Court Opinion

ID: 9840230
Source: CourtListenerOpinion
Date Created: 2023-09-15 16:06:13.391057+00
Date Added: 2024-06-11T10:11:15.410878
License: Public Domain

STATE OF LOUISIANA

                                    COURT OF APPEAL

                                       FIRST CIRCUIT

                                        2023 CA 0065

     GUILBEAU MARINE, INC., FORMOSA PLANTATION, LLC,
    ANTHONY GUILBEAU, JR., AND LORRAINE G. GUILBEAU

                                            VERSUS

     GEORGE J. LEDET, JR. AND XYZ INSURANCE COMPANY

                                                  JUDGMENT RENDERED:
                                                                              SGP 15 2023

                  Appealed from The Seventeenth Judicial District Court
                           Parish of Lafourche • State of Louisiana
                           Docket Number C- 131, 186 * Division B

                       The Honorable Steven Miller, Presiding Judge'

       Bobby J. Triche                                        COUNSLL FOR APPELLANTS
       Damon J. Baldone                                       PLAINT]FFs— Guilbeau Marine, Inc.;
       Thomas E. Dunn                                         Formosa Plantation, LLC; Anthony
       Houma, Louisiana                                       Guilbeau, Jr.; and Lorraine G.
                                                               Guilbeau

       Elliot M. Lonker                                        COUNSEL FOR APPELLEE
       David S. Daly                                          DEFENDANT— George J. Ledet, Jr.
       New Orleans, Louisiana

                 BEFORE:       WELCH, HOLDRIDGE, AND WOLFED JJ.

1 The Honorable John E. Leblanc was appointed as Judge pro tempore of the Seventeenth Judicial
District Court to fill the vacancy created by the election of Judge Steven Miller to the First Circuit
Court of Appeal following the November 8, 2022 election.
WELCH, J.

      In this legal malpractice action, plaintiffs— Guilbeau Marine, Inc., Formosa

Plantation, LLC, Anthony Guilbeau, Jr., and Lorraine G. Guilbeau— appeal the trial

court' s judgment granting summary judgment in favor of defendant— George J.

Ledet, Jr.— and dismissing all of plaintiffs' claims against defendant with prejudice.

For the following reasons, we affirm.

               BACKGROUND AND PROCEDURAL HISTORY

      Plaintiffs filed suit against Mr. Ledet on October 25, 2016, alleging claims of

legal malpractice and breach of fiduciary duty. Approximately thirty- seven years
prior in   1978,   Anthony and Lorraine Guilbeau ( collectively, " the Guilbeaus")

incorporated Guilbeau Marine, Inc. (" Guilbeau Marine"). Guilbeau Marine owns

and operates vessels in the Gulf of Mexico relating to the oil and gas industry, and

the Guilbeaus serve as its principal management.

      Plaintiffs alleged in their petition that beginning with the incorporation of

Guilbeau Marine, Mr. Ledet served as their attorney in all business matters and

represented the Guilbeaus as they acquired and disposed of various assets, created

companies, prepared and notarized documents for their businesses, advised them

regarding mineral rights on their property, and advised them on all financial matters.

For example, in 2006, the Guilbeaus formed Formosa Plantation, LLC, which holds

and operates certain immovable property in Tensas Parish in North Louisiana,

including a farm ( the " Formosa Plantation property").     The Guilbeaus serve as

principal members and managers of Formosa. Plaintiffs alleged that Mr. Ledet

issued invoices for his legal work and was paid by plaintiffs for those invoices.

      Additionally, plaintiffs alleged in their petition that South Lafourche Bank

the `Bank") has extended credit to Guilbeau Marine at various times throughout the

years and, pertinent to this matter, at times when Guilbeau Marine experienced

financial hardship due to downturns in the economy and the global oil and gas

                                          2
market. Plaintiffs' loans from the Bank were secured by preferred ship mortgages

against certain vessels owned by Guilbeau Marine.

          In late 2014 and early 2015, Guilbeau Marine became delinquent on loan

payments. In October 2015, plaintiffs discussed a possible refinancing of the loans

with the Bank. Plaintiffs alleged that the Bank allowed plaintiffs to refinance their

loans, and that if the Guilbeaus personally put up the Formosa Plantation property
as collateral—
                    as allegedly suggested and advised by Mr. Ledet— the Bank would

forgive any delinquent payments and charge plaintiffs one year of "interest only"
payments on the loans.'             Accordingly,        on October 30,      2015,    the Guilbeaus,

individually and on behalf of Formosa Plantation, executed a loan agreement and

two promissory notes in favor of the Bank. The promissory notes were secured by

certain Guilbeau Marine vessels and a second mortgage encumbering the Formosa

Plantation property.

          Six months later, the Bank initiated foreclosure proceedings on the Formosa

plantation property, even though plaintiffs had not been delinquent in making any
payments.'
                 Plaintiffs alleged that unbeknownst to them during the 2015 loan

negotiations, Mr. Ledet had simultaneously represented plaintiffs and the Bank

another      of Mr. Ledet' s       clients.   Plaintiffs   claimed     that Mr. Ledet       had "   an

irreconcilable conflict of interest in his legal representation" of plaintiffs and used

information he garnered through his representation of plaintiffs to benefit his other

client,    the Bank,     during the loan negotiations. Plaintiffs claimed they did not

discover Mr. Ledet had also legally represented the Bank until December 2015.

z
    According to plaintiffs' petition, included in these representations from the Bank to the Guilbeaus
is a written memorandum and term sheet dated October 13, 2015, which stated " Re -structure
Guilbeau Marine Inc. Loan" and specifically provided the restructuring would provide " l Year"
 Interest Only" payments. The memorandum and term sheet provided that such restructuring
would be " secured by vessels and [ second] mortgage on property ( farm) in [ North Louisiana]."

3 See South Lafourche Bank & Trust Co. v. MN Lorraine G, in rem, et al., No. CV 2: 17-
08502- NJB- MBN (E. D. La. 2016).

                                                    3
Plaintiffs filed suit against the Bank and Mr. Ledet for prematurely foreclosing on

the Formosa Plantation property ( the " Bank lawsuit").' Plaintiffs also initiated

bankruptcy proceedings in an attempt to retain the Formosa Plantation property.'

       The bankruptcy proceedings ultimately settled. As part of that settlement,

plaintiffs agreed to dismiss the Bank lawsuit; however, plaintiffs expressly reserved

their legal malpractice claim against Mr. Ledet. Plaintiffs signed a " Forbearance

Agreement,"     wherein plaintiffs:    waived all defenses to the loan documents and

security agreements;     acknowledged the validity of the security agreements; and,

acknowledged that they did not pay their obligations, were in default, and that the

Bank had the right to demand and seek full payment of the indebtedness.

       Pursuant to their express reservation, plaintiffs filed suit against Mr. Ledet on

October 25, 2016, as noted supra, alleging claims of legal malpractice and breach of

fiduciary duty. Mr. Ledet answered plaintiffs' petition and raised several affirmative

defenses. Specifically, Mr. Ledet argued that plaintiffs were estopped from pursing

a legal malpractice claim against him. Mr. Ledet also argued that plaintiffs' own

negligence, or the negligence of third parties, was a substantial cause -in -fact of

plaintiffs'   damages— if damages could be proven— and should operate to bar

plaintiffs' recovery.

       Subsequently, on May 2,         2022, Mr.     Ledet filed a motion for summary

judgment, arguing that plaintiffs: ( 1) are judicially estopped from asserting their

claims by virtue of their judicial admissions in the forbearance agreement; and ( 2)

4 See Guilbeau Marine, Inc., et al. v. South Lafourche Bank and Trust Co. and George J.
Ledet, Jr., Docket No. 131187, Division E, Seventeenth Judicial District Court for the Parish of
Lafourche, State of Louisiana.

5 On September 11, 2018, Guilbeau Marine filed a voluntary petition for relief under Chapter 11
of the Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of
Louisiana. See In re Guilbeau Marine, Inc., No. CV 20- 4, 2020 WL 806672, * 1 ( Bankr. E. D.
La. 2020).

                                               4
cannot establish the causation element of their legal malpractice claim against him.

Plaintiffs opposed Mr. Ledet' s motion for summary judgment.'

         After a hearing on Mr. Ledet' s motion for summary judgment, the trial court

granted summary judgment in favor of Mr. Ledet and gave oral reasons for ruling.

The trial court signed a judgment on November 5, 2022 in accordance with its oral

ruling, granting Mr. Ledet' s motion for summary judgment and dismissing all of

plaintiffs' claims against Mr. Ledet with prejudice.' Plaintiffs now appeal.'

                                     SUMMARY JUDGMENTS

         Appellate courts review the grant or denial of a motion for summary judgment

de novo using the same criteria applied by the trial courts to determine whether

summary judgment is appropriate. Georgia- Pacific Consumer Operations, LLC

v. City of Baton Rouge, 2017- 1553, 2017- 1554 ( La. App. 1st Cir. 7118118), 255

So. 3d 16, 22, writ denied, 2018- 1397 ( La. 1213118), 257 So -3d 194. After an

opportunity for adequate discovery, a motion for summary judgment shall be granted

if the motion, memorandum, and supporting documents show there is no genuine

issue of material fact and that the mover is entitled to judgment as a matter of law.

La. C. C. P. art. 966( A)(3);       Campbell v. Dolgencorp, LLC, 2019- 0036 ( La. App. 1 st

Cir. 119120), 294 So. 3d 522, 526. A summary judgment may be rendered only as to

those issues set forth in the motion under consideration by the court at that time. La.

6 Mr. Ledet filed a reply memorandum in further support of his motion for summary judgment.
7 Although the trial court designated its November 5, 2022 judgment as " final" in accordance with
La. C. C. P. art. 1915, that designation is unnecessary. The November 5, 2022 judgment is final
without need of designation because it dismissed plaintiffs' claims against Mr. Ledet " in their
entirety," i.e., the judgment dismissed plaintiffs' legal malpractice lawsuit against Mr. Ledet. See
La. C. C. P. art. 1915( A)( 1).

g Plaintiffs timely filed a motion for a devolutive appeal on November 14, 2022. The trial court
signed an order of appeal on November 18, 2022, notice of which was transmitted by the Clerk of
Court to the parties on November 21, 2022.

9 Although the Legislature recently amended La. C. C.P. art. 966, those amendments are not
applicable to the instant appeal. See 2023 La. Acts No. 317, § 1 ( eff. Aug. 1,   2023), and 2023 La.
Acts No. 368, §     1 ( eff. Aug. 1, 2023).
C. C. P.    art.   966( F);   Anderson v. Laborde Constr. Indus., L.L.C., 2018- 1583,

2019- 0356 ( La. App. I"          Cir. 3/ 12/ 20), 311 So. 3d 1072, 1080, writ denied, 2020-

00924 ( La. 10/ 20120), 303 So. 3d 307.

           The burden of proof on a motion for summary judgment rests with the mover.

La. C. C. P. art. 966( D)( 1).     If the mover will not bear the burden of proof at trial on

the issue that is before the court on the motion for summary judgment, the mover' s

burden on the motion does not require him to negate all essential elements of the

adverse party' s claim, action, or defense. Rather, after meeting his initial burden, the

mover must only point out to the court the absence of factual support for one or more

elements essential to the adverse party' s claim, action, or defense. The burden then

is on the adverse party to produce factual support sufficient to establish the existence

of a genuine issue of material fact or that the mover is not entitled to judgment as a

matter of law. La. C. C. P. art. 966( D)( 1).

           Claims ofjudicial estoppel and legal malpractice may be raised by a party in

a motion for summary judgment. See, e.g., Hili v. TMR Exploration, Inc., 2022-

0037 ( La. App. 1 ` Cir. 1014122), 353 So. 3d 823, 826, writ denied, 2022- 01628 ( La.

1/ 11/ 23), 352 So. 3d 989; Frisard v. State Farm Fire & Cas. Co., 2006- 2353 ( La.

App. 1 St Cir. 11/ 2/ 07), 979 So.2d 494, 496.

                                   LAW AND DISCUSSION

       In their first assignment of error, plaintiffs argue the trial court erred in

rendering summary judgment on an issue not set forth in Mr. Ledet' s motion,

namely, negligent representation. Second, plaintiffs argue the trial court erred in

finding that plaintiffs could not prove loss caused by Mr. Ledet' s alleged negligence.

Third, plaintiffs argue the trial court erred in granting Mr. Ledet' s motion for

summary judgment and dismissing their claims because plaintiffs contend that Mr.

Ledet failed to meet his burden of proof on the motion.

                                                 6
                   La. C.C.P. art. 966( F): Issues Set Forth in the Motion

       In his memorandum in support of his motion for summary judgment, Mr.

Ledet raised two grounds for the trial court to grant summary judgment -- that
plaintiffs:   1)   are judicially estopped from asserting their claims by virtue of their

judicial admissions in the forbearance agreement; and 2)           cannot establish the

required causation element of their legal malpractice claim against him.

       The trial court did not issue written reasons for judgment; however, the trial

court did give oral reasons for its ruling. Specifically, the trial court ( 1)    denied

summary judgment on the issue of judicial estoppel, finding that a genuine issue of

material fact existed as to whether plaintiffs had asserted a legal position that was

inconsistent with their prior position in the bankruptcy proceedings. The trial court

 2) found that a genuine issue of material fact existed as to whether an attorney- client

relationship and resulting attorney- client privilege existed between plaintiffs and Mr.

Ledet. The trial court ( 3)      granted summary judgment on the issue of negligent

representation, finding that Mr. Ledet had pointed out the absence of factual support

for an element of plaintiffs' negligent representation claim, namely damages, finding

no factual support that plaintiffs would be able to prove they lost money because of

Mr. Ledet' s alleged negligent representation.

       Although appellate courts review judgments, not reasons for judgment, and

afford no deference to the trial court' s underlying reasoning for its judgment when

conducting de novo review of a summary judgment, those reasons may be relevant

when determining whether a trial court exceeded its authority by rendering summary

judgment as to issues not set forth in the motion under consideration by the court.

See La. C. C. P. art. 966( F); Libertas Tax Fund 1, LLC v. Laiche, 2021- 0330 ( La.

App. Pt Cir. 12/ 22121), 340 So. 3d 236, 242- 43 n.6, writ denied, 2022- 00160 ( La.

4112122), 336 So. 3d 82.

                                              7
       As noted above, a summary judgment may only be rendered or affirmed as to

those issues set forth in the motion under consideration by the court at that time. La.

C. C. P. art. 966( F); Anderson, 311 So. 3d at 1080. A summary judgment decided on

issues other than those raised by the parties is legally erroneous and must be
                                                                                     ls`

reversed. Troncoso v. Point Carr Homeowners Ass' n, 2022- 0530 ( La. App.
Cir. 1110123), 360 So. 3d 901, 916. The purpose of the restriction codified in La.

C. C.P. art. 966( F) is to inform the opponent of the summary judgment motion of the

elements on which there allegedly is no genuine issue of material fact and to avoid

surprise. Troncoso, 360 So. 3d at 916; see also La. Dist. Court Rules, Rule 9. 10

 outlining the requirement for a memorandum in support of a motion for summary
judgment). Failure to enforce La. C. C. P. art. 966( F) results in a non -mover on a

motion for summary judgment being required to respond to the motion by submitting

evidence that it will be able to carry its burden of proof as to all essential elements

of his claim, regardless of whether a particular clement of his claim was placed at

issue by the motion or not. Troncoso, 360 So. 3d at 916. Requiring a non -mover to

essentially try their entire case to the court in response to a motion for summary

judgment is contrary to the stated purpose of the summary judgment procedure, i.e.,

to secure the just, speedy, and inexpensive determination of every action. See La.

C. C. P. art. 966( A)(2); Troncoso, 360 So. 3d at 916.

      We find, however, that the issue of "negligent representation" was raised in

Mr. Ledet' s motion for summary judgment. As will be discussed more fully infra,

 negligent representation by an attorney" is the second element of a legal

malpractice claim. Our de novo review of the evidence shows that Mr. Ledet raised

the issue of plaintiffs' legal malpractice claim in his motion for summary judgment,

wherein he argued that plaintiffs would be unable to prove the causation element of

legal malpractice. Therefore, because the trial court granted summary judgment in

favor of Mr. Ledet on the issue of negligent representation— the second element of

                                           8
a legal malpractice claim— and because the issue of legal malpractice was set forth

by Mr. Ledet in his motion, we find that plaintiffs' argument to the contrary is

erroneous. The assignment of error is without merit.

                                       Judicial Estoppel

       Judicial estoppel prohibits parties from deliberately changing positions

according to the exigencies of the moment. The doctrine is intended to prevent the

perversion of the judicial process and prevents playing fast and loose with the courts.

To apply, courts look to whether: ( 1) the party against whom judicial estoppel is

sought has asserted a legal position that is plainly inconsistent with a prior position;

 2) a court accepted the prior position; and ( 3) the party did not act inadvertently.

Webb v. Webb, 2018- 0320 ( La. 1215118),              263 So. 3d 321,   328; Hawkins v.

Meridian Resource and Exploration, LLC, 2016- 1545 ( La. App. Pt Cir. 12/ 6/ 17),

236 So. 3d 610, 618, writ denied, 2018- 0027 ( La. 4116118), 240 So. 3d 920.

       In support of his motion for summary judgment, Mr. Ledet submitted: ( 1)

plaintiffs'   petition; ( 2)   portions of the deposition transcript of Mr. Guilbeau; ( 3)

portions of the deposition transcript of Mrs. Guilbeau; and ( 4) the Forbearance

Agreement. Mr. Ledet argued that plaintiffs'             stipulations in the Forbearance

Agreement constitute " judicial confessions"— namely, plaintiffs' admissions that

the loan documents are valid, that they failed to make the required payments, were

in default, and that the Bank had the right to enforce the loan documents and demand

payment. Mr. Ledet claimed that in their petition, plaintiffs' only asserted damages

are those for "the default on their obligations to the Bank, the Bank' s foreclosure of

their assets, and the resulting legal fees incurred to correct the errors and failures by

Mr.] Ledet as their counsel." Mr. Ledet argued that plaintiffs cannot take positions

contrary to the facts they have judicially confessed.

       In opposition, plaintiffs submitted: ( 1) portions of the deposition transcript of

Mr. Guilbeau;       and (   2) portions of the deposition transcript of Mrs. Guilbeau

                                                9
Plaintiffs stated that they agree with all positions admitted by them in the

Forbearance      Agreement;       however,     plaintiffs   contended     that   nowhere      in the

Forbearance Agreement did plaintiffs " judicially confess" that Mr. Ledet did not

commit malpractice during their representation of them, which led to the bankruptcy

settlement, the foreclosure on the Formosa Plantation property, and the resulting

attorney' s fees. Plaintiffs argued that they specifically retained their malpractice

claim against Mr. Ledet for this purpose— to file a legal malpractice lawsuit.

        Our de novo of the evidence shows that in the Forbearance Agreement,

plaintiffs expressly retained their right to bring a legal malpractice claim against Mr.

Ledet. The Forbearance Agreement, signed in July 2019, states: "[ Plaintiffs] shall

retain malpractice claims against George Ledet as set forth in the Malpractice

Lawsuit," i.e.,     the 2016 legal malpractice lawsuit currently before this court.

Accordingly, we find that under the first prong of the judicial estoppel test, plaintiffs

have not asserted a legal position that is plainly inconsistent with a prior position

taken by them in the bankruptcy proceedings. For these reasons, we find that judicial

estoppel does not prevent plaintiffs from raising their legal malpractice claim against

Mr. Ledet.

                                          Leal Malpractice

        A legal malpractice claim in Louisiana is a negligence claim, 10 albeit a

professional negligence claim, and thus derives from La. C. C. arts. 2315 and 2316.

See Frank L. Maraist, 21 LA. Civ, L. TREATISE, Louisiana Lawyering § 18. 1 ( 2020).

10 Louisiana courts have adopted a duty -risk analysis in determining whether to impose liability
under general negligence principles. For liability to attach under a duty -risk analysis, a plaintiff
must prove five separate elements: ( 1)the defendant had a duty to conform his conduct to a specific
standard of care ( or the defendant owed a duty of care to the plaintiff) (the duty element); ( 2) the
defendant failed to conform his conduct to the appropriate standard (or breached the requisite duty)
the breach element); ( 3) the defendant' s substandard conduct was a cause -in -fact of the harm or
the plaintiffs injuries ( the cause -in -fact element); ( 4) the risk of harm was within the scope of
protection afforded by the duty breached (the scope of the duty, scope of protection, or legal cause
element); and ( 5) actual damages ( damages element). A negative answer to any of the inquiries of

the duty -risk analysis results in a determination of no liability. Aucoin v. Larpenter, 2021- 0064
 La. App. I` Cir. 9120121), 329 So -3d 363, 368- 69, writ denied, 2021- 01505 ( La. 12/ 7/ 21), 328
So. 3d 420.

                                                  10
In order to establish a valid legal malpractice claim, a plaintiff must show evidence

sufficient to convince a reasonable trier of fact of. (1) the existence of an attorney-

client relationship; ( 2) negligent representation by the attorney; and ( 3)          loss caused

by that negligence. MB Industries, LLC v. CNA Ins. Co., 2011- 0303, 2011- 0304

 La. 10125111),    74 So. 3d 1173, 1184. An attorney is not required to exercise perfect

judgment in every instance. Belanger v. Spencer H. Calahan, L.L.C., 2020- 0763,

2020- 0764 ( La. App. 1St Cir. 4116121), 324 So. 3d 152, 159, writ denied, 2021- 00828

 La. 10/ 5/ 21),   325 So. 3d 377. The plaintiff must prove the defendant failed to

 exercise at least that degree of care,         skill, and diligence which is exercised by

prudent practicing attorneys in his locality." MB Industries, 74 So. 3d at 1184

 quotina Ramp v. St. Paul Fire & Marine Ins. Co., 269 So.2d 239, 244 (La. 1972)).

Our Supreme Court has held that expert testimony must be introduced in legal

malpractice cases to establish the applicable standard of care, except in those rare

cases where the malpractice is so egregious that a lay jury could infer the defendant' s

actions fell below any reasonable standard of care." MB Industries, 74 So. 3d at

1185; Belanger, 324 So. 3d at 159.

       Mr. Ledet pointed out that plaintiffs lacked factual support for their contention

that any alleged negligence on his part, or conflict of interest, caused plaintiffs to

default on their loan, lose their property in foreclosure, and incur attorney' s fees to

fight the Bank' s actions. In opposition to Mr. Ledet' s motion, the plaintiffs argued

that had they known Mr. Ledet was also representing the Bank in the negotiations,

they would have sought outside counsel and would never have executed the loan

documents. While plaintiffs had other assets available to secure the loan, Mr.

Ledet— who knew the high value of the Formosa Plantation property and that the

11 For example, the failure to appear and defend a client, when that client faces substantial
ramifications, is an obvious act of professional negligence for which no expert testimony is needed.
Frisard v. State Farm Fire & Cas. Co., 2006- 2353 ( La. App. Pt Cir. 1112107), 979 So. 2d 494,
498.

                                                 11
Guilbeaus planned on retiring on that property— allegedly convinced plaintiffs to

use that property as collateral. Plaintiffs contended that they executed the documents

upon the fraudulent advice of Mr. Ledet, who represented the terms of the loan

agreement to the Guilbeaus differently than the terms contained in the loan

agreement actually signed by them. Because of Mr. Ledet' s alleged negligent acts

and omissions, plaintiffs argued they lost the Formosa Plantation property and had

to secure the services of other attorneys to represent them in the foreclosure

proceedings, file for bankruptcy, and to sue Mr. Ledet.

         On our de novo review of the evidence, we find that plaintiffs did not produce

factual support sufficient to establish the existence of a genuine issue of material fact

as to whether any alleged negligence by Mr. Ledet caused plaintiffs to suffer

damages. The evidence shows that plaintiffs agreed to put up the Formosa Plantation

property as collateral for their refinanced loan, agreed to all loan terms, defaulted on

their loan, lost the property in foreclosure, and incurred attorney' s fees to fight the

Bank in litigation. Based on the evidence presented, the plaintiffs' damages were

caused by their own actions— not any malpractice by Mr. Ledet. Therefore, we find

that plaintiffs failed to meet their burden on summary judgment to produce factual

support sufficient to establish the existence of a genuine issue of material fact or that

Mr. Ledet is not entitled to judgment as a matter of law.

                                        DECREE

         We affirm the trial court' s November 5, 2022 judgment granting George J.

Ledet,    Jr.' s   motion   for summary judgment and dismissing plaintiffs'         legal

malpractice claim against Mr. Ledet, with prejudice. All costs of this appeal are

assessed to plaintiffs, Guilbeau Marine, Inc., Formosa Plantation, LLC, Anthony

Guilbeau, Jr., and Lorraine G. Guilbeau.

         AFFIRMED.

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