PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 425 Park Avenue, 33rd Floor New York, NY 10022
Matter: Meridian Infrastructure Partners LLC v. Northgate Fiber Americas Inc., Supreme Court of the State of New York, New York County, Commercial Division, Index No. 654321/2024, Part 49, Hon. Eleanor M. Ricci
C&H Matter No.: 1022-00005
DEPOSITION SUMMARY — VICTOR SANDOVAL (December 10–11, 2024)
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I. Overview of Deposition
Witness: Victor Sandoval, Managing Member and Chief Executive Officer, Meridian Infrastructure Partners LLC ("Meridian" or "Plaintiff"). Sandoval is the co-founder of Meridian and has served as its chief executive since the company's incorporation in 2011. He is one of the principal fact witnesses for Plaintiff in this action and is expected to be called as a trial witness.
Dates of Examination: December 10–11, 2024 (two full days). The deposition commenced at approximately 9:30 a.m. on each day and concluded at approximately 5:45 p.m. on Day 1 and 6:10 p.m. on Day 2, inclusive of breaks and lunch recesses.
Location: Offices of Calderwood & Harkness LLP, 425 Park Avenue, 33rd Floor, New York, NY 10022.
Examining Attorneys:
• Day 1: Examination principally conducted by Linda Osei (Calderwood & Harkness LLP), with limited follow-up questioning by Jeffrey Park.
• Day 2: Examination principally conducted by Jeffrey Park (Calderwood & Harkness LLP), with supplemental questioning by Linda Osei.
• Defending Attorney: Thomas Deluca of Hargrove, Deluca & Stein LLP defended the deposition on both days. Miriam Vasquez, also of Hargrove, Deluca & Stein LLP, was present both days and appeared to serve as second chair, periodically conferring with Deluca during breaks.
Transcript: The certified transcript consists of approximately 587 pages total (Day 1: pp. 1–312; Day 2: pp. 313–587). The transcript was reported by Katherine Maguire, RPR, of Metro Court Reporters, Inc.
Exhibits Marked: Sandoval Exhibits 1 through 47 were marked during the two-day examination. A comprehensive exhibit list is set forth in Section XIV below.
Videographer: The deposition was videotaped on both days by Metro Court Reporters, Inc. Video files have been preserved and are being stored on the firm's secure litigation support platform.
General Demeanor and Observations: Sandoval was generally composed and deliberate in his responses throughout the two-day examination. He appeared well-prepared, suggesting thorough preparation sessions with Deluca and his litigation team. He frequently paused before answering, particularly on questions touching upon the delay analysis, the Corrective Action Plan, and Ridgepoint Capital Group LP's role in the litigation. His answers tended to be measured and responsive on factual matters relating to contract execution and project history, but became noticeably more evasive when pressed on the specifics of contractual notice requirements and the documentary basis for Meridian's damages claims.
Deluca interposed numerous speaking objections throughout the examination, particularly on topics related to Ridgepoint Capital Group LP communications and Meridian's financial condition. Several contentious exchanges occurred between Linda Osei and Deluca regarding the scope of permissible questioning on litigation funding arrangements. On at least eight occasions, Deluca instructed Sandoval not to answer, invoking common interest privilege and attorney-client privilege. These instructions were noted on the record, and Calderwood & Harkness LLP reserved all rights to move to compel answers on each such question. There was also a notable extended colloquy on the record regarding Deluca's speaking objections, which Linda Osei placed on the record as improperly suggestive under CPLR 3115(b).
II. Background and Qualifications
A. Personal Background
Sandoval confirmed his role as Managing Member and Chief Executive Officer of Meridian Infrastructure Partners LLC, a position he has held continuously since founding the company in 2011. He testified that he holds a 30% equity ownership stake in Meridian, which he has retained since the company's founding, subject to dilution resulting from the Ridgepoint Capital Group LP investment in 2018. Sandoval described his role in the day-to-day management of Meridian as encompassing strategic planning, major client relationship management, capital allocation decisions, and oversight of the company's senior leadership team.
Sandoval's background is in telecommunications construction. He testified that prior to founding Meridian, he held senior operational and business development positions at several other infrastructure firms, including a tenure as Senior Vice President of Operations at Lonestar Telecom Contractors LLC from 2005 to 2010. Before that, he worked for approximately seven years at a regional utility construction company in the Houston metropolitan area.
Sandoval confirmed that Meridian's principal office is located at 1800 Post Oak Boulevard, Suite 1200, Houston, Texas 77056, and that the company also maintains regional offices in Charlotte, North Carolina; Philadelphia, Pennsylvania; and Iselin, New Jersey. The Iselin office was opened specifically to support the Northgate fiber build-out program.
B. Meridian's Corporate Structure and Ownership
Sandoval confirmed that Ridgepoint Capital Group LP ("Ridgepoint"), a private equity fund managed by Ridgepoint Capital Management LLC, acquired a 55% majority equity stake in Meridian in 2018 for approximately $285 million. The transaction closed in the fourth quarter of 2018. Sandoval retained his 30% equity interest. The remaining 15% is held by a senior management equity pool, the beneficiaries of which include Bridget Yeung (COO), Marcus Henley (VP Field Operations, Northeast Division), and several other senior executives.
Sandoval described Ridgepoint's role as that of a "strategic partner" providing growth capital and governance oversight. He testified that Graham Latimer, a Managing Partner at Ridgepoint Capital Management LLC, sits on Meridian's board of directors and participates in quarterly board meetings. Sandoval described the board as comprising five members: Sandoval himself, Bridget Yeung, Latimer, and two additional Ridgepoint designees (identified as James Penmark Strategy Partners and Deepa Rao). Sandoval characterized the board's involvement as focused on strategic decisions, capital expenditure approvals, and financial reporting, rather than day-to-day project management.
With respect to Meridian's financial profile, Sandoval confirmed the following:
• FY2023 Revenue: Approximately $620 million.
• FY2023 EBITDA: Approximately $58.9 million, representing an EBITDA margin of approximately 9.5%.
• Peak Staffing During Northgate Project: Approximately 2,400 employees, including approximately 800 additional field workers and support staff hired specifically for the Northgate program.
These figures were generally consistent with the financial documents produced in discovery, though Sandoval noted that certain of the financial details would be more precisely addressed by Meridian's Chief Financial Officer, Richard Bowen.
C. Role on the Northgate Project
Sandoval described himself as the "executive sponsor" of the Northgate fiber build-out program. He characterized the Northgate contract as Meridian's "anchor" or "marquee" contract and testified that he was personally and directly involved in three principal aspects of the engagement:
1. Negotiation of the Master Construction Agreement ("MCA"): Sandoval testified that he personally led the commercial negotiations with Northgate's leadership team, including Renata Voss (Northgate's Chief Infrastructure Officer) and Sean Calloway (Northgate's Vice President of Network Deployment). He stated that the negotiation process extended from approximately September 2019 through the execution of the MCA in March 2020.
2. Relationship Management: Sandoval served as the primary point of contact for executive-level communications between Meridian and Northgate's senior leadership. He testified that he had regular calls and in-person meetings with Renata Voss on a monthly or bi-monthly basis, and that he was the escalation point for any issues that could not be resolved at the operational level.
3. Escalation-Level Decisions: Sandoval testified that he was involved in decision-making on major project issues that were escalated beyond the authority of the operational team. This included decisions regarding acceleration strategies, resource allocation between project phases, and responses to Northgate's cure notices.
Day-to-day operations on the Northgate project were overseen by Bridget Yeung (COO) and Marcus Henley (VP Field Operations, Northeast Division). Sandoval testified that Yeung was responsible for overall project coordination, subcontractor management, and financial reporting, while Henley managed field crews, quality assurance processes, and day-to-day scheduling on the ground. Sandoval noted that he received weekly status reports from both Yeung and Henley throughout the duration of the project.
III. Execution of the Master Construction Agreement
A. MCA Negotiation and Terms
Sandoval confirmed that the Master Construction Agreement (the "MCA") was executed on March 15, 2020, between Northgate Fiber Americas Inc. ("Northgate" or "Owner") and Meridian Infrastructure Partners LLC ("Meridian" or "Contractor"). The MCA was introduced as Sandoval Exhibit 1 during the deposition. Sandoval confirmed his signature on the agreement and testified that he had authority to bind Meridian to the contract.
The principal terms of the MCA, as confirmed by Sandoval's testimony, are summarized as follows:
Contract Price and Scope: The total contract price was $1.2 billion for the construction of approximately 18,500 route miles of fiber-optic network infrastructure across seven states: New York, New Jersey, Connecticut, Massachusetts, Pennsylvania, Maryland, and Virginia. The scope of work included underground and aerial fiber cable installation, conduit placement, splice enclosure installation, and related civil and outside plant construction.
Pricing Structure: The pricing was structured as a hybrid model consisting of 65% fixed-price milestones (approximately $780 million) and 35% unit-rate work (approximately $420 million). Sandoval testified that this pricing structure was the result of extensive negotiation, with Northgate initially proposing a predominantly unit-rate model and Meridian pressing for a larger fixed-price component to ensure revenue predictability.
Contract Duration: The MCA had a five-year term. The Notice to Proceed ("NTP") was issued on April 1, 2020, and the original completion date for all work under the MCA was March 31, 2025.
Milestones: The MCA defined fourteen (14) milestones under Section 8.2, organized into four project phases corresponding to geographic regions. Milestone completion was tied to specific route-mile counts, acceptance testing criteria, and documentation deliverables.
Liquidated Damages: Sandoval acknowledged his understanding of the liquidated damages provisions set forth in MCA § 9.1. The liquidated damages rate is $175,000 per day per milestone for each day of delay beyond the milestone completion date. The per-milestone cap is 10% of the milestone value for each individual milestone, and the aggregate cap across all milestones is 5% of the total contract price, which equates to $60 million. Sandoval testified that he understood these provisions at the time of contract execution and acknowledged that Meridian's counsel reviewed and commented on them during the negotiation process.
Termination for Cause: Sandoval acknowledged the termination-for-cause provision under MCA § 14.1, which provides that Owner may terminate the contract for cause upon thirty (30) days' written notice specifying the grounds for termination, provided the Contractor fails to cure the specified defaults within the cure period.
Termination for Convenience: Sandoval also acknowledged the termination-for-convenience provision under MCA § 14.3, which provides that Owner may terminate the contract for convenience at any time upon thirty (30) days' written notice, in which event the Contractor is entitled to a termination fee equal to 8% of the unperformed contract value as of the termination date.
B. Significance of the Contract to Meridian
Sandoval described the Northgate contract as the single largest engagement in Meridian's history. He testified that the $1.2 billion contract price exceeded the next-largest contract in Meridian's portfolio by a factor of approximately three. He acknowledged that Ridgepoint Capital Group LP's 2018 investment thesis was "premised in part" on the Northgate contract, characterizing the contract as a "cornerstone" of the growth strategy that underpinned Ridgepoint's decision to invest $285 million in Meridian.
Sandoval further testified that the Northgate contract represented approximately 45–50% of Meridian's projected backlog at the time of execution in March 2020. This level of concentration in a single contract was, by Sandoval's own acknowledgment, atypical for Meridian, but he characterized it as a "calculated bet" on a "transformational" opportunity.
In terms of resource commitment, Sandoval stated that Meridian hired approximately 800 additional field workers specifically for the Northgate program, bringing total Northgate-dedicated staffing to approximately 1,200 personnel at peak. In addition, Meridian invested in new equipment — including directional boring rigs, trenching machines, and specialized splicing vehicles — with a capital expenditure of approximately $38 million dedicated to the Northgate program.
IV. Phase 1 Performance (New York Metro & Northern New Jersey)
Sandoval confirmed that Phase 1 of the Northgate fiber build-out covered the New York metropolitan area and Northern New Jersey, encompassing approximately 3,200 route miles. The milestone value for Phase 1 was $208 million, distributed across Milestones 1 through 4.
Sandoval testified that Phase 1 was substantially completed, with Milestones 1 and 2 achieved on time or within de minimis variance, and Milestone 4 completed within the contractual deadline. However, Sandoval acknowledged that Milestone 3 was completed 47 days late, with an actual completion date of October 14, 2021, as compared to the target completion date of August 28, 2021.
When asked about the reasons for the Milestone 3 delay, Sandoval attributed the delay to "startup challenges" associated with the initial phases of a project of this magnitude, as well as COVID-19-related supply chain disruptions. He described difficulty obtaining fiber-optic cable from suppliers during the pandemic period, citing lead times that had extended from the typical 8–10 weeks to as much as 20–24 weeks. He also referenced labor constraints in the New York metropolitan area during the pandemic recovery period.
Sandoval acknowledged that Northgate assessed $8,225,000 in liquidated damages for the Milestone 3 delay. The assessment was communicated to Meridian via a letter from Northgate dated November 5, 2021, which was introduced as Sandoval Exhibit 7. The calculation reflected 47 days of delay at the contractual rate of $175,000 per day.
When asked whether Meridian formally disputed the Milestone 3 liquidated damages assessment at the time, Sandoval testified that Meridian did not file a formal written objection. He characterized the decision not to dispute as a pragmatic one, stating: "We viewed it as a cost of doing business given the pandemic conditions. We wanted to maintain the relationship and move forward." Sandoval confirmed that the liquidated damages were deducted from Meridian's subsequent payment application, resulting in net Phase 1 payments of $199,775,000 (i.e., $208,000,000 minus $8,225,000).
This testimony is notable because it establishes that Meridian had prior experience with the liquidated damages mechanism under the MCA and acquiesced in its application during Phase 1, which may be relevant to the credibility of Meridian's current position that the Phase 2 liquidated damages assessments were improper.
V. Phase 2 Performance (Connecticut, Western Massachusetts, Southern Pennsylvania)
A. Milestone Delays
Phase 2 of the Northgate fiber build-out covered Connecticut, western Massachusetts, and southern Pennsylvania, encompassing approximately 5,600 route miles. The total milestone value for Phase 2 was $363 million, distributed across Milestones 5 through 8.
Sandoval acknowledged the following delays with respect to the Phase 2 milestones:
These delays reflect a clear pattern of worsening schedule performance across Phase 2. When asked directly whether Meridian's Phase 2 delay trend was "accelerating," Sandoval conceded:
"The numbers speak for themselves. Each milestone was later than the one before." (Day 1, p. 198)
This concession is significant. It constitutes an admission by Meridian's CEO that the delay pattern was worsening over time, which directly supports Northgate's position that the schedule deterioration constituted a material breach of the MCA justifying termination for cause. Sandoval's counsel did not object to this testimony or seek to qualify it on the record.
Notwithstanding this concession, Sandoval consistently attributed the Phase 2 delays to Owner-caused factors, including alleged permitting delays, constructive change orders, and force majeure conditions. These defenses are discussed in detail in Section VI below.
B. Quality Issues and Non-Conformance Reports
Sandoval was confronted extensively with the quality record during Phase 2. Northgate's quality assurance program generated 287 Non-Conformance Reports ("NCRs") during the Phase 2 period, of which 43 were classified as "critical" under Northgate's quality management system. The critical NCR classification denotes conditions that require immediate remediation and may affect network reliability, safety, or regulatory compliance.
Sandoval acknowledged awareness of the overall NCR volume but disputed the severity classifications applied by Northgate's quality assurance team. He characterized the critical NCRs — which included splice loss readings exceeding the technical specifications set forth in the NS-FIBER-2020 Technical Specification, improper conduit depth (i.e., placement below the minimum depth required by the specification), and unauthorized route deviations — as "isolated incidents" that were "blown out of proportion by Northgate's QA team."
Key Admission: Sandoval acknowledged that he was personally briefed on the 43 critical NCRs by Marcus Henley and Bridget Yeung. He further admitted that he received monthly NCR summary reports, which were introduced as Sandoval Exhibits 14 through 19 (selected monthly quality assurance reports covering the Phase 2 period). This testimony is significant because it establishes that Sandoval, as the company's CEO and executive sponsor of the project, had direct and contemporaneous knowledge of the quality deficiencies Northgate identified as grounds for termination.
When pressed on specific critical NCRs involving improper conduit depth — specifically, conduit installations that fell below the minimum burial depth prescribed in the NS-FIBER-2020 Technical Specification — Sandoval stated:
"We had remediation plans in place. These were not systemic failures." (Day 1, p. 247)
However, when further pressed on the status of those remediation plans, Sandoval could not identify how many of the 43 critical NCRs had been fully remediated at the time of termination. He stated he would "need to check with my operations team" — a response he gave on multiple occasions throughout the deposition when confronted with granular operational questions.
This inability to confirm the remediation status of the critical NCRs is significant for the defense. If Meridian cannot demonstrate that the critical NCRs were substantially remediated prior to termination, it will be difficult for Meridian to argue that the quality deficiencies cited in the cure notices did not constitute material breaches of the MCA.
C. Liquidated Damages — Phase 2
Sandoval acknowledged the following liquidated damages assessed by Northgate for Phase 2 milestone delays:
The Milestone 8 liquidated damages were capped at 10% of the milestone value pursuant to MCA § 9.1(b), which limits per-milestone exposure. Without the cap, the 134-day Milestone 8 delay would have generated liquidated damages of $23,450,000.
Combined with the Phase 1 liquidated damages of $8,225,000, the total assessed liquidated damages across Phases 1 and 2 are $49,000,000, which remains below the aggregate cap of $60,000,000 (5% of total contract price) established by MCA § 9.1(c).
Sandoval disputed that the liquidated damages were properly assessed, contending that the underlying delays were excusable under the MCA due to Owner-caused factors. He testified that Meridian reserved all rights to contest the liquidated damages assessments, though he acknowledged that Meridian did not formally dispute the Phase 2 assessments through any specific contractual dispute resolution mechanism prior to the termination.
VI. Meridian's Defenses for Delay — Sandoval's Testimony
A. Permitting Responsibilities (MCA § 5.3)
Sandoval testified at considerable length regarding his contention that Northgate Fiber Americas failed to timely obtain municipal permits from local permitting authorities across multiple jurisdictions in Connecticut, Massachusetts, and Pennsylvania. Sandoval's position was that the MCA allocated responsibility for "major municipal permits" — including municipal rights-of-way permits, street opening permits, and certain environmental approvals — to Northgate as Owner, and that Northgate's delays in obtaining these permits were the primary cause of the Phase 2 schedule slippage.
However, when confronted with the actual text of MCA § 5.3, which distinguishes between Owner-obtained permits (defined as "Major Regulatory Permits" in the MCA, encompassing federal and state-level environmental and regulatory approvals) and Contractor-obtained permits (defined as "Local Construction Permits," encompassing municipal-level permits for construction activities), Sandoval's testimony became markedly less definitive. He stated:
"My understanding was that the major municipal permits were Northgate's obligation. I'll defer to my counsel on the precise contract language." (Day 1, p. 156)
This equivocation is significant. A review of MCA § 5.3 indicates that the contractual allocation of permitting responsibility may not support Sandoval's characterization. The defense should be prepared to argue that the "Local Construction Permits" that Sandoval described as Northgate's responsibility were, in fact, Meridian's responsibility under the plain terms of the MCA.
Equally significant, when pressed on whether Meridian ever issued formal written notice under the MCA that Owner's permitting delays were adversely impacting the project schedule — as required by MCA § 7.4 for excusable delay claims — Sandoval could not identify any specific written notice issued prior to Meridian's February 2, 2024 response to Cure Notice No. 1. This is notable because the Phase 2 delays accumulated over a period of approximately two years (from mid-2022 through early 2024), during which Meridian apparently did not invoke the contractual notice mechanism for excusable delay.
B. Constructive Change Orders
Sandoval identified "approximately 14" instances in which Northgate allegedly directed changes to the scope of work, route alignment, or technical specifications that were not formalized as written Change Orders under MCA § 16.1. Sandoval characterized these as "constructive change orders" — i.e., de facto scope changes imposed by Northgate through informal direction in the field or during project meetings, without the formal Change Order documentation required by the MCA.
When asked why Meridian did not insist on formal written Change Orders at the time the alleged changes were directed, Sandoval testified:
"In a project of this scale, you can't stop work every time there's a field adjustment. We documented them internally and expected to resolve them commercially." (Day 1, p. 221)
Key Admission: Sandoval acknowledged that MCA § 16.1 requires written Change Orders signed by both parties for any change to the scope of work, schedule, or contract price. He conceded that Meridian did not obtain signed Change Orders for any of the 14 alleged scope changes. This concession undermines Meridian's constructive change order defense, because MCA § 16.1 contains an explicit provision stating that "[n]o change in the Work shall be binding upon Owner unless evidenced by a written Change Order signed by Owner and Contractor."
When asked to provide a precise dollar value for the additional cost attributable to each of the 14 alleged constructive change orders, Sandoval was unable to do so. He estimated an aggregate additional cost "in the range of $87 million," which corresponds to the same figure included in Meridian's March 5, 2024 Corrective Action Plan. The inability to break down this figure on a per-change-order basis raises questions about the reliability and documentation of the claim.
C. Force Majeure
Sandoval invoked the continuing aftereffects of the COVID-19 pandemic as a force majeure event excusing Meridian's delays. Specifically, he testified that the labor supply for qualified fiber splicers and directional boring operators remained constrained through 2022 and 2023 due to pandemic-related workforce dislocation, early retirements in the skilled trades, and competition from other large-scale infrastructure projects. He also cited ongoing supply chain disruptions affecting the availability and pricing of fiber-optic cable and conduit materials.
Sandoval acknowledged that the MCA's force majeure clause (MCA § 7.5) requires timely written notice of force majeure events as a condition precedent to claiming excusable delay. When pressed on whether Meridian complied with this notice requirement, Sandoval could not identify any specific force majeure notices sent under the MCA after December 2021. The following exchange is illustrative:
Q (Osei): "Did Meridian send a force majeure notice under the MCA after December 2021?"
A (Sandoval): "I believe we communicated the ongoing impacts in various project meetings."
Q: "I'm asking about a written notice specifically under the force majeure clause."
A: "I'd have to go back and check the records." (Day 1, pp. 270–271)
This testimony is significant because it suggests Meridian may not have preserved its force majeure defense through timely written notice. If Meridian cannot produce written force majeure notices post-2021, the defense can argue that any force majeure claim for the Phase 2 delays (which accrued from mid-2022 onward) was waived under the MCA's notice requirements.
VII. Cure Notices and Termination Sequence
A. Cure Notice No. 1 (January 18, 2024)
Sandoval confirmed receipt of Cure Notice No. 1, dated January 18, 2024, issued by Renata Voss on behalf of Northgate Fiber Americas Inc. The cure notice was introduced as Sandoval Exhibit 11. The cure notice cited the following grounds:
(a) Meridian's failure to achieve Milestone 8 within the contractual deadline;
(b) Inadequate mobilization for Phase 3 work in Maryland and Virginia; and
(c) The accumulation of 43 critical Non-Conformance Reports during Phase 2, reflecting a pattern of quality deficiencies.
Sandoval described his reaction to the cure notice as "surprised by the severity of the tone," noting that while he was aware of Northgate's dissatisfaction with the project schedule, he had not anticipated a formal invocation of the termination-for-cause provisions. However, he acknowledged that he was aware, prior to receiving the cure notice, that Northgate had expressed concern about the quality issues and schedule delays through various project meetings and correspondence during the second half of 2023.
Sandoval confirmed that Meridian responded to Cure Notice No. 1 by letter dated February 2, 2024 (Sandoval Exhibit 12). The response disputed Northgate's characterization of Meridian's performance as constituting a material breach of the MCA and raised the permitting delay, constructive change order, and force majeure defenses discussed in Section VI above. The February 2, 2024 response was the first written communication in which Meridian formally asserted that Northgate's permitting delays had impacted the project schedule.
B. Cure Notice No. 2 (February 19, 2024)
Sandoval confirmed receipt of Cure Notice No. 2, dated February 19, 2024 (Sandoval Exhibit 13). The second cure notice stated that Meridian had failed to cure the defaults identified in Cure Notice No. 1 within the 30-day cure period and demanded that Meridian submit a detailed remediation plan within 15 days addressing the schedule delays, quality deficiencies, and Phase 3 mobilization shortfalls.
Sandoval testified that upon receipt of Cure Notice No. 2, he personally directed the preparation of a Corrective Action Plan, assembling a team that included Bridget Yeung, Marcus Henley, and several other senior Meridian personnel.
C. Corrective Action Plan (March 5, 2024)
Sandoval confirmed that Meridian submitted its Corrective Action Plan (the "CAP") on March 5, 2024 (Sandoval Exhibit 20). The CAP was addressed to Renata Voss and Sean Calloway at Northgate. The CAP proposed the following principal elements:
(a) An accelerated construction schedule utilizing additional field crews to be deployed across the Phase 2 and Phase 3 work areas;
(b) A 9-month extension to the overall contract duration, moving the completion date from March 31, 2025 to December 31, 2025; and
(c) Additional compensation of $87 million for alleged Owner-caused delays and constructive scope changes, to be resolved through the MCA's change order and claims provisions.
Key Testimony Regarding the $87 Million Claim: When asked about the documentary basis for the $87 million figure, Sandoval described it as Meridian's "good faith estimate" of the additional costs incurred as a result of Owner-caused delays and scope changes. However, when asked whether supporting documentation was attached to the Corrective Action Plan, Sandoval's answer was equivocal:
"We had internal tracking spreadsheets. I don't recall whether we attached them to the Corrective Action Plan." (Day 2, p. 342)
This testimony is significant because, upon review of the Corrective Action Plan as produced in discovery (Exhibit 20), no cost backup or tracking spreadsheets are appended to the document. If Meridian cannot produce contemporaneous documentation supporting the $87 million figure, the reliability of this damages component will be substantially weakened.
Sandoval acknowledged that Northgate rejected the Corrective Action Plan by letter dated March 12, 2024 (Sandoval Exhibit 21). The rejection letter characterized the CAP as "inadequate" and cited, among other things, the issuance of 12 additional critical NCRs during February 2024 — suggesting that quality deficiencies were continuing even during the cure period.
Sandoval expressed frustration with the rejection:
"We put forward a real plan. Northgate didn't even engage with it." (Day 2, p. 351)
D. Termination (April 1, 2024)
Sandoval confirmed receipt of the Notice of Termination for Cause dated April 1, 2024, issued by Northgate pursuant to MCA § 14.1 (Sandoval Exhibit 22). Sandoval testified that the termination came as a "shock," notwithstanding the preceding sequence of two cure notices and the rejection of the Corrective Action Plan. He contended that Meridian was actively working to address the issues identified in the cure notices and that the termination was premature.
Sandoval asserted that Northgate's true motivation for the termination was not Meridian's alleged material breach, but rather a desire to "bring the fiber build in-house or re-procure at lower cost." This assertion forms the core of what the defense team has characterized as Meridian's "pretext theory."
Pretext Theory: Sandoval testified that in late 2023 and early 2024, he became aware that construction pricing in the fiber-optic infrastructure market had declined significantly from the pricing levels prevailing at the time the MCA was executed in March 2020. He attributed this decline to a combination of increased competition in the market, moderation in material costs, and a broader softening in infrastructure spending. Sandoval testified that he believed Northgate was "shopping for cheaper alternatives" and used the cure notice process as a mechanism to terminate the MCA and replace Meridian with a lower-cost contractor.
When asked for specific evidence supporting this theory, Sandoval referenced "conversations I had with industry contacts" and pointed to "the speed with which Northgate replaced us with Crestline Construction Group." Sandoval noted that the replacement contract between Northgate and Crestline Construction Group LLC was executed on June 10, 2024 — only approximately 10 weeks after the termination of Meridian's contract — which he characterized as an unusually short procurement timeline for a project of this complexity.
Key Admission on Pretext: When pressed, however, Sandoval acknowledged that he has no direct documentary evidence — no emails, no internal Northgate memoranda, no witness statements — proving that Northgate made the termination decision based on market pricing considerations rather than genuine performance concerns:
"I can't point to a specific document, but the circumstantial evidence speaks for itself." (Day 2, p. 389)
This admission substantially limits the evidentiary basis for Meridian's pretext theory. While circumstantial evidence may be relevant, the absence of any direct documentary support weakens this theory and may render it insufficient to survive a summary judgment challenge.
E. Post-Termination
Sandoval confirmed the following post-termination events:
• Contestation Letter (April 8, 2024): Meridian contested the termination by letter dated April 8, 2024 (Sandoval Exhibit 23), asserting that the termination was wrongful and that Meridian reserved all rights and remedies under the MCA and applicable law.
• Performance Bond Demand (April 15, 2024): Meridian filed a demand on the performance bond issued by Ironclad Surety Group Inc. (Bond No. ISG-2020-NE-04417) in the amount of $120 million (Sandoval Exhibit 24). Sandoval testified that the demand was based on a "subcontractor protection endorsement" in the bond. He acknowledged, however, that both Northgate and Ironclad dispute Meridian's standing to assert a claim under the performance bond, contending that the bond was issued for the benefit of the Owner (Northgate) rather than the Contractor (Meridian).
This aspect of the dispute raises significant legal issues regarding the standing of a terminated contractor to make a claim against a performance bond. The defense team should monitor the progress of the bond dispute, which may be addressed in separate proceedings.
VIII. Work Completed and Financial Status at Termination
Sandoval provided the following summary of the project status and financial position at the time of termination on April 1, 2024:
Work Completed:
Financial Status:
Sandoval testified that the $16.5 million in disputed Phase 3 invoices represented legitimate work properly performed and documented in the Maryland portion of the Phase 3 scope. He objected to Northgate's characterization that the invoices reflected "defective work and inflated unit counts," describing this characterization as "pretextual" and "part of the buildup to termination." The disputed invoices were discussed in connection with Sandoval Exhibits 36 through 40.
With respect to Phase 3 progress, Sandoval acknowledged that only approximately 340 of 9,700 route miles had been constructed at the time of termination, representing approximately 3.5% completion of the Phase 3 scope. He attributed the minimal Phase 3 progress to two principal factors: (1) the permitting delays in Maryland and Virginia that he contended were Owner-caused (consistent with his testimony discussed in Section VI.A above); and (2) the "chilling effect" of the cure notice sequence on Meridian's ability to mobilize additional crews and subcontractors for Phase 3 work. Sandoval testified that subcontractors were reluctant to commit resources to Phase 3 given the uncertainty surrounding the cure notices and the possibility of termination.
IX. Ridgepoint Capital Group LP — Litigation Funding and Involvement
A. Ridgepoint's Role Generally
Sandoval confirmed that Ridgepoint Capital Group LP holds a 55% majority equity interest in Meridian and that Graham Latimer, a Managing Partner at Ridgepoint Capital Management LLC, sits on Meridian's five-member board of directors. Sandoval described Ridgepoint as "supportive" of Meridian's decision to pursue litigation against Northgate and confirmed that Ridgepoint is involved at the "board level" in decisions regarding the litigation. However, Sandoval was careful to characterize Ridgepoint's involvement as limited to governance oversight, stating that Ridgepoint is not involved in "day-to-day litigation decisions," which he described as the province of Meridian's management team and outside counsel.
B. Litigation Funding
This was a heavily contested area of the examination. Thomas Deluca interposed frequent objections on grounds of privilege, relevance, and the common interest doctrine. The exchanges between Deluca and Linda Osei on this topic were among the most contentious of the two-day deposition.
Notwithstanding the objections, Sandoval acknowledged that Ridgepoint Capital Group has funded Meridian's litigation costs in the Northgate dispute. When asked to quantify Ridgepoint's financial commitment to the litigation, Sandoval initially stated he was "not sure of the exact number." After further questioning and confrontation with Meridian's own discovery responses (which identified a litigation budget figure), Sandoval acknowledged a litigation budget "in the range of $10 to $15 million." This testimony is broadly consistent with the approximately $12 million figure identified in discovery materials produced by Meridian.
Sandoval testified that the litigation funding arrangement was structured through Meridian's existing corporate governance framework — specifically, through a board-approved litigation budget rather than a standalone litigation funding agreement or separate financing instrument. This characterization is relevant to the pending privilege dispute, discussed further below.
Deluca instructed Sandoval not to answer questions regarding specific communications between Sandoval and Graham Latimer concerning litigation strategy. Deluca asserted the common interest privilege, contending that communications between Meridian and Ridgepoint regarding the Northgate litigation were protected by the common interest doctrine because Meridian and Ridgepoint share a common legal interest in the outcome of the dispute. Linda Osei preserved her objection to the instruction and noted it on the record, specifically referencing the relevance of these communications to the pending Cross-Motion for Protective Order regarding the 187 Meridian-Ridgepoint documents withheld from production on privilege grounds.
C. Ridgepoint's Investment Thesis
Sandoval confirmed that the Northgate contract was a "significant factor" in Ridgepoint's decision to invest $285 million in Meridian in 2018. He testified that the investment thesis presented to Ridgepoint's investment committee in 2018 specifically highlighted the Northgate contract as a key revenue driver and growth platform for Meridian.
Sandoval further testified that the loss of the Northgate contract has "materially impacted" Meridian's financial position and Ridgepoint's investment value. Specifically, he stated that Meridian's backlog declined from approximately $1.4 billion (including the remaining Northgate contract value) to approximately $770 million following the termination, a reduction of approximately 45%. Sandoval described this as a "devastating blow to our business" and stated that the termination has adversely affected Meridian's ability to secure new contracts, recruit and retain key personnel, and maintain its bonding capacity.
X. Meridian's Damages Claims
Sandoval testified regarding the four counts asserted in Meridian's complaint and the associated damages claims, which total approximately $200 million in the aggregate.
A. Count I — Wrongful Termination ($92,400,000)
Sandoval confirmed that Count I of Meridian's complaint seeks damages in the amount of $92,400,000 for wrongful termination of the MCA. This figure comprises two components:
(a) Termination-for-Convenience Fee: $50,424,000, representing the termination fee Meridian contends it would have been entitled to receive under MCA § 14.3 had the termination been for convenience rather than for cause. This figure is calculated as 8% of the unperformed contract value of $630,300,000 (i.e., $1,200,000,000 total contract price minus $569,700,000 in completed and accepted work value).
(b) Lost Profits: $41,976,000, representing the profits Meridian contends it would have earned on the unperformed scope of work had the MCA not been wrongfully terminated.
When asked how the lost profits figure was calculated, Sandoval deferred to Meridian's damages expert, Dr. Natalie Forster of Westbrook Valuation Services Inc., but described the general methodology as applying Meridian's "historical margin on this type of work" to the unperformed scope. Sandoval did not specify what margin percentage was used in the calculation or how it was adjusted for the specific cost profile of the Northgate project.
B. Count II — Unpaid Invoices ($16,500,000)
Count II seeks recovery of $16,500,000 in disputed Phase 3 invoices that Northgate has refused to approve and pay. Sandoval testified that these invoices were for work "properly performed and documented" in the Maryland portion of the Phase 3 scope. He described Northgate's refusal to approve the invoices as "pretextual" and "part of the buildup to termination," suggesting that Northgate was deliberately withholding payment as leverage during the cure notice process.
C. Count III — Retainage ($56,966,667)
Count III seeks release of the full retainage balance of $56,966,667 withheld by Northgate from Meridian's progress payments over the course of Phases 1 and 2. Sandoval testified that Meridian is entitled to release of the entire retainage balance on the grounds that the work covered by the retainage was substantially performed and accepted by Northgate for Phases 1 and 2. He contended that Northgate's continued withholding of retainage following the wrongful termination is itself a breach of the MCA.
D. Count IV — Breach of Implied Covenant of Good Faith and Fair Dealing ($34,133,333)
Count IV asserts a claim for breach of the implied covenant of good faith and fair dealing and seeks damages of $34,133,333. Sandoval testified that Northgate's conduct — including the termination, the refusal to pay disputed invoices, and the retention of retainage — damaged Meridian's reputation in the infrastructure construction industry and impaired Meridian's bonding capacity. He described the loss of bonding capacity with Ironclad Surety Group Inc. as a "direct consequence" of the wrongful termination.
Key Admission on Count IV Damages: When asked about the specific basis for the $34,133,333 damages figure, Sandoval acknowledged that this number was derived as a "rounding" component designed to bring Meridian's total damages claim to the $200 million headline figure. He stated that the specific damages attributable to Count IV would be quantified by Dr. Natalie Forster of Westbrook Valuation Services Inc. This admission is noteworthy because it suggests that the Count IV damages figure was reverse-engineered from a desired total rather than independently calculated based on actual harm, which may be relevant to a Daubert-type challenge to Dr. Forster's methodology or to a motion for partial summary judgment on Count IV.
XI. Meridian's Financial Condition and Lender Relationship
Sandoval confirmed that Meridian maintains a $150 million revolving credit facility with Dralvecen Commercial Finance LLC ("Dralvecen"). The credit facility is secured by, among other things, Meridian's accounts receivable, including receivables from the Northgate contract.
Sandoval acknowledged that Dralvecen has asserted lien interests in Meridian's receivables from the Northgate contract, including the retainage balance of $56,966,667 and the disputed Phase 3 invoices of $16.5 million. This lien interest may complicate the distribution of any recovery in the litigation and raises potential priority issues between Meridian, Dralvecen, and other creditors.
Sandoval testified that the termination of the Northgate contract placed "strain" on Meridian's relationship with Dralvecen. He acknowledged that Dralvecen issued a notice of potential default under the credit facility following the contract termination, citing the loss of revenue associated with the Northgate contract as a potential covenant violation. However, Sandoval stated that Meridian has maintained compliance with the credit facility's financial covenants and that no event of default has been declared by Dralvecen.
Sandoval identified Daniel Kwon as Dralvecen's Relationship Manager for the Meridian account and stated that Kwon has been "closely monitoring" the situation, including participating in periodic update calls with Meridian's CFO, Richard Bowen.
This testimony is relevant to Northgate's potential defense that Meridian's financial difficulties are attributable to pre-existing business challenges and portfolio concentration risk, rather than solely to the Northgate termination.
XII. Key Admissions and Favorable Testimony (Summary for Defense Team)
The following is a summary of the most significant admissions and favorable testimony elicited from Sandoval during the two-day deposition, organized for ease of reference by the defense team:
1. Accelerating Delay Pattern: Sandoval conceded that each Phase 2 milestone was progressively later than the preceding one, stating: "The numbers speak for themselves. Each milestone was later than the one before." (Day 1, p. 198). This admission directly supports Northgate's position that Meridian's performance was deteriorating and that the delay pattern constituted a material breach.
2. Personal Awareness of NCRs: Sandoval acknowledged that he was personally briefed on all 43 critical NCRs by Marcus Henley and Bridget Yeung and that he received monthly NCR summary reports (Exhibits 14–19). He could not confirm how many of the 43 critical NCRs had been fully remediated at the time of termination. This testimony establishes executive-level awareness of the quality deficiencies and undercuts any argument that the quality issues were unknown to Meridian's leadership.
3. No Written Change Orders: Sandoval conceded that Meridian did not obtain formal signed Change Orders under MCA § 16.1 for any of the 14 alleged constructive scope changes (Day 1, p. 221). This concession is fatal to Meridian's constructive change order defense unless Meridian can establish waiver or estoppel by Northgate.
4. No Timely Force Majeure Notices: Sandoval could not identify any written force majeure notices submitted under the MCA after December 2021 (Day 1, pp. 270–271). If no such notices exist, Meridian's force majeure defense for the Phase 2 delays (which accrued from mid-2022 onward) may be waived.
5. No Written Permitting Delay Notices: Sandoval could not identify any formal written notice of Owner permitting delays prior to Meridian's February 2, 2024 response to Cure Notice No. 1. The failure to give timely notice may bar Meridian from claiming excusable delay on permitting grounds.
6. No Direct Evidence of Pretext: Sandoval acknowledged that he has no documentary evidence proving Northgate terminated the MCA based on market pricing considerations rather than performance issues, stating: "I can't point to a specific document, but the circumstantial evidence speaks for itself." (Day 2, p. 389). This substantially undermines Meridian's pretext theory.
7. Corrective Action Plan Lacked Documentation: Sandoval could not confirm that the $87 million claim for Owner-caused costs was supported by documentation attached to the Corrective Action Plan (Day 2, p. 342). This raises questions about the reliability of a central element of Meridian's damages claims.
8. Count IV Damages Calculation: Sandoval acknowledged that the $34,133,333 damages figure for Count IV (breach of implied covenant) was a "rounding" component to reach the $200 million headline damages number (Day 2). This admission may support a motion for summary judgment on Count IV or a challenge to the reliability of Meridian's damages model.
9. Ridgepoint Litigation Funding: Sandoval confirmed that Ridgepoint Capital Group LP is funding Meridian's litigation costs, estimating the commitment at $10–15 million, broadly corroborating the approximately $12 million figure identified in discovery. This testimony is relevant to the Court's consideration of the common interest privilege dispute and to any assessment of the real party in interest.
XIII. Areas Requiring Follow-Up
A. Upcoming Depositions
Bridget Yeung (COO) — Scheduled February 4, 2025: Sandoval deferred many operational questions to Yeung during his testimony. The Yeung deposition should cover the following topics in detail:
• Operational details and documentation for each of the 14 alleged constructive scope changes, including the identity of Northgate personnel who allegedly directed the changes, the dates of the alleged changes, and the cost impact of each;
• Subcontractor management and mobilization decisions for Phases 2 and 3;
• The preparation of the Corrective Action Plan, including the basis for the $87 million figure and whether internal tracking spreadsheets or other supporting documentation were assembled; and
• The remediation status of the 43 critical NCRs at the time of termination.
Helena Bright (Northgate CFO) — Scheduled February 18, 2025 (London): Sandoval's testimony about Northgate's alleged market-based motivation for termination should be tested through Bright's testimony regarding the following:
• Northgate Fiber Americas' FY2024 capital expenditure budget ($340 million as disclosed in Northgate's parent company filings);
• The economic terms of the Crestline Construction Group replacement contract and the methodology used to determine the replacement contract price; and
• Any internal Northgate analyses comparing the cost of continuing the Meridian contract versus terminating and re-procuring.
Frank DiBello (Northgate VP Procurement) — Scheduled March 4, 2025: Sandoval's contention that the 10-week timeline between termination and the execution of the Crestline replacement contract suggests pretext should be explored through DiBello's testimony regarding:
• The procurement process for the Crestline replacement contract, including when the procurement process was initiated, how many contractors were solicited, and the evaluation criteria used;
• The Crestline contract price of $712 million and how it compares to the unperformed value of the Meridian MCA; and
• Whether Northgate conducted any contingency procurement planning during the cure notice period.