PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — ATTORNEY-CLIENT COMMUNICATION
CALDERWOOD & HARKNESS LLP One Liberty Plaza, 55th Floor New York, New York 10006
INTERNAL LITIGATION MEMORANDUM
TO: Douglas Carmichael, Responsible Partner
FROM: Jeffrey Park, Lead Associate; Yuki Nakamura, Working Associate
DATE: March 17, 2026
RE: Preliminary Witness List and Interview Memoranda — Pinnacle Atlantic Reinsurance Recoverable Dispute (Matter No. 1025-00005)
SUBJECT MATTER: Quorum Casualty & Surety Company v. Pinnacle Atlantic Reinsurance Ltd. — Treaty No. PA-QCS-2019-EXL-0044
PRIVILEGE DESIGNATION: This memorandum is prepared in anticipation of litigation and/or arbitration and is protected by the attorney-client privilege and the work product doctrine. It reflects the mental impressions, conclusions, opinions, and legal theories of the attorneys preparing it. This memorandum should not be distributed outside the engagement team without the prior written approval of the Responsible Partner. Any inadvertent disclosure of this memorandum does not constitute a waiver of the applicable privileges.
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I. Purpose and Scope
This memorandum identifies and evaluates the key fact witnesses likely to be relevant in the dispute between our client, Quorum Casualty & Surety Company ("QC&S"), a wholly owned subsidiary of Quorum Insurance Holdings Corp. ("QIH"), and Pinnacle Atlantic Reinsurance Ltd. ("Pinnacle Atlantic"), concerning $78,400,000 in disputed reinsurance recoverables under Treaty No. PA-QCS-2019-EXL-0044 (the "Treaty"). In addition to the principal amount, Pinnacle Atlantic has asserted a supplemental claim for $12,600,000 in interest, bringing the total amount in dispute to approximately $91,000,000. The pre-suit demand was communicated in a letter dated February 14, 2026, sent on behalf of Pinnacle Atlantic by its outside counsel, Hargrove, Fitch & Calloway LLP ("HFC"), under the signature of Nathaniel R. Calloway III, Esq.
For each witness identified in this memorandum, we provide the following analytical framework:
(a) Identity and organizational role;
(b) Subject matter areas to which the witness can speak;
(c) Anticipated favorable testimony — i.e., testimony that supports QC&S's position on the disputed grounds;
(d) Anticipated unfavorable testimony or areas of concern — i.e., testimony or lines of examination that could be exploited by opposing counsel to QC&S's detriment;
(e) Key document connections — i.e., the principal documents associated with the witness that must be collected, reviewed, and analyzed in connection with the witness's interview or deposition; and
(f) Priority designation for interview or deposition, including recommended scheduling.
The HFC demand letter identifies four grounds for Pinnacle Atlantic's claim, which we have designated as Issues 1 through 4 for internal tracking purposes throughout this proceeding:
Issue 1 — Late Notice (Article 7): Pinnacle Atlantic alleges that QC&S failed to provide timely notice of the Meridian Docks mass tort claim cluster (31 commercial general liability claims arising under Policy No. CGL-2020-09844), in violation of Article 7 of the Treaty. QC&S first reserved these claims on or about March 15, 2021. Reinsurance notice was transmitted to Pinnacle Atlantic via Broadreach Intermediaries Inc. ("Broadreach") on May 22, 2022 — a gap of approximately 14 months and 7 days. Pinnacle Atlantic contends that this delay constitutes a material breach of the Treaty's notice provisions and, if sufficient prejudice is established, excuses its obligation to indemnify under the Treaty for losses arising from these claims.
Issue 2 — IBNR Reserve Misallocation (Article 5): Pinnacle Atlantic disputes $22.3 million in incurred but not reported ("IBNR") reserves that QC&S allocated to accident-year 2022 — and, accordingly, to Treaty Year 2022 (July 1, 2022 – June 30, 2023) — under Article 5 of the Treaty. Pinnacle Atlantic contends that the IBNR development relates to accident-year 2021 exposures and should have been allocated to Treaty Year 2021 (July 1, 2021 – June 30, 2022), which would reduce TY 2022 ceded losses from $69.7 million to approximately $47.4 million.
Issue 3 — Follow-the-Fortunes / Settlement Challenge (Article 11): Pinnacle Atlantic challenges the Veridian Financial Services E&O claim cluster settlement of $34.5 million (executed September 8, 2023) under Article 11 of the Treaty (the follow-the-fortunes clause). The settlement comprised three professional liability claims under Policy No. PL-2021-15327 (Claim A: $14.2M; Claim B: $12.8M; Claim C: $7.5M). QC&S's net retained loss after other reinsurance recoveries was $26.1 million. Pinnacle Atlantic alleges the settlement was reached "without meaningful litigation exposure analysis" and at "inflated amounts" not reflective of a good-faith, businesslike assessment of liability exposure.
Issue 4 — Ceded Earned Premium Underreporting (Article 3): Pinnacle Atlantic contends that QC&S underreported ceded earned premium for TY 2022 by $6.8 million — QC&S reported $38.4 million, while Pinnacle Atlantic calculates $45.2 million. The discrepancy centers on the proper treatment of certain run-off portfolio transfer premiums under Article 3.4 of the Treaty. QC&S's position is that Article 3.4 expressly excludes such premiums from the ceded earned premium calculation.
The Treaty years at issue in this dispute are TY 2022 (July 1, 2022 – June 30, 2023) and TY 2023 (July 1, 2023 – June 30, 2024). The Treaty provides for a per-treaty-year retention of $120 million and a cession limit of $200 million (covering losses in the $120 million to $320 million band), with a sliding-scale premium adjustment mechanism (provisional rate of 42%; minimum 35%; maximum 52%).
The witnesses identified in this memorandum are categorized as follows:
(A) QC&S / QIH Fact Witnesses (Friendly): Current employees or officers of QC&S or QIH who are aligned with our client's interests, over whom we can exercise reasonable scheduling control, and who may be prepared for testimony in the ordinary course.
(B) Third-Party Fact Witnesses (Neutral / Potentially Cooperative): Non-parties to the dispute who possess relevant factual knowledge. While not formally aligned with either party, some may be inclined toward cooperation with QC&S based on existing business relationships.
(C) Adverse Party Fact Witnesses (Hostile): Current employees or officers of Pinnacle Atlantic who are aligned with the opposing party's interests and whose testimony will be obtained, if at all, through formal discovery processes (deposition upon notice or subpoena).
This memorandum is a preliminary assessment. It will be updated and supplemented following the completion of friendly witness interviews, initial document review, and the commencement of formal discovery. The assessments of anticipated testimony set forth below are based on our current understanding of the facts as derived from the Treaty, the HFC demand letter, initial client interviews, and a limited set of documents produced to date.
II. Summary Witness Table
The following table provides a high-level overview of all six witnesses currently designated for formal interview or deposition. Additional potential witnesses who have not yet been prioritized for formal interview are discussed in Section IV below.
Several observations are warranted regarding this preliminary witness list. First, all six witnesses have been designated as either High or Medium priority. There are no Low-priority witnesses at this stage; the dispute involves a relatively concentrated set of decision-makers on both sides, and each witness plays a significant role with respect to at least one of the four disputed grounds. Second, the estimated deposition lengths are preliminary and may be adjusted based on the scope of document production and the complexity of the issues that emerge during discovery. Third, the "Primary Issues Addressed" column reflects the issues on which each witness is expected to offer the most significant testimony, but does not preclude examination on other topics.
III. Detailed Witness Memoranda
A. Friendly Witnesses (QC&S / QIH)
1. Tobias Engström — SVP, Reinsurance & Capital Markets, Quorum Insurance Holdings Corp.
a. Identity and Background. Tobias Engström currently holds the position of Senior Vice President, Reinsurance & Capital Markets, at Quorum Insurance Holdings Corp., headquartered at 200 Constitution Plaza, Suite 3400, Hartford, Connecticut 06103. In this capacity, Mr. Engström oversees QIH's entire reinsurance purchasing program, capital markets strategy, and treaty negotiations for all QIH subsidiaries, including QC&S. He reports directly to the Chief Financial Officer of QIH and is a member of the QIH Capital Management Committee.
Mr. Engström served as the principal QC&S negotiator for Treaty No. PA-QCS-2019-EXL-0044 at inception on July 1, 2019, and was directly responsible for negotiating the terms of the two subsequent one-year extensions that extended the Treaty through its current expiration date of June 30, 2026. In this negotiating role, Mr. Engström worked directly with James "Jamie" Castellano, Account Executive at Broadreach Intermediaries Inc., on the treaty placement and all subsequent administrative matters related to the Treaty. Mr. Engström also interacted with Pinnacle Atlantic personnel, including Conrad Hesse, during the treaty negotiation and extension processes.
Mr. Engström has been employed by QIH in various reinsurance-related capacities for approximately twelve years, having joined the organization in 2014 as a Vice President in the Reinsurance Department. He was promoted to his current role in 2018, approximately one year before the Treaty's inception. Based on our preliminary discussions with the client, Mr. Engström has the deepest institutional knowledge of any QC&S/QIH employee regarding the Treaty's negotiation history, commercial purpose, and the parties' intended interpretation of its key provisions.
b. Subject Matter Areas. Mr. Engström is expected to provide testimony on the following principal subject matter areas:
Treaty Negotiation History and Contractual Intent. Mr. Engström can testify to the negotiation history and the parties' intent behind the key treaty provisions at issue in this dispute, including Article 3 (premium reporting and the sliding-scale premium adjustment mechanism), Article 5 (definition of "losses incurred" and the IBNR allocation framework), Article 7 (notice requirements and reporting thresholds), Article 11 (follow-the-fortunes/follow-the-settlements), and Article 22 (the arbitration clause, requiring resolution of disputes through arbitration administered under ARIAS-U.S. Rules). His testimony on the negotiation history of these provisions is particularly important given the contractual interpretation disputes at the heart of Issues 2 and 4.
Article 3.4 and the Premium Underreporting Dispute (Issue 4). Mr. Engström is the best-positioned witness to testify regarding the Article 3.4 exclusion for run-off portfolio transfer premiums. He can explain the commercial rationale for the exclusion, the specific negotiations that led to its inclusion in the Treaty, and why the exclusion properly supports QC&S's reported ceded earned premium of $38.4 million for TY 2022, as opposed to the $45.2 million figure calculated by Pinnacle Atlantic. This testimony is central to the $6.8 million premium discrepancy identified in Issue 4.
Ceded Earned Premium Reporting Process. More broadly, Mr. Engström can describe the ceded earned premium reporting process under the Treaty, including the sliding-scale premium adjustment mechanism (provisional rate of 42%; minimum 35%; maximum 52%), the frequency and method of reporting, and the interactions between QC&S, Broadreach, and Pinnacle Atlantic in the premium reporting chain.
Course of Dealing. Mr. Engström can testify regarding the course of dealing between QC&S and Pinnacle Atlantic over the entire treaty term, including the fact that prior treaty year billings were submitted, processed, and paid without dispute. This testimony is relevant to QC&S's waiver and estoppel defenses.
Arbitration Clause (Article 22). Mr. Engström's testimony on the negotiation of Article 22 is critical to QC&S's position that the arbitration clause constitutes a broad, mandatory arbitration provision covering all disputes "arising under or relating to" the Treaty. HFC has asserted that the arbitration clause is inapplicable to the specific claims Pinnacle Atlantic has raised, a position that is inconsistent with the plain language of the clause and, as Mr. Engström can testify, inconsistent with the parties' negotiating history and mutual understanding.
Treaty Extension and Non-Renewal. Mr. Engström can describe the treaty extension process, including the automatic annual extension mechanism in the Treaty, and the circumstances surrounding Pinnacle Atlantic's October 1, 2025 non-renewal notice. The timing of the non-renewal, which preceded the reservation of rights letter by approximately two months, may be relevant to understanding the evolution of the dispute.
c. Anticipated Favorable Testimony. Mr. Engström is expected to provide testimony favorable to QC&S on several key points:
First, Mr. Engström can testify that Article 3.4 was specifically and deliberately negotiated to exclude run-off portfolio transfer premiums from the ceded earned premium calculation. Based on our preliminary understanding, the exclusion was proposed by QC&S during the 2019 placement negotiations, and Pinnacle Atlantic accepted the provision as part of the final Treaty terms. If Mr. Engström can identify specific correspondence, negotiation drafts, or meeting notes reflecting this negotiation, this testimony will be particularly powerful in undermining Pinnacle Atlantic's claim of a $6.8 million premium underreporting. The fact that the exclusion was the product of arm's-length negotiation, rather than a unilateral QC&S interpretation, supports QC&S's reported ceded earned premium of $38.4 million for TY 2022.
Second, Mr. Engström can testify that Article 22 of the Treaty was intended to be a broad mandatory arbitration provision covering all disputes arising under or relating to the Treaty. This testimony directly rebuts HFC's position that the arbitration clause does not apply to the specific claims Pinnacle Atlantic has raised. If the arbitration clause is determined to be applicable and enforceable, it will significantly affect the forum and procedural posture of the dispute, and may afford QC&S certain strategic advantages in the selection of an arbitration panel with reinsurance industry expertise.
Third, Mr. Engström can describe the course of dealing in which Pinnacle Atlantic received and paid, without objection, all seven billing installments (October 15, 2022 through March 29, 2024) totaling $78.4 million. This testimony is essential to QC&S's waiver and estoppel defenses. If Mr. Engström can further testify that Pinnacle Atlantic had the same information available to it at the time of each payment as it now relies upon to dispute the billings, the waiver argument is significantly strengthened.
Fourth, Mr. Engström can explain the commercial rationale for the Treaty's structural terms — specifically, the $120 million per-treaty-year retention and the $200 million cession limit ($120 million to $320 million band) — and how the treaty structure was understood by both parties at inception and throughout the treaty term. This contextual testimony will assist the arbitrators or court in understanding the reinsurance relationship and the parties' respective risk-sharing expectations.
d. Anticipated Unfavorable Testimony / Areas of Concern. Several areas of concern must be addressed in preparing Mr. Engström for testimony:
As the senior reinsurance executive with oversight of the premium reporting process, Mr. Engström may be questioned about his personal knowledge of and supervision over the premium calculation methodology applied for TY 2022. Opposing counsel is likely to probe whether Mr. Engström was aware of the Article 3.4 exclusion issue in real time or only became aware of the discrepancy after Pinnacle Atlantic raised it. We need to confirm that Mr. Engström can demonstrate that adequate controls and documentation existed to support the Article 3.4 exclusion and that the exclusion was applied consistently across treaty years.
If internal QC&S or QIH communications exist that reflect any uncertainty or internal debate about the proper premium calculation — for example, emails between the accounting department and the reinsurance team questioning whether certain premiums should be included or excluded — opposing counsel, particularly Nathaniel R. Calloway III at HFC, may press on whether QC&S knew of the discrepancy earlier than it has acknowledged. Any such communications should be identified and reviewed before Mr. Engström's interview.
Mr. Engström's role in the treaty extension negotiations may also present risks. If extension correspondence includes discussions of the Treaty's loss performance, cession levels, or premium adequacy, such communications could be characterized by Pinnacle Atlantic as admissions or acknowledgments by QC&S of developing issues with the Treaty. For example, if Mr. Engström made any representations to Pinnacle Atlantic about loss experience or cession projections during extension negotiations that are inconsistent with the actual cession levels now in dispute, this could be exploited.
e. Key Document Connections. The following documents are associated with Mr. Engström and must be collected and reviewed in connection with his interview:
• Treaty No. PA-QCS-2019-EXL-0044 (fully executed copy, including all amendments, endorsements, and addenda)
• All correspondence between Mr. Engström and Broadreach Intermediaries Inc. (principally Jamie Castellano) during the treaty placement process (2019) and subsequent extensions
• Internal QIH memoranda, presentations, and board materials regarding the reinsurance program, including materials prepared for the QIH Capital Management Committee and QIH Board Audit Committee
• Ceded earned premium workpapers and calculations for TY 2022, including any documentation of the Article 3.4 exclusion methodology
• Extension correspondence and the October 1, 2025 non-renewal notice from Pinnacle Atlantic
• Email communications between Mr. Engström and Pinnacle Atlantic personnel (including Conrad Hesse) regarding treaty administration, billings, and any issues related to the disputed cessions
• Any negotiation drafts, term sheets, or marked-up treaty documents reflecting the evolution of key provisions during the 2019 placement
f. Interview Status and Priority. Priority: HIGH. Mr. Engström should be interviewed first among friendly witnesses. His testimony provides the foundational context for the Treaty relationship, the negotiation history of the disputed provisions, and the course of dealing between the parties.
Scheduling: Interview should be scheduled for the week of March 18, 2026, at the QIH Hartford offices, 200 Constitution Plaza, Suite 3400, Hartford, Connecticut.
Pre-Interview Document Assembly: Before the interview, we must assemble and review the following: the executed Treaty and all amendments; extension documents; ceded earned premium workpapers for TY 2022; the Broadreach placement file correspondence; and any internal QIH memoranda or board materials related to the reinsurance program. A document request was sent to Mr. Engström on March 7, 2026 (per email from Jeffrey Park). We are awaiting production, which is expected by March 15, 2026.
2. Diana Kessler-Hoff — VP, Claims & Reinsurance Recoveries, Quorum Casualty & Surety Company
a. Identity and Background. Diana Kessler-Hoff currently holds the position of Vice President, Claims & Reinsurance Recoveries, at Quorum Casualty & Surety Company (NAIC No. 24891), located at 200 Constitution Plaza, Suite 3200, Hartford, Connecticut 06103. In this role, Ms. Kessler-Hoff is responsible for QC&S's claims handling operations, including the management of reinsurance recovery billings to all treaty reinsurers, including Pinnacle Atlantic. She reports to the Chief Operating Officer of QC&S and has been in her current position since approximately 2019.
Ms. Kessler-Hoff directly supervised the claims handling and reserve-setting processes for both of the claim clusters at issue in this dispute: the Meridian Docks mass tort cluster (31 commercial general liability claims arising under Policy No. CGL-2020-09844) and the Veridian Financial Services E&O cluster (three professional liability claims arising under Policy No. PL-2021-15327). In both instances, Ms. Kessler-Hoff was the senior QC&S claims officer responsible for overseeing the claims adjusters assigned to the files, reviewing and approving reserve recommendations, and authorizing reinsurance notices and billings.
With respect to the Meridian Docks claims, Ms. Kessler-Hoff authorized the transmission of reinsurance notice to Pinnacle Atlantic via Broadreach Intermediaries Inc. on May 22, 2022. With respect to the Veridian Financial Services claims, Ms. Kessler-Hoff was directly involved in the settlement evaluation and authorization process that culminated in the $34.5 million settlement executed on September 8, 2023. Her testimony is therefore directly relevant to two of the four disputed grounds — Issue 1 (late notice) and Issue 3 (follow-the-fortunes/settlement challenge).
b. Subject Matter Areas. Late Notice — Article 7 / Issue 1. Ms. Kessler-Hoff is the critical witness on the notice timing issue. The relevant timeline is as follows: QC&S first reserved the 31 Meridian Docks mass tort claims on approximately March 15, 2021. Reinsurance notice was provided to Pinnacle Atlantic via Broadreach on May 22, 2022 — a gap of 14 months and 7 days. Pinnacle Atlantic contends that this delay constitutes a material breach of the Treaty's notice requirements under Article 7.
QC&S's position, which Ms. Kessler-Hoff must be prepared to articulate and support, is that the individual claims in the Meridian Docks cluster were each reserved at amounts well below the $1 million individual claim reporting threshold specified in Article 7 at the time of initial reserving. It was not until the Q1 2022 reserve strengthening — when individual claim reserves were increased based on updated exposure information regarding the scope of the contamination and the number of affected claimants — that the claims triggered the aggregate notice requirement under Article 7. Ms. Kessler-Hoff must be able to explain QC&S's internal claims reserving workflow, the specific timing and rationale for the reserve increases, and the process by which reinsurance notice decisions are made within the Claims Department.
Follow-the-Fortunes / Veridian Settlement — Article 11 / Issue 3. Ms. Kessler-Hoff is equally critical on the follow-the-fortunes issue. She must testify to the claims evaluation, litigation exposure analysis, settlement negotiation, and internal decision-making process for the Veridian Financial Services E&O cluster settlement. The settlement, totaling $34.5 million, was executed on September 8, 2023, and was allocated across three claims as follows: Claim A ($14.2 million), Claim B ($12.8 million), and Claim C ($7.5 million). QC&S's net retained loss after recoveries from other reinsurance was $26.1 million. Ms. Kessler-Hoff must be able to testify that the settlement was reached in the ordinary course of business, in good faith, and based on a businesslike assessment of QC&S's liability exposure — the standard required to invoke the follow-the-fortunes doctrine and bind the reinsurer to the settlement.
Loss Incurred Amounts. Ms. Kessler-Hoff can also testify to the net incurred losses for the Meridian Docks mass tort cluster, which total $41.2 million across all 31 claims, and can explain how these losses developed over the relevant treaty years.
Reinsurance Recovery Billing Process. Ms. Kessler-Hoff can describe the process by which reinsurance recovery billings were prepared, documented, and transmitted to Pinnacle Atlantic via Broadreach for TY 2022 ($69.7 million ceded) and TY 2023 ($8.7 million ceded). Her testimony on the billing process is relevant to the course of dealing analysis and to confirming that billings were prepared in accordance with the Treaty's requirements.
c. Anticipated Favorable Testimony. Ms. Kessler-Hoff is expected to provide favorable testimony on several important points.
On the late notice issue, Ms. Kessler-Hoff can explain that the Meridian Docks claims were initially reserved at modest individual amounts — each well below the $1 million per-claim notice threshold under Article 7 — because the underlying contamination allegations were at an early stage of development when the claims were first reported in early 2021. At that time, the scope of the alleged environmental contamination had not been fully delineated, the number of affected individuals was not yet determined, and the causal link between the insured's operations and the alleged injuries had not been established with any degree of specificity. Accordingly, the initial reserves reflected appropriate conservatism based on the information available. It was not until the Q1 2022 reserve strengthening — driven by new information regarding the geographic extent of the contamination, updated medical reports, and an increase in the number of individual claimants — that aggregate exposure crossed the threshold warranting notice under Article 7. Ms. Kessler-Hoff can testify that QC&S provided notice to Pinnacle Atlantic promptly once that threshold was triggered, consistent with industry custom and practice and with QC&S's established notice procedures.
On the Veridian settlement, Ms. Kessler-Hoff can testify to the extensive litigation exposure analysis that was conducted before the settlement was executed. This analysis included evaluations by defense counsel in each of the three matters, detailed liability assessments addressing the merits of the underlying E&O claims, damages projections based on expert analysis, and an assessment of the likely range of jury verdicts if the matters proceeded to trial. The $34.5 million settlement reflected a reasonable, informed assessment of trial exposure, taking into account both the probability of adverse liability determinations and the range of probable damages awards. Critically, Ms. Kessler-Hoff can testify that the settlement was not inflated for the purpose of pushing aggregate losses above the TY 2023 retention, as Pinnacle Atlantic has implicitly alleged.
Additionally, Ms. Kessler-Hoff can describe the claims committee review process that QC&S employed for the Veridian settlement authorization. The settlement was reviewed and approved by QC&S's internal Claims Committee, with documented analysis supporting the settlement recommendation. This process was consistent with QC&S's ordinary business practices for settlements of this magnitude and supports the follow-the-fortunes defense by demonstrating that the settlement was the product of a bona fide, arm's-length claims-handling process rather than an effort to maximize reinsurance recoveries.
d. Anticipated Unfavorable Testimony / Areas of Concern. The notice timing issue — the 14-month, 7-day gap between initial reserving and reinsurance notice — is the single most vulnerable factual issue in the QC&S case. Opposing counsel will probe this gap aggressively, and Ms. Kessler-Hoff must be prepared for searching examination. Several specific areas of concern warrant detailed pre-interview analysis.
First, opposing counsel will seek to identify any internal QC&S discussions or documents suggesting that QC&S should have noticed the Meridian Docks claims earlier than it did. This includes claims committee minutes, reserve memoranda, internal emails among claims personnel, and any correspondence with outside defense counsel regarding the Meridian Docks claims during the period from March 2021 to May 2022. If any such documents contain references to the potential for aggregate exposure to escalate, or if any individual claim reserves approached the $1 million threshold before Q1 2022, opposing counsel will exploit those documents to argue that QC&S unreasonably delayed notice.
Second, if claims committee minutes or reserve memoranda for the Meridian Docks cluster show any references to reinsurance implications in connection with the reserve-setting decisions — particularly if the timing of reserve increases coincided with treaty year boundaries in a manner that could be characterized as strategic rather than claims-driven — this is a serious vulnerability. Pinnacle Atlantic may argue that QC&S deliberately timed its reserve increases to allocate losses to a particular treaty year to maximize cessions under the Treaty.
Third, on the Veridian settlement, the robustness of the claims file documentation is essential. Pinnacle Atlantic has alleged that the settlement was reached "without meaningful litigation exposure analysis" and at "inflated amounts." If the claims file lacks a formal settlement evaluation memorandum, a defense counsel recommendation letter, or other contemporaneous documentation supporting the settlement amounts, this gap in documentation could be exploited. We must review the complete claims files before Ms. Kessler-Hoff's interview to assess whether the documentation is sufficient to withstand scrutiny.
Fourth, any communications between Ms. Kessler-Hoff and Mr. Engström that discuss the reinsurance recovery implications of the Veridian settlement timing or amount present a risk. If such communications suggest that the settlement was motivated, even in part, by treaty considerations — for example, by a desire to push aggregate losses above the TY 2023 retention — rather than by a pure claims analysis, opposing counsel will argue that the settlement fails the good-faith, ordinary-course-of-business standard required for follow-the-fortunes protection. All communications between the Claims Department and the Reinsurance Department regarding the Veridian settlement should be reviewed carefully.
e. Key Document Connections. The following documents are associated with Ms. Kessler-Hoff and must be collected and reviewed before her interview:
• QC&S claims file for the Meridian Docks mass tort cluster (Policy No. CGL-2020-09844) — all 31 individual claim files, including initial reserve-setting documentation, reserve increase memoranda (particularly Q1 2022 increases), loss development reports, claims committee minutes, defense counsel reports, and all internal correspondence regarding the claims
• QC&S claims file for the Veridian Financial Services E&O cluster (Policy No. PL-2021-15327) — all three individual claim files (Claims A, B, and C), including settlement evaluation memoranda, defense counsel reports and recommendations, damages analyses, settlement authorization documentation, and claims committee minutes
• Reinsurance notice correspondence transmitted via Broadreach to Pinnacle Atlantic on May 22, 2022 (re: Meridian Docks claims)
• Reinsurance billing transmittals for TY 2022 and TY 2023 (seven installments, covering the period from October 15, 2022 through March 29, 2024)
• Internal QC&S claims handling guidelines, reinsurance notice procedures, and settlement authority protocols
• Any correspondence between Ms. Kessler-Hoff (or the QC&S Claims Department) and Pinnacle Atlantic, Broadreach, or outside counsel regarding the Meridian Docks or Veridian claims
• Any communications between Ms. Kessler-Hoff and Mr. Engström (or other QIH/QC&S reinsurance personnel) regarding the reinsurance recovery implications of the Meridian Docks or Veridian claims
f. Interview Status and Priority. Priority: HIGH. Ms. Kessler-Hoff is the critical witness on two of the four disputed grounds — late notice (Issue 1) and follow-the-fortunes (Issue 3). She should be interviewed during the week of March 18, 2026, concurrently with or immediately following the interview of Mr. Engström.
Scheduling: Interview should be scheduled for the week of March 18, 2026, at the QIH Hartford offices, 200 Constitution Plaza, Suite 3200, Hartford, Connecticut.
Pre-Interview Requirements: It is essential that we obtain and conduct a thorough review of the complete Meridian Docks and Veridian claims files before Ms. Kessler-Hoff's interview. A request for these files was sent to Ms. Kessler-Hoff on March 6, 2026 (per email from Jeffrey Park). As of the date of this memorandum, production is pending and expected by March 14, 2026. If the files are not received by that date, a follow-up request should be made immediately. Without the claims files, we will be unable to adequately prepare for the interview or assess the areas of vulnerability described above.
B. Third-Party Witnesses (Neutral / Potentially Cooperative)
3. James "Jamie" Castellano — Account Executive, Broadreach Intermediaries Inc.
a. Identity and Background. James "Jamie" Castellano is an Account Executive at Broadreach Intermediaries Inc. ("Broadreach"), a New York-licensed reinsurance intermediary with offices at 100 Wall Street, 18th Floor, New York, New York 10005. Broadreach is designated as the intermediary broker under Article 9 of the Treaty and, in that capacity, has served as the conduit for all premium transmittals, claims-settlement billings, and other communications between QC&S and Pinnacle Atlantic throughout the Treaty term. Mr. Castellano was the individual broker assigned to the QC&S account at Broadreach and personally handled the Treaty placement on behalf of QC&S in 2019 and all subsequent administrative matters.
In his role as the designated intermediary, Mr. Castellano holds the original treaty slips and placement records for Treaty No. PA-QCS-2019-EXL-0044 and maintained running files of all transmittals between the cedent (QC&S) and the reinsurer (Pinnacle Atlantic).
Mr. Castellano is not a party to the dispute between QC&S and Pinnacle Atlantic. However, because QC&S is his client, Mr. Castellano may be inclined toward cooperation with QC&S in connection with this proceeding. At the same time, he is a neutral third party, and his testimony could potentially support either side's position depending on the documents in his files and his independent recollection of events. His testimony must therefore be assessed carefully and verified against the documentary record.
b. Subject Matter Areas. Late Notice Transmission — Issue 1. Mr. Castellano is a key witness on the mechanics and timing of the May 22, 2022 reinsurance notice to Pinnacle Atlantic regarding the Meridian Docks mass tort claims. As the intermediary who transmitted the notice, he can testify to precisely what documents were transmitted, when they were received by Pinnacle Atlantic (including any confirmation of receipt), and Pinnacle Atlantic's initial response, if any, to the notice. Equally important, Mr. Castellano can testify as to whether there were any prior communications between QC&S and Broadreach about the Meridian Docks claims before May 22, 2022 — a point that could cut either way.
Premium and Billing Transmittals — Issue 4. Mr. Castellano handled the transmission of all seven billing installments from QC&S to Pinnacle Atlantic between October 15, 2022 and March 29, 2024, totaling $78.4 million. He also transmitted the premium reporting information for TY 2022, including the ceded earned premium calculations. Broadreach's records may corroborate QC&S's reported ceded earned premium figure of $38.4 million, or they may contain calculations or workpapers that reflect a different figure, potentially closer to Pinnacle Atlantic's asserted $45.2 million.
Treaty Placement and Negotiation History. Mr. Castellano's recollection and files regarding the treaty placement process will corroborate (or potentially complicate) Mr. Engström's testimony regarding the negotiation history and intent behind the Treaty's key provisions. As the intermediary broker, Mr. Castellano was present for or involved in many of the substantive negotiations between QC&S and Pinnacle Atlantic.
Course of Dealing. Broadreach's records of Pinnacle Atlantic's receipt and payment of each of the seven billing installments — without objection — are essential to the waiver/estoppel analysis. Mr. Castellano can testify to the communications (or absence of communications) from Pinnacle Atlantic at the time of each payment.
c. Anticipated Favorable Testimony. Mr. Castellano is expected to provide testimony favorable to QC&S on several points. He can corroborate the date and content of the May 22, 2022 notice, confirming that it was transmitted promptly upon receipt from QC&S and in accordance with Broadreach's standard procedures. If Mr. Castellano's files show a clean handoff — i.e., QC&S provided the notice to Broadreach and Broadreach promptly forwarded it to Pinnacle Atlantic — this strengthens the narrative that QC&S acted responsibly once the notice threshold was triggered.
Broadreach's files may also confirm that no earlier notice was required or requested by Pinnacle Atlantic regarding the Meridian Docks claims at any point before May 22, 2022. If Pinnacle Atlantic had no occasion to inquire about the claims during the pre-notice period, this undermines any argument that Pinnacle Atlantic was prejudiced by the timing of notice.
Mr. Castellano can further confirm that Pinnacle Atlantic received and paid all seven billing installments — totaling $78.4 million — without raising any objections at the time of payment or at any point during the payment period. This testimony is crucial for the waiver/estoppel defense and, potentially, for demonstrating that Pinnacle Atlantic's current claims are a retrospective challenge to billings it voluntarily paid.
Finally, Mr. Castellano may possess treaty placement notes, cover notes, or internal file memoranda that corroborate the parties' intent behind Article 3.4 (the run-off portfolio transfer premium exclusion) and Article 22 (the arbitration clause). If Broadreach's files contain placement-stage documentation reflecting Pinnacle Atlantic's agreement to these provisions, this is highly favorable.
d. Anticipated Unfavorable Testimony / Areas of Concern. Several areas of concern must be assessed before and during Mr. Castellano's interview.
First, Broadreach may have internal records — such as emails, call notes, or file memoranda — showing that QC&S discussed the Meridian Docks claims with Mr. Castellano before the Q1 2022 reserve increases. If QC&S brought the claims to Broadreach's attention at any point before May 22, 2022 — even informally or in the context of a general account update — this could undermine QC&S's position that the notice threshold was not triggered until Q1 2022. It would suggest that QC&S was aware of the claims' potential significance earlier than it has represented.
Second, Broadreach's premium accounting records for TY 2022 must be reviewed with great care. If Broadreach's own calculations of the ceded earned premium align more closely with Pinnacle Atlantic's $45.2 million figure than with QC&S's $38.4 million figure — for example, because Broadreach included run-off portfolio transfer premiums in its calculations — this would be significantly damaging to QC&S's position on Issue 4. Broadreach, as the intermediary, maintained its own premium bordereaux, and those records may not have been prepared with the Article 3.4 exclusion in mind.
Third, as the intermediary between the two parties, Mr. Castellano may have had communications with Pinnacle Atlantic (including Conrad Hesse or others at Pinnacle Atlantic's claims or underwriting departments) that we have not yet seen. Such communications could include informal warnings, questions, or concerns about the cession amounts, the premium calculations, or the claims notices. Any such communications could cut against QC&S's course-of-dealing and waiver arguments if they establish that Pinnacle Atlantic raised issues informally before the formal reservation of rights.
Fourth, Mr. Castellano's testimony about industry custom and practice regarding notice timing could be a double-edged sword. If asked whether a 14-month delay in reinsurance notice is common in the industry, his answer may not be favorable to QC&S, depending on his experience and perspective.
e. Key Document Connections.
• Treaty slip and placement records for Treaty No. PA-QCS-2019-EXL-0044
• Cover notes, endorsements, and amendments to the Treaty
• All correspondence between Broadreach and QC&S regarding the Treaty (placement, administration, claims, premium)
• All correspondence between Broadreach and Pinnacle Atlantic regarding the Treaty (claims, premium, billings, inquiries)
• Notice transmittal to Pinnacle Atlantic dated May 22, 2022 (re: Meridian Docks mass tort claims), including any cover letter, enclosures, and transmittal confirmation
• All seven billing transmittals for TY 2022 and TY 2023 (October 15, 2022 through March 29, 2024)
• Premium accounting records and bordereaux prepared by Broadreach for the Treaty
• Reservation of rights letter transmittal (December 12, 2025) — to confirm whether Broadreach handled this transmission and the content as received
• Any Broadreach internal file memoranda, meeting notes, or account reviews relating to the QC&S/Pinnacle Atlantic Treaty
f. Interview Status and Priority. Priority: HIGH. Mr. Castellano must be interviewed early in the process to obtain his perspective and assess the Broadreach files before Pinnacle Atlantic has the opportunity to depose him. As a neutral third party, the first party to interview Mr. Castellano will have a significant informational advantage.
Cooperation Assessment: Because QC&S is Broadreach's client, there is a reasonable expectation that Mr. Castellano and Broadreach will cooperate with QC&S's requests for interviews and document production on a voluntary basis. However, this cooperation should not be taken for granted. We recommend that an initial outreach to Mr. Castellano be made on a collegial, informal basis, with a formal third-party subpoena duces tecum prepared as a backup. A draft subpoena for Broadreach's complete Treaty files is currently in progress.
Broadreach Counsel Coordination: We should inquire whether Broadreach has retained its own counsel in connection with this matter or the anticipated discovery requests. If Broadreach has counsel, we should coordinate with that counsel on the scope and logistics of the interview and document production.
Scheduling: Interview should be scheduled for the week of March 25, 2026, either at Calderwood & Harkness's offices at One Liberty Plaza, New York, or at Broadreach's offices at 100 Wall Street, New York, depending on Mr. Castellano's preference.
4. Dr. Stephen Tanaka, FCAS, MAAA — Principal Actuary, Velthorn Actuarial Advisors LLC
a. Identity and Background. Dr. Stephen Tanaka is a Principal Actuary at Velthorn Actuarial Advisors LLC ("Velthorn"), located at 75 Ashbury Asset Advisors, Suite 1400, Boston, Massachusetts 02109. Dr. Tanaka holds the designation of Fellow of the Casualty Actuarial Society (FCAS) and is a Member of the American Academy of Actuaries (MAAA). He has served as QC&S's consulting actuary for the past several years, and in that capacity performed the loss development analysis and reserve review underlying the disputed cessions for TY 2022 and TY 2023 under the Treaty.
Dr. Tanaka prepared the actuarial certificates supporting the reinsurance billings that QC&S submitted to Pinnacle Atlantic for both treaty years. These certificates are formal professional representations by Dr. Tanaka, issued under his FCAS and MAAA credentials, that the ceded loss amounts reflected in the billings are consistent with actuarially sound estimates of QC&S's incurred losses as allocated to the respective treaty years and accident years.
Dr. Tanaka's testimony is principally relevant to Issue 2 (the $22.3 million IBNR allocation dispute). While Dr. Tanaka is not a party to the dispute and is technically a neutral third party, his longstanding consulting relationship with QC&S makes him potentially cooperative with QC&S's interests. At the same time, his professional obligations as a credentialed actuary require him to provide accurate and objective testimony regarding his methodological choices, and his credibility depends on maintaining a posture of professional independence.
b. Subject Matter Areas. IBNR Allocation — Issue 2. Dr. Tanaka is the central witness on the $22.3 million IBNR reserve dispute. This is the most technically complex of the four issues in the case and turns on an actuarial question: whether the IBNR development that crystallized during TY 2022 reporting relates to accident-year 2022 exposures (QC&S's position) or accident-year 2021 exposures (Pinnacle Atlantic's position).
Dr. Tanaka must be prepared to explain and defend Velthorn's methodology for allocating the IBNR development to accident-year 2022 — and therefore to TY 2022 — under Article 5 of the Treaty. The core analytical question is whether the loss development factors that crystallized during the TY 2022 reporting period reflect new claims emergence and loss development on accident-year 2022 exposures, or whether they represent "tail" development on older, accident-year 2021 claims. This distinction is critical because the Treaty's cession mechanism allocates losses to treaty years based on accident-year designation.
Article 5.2 Application. Dr. Tanaka can explain how the Treaty's definition of "losses incurred" under Article 5.2 interacts with standard actuarial methodology for IBNR estimation. His testimony will connect the actuarial analysis to the contractual framework, helping the arbitrators or court understand why the Velthorn methodology is consistent with the Treaty's allocation provisions.
Quantitative Impact. Dr. Tanaka can quantify the financial stakes of the IBNR allocation dispute with precision. If Pinnacle Atlantic's position prevails and the $22.3 million IBNR is reallocated from TY 2022 to TY 2021:
• TY 2022 gross incurred losses would decrease from $189.7 million to $167.4 million.
• TY 2022 ceded losses would decrease from $69.7 million ($189.7M − $120M retention) to $47.4 million ($167.4M − $120M retention), a reduction of $22.3 million.
• TY 2021 gross incurred losses would increase from $224.6 million to $246.9 million, and TY 2021 ceded losses would correspondingly increase from $104.6 million to $126.9 million. However, TY 2021 is not itself the subject of the current dispute, and Pinnacle Atlantic's argument is specifically directed at reducing TY 2022 cessions.
Actuarial Standards of Practice. Dr. Tanaka can testify regarding the Actuarial Standards of Practice (ASOPs) applicable to IBNR estimation and accident-year allocation in the reinsurance context, including ASOP No. 43 (Unpaid Claim Estimates) and ASOP No. 36 (Statements of Actuarial Opinion Regarding Property/Casualty Loss and Loss Adjustment Expense Reserves). His compliance with these standards is a critical component of the credibility of his analysis.
Technical Methodology. Dr. Tanaka can walk through the loss development triangles, development factor selections, emergence patterns, and other technical elements of his analysis, providing a detailed basis for the TY 2022 allocation.
c. Anticipated Favorable Testimony. Dr. Tanaka can testify that Velthorn's methodology followed all applicable ASOPs and is consistent with standard actuarial practice for allocating IBNR to accident years in aggregate excess-of-loss treaty arrangements. The methodology was not novel or unusual; it applied widely accepted actuarial techniques to the specific facts of QC&S's loss experience.
Dr. Tanaka can explain the technical basis for attributing the $22.3 million IBNR development to accident-year 2022. Specifically, the development factors that crystallized during TY 2022 were driven by new information about accident-year 2022 claims — including newly reported claims, case reserve increases on known 2022 claims, and emergence data that tracked the development patterns characteristic of 2022 accident-year exposures. The loss development triangles and emergence data support the conclusion that the IBNR relates to 2022 accident-year exposures, not to tail development on 2021 claims.
Dr. Tanaka can defend the actuarial certificates he issued as accurate, professionally prepared representations of QC&S's incurred loss position. The certificates were issued in accordance with applicable ASOP requirements and reflect his honest professional judgment.
Finally, Velthorn's independence from QC&S's claims operations provides an additional layer of credibility. Dr. Tanaka was not involved in the claims handling, reserving, or settlement decisions at issue in the dispute; his analysis was based on the data provided by QC&S and his independent application of actuarial methods to that data.
d. Anticipated Unfavorable Testimony / Areas of Concern. Pinnacle Atlantic is highly likely to retain its own actuarial expert to challenge Velthorn's development factor selections and IBNR allocation methodology. This is a battle-of-the-experts scenario, and we need to understand whether there are plausible alternative actuarial methodologies that would support an accident-year 2021 allocation. If such alternatives exist and are within the range of accepted actuarial practice, the dispute becomes a question of which methodology is more appropriate under the specific terms of the Treaty, rather than a question of professional competence.
If Velthorn's workpapers contain any sensitivity analysis, alternative scenarios, or preliminary calculations that produced an accident-year 2021 allocation for some or all of the $22.3 million IBNR — even if those scenarios were ultimately rejected in favor of the selected methodology — opposing counsel will seize on those alternative calculations to undermine the credibility of the selected approach. We must obtain and review the complete workpapers before Dr. Tanaka's interview.
Dr. Tanaka may be pressed on the distinction between "tail" development on older (2021) accident-year claims versus "emergence" of new 2022 accident-year claims. This distinction is at the heart of the actuarial dispute, and Dr. Tanaka must be able to articulate it clearly and consistently. If the development data is ambiguous — as it often is in practice — the credibility of his testimony will depend on the strength of his documentation and the internal consistency of his analysis.
Any communications between Dr. Tanaka and QC&S personnel (including Mr. Engström or Ms. Kessler-Hoff) that suggest QC&S expressed a preference for how the IBNR should be allocated — or communicated the financial implications of different allocation outcomes for the Treaty — could be used by opposing counsel to argue that Dr. Tanaka's analysis was result-driven rather than objectively determined. All communications between Velthorn and QC&S must be reviewed carefully for any such indications.
Finally, the dual-role concern presents a structural vulnerability. Dr. Tanaka is QC&S's consulting actuary — he is retained and paid by QC&S and has a longstanding business relationship with the company. He is not a fully independent third party. Pinnacle Atlantic will argue that his analysis was prepared to maximize cessions under the Treaty, not to provide an objective assessment. This concern has implications for our expert retention strategy: we may need to retain a separate independent actuarial expert for testimony purposes, as discussed in the expert retention strategy memorandum currently in preparation. Dr. Tanaka's analysis would then serve as the factual basis, while the independent expert would provide the opinions.
e. Key Document Connections.
• Velthorn actuarial reports and certificates for TY 2022 and TY 2023 cession calculations
• Loss development triangles (paid and incurred) by accident year, with selected development factors
• IBNR estimation workpapers, including any alternative scenarios, sensitivity analyses, or preliminary calculations
• Correspondence between Velthorn (Dr. Tanaka) and QC&S regarding reserve analysis, IBNR allocation, and Treaty cession calculations
• Applicable Actuarial Standards of Practice (ASOP No. 43 — Unpaid Claim Estimates; ASOP No. 36 — Statements of Actuarial Opinion Regarding Property/Casualty Loss and Loss Adjustment Expense Reserves)
• QC&S Schedule P data and statutory loss reserve filings (Annual Statement submissions to NYDFS)
• Any engagement letters, scope-of-work documents, or fee agreements between Velthorn and QC&S
f. Interview Status and Priority. Priority: HIGH. Dr. Tanaka is the critical witness on the IBNR allocation issue (Issue 2), which represents $22.3 million of the amount in dispute.
Scheduling: Schedule an in-person interview at Velthorn's Boston offices, 75 Ashbury Asset Advisors, Suite 1400, for the week of March 25, 2026.
Pre-Interview Requirements: Before the interview, we must request and obtain the complete set of actuarial workpapers from Velthorn. This request can be made directly to Dr. Tanaka or through Mr. Engström as the QC&S relationship manager. We should also request copies of all correspondence between Velthorn and QC&S regarding the TY 2022 and TY 2023 analyses.
Privilege Assessment: An important threshold issue must be addressed before the interview. Velthorn's engagement was directly with QC&S, not with Calderwood & Harkness. As a result, the attorney-client privilege likely does not extend to Velthorn's communications with QC&S or to Velthorn's workpapers. These materials are likely discoverable by Pinnacle Atlantic in the ordinary course. We should assess the privilege boundaries carefully before the interview and consider whether to re-engage Velthorn through Calderwood & Harkness — i.e., by having Calderwood & Harkness retain Velthorn as a litigation consulting actuary — to create a privileged channel for any litigation-related actuarial analysis going forward. This approach would not retroactively protect the pre-existing workpapers, but it would ensure that any new analysis prepared for litigation purposes is protected as attorney work product.
C. Adverse Party Witnesses (Hostile)
5. Conrad Hesse — SVP, Treaty Disputes & Recoveries, Pinnacle Atlantic Reinsurance Ltd.
a. Identity and Background. Conrad Hesse is the Senior Vice President, Treaty Disputes & Recoveries, at Pinnacle Atlantic Reinsurance Ltd. ("Pinnacle Atlantic"). Pinnacle Atlantic's U.S. office is located at 1285 Avenue of the Americas, 28th Floor, New York, New York 10019. Pinnacle Atlantic's registered office is at Clarendon House, 14 Church Street, Hamilton HM 11, Bermuda. Mr. Hesse operates out of the New York office and is the principal Pinnacle Atlantic executive responsible for the management of treaty disputes and reinsurance recovery matters.
Mr. Hesse is, by all indications, Pinnacle Atlantic's principal decision-maker for the dispute with QC&S. Based on our analysis of the correspondence and the procedural history to date, Mr. Hesse likely directed or approved the substance of both the reservation of rights letter issued to QC&S (dated December 12, 2025) and the pre-suit demand letter (dated February 14, 2026) that was prepared and transmitted by HFC under the signature of Nathaniel R. Calloway III, Esq. While the demand letter is a legal communication drafted by outside counsel, the factual assertions, analytical arguments, and monetary demands contained in the letter almost certainly originated with or were validated by Mr. Hesse and his team at Pinnacle Atlantic.
Additionally, Mr. Hesse may have been involved in the original underwriting and acceptance of the Treaty at its 2019 inception, or in the subsequent treaty administration and extension processes. His role in treaty administration is not yet clear and should be explored during discovery and deposition preparation.
b. Subject Matter Areas. All Four Grounds — Issues 1 through 4. Mr. Hesse is the Pinnacle Atlantic witness with the broadest knowledge of the factual and analytical bases for all four asserted grounds of dispute: late notice (Issue 1), IBNR misallocation (Issue 2), follow-the-fortunes challenge (Issue 3), and ceded earned premium underreporting (Issue 4). He is the most important adverse witness.
Internal Decision-Making. Mr. Hesse can testify to Pinnacle Atlantic's internal analysis and decision-making process that led to the reservation of rights (December 12, 2025) and the pre-suit demand (February 14, 2026). This includes identifying which Pinnacle Atlantic personnel were involved in the analysis, what external advisors (actuarial, legal, or otherwise) were consulted, and the sequence of events from Pinnacle Atlantic's first identification of potential issues through the issuance of the formal demand.
Interest Calculation. Mr. Hesse can be examined on the basis for Pinnacle Atlantic's $12.6 million interest claim, which appears to be calculated at approximately 8% per annum on the $78.4 million principal amount over an average period of approximately 24 months. The basis for the interest rate and the calculation methodology should be probed for errors or inconsistencies.
Internal Investigation. Whether Pinnacle Atlantic conducted any internal investigation, retained its own actuarial experts, or engaged claims consultants to evaluate the disputed cessions is a key discovery area. Mr. Hesse can testify to the scope and findings of any such investigation.
Course of Dealing and Waiver. Perhaps most critically for QC&S's defense, Mr. Hesse must be examined on why Pinnacle Atlantic paid all seven billing installments totaling $78.4 million between October 2022 and March 2024 without raising any objection, and when Pinnacle Atlantic first identified the issues it now raises. The timeline from payment to dispute is central to the waiver/estoppel analysis.
Arbitration Clause. Mr. Hesse can be examined on Pinnacle Atlantic's position regarding the arbitration clause (Article 22) — specifically, the basis for HFC's assertion that the arbitration clause is inapplicable to the specific claims raised. If Mr. Hesse was involved in the Treaty negotiation, his testimony on the scope of the arbitration clause could be highly significant.
Communications with Broadreach. Mr. Hesse may have had communications with Mr. Castellano at Broadreach regarding the billings, cession calculations, or claims notices. Any such communications — formal or informal — must be identified through discovery.
c. Anticipated Favorable Testimony (for QC&S). Our deposition strategy for Mr. Hesse should focus on eliciting admissions and concessions that support QC&S's defenses. Several specific areas of favorable testimony should be targeted:
First, we should elicit admissions that Pinnacle Atlantic received all billing statements and loss reports from QC&S through Broadreach, reviewed them through its normal internal processes, and made payment of all seven installments without raising any objection or reservation. If Mr. Hesse confirms this — as the documentary record is likely to establish — it provides strong support for the waiver/estoppel defense.
Second, we should elicit that Pinnacle Atlantic did not raise the late notice issue regarding the Meridian Docks claims until the reservation of rights letter dated December 12, 2025 — more than three years after the May 22, 2022 notice was transmitted. This extended delay between receivin