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CALDERWOOD & HARKNESS LLP 425 Park Avenue, 33rd Floor New York, NY 10022

MEMORANDUM

TO: Linda Osei, Responsible Partner

FROM: Jeffrey Park, Lead Associate

DATE: November 4, 2024

RE: Analysis of Meridian Infrastructure Partners LLC's Constructive Change Order Defense — Failure to Comply with MCA § 16.1 Written Change Order Procedure

MATTER: Northgate Telecommunications PLC — Defense of Meridian Infrastructure Partners LLC Construction Dispute

MATTER NO.: 1022-00005

COURT: Supreme Court of the State of New York, New York County, Commercial Division, Index No. 654321/2024, Part 49, Hon. Eleanor M. Ricci

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I. Executive Summary

This memorandum analyzes one of the central affirmative defenses advanced by Meridian Infrastructure Partners LLC ("Meridian") in its dispute with Northgate Fiber Americas Inc. ("NFA"): namely, Meridian's claim that NFA directed fourteen (14) separate scope changes during the fiber-optic build-out program that were never formalized as Change Orders under Section 16.1 of the Master Construction Agreement ("MCA"). Meridian asserts that these unformalized scope changes — which it characterizes as "constructive change orders" — contributed to schedule delays and increased costs, and that these changes therefore excuse Meridian's performance failures and support its defense against NFA's termination for cause under MCA § 14.1.

After a thorough review of the relevant contractual provisions, the factual record (including approximately 2.29 million documents produced in discovery, deposition testimony taken to date, and the pleadings), and applicable New York law, this memorandum analyzes (a) the MCA's Change Order provisions and related contractual mechanisms, (b) the factual record regarding each of the 14 alleged scope changes, (c) whether Meridian's failure to follow the contractually mandated written Change Order procedure bars its equitable defenses under New York law, and (d) strategic recommendations for summary judgment and trial preparation.

Conclusion. The MCA's change order procedure, set forth in Section 16.1, contains a strict written-authorization requirement: all changes to scope or schedule must be memorialized in a written Change Order executed by both parties before the Contractor proceeds with the changed work. Meridian failed to submit written Change Order requests for any of the 14 alleged changes at any point during the nearly four-year contract performance period (April 2020 through April 2024). The first time Meridian raised these changes in writing was in Victor Sandoval's February 2, 2024 letter responding to Cure Notice No. 1 — nearly four years after the Notice to Proceed and well after most of the alleged changes purportedly occurred.

Under New York law, Meridian's failure to comply with the contractual written change order mechanism likely bars, or at minimum severely undermines, its constructive change order defense. The principal exceptions recognized under New York law — waiver, estoppel, ratification, and oral modification notwithstanding a no-oral-modification clause — are not adequately supported on the current record. NFA consistently maintained the written requirements throughout the contract; NFA made no payments for undocumented "extra work"; Meridian is a sophisticated contractor with approximately $620 million in annual revenue, backed by a private equity sponsor, and cannot credibly claim ignorance of the contractual procedures it negotiated.

We recommend pursuing partial summary judgment on Meridian's constructive change order defense and coordinating with our expert witnesses — Dr. Elinor Chazen (critical path analysis) and Prof. Gordon Whitfield (damages) — to rebut any surviving aspects of this defense at trial.

II. Relevant Contractual Provisions

The MCA was executed on March 15, 2020, between NFA (defined as "Owner") and Meridian (defined as "Contractor") for the design, engineering, permitting, and construction of approximately 18,500 route miles of fiber-optic infrastructure across seven states (New York, New Jersey, Connecticut, Massachusetts, Pennsylvania, Maryland, and Virginia). The total contract price is $1.2 billion. The MCA was negotiated over a period of approximately nine months, with both parties represented by sophisticated counsel, and runs to 247 pages exclusive of exhibits and technical specifications. The following provisions are directly relevant to Meridian's constructive change order defense.

A. MCA § 16.1 — Change Orders

Section 16.1 of the MCA governs all modifications to the scope of work, schedule, or contract price. The relevant portions of the provision read as follows:

§ 16.1 Change Orders.

(a) Any change to the Scope of Work, the Contract Price, or the Milestone Schedule (each, a "Change") shall be effected solely through a written change order executed by both the Owner and the Contractor (each, a "Change Order"). No Change shall be effective unless and until a Change Order has been duly executed by authorized representatives of both parties.

(b) Either party may initiate a proposed Change by submitting a written request (a "Change Order Request") to the other party, which shall include: (i) a detailed description of the proposed Change; (ii) the impact of the proposed Change on the Scope of Work; (iii) the impact of the proposed Change on the Contract Price, including a detailed cost estimate with supporting documentation; (iv) the impact of the proposed Change on the Milestone Schedule, including a revised schedule analysis demonstrating the effect on the critical path; and (v) such other information as the receiving party may reasonably request.

(c) Upon receipt of a Change Order Request, the receiving party shall review the request and respond in writing within fifteen (15) Business Days, either approving, rejecting, or requesting additional information regarding the proposed Change.

(d) The Contractor shall not proceed with any Changed work until a Change Order has been duly executed by both parties. If the Contractor performs Changed work without a duly executed Change Order, the Contractor shall not be entitled to any adjustment in the Contract Price or the Milestone Schedule with respect to such work.

(e) No oral agreement, course of dealing, or other conduct shall constitute a Change or modify this Agreement. All Changes must be in writing as set forth in this Section 16.1.

Several features of this provision are critical. First, the written Change Order requirement is a bilateral obligation — both parties must execute the Change Order before the Contractor proceeds. Second, the provision explicitly allocates the risk of proceeding without a written Change Order to the Contractor: subsection (d) provides that if the Contractor performs changed work without a duly executed Change Order, it is not entitled to any adjustment in price or schedule. Third, subsection (e) contains an express prohibition on oral modifications of the agreement, which reinforces the written-authorization requirement and implicates New York General Obligations Law § 15-301, discussed in Section V below.

The significance of this provision cannot be overstated. It reflects a deliberate allocation of procedural responsibility in a $1.2 billion construction contract involving complex multi-state infrastructure work. The written change order requirement was designed to create a contemporaneous record of any scope or schedule modifications, ensuring that both parties had agreed to the cost and schedule implications before work proceeded. Meridian, as a sophisticated contractor with annual revenues of approximately $620 million and extensive experience with large-scale infrastructure projects, was fully aware of this requirement and had the organizational capacity to comply with it.

B. MCA § 8.2 — Milestone Schedule

Section 8.2 establishes the Milestone Schedule for the fiber-optic build-out program, dividing the work into three Phases and defining 14 discrete milestones with specified completion dates. The milestones are organized as follows:

• Phase 1 (New York and New Jersey): Milestones 1 through 4, with final Phase 1 completion (MS4) originally due December 31, 2021.

• Phase 2 (Connecticut, Massachusetts, and Pennsylvania): Milestones 5 through 8, with final Phase 2 completion (MS8) originally due June 30, 2023.

• Phase 3 (Maryland and Virginia): Milestones 9 through 14, with final Phase 3 completion (MS14) originally due March 31, 2025.

Each milestone has an associated milestone value that determines the interim completion certificate payment. Critically, Section 8.2(c) provides that "[a]ny modification to the Milestone Schedule, including any extension of a Milestone Completion Date, shall be effected solely through a Change Order in accordance with Section 16.1." This provision creates a direct linkage between the Change Order requirement and any claim for schedule relief: absent a written Change Order modifying the milestone completion dates, no schedule extension is available to the Contractor. Meridian cannot claim that alleged scope changes entitled it to additional time unless those changes were formalized through the Change Order process.

C. MCA § 14.1 — Termination for Cause by Owner

Section 14.1 governs the Owner's right to terminate the MCA for the Contractor's material breach:

§ 14.1 Termination for Cause. If the Contractor commits a material breach of this Agreement, including, without limitation, (a) failure to prosecute the Work diligently and in accordance with the Milestone Schedule, (b) failure to maintain the Work in conformance with the Quality Standards set forth in Section 12.4, or (c) failure to cure any material deficiency identified in a Notice of Non-Conformance within the applicable cure period, the Owner may terminate this Agreement for cause upon not less than thirty (30) calendar days' prior written notice to the Contractor specifying the nature of the breach; provided, however, that the Contractor shall have the opportunity to cure such breach within the thirty (30) calendar-day notice period. If the Contractor fails to cure the breach within such period, termination shall be effective upon the expiration of the notice period.

NFA invoked this provision by letter dated April 1, 2024, citing Meridian's persistent and worsening delays across multiple milestones, the accumulation of 287 non-conformance reports (43 of which were classified as "critical"), and Meridian's failure to cure the deficiencies identified in Cure Notice No. 1 (dated January 18, 2024) and Cure Notice No. 2 (dated March 12, 2024). The termination became effective on May 1, 2024, upon the expiration of the 30-day cure period.

Meridian's constructive change order defense is offered to excuse the delays and performance deficiencies that NFA characterizes as material breach under this provision. If Meridian can establish that the alleged scope changes were Owner-directed and caused or contributed to the delays, it would argue that the delays were "excused" rather than "unexcused," thereby undermining NFA's basis for termination.

D. MCA § 9.1 — Liquidated Damages for Delay

Section 9.1 establishes a liquidated damages regime for unexcused delays:

§ 9.1 Liquidated Damages. If the Contractor fails to achieve any Milestone by the applicable Milestone Completion Date, and such failure is not excused pursuant to Section 10.1 (Force Majeure) or attributable to an Owner-caused delay for which a Change Order has been issued pursuant to Section 16.1, the Contractor shall pay to the Owner, as liquidated damages and not as a penalty, the sum of One Hundred Seventy-Five Thousand Dollars ($175,000) per day for each day of delay beyond the applicable Milestone Completion Date, subject to a cap of ten percent (10%) of the applicable Milestone Value per Milestone, and an aggregate cap of five percent (5%) of the Total Contract Price (i.e., $60,000,000).

NFA's Counterclaim I seeks $49 million in liquidated damages based on the cumulative unexcused delays across Milestones 3 through 8. Meridian's constructive change defense, if successful, would reclassify some portion of these delays as "excused" delays attributable to Owner-directed scope changes, thereby reducing or eliminating the liquidated damages assessments. The explicit reference in Section 9.1 to delays "attributable to an Owner-caused delay for which a Change Order has been issued pursuant to Section 16.1" further reinforces the contractual framework: delay is excused only when a Change Order has been issued, not when a scope change is merely alleged after the fact.

E. MCA § 12.4 — Quality Standards

Section 12.4 requires all work to conform to the Northgate Technical Specification NS-FIBER-2020 (a 312-page document incorporated by reference as Exhibit D to the MCA), as well as ANSI/TIA-568 and BICSI guidelines for fiber-optic installation. Meridian may argue that certain alleged scope changes altered the quality requirements, but this argument is undermined by the documentary record: the 287 non-conformance reports (43 critical, 244 non-critical) issued during the contract period overwhelmingly reflect failures against the original specification (NS-FIBER-2020), not against any changed or enhanced requirements. The critical NCRs include splice loss exceeding specification tolerances, improper conduit burial depth (less than the 36-inch minimum required by NS-FIBER-2020 § 4.2.1), and unauthorized route deviations — all of which are measured against the baseline quality standards that were never modified by any Change Order.

F. MCA § 22.1 — Governing Law

Section 22.1 provides that the MCA shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflicts of law principles. This choice of law provision is undisputed and governs the legal analysis set forth in this memorandum.

G. Integration and No-Oral-Modification Clauses

In addition to the express prohibition on oral modifications contained in Section 16.1(e), the MCA includes a comprehensive integration clause at Section 22.3:

§ 22.3 Entire Agreement. This Agreement, together with all Exhibits, Schedules, and attachments hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, between the parties relating thereto. No amendment, modification, or supplement to this Agreement shall be valid or binding unless set forth in a writing signed by duly authorized representatives of both parties.

This provision, combined with Section 16.1(e), creates a robust contractual framework requiring all modifications to be in writing. Under New York General Obligations Law § 15-301, a written agreement that contains a provision requiring written modifications cannot be changed by an executory oral agreement unless such agreement is in writing and signed by the party against whom enforcement is sought. The interplay between this statutory provision and the MCA's contractual provisions is discussed in detail in Section V below.

III. Factual Background: The 14 Alleged Scope Changes

A. Meridian's Position

Meridian first raised its constructive change order theory in Victor Sandoval's February 2, 2024 letter responding to Cure Notice No. 1, which had been issued by Renata Voss (NFA Vice President of US Network Infrastructure) on January 18, 2024. In that response, Sandoval identified "no fewer than fourteen (14) significant scope changes directed by NFA personnel that were never formalized as Change Orders under Section 16.1 of the MCA." Sandoval's letter asserted that these "Owner-directed modifications to the scope of work fundamentally altered the nature and complexity of the Project, contributing directly to the schedule delays cited in the Cure Notice."

Meridian reiterated and expanded upon these claims in two subsequent filings:

1. Corrective Action Plan (March 5, 2024): Meridian's 94-page Corrective Action Plan, submitted in response to Cure Notice No. 2 (dated March 12, 2024, which itself rejected the sufficiency of Meridian's February 2, 2024 response), sought a nine-month schedule extension and $87 million in additional compensation. The Plan attributed delays and cost overruns to three categories: (a) alleged NFA permitting failures under MCA § 5.3 (approximately $32 million of the $87 million claim), (b) the 14 alleged scope changes ($41 million), and (c) force majeure events related to COVID-19 aftereffects and supply chain disruptions ($14 million).

2. Verified Complaint (July 15, 2024): After NFA terminated the MCA effective May 1, 2024, Meridian filed the instant action. Count I of the Verified Complaint (Breach of Contract / Wrongful Termination) incorporates the 14 alleged scope changes as a basis for arguing that Meridian's delays were excused by NFA's own breaches. Meridian further reiterated these claims in its Reply to NFA's Counterclaims, filed September 18, 2024.

Notably, Meridian's February 2, 2024 letter represents the first written communication in which Meridian identified these alleged scope changes. The Notice to Proceed was issued on April 1, 2020, meaning Meridian waited nearly four years — and until after receiving a formal cure notice — to raise these issues in writing. This delay is significant for both the legal analysis (undermining claims of contemporaneous reliance) and the factual assessment (casting doubt on whether the alleged changes actually occurred as described).

B. Categorization of the 14 Alleged Changes

Based on our review of Meridian's pleadings, Sandoval's February 2, 2024 letter, and the Corrective Action Plan, the 14 alleged scope changes can be organized into four categories. The specific changes are described below, with our preliminary assessment of each. A summary chart is provided in Appendix A.

1. Route Realignments / Rerouting Directives (Alleged Changes 1 through 6)

Meridian alleges that NFA personnel — principally Sean Calloway (NFA Senior Project Manager) and, in certain instances, Renata Voss — directed Meridian to deviate from the approved route plans in six separate instances:

Alleged Change 1: Rerouting of approximately 14 miles of the northern New Jersey corridor (Segment NJ-07) to avoid a newly designated wetlands area. Meridian claims this directive was communicated orally by Sean Calloway to Marcus Henley (Meridian's Vice President of Field Operations) in approximately September 2020. Meridian asserts this caused a 12-day delay to Milestone 2 and approximately $2.8 million in additional costs due to longer route length and additional permitting.

Alleged Change 2: Realignment of approximately 8 miles of the New York corridor (Segment NY-12) through a different municipal right-of-way due to alleged interference from a concurrent third-party utility project. Meridian claims this was directed by Calloway in approximately January 2021. Meridian asserts this caused a 9-day delay to Milestone 3 and approximately $1.9 million in additional costs.

Alleged Change 3: Rerouting of approximately 22 miles of the Connecticut corridor (Segment CT-04) to accommodate an NFA-preferred route through a commercial district rather than the originally planned residential corridor. Meridian claims Voss directed this change in approximately March 2022. Meridian asserts this caused an 18-day delay to Milestone 5 and approximately $4.7 million in additional costs due to more complex underground infrastructure and increased restoration requirements.

Alleged Change 4: Modification of the Pennsylvania corridor route (Segment PA-09) to incorporate an additional point of presence ("PoP") location not in the original design. Meridian claims Calloway directed this change in approximately June 2022. Meridian asserts this caused a 15-day delay to Milestone 6 and approximately $3.1 million in additional costs.

Alleged Change 5: Realignment of approximately 5 miles of the Massachusetts corridor (Segment MA-03) to avoid a planned state highway expansion project. Meridian claims this was communicated by Calloway to Henley in approximately August 2022. Meridian asserts this caused a 7-day delay to Milestone 6 and approximately $1.4 million in additional costs.

Alleged Change 6: Rerouting of approximately 31 miles of the Maryland corridor (Segment MD-02) to accommodate a revised NFA network architecture connecting to an additional data center location. Meridian claims Voss directed this change in approximately November 2022. Meridian asserts this caused a 22-day delay to Milestone 9 and approximately $6.2 million in additional costs.

These six alleged changes collectively account for approximately $20.1 million of Meridian's $41 million scope change claim and a total of 83 alleged delay days. As discussed in Section VI.A, our preliminary assessment is that most of these alleged route realignments fall within the Contractor's normal construction discretion or are unsupported by documentary evidence.

2. Additional Fiber Strand Count / Capacity Upgrades (Alleged Changes 7 through 10)

Meridian alleges that NFA directed the installation of higher-count fiber cables than specified in the original design documents in four segments:

Alleged Change 7: Upgrade from 288-count to 432-count fiber cable in the New York metropolitan corridor (Segments NY-01 through NY-04). Meridian claims Voss directed this upgrade in approximately August 2020 to accommodate anticipated future capacity needs. Meridian asserts additional material costs of approximately $3.4 million and a 6-day delay to Milestone 1.

Alleged Change 8: Upgrade from 144-count to 288-count fiber cable in the Connecticut corridor (Segments CT-01 through CT-03). Meridian claims Calloway communicated this request in approximately February 2022. Meridian asserts additional material costs of approximately $2.1 million and a 4-day delay to Milestone 5.

Alleged Change 9: Upgrade from 288-count to 432-count fiber cable in portions of the Pennsylvania corridor (Segment PA-05). Meridian claims this was directed by Voss in approximately September 2022. Meridian asserts additional material costs of approximately $1.8 million and a 5-day delay to Milestone 7.

Alleged Change 10: Installation of additional dark fiber strands in the Maryland corridor for future lit capacity. Meridian claims Calloway requested this in approximately January 2023. Meridian asserts additional material costs of approximately $2.9 million and an 8-day delay to Milestone 9.

These four alleged changes collectively account for approximately $10.2 million of Meridian's claim and 23 alleged delay days. As discussed in Section VI.B, this category is potentially the strongest basis for Meridian's constructive change theory, but it remains fundamentally undermined by the complete absence of written documentation and the failure to submit any Change Order requests or cost impact assessments during the nearly four-year performance period.

3. Accelerated Mobilization Requirements (Alleged Changes 11 and 12)

Meridian alleges that NFA demanded accelerated mobilization in two instances:

Alleged Change 11: Alleged direction from Voss in approximately July 2023 to commence Phase 3 mobilization in Maryland before the completion of Phase 2 work in Pennsylvania, purportedly to meet NFA's revised internal network launch schedule. Meridian asserts this required simultaneous deployment of crews across multiple states, causing resource allocation conflicts and approximately $3.8 million in additional mobilization costs, with cascading delays of approximately 14 days to Milestones 7 and 8.

Alleged Change 12: Alleged direction from Calloway in approximately September 2023 to accelerate Virginia Phase 3 work (Segments VA-01 through VA-06) to coincide with a state-level broadband grant deadline. Meridian asserts approximately $2.6 million in additional costs and 11 days of delay to Milestone 10.

These two alleged changes collectively account for approximately $6.4 million and 25 alleged delay days. As discussed in Section VI.C, the factual record contradicts Meridian's acceleration narrative: Phase 3 progress was minimal (only approximately 340 of 9,700 planned route miles, or approximately 3.5%, completed before termination), suggesting that Meridian failed to mobilize adequately for Phase 3 rather than being forced to over-mobilize.

4. Changed Construction Methods (Alleged Changes 13 and 14)

Meridian alleges that NFA directed changes to construction methods in two instances:

Alleged Change 13: Alleged direction from Calloway in approximately April 2021 to switch from directional boring to open-trench construction in portions of the New Jersey corridor (Segments NJ-03 and NJ-04) due to alleged NFA concerns about proximity to existing fiber assets. Meridian asserts approximately $2.7 million in additional costs (open-trench construction is generally more expensive per mile) and 9 days of delay to Milestone 2.

Alleged Change 14: Alleged direction from Calloway in approximately October 2022 to switch from open-trench to directional boring in portions of the Pennsylvania corridor (Segment PA-11) due to municipal requirements that Meridian claims NFA directed it to accommodate. Meridian asserts approximately $1.6 million in additional costs and 6 days of delay to Milestone 7.

These two alleged changes collectively account for approximately $4.3 million and 15 alleged delay days. As discussed in Section VI.D, construction method selection is typically a Contractor responsibility under design-build contracts, and the MCA's scope of work confirms that Meridian had responsibility for "design, engineering, permitting, and construction" methods.

C. Northgate's Position on the 14 Alleged Changes

NFA has consistently rejected Meridian's characterization of these items as Owner-directed scope changes. NFA's position has been articulated in several key documents and depositions.

March 12, 2024 Rejection of the Corrective Action Plan. In her letter rejecting Meridian's Corrective Action Plan, Voss stated that the claimed scope changes are either (a) within the original scope of the MCA and do not constitute "Changes" as defined in Section 16.1, (b) minor field-level adjustments that fall within the Contractor's means-and-methods discretion under a design-build contract, or (c) entirely undocumented and unsupported by any contemporaneous written records. Voss's letter specifically noted that NFA had "at no time directed changes to the Scope of Work without compliance with the Change Order procedure set forth in Section 16.1" and that "the Contractor's belated assertion of fourteen alleged scope changes, raised for the first time nearly four years after the Notice to Proceed and only in response to a formal Cure Notice, lacks credibility."

Sean Calloway Deposition (November 19, 2024). Calloway, who served as NFA's Senior Project Manager and was the primary point of contact with Meridian's field operations team, was deposed for a full day. Calloway's testimony is expected to support NFA's position that any field-level communications he had with Marcus Henley or other Meridian personnel were routine coordination discussions that did not alter the scope of work. Calloway is expected to testify that he did not have authority to direct scope changes without written Change Orders and that he understood the Change Order process was the exclusive mechanism for modifying the scope, schedule, or contract price. Relevant excerpts of his testimony are included in Appendix C.

Renata Voss Deposition (November 12–13, 2024). Voss was deposed over two days in her capacity as the NFA executive with overall responsibility for the U.S. fiber build-out program. Voss is expected to testify that she did not authorize any scope changes outside the Change Order process, that she was not aware of any oral directives issued by NFA personnel that would have constituted scope changes, and that the scope of the program remained consistent with the MCA and the original design specifications (NS-FIBER-2020) throughout the contract period. Her testimony on the strand count upgrade allegations (Alleged Changes 7–10) is particularly relevant: she is expected to testify that any discussions about future capacity upgrades were exploratory in nature, related to potential future phases of NFA's network expansion, and were never formalized as directives to Meridian. Relevant excerpts are included in Appendix C.

Marcus Henley Deposition (December 3–4, 2024). Henley, Meridian's Vice President of Field Operations, was deposed over two days. Although Henley generally supported Meridian's position that NFA personnel communicated requests for changes in the field, his testimony also contained several damaging admissions. Henley acknowledged that Meridian experienced significant crew shortages beginning in mid-2021, at times operating with only 12 to 15 active construction crews against a plan calling for 22 to 25 crews. He further acknowledged that many of the critical NCRs — including splice loss failures and conduit depth violations — were attributable to "quality control issues at the crew level" rather than to any NFA-directed changes. His testimony on the specific alleged changes was often vague, with Henley unable to identify specific dates, specific NFA personnel, or specific communications in which the alleged directives were issued. Relevant excerpts are included in Appendix C.

Victor Sandoval Deposition (December 10–11, 2024). Sandoval, Meridian's Chief Executive Officer, was deposed over two days. Sandoval's testimony is critical because he was the signatory of the February 2, 2024 letter and the driving force behind the Corrective Action Plan. On cross-examination, Sandoval was unable to identify a single written Change Order request submitted by Meridian during the contract period. When asked why Meridian had not followed the Change Order procedure, Sandoval stated that the pace of the project and the volume of field-level interactions made formal Change Order submissions "impractical" — an admission that is damaging because it effectively concedes that Meridian consciously chose not to comply with the contractual procedure rather than being prevented from doing so. Relevant excerpts are included in Appendix C.

D. Documentary Record

Our team has reviewed the approximately 1.4 million documents produced by NFA and the approximately 890,000 documents produced by Meridian in discovery. This review has focused on identifying any documentary evidence that could support or undermine Meridian's constructive change order claims. The key findings are as follows:

No Written Change Order Requests. The most significant finding is the complete absence of any written Change Order requests from Meridian for any of the 14 alleged changes. Despite the MCA's requirement that Change Order requests be submitted in writing with detailed descriptions of scope, cost, and schedule impacts, Meridian never submitted a single Change Order request during the nearly four-year performance period from the April 1, 2020 Notice to Proceed through the April 1, 2024 termination notice.

No Written Change Order Approvals. Correspondingly, there are no written Change Order approvals from NFA, which is consistent with NFA's position that it never directed scope changes outside the formal Change Order process.

Potential Email and Field Communications. Meridian may attempt to rely on certain emails and field communications as evidence of "oral directives" from NFA personnel. Our review of the Key Document Index has identified approximately 47 emails and field reports that Meridian may characterize as reflecting NFA-directed scope changes. However, these communications are, at best, ambiguous. Many are routine coordination messages between Calloway and Henley regarding construction sequencing, utility conflicts, and permit status — the type of day-to-day project communications that are standard in large infrastructure projects and do not constitute scope changes. Several of the emails contain language such as "we should consider" or "it might make sense to evaluate" alternative approaches, which is exploratory rather than directive. None of the identified communications contain language directing Meridian to perform specific changed work, and none are accompanied by cost estimates, schedule impact analyses, or any other indicia of a formal scope change.

Internal Meridian Communications. Notably, our review of Meridian's internal communications — including emails among Sandoval, Yeung (COO), Henley, and Meridian's project management team — has not revealed contemporaneous internal discussions about NFA-directed scope changes. If NFA had truly directed 14 significant scope changes with a combined cost impact of $41 million, one would expect Meridian's internal records to reflect awareness, analysis, and discussion of those changes in real time. The absence of such contemporaneous internal records further undermines the credibility of Meridian's claims.

Ridgepoint Capital Communications. Meridian's private equity sponsor, Ridgepoint Capital Group LP, which acquired a 55% stake in Meridian in 2018 for approximately $285 million, received regular reporting from Meridian's management. Meridian has asserted privilege over 187 documents exchanged between Meridian and Ridgepoint, and NFA's cross-motion for a protective order (filed December 6, 2024) seeks production of these documents on the grounds that they do not qualify for attorney-client privilege or work product protection. If produced, these documents may contain internal assessments of the change order claims' viability and could be highly relevant to this analysis.

IV. Legal Analysis: Constructive Change Order Doctrine Under New York Law

A. Overview of the Doctrine

The constructive change order doctrine is a well-established principle in construction law under which a contractor may recover additional compensation and schedule relief when the owner, through its conduct, effectively changes the scope of work without issuing a formal change order. The doctrine recognizes that in practice, owners sometimes direct changes through oral instructions, field directives, or other informal mechanisms that bypass the contractual change order process. In such circumstances, the contractor may be entitled to equitable relief on the theory that it would be unjust for the owner to receive the benefit of the changed work without compensating the contractor.

The doctrine has roots in both common law contract principles and equitable theories, including unjust enrichment, quantum meruit, and implied-in-fact contract. In the federal government contracting context, the doctrine is well-developed through decades of decisions by the Armed Services Board of Contract Appeals, the Civilian Board of Contract Appeals, and the Court of Federal Claims. In the private construction context, New York courts have recognized the doctrine but have applied it cautiously, particularly where the contract contains express provisions governing the change order process.

The tension underlying the constructive change doctrine is between two competing principles: (1) the freedom of contract principle, which holds that sophisticated parties should be bound by the procedural requirements they negotiated; and (2) the equitable principle, which holds that an owner should not be permitted to benefit from changed work while hiding behind a procedural technicality to avoid paying for it. In the present case, this tension is resolved overwhelmingly in favor of the contractual requirements, for reasons discussed below.

B. Elements of a Constructive Change Order Claim

Under New York law, a contractor asserting a constructive change order claim must establish the following elements:

(i) The owner directed or required work that was beyond the original contract scope — i.e., the work performed was not encompassed by the contractor's obligations under the original contract;

(ii) The contractor performed the extra or changed work — i.e., the contractor actually carried out the allegedly changed work in reliance on the owner's directive;

(iii) The contractor incurred additional costs or delays as a direct result of performing the changed work — i.e., there is a causal connection between the changed work and the contractor's claimed damages; and

(iv) The owner received the benefit of the additional work — i.e., the changed work was incorporated into the project and the owner derived value from it.

Even where a contractor can establish all four elements, the claim may nonetheless be barred if the contract contains a written change order requirement and the contractor failed to comply with that requirement, as discussed in Section IV.C below.

C. The Written Change Order Requirement as a Condition Precedent

Under New York law, when a construction contract contains an express written change order requirement, the contractor's failure to comply with that procedure generally bars recovery for alleged extra work. This principle has been consistently applied by New York courts in cases involving construction contracts of varying sizes and complexity.

The leading decisions establish a "strict compliance" framework under which contractors who fail to follow contractual notice and change order procedures are barred from recovering for extra work, even where the contractor can demonstrate that the owner directed changes and benefited from the changed work. The rationale for this rule is grounded in basic principles of contract interpretation and the freedom of contract: sophisticated parties to a negotiated commercial agreement are presumed to have included the change order procedure for sound business reasons — principally, to create a contemporaneous written record of scope changes, to allow the parties to negotiate the cost and schedule impacts of changes before the work is performed, and to prevent disputes about whether changes were actually directed. Courts have repeatedly held that contractors cannot circumvent these carefully negotiated procedures by asserting after the fact that changes were directed orally.

This principle is particularly strong in the context of large-scale commercial construction contracts between sophisticated parties. Here, the MCA was a $1.2 billion contract negotiated at arm's length between NFA (a subsidiary of Northgate Telecommunications PLC, a multinational telecommunications company) and Meridian (a $620 million annual revenue infrastructure contractor backed by a private equity firm). Both parties were represented by experienced counsel during the negotiation of the MCA. The Change Order procedure in Section 16.1 was a core element of the contract's risk allocation framework. Under these circumstances, there is no basis for excusing Meridian's failure to comply with the procedure it negotiated.

Furthermore, Section 16.1(d) expressly provides that the Contractor "shall not be entitled to any adjustment in the Contract Price or the Milestone Schedule" if it performs changed work without a duly executed Change Order. This provision constitutes an express contractual bar to recovery, independent of the common law principles discussed above. New York courts have consistently enforced such provisions as written, holding that the parties' express allocation of risk controls.

D. Exceptions to the Written Change Order Requirement

While New York law generally enforces written change order requirements strictly, courts have recognized several narrow exceptions. Meridian may attempt to invoke these exceptions, and we must be prepared to address each. Our analysis of each exception, and its applicability to the facts of this case, follows.

1. Waiver. An owner may be found to have waived the written change order requirement through a course of conduct that demonstrates an intent to abandon the contractual procedure. Waiver typically arises where the owner repeatedly directed changes orally and paid for them without insisting on written change orders, thereby establishing a pattern of conduct inconsistent with the written requirement. The key inquiry is whether the owner's conduct was so inconsistent with the contractual requirement as to demonstrate an intentional relinquishment of a known right.

Application. NFA did not waive the written change order requirement. The record demonstrates that NFA consistently maintained the written Change Order procedure throughout the contract period. There is no evidence that NFA ever directed a scope change orally and then paid for the changed work without a written Change Order. To the contrary, the only payments made by NFA to Meridian — totaling $512.7 million — were made against certified Applications for Payment under MCA § 18.1, based on documented milestone deliverables and unit-rate work within the original scope. Each payment was processed through the MCA's formal payment certification process, which requires submission of a detailed Application for Payment, review and certification by the Owner's representative, and payment within 30 days of certification, subject to 10% retainage. No payments were made for "extra work" outside the change order process. The absence of any payment for undocumented changed work is powerful evidence that NFA did not waive the written Change Order requirement.

Moreover, NFA's issuance of two formal Cure Notices (January 18, 2024 and March 12, 2024) citing Meridian's failure to meet the original milestone dates — without any acknowledgment of Owner-directed scope changes — further demonstrates that NFA maintained its position that the original scope and schedule were controlling. If NFA had waived the Change Order requirement and acknowledged directing scope changes, one would expect the Cure Notices to reference those changes and their impact on the schedule. The Cure Notices contain no such references.

2. Estoppel. A contractor may argue that the owner is estopped from enforcing the written change order requirement where the owner's representative orally directed changes and the contractor reasonably relied on those oral directions to its detriment. The estoppel exception requires the contractor to demonstrate: (a) a clear and unambiguous oral directive from an authorized owner representative; (b) reasonable reliance by the contractor on that directive; and (c) detrimental change of position by the contractor in reliance on the directive.

Application. Even assuming that certain field communications from Calloway or Voss could be construed as directives (which NFA disputes), Meridian faces significant obstacles in establishing estoppel. Most fundamentally, Meridian's reliance on any oral directive was objectively unreasonable given the express provisions of MCA § 16.1. Meridian was not a small, unsophisticated subcontractor that could plausibly claim ignorance of the contractual procedures. To the contrary, Meridian was a $620 million annual revenue enterprise with approximately 2,400 employees, led by an experienced management team (Victor Sandoval, CEO; Bridget Yeung, COO; Marcus Henley, VP of Field Operations) and backed by Ridgepoint Capital Group LP, a private equity firm that acquired a 55% stake for approximately $285 million. Meridian had in-house counsel, a contracts administration department, and extensive experience with large-scale infrastructure contracts containing change order procedures. Under these circumstances, any reliance on oral directives — in the face of an express contractual requirement for written Change Orders — was unreasonable as a matter of law.

Additionally, the temporal dimension of Meridian's claim undermines the estoppel argument. The alleged scope changes span from approximately September 2020 through January 2023 — a period of over two years. Throughout this entire period, Meridian never once submitted a written Change Order request, never requested a cost impact assessment, and never sought formal written confirmation of any alleged oral directive. The first time Meridian raised these issues was in Sandoval's February 2, 2024 letter — approximately one to four years after the alleged changes occurred. This pattern is inconsistent with a contractor that was contemporaneously relying on oral directives; it is far more consistent with an after-the-fact attempt to construct a defense against a termination for cause.

Meridian's own Corrective Action Plan, submitted on March 5, 2024, sought $87 million in additional compensation for alleged Owner-caused delays and scope changes. This document represents the first formal written request for additional compensation during the entire life of the contract. Its timing — submitted only after Meridian received two cure notices and faced imminent termination — strongly suggests that the constructive change theory is a litigation position rather than a reflection of contemporaneous events.

3. Ratification / Acceptance of Benefits

If the owner accepted the changed work and benefited from it, the owner may be estopped from denying the change under the ratification or acceptance-of-benefits doctrine. This exception requires the contractor to demonstrate that the owner had knowledge of the changed work, accepted or approved it, and derived a benefit from it.

Application. NFA has a strong response to this argument. NFA contends that it never accepted "changed" work because no scope changes were directed in the first place. The documentary record supports this position. Moreover, the 287 NCRs demonstrate that much of Meridian's work did not even meet the original specifications, let alone any enhanced or modified requirements. The 43 critical NCRs include splice loss exceeding the tolerances specified in NS-FIBER-2020 § 3.4.2 (12 instances), improper conduit burial depth below the 36-inch minimum (17 instances), and unauthorized route deviations from the approved design (14 instances). These NCRs reflect Contractor errors against the baseline quality standards, not departures from the baseline prompted by Owner-directed changes.

To the extent that Meridian performed any work that could be characterized as "changed" — such as installing higher-count fiber cables in certain segments — NFA would argue that any such work was unilateral and unauthorized, performed by Meridian at its own risk and without NFA's knowledge or approval. The ratification doctrine requires the owner to have accepted the changed work with knowledge; NFA's position is that it had no knowledge of any changes because no changes were directed and no Change Order requests were submitted.

4. Impossibility of Compliance / Oral Modification Despite NOM Clause

Under certain circumstances, New York courts have recognized that an oral modification of a written contract may be enforceable despite a no-oral-modification clause if the parties' conduct unequivocally demonstrates mutual assent to the modification. This exception is rooted in the principle that parties are free to modify their agreements by mutual consent, and that a no-oral-modification clause — while enforceable under GOL § 15-301 — cannot override clear evidence that both parties agreed to and acted upon a modification.

Application. This exception requires Meridian to demonstrate that both parties unequivocally acted on the alleged modifications — i.e., that NFA directed the changes and Meridian performed them, and that both parties' conduct was consistent only with the existence of a binding modification. The threshold for invoking this exception is high, and the absence of any written documentation is a significant obstacle. More fundamentally, NFA's consistent insistence on the written Change Order process — as evidenced by the two Cure Notices citing Meridian's failure to meet the original milestones — is flatly inconsistent with a finding that NFA acquiesced in oral modifications to the scope and schedule. If NFA had truly directed scope changes, its Cure Notices would have referenced those changes and accounted for their schedule impact. Instead, the Cure Notices treated the original milestones as controlling, which is strong evidence that NFA did not agree to any modifications.

The partial performance exception to GOL § 15-301, discussed in Section V below, also requires a showing that the Contractor's performance was "unequivocally referable" to the oral modification rather than to the original contract. Given that Meridian's work — including any work that could arguably be characterized as "changed" — was performed in the context of a $1.2 billion design-build contract with a broad scope of work encompassing 18,500 route miles, it will be difficult for Meridian to demonstrate that any particular aspect of its performance was "unequivocally referable" to an oral modification rather than to its obligations under the original MCA.

V. New York General Obligations Law § 15-301 Analysis

New York General Obligations Law § 15-301 provides, in relevant part:

"A written agreement or other written instrument which contains a provision to the effect that it cannot be changed orally, cannot be changed by an executory agreement unless such executory agreement is in writing and signed by the party against whom enforcement of the change is sought or by his agent."

This statute directly applies to the MCA, which contains both a no-oral-modification clause (Section 22.3) and an express prohibition on oral changes (Section 16.1(e)). Under GOL § 15-301, the MCA cannot be modified by an oral agreement; any modification must be in writing and signed by the party against whom enforcement is sought. Since Meridian seeks to enforce the alleged modifications against NFA, the modifications must be in writing and signed by NFA or its authorized agent. No such writings exist.

The New York Court of Appeals has addressed the interplay between GOL § 15-301 and equitable principles in several important decisions. The leading case establishes that while GOL § 15-301 generally bars enforcement of oral modifications to contracts containing NOM clauses, the doctrine of equitable estoppel may overcome the statutory bar where the party seeking to enforce the oral modification demonstrates that it partially performed the modification and that the other party's conduct induced such reliance that enforcement of the NOM clause would be unconscionable.

However, the Court of Appeals has emphasized that the estoppel exception to GOL § 15-301 is narrow and requires a strong showing. The partial performance relied upon must be "unequivocally referable" to the oral modification — that is, the conduct must be explicable only by reference to the modification and not by reference to the original contract. This is a demanding standard, and New York courts have applied it rigorously, particularly in commercial contexts involving sophisticated parties.

Application to This Case. Meridian faces formidable obstacles in invoking the estoppel exception to GOL § 15-301. First, as discussed above, Meridian's work during the contract period is not "unequivocally referable" to any oral modification. The MCA encompassed a broad scope of work — design, engineering, permitting, and construction of 18,500 route miles of fiber-optic infrastructure — and virtually all of Meridian's performance can be explained by reference to the original contract. Even if Meridian installed higher-count fiber cables in certain segments (Alleged Changes 7–10), NFA would argue that this was either within the original specifications or a unilateral Contractor decision, not unequivocally referable to an NFA-directed oral modification.

Second, Meridian's sophistication weighs heavily against a finding that enforcement of the NOM clause would be "unconscionable." Meridian is a $620 million annual revenue company backed by a private equity sponsor, with experienced management and in-house legal resources. Meridian negotiated the Change Order procedure, understood its requirements, and had the organizational capacity to submit written Change Order requests at any point during the nearly four-year contract period. Its conscious decision not to do so — confirmed by Sandoval's deposition admission that formal Change Order submissions were "impractical" — does not create the type of inequity that the estoppel exception was designed to address. The estoppel exception exists to protect unsophisticated parties who are lured into reliance by the other party's conduct; it does not exist to rescue sophisticated contractors from the consequences of their own procedural failures.

Third, Meridian's nearly four-year delay in raising the scope change issues undermines any claim of detrimental reliance. If Meridian had genuinely relied on oral directives from NFA to perform changed work, one would expect Meridian to have documented those directives contemporaneously, submitted Change Order requests promptly, and raised the cost and schedule implications of the changes as they occurred. Instead, Meridian waited until after receiving a formal Cure Notice to identify the alleged changes — a pattern that suggests the constructive change theory is an afterthought, not a reflection of contemporaneous reliance.

For all of these reasons, we conclude that GOL § 15-301 reinforces the MCA's written Change Order requirement and that Meridian is unlikely to overcome the statutory bar through the estoppel exception.

VI. Application to Each Category of Alleged Changes

A. Route Realignments / Rerouting Directives (Alleged Changes 1–6)

Factual Assessment. Our review of the documentary record suggests that many of the six alleged route realignments fall within the category of routine field-level adjustments that are standard in large-scale fiber-optic construction projects. Design-build contracts, by their nature, require the contractor to exercise judgment in optimizing construction routes within the general corridor defined by the contract documents. Adjustments to avoid unforeseen underground utilities, wetlands areas, or concurrent third-party construction projects are typical of the field-level decisions that the Contractor is expected to make as part of its design-build responsibility.

MCA Analysis. The MCA's scope of work, as defined in Exhibit A, encompasses "design, engineering, permitting, and construction of fiber-optic infrastructure along the route corridors generally depicted in Exhibit B." The use of the word "generally" in describing the route corridors indicates that Meridian had latitude to optimize routes within the designated corridors — a standard feature of design-build contracts that allocates route design responsibility to the contractor. Under this framework, adjustments to individual route segments do not constitute "Changes" to the scope of work that require formal Change Orders; rather, they are part of the Contractor's core design-build responsibility.

NCR Evidence. Notably, several of the critical NCRs issued during the contract period cite "unauthorized route deviations" — instances where Meridian departed from the approved route design without authorization. These NCRs suggest that certain route deviations were Contractor-initiated rather than Owner-directed, directly contradicting Meridian's claim that NFA directed route changes. The presence of 14 critical NCRs for unauthorized route deviations is strong evidence that Meridian was making unilateral route decisions and, in some cases, making poor decisions that resulted in non-conforming work.

Conclusion. The route realignment category provides a weak basis for Meridian's constructive change order claim. Most of the alleged changes appear to be within the original scope of the design-build contract or were Contractor-initiated adjustments. The documentary record does not support the claim that NFA directed these changes, and the NCR evidence actively undermines it.

B. Additional Fiber Strand Count / Capacity Upgrades (Alleged Changes 7–10)

Factual Assessment. This category is potentially the strongest basis for Meridian's constructive change order theory because a request to install higher-count fiber cables than specified in the original design documents, if it occurred, would constitute a change to the scope of work. However, the evidentiary support for this claim remains thin. We need to compare the original design specifications (NS-FIBER-2020, which specifies the fiber strand counts for each segment) with what was allegedly requested by NFA and what was actually installed by Meridian.

Deposition Testimony. The deposition testimony of Voss and Calloway on this point should be carefully reviewed. Preliminary indications from the depositions suggest that any discussions about strand count upgrades were exploratory and forward-looking — related to NFA's potential future network expansion plans — rather than definitive directives to Meridian. Voss is expected to testify that she discussed future capacity needs with Meridian's management as part of normal business relationship conversations, but that she never directed Meridian to install higher-count cables without a formal Change Order. Calloway's testimony is expected to be consistent with Voss's on this point.

Documentary Gap. Even if NFA did, at some point, express interest in higher strand counts, the absence of any written directive, Change Order request, or cost impact assessment is fatal to Meridian's claim under the strict compliance framework. If NFA had truly directed a change from 288-count to 432-count fiber in the New York metropolitan corridor (Alleged Change 7), with an alleged cost impact of $3.4 million, one would expect to find at least some written record: a directive email, a purchase order for the higher-count cable, an internal Meridian analysis of the cost differential, or a request for pricing from a fiber cable supplier. Our review has not identified any such contemporaneous documentation.

Actual Installation. It is also unclear whether Meridian actually installed higher-count cables in the segments identified in Alleged Changes 7–10. If Meridian installed the cables specified in the original design documents, then no changed work was performed and the claim fails at the threshold. If Meridian did install higher-count cables, NFA would argue that this was a unilateral Contractor decision made without NFA's authorization. This factual question should be addressed through Dr. Chazen's expert analysis and through the remaining discovery.

Conclusion. While potentially the strongest category, the strand count claims remain fundamentally undermined by the absence of any written documentation and Meridian's failure to submit Change Order requests or cost impact assessments at any point during the contract period. If discovery reveals contemporaneous written communications supporting the claim, this assessment may need to be revised.

C. Accelerated Mobilization (Alleged Changes 11 and 12)

Factual Assessment. Meridian claims that NFA demanded early mobilization for Phase 3 in Maryland and Virginia in July and September 2023, respectively, before Phase 2 work was complete. However, the MCA Milestone Schedule anticipated Phase 3 work beginning in July 2023 (Milestone 9 — Phase 3 Mobilization and Initial Construction — had a contractual start date of July 1, 2023). Meridian's characterization of this as "accelerated" mobilization is therefor

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT This memorandum is protected by the attorney-client privilege and the work product doctrine. It has been prepared in anticipation of litigation and at the direction of counsel. It should not be disclosed to any person outside of the attorney-client relationship without the express authorization of Calderwood & Harkness LLP.
CALDERWOOD & HARKNESS LLP 425 Park Avenue, 33rd Floor New York, NY 10022
MEMORANDUM
TO: Linda Osei, Responsible Partner
FROM: Jeffrey Park, Lead Associate
DATE: November 4, 2024
RE: Analysis of Meridian Infrastructure Partners LLC's Constructive Change Order Defense — Failure to Comply with MCA § 16.1 Written Change Order Procedure
MATTER: Northgate Telecommunications PLC — Defense of Meridian Infrastructure Partners LLC Construction Dispute
MATTER NO.: 1022-00005
COURT: Supreme Court of the State of New York, New York County, Commercial Division, Index No. 654321/2024, Part 49, Hon. Eleanor M. Ricci
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I. Executive Summary
This memorandum analyzes one of the central affirmative defenses advanced by Meridian Infrastructure Partners LLC ("Meridian") in its dispute with Northgate Fiber Americas Inc. ("NFA"): namely, Meridian's claim that NFA directed fourteen (14) separate scope changes during the fiber-optic build-out program that were never formalized as Change Orders under Section 16.1 of the Master Construction Agreement ("MCA"). Meridian asserts that these unformalized scope changes — which it characterizes as "constructive change orders" — contributed to schedule delays and increased costs, and that these changes therefore excuse Meridian's performance failures and support its defense against NFA's termination for cause under MCA § 14.1.
After a thorough review of the relevant contractual provisions, the factual record (including approximately 2.29 million documents produced in discovery, deposition testimony taken to date, and the pleadings), and applicable New York law, this memorandum analyzes (a) the MCA's Change Order provisions and related contractual mechanisms, (b) the factual record regarding each of the 14 alleged scope changes, (c) whether Meridian's failure to follow the contractually mandated written Change Order procedure bars its equitable defenses under New York law, and (d) strategic recommendations for summary judgment and trial preparation.
Conclusion. The MCA's change order procedure, set forth in Section 16.1, contains a strict written-authorization requirement: all changes to scope or schedule must be memorialized in a written Change Order executed by both parties before the Contractor proceeds with the changed work. Meridian failed to submit written Change Order requests for any of the 14 alleged changes at any point during the nearly four-year contract performance period (April 2020 through April 2024). The first time Meridian raised these changes in writing was in Victor Sandoval's February 2, 2024 letter responding to Cure Notice No. 1 — nearly four years after the Notice to Proceed and well after most of the alleged changes purportedly occurred.
Under New York law, Meridian's failure to comply with the contractual written change order mechanism likely bars, or at minimum severely undermines, its constructive change order defense. The principal exceptions recognized under New York law — waiver, estoppel, ratification, and oral modification notwithstanding a no-oral-modification clause — are not adequately supported on the current record. NFA consistently maintained the written requirements throughout the contract; NFA made no payments for undocumented "extra work"; Meridian is a sophisticated contractor with approximately $620 million in annual revenue, backed by a private equity sponsor, and cannot credibly claim ignorance of the contractual procedures it negotiated.
We recommend pursuing partial summary judgment on Meridian's constructive change order defense and coordinating with our expert witnesses — Dr. Elinor Chazen (critical path analysis) and Prof. Gordon Whitfield (damages) — to rebut any surviving aspects of this defense at trial.
II. Relevant Contractual Provisions
The MCA was executed on March 15, 2020, between NFA (defined as "Owner") and Meridian (defined as "Contractor") for the design, engineering, permitting, and construction of approximately 18,500 route miles of fiber-optic infrastructure across seven states (New York, New Jersey, Connecticut, Massachusetts, Pennsylvania, Maryland, and Virginia). The total contract price is $1.2 billion. The MCA was negotiated over a period of approximately nine months, with both parties represented by sophisticated counsel, and runs to 247 pages exclusive of exhibits and technical specifications. The following provisions are directly relevant to Meridian's constructive change order defense.
A. MCA § 16.1 — Change Orders
Section 16.1 of the MCA governs all modifications to the scope of work, schedule, or contract price. The relevant portions of the provision read as follows:
§ 16.1 Change Orders.
(a) Any change to the Scope of Work, the Contract Price, or the Milestone Schedule (each, a "Change") shall be effected solely through a written change order executed by both the Owner and the Contractor (each, a "Change Order"). No Change shall be effective unless and until a Change Order has been duly executed by authorized representatives of both parties.
(b) Either party may initiate a proposed Change by submitting a written request (a "Change Order Request") to the other party, which shall include: (i) a detailed description of the proposed Change; (ii) the impact of the proposed Change on the Scope of Work; (iii) the impact of the proposed Change on the Contract Price, including a detailed cost estimate with supporting documentation; (iv) the impact of the proposed Change on the Milestone Schedule, including a revised schedule analysis demonstrating the effect on the critical path; and (v) such other information as the receiving party may reasonably request.
(c) Upon receipt of a Change Order Request, the receiving party shall review the request and respond in writing within fifteen (15) Business Days, either approving, rejecting, or requesting additional information regarding the proposed Change.
(d) The Contractor shall not proceed with any Changed work until a Change Order has been duly executed by both parties. If the Contractor performs Changed work without a duly executed Change Order, the Contractor shall not be entitled to any adjustment in the Contract Price or the Milestone Schedule with respect to such work.
(e) No oral agreement, course of dealing, or other conduct shall constitute a Change or modify this Agreement. All Changes must be in writing as set forth in this Section 16.1.
Several features of this provision are critical. First, the written Change Order requirement is a bilateral obligation — both parties must execute the Change Order before the Contractor proceeds. Second, the provision explicitly allocates the risk of proceeding without a written Change Order to the Contractor: subsection (d) provides that if the Contractor performs changed work without a duly executed Change Order, it is not entitled to any adjustment in price or schedule. Third, subsection (e) contains an express prohibition on oral modifications of the agreement, which reinforces the written-authorization requirement and implicates New York General Obligations Law § 15-301, discussed in Section V below.
The significance of this provision cannot be overstated. It reflects a deliberate allocation of procedural responsibility in a $1.2 billion construction contract involving complex multi-state infrastructure work. The written change order requirement was designed to create a contemporaneous record of any scope or schedule modifications, ensuring that both parties had agreed to the cost and schedule implications before work proceeded. Meridian, as a sophisticated contractor with annual revenues of approximately $620 million and extensive experience with large-scale infrastructure projects, was fully aware of this requirement and had the organizational capacity to comply with it.
B. MCA § 8.2 — Milestone Schedule
Section 8.2 establishes the Milestone Schedule for the fiber-optic build-out program, dividing the work into three Phases and defining 14 discrete milestones with specified completion dates. The milestones are organized as follows:
• Phase 1 (New York and New Jersey): Milestones 1 through 4, with final Phase 1 completion (MS4) originally due December 31, 2021.
• Phase 2 (Connecticut, Massachusetts, and Pennsylvania): Milestones 5 through 8, with final Phase 2 completion (MS8) originally due June 30, 2023.
• Phase 3 (Maryland and Virginia): Milestones 9 through 14, with final Phase 3 completion (MS14) originally due March 31, 2025.
Each milestone has an associated milestone value that determines the interim completion certificate payment. Critically, Section 8.2(c) provides that "[a]ny modification to the Milestone Schedule, including any extension of a Milestone Completion Date, shall be effected solely through a Change Order in accordance with Section 16.1." This provision creates a direct linkage between the Change Order requirement and any claim for schedule relief: absent a written Change Order modifying the milestone completion dates, no schedule extension is available to the Contractor. Meridian cannot claim that alleged scope changes entitled it to additional time unless those changes were formalized through the Change Order process.
C. MCA § 14.1 — Termination for Cause by Owner
Section 14.1 governs the Owner's right to terminate the MCA for the Contractor's material breach:
§ 14.1 Termination for Cause. If the Contractor commits a material breach of this Agreement, including, without limitation, (a) failure to prosecute the Work diligently and in accordance with the Milestone Schedule, (b) failure to maintain the Work in conformance with the Quality Standards set forth in Section 12.4, or (c) failure to cure any material deficiency identified in a Notice of Non-Conformance within the applicable cure period, the Owner may terminate this Agreement for cause upon not less than thirty (30) calendar days' prior written notice to the Contractor specifying the nature of the breach; provided, however, that the Contractor shall have the opportunity to cure such breach within the thirty (30) calendar-day notice period. If the Contractor fails to cure the breach within such period, termination shall be effective upon the expiration of the notice period.
NFA invoked this provision by letter dated April 1, 2024, citing Meridian's persistent and worsening delays across multiple milestones, the accumulation of 287 non-conformance reports (43 of which were classified as "critical"), and Meridian's failure to cure the deficiencies identified in Cure Notice No. 1 (dated January 18, 2024) and Cure Notice No. 2 (dated March 12, 2024). The termination became effective on May 1, 2024, upon the expiration of the 30-day cure period.
Meridian's constructive change order defense is offered to excuse the delays and performance deficiencies that NFA characterizes as material breach under this provision. If Meridian can establish that the alleged scope changes were Owner-directed and caused or contributed to the delays, it would argue that the delays were "excused" rather than "unexcused," thereby undermining NFA's basis for termination.
D. MCA § 9.1 — Liquidated Damages for Delay
Section 9.1 establishes a liquidated damages regime for unexcused delays:
§ 9.1 Liquidated Damages. If the Contractor fails to achieve any Milestone by the applicable Milestone Completion Date, and such failure is not excused pursuant to Section 10.1 (Force Majeure) or attributable to an Owner-caused delay for which a Change Order has been issued pursuant to Section 16.1, the Contractor shall pay to the Owner, as liquidated damages and not as a penalty, the sum of One Hundred Seventy-Five Thousand Dollars ($175,000) per day for each day of delay beyond the applicable Milestone Completion Date, subject to a cap of ten percent (10%) of the applicable Milestone Value per Milestone, and an aggregate cap of five percent (5%) of the Total Contract Price (i.e., $60,000,000).
NFA's Counterclaim I seeks $49 million in liquidated damages based on the cumulative unexcused delays across Milestones 3 through 8. Meridian's constructive change defense, if successful, would reclassify some portion of these delays as "excused" delays attributable to Owner-directed scope changes, thereby reducing or eliminating the liquidated damages assessments. The explicit reference in Section 9.1 to delays "attributable to an Owner-caused delay for which a Change Order has been issued pursuant to Section 16.1" further reinforces the contractual framework: delay is excused only when a Change Order has been issued, not when a scope change is merely alleged after the fact.
E. MCA § 12.4 — Quality Standards
Section 12.4 requires all work to conform to the Northgate Technical Specification NS-FIBER-2020 (a 312-page document incorporated by reference as Exhibit D to the MCA), as well as ANSI/TIA-568 and BICSI guidelines for fiber-optic installation. Meridian may argue that certain alleged scope changes altered the quality requirements, but this argument is undermined by the documentary record: the 287 non-conformance reports (43 critical, 244 non-critical) issued during the contract period overwhelmingly reflect failures against the original specification (NS-FIBER-2020), not against any changed or enhanced requirements. The critical NCRs include splice loss exceeding specification tolerances, improper conduit burial depth (less than the 36-inch minimum required by NS-FIBER-2020 § 4.2.1), and unauthorized route deviations — all of which are measured against the baseline quality standards that were never modified by any Change Order.
F. MCA § 22.1 — Governing Law
Section 22.1 provides that the MCA shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflicts of law principles. This choice of law provision is undisputed and governs the legal analysis set forth in this memorandum.
G. Integration and No-Oral-Modification Clauses
In addition to the express prohibition on oral modifications contained in Section 16.1(e), the MCA includes a comprehensive integration clause at Section 22.3:
§ 22.3 Entire Agreement. This Agreement, together with all Exhibits, Schedules, and attachments hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, between the parties relating thereto. No amendment, modification, or supplement to this Agreement shall be valid or binding unless set forth in a writing signed by duly authorized representatives of both parties.
This provision, combined with Section 16.1(e), creates a robust contractual framework requiring all modifications to be in writing. Under New York General Obligations Law § 15-301, a written agreement that contains a provision requiring written modifications cannot be changed by an executory oral agreement unless such agreement is in writing and signed by the party against whom enforcement is sought. The interplay between this statutory provision and the MCA's contractual provisions is discussed in detail in Section V below.
III. Factual Background: The 14 Alleged Scope Changes
A. Meridian's Position
Meridian first raised its constructive change order theory in Victor Sandoval's February 2, 2024 letter responding to Cure Notice No. 1, which had been issued by Renata Voss (NFA Vice President of US Network Infrastructure) on January 18, 2024. In that response, Sandoval identified "no fewer than fourteen (14) significant scope changes directed by NFA personnel that were never formalized as Change Orders under Section 16.1 of the MCA." Sandoval's letter asserted that these "Owner-directed modifications to the scope of work fundamentally altered the nature and complexity of the Project, contributing directly to the schedule delays cited in the Cure Notice."
Meridian reiterated and expanded upon these claims in two subsequent filings:
1. Corrective Action Plan (March 5, 2024): Meridian's 94-page Corrective Action Plan, submitted in response to Cure Notice No. 2 (dated March 12, 2024, which itself rejected the sufficiency of Meridian's February 2, 2024 response), sought a nine-month schedule extension and $87 million in additional compensation. The Plan attributed delays and cost overruns to three categories: (a) alleged NFA permitting failures under MCA § 5.3 (approximately $32 million of the $87 million claim), (b) the 14 alleged scope changes ($41 million), and (c) force majeure events related to COVID-19 aftereffects and supply chain disruptions ($14 million).
2. Verified Complaint (July 15, 2024): After NFA terminated the MCA effective May 1, 2024, Meridian filed the instant action. Count I of the Verified Complaint (Breach of Contract / Wrongful Termination) incorporates the 14 alleged scope changes as a basis for arguing that Meridian's delays were excused by NFA's own breaches. Meridian further reiterated these claims in its Reply to NFA's Counterclaims, filed September 18, 2024.
Notably, Meridian's February 2, 2024 letter represents the first written communication in which Meridian identified these alleged scope changes. The Notice to Proceed was issued on April 1, 2020, meaning Meridian waited nearly four years — and until after receiving a formal cure notice — to raise these issues in writing. This delay is significant for both the legal analysis (undermining claims of contemporaneous reliance) and the factual assessment (casting doubt on whether the alleged changes actually occurred as described).
B. Categorization of the 14 Alleged Changes
Based on our review of Meridian's pleadings, Sandoval's February 2, 2024 letter, and the Corrective Action Plan, the 14 alleged scope changes can be organized into four categories. The specific changes are described below, with our preliminary assessment of each. A summary chart is provided in Appendix A.
1. Route Realignments / Rerouting Directives (Alleged Changes 1 through 6)
Meridian alleges that NFA personnel — principally Sean Calloway (NFA Senior Project Manager) and, in certain instances, Renata Voss — directed Meridian to deviate from the approved route plans in six separate instances:
Alleged Change 1: Rerouting of approximately 14 miles of the northern New Jersey corridor (Segment NJ-07) to avoid a newly designated wetlands area. Meridian claims this directive was communicated orally by Sean Calloway to Marcus Henley (Meridian's Vice President of Field Operations) in approximately September 2020. Meridian asserts this caused a 12-day delay to Milestone 2 and approximately $2.8 million in additional costs due to longer route length and additional permitting.
Alleged Change 2: Realignment of approximately 8 miles of the New York corridor (Segment NY-12) through a different municipal right-of-way due to alleged interference from a concurrent third-party utility project. Meridian claims this was directed by Calloway in approximately January 2021. Meridian asserts this caused a 9-day delay to Milestone 3 and approximately $1.9 million in additional costs.
Alleged Change 3: Rerouting of approximately 22 miles of the Connecticut corridor (Segment CT-04) to accommodate an NFA-preferred route through a commercial district rather than the originally planned residential corridor. Meridian claims Voss directed this change in approximately March 2022. Meridian asserts this caused an 18-day delay to Milestone 5 and approximately $4.7 million in additional costs due to more complex underground infrastructure and increased restoration requirements.
Alleged Change 4: Modification of the Pennsylvania corridor route (Segment PA-09) to incorporate an additional point of presence ("PoP") location not in the original design. Meridian claims Calloway directed this change in approximately June 2022. Meridian asserts this caused a 15-day delay to Milestone 6 and approximately $3.1 million in additional costs.
Alleged Change 5: Realignment of approximately 5 miles of the Massachusetts corridor (Segment MA-03) to avoid a planned state highway expansion project. Meridian claims this was communicated by Calloway to Henley in approximately August 2022. Meridian asserts this caused a 7-day delay to Milestone 6 and approximately $1.4 million in additional costs.
Alleged Change 6: Rerouting of approximately 31 miles of the Maryland corridor (Segment MD-02) to accommodate a revised NFA network architecture connecting to an additional data center location. Meridian claims Voss directed this change in approximately November 2022. Meridian asserts this caused a 22-day delay to Milestone 9 and approximately $6.2 million in additional costs.
These six alleged changes collectively account for approximately $20.1 million of Meridian's $41 million scope change claim and a total of 83 alleged delay days. As discussed in Section VI.A, our preliminary assessment is that most of these alleged route realignments fall within the Contractor's normal construction discretion or are unsupported by documentary evidence.
2. Additional Fiber Strand Count / Capacity Upgrades (Alleged Changes 7 through 10)
Meridian alleges that NFA directed the installation of higher-count fiber cables than specified in the original design documents in four segments:
Alleged Change 7: Upgrade from 288-count to 432-count fiber cable in the New York metropolitan corridor (Segments NY-01 through NY-04). Meridian claims Voss directed this upgrade in approximately August 2020 to accommodate anticipated future capacity needs. Meridian asserts additional material costs of approximately $3.4 million and a 6-day delay to Milestone 1.
Alleged Change 8: Upgrade from 144-count to 288-count fiber cable in the Connecticut corridor (Segments CT-01 through CT-03). Meridian claims Calloway communicated this request in approximately February 2022. Meridian asserts additional material costs of approximately $2.1 million and a 4-day delay to Milestone 5.
Alleged Change 9: Upgrade from 288-count to 432-count fiber cable in portions of the Pennsylvania corridor (Segment PA-05). Meridian claims this was directed by Voss in approximately September 2022. Meridian asserts additional material costs of approximately $1.8 million and a 5-day delay to Milestone 7.
Alleged Change 10: Installation of additional dark fiber strands in the Maryland corridor for future lit capacity. Meridian claims Calloway requested this in approximately January 2023. Meridian asserts additional material costs of approximately $2.9 million and an 8-day delay to Milestone 9.
These four alleged changes collectively account for approximately $10.2 million of Meridian's claim and 23 alleged delay days. As discussed in Section VI.B, this category is potentially the strongest basis for Meridian's constructive change theory, but it remains fundamentally undermined by the complete absence of written documentation and the failure to submit any Change Order requests or cost impact assessments during the nearly four-year performance period.
3. Accelerated Mobilization Requirements (Alleged Changes 11 and 12)
Meridian alleges that NFA demanded accelerated mobilization in two instances:
Alleged Change 11: Alleged direction from Voss in approximately July 2023 to commence Phase 3 mobilization in Maryland before the completion of Phase 2 work in Pennsylvania, purportedly to meet NFA's revised internal network launch schedule. Meridian asserts this required simultaneous deployment of crews across multiple states, causing resource allocation conflicts and approximately $3.8 million in additional mobilization costs, with cascading delays of approximately 14 days to Milestones 7 and 8.
Alleged Change 12: Alleged direction from Calloway in approximately September 2023 to accelerate Virginia Phase 3 work (Segments VA-01 through VA-06) to coincide with a state-level broadband grant deadline. Meridian asserts approximately $2.6 million in additional costs and 11 days of delay to Milestone 10.
These two alleged changes collectively account for approximately $6.4 million and 25 alleged delay days. As discussed in Section VI.C, the factual record contradicts Meridian's acceleration narrative: Phase 3 progress was minimal (only approximately 340 of 9,700 planned route miles, or approximately 3.5%, completed before termination), suggesting that Meridian failed to mobilize adequately for Phase 3 rather than being forced to over-mobilize.
4. Changed Construction Methods (Alleged Changes 13 and 14)
Meridian alleges that NFA directed changes to construction methods in two instances:
Alleged Change 13: Alleged direction from Calloway in approximately April 2021 to switch from directional boring to open-trench construction in portions of the New Jersey corridor (Segments NJ-03 and NJ-04) due to alleged NFA concerns about proximity to existing fiber assets. Meridian asserts approximately $2.7 million in additional costs (open-trench construction is generally more expensive per mile) and 9 days of delay to Milestone 2.
Alleged Change 14: Alleged direction from Calloway in approximately October 2022 to switch from open-trench to directional boring in portions of the Pennsylvania corridor (Segment PA-11) due to municipal requirements that Meridian claims NFA directed it to accommodate. Meridian asserts approximately $1.6 million in additional costs and 6 days of delay to Milestone 7.
These two alleged changes collectively account for approximately $4.3 million and 15 alleged delay days. As discussed in Section VI.D, construction method selection is typically a Contractor responsibility under design-build contracts, and the MCA's scope of work confirms that Meridian had responsibility for "design, engineering, permitting, and construction" methods.
C. Northgate's Position on the 14 Alleged Changes
NFA has consistently rejected Meridian's characterization of these items as Owner-directed scope changes. NFA's position has been articulated in several key documents and depositions.
March 12, 2024 Rejection of the Corrective Action Plan. In her letter rejecting Meridian's Corrective Action Plan, Voss stated that the claimed scope changes are either (a) within the original scope of the MCA and do not constitute "Changes" as defined in Section 16.1, (b) minor field-level adjustments that fall within the Contractor's means-and-methods discretion under a design-build contract, or (c) entirely undocumented and unsupported by any contemporaneous written records. Voss's letter specifically noted that NFA had "at no time directed changes to the Scope of Work without compliance with the Change Order procedure set forth in Section 16.1" and that "the Contractor's belated assertion of fourteen alleged scope changes, raised for the first time nearly four years after the Notice to Proceed and only in response to a formal Cure Notice, lacks credibility."
Sean Calloway Deposition (November 19, 2024). Calloway, who served as NFA's Senior Project Manager and was the primary point of contact with Meridian's field operations team, was deposed for a full day. Calloway's testimony is expected to support NFA's position that any field-level communications he had with Marcus Henley or other Meridian personnel were routine coordination discussions that did not alter the scope of work. Calloway is expected to testify that he did not have authority to direct scope changes without written Change Orders and that he understood the Change Order process was the exclusive mechanism for modifying the scope, schedule, or contract price. Relevant excerpts of his testimony are included in Appendix C.
Renata Voss Deposition (November 12–13, 2024). Voss was deposed over two days in her capacity as the NFA executive with overall responsibility for the U.S. fiber build-out program. Voss is expected to testify that she did not authorize any scope changes outside the Change Order process, that she was not aware of any oral directives issued by NFA personnel that would have constituted scope changes, and that the scope of the program remained consistent with the MCA and the original design specifications (NS-FIBER-2020) throughout the contract period. Her testimony on the strand count upgrade allegations (Alleged Changes 7–10) is particularly relevant: she is expected to testify that any discussions about future capacity upgrades were exploratory in nature, related to potential future phases of NFA's network expansion, and were never formalized as directives to Meridian. Relevant excerpts are included in Appendix C.
Marcus Henley Deposition (December 3–4, 2024). Henley, Meridian's Vice President of Field Operations, was deposed over two days. Although Henley generally supported Meridian's position that NFA personnel communicated requests for changes in the field, his testimony also contained several damaging admissions. Henley acknowledged that Meridian experienced significant crew shortages beginning in mid-2021, at times operating with only 12 to 15 active construction crews against a plan calling for 22 to 25 crews. He further acknowledged that many of the critical NCRs — including splice loss failures and conduit depth violations — were attributable to "quality control issues at the crew level" rather than to any NFA-directed changes. His testimony on the specific alleged changes was often vague, with Henley unable to identify specific dates, specific NFA personnel, or specific communications in which the alleged directives were issued. Relevant excerpts are included in Appendix C.
Victor Sandoval Deposition (December 10–11, 2024). Sandoval, Meridian's Chief Executive Officer, was deposed over two days. Sandoval's testimony is critical because he was the signatory of the February 2, 2024 letter and the driving force behind the Corrective Action Plan. On cross-examination, Sandoval was unable to identify a single written Change Order request submitted by Meridian during the contract period. When asked why Meridian had not followed the Change Order procedure, Sandoval stated that the pace of the project and the volume of field-level interactions made formal Change Order submissions "impractical" — an admission that is damaging because it effectively concedes that Meridian consciously chose not to comply with the contractual procedure rather than being prevented from doing so. Relevant excerpts are included in Appendix C.
D. Documentary Record
Our team has reviewed the approximately 1.4 million documents produced by NFA and the approximately 890,000 documents produced by Meridian in discovery. This review has focused on identifying any documentary evidence that could support or undermine Meridian's constructive change order claims. The key findings are as follows:
No Written Change Order Requests. The most significant finding is the complete absence of any written Change Order requests from Meridian for any of the 14 alleged changes. Despite the MCA's requirement that Change Order requests be submitted in writing with detailed descriptions of scope, cost, and schedule impacts, Meridian never submitted a single Change Order request during the nearly four-year performance period from the April 1, 2020 Notice to Proceed through the April 1, 2024 termination notice.
No Written Change Order Approvals. Correspondingly, there are no written Change Order approvals from NFA, which is consistent with NFA's position that it never directed scope changes outside the formal Change Order process.
Potential Email and Field Communications. Meridian may attempt to rely on certain emails and field communications as evidence of "oral directives" from NFA personnel. Our review of the Key Document Index has identified approximately 47 emails and field reports that Meridian may characterize as reflecting NFA-directed scope changes. However, these communications are, at best, ambiguous. Many are routine coordination messages between Calloway and Henley regarding construction sequencing, utility conflicts, and permit status — the type of day-to-day project communications that are standard in large infrastructure projects and do not constitute scope changes. Several of the emails contain language such as "we should consider" or "it might make sense to evaluate" alternative approaches, which is exploratory rather than directive. None of the identified communications contain language directing Meridian to perform specific changed work, and none are accompanied by cost estimates, schedule impact analyses, or any other indicia of a formal scope change.
Internal Meridian Communications. Notably, our review of Meridian's internal communications — including emails among Sandoval, Yeung (COO), Henley, and Meridian's project management team — has not revealed contemporaneous internal discussions about NFA-directed scope changes. If NFA had truly directed 14 significant scope changes with a combined cost impact of $41 million, one would expect Meridian's internal records to reflect awareness, analysis, and discussion of those changes in real time. The absence of such contemporaneous internal records further undermines the credibility of Meridian's claims.
Ridgepoint Capital Communications. Meridian's private equity sponsor, Ridgepoint Capital Group LP, which acquired a 55% stake in Meridian in 2018 for approximately $285 million, received regular reporting from Meridian's management. Meridian has asserted privilege over 187 documents exchanged between Meridian and Ridgepoint, and NFA's cross-motion for a protective order (filed December 6, 2024) seeks production of these documents on the grounds that they do not qualify for attorney-client privilege or work product protection. If produced, these documents may contain internal assessments of the change order claims' viability and could be highly relevant to this analysis.
IV. Legal Analysis: Constructive Change Order Doctrine Under New York Law
A. Overview of the Doctrine
The constructive change order doctrine is a well-established principle in construction law under which a contractor may recover additional compensation and schedule relief when the owner, through its conduct, effectively changes the scope of work without issuing a formal change order. The doctrine recognizes that in practice, owners sometimes direct changes through oral instructions, field directives, or other informal mechanisms that bypass the contractual change order process. In such circumstances, the contractor may be entitled to equitable relief on the theory that it would be unjust for the owner to receive the benefit of the changed work without compensating the contractor.
The doctrine has roots in both common law contract principles and equitable theories, including unjust enrichment, quantum meruit, and implied-in-fact contract. In the federal government contracting context, the doctrine is well-developed through decades of decisions by the Armed Services Board of Contract Appeals, the Civilian Board of Contract Appeals, and the Court of Federal Claims. In the private construction context, New York courts have recognized the doctrine but have applied it cautiously, particularly where the contract contains express provisions governing the change order process.
The tension underlying the constructive change doctrine is between two competing principles: (1) the freedom of contract principle, which holds that sophisticated parties should be bound by the procedural requirements they negotiated; and (2) the equitable principle, which holds that an owner should not be permitted to benefit from changed work while hiding behind a procedural technicality to avoid paying for it. In the present case, this tension is resolved overwhelmingly in favor of the contractual requirements, for reasons discussed below.
B. Elements of a Constructive Change Order Claim
Under New York law, a contractor asserting a constructive change order claim must establish the following elements:
(i) The owner directed or required work that was beyond the original contract scope — i.e., the work performed was not encompassed by the contractor's obligations under the original contract;
(ii) The contractor performed the extra or changed work — i.e., the contractor actually carried out the allegedly changed work in reliance on the owner's directive;
(iii) The contractor incurred additional costs or delays as a direct result of performing the changed work — i.e., there is a causal connection between the changed work and the contractor's claimed damages; and
(iv) The owner received the benefit of the additional work — i.e., the changed work was incorporated into the project and the owner derived value from it.
Even where a contractor can establish all four elements, the claim may nonetheless be barred if the contract contains a written change order requirement and the contractor failed to comply with that requirement, as discussed in Section IV.C below.
C. The Written Change Order Requirement as a Condition Precedent
Under New York law, when a construction contract contains an express written change order requirement, the contractor's failure to comply with that procedure generally bars recovery for alleged extra work. This principle has been consistently applied by New York courts in cases involving construction contracts of varying sizes and complexity.
The leading decisions establish a "strict compliance" framework under which contractors who fail to follow contractual notice and change order procedures are barred from recovering for extra work, even where the contractor can demonstrate that the owner directed changes and benefited from the changed work. The rationale for this rule is grounded in basic principles of contract interpretation and the freedom of contract: sophisticated parties to a negotiated commercial agreement are presumed to have included the change order procedure for sound business reasons — principally, to create a contemporaneous written record of scope changes, to allow the parties to negotiate the cost and schedule impacts of changes before the work is performed, and to prevent disputes about whether changes were actually directed. Courts have repeatedly held that contractors cannot circumvent these carefully negotiated procedures by asserting after the fact that changes were directed orally.
This principle is particularly strong in the context of large-scale commercial construction contracts between sophisticated parties. Here, the MCA was a $1.2 billion contract negotiated at arm's length between NFA (a subsidiary of Northgate Telecommunications PLC, a multinational telecommunications company) and Meridian (a $620 million annual revenue infrastructure contractor backed by a private equity firm). Both parties were represented by experienced counsel during the negotiation of the MCA. The Change Order procedure in Section 16.1 was a core element of the contract's risk allocation framework. Under these circumstances, there is no basis for excusing Meridian's failure to comply with the procedure it negotiated.
Furthermore, Section 16.1(d) expressly provides that the Contractor "shall not be entitled to any adjustment in the Contract Price or the Milestone Schedule" if it performs changed work without a duly executed Change Order. This provision constitutes an express contractual bar to recovery, independent of the common law principles discussed above. New York courts have consistently enforced such provisions as written, holding that the parties' express allocation of risk controls.
D. Exceptions to the Written Change Order Requirement
While New York law generally enforces written change order requirements strictly, courts have recognized several narrow exceptions. Meridian may attempt to invoke these exceptions, and we must be prepared to address each. Our analysis of each exception, and its applicability to the facts of this case, follows.
1. Waiver. An owner may be found to have waived the written change order requirement through a course of conduct that demonstrates an intent to abandon the contractual procedure. Waiver typically arises where the owner repeatedly directed changes orally and paid for them without insisting on written change orders, thereby establishing a pattern of conduct inconsistent with the written requirement. The key inquiry is whether the owner's conduct was so inconsistent with the contractual requirement as to demonstrate an intentional relinquishment of a known right.
Application. NFA did not waive the written change order requirement. The record demonstrates that NFA consistently maintained the written Change Order procedure throughout the contract period. There is no evidence that NFA ever directed a scope change orally and then paid for the changed work without a written Change Order. To the contrary, the only payments made by NFA to Meridian — totaling $512.7 million — were made against certified Applications for Payment under MCA § 18.1, based on documented milestone deliverables and unit-rate work within the original scope. Each payment was processed through the MCA's formal payment certification process, which requires submission of a detailed Application for Payment, review and certification by the Owner's representative, and payment within 30 days of certification, subject to 10% retainage. No payments were made for "extra work" outside the change order process. The absence of any payment for undocumented changed work is powerful evidence that NFA did not waive the written Change Order requirement.
Moreover, NFA's issuance of two formal Cure Notices (January 18, 2024 and March 12, 2024) citing Meridian's failure to meet the original milestone dates — without any acknowledgment of Owner-directed scope changes — further demonstrates that NFA maintained its position that the original scope and schedule were controlling. If NFA had waived the Change Order requirement and acknowledged directing scope changes, one would expect the Cure Notices to reference those changes and their impact on the schedule. The Cure Notices contain no such references.
2. Estoppel. A contractor may argue that the owner is estopped from enforcing the written change order requirement where the owner's representative orally directed changes and the contractor reasonably relied on those oral directions to its detriment. The estoppel exception requires the contractor to demonstrate: (a) a clear and unambiguous oral directive from an authorized owner representative; (b) reasonable reliance by the contractor on that directive; and (c) detrimental change of position by the contractor in reliance on the directive.
Application. Even assuming that certain field communications from Calloway or Voss could be construed as directives (which NFA disputes), Meridian faces significant obstacles in establishing estoppel. Most fundamentally, Meridian's reliance on any oral directive was objectively unreasonable given the express provisions of MCA § 16.1. Meridian was not a small, unsophisticated subcontractor that could plausibly claim ignorance of the contractual procedures. To the contrary, Meridian was a $620 million annual revenue enterprise with approximately 2,400 employees, led by an experienced management team (Victor Sandoval, CEO; Bridget Yeung, COO; Marcus Henley, VP of Field Operations) and backed by Ridgepoint Capital Group LP, a private equity firm that acquired a 55% stake for approximately $285 million. Meridian had in-house counsel, a contracts administration department, and extensive experience with large-scale infrastructure contracts containing change order procedures. Under these circumstances, any reliance on oral directives — in the face of an express contractual requirement for written Change Orders — was unreasonable as a matter of law.
Additionally, the temporal dimension of Meridian's claim undermines the estoppel argument. The alleged scope changes span from approximately September 2020 through January 2023 — a period of over two years. Throughout this entire period, Meridian never once submitted a written Change Order request, never requested a cost impact assessment, and never sought formal written confirmation of any alleged oral directive. The first time Meridian raised these issues was in Sandoval's February 2, 2024 letter — approximately one to four years after the alleged changes occurred. This pattern is inconsistent with a contractor that was contemporaneously relying on oral directives; it is far more consistent with an after-the-fact attempt to construct a defense against a termination for cause.
Meridian's own Corrective Action Plan, submitted on March 5, 2024, sought $87 million in additional compensation for alleged Owner-caused delays and scope changes. This document represents the first formal written request for additional compensation during the entire life of the contract. Its timing — submitted only after Meridian received two cure notices and faced imminent termination — strongly suggests that the constructive change theory is a litigation position rather than a reflection of contemporaneous events.
3. Ratification / Acceptance of Benefits
If the owner accepted the changed work and benefited from it, the owner may be estopped from denying the change under the ratification or acceptance-of-benefits doctrine. This exception requires the contractor to demonstrate that the owner had knowledge of the changed work, accepted or approved it, and derived a benefit from it.
Application. NFA has a strong response to this argument. NFA contends that it never accepted "changed" work because no scope changes were directed in the first place. The documentary record supports this position. Moreover, the 287 NCRs demonstrate that much of Meridian's work did not even meet the original specifications, let alone any enhanced or modified requirements. The 43 critical NCRs include splice loss exceeding the tolerances specified in NS-FIBER-2020 § 3.4.2 (12 instances), improper conduit burial depth below the 36-inch minimum (17 instances), and unauthorized route deviations from the approved design (14 instances). These NCRs reflect Contractor errors against the baseline quality standards, not departures from the baseline prompted by Owner-directed changes.
To the extent that Meridian performed any work that could be characterized as "changed" — such as installing higher-count fiber cables in certain segments — NFA would argue that any such work was unilateral and unauthorized, performed by Meridian at its own risk and without NFA's knowledge or approval. The ratification doctrine requires the owner to have accepted the changed work with knowledge; NFA's position is that it had no knowledge of any changes because no changes were directed and no Change Order requests were submitted.
4. Impossibility of Compliance / Oral Modification Despite NOM Clause
Under certain circumstances, New York courts have recognized that an oral modification of a written contract may be enforceable despite a no-oral-modification clause if the parties' conduct unequivocally demonstrates mutual assent to the modification. This exception is rooted in the principle that parties are free to modify their agreements by mutual consent, and that a no-oral-modification clause — while enforceable under GOL § 15-301 — cannot override clear evidence that both parties agreed to and acted upon a modification.
Application. This exception requires Meridian to demonstrate that both parties unequivocally acted on the alleged modifications — i.e., that NFA directed the changes and Meridian performed them, and that both parties' conduct was consistent only with the existence of a binding modification. The threshold for invoking this exception is high, and the absence of any written documentation is a significant obstacle. More fundamentally, NFA's consistent insistence on the written Change Order process — as evidenced by the two Cure Notices citing Meridian's failure to meet the original milestones — is flatly inconsistent with a finding that NFA acquiesced in oral modifications to the scope and schedule. If NFA had truly directed scope changes, its Cure Notices would have referenced those changes and accounted for their schedule impact. Instead, the Cure Notices treated the original milestones as controlling, which is strong evidence that NFA did not agree to any modifications.
The partial performance exception to GOL § 15-301, discussed in Section V below, also requires a showing that the Contractor's performance was "unequivocally referable" to the oral modification rather than to the original contract. Given that Meridian's work — including any work that could arguably be characterized as "changed" — was performed in the context of a $1.2 billion design-build contract with a broad scope of work encompassing 18,500 route miles, it will be difficult for Meridian to demonstrate that any particular aspect of its performance was "unequivocally referable" to an oral modification rather than to its obligations under the original MCA.
V. New York General Obligations Law § 15-301 Analysis
New York General Obligations Law § 15-301 provides, in relevant part:
"A written agreement or other written instrument which contains a provision to the effect that it cannot be changed orally, cannot be changed by an executory agreement unless such executory agreement is in writing and signed by the party against whom enforcement of the change is sought or by his agent."
This statute directly applies to the MCA, which contains both a no-oral-modification clause (Section 22.3) and an express prohibition on oral changes (Section 16.1(e)). Under GOL § 15-301, the MCA cannot be modified by an oral agreement; any modification must be in writing and signed by the party against whom enforcement is sought. Since Meridian seeks to enforce the alleged modifications against NFA, the modifications must be in writing and signed by NFA or its authorized agent. No such writings exist.
The New York Court of Appeals has addressed the interplay between GOL § 15-301 and equitable principles in several important decisions. The leading case establishes that while GOL § 15-301 generally bars enforcement of oral modifications to contracts containing NOM clauses, the doctrine of equitable estoppel may overcome the statutory bar where the party seeking to enforce the oral modification demonstrates that it partially performed the modification and that the other party's conduct induced such reliance that enforcement of the NOM clause would be unconscionable.
However, the Court of Appeals has emphasized that the estoppel exception to GOL § 15-301 is narrow and requires a strong showing. The partial performance relied upon must be "unequivocally referable" to the oral modification — that is, the conduct must be explicable only by reference to the modification and not by reference to the original contract. This is a demanding standard, and New York courts have applied it rigorously, particularly in commercial contexts involving sophisticated parties.
Application to This Case. Meridian faces formidable obstacles in invoking the estoppel exception to GOL § 15-301. First, as discussed above, Meridian's work during the contract period is not "unequivocally referable" to any oral modification. The MCA encompassed a broad scope of work — design, engineering, permitting, and construction of 18,500 route miles of fiber-optic infrastructure — and virtually all of Meridian's performance can be explained by reference to the original contract. Even if Meridian installed higher-count fiber cables in certain segments (Alleged Changes 7–10), NFA would argue that this was either within the original specifications or a unilateral Contractor decision, not unequivocally referable to an NFA-directed oral modification.
Second, Meridian's sophistication weighs heavily against a finding that enforcement of the NOM clause would be "unconscionable." Meridian is a $620 million annual revenue company backed by a private equity sponsor, with experienced management and in-house legal resources. Meridian negotiated the Change Order procedure, understood its requirements, and had the organizational capacity to submit written Change Order requests at any point during the nearly four-year contract period. Its conscious decision not to do so — confirmed by Sandoval's deposition admission that formal Change Order submissions were "impractical" — does not create the type of inequity that the estoppel exception was designed to address. The estoppel exception exists to protect unsophisticated parties who are lured into reliance by the other party's conduct; it does not exist to rescue sophisticated contractors from the consequences of their own procedural failures.
Third, Meridian's nearly four-year delay in raising the scope change issues undermines any claim of detrimental reliance. If Meridian had genuinely relied on oral directives from NFA to perform changed work, one would expect Meridian to have documented those directives contemporaneously, submitted Change Order requests promptly, and raised the cost and schedule implications of the changes as they occurred. Instead, Meridian waited until after receiving a formal Cure Notice to identify the alleged changes — a pattern that suggests the constructive change theory is an afterthought, not a reflection of contemporaneous reliance.
For all of these reasons, we conclude that GOL § 15-301 reinforces the MCA's written Change Order requirement and that Meridian is unlikely to overcome the statutory bar through the estoppel exception.
VI. Application to Each Category of Alleged Changes
A. Route Realignments / Rerouting Directives (Alleged Changes 1–6)
Factual Assessment. Our review of the documentary record suggests that many of the six alleged route realignments fall within the category of routine field-level adjustments that are standard in large-scale fiber-optic construction projects. Design-build contracts, by their nature, require the contractor to exercise judgment in optimizing construction routes within the general corridor defined by the contract documents. Adjustments to avoid unforeseen underground utilities, wetlands areas, or concurrent third-party construction projects are typical of the field-level decisions that the Contractor is expected to make as part of its design-build responsibility.
MCA Analysis. The MCA's scope of work, as defined in Exhibit A, encompasses "design, engineering, permitting, and construction of fiber-optic infrastructure along the route corridors generally depicted in Exhibit B." The use of the word "generally" in describing the route corridors indicates that Meridian had latitude to optimize routes within the designated corridors — a standard feature of design-build contracts that allocates route design responsibility to the contractor. Under this framework, adjustments to individual route segments do not constitute "Changes" to the scope of work that require formal Change Orders; rather, they are part of the Contractor's core design-build responsibility.
NCR Evidence. Notably, several of the critical NCRs issued during the contract period cite "unauthorized route deviations" — instances where Meridian departed from the approved route design without authorization. These NCRs suggest that certain route deviations were Contractor-initiated rather than Owner-directed, directly contradicting Meridian's claim that NFA directed route changes. The presence of 14 critical NCRs for unauthorized route deviations is strong evidence that Meridian was making unilateral route decisions and, in some cases, making poor decisions that resulted in non-conforming work.
Conclusion. The route realignment category provides a weak basis for Meridian's constructive change order claim. Most of the alleged changes appear to be within the original scope of the design-build contract or were Contractor-initiated adjustments. The documentary record does not support the claim that NFA directed these changes, and the NCR evidence actively undermines it.
B. Additional Fiber Strand Count / Capacity Upgrades (Alleged Changes 7–10)
Factual Assessment. This category is potentially the strongest basis for Meridian's constructive change order theory because a request to install higher-count fiber cables than specified in the original design documents, if it occurred, would constitute a change to the scope of work. However, the evidentiary support for this claim remains thin. We need to compare the original design specifications (NS-FIBER-2020, which specifies the fiber strand counts for each segment) with what was allegedly requested by NFA and what was actually installed by Meridian.
Deposition Testimony. The deposition testimony of Voss and Calloway on this point should be carefully reviewed. Preliminary indications from the depositions suggest that any discussions about strand count upgrades were exploratory and forward-looking — related to NFA's potential future network expansion plans — rather than definitive directives to Meridian. Voss is expected to testify that she discussed future capacity needs with Meridian's management as part of normal business relationship conversations, but that she never directed Meridian to install higher-count cables without a formal Change Order. Calloway's testimony is expected to be consistent with Voss's on this point.
Documentary Gap. Even if NFA did, at some point, express interest in higher strand counts, the absence of any written directive, Change Order request, or cost impact assessment is fatal to Meridian's claim under the strict compliance framework. If NFA had truly directed a change from 288-count to 432-count fiber in the New York metropolitan corridor (Alleged Change 7), with an alleged cost impact of $3.4 million, one would expect to find at least some written record: a directive email, a purchase order for the higher-count cable, an internal Meridian analysis of the cost differential, or a request for pricing from a fiber cable supplier. Our review has not identified any such contemporaneous documentation.
Actual Installation. It is also unclear whether Meridian actually installed higher-count cables in the segments identified in Alleged Changes 7–10. If Meridian installed the cables specified in the original design documents, then no changed work was performed and the claim fails at the threshold. If Meridian did install higher-count cables, NFA would argue that this was a unilateral Contractor decision made without NFA's authorization. This factual question should be addressed through Dr. Chazen's expert analysis and through the remaining discovery.
Conclusion. While potentially the strongest category, the strand count claims remain fundamentally undermined by the absence of any written documentation and Meridian's failure to submit Change Order requests or cost impact assessments at any point during the contract period. If discovery reveals contemporaneous written communications supporting the claim, this assessment may need to be revised.
C. Accelerated Mobilization (Alleged Changes 11 and 12)
Factual Assessment. Meridian claims that NFA demanded early mobilization for Phase 3 in Maryland and Virginia in July and September 2023, respectively, before Phase 2 work was complete. However, the MCA Milestone Schedule anticipated Phase 3 work beginning in July 2023 (Milestone 9 — Phase 3 Mobilization and Initial Construction — had a contractual start date of July 1, 2023). Meridian's characterization of this as "accelerated" mobilization is therefor

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