Court Opinion

ID: 4125311
Source: CourtListenerOpinion
Date Created: 2017-02-10 20:13:40.178378+00
Date Added: 2024-06-11T11:26:48.128425
License: Public Domain

J-S84002-16

                              2017 PA Super 31

THE HARTFORD INSURANCE GROUP ON                 IN THE SUPERIOR COURT OF
BEHALF OF CHUNLI CHEN,                                PENNSYLVANIA

                         Appellant

                    v.

KAFUMBA KAMARA, THRIFTY CAR
RENTAL, AND RENTAL CAR FINANCE
GROUP,

                         Appellees                   No. 976 EDA 2016

                 Appeal from the Order of February 25, 2016
            In the Court of Common Pleas of Philadelphia County
                      Civil Division at No(s): No. 1534

BEFORE: OLSON, SOLANO and FITZGERALD,* JJ.

OPINION BY OLSON, J.:                           FILED FEBRUARY 10, 2017

      Appellant, The Hartford Insurance Group (“Hartford”) on behalf of

Chunli Chen, appeals from the order entered on February 25, 2016, which

sustained the preliminary objections filed by Kafumba Kamara, Thrifty Car

Rental, and Rental Car Finance Group (hereinafter, collectively “the

Defendants”). We respectfully vacate and remand.

      Appellant instituted the current suit on September 15, 2015, by filing a

praecipe for a writ of summons.      Within Appellant’s later-filed complaint,

Appellant declared, in the caption of the complaint, that the plaintiff was

“The Hartford Insurance Group on behalf of Chunli Chen.”           Appellant’s

Complaint, 12/8/15, at Caption.

      As Appellant averred, on October 10, 2013, Chunli Chen (hereinafter

“Chen”) “was standing in the parking lot of Thrifty Car Rental, waiting to rent

* Former Justice specially assigned to the Superior Court.
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a car, when she was struck by a rental car operated by defendant, Kafumba

Kamara, and owned by defendant, Thrifty Car Rental, and/or defendant,

Rental Car Finance Group.”        Id. at ¶ 12 (some internal capitalization

omitted).   Appellant averred that the accident caused Chen extensive

injuries and Appellant alleged that the Defendants were negligent in causing

the accident. Id. at ¶¶ 18-23.

      Further, within Appellant’s complaint, Appellant averred that, at the

time of the accident, Chen “was in the employ of Reliance Sourcing, Inc.”

and that Hartford “has paid $59,424.71 to date in medical and wage benefits

to [] Chen pursuant to a Workers’ Compensation insurance policy maintained

by her employer, Reliance Sourcing, Inc.” Id. at ¶¶ 8-9.

      Appellant’s complaint contained two negligence counts and, in each

count, Appellant claimed that the particular defendant was “liable to Plaintiff,

[ ] Hartford, and to Chunli Chen for injuries caused to her by” the defendant.

The complaint was then verified by “Jaime Young[;] Workers’ Compensation

Subrogation Specialist[;] The Hartford” and the verification declared that

“[t]he averments and allegations of fact made in the foregoing civil

complaint are true and correct to the best of [Jaime Young’s] information

and belief.” Id. at Verification (some internal capitalization omitted).

      On January 26, 2015, the Defendants filed preliminary objections to

Appellant’s complaint. The Defendants’ first preliminary objection was in the

nature of a demurrer and claimed that the entire complaint must be

dismissed because Hartford was “attempting to file suit to assert subrogation

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rights directly against the alleged third-party tortfeasors.” The Defendants’

Preliminary Objections, 1/26/16, at ¶ 5. The Defendants argued:

        While Pennsylvania law does allow for a workers’
        compensation carrier to be subrogated to the rights of the
        employee, the Pennsylvania Supreme Court has held, based
        on long-standing precedent established by Pennsylvania’s
        Superior Court[,] that “the right of action against a
        third-party tortfeasor under Section 319 of the [Workers’
        Compensation Act] remains in the injured employee, and
        that the employer/insurer’s right of subrogation under
        Section 319 must be achieved through a single action
        brought in the name of the injured employee or joined by
        the injured employee.” Liberty Mutual Insurance Co. v.
        Domtar Paper Co., 113 A.3d 1230 (Pa. 2015).

The Defendants’ Preliminary Objections, 1/26/16, at ¶ 9.

      According to the Defendants, since Chen was the injured employee

and since Chen neither assigned her cause of action to Hartford nor was a

party to the lawsuit, the entire complaint must be dismissed. Id. at ¶¶ 13-

16.

      Second, the Defendants claimed that the complaint must be stricken

because Chen did not verify the complaint. The Defendants further claimed

that the individual who did verify the complaint – an employee of Hartford

named Jaime Young – “was not present at the scene of the alleged accident

and has no first-hand knowledge of the alleged accident from which to allege

the facts pleaded in [the] complaint.” Id. at ¶ 20.

      Appellant responded to the preliminary objections and claimed that the

Supreme Court’s holding in Domtar Paper was inapplicable to the case at

bar because “[i]n the Domtar [Paper] case, Liberty Mutual filed suit ‘as

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subrogee of’ [the injured employee, while, in the case at bar,] Hartford []

captioned the suit ‘on behalf of Chunli Chen’ to show [that Hartford is]

appropriately pursuing this action in the name of the injured employee.”

Appellant’s Response, 2/15/16, at ¶¶ 11 and 14. Further, Appellant claimed

that the verification in the complaint was proper because Jaime Young “has

knowledge of the facts contained in the complaint through her work on

[Chen’s] workers’ compensation claim.”             Id. at ¶ 18 (some internal

capitalization omitted).

      On February 25, 2016, the trial court entered an order that sustained

both of the Defendants’ preliminary objections and dismissed Appellant’s

complaint with prejudice. Trial Court Order, 2/25/16, at 1. Within the trial

court’s later-filed opinion, the trial court reasoned that the case was

controlled by our Supreme Court’s opinion in Domtar Paper and that, in

accordance with Domtar Paper, dismissal was proper because Hartford was

attempting to bring an independent cause of action against third-party

tortfeasors. As the trial court explained, “[u]nder Pennsylvania law, actions

against a third-party tortfeasor must be brought by the injured employee;

the workers’ compensation insurance carrier has no independent cause of

action   against   the     tortfeasor   under   Section   319   of   the   Workers’

Compensation Act.” Trial Court Opinion, 6/23/15, at 4.

      Further, the trial court held that Appellant did not properly verify the

complaint, as the complaint was not verified by Chen; rather, the complaint

was verified by Jaime Young, a Worker’s Compensation Specialist for

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Hartford. Id. at 6. The trial court held that this verification was improper

because Jaime Young “was not present at the scene of the accident and did

not have first-hand knowledge of the incident” and the verification “did not

state the source of Young’s information or the reason why the verification

was not made by a party.” Id. Finally, the trial court stated that it did not

grant Appellant leave to amend the verification because Appellant “failed to

assert a legally cognizable cause of action against [the] Defendants; thus,

granting [Appellant] leave to attach a sufficient verification would have been

futile.” Id.

      Appellant filed a timely notice of appeal and now raises two issues to

this Court:

        1. Did the trial court err as a matter of law in dismissing
        [Appellant’s] claim with prejudice when pursuant to Liberty
        Mutual Insurance Company v. Domtar Paper Co., 113
        A.3d 1230 (Pa. 2015), [Hartford] captioned the suit “The
        Hartford Insurance Group on behalf of Chunli Chen” to show
        that the action was appropriately brought in the name of
        the injured employee[?]

        2. Did the trial court err as a matter of law in dismissing
        [Appellant’s] complaint for lack of a verification signed by
        use party plaintiff, Chunli Chen, when the attached
        verification was signed by a representative of [] Hartford
        with knowledge of the claim; or in the alternative, did the
        trial court err in dismissing the claim rather than allowing
        [Appellant] to amend by attaching a verification signed by
        Chunli Chen?

Appellant’s Brief at 3 (some internal capitalization omitted).

      We have stated:

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        A preliminary objection in the nature of a demurrer is
        properly [sustained] where the contested pleading is legally
        insufficient.   Preliminary objections in the nature of a
        demurrer require the court to resolve the issues solely on
        the basis of the pleadings; no testimony or other evidence
        outside of the complaint may be considered to dispose of
        the legal issues presented by the demurrer. All material
        facts set forth in the pleading and all inferences reasonably
        deducible therefrom must be admitted as true.

        In determining whether the trial court properly sustained
        preliminary objections, the appellate court must examine
        the averments in the complaint, together with the
        documents and exhibits attached thereto, in order to
        evaluate the sufficiency of the facts averred. The impetus
        of our inquiry is to determine the legal sufficiency of the
        complaint and whether the pleading would permit recovery
        if ultimately proven. This Court will reverse the trial court’s
        decision regarding preliminary objections only where there
        has been an error of law or abuse of discretion. When
        sustaining the [preliminary objections] will result in the
        denial of claim or a dismissal of suit, [the preliminary
        objections may be sustained] only where the case [is] free
        and clear of doubt.

Lugo v. Farmers Pride, Inc., 967 A.2d 963, 966 (Pa. Super. 2009)

(internal citations, quotations, and corrections omitted).

      First, Appellant claims that the trial court erred in sustaining the

Defendants’ preliminary objection in the nature of a demurrer and in holding

that dismissal was required under Domtar Paper.          As Appellant argues,

Hartford is not pursuing a subrogation claim directly against the third-party

tortfeasors, as was the case in Domtar Paper.          Appellant’s Brief at 9.

Rather, Hartford filed suit “on behalf of Chen” – and is attempting to

establish the liability of the third-party tortfeasors to Chen. Id. Therefore,

Appellant claims, its lawsuit is proper under both the Workers’ Compensation

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Act and Superior and Supreme Court precedent construing the Act. Id. We

agree with Appellant.

       Section 319 of the Workers’ Compensation Act (“WCA”), codified at 77

P.S. § 671, furnishes the statutory basis for subrogation by a workers’

compensation carrier. Section 319 states, in relevant part:

         Where the compensable injury is caused in whole or in part
         by the act or omission of a third party, the employer shall
         be subrogated to the right of the employe . . . against such
         third party to the extent of the compensation payable under
         [the WCA] by the employer. . . .

77 P.S. § 671 (internal footnote omitted).1

       As both this Court and the Pennsylvania Supreme Court have

continuously declared, “the right of action against a third-party tortfeasor

under Section 319 of the WCA remains in the injured employee, and [] the

employer/insurer’s right of subrogation under Section 319 must be achieved

through a single action brought in the name of the injured employee or

____________________________________________

1
   Further, we note that Section 303(b) of the WCA is entitled
“[e]xclusiveness of remedy; actions by and against third party; contract
indemnifying third party” and provides:

         In the event injury or death to an employe is caused by a
         third party, then such employe, his legal representative,
         husband or wife, parents, dependents, next of kin, and
         anyone otherwise entitled to receive damages by reason
         thereof, may bring their action at law against such third
         party. . . .

77 P.S. § 481(b).

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joined by the injured employee.”      Domtar Paper, 113 A.3d at 1240; see

also Scalise v. F.M. Venzie & Co., 152 A. 90, 92 (Pa. 1930) (“[t]he right

of action [against a third-party tortfeasor] remains in the injured employee;

suit is to be brought in his name; the [WCA] employer may appear as an

additional party plaintiff . . . or, as use plaintiff . . . , may intervene for the

purpose of protection or he may . . . notify the tort-feasor of the fact of

employment and of the payments made or to be made. . . . The employer,

moreover, is not to be denied his right of suit because the employee does

not sue, but may institute the action in the latter’s name”); Motz v.

Sherwood Bros., 176 A. 842, 843 (Pa. Super. 1935) (“[t]he [WCA]

employer’s right of subrogation must be worked out through an action

brought in the name of the injured employee, either by joining the employer

as a party plaintiff or as a use plaintiff”) (internal citations omitted);

Reliance Ins. Co. v. Richmond Mach. Co., 455 A.2d 686, 690 (Pa. Super.

1983) (“[w]e therefore hold that Section 319 is an exclusive remedy, and

that for an employer or its insurer to enforce its subrogation rights, it must

proceed in an action brought on behalf of the injured employee in order to

determine the liability of the third party to the employee. If such liability is

determined, then the employer or its insurer may recover, out of an award

to the injured employee, the amount it has paid in workers’ compensation

benefits”).

      In Domtar Paper, our Supreme Court recently “reaffirm[ed]” the

above pronouncements.        In Domtar Paper, George Lawrence was an

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employee of Schneider National, Inc., who sustained a work-related injury

when he slipped and fell in a parking lot leased by the Domtar Paper Co. As

a result of this injury, Schneider’s workers’ compensation carrier, Liberty

Mutual, paid Mr. Lawrence thousands of dollars in workers’ compensation

benefits. Domtar Paper, 113 A.3d at 1232.

       Mr. Lawrence did not sue Domtar Paper. Nevertheless, Liberty Mutual

instituted suit directly against Domtar Paper in pursuit of its subrogation

claim.2 Moreover, in the caption of the complaint, Liberty Mutual declared

that it was suing Domtar Paper “as Subrogee of George Lawrence.”                  Id.

(emphasis added).

       The trial court sustained Domtar Paper’s preliminary objections and

dismissed     Liberty    Mutual’s     complaint   because,   in   contravention    of

Pennsylvania law, Liberty Mutual was attempting to “pursue a subrogation

claim directly against the third-party tortfeasor when the compensated

employee who was injured ha[d] taken no action against the tortfeasor.”

See id. at 1234. This Court affirmed the trial court’s order. Id. at 1233.

       On appeal to the Pennsylvania Supreme Court, the Supreme Court

held that a workers’ compensation insurer may not “pursue a subrogation

claim directly against a third-party tortfeasor when the compensated

____________________________________________

2
  Liberty Mutual also sued various other entities; however, for ease of
discussion, we will collectively refer to the defendants in the case as “Domtar
Paper.”

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employee who was injured ha[d] taken no action against the tortfeasor.”

Id. at 1232. Thus, the Supreme Court held, since Liberty Mutual was suing

the third-party tortfeasors “as subrogee of” the injured employee – and

since Liberty Mutual was simply attempting to pursue its own subrogation

claim directly against the third-party tortfeasors, Liberty Mutual’s complaint

was properly dismissed. Id. at 1238 and 1240 (emphasis added). As the

Domtar Paper Court reasoned, its holding was required because:

        the right of action against the tortfeasor is indivisible and
        remains in the employee who suffered the entire loss in the
        first instance. We emphasize that in Pennsylvania, courts
        disfavor splitting causes of action, and have frequently
        remained true to this maxim in the context of workers'
        compensation subrogation. . . .             Preventing the
        employer/insurer from asserting an independent cause of
        action against the tortfeasor eliminates the possibility that
        the third-party tortfeasor could be exposed to multiple suits
        filed by both the employer and the injured employee, and
        will preserve the preferred rights of the injured employee
        who retains a beneficial interest in the cause of action
        against the tortfeasor.

Id. at 1240.

      The Domtar Paper Court then held:

        Accordingly, we reaffirm that the right of action against a
        third-party tortfeasor under Section 319 of the WCA
        remains in the injured employee, and that the
        employer/insurer's right of subrogation under Section 319
        must be achieved through a single action brought in the
        name of the injured employee or joined by the injured
        employee. Because [Mr.] Lawrence did not commence an
        action against [Domtar Paper], was not named in the action
        filed by Liberty Mutual, and did not join the action filed by
        Liberty Mutual, the Superior Court properly affirmed the
        grant of [Domtar Paper’s] preliminary objections.

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Id.

       In the case at bar, Appellant followed the above precedent and

instituted suit against the Defendants as “The Hartford Insurance Group on

behalf of” the injured employee, Chunli Chen.           Within the complaint,

Appellant seeks to establish the liability of the third-party tortfeasors to

Chen – and Appellant seeks recovery in the full amount to which Chen is

entitled due to the Defendants’ alleged negligence.           See Appellant’s

Complaint, 12/8/15, at ¶¶ 1-23. Therefore, in the case at bar, Hartford is

not attempting to “pursue a subrogation claim directly against a third-party

tortfeasor,” is not seeking to recover only the amount that it paid to Chen in

workers’ compensation benefits, and is not “splitting” Chen’s cause of action.

See Domtar Paper, 113 A.3d at 1234 and 1240. Rather, Appellant brought

“a single action [against the third-party tortfeasors] in the name of the

injured employee” and Appellant is attempting to recover the entire amount

to which Chen is entitled.       Thus, the procedure Appellant employed in the

case at bar is the procedure our Supreme Court countenanced in Domtar

Paper. Id. at 1240 (emphasis added). As such, we respectfully conclude

that the trial court erred when it sustained the Defendants’ preliminary

objection in the nature of a demurrer.3
____________________________________________

3
  In her dissent in Domtar Paper, Justice Todd declared that, where an
employer or workers’ compensation carrier brings suit in the name of the
injured employee in the capacity of a use plaintiff:

(Footnote Continued Next Page)

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                       _______________________
(Footnote Continued)

         it is critical that the actual plaintiff – here, the injured
         employee – be served with a copy of the subrogee's
         complaint so that the employee may, if he or she desires,
         retain counsel and actively participate in the action. Such
         service ensures the injured employee may actively
         prosecute all claims he or she may possess, and not leave
         the conduct of the litigation solely in the hands of the
         subrogee.

         Indeed, I deem this requirement to be particularly
         important in cases such as this, inasmuch as a workers'
         compensation subrogee is precluded by 77 P.S. § 319 from
         recovering any damages in excess of what it paid to the
         injured employee in workers' compensation benefits.
         Consequently, the subrogee has no incentive to pursue
         claims for additional damages which the injured employee
         might ordinarily seek in his or her own capacity. Giving an
         injured employee notice of a subrogee's suit is essential, as
         it allows the injured employee to actively participate in and
         direct the scope and course of discovery, trial preparation,
         or the conduct of settlement negotiations in the proceeding
         where the final fate of his or her claims is irrevocably
         decided. To be sure . . . were Liberty Mutual's instant
         action to be litigated to final judgment, any subsequent
         action brought by Lawrence would be barred under the
         doctrine of res judicata. . . .

         [In his separate dissent,] Chief Justice Saylor observes that,
         to avoid harm to the ability of Lawrence to be fully and
         fairly compensated, the trial court could have required that
         he be joined as a party. . . . However, in my view, such a
         wholly discretionary process is insufficiently protective of
         the important fundamental rights of the injured employee at
         stake in these situations.      It seems to me the better
         practice, then, is to require the subrogee to provide notice
         to the injured employee upon commencement of its action
         as use-plaintiff.    Requiring such notice would also be
         consistent with the principle reaffirmed by the majority that
         there should be no splitting of an injured employee's cause
         of action against a third-party tortfeasor, in order to ensure
         that the injured employee may still prosecute all causes of
(Footnote Continued Next Page)

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      Next, Appellant contends that the trial court erred in dismissing its

complaint for an improper verification, when the complaint was verified by

Jaime Young, “a representative of [] Hartford with knowledge of the claim.”

Appellant’s Brief at 10. Appellant claims that the verification was proper or,

in the alternative, Appellant claims that the trial court “should have allowed

[Appellant 20] days to attach a verification signed by Chunli Chen, rather

than dismissing [Appellant’s c]omplaint.” Id. at 10-11. The trial court held

that the verification was improper because Jaime Young “was not present at

the scene of the accident and did not have first-hand knowledge of the

incident” and because the verification “did not state the source of Young’s

information or the reason why the verification was not made by a party.”

Trial Court Opinion, 6/23/15, at 6. We respectfully conclude that the trial

court erred.

      Pennsylvania Rule of Civil Procedure 1024 declares, in relevant part:

                       _______________________
(Footnote Continued)

         action in the manner he or she sees fit, even if the subrogee
         commences suit first.

Domtar Paper, 113 A.3d at 1243-1244 (Todd, J., dissenting) (emphasis in
original).

However, in the case at bar, the Defendants did not raise any issue
concerning lack of service to Chen. Therefore, any such issue is not properly
before this Court. See id. at 1244 n.1 (Todd, J., dissenting) (“any issue
regarding [] lack of service was not raised in the lower courts, and, thus, is
not preserved for our review in the present appeal”); Pa.R.A.P. 302(a)
(“[i]ssues not raised in the lower court are waived and cannot be raised for
the first time on appeal”).

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        (a) Every pleading containing an averment of fact not
        appearing of record in the action or containing a denial of
        fact shall state that the averment or denial is true upon the
        signer's personal knowledge or information and belief and
        shall be verified. The signer need not aver the source of the
        information or expectation of ability to prove the averment
        or denial at the trial. A pleading may be verified upon
        personal knowledge as to a part and upon information and
        belief as to the remainder.

                                      ...

        (c) The verification shall be made by one or more of the
        parties filing the pleading unless all the parties (1) lack
        sufficient knowledge or information, or (2) are outside the
        jurisdiction of the court and the verification of none of them
        can be obtained within the time allowed for filing the
        pleading. In such cases, the verification may be made by
        any person having sufficient knowledge or information and
        belief and shall set forth the source of the person's
        information as to matters not stated upon his or her own
        knowledge and the reason why the verification is not made
        by a party.

Pa.R.C.P. 1024.

      In the case at bar, Hartford is a party to this action because the

injured employee, Chunli Chen, did not bring suit against the third-party

tortfeasors and Hartford thus brought suit “on behalf of” Chen.          Further,

Hartford has a real interest in this lawsuit because it has a statutory right of

subrogation to Chen’s recovery against the third-party tortfeasors, “to the

extent of the compensation payable under [the WCA] by [Hartford].”            77

P.S. § 671; see also Thompson v. W.C.A.B. (WSF&G Co.), 781 A.2d

1146, 1151 (Pa. 2001) (holding that Section 319 of the WCA “is written in

mandatory terms and, by its terms, admits of no express exceptions,

equitable or otherwise. Furthermore, it does more than confer a ‘right’ of

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subrogation upon the employer; rather, subrogation is automatic”). Finally,

since Chen has not sued the third-party tortfeasors, Hartford is the entity

that is controlling this litigation.    Therefore, Hartford is a party to this

litigation and Jaime Young, as a representative of Hartford, properly verified

the complaint. See Pa.R.C.P. 1024(c) (“[t]he verification shall be made by

one or more of the parties filing the pleading . . .”).

      Further, although Jaime Young does not have personal knowledge of

the accident, Jaime Young did not state as much in the verification. Rather,

within the verification, Jaime Young averred that “[t]he averments and

allegations of fact made in the [] civil complaint are true and correct to the

best of my information and belief.” Appellant’s Complaint, 12/8/15, at

Verification (some internal capitalization omitted) (emphasis added); see

also 2 Goodrich Amram 2d § 1024(a):7 (“[if a] signer knows of [the facts

averred in the pleading] because others have informed him or her of them,

the verification should be upon ‘information and belief’”); Pa.R.C.P. 1024(a)

(“[t]he signer need not aver the source of the information or expectation of

ability to prove the averment or denial at the trial”). Therefore, in the case

at bar, the verification was proper and the trial court erred when it sustained

the Defendants’ preliminary objection in the nature of a motion to strike.

      We thus conclude that the trial court erred when it sustained the

Defendants’ preliminary objections and dismissed Appellant’s complaint with

prejudice.   We respectfully vacate the trial court’s order and remand for

further proceedings.

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     Order vacated. Case remanded. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 2/10/2017

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