Court Opinion

ID: 2782343
Source: CourtListenerOpinion
Date Created: 2015-02-26 16:04:09.991481+00
Date Added: 2024-06-11T11:28:23.320259
License: Public Domain

Feb 26 2015, 9:57 am

ATTORNEYS FOR APPELLANT                                     ATTORNEYS FOR APPELLEES
Jason D. May                                                Beverly J. Mack
Indianapolis, Indiana                                       Huelat Mack & Kreppein, P.C.
                                                            Michigan City, Indiana
Troy M. Miller
V. Samuel Laurin, III                                       Edward B. Keidan
Bryan H. Babb                                               Conway & Mrowiec
Bose McKinney & Evans, LLP                                  Chicago, Illinois
Indianapolis, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

Skyline Roofing & Sheet Metal                              February 26, 2015
Company, Inc.,                                             Court of Appeals Cause No.
                                                           71A03-1406-PL-217
Appellant-Plaintiff,
                                                           Appeal from the St. Joseph Circuit
        v.                                                 Court.
                                                           The Honorable Michael G. Gotsch,
                                                           Judge.
Ziolkowski Construction, Inc.
and United Union Roofers,                                  Cause No. 71C01-1009-PL-183
Waterproofers and Allied
Workers Local #26,
Appellees-Defendants.

Riley, Judge.

Court of Appeals of Indiana | Opinion | 71A03-1406-PL-217 | February 26, 2015                    Page 1 of 16
                                     STATEMENT OF THE CASE
[1]   Appellant-Plaintiff, Skyline Roofing & Sheet Metal Company, Inc. (Skyline),

      appeals the trial court’s summary judgment in favor of Appellees-Defendants,

      Ziolkowski Construction, Inc. (Ziolkowski) and United Union Roofers

      Waterproofers and Allied Workers Local #26 (Local #26) 1 (collectively,

      Appellees), concluding that Skyline failed to establish a genuine issue of

      material fact that Appellees violated Indiana’s Antitrust Act.

[2]   We reverse and remand for further proceedings.

                                                       ISSUE

[3]   Skyline raises two issues on appeal, which we consolidate and restate as the

      following single issue: Whether the trial court properly concluded that Skyline

      failed to establish a genuine issue of material fact that Ziolkowski violated

      Indiana’s Antitrust Act by unlawfully restraining open and free competition in

      bidding for a public project to build a new middle school.

                            FACTS AND PROCEDURAL HISTORY

[4]   At some time prior to August 2009, the Kankakee Valley School Corporation

      (Kankakee Valley) planned to construct a new middle school in Wheatfield,

      1
        Although Local #26 is listed on the caption of the briefs, this appeal only involves the summary judgment
      in favor of Ziolkowski.

      Court of Appeals of Indiana | Opinion | 71A03-1406-PL-217 | February 26, 2015                    Page 2 of 16
      Indiana. To that end, Kankakee Valley mapped out a campaign that included

      enlisting the unions to help pass a referendum that would eventually fund the

      new middle school project (the Project). The unions placed union members at

      voting sites to show their support for the referendum and the Project. The

      referendum passed. See Skyline Roofing & Sheet Metal Co., Inc. v. Ziolkowski Const.,

      Inc., 957 N.E.2d 176, 180 (Ind. Ct. App. 2011) (Skyline I).

[5]   In August 2009, Kankakee Valley issued an advertisement requesting bids for

      the Project and setting September 17, 2009, as the deadline for submission of

      such bids. During a pre-bid meeting on September 8, 2009, which was attended

      by Ziolkowski, it was clarified that any submitted bid must include a list of the

      proposed sub-contractors. At the same time, Glenn Krueger (Krueger), the

      superintendent of Kankakee Valley, specified that he “did not want to see non-

      union contractors.” (Appellant’s App. p. 222).

[6]   On September 17, 2009, Ziolkowski timely submitted its bid to Kankakee

      Valley. After bids were opened, Kankakee Valley notified Ziolkowski that it

      was the successful bidder for the Project. In turn, Ziolkowski notified Skyline, a

      non-union subcontractor, that it had “submitted the low bid” for the roofing

      system of the Project and that Ziolkowski had listed Skyline “on the

      subcontractor list” submitted to Kankakee Valley. (Appellant’s App. p. 303).

      At Ziolkowski’s request, Skyline sent it a detailed list of “customer references

      for projects currently in progress, projects that are constantly ongoing[,] and

      completed projects.” (Appellant’s App. p. 189). On September 23, 2009, the

      Project Architect, Steven Park (Architect Park), emailed Krueger with a

      Court of Appeals of Indiana | Opinion | 71A03-1406-PL-217 | February 26, 2015   Page 3 of 16
      comparison of different roofing systems and identified Skyline as a non-union

      contractor.

[7]   On September 30, 2009, Kankakee Valley notified Ziolkowski of its intent to

      enter into a contract with the company. That same day, Kankakee Valley

      received a public records request from Local #26 asking for copies of

      Ziolkowski’s bid documents, including Ziolkowski’s subcontractor list. Local

      #26 subsequently discovered that Ziolkowski was “using Skyline.”

      (Appellant’s App. p. 239).

[8]   On October 5, 2009, Ziolkowski and Kankakee Valley entered into a contract

      for the construction of the Project. Meanwhile, Krueger received complaints

      from representatives of the Local #26 who expressed their concern that Skyline

      was a “nonunion roofer and that they would love to have the job.” (Appellant’s

      App. p. 312). On October 16, 2009, Ziolkowski emailed its subcontractor list

      for the Project to Krueger, and listed Skyline as the subcontractor for the

      roofing system. Three days later, at 7:39 a.m. on October 19, 2009, Krueger

      replied, “I have the Ziolkowski Contract on my desk. I am deeply concerned

      about a union job action due to the non-union roofer. I will be seeking advice

      from our lawyer and a review by the School Board before I sign.” (Appellant’s

      App. p. 331). One hour later, at 8:25 a.m., Krueger emailed Architect Park,

      stating, “I have Ziolkowski’s Contract. There is a huge issue over the roofing

      sub who is not union. I am not sure what to do. I am sure the unions will stop

      Court of Appeals of Indiana | Opinion | 71A03-1406-PL-217 | February 26, 2015   Page 4 of 16
      the project.” (Appellant’s App. p. 325). Architect Park replied, understanding

      “the concern but this is where a lot of the costs issues have come in from the

      bids. If we need to change the roofing contractor it would seem that we would

      need to rebid the project because it determined the selected contractor?”

      (Appellant’s App. p. 325). Krueger then inquired whether it was possible to

      “re-bid” the Project, to which Architect Park responded: “Would need to stop

      everything and re-advertise. Even then we cannot eliminate non-union

      bidders.” (Appellant’s App. p. 329). Krueger agreed, and the following day he

      affirmed:

              I guess we are stuck. There is no question this non-union situation
              strains the relationship between the contractors hiring them and me. I
              am not a happy camper. We passed ou[r] referendum with the help of
              the unions and now we turn on them. This non-union issue is deadly
              for our next referendum. It is just a shame.
      (Appellant’s App. p. 329). Fifty minutes later, at 8:50 a.m., Krueger emailed

      Ziolkowski, with the subject line “Reject Sub:”

              I believe [Kankakee Valley] has the right to reject a sub-contractor. I
              am looking into the legal aspects of this and of course the issue is
              Skyline-non-union. The union helped us pass our referendum and as I
              stated in the Pre Bid meeting I did not want to see non-union
              contractors. That was ignored by [Ziolkowski]. I am not happy with
              this situation. In any event, I don’t like to being ignored.
              I am discussing my legal options with our construction attorney.
      (Appellant’s App. p. 337).

[9]   On September 21, 2009, Bill Favors (Favors), President of Ziolkowski, initiated

      a meeting with Krueger to discuss “the union/nonunion thing” as Krueger
      Court of Appeals of Indiana | Opinion | 71A03-1406-PL-217 | February 26, 2015    Page 5 of 16
       “was a little disgruntled with the way the bid shook out” because Skyline was

       on the bid list. (Appellant’s App. pp. 345, 347). The following day, after the

       meeting took place, Favors informed Krueger by email:

               I am sure you will be happy to know, we were able to negotiate terms
               with our union subcontractor this morning that will allow us to
               contract their services on your building. Although their financial terms
               were not completely satisfactory, we feel that to contract otherwise
               would jeopardize the smooth and successful construction of your
               building and increase your frustration. We will be sending you an
               updated subcontractor list in the very near future.
       (Appellant’s App. p. 350).

[10]   Towards the “end of October or during November,” Ziolkowski started to

       organize the work schedule and noticed that “the roofing would land right in

       the middle of winter.” (Appellant’s App. p. 138). In order to get the roofing

       done in winter weather, Ziolkowski suggested to Kankakee Valley that they

       change the specification of the roof from an EPDM-type roof to a

       “mechanically fastened TPO”-type roof. (Appellant’s App. p. 139).

       Ziolkowski invited the three roofing contractors—Midland, Korellis, and

       Gluth—who had previously also submitted bids for the EPDM roof, to submit

       pricing for the TPO roof. Skyline was not invited to bid on these revised

       specifications. Because the TPO roof allowed the Project to remain on schedule

       during winter and awarded a longer warranty, Kankakee Valley agreed to

       change the roof specification through a formal change order to Ziolkowski’s

       contract. On December 4, 2009, Ziolkowski executed a subcontract agreement

       with Midland for the roofing work.

       Court of Appeals of Indiana | Opinion | 71A03-1406-PL-217 | February 26, 2015   Page 6 of 16
[11]   In September 2010, Skyline filed a complaint against Ziolkowski alleging that it

       colluded with Kankakee Valley to exclude Skyline as the roofing subcontractor

       in favor of Midland in violation of the Indiana Antitrust Act. Ziolkowski

       moved to dismiss Skyline’s complaint for failure to state a claim under Indiana

       Trial Rule 12(B)(6) and failure to join Local #26, Midland, and Kankakee

       Valley as necessary parties under Indiana Trial Rule 12(B)(7). After a hearing,

       the trial court dismissed Skyline’s complaint without prejudice for failure to

       state a claim.

[12]   In February 2011, Skyline filed an amended complaint against Ziolkowski and

       Local #26, again contending that Ziolkowski and Local #26 violated Indiana’s

       Antitrust Act. As before, Ziolkowski and Local #26 each filed a motion to

       dismiss the complaint, asserting that Skyline’s complaint failed to state a claim

       under Indiana Trial Rule 12(B)(6), Skyline failed to join Midland and Kankakee

       Valley as necessary parties under Indiana Trial Rule 12(B)(7), and Skyline’s

       allegations were preempted by federal labor laws. The trial court dismissed

       Skyline’s complaint with prejudice without a hearing. Skyline appealed.

[13]   In our Opinion, issued October 25, 2011, we reversed the trial court’s order. See

       Skyline I, 957 N.E.2d at 176. Finding error in the trial court’s decision on the

       preemption issue and the joinder, and concluding that Skyline’s complaint

       sufficiently alleged a scheme instigated by Ziolkowski to exclude Skyline and to

       constitute a restraint on free competition, we remanded the cause to the trial

       court for further proceedings. See id. at 188.

       Court of Appeals of Indiana | Opinion | 71A03-1406-PL-217 | February 26, 2015   Page 7 of 16
[14]   On February 20, 2012, Skyline filed its second amended complaint, contending

       that (1) Ziolkowski violated the Indiana Antitrust Act; and (2) Local #26

       violated Section 303 of the Labor Management Relations Act. On February 28,

       2014, both Ziolkowski and Labor # 26 filed their respective motions for

       summary judgment. On April 7, 2014, Skyline filed its cross-motion for partial

       summary judgment, together with its opposition to Ziolkowski’s and Labor

       #26’s motions for summary judgment. At the request of Appellees, the trial

       court struck Skyline’s cross-motion for summary judgment for being filed

       outside the court’s case management deadline; however, the trial court ordered

       Skyline’s cross-motion to be considered as a reply to Appellees’ motions. On

       April 17, 2014, the trial court conducted a hearing on the motions for summary

       judgment. Approximately a month later, on May 29, 2014, the trial court,

       finding no genuine issues of material fact, entered summary judgment in favor

       of Appellees.

[15]   Skyline now appeals the summary judgment in favor of Ziolkowski. Additional

       facts will be provided as necessary.

                                    DISCUSSION AND DECISION

                                              I. Standard of Review

[16]   Summary judgment is appropriate only when there are no genuine issues of

       material fact and the moving party is entitled to a judgment as a matter of law.

       Ind. Trial Rule 56(C). “A fact is material if its resolution would affect the

       outcome of the case, and an issue is genuine if a trier of fact is required to

       Court of Appeals of Indiana | Opinion | 71A03-1406-PL-217 | February 26, 2015   Page 8 of 16
       resolve the parties’ differing accounts of the truth . . . , or if the undisputed facts

       support conflicting reasonable inferences.” Williams v. Tharp, 914 N.E.2d 756,

       761 (Ind. 2009).

[17]   In reviewing a trial court’s ruling on summary judgment, this court stands in the

       shoes of the trial court, applying the same standards in deciding whether to

       affirm or reverse summary judgment. First Farmers Bank & Trust Co. v. Whorley,

       891 N.E.2d 604, 607 (Ind. Ct. App. 2008), trans. denied. Thus, on appeal, we

       must determine whether there is a genuine issue of material fact and whether

       the trial court has correctly applied the law. Id. at 607-08. In doing so, we

       consider all of the designated evidence in the light most favorable to the non-

       moving party. Id. at 608. The party appealing the grant of summary judgment

       has the burden of persuading this court that the trial court’s ruling was

       improper. Id. When the defendant is the moving party, the defendant must

       show that the undisputed facts negate at least one element of the plaintiff’s

       cause of action or that the defendant has a factually unchallenged affirmative

       defense that bars the plaintiff’s claim. Id. Accordingly, the grant of summary

       judgment must be reversed if the record discloses an incorrect application of the

       law to the facts. Id.

[18]   We observe that, in the present case, the trial court did not enter findings of fact

       and conclusions of law in support of its Judgment. Special findings are not

       required in summary judgment proceedings and are not binding on appeal. Id.

       However, such findings offer this court valuable insight into the trial court’s

       rationale for its decision and facilitate appellate review. Id.

       Court of Appeals of Indiana | Opinion | 71A03-1406-PL-217 | February 26, 2015   Page 9 of 16
                                                    II. Analysis

[19]   Skyline contends that the trial court erred in entering summary judgment for

       Ziolkowski on its claim brought pursuant to Indiana’s Antitrust Act (Act). The

       purpose of the Act is to prevent fraud and collusion in the letting of contracts

       and to protect trade and commerce against unlawful restraints and monopolies.

       Gariup Const. Co., Inc. v. Carras-Szany-Kuhm & Assocs, P.C., 945 N.E.2d 227, 233

       (Ind. Ct. App. 2011), trans. denied. Skyline filed its second amended complaint

       under two specific sections of the Act.

[20]   Indiana Code section 24-1-2-3 provides, “A person who engages in any scheme,

       contract, or combination to restrain or restrict bidding for the letting of any

       contract for private or public work, or restricts free competition for the letting of

       any contract for private or public work, commits a Class A misdemeanor.”

       Indiana Code section 24-1-2-7(a), in turn, provides a private right of action

       allowing treble damages, costs, and attorney’s fees to “[a]ny person whose

       business or property is injured by a violation of this chapter.” A plaintiff

       requesting damages under the Act must prove three essential elements: (1) a

       violation of the statute; (2) injury to a person’s business or property proximately

       caused by the violation; and (3) actual damages. Thompson v. Vigo Cnty. Bd. of

       Cnty. Comm’rs, 876 N.E.2d 1150, 1155 (Ind. Ct. App. 2007), trans. denied.

[21]   The premise of Skyline’s claim is that the designated evidence establishes a

       genuine issue of material fact that Ziolkowski engaged in a scheme in violation

       of the Act to replace a non-union company—Skyline—with a union

       Court of Appeals of Indiana | Opinion | 71A03-1406-PL-217 | February 26, 2015   Page 10 of 16
       contractor—Midland—as the roofing subcontractor for the Project. Focusing

       on Krueger’s “extreme displeasure” that non-union contractors were

       performing part of the Project and his expressed “frustration” to be unable to

       reward the union for helping pass the referendum, Skyline maintains that

       Ziolkowski was pressured into selecting a costlier union roofing contractor.

       (Appellant’s Br. p. 10). In response to these allegations, Ziolkowski rejects the

       existence of any scheme and contends that it is uncontroverted that Ziolkowski

       contracted with Midland after reviewing Skyline’s references which indicated

       that Skyline lacked the ability to perform the roofing work on this complex

       Project.

[22]   The designated evidence in the light most favorable to the non-moving party

       demonstrates that during a pre-bid meeting on September 8, 2009, Krueger

       stressed the importance of not using “non-union contractors.” (Appellant’s

       App. p. 222). Despite this caution, Ziolkowski submitted a successful bid for

       the Project, in which it had listed Skyline, a non-union company, as the roofing

       contractor “on the subcontractor list.” (Appellant’s App. p. 303). On

       September 23, 2009, before the execution of the contract between Ziolkowski

       and Kankakee Valley, Skyline gave Ziolkowski a detailed list of its customer

       references.

[23]   Prior to Krueger signing the contract with Ziolkowski for the Project,

       Ziolkowski emailed him the subcontractor list on October 16, 2009, in which

       Skyline was still identified as the roofing subcontractor. Meanwhile, at the

       instigation of a public records request from Local #26, Krueger was informed

       Court of Appeals of Indiana | Opinion | 71A03-1406-PL-217 | February 26, 2015   Page 11 of 16
       by the union representatives that Ziolkowski was using a non-union roofing

       company as its subcontractor on the Project and that Local #26 “would love to

       have the job.” (Appellant’s App. p. 312). Three days after Skyline was

       disclosed as the roofing contractor and after a meeting with Local #26

       representatives, Krueger shared his “deep” concern with Ziolkowski “about a

       union job action due to the non-union roofer.” (Appellant’s App. p. 331). He

       advised Ziolkowski that prior to signing the contract, he would be “seeking

       advice” from counsel. (Appellant’s App. p. 331). Within the hour, Krueger

       consulted with Architect Park, discussing this “huge issue” of a non-union

       roofing subcontractor and agreeing that the only solution is to re-bid the Project

       but even then non-union bidders could not be eliminated. (Appellant’s App. p.

       325). Not being “a happy camper,” Krueger contacted Ziolkowski the

       following morning, October 20, 2009, by email with subject line “Reject Sub,”

       and expressed his frustration in adamant language:

               I believe [Kankakee Valley] has the right to reject a sub-contractor. I
               am looking into the legal aspects of this and of course the issue is
               Skyline-non-union. The union helped us pass our referendum and as I
               stated in the Pre Bid meeting I did not want to see non-union
               contractors. That was ignored by [Ziolkowski]. I am not happy with
               this situation. In any event, I don’t like to being ignored.
               I am discussing my legal options with our construction attorney.
       (Appellant’s App. p. 337).

[24]   Barely one day after receipt of this email, Favors, President of Ziolkowski,

       personally arrived in Krueger’s office, placating Krueger and discussing “the

       union/nonunion thing.” (Appellant’s App. p. 345). The next day, October 22,

       Court of Appeals of Indiana | Opinion | 71A03-1406-PL-217 | February 26, 2015   Page 12 of 16
       2009, Favors “happily” informed Krueger that they “were able to negotiate

       terms with our union subcontractor this morning that will allow us to contract

       their services.” (Appellant’s App. p. 350). Admitting that even though the

       financial terms were not completely to Ziolkowski’s satisfaction, Favors

       acknowledges that a different solution would “jeopardize” the Project.

       (Appellant’s App. p. 350).

[25]   Faced with designated evidence that indicates the existence of a genuine issue

       of material fact pointing towards a scheme to prevent the free letting of a

       contract for the construction of a public project, Ziolkowski relies on two main

       arguments. First, Ziolkowski contends that “[b]y the time [Krueger] sent the

       October 19 and 20, 2009 emails, it is undisputed that Ziolkowski had already

       decided not to consider Skyline’s bid.” (Ziolkowski Br. 17). Characterizing

       Skyline as a fast food roofing contractor who had mostly completed one-day

       projects at Steak-N-Shake, Wendy’s, Chick-fil-A, and Burger King restaurants,

       Ziolkowski claims to be “extremely concerned” that Skyline had no experience

       with a 250,000 square foot project, worth approximately $2 million.

       (Appellee’s Br. p. 19). We disagree that the designated evidence conclusively

       leads to the result proposed by Ziolkowski.

[26]   At no point during the terse email exchanges with Krueger did Ziolkowski

       alleviate Krueger’s concern and clarify to him that the company was no longer

       considering Skyline for the Project. To the contrary, barely three days before

       Krueger’s first email, Ziolkowski still stood by Skyline as its roofing

       subcontractor. The situation escalated to the point where Ziolkowski’s

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       president personally met with Krueger. If Ziolkowski had indeed already

       decided that Skyline was unqualified for the Project, there would be no reason

       to incur the wrath of a disgruntled and frustrated customer or even the necessity

       to discuss this “union/nonunion thing” in person. (Appellant’s App. p. 345).

       Moreover, Ziolkowski mischaracterizes Skyline’s qualifications. Its references

       list projects from 350,000 square feet re-roofs to 200,000 square feet new

       construction projects, with roofs installed on well over 6000 buildings.

       Skyline’s most notable projects include Fort Ben’s Commissary Building, the

       Fishers public library, Arlington Elementary School, IUPUI’s SPEA building,

       and the Carmel City Center, a job exceeding the contract amount of the Project

       at bar.

[27]   Secondly, Ziolkowski maintains that the change in roof systems was instigated

       solely due to concerns with the performance of the specified system in winter

       weather and did not amount to a violation of Indiana’s Antitrust Act.

       However, considered within the totality of the evidence, the timing of

       contemplating a new roof system in the Project is, at a minimum, suspicious.

       Towards the “end of October or during November” and after the email

       exchange with Krueger resulted in a new union roofing subcontractor,

       Ziolkowski suggested to change the specified EPDM-type roof to a TPO-type

       roof, which would allow them to continue working through winter.

       (Appellant’s App. p. 138). Ziolkowski contacted three different

       subcontractors—not Skyline—to submit proposed pricing for the new work.

       Kankakee Valley subsequently agreed to change the roof specification through a

       Court of Appeals of Indiana | Opinion | 71A03-1406-PL-217 | February 26, 2015   Page 14 of 16
       formal change order. Only after the new roof specification was agreed upon,

       did Ziolkowski enter into a subcontract agreement with Midland, a union

       contractor. A reasonable inference can be derived that the change order served

       as a mere subterfuge to easier get rid of Skyline.

[28]   Moreover, during the roofing work on the Project, it also became clear that

       Local #26 contributed some specific funds towards the employment of its

       members, thereby affirming that Ziolkowski received some financial

       incentive—however slight—towards its trouble of having to “negotiate terms

       which [the] union subcontractor,” which were not “completely satisfactory.”

       (Appellant’s App. p. 350). Not only did the business representative of Local

       #26 “volunteer” to work on the project for eleven days as a journeyman roofer

       paid for by Local #26, Midland did not have to pay travel expenses for other

       Local #26 union members. (Appellant’s App. p. 358).

[29]   Viewing the designated evidence in favor of the nonmoving party, we conclude

       that the evidence amounts to more than “speculation” and “innuendo” and

       raises at a minimum a genuine issue of material fact that Ziolkowski colluded to

       substitute a non-union contractor with a union contractor. (Appellant’s App. p.

       16). Serving as a catalyst, Krueger’s disgruntled emails about selecting a non-

       union roofing contractor and his two cautions of “discussing [his] legal

       actions,” spurred Ziolkowski into action to save the Project and ensure a

       “smooth construction.” (Appellant’s App. pp. 337, 350). Ziolkowski turned to

       Midland, a union roofing contractor, to replace Skyline, despite having publicly

       submitted Skyline as its roofing subcontractor in its subcontractor list. With

       Court of Appeals of Indiana | Opinion | 71A03-1406-PL-217 | February 26, 2015   Page 15 of 16
       financial incentives received from Local #26 and a change order for the roofing

       specifications, Ziolkowski entered into an agreement with Midland. In this

       light, we conclude that the trial court erred in granting summary judgment to

       Ziolkowski. We reverse the trial court’s grant of summary judgment and

       remand this cause for further proceedings.

                                                CONCLUSION

[30]   Based on the foregoing, we conclude that Skyline established a genuine issue of

       material fact that Ziolkowski violated Indiana’s Antitrust Act by unlawfully

       restraining open and free competition in bidding for a public project to build a

       new middle school.

[31]   Reversed and remanded for further proceedings.

[32]   Vaidik, C. J. and Baker, J. concur

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