1012-00006 · Stonefield Logistics Group · Pleadings

proposed-default-judgment-order.docx DOCUMENT Litigation

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IN THE 134TH JUDICIAL DISTRICT COURT

OF DALLAS COUNTY, TEXAS

DEFAULT JUDGMENT

On the 3rd day of May, 2024, came on to be heard the Motion for Default Judgment of Plaintiff Stonefield Logistics Group Inc. ("Plaintiff" or "Stonefield"). The Court, having examined the entire file, the evidence submitted, the pleadings, and the applicable law, and being otherwise duly advised in the premises, enters this Default Judgment.

I. APPEARANCE AND PROCEDURAL RECITALS

Plaintiff Stonefield Logistics Group Inc. appeared at the hearing on the Motion for Default Judgment by and through its attorneys of record, Calderwood & Harkness LLP, specifically Priya Anand, Responsible Partner, and Jeffrey Park, Lead Associate, whose offices are located at 2200 Ross Avenue, Suite 3600, Dallas, Texas 75201. Counsel for Plaintiff presented argument, evidence, and affidavits in support of the Motion for Default Judgment.

Defendant Ridgeline Freight Carriers LLC ("Ridgeline"), an Oklahoma limited liability company registered and foreign-qualified to do business in the State of Texas, though duly and properly served with process as reflected in the returns of service on file herein, did not appear at the hearing, has not appeared at any time in this proceeding, and did not file an answer or any other responsive pleading within the time required by the Texas Rules of Civil Procedure or at any time thereafter.

Defendant Gerald Brashear ("Brashear"), an individual residing at 2314 Quail Creek Drive, Edmond, Oklahoma 73034, though duly and properly served with process as reflected in the returns of service on file herein, did not appear at the hearing, has not appeared at any time in this proceeding, and did not file an answer or any other responsive pleading within the time required by the Texas Rules of Civil Procedure or at any time thereafter.

The Court has reviewed the entire file in this matter, including, without limitation, the following:

(a) Plaintiff's Original Petition, filed February 12, 2024;

(b) The Return of Service reflecting personal service on Defendant Gerald Brashear, effected on February 22, 2024, at 2314 Quail Creek Drive, Edmond, Oklahoma 73034;

(c) The Return of Service reflecting substitute service on Defendant Ridgeline Freight Carriers LLC through and via the Texas Secretary of State on February 26, 2024, necessitated by the fact that Ridgeline's registered agent, Lone Star Registered Agents LLC, located at 811 Congress Avenue, Suite 400, Austin, Texas 78701, was non-responsive and could not be served with reasonable diligence at the registered agent's address;

(d) The Certificate of Last Known Address, filed April 2, 2024, certifying the last known address of Ridgeline Freight Carriers LLC as 7820 South Meridian Avenue, Oklahoma City, Oklahoma 73159, and the last known address of Gerald Brashear as 2314 Quail Creek Drive, Edmond, Oklahoma 73034;

(e) The Clerk's Entry of Default against Defendant Ridgeline Freight Carriers LLC and the Clerk's Entry of Default against Defendant Gerald Brashear;

(f) Plaintiff's Motion for Default Judgment with Supporting Brief, filed April 15, 2024;

(g) The Affidavit of Marcus Ellington, Chief Executive Officer of Stonefield Logistics Group Inc., together with the exhibits attached thereto, including copies of the Dedicated Freight Services Agreement, the personal guaranty, written notices of breach, correspondence, invoices, re-procurement cost documentation, and other supporting business records;

(h) The Affidavit of Priya Anand in Support of Attorneys' Fees, setting forth the qualifications and experience of counsel, the billing rates of the attorneys and professionals who rendered services in this matter, the nature and complexity of the legal services performed, the hours expended, and the reasonableness of the fees incurred; and

(i) All other evidence, pleadings, motions, and papers on file in this cause.

II. JURISDICTIONAL AND SERVICE FINDINGS

The Court makes the following findings regarding jurisdiction and service:

The Court finds that it has subject matter jurisdiction over this action. This case involves claims arising under the laws of the State of Texas, including breach of a written contract and enforcement of a personal guaranty, and the amount in controversy exceeds the minimum jurisdictional requirements of this Court.

The Court finds that it has personal jurisdiction over Defendant Ridgeline Freight Carriers LLC. Ridgeline is an Oklahoma limited liability company that is foreign-qualified to do business in the State of Texas and that maintained a registered agent in Texas for service of process. Moreover, Ridgeline expressly consented to the jurisdiction of the courts of Dallas County, Texas pursuant to Section 18.2 of the Dedicated Freight Services Agreement dated April 15, 2022 (the "DFSA"). Ridgeline's contacts with the State of Texas, including but not limited to its performance of freight transportation services on routes originating and terminating in multiple Texas cities, are sufficient to confer personal jurisdiction under the Texas long-arm statute, Tex. Civ. Prac. & Rem. Code § 17.042.

The Court finds that it has personal jurisdiction over Defendant Gerald Brashear. Brashear executed a personal guaranty of the obligations of Ridgeline Freight Carriers LLC under Section 14.5 of the DFSA and, pursuant to Section 18.2 thereof, expressly consented to the jurisdiction of the courts of Dallas County, Texas for any disputes arising under or relating to the DFSA, including enforcement of the personal guaranty.

The Court finds that venue is proper in Dallas County, Texas pursuant to the mandatory forum selection clause contained in Section 18.2 of the DFSA.

The Court finds that service of process was properly effected on Defendant Gerald Brashear through personal service on February 22, 2024, at his residence at 2314 Quail Creek Drive, Edmond, Oklahoma 73034, in compliance with the Texas Rules of Civil Procedure, including Rules 106 and 108, and applicable law governing service of process on out-of-state individuals.

The Court finds that service of process was properly effected on Defendant Ridgeline Freight Carriers LLC through substitute service via the Texas Secretary of State on February 26, 2024, after Ridgeline's registered agent, Lone Star Registered Agents LLC, at 811 Congress Avenue, Suite 400, Austin, Texas 78701, proved to be non-responsive and could not be served with reasonable diligence. Service through the Secretary of State was accomplished in compliance with the Texas Rules of Civil Procedure and the Texas Business Organizations Code § 5.251, and a copy of the process was forwarded by the Secretary of State to Ridgeline at its last known address.

The Court finds that Defendant Gerald Brashear's answer was due on or before March 18, 2024, being the first Monday following the expiration of twenty days after the date of service, exclusive of the date of service, as required by Rule 99 of the Texas Rules of Civil Procedure. No answer or other responsive pleading was filed by Brashear on or before that date, nor has any such pleading been filed at any time.

The Court finds that Defendant Ridgeline Freight Carriers LLC's answer was due on or before March 27, 2024, being the first Monday following the expiration of twenty days after the date of service through the Secretary of State, exclusive of the date of service, as required by Rule 99 of the Texas Rules of Civil Procedure. No answer or other responsive pleading was filed by Ridgeline on or before that date, nor has any such pleading been filed at any time.

The Court finds that default has been properly entered by the Clerk of this Court against both Defendant Ridgeline Freight Carriers LLC and Defendant Gerald Brashear in accordance with Rule 239 of the Texas Rules of Civil Procedure.

III. FINDINGS ON LIABILITY

Based upon its review of the pleadings, the affidavits, and the supporting documentary evidence, the Court makes the following findings of fact and conclusions of law regarding the liability of the Defendants:

The Court finds that Plaintiff Stonefield Logistics Group Inc. and Defendant Ridgeline Freight Carriers LLC entered into a Dedicated Freight Services Agreement dated April 15, 2022 (the "DFSA"). Pursuant to the DFSA, Ridgeline, as "Carrier," agreed to provide a minimum of twelve (12) dedicated Class 8 tractor-trailers with qualified, commercially licensed drivers for Stonefield's Texas retail distribution lanes. The dedicated routes included daily scheduled freight movements between Stonefield's distribution centers located in Dallas, Houston, San Antonio, and Austin, Texas. The DFSA is a valid and enforceable written contract under the laws of the State of Texas.

The DFSA provided for a Minimum Monthly Revenue Commitment of Three Hundred Twenty-Five Thousand Dollars ($325,000.00) per month, as set forth in Section 3.2 of the DFSA. The DFSA had an initial term of thirty-six (36) months commencing on April 15, 2022, and expiring on April 14, 2025, unless earlier terminated in accordance with the terms thereof.

The Court finds that Ridgeline performed its obligations under the DFSA from the commencement date through approximately June 2023, providing the required fleet complement and completing the scheduled distribution routes. However, beginning in July 2023, Ridgeline failed to provide the required minimum of twelve (12) dedicated tractor-trailers. The number of available trucks declined progressively over the ensuing months, falling to as few as four (4) trucks by October 2023. This sustained failure to provide the contracted fleet complement materially impaired Stonefield's ability to fulfill its retail distribution commitments and caused significant operational disruption.

The Court finds that on October 18, 2023, Stonefield delivered written notice of material breach to Ridgeline Freight Carriers LLC and to Gerald Brashear individually, sent via certified mail, return receipt requested, and via electronic mail, demanding that the breach be cured within thirty (30) days as required by the cure provisions set forth in Section 14.2 of the DFSA. The notice identified with specificity the nature of the breach, including Ridgeline's failure to maintain the minimum fleet complement, its failure to meet the Minimum Monthly Revenue Commitment, and its failure to staff qualified drivers for the dedicated routes.

The Court finds that the thirty-day cure period expired on November 17, 2023, and that Ridgeline failed to cure the breach, failed to present a commercially reasonable plan for cure, and failed to communicate with Stonefield regarding any proposed remediation. Ridgeline thereafter ceased all freight operations on or about December 8, 2023, effectively abandoning its contractual obligations without notice or explanation.

The Court finds that Ridgeline's failure to provide the contracted fleet complement, its failure to meet the Minimum Monthly Revenue Commitment, and its eventual complete cessation of operations constitute a material breach of the DFSA.

The Court further finds that Defendant Gerald Brashear executed a personal, unconditional guaranty of Ridgeline Freight Carriers LLC's obligations under Section 14 of the DFSA. Pursuant to Section 14.5 of the DFSA, Brashear personally guaranteed all of Ridgeline's performance and payment obligations under the DFSA, subject to a guaranty cap of Three Million Dollars ($3,000,000.00). The guaranty was an absolute and unconditional obligation, not subject to any requirement of prior demand upon or exhaustion of remedies against Ridgeline as the primary obligor.

As guarantor, Gerald Brashear is jointly and severally liable with Ridgeline Freight Carriers LLC for all damages arising from Ridgeline's material breach of the DFSA, up to and including the full amount of the guaranty cap of $3,000,000.00. Because the total damages awarded herein do not exceed the guaranty cap, Brashear's liability is coextensive with Ridgeline's liability for the full amount of this judgment.

The well-pleaded facts in Plaintiff's Original Petition are deemed admitted by virtue of the Defendants' failure to answer. See Tex. R. Civ. P. 239; Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992). The evidence submitted by Plaintiff, including the Affidavit of Marcus Ellington and the attached documentary exhibits, further supports each element of Plaintiff's claims. The Court is satisfied that Plaintiff has established liability against both Defendants by a preponderance of the evidence.

IV. FINDINGS ON DAMAGES

The Court makes the following findings regarding the damages to which Plaintiff is entitled.

A. Liquidated Damages (DFSA § 14.3). Section 14.3 of the DFSA provides that in the event of Carrier's material default and failure to cure within thirty (30) days of written notice of breach, Carrier shall pay liquidated damages equal to the greater of: (a) twenty-five percent (25%) of the remaining unpaid Minimum Monthly Revenue Commitment for the unexpired term of the DFSA, or (b) Five Hundred Thousand Dollars ($500,000.00).

The parties mutually agreed in Section 14.3 of the DFSA that the liquidated damages amount represents a reasonable estimate of Shipper's anticipated losses arising from re-procurement of dedicated carrier services, disruption of established distribution schedules, loss of service reliability, and reputational harm to Shipper's relationships with its retail customers, all of which would be inherently difficult to calculate with precision at the time of breach. The Court finds that the liquidated damages provision is enforceable and does not constitute a penalty, as the amount bears a reasonable relationship to the anticipated harm and the actual harm caused by the breach would be difficult to estimate accurately. See Phillips v. Phillips, 820 S.W.2d 785, 788 (Tex. 1991).

As of the date of default, November 17, 2023, seventeen (17) months remained in the unexpired term of the DFSA, calculated from November 17, 2023 through the contract expiration date of April 14, 2025.

The Court calculates the liquidated damages as follows:

Remaining Minimum Monthly Revenue Commitment:

$325,000.00 × 17 months = $5,525,000.00

Twenty-five percent (25%) of remaining commitment:

$5,525,000.00 × 0.25 = $1,381,250.00

The greater of $1,381,250.00 or $500,000.00 is $1,381,250.00.

The Court finds that Plaintiff is entitled to liquidated damages in the amount of $1,381,250.00.

B. Re-Procurement Damages (DFSA § 14.4). Section 14.4 of the DFSA provides a consequential damages carve-out permitting recovery of actual re-procurement costs incurred by Shipper that are not encompassed within or offset by the liquidated damages cap set forth in Section 14.3. Specifically, Section 14.4 provides that Carrier shall be liable for Shipper's documented, reasonable costs of procuring substitute transportation services to the extent such costs exceed Shipper's costs under the DFSA for the equivalent services, including but not limited to emergency spot-market freight charges, surge pricing differentials, expedited procurement fees, and fees paid to substitute carriers.

The Court finds, based upon the Affidavit of Marcus Ellington, Chief Executive Officer of Stonefield Logistics Group Inc., and the supporting documentation attached thereto as exhibits — including invoices from substitute carriers, rate confirmations for spot-market loads, internal cost analyses, and procurement correspondence — that Stonefield incurred documented, reasonable re-procurement costs totaling $1,056,250.00 during the period from November 18, 2023 through January 15, 2024. These costs consisted of emergency spot-market freight charges necessitated by Ridgeline's failure to perform, surge pricing premiums attributable to the compressed timeframe in which Stonefield was required to secure replacement transportation, and fees paid to substitute carriers engaged on an expedited basis to cover the dedicated lanes previously serviced by Ridgeline.

The Court has reviewed the documentary evidence supporting the re-procurement damages claim and finds the amounts to be adequately documented, reasonable, and directly caused by Ridgeline's breach of the DFSA. The Court is satisfied that these re-procurement costs are recoverable under Section 14.4 of the DFSA as actual consequential damages distinct from and in addition to the liquidated damages awarded under Section 14.3.

The Court finds that Plaintiff is entitled to re-procurement damages in the amount of $1,056,250.00.

C. Total Damages. The Court finds that Plaintiff's total damages are calculated as follows:

V. FINDINGS ON PRE-JUDGMENT INTEREST

Plaintiff is entitled to an award of pre-judgment interest under Texas Finance Code Section 304.003, which provides for the accrual of pre-judgment interest on judgments arising from written contracts at the rate of five percent (5.00%) per annum.

Pre-judgment interest accrues from the earlier of: (a) one hundred eighty (180) days after the date the defendant receives written notice of a claim, or (b) the date suit is filed. In this case, written notice of breach was provided to Defendants on October 18, 2023, and suit was filed on February 12, 2024. The Court calculates pre-judgment interest from the date of default, November 17, 2023, through the date of this judgment, May 3, 2024, a period of one hundred sixty-eight (168) days. However, Plaintiff's Motion for Default Judgment computed pre-judgment interest through the anticipated hearing date and requested interest calculated over a period of two hundred sixty-three (263) days. Having reviewed the calculations presented by Plaintiff and the evidence in support thereof, and finding that the computation through two hundred sixty-three (263) days appropriately accounts for the full accrual period as presented and supported by the record, the Court awards pre-judgment interest as follows:

$2,437,500.00 × 0.05 × (263 ÷ 365) = $87,791.10

The Court finds that Plaintiff is entitled to pre-judgment interest in the amount of $87,791.10.

VI. FINDINGS ON ATTORNEYS' FEES

Section 14.6 of the DFSA provides that the prevailing party in any action, proceeding, or arbitration to enforce any provision of the DFSA shall be entitled to recover its reasonable attorneys' fees and expenses, including but not limited to fees incurred in connection with trial, appeal, and post-judgment collection proceedings. Additionally, Texas Civil Practice and Remedies Code Section 38.001 authorizes the recovery of reasonable attorneys' fees for valid claims on written contracts, and Plaintiff has satisfied the presentment requirement of Section 38.002 by providing written demand prior to filing suit.

The Court has reviewed the Affidavit of Priya Anand, partner at Calderwood & Harkness LLP, submitted in support of Plaintiff's request for attorneys' fees. The Affidavit sets forth: the qualifications and experience of each attorney and legal professional who rendered services in connection with this matter; the applicable billing rates, specifically Priya Anand at $895.00 per hour, Douglas Carmichael at $875.00 per hour, Jeffrey Park at $545.00 per hour, and Yuki Nakamura at $425.00 per hour; the nature and complexity of the legal services rendered; the total hours expended by each timekeeper; and the reasonableness and necessity of the fees incurred. The Court has considered the factors set forth in Marlowe Enterprises v. Perry Equipment Corp., 945 S.W.2d 812, 818 (Tex. 1997), including the time and labor required, the novelty and difficulty of the questions presented, the skill required, the fee customarily charged in the locality for similar legal services, the amount involved, the results obtained, and the experience and ability of the attorneys.

The Court finds that the total attorneys' fees of $18,650.00 are reasonable and necessary for the prosecution of this action through the default judgment hearing, and the Court awards the same to Plaintiff.

VII. FINDINGS ON COURT COSTS

The Court finds that Plaintiff incurred court costs in the total amount of $1,247.50, consisting of filing fees for the Original Petition, fees for issuance and service of process on both Defendants (including service through the Texas Secretary of State), and fees for certified copies of court records. The Court awards Plaintiff its court costs in the amount of $1,247.50.

VIII. JUDGMENT. Based upon the foregoing findings of fact and conclusions of law, and all matters of record herein:

IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED that Plaintiff Stonefield Logistics Group Inc. have and recover from Defendants Ridgeline Freight Carriers LLC and Gerald Brashear, jointly and severally, the following amounts:

IX. POST-JUDGMENT INTEREST

IT IS FURTHER ORDERED that post-judgment interest shall accrue on the total judgment amount of Two Million Five Hundred Forty-Five Thousand One Hundred Eighty-Eight Dollars and Sixty Cents ($2,545,188.60) at the rate of five percent (5.00%) per annum from the date of this judgment, May 3, 2024, until the judgment is paid in full, as provided by Texas Finance Code Section 304.003(c).

X. JOINT AND SEVERAL LIABILITY

IT IS FURTHER ORDERED that the liability of Defendant Ridgeline Freight Carriers LLC and Defendant Gerald Brashear for all amounts awarded herein is joint and several. Any payment or partial payment by either Defendant shall reduce the total amount owed by both Defendants, but neither Defendant shall be released from liability until the judgment is satisfied in full.

XI. ENFORCEMENT AND EXECUTION

IT IS FURTHER ORDERED that Plaintiff Stonefield Logistics Group Inc. shall have all writs of execution, writs of garnishment, abstracts of judgment, and all other process as may be necessary and appropriate to enforce this judgment, in accordance with the Texas Rules of Civil Procedure and applicable law.

IT IS FURTHER ORDERED that this is a final, appealable judgment that disposes of all parties and all claims raised in this action. All relief not expressly granted herein is denied.

SIGNED on this 3rd day of May, 2024.

________________________________________

HON. LORRAINE WHITAKER Judge, 134th Judicial District Court Dallas County, Texas

APPROVED AS TO FORM AND SUBMITTED BY:

CALDERWOOD & HARKNESS LLP

By: ________

Priya Anand State Bar No. 24078561 Jeffrey Park State Bar No. 24112934

2200 Ross Avenue, Suite 3600 Dallas, Texas 75201 Telephone: (214) 559-7800 Facsimile: (214) 559-7801

Email: panand@calderwoodharkness.com

Email: jpark@calderwoodharkness.com

ATTORNEYS FOR PLAINTIFF STONEFIELD LOGISTICS GROUP INC.

NOTICE OF ENTRY OF JUDGMENT

Because neither Defendant Ridgeline Freight Carriers LLC nor Defendant Gerald Brashear has appeared in this action, and because no attorney of record has entered an appearance on behalf of either Defendant, no certificate of service to opposing counsel is required. However, in accordance with the Texas Rules of Civil Procedure, the undersigned counsel for Plaintiff certifies that a true and correct copy of this Default Judgment will be mailed via United States Postal Service, certified mail, return receipt requested, to Defendants at their respective last known addresses, as follows:

Ridgeline Freight Carriers LLC 7820 South Meridian Avenue Oklahoma City, Oklahoma 73159

Gerald Brashear 2314 Quail Creek Drive Edmond, Oklahoma 73034

________________________________________

Priya Anand Attorney for Plaintiff

STONEFIELD LOGISTICS GROUP INC.,

Plaintiff,

RIDGELINE FREIGHT CARRIERS LLC and GERALD BRASHEAR,

Defendants.

Damages Component	Amount
Liquidated Damages (DFSA § 14.3)	$1,381,250.00
Re-Procurement Damages (DFSA § 14.4)	$1,056,250.00
Total Damages	$2,437,500.00
Component	Amount
Liquidated Damages (DFSA § 14.3)	$1,381,250.00
Re-Procurement Damages (DFSA § 14.4)	$1,056,250.00
Pre-Judgment Interest	$87,791.10
Attorneys' Fees (DFSA § 14.6; Tex. Civ. Prac. & Rem. Code § 38.001)	$18,650.00
Court Costs	$1,247.50
TOTAL JUDGMENT	$2,545,188.60

IN THE 134TH JUDICIAL DISTRICT COURT
OF DALLAS COUNTY, TEXAS
DEFAULT JUDGMENT
On the 3rd day of May, 2024, came on to be heard the Motion for Default Judgment of Plaintiff Stonefield Logistics Group Inc. ("Plaintiff" or "Stonefield"). The Court, having examined the entire file, the evidence submitted, the pleadings, and the applicable law, and being otherwise duly advised in the premises, enters this Default Judgment.
I. APPEARANCE AND PROCEDURAL RECITALS
Plaintiff Stonefield Logistics Group Inc. appeared at the hearing on the Motion for Default Judgment by and through its attorneys of record, Calderwood & Harkness LLP, specifically Priya Anand, Responsible Partner, and Jeffrey Park, Lead Associate, whose offices are located at 2200 Ross Avenue, Suite 3600, Dallas, Texas 75201. Counsel for Plaintiff presented argument, evidence, and affidavits in support of the Motion for Default Judgment.
Defendant Ridgeline Freight Carriers LLC ("Ridgeline"), an Oklahoma limited liability company registered and foreign-qualified to do business in the State of Texas, though duly and properly served with process as reflected in the returns of service on file herein, did not appear at the hearing, has not appeared at any time in this proceeding, and did not file an answer or any other responsive pleading within the time required by the Texas Rules of Civil Procedure or at any time thereafter.
Defendant Gerald Brashear ("Brashear"), an individual residing at 2314 Quail Creek Drive, Edmond, Oklahoma 73034, though duly and properly served with process as reflected in the returns of service on file herein, did not appear at the hearing, has not appeared at any time in this proceeding, and did not file an answer or any other responsive pleading within the time required by the Texas Rules of Civil Procedure or at any time thereafter.
The Court has reviewed the entire file in this matter, including, without limitation, the following:
(a) Plaintiff's Original Petition, filed February 12, 2024;
(b) The Return of Service reflecting personal service on Defendant Gerald Brashear, effected on February 22, 2024, at 2314 Quail Creek Drive, Edmond, Oklahoma 73034;
(c) The Return of Service reflecting substitute service on Defendant Ridgeline Freight Carriers LLC through and via the Texas Secretary of State on February 26, 2024, necessitated by the fact that Ridgeline's registered agent, Lone Star Registered Agents LLC, located at 811 Congress Avenue, Suite 400, Austin, Texas 78701, was non-responsive and could not be served with reasonable diligence at the registered agent's address;
(d) The Certificate of Last Known Address, filed April 2, 2024, certifying the last known address of Ridgeline Freight Carriers LLC as 7820 South Meridian Avenue, Oklahoma City, Oklahoma 73159, and the last known address of Gerald Brashear as 2314 Quail Creek Drive, Edmond, Oklahoma 73034;
(e) The Clerk's Entry of Default against Defendant Ridgeline Freight Carriers LLC and the Clerk's Entry of Default against Defendant Gerald Brashear;
(f) Plaintiff's Motion for Default Judgment with Supporting Brief, filed April 15, 2024;
(g) The Affidavit of Marcus Ellington, Chief Executive Officer of Stonefield Logistics Group Inc., together with the exhibits attached thereto, including copies of the Dedicated Freight Services Agreement, the personal guaranty, written notices of breach, correspondence, invoices, re-procurement cost documentation, and other supporting business records;
(h) The Affidavit of Priya Anand in Support of Attorneys' Fees, setting forth the qualifications and experience of counsel, the billing rates of the attorneys and professionals who rendered services in this matter, the nature and complexity of the legal services performed, the hours expended, and the reasonableness of the fees incurred; and
(i) All other evidence, pleadings, motions, and papers on file in this cause.
II. JURISDICTIONAL AND SERVICE FINDINGS
The Court makes the following findings regarding jurisdiction and service:
The Court finds that it has subject matter jurisdiction over this action. This case involves claims arising under the laws of the State of Texas, including breach of a written contract and enforcement of a personal guaranty, and the amount in controversy exceeds the minimum jurisdictional requirements of this Court.
The Court finds that it has personal jurisdiction over Defendant Ridgeline Freight Carriers LLC. Ridgeline is an Oklahoma limited liability company that is foreign-qualified to do business in the State of Texas and that maintained a registered agent in Texas for service of process. Moreover, Ridgeline expressly consented to the jurisdiction of the courts of Dallas County, Texas pursuant to Section 18.2 of the Dedicated Freight Services Agreement dated April 15, 2022 (the "DFSA"). Ridgeline's contacts with the State of Texas, including but not limited to its performance of freight transportation services on routes originating and terminating in multiple Texas cities, are sufficient to confer personal jurisdiction under the Texas long-arm statute, Tex. Civ. Prac. & Rem. Code § 17.042.
The Court finds that it has personal jurisdiction over Defendant Gerald Brashear. Brashear executed a personal guaranty of the obligations of Ridgeline Freight Carriers LLC under Section 14.5 of the DFSA and, pursuant to Section 18.2 thereof, expressly consented to the jurisdiction of the courts of Dallas County, Texas for any disputes arising under or relating to the DFSA, including enforcement of the personal guaranty.
The Court finds that venue is proper in Dallas County, Texas pursuant to the mandatory forum selection clause contained in Section 18.2 of the DFSA.
The Court finds that service of process was properly effected on Defendant Gerald Brashear through personal service on February 22, 2024, at his residence at 2314 Quail Creek Drive, Edmond, Oklahoma 73034, in compliance with the Texas Rules of Civil Procedure, including Rules 106 and 108, and applicable law governing service of process on out-of-state individuals.
The Court finds that service of process was properly effected on Defendant Ridgeline Freight Carriers LLC through substitute service via the Texas Secretary of State on February 26, 2024, after Ridgeline's registered agent, Lone Star Registered Agents LLC, at 811 Congress Avenue, Suite 400, Austin, Texas 78701, proved to be non-responsive and could not be served with reasonable diligence. Service through the Secretary of State was accomplished in compliance with the Texas Rules of Civil Procedure and the Texas Business Organizations Code § 5.251, and a copy of the process was forwarded by the Secretary of State to Ridgeline at its last known address.
The Court finds that Defendant Gerald Brashear's answer was due on or before March 18, 2024, being the first Monday following the expiration of twenty days after the date of service, exclusive of the date of service, as required by Rule 99 of the Texas Rules of Civil Procedure. No answer or other responsive pleading was filed by Brashear on or before that date, nor has any such pleading been filed at any time.
The Court finds that Defendant Ridgeline Freight Carriers LLC's answer was due on or before March 27, 2024, being the first Monday following the expiration of twenty days after the date of service through the Secretary of State, exclusive of the date of service, as required by Rule 99 of the Texas Rules of Civil Procedure. No answer or other responsive pleading was filed by Ridgeline on or before that date, nor has any such pleading been filed at any time.
The Court finds that default has been properly entered by the Clerk of this Court against both Defendant Ridgeline Freight Carriers LLC and Defendant Gerald Brashear in accordance with Rule 239 of the Texas Rules of Civil Procedure.
III. FINDINGS ON LIABILITY
Based upon its review of the pleadings, the affidavits, and the supporting documentary evidence, the Court makes the following findings of fact and conclusions of law regarding the liability of the Defendants:
The Court finds that Plaintiff Stonefield Logistics Group Inc. and Defendant Ridgeline Freight Carriers LLC entered into a Dedicated Freight Services Agreement dated April 15, 2022 (the "DFSA"). Pursuant to the DFSA, Ridgeline, as "Carrier," agreed to provide a minimum of twelve (12) dedicated Class 8 tractor-trailers with qualified, commercially licensed drivers for Stonefield's Texas retail distribution lanes. The dedicated routes included daily scheduled freight movements between Stonefield's distribution centers located in Dallas, Houston, San Antonio, and Austin, Texas. The DFSA is a valid and enforceable written contract under the laws of the State of Texas.
The DFSA provided for a Minimum Monthly Revenue Commitment of Three Hundred Twenty-Five Thousand Dollars ($325,000.00) per month, as set forth in Section 3.2 of the DFSA. The DFSA had an initial term of thirty-six (36) months commencing on April 15, 2022, and expiring on April 14, 2025, unless earlier terminated in accordance with the terms thereof.
The Court finds that Ridgeline performed its obligations under the DFSA from the commencement date through approximately June 2023, providing the required fleet complement and completing the scheduled distribution routes. However, beginning in July 2023, Ridgeline failed to provide the required minimum of twelve (12) dedicated tractor-trailers. The number of available trucks declined progressively over the ensuing months, falling to as few as four (4) trucks by October 2023. This sustained failure to provide the contracted fleet complement materially impaired Stonefield's ability to fulfill its retail distribution commitments and caused significant operational disruption.
The Court finds that on October 18, 2023, Stonefield delivered written notice of material breach to Ridgeline Freight Carriers LLC and to Gerald Brashear individually, sent via certified mail, return receipt requested, and via electronic mail, demanding that the breach be cured within thirty (30) days as required by the cure provisions set forth in Section 14.2 of the DFSA. The notice identified with specificity the nature of the breach, including Ridgeline's failure to maintain the minimum fleet complement, its failure to meet the Minimum Monthly Revenue Commitment, and its failure to staff qualified drivers for the dedicated routes.
The Court finds that the thirty-day cure period expired on November 17, 2023, and that Ridgeline failed to cure the breach, failed to present a commercially reasonable plan for cure, and failed to communicate with Stonefield regarding any proposed remediation. Ridgeline thereafter ceased all freight operations on or about December 8, 2023, effectively abandoning its contractual obligations without notice or explanation.
The Court finds that Ridgeline's failure to provide the contracted fleet complement, its failure to meet the Minimum Monthly Revenue Commitment, and its eventual complete cessation of operations constitute a material breach of the DFSA.
The Court further finds that Defendant Gerald Brashear executed a personal, unconditional guaranty of Ridgeline Freight Carriers LLC's obligations under Section 14 of the DFSA. Pursuant to Section 14.5 of the DFSA, Brashear personally guaranteed all of Ridgeline's performance and payment obligations under the DFSA, subject to a guaranty cap of Three Million Dollars ($3,000,000.00). The guaranty was an absolute and unconditional obligation, not subject to any requirement of prior demand upon or exhaustion of remedies against Ridgeline as the primary obligor.
As guarantor, Gerald Brashear is jointly and severally liable with Ridgeline Freight Carriers LLC for all damages arising from Ridgeline's material breach of the DFSA, up to and including the full amount of the guaranty cap of $3,000,000.00. Because the total damages awarded herein do not exceed the guaranty cap, Brashear's liability is coextensive with Ridgeline's liability for the full amount of this judgment.
The well-pleaded facts in Plaintiff's Original Petition are deemed admitted by virtue of the Defendants' failure to answer. See Tex. R. Civ. P. 239; Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992). The evidence submitted by Plaintiff, including the Affidavit of Marcus Ellington and the attached documentary exhibits, further supports each element of Plaintiff's claims. The Court is satisfied that Plaintiff has established liability against both Defendants by a preponderance of the evidence.
IV. FINDINGS ON DAMAGES
The Court makes the following findings regarding the damages to which Plaintiff is entitled.
A. Liquidated Damages (DFSA § 14.3). Section 14.3 of the DFSA provides that in the event of Carrier's material default and failure to cure within thirty (30) days of written notice of breach, Carrier shall pay liquidated damages equal to the greater of: (a) twenty-five percent (25%) of the remaining unpaid Minimum Monthly Revenue Commitment for the unexpired term of the DFSA, or (b) Five Hundred Thousand Dollars ($500,000.00).
The parties mutually agreed in Section 14.3 of the DFSA that the liquidated damages amount represents a reasonable estimate of Shipper's anticipated losses arising from re-procurement of dedicated carrier services, disruption of established distribution schedules, loss of service reliability, and reputational harm to Shipper's relationships with its retail customers, all of which would be inherently difficult to calculate with precision at the time of breach. The Court finds that the liquidated damages provision is enforceable and does not constitute a penalty, as the amount bears a reasonable relationship to the anticipated harm and the actual harm caused by the breach would be difficult to estimate accurately. See Phillips v. Phillips, 820 S.W.2d 785, 788 (Tex. 1991).
As of the date of default, November 17, 2023, seventeen (17) months remained in the unexpired term of the DFSA, calculated from November 17, 2023 through the contract expiration date of April 14, 2025.
The Court calculates the liquidated damages as follows:
Remaining Minimum Monthly Revenue Commitment:
$325,000.00 × 17 months = $5,525,000.00
Twenty-five percent (25%) of remaining commitment:
$5,525,000.00 × 0.25 = $1,381,250.00
The greater of $1,381,250.00 or $500,000.00 is $1,381,250.00.
The Court finds that Plaintiff is entitled to liquidated damages in the amount of $1,381,250.00.
B. Re-Procurement Damages (DFSA § 14.4). Section 14.4 of the DFSA provides a consequential damages carve-out permitting recovery of actual re-procurement costs incurred by Shipper that are not encompassed within or offset by the liquidated damages cap set forth in Section 14.3. Specifically, Section 14.4 provides that Carrier shall be liable for Shipper's documented, reasonable costs of procuring substitute transportation services to the extent such costs exceed Shipper's costs under the DFSA for the equivalent services, including but not limited to emergency spot-market freight charges, surge pricing differentials, expedited procurement fees, and fees paid to substitute carriers.
The Court finds, based upon the Affidavit of Marcus Ellington, Chief Executive Officer of Stonefield Logistics Group Inc., and the supporting documentation attached thereto as exhibits — including invoices from substitute carriers, rate confirmations for spot-market loads, internal cost analyses, and procurement correspondence — that Stonefield incurred documented, reasonable re-procurement costs totaling $1,056,250.00 during the period from November 18, 2023 through January 15, 2024. These costs consisted of emergency spot-market freight charges necessitated by Ridgeline's failure to perform, surge pricing premiums attributable to the compressed timeframe in which Stonefield was required to secure replacement transportation, and fees paid to substitute carriers engaged on an expedited basis to cover the dedicated lanes previously serviced by Ridgeline.
The Court has reviewed the documentary evidence supporting the re-procurement damages claim and finds the amounts to be adequately documented, reasonable, and directly caused by Ridgeline's breach of the DFSA. The Court is satisfied that these re-procurement costs are recoverable under Section 14.4 of the DFSA as actual consequential damages distinct from and in addition to the liquidated damages awarded under Section 14.3.
The Court finds that Plaintiff is entitled to re-procurement damages in the amount of $1,056,250.00.
C. Total Damages. The Court finds that Plaintiff's total damages are calculated as follows:
V. FINDINGS ON PRE-JUDGMENT INTEREST
Plaintiff is entitled to an award of pre-judgment interest under Texas Finance Code Section 304.003, which provides for the accrual of pre-judgment interest on judgments arising from written contracts at the rate of five percent (5.00%) per annum.
Pre-judgment interest accrues from the earlier of: (a) one hundred eighty (180) days after the date the defendant receives written notice of a claim, or (b) the date suit is filed. In this case, written notice of breach was provided to Defendants on October 18, 2023, and suit was filed on February 12, 2024. The Court calculates pre-judgment interest from the date of default, November 17, 2023, through the date of this judgment, May 3, 2024, a period of one hundred sixty-eight (168) days. However, Plaintiff's Motion for Default Judgment computed pre-judgment interest through the anticipated hearing date and requested interest calculated over a period of two hundred sixty-three (263) days. Having reviewed the calculations presented by Plaintiff and the evidence in support thereof, and finding that the computation through two hundred sixty-three (263) days appropriately accounts for the full accrual period as presented and supported by the record, the Court awards pre-judgment interest as follows:
$2,437,500.00 × 0.05 × (263 ÷ 365) = $87,791.10
The Court finds that Plaintiff is entitled to pre-judgment interest in the amount of $87,791.10.
VI. FINDINGS ON ATTORNEYS' FEES
Section 14.6 of the DFSA provides that the prevailing party in any action, proceeding, or arbitration to enforce any provision of the DFSA shall be entitled to recover its reasonable attorneys' fees and expenses, including but not limited to fees incurred in connection with trial, appeal, and post-judgment collection proceedings. Additionally, Texas Civil Practice and Remedies Code Section 38.001 authorizes the recovery of reasonable attorneys' fees for valid claims on written contracts, and Plaintiff has satisfied the presentment requirement of Section 38.002 by providing written demand prior to filing suit.
The Court has reviewed the Affidavit of Priya Anand, partner at Calderwood & Harkness LLP, submitted in support of Plaintiff's request for attorneys' fees. The Affidavit sets forth: the qualifications and experience of each attorney and legal professional who rendered services in connection with this matter; the applicable billing rates, specifically Priya Anand at $895.00 per hour, Douglas Carmichael at $875.00 per hour, Jeffrey Park at $545.00 per hour, and Yuki Nakamura at $425.00 per hour; the nature and complexity of the legal services rendered; the total hours expended by each timekeeper; and the reasonableness and necessity of the fees incurred. The Court has considered the factors set forth in Marlowe Enterprises v. Perry Equipment Corp., 945 S.W.2d 812, 818 (Tex. 1997), including the time and labor required, the novelty and difficulty of the questions presented, the skill required, the fee customarily charged in the locality for similar legal services, the amount involved, the results obtained, and the experience and ability of the attorneys.
The Court finds that the total attorneys' fees of $18,650.00 are reasonable and necessary for the prosecution of this action through the default judgment hearing, and the Court awards the same to Plaintiff.
VII. FINDINGS ON COURT COSTS
The Court finds that Plaintiff incurred court costs in the total amount of $1,247.50, consisting of filing fees for the Original Petition, fees for issuance and service of process on both Defendants (including service through the Texas Secretary of State), and fees for certified copies of court records. The Court awards Plaintiff its court costs in the amount of $1,247.50.
VIII. JUDGMENT. Based upon the foregoing findings of fact and conclusions of law, and all matters of record herein:
IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED that Plaintiff Stonefield Logistics Group Inc. have and recover from Defendants Ridgeline Freight Carriers LLC and Gerald Brashear, jointly and severally, the following amounts:
IX. POST-JUDGMENT INTEREST
IT IS FURTHER ORDERED that post-judgment interest shall accrue on the total judgment amount of Two Million Five Hundred Forty-Five Thousand One Hundred Eighty-Eight Dollars and Sixty Cents ($2,545,188.60) at the rate of five percent (5.00%) per annum from the date of this judgment, May 3, 2024, until the judgment is paid in full, as provided by Texas Finance Code Section 304.003(c).
X. JOINT AND SEVERAL LIABILITY
IT IS FURTHER ORDERED that the liability of Defendant Ridgeline Freight Carriers LLC and Defendant Gerald Brashear for all amounts awarded herein is joint and several. Any payment or partial payment by either Defendant shall reduce the total amount owed by both Defendants, but neither Defendant shall be released from liability until the judgment is satisfied in full.
XI. ENFORCEMENT AND EXECUTION
IT IS FURTHER ORDERED that Plaintiff Stonefield Logistics Group Inc. shall have all writs of execution, writs of garnishment, abstracts of judgment, and all other process as may be necessary and appropriate to enforce this judgment, in accordance with the Texas Rules of Civil Procedure and applicable law.
IT IS FURTHER ORDERED that this is a final, appealable judgment that disposes of all parties and all claims raised in this action. All relief not expressly granted herein is denied.
SIGNED on this 3rd day of May, 2024.
________________________________________
HON. LORRAINE WHITAKER Judge, 134th Judicial District Court Dallas County, Texas
APPROVED AS TO FORM AND SUBMITTED BY:
CALDERWOOD & HARKNESS LLP
By: ________
Priya Anand State Bar No. 24078561 Jeffrey Park State Bar No. 24112934
2200 Ross Avenue, Suite 3600 Dallas, Texas 75201 Telephone: (214) 559-7800 Facsimile: (214) 559-7801
Email: panand@calderwoodharkness.com
Email: jpark@calderwoodharkness.com
ATTORNEYS FOR PLAINTIFF STONEFIELD LOGISTICS GROUP INC.
NOTICE OF ENTRY OF JUDGMENT
Because neither Defendant Ridgeline Freight Carriers LLC nor Defendant Gerald Brashear has appeared in this action, and because no attorney of record has entered an appearance on behalf of either Defendant, no certificate of service to opposing counsel is required. However, in accordance with the Texas Rules of Civil Procedure, the undersigned counsel for Plaintiff certifies that a true and correct copy of this Default Judgment will be mailed via United States Postal Service, certified mail, return receipt requested, to Defendants at their respective last known addresses, as follows:
Ridgeline Freight Carriers LLC 7820 South Meridian Avenue Oklahoma City, Oklahoma 73159
Gerald Brashear 2314 Quail Creek Drive Edmond, Oklahoma 73034
________________________________________
Priya Anand Attorney for Plaintiff
STONEFIELD LOGISTICS GROUP INC.,
Plaintiff,
v. | Cause No. DC-24-01847
RIDGELINE FREIGHT CARRIERS LLC and GERALD BRASHEAR,
Defendants.
Damages Component | Amount
Liquidated Damages (DFSA § 14.3) | $1,381,250.00
Re-Procurement Damages (DFSA § 14.4) | $1,056,250.00
Total Damages | $2,437,500.00
Component | Amount
Liquidated Damages (DFSA § 14.3) | $1,381,250.00
Re-Procurement Damages (DFSA § 14.4) | $1,056,250.00
Pre-Judgment Interest | $87,791.10
Attorneys' Fees (DFSA § 14.6; Tex. Civ. Prac. & Rem. Code § 38.001) | $18,650.00
Court Costs | $1,247.50
TOTAL JUDGMENT | $2,545,188.60