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Equistar Chemicals, L.P. v. BMW Constructors, Inc.
State: Illinois
Court: 3rd District Appellate
Docket No: 3-03-0100 Rel
Case Date: 11/03/2004

No. 3-03-0100


IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

A.D., 2004

EQUISTAR CHEMICALS, L.P.,

     Third Party Plaintiff-Appellant,

           v.

BMW CONSTRUCTORS, INC.,

     Third Party Defendant-Appellee.

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Appeal from the Circuit
Court of the 13th Judicial
Circuit, Grundy County,
Illinois,

No. 99-L-21

Honorable Lance Peterson,
Judge, Presiding.



JUSTICE McDADE delivered the opinion of the court modified upon denial of rehearing:
 

Jerry Wood, an injured employee, brought an action in the Circuit Court in GrundyCounty against his co-employee, Michael Bromberek, and the premises owner, third partytortfeasor Equistar Chemicals. Equistar filed a third party action against Wood's employer, BMWConstruction, seeking contribution. Bromberek and Wood entered into a settlement agreementwhereby Bromberek agreed to pay Wood $5,000 for injuries he sustained in exchange for a fullrelease of all liability. BMW moved for summary judgment, contending the settlement haddischarged its vicarious liability. The trial court agreed and granted BMW's summary judgmentmotion and appeal was taken. For the following reasons, we reverse and remand.

 

FACTS

Wood and his spouse sued defendant Equistar to recover damages for personal injuriesreceived when Wood was struck by a truck driven by Bromberek. In his complaint, Wood allegedthe negligence of Equistar in connection with the condition of the premises on which the injuriesoccurred. Wood further alleged that at the time of the accident, he and Bromberek wereemployees of BMW. Equistar answered and filed a third-party complaint seeking contributionfrom BMW and Bromberek for the underlying claim filed by Wood. The third-party complaintagainst BMW asserted two grounds for recovery: BMW's own negligence and vicarious liabilityfor the negligence of Bromberek. This third party complaint is the subject of this appeal. Woodsubsequently amended his complaint to make Bromberek a direct defendant alleging negligencebut not intentional misconduct. That complaint sought to recover for the same injuries.(1)

On June 21, 2000, Bromberek filed a motion to dismiss. In his motion, Bromberekclaimed, in part, that he was entitled to the dismissal of the Wood complaint under the exclusiveremedy provision of the Workers' Compensation Act (820 ILCS 305/5(a) (West 2002)) where thecomplaint alleged that Wood and Bromberek were both employees of BMW. Memorandaopposing the motion on the grounds that Bromberek had not been acting in the course and scopeof his employment at the time of the accident were filed or adopted by plaintiff and Equistar. Thebriefing was completed in late October 2001.

On January 23, 2002, in advance of any decision by the court on the motion to dismiss,Bromberek entered into a written settlement and release agreement with Wood under the terms ofwhich Wood received $5,000 in exchange for a full and complete release of Bromberek and hisinsurer from all liability as a consequence of his injuries. In the written agreement, Bromberekspecifically denied he had been negligent. BMW was not named as a released party in the writtensettlement.

Bromberek, thereafter, petitioned the trial court for a finding of good faith pursuant to theIllinois Joint Tortfeasors Contribution Act (Contribution Act) (740 ILCS 100/2(d) (West 2002)). On the same day, the trial court held a settlement hearing with all parties present through theirattorneys. The court entered an order finding that the settlement between Bromberek and Woodwas in good faith and dismissed Wood's action against Bromberek with prejudice. Counsel forEquistar did not object to the court's good faith finding.

On October 7, 2002, BMW filed a motion for summary judgment as to both counts ofEquistar's second amended complaint on the theory that Equistar "has failed to establish thenecessary requisites to hold BMW liable under vicarious liability." Also on October 7, BMW fileda memorandum in support of its summary judgment motion, asserting: (1) Wood's settlement withBromberek "extinguishes any purported vicarious liability" of BMW; and (2) "BMW had no dutyto supervise its employees in the operation of their own vehicles."

Equistar filed a response to BMW's motion for summary judgment on October 21, 2002. In this response, Equistar did not address the substance of the first legal contention raised by thesummary judgment motion.

On October 29, 2002, the trial court heard argument on the motion. During the course ofthe hearing, counsel for Equistar stated: "Judge, I think as we noted earlier on the record, wedon't contest the liability of BMW strictly as it relates to vicarious liability. Based on thatsettlement, once Mr. Bromberek was out, I don't think he (sic) could be vicariously liable." OnOctober 30, the court granted BMW's motion for summary judgment and dismissed allcomplaints and cross-claims against BMW with prejudice. A finding pursuant to Supreme CourtRule 304(a) (155 Ill. 2d R. 304(a)) was made.

On December 2, 2002, Equistar filed a motion to reconsider the court's ruling. Equistar,citing Ramsey v. Morrison, 175 Ill. 2d 218, 676 N.E.2d 1304 (1997), argued Bromberek'ssettlement had no bearing on BMW's derivative liability. Following a hearing, the court deniedEquistar's motion and concluded:

"I'm quite confident this unique set of facts has not been addressed by an appellatecourt, at least that I know of, and so if I just dogmatically apply the rules set forthin both cases, that plaintiff has the right--I'm sorry, third party plaintiff Equistar hasthe right to sue the employer for contribution notwithstanding the Workers'Compensation Act, which they did, but I cannot get around the rule of law thatstill exists that settlement between the plaintiff and the agent extinguishes vicariousliability of the principal."

The trial court then entered the required finding of "no just reason to delay enforcement orappeal," and third-party plaintiff filed a timely notice of appeal.

DISCUSSION

Summary of Our Decision

The trial court has found that common law principles of vicarious liability create anexception to the Contribution Act's directive that no party is relieved from liability by thesettlement of another unless expressly released in the written settlement agreement reached ingood faith. We do not believe that finding is required by the plain and unambiguous language ofsection 2(c) of the Contribution Act (740 ILCS 100/2(c) (West 2002)) which provides:

"When a release *** is given in good faith to one or more personsliable in tort arising out of the same injury *** , it does notdischarge any of the other tortfeasors from liability for the injury*** unless its terms so provide ***"

That provision of the Act contains no express exception and appears to be unequivocal anddispositive. BMW, however, relying on the appellate court's decision in Bristow v. GriffittsConstruction Co., 140 Ill. App. 3d 191, 488 N.E.2d 332 (1986), and the supreme court's decisionin American National Bank & Trust Co. v. Columbus-Cuneo-Cabrini Medical Center, 154 Ill. 2d347, 355, 609 N.E.2d 285, 289-90 (1992), which agreed with Bristow's reasoning andconclusion, has suggested, and the trial court has agreed, that there is an implicit exception insection 2(c) of the Act for a situation where the liability of one tortfeasor rests solely in itsvicarious responsibility for the negligence of the settling party.

We address the issue thus presented, and we find that, on the facts of this case, the trialcourt's decision is inconsistent with the purposes of both the Contribution Act and the Workers'Compensation Act.

The purpose of the Contribution Act (740 ILCS 100/0.01 et seq (West 2002)) is relief,through a proper apportionment of fault, of a party who is obligated to pay more than his fairshare of damages for an injury. The purpose of the Workers' Compensation Act (820 ILCS305/1, et seq (West 2002)) is the development and enforcement of an expedited procedure forachieving a fair payment for work-related injury without requiring a determination of fault. Tothis end, the act prohibits civil claims against a covered employer and allegedly negligent co-employees by an employee injured on the job.

It is the interplay between these two statutes that distinguishes this case from those onwhich the court and parties relied in arriving at the summary judgment finding. More specifically,it is the fact that plaintiff is the employee as opposed to an independent party that requires a resultdifferent from American National and Bristow.

At the time of the accident at issue in this case, BMW, as employer, became legallyresponsible for Wood's injury to the extent it was caused by its own negligence or the negligenceof Wood's co-worker, Bromberek, while acting within the course and scope of his employment. BMW was thus subject to liability in tort and could be sued for contribution despite the stricturesof the Workers' Compensation Act. Doyle v. Rhodes, 101 Ill. 2d 1, 14, 461 N.E.2d 382, 388(1984). No similar exception exists for co-workers, however, and under the Workers'Compensation Act, Wood could not sue Bromberek for damages negligently caused byBromberek while on the job. Ramsey, 175 Ill. 2d at 224, 676 N.E.2d at 1307. Nonetheless,Wood filed a claim against Bromberek alleging their common employment by BMW, allegingnegligence, and making no allegations of intentional actions. To the extent that Bromberek'snegligence was responsible for Wood's injury, the trial court's order--finding that Bromberek'ssettlement for a relative pittance (a mere 1.3% of the portion of the verdict attributable to hisfault) effectively released BMW from any liability in contribution--would force Equistar to paymore than its fair share.(2)

In the written settlement, Bromberek denied both negligence and liability for Wood'sinjury, and he did not release BMW. If this court were to hold on the facts of this case that thatrelease could operate to bar Equistar's claim for contribution from BMW, the intent of theContribution Act would be thwarted. Therefore, we believe that the Contribution Act requiresthat when the plaintiff is his employee, an employer joint tortfeasor whose liability is solelyvicarious cannot be relieved from a contribution claim on the basis of a release in which it is notnamed. Its relief can only be achieved by a finding on the merits that the co-employee for whomthe employer is vicariously liable was not negligent.

We further believe that this conclusion draws even greater force when coupled with theWorkers' Compensation Act's express intent to subsume the negligence of a co-worker into thecompensation claim against the employer and to permit only one simplified recovery of prescribeddamages payable to the injured employee without consideration of fault. Our supreme court hasdetermined that an employer-- although insulated from direct action by its employee-- can be suedin contribution by another alleged tortfeasor. In the circumstances posed in this case, noexception for either a direct action or a claim in contribution against a negligent co-employee hasbeen recognized. There is, therefore, no legal basis on which any claim of negligence could bemaintained against Bromberek by either Wood or Equistar. To permit a settlement with him torelease the employer does an end-run around the Workers' Compensation Act.

The effect of releasing Bromberek pursuant to a settlement is not and should not beconstrued as a determination of his liability on the merits. Our reversal of the trial court's ordergranting summary judgment in favor in BMW protects the purpose of the Contribution Act whileensuring that the proper parties, as delineated under Ramsey v. Morrison and the Workers'Compensation Act, actually resolve the issues. We believe our holding is consistent with thelegislature's intent in enacting both of these statutes.

Standard of Review

The issues in this appeal arise in conjunction with the trial court's grant of summaryjudgment in favor of BMW. In Illinois, summary judgment is governed by section 2-1005 of theCode of Civil Procedure. 735 ILCS 5/2-1005 (West 2002). Under section 2-1005(c), a party isentitled to summary judgment "if the pleadings, depositions, and admissions on file, together withthe affidavits, if any, show that there is no genuine issue as to any material fact and that themoving party is entitled to judgment as a matter of law." 735 ILCS 5/2-1005(c) (West 2002). Because summary judgment is a drastic method of terminating litigation, the movant's entitlementmust be free from doubt. Logan v. Old Enterprise Farms, Ltd., 139 Ill. 2d 229, 233, 564 N.E.2d778, 780 (1990). Accordingly, the reviewing court must construe the evidence strictly against themovant and liberally in favor of the non-moving party. Logan, 139 Ill. 2d at 234, 564 N.E.2d at780. Where reasonable persons could draw divergent inferences from undisputed facts, summaryjudgment should be denied. Loyola Academy v. S & S Roof Maintenance, Inc., 146 Ill. 2d 263,586 N.E.2d 1211 (1992). In appeals from summary judgment rulings, we conduct de novo reviewutilizing the same standards imposed on the trial court. Outboard Marine Corp. v. LibertyMutual Insurance Co., 154 Ill. 2d 90, 607 N.E.2d 1204 (1992).

We are also called upon to construe the effect of two statutes--the Contribution Act andthe Workers' Compensation Act. Statutory construction presents a question of law which wereview de novo. Health Professionals, LTD. v. Cullinan, 339 Ill. App. 3d 1021, 1026, 791N.E.2d 1179, 1186 (2003).

Analysis

BMW first argues that the question of whether, as a matter of law, a third party plaintiff isentitled to proceed against a vicariously liable employer in an action for contribution after theoriginal plaintiff enters into a settlement with the negligent employee, should not be considered onreview because Equistar did not contest the issue prior to the entry of summary judgment. SeeMcMath v. Katholi, 191 Ill. 2d 251, 255, 730 N.E.2d 1 (2000). To refute this argument, Equistarrefers to its motion to reconsider the order granting summary judgment, BMW's response,Equistar's reply to that response, and the oral argument heard on the motion to reconsider. Further, the pleadings in the cause raise this issue for determination in that Equistar specificallyasserted a contribution claim against BMW based on its vicarious liability. BMW's motion forsummary judgment itself and the attached memoranda further informed the trial judge that he wasbeing asked to pass on the legal viability and sufficiency of Equistar's contribution claim. Forthese reasons, we will consider the issue. See Pick v. Associated Indemnity Corp., 191 Ill. App.3d 121, 126, 547 N.E.2d 555, 559 (1989).

There is a simple statutory answer to the question of whether Equistar's claim againstBMW survives Bromberek's settlement with Wood. The Contribution Act provides that wheretwo or more persons are "subject to liability in tort arising out of the same injury to person orproperty, *** there is a right of contribution among them." 740 ILCS 100/2(a) (West 2002). Section 2(c) of the Contribution Act specifically addresses the effect of settlements oncontribution among tortfeasors. Section 2(c) provides as follows:

"When a release *** is given in good faith to one or more persons liable in tortarising out of the same injury ***, it does not discharge any of the othertortfeasors from liability for the injury or wrongful death unless its terms soprovide ***." 740 ILCS 100/2(c) (West 1993). When read together, the above statutory sections entitle a third party plaintiff to seek recovery incontribution from a joint tortfeasor where the joint tortfeasor has not settled with the claimant andhas not obtained a release, given in good faith, that extinguishes its tort liability. Section 2(c)contains no exceptions. The clear import of the section is that all persons who have not beenexpressly released remain obligated to defend the claim asserted against them on the merits.

BMW urges us to affirm the trial court's finding that common law tort principles requirean interpretation that reads a vicarious liability exception into section 2(c), arguing that thesupreme court has already approved such an exception in American National, 154 Ill. 2d at 355,609 N.E.2d at 289-90. For the reasons that follow, we find such an interpretation is notwarranted in this case.

In applying the above cited statutory language to the case at bar, we must first considerwhether BMW was subject to liability in tort for Wood's injury. If not, there is no right ofcontribution between Equistar and BMW. Giordano v. Morgan, 197 Ill. App. 3d 543, 548, 554N.E.2d 810, 813 (1990). In concluding that BMW was subject to liability in tort for Wood'sinjuries, we rely on the case of Doyle v. Rhodes, 101 Ill. 2d 1, 461 N.E.2d 382 (1984). TheIllinois Supreme Court held in Doyle that under the Contribution Act, an employer's immunityfrom a suit in tort by its employee as plaintiff is not a bar to a claim for contribution against it by athird-party plaintiff. Doyle, 101 Ill. 2d at 14, 461 N.E.2d at 388.

In Doyle, the plaintiff-employee brought a negligence suit against a motorist for injuriessuffered when the motorist's vehicle struck him. The defendant-motorist filed a third-partynegligence action against the plaintiff's employer, seeking contribution under the ContributionAct. The employer argued it was not "subject to liability in tort" to its employees because theWorkers' Compensation Act immunized an employer from an employee's tort action and,consequently, it was not subject to suit under the Contribution Act. Doyle, 101 Ill. 2d at 6, 461N.E.2d at 384-85. In rejecting the employer's argument, the supreme court explained that underthe Contribution Act, "liability is determined at the time of the injury out of which the right tocontribution arises, and not at the time the action for contribution is brought." Doyle, 101 Ill. 2dat 11, 461 N.E.2d at 387. The court held that at the time of an injury for which an employer'snegligence was responsible, the employer is in fact "subject to liability in tort" to his employee.

The Workers' Compensation Act provided an employer only with an affirmative defenseagainst an employee's tort action. Because there was an exposure to tort liability until the defensewas established, the court held that employers were "subject to liability in tort" for purposes of theContribution Act. Doyle, 101 Ill. 2d at 12, 461 N.E.2d at 387. The Doyle court did not limit itsholding to a particular form of tort action. See Schrock v. Shoemaker, 159 Ill. 2d 533, 640N.E.2d 937 (1994). The affirmative defense provided by the Workers' Compensation Act isavailable in an action for contribution. Section 3.5(a) of the Contribution Act reads as follows:

"If a tortfeasor brings an action for contribution against the plaintiff'semployer, the employer's liability for contribution shall not exceed the amount ofthe employer's liability to the plaintiff under the Workers' Compensation Act ***." 740 ILCS 100/3.5(a) (West 2002).

Although the employer's liability is capped, it does exist--and that is what matters here, forpurposes of determining BMW's right to summary judgment. Accordingly, BMW's immunity tosuit by Wood does not bar Equistar's contribution claim against BMW.

Although Equistar claimed BMW was negligent and that its own negligence contributed toWood's injury, that issue is not before this court in this appeal. Equistar also sought contributionbased on BMW's vicarious liability for Bromberek's negligence. In support of its argument thatBromberek's settlement had no effect on BMW's liability, Equistar relied on Ramsey, wherein thesupreme court stated as follows:

"[A] third party sued by an injured employee is not, as a result of this holding,entirely without recourse when the negligence of the plaintiff's coemployee causedor contributed to the plaintiff's injury. *** [T]he third party may still recovercontribution, albeit in a limited amount, from the employer. In many cases, thebasis for imposing contribution liability on the employer will be the negligence of acoemployee. By pursuing a contribution action against the employer, the thirdparty is thereby able to recover some contribution premised on the coemployee'snegligence." Ramsey, 175 Ill. 2d at 230-31, 676 N.E.2d at 1310.

Ramsey, therefore, stands for the proposition that a defendant cannot seek contribution from thecoemployee but could seek contribution from the employer under those facts. Ramsey, 175 Ill. 2dat 231, 676 N.E.2d at 1310. However, in Ramsey, 175 Ill. 2d at 221, 676 N.E.2d at 1305-06, thecoemployee has not, as in this case, been released from liability by the plaintiff. So while the caseclearly established the principle, it does not address the particular fact situation with which we arefaced.

In American National, 154 Ill. 2d 347, 609 N.E.2d 285, the legal issue to be resolved waswhether the Contribution Act had eliminated the doctrine of implied indemnity and therebyprecluded direct quasi-contractual actions based on vicarious liability. The supreme court heldthat it had not, stating:

"The viability of implied indemnity in the quasi-contractual situation insures that ablameless principal cannot be found legally accountable. We therefore hold thatcommon law implied indemnity was not abolished by the Contribution Act inquasi-contractual relationships involving vicarious liability." American National,154 Ill. 2d at 354, 609 N.E.2d at 289.

The plaintiff in American National brought suit against a medical center on a theory ofvicarious liability based on the negligence of its employees. Pursuant to a settlement reachedbetween the plaintiff and the employees, the employees were dismissed from the primary suit. The plaintiff then filed an amended complaint alleging only derivative liability against the medicalcenter for the conduct of its employees. In addressing the amended complaint, the supreme courtcommented that "[i]n a case of vicarious liability in the quasi-contractual context, the principalsimply cannot be one of the 'other tortfeasors' to which section 3 of the Contribution Act refers. [Citation omitted.] The principal is blameless." American National, 154 Ill. 2d at 354, 609N.E.2d at 289. We believe this analysis plainly suggests a difference between direct quasi-contractual actions and contribution claims.

The court held that when a plaintiff brings a respondeat superior claim against a principalin quasi-contract, and to the extent that the principal's potential liability is solely derivative, "anysettlement between the agent and the plaintiff must also extinguish the principal's vicariousliability." American National, 154 Ill. 2d at 355, 609 N.E.2d at 289-90. The court added: "[I]nsuch [quasi-contract] cases, an order should be entered to reflect the extinguishment of theprincipal's vicarious liability." American National, 154 Ill. 2d at 355, 609 N.E.2d at 289.

In reaching its conclusion, the court considered the analysis of the appellate court in a casewhere the parties stood in essentially the same relationships to one another. Bristow, 140 Ill. App.3d 191, 488 N.E.2d 332. The plaintiffs in Bristow brought suit against the driver of a vehicle andhis employer. The plaintiffs' suit against the employer was based solely on the employee'snegligence through the doctrine of respondeat superior. Bristow, 140 Ill. App. 3d at 192, 488N.E.2d at 333. The plaintiffs signed a covenant not to sue the employee in exchange for $20,000,and the employer moved for summary judgment, contending the covenant not to sue haddischarged its liability. Bristow, 140 Ill. App. 3d at 192, 488 N.E.2d at 333. The trial courtdenied the employer's motion for summary judgment and the appellate court reversed. Bristow,140 Ill. App. 3d at 199, 488 N.E.2d at 338. The supreme court cited both the reasoning and theoutcome of Bristow with approval and adopted its result. Neither court made a finding that itsholding regarding direct quasi-contractual actions was applicable in a contribution case.

The specific facts before us remove this case from the general holding in AmericanNational. Although the supreme court held that settlement with the agent should result in anorder extinguishing the principal's vicarious liability, that case did not involve a contributionaction by a third-party plaintiff. In American National (as in Bristow), the plaintiff sued thevicariously liable principal directly. Under those facts, a plaintiff's settlement with an agent, and asubsequent dismissal of the principal, would affect only the plaintiff's own recovery, potentiallylimiting it to the amount of the settlement. Here, Wood's settlement with Bromberek would,given the trial court's order, force Equistar to pay more than its share for Wood's injuriesbecause, under American National's general proposition, Equistar would be precluded frommaintaining its contribution claim against BMW. That result is in contravention of theContribution Act, which has as one of its goals "eliminating inequity between joint tortfeasors." American National, 154 Ill. 2d at 352, 609 N.E.2d at 288.

More importantly, however, the significant, and we believe, dispositive difference betweenthose cases and the instant case is the fact that the plaintiffs in Bristow and American Nationalwere neither employed by the principal nor co-workers of the person(s) whose actions formed thebasis for the vicarious liability claim. There was, therefore, in those cases, no need to factor theWorkers' Compensation Act into the analysis. The Workers' Compensation Act prohibits acommon-law action by an injured employee against a negligent coemployee where the injuryarises out of the employment and occurs in the course of employment. 820 ILCS 305/5 (West2002); Sangster v. Keller, 226 Ill. App. 3d 535, 538, 589 N.E.2d 940, 941 (1992). Unlike theemployer's immunity from suit by an employee, the prohibition of suit against a coemployee is notan affirmative defense to be pled by the coemployee. See Doyle, 101 Ill. 2d at 10, 461 N.E.2d at386. Instead, the plaintiff bears the burden of proof to show that the Act's exclusive remedyprovision does not apply. Fregeau v. Gillespie, 96 Ill. 2d 479, 483, 451 N.E.2d 870, 871-72(1983). Therefore, section 5 of the Workers' Compensation Act presents a statutory bar to anegligence claim between coemployees unless the exception applies. Ultimately, and usually,whether the injury arose out of the employment and occurred in the course of employment is aquestion for the trier of fact. See Kancevicius v. Moyes, 132 Ill. App. 2d 86, 90, 269 N.E.2d 328,331 (1971).

Achieving the purpose of the Contribution Act requires a determination of fault on themerits for all actors who have not been released by a good faith settlement. BMW was notreleased by Bromberek's settlement. Under the scheme established by the Workers'Compensation Act and the cases interpreting its operation, the employer of the plaintiff issubstituted (on a theory of vicarious liability) for any other of his employees whose negligencewould have rendered them subject to liability to their co-worker but for the Workers'Compensation Act's insulation of them from suit. In the context of this case, it is BMW'sobligation to litigate the fault of Bromberek. Because of the trial court's order granting summaryjudgment that has not been done. The order must, therefore, be reversed.

CONCLUSION

For each of the foregoing reasons, the judgment of the circuit court of Grundy Countygranting summary judgment in favor of Equistar and against BMW is reversed, and the cause isremanded for further proceedings consistent with this opinion.

HOLDRIDGE, P.J. and LYTTON, J., concur.

 

 

1. On January 24, 2003, a jury returned a verdict forplaintiffs in the amount of $1,250,000. The apportionment offault was 19% for Wood's contributory fault, 51% for Equistar,and 30% for Bromberek. It is that 30%, or $375,000 which lies atthe heart of this appeal.

2. BMW's actual liability would, of course, be limited to anoffset of the amount it paid on Wood's workers' compensationclaim and the loss of its lien.

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