each April 1 during the term. Stonefield denies that the April 2022 projected rate adjustment — estimated at an approximately 14.3% increase, which would have increased the weighted average per-mile rate from approximately $2.87 to approximately $3.28 — motivated Stonefield's termination of the TSA. The termination was for Cause based on VTS's sustained material breaches, and the timing of the termination bore no causal relationship to the forthcoming rate adjustment. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 20.
> [Note to SAE: Rate adjustment motive — we deny it in responses to Amended Complaint paragraphs but should we address more specifically? Per Laroche's March 28, 2023 memo [forthcoming], NY law supports position that objective Cause precludes motive inquiry.]
Paragraph 21. Stonefield admits that the TSA set forth five SLOs, which are as follows:
(a) On-Time Pickup: ≥95%;
(b) On-Time Delivery: ≥93%;
(c) Cargo Claims Ratio: ≤0.5% of gross revenue;
(d) Tender Acceptance: ≥90%; and
(e) Equipment Availability: ≥85% of committed fleet capacity.
Stonefield avers that VTS failed to meet each and every one of these SLOs during the fourth quarter of 2021, as detailed in the Cure Notice and in this Answer. The TSA speaks for itself. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 21.
Paragraph 22. Stonefield admits the existence of Section 14.2 of the TSA, which provides for liquidated damages equal to 75% of the ACV multiplied by the number of remaining full and partial contract years in the event that Stonefield terminates the TSA "other than for Cause." Stonefield denies that liquidated damages are owed because the termination was for Cause under Section 13.1(a). Stonefield further denies the enforceability of Section 14.2 and affirmatively asserts that the liquidated damages provision constitutes an unenforceable penalty under New York law, as more fully set forth in Stonefield's Second Affirmative Defense below. The TSA speaks for itself. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 22.
Paragraph 23. Stonefield admits the provisions of Section 13.1 of the TSA, which sets forth the grounds upon which either party may terminate the TSA for Cause, including:
(a) Subsection 13.1(a): material breach that remains uncured for 30 calendar days after written notice specifying such breach with reasonable particularity;
(b) Subsection 13.1(b): insolvency, bankruptcy, or similar proceedings;
(c) Subsection 13.1(c): failure to maintain required insurance coverage for a period of 15 or more consecutive days; and
(d) Subsection 13.1(d): material violation of applicable law, including regulations promulgated by the Department of Transportation and the Federal Motor Carrier Safety Administration.
The TSA speaks for itself. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 23.
Paragraph 24. Stonefield admits the provisions of Section 13.2 of the TSA, which requires that a terminating party deliver a written Cure Notice "specifying with reasonable particularity" the alleged breach and providing the applicable cure period. Stonefield avers that its January 18, 2022 Cure Notice fully complied with the requirements of Section 13.2. The TSA speaks for itself. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 24.
Paragraph 25. Stonefield admits the existence of the force majeure provision in Section 12.1 of the TSA. Stonefield avers that it properly and timely invoked the force majeure provision for the period April 2020 through September 2020 due to the unprecedented impact of the COVID-19 pandemic on freight demand across the national and regional markets. The TSA speaks for itself. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 25.
Paragraph 26. Stonefield admits the existence of the dispute resolution provision in Section 16 of the TSA, which includes a mandatory 30-day executive negotiation period prior to the commencement of litigation. Stonefield avers that it complied with this requirement. Following Vantor's demand letter dated April 8, 2022, Stonefield rejected the demand on April 29, 2022 and invoked the executive negotiation period. Executive-level meetings were held on May 16, 2022 (in person, attended by Marcus Denton, CEO of Stonefield, and Nikolai Vantorovich, CEO of Vantor) and June 3, 2022 (telephonic). No resolution was reached. The TSA speaks for itself. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 26.
Paragraph 27. Stonefield admits the existence of the mutual waiver of consequential damages set forth in Section 15.1 of the TSA. Stonefield avers that this provision bars Vantor's claims for stranded assets, workforce reduction costs, and mitigation costs, each of which constitutes consequential, special, or indirect damages within the meaning of Section 15.1. The TSA speaks for itself. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 27.
Paragraph 28. Stonefield admits that Schedule C to the TSA designated 14 lane-specific origin-destination pairs and that certain of those lanes were subject to exclusivity provisions under Section 2(b) of the TSA. Specifically, Stonefield admits that Lanes 1 through 7 were classified as "Primary Lanes" and were subject to exclusivity restrictions, while Lanes 8 through 14 were classified as "Secondary Lanes" and were expressly excluded from the exclusivity restrictions. Stonefield denies that it violated the exclusivity provisions of Schedule C. Stonefield avers that any use of Cascade Freight Systems Inc. (4700 Lakehurst Court, Columbus, Ohio 43016) and Briarwood Trucking Co. (1280 Jefferson Davis Highway, Suite 310, Arlington, Virginia 22202) was limited to Lanes 8 through 14, the Secondary Lanes, and was therefore fully consistent with and permitted under the terms of the TSA. The TSA and Schedule C speak for themselves. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 28.
Paragraphs 29–35. To the extent these paragraphs contain allegations regarding additional terms, provisions, or characterizations of the TSA, Stonefield respectfully refers the Court to the full text of the TSA for a complete and accurate statement of its terms. Stonefield admits those factual allegations that are consistent with the actual language of the TSA and with the facts as set forth in this Answer. Stonefield denies all characterizations, legal conclusions, and allegations in these paragraphs that are inconsistent with the foregoing admissions and with the actual terms of the TSA as written.
D. Responses to Paragraphs Relating to VTS Performance and Stonefield's Termination (Paragraphs 36–55)
Paragraph 36. Stonefield admits that VTS's performance during the fourth quarter of 2021 was the subject of the Cure Notice dated January 18, 2022. Stonefield specifically avers that VTS's Q4 2021 performance was materially deficient across all five SLOs, as follows:
(a) On-time pickup rate: 78.2%, which was 16.8 percentage points below the contractual SLO of ≥95%. Stonefield admits this figure and avers that this sustained and severe underperformance constitutes a material breach of the TSA.
(b) On-time delivery rate: 81.6%, which was 11.4 percentage points below the contractual SLO of ≥93%. Stonefield admits this figure and avers that this sustained and severe underperformance constitutes a material breach of the TSA.
(c) Tender acceptance rate: 71.4%, which was 18.6 percentage points below the contractual SLO of ≥90%. Stonefield admits this figure and avers that this sustained and severe underperformance constitutes a material breach of the TSA.
(d) Equipment availability: 62% of committed fleet capacity, representing approximately 248 tractors available versus the 400 tractors required under the TSA. This was 23 percentage points below the contractual SLO of ≥85%. Stonefield admits this figure and avers that this sustained and severe underperformance constitutes a material breach of the TSA.
(e) Cargo claims ratio: approximately 1.07%, based on 16 documented cargo claims in November and December 2021 totaling $387,400, against gross revenue for that period. This was more than double the contractual SLO of ≤0.5%. Stonefield admits these figures and avers that this performance constitutes a material breach of the TSA.
Stonefield further avers that VTS chronically failed to provide substitute equipment or surge capacity as required under Section 7.4 of the TSA during this period. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 36, including any attempt to characterize VTS's performance as satisfactory or to attribute VTS's failures to causes other than VTS's own operational decisions.
Paragraphs 37–40. To the extent these paragraphs set forth factual allegations regarding VTS's performance during Q4 2021 and the period leading up to the Cure Notice, Stonefield responds as set forth in its response to Paragraph 36 above. Stonefield admits the performance metrics stated in these paragraphs to the extent they are consistent with the figures set forth in the Cure Notice and in this Answer. Stonefield denies any characterization of VTS's performance as attributable to causes other than VTS's own operational decisions, including the deliberate reassignment of 85 tractors from Stonefield's dedicated lanes. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraphs 37 through 40.
Paragraph 41. Stonefield admits that on January 18, 2022, Raymond Hess, Director of Contract Compliance at Stonefield, sent a written Cure Notice to Sandra Milescu, Chief Operating Officer of Vantor and VTS. Stonefield avers that the Cure Notice specified each of the foregoing material breaches with reasonable particularity, as required by Section 13.2 of the TSA. The Cure Notice identified each SLO, stated VTS's actual performance against each SLO for the relevant period, quantified the magnitude of the deficiency, and specified the contractual provisions breached. Stonefield avers that the Cure Notice was proper, timely, and satisfied all contractual prerequisites to termination for Cause. The Cure Notice speaks for itself. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 41.
Paragraph 42. Stonefield admits that on February 14, 2022, Derek Pruitt, Vice President of Business Development at Vantor, sent a letter to Janet Kirkwood, Vice President of Carrier Relations at Stonefield. Stonefield denies that the February 14, 2022 letter constituted a cure of the identified material breaches. The letter acknowledged "operational challenges" but did not demonstrate actual remediation of any of the SLO failures identified in the Cure Notice. The letter disputed certain cargo claims data but notably did not contest VTS's on-time pickup rate, on-time delivery rate, tender acceptance rate, or equipment availability metrics — each of which, standing alone, constituted a material breach of the TSA. Stonefield denies that VTS's performance deficiencies were caused by a nationwide driver shortage, by Stonefield's alleged failure to tender minimum committed volumes, or by Stonefield's purported instructions to divert volume to spot market carriers. These assertions are factually unsupported and contradicted by VTS's own internal communications regarding the deliberate reassignment of tractors. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 42.
Paragraph 43. Stonefield avers that the 30-day cure period specified in Section 13.1(a) of the TSA expired on February 17, 2022 — 30 calendar days after delivery of the Cure Notice on January 18, 2022 — without VTS having cured any of the identified material breaches. VTS's performance metrics remained materially below the SLOs through the expiration of the cure period and beyond.
Paragraph 44. Stonefield admits that on March 4, 2022, Tobias Wren, General Counsel of Stonefield, sent a formal termination letter to Vantor Holdings Corp. and Vantor Transport Services LLC, terminating the TSA effective immediately pursuant to Section 13.1(a) for Cause. Stonefield admits that the termination letter reserved all of Stonefield's rights and remedies under the TSA and applicable law. Stonefield denies that the termination was wrongful, pretextual, or constituted a breach of the TSA or any other legal obligation. The termination letter speaks for itself. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 44.
Paragraph 45. Stonefield admits that approximately 2 years and 27 days remained on the initial term of the TSA at the time of termination (from March 4, 2022 through the scheduled expiration date of March 31, 2024). Stonefield denies that the duration of the remaining term has any relevance to the validity of the termination for Cause.
Paragraphs 46–55. To the extent these paragraphs contain additional factual allegations, characterizations, or legal conclusions regarding VTS's performance, the Cure Notice, VTS's response, the cure period, or the termination, Stonefield responds as set forth in its responses to Paragraphs 36 through 45 above. Stonefield denies all allegations in these paragraphs that are inconsistent with the facts and positions set forth in this Answer. Stonefield specifically denies any allegation that the termination was wrongful, pretextual, or motivated by improper considerations. Stonefield denies any allegation that VTS's performance failures were caused by Stonefield's conduct or that Stonefield failed to comply with any contractual prerequisite to termination.
E. Responses to Paragraphs Relating to Vantor's Breach-by-Stonefield Allegations (Paragraphs 56–75)
Paragraph 56. Stonefield denies that it failed to tender the ACV in any contract year. Specifically:
With respect to Contract Year 2 (April 2020 through March 2021): Stonefield properly and timely invoked the force majeure provision under Section 12.1 of the TSA for the period April 2020 through September 2020, due to the unprecedented impact of the COVID-19 pandemic on freight demand across the transportation industry. Under the force majeure provision, Stonefield's volume commitment obligations were suspended during this six-month period. The adjusted ACV for Contract Year 2, reflecting the six-month force majeure suspension, was $21.6 million (calculated as $43.2 million × 6/12). Stonefield's actual tenders during Contract Year 2 totaled $31.8 million, exceeding the adjusted minimum by $10.2 million. No volume shortfall occurred.
With respect to Contract Year 3 (April 2021 through the termination date): Stonefield's actual tenders during the period April 2021 through January 2022 (10 of 12 months of Contract Year 3) totaled $36.5 million. Stonefield denies that this figure constitutes a breach. Vantor's claim of a $6.7 million shortfall improperly attributes a full-year ACV obligation of $43.2 million to a period that was cut short by the termination — a termination that VTS's own material breaches necessitated. Stonefield cannot be held liable for a purported volume shortfall during a period in which the TSA was no longer in effect as a consequence of VTS's own breaches.
Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 56.
Paragraphs 57–60. To the extent these paragraphs contain additional allegations regarding volume shortfalls or Stonefield's alleged failure to meet the ACV, Stonefield responds as set forth in its response to Paragraph 56 above. Stonefield denies all such allegations.
Paragraph 61. Stonefield denies that it violated the exclusivity provisions of Schedule C to the TSA. Stonefield avers that all use of Cascade Freight Systems Inc. (4700 Lakehurst Court, Columbus, Ohio 43016) and Briarwood Trucking Co. (1280 Jefferson Davis Highway, Suite 310, Arlington, Virginia 22202) was limited to Lanes 8 through 14. Lanes 8 through 14 are classified as "Secondary Lanes" under Schedule C, Section 2(b), and are expressly excluded from the exclusivity restrictions that apply to the "Primary Lanes" (Lanes 1 through 7). Stonefield's use of alternative carriers on the Secondary Lanes was fully consistent with and permitted under the terms of the TSA. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 61.
Paragraphs 62–65. To the extent these paragraphs contain additional allegations regarding purported exclusivity violations, Stonefield responds as set forth in its response to Paragraph 61 above. Stonefield denies all such allegations.
Paragraph 66. Stonefield denies that the termination was pretextual. Stonefield denies that the termination was motivated by a desire to avoid the April 2022 rate adjustment under the TSA's Rate Adjustment Mechanism (projected at approximately 14.3%, representing an estimated increase from a weighted average of $2.87 per mile to $3.28 per mile, adding approximately $6.2 million in annual transportation costs). Stonefield avers that objective Cause for termination existed independently of any cost considerations, as demonstrated by VTS's sustained failures across all five SLOs in Q4 2021. Under well-established New York law, a party's subjective motivations are irrelevant where objective contractual grounds for the exercise of a contractual right have been demonstrated. See, e.g., Moran v. Erk, 11 N.Y.3d 452, 457 (2008) (where the terms of an agreement authorize a particular action, the court need not inquire into the party's motivations). Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 66.
Paragraphs 67–70. To the extent these paragraphs contain additional allegations regarding Stonefield's purported pretextual motive, Stonefield denies all such allegations and responds as set forth in its response to Paragraph 66 above.
Paragraph 71. Stonefield denies that VTS's performance failures were caused by Stonefield's alleged volume shortfalls, alleged exclusivity violations, or any other conduct of Stonefield. Stonefield avers that VTS's performance failures were caused by VTS's own deliberate decision to unilaterally reassign 85 tractors from Stonefield's dedicated lanes to service another shipper's account — specifically, that of Northwind Distribution Co. — in or about October 2021, without providing notice to Stonefield and in direct violation of VTS's fleet commitment obligations under the TSA. This deliberate reallocation of fleet resources is confirmed by VTS COO Sandra Milescu's November 12, 2021 internal email to CEO Nikolai Vantorovich, in which Ms. Milescu wrote: "We've pulled 85 tractors off the SLG dedicated lanes to cover [other] commitments. SLG won't notice until January." Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 71.
Paragraphs 72–75. To the extent these paragraphs contain additional allegations regarding causation, Stonefield responds as set forth in its response to Paragraph 71 above. Stonefield denies all allegations that attribute VTS's performance failures to Stonefield's conduct or to external market conditions. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraphs 72 through 75.
F. Responses to Paragraphs Relating to Damages (Paragraphs 76–90)
Paragraph 76. Stonefield denies that Vantor is entitled to liquidated damages in the amount of $67,230,000 or in any amount. The termination was for Cause pursuant to Section 13.1(a) of the TSA. Section 14.2 provides for liquidated damages only in the event of termination "other than for Cause." Because the termination was for Cause, Section 14.2 is inapplicable by its own terms.
In the alternative, Stonefield denies the enforceability of Section 14.2 and affirmatively asserts that it constitutes an unenforceable penalty under New York law. The formula in Section 14.2 — 75% of the ACV ($43.2 million) multiplied by the number of remaining full and partial contract years — produces a liquidated damages amount of $67,230,000 (consisting of $64,800,000 for two full remaining contract years and approximately $2,430,000 for the remaining 27-day partial year). This amount is grossly disproportionate to any actual harm Vantor could have suffered, and actual damages were readily ascertainable at the time of contracting given the defined rate structure, known volume commitments, and calculable margins. The provision fails the two-part test for enforceability of liquidated damages clauses under New York law. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 76.
Paragraph 77. Stonefield denies that Vantor is entitled to lost profits in the amount of $18,700,000 or in any amount. This claim is duplicative of the liquidated damages claim, as both seek to compensate Vantor for the same underlying harm — the value of the lost contract. Under New York's well-established prohibition on double recovery, Vantor cannot recover both liquidated damages and lost profits for the same breach. Additionally, Vantor's claimed 12% operating margin is inflated, speculative, and unsupported by the actual financial performance of VTS. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 77.
Paragraph 78. Stonefield denies that Vantor is entitled to recover $5,200,000 for alleged stranded assets. This claim — which purports to recover depreciation losses on tractors and trailers and lease termination costs — constitutes consequential, special, or indirect damages that are barred by the mutual waiver of consequential damages set forth in Section 15.1 of the TSA. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 78.
Paragraph 79. Stonefield denies that Vantor is entitled to recover $2,870,000 for alleged workforce reduction costs. This claim — which purports to recover severance payments and unemployment-related costs for approximately 180 drivers and support staff — constitutes consequential, special, or indirect damages that are barred by the mutual waiver of consequential damages set forth in Section 15.1 of the TSA. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 79.
Paragraph 80. Stonefield denies that Vantor is entitled to recover $1,400,000 in alleged mitigation costs. This claim — which purports to recover costs incurred in seeking replacement freight — constitutes consequential, special, or indirect damages barred by Section 15.1 of the TSA. Moreover, the relatively modest amount of $1.4 million that Vantor claims to have expended on mitigation efforts is itself evidence of Vantor's failure to meaningfully mitigate its damages, as more fully set forth in Stonefield's Third Affirmative Defense below. In a freight market in which spot rates were elevated approximately 35% above historical averages during Q1–Q2 2022, Vantor's minimal mitigation expenditures suggest that Vantor elected to sit on its hands rather than take the reasonable steps available to it to reduce or avoid the harm it now claims. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 80.
Paragraph 81. Stonefield denies that Vantor is entitled to total damages of $95,400,000 or any amount. Stonefield's rebuttal expert, Dr. Evelyn Rosser of Kensington Analytics Group LLC, has opined that Vantor's damages are $0 if the termination is found to be valid, or, in the alternative, a maximum of $8.2 million under an alternative lost-profits analysis assuming arguendo that the termination was wrongful, after adjusting for VTS's own material breaches, Vantor's failure to mitigate, and a proper market-based calculation of lost profits using VTS's actual (rather than inflated) operating margins. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraph 81.
Paragraphs 82–90. Stonefield denies that Vantor is entitled to attorneys' fees, prejudgment interest, postjudgment interest, or any other relief sought in the Amended Complaint. The TSA does not provide for the recovery of attorneys' fees, and no basis exists under applicable law for such an award. To the extent these paragraphs contain additional damages allegations, Stonefield responds as set forth in its responses to Paragraphs 76 through 81 above. Except as specifically admitted herein, Stonefield denies the remaining allegations in Paragraphs 82 through 90.
G. Responses to Remaining Paragraphs
To the extent the Amended Complaint contains any additional paragraphs, allegations, or claims not specifically addressed in the foregoing responses, Stonefield denies each and every such allegation. Stonefield specifically denies any allegation that it acted in bad faith, with improper motive, or in breach of any contractual, statutory, or common law obligation. Stonefield denies that Vantor is entitled to any relief of any kind.
PART II: AFFIRMATIVE DEFENSES
Without assuming the burden of proof on any issue for which such burden properly rests with Plaintiff, and without waiving any defenses that may become available as a result of further investigation or discovery, Defendant Stonefield Logistics Group Inc. asserts the following affirmative defenses to the Amended Complaint:
FIRST AFFIRMATIVE DEFENSE: Valid Termination for Cause (Section 13.1(a))
Vantor's claims are barred, in whole or in part, because Stonefield validly terminated the TSA for Cause pursuant to Section 13.1(a) of the TSA. VTS committed sustained and material breaches of the SLOs during the fourth quarter of 2021, each of which independently constituted a material breach of the TSA and which, taken together, represented a pervasive and systemic failure to perform VTS's core obligations under the agreement.
Specifically, VTS's Q4 2021 performance fell below each of the five SLOs: on-time pickup at 78.2% (versus the 95% SLO); on-time delivery at 81.6% (versus the 93% SLO); tender acceptance at 71.4% (versus the 90% SLO); equipment availability at 62% of committed fleet capacity (versus the 85% SLO); and a cargo claims ratio of approximately 1.07% (versus the ≤0.5% SLO). These were not marginal deviations but severe and sustained failures, in many cases exceeding 15 to 25 percentage points below the contractually required minimums.
On January 18, 2022, Stonefield delivered a Cure Notice to VTS specifying each of the foregoing material breaches with reasonable particularity, in full compliance with the requirements of Section 13.2 of the TSA. VTS's February 14, 2022 response acknowledged "operational challenges" but did not demonstrate actual remediation of any of the identified breaches. The 30-day cure period expired on February 17, 2022 without cure. Stonefield's termination of the TSA on March 4, 2022 was lawful, procedurally proper, and substantively justified. Because the termination was for Cause, Vantor's claims for damages — including liquidated damages under Section 14.2, which applies only to termination "other than for Cause" — are without merit.
SECOND AFFIRMATIVE DEFENSE: Unenforceable Penalty (Liquidated Damages)
Vantor's claim for liquidated damages under Section 14.2 of the TSA is barred, in whole or in part, because the liquidated damages clause is unenforceable as a penalty under New York law.
The formula set forth in Section 14.2 — 75% of the ACV ($43.2 million) multiplied by the number of remaining full and partial contract years — produces a liquidated damages figure of $67,230,000 in this case. This amount is grossly disproportionate to any actual or reasonably anticipated harm that Vantor could suffer as a result of early termination of the TSA.
Under New York law, a liquidated damages provision is enforceable only if (1) the amount of liquidated damages is a reasonable estimate of the probable damages upon breach, and (2) actual damages were difficult to determine at the time of contracting. See Northpoint Holdings v. Purdy Corp., 41 N.Y.2d 354, 357 (1977); JMD Holding Corp. v. Cong. Fin. Corp., 4 N.Y.3d 373, 380 (2005). The liquidated damages formula in Section 14.2 fails both prongs of this test. First, the formula bears no reasonable relationship to the anticipated or actual harm from early termination; it effectively awards Vantor 75% of the gross contract value for the remaining term, without any adjustment for VTS's actual operating margins, saved costs, or mitigation opportunities. Second, actual damages were readily ascertainable at the time of contracting given the defined rate structure, known volume commitments, and calculable margins that characterized the TSA.
Regardless of the provision's recital that the parties "acknowledge and agree" the liquidated damages amount is a "reasonable estimate" of probable loss, New York courts consistently look beyond such boilerplate language to the substance of the provision and its operation in the specific circumstances of the case. The liquidated damages clause in Section 14.2 is an unenforceable penalty and cannot form the basis for Vantor's recovery.
THIRD AFFIRMATIVE DEFENSE: Failure to Mitigate Damages
Vantor's claims are barred or should be reduced, in whole or in part, because Vantor failed to take reasonable steps to mitigate its damages following the termination of the TSA on March 4, 2022.
Under New York law, a party claiming damages for breach of contract has a duty to take reasonable steps to minimize its losses. See Wilmot v. State, 32 N.Y.2d 164, 168-69 (1973). The freight market in the first and second quarters of 2022 was exceptionally robust, with spot rates elevated approximately 35% above historical averages. Vantor had approximately 248 tractors and associated trailer capacity available for redeployment following the termination. Despite these favorable market conditions, Vantor made no meaningful effort to secure replacement freight volume or to redeploy its available assets to alternative revenue-generating opportunities.
The inadequacy of Vantor's mitigation efforts is underscored by Vantor's own disclosure that it incurred only $1.4 million in mitigation-related costs. In a market characterized by significant excess demand for carrier capacity, this negligible level of mitigation expenditure demonstrates that Vantor failed to exercise reasonable diligence in seeking replacement business. Vantor's damages, to the extent any are found to exist, must be reduced by the amount that could have been avoided through the exercise of reasonable mitigation efforts.
FOURTH AFFIRMATIVE DEFENSE: Force Majeure (Section 12.1)
To the extent Vantor alleges that Stonefield failed to tender the ACV in Contract Year 2 (April 2020 through March 2021), Vantor's claim is barred, in whole or in part, because Stonefield properly and timely invoked the force majeure provision in Section 12.1 of the TSA.
The COVID-19 pandemic constituted a force majeure event within the meaning of Section 12.1, as it caused an unprecedented disruption to freight demand across the national and regional transportation markets during the period April 2020 through September 2020. Stonefield's invocation of the force majeure provision was timely and in compliance with the notice requirements of Section 12.1. During the force majeure period, Stonefield's volume commitment obligations under the TSA were suspended.
After adjustment for the six-month force majeure period, the ACV for Contract Year 2 was $21.6 million (calculated as $43.2 million × 6/12 active months). Stonefield's actual tenders during Contract Year 2 totaled $31.8 million, exceeding the adjusted minimum by $10.2 million, or approximately 47%. No volume shortfall occurred in Contract Year 2, and Vantor's allegations to the contrary are without factual or legal basis.
FIFTH AFFIRMATIVE DEFENSE: Unclean Hands
Vantor's claims are barred, in whole or in part, under the equitable doctrine of unclean hands. Vantor and its wholly owned subsidiary VTS come before this Court having engaged in the very conduct that gave rise to the dispute.
In or about October 2021, VTS deliberately and covertly reassigned approximately 85 tractors from Stonefield's dedicated lanes to service another shipper, Northwind Distribution Co., without providing any notice to Stonefield and in direct breach of VTS's fleet commitment obligations under the TSA. This deliberate diversion of resources was undertaken with full knowledge that it would degrade VTS's performance on Stonefield's account.
The intentional and concealed nature of VTS's conduct is confirmed by VTS COO Sandra Milescu's November 12, 2021 internal email to CEO Nikolai Vantorovich, in which Ms. Milescu stated: "We've pulled 85 tractors off the SLG dedicated lanes to cover [other] commitments. SLG won't notice until January." This communication demonstrates that VTS not only deliberately reduced its capacity on Stonefield's account, but also took steps to conceal that reduction from Stonefield for as long as possible, thereby depriving Stonefield of the opportunity to take timely corrective action.
Having deliberately created the conditions that led to its own performance failures — the very failures that constituted Cause for termination — Vantor cannot now be heard to complain that Stonefield exercised its contractual right to terminate. Vantor's inequitable conduct bars or limits its right to recovery.
SIXTH AFFIRMATIVE DEFENSE: Contributory Breach / Prior Material Breach (First-to-Breach Doctrine)
Vantor's claims are barred, in whole or in part, under the first-to-breach doctrine recognized by New York courts. Under this doctrine, when one party commits the first material breach of a contract, the other party is excused from further performance, and the breaching party cannot recover damages for the other party's subsequent nonperformance. See Ashgrove & Co. v. Camberwell Industries, 500 F.3d 171, 186 (2d Cir. 2007).
VTS committed the first material breach of the TSA by unilaterally reducing the fleet capacity dedicated to Stonefield's account in October 2021 — months before any alleged volume shortfall by Stonefield and months before the termination. VTS's deliberate reassignment of approximately 85 tractors from Stonefield's dedicated lanes to another shipper's account, in violation of VTS's fleet commitment obligations under the TSA, constituted a material breach that preceded and caused the service-level failures identified in the Cure Notice. VTS's prior material breach excused Stonefield's subsequent performance obligations under the TSA and bars Vantor's claims for damages arising from the termination.
SEVENTH AFFIRMATIVE DEFENSE: Waiver
Vantor's claims regarding alleged volume shortfalls and alleged exclusivity violations are barred, in whole or in part, because Vantor waived any right to assert such claims through its conduct.
Throughout the term of the TSA — including the periods during which the alleged volume shortfalls and alleged exclusivity violations are said to have occurred — Vantor and VTS continued to perform under the TSA without objection. Vantor and VTS did not deliver any written notice of breach to Stonefield regarding volume, exclusivity, or any other performance obligation at any point prior to the commencement of this litigation. Vantor's failure to raise these issues at the time of their alleged occurrence, and its continued performance notwithstanding its claimed awareness of such issues, constitutes a waiver of any right to assert these allegations as grounds for its claims in this action.
EIGHTH AFFIRMATIVE DEFENSE: Estoppel
Vantor is estopped from asserting that Stonefield's termination was wrongful. VTS's own conduct — specifically, its acknowledgment of "operational challenges" in its February 14, 2022 response to the Cure Notice, its failure to dispute the Q4 2021 performance metrics for on-time pickup, on-time delivery, tender acceptance, and equipment availability, and its failure to demonstrate actual remediation — induced Stonefield's reasonable reliance on the conclusion that VTS had failed to cure the identified material breaches within the 30-day cure period.
Stonefield relied on VTS's conduct and communications in determining that Cause existed to terminate the TSA. Vantor cannot now disclaim the very conduct and admissions that led to Stonefield's termination decision. Permitting Vantor to do so would be inequitable and would prejudice Stonefield, which acted in good faith and in reliance on VTS's own representations and conduct.
NINTH AFFIRMATIVE DEFENSE: Setoff / Recoupment
To the extent Vantor is found to be entitled to any damages arising from the termination of the TSA, Stonefield is entitled to a setoff or recoupment for the damages that Stonefield itself suffered as a direct and proximate result of VTS's material breaches of the TSA. Such damages include, but are not limited to:
(a) costs incurred by Stonefield to procure alternative carrier services on VTS's dedicated lanes during Q4 2021 and Q1 2022, at rates exceeding those provided under the TSA;
(b) payments made by Stonefield to its customers to resolve cargo claims attributable to VTS's service failures;
(c) operational disruption costs, including the costs of redirecting freight, rebidding lanes, and managing the transition to replacement carriers; and
(d) reputational harm suffered by Stonefield with its customers as a result of VTS's chronic service failures on Stonefield's account.
Stonefield reserves its right to quantify these damages more precisely as discovery proceeds.
TENTH AFFIRMATIVE DEFENSE: Consequential Damages Waiver (Section 15.1)
Vantor's claims for stranded assets ($5,200,000), workforce reduction costs ($2,870,000), and mitigation costs ($1,400,000) — totaling $9,470,000 — are barred by the mutual waiver of consequential damages set forth in Section 15.1 of the TSA.
Section 15.1 provides that neither party shall be liable to the other for any indirect, special, incidental, or consequential damages arising out of or relating to the TSA, regardless of whether such damages are based on contract, tort, strict liability, or any other theory. Vantor's claimed stranded assets (depreciation losses and lease termination costs), workforce reduction costs (severance and unemployment-related expenses for approximately 180 drivers and support staff), and mitigation costs (expenses incurred seeking replacement freight) are each consequential, special, or indirect in nature, as they represent downstream economic effects of the alleged breach rather than direct damages flowing naturally from the breach itself. These categories of damages are barred by Section 15.1 and must be excluded from any recovery.
ELEVENTH AFFIRMATIVE DEFENSE: Duplicative Recovery / No Double Recovery
Vantor cannot recover both liquidated damages ($67,230,000) and lost profits ($18,700,000), as these two categories of damages seek to compensate Vantor for the same underlying harm — namely, the value of the lost contract over the remaining term.
Under New York law, a plaintiff may not obtain a double recovery for the same injury. See Lama Holding Co. v. Smith Barney Inc., 88 N.Y.2d 413, 421 (1996). Liquidated damages and lost profits are alternative measures of the same loss. To the extent Vantor pursues both claims, it must elect between them; it cannot recover both. The award of both liquidated damages and lost profits would constitute an impermissible windfall.
TWELFTH AFFIRMATIVE DEFENSE: Failure to State a Claim / Insufficiency of Pleading
Certain claims asserted in the Amended Complaint fail to state a claim upon which relief can be granted. In particular, Vantor's lost profits claim is speculative and fails to plead damages with the requisite certainty required under New York law for the recovery of lost profits. Under New York law, lost profits must be established with a reasonable degree of certainty and may not be based on speculation, conjecture, or surmise. See Kenford Co. v. County of Erie, 67 N.Y.2d 257, 261 (1986). Vantor's claimed 12% operating margin is insufficiently supported and does not meet the heightened pleading and proof requirements for lost profits.
THIRTEENTH AFFIRMATIVE DEFENSE: Standing / Real Party in Interest
Vantor Holdings Corp. was not a signatory to the TSA. The TSA was executed between Stonefield Logistics Group Inc. and Vantor Transport Services LLC. To the extent that Vantor Holdings Corp. lacks standing to assert claims under the TSA, or is not the real party in interest under Federal Rule of Civil Procedure 17(a), its claims must be dismissed.
Stonefield reserves all rights to challenge Vantor Holdings Corp.'s standing to bring this action, including through appropriate motion practice, as discovery proceeds and additional facts are developed.
> [Note to SAE: Please review ¶¶ re standing defense — preserving argument per Laroche's December 8 memo re Vantor's Standing — Parent vs. Subsidiary but not leading with it per recommendation given likelihood Vantor could amend to add VTS if challenged.]
FOURTEENTH AFFIRMATIVE DEFENSE: Reservation of Rights
Stonefield reserves the right to assert additional affirmative defenses, and to amend or supplement this Answer and these Affirmative Defenses, as discovery proceeds and additional facts, circumstances, or legal bases are developed. Stonefield's assertion of the foregoing affirmative defenses does not constitute an admission that it bears the burden of proof on any issue for which such burden properly rests with Plaintiff.
> [Note to SAE: 14 affirmative defenses listed; please confirm we want to include all or prune. Reservation of rights (14th) is standard.]
PART III: COUNTERCLAIM FOR DECLARATORY JUDGMENT
Defendant and Counterclaim Plaintiff Stonefield Logistics Group Inc. ("Stonefield"), by and through its attorneys Calderwood & Harkness LLP, asserts the following Counterclaim for Declaratory Judgment against Plaintiff and Counterclaim Defendant Vantor Holdings Corp. ("Vantor").
> [Note to SAE: Counterclaim for DJ — per January 6 memo, this frames narrative and positions for SJ but need to confirm client sign-off from Tobias Wren before filing.]
Nature of Counterclaim
1. Stonefield asserts this Counterclaim against Vantor Holdings Corp. for declaratory judgment pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201. This Counterclaim seeks declarations from the Court resolving the central contractual disputes between the parties and confirming the validity and propriety of Stonefield's termination of the TSA.
Jurisdiction and Venue
2. This Court has subject-matter jurisdiction over this Counterclaim pursuant to 28 U.S.C. § 2201 (Declaratory Judgment Act) and 28 U.S.C. § 13

CONFIDENTIAL — ATTORNEY WORK PRODUCT / PRIVILEGED

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

PRELIMINARY STATEMENT

PART I: ANSWER TO AMENDED COMPLAINT

PART II: AFFIRMATIVE DEFENSES

PART III: COUNTERCLAIM FOR DECLARATORY JUDGMENT

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