1005-00005 · Nexford Industrial Holdings · Discovery

nexford-first-rfps-to-cpi.docx DOCUMENT Litigation

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IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS COUNTY DEPARTMENT, LAW DIVISION

DEFENDANT NEXFORD INDUSTRIAL HOLDINGS INC.'S FIRST SET OF REQUESTS FOR PRODUCTION OF DOCUMENTS TO PLAINTIFF CARDINAL PEAK INDUSTRIES

Date Served: December 5, 2022

Propounding Party: Nexford Industrial Holdings Inc. By its attorneys, Calderwood & Harkness LLP 200 South Wacker Drive, Suite 4400 Chicago, Illinois 60606

Responding Party: Cardinal Peak Industries 1580 Ridgeline Boulevard Pueblo, Colorado 81001 Through its counsel, Blackwood Stein & Associates LLP 717 Seventeenth Street, Suite 2200 Denver, Colorado 80202

INTRODUCTORY PARAGRAPH

Defendant Nexford Industrial Holdings Inc. ("Nexford" or "NIH"), by and through its undersigned attorneys, Calderwood & Harkness LLP, and pursuant to Illinois Supreme Court Rules 214 and 201 through 218, hereby requests that Plaintiff Cardinal Peak Industries ("Cardinal Peak," "CPI," or "Plaintiff") produce for inspection and copying the documents and things described in the Requests set forth below. Cardinal Peak shall respond to these Requests within twenty-eight (28) days of service, or within such other time as may be agreed upon by the parties or ordered by the Court. All Documents responsive to these Requests shall be produced at the offices of Calderwood & Harkness LLP, located at 200 South Wacker Drive, Suite 4400, Chicago, Illinois 60606, or at such other location as may be mutually agreed upon by the parties. Documents shall be produced as they are kept in the ordinary course of business, including all file folder labels and other identifying information, or shall be organized and labeled to correspond with the categories set forth in each individual Request below.

DEFINITIONS

As used in these Requests for Production, the following terms shall have the meanings set forth below. These definitions are intended to supplement, and not to limit, any definitions provided by the Illinois Supreme Court Rules, including Rule 201.

A. "Cardinal Peak," "CPI," "Plaintiff," "You," or "Your" means Cardinal Peak Industries, a Colorado limited liability company, together with its predecessors, successors, subsidiaries, affiliates, and divisions, and all of its present and former officers, directors, managers, members, employees, agents, representatives, consultants, and attorneys, whether acting in an individual or representative capacity. Without limiting the generality of the foregoing, these terms include Frank Delacroix (President and Chief Executive Officer), Natalie Gunderson (Vice President, Sales & Commercial), Harold Briggs (Controller), and Patricia Morrow (General Counsel), as well as any other individuals who, at any time during the relevant period, had responsibilities or authority relating to the matters at issue in this action.

B. "Nexford," "NIH," or "Defendant" means Nexford Industrial Holdings Inc., a Delaware corporation with its principal place of business and headquarters located at 4200 West Lakeshore Industrial Parkway, Suite 300, Waukegan, Illinois 60085, together with its officers, directors, employees, agents, and representatives.

C. "MSA" or "Master Supply Agreement" means the Master Supply Agreement between Nexford Industrial Holdings Inc. and Cardinal Peak Industries dated January 15, 2020, bearing reference number MSA-NIH-CPI-2020-001, including all exhibits, schedules, appendices, amendments, addenda, side letters, and modifications thereto. Without limiting the foregoing, the term "MSA" specifically includes Exhibit C (Surcharge Methodology), Exhibit A (Product Specifications), Exhibit B (Pricing Schedule), and any other documents incorporated by reference into the MSA or appended thereto.

D. "Surcharge Notice" means any notice, invoice, statement, calculation, or communication delivered or purportedly delivered by Cardinal Peak to Nexford pursuant to Section 7.4(a) of the MSA relating to raw-material surcharges, including without limitation scrap surcharges, energy surcharges, and alloy surcharges, whether delivered by email, mail, courier, or any other means, and whether in final or draft form.

E. "Disputed Period" means the period from March 2021 through May 2022, inclusive, encompassing the fourteen (14) months during which the surcharge amounts at issue in this litigation were invoiced.

F. "Document" or "Documents" shall be construed in the broadest sense permitted under the Illinois Supreme Court Rules and applicable law, and means all writings, recordings, and tangible things of any kind, in whatever form or medium. Without limiting the generality of the foregoing, the term includes: correspondence, memoranda, notes, emails, text messages, instant messages (including messages sent via platforms such as Meridian Solutions, Northgate Data Systems, or similar applications), letters, reports, analyses, spreadsheets, databases, charts, graphs, summaries, invoices, purchase orders, receipts, contracts, agreements, amendments, financial statements, accounting records, ledgers, journals, worksheets, working papers, drafts, presentations, board minutes, meeting notes and agendas, telephone logs, calendars, diaries, appointment books, and electronically stored information ("ESI") in any format. The term also includes all metadata associated with any electronically stored information. The term "Document" or "Documents" further includes originals, copies (including carbon copies, photocopies, and facsimile copies), and drafts, whether handwritten, typed, printed, recorded, filmed, photographed, or stored electronically on any medium, including hard drives, servers, cloud-based storage systems, backup tapes, removable media, and mobile devices.

G. "Communication" or "Communications" means any oral, written, or electronic exchange of information, ideas, opinions, or data between two or more persons, including without limitation letters, emails, text messages, instant messages, voicemails, telephone calls, video conferences, in-person conversations, and any other means of conveying information, as well as any Document or record memorializing, summarizing, reflecting, or referencing any such exchange.

H. "Relating to" or "Concerning" means referring to, reflecting, evidencing, describing, constituting, pertaining to, connected with, commenting on, responsive to, in respect of, regarding, mentioning, discussing, analyzing, summarizing, or having any logical connection to the subject matter referenced.

I. "Person" means any natural person, corporation, limited liability company, partnership, joint venture, association, trust, governmental entity, agency, department, or any other legal entity or organization, however organized.

J. "Exhibit C" or "Surcharge Methodology" means Exhibit C to the MSA, entitled "Surcharge Methodology," which prescribes the methodology for calculating raw-material surcharges applicable to products sold under the MSA. Specifically, Exhibit C requires the use of the published Ferrous Scrap Index (as reported by Drayton Partners LLC, formerly Steel Pricing Index or "SPI") and the Industrial Energy Cost Index, applied against the agreed baseline scrap cost of $340 per ton and the agreed baseline energy cost of $48 per ton, as the exclusive basis for computing monthly surcharge adjustments.

K. "Base Price" means the base prices for products sold under the MSA as set forth in Section 7.2 of the MSA, specifically $620 per ton for hot-rolled coil ("HRC") and $740 per ton for cold-rolled coil ("CRC"), as applicable, subject to quarterly adjustment in accordance with the terms and conditions set forth in Section 7.2.

L. "Blended Cost Methodology" or "Blended Cost Metric" means any internal methodology, formula, calculation, model, or metric used or applied by Cardinal Peak to compute, derive, or estimate surcharges that differs in any material respect from the Exhibit C Surcharge Methodology, including without limitation any methodology that blends, averages, weights, or otherwise combines raw-material costs, actual purchase costs, spot prices, or any other cost inputs in a manner not prescribed by or consistent with Exhibit C.

INSTRUCTIONS

The following Instructions apply to each Request for Production set forth below and shall be read in conjunction with the Definitions set forth above.

Instruction 1 — Scope of Production. Each Request calls for all responsive Documents in Cardinal Peak's possession, custody, or control, regardless of where such Documents are located. This includes, without limitation, Documents held by or in the possession of CPI's officers, directors, managers, members, employees, agents, consultants, accountants, auditors, and attorneys (to the extent not protected by a valid claim of privilege). Documents within Cardinal Peak's "control" include Documents that Cardinal Peak has the right to obtain, or could obtain, upon demand from any third party with whom it has a legal or practical ability to obtain such Documents.

Instruction 2 — Time Period. Unless otherwise specified in a particular Request, each Request covers the period from January 1, 2020 through the date of production, with particular focus on the Disputed Period of March 2021 through May 2022. To the extent any Request specifies a different time period, the specified time period shall control for that Request.

Instruction 3 — Privilege Log. To the extent that Cardinal Peak withholds or redacts any Document, or any portion of a Document, on the basis of attorney-client privilege, work product protection, or any other privilege, immunity, or protection from disclosure, Cardinal Peak shall provide a privilege log in accordance with Illinois Supreme Court Rule 201(n) and any applicable orders of this Court. The privilege log shall identify each withheld or redacted Document with sufficient detail to permit Nexford and the Court to assess the validity of the claim of privilege, including at a minimum: (a) the date of the Document; (b) the author or sender of the Document; (c) all recipients, including "cc" and "bcc" recipients; (d) a general description of the subject matter of the Document (without disclosing privileged content); and (e) the specific privilege or protection asserted as the basis for withholding or redacting the Document.

Instruction 4 — Continuing Obligation. Cardinal Peak's obligation to produce Documents responsive to these Requests is a continuing obligation pursuant to Illinois Supreme Court Rule 214. If, at any time after the initial production, Cardinal Peak identifies, locates, or comes into possession of additional Documents responsive to any of these Requests, Cardinal Peak shall promptly supplement its production and notify Nexford's counsel of any such supplemental production.

Instruction 5 — Document Organization. Cardinal Peak shall produce Documents as they are kept in the ordinary course of business, including all file folder labels, tabs, and other identifying information reflecting the organizational scheme in which the Documents were maintained. In the alternative, Cardinal Peak may organize and label Documents to correspond with each numbered Request, provided that the organizational scheme is clearly indicated and permits identification of which Documents are responsive to which Request(s).

Instruction 6 — Electronic Documents. All electronically stored information ("ESI") shall be produced in its native format, including all associated metadata (e.g., author, date created, date modified, file name, file path, and custodian information). In the alternative, ESI may be produced in a searchable format, such as searchable PDF (with OCR applied) or single-page TIFF images accompanied by load files (including Concordance or Relativity load files, as applicable) and extracted text files. Spreadsheets, databases, and other structured data files shall be produced in their native format (e.g., .xlsx, .csv, .accdb) so as to preserve formulas, embedded calculations, and cell-level metadata. Email shall be produced in a format that preserves the email's header information, including sender, recipient, date, time, and subject line, as well as any attachments.

REQUESTS FOR PRODUCTION

REQUEST NO. 1 — The Master Supply Agreement and Related Documents

Produce all copies of the Master Supply Agreement (MSA-NIH-CPI-2020-001) dated January 15, 2020, between Nexford Industrial Holdings Inc. and Cardinal Peak Industries, including all exhibits (specifically including, without limitation, Exhibit A — Product Specifications, Exhibit B — Pricing Schedule, and Exhibit C — Surcharge Methodology), schedules, appendices, amendments, addenda, side letters, and modifications thereto, in whatever form they exist.

Produce all drafts of the MSA and its related exhibits that were exchanged between the parties, or circulated internally within Cardinal Peak, during the negotiation of the MSA prior to its execution on January 15, 2020, including all redlined or marked-up versions reflecting proposed changes, comments, or revisions by either party.

Produce all internal Cardinal Peak memoranda, analyses, presentations, summaries, reports, approval forms, and similar Documents relating to the negotiation, review, approval, or execution of the MSA, including without limitation any Documents prepared for or presented to Cardinal Peak's management, board, or members in connection with the decision to enter into the MSA.

REQUEST NO. 2 — Surcharge Notices

Produce all Surcharge Notices issued, transmitted, or delivered by Cardinal Peak to Nexford during the Disputed Period (March 2021 through May 2022), for each of the fourteen (14) months within that period. For each such Surcharge Notice, produce:

(a) The Surcharge Notice itself, in its final form as delivered to Nexford, including all exhibits, attachments, and enclosures;

(b) All supporting documentation referenced in, attached to, or accompanying each Surcharge Notice, including but not limited to index data printouts, calculation summaries, and supporting worksheets;

(c) All proof of delivery or transmission for each Surcharge Notice, including without limitation email transmittal records (with headers and timestamps), delivery confirmations, certified mail receipts, return receipts, Severin Partners LLC or UPS tracking records and delivery confirmations, or any other evidence establishing the date and manner of delivery;

(d) All records, logs, or Documents reflecting the date on which each Surcharge Notice was prepared, the date on which each Surcharge Notice was internally approved or authorized for issuance, and the date on which each Surcharge Notice was actually delivered or transmitted to Nexford.

This Request is propounded in connection with Nexford's contention that seven (7) of the fourteen (14) Surcharge Notices issued during the Disputed Period were delivered in violation of the timeliness requirement of Section 7.4(a) of the MSA, which mandates delivery no later than fifteen (15) business days after the end of the applicable month. Nexford contends that the late-noticed months account for approximately $2.18 million of the total amount claimed by Cardinal Peak.

REQUEST NO. 3 — Surcharge Calculation Worksheets and Supporting Documentation

Produce all internal worksheets, spreadsheets, calculations, models, templates, and working papers used by Cardinal Peak to calculate the surcharge amounts set forth in each Surcharge Notice issued during the Disputed Period (March 2021 through May 2022), including all interim and final versions of such Documents.

Produce all Documents showing or reflecting the inputs, formulas, data sources, assumptions, and variables used in each monthly surcharge calculation during the Disputed Period, including but not limited to the index values applied, the baseline costs referenced, the tonnage volumes used, and the resulting surcharge amounts per ton and in the aggregate.

Produce all Documents reflecting or relating to the application of the Exhibit C Surcharge Methodology to each monthly surcharge calculation during the Disputed Period, including all Documents showing how the published Ferrous Scrap Index and Industrial Energy Cost Index were applied against the agreed baseline scrap cost of $340 per ton and baseline energy cost of $48 per ton, as required by Exhibit C.

Produce all Documents reflecting, evidencing, or relating to the use of any internal "blended cost" metric, Blended Cost Methodology, or any calculation methodology other than the methodology prescribed by Exhibit C — that is, any methodology other than the sole and exclusive use of the published Ferrous Scrap Index and Industrial Energy Cost Index — in connection with the computation of surcharges invoiced to Nexford during the Disputed Period.

REQUEST NO. 4 — Published Index Data

Produce all copies of the published Ferrous Scrap Index (as reported by Drayton Partners LLC, formerly SPI) for each month during the Disputed Period (March 2021 through May 2022) that Cardinal Peak used, relied upon, referenced, or had access to in connection with surcharge calculations under the MSA.

Produce all copies of the Industrial Energy Cost Index for each month during the Disputed Period that Cardinal Peak used, relied upon, referenced, or had access to in connection with surcharge calculations under the MSA.

Produce all Documents comparing, contrasting, reconciling, or otherwise analyzing the published index data (i.e., the Ferrous Scrap Index and the Industrial Energy Cost Index) against Cardinal Peak's internal cost data, blended cost calculations, or actual raw-material purchase costs for any month during the Disputed Period.

Produce all subscription agreements, data feed agreements, license agreements, or other contracts or arrangements with index publishers, data providers, or information services relating to the Ferrous Scrap Index, the Industrial Energy Cost Index, or any other commodity pricing index used by Cardinal Peak in connection with surcharge calculations during the Disputed Period.

REQUEST NO. 5 — Internal Cost Data and Blended Cost Methodology

Produce all Documents relating to Cardinal Peak's internal tracking, recording, analysis, or reporting of raw-material costs during the Disputed Period (March 2021 through May 2022), including without limitation: scrap metal purchase costs, scrap metal inventory costs, energy costs (including electricity, natural gas, and other fuel costs), alloy costs, and any other input costs used in the production of HRC and CRC products supplied to Nexford under the MSA.

Produce all Documents reflecting, describing, defining, or explaining the "blended cost" metric or Blended Cost Methodology that Cardinal Peak applied to calculate surcharges during the Disputed Period, including any internal policy, procedure, directive, memorandum, manual, guideline, or standard operating procedure that establishes, authorizes, approves, or implements such methodology. This includes all Documents reflecting the specific formula, weighting factors, data sources, and calculation steps comprising the Blended Cost Methodology.

Produce all Documents reflecting when the Blended Cost Methodology was adopted or first implemented by Cardinal Peak, the identity of the individual(s) who authorized or approved its adoption, and whether the Blended Cost Methodology was communicated to, disclosed to, discussed with, or approved by Nexford at any time prior to or during the Disputed Period.

Produce all Documents reflecting the baseline scrap cost of $340 per ton and baseline energy cost of $48 per ton as set forth in Exhibit C, and all Documents reflecting, evidencing, or explaining any deviation from those contractual baselines in Cardinal Peak's actual surcharge calculations during the Disputed Period, including any Documents explaining the reasons for or justification of any such deviation.

REQUEST NO. 6 — Surcharge Cap Analysis (Section 7.4(c))

Produce all Documents relating to the twelve percent (12%) surcharge cap set forth in Section 7.4(c) of the MSA, including without limitation:

(a) Any analysis, calculation, worksheet, spreadsheet, or model prepared by or on behalf of Cardinal Peak to determine whether the monthly surcharges imposed on Nexford during the Disputed Period exceeded twelve percent (12%) of the applicable Base Price (i.e., $620 per ton for HRC and $740 per ton for CRC);

(b) All requests, notices, or Communications sent by Cardinal Peak to Nexford seeking Nexford's prior written consent to exceed the twelve percent (12%) surcharge cap, for any month during the Disputed Period, as required by Section 7.4(c);

(c) All responses, acknowledgments, or Communications from Nexford (or the absence thereof) to any requests by Cardinal Peak for consent to exceed the twelve percent (12%) surcharge cap;

(d) All internal Cardinal Peak Communications, memoranda, analyses, or reports concerning the twelve percent (12%) cap provision, its applicability during the Disputed Period, and whether Cardinal Peak complied with or exceeded the cap for any particular month.

This Request is propounded in connection with Nexford's contention that for four (4) months during the Disputed Period, Cardinal Peak imposed surcharges that exceeded the twelve percent (12%) cap without first obtaining Nexford's prior written consent as required by Section 7.4(c), and that the excess surcharges attributable to those months account for approximately $1.08 million of the total amount claimed by Cardinal Peak.

REQUEST NO. 7 — Invoices and Payment Records

Produce all invoices issued by Cardinal Peak to Nexford during the Disputed Period (March 2021 through May 2022), including both base product invoices and surcharge invoices, and including all attachments, supporting schedules, and cover communications accompanying such invoices.

Produce all records of payments received from Nexford on surcharge invoices during the Disputed Period and thereafter, including payment amounts, payment dates, payment methods (e.g., wire transfer, check, ACH), and remittance advices or payment stubs received from Nexford.

Produce all Documents reflecting the total surcharges invoiced by Cardinal Peak to Nexford during the Disputed Period, which Cardinal Peak has claimed to be $6.41 million, and the amounts actually paid by Nexford against such surcharge invoices, which Nexford has acknowledged to be $1.68 million.

Produce all accounts receivable ledgers, subledgers, aging reports, statements of account, and balance summaries relating to the Nexford account for the Disputed Period and through the date of production.

Produce all credit memos, debit memos, adjustments, write-offs, reserves, or allowances issued, recorded, or applied by Cardinal Peak with respect to surcharge invoices issued to Nexford, at any time from March 2021 through the date of production.

REQUEST NO. 8 — Communications with Nexford Regarding Surcharges

Produce all Communications between Cardinal Peak (including any officers, directors, managers, members, employees, agents, consultants, or representatives of Cardinal Peak) and Nexford (including any officers, directors, managers, employees, agents, consultants, or representatives of Nexford) relating to surcharges, surcharge invoices, surcharge calculations, surcharge methodology, the Surcharge Methodology set forth in Exhibit C, the twelve percent (12%) surcharge cap under Section 7.4(c), the timeliness of Surcharge Notice delivery, or the disputes concerning any of the foregoing, from January 15, 2020 through the date of production.

Without limiting the generality of the foregoing, this Request specifically encompasses all Communications with the following Nexford personnel: Russell Okonkwo (Vice President, Procurement), Lydia Tran (Chief Financial Officer), Deborah Whitfield (General Counsel), and any other Nexford officer, director, employee, or agent who participated in or was copied on Communications relating to surcharges or the surcharge dispute.

This Request further specifically encompasses all Communications between Natalie Gunderson (Cardinal Peak Vice President, Sales & Commercial) and any Nexford personnel regarding surcharge invoices, surcharge amounts, surcharge methodology, surcharge disputes, or the payment or non-payment of surcharge invoices.

REQUEST NO. 9 — Internal Communications Regarding the Surcharge Dispute

Produce all internal Cardinal Peak Communications among officers, directors, managers, members, employees, consultants, or agents of Cardinal Peak, including but not limited to Frank Delacroix (President and CEO), Natalie Gunderson (Vice President, Sales & Commercial), Harold Briggs (Controller), and Patricia Morrow (General Counsel), relating to any of the following subjects:

(a) The surcharge dispute with Nexford, including the nature, scope, amounts, and bases for the dispute;

(b) Nexford's rejection, dispute, partial payment, or non-payment of surcharge invoices issued by Cardinal Peak;

(c) The decision to pursue legal action against Nexford, including the decision to retain counsel, the timing of litigation, and the selection of claims to be asserted;

(d) Cardinal Peak's assessment, analysis, or evaluation of its rights and obligations under MSA Section 7.4, including Sections 7.4(a), 7.4(c), and 7.4(d);

(e) Cardinal Peak's compliance or non-compliance with the Exhibit C Surcharge Methodology, including any analysis of whether Cardinal Peak's surcharge calculations conformed to the requirements of Exhibit C;

(f) The timeliness of Surcharge Notice delivery to Nexford, including any analysis or awareness of late deliveries and the potential consequences thereof under the MSA.

REQUEST NO. 10 — Demand Letter and Pre-Litigation Communications

Produce all Documents relating to the formal demand letter dated June 10, 2022, sent by Blackwood Stein & Associates LLP on behalf of Cardinal Peak to Nexford, including:

(a) All drafts, revisions, and marked-up versions of the demand letter prepared prior to its finalization and delivery;

(b) All internal Cardinal Peak Communications regarding the preparation, content, review, approval, and sending of the demand letter;

(c) All Communications between Cardinal Peak and Blackwood Stein & Associates LLP regarding the demand letter, to the extent not protected by attorney-client privilege or the work product doctrine. To the extent any such Communications are withheld on the basis of privilege, they shall be identified on a privilege log in accordance with Instruction 3 above.

Produce all Documents relating to Nexford's response to the demand letter, dated July 5, 2022, in which Nexford rejected Cardinal Peak's demand, including all internal Cardinal Peak Communications analyzing, discussing, or responding to Nexford's July 5, 2022 letter.

Produce all Documents relating to any pre-litigation settlement discussions, negotiations, or offers between the parties (or their respective counsel), from June 10, 2022 through the filing of the Complaint on August 8, 2022, including all term sheets, draft settlement agreements, and Communications memorializing the substance of any settlement discussions.

REQUEST NO. 11 — Complaint and Damages Calculations

Produce all Documents supporting, underlying, or relating to the damages claimed in Cardinal Peak's Complaint filed August 8, 2022, in this action, Case No. 2022-L-008471, including:

(a) All calculations, spreadsheets, worksheets, analyses, and models used to compute the $4.73 million in claimed unpaid surcharges (representing $6.41 million invoiced less $1.68 million paid);

(b) All calculations of any prejudgment interest claimed by Cardinal Peak, including the interest rate applied, the methodology for computing interest, and the compounding period used;

(c) All Documents provided to, relied upon by, or made available to Cardinal Peak's counsel at Blackwood Stein & Associates LLP in connection with the preparation and filing of the Complaint;

(d) All Documents reflecting the factual basis, evidence, and supporting materials for each cause of action asserted in the Complaint, including Count I (Breach of Contract), Count II (Unjust Enrichment), and Count III (Account Stated).

REQUEST NO. 12 — Documents Relating to the Unjust Enrichment Claim

Produce all Documents supporting, evidencing, or relating to Cardinal Peak's claim for unjust enrichment as set forth in Count II of the Complaint, including:

(a) All Documents reflecting, identifying, or quantifying any benefit allegedly conferred by Cardinal Peak upon Nexford beyond the scope of or in addition to the obligations set forth in the MSA;

(b) All Documents reflecting any theory, analysis, or legal basis under which Cardinal Peak contends that an equitable remedy in the form of unjust enrichment is available notwithstanding the existence of the MSA, which governs the subject matter of the parties' relationship regarding product supply and surcharge obligations;

(c) All Documents reflecting any analysis by Cardinal Peak or its counsel of whether the unjust enrichment claim is cognizable as a matter of law given the existence of an express contract governing the same subject matter.

REQUEST NO. 13 — Documents Relating to the Account Stated Claim

Produce all Documents supporting, evidencing, or relating to Cardinal Peak's claim for account stated as set forth in Count III of the Complaint, including:

(a) All statements of account rendered by Cardinal Peak to Nexford at any time from January 1, 2020 through the date of production, including monthly, quarterly, or annual account statements;

(b) All Documents reflecting any acknowledgment, acceptance, acquiescence, or agreement by Nexford with respect to any statement of account rendered by Cardinal Peak, including any Communications from Nexford that Cardinal Peak contends constitute an admission of the correctness of any stated balance;

(c) All Documents reflecting a course of dealing between the parties with respect to surcharge invoicing, payment, and account reconciliation, including any historical pattern of invoicing and payment that Cardinal Peak contends supports its account stated claim.

REQUEST NO. 14 — Expert Materials

Produce all Documents provided to, relied upon by, generated by, or prepared by Dr. Theodore Voss of Pinnacle Economics Group LLC, or any other expert witness, consultant, or advisor retained, consulted, or engaged by Cardinal Peak or its counsel in connection with this matter, including:

(a) All data, reports, analyses, draft reports, final reports, spreadsheets, models, working papers, presentations, and exhibits prepared by or for Dr. Voss or Pinnacle Economics Group LLC;

(b) All Communications between Cardinal Peak (or its counsel at Blackwood Stein & Associates LLP) and Dr. Voss, Pinnacle Economics Group LLC, or any other retained or consulting expert, relating to this matter;

(c) All Documents constituting the factual basis, data inputs, or source materials for any opinions to be rendered by Dr. Voss or any other expert;

(d) The engagement letter, retention agreement, fee arrangement, or other contractual documents between Cardinal Peak (or its counsel) and Pinnacle Economics Group LLC or any other expert retained in connection with this matter;

(e) All prior publications, reports, or testimony by Dr. Voss or any other retained expert that are relevant to the subject matter of this litigation.

REQUEST NO. 15 — Surcharge Practices with Other Customers

Produce all Documents reflecting Cardinal Peak's surcharge policies, practices, and methodologies applied to customers other than Nexford during the Disputed Period (March 2021 through May 2022), to the extent such Documents relate to:

(a) Whether Cardinal Peak applied the Exhibit C Surcharge Methodology (i.e., surcharge calculations based solely on the published Ferrous Scrap Index and Industrial Energy Cost Index, applied against stated baselines) or the Blended Cost Methodology (or any other alternative methodology) in calculating surcharges for customers other than Nexford;

(b) Whether Cardinal Peak's standard or default surcharge calculation methodology — as applied to its customer base generally — is the Blended Cost Methodology or the published-index methodology prescribed by Exhibit C, including any Documents reflecting Cardinal Peak's standard form surcharge provisions or standard operating procedures for surcharge calculations.

For the avoidance of doubt, Nexford does not seek the identity of, or specific pricing terms applicable to, Cardinal Peak's other customers. This Request is expressly limited to Documents concerning Cardinal Peak's surcharge calculation methodology and practices as applied to its customer base during the Disputed Period, for the purpose of determining whether the Blended Cost Methodology represents Cardinal Peak's standard practice or a deviation therefrom.

REQUEST NO. 16 — Organizational and Corporate Documents

Produce Cardinal Peak's organizational and formation documents, including its operating agreement (and any amendments, restatements, or supplements thereto), articles of organization as filed with the Colorado Secretary of State, and any certificates of amendment or other filings reflecting changes to Cardinal Peak's organizational structure.

Produce all Documents reflecting the authority of any individual to execute the MSA on behalf of Cardinal Peak, to issue Surcharge Notices on behalf of Cardinal Peak, or to authorize, initiate, or direct litigation on behalf of Cardinal Peak, including without limitation resolutions, authorizations, delegations of authority, powers of attorney, and corporate governance documents.

Produce Cardinal Peak's annual revenue figures, financial statements (including balance sheets, income statements, and cash flow statements), or summaries thereof, for fiscal years 2020, 2021, and 2022, to the extent relevant to the calculation of damages, the commercial significance of the parties' relationship, or the proportionality of the claims at issue.

REQUEST NO. 17 — MSA Section 7.4(d) Dispute Procedure Communications

Produce all Documents relating to the dispute resolution process set forth in Section 7.4(d) of the MSA, including:

(a) All dispute notices sent by Nexford to Cardinal Peak regarding surcharge invoices, as required by Section 7.4(d) to be delivered within thirty (30) calendar days of receipt of a Surcharge Notice;

(b) All responses by Cardinal Peak to any dispute notices received from Nexford, including all substantive responses, acknowledgments of receipt, and requests for additional information;

(c) All escalation Communications between senior officers of the parties pursuant to the escalation provisions of Section 7.4(d), including any Communications between Frank Delacroix (Cardinal Peak) and any senior officer of Nexford regarding the resolution of surcharge disputes;

(d) All Documents reflecting the parties' efforts, or the absence of efforts, to resolve surcharge disputes through the contractual dispute resolution process prior to the commencement of this litigation, including any meeting agendas, meeting minutes, summaries of discussions, and proposals for resolution.

REQUEST NO. 18 — MSA Performance and Order History

Produce all purchase orders, order confirmations, order acknowledgments, shipping documents, packing lists, bills of lading, delivery receipts, and other delivery records for products (HRC and CRC) sold by Cardinal Peak to Nexford under the MSA during the Disputed Period (March 2021 through May 2022).

Produce all Documents reflecting the volume of HRC and CRC products delivered by Cardinal Peak to Nexford during the Disputed Period, including monthly and cumulative tonnage records. For reference, the MSA contemplated estimated annual volumes of approximately 18,000 tons of HRC and 6,500 tons of CRC.

Produce all Documents reflecting the Base Price applied to each shipment of HRC and CRC during the Disputed Period, and all Documents reflecting any quarterly price adjustments made pursuant to Section 7.2 of the MSA, including the basis for and calculation of any such adjustments.

REQUEST NO. 19 — Insurance and Indemnification

Produce all Documents relating to any insurance policies under which Cardinal Peak has sought, may seek, or is entitled to seek coverage or reimbursement for the claims, damages, losses, or legal expenses asserted in or arising out of this action, including all declarations pages, policy terms, endorsements, and coverage correspondence with insurers.

Produce all Documents relating to any indemnification obligations or contribution rights of any third party with respect to Cardinal Peak's claims against Nexford, or with respect to any liability that Cardinal Peak may incur in connection with this action, including any contractual indemnification provisions, hold harmless agreements, or insurance-related subrogation arrangements.

REQUEST NO. 20 — Document Retention and Preservation

Produce all document retention policies, records management policies, and data retention schedules maintained by Cardinal Peak that are or were in effect at any time from January 1, 2020 through the date of production.

Produce all litigation hold notices, preservation directives, and similar Communications issued by Cardinal Peak, its officers, or its counsel (including Blackwood Stein & Associates LLP) in connection with this matter or the underlying surcharge dispute, including all notices issued to custodians, IT personnel, and records management personnel directing the preservation of Documents and ESI.

Produce all Documents reflecting any destruction, deletion, loss, alteration, or unavailability of Documents potentially responsive to any Request set forth herein, including any Documents reflecting the circumstances under which any such destruction, deletion, loss, or alteration occurred, the identity of the individuals involved, and the steps taken (if any) to recover or remediate any lost or destroyed Documents.

CERTIFICATION AND SIGNATURE

Respectfully submitted on behalf of Defendant Nexford Industrial Holdings Inc.

CALDERWOOD & HARKNESS LLP

By: ________

Priya Anand Partner Illinois ARDC No. 6312487 Calderwood & Harkness LLP 200 South Wacker Drive, Suite 4400 Chicago, Illinois 60606 Telephone: (312) 555-7800 Facsimile: (312) 555-7801

Email: panand@calderwoodharkness.com

By: ________

Simone Laroche Associate Illinois ARDC No. 6328914 Calderwood & Harkness LLP 200 South Wacker Drive, Suite 4400 Chicago, Illinois 60606 Telephone: (312) 555-7800 Facsimile: (312) 555-7801

Email: slaroche@calderwoodharkness.com

Attorneys for Defendant Nexford Industrial Holdings Inc.

CERTIFICATE OF SERVICE

I, Simone Laroche, an attorney, hereby certify that on December 5, 2022, I caused a true and correct copy of the foregoing Defendant Nexford Industrial Holdings Inc.'s First Set of Requests for Production of Documents to Plaintiff Cardinal Peak Industries to be served upon counsel for Plaintiff via electronic service and email, addressed as follows:

Garrett Blackwood, Esq. Megan Hsu, Esq. Blackwood Stein & Associates LLP 717 Seventeenth Street, Suite 2200 Denver, Colorado 80202

Email: gblackwood@blackwoodstein.com

Email: mhsu@blackwoodstein.com

________________________________________

Simone Laroche

CARDINAL PEAK INDUSTRIES, a Colorado limited liability company,

Plaintiff,

NEXFORD INDUSTRIAL HOLDINGS INC., a Delaware corporation,

Defendant.

Judge: Hon. Katherine M. Reilly

IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS COUNTY DEPARTMENT, LAW DIVISION
DEFENDANT NEXFORD INDUSTRIAL HOLDINGS INC.'S FIRST SET OF REQUESTS FOR PRODUCTION OF DOCUMENTS TO PLAINTIFF CARDINAL PEAK INDUSTRIES
Date Served: December 5, 2022
Propounding Party: Nexford Industrial Holdings Inc. By its attorneys, Calderwood & Harkness LLP 200 South Wacker Drive, Suite 4400 Chicago, Illinois 60606
Responding Party: Cardinal Peak Industries 1580 Ridgeline Boulevard Pueblo, Colorado 81001 Through its counsel, Blackwood Stein & Associates LLP 717 Seventeenth Street, Suite 2200 Denver, Colorado 80202
INTRODUCTORY PARAGRAPH
Defendant Nexford Industrial Holdings Inc. ("Nexford" or "NIH"), by and through its undersigned attorneys, Calderwood & Harkness LLP, and pursuant to Illinois Supreme Court Rules 214 and 201 through 218, hereby requests that Plaintiff Cardinal Peak Industries ("Cardinal Peak," "CPI," or "Plaintiff") produce for inspection and copying the documents and things described in the Requests set forth below. Cardinal Peak shall respond to these Requests within twenty-eight (28) days of service, or within such other time as may be agreed upon by the parties or ordered by the Court. All Documents responsive to these Requests shall be produced at the offices of Calderwood & Harkness LLP, located at 200 South Wacker Drive, Suite 4400, Chicago, Illinois 60606, or at such other location as may be mutually agreed upon by the parties. Documents shall be produced as they are kept in the ordinary course of business, including all file folder labels and other identifying information, or shall be organized and labeled to correspond with the categories set forth in each individual Request below.
DEFINITIONS
As used in these Requests for Production, the following terms shall have the meanings set forth below. These definitions are intended to supplement, and not to limit, any definitions provided by the Illinois Supreme Court Rules, including Rule 201.
A. "Cardinal Peak," "CPI," "Plaintiff," "You," or "Your" means Cardinal Peak Industries, a Colorado limited liability company, together with its predecessors, successors, subsidiaries, affiliates, and divisions, and all of its present and former officers, directors, managers, members, employees, agents, representatives, consultants, and attorneys, whether acting in an individual or representative capacity. Without limiting the generality of the foregoing, these terms include Frank Delacroix (President and Chief Executive Officer), Natalie Gunderson (Vice President, Sales & Commercial), Harold Briggs (Controller), and Patricia Morrow (General Counsel), as well as any other individuals who, at any time during the relevant period, had responsibilities or authority relating to the matters at issue in this action.
B. "Nexford," "NIH," or "Defendant" means Nexford Industrial Holdings Inc., a Delaware corporation with its principal place of business and headquarters located at 4200 West Lakeshore Industrial Parkway, Suite 300, Waukegan, Illinois 60085, together with its officers, directors, employees, agents, and representatives.
C. "MSA" or "Master Supply Agreement" means the Master Supply Agreement between Nexford Industrial Holdings Inc. and Cardinal Peak Industries dated January 15, 2020, bearing reference number MSA-NIH-CPI-2020-001, including all exhibits, schedules, appendices, amendments, addenda, side letters, and modifications thereto. Without limiting the foregoing, the term "MSA" specifically includes Exhibit C (Surcharge Methodology), Exhibit A (Product Specifications), Exhibit B (Pricing Schedule), and any other documents incorporated by reference into the MSA or appended thereto.
D. "Surcharge Notice" means any notice, invoice, statement, calculation, or communication delivered or purportedly delivered by Cardinal Peak to Nexford pursuant to Section 7.4(a) of the MSA relating to raw-material surcharges, including without limitation scrap surcharges, energy surcharges, and alloy surcharges, whether delivered by email, mail, courier, or any other means, and whether in final or draft form.
E. "Disputed Period" means the period from March 2021 through May 2022, inclusive, encompassing the fourteen (14) months during which the surcharge amounts at issue in this litigation were invoiced.
F. "Document" or "Documents" shall be construed in the broadest sense permitted under the Illinois Supreme Court Rules and applicable law, and means all writings, recordings, and tangible things of any kind, in whatever form or medium. Without limiting the generality of the foregoing, the term includes: correspondence, memoranda, notes, emails, text messages, instant messages (including messages sent via platforms such as Meridian Solutions, Northgate Data Systems, or similar applications), letters, reports, analyses, spreadsheets, databases, charts, graphs, summaries, invoices, purchase orders, receipts, contracts, agreements, amendments, financial statements, accounting records, ledgers, journals, worksheets, working papers, drafts, presentations, board minutes, meeting notes and agendas, telephone logs, calendars, diaries, appointment books, and electronically stored information ("ESI") in any format. The term also includes all metadata associated with any electronically stored information. The term "Document" or "Documents" further includes originals, copies (including carbon copies, photocopies, and facsimile copies), and drafts, whether handwritten, typed, printed, recorded, filmed, photographed, or stored electronically on any medium, including hard drives, servers, cloud-based storage systems, backup tapes, removable media, and mobile devices.
G. "Communication" or "Communications" means any oral, written, or electronic exchange of information, ideas, opinions, or data between two or more persons, including without limitation letters, emails, text messages, instant messages, voicemails, telephone calls, video conferences, in-person conversations, and any other means of conveying information, as well as any Document or record memorializing, summarizing, reflecting, or referencing any such exchange.
H. "Relating to" or "Concerning" means referring to, reflecting, evidencing, describing, constituting, pertaining to, connected with, commenting on, responsive to, in respect of, regarding, mentioning, discussing, analyzing, summarizing, or having any logical connection to the subject matter referenced.
I. "Person" means any natural person, corporation, limited liability company, partnership, joint venture, association, trust, governmental entity, agency, department, or any other legal entity or organization, however organized.
J. "Exhibit C" or "Surcharge Methodology" means Exhibit C to the MSA, entitled "Surcharge Methodology," which prescribes the methodology for calculating raw-material surcharges applicable to products sold under the MSA. Specifically, Exhibit C requires the use of the published Ferrous Scrap Index (as reported by Drayton Partners LLC, formerly Steel Pricing Index or "SPI") and the Industrial Energy Cost Index, applied against the agreed baseline scrap cost of $340 per ton and the agreed baseline energy cost of $48 per ton, as the exclusive basis for computing monthly surcharge adjustments.
K. "Base Price" means the base prices for products sold under the MSA as set forth in Section 7.2 of the MSA, specifically $620 per ton for hot-rolled coil ("HRC") and $740 per ton for cold-rolled coil ("CRC"), as applicable, subject to quarterly adjustment in accordance with the terms and conditions set forth in Section 7.2.
L. "Blended Cost Methodology" or "Blended Cost Metric" means any internal methodology, formula, calculation, model, or metric used or applied by Cardinal Peak to compute, derive, or estimate surcharges that differs in any material respect from the Exhibit C Surcharge Methodology, including without limitation any methodology that blends, averages, weights, or otherwise combines raw-material costs, actual purchase costs, spot prices, or any other cost inputs in a manner not prescribed by or consistent with Exhibit C.
INSTRUCTIONS
The following Instructions apply to each Request for Production set forth below and shall be read in conjunction with the Definitions set forth above.
Instruction 1 — Scope of Production. Each Request calls for all responsive Documents in Cardinal Peak's possession, custody, or control, regardless of where such Documents are located. This includes, without limitation, Documents held by or in the possession of CPI's officers, directors, managers, members, employees, agents, consultants, accountants, auditors, and attorneys (to the extent not protected by a valid claim of privilege). Documents within Cardinal Peak's "control" include Documents that Cardinal Peak has the right to obtain, or could obtain, upon demand from any third party with whom it has a legal or practical ability to obtain such Documents.
Instruction 2 — Time Period. Unless otherwise specified in a particular Request, each Request covers the period from January 1, 2020 through the date of production, with particular focus on the Disputed Period of March 2021 through May 2022. To the extent any Request specifies a different time period, the specified time period shall control for that Request.
Instruction 3 — Privilege Log. To the extent that Cardinal Peak withholds or redacts any Document, or any portion of a Document, on the basis of attorney-client privilege, work product protection, or any other privilege, immunity, or protection from disclosure, Cardinal Peak shall provide a privilege log in accordance with Illinois Supreme Court Rule 201(n) and any applicable orders of this Court. The privilege log shall identify each withheld or redacted Document with sufficient detail to permit Nexford and the Court to assess the validity of the claim of privilege, including at a minimum: (a) the date of the Document; (b) the author or sender of the Document; (c) all recipients, including "cc" and "bcc" recipients; (d) a general description of the subject matter of the Document (without disclosing privileged content); and (e) the specific privilege or protection asserted as the basis for withholding or redacting the Document.
Instruction 4 — Continuing Obligation. Cardinal Peak's obligation to produce Documents responsive to these Requests is a continuing obligation pursuant to Illinois Supreme Court Rule 214. If, at any time after the initial production, Cardinal Peak identifies, locates, or comes into possession of additional Documents responsive to any of these Requests, Cardinal Peak shall promptly supplement its production and notify Nexford's counsel of any such supplemental production.
Instruction 5 — Document Organization. Cardinal Peak shall produce Documents as they are kept in the ordinary course of business, including all file folder labels, tabs, and other identifying information reflecting the organizational scheme in which the Documents were maintained. In the alternative, Cardinal Peak may organize and label Documents to correspond with each numbered Request, provided that the organizational scheme is clearly indicated and permits identification of which Documents are responsive to which Request(s).
Instruction 6 — Electronic Documents. All electronically stored information ("ESI") shall be produced in its native format, including all associated metadata (e.g., author, date created, date modified, file name, file path, and custodian information). In the alternative, ESI may be produced in a searchable format, such as searchable PDF (with OCR applied) or single-page TIFF images accompanied by load files (including Concordance or Relativity load files, as applicable) and extracted text files. Spreadsheets, databases, and other structured data files shall be produced in their native format (e.g., .xlsx, .csv, .accdb) so as to preserve formulas, embedded calculations, and cell-level metadata. Email shall be produced in a format that preserves the email's header information, including sender, recipient, date, time, and subject line, as well as any attachments.
REQUESTS FOR PRODUCTION
REQUEST NO. 1 — The Master Supply Agreement and Related Documents
Produce all copies of the Master Supply Agreement (MSA-NIH-CPI-2020-001) dated January 15, 2020, between Nexford Industrial Holdings Inc. and Cardinal Peak Industries, including all exhibits (specifically including, without limitation, Exhibit A — Product Specifications, Exhibit B — Pricing Schedule, and Exhibit C — Surcharge Methodology), schedules, appendices, amendments, addenda, side letters, and modifications thereto, in whatever form they exist.
Produce all drafts of the MSA and its related exhibits that were exchanged between the parties, or circulated internally within Cardinal Peak, during the negotiation of the MSA prior to its execution on January 15, 2020, including all redlined or marked-up versions reflecting proposed changes, comments, or revisions by either party.
Produce all internal Cardinal Peak memoranda, analyses, presentations, summaries, reports, approval forms, and similar Documents relating to the negotiation, review, approval, or execution of the MSA, including without limitation any Documents prepared for or presented to Cardinal Peak's management, board, or members in connection with the decision to enter into the MSA.
REQUEST NO. 2 — Surcharge Notices
Produce all Surcharge Notices issued, transmitted, or delivered by Cardinal Peak to Nexford during the Disputed Period (March 2021 through May 2022), for each of the fourteen (14) months within that period. For each such Surcharge Notice, produce:
(a) The Surcharge Notice itself, in its final form as delivered to Nexford, including all exhibits, attachments, and enclosures;
(b) All supporting documentation referenced in, attached to, or accompanying each Surcharge Notice, including but not limited to index data printouts, calculation summaries, and supporting worksheets;
(c) All proof of delivery or transmission for each Surcharge Notice, including without limitation email transmittal records (with headers and timestamps), delivery confirmations, certified mail receipts, return receipts, Severin Partners LLC or UPS tracking records and delivery confirmations, or any other evidence establishing the date and manner of delivery;
(d) All records, logs, or Documents reflecting the date on which each Surcharge Notice was prepared, the date on which each Surcharge Notice was internally approved or authorized for issuance, and the date on which each Surcharge Notice was actually delivered or transmitted to Nexford.
This Request is propounded in connection with Nexford's contention that seven (7) of the fourteen (14) Surcharge Notices issued during the Disputed Period were delivered in violation of the timeliness requirement of Section 7.4(a) of the MSA, which mandates delivery no later than fifteen (15) business days after the end of the applicable month. Nexford contends that the late-noticed months account for approximately $2.18 million of the total amount claimed by Cardinal Peak.
REQUEST NO. 3 — Surcharge Calculation Worksheets and Supporting Documentation
Produce all internal worksheets, spreadsheets, calculations, models, templates, and working papers used by Cardinal Peak to calculate the surcharge amounts set forth in each Surcharge Notice issued during the Disputed Period (March 2021 through May 2022), including all interim and final versions of such Documents.
Produce all Documents showing or reflecting the inputs, formulas, data sources, assumptions, and variables used in each monthly surcharge calculation during the Disputed Period, including but not limited to the index values applied, the baseline costs referenced, the tonnage volumes used, and the resulting surcharge amounts per ton and in the aggregate.
Produce all Documents reflecting or relating to the application of the Exhibit C Surcharge Methodology to each monthly surcharge calculation during the Disputed Period, including all Documents showing how the published Ferrous Scrap Index and Industrial Energy Cost Index were applied against the agreed baseline scrap cost of $340 per ton and baseline energy cost of $48 per ton, as required by Exhibit C.
Produce all Documents reflecting, evidencing, or relating to the use of any internal "blended cost" metric, Blended Cost Methodology, or any calculation methodology other than the methodology prescribed by Exhibit C — that is, any methodology other than the sole and exclusive use of the published Ferrous Scrap Index and Industrial Energy Cost Index — in connection with the computation of surcharges invoiced to Nexford during the Disputed Period.
REQUEST NO. 4 — Published Index Data
Produce all copies of the published Ferrous Scrap Index (as reported by Drayton Partners LLC, formerly SPI) for each month during the Disputed Period (March 2021 through May 2022) that Cardinal Peak used, relied upon, referenced, or had access to in connection with surcharge calculations under the MSA.
Produce all copies of the Industrial Energy Cost Index for each month during the Disputed Period that Cardinal Peak used, relied upon, referenced, or had access to in connection with surcharge calculations under the MSA.
Produce all Documents comparing, contrasting, reconciling, or otherwise analyzing the published index data (i.e., the Ferrous Scrap Index and the Industrial Energy Cost Index) against Cardinal Peak's internal cost data, blended cost calculations, or actual raw-material purchase costs for any month during the Disputed Period.
Produce all subscription agreements, data feed agreements, license agreements, or other contracts or arrangements with index publishers, data providers, or information services relating to the Ferrous Scrap Index, the Industrial Energy Cost Index, or any other commodity pricing index used by Cardinal Peak in connection with surcharge calculations during the Disputed Period.
REQUEST NO. 5 — Internal Cost Data and Blended Cost Methodology
Produce all Documents relating to Cardinal Peak's internal tracking, recording, analysis, or reporting of raw-material costs during the Disputed Period (March 2021 through May 2022), including without limitation: scrap metal purchase costs, scrap metal inventory costs, energy costs (including electricity, natural gas, and other fuel costs), alloy costs, and any other input costs used in the production of HRC and CRC products supplied to Nexford under the MSA.
Produce all Documents reflecting, describing, defining, or explaining the "blended cost" metric or Blended Cost Methodology that Cardinal Peak applied to calculate surcharges during the Disputed Period, including any internal policy, procedure, directive, memorandum, manual, guideline, or standard operating procedure that establishes, authorizes, approves, or implements such methodology. This includes all Documents reflecting the specific formula, weighting factors, data sources, and calculation steps comprising the Blended Cost Methodology.
Produce all Documents reflecting when the Blended Cost Methodology was adopted or first implemented by Cardinal Peak, the identity of the individual(s) who authorized or approved its adoption, and whether the Blended Cost Methodology was communicated to, disclosed to, discussed with, or approved by Nexford at any time prior to or during the Disputed Period.
Produce all Documents reflecting the baseline scrap cost of $340 per ton and baseline energy cost of $48 per ton as set forth in Exhibit C, and all Documents reflecting, evidencing, or explaining any deviation from those contractual baselines in Cardinal Peak's actual surcharge calculations during the Disputed Period, including any Documents explaining the reasons for or justification of any such deviation.
REQUEST NO. 6 — Surcharge Cap Analysis (Section 7.4(c))
Produce all Documents relating to the twelve percent (12%) surcharge cap set forth in Section 7.4(c) of the MSA, including without limitation:
(a) Any analysis, calculation, worksheet, spreadsheet, or model prepared by or on behalf of Cardinal Peak to determine whether the monthly surcharges imposed on Nexford during the Disputed Period exceeded twelve percent (12%) of the applicable Base Price (i.e., $620 per ton for HRC and $740 per ton for CRC);
(b) All requests, notices, or Communications sent by Cardinal Peak to Nexford seeking Nexford's prior written consent to exceed the twelve percent (12%) surcharge cap, for any month during the Disputed Period, as required by Section 7.4(c);
(c) All responses, acknowledgments, or Communications from Nexford (or the absence thereof) to any requests by Cardinal Peak for consent to exceed the twelve percent (12%) surcharge cap;
(d) All internal Cardinal Peak Communications, memoranda, analyses, or reports concerning the twelve percent (12%) cap provision, its applicability during the Disputed Period, and whether Cardinal Peak complied with or exceeded the cap for any particular month.
This Request is propounded in connection with Nexford's contention that for four (4) months during the Disputed Period, Cardinal Peak imposed surcharges that exceeded the twelve percent (12%) cap without first obtaining Nexford's prior written consent as required by Section 7.4(c), and that the excess surcharges attributable to those months account for approximately $1.08 million of the total amount claimed by Cardinal Peak.
REQUEST NO. 7 — Invoices and Payment Records
Produce all invoices issued by Cardinal Peak to Nexford during the Disputed Period (March 2021 through May 2022), including both base product invoices and surcharge invoices, and including all attachments, supporting schedules, and cover communications accompanying such invoices.
Produce all records of payments received from Nexford on surcharge invoices during the Disputed Period and thereafter, including payment amounts, payment dates, payment methods (e.g., wire transfer, check, ACH), and remittance advices or payment stubs received from Nexford.
Produce all Documents reflecting the total surcharges invoiced by Cardinal Peak to Nexford during the Disputed Period, which Cardinal Peak has claimed to be $6.41 million, and the amounts actually paid by Nexford against such surcharge invoices, which Nexford has acknowledged to be $1.68 million.
Produce all accounts receivable ledgers, subledgers, aging reports, statements of account, and balance summaries relating to the Nexford account for the Disputed Period and through the date of production.
Produce all credit memos, debit memos, adjustments, write-offs, reserves, or allowances issued, recorded, or applied by Cardinal Peak with respect to surcharge invoices issued to Nexford, at any time from March 2021 through the date of production.
REQUEST NO. 8 — Communications with Nexford Regarding Surcharges
Produce all Communications between Cardinal Peak (including any officers, directors, managers, members, employees, agents, consultants, or representatives of Cardinal Peak) and Nexford (including any officers, directors, managers, employees, agents, consultants, or representatives of Nexford) relating to surcharges, surcharge invoices, surcharge calculations, surcharge methodology, the Surcharge Methodology set forth in Exhibit C, the twelve percent (12%) surcharge cap under Section 7.4(c), the timeliness of Surcharge Notice delivery, or the disputes concerning any of the foregoing, from January 15, 2020 through the date of production.
Without limiting the generality of the foregoing, this Request specifically encompasses all Communications with the following Nexford personnel: Russell Okonkwo (Vice President, Procurement), Lydia Tran (Chief Financial Officer), Deborah Whitfield (General Counsel), and any other Nexford officer, director, employee, or agent who participated in or was copied on Communications relating to surcharges or the surcharge dispute.
This Request further specifically encompasses all Communications between Natalie Gunderson (Cardinal Peak Vice President, Sales & Commercial) and any Nexford personnel regarding surcharge invoices, surcharge amounts, surcharge methodology, surcharge disputes, or the payment or non-payment of surcharge invoices.
REQUEST NO. 9 — Internal Communications Regarding the Surcharge Dispute
Produce all internal Cardinal Peak Communications among officers, directors, managers, members, employees, consultants, or agents of Cardinal Peak, including but not limited to Frank Delacroix (President and CEO), Natalie Gunderson (Vice President, Sales & Commercial), Harold Briggs (Controller), and Patricia Morrow (General Counsel), relating to any of the following subjects:
(a) The surcharge dispute with Nexford, including the nature, scope, amounts, and bases for the dispute;
(b) Nexford's rejection, dispute, partial payment, or non-payment of surcharge invoices issued by Cardinal Peak;
(c) The decision to pursue legal action against Nexford, including the decision to retain counsel, the timing of litigation, and the selection of claims to be asserted;
(d) Cardinal Peak's assessment, analysis, or evaluation of its rights and obligations under MSA Section 7.4, including Sections 7.4(a), 7.4(c), and 7.4(d);
(e) Cardinal Peak's compliance or non-compliance with the Exhibit C Surcharge Methodology, including any analysis of whether Cardinal Peak's surcharge calculations conformed to the requirements of Exhibit C;
(f) The timeliness of Surcharge Notice delivery to Nexford, including any analysis or awareness of late deliveries and the potential consequences thereof under the MSA.
REQUEST NO. 10 — Demand Letter and Pre-Litigation Communications
Produce all Documents relating to the formal demand letter dated June 10, 2022, sent by Blackwood Stein & Associates LLP on behalf of Cardinal Peak to Nexford, including:
(a) All drafts, revisions, and marked-up versions of the demand letter prepared prior to its finalization and delivery;
(b) All internal Cardinal Peak Communications regarding the preparation, content, review, approval, and sending of the demand letter;
(c) All Communications between Cardinal Peak and Blackwood Stein & Associates LLP regarding the demand letter, to the extent not protected by attorney-client privilege or the work product doctrine. To the extent any such Communications are withheld on the basis of privilege, they shall be identified on a privilege log in accordance with Instruction 3 above.
Produce all Documents relating to Nexford's response to the demand letter, dated July 5, 2022, in which Nexford rejected Cardinal Peak's demand, including all internal Cardinal Peak Communications analyzing, discussing, or responding to Nexford's July 5, 2022 letter.
Produce all Documents relating to any pre-litigation settlement discussions, negotiations, or offers between the parties (or their respective counsel), from June 10, 2022 through the filing of the Complaint on August 8, 2022, including all term sheets, draft settlement agreements, and Communications memorializing the substance of any settlement discussions.
REQUEST NO. 11 — Complaint and Damages Calculations
Produce all Documents supporting, underlying, or relating to the damages claimed in Cardinal Peak's Complaint filed August 8, 2022, in this action, Case No. 2022-L-008471, including:
(a) All calculations, spreadsheets, worksheets, analyses, and models used to compute the $4.73 million in claimed unpaid surcharges (representing $6.41 million invoiced less $1.68 million paid);
(b) All calculations of any prejudgment interest claimed by Cardinal Peak, including the interest rate applied, the methodology for computing interest, and the compounding period used;
(c) All Documents provided to, relied upon by, or made available to Cardinal Peak's counsel at Blackwood Stein & Associates LLP in connection with the preparation and filing of the Complaint;
(d) All Documents reflecting the factual basis, evidence, and supporting materials for each cause of action asserted in the Complaint, including Count I (Breach of Contract), Count II (Unjust Enrichment), and Count III (Account Stated).
REQUEST NO. 12 — Documents Relating to the Unjust Enrichment Claim
Produce all Documents supporting, evidencing, or relating to Cardinal Peak's claim for unjust enrichment as set forth in Count II of the Complaint, including:
(a) All Documents reflecting, identifying, or quantifying any benefit allegedly conferred by Cardinal Peak upon Nexford beyond the scope of or in addition to the obligations set forth in the MSA;
(b) All Documents reflecting any theory, analysis, or legal basis under which Cardinal Peak contends that an equitable remedy in the form of unjust enrichment is available notwithstanding the existence of the MSA, which governs the subject matter of the parties' relationship regarding product supply and surcharge obligations;
(c) All Documents reflecting any analysis by Cardinal Peak or its counsel of whether the unjust enrichment claim is cognizable as a matter of law given the existence of an express contract governing the same subject matter.
REQUEST NO. 13 — Documents Relating to the Account Stated Claim
Produce all Documents supporting, evidencing, or relating to Cardinal Peak's claim for account stated as set forth in Count III of the Complaint, including:
(a) All statements of account rendered by Cardinal Peak to Nexford at any time from January 1, 2020 through the date of production, including monthly, quarterly, or annual account statements;
(b) All Documents reflecting any acknowledgment, acceptance, acquiescence, or agreement by Nexford with respect to any statement of account rendered by Cardinal Peak, including any Communications from Nexford that Cardinal Peak contends constitute an admission of the correctness of any stated balance;
(c) All Documents reflecting a course of dealing between the parties with respect to surcharge invoicing, payment, and account reconciliation, including any historical pattern of invoicing and payment that Cardinal Peak contends supports its account stated claim.
REQUEST NO. 14 — Expert Materials
Produce all Documents provided to, relied upon by, generated by, or prepared by Dr. Theodore Voss of Pinnacle Economics Group LLC, or any other expert witness, consultant, or advisor retained, consulted, or engaged by Cardinal Peak or its counsel in connection with this matter, including:
(a) All data, reports, analyses, draft reports, final reports, spreadsheets, models, working papers, presentations, and exhibits prepared by or for Dr. Voss or Pinnacle Economics Group LLC;
(b) All Communications between Cardinal Peak (or its counsel at Blackwood Stein & Associates LLP) and Dr. Voss, Pinnacle Economics Group LLC, or any other retained or consulting expert, relating to this matter;
(c) All Documents constituting the factual basis, data inputs, or source materials for any opinions to be rendered by Dr. Voss or any other expert;
(d) The engagement letter, retention agreement, fee arrangement, or other contractual documents between Cardinal Peak (or its counsel) and Pinnacle Economics Group LLC or any other expert retained in connection with this matter;
(e) All prior publications, reports, or testimony by Dr. Voss or any other retained expert that are relevant to the subject matter of this litigation.
REQUEST NO. 15 — Surcharge Practices with Other Customers
Produce all Documents reflecting Cardinal Peak's surcharge policies, practices, and methodologies applied to customers other than Nexford during the Disputed Period (March 2021 through May 2022), to the extent such Documents relate to:
(a) Whether Cardinal Peak applied the Exhibit C Surcharge Methodology (i.e., surcharge calculations based solely on the published Ferrous Scrap Index and Industrial Energy Cost Index, applied against stated baselines) or the Blended Cost Methodology (or any other alternative methodology) in calculating surcharges for customers other than Nexford;
(b) Whether Cardinal Peak's standard or default surcharge calculation methodology — as applied to its customer base generally — is the Blended Cost Methodology or the published-index methodology prescribed by Exhibit C, including any Documents reflecting Cardinal Peak's standard form surcharge provisions or standard operating procedures for surcharge calculations.
For the avoidance of doubt, Nexford does not seek the identity of, or specific pricing terms applicable to, Cardinal Peak's other customers. This Request is expressly limited to Documents concerning Cardinal Peak's surcharge calculation methodology and practices as applied to its customer base during the Disputed Period, for the purpose of determining whether the Blended Cost Methodology represents Cardinal Peak's standard practice or a deviation therefrom.
REQUEST NO. 16 — Organizational and Corporate Documents
Produce Cardinal Peak's organizational and formation documents, including its operating agreement (and any amendments, restatements, or supplements thereto), articles of organization as filed with the Colorado Secretary of State, and any certificates of amendment or other filings reflecting changes to Cardinal Peak's organizational structure.
Produce all Documents reflecting the authority of any individual to execute the MSA on behalf of Cardinal Peak, to issue Surcharge Notices on behalf of Cardinal Peak, or to authorize, initiate, or direct litigation on behalf of Cardinal Peak, including without limitation resolutions, authorizations, delegations of authority, powers of attorney, and corporate governance documents.
Produce Cardinal Peak's annual revenue figures, financial statements (including balance sheets, income statements, and cash flow statements), or summaries thereof, for fiscal years 2020, 2021, and 2022, to the extent relevant to the calculation of damages, the commercial significance of the parties' relationship, or the proportionality of the claims at issue.
REQUEST NO. 17 — MSA Section 7.4(d) Dispute Procedure Communications
Produce all Documents relating to the dispute resolution process set forth in Section 7.4(d) of the MSA, including:
(a) All dispute notices sent by Nexford to Cardinal Peak regarding surcharge invoices, as required by Section 7.4(d) to be delivered within thirty (30) calendar days of receipt of a Surcharge Notice;
(b) All responses by Cardinal Peak to any dispute notices received from Nexford, including all substantive responses, acknowledgments of receipt, and requests for additional information;
(c) All escalation Communications between senior officers of the parties pursuant to the escalation provisions of Section 7.4(d), including any Communications between Frank Delacroix (Cardinal Peak) and any senior officer of Nexford regarding the resolution of surcharge disputes;
(d) All Documents reflecting the parties' efforts, or the absence of efforts, to resolve surcharge disputes through the contractual dispute resolution process prior to the commencement of this litigation, including any meeting agendas, meeting minutes, summaries of discussions, and proposals for resolution.
REQUEST NO. 18 — MSA Performance and Order History
Produce all purchase orders, order confirmations, order acknowledgments, shipping documents, packing lists, bills of lading, delivery receipts, and other delivery records for products (HRC and CRC) sold by Cardinal Peak to Nexford under the MSA during the Disputed Period (March 2021 through May 2022).
Produce all Documents reflecting the volume of HRC and CRC products delivered by Cardinal Peak to Nexford during the Disputed Period, including monthly and cumulative tonnage records. For reference, the MSA contemplated estimated annual volumes of approximately 18,000 tons of HRC and 6,500 tons of CRC.
Produce all Documents reflecting the Base Price applied to each shipment of HRC and CRC during the Disputed Period, and all Documents reflecting any quarterly price adjustments made pursuant to Section 7.2 of the MSA, including the basis for and calculation of any such adjustments.
REQUEST NO. 19 — Insurance and Indemnification
Produce all Documents relating to any insurance policies under which Cardinal Peak has sought, may seek, or is entitled to seek coverage or reimbursement for the claims, damages, losses, or legal expenses asserted in or arising out of this action, including all declarations pages, policy terms, endorsements, and coverage correspondence with insurers.
Produce all Documents relating to any indemnification obligations or contribution rights of any third party with respect to Cardinal Peak's claims against Nexford, or with respect to any liability that Cardinal Peak may incur in connection with this action, including any contractual indemnification provisions, hold harmless agreements, or insurance-related subrogation arrangements.
REQUEST NO. 20 — Document Retention and Preservation
Produce all document retention policies, records management policies, and data retention schedules maintained by Cardinal Peak that are or were in effect at any time from January 1, 2020 through the date of production.
Produce all litigation hold notices, preservation directives, and similar Communications issued by Cardinal Peak, its officers, or its counsel (including Blackwood Stein & Associates LLP) in connection with this matter or the underlying surcharge dispute, including all notices issued to custodians, IT personnel, and records management personnel directing the preservation of Documents and ESI.
Produce all Documents reflecting any destruction, deletion, loss, alteration, or unavailability of Documents potentially responsive to any Request set forth herein, including any Documents reflecting the circumstances under which any such destruction, deletion, loss, or alteration occurred, the identity of the individuals involved, and the steps taken (if any) to recover or remediate any lost or destroyed Documents.
CERTIFICATION AND SIGNATURE
Respectfully submitted on behalf of Defendant Nexford Industrial Holdings Inc.
CALDERWOOD & HARKNESS LLP
By: ________
Priya Anand Partner Illinois ARDC No. 6312487 Calderwood & Harkness LLP 200 South Wacker Drive, Suite 4400 Chicago, Illinois 60606 Telephone: (312) 555-7800 Facsimile: (312) 555-7801
Email: panand@calderwoodharkness.com
By: ________
Simone Laroche Associate Illinois ARDC No. 6328914 Calderwood & Harkness LLP 200 South Wacker Drive, Suite 4400 Chicago, Illinois 60606 Telephone: (312) 555-7800 Facsimile: (312) 555-7801
Email: slaroche@calderwoodharkness.com
Attorneys for Defendant Nexford Industrial Holdings Inc.
CERTIFICATE OF SERVICE
I, Simone Laroche, an attorney, hereby certify that on December 5, 2022, I caused a true and correct copy of the foregoing Defendant Nexford Industrial Holdings Inc.'s First Set of Requests for Production of Documents to Plaintiff Cardinal Peak Industries to be served upon counsel for Plaintiff via electronic service and email, addressed as follows:
Garrett Blackwood, Esq. Megan Hsu, Esq. Blackwood Stein & Associates LLP 717 Seventeenth Street, Suite 2200 Denver, Colorado 80202
Email: gblackwood@blackwoodstein.com
Email: mhsu@blackwoodstein.com
________________________________________
Simone Laroche
CARDINAL PEAK INDUSTRIES, a Colorado limited liability company,
Plaintiff,
v. | Case No. 2022-L-008471
NEXFORD INDUSTRIAL HOLDINGS INC., a Delaware corporation,
Defendant. | Calendar: 5
Judge: Hon. Katherine M. Reilly

IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS COUNTY DEPARTMENT, LAW DIVISION

INTRODUCTORY PARAGRAPH

DEFINITIONS

INSTRUCTIONS

REQUESTS FOR PRODUCTION

CERTIFICATION AND SIGNATURE

CALDERWOOD & HARKNESS LLP

CERTIFICATE OF SERVICE

Record

Parties

Dates

Amounts