Court Opinion

ID: 3113802
Source: CourtListenerOpinion
Date Created: 2015-10-16 07:18:52.82013+00
Date Added: 2024-06-11T10:32:31.959389
License: Public Domain

AFFIRM; and Opinion Filed March 14, 2013.

                                           In The
                                  Q!nurt nf AIatk1
                       *iftl! iitrirt uf izau at at1a
                                    No,   O5-11-00649-CV

      JEFF AND COURTNEY BLANKINSHIP, AND MIRACLE GOLF
                     CONCEPTS, Appellants
                                              V.
       TIMOTHY BROWN, GARY W. BLANSCET, AND BLANSCET
           SUTHERLAND, lOOPER, & HALE, LLP, Appellees

                      On Appeal from the 14th Judicial District Court
                                  Dallas County, Texas
                            Trial Court Cause No. 320570014

                                          OPINION
                         Before Justices O’Neill, Francis, and Murphy
                                  Opinion by Justice O’Neill
       The trial court granted two motions for summary judgment in favor of appellees Timothy

Brown, Gary W. Blanscet, and Blanscet, Sutherland, looper, & Hale LLP. Appellants Jeff and

Courtney Blankinship and Miracle Golf Concepts appeal the trial court’s orders, In four issues,

they argue (1) the trial court erred by granting the October 27, 2010 summary judgment with

respect to their claims for common law fraud, fraud by nondisclosure, and negligent

misrepresentation; (2) the trial court abused its discretion by denying their motion to compel

discovery; (3) the trial court erred by granting the January 21, 2011 summary judgment with

respect to their claims for aiding and abetting common law fraud, fraud by nondisclosure, and
negligent misrepresentation; and (4) the trial court abused its discretion when it rendered the

May 6, 201 1 protective order regarding their post-judgment deposition of Brown. We affirm.

                                      Factual Background

       Appellee Brown was a golf professional, who formed a company called Miracle Golf

Concepts. In 2007, he and his wife sold Miracle Gold Concepts to Golf & Tennis Pro Shop, Inc.

(G&TPS),     Brown worked for G&TPS from 2007 until December 31, 2008.                 During his

employment, he was bound by a non-compete agreement that prohibited him from rendering

services or being otherwise affiliated with another entity in the charity golf tournament industry.

The agreement was in force during his tenure and for two years thereafter.

       In late 2008, a dispute over Brown’s wages ensued and G&TPS eventually terminated

him. The dispute was formally resolved with a Termination Agreement and Mutual Release

signed on March 17, 2010 with an effective date of December 31, 2008.

       In April or May of 2009, Brown entered into a business relationship with the

Blankinships to pursue Miracle Golf Concepts on their own. In September 2009, an attorney for

the Blankinships drafted an independent contract agreement and presented it to Brown.       Brown

gave the agreement to appellee Gary Blanscet, his attorney, to review. Blanscet advised Brown

he could not make certain representations because of his prior dealings with G&TPS. Blanscet

revised the agreement, and the Blankinships signed it on October 14, 2009.

       On October 23, 2009, Brown discussed with the Blankinships his prior dealings with

G&TPS, including the noncompete agreement. The Blankinships terminated their contract with

Brown and filed suit against him for common law fraud, negligent misrepresentation, and breach

of contract. They brought causes of action against Blanscet and his law firm for common law

fraud, aiding and abetting common law fraud, negligent misrepresentation, and aiding and
abetting negligent misrepresentation.     A later amended petition included causes of action for

fraud by nondisclosure and aiding and abetting fraud by nondisclosure,

       On October 4, 2010, Blanscet and his firm filed a motion for summary judgment pursuant

to Texas Rule of Civil Procedure 166a asserting that all of appellants’ claims failed as a matter of

law. The trial court granted the motion on October 27, 2010 and dismissed with prejudice all of

appellants’ claims against them.

       Appellants filed a motion to reconsider the October 27, 2010 order, and the trial court

granted it in part and reinstated their aiding and abetting claims. Blanscet and his firm later filed

a no evidence motion for summary judgment on the reinstated claims, which the trial court

granted on January 21, 2011.

        Appellants proceeded to trial against Brown. The jury found in favor of appellants on

their claims for breach of contract, negligent misrepresentation, and fraud.        Appellants now

appeal the trial court’s rulings in favor of l3lanscet and his law firm.

                      January 21, 2011 No Evidence Summary Judgment

        In their third issue, appellants argue the trial court erred by granting appellees’ no

evidence motion for summary judgment with respect to their claims for aiding and abetting

common law fraud, fraud by nondisclosure, and negligent misrepresentation. Appellees respond

appellants violated Texas Rule of Appellate Procedure 38 and therefore have waived their

complaints. We agree with appellees.

        After discussing the procedural history of the January 21, 2011 summary judgment order,

appellants state the following:

                The Blankinships will refrain from regurgitating the arguments and
                evidence proffered to rebut each of these nine criticisms, which are
                set forth in full in the clerk’s record. [CR 70-251 1. Upon review
                of the arguments, authorities and evidence proffered by the
                Blankinships, the Blankinships submit that no doubt exists that

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                they met their burden to present evidence creating factual issues
                which should have been resolved at trial with respect to each oi the
                elements challenged by the l3lanscet delcndants.

        Texas Rule of Appellate Procedure 38. 1(0 states that a brief “must contain a clear and

concise argument for the contentions made, with appropriate citations to authorities and to the

record.” TEx. R. APP. P. 38.1(i). The above conclusory statement with              citation   to over 150

pages of the Clerk’s Record (toes not   Comport   with rule 38.1(i). See Taylor v. State, 293 S.W.3d
913, 916 (Tex. App.—Austin 2009. no pet) (concluding brief, conclusory statements.

unsupported by legal citations. are insufficient to sustain an appellant’s complaint). Although

appellate courts generally construe the briefing rules liberally, points of error unsupported by the

citation of authority present nothing for the court to review. See Arias v. Brookstone, L.P., 265
S.W.3d 459, 470 (Tex. App.—Houston list Dist.I 2007, pet. denied).                 Further, appellant’s

suggestion for disregarding nile 38. 1 negates appellate rule page limitations.               Accordingly,

appellant’s third issue is overruled.

        Having ovelTuled this issue, we need    not    address appellants’ second issue in which they

complain the trial court abused its discretion when it denied their motion to compel discovery

and continue the summary judgment hearing regarding the aiding and abetting claims. Because

they waived their aiding and abetting claims on appeal,        any   alleged error by the trial court in

denying discovery or a continuance based on these claims is moot. Thus, appellant’s second

issue is overruled.

                 October 27, 2010 Traditional Motion for Summary Judgment

        In their first issue, appellants argue the trial court erred by granting appellees’ motion for

summary judgment with respect to their causes of action for common law fraud, fraud by

nondisclosure, and negligent misrepresentation. Appellees respond the trial court did not           err   in

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eranting   their   motion   because no genuine issue of   material [act exists indicating appellants

justifiably relied upon any alleged misrepresentations by Blanscet.

        We review the trial court’s summary judgment de novo. Provjdeni Lik’ & ;lccident Ins.

Co. v. Knott. I 2i S.Vv 3d 211. 215 (Tex. 2003). When reviewing a summary judgment, we take

as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and

resolve any doubts in the nonmovant’s favor. Id. Under Texas Rule of Civil Procedure 166a(c),

the party moving for summary judgment bears the burden to show that no genuine issue of

material fact exists and that it is entitled to judgment as a matter of law, Id.

       To establish common law fraud, appellants must prove (I) a material misrepresentation

was made, (2) the representation was false, (3) when the representation was made, the speaker

knew it was false or made it recklessly without any knowledge of [lie truth and as a positive

assertion. (4) the speaker made the representation with the intent that the other party should act

upon it, (5) the party acted in reliance on the representation, and (6) the party thereby suffered

injury. Hall v. Douglas, 380 S.W.3d 860, 80 (Tex. App.—Dallas 2012, no pet.).

       Fraud by nondisclosure is considered a subcategory of fraud. Schlurnberger Tech. Corp.

v. Swanson, 959 S .W.2d 171, 181 (Tex. 1997). To establish fraud by nondisclosure, appellants

must prove (1) the defendant failed to disclose facts to the plaintiff, (2) the defendant had a duty

to disclose those facts, (3) the facts were material, (4) the defendant knew the plaintiff was

ignorant of the facts and the plaintiff did not have an equal opportunity to discover the facts, (5)

the defendant was deliberately silent when it had a duty to speak, (6) by failing to disclose the

facts, the defendant intended to induce the plaintiff to take some action or refrain from acting, (7)

the plaintiff relied on the defendant’s nondisclosure, and (8) the plaintiff was injured as a result

                                                   5
of acting without that knowledge.    Hori:on   Shipbuilding. Inc.   i.   fllvn II Hidin. LLC, 32$

S.W.3d 840, 850 (Tex, App.—Houston I 14th Dist.I 2010, no pci).

       And lastly, to establish negligent misrepresentation, appellants must prove (1) the

representation was made by a defendant in the course of his business, or in   a transaction   in which

he had a pecuniary interest. (2) the delendant supplied “false information’ br the guidance of

others in their business. (3) the defendant did not exercise reasonable care or competence in

obtaining or communicating the information, and (4) the plaintiff suffered pecuniary loss by

justifiably relying on the representation. Henry Schein, Inc. v. Stromboe. 102 S.W.3d 675. 686

n.24 (Tex. 2002>.

       Appellees’ motion for summary    judgment    challenged the reliance element of appellants’

causes of action,   They contended appellants’ claims failed as a matter of law because the

uncontroverted evidence established appellees did not become aware of Brown’s involvement

with appellants until August 2009. which was approximately four months after Brown and

appellants began working together. Thus, appellees claimed appellants could not have possibly

relied on any representations or lack of disclosures by them when they signed the October 14,

2009 contract.

       Both common law fraud and negligent misrepresentation require a showing of actual and

justifiable reliance. AKB Hendrick. LP r. Musgrave Enter., Inc., 380 S.W.3d 221, 238 (Tex.

App.—Dallas 2012, no pet.).         Likewise, reliance is a necessary element of fraud by

nondisclosure. Schiumberger Tech. Co.. 959 S.W.2d at 181 (holding fraud by nondisclosure is a

subcategory of fraud and because reliance is an element of fraud, it is likewise an element of

fraud by nondisclosure). Appellants acknowledge that in order to substantiate their causes of

                                                6
action against appellees they must establish they relied upon misrepresentations or

nondisclosures by appellees.

         In response to appellees’ motion for summary judgment, appellants submitted the

affidavit of Jeff Blankinship.     He stated they “actually relied on both the representations

contained within the Independent Contract Agreement as reviewed and redrafted by [appellees I

    ,“   and they “actually relied on the lappellees’ I nondisclosure of the existence of the Asset

Purchase Agreement and the Noncompetition Agreement” He further asserted they would not

have entered into the redrafted agreement had they been aware of the Asset Purchase Agreement

and the Noncompetition Agreement.          Had they known of these agreements, “they would

immediately have ceased incurring any further expenditures or liabilities with respect to their

business relationship with Defendant Brown.” eased on this affidavit, appellants argue they

created a fact issue to overcome summary judgment.

         Appellees first argue the affidavit does not create a fact issue because Jeff Blankinship’s

trial testimony proves he did not rely on any representations or nondisclosures by Blanscet, He

admitted at trial he did not read the contract before signing it nor did he submit it to his attorney

to review despite knowing appellees made revisions to it. However, this evidence was not before

the trial court at the time it considered summary judgment. Accordingly, we may not consider

the trial testimony in our summary judgment analysis. See Young v. Gunfory, 322 S.W.3d 731,

745 n.3 (Tex. App.—Dallas 2010, no pet.) (noting review was limited to evidence before the

court at the time of the first motion for partial summary judgment); Deerfield Land Joint Venture

v. S. Union Realty Co., 758 S.W.2d 608, 610 (Tex. App.—Dallas 1988, writ denied).

         In reaching this conclusion, we are unpersuaded by appellees’ arguments that appellants

“opened the door” to our consideration of such evidence when they filed a motion for new trial

                                                  7
with the trial transcript attacheci.    Appellees have provided no authority to support this

proposition, and appellants      have not challenged the denial ol their motion for new trial.

Accordingly, we will consider the affidavit to determine whether appellants created a fact issue

as to the element of reliance.

        It is undisputed appellees did not have an attorney—client relationship with appellants.

However, appellants rely on Mc€’arnish, Martin, Brown & Loeffler v. F.E. Appling Investments,

991 S.W.2d 787 (Tex. 1999) to support their position that an attorney can be responsible to a

non-client for misrepresentations. Appellants argue Mccamish should apply because Blanscet

reviewed, modified, and redrafted the independent contractor agreement for Brown, who in turn

provided the contract with alleged fraudulent statements to them. They claim to have relied on

the representations in the contract, and their reliance “was justifiable, because a non-client has a

reasonable and justifiable expectation that his counterpartys attorney will comply with his

ethical and professional responsibilities” as provided by the Texas Disciplinary Rules of

Professional Conduct. As explained below, we conclude McCa,nish and the Texas Disciplinary

Rules of Professional Conduct do not apply under these facts,

       The McCamish court decided whether the absence of an attorney-client relationship

precludes a third party from suing an attorney for negligent misrepresentation under section 552

of the Restatement (Second) of Torts.            While it concluded the theory of negligent

misrepresentation permits plaintiffs who are not parties to a contract for professional services to

recover from the contracting professionals, the duty imposed on an attorney to a non-client is

limited. Id. at 793—94.; see also Kastner v. Jenkins & Gilchrist, P.C., 231 S.W.3d 571, 577 (Tex.

App.—Dallas 2007, no pet.). The duty arises only when (1) the attorney is aware of the non-

client and intends that the non-client rely on the representation; and (2) the non-client justifiably

                                                  8
relics on the attorney’s representation of a material fact,        Mcarnish, 991 S,W.2d at 794;

Kastner, 231 S,W.3d at 577.

          To determine whether the nonclient justifiably relied on the representation, the

reviewing court must consider the nature of the relationship among the attorney, client, and non

client.    McCamzsh, 991 S.W,2d at 794.            The non-client cannot rely on an attorney’s

representations unless the attorney invites that reliance.       Id. at 795.    Further, courts have

generally acknowledged that a third partys reliance on an attorneys representation is not

justified when the representation takes place in an adversarial context. Id. at 794.

          Here, Blanscet was aware he was reviewing a contract for Brown that would be given to

appellants.     However, there is no evidence Blanscet intended appellants to rely on any

representations in the contract or that he invited any such reliance. In fact, appellants have not

presented any evidence that they had any dealings, discussions, or interactions with Blanscet

prior to signing the contract that would establish an invitation of reliance.

          Further, courts have allowed an attorney to be held liable to a non-client in situations

such as when the attorney issues an opinion letter or some type of evaluation. See McCwnish,
991 S.W.2d at 793 (“A typical negligent misrepresentation case involves one party to a

transaction receiving   and relying on an evaluation, such as an opinion letter, prepared by another

party’s attorney.”). Blanscet did not issue any type of opinion letter or evaluation. Rather, he

revised the contract on behalf of Brown because the initial contract “was not in the format of a

typically acceptable” independent contractor agreement.         “Modifications were made to the

proffered format in order to assist Mr. Brown in his further discussions with jappellantsj.”

[Emphasis added.] Thus, Blanscet was clearly acting on behalf of his client’s interest.
       Kasiner v. Jenkens & Gilchrist. P. C., a case out of this court that declined to extend

iWcCaniish, is instructive. In that case, non—clients sued an attorney and his firm afler a limited

partnership’s investment in a commercial real estate venture failed. Kasiner, 23 1 S.W.3d at 573.

The attorney prepared a partnership agreement on behalf of his clients based on information they

provided him. Id. at 574. It was later determined that the partnership did not have sufficient

funds to go through with certain transactions.       Id.   The Kastners filed suit for negligent

misrepresentation. and the trial court granted the attorney’s no-evidence motion for summary

judgment. Id. at 577.

       We concluded McCamivh did not apply, and the reliance element was missing. Id. at

578, In reaching this conclusion, we noted “there was no reason for [aftorneyl to anticipate the

non-client recipient might attach any extraordinary significance to his transmission of the

partnership agreement or the accompanying colTespondence.” id. at 578. We further concluded:

              [Tjhe mere transmission of a partnership agreement from an
              attorney to a non-client cannot reasonably be construed as a legal
              opinion on the validity of the agreement         We similarly reject
              the Kastners’ attempt to characterize the contents of the
              partnership agreement as representations by [attorneyj. To do so
              would effectively require attorneys to adopt as their own the terms
              of—and representations made in—legal documents they prepare
              tor their clients. Such an expansive interpretation far exceeds the
              scope of Mccamish liability.

Id.

       Appellants are again asking this Court to expand McC’a,nish to circumstances we have

already concluded far exceed the scope of such liability. Similar to the attorney in Kastner,

Blanscet revised the independent contract agreement based on information he received from

Brown. There is no evidence he had any communication with appellants other than providing

the revised independent contract agreement to Brown, who then provided it to appellants.

                                                ID
 Nothing within the agreement included any type of opinion or evaluation. We again refuse to

 expand 4frCi,tiisIz to the point that an attorney can he held liable for alleged misrepresentations

 when preparing legal docunienis, based on information provided by the client, that ended up in

 the hands of nomelients. Accordingly, Jeff Blankinship’s affidavit does not raise a genuine fact

 issue as to reliance.      l3ecause appellees’ have conclusively negated this essential element of

 appellants’ causes of action for common law fraud, negligent misrepresentation, and fraud by

nondisclosure, they were entitled to judgment as a matter of law.

          In reaching this conclusion, we are not l)erstlade(l by appellants’ argument that the Texas

 Disciplinary Rules of Professional Conduct create a duty on the part of Blanscet to disclose any

information regarding Brown’s prior dealings with G&TPS. See TEX.                     DISCIPLINARY      R. PROF’L

CONDUCT 4.01,         The Texas Disciplinary Rules of Professional Conduct expressly stale that a

violation of the Code of Professional Responsibility does not give rise to a private cause of

action.    See Tix.     DISCIPLINARY      R.   PR0F’L CONDUCT        preamble     ¶ 15 (“These rules do not
undertake to define standards of civil liability of lawyers for professional conduct. Violation of a

rule does not give rise to a private cause of action nor does it create any presumption that a legal

duty to a client has been breached.”); Jovner v. DeFriend, 255 S.W.3d 281, 283 (Tex. App—

Waco 2008, no pet.) (holding plaintiff could not support causes of action for fraud and civil

conspiracy based on a violation of rule 4.01). Accordingly, appellants’ first issue is overruled.

                              Post-Judgment Deposition Protective Order

          In their final issue, appellants argue the trial court abused its discretion when it rendered

the May 16, 2011 protective order preventing them from deposing Brown post-judgment.

Texas Disciplinary Rule of Professional Conduct 4.01 provides that in the course of representing a client, a lawyer
shall not knowingly (a) make a false statement of material fact or law to a third person; or (b) fail to disclose a
material fact to a third person when disclosure is necessary to avoid making the lawyer a party to a criminal act or
knowingly assisting a fraudulent act perpetrated by a client. TEx. DISCIPLINARY R. PR0F’L CONDUCT 4.01.
Appellees respond the trial court did not abuse its discretion because appellants were essentially

trying to circumvent the court’s prior order denying their   motion to   reconsider and   motion for

new trial.

        After trial, appellants filed a Notice of Intent to Take Oral Deposition of Defendant

Timothy Brown.” Appellees filed their motion to quash and motion for protective order pursuant

to Texas Rule of Civil Procedure 192.6 and asked the trial court to strictly limit the scope of the

deposition to enforcement of   the judgment. “Any inquiry beyond the scope of the enforcement

would be irrelevant,   .   .

        The trial court held a hearing on the motion, and appellants admitted they planned to

inquire into issues beyond the enforcement of judgment.        Appellants argued that after trial.

Brown’s counsel informed them that Brown disputed some of Blanscet’s trial testimony, and

Brown was willing to testify as to those matters. Appellants claimed Brown’s testimony could

“constitute new evidence warranting a re-examination of Mr. Blanscet’s and his law firm’s

potential culpability with respect to our prior causes of action.” Appcllees responded that all

issues regarding their liability had been fully and finally resolved in summary judgment motions.

The trial court granted a protective order and limited the deposition to issues surrounding

collection of the judgment.

       Rule 621a allows a successful party after the rendition of judgment to initiate and

maintain discovery proceedings to aid in the enforcement of judgment. TEX. R. Civ. P. 621 a;

Zenner v. Lone Star Striping & Paving, L.L.C., 371 S.W.3d 311, 316 (Tex. App.—Houston [1st

Dist.j 2012, pet. denied). Relevance in the context of post-judgment discovery must be viewed

generally in the same manner as in ordinary pretrial discovery, which includes anything

reasonably calculated to lead to the discovery of material evidence.        Collier Serv. Corp. v.

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Sat inns, 812 S.W.2d 372. 376 (Tex AppCorpus Christi 1991. no writ).             Material evidence

includes any inftwmation that would aid in enforcement of the judgment. Id.

       Texas Rule of Civil Procedure 192.6(b) authorizes a trial court to grant an order of

protectiOn, “to protect the moVant Irom undue hurden, unnecessary expense, harassment.

annoyance, or invasion of personal. constitutional, or property rights.” TEx. R. Civ. P. 192.6(b).

While a trial judge may exercise some discretion in the granting of protective orders, this

discretion is not without bounds, See Masinga v. Whittingron, 792 S.W.2d 940. 940 (Tex, 1990);

see also In re Collins, 286 S.W.3d 911, 919 (Tex. 2009) (orig. proceeding). A party seeking

protection must show facts of a particular. speci1c, and demonstrable injury sufficient to justify a

protective order. In re K.L&J. Ltd. Pship, 336 S.W.3d 286, 294 (Tex. App.—San Antonio

2010, orig. proceeding) (citing Masinga, 792 S.W.2d at 940)).           It may not simply make

conclusory allegations that the requested discovery is unduly burdensome or unnecessarily

harassing. In re Alford Clievrolet-Geo. 997 S.W.2d 173, 181 (Tex. 1999) (orig. proceeding).

The party must produce some evidence supporting its request for a protective order when sought

on that basis. Id.

       While we agree appellees’ motion for protective order does not specifically state why the

discovery sought was irrelevant, appellees clearly made their objections to the trial court during

the hearing.   Appellees argued that appellants’ requests to inquire into information beyond

enforcement of the judgment was irrelevant. Further, appellees correctly argued that all causes

of action against them had been fully and finally resolved by the trial court in motions for

summary judgment. Therefore, any information Brown allegedly could have provided regarding

Blanscet’s trial testimony was irrelevant.    Further, the trial court had previously overruled

appellants’ motion for reconsideration and motion for new trial in which they made the same

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arguments. 1 bus, appellees’ arguments were    hot conclusory   to the trial court but were supported

by the record. Accordingly, because the information appellants sought was irrelevant and would

not assist in enlorcement ol the judgment against Brown, the trial court did not abuse its

discretion in granting the protective order. We overrule appellants’ fouiih issue.

                                           Conclusion

       Having overruled appellants’ issues, we affirm the trial court’s judgment.
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                                                     JuslicE           //

       I 10649F.Pt)5

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                                     (Cnitrt 01
                         Fif11i Jitrirt of IExai at Ja1tu
                                          JUDGMENT

JEFF AND COURTNEY I3LANKINSIIIP,                    On Appeal from the 14th Judicial District
AND MIRACLE GOLF CONCEPTS,                          Court, Dallas County, Texas
Appellants                                          Trial Court Cause No. 320570014.
                                                    Opinion delivered by Justice O’Neill,
No. 051 L-00649CV            V.                     Justices Francis and Murphy participating.

TIMOTHY BROWN, GARY W.
BLANSCET, AND BLANSCET
SUTHERLAND, HOOPER & HALE LLP,
Appellees

     In accordance with this Court’s opinion of this date, the judgment of the trial court is
AFFIRMED.

       It is ORDERED that appellee TIMOTHY BROWN. GARY W. BLANSCET AND
BLANSCET SUTHERLAND, HOOPER & HALE LLP recover their costs of this appeal from
appellant JEFF AND COURTNEY BLANKINSHIP,AND MiRACLE GOLF CONCEPTS.

                        th
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Judgment entered this        day of March, 2013.

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                                                   /4I1ARL JLL”
                                                     JUSTICE ,//  /7