Court Opinion

ID: 4123732
Source: CourtListenerOpinion
Date Created: 2017-02-07 14:09:04.959124+00
Date Added: 2024-06-11T14:50:24.893551
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                 No. COA16-593

                             Filed: 7 February 2017

North Carolina Industrial Commission, I.C. Nos. 14-726251 & 14-773225

MARTHA HOLMES, Employee, Plaintiff

            v.

ASSOCIATED PIPE LINE CONTRACTORS, INC., Employer, OLD REPUBLIC
CONSTRUCTION PROGRAM GROUP, INC., Carrier (GALLAGHER BASSETT
SERVICES, Third-Party Administrator), Defendants.

      Appeal by plaintiff from opinion and award entered 2 March 2016 by the North

Carolina Industrial Commission. Heard in the Court of Appeals 2 November 2016.

      Oxner + Permar, PLLC, by John R. Landry, Jr., for plaintiff-appellant.

      Hedrick Gardner Kincheloe & Garofalo, LLP, by M. Duane Jones and Thomas
      W. Page, for defendants-appellees.

      DAVIS, Judge.

      This workers’ compensation case presents the jurisdictional question of

whether an employee’s submission to a mandatory drug test in another state before

beginning work constitutes the last act necessary to form an employment contract

between the employee and her employer. Martha Holmes (“Plaintiff”) appeals from

an opinion and award of the North Carolina Industrial Commission dismissing her

claims for benefits under the North Carolina Workers’ Compensation Act based on
                HOLMES V. ASSOCIATED PIPE LINE CONTRACTORS, INC.

                                  Opinion of the Court

lack of jurisdiction. Because we conclude that the last act necessary to create her

employment contract occurred in Texas, we affirm.

                      Factual and Procedural Background

      Associated Pipe Line Contractors, Inc. (“Associated”) is headquartered and has

its principal place of business in Houston, Texas. In the fall of 2013, Associated was

in need of workers for a project in Huntsville, Texas. Associated’s superintendent

contacted the on-site union steward at the work site in Huntsville and informed the

steward that Associated needed union workers for the project. The steward then

contacted “Local 798,” a local trade union based in Tulsa, Oklahoma.

      Since 2007, Plaintiff, a member of Local 798, had been working as a welder

helper for various contractors. On 29 October 2013 — while Plaintiff was living in

Fayetteville, North Carolina — she was contacted by telephone by a representative

of Local 798 and told to report to an assignment in Huntsville, Texas. Plaintiff was

instructed that “she had 24 hours to be in route to the jobsite” and that Associated

would reimburse her for her travel expenses.

      When she arrived in Huntsville, Plaintiff was required to submit to a drug test

and complete various forms — including an authorization for a Department of

Transportation background check — before she could begin working. Within two

hours after taking the drug test, Plaintiff began work at the Huntsville jobsite.

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                HOLMES V. ASSOCIATED PIPE LINE CONTRACTORS, INC.

                                  Opinion of the Court

      On 8 and 26 January 2014, Plaintiff suffered injuries on the jobsite. On 24

March 2014, Plaintiff filed a Form 18 Notice of Accident for the first injury, and on 5

September 2014, she submitted a Form 18 for the second injury. Associated filed a

Form 61 denying liability on 12 May 2014 and an amended Form 61 on 21 August

2014. Its denial of liability was based on the assertion that “the North Carolina

Industrial Commission does not have jurisdiction over this claim, which occurred

outside of North Carolina.”

      On 13 May 2014, Plaintiff filed a Form 33 Request that Claim be Assigned for

Hearing. On 25 June 2014, Associated filed a Form 33R disputing that Plaintiff had

sustained a compensable injury and once again contending that the Industrial

Commission lacked jurisdiction over her claims.          Plaintiff subsequently filed an

amended Form 33 to include her second injury.

      On 9 December 2014, a hearing was held before Deputy Commissioner George

T. Glenn, II.   Plaintiff, Ryan Wilcox, Associated’s Vice President of Safety and

Compliance, and Gary Allison, the welding foreman for the project, appeared as

witnesses at the hearing. Wilcox testified that when Associated is in need of laborers

for a project, it requests the workers through an on-site union steward. The steward

then contacts a trade union, who, in turn, dispatches workers from various locations

around the country. When the workers arrive at the jobsite, they are required to take

a drug test and consent to a background check. Unless the worker submits to both

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                HOLMES V. ASSOCIATED PIPE LINE CONTRACTORS, INC.

                                   Opinion of the Court

the drug test and the background check, she will not be hired. Because it takes

several days for Associated to receive the results, the worker begins work

immediately upon taking the drug test and signing a form acknowledging consent to

the background check.

      On 25 February 2015, the Deputy Commissioner issued an opinion and award

dismissing Plaintiff’s claims based on lack of subject matter jurisdiction. Plaintiff

appealed to the Full Commission on 2 March 2015. On 1 October 2015, the Full

Commission heard arguments from the parties as to whether the Commission

possessed jurisdiction over Plaintiff’s claims.

      On 2 March 2016, the Commission issued its Opinion and Award, which

contained the following pertinent findings of fact:

             6. Plaintiff was working for [Associated] on a job site
             located in Huntsville, Texas at the time of her alleged
             injuries. This was the only location at which plaintiff ever
             worked for [Associated].

             7. While performing a contract job in Huntsville, Texas,
             [Associated] contacted the on-site union steward and
             requested union workers for the job. The union steward
             contacted the Local 798 union in Tulsa, Oklahoma. A
             dispatcher with the Local 798 union in Oklahoma then
             contacted plaintiff at her home in Fayetteville, North
             Carolina.

             8. The Local 798 dispatcher told plaintiff to report to an
             assignment in Huntsville, Texas as a welder’s helper. The
             union dispatcher informed plaintiff that she had 24 hours
             to be en route to the job site in Huntsville, Texas, and she
             was required to travel 500 miles per day.

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  HOLMES V. ASSOCIATED PIPE LINE CONTRACTORS, INC.

                     Opinion of the Court

9. [Associated] did not specifically request plaintiff for the
job in Huntsville, Texas when requesting workers through
the Local 798 union, nor did [Associated] directly contact
plaintiff in North Carolina for the Huntsville, Texas job.

10. Neither plaintiff nor [Associated] could negotiate
plaintiff’s rate of pay or her work schedule for her work on
the Huntsville, Texas job. Plaintiff’s rate of pay was pre-
determined by an agreement between [Associated] and the
Pipe Line Contractors Association. Further, plaintiff’s
working hours on the Huntsville, Texas job were pre-
determined by an agreement between [Associated], the
union, and Texas state requirements.

11. Ryan Michael Wilcox testified as Vice President of
Safety and Compliance for [Associated]. In this position,
Mr. Wilcox assists union workers with completing
necessary paperwork required as part of [Associated]’s
hiring process. This hiring process includes obtaining
consent from union workers to perform a background
check. Mr. Wilcox was not involved in contacting the Local
798 union to request workers.

12. Mr. Wilcox testified that if any union member does not
provide a urine sample for purposes of a drug screen or
consent to a background check, then those union members
are not employable and [Associated] does not pay the union
member any compensation for travel to the job site or
otherwise. Once the union member provides the urine
sample and consents to the background check, that
individual reports to the safety office for safety training,
environmental      training,     and    other    orientation
presentations. Once the union member has successfully
completed the orientation process, that individual is
allowed to begin work at the job site and continue work
until results of the drug test and background check are
returned.

13. Plaintiff   completed     the    necessary   paperwork,

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                HOLMES V. ASSOCIATED PIPE LINE CONTRACTORS, INC.

                                  Opinion of the Court

             consented to the background check, and provided a urine
             sample for the drug test on October 29, 2013. Upon
             completion    of    these    pre-employment  processes,
             [Associated] hired plaintiff and she began work at the
             Huntsville, Texas job site.

             14. Mr. Wilcox testified that if plaintiff’s drug test or
             background check had not “come back clean,” she would
             have been terminated from the Huntsville, Texas job and
             paid a per-day rate for the time she worked versus the full
             hourly rate required by the union agreement.

             15. Plaintiff contends that she was automatically hired by
             [Associated] once she received the call from the Local 798
             union dispatcher to present to the Huntsville, Texas job.
             However, plaintiff testified that she did not begin work on
             the Huntsville, Texas job until after she consented to the
             drug screen required by [Associated].

             ....

             18. The preponderance of the evidence in view of the entire
             record establishes that plaintiff’s submission to a drug test
             and background check and completion of certain
             paperwork were conditions precedent to her hire by
             [Associated] for the Huntsville, Texas job.

             19. The preponderance of the evidence in view of the entire
             record establishes that plaintiff submitted to the drug test,
             consented to the background check, and completed all
             necessary paperwork upon her arrival in Huntsville,
             Texas. It was only upon the completion of these processes
             that [Associated] hired plaintiff and she began work on the
             Texas job. Accordingly, the Commission finds that the last
             act required to create a contract of employment between
             plaintiff and [Associated] occurred in Texas.

      Based on these findings of fact, the Commission made the following pertinent

conclusions of law:

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  HOLMES V. ASSOCIATED PIPE LINE CONTRACTORS, INC.

                     Opinion of the Court

3. “To determine where a contract for employment was
made, the Commission and the courts of this state apply
the ‘last act’ test.” Murray v. Ahlstrom Indus. Holdings,
Inc., 131 N.C. App. 294, 296, 506 S.E.2d 724, 726 (1998)
(internal citations omitted).

4. “[F]or a contract to be made in North Carolina, the final
act necessary to make it a binding obligation must be done
here.” Thomas v. Overland Express, Inc., 101 N.C. App. 90,
96, 398 S.E.2d 921, 926 (1990) (internal citations omitted).
The completion of paperwork generally constitutes an
administrative task that serves as a consummation of the
employment relationship and is not the “last act” for
purposes of making the relationship a binding obligation.
Murray, 131 N.C. App. at 296-97, 506 S.E.2d at 726-27
(citing Warren v. Dixon and Christopher Co., 252 N.C. 534,
114 S.E.2d 250 (1960)). However, the completion of such
things as an orientation program, a physical examination,
a road test, or a drug test as part of the hiring process
extends “well beyond ‘mostly administrative’ paperwork.”
Taylor v. Howard Transp., Inc., ___ N.C. App. ___, ___, 771
S.E.2d 835, 839 (2015), disc. rev. denied, ___ N.C. ___
(2015).

5. Based upon a preponderance of the evidence in view of
the entire record, the Commission concludes that plaintiff’s
submission to the drug test and consent to a background
check outside of North Carolina, upon her arrival in
Huntsville, Texas, were conditions precedent to her hire by
[Associated] and such contingences [sic] were more than
administrative paperwork. Had plaintiff not submitted to
the drug test and consented to the background check,
[Associated] would not have hired plaintiff to work on the
Huntsville, Texas job. Consequently, the Commission
concludes the “last act” necessary to create an employment
contract and a binding obligation between plaintiff and
[Associated] occurred in Texas. N.C. Gen. Stat. § 97-36;
Taylor, 771 S.E.2d at 839; Thomas, 101 N.C. App. at 96,
398 S.E.2d at 926; Murray, 131 N.C. App. at 296, 506
S.E.2d at 726.

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                HOLMES V. ASSOCIATED PIPE LINE CONTRACTORS, INC.

                                 Opinion of the Court

             6. Because the contract of employment between plaintiff
             and [Associated] was not made in North Carolina;
             [Associated]’s principal place of business is not in North
             Carolina; and plaintiff’s principal place of employment was
             not in North Carolina, the North Carolina Industrial
             Commission cannot assert subject matter jurisdiction over
             these claims. N.C. Gen. Stat. § 97-36.

      Based on these conclusions, the Commission dismissed Plaintiff’s claims.

Deputy Commissioner Bernadine S. Ballance dissented based on her belief that the

Commission possessed jurisdiction in light of the fact that Plaintiff’s contract of

employment was, in fact, made in North Carolina. On 23 March 2016, Plaintiff filed

a timely notice of appeal.

                                     Analysis

      Appellate review of an opinion and award of the Industrial Commission is

typically “limited to consideration of whether competent evidence supports the

Commission’s findings of fact and whether the findings support the Commission’s

conclusions of law.” Philbeck v. Univ. of Mich., 235 N.C. App. 124, 127, 761 S.E.2d
668, 671 (2014) (citation and quotation marks omitted). “The findings of fact made

by the Commission are conclusive on appeal if supported by competent evidence even

if there is also evidence that would support a contrary finding. The Commission’s

conclusions of law, however, are reviewed de novo.” Morgan v. Morgan Motor Co. of

Albemarle, 231 N.C. App. 377, 380, 752 S.E.2d 677, 680 (2013) (internal citation

omitted), aff’d per curiam, 368 N.C. 69, 772 S.E.2d 238 (2015). However,

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               HOLMES V. ASSOCIATED PIPE LINE CONTRACTORS, INC.

                                  Opinion of the Court

             [w]hen reviewing an Opinion and Award, the jurisdictional
             facts found by the Commission are not conclusive even if
             there is evidence in the record to support such findings.
             Instead, reviewing courts are obliged to make independent
             findings of jurisdictional facts based upon consideration of
             the entire record.

Salvie v. Med. Ctr. Pharm. of Concord, Inc., 235 N.C. App. 489, 491, 762 S.E.2d 273,

276 (2014) (internal citations and quotation marks omitted).

      The North Carolina Workers’ Compensation Act provides, in pertinent part, as

follows:

             Where an accident happens while the employee is
             employed elsewhere than in this State and the accident is
             one which would entitle him or his dependents or next of
             kin to compensation if it had happened in this State, then
             the employee or his dependents or next of kin shall be
             entitled to compensation (i) if the contract of employment
             was made in this State, (ii) if the employer’s principal place
             of business is in this State, or (iii) if the employee’s
             principal place of employment is within this State;
             provided, however, that if an employee or his dependents
             or next of kin shall receive compensation or damages under
             the laws of any other state nothing herein contained shall
             be construed so as to permit a total compensation for the
             same injury greater than is provided for in this Article.

N.C. Gen. Stat. § 97-36 (2015) (emphasis added).

      Here, it is undisputed that Associated’s principal place of business is in Texas,

and Plaintiff does not contend that her principal place of employment is within North

Carolina.   Thus, the only remaining question is whether Plaintiff’s contract of

employment was made in Texas or North Carolina.

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                HOLMES V. ASSOCIATED PIPE LINE CONTRACTORS, INC.

                                   Opinion of the Court

      In determining where a contract of employment was made, our courts apply

the “last act” test. Murray v. Ahlstrom Indus. Holdings, Inc., 131 N.C. App. 294, 296,

506 S.E.2d 724, 726 (1998). “For a contract to be made in North Carolina, the final

act necessary to make it a binding obligation must be done here.” Id. (citation,

quotation marks, and brackets omitted). In the present case, Plaintiff contends that

the last act necessary to form her employment contract occurred in North Carolina

because she accepted the job for Associated by telephone from her North Carolina

home. Associated, conversely, argues that her employment was conditioned upon her

submission to a drug test and written consent to a background check — acts that did

not occur until she arrived in Texas.

      Plaintiff relies primarily on our decision in Murray.         In that case, the

defendant-employer’s agent contacted the plaintiff-employee in North Carolina for a

position as an instrument and pipe foreman at a jobsite in Mississippi. The plaintiff,

who had previously performed work for the employer, negotiated his salary over the

telephone in North Carolina with the agent. When the plaintiff arrived at the jobsite

in Mississippi, he was required to fill out paperwork before he could begin work.

However, “because he was a rehire (as opposed to a new hire) he was not required to

submit to a physical, drug test, or go to the local employment security office.” Murray,
131 N.C. App. at 295, 506 S.E.2d at 725.

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                 HOLMES V. ASSOCIATED PIPE LINE CONTRACTORS, INC.

                                  Opinion of the Court

      Shortly thereafter, the plaintiff was injured on the job. He filed a workers’

compensation claim with the North Carolina Industrial Commission, and the

Commission determined it possessed jurisdiction over the claim. Id. at 295, 506

S.E.2d at 726.

      On appeal, this Court affirmed, holding that “[t]he paperwork appears to be

more of a consummation of the employment relationship than the ‘last act’ required

to make it a binding obligation.” Id. at 297, 506 S.E.2d at 727. In reaching this

conclusion, we noted that “[a]lthough the paperwork filled out by plaintiff was

required before he could begin work,” the employer had conceded that the paperwork

was “mostly administrative.” Id. Thus, we held that “[t]he Commission’s findings

were based upon ample competent evidence, and the conclusion that the contract was

made in North Carolina was correct.” Id.

      In Murray, we cited our prior opinion in Thomas v. Overland Express, Inc., 101
N.C. App. 90, 398 S.E.2d 921 (1990), disc. review denied, 328 N.C. 576, 403 S.E.2d
522 (1991). In Thomas, an employer arranged for the plaintiff — who lived in North

Carolina — to fly to Indiana along with other prospective employees before officially

hiring them as truck drivers. Upon arriving in Indiana, “the plaintiff was given a

physical and road test by [the employer].” Id. at 94, 398 S.E.2d at 924. Four days

after his arrival in Indiana, he was informed that he was being hired as a truck driver

by the employer and signed employment-related paperwork that same day. The

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                HOLMES V. ASSOCIATED PIPE LINE CONTRACTORS, INC.

                                  Opinion of the Court

plaintiff subsequently sustained an injury arising out of his employment. Id. at 93,

398 S.E.2d at 924.

      The plaintiff filed a workers’ compensation claim in North Carolina, which the

Industrial Commission dismissed for lack of jurisdiction. Id. We affirmed, explaining

that “our review of the record in the present case reveals that the events which

culminated in plaintiff accepting employment with defendant, and the ‘last act’ for

purposes of conferring extraterritorial jurisdiction on the Commission, occurred in

Indiana rather than in North Carolina.” Id. at 97, 398 S.E.2d at 926.

      Associated contends that the present case is most analogous to Taylor v.

Howard Transp., Inc., __ N.C. App. __, 771 S.E.2d 835, disc. review denied, __ N.C.

__, 775 S.E.2d 857 (2015). In Taylor, an employer sent the plaintiff a letter “inviting

him to reapply to work for [the employer].” Id. at __, 771 S.E.2d at 837-38. The

plaintiff responded that he would only do so if the employer provided a better truck

for him and assigned him to a different dispatcher. The employer told the plaintiff

that his conditions would be met if he would “come back to work.” Id. at __, 771

S.E.2d at 838 (quotation marks omitted). The plaintiff agreed, and the employer

arranged for a van to pick the plaintiff up from his home in North Carolina and take

him to the employer’s headquarters in Mississippi. Id. at __, 771 S.E.2d at 838.

      After the plaintiff successfully completed in Mississippi the employer’s

“orientation, a road test, a drug test, and a physical exam[,]” the employer hired the

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                                   Opinion of the Court

plaintiff as a truck driver. Id. at __, 771 S.E.2d at 836. The plaintiff was subsequently

injured in Maryland in the course of his employment. The plaintiff brought a workers’

compensation claim in North Carolina, and the Industrial Commission determined

that it lacked jurisdiction over the plaintiff’s claim. Id. at __, 771 S.E.2d at 836.

      Concluding that “this case is more closely analogous to Thomas than to

Murray[,]” id. at __, 771 S.E.2d at 839, we affirmed the Commission’s decision. We

reasoned that the employer “did not consider plaintiff an employee until after he had

successfully completed the orientation, road test, drug test, and physical exam.” Id.

at __, 771 S.E.2d at 839. Thus, we held that the “plaintiff would not have been hired

as an employee if he had failed one of these tests[.]” Id. at __, 771 S.E.2d at 838.

Moreover, we stated that “[t]he fact that plaintiff was paid for [the three-day

orientation period] does not vitiate the fact that plaintiff’s employment was

contingent upon his successful completion of the orientation, road test, drug test, and

physical exam.” Id. at __, 771 S.E.2d at 839. Therefore, we concluded that the last

act forming the plaintiff’s employment contract occurred in Mississippi. Id. at __, 771

S.E.2d at 839.

      We believe that the present facts are more similar to Taylor and Thomas than

Murray. The evidence is undisputed that Associated made Plaintiff’s submission to

a drug test a prerequisite to her employment. It is clear that she would not have been

permitted to begin work for Associated had she refused to provide a urine sample.

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                  HOLMES V. ASSOCIATED PIPE LINE CONTRACTORS, INC.

                                       Opinion of the Court

We are unable to agree with Plaintiff that a prospective employee’s submission to a

mandatory drug test is akin to the completion of routine paperwork that was

determined to be merely a “consummation of the employment relationship” in

Murray. See Murray, 131 N.C. App. at 297, 506 S.E.2d at 727. Rather, a prospective

employee’s demonstrated willingness to submit to a drug test is more than simply an

administrative formality given that — unlike the completion of garden-variety

personnel forms — the taking of a drug test carries the risk of failing the test.

Moreover, while Plaintiff argues that requiring a drug test as a condition of

employment makes sense only if the employee is not permitted to begin work until

the results of the test are received by the employer, the employer possesses the

discretion to determine how soon a new employee may begin working after taking the

drug test.

       Quite simply, had Plaintiff refused to submit to a drug test upon her arrival in

Texas, she would not have been permitted to begin employment with Associated.

Therefore, her taking of the drug test was the last act necessary to form a binding

employment relationship between her and Associated. Because this act occurred in

Texas rather than North Carolina, the Commission lacked jurisdiction over her

claims pursuant to N.C. Gen. Stat. § 97-36.1

       1 In light of our holding that Plaintiff’s submission to a drug test was a condition of her
employment, we need not determine whether her consent to a background check likewise constituted
a separate act necessary to form an employment contract between Plaintiff and Associated.

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                 HOLMES V. ASSOCIATED PIPE LINE CONTRACTORS, INC.

                                    Opinion of the Court

       Plaintiff also cites Warren v. Dixon & Christopher Co., 252 N.C. 534, 114 S.E.2d
250 (1960), to support her argument that because Local 798 was an agent of

Associated, the 29 October 2013 telephone conversation between the Local 798

representative and Plaintiff formed a binding employment contract between Plaintiff

and Associated. In Warren, the plaintiff contracted with a local union in North

Carolina to work as a pipe fitter for the employer. After arriving at the jobsite in

Virginia, the plaintiff began work, was subsequently injured, and filed a workers’

compensation claim in North Carolina. Id. at 536-37, 114 S.E.2d at 251-52.

       Our Supreme Court affirmed the Commission’s determination that it

possessed jurisdiction over the plaintiff’s claim. The Supreme Court held that even

though “[t]he employer had a right to reject [the plaintiff] if work was not available . . .

[a]ccepting the worker on the job was merely the consummation of what had been

previously arranged, that is, the employment.” Id. at 537-38, 114 S.E.2d at 252-53.

       Here, while it appears from the record that Local 798 was authorized to select

prospective employees for Associated, it is undisputed that Associated ultimately

retained the right to deny employment to any such person who refused to submit to

a drug test upon arrival in Texas. Therefore, the role played by Local 798 in Plaintiff’s

hiring process does not alter our conclusion that because her employment was

contingent upon her submission to a drug test in Texas before she could begin work

for Associated, the last act necessary to form a binding employment relationship

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                HOLMES V. ASSOCIATED PIPE LINE CONTRACTORS, INC.

                                  Opinion of the Court

occurred in Texas. Accordingly, the Commission correctly determined that it lacked

jurisdiction over Plaintiff’s workers’ compensation claims.

                                    Conclusion

      For the reasons stated above, we affirm.

      AFFIRMED.

      Chief Judge MCGEE and Judge INMAN concur.

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