MEMORANDUM
PRIVILEGED & CONFIDENTIAL / ATTORNEY WORK PRODUCT
TO: Dominic Hale, General Counsel, Northgate Telecommunications PLC
FROM: Linda Osei, Responsible Partner, Calderwood & Harkness LLP
CC: Priya Anand, Jeffrey Park, Yuki Nakamura (Calderwood & Harkness LLP)
DATE: January 20, 2025
RE: Preliminary Trial Plan and Witness List — Meridian Infrastructure Partners LLC v. Northgate Fiber Americas Inc., Index No. 654321/2024, Supreme Court of the State of New York, New York County, Commercial Division (Part 49, Hon. Eleanor M. Ricci)
MATTER NO.: 1022-00005
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I. Purpose and Overview
The purpose of this memorandum is to set forth a preliminary trial plan for the six-week trial window reserved by Justice Ricci for November 2025 in the above-captioned matter. This memorandum identifies our proposed trial themes, witness list, key exhibits, legal issues for trial, pre-trial motion strategy, trial team structure, and a timeline of next steps leading to trial. It is intended to serve as a framework for ongoing trial preparation discussions with the Northgate litigation team and senior management.
At the outset, we note that this is an early-stage planning document. The trial plan will necessarily be refined and updated as the litigation progresses through several critical remaining milestones, including: (a) the completion of expert reports, which are due on March 31, 2025; (b) the exchange and filing of rebuttal expert reports, due on May 15, 2025; (c) the completion of expert depositions, which are scheduled for June 2025; and (d) any summary judgment proceedings, for which the parties have an August 2025 briefing window under the scheduling order entered by Justice Ricci. The outcomes of each of these stages—and particularly the resolution of the pending privilege motions currently set for oral argument on January 27, 2025—will have a meaningful impact on the shape of this trial plan.
As a threshold matter, it bears emphasis that this is a bench trial. Pursuant to Section 22.4 of the Master Construction Agreement ("MCA"), the parties waived the right to a jury trial for any dispute arising under or in connection with the MCA. The case will therefore be tried to Justice Ricci sitting without a jury in the Commercial Division. This procedural posture influences our trial strategy at every level—from the depth and technicality of expert presentations, to the manner of direct and cross-examination, to the structure and length of summations.
The total financial exposure in this case is substantial. Meridian Infrastructure Partners LLC ("Meridian") has asserted claims against Northgate Fiber Americas Inc. ("NFA") totaling approximately $200,000,000 across four counts. Northgate has asserted counterclaims totaling $149,000,000 across three counterclaims. The net swing between the parties' competing positions is therefore approximately $349,000,000—a figure that underscores the significance of this trial to Northgate Telecommunications PLC ("NTP") and its United States subsidiary NFA.
Our key objective at trial is twofold. First, we must demonstrate that Northgate's April 1, 2024 termination of the MCA for cause was fully justified by Meridian's persistent and material breach of its contractual obligations, including: (i) schedule delays across multiple milestones that were accelerating in severity; (ii) 287 non-conformance reports ("NCRs"), including 43 NCRs classified as "critical" under Northgate Technical Specification NS-FIBER-2020; and (iii) Meridian's failure to cure those breaches after receiving two formal cure notices and more than 73 days of opportunity to do so. Second, we must affirmatively establish Northgate's entitlement to $149,000,000 in counterclaim damages, comprising liquidated damages for milestone delays, excess completion costs incurred by engaging a replacement contractor, and remediation costs for defective work.
This memorandum is organized as follows: Section II identifies the five trial themes we propose to advance. Section III addresses the case structure and burden of proof. Section IV presents a proposed six-week trial schedule. Section V contains our proposed witness list. Section VI catalogs the key exhibits. Section VII discusses the key legal issues for trial. Section VIII outlines our pre-trial motion strategy. Section IX sets forth the trial team and roles. Section X identifies outstanding issues and next steps. Section XI concludes with a summary assessment and recommendations.
II. Trial Themes
A compelling trial narrative is essential even in a bench trial. Justice Ricci is an experienced Commercial Division jurist, but the sheer volume of construction documentation, delay analyses, and financial data in this case demands that we organize our presentation around a small number of clear, recurring themes that the court can use as a framework for evaluating the evidence. We propose the following five themes, each of which is supported by the documentary record and will be reinforced through both our fact and expert testimony.
A. Theme 1: Meridian's Pattern of Persistent Delay
At its core, this case is about a contractor that failed to build what it promised, when it promised to build it. Meridian entered into a $1.2 billion design-build contract to construct an 18,500-route-mile fiber-optic network across three phases. The MCA established fourteen defined milestones with contractually binding completion dates, and Section 8.2 of the MCA expressly provided that "time is of the essence with respect to each Milestone Completion Date." Schedule performance was not an aspiration; it was a core contractual obligation, and Meridian's compensation, milestone payments, and right to continue as the contractor were all tied to meeting those dates.
The evidence will show that Meridian failed to meet milestone after milestone across all three phases of the fiber build-out program. Every single milestone from MS3 onward was late:
• MS3 (Phase 1): 47 days late
• MS5 (Phase 2): 22 days late
• MS6 (Phase 2): 68 days late
• MS7 (Phase 2): 91 days late
• MS8 (Phase 2): 134+ days late—and, critically, MS8 was never completed before Northgate terminated the MCA
The pattern is unmistakable and, importantly, it demonstrates that the delays were accelerating rather than improving. Meridian was not a contractor experiencing temporary setbacks and gradually returning to schedule compliance. To the contrary, each successive milestone slipped further behind schedule than the last. By the time Northgate issued its first cure notice in January 2024, Meridian's delays had grown from weeks to months, and there was no credible basis to believe that Meridian would reverse course.
The most striking evidence of Meridian's inability to perform is found in Phase 3, the largest and most valuable phase of the program ($629 million, covering 9,700 route miles). Despite mobilizing for Phase 3 in July 2023, Meridian had completed only 340 of 9,700 route miles by the time of termination—a mere 3.5 percent of the required work. This is not a marginal shortfall. It reflects a fundamental failure of execution on the part of the contractor.
We will present this theme early in our opening statement and return to it throughout trial. The Milestone Completion Tracking Chart (Exhibit 13), the LD assessment letters (Exhibit 14), and the Phase 3 Progress Reports (Exhibit 18) will be central demonstrative exhibits. On direct examination, Renata Voss and Sean Calloway will provide context for each milestone delay and explain how Northgate tracked and documented Meridian's schedule failures in real time. On cross-examination, we expect to elicit admissions from Victor Sandoval and Marcus Henley that confirm the scope and severity of the delays and undermine Meridian's efforts to shift blame to Northgate.
B. Theme 2: Substandard Workmanship
Meridian not only built late—it built poorly. Over the life of the project, NFA's construction management team issued 287 non-conformance reports documenting deficiencies in Meridian's work. Of these, 43 were classified as "critical" NCRs, reflecting defects that posed a material risk to network performance, safety, or regulatory compliance. The critical NCRs included instances of:
• Splice loss exceeding specification — fiber splices that exceeded the maximum loss thresholds set forth in Northgate Technical Specification NS-FIBER-2020, resulting in signal degradation and potential service interruption once the network became operational;
• Improper conduit depth — underground conduit installations that failed to meet the minimum burial depth requirements specified in NS-FIBER-2020 and applicable industry standards (including ANSI/TIA-568 and BICSI guidelines), exposing the fiber infrastructure to physical damage and code violations; and
• Unauthorized route deviations — instances in which Meridian deviated from the approved route design without obtaining prior written approval from NFA, resulting in work that did not conform to the as-designed alignment and, in several cases, encroached on property for which Northgate did not hold rights-of-way.
Section 12.4 of the MCA required all work to conform to Northgate Technical Specification NS-FIBER-2020 and to "all applicable industry standards, including but not limited to ANSI/TIA-568 and BICSI guidelines." Meridian's persistent quality failures violated this express contractual obligation.
Particularly damning is the fact that quality problems not only persisted but worsened during the cure period. After Northgate issued Cure Notice No. 1 on January 18, 2024, NFA's construction management team continued to monitor Meridian's ongoing work and issued 12 additional critical NCRs in February 2024 alone. This evidence directly refutes any suggestion by Meridian that it was making good-faith efforts to cure its deficiencies during the cure period.
The estimated cost to remediate all defective work is $18.3 million. This figure is broken down across the 43 critical NCRs (estimated at approximately $275,000 per NCR, on average) and the 244 non-critical NCRs (estimated at approximately $26,500 per NCR, on average). Professor Gordon Whitfield will present a detailed remediation cost analysis at trial supported by the NCR Summary Register (Exhibit 15), the selected Critical NCR Files (Exhibit 16), and the Remediation Cost Estimates (Exhibit 24).
C. Theme 3: The Cure Process Was Fair and Meridian Failed to Cure
Northgate did not rush to terminate. To the contrary, Northgate followed the cure process prescribed by Section 14.1 of the MCA meticulously, and it afforded Meridian more than double the minimum cure period required by the contract. The timeline of the cure process speaks for itself:
• January 18, 2024: Northgate issued Cure Notice No. 1 (Exhibit 6), citing Meridian's failure to achieve MS8, Meridian's inadequate mobilization for Phase 3, and the accumulation of 43 critical NCRs. The Cure Notice identified the specific defaults and stated that Meridian was required to cure within the time period prescribed by MCA § 14.1.
• February 2, 2024: Meridian responded (Exhibit 7) through CEO Victor Sandoval, disputing the existence of material breach and raising three defenses: permitting delays allegedly attributable to Northgate, constructive change orders, and force majeure arising from COVID-19 labor and supply chain effects.
• February 19, 2024: Northgate issued Cure Notice No. 2 (Exhibit 8), stating that Meridian had failed to cure the identified defaults, rejecting Meridian's asserted defenses as unsupported by the contract and the facts, and reiterating Northgate's requirement that Meridian cure its material breaches.
• March 5, 2024: Meridian submitted a Corrective Action Plan (Exhibit 9).
• March 12, 2024: Northgate rejected the Corrective Action Plan (Exhibit 10) as inadequate.
• April 1, 2024: Northgate issued the Notice of Termination for Cause (Exhibit 11), terminating the MCA under Section 14.1.
Under MCA § 14.1, the Contractor is afforded no fewer than 30 calendar days to cure a noticed default. In practice, Northgate provided Meridian 73 days from the date of the first Cure Notice to the date of termination. During that period, Meridian had ample opportunity to develop and implement a credible plan to address its schedule delays and quality failures. Instead, Meridian's Corrective Action Plan proposed a nine-month extension of the project schedule and $87 million in additional compensation—effectively demanding that Northgate pay more and wait longer, rather than addressing the material breaches that had prompted the cure process in the first place.
We anticipate that Meridian will argue at trial that its Corrective Action Plan was a good-faith effort to address legitimate impediments to performance. The evidence will show otherwise. The Corrective Action Plan did not propose any specific measures to increase crew staffing levels, did not commit to any measurable quality improvement targets, and did not address the 43 outstanding critical NCRs. It was, in substance, a request for a contract modification that would have rewarded Meridian for its own failures.
This theme is critical to our defense of Counts I and IV. It demonstrates not only that the termination was procedurally proper, but that Northgate acted reasonably and in good faith throughout the cure process—undermining any claim that the termination was pretextual.
D. Theme 4: Meridian's Defenses Are Pretextual
Meridian has advanced three principal defenses to justify its failure to perform: (i) permitting delays attributable to Northgate as the owner; (ii) constructive change orders that allegedly expanded the scope of Meridian's work; and (iii) force majeure arising from the ongoing effects of the COVID-19 pandemic on labor availability and supply chains. None of these defenses withstands scrutiny.
Permitting. Section 5.3 of the MCA establishes a clear allocation of permitting responsibility between the Owner and the Contractor. While Northgate was responsible for certain categories of permits (principally environmental and federal permits), the vast majority of construction permits—including local building permits, right-of-way permits, railroad crossing permits, and state DOT permits—were expressly allocated to Meridian as the Contractor. A detailed analysis of the permit log demonstrates that the permits Meridian claims Northgate delayed were overwhelmingly Contractor-responsibility permits. Moreover, even where Northgate bore permit responsibility, our analysis shows that Northgate obtained those permits within the time frames contemplated by the project schedule. This analysis will be presented through the testimony of Dr. Elinor Chazen and supported by the documentary record.
Constructive Change Orders. Section 16.1 of the MCA establishes a mandatory written Change Order procedure. The provision states that "no change in the Work shall be binding upon either party unless set forth in a Change Order signed by authorized representatives of both Owner and Contractor." Meridian never submitted a formal Change Order request for any of its 14 alleged scope changes. This procedural failure is dispositive under the plain language of the MCA. Moreover, our analysis of the 14 alleged scope changes demonstrates that each falls into one of two categories: either the work was squarely within the original scope of the MCA (including its exhibits and specifications), or the alleged change was de minimis and did not materially affect Meridian's cost or schedule.
Force Majeure (COVID-19). While the COVID-19 pandemic undeniably caused significant disruption to the construction industry in 2020 and into 2021, Meridian's reliance on pandemic-related force majeure for Phase 2 and Phase 3 delays occurring in 2022, 2023, and 2024 is not credible. By Phase 2 and Phase 3, the acute effects of the pandemic on labor availability and supply chains had substantially abated. The construction industry had broadly returned to normal operations, and material supply lead times had stabilized. Most tellingly, Meridian's own internal hiring records—produced in discovery—reveal that Meridian was not meeting its own internal crew staffing targets for reasons that had nothing to do with COVID-19. Rather, Meridian was experiencing difficulties in attracting and retaining qualified field personnel due to below-market compensation, high turnover among project managers, and the simultaneous commencement of crew mobilization for a competing project in the Southeast (the "Palmetto Build" for a different client). This evidence will be developed through the cross-examination of Bridget Yeung and Marcus Henley, who were deposed on these topics.
E. Theme 5: Northgate Has Been Damaged
Finally, we will demonstrate that Meridian's material breaches caused Northgate substantial and quantifiable harm. Northgate's counterclaim damages of $149,000,000 are comprised of three categories, each of which is supported by the documentary record and will be established through expert testimony:
• Liquidated Damages: $49,000,000. The MCA provides for liquidated damages of $175,000 per day per milestone for delays in achieving Milestone Completion Dates, subject to a per-milestone cap of 10% of the milestone value and an aggregate cap of $60,000,000 (5% of the total contract price). Northgate has assessed $49,000,000 in liquidated damages across all late milestones, which is below the $60,000,000 aggregate cap.
• Excess Completion Costs: $81,700,000. Following the termination, Northgate engaged Crestline Construction Group Inc. ("Crestline") as the replacement contractor through a contract executed on June 10, 2024. The Crestline contract has a value of $712,000,000 for the completion of the remaining work under the fiber build-out program. The remaining value of the work under the MCA at the time of termination was $630,300,000. The excess completion cost is therefore $81,700,000 ($712,000,000 – $630,300,000).
• Remediation of Defective Work: $18,300,000. As discussed above, the estimated cost to remediate defects documented in the 287 NCRs is $18,300,000.
The total counterclaim amount of $149,000,000, when offset against any amounts Meridian may be found to be owed, represents a substantial recovery for Northgate and a meaningful offset against any liability exposure on Meridian's claims.
III. Case Structure and Burden of Proof
Understanding the allocation of the burden of proof is essential to trial planning. Because this is a bench trial, the court will be acutely attentive to which party bears the burden on each claim and counterclaim, and the presentation of evidence should be organized to make clear that Meridian has failed to carry its burden on its affirmative claims while Northgate has satisfied its burden on the counterclaims. Below, we summarize the elements and burden for each claim.
A. Meridian's Claims (Plaintiff Bears Burden)
Count I — Wrongful Termination (Damages Claimed: $92,400,000). Meridian bears the burden of proving that Northgate's termination for cause was not justified. To prevail, Meridian must establish either (a) that there was no material breach by Meridian that would have entitled Northgate to terminate under MCA § 14.1, or (b) that Northgate failed to comply with the procedural requirements of Section 14.1, rendering the termination procedurally defective. As discussed in the trial themes above, Northgate's position is strong on both fronts: the material breach is extensively documented, and Northgate followed the cure process meticulously. Meridian's damages on this count reportedly include the 8% termination fee that would have been payable under a termination for convenience ($50,424,000), lost profits on unperformed work ($41,976,000), and potentially other consequential damages that we contend are barred by MCA § 20.1.
Count II — Unpaid Invoices (Damages Claimed: $16,500,000). Meridian bears the burden of proving that its disputed Phase 3 payment applications reflect work that was properly performed, in conformity with the contract specifications, and entitled to payment. Northgate issued deficiency notices on each of the disputed invoices, identifying specific defects in the work that rendered the payment applications non-conforming. The disputed invoices are set forth in Exhibit 21.
Count III — Wrongful Withholding of Retainage (Damages Claimed: $56,966,667). Meridian must show that it is entitled to release of the 10% retainage held by Northgate on $569,666,670 in gross certified work, notwithstanding the termination for cause. Under the MCA, retainage is not released upon a termination for cause until all claims, counterclaims, and back-charges have been resolved. If the termination is upheld, Meridian's entitlement to retainage will be subject to offset by Northgate's counterclaim damages.
Count IV — Breach of Implied Covenant of Good Faith and Fair Dealing (Damages Claimed: $34,133,333). Meridian bears the burden of proving that Northgate acted in bad faith in terminating the MCA. Specifically, Meridian alleges that the termination was pretextual and motivated by Northgate's desire to bring fiber construction capabilities in-house at a lower cost, thereby depriving Meridian of the benefit of the bargain. This is an inherently difficult burden to carry. The strength of the documented record of material breach—287 NCRs, 43 critical NCRs, persistent and accelerating milestone delays, and a failed cure process—provides an overwhelming legitimate basis for the termination decision. Moreover, the damages sought under this count—reputational harm and loss of bonding capacity—are consequential damages that we contend are barred by the mutual waiver in MCA § 20.1.
B. Northgate's Counterclaims (Defendant Bears Burden)
Counterclaim I — Liquidated Damages (Damages Claimed: $49,000,000). Northgate bears the burden of establishing: (i) that each milestone was delayed beyond its contractual completion date; (ii) that the liquidated damages were assessed in accordance with the procedure set forth in MCA § 9.1; and (iii) that the liquidated damages clause is enforceable under New York law—i.e., that the $175,000 per-day rate was a reasonable pre-estimate of anticipated harm at the time of contracting and does not constitute an unenforceable penalty. The per-milestone cap (10% of milestone value) and aggregate cap ($60,000,000, or 5% of the total contract price) bolster the reasonableness argument.
Counterclaim II — Excess Completion Costs (Damages Claimed: $81,700,000). Northgate must show: (i) that the termination for cause was valid; (ii) that the engagement of Crestline as a replacement contractor was reasonable in scope and timing; and (iii) that the excess completion costs of $81,700,000 are provable and represent a reasonable measure of damages. The testimony of Frank DiBello (Crestline's CEO) and Helena Bright (Northgate's CFO) will be central to establishing the reasonableness of the replacement contract.
Counterclaim III — Remediation Costs (Damages Claimed: $18,300,000). Northgate must prove: (i) that Meridian's work was defective as documented in the NCRs; (ii) that the remediation cost estimates are accurate and reasonable; and (iii) that Northgate incurred or will incur these costs to bring the defective work into conformance with the contract specifications. Professor Whitfield will present a detailed remediation cost model based on the NCR Summary Register and supporting documentation.
C. Key Affirmative Defenses
In addition to defending against Meridian's claims and prosecuting Northgate's counterclaims, the trial plan must account for several affirmative defenses that will be important at trial:
• Material Breach Justifying Termination under MCA § 14.1. This is the central affirmative defense to Meridian's wrongful termination claim and serves as a predicate for Northgate's excess completion cost counterclaim.
• Consequential Damages Waiver (MCA § 20.1). This defense bars Meridian's claims for lost profits (a portion of Count I) and reputational harm (Count IV). MCA § 20.1 provides for a mutual waiver of consequential, incidental, and indirect damages, with limited carve-outs for willful misconduct, intellectual property indemnification, and confidentiality breaches. We anticipate that Meridian will argue that the willful misconduct carve-out applies if the termination is found to have been pretextual. This argument should be addressed head-on through evidence demonstrating the good-faith basis for the termination decision.
• Failure to Mitigate. Northgate will argue that Meridian failed to mitigate its damages by, among other things, failing to pursue alternative projects or reassign its workforce after termination.
• Comparative Fault. To the extent applicable under New York law, Northgate will argue that Meridian's own actions—including its failure to adequately staff the project, its subcontractor management failures, and its decision to simultaneously mobilize for the Palmetto Build—were the proximate cause of its alleged injuries.
• Set-Off. Northgate will assert its right to set off any amounts owed to Meridian against the counterclaim damages, retainage, and other amounts due and owing from Meridian to Northgate.
IV. Proposed Trial Schedule (Six-Week Framework)
Justice Ricci has reserved a six-week trial window commencing in November 2025. Based on our current assessment of the evidence and the number of anticipated witnesses, we propose the following preliminary trial schedule. This schedule assumes approximately five trial days per week (Monday through Friday), with each trial day running from approximately 10:00 a.m. to 5:00 p.m. with breaks, yielding approximately five hours of testimony per day. We note that Justice Ricci's Part 49 customarily takes a longer midday recess (12:45 p.m. to 2:15 p.m.), which may reduce available testimony time. The schedule will be adjusted as the final pre-trial conference approaches and the court provides specific guidance on its trial preferences.
A. Week 1: Opening Statements and Plaintiff's Case-in-Chief (Liability)
Day 1 (Monday): Opening statements. As the defendant and counterclaimant, Northgate will present an opening statement of approximately 90 minutes that introduces the five trial themes set forth in Section II above and provides the court with a roadmap of the evidence. We anticipate that Meridian will use approximately 90 minutes for its opening as well. Given the complexity of the case and the bench-trial format, it is possible that Justice Ricci will permit somewhat longer openings, but we will prepare a 90-minute version as the baseline. The afternoon of Day 1 will be reserved for the commencement of Meridian's case-in-chief.
Days 1–5: Meridian's liability witnesses. As the plaintiff, Meridian will present its case first. We anticipate that Meridian's counsel (Holcomb, Dietrich & Sharma LLP, "HDS") will call the following witnesses during Week 1:
• Victor Sandoval (CEO, Meridian) — likely Meridian's lead narrative witness, who will testify to Meridian's version of the project history, the alleged Owner-caused delays, the alleged scope changes, and the circumstances surrounding the termination.
• Bridget Yeung (COO, Meridian) — likely to testify regarding Meridian's operational management of the project, subcontractor coordination, and the alleged constructive change orders.
• Marcus Henley (VP Field Operations, Northeast Division, Meridian) — likely to testify regarding field-level operations, crew staffing, and Meridian's perspective on the NCRs.
• Randall Obrecht (CFO, Meridian) — may testify during Week 1 or Week 2 regarding the financial aspects of Meridian's claims, including the disputed invoices and retainage.
Our cross-examination preparation for each of these witnesses will focus on eliciting admissions from their prior deposition testimony regarding the scope and causes of the milestone delays, Meridian's awareness of the NCRs and quality failures, Meridian's crew shortages and staffing problems, Meridian's failure to follow the Change Order procedure under MCA § 16.1, and the inadequacy of the Corrective Action Plan. Detailed cross-examination outlines for each witness are being prepared by Jeffrey Park and will be circulated to the trial team for review in advance of witness preparation sessions.
B. Week 2: Plaintiff's Case-in-Chief (Continued) and Plaintiff's Experts
Days 6–8: Remaining plaintiff fact witnesses and documentary proof. We expect that Meridian will use a portion of Week 2 to complete its fact witness presentations and to offer documentary evidence, including its versions of the project correspondence, its payment applications, and any evidence relating to its defenses (permitting, scope changes, force majeure). Depending on the pace of examination in Week 1, this could extend through mid-Week 2.
Days 8–10: Plaintiff's expert witnesses. We anticipate that Meridian will call two expert witnesses:
• James Ochoa, PE (Keystone Project Advisory LLC) — Meridian's construction and delay expert. Based on his engagement letter and the scope of his anticipated work (the expert report is due March 31, 2025), we expect Ochoa to opine on Owner-caused delay, the impact of permit delays on Meridian's critical path schedule, the existence and schedule impact of the alleged constructive change orders, and the total delay attributable to Northgate. Our cross-examination strategy for Ochoa will focus on challenging his delay methodology, including his anticipated failure to account for Contractor-caused concurrent delays. We will also challenge his characterization of certain permits as Owner-responsibility permits under MCA § 5.3, and his treatment of the alleged scope changes as constructive change orders despite the absence of any written Change Order requests under MCA § 16.1.
• Dr. Natalie Forster (Westbrook Valuation Services Inc.) — Meridian's damages expert. We expect Dr. Forster to present a lost-profits model quantifying Meridian's $200,000,000 claim, including the wrongful termination damages, the value of the disputed invoices, the retainage, and the lost future profits and reputational harm. Our cross-examination strategy for Dr. Forster will focus on challenging her use of projected rather than actual profit margins, her failure to account for Meridian's declining backlog and deteriorating financial condition at the time of termination, and the applicability of the consequential damages waiver in MCA § 20.1 to significant components of her damages model.
C. Week 3: Defendant's Case-in-Chief (Liability)
Days 11–13: Northgate's primary fact witnesses. The heart of our affirmative case will be presented during Week 3 through the following witnesses:
• Renata Voss (Vice President, US Network Infrastructure, NFA) — Ms. Voss served as the senior Northgate executive responsible for overseeing the fiber build-out program. She will be our lead narrative witness and will testify regarding: the overall structure and objectives of the program; the milestone schedule and Meridian's progressive failure to meet its schedule obligations; the NCR process and the accumulation of quality deficiencies; the cure process, including the rationale for and content of each cure notice; and the basis for the termination decision. We estimate four hours of direct examination for Ms. Voss. Given the centrality of her testimony, we should anticipate that Meridian's counsel will conduct an extended cross-examination of four to six hours.
• Sean Calloway (Director, Construction Management, NFA) — Mr. Calloway served as the day-to-day contract administrator for the fiber build-out program and was responsible for NCR documentation, monthly quality assurance reporting, milestone tracking, and review of Meridian's payment applications. His testimony will provide the granular, documentary foundation for our termination defense and counterclaims. We estimate three hours of direct examination, with Meridian's cross likely running three to four hours.
• Dominic Hale (General Counsel, NTP) — Subject to the resolution of privilege issues and a determination that Mr. Hale's testimony is appropriate and necessary, Mr. Hale may provide limited testimony regarding the cure notice and termination process, including the legal review and approval chain for the cure notices and the termination letter. This testimony would be tightly circumscribed to avoid waiver of attorney-client privilege, and we will continue to assert privilege objections as appropriate. We have reserved this as conditional testimony, with a decision to be made following the outcome of the January 27, 2025 oral argument on the pending privilege motions. If Mr. Hale testifies, we estimate one hour of direct examination, with Meridian's cross likely running one to two hours.
Day 14: Helena Bright (CFO, NTP). Ms. Bright will testify regarding the financial context of the fiber build-out program, including NFA's revenue ($1.1 billion in FY2023), the capital expenditure budget allocated to the program ($340 million in FY2024), the budget impact of Meridian's delays, and the procurement process for the replacement contractor. Her testimony is important to establishing the reasonableness of the Crestline replacement contract and Northgate's excess completion cost counterclaim. We estimate two hours of direct examination, with cross running two to three hours.
Day 15: Frank DiBello (CEO, Crestline Construction Group Inc.). Mr. DiBello is a non-party witness who will testify regarding the Crestline replacement contract (executed June 10, 2024; contract value of $712,000,000; 30-month term). His testimony will address the scope of the replacement contract, the basis for Crestline's pricing, and the prevailing market conditions for fiber construction services at the time the contract was negotiated. This testimony is essential to establishing that the Crestline contract was procured through a reasonable process at a fair market price, thereby supporting the $81,700,000 excess completion cost counterclaim. We estimate two hours of direct examination, with cross running two to three hours. We will need to ensure that Mr. DiBello is available for the anticipated trial window and may need to serve a trial subpoena if he does not agree to appear voluntarily.
D. Week 4: Defendant's Experts and Completion of Defense Case
Days 16–18: Dr. Elinor Chazen (Lakeview Consulting Group LLC). Dr. Chazen is Northgate's construction and delay expert. She will present a critical path analysis demonstrating that Meridian's milestone delays were predominantly Contractor-caused and were not attributable to permitting delays, constructive change orders, or force majeure. Her analysis will include:
• A detailed critical path analysis of the project schedule, identifying the Contractor-caused activities that drove the delays on each milestone from MS3 onward;
• An analysis of the 43 critical NCRs and their impact on the project schedule, including rework time and the schedule consequences of defective work;
• A comprehensive rebuttal of James Ochoa's anticipated Owner-delay theory, addressing his treatment of permitting responsibilities under MCA § 5.3 and his characterization of the alleged scope changes as constructive change orders; and
• An assessment of the concurrent delay issues, demonstrating that even where there may have been minor Owner-caused delays, the Contractor-caused delays were independently sufficient to cause the observed schedule overruns.
We estimate six to eight hours of direct examination for Dr. Chazen, given the technical complexity of the delay analysis and the need to walk the court through the critical path methodology. Meridian's cross-examination is likely to run four to six hours.
Days 18–20: Professor Gordon Whitfield (Pinnacle Economics LLC). Professor Whitfield is Northgate's damages expert. He will present two categories of opinions:
• Rebuttal of Dr. Forster's lost-profits methodology. Professor Whitfield will challenge the assumptions underlying Dr. Forster's damages model, including her use of projected profit margins that do not reflect Meridian's actual historical performance, her failure to account for Meridian's declining backlog at the time of termination, and her failure to apply the consequential damages waiver in MCA § 20.1 to the lost-profits and reputational-harm components of Meridian's claim.
• Quantification of Northgate's counterclaim damages. Professor Whitfield will present a comprehensive damages analysis supporting Northgate's $149,000,000 counterclaim, including:
• Liquidated damages: $49,000,000. Calculated at $175,000 per day per milestone, subject to the per-milestone cap of 10% of milestone value and the aggregate cap of $60,000,000 (5% of the total contract price) under MCA § 9.1. The actual assessed amount of $49,000,000 is below the aggregate cap.
• Excess completion costs: $81,700,000. Based on the difference between the Crestline replacement contract value ($712,000,000) and the remaining value of work under the MCA at the time of termination ($630,300,000).
• Remediation costs: $18,300,000. Calculated based on the 43 critical NCRs at an average remediation cost of $275,000 per NCR ($11,825,000) plus the 244 non-critical NCRs at an average remediation cost of $26,500 per NCR ($6,466,000), for a combined total of approximately $18,300,000.
• Analysis of MCA § 20.1 (Consequential Damages Waiver). Professor Whitfield will analyze the application of the mutual consequential damages waiver to Meridian's lost-profits and reputational-harm claims, opining that these categories of damages are barred by the waiver and should be excluded from any damages calculation.
We estimate six to eight hours of direct examination for Professor Whitfield. Meridian's cross-examination is likely to run four to six hours.
E. Week 5: Rebuttal, Surrebuttal, and Additional Witnesses
Days 21–23: Plaintiff's rebuttal case. We anticipate that Meridian will use a portion of Week 5 to present rebuttal testimony. Based on our experience with HDS in prior cases and the structure of the issues, we expect Meridian to recall one or more of the following witnesses in rebuttal: Victor Sandoval (to respond to Northgate's cure-process testimony), James Ochoa (to rebut Dr. Chazen's delay analysis), or Dr. Natalie Forster (to rebut Professor Whitfield's damages analysis). We will prepare cross-examination materials for each potential rebuttal witness in advance.
Days 23–24: Defendant's surrebuttal. If the court permits, we may present limited surrebuttal testimony focused on specific points raised in Meridian's rebuttal case. This testimony will be narrowly tailored to address new matters raised in rebuttal and will not repeat our case-in-chief. Potential surrebuttal witnesses include Dr. Chazen or Professor Whitfield.
Day 25: Any additional witnesses not previously called; resolution of outstanding evidentiary disputes; and the reading of stipulations into the record. This day also provides a buffer for any schedule slippage from prior weeks.
F. Week 6: Summations and Post-Trial Matters
Days 26–27: Preparation and submission of proposed findings of fact and conclusions of law. As this is a bench trial, Justice Ricci may require the parties to submit proposed findings of fact and conclusions of law either in advance of or contemporaneously with closing arguments. We recommend beginning the drafting process during Weeks 4–5 of trial, with final editing and submission during Days 26–27. The proposed findings should track our trial themes closely and incorporate specific citations to the trial record (testimony and exhibits).
Days 28–29: Closing arguments. We estimate that Northgate's closing argument will require three to four hours, given the complexity of the issues and the need to walk the court through the evidence on both Meridian's claims and Northgate's counterclaims. We anticipate that Meridian will require a similar amount of time. The order of summations will be determined by the court; as the plaintiff, Meridian may present first and last, with Northgate in between.
Day 30: Reserve day for overflow, any additional proceedings, or scheduling of post-trial submissions.
V. Proposed Witness List
The following tables set forth our proposed witness list, organized by category. The list includes our fact witnesses, expert witnesses, non-party witnesses, adverse witnesses whom we anticipate cross-examining during Meridian's case-in-chief, and reserve witnesses whose use depends on the resolution of pending issues.
A. Defendant's Fact Witnesses
B. Defendant's Expert Witnesses
C. Non-Party Witnesses (Called by Defense)
D. Adverse / Cross-Examination Witnesses (Plaintiff's Witnesses)
E. Witnesses Under Consideration / Reserve
The following witnesses are under consideration and may be added to the final trial witness list depending on the resolution of pending issues:
• Patricia Dwyer (Vice President, Claims, Ironclad Surety Group Inc.) — Potential testimony regarding Northgate's claim against the performance bond (Bond No. ISG-2020-NE-04417, $120M). Use of this witness depends on whether the bond claim is resolved pre-trial or proceeds as a separate or consolidated matter. If the bond claim remains pending at trial, Ms. Dwyer may be called to testify regarding Ironclad's obligations under the bond, the claims process, and any defenses asserted by Ironclad.
• Daniel Kwon (Relationship Manager, Dralvecen Commercial Finance LLC) — Potential testimony regarding Meridian's $150 million credit facility with Dralvecen, including Meridian's financial distress, covenant compliance, the lien on Meridian's receivables (including the disputed Phase 3 invoices), and any communications between Dralvecen and Meridian regarding the project. This testimony is relevant to Meridian's financial condition and the credibility of Dr. Forster's lost-profits model. Use of this witness depends on the scope of cross-examination of Randall Obrecht and whether Obrecht's testimony adequately addresses Meridian's financial condition.
• Graham Latimer (Managing Partner, Ridgepoint Capital Group LP) — Potential testimony regarding Ridgepoint's litigation funding arrangement with Meridian and Ridgepoint's investment thesis for the litigation. This testimony is relevant to the motivations behind Meridian's prosecution of its claims, including Count IV. However, the use of this witness is contingent on the outcome of the pending privilege motions relating to Meridian's 187 Ridgepoint communications. Oral argument on the privilege motions is scheduled for January 27, 2025, and we will reassess the availability and utility of Mr. Latimer's testimony after the court's ruling.
• Subcontractor Representatives (up to 7 potential witnesses, to be subpoenaed) — Potential corroborating testimony from Meridian's subcontractors regarding Meridian's crew shortages, scheduling failures, and quality issues observed at the subcontractor level. Based on our assessment of the testimony needed and the logistical burden of calling multiple subcontractor witnesses live, we believe it is likely more efficient to present this testimony through deposition designations rather than live testimony. We will finalize this decision after completing the subcontractor depositions (if taken) and assessing the strength and relevance of the available deposition testimony.
VI. Key Exhibits
The following is a preliminary catalog of key exhibits organized by category. This list is not exhaustive and will be supplemented as the exhibit list is finalized in accordance with the Commercial Division's pre-trial requirements. Exhibit numbers are preliminary and subject to change.
A. Contract Documents
B. Cure Notices and Termination Documents
C. Delay and Quality Documentation
D. Financial and Payment Documents
E. Communications and Internal Documents
F. Expert Reports (To Be Supplemented)
The expert report exhibits listed above are placeholders and will be supplemented with the actual reports and any accompanying appendices, workpapers, and demonstratives once the reports are finalized and exchanged.
G. Deposition Designations
Deposition transcripts of non-testifying witnesses or witnesses who are unavailable for trial may be offered as substantive evidence at trial. In addition, deposition testimony of witnesses who do testify live may be offered for impeachment purposes or to supplement the trial record. We anticipate the following deposition designations:
• Renata Voss — Deposition taken November 12–13, 2024. Portions containing favorable admissions may be designated for use in addition to live testimony, particularly to the extent Ms. Voss's live testimony is challenged on cross-examination.
• Sean Calloway — Deposition taken November 19, 2024. Relevant portions will be designated to supplement live testimony as needed.
• Marcus Henley — Deposition taken December 3–4, 2024. Key admissions regarding crew shortages, the causes of NCR defects, and Contractor-caused delays will be designated for use on cross-examination during Meridian's case-in-chief.
• Victor Sandoval — Deposition taken December 10–11, 2024. Key admissions regarding the Corrective Action Plan, Sandoval's awareness of the schedule deterioration, and the Ridgepoint Capital Group funding arrangement will be designated for use on cross-examination.
• Bridget Yeung — Deposition scheduled for February 4, 2025. Designations to be determined following completion of deposition.
• Helena Bright — Deposition scheduled for February 18, 2025 (London commission). Designations to be determined following completion of deposition. If Ms. Bright is unable to appear live at trial due to her residence in the United Kingdom, her deposition testimony may be offered as her direct testimony, subject to cross-examination via video link if the court permits.
• Frank DiBello — Deposition scheduled for March 4, 2025. Designations to be determined following completion of deposition. Mr. DiBello's deposition will serve as an alternative to live testimony if he is unavailable for the trial window.
• Subcontractor depositions — If subcontractor depositions are taken in lieu of live testimony, relevant portions will be designated to corroborate Northgate's evidence of Meridian's crew shortages and quality deficiencies at the field level.
All deposition designations will be prepared in accordance with the Commercial Division's procedures for the submission of deposition testimony at bench trials and will be exchanged with opposing counsel in advance of trial.
VII. Key Legal Issues for Trial
The following discussion identifies the principal legal issues that are likely to be contested at trial and that will shape the parties' respective presentations. We address each issue in turn, along with our preliminary assessment of the applicable law and our recommended approach.
A. Termination for Cause vs. Termination for Convenience
The central liability issue in this case is whether Northgate's termination of the MCA was properly exercised under Section 14.1 (termination for cause) or should be recharacterized as a termination for convenience under Section 14.3. The distinction has enormous financial consequences:
• If the termination is upheld as a termination for cause: Meridian forfeits any entitlement to a termination fee; Northgate may recover excess completion costs from Meridian; and Northgate is entitled to draw on the $120,000,000 performance bond issued by Ironclad Surety Group (MCA § 14.5). Additionally, Northgate's liquidated damages claims remain enforceable, and Meridian's retainage is subject to offset.
• If the termination is recharacterized as a termination for convenience: Meridian would be entitled to an 8% termination fee on the unperformed value of the contract, calculated as 8% × $630,300,000 = $50,424,000, plus payment for all work properly completed, plus release of retainage (less legitimate back-charges). Northgate would lose its excess completion cost counterclaim and potentially its liquidated damages claim.
The legal standard for termination for cause under New York law requires a showing of "material breach" by the terminated party. Under the Restatement (Second) of Contracts § 241, which New York courts have endorsed, the materiality of a breach is assessed by considering the extent to which the injured party will be deprived of the benefit it reasonably expected, the extent to which the injured party can be adequately compensated, the extent of forfeiture the breaching party will suffer, the likelihood of cure, and the extent to which the breaching party's behavior comported with standards of good faith and fair dealing.
Our position is that Meridian's cumulative delays across all milestones from MS3 onward, its 287 NCRs (including 43 critical NCRs), its failure to meaningfully mobilize for Phase 3, and its failure to cure after receiving two cure notices and 73 days of opportunity collectively satisfy any definition of material breach. The evidence demonstrates that Northgate was being deprived of the fundamental benefit of the MCA—a completed, code-compliant fiber network built on schedule—and that Meridian had neither the capacity nor the willingness to cure.
B. Enforceability of Liquidated Damages Clause (MCA § 9.1)
Northgate seeks $49,000,000 in liquidated damages under MCA § 9.1. Under New York law, a liquidated damages clause is enforceable if it represents a reasonable pre-estimate of the anticipated harm that would result from a breach and is not a penalty. See Truck Rent-A-Ctr., Inc. v. Purdy Corp., 41 N.Y.2d 354, 357 (1977); Kestrel Corporation, 4 N.Y.3d 373, 380 (2005). The party challenging the clause bears the burden of demonstrating that it is an unenforceable penalty.
Several features of the LD clause support its enforceability. First, the rate of $175,000 per day per milestone was negotiated at arm's length as part of a sophisticated commercial contract between experienced parties represented by counsel. Second, the per-milestone cap (10% of milestone value) and the aggregate cap ($60,000,000, or 5% of the total contract price of $1.2 billion) demonstrate that the parties intended to impose a reasonable limitation on the contractor's LD exposure—a structure that courts have recognized as indicative of a genuine pre-estimate rather than a penalty. Third, the actual damages resulting from schedule delays in a project of this scale—including lost revenue from delayed network activation, increased internal costs, and reputational harm to Northgate's competitive position in the fiber market—are inherently difficult to calculate at the time of contracting, further supporting the reasonableness of a per diem LD provision.
We anticipate that Meridian will argue that the LD clause is an unenforceable penalty because the $175,000 per-day rate bears no reasonable relationship to Northgate's actual damages. Our response will include evidence regarding the anticipated revenue from the completed fiber network, the internal cost of delay, and the market context in which the LD rate was negotiated. Professor Whitfield may also address the reasonableness of the LD rate in his expert report.
C. Consequential Damages Waiver (MCA § 20.1)
Section 20.1 of the MCA provides for a mutual waiver of consequential, incidental, and indirect damages, including but not limited to lost profits, lost revenue, loss of use, loss of opportunity, and reputational harm. The waiver contains limited carve-outs for damages arising from willful misconduct, intellectual property indemnification obligations, and breaches of the confidentiality provisions.
This waiver is critical to our defense of two components of Meridian's claims:
• Count I (Wrongful Termination), in part: To the extent Meridian seeks lost profits on unperformed work (estimated at $41,976,000), those damages are consequential in nature and are barred by the mutual waiver.
• Count IV (Breach of Implied Covenant of Good Faith and Fair Dealing): Meridian's claimed damages of $34,133,333 for reputational harm and loss of bonding capacity are quintessentially consequential damages that fall squarely within the scope of the MCA § 20.1 waiver.
New York law generally enforces consequential damages waivers in arm's-length commercial contracts between sophisticated parties. See Metropolitan Life Ins. Co. v. Noble Lowndes Int'l, Inc., 84 N.Y.2d 430 (1994). We do not expect a serious challenge to the enforceability of the waiver in principle. The more likely battleground will be Meridian's invocation of the willful misconduct carve-out. Meridian may argue that if the termination is found to have been pretextual—i.e., motivated by Northgate's desire to bring fiber construction in-house rather than by genuine dissatisfaction with Meridian's performance—then the termination constitutes willful misconduct that triggers the carve-out.
Our defense to this argument is twofold. First, the termination was not pretextual; it was fully justified by Meridian's documented material breaches, and the cure process was conducted in good faith and in strict compliance with MCA § 14.1. Second, even if the court were to credit some element of strategic motivation on Northgate's part (which we do not concede), the existence of a concurrent legitimate basis for termination precludes a finding of willful misconduct. We will develop this legal argument further in our pre-trial memorandum and proposed findings of fact and conclusions of law.
D. Meridian's Affirmative Defenses
Each of Meridian's three principal affirmative defenses—permitting delays, constructive change orders, and force majeure—presents a distinct factual and legal issue that must be addressed at trial.
Permitting Responsibility under MCA § 5.3. The key factual question is which party bore responsibility for the specific permits that Meridian claims were delayed. Our analysis of the permit log, which will be presented through Dr. Chazen's testimony, demonstrates that the overwhelming majority of the allegedly delayed permits were Contractor-responsibility permits under the allocation set forth in MCA § 5.3. To the extent any Owner-responsibility permits were delayed, the delays were minor and did not affect the critical path of the project schedule.
Constructive Change Orders (MCA § 16.1). The key legal question is whether Meridian can recover for alleged scope changes in the absence of written Change Orders executed in accordance with MCA § 16.1. New York law generally enforces written change order requirements in construction contracts, particularly where the contract language is clear and unambiguous. See E.W. Howell Co., LLC v. S.A.F. La Sala Corp., 36 A.D.3d 653 (2d Dep't 2007). Here, MCA § 16.1 explicitly requires that all changes be memorialized in writing and signed by authorized representatives of both parties. Meridian never submitted a single Change Order request. Its claim that 14 separate scope changes were imposed constructively without written authorization is both procedurally barred and factually unsupported.
Force Majeure — COVID-19. While the MCA contains a force majeure provision (MCA § 17.1), Meridian's reliance on COVID-19 as a justification for delays occurring in 2022, 2023, and 2024 is not credible. The force majeure provision requires the affected party to provide prompt notice of the force majeure event and to demonstrate that the event was the proximate cause of the delay. By the time Phase 2 and Phase 3 delays were accruing, the acute effects of the pandemic had abated, and Meridian's own internal records demonstrate that its staffing shortfalls were attributable to internal management decisions rather than pandemic-related labor unavailability.
E. Damages Proof
Both sides bear the burden of proving their respective damages with reasonable certainty, as required by New York law. Several damages-related issues merit attention:
• Northgate's burden on counterclaim damages. Northgate must prove the reasonableness of the Crestline replacement contract ($712,000,000) and the remediation cost estimates ($18,300,000). Frank DiBello's testimony regarding the competitive procurement process and market conditions will be important on the excess completion cost issue. The NCR Summary Register and the detailed remediation cost estimates prepared by NFA's construction management team and validated by Professor Whitfield will support the remediation cost claim.
• Meridian's burden on lost profits. Under New York law, lost profits must be proven with "reasonable certainty" and cannot be based on speculative projections. See Kenford Co. v. County of Erie, 67 N.Y.2d 257 (1986). We anticipate challenging Dr. Forster's lost-profits methodology on the grounds that she relies on projected profit margins rather than actual historical margins, fails to account for Meridian's declining backlog and financial deterioration, and does not adequately address the impact of the consequential damages waiver.
• Potential Frye challenges to Dr. Forster's methodology. New York applies the Frye general acceptance standard (not Daubert) for evaluating the admissibility of expert testimony. See People v. Wesley, 83 N.Y.2d 417 (1994). If Dr. Forster's damages methodology is based on novel or unorthodox analytical techniques, we may seek to exclude or limit her testimony through a pre-trial motion in limine. This determination will be made after review of her expert report (due March 31, 2025).
VIII. Pre-Trial Motion Strategy
A. Summary Judgment Motions (August 2025 Window)
The scheduling order provides for a summary judgment briefing window in August 2025. We recommend considering the following potential motions:
1. Summary judgment on Count IV (Breach of Implied Covenant of Good Faith and Fair Dealing). We believe this is our strongest summary judgment candidate. The consequential damages waiver in MCA § 20.1 bars the categories of damages Meridian seeks under this count (reputational harm, loss of bonding capacity) as a matter of law. If we can establish on the undisputed record that the termination was supported by a legitimate basis (the documented material breaches), the bad-faith claim fails as a matter of law regardless of whether Northgate may also have had strategic motivations. A successful motion on Count IV would eliminate $34,133,333 from Meridian's claim and remove a potentially distracting trial theme.
2. Partial summary judgment on enforceability of the LD clause (Counterclaim I). If the facts regarding the negotiation and structure of the LD provision are undisputed, we may seek a ruling that the LD clause is enforceable as a matter of law, leaving only the calculation of LDs for trial. This would narrow the issues and save trial time.
3. Summary judgment on termination for cause. This motion would seek a ruling that the termination was valid as a matter of law based on the undisputed record of material breach and procedural compliance with MCA § 14.1. However, this is a more challenging motion because Meridian will argue that the materiality of the breach and the adequacy of its cure efforts present genuine issues of fact. We will assess the strength of this motion after the completion of expert reports and depositions.
The decision on which motions to file will be made after the expert reports and depositions are complete, at which point we will have a clearer picture of the undisputed factual record and the strength of our positions on each issue.
B. Motions in Limine
We anticipate filing several motions in limine in advance of trial to exclude or limit certain evidence:
1. Exclude or limit Dr. Forster's lost-profits testimony. If Dr. Forster's damages methodology is based o