1022-00005 · Hargrove, Deluca & Stein LLP · Depositions

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PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

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

DEPOSITION SUMMARY SEAN CALLOWAY November 19, 2024

Matter:

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

C&H Matter No.: 1022-00005

Prepared By: Yuki Nakamura, Associate, Calderwood & Harkness LLP

Reviewed By: Jeffrey Park, Lead Associate; Linda Osei, Responsible Partner

Date of Memorandum: November 25, 2024

Date of Deposition: November 19, 2024

Location of Deposition: Offices of Calderwood & Harkness LLP, 425 Park Avenue, 33rd Floor, New York, NY 10022

Court Reporter: Markham & Ellison Reporting Services, Inc.

Deponent: Sean Calloway, Director of Construction Management, Northgate Fiber Americas Inc., 600 Lexington Avenue, 28th Floor, New York, NY 10022

Examining Counsel (Plaintiff): Thomas Deluca, Lead Partner, Hargrove, Deluca & Stein LLP; Miriam Vasquez, Senior Associate, Hargrove, Deluca & Stein LLP

Defending Counsel (Defendant): Jeffrey Park, Lead Associate, Calderwood & Harkness LLP; Yuki Nakamura, Working Associate, Calderwood & Harkness LLP

Duration: Approximately 7 hours (one day)

Transcript Pages: Approximately 320 pages

Exhibits Marked: Approximately 35 deposition exhibits (Calloway Exhibits 1–35)

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I. Executive Summary

Sean Calloway was deposed on November 19, 2024, at the offices of Calderwood & Harkness LLP. Mr. Calloway serves as the Director of Construction Management at Northgate Fiber Americas Inc. ("NFA" or "Northgate" or "Owner") and functioned as the day-to-day contract administrator for the Master Construction Agreement ("MCA") between Northgate and Meridian Infrastructure Partners LLC ("Meridian" or "Contractor"), which was executed on March 15, 2020. In this capacity, Mr. Calloway reported to Renata Voss, Vice President of US Network Infrastructure at NFA, and served as the primary interface with Meridian's field operations team, particularly Marcus Henley, Meridian's Vice President of Field Operations, Northeast Division. His testimony addressed virtually all aspects of the project's operational history, from procurement through termination.

Overall Assessment. Mr. Calloway was a strong, well-prepared witness. He was composed throughout the approximately seven-hour examination, responsive to questions without volunteering unnecessary information, and appropriately deferential on topics outside his personal knowledge. His testimony was consistent with the prior document production and with the testimony of Renata Voss, who was deposed on November 12–13, 2024. No material inconsistencies were identified between the two depositions. Mr. Calloway demonstrated thorough command of the project timeline, technical specifications, and contractual provisions, reflecting his day-to-day involvement in the administration of the MCA from inception through termination.

Key Favorable Testimony. Mr. Calloway provided detailed, firsthand accounts of Meridian's persistent schedule delays across all three phases of the fiber build-out program. He demonstrated comprehensive knowledge of all 287 non-conformance reports ("NCRs"), including 43 classified as critical under the governing technical specifications, and was able to describe the circumstances underlying many of the critical NCRs from memory. He described in detail the cure notice and termination sequence, confirming that NFA complied with every procedural requirement set forth in MCA § 14.1, including the 30-day cure period, the issuance of a second cure notice, and the opportunity for Meridian to present a corrective action plan. Critically, Mr. Calloway testified that Meridian never issued a formal force majeure notice under the MCA and never submitted written Change Order requests for any of the 14 alleged scope changes that form the centerpiece of Meridian's affirmative defense. These admissions are powerful support for the defense position.

Areas of Plaintiff Focus. Plaintiff's counsel, Mr. Deluca, pressed Mr. Calloway extensively on three subjects: (a) alleged Owner-directed scope changes that were not formalized as Change Orders under MCA § 16.1, with particular focus on field directives and requests for information ("RFIs") issued during Phases 2 and 3; (b) the allocation of permitting responsibility under MCA § 5.3 and whether NFA's delays in obtaining certain franchise agreements contributed to Meridian's milestone delays; and (c) whether Northgate's internal discussions about potentially bringing fiber construction in-house influenced or motivated the termination decision. Mr. Deluca's examination was competent and thorough on these points, and these topics will require continued attention in trial preparation.

Key Admissions Favorable to Defense. Among the most significant testimony, Mr. Calloway confirmed: (1) Meridian's construction crews were persistently understaffed beginning in mid-2022, with field staffing dropping to roughly 60–65% of the levels committed in Meridian's original mobilization plan; (2) quality defects were documented in real time through the NCR process and were not the product of post-hoc analysis; (3) Meridian failed to submit a viable cure plan within the 30-day period following Cure Notice No. 1; and (4) 12 additional critical NCRs were issued in February 2024, during the cure period itself, demonstrating that Meridian's performance was deteriorating even after receiving formal notice of material breach.

Potential Areas of Concern. Mr. Calloway acknowledged under cross-examination that on approximately three to four occasions, he verbally communicated minor field adjustments to Meridian's crew supervisors—for example, routing adjustments around unexpected subsurface conditions encountered during construction. These verbal communications could arguably be characterized by Meridian as informal scope directives that should have been formalized as Change Orders under MCA § 16.1. However, Mr. Calloway consistently and credibly testified that these adjustments were de minimis in nature, fell squarely within the existing scope of work, and did not alter the contract price or milestone schedule. He further noted that Meridian never requested written Change Orders for any of these adjustments at the time they were made, which undercuts the significance of this point. This testimony will nevertheless require attention during trial preparation to ensure Mr. Calloway is prepared for further cross-examination on this topic.

Privilege Matters. No privilege breaches occurred during the deposition. Jeffrey Park instructed the witness on two occasions not to disclose the substance of communications protected by the attorney-client privilege: once regarding communications with Dominic Hale (NFA General Counsel) and outside counsel concerning the drafting of Cure Notice No. 1, and once regarding discussions with outside counsel about the termination decision. In both instances, Mr. Deluca did not challenge the instruction beyond a brief colloquy on the record, and the witness complied without difficulty.

II. Background and Qualifications of the Witness

A. Employment History and Role at NFA

Mr. Calloway testified that he holds the title of Director of Construction Management at Northgate Fiber Americas Inc. He has been employed by NFA since approximately June 2019. Prior to joining NFA, Mr. Calloway spent approximately eight years at Arcadian Telecom Solutions Inc., where he held progressively senior roles in construction management for fiber-optic and wireline telecommunications infrastructure projects, ultimately serving as Senior Manager of Field Construction for the Mid-Atlantic region.

At NFA, Mr. Calloway is responsible for the day-to-day oversight and administration of all construction contracts related to NFA's fiber build-out program in the northeastern United States. His responsibilities encompass schedule management, quality assurance oversight, progress payment certification, and the management of contractor performance issues. With respect to the Meridian MCA specifically, Mr. Calloway served as the designated "Owner's Representative" under the contract for purposes of day-to-day administration, as that term is defined in MCA § 2.1.

Mr. Calloway reported directly to Renata Voss, Vice President of US Network Infrastructure at NFA. He supervised a team of approximately 12 project managers and quality assurance inspectors who were assigned to the fiber build-out program and who monitored Meridian's construction activities across all three phases of the project. Mr. Calloway served as NFA's principal point of contact for Meridian on all field-level construction and quality matters, interfacing most frequently with Marcus Henley, Meridian's Vice President of Field Operations for the Northeast Division, as well as with various Meridian project managers and site supervisors.

Mr. Calloway testified that he communicated with Mr. Henley on a near-daily basis during active construction periods and participated in weekly project coordination meetings with Meridian's management team. He also participated in monthly executive-level status meetings attended by Renata Voss and Victor Sandoval (Meridian's President and CEO), although his role in those meetings was primarily to present progress data and respond to questions from the principals.

B. Educational Background

Mr. Calloway holds a Bachelor of Science degree in Civil Engineering from the Pennsylvania State University, which he received in 2009. He subsequently obtained a Project Management Professional ("PMP") certification from the Project Management Institute in 2013 and has maintained that certification continuously since that time. He testified to approximately 15 years of professional experience in telecommunications infrastructure construction management, encompassing both underground fiber-optic cable installation and aerial construction, as well as experience with conduit systems, splicing, and outside-plant engineering.

Mr. Calloway was credible in describing his qualifications and demonstrated a strong command of the technical aspects of fiber construction throughout his testimony.

C. Involvement with the MCA

Mr. Calloway testified that his involvement with the Meridian engagement predated the execution of the MCA. He participated in the procurement process that led to the selection of Meridian as the Contractor in late 2019 and early 2020, serving on NFA's evaluation team alongside Renata Voss, members of NFA's procurement department, and representatives from NFA's engineering group. Mr. Calloway testified that Meridian was selected from a short list of three qualified bidders based on a combination of price, technical capability, and demonstrated experience with large-scale fiber build-out programs.

Following Meridian's selection, Mr. Calloway participated in the negotiation of the MCA, with a particular focus on the provisions most directly relevant to his role as contract administrator. Specifically, he was involved in the development and negotiation of: (a) MCA Exhibit B, the milestone schedule and milestone values, which established the phased build-out timeline and the payment amounts associated with each milestone; (b) the Northgate Technical Specification NS-FIBER-2020, which set forth the detailed engineering and quality requirements for the fiber installation work; and (c) the quality assurance and quality control provisions of MCA § 12.4, which established the inspection, testing, and acceptance protocols and the NCR process. Mr. Calloway testified that he worked with NFA's engineering team to develop the Technical Specification NS-FIBER-2020 and that it reflected industry best practices as well as Northgate's proprietary network requirements.

After the MCA was executed on March 15, 2020, and Notice to Proceed was issued on April 1, 2020, Mr. Calloway assumed his role as Owner's Representative and managed the contract on a day-to-day basis for the duration of the project. In this capacity, he signed or co-signed interim completion certificates for Milestones 1 through 7, certifying that Meridian had substantially completed the work required under each milestone in accordance with the contract requirements (albeit in several instances with noted deficiencies documented through NCRs and with liquidated damages assessments for late completion).

III. Testimony Regarding Project Phases and Milestone Delays

A. Phase 1 — New York Metro & Northern New Jersey (Milestones 1–4)

Mr. Calloway testified in detail regarding the scope and performance of Phase 1 of the fiber build-out program. Phase 1 encompassed the New York metropolitan area and northern New Jersey and involved the construction of approximately 3,200 route miles of fiber-optic infrastructure. The total milestone value for Phase 1 was $208 million, allocated across four milestones (Milestones 1 through 4) as set forth in MCA Exhibit B.

Mr. Calloway testified that Milestones 1, 2, and 4 were completed on time or within what he described as "acceptable tolerances," meaning minor delays of a few days that did not trigger liquidated damages under the MCA's grace-period provisions. These milestones proceeded generally in accordance with the project schedule, and Meridian's performance during the early stages of Phase 1 was, in Mr. Calloway's words, "adequate" and "in line with our expectations."

However, Milestone 3 was completed 47 days late. The target completion date for Milestone 3 was August 28, 2021. Meridian did not submit its completion documentation for Milestone 3 until October 14, 2021, a delay of 47 calendar days. Mr. Calloway testified that the Milestone 3 delay was caused primarily by two factors, both of which were within Meridian's contractual responsibility: first, Meridian's failure to deploy a sufficient number of horizontal directional drilling ("HDD") and boring crews in northern New Jersey, particularly in the densely urbanized areas of Bergen and Essex counties where subsurface construction was required; and second, Meridian's slow resolution of utility conflicts in those same areas, which were the Contractor's responsibility to coordinate under the MCA's utility conflict resolution provisions.

Mr. Calloway confirmed that, following the Milestone 3 delay, he recommended to Renata Voss that liquidated damages be assessed in accordance with MCA § 9.1. Ms. Voss authorized the assessment, and an LD assessment letter was issued on November 5, 2021 (Calloway Exhibit 10). The liquidated damages were calculated at the contractual rate of $175,000 per day for 47 days, totaling $8,225,000. Mr. Calloway testified that these LDs were deducted from Meridian's subsequent payment application, consistent with the setoff provisions of MCA § 18.1.

Mr. Calloway further testified that Victor Sandoval, Meridian's President and CEO, protested the LD assessment by telephone, characterizing the delay as partially attributable to unusually adverse weather conditions during the summer of 2021. However, Mr. Calloway stated that Mr. Sandoval did not formally dispute the LD assessment in writing at the time, nor did Meridian invoke the dispute resolution procedures set forth in MCA § 20.1. Mr. Calloway noted that the weather conditions cited by Mr. Sandoval were not unusual for the region and did not constitute a force majeure event under the MCA.

B. Phase 2 — Connecticut, Western Massachusetts, Southern Pennsylvania (Milestones 5–8)

Phase 2 of the fiber build-out program encompassed construction in Connecticut, western Massachusetts, and southern Pennsylvania, involving approximately 5,600 route miles and carrying a total milestone value of $363 million, allocated across Milestones 5 through 8 as set forth in MCA Exhibit B.

Mr. Calloway's testimony regarding Phase 2 was extensive and constituted one of the most significant portions of the deposition. He described a pattern of progressively worsening delays that became increasingly severe with each successive milestone:

• Milestone 5 was completed 22 days late, resulting in liquidated damages of $3,850,000 (22 days × $175,000/day).

• Milestone 6 was completed 68 days late, resulting in liquidated damages of $11,900,000 (68 days × $175,000/day).

• Milestone 7 was completed 91 days late, resulting in liquidated damages of $15,925,000 (91 days × $175,000/day).

• Milestone 8 was never completed before termination. As of the termination date of April 1, 2024, Meridian had accrued 134 days of delay on Milestone 8. Mr. Calloway testified that the liquidated damages for Milestone 8 were subject to the 10% cap set forth in MCA § 9.1, which limited the LD exposure to 10% of the Milestone 8 value. The Milestone 8 value was $91 million, resulting in a capped LD amount of $9,100,000.

The total Phase 2 liquidated damages amounted to $40,775,000.

Mr. Calloway described in considerable detail a pattern of Meridian failing to maintain adequate crew levels throughout Phase 2. He testified that beginning in approximately mid-2022, Meridian's field staffing dropped to roughly 60–65% of the levels specified in Meridian's original mobilization plan, which had been submitted as part of the procurement process and was incorporated by reference into MCA Exhibit D. Mr. Calloway stated that he documented these staffing shortfalls in his monthly progress reports and raised them directly with Marcus Henley on multiple occasions.

In a particularly significant line of testimony, Mr. Calloway stated that Mr. Henley told him in multiple conversations — Mr. Calloway estimated between four and six such conversations over the course of 2022 and early 2023 — that Meridian was experiencing difficulty retaining skilled laborers, particularly experienced HDD operators and fiber splicers, and that Ridgepoint Capital Group, Meridian's private equity owner, was "putting pressure on the company on the cost side." Mr. Calloway testified that Mr. Henley described the situation as a conflict between Meridian's operational needs and the financial constraints being imposed by its ownership. While this testimony is hearsay as to the truth of the matter asserted (i.e., whether Ridgepoint was in fact pressuring Meridian on costs), it is admissible for the non-hearsay purpose of showing Mr. Calloway's state of mind and the basis for NFA's growing concerns about Meridian's capacity to perform. It may also be admissible as a statement of a party-opponent under CPLR 4549 if Mr. Henley is deemed to have been speaking within the scope of his authority as Meridian's VP of Field Operations.

Mr. Calloway confirmed that he raised the escalating delay issue in written monthly progress reports submitted to Renata Voss throughout 2022 and 2023 (selected examples of which were marked as Calloway Exhibits 21–25). These reports documented, among other things, crew counts, productivity metrics, milestone progress against the baseline schedule, and quality deficiency trends. Mr. Calloway testified that his reports consistently identified Meridian's inadequate staffing as the primary driver of schedule delays during Phase 2.

C. Phase 3 — Maryland, Virginia, Eastern Pennsylvania (Milestones 9–14)

Phase 3 was the largest and most ambitious phase of the fiber build-out program, encompassing construction in Maryland, Virginia, and eastern Pennsylvania. The scope comprised approximately 9,700 route miles, with a total milestone value of $629 million allocated across Milestones 9 through 14.

Mr. Calloway testified that Meridian mobilized crews in Maryland in July 2023, but that the mobilization effort was, in his words, "woefully inadequate." He stated that Meridian deployed fewer than half the crews necessary to meet the Phase 3 schedule, and that the crews that were deployed exhibited the same quality issues that had plagued Phase 2. By the time of termination on April 1, 2024 — approximately nine months after initial mobilization — only approximately 340 of the 9,700 route miles had been constructed, representing approximately 3.5% of the Phase 3 scope. Mr. Calloway characterized this level of progress as dramatically insufficient and stated that, based on Meridian's rate of production, Phase 3 would not have been completed for years beyond the contractual completion date.

With respect to payment applications, Mr. Calloway testified that Meridian submitted payment applications totaling $48.2 million for Phase 3 work performed through the termination date. Mr. Calloway recommended approval of only $31.7 million of that amount, disputing $16.5 million on the grounds of defective work that had not passed quality acceptance testing and inflated unit counts in Meridian's payment applications.

Mr. Calloway provided detailed testimony regarding the unit count discrepancies. He stated that his team conducted field audits of Meridian's Phase 3 unit count claims — i.e., verification of the actual quantities of conduit installed, cable placed, handholes set, and splices completed — and found discrepancies of 15–20% between the quantities claimed by Meridian in its payment applications and the quantities that could be verified through physical inspection and measurement. Mr. Calloway testified that these discrepancies were documented in his team's field audit reports, copies of which were provided to NFA's finance department and to outside counsel.

IV. Testimony Regarding Non-Conformance Reports (NCRs) and Quality Defects

A. NCR Process and Documentation

Mr. Calloway testified at length regarding the quality assurance and non-conformance reporting framework that governed the project. Under MCA § 12.4 and the Northgate Technical Specification NS-FIBER-2020, all construction work performed by Meridian was required to conform to three sets of standards: (1) the ANSI/TIA-568 standard for telecommunications cabling infrastructure, as then in effect; (2) the Building Industry Consulting Service International ("BICSI") guidelines for outside-plant design and construction; and (3) Northgate's proprietary Technical Specification NS-FIBER-2020, which established additional and, in some respects, more stringent requirements tailored to NFA's specific network performance objectives.

Mr. Calloway's team was responsible for monitoring Meridian's compliance with these standards through a program of field inspections, acceptance testing, and documentation. When work was found to deviate from the applicable specifications, Mr. Calloway's team issued an NCR in accordance with the procedures set forth in MCA § 12.4. Each NCR identified the nature and location of the non-conformance, the applicable specification requirement, and the required corrective action. NCRs were transmitted to Meridian's project management team and tracked through a centralized database maintained by NFA.

NCRs were categorized into two severity classifications: "critical" and "non-critical." Critical NCRs were those involving defects that posed a risk to network performance, reliability, or safety, or that involved deviations from specification requirements that could not be accepted through waiver or use-as-is disposition. Non-critical NCRs involved lesser defects that, while requiring correction, did not pose immediate risks to network function or safety.

Over the course of the project, Mr. Calloway's team issued a total of 287 NCRs against Meridian's work. Of these, 43 were classified as critical and 244 were classified as non-critical.

B. Critical NCRs — Phase 2 Focus

Mr. Calloway testified in detail regarding the 43 critical NCRs. Although critical NCRs were issued across all three phases, the concentration of critical NCRs in Phase 2 was of particular significance. The critical NCRs encompassed several categories of defects:

Splice Loss Exceedances. A significant number of critical NCRs involved optical fiber fusion splices that failed acceptance testing — i.e., the measured splice loss exceeded the maximum tolerable loss specified in NS-FIBER-2020 and ANSI/TIA-568. Mr. Calloway explained that excessive splice loss degrades signal quality and can cause service impairments on high-capacity fiber routes. He testified that the splice loss failures were indicative of inadequate training and supervision of Meridian's splicing technicians, a conclusion that was supported by the fact that splice loss failures tended to cluster in certain geographic areas corresponding to specific Meridian crews.

Improper Conduit Burial Depth. Another category of critical NCRs involved instances where Meridian installed underground conduit at depths below the minimum depth specified in NS-FIBER-2020 and applicable municipal code requirements. Mr. Calloway testified that insufficient burial depth creates vulnerability to third-party damage — for example, from excavation by utility companies or road construction contractors — and is a safety hazard because it increases the risk of accidental cable cuts that could disrupt critical telecommunications services.

Unauthorized Route Deviations. A third category involved instances where Meridian changed the fiber route — i.e., the physical path of the conduit and cable installation — without obtaining written approval from NFA or executing a Change Order as required by the MCA. Mr. Calloway testified that these unauthorized route deviations created problems for NFA's network engineering and records management, because the as-built fiber routes did not correspond to the engineered routes reflected in NFA's GIS and mapping systems.

Mr. Calloway testified that he personally reviewed and signed off on each of the 43 critical NCRs, and that each one was reviewed by at least one member of his quality assurance team before issuance. He described the critical NCRs as posing genuine risks to network reliability and safety, and he rejected any characterization of them as mere paperwork deficiencies or technical quibbles.

Mr. Calloway further testified that Meridian's response to critical NCRs was often unacceptably slow. He estimated that the average time from issuance of a critical NCR to completion of the required corrective action by Meridian was 45 to 60 days, versus the 14-calendar-day cure period specified in Section 8.3 of Technical Specification NS-FIBER-2020. In several instances, corrective action on critical NCRs remained incomplete for 90 days or more. Mr. Calloway stated that he raised Meridian's slow NCR response times with Marcus Henley on numerous occasions, but that the situation did not materially improve.

Of particular significance, Mr. Calloway testified that 12 additional critical NCRs were issued in February 2024 alone — during the cure period following Cure Notice No. 1 (issued January 18, 2024). Mr. Calloway characterized these additional critical NCRs as demonstrating Meridian's inability to remedy its performance deficiencies even when on formal notice of material breach. He testified that the issuance of these 12 NCRs during the cure period was one of the principal factors underlying his recommendation that Northgate reject Meridian's Corrective Action Plan and proceed with termination.

C. Remediation Cost Estimates

Mr. Calloway testified regarding the estimated costs to remediate the defective work documented in the 287 NCRs. He stated that he worked with NFA's engineering team to develop remediation cost estimates for each NCR, based on the nature and extent of the defect, the difficulty of access, and the scope of corrective work required.

For the 43 critical NCRs, the average estimated remediation cost was approximately $275,000 per NCR, yielding a total estimated critical NCR remediation cost of approximately $11,825,000 (43 × $275,000). The variation in per-NCR cost reflected differences in the severity and location of the defects: splice loss remediation in urban areas with limited access was generally more expensive than conduit depth corrections in rural rights-of-way.

For the 244 non-critical NCRs, the average estimated remediation cost was approximately $26,500 per NCR, yielding a total estimated non-critical NCR remediation cost of approximately $6,466,000 (244 × $26,500).

The aggregate estimated remediation cost for all 287 NCRs was therefore approximately $18.3 million. This figure forms a significant component of the damages supporting Northgate's Counterclaim III, which seeks recovery of remediation costs arising from Meridian's defective work. Mr. Calloway confirmed that these remediation cost estimates were provided to the defense expert, Dr. Elinor Chazen of Lakeview Consulting Group LLC, for independent verification and incorporation into her expert analysis.

V. Testimony Regarding the Cure Notice and Termination Sequence

A. Cure Notice No. 1 (January 18, 2024)

Mr. Calloway testified that he drafted the initial version of Cure Notice No. 1, working from a template and incorporating specific factual details regarding Meridian's performance deficiencies that he had compiled from his monthly progress reports, the NCR database, and his contemporaneous records. The cure notice was reviewed and finalized by Renata Voss and was issued over Ms. Voss's signature on January 18, 2024 (Calloway Exhibit 4).

The Cure Notice cited three grounds for material breach under MCA § 14.1: (a) Meridian's failure to achieve Milestone 8 (the final Phase 2 milestone), which was then more than 100 days overdue; (b) Meridian's inadequate mobilization for Phase 3, with only approximately 340 route miles completed out of the 9,700-mile scope despite nine months of activity; and (c) the 43 critical NCRs as evidence of Meridian's systematic failure to meet the quality requirements of the MCA and the Technical Specification NS-FIBER-2020.

The Cure Notice demanded that Meridian cure the identified breaches within 30 calendar days, in accordance with the cure period specified in MCA § 14.1, or face termination for cause.

Mr. Calloway testified that the Cure Notice was reviewed by Dominic Hale, NFA's General Counsel, and by outside counsel at Calderwood & Harkness LLP before issuance. At this point in the examination, Mr. Deluca inquired into the substance of the legal advice provided by Mr. Hale and outside counsel regarding the Cure Notice. Jeffrey Park instructed the witness not to disclose the substance of those communications on the grounds of attorney-client privilege. Mr. Deluca placed a brief objection on the record but did not press further, and the instruction was sustained without additional challenge.

B. Meridian's Response (February 2, 2024)

Mr. Calloway testified regarding Meridian's response to Cure Notice No. 1, which was submitted by Victor Sandoval on February 2, 2024 (Calloway Exhibit 5). Mr. Sandoval's response disputed the characterization of Meridian's delays as material breach and advanced three defenses:

First, Meridian asserted that NFA had failed to timely obtain municipal permits required for construction, claiming that permits were the Owner's responsibility under MCA § 5.3 and that NFA's permitting delays had contributed materially to Meridian's milestone delays. Second, Meridian identified 14 alleged Owner-directed scope changes that were not formalized as Change Orders under MCA § 16.1, contending that these scope changes expanded Meridian's work and disrupted the construction schedule without corresponding adjustments to the contract price or milestone dates. Third, Meridian invoked force majeure, citing the continuing aftereffects of the COVID-19 pandemic on labor supply and supply chain disruptions affecting the procurement of fiber-optic cable.

Mr. Calloway testified that he disagreed with each of these characterizations. He stated that he prepared a detailed internal memorandum, addressed to Renata Voss, rebutting each of Meridian's asserted defenses point by point, drawing on the contemporaneous project records maintained by his team. Mr. Calloway was not asked to disclose the contents of this memorandum in detail, and its privileged nature was not challenged by plaintiff's counsel.

C. Cure Notice No. 2 (February 19, 2024)

Mr. Calloway testified that Northgate issued a second cure notice on February 19, 2024 (Calloway Exhibit 6). Cure Notice No. 2 stated that Meridian had failed to cure the deficiencies identified in Cure Notice No. 1 and was in continuing material breach of the MCA. The notice rejected each of Meridian's three asserted defenses, stating that permitting delays were not Owner-caused, that the alleged scope changes were clarifications within existing scope, and that force majeure did not excuse Meridian's performance failures, particularly as no formal force majeure notice had been issued under the MCA.

Cure Notice No. 2 demanded that Meridian present a detailed written remediation plan within 15 additional calendar days, specifying the steps Meridian would take to (a) complete Milestone 8, (b) accelerate Phase 3 construction to recover the schedule, and (c) remediate the 43 critical NCRs.

D. Meridian's Corrective Action Plan (March 5, 2024)

Meridian submitted its Corrective Action Plan on March 5, 2024 (Calloway Exhibit 7), four days after the 15-day deadline established in Cure Notice No. 2. Mr. Calloway testified that the lateness of the submission was itself indicative of Meridian's inability to marshal the resources necessary to address its performance deficiencies.

Mr. Calloway reviewed the Corrective Action Plan in detail and testified regarding its contents and deficiencies. The plan proposed the following: an accelerated construction schedule for the remaining Phase 2 and Phase 3 work; the deployment of additional construction crews, sourced through subcontracting arrangements with two regional construction firms; and a nine-month extension to the contractual completion date for Phase 3. In addition, the Corrective Action Plan requested $87 million in additional compensation from NFA, purportedly to cover costs associated with the 14 alleged Owner-caused delays and scope changes.

Mr. Calloway testified that he found the Corrective Action Plan to be "unrealistic" for several reasons. First, the plan did not address the quality defects documented in the 43 critical NCRs; it focused exclusively on schedule recovery and contained no provisions for improving quality assurance practices or remediating existing defective work. Second, the proposed crew additions were insufficient to recover the schedule even with the nine-month extension, based on Mr. Calloway's analysis of the productivity rates achievable with the crew levels proposed. Third, the proposed subcontractors had not been vetted or approved by NFA, and Mr. Calloway had concerns about their qualifications and capacity. Fourth, the $87 million additional compensation request was unsupported by documentation and appeared to be an attempt to renegotiate the contract price under the guise of a cure plan.

Mr. Calloway recommended that Northgate reject the Corrective Action Plan. Northgate did so on March 12, 2024, in a letter citing the plan's failure to address quality defects and the issuance of 12 additional critical NCRs during February 2024 as evidence that Meridian's quality performance was not improving (Calloway Exhibit 8).

E. Notice of Termination for Cause (April 1, 2024)

Northgate delivered its Notice of Termination for Cause under MCA § 14.1 on April 1, 2024, effective immediately (Calloway Exhibit 9). The notice terminated the MCA for Meridian's material breach and invoked NFA's right under MCA § 14.5 to complete the remaining work using one or more substitute contractors, with any excess costs to be charged to Meridian.

Mr. Calloway testified that he was directly involved in the decision-making process leading to the termination and that he believed the termination was fully justified by Meridian's cumulative performance failures over the preceding two-plus years. He stated that his recommendation to terminate was based on the totality of the evidence: the persistent and worsening schedule delays, the 43 critical NCRs (plus the 12 additional critical NCRs issued during the cure period), the inadequate Phase 3 mobilization, and Meridian's failure to submit a viable corrective action plan.

Mr. Calloway confirmed that the procedural requirements of MCA § 14.1 were fully satisfied. Cure Notice No. 1 was sent on January 18, 2024. The 30-day cure period expired on February 17, 2024. Northgate extended the process further by issuing Cure Notice No. 2 on February 19, 2024, and allowing Meridian an additional 15 days to submit a corrective action plan. Even measuring from the issuance of Cure Notice No. 1, more than 73 days elapsed before the termination on April 1, 2024 — well in excess of the 30-day cure period required by the contract. Mr. Calloway emphasized that Northgate exercised patience and gave Meridian multiple opportunities to demonstrate its ability to cure, all of which Meridian failed to take advantage of.

F. Meridian's Response (April 8, 2024)

Mr. Calloway testified that Meridian contested the termination by letter dated April 8, 2024. Meridian's response characterized the termination as pretextual and alleged that it was motivated by Northgate's desire to bring fiber construction in-house or to re-procure the work at lower market prices from another contractor, rather than by genuine concerns about Meridian's performance.

Mr. Calloway denied this allegation categorically. He testified that he had no knowledge of any plan by NFA to bring fiber construction in-house, either before or after the termination decision. He stated that his sole focus throughout the process was on Meridian's failure to perform its contractual obligations and that the termination decision was driven entirely by Meridian's persistent schedule delays, inadequate staffing, and quality failures. Mr. Calloway further testified that no one at NFA — including Renata Voss, Dominic Hale, or any other executive — ever communicated to him that the termination was motivated by anything other than Meridian's material breach.

VI. Testimony Regarding Meridian's Scope Change / Change Order Defense

A. The 14 Alleged Scope Changes

Mr. Deluca devoted a substantial portion of his examination to Meridian's claim that 14 Owner-directed scope changes were not formalized as Change Orders under MCA § 16.1. This line of questioning occupied approximately 90 minutes of the deposition and was the area where Mr. Deluca was most persistent and aggressive in his cross-examination.

Mr. Calloway testified that MCA § 16.1 established a clear and comprehensive Change Order process. Under that provision, all changes to the scope of work, the milestone schedule, or the contract price were required to be documented through written Change Orders signed by authorized representatives of both NFA and Meridian. The Change Order process required the party proposing the change to submit a written Change Order request identifying the proposed change, the reason for the change, the estimated impact on the contract price, and the estimated impact on the milestone schedule. The other party was required to respond within 14 business days, and no change was to be implemented until a written Change Order was fully executed by both parties.

Mr. Calloway acknowledged that, throughout the project, NFA issued various field directives and requests for information ("RFIs") to Meridian, which is standard practice in large-scale infrastructure construction projects. He testified that field directives and RFIs were routine communications used to clarify design details, address field conditions encountered during construction, and provide guidance on questions raised by Meridian's crews. Mr. Calloway disputed, however, that any of these field directives or RFIs constituted scope changes requiring formal Change Orders under MCA § 16.1. He characterized them as clarifications or refinements within the existing contractual scope of work — the type of day-to-day communications that are inherent in the administration of a construction contract of this magnitude and complexity.

Mr. Deluca walked Mr. Calloway through several of the field directives and RFIs marked as Calloway Exhibits 33–35, questioning him about the specific instructions contained in each document and whether those instructions could be interpreted as expanding Meridian's scope of work. Mr. Calloway maintained his position throughout, testifying that none of these documents directed Meridian to perform work outside the scope of the MCA or the Technical Specification NS-FIBER-2020.

B. Calloway's Verbal Field Adjustments

Under further questioning by Mr. Deluca, Mr. Calloway acknowledged that on approximately three to four occasions, he verbally communicated minor field adjustments to Meridian's crew supervisors. Mr. Calloway described these as instances where, during routine field visits, he directed or suggested adjustments to the construction approach in response to conditions encountered in the field — for example, routing the conduit around an unexpected subsurface obstruction or adjusting the placement of a handhole to avoid a conflict with an existing utility.

Mr. Calloway was forthright about these verbal communications but was careful and consistent in characterizing them as de minimis adjustments that fell squarely within the existing scope of work. He testified that none of these adjustments altered the contract price, changed any milestone date, or required Meridian to perform work outside the scope of the MCA. He further stated that these types of minor field adjustments are a routine and expected part of construction management on any project of this scale, and that it would be impractical and contrary to industry practice to formalize each such adjustment through a written Change Order.

Critically, Mr. Calloway testified that Meridian never requested written Change Orders for any of these verbal field adjustments at the time they were made. Nor did Meridian ever submit formal Change Order requests for any of the 14 alleged scope changes that it now claims were directed by NFA. Mr. Calloway stated that Meridian raised the scope change issue for the first time only after receiving Cure Notice No. 1 on January 18, 2024 — in its February 2, 2024 response letter — which was approximately three to four years after the alleged scope changes purportedly occurred.

C. Assessment for Defense

Mr. Calloway's acknowledgment of three to four verbal field adjustments presents a minor vulnerability that plaintiff's counsel will undoubtedly revisit at trial. However, this testimony was handled well by the witness. Mr. Calloway was forthright without being defensive, and he consistently and credibly characterized the adjustments as de minimis and within existing scope. His demeanor during this line of questioning was calm and measured, which will serve him well before a jury or, in this case, before Justice Ricci.

The stronger point for the defense remains Meridian's complete failure to invoke the Change Order process under MCA § 16.1 at any time during the performance of the contract. If Meridian genuinely believed that NFA was directing scope changes that expanded its work and disrupted its schedule, the contractual mechanism for addressing that situation was to submit a written Change Order request — which Meridian never did. Meridian's failure to utilize the contractual Change Order process during performance, coupled with the fact that it raised the scope change issue only after receiving a cure notice, strongly supports the argument that the alleged scope changes are a post-hoc litigation construct developed to justify Meridian's performance failures.

VII. Testimony Regarding Permitting Responsibilities (MCA § 5.3)

Mr. Deluca also questioned Mr. Calloway regarding Meridian's assertion that municipal permits were the Owner's responsibility under MCA § 5.3 and that NFA's delays in obtaining certain permits contributed to Meridian's milestone delays.

Mr. Calloway testified clearly and in detail regarding the allocation of permitting responsibilities under the MCA. He stated that MCA § 5.3 established a two-tier permitting framework. Under that framework, NFA (as Owner) was responsible for obtaining the initial franchise agreements and rights-of-way at the state and county level — i.e., the overarching governmental authorizations that permitted NFA to deploy fiber infrastructure within a given jurisdiction. Meridian (as Contractor) was responsible for obtaining all local municipal construction permits, road opening permits, utility crossing permits, and any other permits or approvals required for the actual performance of the construction work. Mr. Calloway described this allocation as standard in the telecommunications infrastructure industry and consistent with the approach taken on other fiber build-out projects in which he had been involved.

Mr. Calloway stated that NFA timely obtained all franchise agreements and state-level approvals required under the MCA. He testified that NFA's regulatory affairs team, working with external counsel, secured the necessary franchise agreements and rights-of-way in advance of Meridian's construction schedule for each phase.

However, Mr. Calloway acknowledged, under questioning by Mr. Deluca, that there were some delays in approximately four to five municipalities where NFA's franchise approvals took longer than initially anticipated. He testified that these delays were concentrated in smaller municipalities in western Massachusetts and southern Pennsylvania that had less experience with large-scale telecommunications infrastructure projects and, in some cases, required additional time to process NFA's franchise applications.

Mr. Calloway was careful to qualify this acknowledgment. He testified that these franchise approval delays were isolated incidents, that they affected relatively small geographic areas within the overall project scope, and that they did not affect the critical path for any milestone. He stated that in each instance, there was other work available for Meridian's crews to perform in adjacent areas while the franchise approvals were being finalized, and that the franchise delays therefore did not prevent or delay Meridian from maintaining its construction schedule.

Mr. Calloway's testimony on this point is consistent with the defense's overarching position that permitting delays — to the extent they occurred at all — were not Owner-caused breaches, were not on the critical path, and did not excuse Meridian's systemic and pervasive performance failures. This topic will be further analyzed by Dr. Elinor Chazen of Lakeview Consulting Group LLC in her critical path analysis, and we should ensure that Dr. Chazen's analysis specifically addresses and neutralizes the four to five municipal permit delays acknowledged by Mr. Calloway.

VIII. Testimony Regarding Force Majeure

Mr. Deluca briefly explored the impact of the COVID-19 pandemic on the project. This line of questioning was relatively brief compared to the scope change and permitting topics, occupying approximately 20–25 minutes of the deposition.

Mr. Calloway acknowledged that COVID-19 caused some disruption during the initial months of the project. The Notice to Proceed was issued on April 1, 2020, at a time when many states in the project footprint had imposed construction restrictions or slowdowns in response to the pandemic. Mr. Calloway testified that both NFA and Meridian recognized that these restrictions would affect the early Phase 1 schedule, and that the parties informally agreed to adjust the Phase 1 schedule by approximately three months in 2020 to account for pandemic-related shutdowns. This adjustment was communicated verbally and through email correspondence between Renata Voss and Victor Sandoval, but Mr. Calloway acknowledged that no formal force majeure notice was ever issued by Meridian under the MCA's force majeure clause (MCA § 15.1), nor was a formal Change Order executed to document the schedule adjustment.

Mr. Calloway testified that by mid-2021, COVID-related disruptions had largely dissipated and should not have affected Meridian's performance on Phase 2 or Phase 3. He stated that the construction industry in the northeastern United States had returned to near-normal operations by that time, and that other infrastructure contractors working in the same geographic areas were not experiencing the types of systemic delays that Meridian was experiencing. Mr. Calloway noted that while there were some lingering labor market effects — including increased competition for skilled workers — these were market conditions affecting the entire industry, not force majeure events excusing an individual contractor's non-performance.

Regarding Meridian's assertion of supply chain disruptions affecting the procurement of fiber-optic cable, Mr. Calloway testified that NFA actively assisted Meridian by facilitating introductions to alternative cable suppliers when Meridian reported difficulties obtaining cable from its primary supplier. Mr. Calloway stated that fiber cable was available in the market during the relevant period, and that Meridian's procurement difficulties were, in his assessment, a function of poor planning and inadequate procurement lead times rather than genuine supply unavailability. He noted that NFA was simultaneously procuring fiber cable for other projects and was not experiencing comparable supply issues.

The absence of a formal force majeure notice under MCA § 15.1 is a significant point. Mr. Calloway confirmed that the MCA required a party claiming force majeure to provide written notice to the other party within 10 business days of the occurrence of the force majeure event, specifying the nature of the event, its expected duration, and the steps being taken to mitigate its effects. Meridian never submitted such a notice at any time during the project. This failure to comply with the contractual notice requirement undermines Meridian's ability to invoke force majeure as a defense.

IX. Testimony Regarding Replacement Contractor — Crestline Construction Group Inc.

Mr. Calloway testified regarding the process by which NFA identified and retained a replacement contractor following the termination of the MCA. He stated that after the termination on April 1, 2024, NFA conducted an expedited procurement process to identify a qualified contractor capable of completing the remaining Phase 2 work (Milestone 8) and all of the Phase 3 work (Milestones 9–14). The urgency of this procurement was driven by NFA's operational need to complete its fiber network build-out on an aggressive timeline in order to serve contractual commitments to its wholesale customers and to comply with certain regulatory deployment obligations.

Crestline Construction Group Inc. ("Crestline"), a Virginia corporation headquartered in McLean, Virginia, was selected as the replacement contractor. Crestline's CEO is Frank DiBello, and the company has a track record of large-scale fiber and telecommunications infrastructure construction in the mid-Atlantic and southeastern United States. Mr. Calloway testified that he was aware of Crestline's reputation in the industry and considered it a qualified and capable contractor.

A replacement construction contract between NFA and Crestline was executed on June 10, 2024. The contract price was $712 million for the remaining scope, encompassing completion of Milestone 8 (Phase 2) and all of Phase 3 (Milestones 9–14). Mr. Calloway testified that the Crestline contract price reflected then-current market conditions and included a premium associated with the accelerated mobilization timeline that NFA required in order to mitigate the further delay to its fiber deployment caused by Meridian's non-performance. He acknowledged that market prices for fiber construction had increased since 2020, when the MCA was executed, due to increased demand for fiber infrastructure and rising labor costs.

The excess of the Crestline contract price over the remaining unperformed MCA value — $712 million minus $630.3 million, equaling $81.7 million — forms the basis for Northgate's Counterclaim II, which seeks recovery of excess completion costs under MCA § 14.5.

Mr. Calloway clarified that he was not directly involved in the Crestline contract negotiations, which were handled by Renata Voss and NFA's procurement team. However, he was familiar with the Crestline contract pricing because he provided the scope and quantity inputs that formed the basis for Crestline's pricing proposal. He testified that the scope of work defined in the Crestline contract was substantially the same as the remaining unperformed scope under the MCA, adjusted to account for the approximately 340 route miles of Phase 3 work that Meridian had completed (and, where applicable, to account for remediation of defective work left behind by Meridian).

X. Testimony Regarding Payments and Retainage

Mr. Calloway testified in detail regarding the progress payment process and the financial status of the MCA at the time of termination. As Owner's Representative, Mr. Calloway oversaw the monthly progress payment certification process under MCA § 18.1. Under that process, Meridian submitted monthly payment applications detailing the work completed during the preceding month, supported by unit count documentation and, where applicable, milestone completion certifications. Mr. Calloway's team reviewed and verified the payment applications, conducted field inspections to confirm the claimed quantities, and issued payment certifications to NFA's finance department.

Mr. Calloway testified that total payments made to Meridian over the life of the project were $512,700,000, broken down as follows:

In addition to the net payments, NFA held retainage in the amount of $56,966,667. Mr. Calloway testified that the retainage was calculated at 10% of the gross certified work value ($569,666,670 × 10%), in accordance with MCA § 18.1. He stated that the retainage would ordinarily be released upon final completion and acceptance of the work, but that as of the termination date, the retainage remained held by NFA and was available as a credit against Northgate's counterclaims.

Mr. Calloway confirmed that Northgate properly applied all liquidated damages deductions and retainage amounts in accordance with the MCA's payment provisions. He stated that each LD deduction was supported by a formal LD assessment letter identifying the milestone, the number of days of delay, and the calculated LD amount, and that Meridian was notified of each deduction through the monthly payment process.

Regarding the $16.5 million in disputed Phase 3 payment applications, Mr. Calloway reiterated his testimony that his team's field audits revealed significant discrepancies between Meridian's claimed unit quantities and the verified installed quantities. He stated that portions of the claimed work also failed quality acceptance testing and therefore did not qualify for payment under MCA § 18.1, which conditioned payment on the work being performed in conformance with the contract requirements. Mr. Calloway testified that NFA communicated the basis for each payment reduction to Meridian in writing, and that Meridian did not formally dispute the reductions through the MCA's dispute resolution process before the termination.

XI. Exhibits Marked During Deposition

The following exhibits were marked during the deposition of Sean Calloway on November 19, 2024:

All exhibits are being maintained in the matter file and have been cross-referenced against the document production index.

XII. Key Admissions and Favorable Testimony (Summary)

A. Favorable to Defense

The following key admissions and favorable testimony from Mr. Calloway's deposition are highlighted for purposes of trial preparation and dispositive motion practice:

1. Crew Shortages. Mr. Calloway confirmed that Meridian's construction crew levels dropped to approximately 60–65% of the levels specified in Meridian's original mobilization plan by mid-2022, and that these staffing shortfalls persisted through the termination date. This testimony establishes that Meridian's schedule delays were the direct result of its own failure to maintain adequate resources, not external factors.

2. Contemporaneous NCR Documentation. All 287 NCRs, including the 43 classified as critical, were documented contemporaneously as deficiencies were identified during construction. The NCRs are not a post-hoc litigation product; they were created in the ordinary course of contract administration and reflect genuine quality defects with safety and network performance implications.

3. No Change Order Requests by Meridian. Meridian never submitted formal Change Order requests under MCA § 16.1 for any of the 14 alleged scope changes during the performance of the contract. This fact powerfully undercuts Meridian's scope change defense, as it demonstrates that Meridian did not consider these matters to be scope changes at the time, and only raised them after receiving the cure notice.

4. Cure Period Compliance. Cure Notice No. 1 was sent on January 18, 2024, and the termination did not occur until April 1, 2024 — a period of 73 days, well in excess of the 30-day cure period required by MCA § 14.1. Northgate not only satisfied the contractual cure period but extended additional time and process to Meridian through Cure Notice No. 2 and the corrective action plan process.

5. Continuing Deficiencies During Cure Period. Twelve additional critical NCRs were issued in February 2024, during the cure period following Cure Notice No. 1. This testimony is devastating to Meridian's position, as it demonstrates that Meridian's quality performance was not improving — and may have been deteriorating — even after receiving formal notice of material breach.

6. Unrealistic Corrective Action Plan. Mr. Calloway testified that Meridian's Corrective Action Plan was facially unrealistic, failed to address the quality defects documented in the critical NCRs, and proposed crew additions insufficient to recover the schedule even with the requested nine-month extension.

7. No Knowledge of In-House Plans. Mr. Calloway testified unequivocally that he had no knowledge of any plan by NFA to bring fiber construction in-house and that the termination was motivated solely by Meridian's material breach of the MCA. This testimony directly rebuts Meridian's pretext theory.

8. No Formal Force Majeure Notice. Meridian never issued a formal force majeure notice under MCA § 15.1 at any time during the project. This failure to comply with the contractual notice requirement significantly undermines Meridian's force majeure defense.

B. Potentially Unfavorable or Requiring Attention

The following areas of Mr. Calloway's testimony are potentially unfavorable or require further attention during trial preparation:

1. Verbal Field Adjustments. Mr. Calloway acknowledged three to four instances in which he verbally communicated minor field adjustments to Meridian's crew supervisors without formalizing those adjustments as Change Orders. While Mr. Calloway credibly characterized these as de minimis adjustments within existing scope, plaintiff's counsel will attempt to use this testimony to argue that NFA engaged in a broader pattern of informal scope changes. This point was mitigated by Mr. Calloway's testimony that the adjustments did not alter the contract price or milestone schedule, and by the fact that Meridian never requested Change Orders for these adjustments.

2. Municipal Permit Delays. Mr. Calloway acknowledged that NFA's franchise approvals were delayed in approximately four to five municipalities. While he testified that these delays were is

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 425 Park Avenue, 33rd Floor New York, New York 10022
DEPOSITION SUMMARY SEAN CALLOWAY November 19, 2024
Matter:
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
C&H Matter No.: 1022-00005
Prepared By: Yuki Nakamura, Associate, Calderwood & Harkness LLP
Reviewed By: Jeffrey Park, Lead Associate; Linda Osei, Responsible Partner
Date of Memorandum: November 25, 2024
Date of Deposition: November 19, 2024
Location of Deposition: Offices of Calderwood & Harkness LLP, 425 Park Avenue, 33rd Floor, New York, NY 10022
Court Reporter: Markham & Ellison Reporting Services, Inc.
Deponent: Sean Calloway, Director of Construction Management, Northgate Fiber Americas Inc., 600 Lexington Avenue, 28th Floor, New York, NY 10022
Examining Counsel (Plaintiff): Thomas Deluca, Lead Partner, Hargrove, Deluca & Stein LLP; Miriam Vasquez, Senior Associate, Hargrove, Deluca & Stein LLP
Defending Counsel (Defendant): Jeffrey Park, Lead Associate, Calderwood & Harkness LLP; Yuki Nakamura, Working Associate, Calderwood & Harkness LLP
Duration: Approximately 7 hours (one day)
Transcript Pages: Approximately 320 pages
Exhibits Marked: Approximately 35 deposition exhibits (Calloway Exhibits 1–35)
Right-click to update Table of Contents
I. Executive Summary
Sean Calloway was deposed on November 19, 2024, at the offices of Calderwood & Harkness LLP. Mr. Calloway serves as the Director of Construction Management at Northgate Fiber Americas Inc. ("NFA" or "Northgate" or "Owner") and functioned as the day-to-day contract administrator for the Master Construction Agreement ("MCA") between Northgate and Meridian Infrastructure Partners LLC ("Meridian" or "Contractor"), which was executed on March 15, 2020. In this capacity, Mr. Calloway reported to Renata Voss, Vice President of US Network Infrastructure at NFA, and served as the primary interface with Meridian's field operations team, particularly Marcus Henley, Meridian's Vice President of Field Operations, Northeast Division. His testimony addressed virtually all aspects of the project's operational history, from procurement through termination.
Overall Assessment. Mr. Calloway was a strong, well-prepared witness. He was composed throughout the approximately seven-hour examination, responsive to questions without volunteering unnecessary information, and appropriately deferential on topics outside his personal knowledge. His testimony was consistent with the prior document production and with the testimony of Renata Voss, who was deposed on November 12–13, 2024. No material inconsistencies were identified between the two depositions. Mr. Calloway demonstrated thorough command of the project timeline, technical specifications, and contractual provisions, reflecting his day-to-day involvement in the administration of the MCA from inception through termination.
Key Favorable Testimony. Mr. Calloway provided detailed, firsthand accounts of Meridian's persistent schedule delays across all three phases of the fiber build-out program. He demonstrated comprehensive knowledge of all 287 non-conformance reports ("NCRs"), including 43 classified as critical under the governing technical specifications, and was able to describe the circumstances underlying many of the critical NCRs from memory. He described in detail the cure notice and termination sequence, confirming that NFA complied with every procedural requirement set forth in MCA § 14.1, including the 30-day cure period, the issuance of a second cure notice, and the opportunity for Meridian to present a corrective action plan. Critically, Mr. Calloway testified that Meridian never issued a formal force majeure notice under the MCA and never submitted written Change Order requests for any of the 14 alleged scope changes that form the centerpiece of Meridian's affirmative defense. These admissions are powerful support for the defense position.
Areas of Plaintiff Focus. Plaintiff's counsel, Mr. Deluca, pressed Mr. Calloway extensively on three subjects: (a) alleged Owner-directed scope changes that were not formalized as Change Orders under MCA § 16.1, with particular focus on field directives and requests for information ("RFIs") issued during Phases 2 and 3; (b) the allocation of permitting responsibility under MCA § 5.3 and whether NFA's delays in obtaining certain franchise agreements contributed to Meridian's milestone delays; and (c) whether Northgate's internal discussions about potentially bringing fiber construction in-house influenced or motivated the termination decision. Mr. Deluca's examination was competent and thorough on these points, and these topics will require continued attention in trial preparation.
Key Admissions Favorable to Defense. Among the most significant testimony, Mr. Calloway confirmed: (1) Meridian's construction crews were persistently understaffed beginning in mid-2022, with field staffing dropping to roughly 60–65% of the levels committed in Meridian's original mobilization plan; (2) quality defects were documented in real time through the NCR process and were not the product of post-hoc analysis; (3) Meridian failed to submit a viable cure plan within the 30-day period following Cure Notice No. 1; and (4) 12 additional critical NCRs were issued in February 2024, during the cure period itself, demonstrating that Meridian's performance was deteriorating even after receiving formal notice of material breach.
Potential Areas of Concern. Mr. Calloway acknowledged under cross-examination that on approximately three to four occasions, he verbally communicated minor field adjustments to Meridian's crew supervisors—for example, routing adjustments around unexpected subsurface conditions encountered during construction. These verbal communications could arguably be characterized by Meridian as informal scope directives that should have been formalized as Change Orders under MCA § 16.1. However, Mr. Calloway consistently and credibly testified that these adjustments were de minimis in nature, fell squarely within the existing scope of work, and did not alter the contract price or milestone schedule. He further noted that Meridian never requested written Change Orders for any of these adjustments at the time they were made, which undercuts the significance of this point. This testimony will nevertheless require attention during trial preparation to ensure Mr. Calloway is prepared for further cross-examination on this topic.
Privilege Matters. No privilege breaches occurred during the deposition. Jeffrey Park instructed the witness on two occasions not to disclose the substance of communications protected by the attorney-client privilege: once regarding communications with Dominic Hale (NFA General Counsel) and outside counsel concerning the drafting of Cure Notice No. 1, and once regarding discussions with outside counsel about the termination decision. In both instances, Mr. Deluca did not challenge the instruction beyond a brief colloquy on the record, and the witness complied without difficulty.
II. Background and Qualifications of the Witness
A. Employment History and Role at NFA
Mr. Calloway testified that he holds the title of Director of Construction Management at Northgate Fiber Americas Inc. He has been employed by NFA since approximately June 2019. Prior to joining NFA, Mr. Calloway spent approximately eight years at Arcadian Telecom Solutions Inc., where he held progressively senior roles in construction management for fiber-optic and wireline telecommunications infrastructure projects, ultimately serving as Senior Manager of Field Construction for the Mid-Atlantic region.
At NFA, Mr. Calloway is responsible for the day-to-day oversight and administration of all construction contracts related to NFA's fiber build-out program in the northeastern United States. His responsibilities encompass schedule management, quality assurance oversight, progress payment certification, and the management of contractor performance issues. With respect to the Meridian MCA specifically, Mr. Calloway served as the designated "Owner's Representative" under the contract for purposes of day-to-day administration, as that term is defined in MCA § 2.1.
Mr. Calloway reported directly to Renata Voss, Vice President of US Network Infrastructure at NFA. He supervised a team of approximately 12 project managers and quality assurance inspectors who were assigned to the fiber build-out program and who monitored Meridian's construction activities across all three phases of the project. Mr. Calloway served as NFA's principal point of contact for Meridian on all field-level construction and quality matters, interfacing most frequently with Marcus Henley, Meridian's Vice President of Field Operations for the Northeast Division, as well as with various Meridian project managers and site supervisors.
Mr. Calloway testified that he communicated with Mr. Henley on a near-daily basis during active construction periods and participated in weekly project coordination meetings with Meridian's management team. He also participated in monthly executive-level status meetings attended by Renata Voss and Victor Sandoval (Meridian's President and CEO), although his role in those meetings was primarily to present progress data and respond to questions from the principals.
B. Educational Background
Mr. Calloway holds a Bachelor of Science degree in Civil Engineering from the Pennsylvania State University, which he received in 2009. He subsequently obtained a Project Management Professional ("PMP") certification from the Project Management Institute in 2013 and has maintained that certification continuously since that time. He testified to approximately 15 years of professional experience in telecommunications infrastructure construction management, encompassing both underground fiber-optic cable installation and aerial construction, as well as experience with conduit systems, splicing, and outside-plant engineering.
Mr. Calloway was credible in describing his qualifications and demonstrated a strong command of the technical aspects of fiber construction throughout his testimony.
C. Involvement with the MCA
Mr. Calloway testified that his involvement with the Meridian engagement predated the execution of the MCA. He participated in the procurement process that led to the selection of Meridian as the Contractor in late 2019 and early 2020, serving on NFA's evaluation team alongside Renata Voss, members of NFA's procurement department, and representatives from NFA's engineering group. Mr. Calloway testified that Meridian was selected from a short list of three qualified bidders based on a combination of price, technical capability, and demonstrated experience with large-scale fiber build-out programs.
Following Meridian's selection, Mr. Calloway participated in the negotiation of the MCA, with a particular focus on the provisions most directly relevant to his role as contract administrator. Specifically, he was involved in the development and negotiation of: (a) MCA Exhibit B, the milestone schedule and milestone values, which established the phased build-out timeline and the payment amounts associated with each milestone; (b) the Northgate Technical Specification NS-FIBER-2020, which set forth the detailed engineering and quality requirements for the fiber installation work; and (c) the quality assurance and quality control provisions of MCA § 12.4, which established the inspection, testing, and acceptance protocols and the NCR process. Mr. Calloway testified that he worked with NFA's engineering team to develop the Technical Specification NS-FIBER-2020 and that it reflected industry best practices as well as Northgate's proprietary network requirements.
After the MCA was executed on March 15, 2020, and Notice to Proceed was issued on April 1, 2020, Mr. Calloway assumed his role as Owner's Representative and managed the contract on a day-to-day basis for the duration of the project. In this capacity, he signed or co-signed interim completion certificates for Milestones 1 through 7, certifying that Meridian had substantially completed the work required under each milestone in accordance with the contract requirements (albeit in several instances with noted deficiencies documented through NCRs and with liquidated damages assessments for late completion).
III. Testimony Regarding Project Phases and Milestone Delays
A. Phase 1 — New York Metro & Northern New Jersey (Milestones 1–4)
Mr. Calloway testified in detail regarding the scope and performance of Phase 1 of the fiber build-out program. Phase 1 encompassed the New York metropolitan area and northern New Jersey and involved the construction of approximately 3,200 route miles of fiber-optic infrastructure. The total milestone value for Phase 1 was $208 million, allocated across four milestones (Milestones 1 through 4) as set forth in MCA Exhibit B.
Mr. Calloway testified that Milestones 1, 2, and 4 were completed on time or within what he described as "acceptable tolerances," meaning minor delays of a few days that did not trigger liquidated damages under the MCA's grace-period provisions. These milestones proceeded generally in accordance with the project schedule, and Meridian's performance during the early stages of Phase 1 was, in Mr. Calloway's words, "adequate" and "in line with our expectations."
However, Milestone 3 was completed 47 days late. The target completion date for Milestone 3 was August 28, 2021. Meridian did not submit its completion documentation for Milestone 3 until October 14, 2021, a delay of 47 calendar days. Mr. Calloway testified that the Milestone 3 delay was caused primarily by two factors, both of which were within Meridian's contractual responsibility: first, Meridian's failure to deploy a sufficient number of horizontal directional drilling ("HDD") and boring crews in northern New Jersey, particularly in the densely urbanized areas of Bergen and Essex counties where subsurface construction was required; and second, Meridian's slow resolution of utility conflicts in those same areas, which were the Contractor's responsibility to coordinate under the MCA's utility conflict resolution provisions.
Mr. Calloway confirmed that, following the Milestone 3 delay, he recommended to Renata Voss that liquidated damages be assessed in accordance with MCA § 9.1. Ms. Voss authorized the assessment, and an LD assessment letter was issued on November 5, 2021 (Calloway Exhibit 10). The liquidated damages were calculated at the contractual rate of $175,000 per day for 47 days, totaling $8,225,000. Mr. Calloway testified that these LDs were deducted from Meridian's subsequent payment application, consistent with the setoff provisions of MCA § 18.1.
Mr. Calloway further testified that Victor Sandoval, Meridian's President and CEO, protested the LD assessment by telephone, characterizing the delay as partially attributable to unusually adverse weather conditions during the summer of 2021. However, Mr. Calloway stated that Mr. Sandoval did not formally dispute the LD assessment in writing at the time, nor did Meridian invoke the dispute resolution procedures set forth in MCA § 20.1. Mr. Calloway noted that the weather conditions cited by Mr. Sandoval were not unusual for the region and did not constitute a force majeure event under the MCA.
B. Phase 2 — Connecticut, Western Massachusetts, Southern Pennsylvania (Milestones 5–8)
Phase 2 of the fiber build-out program encompassed construction in Connecticut, western Massachusetts, and southern Pennsylvania, involving approximately 5,600 route miles and carrying a total milestone value of $363 million, allocated across Milestones 5 through 8 as set forth in MCA Exhibit B.
Mr. Calloway's testimony regarding Phase 2 was extensive and constituted one of the most significant portions of the deposition. He described a pattern of progressively worsening delays that became increasingly severe with each successive milestone:
• Milestone 5 was completed 22 days late, resulting in liquidated damages of $3,850,000 (22 days × $175,000/day).
• Milestone 6 was completed 68 days late, resulting in liquidated damages of $11,900,000 (68 days × $175,000/day).
• Milestone 7 was completed 91 days late, resulting in liquidated damages of $15,925,000 (91 days × $175,000/day).
• Milestone 8 was never completed before termination. As of the termination date of April 1, 2024, Meridian had accrued 134 days of delay on Milestone 8. Mr. Calloway testified that the liquidated damages for Milestone 8 were subject to the 10% cap set forth in MCA § 9.1, which limited the LD exposure to 10% of the Milestone 8 value. The Milestone 8 value was $91 million, resulting in a capped LD amount of $9,100,000.
The total Phase 2 liquidated damages amounted to $40,775,000.
Mr. Calloway described in considerable detail a pattern of Meridian failing to maintain adequate crew levels throughout Phase 2. He testified that beginning in approximately mid-2022, Meridian's field staffing dropped to roughly 60–65% of the levels specified in Meridian's original mobilization plan, which had been submitted as part of the procurement process and was incorporated by reference into MCA Exhibit D. Mr. Calloway stated that he documented these staffing shortfalls in his monthly progress reports and raised them directly with Marcus Henley on multiple occasions.
In a particularly significant line of testimony, Mr. Calloway stated that Mr. Henley told him in multiple conversations — Mr. Calloway estimated between four and six such conversations over the course of 2022 and early 2023 — that Meridian was experiencing difficulty retaining skilled laborers, particularly experienced HDD operators and fiber splicers, and that Ridgepoint Capital Group, Meridian's private equity owner, was "putting pressure on the company on the cost side." Mr. Calloway testified that Mr. Henley described the situation as a conflict between Meridian's operational needs and the financial constraints being imposed by its ownership. While this testimony is hearsay as to the truth of the matter asserted (i.e., whether Ridgepoint was in fact pressuring Meridian on costs), it is admissible for the non-hearsay purpose of showing Mr. Calloway's state of mind and the basis for NFA's growing concerns about Meridian's capacity to perform. It may also be admissible as a statement of a party-opponent under CPLR 4549 if Mr. Henley is deemed to have been speaking within the scope of his authority as Meridian's VP of Field Operations.
Mr. Calloway confirmed that he raised the escalating delay issue in written monthly progress reports submitted to Renata Voss throughout 2022 and 2023 (selected examples of which were marked as Calloway Exhibits 21–25). These reports documented, among other things, crew counts, productivity metrics, milestone progress against the baseline schedule, and quality deficiency trends. Mr. Calloway testified that his reports consistently identified Meridian's inadequate staffing as the primary driver of schedule delays during Phase 2.
C. Phase 3 — Maryland, Virginia, Eastern Pennsylvania (Milestones 9–14)
Phase 3 was the largest and most ambitious phase of the fiber build-out program, encompassing construction in Maryland, Virginia, and eastern Pennsylvania. The scope comprised approximately 9,700 route miles, with a total milestone value of $629 million allocated across Milestones 9 through 14.
Mr. Calloway testified that Meridian mobilized crews in Maryland in July 2023, but that the mobilization effort was, in his words, "woefully inadequate." He stated that Meridian deployed fewer than half the crews necessary to meet the Phase 3 schedule, and that the crews that were deployed exhibited the same quality issues that had plagued Phase 2. By the time of termination on April 1, 2024 — approximately nine months after initial mobilization — only approximately 340 of the 9,700 route miles had been constructed, representing approximately 3.5% of the Phase 3 scope. Mr. Calloway characterized this level of progress as dramatically insufficient and stated that, based on Meridian's rate of production, Phase 3 would not have been completed for years beyond the contractual completion date.
With respect to payment applications, Mr. Calloway testified that Meridian submitted payment applications totaling $48.2 million for Phase 3 work performed through the termination date. Mr. Calloway recommended approval of only $31.7 million of that amount, disputing $16.5 million on the grounds of defective work that had not passed quality acceptance testing and inflated unit counts in Meridian's payment applications.
Mr. Calloway provided detailed testimony regarding the unit count discrepancies. He stated that his team conducted field audits of Meridian's Phase 3 unit count claims — i.e., verification of the actual quantities of conduit installed, cable placed, handholes set, and splices completed — and found discrepancies of 15–20% between the quantities claimed by Meridian in its payment applications and the quantities that could be verified through physical inspection and measurement. Mr. Calloway testified that these discrepancies were documented in his team's field audit reports, copies of which were provided to NFA's finance department and to outside counsel.
IV. Testimony Regarding Non-Conformance Reports (NCRs) and Quality Defects
A. NCR Process and Documentation
Mr. Calloway testified at length regarding the quality assurance and non-conformance reporting framework that governed the project. Under MCA § 12.4 and the Northgate Technical Specification NS-FIBER-2020, all construction work performed by Meridian was required to conform to three sets of standards: (1) the ANSI/TIA-568 standard for telecommunications cabling infrastructure, as then in effect; (2) the Building Industry Consulting Service International ("BICSI") guidelines for outside-plant design and construction; and (3) Northgate's proprietary Technical Specification NS-FIBER-2020, which established additional and, in some respects, more stringent requirements tailored to NFA's specific network performance objectives.
Mr. Calloway's team was responsible for monitoring Meridian's compliance with these standards through a program of field inspections, acceptance testing, and documentation. When work was found to deviate from the applicable specifications, Mr. Calloway's team issued an NCR in accordance with the procedures set forth in MCA § 12.4. Each NCR identified the nature and location of the non-conformance, the applicable specification requirement, and the required corrective action. NCRs were transmitted to Meridian's project management team and tracked through a centralized database maintained by NFA.
NCRs were categorized into two severity classifications: "critical" and "non-critical." Critical NCRs were those involving defects that posed a risk to network performance, reliability, or safety, or that involved deviations from specification requirements that could not be accepted through waiver or use-as-is disposition. Non-critical NCRs involved lesser defects that, while requiring correction, did not pose immediate risks to network function or safety.
Over the course of the project, Mr. Calloway's team issued a total of 287 NCRs against Meridian's work. Of these, 43 were classified as critical and 244 were classified as non-critical.
B. Critical NCRs — Phase 2 Focus
Mr. Calloway testified in detail regarding the 43 critical NCRs. Although critical NCRs were issued across all three phases, the concentration of critical NCRs in Phase 2 was of particular significance. The critical NCRs encompassed several categories of defects:
Splice Loss Exceedances. A significant number of critical NCRs involved optical fiber fusion splices that failed acceptance testing — i.e., the measured splice loss exceeded the maximum tolerable loss specified in NS-FIBER-2020 and ANSI/TIA-568. Mr. Calloway explained that excessive splice loss degrades signal quality and can cause service impairments on high-capacity fiber routes. He testified that the splice loss failures were indicative of inadequate training and supervision of Meridian's splicing technicians, a conclusion that was supported by the fact that splice loss failures tended to cluster in certain geographic areas corresponding to specific Meridian crews.
Improper Conduit Burial Depth. Another category of critical NCRs involved instances where Meridian installed underground conduit at depths below the minimum depth specified in NS-FIBER-2020 and applicable municipal code requirements. Mr. Calloway testified that insufficient burial depth creates vulnerability to third-party damage — for example, from excavation by utility companies or road construction contractors — and is a safety hazard because it increases the risk of accidental cable cuts that could disrupt critical telecommunications services.
Unauthorized Route Deviations. A third category involved instances where Meridian changed the fiber route — i.e., the physical path of the conduit and cable installation — without obtaining written approval from NFA or executing a Change Order as required by the MCA. Mr. Calloway testified that these unauthorized route deviations created problems for NFA's network engineering and records management, because the as-built fiber routes did not correspond to the engineered routes reflected in NFA's GIS and mapping systems.
Mr. Calloway testified that he personally reviewed and signed off on each of the 43 critical NCRs, and that each one was reviewed by at least one member of his quality assurance team before issuance. He described the critical NCRs as posing genuine risks to network reliability and safety, and he rejected any characterization of them as mere paperwork deficiencies or technical quibbles.
Mr. Calloway further testified that Meridian's response to critical NCRs was often unacceptably slow. He estimated that the average time from issuance of a critical NCR to completion of the required corrective action by Meridian was 45 to 60 days, versus the 14-calendar-day cure period specified in Section 8.3 of Technical Specification NS-FIBER-2020. In several instances, corrective action on critical NCRs remained incomplete for 90 days or more. Mr. Calloway stated that he raised Meridian's slow NCR response times with Marcus Henley on numerous occasions, but that the situation did not materially improve.
Of particular significance, Mr. Calloway testified that 12 additional critical NCRs were issued in February 2024 alone — during the cure period following Cure Notice No. 1 (issued January 18, 2024). Mr. Calloway characterized these additional critical NCRs as demonstrating Meridian's inability to remedy its performance deficiencies even when on formal notice of material breach. He testified that the issuance of these 12 NCRs during the cure period was one of the principal factors underlying his recommendation that Northgate reject Meridian's Corrective Action Plan and proceed with termination.
C. Remediation Cost Estimates
Mr. Calloway testified regarding the estimated costs to remediate the defective work documented in the 287 NCRs. He stated that he worked with NFA's engineering team to develop remediation cost estimates for each NCR, based on the nature and extent of the defect, the difficulty of access, and the scope of corrective work required.
For the 43 critical NCRs, the average estimated remediation cost was approximately $275,000 per NCR, yielding a total estimated critical NCR remediation cost of approximately $11,825,000 (43 × $275,000). The variation in per-NCR cost reflected differences in the severity and location of the defects: splice loss remediation in urban areas with limited access was generally more expensive than conduit depth corrections in rural rights-of-way.
For the 244 non-critical NCRs, the average estimated remediation cost was approximately $26,500 per NCR, yielding a total estimated non-critical NCR remediation cost of approximately $6,466,000 (244 × $26,500).
The aggregate estimated remediation cost for all 287 NCRs was therefore approximately $18.3 million. This figure forms a significant component of the damages supporting Northgate's Counterclaim III, which seeks recovery of remediation costs arising from Meridian's defective work. Mr. Calloway confirmed that these remediation cost estimates were provided to the defense expert, Dr. Elinor Chazen of Lakeview Consulting Group LLC, for independent verification and incorporation into her expert analysis.
V. Testimony Regarding the Cure Notice and Termination Sequence
A. Cure Notice No. 1 (January 18, 2024)
Mr. Calloway testified that he drafted the initial version of Cure Notice No. 1, working from a template and incorporating specific factual details regarding Meridian's performance deficiencies that he had compiled from his monthly progress reports, the NCR database, and his contemporaneous records. The cure notice was reviewed and finalized by Renata Voss and was issued over Ms. Voss's signature on January 18, 2024 (Calloway Exhibit 4).
The Cure Notice cited three grounds for material breach under MCA § 14.1: (a) Meridian's failure to achieve Milestone 8 (the final Phase 2 milestone), which was then more than 100 days overdue; (b) Meridian's inadequate mobilization for Phase 3, with only approximately 340 route miles completed out of the 9,700-mile scope despite nine months of activity; and (c) the 43 critical NCRs as evidence of Meridian's systematic failure to meet the quality requirements of the MCA and the Technical Specification NS-FIBER-2020.
The Cure Notice demanded that Meridian cure the identified breaches within 30 calendar days, in accordance with the cure period specified in MCA § 14.1, or face termination for cause.
Mr. Calloway testified that the Cure Notice was reviewed by Dominic Hale, NFA's General Counsel, and by outside counsel at Calderwood & Harkness LLP before issuance. At this point in the examination, Mr. Deluca inquired into the substance of the legal advice provided by Mr. Hale and outside counsel regarding the Cure Notice. Jeffrey Park instructed the witness not to disclose the substance of those communications on the grounds of attorney-client privilege. Mr. Deluca placed a brief objection on the record but did not press further, and the instruction was sustained without additional challenge.
B. Meridian's Response (February 2, 2024)
Mr. Calloway testified regarding Meridian's response to Cure Notice No. 1, which was submitted by Victor Sandoval on February 2, 2024 (Calloway Exhibit 5). Mr. Sandoval's response disputed the characterization of Meridian's delays as material breach and advanced three defenses:
First, Meridian asserted that NFA had failed to timely obtain municipal permits required for construction, claiming that permits were the Owner's responsibility under MCA § 5.3 and that NFA's permitting delays had contributed materially to Meridian's milestone delays. Second, Meridian identified 14 alleged Owner-directed scope changes that were not formalized as Change Orders under MCA § 16.1, contending that these scope changes expanded Meridian's work and disrupted the construction schedule without corresponding adjustments to the contract price or milestone dates. Third, Meridian invoked force majeure, citing the continuing aftereffects of the COVID-19 pandemic on labor supply and supply chain disruptions affecting the procurement of fiber-optic cable.
Mr. Calloway testified that he disagreed with each of these characterizations. He stated that he prepared a detailed internal memorandum, addressed to Renata Voss, rebutting each of Meridian's asserted defenses point by point, drawing on the contemporaneous project records maintained by his team. Mr. Calloway was not asked to disclose the contents of this memorandum in detail, and its privileged nature was not challenged by plaintiff's counsel.
C. Cure Notice No. 2 (February 19, 2024)
Mr. Calloway testified that Northgate issued a second cure notice on February 19, 2024 (Calloway Exhibit 6). Cure Notice No. 2 stated that Meridian had failed to cure the deficiencies identified in Cure Notice No. 1 and was in continuing material breach of the MCA. The notice rejected each of Meridian's three asserted defenses, stating that permitting delays were not Owner-caused, that the alleged scope changes were clarifications within existing scope, and that force majeure did not excuse Meridian's performance failures, particularly as no formal force majeure notice had been issued under the MCA.
Cure Notice No. 2 demanded that Meridian present a detailed written remediation plan within 15 additional calendar days, specifying the steps Meridian would take to (a) complete Milestone 8, (b) accelerate Phase 3 construction to recover the schedule, and (c) remediate the 43 critical NCRs.
D. Meridian's Corrective Action Plan (March 5, 2024)
Meridian submitted its Corrective Action Plan on March 5, 2024 (Calloway Exhibit 7), four days after the 15-day deadline established in Cure Notice No. 2. Mr. Calloway testified that the lateness of the submission was itself indicative of Meridian's inability to marshal the resources necessary to address its performance deficiencies.
Mr. Calloway reviewed the Corrective Action Plan in detail and testified regarding its contents and deficiencies. The plan proposed the following: an accelerated construction schedule for the remaining Phase 2 and Phase 3 work; the deployment of additional construction crews, sourced through subcontracting arrangements with two regional construction firms; and a nine-month extension to the contractual completion date for Phase 3. In addition, the Corrective Action Plan requested $87 million in additional compensation from NFA, purportedly to cover costs associated with the 14 alleged Owner-caused delays and scope changes.
Mr. Calloway testified that he found the Corrective Action Plan to be "unrealistic" for several reasons. First, the plan did not address the quality defects documented in the 43 critical NCRs; it focused exclusively on schedule recovery and contained no provisions for improving quality assurance practices or remediating existing defective work. Second, the proposed crew additions were insufficient to recover the schedule even with the nine-month extension, based on Mr. Calloway's analysis of the productivity rates achievable with the crew levels proposed. Third, the proposed subcontractors had not been vetted or approved by NFA, and Mr. Calloway had concerns about their qualifications and capacity. Fourth, the $87 million additional compensation request was unsupported by documentation and appeared to be an attempt to renegotiate the contract price under the guise of a cure plan.
Mr. Calloway recommended that Northgate reject the Corrective Action Plan. Northgate did so on March 12, 2024, in a letter citing the plan's failure to address quality defects and the issuance of 12 additional critical NCRs during February 2024 as evidence that Meridian's quality performance was not improving (Calloway Exhibit 8).
E. Notice of Termination for Cause (April 1, 2024)
Northgate delivered its Notice of Termination for Cause under MCA § 14.1 on April 1, 2024, effective immediately (Calloway Exhibit 9). The notice terminated the MCA for Meridian's material breach and invoked NFA's right under MCA § 14.5 to complete the remaining work using one or more substitute contractors, with any excess costs to be charged to Meridian.
Mr. Calloway testified that he was directly involved in the decision-making process leading to the termination and that he believed the termination was fully justified by Meridian's cumulative performance failures over the preceding two-plus years. He stated that his recommendation to terminate was based on the totality of the evidence: the persistent and worsening schedule delays, the 43 critical NCRs (plus the 12 additional critical NCRs issued during the cure period), the inadequate Phase 3 mobilization, and Meridian's failure to submit a viable corrective action plan.
Mr. Calloway confirmed that the procedural requirements of MCA § 14.1 were fully satisfied. Cure Notice No. 1 was sent on January 18, 2024. The 30-day cure period expired on February 17, 2024. Northgate extended the process further by issuing Cure Notice No. 2 on February 19, 2024, and allowing Meridian an additional 15 days to submit a corrective action plan. Even measuring from the issuance of Cure Notice No. 1, more than 73 days elapsed before the termination on April 1, 2024 — well in excess of the 30-day cure period required by the contract. Mr. Calloway emphasized that Northgate exercised patience and gave Meridian multiple opportunities to demonstrate its ability to cure, all of which Meridian failed to take advantage of.
F. Meridian's Response (April 8, 2024)
Mr. Calloway testified that Meridian contested the termination by letter dated April 8, 2024. Meridian's response characterized the termination as pretextual and alleged that it was motivated by Northgate's desire to bring fiber construction in-house or to re-procure the work at lower market prices from another contractor, rather than by genuine concerns about Meridian's performance.
Mr. Calloway denied this allegation categorically. He testified that he had no knowledge of any plan by NFA to bring fiber construction in-house, either before or after the termination decision. He stated that his sole focus throughout the process was on Meridian's failure to perform its contractual obligations and that the termination decision was driven entirely by Meridian's persistent schedule delays, inadequate staffing, and quality failures. Mr. Calloway further testified that no one at NFA — including Renata Voss, Dominic Hale, or any other executive — ever communicated to him that the termination was motivated by anything other than Meridian's material breach.
VI. Testimony Regarding Meridian's Scope Change / Change Order Defense
A. The 14 Alleged Scope Changes
Mr. Deluca devoted a substantial portion of his examination to Meridian's claim that 14 Owner-directed scope changes were not formalized as Change Orders under MCA § 16.1. This line of questioning occupied approximately 90 minutes of the deposition and was the area where Mr. Deluca was most persistent and aggressive in his cross-examination.
Mr. Calloway testified that MCA § 16.1 established a clear and comprehensive Change Order process. Under that provision, all changes to the scope of work, the milestone schedule, or the contract price were required to be documented through written Change Orders signed by authorized representatives of both NFA and Meridian. The Change Order process required the party proposing the change to submit a written Change Order request identifying the proposed change, the reason for the change, the estimated impact on the contract price, and the estimated impact on the milestone schedule. The other party was required to respond within 14 business days, and no change was to be implemented until a written Change Order was fully executed by both parties.
Mr. Calloway acknowledged that, throughout the project, NFA issued various field directives and requests for information ("RFIs") to Meridian, which is standard practice in large-scale infrastructure construction projects. He testified that field directives and RFIs were routine communications used to clarify design details, address field conditions encountered during construction, and provide guidance on questions raised by Meridian's crews. Mr. Calloway disputed, however, that any of these field directives or RFIs constituted scope changes requiring formal Change Orders under MCA § 16.1. He characterized them as clarifications or refinements within the existing contractual scope of work — the type of day-to-day communications that are inherent in the administration of a construction contract of this magnitude and complexity.
Mr. Deluca walked Mr. Calloway through several of the field directives and RFIs marked as Calloway Exhibits 33–35, questioning him about the specific instructions contained in each document and whether those instructions could be interpreted as expanding Meridian's scope of work. Mr. Calloway maintained his position throughout, testifying that none of these documents directed Meridian to perform work outside the scope of the MCA or the Technical Specification NS-FIBER-2020.
B. Calloway's Verbal Field Adjustments
Under further questioning by Mr. Deluca, Mr. Calloway acknowledged that on approximately three to four occasions, he verbally communicated minor field adjustments to Meridian's crew supervisors. Mr. Calloway described these as instances where, during routine field visits, he directed or suggested adjustments to the construction approach in response to conditions encountered in the field — for example, routing the conduit around an unexpected subsurface obstruction or adjusting the placement of a handhole to avoid a conflict with an existing utility.
Mr. Calloway was forthright about these verbal communications but was careful and consistent in characterizing them as de minimis adjustments that fell squarely within the existing scope of work. He testified that none of these adjustments altered the contract price, changed any milestone date, or required Meridian to perform work outside the scope of the MCA. He further stated that these types of minor field adjustments are a routine and expected part of construction management on any project of this scale, and that it would be impractical and contrary to industry practice to formalize each such adjustment through a written Change Order.
Critically, Mr. Calloway testified that Meridian never requested written Change Orders for any of these verbal field adjustments at the time they were made. Nor did Meridian ever submit formal Change Order requests for any of the 14 alleged scope changes that it now claims were directed by NFA. Mr. Calloway stated that Meridian raised the scope change issue for the first time only after receiving Cure Notice No. 1 on January 18, 2024 — in its February 2, 2024 response letter — which was approximately three to four years after the alleged scope changes purportedly occurred.
C. Assessment for Defense
Mr. Calloway's acknowledgment of three to four verbal field adjustments presents a minor vulnerability that plaintiff's counsel will undoubtedly revisit at trial. However, this testimony was handled well by the witness. Mr. Calloway was forthright without being defensive, and he consistently and credibly characterized the adjustments as de minimis and within existing scope. His demeanor during this line of questioning was calm and measured, which will serve him well before a jury or, in this case, before Justice Ricci.
The stronger point for the defense remains Meridian's complete failure to invoke the Change Order process under MCA § 16.1 at any time during the performance of the contract. If Meridian genuinely believed that NFA was directing scope changes that expanded its work and disrupted its schedule, the contractual mechanism for addressing that situation was to submit a written Change Order request — which Meridian never did. Meridian's failure to utilize the contractual Change Order process during performance, coupled with the fact that it raised the scope change issue only after receiving a cure notice, strongly supports the argument that the alleged scope changes are a post-hoc litigation construct developed to justify Meridian's performance failures.
VII. Testimony Regarding Permitting Responsibilities (MCA § 5.3)
Mr. Deluca also questioned Mr. Calloway regarding Meridian's assertion that municipal permits were the Owner's responsibility under MCA § 5.3 and that NFA's delays in obtaining certain permits contributed to Meridian's milestone delays.
Mr. Calloway testified clearly and in detail regarding the allocation of permitting responsibilities under the MCA. He stated that MCA § 5.3 established a two-tier permitting framework. Under that framework, NFA (as Owner) was responsible for obtaining the initial franchise agreements and rights-of-way at the state and county level — i.e., the overarching governmental authorizations that permitted NFA to deploy fiber infrastructure within a given jurisdiction. Meridian (as Contractor) was responsible for obtaining all local municipal construction permits, road opening permits, utility crossing permits, and any other permits or approvals required for the actual performance of the construction work. Mr. Calloway described this allocation as standard in the telecommunications infrastructure industry and consistent with the approach taken on other fiber build-out projects in which he had been involved.
Mr. Calloway stated that NFA timely obtained all franchise agreements and state-level approvals required under the MCA. He testified that NFA's regulatory affairs team, working with external counsel, secured the necessary franchise agreements and rights-of-way in advance of Meridian's construction schedule for each phase.
However, Mr. Calloway acknowledged, under questioning by Mr. Deluca, that there were some delays in approximately four to five municipalities where NFA's franchise approvals took longer than initially anticipated. He testified that these delays were concentrated in smaller municipalities in western Massachusetts and southern Pennsylvania that had less experience with large-scale telecommunications infrastructure projects and, in some cases, required additional time to process NFA's franchise applications.
Mr. Calloway was careful to qualify this acknowledgment. He testified that these franchise approval delays were isolated incidents, that they affected relatively small geographic areas within the overall project scope, and that they did not affect the critical path for any milestone. He stated that in each instance, there was other work available for Meridian's crews to perform in adjacent areas while the franchise approvals were being finalized, and that the franchise delays therefore did not prevent or delay Meridian from maintaining its construction schedule.
Mr. Calloway's testimony on this point is consistent with the defense's overarching position that permitting delays — to the extent they occurred at all — were not Owner-caused breaches, were not on the critical path, and did not excuse Meridian's systemic and pervasive performance failures. This topic will be further analyzed by Dr. Elinor Chazen of Lakeview Consulting Group LLC in her critical path analysis, and we should ensure that Dr. Chazen's analysis specifically addresses and neutralizes the four to five municipal permit delays acknowledged by Mr. Calloway.
VIII. Testimony Regarding Force Majeure
Mr. Deluca briefly explored the impact of the COVID-19 pandemic on the project. This line of questioning was relatively brief compared to the scope change and permitting topics, occupying approximately 20–25 minutes of the deposition.
Mr. Calloway acknowledged that COVID-19 caused some disruption during the initial months of the project. The Notice to Proceed was issued on April 1, 2020, at a time when many states in the project footprint had imposed construction restrictions or slowdowns in response to the pandemic. Mr. Calloway testified that both NFA and Meridian recognized that these restrictions would affect the early Phase 1 schedule, and that the parties informally agreed to adjust the Phase 1 schedule by approximately three months in 2020 to account for pandemic-related shutdowns. This adjustment was communicated verbally and through email correspondence between Renata Voss and Victor Sandoval, but Mr. Calloway acknowledged that no formal force majeure notice was ever issued by Meridian under the MCA's force majeure clause (MCA § 15.1), nor was a formal Change Order executed to document the schedule adjustment.
Mr. Calloway testified that by mid-2021, COVID-related disruptions had largely dissipated and should not have affected Meridian's performance on Phase 2 or Phase 3. He stated that the construction industry in the northeastern United States had returned to near-normal operations by that time, and that other infrastructure contractors working in the same geographic areas were not experiencing the types of systemic delays that Meridian was experiencing. Mr. Calloway noted that while there were some lingering labor market effects — including increased competition for skilled workers — these were market conditions affecting the entire industry, not force majeure events excusing an individual contractor's non-performance.
Regarding Meridian's assertion of supply chain disruptions affecting the procurement of fiber-optic cable, Mr. Calloway testified that NFA actively assisted Meridian by facilitating introductions to alternative cable suppliers when Meridian reported difficulties obtaining cable from its primary supplier. Mr. Calloway stated that fiber cable was available in the market during the relevant period, and that Meridian's procurement difficulties were, in his assessment, a function of poor planning and inadequate procurement lead times rather than genuine supply unavailability. He noted that NFA was simultaneously procuring fiber cable for other projects and was not experiencing comparable supply issues.
The absence of a formal force majeure notice under MCA § 15.1 is a significant point. Mr. Calloway confirmed that the MCA required a party claiming force majeure to provide written notice to the other party within 10 business days of the occurrence of the force majeure event, specifying the nature of the event, its expected duration, and the steps being taken to mitigate its effects. Meridian never submitted such a notice at any time during the project. This failure to comply with the contractual notice requirement undermines Meridian's ability to invoke force majeure as a defense.
IX. Testimony Regarding Replacement Contractor — Crestline Construction Group Inc.
Mr. Calloway testified regarding the process by which NFA identified and retained a replacement contractor following the termination of the MCA. He stated that after the termination on April 1, 2024, NFA conducted an expedited procurement process to identify a qualified contractor capable of completing the remaining Phase 2 work (Milestone 8) and all of the Phase 3 work (Milestones 9–14). The urgency of this procurement was driven by NFA's operational need to complete its fiber network build-out on an aggressive timeline in order to serve contractual commitments to its wholesale customers and to comply with certain regulatory deployment obligations.
Crestline Construction Group Inc. ("Crestline"), a Virginia corporation headquartered in McLean, Virginia, was selected as the replacement contractor. Crestline's CEO is Frank DiBello, and the company has a track record of large-scale fiber and telecommunications infrastructure construction in the mid-Atlantic and southeastern United States. Mr. Calloway testified that he was aware of Crestline's reputation in the industry and considered it a qualified and capable contractor.
A replacement construction contract between NFA and Crestline was executed on June 10, 2024. The contract price was $712 million for the remaining scope, encompassing completion of Milestone 8 (Phase 2) and all of Phase 3 (Milestones 9–14). Mr. Calloway testified that the Crestline contract price reflected then-current market conditions and included a premium associated with the accelerated mobilization timeline that NFA required in order to mitigate the further delay to its fiber deployment caused by Meridian's non-performance. He acknowledged that market prices for fiber construction had increased since 2020, when the MCA was executed, due to increased demand for fiber infrastructure and rising labor costs.
The excess of the Crestline contract price over the remaining unperformed MCA value — $712 million minus $630.3 million, equaling $81.7 million — forms the basis for Northgate's Counterclaim II, which seeks recovery of excess completion costs under MCA § 14.5.
Mr. Calloway clarified that he was not directly involved in the Crestline contract negotiations, which were handled by Renata Voss and NFA's procurement team. However, he was familiar with the Crestline contract pricing because he provided the scope and quantity inputs that formed the basis for Crestline's pricing proposal. He testified that the scope of work defined in the Crestline contract was substantially the same as the remaining unperformed scope under the MCA, adjusted to account for the approximately 340 route miles of Phase 3 work that Meridian had completed (and, where applicable, to account for remediation of defective work left behind by Meridian).
X. Testimony Regarding Payments and Retainage
Mr. Calloway testified in detail regarding the progress payment process and the financial status of the MCA at the time of termination. As Owner's Representative, Mr. Calloway oversaw the monthly progress payment certification process under MCA § 18.1. Under that process, Meridian submitted monthly payment applications detailing the work completed during the preceding month, supported by unit count documentation and, where applicable, milestone completion certifications. Mr. Calloway's team reviewed and verified the payment applications, conducted field inspections to confirm the claimed quantities, and issued payment certifications to NFA's finance department.
Mr. Calloway testified that total payments made to Meridian over the life of the project were $512,700,000, broken down as follows:
In addition to the net payments, NFA held retainage in the amount of $56,966,667. Mr. Calloway testified that the retainage was calculated at 10% of the gross certified work value ($569,666,670 × 10%), in accordance with MCA § 18.1. He stated that the retainage would ordinarily be released upon final completion and acceptance of the work, but that as of the termination date, the retainage remained held by NFA and was available as a credit against Northgate's counterclaims.
Mr. Calloway confirmed that Northgate properly applied all liquidated damages deductions and retainage amounts in accordance with the MCA's payment provisions. He stated that each LD deduction was supported by a formal LD assessment letter identifying the milestone, the number of days of delay, and the calculated LD amount, and that Meridian was notified of each deduction through the monthly payment process.
Regarding the $16.5 million in disputed Phase 3 payment applications, Mr. Calloway reiterated his testimony that his team's field audits revealed significant discrepancies between Meridian's claimed unit quantities and the verified installed quantities. He stated that portions of the claimed work also failed quality acceptance testing and therefore did not qualify for payment under MCA § 18.1, which conditioned payment on the work being performed in conformance with the contract requirements. Mr. Calloway testified that NFA communicated the basis for each payment reduction to Meridian in writing, and that Meridian did not formally dispute the reductions through the MCA's dispute resolution process before the termination.
XI. Exhibits Marked During Deposition
The following exhibits were marked during the deposition of Sean Calloway on November 19, 2024:
All exhibits are being maintained in the matter file and have been cross-referenced against the document production index.
XII. Key Admissions and Favorable Testimony (Summary)
A. Favorable to Defense
The following key admissions and favorable testimony from Mr. Calloway's deposition are highlighted for purposes of trial preparation and dispositive motion practice:
1. Crew Shortages. Mr. Calloway confirmed that Meridian's construction crew levels dropped to approximately 60–65% of the levels specified in Meridian's original mobilization plan by mid-2022, and that these staffing shortfalls persisted through the termination date. This testimony establishes that Meridian's schedule delays were the direct result of its own failure to maintain adequate resources, not external factors.
2. Contemporaneous NCR Documentation. All 287 NCRs, including the 43 classified as critical, were documented contemporaneously as deficiencies were identified during construction. The NCRs are not a post-hoc litigation product; they were created in the ordinary course of contract administration and reflect genuine quality defects with safety and network performance implications.
3. No Change Order Requests by Meridian. Meridian never submitted formal Change Order requests under MCA § 16.1 for any of the 14 alleged scope changes during the performance of the contract. This fact powerfully undercuts Meridian's scope change defense, as it demonstrates that Meridian did not consider these matters to be scope changes at the time, and only raised them after receiving the cure notice.
4. Cure Period Compliance. Cure Notice No. 1 was sent on January 18, 2024, and the termination did not occur until April 1, 2024 — a period of 73 days, well in excess of the 30-day cure period required by MCA § 14.1. Northgate not only satisfied the contractual cure period but extended additional time and process to Meridian through Cure Notice No. 2 and the corrective action plan process.
5. Continuing Deficiencies During Cure Period. Twelve additional critical NCRs were issued in February 2024, during the cure period following Cure Notice No. 1. This testimony is devastating to Meridian's position, as it demonstrates that Meridian's quality performance was not improving — and may have been deteriorating — even after receiving formal notice of material breach.
6. Unrealistic Corrective Action Plan. Mr. Calloway testified that Meridian's Corrective Action Plan was facially unrealistic, failed to address the quality defects documented in the critical NCRs, and proposed crew additions insufficient to recover the schedule even with the requested nine-month extension.
7. No Knowledge of In-House Plans. Mr. Calloway testified unequivocally that he had no knowledge of any plan by NFA to bring fiber construction in-house and that the termination was motivated solely by Meridian's material breach of the MCA. This testimony directly rebuts Meridian's pretext theory.
8. No Formal Force Majeure Notice. Meridian never issued a formal force majeure notice under MCA § 15.1 at any time during the project. This failure to comply with the contractual notice requirement significantly undermines Meridian's force majeure defense.
B. Potentially Unfavorable or Requiring Attention
The following areas of Mr. Calloway's testimony are potentially unfavorable or require further attention during trial preparation:
1. Verbal Field Adjustments. Mr. Calloway acknowledged three to four instances in which he verbally communicated minor field adjustments to Meridian's crew supervisors without formalizing those adjustments as Change Orders. While Mr. Calloway credibly characterized these as de minimis adjustments within existing scope, plaintiff's counsel will attempt to use this testimony to argue that NFA engaged in a broader pattern of informal scope changes. This point was mitigated by Mr. Calloway's testimony that the adjustments did not alter the contract price or milestone schedule, and by the fact that Meridian never requested Change Orders for these adjustments.
2. Municipal Permit Delays. Mr. Calloway acknowledged that NFA's franchise approvals were delayed in approximately four to five municipalities. While he testified that these delays were is

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