Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-1_10-cv-00109/USCOURTS-alsd-1_10-cv-00109-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

---

1 The briefing schedule (doc. 8) authorized plaintiffs to file a reply brief in further

support of their Motion on or before March 31, 2010. By not filing a reply, plaintiffs have

elected not to be heard in rebuttal to the Response (doc. 9) submitted by defendant.

2 Although the Complaint does not specify the precise location of that parcel,

accompanying exhibits reflect that the Spottswoods’ property is located in an exclusive

residential area on Scenic Highway 98 in Point Clear, Alabama. (Complaint, Exh. 2, ¶ 2.) An

Alabama appellate court has described this lot as being “located along the eastern shore of

Mobile Bay approximately one mile south of the Grand Hotel at Point Clear.” Spottswood v.

Reimer, --- So.3d ----, 2009 WL 2195888, *1 (Ala.Civ.App. July 24, 2009). 

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

GEORGE G. SPOTTSWOOD, et al., )

 )

Plaintiffs, )

 )

v. ) CIVIL ACTION 10-0109-WS-B

 )

STEWART TITLE GUARANTY )

COMPANY, )

 )

Defendant. )

ORDER

This matter comes before the Court on plaintiffs’ Motion to Remand (doc. 6). The

Motion has been briefed and is now ripe for disposition.1

I. Relevant Background.

On February 2, 2010, plaintiffs, George and Amy Spottswood, filed their Complaint

against defendant, Stewart Title Guaranty Company (“Stewart”), in the Circuit Court of Baldwin

County, Alabama. In this action, the Spottswoods brought a claim against Stewart pursuant to a

title insurance policy (the “Policy”) that Stewart had issued in plaintiffs’ favor on March 23,

2005. According to the Complaint, the Policy’s coverage limits were $1.8 million.

The Policy applied to certain real property in Baldwin County that the Spottswoods had

purchased in March 2005.2

 The Warranty Deed conveyed to the Spottswoods in that transaction

specified that the parcel included 56.53 feet, more or less, of frontage on Mobile Bay. Shortly

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3 Review of the published opinion of the Alabama Court of Civil Appeals in the

Reimer Action confirms this characterization. The Alabama appellate court noted that the

boundary line established by the trial court “results in the Reimer lot having a bay frontage of

61.3 feet while the Spottswood lot has a bay frontage of 48.9 feet,” and specifically affirmed that

determination. See Reimer, 2009 WL 2195888 at *8.

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after the Spottswoods purchased that property, however, their immediate neighbors to the south

(who are not parties to these proceedings) brought a declaratory judgment action (the “Reimer

Action”) against the Spottswoods in Baldwin County Circuit Court contesting the precise

location of the common boundary line separating their respective parcels. The Spottswoods

allege in their Complaint that the Reimer Action was decided adversely to them, in that “the trial

court decree awarded to the Spottswoods a parcel of real property having approximately 49.50

feet of frontage on Mobile Bay, rather than frontage of 56.53 feet.” (Complaint, ¶ 7.) According

to the Spottswoods, this aspect of the trial court’s ruling was affirmed on appeal.3

Based on the Spottswoods’ loss of more than seven feet of Mobile Bay frontage pursuant

to the Reimer Action, the Spottswoods’ Complaint alleges a cause of action for compensatory

damages against Stewart under the Policy. In particular, the Spottswoods seek to recover from

Stewart on the grounds that title to their property was “vested other than as stated” in the Policy,

that their property was “subject to a defect in or encumbrance on said title,” and that during the

pendency of the Reimer Action (from June 2005 through July 2009) “the title to the Spottswood

property has been unmarketable.” (Complaint, ¶ 9.) The Complaint does not purport to quantify

the compensatory damages sought.

On March 3, 2010, Stewart removed this action to this District Court, predicating federal

subject matter jurisdiction on 28 U.S.C. § 1332. Specifically, Stewart maintains that there is

complete diversity of citizenship between the parties, inasmuch as plaintiffs are Alabama

citizens while Stewart is a Texas corporation with its principal place of business in Texas. (Doc.

1, ¶¶ 7-8; Martin Decl., ¶ 7.) As to the $75,000 jurisdictional threshold, Stewart asserts that the

loss of more than seven feet of Mobile Bay frontage (i.e., the injury for which the Spottswoods

seek recompense under the Policy) “would certainly result in damages in excess of $75,000” in

the form of diminished valuation of plaintiffs’ property. (Doc. 1, ¶ 12.) To demonstrate that the

amount in controversy is satisfied, Stewart filed contemporaneously with its Notice of Removal

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4 See also Whitt v. Sherman Int’l Corp., 147 F.3d 1325, 1333 (11th Cir. 1998)

(expressing preference for remand where removal jurisdiction is not absolutely clear); Burns v.

Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994) (uncertainties regarding removal are

resolved in favor of remand); Newman v. Spectrum Stores, Inc., 109 F. Supp.2d 1342, 1345 

(M.D. Ala. 2000) (“Because federal court jurisdiction is limited, the Eleventh Circuit favors

remand of removed cases where federal jurisdiction is not absolutely clear.”).

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a report from Edmund G. Eslava III of The Appraisal & Consultant Group (“ACG”) dated

February 26, 2010. The ACG report set forth specific expert opinions utilizing valuation

techniques for property in that geographic area and actual data from comparable sales, as to the

impact of the Spottswoods’ loss of 7.03 feet of Mobile Bay frontage on the value of their

property. (See doc. 1, Exh. 2, Exh. A at 8.) 

Plaintiffs have now filed a Motion to Remand in which they seek remand of this action to

state court for lack of federal subject matter jurisdiction.

II. Analysis.

A. Legal Standard for Motion to Remand.

A removing defendant must establish the propriety of removal under 28 U.S.C. § 1441

and, therefore, must establish the existence of federal jurisdiction. See Friedman v. New York

Life Ins. Co., 410 F.3d 1350, 1353 (11th Cir. 2005) (“[i]n removal cases, the burden is on the

party who sought removal to demonstrate that federal jurisdiction exists”) (citation omitted). 

Because removal infringes upon state sovereignty and implicates central concepts of federalism,

removal statutes must be construed narrowly, with all doubts resolved in favor of remand. See

University of South Alabama v. American Tobacco Co., 168 F.3d 405, 411 (11th Cir. 1999)

(explaining that strict construction of removal statutes derives from “significant federalism

concerns” raised by removal jurisdiction).4

There being no federal question presented in the Complaint, Stewart’s sole basis for

removal was diversity of citizenship. Under 28 U.S.C. § 1332(a), federal courts have original

jurisdiction over all civil actions between citizens of different states where the amount in

controversy exceeds the sum or value of $75,000, exclusive of interest and costs. See Darden v.

Ford Consumer Finance Co., 200 F.3d 753, 755 (11th Cir. 2000) (to qualify for diversity

jurisdiction, complaint must establish “complete diversity of the parties’ citizenship and an

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5 Compliance with the diversity of citizenship requirement is clearly set forth in the

Notice of Remand and in the Complaint. There is no reason to believe that complete diversity

between the parties is lacking, and plaintiffs do not suggest otherwise. Accordingly, the Motion

to Remand turns solely on whether the amount in controversy element of § 1332 is satisfied.

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amount in controversy exceeding $75,000”); Triggs v. John Crump Toyota, Inc., 154 F.3d 1284,

1287 (11th Cir. 1998) (similar). “In light of the federalism and separation of powers concerns

implicated by diversity jurisdiction, federal courts are obligated to strictly construe the statutory

grant of diversity jurisdiction ... [and] to scrupulously confine their own jurisdiction to the

precise limits which the statute has defined.” Morrison v. Allstate Indem. Co., 228 F.3d 1255,

1268 (11th Cir. 2000) (citations omitted).

B. The Amount in Controversy.

Plaintiffs’ Motion to Remand is framed strictly in terms of the sufficiency of proof as to

the amount in controversy prong of the § 1332 jurisdictional test.5 The Spottswoods do not

represent (much less offer evidence) that the amount in controversy is actually below the

$75,000 threshold, nor do they deny that they are claiming damages of at least that amount. 

Instead, the thrust of the Motion is plaintiffs’ contention that defendant has failed to establish the

jurisdictional amount by a preponderance of the evidence, but is improperly relying on sheer

speculation as to amount in controversy.

It is well established that “in the removal context where damages are unspecified, the

removing party bears the burden of establishing the jurisdictional amount by a preponderance of

the evidence.” Lowery v. Alabama Power Co., 483 F.3d 1184, 1208 (11th Cir. 2007); see also

Jackson v. Select Portfolio Servicing, Inc., 651 F. Supp.2d 1279, 1283 (S.D. Ala. 2009) (“In a

removal action, the party asserting jurisdiction has the burden of establishing proof of

jurisdiction by a preponderance of the evidence.”); Roe v. Michelin North America, Inc., 637 F.

Supp.2d 995, 998 (M.D. Ala. 2009) (“where damages have not been specified by the plaintiff,

the defendant must show by a preponderance of the evidence that the $ 75,000 amount-incontroversy requirement is met”). The Eleventh Circuit has explained that “[i]f the jurisdictional

amount is either stated clearly on the face of the documents before the court, or readily deducible

from them, then the court has jurisdiction. If not, the court must remand.” Lowery, 483 F.3d at

1211. Moreover, because “the district court has before it only the limited universe of evidence

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6 Had Lowery so declared, that proposition would have been at odds with prior

Eleventh Circuit precedent recognizing that if it is not facially apparent from the complaint that

the jurisdictional amount is in controversy, “the court may consider facts in the removal petition,

and may require parties to submit summary-judgment-type evidence relevant to the amount in

controversy at the time of removal.” Williams v. Best Buy Co., 269 F.3d 1316, 1319 (11th Cir.

2001) (citations and internal quotation marks omitted); see also Sierminski v. Transouth Fin.

Corp., 216 F.3d 945, 949 (11th Cir. 2000).

7 Another example of permissible outside evidence is found in a post-Lowery

unpublished decision styled Kok v Kadant Black Clawson, Inc., 2008 WL 1823336 (11th Cir.

Apr. 24, 2008). In Kok, the plaintiff brought a state-law employment discrimination claim and

demanded back pay, front pay and other damages. The defendant removed the case to federal

court pursuant to 28 U.S.C. §§ 1332 and 1446, following which the plaintiff filed a motion to

remand based on the jurisdictional amount. In opposition to that motion, the employer submitted

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available when the motion to remand is filed – i.e., the notice of removal and accompanying

documents,” if that evidence is inadequate to establish jurisdiction, then “neither the defendants

nor the court may speculate in an attempt to make up for the notice’s failings.” Id. at 1214-15

(footnotes omitted). The law is clear that “the existence of jurisdiction should not be divined by

looking to the stars.” Id. at 1215; see also Bowen v. State Farm Mut. Auto. Ins. Co., 2010 WL

1257470, *1 (M.D. Fla. Mar. 29, 2010) (“Conclusory allegations that the jurisdictional amount is

satisfied, without setting forth the underlying facts supporting such assertion, are insufficient.”).

In reliance on these principles, the Spottswoods advance a pair of arguments to support

their contention that remand is warranted. First, plaintiffs contend, citing Lowery, that

defendant’s exhibits appended to its Notice of Removal cannot be considered at all because they

were not “received from Plaintiffs.” (Doc. 6, at 4.) This reasoning embraces a common

misunderstanding of Lowery. Contrary to plaintiffs’ suggestion, Lowery does not categorically

bar a removing defendant from submitting outside evidence of damages contemporaneously with

its notice of removal to satisfy its burden of proving jurisdiction by a preponderance of the

evidence.6

 In fact, the Lowery panel recognized that “[a] defendant would be free to introduce

evidence regarding damages arising from a source such as a contract provision whether or not

the defendant received the contract from the plaintiff” because, in those circumstances, “the

underlying substantive law provides a rule that allows the court to determine the amount of

damages.” Lowery, 483 F.3d at 1214 n.66.7 Such is the case here. The Spottswoods’ Complaint

Case 1:10-cv-00109-WS-B Document 10 Filed 04/16/10 Page 5 of 9
the plaintiff’s W-2 form and an affidavit documenting his gross pay and benefits, from which his

back pay entitlement (if he were to prevail) could be definitively computed as exceeding

$75,000. Based on this evidence, the Kok panel found that “[t]he district court correctly

concluded that [the defendant] established that, at the time of removal, [the plaintiff]’s complaint

for damages exceeded the amount in controversy required for diversity jurisdiction.” Id. at *1;

see also Webb v. CUNA Mut. Group, 2010 WL 366688 (S.D. Ala. Jan. 22, 2010) (denying

motion to remand where plaintiff sought unspecified life insurance proceeds, defendant

appended life insurance policy to notice of removal, and policy provided for benefits of

$77,000); Boland v. Auto-Owners Ins. Co., 2009 WL 4730681, *3-4 (M.D. Ala. Dec. 7, 2009)

(considering pre-suit papers showing “specific and reasonable estimates” of lost rental income

for each piece of property for which plaintiff sought insurance benefits, and finding jurisdictional

amount satisfied, even though complaint did not specify amount in controversy); Wiltew v.

Parker, 2009 WL 3615041, *1 (S.D. Ala. Oct. 30, 2009) (finding that defendant’s declaration

concerning amount in controversy may properly be considered in remand analysis, where

declaration documented the value of three different bids which formed the basis of the plaintiff’s

claims); La Rocca v. Stahlheber, --- F. Supp.2d ----, 2009 WL 3667068, *2-3 (S.D. Fla. Oct. 23,

2009) (denying motion to remand where defendant submitted medical reports showing a low-end

estimate of $2,000 in future medical bills per year, plus actuarial tables showing a life

expectancy for plaintiff of approximately 38 years, such that amount in controversy was at least

$76,000); Dutton v. State Farm Mut. Auto. Ins. Co., 2009 WL 2985685, *2 (M.D. Fla. Sept. 15,

2009) (“If a district court cannot determine the amount of controversy from the face of the

complaint, it should consider the allegations in the notice of removal and any summary judgment

type evidence that the amount in controversy exceeds $75,000.00.”); Gleason v. Roche

Laboratories, Inc., 2009 WL 728531, *2 n.2 (M.D. Fla. Mar. 19, 2009) (considering defendant’s

affidavits concerning plaintiff’s past wages as relevant evidence to establish the amount in

controversy, and finding nothing in Lowery precluding it from doing so). The point is that when

the value of a plaintiff’s claim is objectively verifiable using evidence that is both available to

the defendant (such that evidence of damages is not within the sole purview of the plaintiff) and

tied directly to the plaintiff’s case (i.e., evidence other than jury awards from purportedly similar

cases), the defendant may present that evidence contemporaneously with its notice of removal

regardless of whether the plaintiff is the source of that evidence.

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is predicated on the notion that the Policy entitles them to recover from Stewart compensatory

damages representing the diminution in value resulting from the title defect that reduced the

Spottswoods’ parcel by more than seven feet of Mobile Bay frontage. The reduction in that

parcel’s value caused by the modification of its frontage from 56.53 feet to 49.50 feet is an

objective figure as to which Stewart is entitled to present evidence with its Notice of Removal,

regardless of the source of that evidence. It would be a strange result, indeed, if Lowery were to

be construed as forcing a removing defendant to prove jurisdiction by a preponderance of the

evidence, even as it categorically foreclosed defendants from being able to present objective

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8 More generally, the critical point that defeats the Spottswoods’ “other paper”

objection (i.e., their contention that the exhibits to the Notice of Removal are improper because

they did not originate from plaintiffs) is that the rule in Lowery followed from a set of

assumptions that do not exist here. In discussing the “other paper” requirement, the Lowery

panel explained that “the removing defendant generally will have no direct knowledge of the

value of the plaintiff’s claims” and that “[t]o the extent the defendant does obtain knowledge of

the claims’ value, it will generally come from the plaintiff herself in the form of information in

an ‘other paper.’ ... In the absence of such a document, the defendant’s appraisal of the amount

in controversy ... will ordinarily not provide grounds for his counsel to sign a notice of removal

in good faith.” 483 F.3d at 1213 n.63 (emphasis added). But this action is not the “ordinary”

case described in Lowery. Here, the Spottswoods seek to recover under the Policy for the

diminution in value of their real property caused by the divergence of the property description in

their warranty deed and their actual property holding to the tune of seven-plus feet of Mobile

Bay frontage. That diminution in value is not a dollar figure uniquely within the Spottswoods’

purview, but is instead an objective market fact ascertainable by any qualified real estate

appraiser. Thus, unlike the ordinary/usual/typical scenario addressed by Lowery, Stewart was

not beholden to the Spottswoods for all valuation information pertaining to their claim. The

Spottswoods say they are owed compensatory damages under the Policy because their title to the

property was vested other than as stated in the warranty deed, with the result that they were

deprived of seven feet of frontage they thought they were acquiring when they purchased the

property. Stewart properly submitted the ACG report with its Notice of Removal as evidence of

the amount of damages plaintiffs had suffered due to the defective title, inasmuch as that report

quantifies the diminution in value to plaintiffs’ property resulting from the title defect that

animates their claim against Stewart under the Policy.

9 Significantly, plaintiffs do not disclaim an intent to recover from Stewart in this

litigation for the diminution in property value resulting from the loss of 7+ feet of Mobile Bay

frontage. The language of their Complaint strongly suggests that this is, in fact, their theory of

recovery, inasmuch as it stresses that the Spottswoods ultimately received “a parcel of real

property having approximately 49.50 feet of frontage on Mobile Bay, rather than frontage of

56.53 feet.” (Complaint, ¶ 7.) All indications from the Complaint are that this is the harm for

which the Spottswoods seek recompense under the Policy, and they have not suggested

otherwise in their Motion to Remand.

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evidence specific to the plaintiff’s claims to demonstrate the amount in controversy.8

Second, plaintiffs deride Stewart’s amount-in-controversy argument as “only a purely

speculative statement that if the Plaintiffs lost seven feet of frontage on Mobile Bay, the value of

their loss would exceed $75,000.” (Doc. 6, at 4.)9 But closer inspection of defendant’s

evidentiary showing belies this line of criticism. The ACG report, which was prepared by a

licensed, certified real estate appraiser, included an opinion that “generally sites along the bay

Case 1:10-cv-00109-WS-B Document 10 Filed 04/16/10 Page 7 of 9
10 The record reflects that when the Spottswoods purchased their property in March

2005, they paid $1.8 million for what they thought was 56.53 feet of Mobile Bay frontage, or

$31,843 per front foot. (Doc. 1, Exh. 2, Exh. B, at 2.) As such, the comparable sales appear to

represent low-end estimates of the valuation of front footage on the Spottswoods’ parcel.

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are both priced and purchased on the basis of their bay front footage.” (Doc. 1, Exh. 2, Exh. A,

at 8.) Based on that foundation, the ACG report examined several comparable sales, including

three properties “located directly south of the Spottswood property [that] were all vacant sites

with 91 ± front feet (FF) on the bay.” (Id.) For those three comparables, the ACG report noted,

the average sales price was $16,850 per front foot. (Id.)

10 In light of that fact, the ACG report

concluded with an express “opinion that the loss of the 7.03 feet of Mobile Bay frontage will

reduce the value of the Spottswood’s [sic] property by at least $75,000.” (Id.) If, as the ACG

report demonstrates, real property in the vicinity of the Spottswoods’ parcel is bought and sold

on the basis of its front footage and the average recent sales price for comparable parcels is

$16,850 per front foot, then simple arithmetic confirms that a loss of more than seven front feet

would be accompanied by a diminution in value of greater than $100,000 (inasmuch as

$16,850/foot x 7 feet = $117,950). This figure is well in excess of the $75,000 amount needed to

give rise to federal diversity jurisdiction.

In short, defendant’s statement that the amount in controversy is satisfied is not purely

speculative. Stewart is not asking this Court to divine the existence of jurisdiction by looking to

the stars, or engaging in unbridled guesswork and reckless conjecture to reach a preordained

conclusion. To the contrary, Stewart has come forward – contemporaneously with its Notice of

Removal – with an expert report that is both concrete and directly on-point, providing a valid

evidentiary basis for defendant’s contention that the amount in controversy in this lawsuit

objectively exceeds the sum or value of $75,000, exclusive of interest and costs. Plaintiffs have

made no attempt to rebut that expert report, or to suggest that the jurisdictional amount is not

actually in dispute here; therefore, the ACG report is the only record evidence of valuation at this

time. In the Court’s view, this showing is sufficient to satisfy Stewart’s burden of establishing

the presence of the necessary amount in controversy (and, consequently, removal jurisdiction) by

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11 Plaintiffs also advance two collateral challenges to the ACG report, maintaining

that this exhibit should not be considered because it (a) is unauthenticated hearsay and (b) rests

on comparables that are too temporally remote to have value. As to the former objection, it is

true, of course, that authentication of an exhibit is a condition precedent to admissibility. See

Rule 901, Fed.R.Evid. But this is not an evidentiary hearing. The Court is not deciding whether

or not to admit the ACG report into evidence, but is simply evaluating whether to consider it for

purposes of a preliminary ruling. Plaintiffs identify no authority to support their apparent belief

that strict compliance with all prerequisites of admissibility is necessary before an exhibit may

be considered on a motion to remand. Courts in analogous circumstances have held otherwise. 

See, e.g., Longcrier v. HL-A Co., 595 F. Supp.2d 1218, 1223 (S.D. Ala. 2008) (“The general rule

in this Circuit is that parties’ exhibits may be considered for purposes of pretrial rulings so long

as they can be reduced to admissible form at trial.”) (citations omitted). The Spottswoods’

hearsay objection fails for the same reason. Because all indications are that the ACG report can

be reduced to admissible, non-hearsay form at trial, it will not be excluded from consideration on

the Motion to Remand as hearsay. As to the latter objection, the comparables in question all

occurred within 24 months preceding removal of this action, with the most recent being dated

March 2009. Plaintiffs provide nothing other than the unvarnished conclusory statement of their

counsel that those comparable sales are too remote in time to be useful in calculating the

diminution in the Spottswoods’ property value arising from the post-purchase redrawing of

boundary lines to eliminate seven feet of plaintiffs’ Mobile Bay frontage. This bald assertion

lacks any indicia of reliability, and appears to consist of nothing more than counsel’s subjective,

lay beliefs concerning real estate appraisal practices in Point Clear, Alabama; therefore, it will

not be credited. Accordingly, the Court rejects the Spottswoods’ hearsay, lack of authentication,

and remoteness objections to the ACG report appraising the diminution in value of plaintiffs’

property arising from the loss of bay front footage (i.e., the injury that animates their claims

against Stewart in this litigation).

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a preponderance of the evidence.11

III. Conclusion.

For all of the foregoing reasons, the Court concludes that defendant has satisfied its

burden of showing the existence of the jurisdictional amount by a preponderance of the

evidence. Accordingly, removal was proper and federal subject matter jurisdiction properly lies

pursuant to 28 U.S.C. § 1332. Plaintiffs’ Motion for Remand (doc. 6) is denied.

DONE and ORDERED this 15th day of April, 2010.

 s/ WILLIAM H. STEELE 

CHIEF UNITED STATES DISTRICT JUDGE

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