Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-89-02310/USCOURTS-ca10-89-02310-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 

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FI E 

Ualt: Scat"' Cou-rt of Appeals 

-re .. t!.. c· . .:. Hu 1rcu1c 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

lvlAR 21 1991 

. OBERT L. HOECKER 

Clerk 

CHARLA K. BAYLISS, ) 

) 

Plaintiff-Appellant, ) 

) 

v. ) 

) 

CONTEL FEDERAL SYSTEMS, INC., A Delaware) 

Corporation, successor-in-interest ) 

to Space Communications Company; and ) 

VIRGIL TRUE, an individual, ) 

) 

Defendants-Appellees. ) 

ORDER AND JUDGMENT 

No. 89-2310 

(D.C. No. 87-153-HB 

(D. N.M.) 

Before ANDERSON, TACHA, and BRORBY, Circuit Judges. 

This action arose out of plaintiff's termination from her 

employment with Space Communications Company (Spacecom), the 

1 predecessor in interest to Contel Federal Systems, Inc. Spacecom 

hired plaintiff in August of 1983. At the time of her discharge 

on June 7, 1985, she was working as a senior electronics 

technician on the Tracking Data Relay Satellite System (TDRSS) 

1 After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.9. The case is therefore ordered 

submitted without oral argument. 

Appellate Case: 89-2310 Document: 010110031268 Date Filed: 03/21/1991 Page: 1 
that Spacecom was installing at the White Sands Ground Facility in 

Las Cruces, New Mexico, under a contract with the NASA Goddard 

Space Flight Center. 

Spacecom's contract with NASA covered both the installation 

and the maintenance and operation of the TDRSS. In the spring of 

1985, as Spacecom neared the operation and maintenance phase of 

the project, NASA and Spacecom began negotiating a modification to 

the contract, which included changing from a fixed-cost to a 

cost-plus basis for payment. As part of the modification, NASA 

required Spacecom to revise its staffing plan. Under the new 

staffing plan, Spacecom had to reduce its personnel from 224 

employees to 189 employees by September 1, 1985, as well as change 

the types of jobs to be performed. Taking into account normal 

attrition, Spacecom had to terminate twenty-two employees to meet 

the requirements of the new staffing plan. Plaintiff was one of 

the employees terminated under the reduction in force (RIF). 

In her complaint, plaintiff alleged that Spacecom breached 

its implied contract of employment with her by terminating her 

without following the procedures outlined in two policy manuals. 

She also alleged that Spacecom and Virgil True, the NASA station 

director at the White Sands facility, engaged in unlawful and 

discriminatory employment practices in violation of Title VII, 42 

U.S.C. §§ 2000e through 2000e(17), and that they discharged her in 

violation of public policy. Plaintiff further alleged that Mr. 

True defamed her and tortiously interfered with her contract with 

Spacecom, and that Spacecom failed to pay her all compensation 

due, in violation of N.M. Stat. Ann.§ 50-4-4. 

2 

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Spacecom moved to dismiss plaintiff's claims for breach of 

contract, failure to pay compensation, and discharge in violation 

of public policy. Mr. True moved to dismiss, or in the 

alternative, for summary judgment on, all plaintiff's claims 

against him. By order dated August 7, 1987, the district court 

granted Spacecom's motion as to the claim for discharge in 

violation of public policy, but denied the remainder of the 

motion. The court granted Mr. True's motion for summary judgment, 

concluding that he was absolutely immune from liability for 

plaintiff's claims for tortious interference and defamation, and 

that he could not be liable for the Title VII claims because he 

was not plaintiff's employer. 

Spacecom subsequently moved for summary judgment on the 

remaining claims against it. By order dated August 15, 1988, the 

district court granted the motion as to plaintiff's claims for 

failure to pay compensation and breach of an implied covenant of 

good faith and fair dealing (which was asserted for the first time 

in the summary judgment documents), and denied the motion as to 

the contract and Title VII claims, concluding that genuine issues 

of material fact existed with respect to those claims. 

On November 12, 1989, plaintiff and Spacecom proceeded to 

trial before the court on the contract and Title VII claims. At 

the conclusion of the trial, the district court ruled in favor of 

Spacecom. The court found that plaintiff did not have an implied 

contract of employment with Spacecom, and that even if she did, 

Spacecom did not breach it. With respect to plaintiff's Title VII 

claims, the court found that the RIF was legitimate and that there 

3 

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was no evidence, statistical or otherwise, that Spacecom 

discriminated against any employees on the basis of their gender 

in determining who to terminate; all the RIF candidates were 

chosen for legitimate business reasons. The court also found that 

Spacecom did not discriminate against plaintiff on the basis of 

her gender by failing to rehire her when she applied for positions 

in 1985 and 1989. Furthermore, the court concluded that 

plaintiff's claim for retaliatory failure to rehire was not 

properly before it because plaintiff did not raise the claim in 

her complaint before the New Mexico Human Rights Commission. To 

the extent the claim was before the court, it found that the 

undisputed evidence showed that the person who made the decision 

not to rehire plaintiff did not know she had filed a complaint 

with either the Human Rights Commission or the district court. 

In the section of her appellate brief entitled "Statement of 

the Issues," plaintiff sets forth five issues: 

I. Was Defendant True correctly dismissed from the 

complaint? 

II. Did the Court err in granting defendant's motion 

for summary judgment on the claim for breach of implied 

covenant of good faith and fair dealing? 

III. Did the Court err in dismissing Bayliss' claim for 

wrongful discharge in violation of public policy? 

IV. Did the Court err in dismissing Bayliss' claims 

under Title VII of the Civil Rights Act of 1964? 

V. Did the Court err in dismissing Bayliss' claim of 

breach of employment contract? 

In the body of her appellate brief, however, plaintiff fails to 

discuss the second and third issues. Therefore, we will deem 

those issues waived and address only the other three issues. See 

4 

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Abercrombie v. City of Catoosa, 896 F.2d 1228, 1231 (10th Cir. 

1990). 

We turn first to the district court's disposition of 

plaintiff's claims against Mr. True. Plaintiff's only arguments 

with respect to those claims are (1) that she named Mr. True in 

his individual, not his official, capacity, (2) that Mr. True hid 

behind his official position with NASA to advance his personal 

goals, which included ridding Spacecom of employees he did not 

like, and (3) that the district court prematurely dismissed the 

claims against Mr. True before plaintiff could produce evidence of 

Mr. True's complicity in her termination. 

With respect to the last argument, the record does not 

reflect that plaintiff moved for a continuance of the summary 

judgment motion under Fed. R. Civ. P. 56(f) to conduct additional 

discovery or submit additional materials to the court. 

Plaintiff's "decision not to ask for a continuance evinces [her] 

willingness to stand on the submissions [she] had already made," 

Friedel v. City of Madison, 832 F.2d 965, 968 (7th Cir. 1987), and 

she cannot complain on appeal that the district court ruled on the 

summary judgment motion prematurely. 

Plaintiff's other arguments challenge only the district 

court's ruling that Mr. True was absolutely immune from liability 

on the tortious interference and defamation claims, not its ruling 

that Mr. True could not be held liable on the Title VII claims. 

Therefore, we will address only the ruling on absolute immunity. 

After the district court granted summary judgment for Mr. 

True, but before it entered a final judgment in this case, 

5 

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Congress enacted the Federal Employees Liability Reform and Tort 

Compensation Act of 1988, Pub. L. No. 100-694, 102 Stat. 4563 

(1988)(Reform Act), codified at 28 u.s.c. § 2679 (1989), which 

applies to "all claims, civil actions, and proceedings pending on, 

or filed on or after" November 18, 1988, Pub. L. No. 100-694, § 8, 

102 Stat. 4565. This case was still pending in the district court 

on November 18, 1988, so the Reform Act applies to it. "The 

[Reform] Act provides that when a federal employee who was acting 

within the scope of his employment is sued for a common-law tort, 

the United States is substituted as a party defendant, and the 

exclusive remedy lies under the Federal Tort Claims Act against 

the United States." Moreno v. Small Business Admin., 877 F.2d 

715, 716-17 (8th Cir. 1989). 

As part of its analysis of absolute immunity, the district 

court found that Mr. True was acting within the scope of his 

employment when he committed the actions of which plaintiff 

complained. In addition, after plaintiff filed her appeal, the 

United States Attorney General issued a certificate stating that 

Mr. True was acting within the scope of his employment. The 

Attorney General issued the certificate pursuant to 28 U.S.C. 

§ 2679(d)(l), which provides: 

Upon certification by the Attorney General that the 

defendant employee was acting within the scope of his 

office or employment at the time of the incident out of 

which the claim arose, any civil action or proceeding 

commenced upon such claim in a United States district 

court shall be deemed an action against the United 

States under the provisions of this title and all 

references thereto, and the United States shall be 

substituted as the party defendant. 

6 

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Plaintiff does not challenge either the district court's or 

the Attorney General's determination that Mr. True acted within 

the scope of his employment; she argues only that he acted with an 

improper motive. Therefore, pursuant to the Reform Act, the 

United States should be substituted for Mr. True and the case 

should proceed as one against the United States under the Federal 

Tort Claims Act (FTCA), 28 U.S.C. §§ 1346, 2671-2680. See id. 

§ 2679(d)(l) and (4). "The terms of the government's consent to 

be sued define the court's jurisdiction [under the FTCA]," Ewell 

v. United States, 776 F.2d 246, 248 (10th Cir. 1985), however, and 

the United States has not consented to be sued for "[a]ny claim 

arising out of assault, battery, false imprisonment, false arrest, 

malicious prosecution, abuse of process, libel, slander, 

misrepresentation, deceit, or interference with contract rights" 

by any federal employee who is not an "investigative or law 

enforcement officer[] of the United States." 28 U.S.C. § 2680(h). 

Therefore, neither this court nor the district court has subject 

matter jurisdiction to entertain a claim against the United States 

for defamation or tortious interference with contractual 

relations. 

In light of the foregoing, we will vacate the district 

court's judgment in favor of Mr. True on plaintiff's claims for 

defamation and tortious interference, and remand those claims to 

the district court with directions to substitute the United States 

as the party defendant and then dismiss for lack of subject matter 

jurisdiction. Since the district court determined that plaintiff 

essentially failed to state a claim for relief against Mr. True 

7 

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under Title VII, we need not determine whether the United States 

otherwise should be substituted as a party defendant on that 

claim. Instead, we simply may affirm the district court's 

judgment. 

We turn next to plaintiff's claim for breach of implied 

contract. Plaintiff contends that she had an implied contract of 

employment with Spacecom based on the representations made to her 

at the time of her employment and the provisions of certain policy 

manuals. Under New Mexico law, whether a contract of employment 

can be implied depends on the "totality of the parties' 

relationship and surrounding circumstances," including the 

parties' words, conduct, and any policy manual. Newberry v. 

Allied Stores, Inc., 773 P.2d 1231, 1234-35 (N.M. 1989). "[A] 

personnel manual gives rise to an implied contract if it 

controlled the employer-employee relationship and an employee 

could reasonably expect his employer to conform to the procedures 

it outlined." Id. at 1234. "[W]hether an employee handbook has 

modified the employment relationship is a question of fact 

. . . . " Id. 

The district court determined that plaintiff did not have an 

implied employment contract with Spacecom, and specifically found 

that "there is no provision in any procedure manual or policy 

manual of [Spacecom] that could be considered an employment 

contract that would give any rights to an employee in case of a 

RIF." Rec. Vol. III, tr. at 418. We review this finding of fact 

under a clearly erroneous standard. See Fed. R. Civ. P. 

52(a)("Findings of fact, whether based on oral or documentary 

8 

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evidence, shall not be set aside unless clearly erroneous, and due 

regard shall be given to the opportunity of the trial court to 

judge the credibility of the witnesses."); Anderson v. City of 

Bessemer City, 470 U.S. 564, 573 (1985)(standard governing 

appellate review of district court's findings of fact is set forth 

in Rule 52 (a)). 

The record shows that the only manual Spacecom gave plaintiff 

during the course of her employment was the employee manual. 

Plaintiff, however, does not rely on the provisions of that 

manual; she relies solely on the Spacecom Policy Manual and the 

TDRSS Operations Handbook. Spacecom gave its Policy Manual only 

to members of management. Plaintiff testified that the one time 

she sought to consult the manual, concerning reimbursement for 

travel expenses, her supervisor questioned her extensively before 

he would permit her to look at the manual and then he limited her 

review to the provision(s) on travel expenses. 

The New Mexico Supreme Court has held that "'if an employer 

does choose to issue a policy statement, in a manual or otherwise, 

and, by its language or by the employer's actions, encourages 

reliance thereon, the employer cannot be free to only selectively 

abide by it.'" Lukoski v. Sandia Indian Management Co., 748 P.2d 

507, 510 (N.M. 1988)(quoting Leikvold v. Valley View Community 

Hosp., 688 P.2d 170, 174 (Ariz. 1984)(emphasis added). In 

general, handbooks should not be given contractual effect unless 

the employee can establish that she knew of the provisions in 

question, that her employer induced her to rely on the provisions, 

and that she did in fact rely on them. See Williams v. Maremont 

9 

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Corp., 875 F.2d 1476, 1482-83 (10th Cir. 1989)(applying Oklahoma 

law). Although New Mexico law is a bit unclear as to what an 

employee must show concerning reliance, the New Mexico courts have 

treated reliance as an important factor in determining whether an 

implied contract exists. See Paca v. K-Mart Corp., 775 P.2d 245, 

246-47 (N.M. 1989)(because handbook applied only to hourly 

employees and was not given to plaintiff, a salaried managerial 

employee, plaintiff "had no reason to rely on its contents"); 

Newberry v. Allied Stores, Inc., 773 P.2d at 1235 (handbook given 

to plaintiff during training as manager, who was told that it was 

"his bible," created implied contract); Lukoski v. Sandia Indian 

Management Co., 748 P.2d at 508-10 (manual distributed to all 

employees, who were required to acknowledge receipt and agree to 

conform to the provisions thereof, created implied contract). But 

see, McGinnis v. Honeywell, Inc., 791 P.2d 452, 457 (N.M. 

1990)(noting that other jurisdictions have either "rejected or 

significantly diluted" some or all of the elements of an implied 

contract, including reliance, in the employment context). 

Here, plaintiff did not establish that she even knew of the 

provisions concerning termination in the Spacecom Policy Manual 

and the TDRSS Operations Handbook prior to her termination, much 

less relied on them. Furthermore, she did not present any 

evidence that Spacecom's conduct otherwise encouraged her to rely 

on the provisions in the manuals or created an implied contract of 

employment. To the contrary, the evidence showed that several 

members of Spacecom management told plaintiff during and after her 

termination that she could not rely on the provisions in the 

10 

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Policy Manual or the TDRSS Operations Handbook. As to the 

representations made to plaintiff when she was hired, Carl Reilly, 

who interviewed and hired plaintiff, testified that he told her 

that Spacecom had a ten-year contract with NASA, but did not 

promise her any specific term of employment. Based on the 

totality of the circumstances, the trial court's finding that 

there was no implied contract of employment between plaintiff and 

Spacecom was not clearly erroneous. 

Even if Spacecom were otherwise bound to follow the 

procedures for termination set forth in its Policy Manual and 

TDRSS Operations Handbook, as the New Mexico Supreme Court 

suggested in Boudar v. E.G. & G., Inc., 742 P.2d 491, 495 (N.M. 

1987)(plaintiff may rely on personnel policy guide "simply as a 

means to assess his employer's procedure as to termination"), and 

Francis v. Memorial General Hospital, 726 P.2d 852, 853 (N.M. 

1986)("where such a policy manual exists, the employer must follow 

the procedures therein governing termination, even for an employee 

at will"), the district court found there were no provisions in 

the manuals concerning the procedures to be followed in the event 

of a RIF. The record supports this finding, and plaintiff's 

counsel conceded the point in his argument before the district 

court. Furthermore, the record shows that Spacecom substantially 

complied with the general provisions concerning involuntary 

terminations. Therefore, we affirm the district court's entry of 

judgment in favor of Spacecom on plaintiff's claim for breach of 

implied contract. 

11 

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We turn now to plaintiff's claims against Spacecom under 

Title VII. Although plaintiff did not include in her complaint 

before the New Mexico Human Rights Commission any allegation that 

Spacecom maintained a sexually hostile work environment, she did 

attempt to present such a claim to the district court. Spacecom 

contended below and on appeal that a claim for hostile work 

environment was not before the district court. We need not decide 

whether plaintiff adequately raised a claim for hostile work 

environment, however, because even if she did, the evidence to 

support such a claim is wholly lacking. 

[H)ostile work environment harassment arises when sexual 

conduct "has the purpose or effect of unreasonably 

interfering with an individual's work performance or 

creating an intimidating, hostile, or offensive working 

environment." "For [hostile work environment) sexual 

harassment to be actionable, it must be sufficiently 

severe or pervasive 'to alter the conditions of [the 

victim's) employment and create an abusive working 

environment.'" 

Hicks v. Gates Rubber Co., 833 F.2d 1406, 1413 (10th Cir. 

1987)(citations omitted). Although the evidence in the record 

establishes that an atmosphere of unease and mistrust existed 

among the Spacecom employees at the White Sands Ground Facility, 

the evidence does not suggest that the atmosphere resulted from 

sexual harassment. Rather, the atmosphere resulted from ongoing 

conflicts between NASA and Spacecom regarding the performance of 

their contract, as well as uncertainties that arose when the 

parties began negotiating the modification to their contract. 

Plaintiff contends that her claim for hostile work 

environment is supported by evidence that she was assigned 

clerical duties in her department when the other employees, who 

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were males, were not. Plaintiff testified, however, that she was 

assigned those duties because she was the most capable of 

performing them well, and that she gladly agreed to perform them. 

Therefore, the district court's finding that Spacecom did not 

discriminate against plaintiff in her work assignments is not 

clearly erroneous. 

Plaintiff also contends that the district court erred in 

entering judgment in favor of Spacecom on her claim for 

discriminatory discharge. The district court found that there was 

no evidence of Spacecom's intent to discriminate against anyone on 

the basis of gender in choosing which employees to terminate in 

the RIF. Plaintiff does not raise any issues of law regarding her 

claim for discriminatory discharge, so "our review is limited to a 

determination of whether the trial judge's factual findings of no 

discrimination are 'clearly erroneous' under Rule 52(a) of the 

Federal Rules of Civil Procedure." Reyes v. Hoffman, 580 F.2d 

393, 394 (10th Cir. 1978); see also, Thompson v. Rockwell Int'l 

Corp., 811 F.2d 1345, 1350 (10th Cir. 1987)("The Supreme Court has 

made clear that discriminatory intent, although it is the ultimate 

issue in Title VII cases, is still a factual question to be 

reviewed under the 'clearly erroneous' standard as prescribed in 

Rule 52(a), F.R.Civ.P."). 

The district court specifically found that the RIF was not a 

subterfuge, but rather "was brought about by pressure from NASA to 

reduce the number of personnel, because the contract was going to 

a cost-plus basis," Rec. Vol. III, tr. at 417, and that Spacecom 

decided who to terminate in the RIF based on "legitimate business 

13 

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determinations to try to retain the best employees," id. at 419. 

Based on these findings, the court determined that Spacecom did 

not discriminate against plaintiff in discharging her. Our review 

of the record satisfies us that the district court's ultimate 

finding in favor of Spacecom is supported by substantial evidence 

and is not clearly erroneous. 

Plaintiff also asserted a claim for discrimination in failing 

to rehire her when she applied for positions with Spacecom in 1985 

and 1989. On appeal, she does not raise any issues of law; she 

argues only that the evidence showed she was not hired because 

Spacecom blackballed her based on her attitude and work habits, 

and that such blackballing "was retaliatory in furtherance of 

Spacecom's policy not to rehire RIFed personnel under any 

circumstances," Brief of Appellant at 34. Once again, our review 

is limited to determining whether the district court's findings of 

no discrimination are clearly erroneous. See Reyes v. Hoffman, 

580 F.2d at 394. 

We note at the outset that plaintiff's arguments on appeal do 

not challenge the district court's determination that Spacecom did 

not discriminate against her on the basis of her gender in failing 

to rehire her. In fact, her argument that Spacecom had a policy 

of not rehiring any employees who were terminated in the RIF 

supports the district court's findings, since only two of the 

twenty-two employees terminated in the RIF were women. 

With respect to the 1985 failure to rehire, the district 

court found that although plaintiff was qualified for the position 

for which she applied, the court had "no reason to discount [the] 

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reasoning [of Mr. Shelden, who made the hiring decision,] that he 

found the others to be at least as qualified as the plaintiff." 

Rec. Vol. III, tr. at 421. The court evidently based its finding, 

at least in part, on its determination that Mr. Shelden's 

testimony about Spacecom's reason for not rehiring plaintiff was 

entirely credible. "When findings are based on determinations 

regarding the credibility of witnesses, Rule 52(a) demands even 

greater deference to the trial court's findings .... " 

Anderson v. City of Bessemer City, 470 U.S. at 575. Based upon 

our review of the record, we conclude that the district court's 

finding that Spacecom did not discriminate against plaintiff when 

it failed to rehire her in 1985 is supported by substantial 

evidence and is not clearly erroneous. 

With regard to plaintiff's claim that Spacecom discriminated 

against her when it failed to rehire her in 1989, the district 

court found that Spacecom legitimately filled the position through 

an internal transfer. In order to prevail on her claim, plaintiff 

had to prove, among other things, that she applied for an 

available position for which she was qualified. See Texas Dep't 

of Community Affairs v. Burdine, 450 U.S. 248, 253 (1981). The 

record shows that although Spacecom originally advertised for a 

senior electronics technician in 1989, the site manager put the 

position on hold pending a RIF, and, as part of the reorganization 

associated with the RIF, later determined that Spacecom needed 

another senior computer operator more than a senior electronics 

technician. Therefore, the position was reclassified to senior 

computer operator and an employee who otherwise would have been 

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terminated in the RIF was transferred into the position. Thus, 

when Spacecom made its hiring decision, the position of senior 

electronics technician was no longer available. Plaintiff 

presented no evidence that she was qualified for the senior 

computer operator position, or that Spacecom's decision to 

reclassify the position was discriminatorily motivated. 

Therefore, the district court's ultimate finding in favor of 

Spacecom was not clearly erroneous. 

Plaintiff does not present any argument in her brief on 

appeal concerning the district court's ruling on her claim for 

retaliatory failure to rehire. Therefore, we will deem the issue 

waived. See Abercrombie v. City of Catoosa, 896 F.2d at 1231. In 

light of the foregoing, we affirm the district court's ruling in 

favor of Spacecom on plaintiff's Title VII claims. 

In sum, we affirm the district court's disposition of each of 

plaintiff's claims with the exception of her claims for tortious 

interference and defamation against Mr. True. Pursuant to the 

Reform Act and the other provisions of the FTCA, the United States 

should be substituted as the party defendant on the latter two 

claims, and then those claims should be dismissed for lack of 

subject matter jurisdiction. The judgment of the United States 

District Court for the District of New Mexico is AFFIRMED in part, 

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VACATED in part, and REMANDED for further proceedings consistent 

with this opinion. 

17 

Entered for the Court 

Stephen H. Anderson 

Circuit Judge 

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