1012-00006 · Stonefield Logistics Group · Closing

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PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP

Matter Closing Memorandum

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I. Purpose and Scope of Memorandum

This memorandum is prepared for file-closing purposes in connection with the conclusion of Calderwood & Harkness LLP Matter No. 1012-00006, styled Stonefield Logistics Group Inc. v. Ridgeline Freight Carriers LLC and Gerald Brashear, Cause No. DC-24-01847, in the 134th Judicial District Court of Dallas County, Texas, before the Honorable Lorraine Whitaker.

The purpose of this memorandum is to provide a comprehensive summary of the engagement, including the claims asserted, the underlying facts and contractual basis for recovery, all material litigation proceedings, the entry of a default judgment against both defendants, the post-judgment collection efforts undertaken by the firm and by retained forensic accounting professionals, the ultimate settlement of all claims, the financial outcomes achieved for the client, and the document retention obligations applicable to the closing of this matter file.

This matter is now closed effective September 20, 2024, following the execution and filing of the Agreed Order of Satisfaction and Release of Judgment on September 17, 2024, which was entered by the 134th Judicial District Court of Dallas County, Texas, and which confirmed the full and final satisfaction of the default judgment entered on May 3, 2024. Corresponding releases of judgment have been filed in both Dallas County, Texas, and Oklahoma County, Oklahoma, and no further proceedings are pending or anticipated in any jurisdiction.

This memorandum is intended to serve as a permanent part of the firm's closing file and to facilitate any future reference to this matter by firm personnel or, if authorized, by the client.

II. Engagement Summary

A. Client and Engagement

Client: Stonefield Logistics Group Inc. ("Stonefield" or "SLG"), a Texas corporation, headquartered at 4100 Commerce Street, Suite 1200, Dallas, Texas 75226. Stonefield is a transportation and logistics company operating as a third-party logistics ("3PL") provider specializing in dedicated fleet management, intermodal drayage, and last-mile delivery services. The company operates across fourteen states in the Southern and Central United States, maintains relationships with approximately 340 carrier partners, and generated approximately $485 million in annual revenue for its fiscal year ending December 31, 2023.

Stonefield is a portfolio company of Crestpoint Industrial Partners Fund III, LP, a private equity fund whose general partner is Crestpoint Industrial Capital LLC, located at 600 Lexington Avenue, 28th Floor, New York, New York 10022. Rebecca Fontaine, a Partner at Crestpoint Industrial Capital LLC, provides portfolio oversight for the Stonefield investment. Although Crestpoint was not a party to this litigation, its interest as the controlling equity holder of Stonefield was noted for conflicts purposes and was relevant to certain client-side decision-making throughout the engagement, particularly with respect to settlement authority. Ms. Fontaine was consulted by Stonefield management at key junctures but was not a direct point of contact for the firm's litigation team.

Primary Client Contacts: The firm's principal points of contact for this engagement were:

• Diane Ostrowski, General Counsel, Stonefield Logistics Group Inc. — Ms. Ostrowski served as the day-to-day client contact and decision-maker for all matters relating to this litigation and was the signatory on the engagement letter.

• Marcus Ellington, Chief Executive Officer, Stonefield Logistics Group Inc. — Mr. Ellington provided an affidavit in support of the motion for default judgment and was consulted on key strategic decisions, including settlement authority.

• Samuel Trujillo, Vice President of Operations, Stonefield Logistics Group Inc. — Mr. Trujillo provided factual information regarding Ridgeline's operational failures, the cure notice process, and the re-procurement damages incurred by Stonefield during the period following Ridgeline's cessation of operations.

Engagement Date: January 29, 2024.

Engagement Letter: An engagement letter was executed on January 29, 2024, between Calderwood & Harkness LLP and Stonefield Logistics Group Inc., executed on behalf of Stonefield by Diane Ostrowski, General Counsel, and on behalf of Calderwood & Harkness LLP by Priya Anand, Partner. The engagement letter established the scope of the representation, set forth the applicable fee arrangement, and confirmed the firm's standard terms and conditions of engagement.

Fee Arrangement: The engagement was undertaken on an hourly fee basis, with no contingency component. The applicable billing rates for each timekeeper are set forth in Section II.B below. All fees and costs billed to the client during the course of this engagement have been paid in full as of the date of this memorandum.

B. Engagement Team and Billing Rates

The following attorneys comprised the Calderwood & Harkness engagement team for this matter, together with the applicable hourly billing rates in effect during the engagement:

Priya Anand served as the responsible partner with primary supervisory authority over the matter, including all strategic and settlement decisions. Douglas Carmichael served as the billing partner and maintained billing oversight in accordance with firm policy. Jeffrey Park served as lead associate and was responsible for day-to-day case management, drafting of all pleadings and motions, and coordination of post-judgment collection efforts. Yuki Nakamura served as working associate and was responsible for legal research, drafting of the internal memorandum on enforceability of the liquidated damages provision, and assistance with post-judgment discovery and asset tracing coordination.

C. Scope of Engagement

The scope of the firm's engagement encompassed the pursuit of breach-of-contract claims against Ridgeline Freight Carriers LLC ("Ridgeline" or "RFC"), an Oklahoma limited liability company foreign-qualified to do business in Texas, and its managing member and sole owner, Gerald "Gerry" Brashear, individually. The claims arose from Ridgeline's material default under a Dedicated Freight Services Agreement dated April 15, 2022 (the "DFSA"), and from Brashear's personal, unconditional guaranty of Ridgeline's obligations under the DFSA.

The claims sought recovery of liquidated damages totaling $2,437,500, together with pre-judgment interest at the statutory rate, reasonable attorneys' fees incurred in connection with the enforcement of the DFSA, and all taxable court costs. The scope of the engagement as defined in the engagement letter and as subsequently authorized by the client included the following phases of work:

(a) Pre-suit demand correspondence to Ridgeline and Brashear;

(b) Preparation and filing of the original petition in Dallas County, Texas, and completion of service of process on both defendants;

(c) Prosecution of the litigation through entry of default judgment following defendants' failure to answer or otherwise appear;

(d) Post-judgment discovery and enforcement proceedings, including abstracting of the judgment in Texas and Oklahoma, domestication of the Texas judgment in the Oklahoma County District Court, post-judgment interrogatories and document requests, and coordination with forensic accounting consultants for asset tracing;

(e) Negotiation and documentation of the settlement, including the Settlement Agreement and Mutual Release and the Agreed Order of Satisfaction and Release of Judgment; and

(f) Closing of the matter file.

III. Defendants

A. Ridgeline Freight Carriers LLC

Ridgeline Freight Carriers LLC is an Oklahoma limited liability company with its principal office located at 7820 South Meridian Avenue, Oklahoma City, Oklahoma 73159. Ridgeline was foreign-qualified to do business in Texas and maintained a Texas registered agent, Lone Star Registered Agents LLC, at 811 Congress Avenue, Suite 400, Austin, Texas 78701. Lone Star Registered Agents LLC proved non-responsive during the service of process phase, as discussed further in Section V.B below.

Ridgeline held United States Department of Transportation Number 3281947 and Motor Carrier Number MC-1042886, authorizing it to operate as a for-hire motor carrier in interstate commerce. The company's Employer Identification Number is 73-6218504.

Ridgeline was a regional motor carrier operating primarily in Texas, Oklahoma, Arkansas, and Louisiana. At its peak operational capacity, Ridgeline maintained a fleet of approximately 38 Class 8 tractors and 52 dry van trailers. Gerald "Gerry" Brashear was the managing member and sole owner of Ridgeline, having founded the company in 2017.

During the period leading up to and throughout this litigation, Ridgeline was represented by Meridian Holloway PLLC, a law firm located at 101 Park Avenue, Suite 600, Oklahoma City, Oklahoma 73102. Nathan Holloway, Managing Partner of Meridian Holloway PLLC, served as Ridgeline's primary outside counsel for general corporate matters. However, Meridian Holloway PLLC did not enter an appearance in this litigation on behalf of either Ridgeline or Brashear, and no counsel of record ever appeared for either defendant in the proceedings before the 134th Judicial District Court or in the Oklahoma domestication proceeding.

Ridgeline ceased all freight operations on or about December 8, 2023. The company did not file for bankruptcy protection under any chapter of the United States Bankruptcy Code. Based on post-judgment investigation and forensic accounting analysis, Ridgeline appeared to be judgment-proof as a going concern at the time of default judgment, with its only remaining assets of material value being three Class 8 tractors and seven dry van trailers, appraised in the aggregate at approximately $210,000, as discussed further in Section VI.D below.

B. Gerald "Gerry" Brashear

Gerald "Gerry" Brashear is an individual residing at 2314 Quail Creek Drive, Edmond, Oklahoma 73034. In addition to his primary residence, Brashear also owned a 42-acre ranch property located at 8900 Redbud Lane, Blanchard, Oklahoma 73010.

Brashear founded Ridgeline Freight Carriers LLC in 2017. Prior to founding Ridgeline, Brashear was employed as an operations manager at Heartland Motor Lines Inc., a regional trucking company. Brashear served as the sole managing member and owner of Ridgeline throughout its existence and was personally involved in the negotiation and execution of the DFSA with Stonefield.

Critically, Brashear executed a personal, unconditional guaranty of Ridgeline's obligations under Section 14 of the DFSA. The guaranty was capped at $3,000,000 and provided for joint and several liability with Ridgeline for any amounts owed to Stonefield arising from Ridgeline's material default under the DFSA. The enforceability and scope of this guaranty provided the basis for the personal claims asserted against Brashear in this litigation, and his personal assets ultimately provided the primary source of recovery in the settlement.

IV. Summary of Claims and Underlying Facts

A. The Dedicated Freight Services Agreement

The contractual relationship between Stonefield and Ridgeline was governed by the Dedicated Freight Services Agreement (the "DFSA"), executed on April 15, 2022, by and between Stonefield Logistics Group Inc. (as "Shipper") and Ridgeline Freight Carriers LLC (as "Carrier"). The DFSA was a comprehensive, negotiated commercial agreement setting forth the terms under which Ridgeline would provide dedicated transportation services to Stonefield for certain of Stonefield's Texas retail distribution lanes.

The material terms of the DFSA relevant to this matter are summarized below:

Term. The DFSA provided for a term of 36 months, commencing on April 15, 2022, and expiring on April 14, 2025.

Scope of Services. Under the DFSA, Ridgeline committed to providing a minimum of 12 dedicated Class 8 tractor-trailers with qualified, licensed commercial drivers for Stonefield's Texas retail distribution lanes. The dedicated equipment and drivers were to be assigned exclusively to Stonefield's daily routes between distribution centers located in Dallas, Houston, San Antonio, and Austin, Texas. Ridgeline was responsible for maintaining all equipment in compliance with applicable Federal Motor Carrier Safety Administration regulations and for ensuring that all drivers met Stonefield's qualification standards as set forth in Exhibit B to the DFSA.

Minimum Monthly Revenue Commitment (DFSA § 3.2). The DFSA established a Minimum Monthly Revenue Commitment of $325,000 per month, equating to an annual revenue floor of $3,900,000 and a total contract value over the full 36-month term of $11,700,000. This commitment ensured that Stonefield could rely upon Ridgeline's capacity for its Texas distribution network and justified Stonefield's decision not to contract with alternative carriers for the covered lanes.

Liquidated Damages Provision (DFSA § 14.3). Section 14.3 of the DFSA provided that, upon Carrier's material default and failure to cure within 30 days of written notice from Shipper, Carrier would pay liquidated damages equal to the greater of (a) 25% of the remaining unpaid Minimum Monthly Revenue Commitment for the unexpired term of the DFSA, or (b) $500,000. The DFSA expressly recited that the parties agreed the liquidated damages represented a reasonable estimate of Shipper's anticipated losses from re-procurement of equivalent carrier services, service disruption to Shipper's distribution network, and reputational harm to Shipper's relationships with its retail customers.

Consequential Damages Carve-Out (DFSA § 14.4). In addition to the liquidated damages under Section 14.3, Section 14.4 of the DFSA permitted Stonefield to recover actual re-procurement costs incurred in connection with securing substitute carrier services following Ridgeline's default, to the extent such costs exceeded the liquidated damages amount. This provision was designed to ensure that Stonefield would be made whole for the incremental out-of-pocket expenses of emergency freight procurement during the transition period following a carrier default.

Personal Guaranty (DFSA § 14.5). Section 14.5 of the DFSA required that Gerald Brashear, as the managing member and sole owner of Ridgeline, execute a personal, unconditional guaranty of Carrier's obligations under Section 14 of the DFSA. The guaranty was executed contemporaneously with the DFSA and was capped at $3,000,000. The guaranty was unconditional and absolute, not requiring Stonefield to exhaust remedies against Ridgeline before pursuing Brashear personally.

Attorneys' Fees (DFSA § 14.6). Section 14.6 of the DFSA provided that the prevailing party in any dispute arising under the agreement would be entitled to recover its reasonable attorneys' fees and costs incurred in connection with enforcement of the agreement. This provision was consistent with and supplemented the statutory right to recover attorneys' fees in breach-of-contract actions under Texas Civil Practice and Remedies Code § 38.001.

Governing Law (DFSA § 18.1). Section 18.1 of the DFSA specified that the agreement would be governed by and construed in accordance with the laws of the State of Texas, without regard to principles of conflict of laws.

Forum Selection (DFSA § 18.2). Section 18.2 of the DFSA contained a mandatory forum selection clause requiring that any action arising under or relating to the agreement be brought exclusively in the state or federal courts located in Dallas County, Texas. Both Ridgeline and Brashear consented to personal jurisdiction in Dallas County, Texas, and waived any objection to venue therein.

B. The Breach

Ridgeline performed its obligations under the DFSA without material incident from the contract's inception on April 15, 2022, through approximately June 2023. Beginning in July 2023, however, Ridgeline began failing to provide the contractually required minimum of 12 dedicated trucks for Stonefield's Texas distribution lanes. Ridgeline's capacity declined progressively over the ensuing months, dropping from 12 trucks to as few as 4 trucks available for service by October 2023. Stonefield's operations team, led by Samuel Trujillo, VP of Operations, documented the capacity shortfalls and communicated repeatedly with Ridgeline and Brashear regarding the deteriorating service levels.

The root causes of Ridgeline's operational failure included severe driver attrition, which Ridgeline was unable to remedy due to mounting financial distress, and the company's apparent inability to maintain its fleet or recruit replacement drivers in a competitive labor market. By the fall of 2023, Ridgeline's operational capacity had deteriorated to the point where it was no longer capable of supporting Stonefield's distribution requirements on the covered lanes.

Cure Notice — October 18, 2023. On October 18, 2023, Stonefield sent a formal written notice of material breach to both Ridgeline Freight Carriers LLC and Gerald Brashear via certified mail and email. The notice identified the specific contractual provisions that had been breached, documented the progressive decline in truck availability from 12 to 4 units, and demanded that Ridgeline cure the identified defaults within 30 days, as required under DFSA § 14.3 as a condition precedent to the accrual of liquidated damages.

Cure Period Expiration / Date of Default — November 17, 2023. The 30-day cure period expired on November 17, 2023. Ridgeline failed to cure any of the identified defaults. No additional trucks were provided, no plan for restoration of service was communicated, and no meaningful response was received from either Ridgeline or Brashear during the cure period. Accordingly, November 17, 2023, constitutes the date of Ridgeline's material default under the DFSA for purposes of damages computation.

Cessation of Operations — December 8, 2023. Ridgeline ceased all freight operations on or about December 8, 2023. Stonefield was notified informally by one of Ridgeline's remaining drivers that the company had shut down and that no further loads would be accepted. Ridgeline did not file for bankruptcy protection and did not provide any formal notice of cessation of operations to Stonefield or to any other shipper or regulatory authority.

Formal Demand Letter — December 22, 2023. On December 22, 2023, Diane Ostrowski, General Counsel of Stonefield, sent a formal demand letter to Ridgeline and Brashear demanding payment of the full amount of liquidated damages and re-procurement costs owed under the DFSA. No response was received to this demand.

C. Damages Calculation

The damages claimed in this action were computed as follows, consistent with the terms of the DFSA and supported by the affidavit of Marcus Ellington, CEO of Stonefield:

The re-procurement damages of $1,056,250 were documented through invoices, purchase orders, and rate confirmations for emergency substitute carrier services that Stonefield was required to procure on an expedited basis following Ridgeline's default. These costs reflected the significant premium that Stonefield was required to pay for spot-market freight capacity during the peak holiday shipping season of November and December 2023, as well as mobilization fees charged by replacement carriers for the dedicated Dallas-Houston, Dallas-San Antonio, and Dallas-Austin distribution lanes. Supporting documentation was compiled by Samuel Trujillo, VP of Operations, and was attached as exhibits to the Ellington Affidavit filed in support of the motion for default judgment.

V. Litigation Timeline and Proceedings

A. Pre-Suit Phase

Following the expiration of the cure period and the failure of both Ridgeline and Brashear to respond to the formal demand letter sent by Stonefield's General Counsel on December 22, 2023, Stonefield engaged Calderwood & Harkness LLP to pursue litigation.

January 29, 2024: Calderwood & Harkness LLP was formally engaged by Stonefield Logistics Group Inc. to prosecute the breach-of-contract and guaranty enforcement claims. The engagement letter was executed, and the matter was opened in the firm's matter management system as Matter No. 1012-00006.

February 5, 2024: Priya Anand, as lead partner, sent a pre-suit demand letter on behalf of Stonefield to both Ridgeline Freight Carriers LLC (at 7820 South Meridian Avenue, Oklahoma City, Oklahoma 73159) and Gerald Brashear (at 2314 Quail Creek Drive, Edmond, Oklahoma 73034). The letter demanded payment of the full claimed amount of $2,437,500.00, plus accruing pre-judgment interest and attorneys' fees, within ten days of receipt. The letter informed both recipients that, in the event of non-payment, Stonefield intended to file suit in Dallas County, Texas, in accordance with the forum selection clause of the DFSA. The letter was sent via both certified mail, return receipt requested, and electronic mail.

No response was received from either Ridgeline or Brashear to the pre-suit demand letter, either during or after the expiration of the ten-day demand period.

B. Filing and Service

February 12, 2024: The Original Petition was filed in the 134th Judicial District Court of Dallas County, Texas, and was assigned Cause No. DC-24-01847. The petition asserted two causes of action: (1) breach of contract against Ridgeline Freight Carriers LLC, seeking recovery of liquidated damages and re-procurement damages arising from Ridgeline's material default under the DFSA, and (2) enforcement of the personal guaranty against Gerald Brashear, seeking recovery of all amounts owed by Ridgeline under the DFSA in accordance with the personal guaranty executed by Brashear pursuant to DFSA § 14.5. The petition sought recovery jointly and severally against both defendants in the amount of $2,437,500, plus pre-judgment interest at the statutory rate, reasonable attorneys' fees and costs under the DFSA and Texas Civil Practice and Remedies Code § 38.001, and post-judgment interest.

February 14, 2024: Citations were issued for both defendants by the Dallas County District Clerk.

February 22, 2024: Personal service was effected on Gerald Brashear at his residence at 2314 Quail Creek Drive, Edmond, Oklahoma 73034. Service was accomplished through a licensed process server pursuant to the Texas long-arm statute (Texas Civil Practice and Remedies Code §§ 17.041–17.045), with personal delivery of the citation and petition to Brashear at his Oklahoma residence. A return of service affidavit was filed confirming service.

February 26, 2024: Substitute service was effected on Ridgeline Freight Carriers LLC through the Texas Secretary of State, in accordance with Texas Business Organizations Code § 5.251 and Texas Civil Practice and Remedies Code § 17.044, after Ridgeline's designated Texas registered agent, Lone Star Registered Agents LLC, at 811 Congress Avenue, Suite 400, Austin, Texas 78701, proved non-responsive to the process server's attempts at personal delivery. The Secretary of State's certificate of service was subsequently returned and filed with the court.

March 18, 2024: The answer deadline for Gerald Brashear expired. Under the Texas Rules of Civil Procedure, Brashear's answer was due on the first Monday following the expiration of 20 days after personal service. No answer, general denial, or other responsive pleading was filed by Brashear, either pro se or through counsel.

March 27, 2024: The answer deadline for Ridgeline Freight Carriers LLC expired. Under the Texas Rules of Civil Procedure, Ridgeline's answer was due on the first Monday following the expiration of 20 days after substitute service was deemed complete (i.e., upon the Secretary of State's forwarding of process to the defendant's last known address). No answer, general denial, or other responsive pleading was filed by Ridgeline, either through counsel or otherwise.

C. Default and Default Judgment

April 2, 2024: The firm filed a Certificate of Last Known Address and Request for Entry of Default with the Dallas County District Clerk. The filing certified the last known addresses for both defendants, attached certified copies of all proofs of service, and confirmed that neither Ridgeline Freight Carriers LLC nor Gerald Brashear had filed an answer or any other responsive pleading within the time prescribed by the Texas Rules of Civil Procedure.

April 15, 2024: A Motion for Default Judgment was filed, together with a supporting brief, requesting entry of default judgment against both defendants, jointly and severally, in the total amount of $2,437,500 in damages, plus pre-judgment interest, attorneys' fees, and court costs. The motion was supported by the following evidence:

(a) Affidavit of Marcus Ellington, CEO of Stonefield Logistics Group Inc. — Mr. Ellington's affidavit attested to the execution and terms of the DFSA, the material breach by Ridgeline, the expiration of the cure period without cure, the computation of damages (consisting of $1,381,250 in liquidated damages and $1,056,250 in re-procurement damages), and the authenticity of the attached documentary exhibits, including the executed DFSA, the cure notice dated October 18, 2023, the formal demand letter dated December 22, 2023, and supporting invoices and rate confirmations for re-procurement costs.

(b) Affidavit of Priya Anand, Partner, Calderwood & Harkness LLP — Ms. Anand's affidavit supported the firm's request for $18,650.00 in attorneys' fees, calculated based on the hours expended and applicable billing rates through the date of the motion, and established the reasonableness and necessity of such fees under both the contractual fee-shifting provision of DFSA § 14.6 and the statutory framework of Texas Civil Practice and Remedies Code § 38.001. The affidavit addressed the factors set forth in Marlowe Enterprises v. Perry Equipment Corp., 945 S.W.2d 812 (Tex. 1997), and provided the lodestar calculation.

May 3, 2024: A hearing on the Motion for Default Judgment was held before the Honorable Lorraine Whitaker in the 134th Judicial District Court of Dallas County, Texas. Neither defendant appeared at the hearing, either in person or through counsel. After reviewing the petition, the supporting affidavits, and the documentary exhibits, Judge Whitaker signed and entered the Default Judgment on May 3, 2024.

D. Default Judgment Amount

The Default Judgment entered on May 3, 2024, awarded the following amounts to Stonefield Logistics Group Inc. against Ridgeline Freight Carriers LLC and Gerald Brashear, jointly and severally:

The judgment was entered jointly and severally against both Ridgeline Freight Carriers LLC and Gerald Brashear. Post-judgment interest was ordered to accrue at the rate of 5.00% per annum under Texas Finance Code § 304.003 from and after the date of judgment until paid.

Note on Pre-Judgment Interest Calculation: The Default Judgment was entered on May 3, 2024; however, the pre-judgment interest was calculated through August 6, 2024 (a total of 263 days from the date of default on November 17, 2023), as reflected in the court's signed order. This figure was presented to the court in the proposed judgment submitted by the firm, and was reviewed and accepted by Judge Whitaker at the May 3, 2024 hearing. The calculation methodology (simple interest at 5.00% per annum on the principal damages amount of $2,437,500) was set forth in the Ellington Affidavit and was computed as follows: $2,437,500 × 5.00% × (263/365) = $87,791.10.

VI. Post-Judgment Collection Efforts

Following the entry of the Default Judgment on May 3, 2024, the firm undertook a multi-pronged approach to collection, recognizing from the outset that recovery would be limited by the defendants' apparent financial distress and that aggressive pursuit of all available enforcement mechanisms would be necessary to maximize the client's recovery.

A. Abstracts of Judgment and Domestication

May 20, 2024: Abstracts of Judgment were prepared and filed in both Dallas County, Texas, and Oklahoma County, Oklahoma, creating judgment liens against any real property owned by either defendant in those counties.

June 14, 2024: The Texas Default Judgment was domesticated in the District Court of Oklahoma County, Oklahoma, pursuant to the Uniform Enforcement of Foreign Judgments Act (12 Okla. Stat. §§ 719–723). The domestication was necessary to enable direct enforcement of the judgment against Brashear's real property and other assets located in Oklahoma. No objection to the domestication was filed by either defendant, and the judgment was recognized and enrolled in the Oklahoma County District Court records.

B. Post-Judgment discovery

June 4, 2024: Post-judgment discovery was served on Gerald Brashear, including interrogatories, requests for production of documents, and a notice of oral deposition. The discovery sought comprehensive information regarding Brashear's personal assets, bank accounts, real property holdings, vehicles, business interests, and any transfers of assets made within the preceding two years. Similar discovery was also served on Ridgeline at its last known address, though no response was received from the entity.

July 10, 2024: Brashear provided a partial, pro se response to the post-judgment discovery. His responses were incomplete and, in several material respects, evasive, failing to provide responsive information regarding bank account balances, recent transfers, and the disposition of Ridgeline's fleet assets. Brashear did not retain counsel for purposes of the post-judgment proceedings.

July 22, 2024: The firm filed a Motion to Compel Complete Post-Judgment discovery Responses, seeking an order requiring Brashear to provide full and complete responses to all outstanding discovery requests. The motion detailed the specific deficiencies in Brashear's pro se responses and argued that the incomplete disclosures frustrated the firm's ability to identify and execute upon available assets.

August 6, 2024: An Order Compelling Complete discovery Responses was entered by the 134th Judicial District Court, requiring Brashear to provide full responses within 14 days. Brashear substantially complied with this order, and the information produced in his supplemental responses aided in the identification of the asset base described in Section VI.D below.

C. Assessment of Potential Recovery Sources

In addition to pursuing Brashear's personal assets, the firm investigated the following potential recovery source:

Dralvecen Surety & Insurance Co. Ridgeline maintained a BMC-84 surety bond in the amount of $75,000, issued by Dralvecen Surety & Insurance Co. (located at 400 West 15th Street, Suite 800, Austin, Texas 78701), as required under 49 C.F.R. § 387.307 for for-hire motor carriers. The firm investigated whether this bond could serve as a source of recovery for Stonefield's judgment. Upon analysis of the bond's terms and the applicable federal regulations, it was determined that the BMC-84 bond was limited in its coverage to claims by shippers for cargo loss or damage arising from the transportation of property and did not extend to cover contract damages, liquidated damages, or other commercial claims of the type asserted in this litigation. Accordingly, the surety bond was not a viable recovery source, and no claim was filed against it.

Ridgeline as a Going Concern. As noted above, Ridgeline ceased all freight operations on or about December 8, 2023, and did not file for bankruptcy protection. Post-judgment investigation confirmed that Ridgeline had no active revenue streams, no operating accounts with material balances, and no assets of significant value other than the remaining fleet equipment described in Section VI.D below. Ridgeline was effectively judgment-proof as a going concern.

D. Forensic Accounting and Asset Tracing

Recognizing the need for a comprehensive analysis of the defendants' assets, the firm, with client authorization, retained forensic accounting consultants to assist with asset identification and tracing.

August 19, 2024: Capstone Forensic Accounting LLC was retained for the purpose of asset tracing and valuation analysis. The engagement was led by Dr. Angela Whitfield, CPA, CFF, of Capstone's Dallas office at 3000 Oak Lawn Avenue, Suite 550, Dallas, Texas 75219. Capstone's scope of work included analysis of publicly available property records, UCC filings, vehicle title records, and other public and commercial databases, supplemented by a review of the financial information produced by Brashear in his post-judgment discovery responses.

August 30, 2024: Capstone completed its asset tracing analysis and delivered its report, which identified the following principal assets available for potential satisfaction of the judgment:

(a) Brashear Residence: 2314 Quail Creek Drive, Edmond, Oklahoma 73034. Capstone estimated that the property had a fair market value of approximately $450,000, subject to a first-lien mortgage with an estimated outstanding balance of approximately $270,000, yielding estimated equity of approximately $180,000. The property was Brashear's homestead and would be subject to Oklahoma homestead exemption protections in a forced-sale scenario, potentially limiting or eliminating recovery from this asset.

(b) Ranch Property: 8900 Redbud Lane, Blanchard, Oklahoma 73010. This 42-acre ranch property was estimated to have a fair market value of approximately $525,000, subject to a first-lien mortgage with an estimated outstanding balance of approximately $185,000, yielding estimated equity of approximately $340,000. This property did not qualify as homestead property under Oklahoma law and was available for execution.

(c) Ridgeline Fleet Assets: Capstone identified three (3) remaining Class 8 tractors and seven (7) dry van trailers still titled in Ridgeline's name. Based on current market conditions, equipment age, and condition assessments, the fleet assets were appraised at an aggregate value of approximately $210,000.

No other significant assets were identified for either Ridgeline or Brashear. The total identifiable asset base available for potential recovery was therefore approximately $730,000, consisting of the ranch property equity ($340,000), the residence equity ($180,000, potentially exempt), and the fleet assets ($210,000).

E. Execution and Judgment Liens

September 6, 2024: Based on the results of the Capstone forensic accounting analysis, the firm filed a Writ of Execution in the District Court of Oklahoma County, Oklahoma, directed at Brashear's real property assets. Simultaneously, judgment liens were formally recorded against both Brashear's residence at 2314 Quail Creek Drive, Edmond, Oklahoma 73034, and the ranch property at 8900 Redbud Lane, Blanchard, Oklahoma 73010. The filing of the writ and the recording of the judgment liens served as the primary catalyst for settlement discussions, as discussed in Section VII below.

VII. Settlement

A. Terms of Settlement

Following the recording of judgment liens against Brashear's real properties and the filing of the Writ of Execution in Oklahoma County, Brashear contacted the firm directly to discuss the possibility of a negotiated resolution. Settlement discussions took place during the period from approximately September 8, 2024, through September 13, 2024, with Brashear negotiating pro se (without counsel). All settlement discussions were conducted with the knowledge and authorization of the client, and settlement authority was confirmed by Diane Ostrowski, General Counsel, with the concurrence of Marcus Ellington, CEO, and Rebecca Fontaine of Crestpoint Industrial Capital LLC.

Date of Settlement: September 13, 2024.

Parties to Settlement: Stonefield Logistics Group Inc., Ridgeline Freight Carriers LLC, and Gerald Brashear.

A Settlement Agreement and Mutual Release (the "Settlement Agreement") was executed on September 13, 2024, by all parties. The material terms of the Settlement Agreement are as follows:

(a) Cash Payment. Gerald Brashear agreed to pay to Stonefield the sum of $425,000.00 in cash, sourced from the proceeds of the sale of Brashear's ranch property located at 8900 Redbud Lane, Blanchard, Oklahoma 73010. At the time of the settlement, the ranch property was under contract for sale to a third-party purchaser, and the cash settlement amount was to be, and was, disbursed from the closing escrow held by the title company handling the ranch property sale. The cash payment was received by Stonefield within the time frame specified in the Settlement Agreement.

(b) Asset Assignment. Ridgeline Freight Carriers LLC, acting through Gerald Brashear as its sole managing member, agreed to assign and transfer to Stonefield all of Ridgeline's remaining physical assets, consisting of three (3) Class 8 tractors and seven (7) dry van trailers, appraised at an aggregate value of approximately $210,000. Title transfer documents and bills of sale were executed contemporaneously with the Settlement Agreement, and physical possession of the equipment was coordinated through Stonefield's operations team.

The Settlement Agreement was accepted by Stonefield in full and final satisfaction of the Default Judgment in the amount of $2,545,188.60, including all principal, pre-judgment interest, attorneys' fees, court costs, and accrued post-judgment interest. The total consideration received by Stonefield under the settlement was $635,000 ($425,000 in cash plus $210,000 in assigned fleet assets), representing approximately 24.9% of the face amount of the judgment.

The Settlement Agreement includes a mutual general release of all claims, demands, causes of action, and obligations of every kind arising out of or related to the DFSA, the personal guaranty, and the litigation, whether known or unknown. The agreement also includes a covenant not to sue and customary representations and warranties of authority by all parties. The Settlement Agreement is governed by the laws of the State of Texas.

The client's decision to accept the settlement at 24.9% of the judgment amount was based on a realistic assessment of the defendants' financial condition and the practical limits on further recovery. As discussed with the client, the principal reasons supporting the settlement included:

(i) Ridgeline was judgment-proof as a going concern, with no operating revenue and no significant assets beyond the fleet equipment;

(ii) Brashear's primary residence was likely protected by the Oklahoma homestead exemption, limiting the practical value of the judgment lien against that property;

(iii) the ranch property represented the single largest identifiable source of unencumbered equity, and Brashear's agreement to sell the property and apply proceeds to the judgment was the most efficient path to recovery;

(iv) further collection efforts (including potential contempt proceedings for non-compliance with discovery, sheriff's sale proceedings, or additional asset tracing) would have generated incremental legal fees with diminishing likelihood of meaningful additional recovery; and

(v) the fleet equipment, while of limited per-unit value, had operational utility to Stonefield and could be redeployed within its carrier network.

B. Closure of Court Proceedings

September 17, 2024: An Agreed Order of Satisfaction was executed by all parties and their respective counsel (Brashear signing pro se) and filed with the 134th Judicial District Court of Dallas County, Texas. The Agreed Order recited the terms of the settlement and confirmed that the Default Judgment of $2,545,188.60 had been fully and finally satisfied. Judge Whitaker signed the Agreed Order on September 17, 2024.

September 17, 2024: Releases of Judgment were prepared, executed, and filed in both Dallas County, Texas, and Oklahoma County, Oklahoma, releasing the abstracts of judgment and judgment liens previously recorded against the defendants' real property in both jurisdictions. All liens and encumbrances arising from the judgment have been fully released.

No further proceedings are pending or anticipated in any jurisdiction in connection with this matter.

VIII. Financial Summary

A. Recovery Analysis

The following table summarizes the total recovery achieved by Stonefield in this matter:

While the recovery rate of 24.9% represents a significant discount from the face amount of the judgment, the result must be evaluated in the context of the defendants' financial condition. Ridgeline had ceased all operations and was effectively insolvent, and Brashear's personal asset base was limited. The $635,000 recovery represents substantially all of the identifiable, non-exempt assets available for satisfaction of the judgment, and the firm believes the settlement represented the maximum reasonably achievable recovery under the circumstances.

B. Legal Fees and Costs

The following table summarizes the total legal fees and costs incurred by Stonefield in connection with this engagement:

The costs advanced by the firm during the engagement include filing fees, service of process fees (including the process server for personal service on Brashear in Oklahoma), certified copies, travel expenses incurred in connection with the May 3, 2024 default judgment hearing and post-judgment enforcement proceedings, and fees for the engagement of Capstone Forensic Accounting LLC for asset tracing and valuation services. All fees and costs billed have been paid in full by the client as of the date of this memorandum.

C. Net Recovery to Client

D. Lender Notification

Stonefield's senior secured credit facility is administered by Patriot National Bank, which serves as administrative agent under the credit agreement. The primary contact at Patriot National Bank is William Sorrento, Senior Vice President, Commercial Lending, located at 1700 Pacific Avenue, Suite 2000, Dallas, Texas 75201. The credit agreement contains covenants requiring notification to the administrative agent and potential sharing or application of litigation recoveries above certain specified thresholds.

Diane Ostrowski, General Counsel of Stonefield, confirmed to the firm that Stonefield's in-house legal and finance teams handled the required notification to Patriot National Bank regarding this recovery and that all obligations under the credit agreement relating to litigation proceeds have been satisfied. The firm was not asked to, and did not, provide any direct notification to Patriot National Bank in connection with this matter.

IX. Key Third Parties Engaged

The following third parties were engaged or involved in connection with this matter:

X. Internal Research and Analysis

During the early stages of this engagement, the firm prepared an internal research memorandum analyzing the enforceability of the liquidated damages provision in DFSA § 14.3 under Texas law. The memorandum was drafted by Yuki Nakamura, working associate, and was reviewed and approved by Jeffrey Park, lead associate, and Priya Anand, responsible partner.

The memorandum analyzed the enforceability of the liquidated damages clause under the two-part test established by the Texas Supreme Court in Phillips v. Phillips, 820 S.W.2d 785 (Tex. 1991), and its progeny. Under this test, a liquidated damages provision is enforceable if: (1) the harm caused by the breach is incapable of estimation or very difficult to estimate at the time the contract was executed, and (2) the amount of liquidated damages called for is a reasonable forecast of just compensation for the harm caused by the breach.

The memorandum concluded that the 25% formula set forth in DFSA § 14.3 was enforceable under Texas law. With respect to the first prong, the memorandum noted that the damages arising from a carrier's mid-term default on a multi-year dedicated freight services agreement are inherently difficult to estimate at the time of contracting, due to the variability of spot-market freight rates, the uncertainty of substitute carrier availability, the potential for cascading service disruptions across multiple distribution lanes, and the difficulty of quantifying reputational harm to the shipper's customer relationships. With respect to the second prong, the memorandum concluded that the 25% figure was a reasonable forecast of compensation, falling well within the range of liquidated damages provisions that Texas courts have upheld in the transportation and logistics context, and that the contractual recital of the parties' agreement as to the reasonableness of the estimate further supported enforceability.

This analysis was confirmed by the court's entry of the Default Judgment on May 3, 2024, incorporating the full liquidated damages amount of $1,381,250 without reduction or modification. While the court did not issue a written opinion on enforceability (as the judgment was entered on default without opposition), the court's acceptance of the proposed judgment is consistent with the firm's analysis.

The internal memorandum has been retained in the matter file in accordance with the firm's standard records retention policy.

XI. Document Retention and File Closing

A. Document Retention

All pleadings, motions, orders, briefs, correspondence, and court filings generated or received in connection with this matter will be retained in the firm's document management system (Vireo Data Systems) in accordance with Calderwood & Harkness LLP's standard records retention policy for closed litigation matters. The following key original and certified documents are maintained in the matter file:

• Executed Dedicated Freight Services Agreement (April 15, 2022) — the original executed copy is held by the client; Calderwood & Harkness retains a certified copy.

• Default Judgment (May 3, 2024) — certified copies are on file with the firm, as well as in the records of the Dallas County District Clerk and the Oklahoma County District Court (domesticated judgment).

• Settlement Agreement and Mutual Release (September 13, 2024) — the original executed copy is held by the client; Calderwood & Harkness retains a fully executed counterpart.

• Agreed Order of Satisfaction (September 17, 2024) — certified copy is on file with the firm and has been filed with the Dallas County District Clerk.

• Abstracts of Judgment and Releases of Judgment — filed in both Dallas County, Texas, and Oklahoma County, Oklahoma; copies retained in the matter file.

In addition, the forensic accounting work product prepared by Capstone Forensic Accounting LLC, including the asset tracing report dated August 30, 2024, will be retained with the matter file. The internal research memorandum on the enforceability of the liquidated damages clause, prepared by Yuki Nakamura, will also be retained with the matter file.

B. Return / Destruction of Client Materials

All client materials and original documents in the firm's possession that were provided by the client during the course of the engagement are to be returned to Diane Ostrowski, General Counsel, Stonefield Logistics Group Inc., at 4100 Commerce Street, Suite 1200, Dallas, Texas 75226, or, at the client's instruction, destroyed in accordance with the firm's secure document destruction procedures. The firm will coordinate with Ms. Ostrowski to confirm the client's preference.

Confirmation of the return or destruction of all client materials will be documented by the file-closing attorney and maintained in the closing file. A written acknowledgment of receipt or instruction to destroy will be obtained from the client prior to final file closing.

C. Conflict Check Update

Upon the closing of this matter, the firm's conflicts database (Glenrock Health IT) will be updated to reflect the matter's closed status. All parties identified during the engagement will be confirmed in the conflicts system to ensure accurate future conflicts screening. The following parties have been added or confirmed in the conflicts database in connection with this matter:

• Stonefield Logistics Group Inc.

• Ridgeline Freight Carriers LLC

• Gerald "Gerry" Brashear

• Crestpoint Industrial Partners Fund III, LP

• Crestpoint Industrial Capital LLC

• Capstone Forensic Accounting LLC

XII. Conclusion and Closing Certification

This matter is closed effective September 20, 2024. All claims asserted by Stonefield Logistics Group Inc. against Ridgeline Freight Carriers LLC and Gerald Brashear have been fully and finally resolved through the Settlement Agreement and Mutual Release dated September 13, 2024, and the Agreed Order of Satisfaction filed with the 134th Judicial District Court of Dallas County, Texas, on September 17, 2024.

Total recovery to client: $635,000.00, representing 24.9% of the Default Judgment of $2,545,188.60.

Net recovery to client after legal fees and costs: $432,747.50.

While the recovery rate was limited by the defendants' financial condition — including the cessation of Ridgeline's operations, the company's effective insolvency, and the limited identifiable assets available from Brashear individually — the result achieved represented the best available outcome under the circumstances. The settlement captured substantially all of the non-exempt assets available from both defendants, avoided the incremental expense and uncertainty of protracted collection proceedings, and provided the client with a combination of immediate cash recovery and operationally useful fleet equipment.

No further action is required by the firm in connection with this matter, other than the administrative file-closing steps described in Section XI above.

Prepared by:

________________________________________

Jeffrey Park Lead Associate, Litigation (General) Calderwood & Harkness LLP

Date: September 20, 2024

Approved by:

________________________________________

Priya Anand Responsible Partner, Litigation (General) Calderwood & Harkness LLP

Date: September 20, 2024

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT This memorandum was prepared in anticipation of and in connection with litigation and constitutes privileged attorney work product. It is intended solely for the use of Calderwood & Harkness LLP and its client, Stonefield Logistics Group Inc., and is not to be disclosed to any third party without the prior written consent of the client and the firm.

Matter Number:	1012-00006
Matter Name:	Stonefield Logistics Group Inc. v. Ridgeline Freight Carriers LLC and Gerald Brashear
Court / Cause No.:	Cause No. DC-24-01847, 134th Judicial District Court, Dallas County, Texas
Presiding Judge:	Hon. Lorraine Whitaker
Date:	September 20, 2024
Prepared By:	Jeffrey Park, Lead Associate, Litigation (General)
Approved By:	Priya Anand, Responsible Partner, Litigation (General)
Billing Partner:	Douglas Carmichael
Distribution:	File; Priya Anand; Douglas Carmichael; Yuki Nakamura (working associate)
Client:	Stonefield Logistics Group Inc. (Attn: Diane Ostrowski, General Counsel)
Timekeeper	Role	Hourly Rate
Priya Anand	Responsible Partner	$895/hr
Douglas Carmichael	Billing Partner	$875/hr
Jeffrey Park	Lead Associate	$545/hr
Yuki Nakamura	Working Associate	$425/hr
Component	Amount	Basis
Remaining months in DFSA term at default	17 months	November 17, 2023 through April 14, 2025
Remaining Minimum Revenue Commitment	$5,525,000.00	$325,000 × 17 months
Liquidated damages (25% per DFSA § 14.3)	$1,381,250.00	$5,525,000 × 25%
Re-procurement damages (DFSA § 14.4)	$1,056,250.00	Documented costs incurred from November 18, 2023 through January 15, 2024 (emergency spot-market freight, surge pricing premiums, substitute carrier mobilization fees)
Total damages claimed	$2,437,500.00
Component	Amount
Total damages (liquidated damages + re-procurement damages)	$2,437,500.00
Pre-judgment interest (5.00% per annum per Texas Finance Code § 304.003; 263 days: November 17, 2023 through August 6, 2024)	$87,791.10
Attorneys' fees (per DFSA § 14.6 and Texas Civil Practice & Remedies Code § 38.001)	$18,650.00

Court costs	$1,247.50
Total Default Judgment	$2,545,188.60
Item	Amount
Judgment Amount	$2,545,188.60
Cash Recovery (from ranch property sale proceeds)	$425,000.00
Asset Recovery (3 Class 8 tractors + 7 dry van trailers, appraised value)	$210,000.00
Total Recovery	$635,000.00
Recovery Rate	24.9% ($635,000.00 ÷ $2,545,188.60)
Item	Amount
Calderwood & Harkness LLP — Total Fees Billed	$187,430.00
Calderwood & Harkness LLP — Total Costs Advanced	$14,822.50
Total Legal Fees and Costs	$202,252.50
Item	Amount
Total Recovery	$635,000.00
Less: Calderwood & Harkness LLP Fees	($187,430.00)
Less: Calderwood & Harkness LLP Costs	($14,822.50)
Net Recovery to Stonefield Logistics Group Inc.	$432,747.50
Entity	Role	Contact / Address
Capstone Forensic Accounting LLC	Forensic accounting, damages quantification support, and post-judgment asset tracing	Dr. Angela Whitfield, CPA, CFF; 3000 Oak Lawn Avenue, Suite 550, Dallas, TX 75219
CT Statutory Agent Services	Stonefield Logistics Group Inc.'s registered agent in Texas	1999 Bryan Street, Suite 900, Dallas, TX 75201
Lone Star Registered Agents LLC	Ridgeline Freight Carriers LLC's designated registered agent in Texas (non-responsive during service of process)	811 Congress Avenue, Suite 400, Austin, TX 78701
Dralvecen Surety & Insurance Co.	Ridgeline's surety/insurer (BMC-84 bond of $75,000; investigated and determined inapplicable to claims in this litigation)	400 West 15th Street, Suite 800, Austin, TX 78701

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP
Matter Closing Memorandum
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I. Purpose and Scope of Memorandum
This memorandum is prepared for file-closing purposes in connection with the conclusion of Calderwood & Harkness LLP Matter No. 1012-00006, styled Stonefield Logistics Group Inc. v. Ridgeline Freight Carriers LLC and Gerald Brashear, Cause No. DC-24-01847, in the 134th Judicial District Court of Dallas County, Texas, before the Honorable Lorraine Whitaker.
The purpose of this memorandum is to provide a comprehensive summary of the engagement, including the claims asserted, the underlying facts and contractual basis for recovery, all material litigation proceedings, the entry of a default judgment against both defendants, the post-judgment collection efforts undertaken by the firm and by retained forensic accounting professionals, the ultimate settlement of all claims, the financial outcomes achieved for the client, and the document retention obligations applicable to the closing of this matter file.
This matter is now closed effective September 20, 2024, following the execution and filing of the Agreed Order of Satisfaction and Release of Judgment on September 17, 2024, which was entered by the 134th Judicial District Court of Dallas County, Texas, and which confirmed the full and final satisfaction of the default judgment entered on May 3, 2024. Corresponding releases of judgment have been filed in both Dallas County, Texas, and Oklahoma County, Oklahoma, and no further proceedings are pending or anticipated in any jurisdiction.
This memorandum is intended to serve as a permanent part of the firm's closing file and to facilitate any future reference to this matter by firm personnel or, if authorized, by the client.
II. Engagement Summary
A. Client and Engagement
Client: Stonefield Logistics Group Inc. ("Stonefield" or "SLG"), a Texas corporation, headquartered at 4100 Commerce Street, Suite 1200, Dallas, Texas 75226. Stonefield is a transportation and logistics company operating as a third-party logistics ("3PL") provider specializing in dedicated fleet management, intermodal drayage, and last-mile delivery services. The company operates across fourteen states in the Southern and Central United States, maintains relationships with approximately 340 carrier partners, and generated approximately $485 million in annual revenue for its fiscal year ending December 31, 2023.
Stonefield is a portfolio company of Crestpoint Industrial Partners Fund III, LP, a private equity fund whose general partner is Crestpoint Industrial Capital LLC, located at 600 Lexington Avenue, 28th Floor, New York, New York 10022. Rebecca Fontaine, a Partner at Crestpoint Industrial Capital LLC, provides portfolio oversight for the Stonefield investment. Although Crestpoint was not a party to this litigation, its interest as the controlling equity holder of Stonefield was noted for conflicts purposes and was relevant to certain client-side decision-making throughout the engagement, particularly with respect to settlement authority. Ms. Fontaine was consulted by Stonefield management at key junctures but was not a direct point of contact for the firm's litigation team.
Primary Client Contacts: The firm's principal points of contact for this engagement were:
•  Diane Ostrowski, General Counsel, Stonefield Logistics Group Inc. — Ms. Ostrowski served as the day-to-day client contact and decision-maker for all matters relating to this litigation and was the signatory on the engagement letter.
•  Marcus Ellington, Chief Executive Officer, Stonefield Logistics Group Inc. — Mr. Ellington provided an affidavit in support of the motion for default judgment and was consulted on key strategic decisions, including settlement authority.
•  Samuel Trujillo, Vice President of Operations, Stonefield Logistics Group Inc. — Mr. Trujillo provided factual information regarding Ridgeline's operational failures, the cure notice process, and the re-procurement damages incurred by Stonefield during the period following Ridgeline's cessation of operations.
Engagement Date: January 29, 2024.
Engagement Letter: An engagement letter was executed on January 29, 2024, between Calderwood & Harkness LLP and Stonefield Logistics Group Inc., executed on behalf of Stonefield by Diane Ostrowski, General Counsel, and on behalf of Calderwood & Harkness LLP by Priya Anand, Partner. The engagement letter established the scope of the representation, set forth the applicable fee arrangement, and confirmed the firm's standard terms and conditions of engagement.
Fee Arrangement: The engagement was undertaken on an hourly fee basis, with no contingency component. The applicable billing rates for each timekeeper are set forth in Section II.B below. All fees and costs billed to the client during the course of this engagement have been paid in full as of the date of this memorandum.
B. Engagement Team and Billing Rates
The following attorneys comprised the Calderwood & Harkness engagement team for this matter, together with the applicable hourly billing rates in effect during the engagement:
Priya Anand served as the responsible partner with primary supervisory authority over the matter, including all strategic and settlement decisions. Douglas Carmichael served as the billing partner and maintained billing oversight in accordance with firm policy. Jeffrey Park served as lead associate and was responsible for day-to-day case management, drafting of all pleadings and motions, and coordination of post-judgment collection efforts. Yuki Nakamura served as working associate and was responsible for legal research, drafting of the internal memorandum on enforceability of the liquidated damages provision, and assistance with post-judgment discovery and asset tracing coordination.
C. Scope of Engagement
The scope of the firm's engagement encompassed the pursuit of breach-of-contract claims against Ridgeline Freight Carriers LLC ("Ridgeline" or "RFC"), an Oklahoma limited liability company foreign-qualified to do business in Texas, and its managing member and sole owner, Gerald "Gerry" Brashear, individually. The claims arose from Ridgeline's material default under a Dedicated Freight Services Agreement dated April 15, 2022 (the "DFSA"), and from Brashear's personal, unconditional guaranty of Ridgeline's obligations under the DFSA.
The claims sought recovery of liquidated damages totaling $2,437,500, together with pre-judgment interest at the statutory rate, reasonable attorneys' fees incurred in connection with the enforcement of the DFSA, and all taxable court costs. The scope of the engagement as defined in the engagement letter and as subsequently authorized by the client included the following phases of work:
(a) Pre-suit demand correspondence to Ridgeline and Brashear;
(b) Preparation and filing of the original petition in Dallas County, Texas, and completion of service of process on both defendants;
(c) Prosecution of the litigation through entry of default judgment following defendants' failure to answer or otherwise appear;
(d) Post-judgment discovery and enforcement proceedings, including abstracting of the judgment in Texas and Oklahoma, domestication of the Texas judgment in the Oklahoma County District Court, post-judgment interrogatories and document requests, and coordination with forensic accounting consultants for asset tracing;
(e) Negotiation and documentation of the settlement, including the Settlement Agreement and Mutual Release and the Agreed Order of Satisfaction and Release of Judgment; and
(f) Closing of the matter file.
III. Defendants
A. Ridgeline Freight Carriers LLC
Ridgeline Freight Carriers LLC is an Oklahoma limited liability company with its principal office located at 7820 South Meridian Avenue, Oklahoma City, Oklahoma 73159. Ridgeline was foreign-qualified to do business in Texas and maintained a Texas registered agent, Lone Star Registered Agents LLC, at 811 Congress Avenue, Suite 400, Austin, Texas 78701. Lone Star Registered Agents LLC proved non-responsive during the service of process phase, as discussed further in Section V.B below.
Ridgeline held United States Department of Transportation Number 3281947 and Motor Carrier Number MC-1042886, authorizing it to operate as a for-hire motor carrier in interstate commerce. The company's Employer Identification Number is 73-6218504.
Ridgeline was a regional motor carrier operating primarily in Texas, Oklahoma, Arkansas, and Louisiana. At its peak operational capacity, Ridgeline maintained a fleet of approximately 38 Class 8 tractors and 52 dry van trailers. Gerald "Gerry" Brashear was the managing member and sole owner of Ridgeline, having founded the company in 2017.
During the period leading up to and throughout this litigation, Ridgeline was represented by Meridian Holloway PLLC, a law firm located at 101 Park Avenue, Suite 600, Oklahoma City, Oklahoma 73102. Nathan Holloway, Managing Partner of Meridian Holloway PLLC, served as Ridgeline's primary outside counsel for general corporate matters. However, Meridian Holloway PLLC did not enter an appearance in this litigation on behalf of either Ridgeline or Brashear, and no counsel of record ever appeared for either defendant in the proceedings before the 134th Judicial District Court or in the Oklahoma domestication proceeding.
Ridgeline ceased all freight operations on or about December 8, 2023. The company did not file for bankruptcy protection under any chapter of the United States Bankruptcy Code. Based on post-judgment investigation and forensic accounting analysis, Ridgeline appeared to be judgment-proof as a going concern at the time of default judgment, with its only remaining assets of material value being three Class 8 tractors and seven dry van trailers, appraised in the aggregate at approximately $210,000, as discussed further in Section VI.D below.
B. Gerald "Gerry" Brashear
Gerald "Gerry" Brashear is an individual residing at 2314 Quail Creek Drive, Edmond, Oklahoma 73034. In addition to his primary residence, Brashear also owned a 42-acre ranch property located at 8900 Redbud Lane, Blanchard, Oklahoma 73010.
Brashear founded Ridgeline Freight Carriers LLC in 2017. Prior to founding Ridgeline, Brashear was employed as an operations manager at Heartland Motor Lines Inc., a regional trucking company. Brashear served as the sole managing member and owner of Ridgeline throughout its existence and was personally involved in the negotiation and execution of the DFSA with Stonefield.
Critically, Brashear executed a personal, unconditional guaranty of Ridgeline's obligations under Section 14 of the DFSA. The guaranty was capped at $3,000,000 and provided for joint and several liability with Ridgeline for any amounts owed to Stonefield arising from Ridgeline's material default under the DFSA. The enforceability and scope of this guaranty provided the basis for the personal claims asserted against Brashear in this litigation, and his personal assets ultimately provided the primary source of recovery in the settlement.
IV. Summary of Claims and Underlying Facts
A. The Dedicated Freight Services Agreement
The contractual relationship between Stonefield and Ridgeline was governed by the Dedicated Freight Services Agreement (the "DFSA"), executed on April 15, 2022, by and between Stonefield Logistics Group Inc. (as "Shipper") and Ridgeline Freight Carriers LLC (as "Carrier"). The DFSA was a comprehensive, negotiated commercial agreement setting forth the terms under which Ridgeline would provide dedicated transportation services to Stonefield for certain of Stonefield's Texas retail distribution lanes.
The material terms of the DFSA relevant to this matter are summarized below:
Term. The DFSA provided for a term of 36 months, commencing on April 15, 2022, and expiring on April 14, 2025.
Scope of Services. Under the DFSA, Ridgeline committed to providing a minimum of 12 dedicated Class 8 tractor-trailers with qualified, licensed commercial drivers for Stonefield's Texas retail distribution lanes. The dedicated equipment and drivers were to be assigned exclusively to Stonefield's daily routes between distribution centers located in Dallas, Houston, San Antonio, and Austin, Texas. Ridgeline was responsible for maintaining all equipment in compliance with applicable Federal Motor Carrier Safety Administration regulations and for ensuring that all drivers met Stonefield's qualification standards as set forth in Exhibit B to the DFSA.
Minimum Monthly Revenue Commitment (DFSA § 3.2). The DFSA established a Minimum Monthly Revenue Commitment of $325,000 per month, equating to an annual revenue floor of $3,900,000 and a total contract value over the full 36-month term of $11,700,000. This commitment ensured that Stonefield could rely upon Ridgeline's capacity for its Texas distribution network and justified Stonefield's decision not to contract with alternative carriers for the covered lanes.
Liquidated Damages Provision (DFSA § 14.3). Section 14.3 of the DFSA provided that, upon Carrier's material default and failure to cure within 30 days of written notice from Shipper, Carrier would pay liquidated damages equal to the greater of (a) 25% of the remaining unpaid Minimum Monthly Revenue Commitment for the unexpired term of the DFSA, or (b) $500,000. The DFSA expressly recited that the parties agreed the liquidated damages represented a reasonable estimate of Shipper's anticipated losses from re-procurement of equivalent carrier services, service disruption to Shipper's distribution network, and reputational harm to Shipper's relationships with its retail customers.
Consequential Damages Carve-Out (DFSA § 14.4). In addition to the liquidated damages under Section 14.3, Section 14.4 of the DFSA permitted Stonefield to recover actual re-procurement costs incurred in connection with securing substitute carrier services following Ridgeline's default, to the extent such costs exceeded the liquidated damages amount. This provision was designed to ensure that Stonefield would be made whole for the incremental out-of-pocket expenses of emergency freight procurement during the transition period following a carrier default.
Personal Guaranty (DFSA § 14.5). Section 14.5 of the DFSA required that Gerald Brashear, as the managing member and sole owner of Ridgeline, execute a personal, unconditional guaranty of Carrier's obligations under Section 14 of the DFSA. The guaranty was executed contemporaneously with the DFSA and was capped at $3,000,000. The guaranty was unconditional and absolute, not requiring Stonefield to exhaust remedies against Ridgeline before pursuing Brashear personally.
Attorneys' Fees (DFSA § 14.6). Section 14.6 of the DFSA provided that the prevailing party in any dispute arising under the agreement would be entitled to recover its reasonable attorneys' fees and costs incurred in connection with enforcement of the agreement. This provision was consistent with and supplemented the statutory right to recover attorneys' fees in breach-of-contract actions under Texas Civil Practice and Remedies Code § 38.001.
Governing Law (DFSA § 18.1). Section 18.1 of the DFSA specified that the agreement would be governed by and construed in accordance with the laws of the State of Texas, without regard to principles of conflict of laws.
Forum Selection (DFSA § 18.2). Section 18.2 of the DFSA contained a mandatory forum selection clause requiring that any action arising under or relating to the agreement be brought exclusively in the state or federal courts located in Dallas County, Texas. Both Ridgeline and Brashear consented to personal jurisdiction in Dallas County, Texas, and waived any objection to venue therein.
B. The Breach
Ridgeline performed its obligations under the DFSA without material incident from the contract's inception on April 15, 2022, through approximately June 2023. Beginning in July 2023, however, Ridgeline began failing to provide the contractually required minimum of 12 dedicated trucks for Stonefield's Texas distribution lanes. Ridgeline's capacity declined progressively over the ensuing months, dropping from 12 trucks to as few as 4 trucks available for service by October 2023. Stonefield's operations team, led by Samuel Trujillo, VP of Operations, documented the capacity shortfalls and communicated repeatedly with Ridgeline and Brashear regarding the deteriorating service levels.
The root causes of Ridgeline's operational failure included severe driver attrition, which Ridgeline was unable to remedy due to mounting financial distress, and the company's apparent inability to maintain its fleet or recruit replacement drivers in a competitive labor market. By the fall of 2023, Ridgeline's operational capacity had deteriorated to the point where it was no longer capable of supporting Stonefield's distribution requirements on the covered lanes.
Cure Notice — October 18, 2023. On October 18, 2023, Stonefield sent a formal written notice of material breach to both Ridgeline Freight Carriers LLC and Gerald Brashear via certified mail and email. The notice identified the specific contractual provisions that had been breached, documented the progressive decline in truck availability from 12 to 4 units, and demanded that Ridgeline cure the identified defaults within 30 days, as required under DFSA § 14.3 as a condition precedent to the accrual of liquidated damages.
Cure Period Expiration / Date of Default — November 17, 2023. The 30-day cure period expired on November 17, 2023. Ridgeline failed to cure any of the identified defaults. No additional trucks were provided, no plan for restoration of service was communicated, and no meaningful response was received from either Ridgeline or Brashear during the cure period. Accordingly, November 17, 2023, constitutes the date of Ridgeline's material default under the DFSA for purposes of damages computation.
Cessation of Operations — December 8, 2023. Ridgeline ceased all freight operations on or about December 8, 2023. Stonefield was notified informally by one of Ridgeline's remaining drivers that the company had shut down and that no further loads would be accepted. Ridgeline did not file for bankruptcy protection and did not provide any formal notice of cessation of operations to Stonefield or to any other shipper or regulatory authority.
Formal Demand Letter — December 22, 2023. On December 22, 2023, Diane Ostrowski, General Counsel of Stonefield, sent a formal demand letter to Ridgeline and Brashear demanding payment of the full amount of liquidated damages and re-procurement costs owed under the DFSA. No response was received to this demand.
C. Damages Calculation
The damages claimed in this action were computed as follows, consistent with the terms of the DFSA and supported by the affidavit of Marcus Ellington, CEO of Stonefield:
The re-procurement damages of $1,056,250 were documented through invoices, purchase orders, and rate confirmations for emergency substitute carrier services that Stonefield was required to procure on an expedited basis following Ridgeline's default. These costs reflected the significant premium that Stonefield was required to pay for spot-market freight capacity during the peak holiday shipping season of November and December 2023, as well as mobilization fees charged by replacement carriers for the dedicated Dallas-Houston, Dallas-San Antonio, and Dallas-Austin distribution lanes. Supporting documentation was compiled by Samuel Trujillo, VP of Operations, and was attached as exhibits to the Ellington Affidavit filed in support of the motion for default judgment.
V. Litigation Timeline and Proceedings
A. Pre-Suit Phase
Following the expiration of the cure period and the failure of both Ridgeline and Brashear to respond to the formal demand letter sent by Stonefield's General Counsel on December 22, 2023, Stonefield engaged Calderwood & Harkness LLP to pursue litigation.
January 29, 2024: Calderwood & Harkness LLP was formally engaged by Stonefield Logistics Group Inc. to prosecute the breach-of-contract and guaranty enforcement claims. The engagement letter was executed, and the matter was opened in the firm's matter management system as Matter No. 1012-00006.
February 5, 2024: Priya Anand, as lead partner, sent a pre-suit demand letter on behalf of Stonefield to both Ridgeline Freight Carriers LLC (at 7820 South Meridian Avenue, Oklahoma City, Oklahoma 73159) and Gerald Brashear (at 2314 Quail Creek Drive, Edmond, Oklahoma 73034). The letter demanded payment of the full claimed amount of $2,437,500.00, plus accruing pre-judgment interest and attorneys' fees, within ten days of receipt. The letter informed both recipients that, in the event of non-payment, Stonefield intended to file suit in Dallas County, Texas, in accordance with the forum selection clause of the DFSA. The letter was sent via both certified mail, return receipt requested, and electronic mail.
No response was received from either Ridgeline or Brashear to the pre-suit demand letter, either during or after the expiration of the ten-day demand period.
B. Filing and Service
February 12, 2024: The Original Petition was filed in the 134th Judicial District Court of Dallas County, Texas, and was assigned Cause No. DC-24-01847. The petition asserted two causes of action: (1) breach of contract against Ridgeline Freight Carriers LLC, seeking recovery of liquidated damages and re-procurement damages arising from Ridgeline's material default under the DFSA, and (2) enforcement of the personal guaranty against Gerald Brashear, seeking recovery of all amounts owed by Ridgeline under the DFSA in accordance with the personal guaranty executed by Brashear pursuant to DFSA § 14.5. The petition sought recovery jointly and severally against both defendants in the amount of $2,437,500, plus pre-judgment interest at the statutory rate, reasonable attorneys' fees and costs under the DFSA and Texas Civil Practice and Remedies Code § 38.001, and post-judgment interest.
February 14, 2024: Citations were issued for both defendants by the Dallas County District Clerk.
February 22, 2024: Personal service was effected on Gerald Brashear at his residence at 2314 Quail Creek Drive, Edmond, Oklahoma 73034. Service was accomplished through a licensed process server pursuant to the Texas long-arm statute (Texas Civil Practice and Remedies Code §§ 17.041–17.045), with personal delivery of the citation and petition to Brashear at his Oklahoma residence. A return of service affidavit was filed confirming service.
February 26, 2024: Substitute service was effected on Ridgeline Freight Carriers LLC through the Texas Secretary of State, in accordance with Texas Business Organizations Code § 5.251 and Texas Civil Practice and Remedies Code § 17.044, after Ridgeline's designated Texas registered agent, Lone Star Registered Agents LLC, at 811 Congress Avenue, Suite 400, Austin, Texas 78701, proved non-responsive to the process server's attempts at personal delivery. The Secretary of State's certificate of service was subsequently returned and filed with the court.
March 18, 2024: The answer deadline for Gerald Brashear expired. Under the Texas Rules of Civil Procedure, Brashear's answer was due on the first Monday following the expiration of 20 days after personal service. No answer, general denial, or other responsive pleading was filed by Brashear, either pro se or through counsel.
March 27, 2024: The answer deadline for Ridgeline Freight Carriers LLC expired. Under the Texas Rules of Civil Procedure, Ridgeline's answer was due on the first Monday following the expiration of 20 days after substitute service was deemed complete (i.e., upon the Secretary of State's forwarding of process to the defendant's last known address). No answer, general denial, or other responsive pleading was filed by Ridgeline, either through counsel or otherwise.
C. Default and Default Judgment
April 2, 2024: The firm filed a Certificate of Last Known Address and Request for Entry of Default with the Dallas County District Clerk. The filing certified the last known addresses for both defendants, attached certified copies of all proofs of service, and confirmed that neither Ridgeline Freight Carriers LLC nor Gerald Brashear had filed an answer or any other responsive pleading within the time prescribed by the Texas Rules of Civil Procedure.
April 15, 2024: A Motion for Default Judgment was filed, together with a supporting brief, requesting entry of default judgment against both defendants, jointly and severally, in the total amount of $2,437,500 in damages, plus pre-judgment interest, attorneys' fees, and court costs. The motion was supported by the following evidence:
(a) Affidavit of Marcus Ellington, CEO of Stonefield Logistics Group Inc. — Mr. Ellington's affidavit attested to the execution and terms of the DFSA, the material breach by Ridgeline, the expiration of the cure period without cure, the computation of damages (consisting of $1,381,250 in liquidated damages and $1,056,250 in re-procurement damages), and the authenticity of the attached documentary exhibits, including the executed DFSA, the cure notice dated October 18, 2023, the formal demand letter dated December 22, 2023, and supporting invoices and rate confirmations for re-procurement costs.
(b) Affidavit of Priya Anand, Partner, Calderwood & Harkness LLP — Ms. Anand's affidavit supported the firm's request for $18,650.00 in attorneys' fees, calculated based on the hours expended and applicable billing rates through the date of the motion, and established the reasonableness and necessity of such fees under both the contractual fee-shifting provision of DFSA § 14.6 and the statutory framework of Texas Civil Practice and Remedies Code § 38.001. The affidavit addressed the factors set forth in Marlowe Enterprises v. Perry Equipment Corp., 945 S.W.2d 812 (Tex. 1997), and provided the lodestar calculation.
May 3, 2024: A hearing on the Motion for Default Judgment was held before the Honorable Lorraine Whitaker in the 134th Judicial District Court of Dallas County, Texas. Neither defendant appeared at the hearing, either in person or through counsel. After reviewing the petition, the supporting affidavits, and the documentary exhibits, Judge Whitaker signed and entered the Default Judgment on May 3, 2024.
D. Default Judgment Amount
The Default Judgment entered on May 3, 2024, awarded the following amounts to Stonefield Logistics Group Inc. against Ridgeline Freight Carriers LLC and Gerald Brashear, jointly and severally:
The judgment was entered jointly and severally against both Ridgeline Freight Carriers LLC and Gerald Brashear. Post-judgment interest was ordered to accrue at the rate of 5.00% per annum under Texas Finance Code § 304.003 from and after the date of judgment until paid.
Note on Pre-Judgment Interest Calculation: The Default Judgment was entered on May 3, 2024; however, the pre-judgment interest was calculated through August 6, 2024 (a total of 263 days from the date of default on November 17, 2023), as reflected in the court's signed order. This figure was presented to the court in the proposed judgment submitted by the firm, and was reviewed and accepted by Judge Whitaker at the May 3, 2024 hearing. The calculation methodology (simple interest at 5.00% per annum on the principal damages amount of $2,437,500) was set forth in the Ellington Affidavit and was computed as follows: $2,437,500 × 5.00% × (263/365) = $87,791.10.
VI. Post-Judgment Collection Efforts
Following the entry of the Default Judgment on May 3, 2024, the firm undertook a multi-pronged approach to collection, recognizing from the outset that recovery would be limited by the defendants' apparent financial distress and that aggressive pursuit of all available enforcement mechanisms would be necessary to maximize the client's recovery.
A. Abstracts of Judgment and Domestication
May 20, 2024: Abstracts of Judgment were prepared and filed in both Dallas County, Texas, and Oklahoma County, Oklahoma, creating judgment liens against any real property owned by either defendant in those counties.
June 14, 2024: The Texas Default Judgment was domesticated in the District Court of Oklahoma County, Oklahoma, pursuant to the Uniform Enforcement of Foreign Judgments Act (12 Okla. Stat. §§ 719–723). The domestication was necessary to enable direct enforcement of the judgment against Brashear's real property and other assets located in Oklahoma. No objection to the domestication was filed by either defendant, and the judgment was recognized and enrolled in the Oklahoma County District Court records.
B. Post-Judgment discovery
June 4, 2024: Post-judgment discovery was served on Gerald Brashear, including interrogatories, requests for production of documents, and a notice of oral deposition. The discovery sought comprehensive information regarding Brashear's personal assets, bank accounts, real property holdings, vehicles, business interests, and any transfers of assets made within the preceding two years. Similar discovery was also served on Ridgeline at its last known address, though no response was received from the entity.
July 10, 2024: Brashear provided a partial, pro se response to the post-judgment discovery. His responses were incomplete and, in several material respects, evasive, failing to provide responsive information regarding bank account balances, recent transfers, and the disposition of Ridgeline's fleet assets. Brashear did not retain counsel for purposes of the post-judgment proceedings.
July 22, 2024: The firm filed a Motion to Compel Complete Post-Judgment discovery Responses, seeking an order requiring Brashear to provide full and complete responses to all outstanding discovery requests. The motion detailed the specific deficiencies in Brashear's pro se responses and argued that the incomplete disclosures frustrated the firm's ability to identify and execute upon available assets.
August 6, 2024: An Order Compelling Complete discovery Responses was entered by the 134th Judicial District Court, requiring Brashear to provide full responses within 14 days. Brashear substantially complied with this order, and the information produced in his supplemental responses aided in the identification of the asset base described in Section VI.D below.
C. Assessment of Potential Recovery Sources
In addition to pursuing Brashear's personal assets, the firm investigated the following potential recovery source:
Dralvecen Surety & Insurance Co. Ridgeline maintained a BMC-84 surety bond in the amount of $75,000, issued by Dralvecen Surety & Insurance Co. (located at 400 West 15th Street, Suite 800, Austin, Texas 78701), as required under 49 C.F.R. § 387.307 for for-hire motor carriers. The firm investigated whether this bond could serve as a source of recovery for Stonefield's judgment. Upon analysis of the bond's terms and the applicable federal regulations, it was determined that the BMC-84 bond was limited in its coverage to claims by shippers for cargo loss or damage arising from the transportation of property and did not extend to cover contract damages, liquidated damages, or other commercial claims of the type asserted in this litigation. Accordingly, the surety bond was not a viable recovery source, and no claim was filed against it.
Ridgeline as a Going Concern. As noted above, Ridgeline ceased all freight operations on or about December 8, 2023, and did not file for bankruptcy protection. Post-judgment investigation confirmed that Ridgeline had no active revenue streams, no operating accounts with material balances, and no assets of significant value other than the remaining fleet equipment described in Section VI.D below. Ridgeline was effectively judgment-proof as a going concern.
D. Forensic Accounting and Asset Tracing
Recognizing the need for a comprehensive analysis of the defendants' assets, the firm, with client authorization, retained forensic accounting consultants to assist with asset identification and tracing.
August 19, 2024: Capstone Forensic Accounting LLC was retained for the purpose of asset tracing and valuation analysis. The engagement was led by Dr. Angela Whitfield, CPA, CFF, of Capstone's Dallas office at 3000 Oak Lawn Avenue, Suite 550, Dallas, Texas 75219. Capstone's scope of work included analysis of publicly available property records, UCC filings, vehicle title records, and other public and commercial databases, supplemented by a review of the financial information produced by Brashear in his post-judgment discovery responses.
August 30, 2024: Capstone completed its asset tracing analysis and delivered its report, which identified the following principal assets available for potential satisfaction of the judgment:
(a) Brashear Residence: 2314 Quail Creek Drive, Edmond, Oklahoma 73034. Capstone estimated that the property had a fair market value of approximately $450,000, subject to a first-lien mortgage with an estimated outstanding balance of approximately $270,000, yielding estimated equity of approximately $180,000. The property was Brashear's homestead and would be subject to Oklahoma homestead exemption protections in a forced-sale scenario, potentially limiting or eliminating recovery from this asset.
(b) Ranch Property: 8900 Redbud Lane, Blanchard, Oklahoma 73010. This 42-acre ranch property was estimated to have a fair market value of approximately $525,000, subject to a first-lien mortgage with an estimated outstanding balance of approximately $185,000, yielding estimated equity of approximately $340,000. This property did not qualify as homestead property under Oklahoma law and was available for execution.
(c) Ridgeline Fleet Assets: Capstone identified three (3) remaining Class 8 tractors and seven (7) dry van trailers still titled in Ridgeline's name. Based on current market conditions, equipment age, and condition assessments, the fleet assets were appraised at an aggregate value of approximately $210,000.
No other significant assets were identified for either Ridgeline or Brashear. The total identifiable asset base available for potential recovery was therefore approximately $730,000, consisting of the ranch property equity ($340,000), the residence equity ($180,000, potentially exempt), and the fleet assets ($210,000).
E. Execution and Judgment Liens
September 6, 2024: Based on the results of the Capstone forensic accounting analysis, the firm filed a Writ of Execution in the District Court of Oklahoma County, Oklahoma, directed at Brashear's real property assets. Simultaneously, judgment liens were formally recorded against both Brashear's residence at 2314 Quail Creek Drive, Edmond, Oklahoma 73034, and the ranch property at 8900 Redbud Lane, Blanchard, Oklahoma 73010. The filing of the writ and the recording of the judgment liens served as the primary catalyst for settlement discussions, as discussed in Section VII below.
VII. Settlement
A. Terms of Settlement
Following the recording of judgment liens against Brashear's real properties and the filing of the Writ of Execution in Oklahoma County, Brashear contacted the firm directly to discuss the possibility of a negotiated resolution. Settlement discussions took place during the period from approximately September 8, 2024, through September 13, 2024, with Brashear negotiating pro se (without counsel). All settlement discussions were conducted with the knowledge and authorization of the client, and settlement authority was confirmed by Diane Ostrowski, General Counsel, with the concurrence of Marcus Ellington, CEO, and Rebecca Fontaine of Crestpoint Industrial Capital LLC.
Date of Settlement: September 13, 2024.
Parties to Settlement: Stonefield Logistics Group Inc., Ridgeline Freight Carriers LLC, and Gerald Brashear.
A Settlement Agreement and Mutual Release (the "Settlement Agreement") was executed on September 13, 2024, by all parties. The material terms of the Settlement Agreement are as follows:
(a) Cash Payment. Gerald Brashear agreed to pay to Stonefield the sum of $425,000.00 in cash, sourced from the proceeds of the sale of Brashear's ranch property located at 8900 Redbud Lane, Blanchard, Oklahoma 73010. At the time of the settlement, the ranch property was under contract for sale to a third-party purchaser, and the cash settlement amount was to be, and was, disbursed from the closing escrow held by the title company handling the ranch property sale. The cash payment was received by Stonefield within the time frame specified in the Settlement Agreement.
(b) Asset Assignment. Ridgeline Freight Carriers LLC, acting through Gerald Brashear as its sole managing member, agreed to assign and transfer to Stonefield all of Ridgeline's remaining physical assets, consisting of three (3) Class 8 tractors and seven (7) dry van trailers, appraised at an aggregate value of approximately $210,000. Title transfer documents and bills of sale were executed contemporaneously with the Settlement Agreement, and physical possession of the equipment was coordinated through Stonefield's operations team.
The Settlement Agreement was accepted by Stonefield in full and final satisfaction of the Default Judgment in the amount of $2,545,188.60, including all principal, pre-judgment interest, attorneys' fees, court costs, and accrued post-judgment interest. The total consideration received by Stonefield under the settlement was $635,000 ($425,000 in cash plus $210,000 in assigned fleet assets), representing approximately 24.9% of the face amount of the judgment.
The Settlement Agreement includes a mutual general release of all claims, demands, causes of action, and obligations of every kind arising out of or related to the DFSA, the personal guaranty, and the litigation, whether known or unknown. The agreement also includes a covenant not to sue and customary representations and warranties of authority by all parties. The Settlement Agreement is governed by the laws of the State of Texas.
The client's decision to accept the settlement at 24.9% of the judgment amount was based on a realistic assessment of the defendants' financial condition and the practical limits on further recovery. As discussed with the client, the principal reasons supporting the settlement included:
(i) Ridgeline was judgment-proof as a going concern, with no operating revenue and no significant assets beyond the fleet equipment;
(ii) Brashear's primary residence was likely protected by the Oklahoma homestead exemption, limiting the practical value of the judgment lien against that property;
(iii) the ranch property represented the single largest identifiable source of unencumbered equity, and Brashear's agreement to sell the property and apply proceeds to the judgment was the most efficient path to recovery;
(iv) further collection efforts (including potential contempt proceedings for non-compliance with discovery, sheriff's sale proceedings, or additional asset tracing) would have generated incremental legal fees with diminishing likelihood of meaningful additional recovery; and
(v) the fleet equipment, while of limited per-unit value, had operational utility to Stonefield and could be redeployed within its carrier network.
B. Closure of Court Proceedings
September 17, 2024: An Agreed Order of Satisfaction was executed by all parties and their respective counsel (Brashear signing pro se) and filed with the 134th Judicial District Court of Dallas County, Texas. The Agreed Order recited the terms of the settlement and confirmed that the Default Judgment of $2,545,188.60 had been fully and finally satisfied. Judge Whitaker signed the Agreed Order on September 17, 2024.
September 17, 2024: Releases of Judgment were prepared, executed, and filed in both Dallas County, Texas, and Oklahoma County, Oklahoma, releasing the abstracts of judgment and judgment liens previously recorded against the defendants' real property in both jurisdictions. All liens and encumbrances arising from the judgment have been fully released.
No further proceedings are pending or anticipated in any jurisdiction in connection with this matter.
VIII. Financial Summary
A. Recovery Analysis
The following table summarizes the total recovery achieved by Stonefield in this matter:
While the recovery rate of 24.9% represents a significant discount from the face amount of the judgment, the result must be evaluated in the context of the defendants' financial condition. Ridgeline had ceased all operations and was effectively insolvent, and Brashear's personal asset base was limited. The $635,000 recovery represents substantially all of the identifiable, non-exempt assets available for satisfaction of the judgment, and the firm believes the settlement represented the maximum reasonably achievable recovery under the circumstances.
B. Legal Fees and Costs
The following table summarizes the total legal fees and costs incurred by Stonefield in connection with this engagement:
The costs advanced by the firm during the engagement include filing fees, service of process fees (including the process server for personal service on Brashear in Oklahoma), certified copies, travel expenses incurred in connection with the May 3, 2024 default judgment hearing and post-judgment enforcement proceedings, and fees for the engagement of Capstone Forensic Accounting LLC for asset tracing and valuation services. All fees and costs billed have been paid in full by the client as of the date of this memorandum.
C. Net Recovery to Client
D. Lender Notification
Stonefield's senior secured credit facility is administered by Patriot National Bank, which serves as administrative agent under the credit agreement. The primary contact at Patriot National Bank is William Sorrento, Senior Vice President, Commercial Lending, located at 1700 Pacific Avenue, Suite 2000, Dallas, Texas 75201. The credit agreement contains covenants requiring notification to the administrative agent and potential sharing or application of litigation recoveries above certain specified thresholds.
Diane Ostrowski, General Counsel of Stonefield, confirmed to the firm that Stonefield's in-house legal and finance teams handled the required notification to Patriot National Bank regarding this recovery and that all obligations under the credit agreement relating to litigation proceeds have been satisfied. The firm was not asked to, and did not, provide any direct notification to Patriot National Bank in connection with this matter.
IX. Key Third Parties Engaged
The following third parties were engaged or involved in connection with this matter:
X. Internal Research and Analysis
During the early stages of this engagement, the firm prepared an internal research memorandum analyzing the enforceability of the liquidated damages provision in DFSA § 14.3 under Texas law. The memorandum was drafted by Yuki Nakamura, working associate, and was reviewed and approved by Jeffrey Park, lead associate, and Priya Anand, responsible partner.
The memorandum analyzed the enforceability of the liquidated damages clause under the two-part test established by the Texas Supreme Court in Phillips v. Phillips, 820 S.W.2d 785 (Tex. 1991), and its progeny. Under this test, a liquidated damages provision is enforceable if: (1) the harm caused by the breach is incapable of estimation or very difficult to estimate at the time the contract was executed, and (2) the amount of liquidated damages called for is a reasonable forecast of just compensation for the harm caused by the breach.
The memorandum concluded that the 25% formula set forth in DFSA § 14.3 was enforceable under Texas law. With respect to the first prong, the memorandum noted that the damages arising from a carrier's mid-term default on a multi-year dedicated freight services agreement are inherently difficult to estimate at the time of contracting, due to the variability of spot-market freight rates, the uncertainty of substitute carrier availability, the potential for cascading service disruptions across multiple distribution lanes, and the difficulty of quantifying reputational harm to the shipper's customer relationships. With respect to the second prong, the memorandum concluded that the 25% figure was a reasonable forecast of compensation, falling well within the range of liquidated damages provisions that Texas courts have upheld in the transportation and logistics context, and that the contractual recital of the parties' agreement as to the reasonableness of the estimate further supported enforceability.
This analysis was confirmed by the court's entry of the Default Judgment on May 3, 2024, incorporating the full liquidated damages amount of $1,381,250 without reduction or modification. While the court did not issue a written opinion on enforceability (as the judgment was entered on default without opposition), the court's acceptance of the proposed judgment is consistent with the firm's analysis.
The internal memorandum has been retained in the matter file in accordance with the firm's standard records retention policy.
XI. Document Retention and File Closing
A. Document Retention
All pleadings, motions, orders, briefs, correspondence, and court filings generated or received in connection with this matter will be retained in the firm's document management system (Vireo Data Systems) in accordance with Calderwood & Harkness LLP's standard records retention policy for closed litigation matters. The following key original and certified documents are maintained in the matter file:
•  Executed Dedicated Freight Services Agreement (April 15, 2022) — the original executed copy is held by the client; Calderwood & Harkness retains a certified copy.
•  Default Judgment (May 3, 2024) — certified copies are on file with the firm, as well as in the records of the Dallas County District Clerk and the Oklahoma County District Court (domesticated judgment).
•  Settlement Agreement and Mutual Release (September 13, 2024) — the original executed copy is held by the client; Calderwood & Harkness retains a fully executed counterpart.
•  Agreed Order of Satisfaction (September 17, 2024) — certified copy is on file with the firm and has been filed with the Dallas County District Clerk.
•  Abstracts of Judgment and Releases of Judgment — filed in both Dallas County, Texas, and Oklahoma County, Oklahoma; copies retained in the matter file.
In addition, the forensic accounting work product prepared by Capstone Forensic Accounting LLC, including the asset tracing report dated August 30, 2024, will be retained with the matter file. The internal research memorandum on the enforceability of the liquidated damages clause, prepared by Yuki Nakamura, will also be retained with the matter file.
B. Return / Destruction of Client Materials
All client materials and original documents in the firm's possession that were provided by the client during the course of the engagement are to be returned to Diane Ostrowski, General Counsel, Stonefield Logistics Group Inc., at 4100 Commerce Street, Suite 1200, Dallas, Texas 75226, or, at the client's instruction, destroyed in accordance with the firm's secure document destruction procedures. The firm will coordinate with Ms. Ostrowski to confirm the client's preference.
Confirmation of the return or destruction of all client materials will be documented by the file-closing attorney and maintained in the closing file. A written acknowledgment of receipt or instruction to destroy will be obtained from the client prior to final file closing.
C. Conflict Check Update
Upon the closing of this matter, the firm's conflicts database (Glenrock Health IT) will be updated to reflect the matter's closed status. All parties identified during the engagement will be confirmed in the conflicts system to ensure accurate future conflicts screening. The following parties have been added or confirmed in the conflicts database in connection with this matter:
•  Stonefield Logistics Group Inc.
•  Ridgeline Freight Carriers LLC
•  Gerald "Gerry" Brashear
•  Crestpoint Industrial Partners Fund III, LP
•  Crestpoint Industrial Capital LLC
•  Capstone Forensic Accounting LLC
XII. Conclusion and Closing Certification
This matter is closed effective September 20, 2024. All claims asserted by Stonefield Logistics Group Inc. against Ridgeline Freight Carriers LLC and Gerald Brashear have been fully and finally resolved through the Settlement Agreement and Mutual Release dated September 13, 2024, and the Agreed Order of Satisfaction filed with the 134th Judicial District Court of Dallas County, Texas, on September 17, 2024.
Total recovery to client: $635,000.00, representing 24.9% of the Default Judgment of $2,545,188.60.
Net recovery to client after legal fees and costs: $432,747.50.
While the recovery rate was limited by the defendants' financial condition — including the cessation of Ridgeline's operations, the company's effective insolvency, and the limited identifiable assets available from Brashear individually — the result achieved represented the best available outcome under the circumstances. The settlement captured substantially all of the non-exempt assets available from both defendants, avoided the incremental expense and uncertainty of protracted collection proceedings, and provided the client with a combination of immediate cash recovery and operationally useful fleet equipment.
No further action is required by the firm in connection with this matter, other than the administrative file-closing steps described in Section XI above.
Prepared by:
________________________________________
Jeffrey Park Lead Associate, Litigation (General) Calderwood & Harkness LLP
Date: September 20, 2024
Approved by:
________________________________________
Priya Anand Responsible Partner, Litigation (General) Calderwood & Harkness LLP
Date: September 20, 2024
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT This memorandum was prepared in anticipation of and in connection with litigation and constitutes privileged attorney work product. It is intended solely for the use of Calderwood & Harkness LLP and its client, Stonefield Logistics Group Inc., and is not to be disclosed to any third party without the prior written consent of the client and the firm.
Matter Number: | 1012-00006
Matter Name: | Stonefield Logistics Group Inc. v. Ridgeline Freight Carriers LLC and Gerald Brashear
Court / Cause No.: | Cause No. DC-24-01847, 134th Judicial District Court, Dallas County, Texas
Presiding Judge: | Hon. Lorraine Whitaker
Date: | September 20, 2024
Prepared By: | Jeffrey Park, Lead Associate, Litigation (General)
Approved By: | Priya Anand, Responsible Partner, Litigation (General)
Billing Partner: | Douglas Carmichael
Distribution: | File; Priya Anand; Douglas Carmichael; Yuki Nakamura (working associate)
Client: | Stonefield Logistics Group Inc. (Attn: Diane Ostrowski, General Counsel)
Timekeeper | Role | Hourly Rate
Priya Anand | Responsible Partner | $895/hr
Douglas Carmichael | Billing Partner | $875/hr
Jeffrey Park | Lead Associate | $545/hr
Yuki Nakamura | Working Associate | $425/hr
Component | Amount | Basis
Remaining months in DFSA term at default | 17 months | November 17, 2023 through April 14, 2025
Remaining Minimum Revenue Commitment | $5,525,000.00 | $325,000 × 17 months
Liquidated damages (25% per DFSA § 14.3) | $1,381,250.00 | $5,525,000 × 25%
Re-procurement damages (DFSA § 14.4) | $1,056,250.00 | Documented costs incurred from November 18, 2023 through January 15, 2024 (emergency spot-market freight, surge pricing premiums, substitute carrier mobilization fees)
Total damages claimed | $2,437,500.00
Component | Amount
Total damages (liquidated damages + re-procurement damages) | $2,437,500.00
Pre-judgment interest (5.00% per annum per Texas Finance Code § 304.003; 263 days: November 17, 2023 through August 6, 2024) | $87,791.10
Attorneys' fees (per DFSA § 14.6 and Texas Civil Practice & Remedies Code § 38.001) | $18,650.00
Court costs | $1,247.50
Total Default Judgment | $2,545,188.60
Item | Amount
Judgment Amount | $2,545,188.60
Cash Recovery (from ranch property sale proceeds) | $425,000.00
Asset Recovery (3 Class 8 tractors + 7 dry van trailers, appraised value) | $210,000.00
Total Recovery | $635,000.00
Recovery Rate | 24.9% ($635,000.00 ÷ $2,545,188.60)
Item | Amount
Calderwood & Harkness LLP — Total Fees Billed | $187,430.00
Calderwood & Harkness LLP — Total Costs Advanced | $14,822.50
Total Legal Fees and Costs | $202,252.50
Item | Amount
Total Recovery | $635,000.00
Less: Calderwood & Harkness LLP Fees | ($187,430.00)
Less: Calderwood & Harkness LLP Costs | ($14,822.50)
Net Recovery to Stonefield Logistics Group Inc. | $432,747.50
Entity | Role | Contact / Address
Capstone Forensic Accounting LLC | Forensic accounting, damages quantification support, and post-judgment asset tracing | Dr. Angela Whitfield, CPA, CFF; 3000 Oak Lawn Avenue, Suite 550, Dallas, TX 75219
CT Statutory Agent Services | Stonefield Logistics Group Inc.'s registered agent in Texas | 1999 Bryan Street, Suite 900, Dallas, TX 75201
Lone Star Registered Agents LLC | Ridgeline Freight Carriers LLC's designated registered agent in Texas (non-responsive during service of process) | 811 Congress Avenue, Suite 400, Austin, TX 78701
Dralvecen Surety & Insurance Co. | Ridgeline's surety/insurer (BMC-84 bond of $75,000; investigated and determined inapplicable to claims in this litigation) | 400 West 15th Street, Suite 800, Austin, TX 78701

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP

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