J-A18009-19


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 JOHN J. BERNADOWSKI AND                 :   IN THE SUPERIOR COURT OF
 BONNIE L. BERNADOWSKI                   :        PENNSYLVANIA
                                         :
                   Appellants            :
                                         :
                                         :
              v.                         :
                                         :
                                         :   No. 1234 WDA 2018
 AMERIPRISE FINANCIAL, INC.;             :
 AMERIPRISE FINANCIAL SERVICES,          :
 INC.; RIVERSOURCE LIFE                  :
 INSURANCE COMPANY AND DANIEL            :
 S. HENDERSON                            :

             Appeal from the Judgment Entered August 28, 2018
     In the Court of Common Pleas of Allegheny County Civil Division at
                         No(s): No. GD-01-008101


BEFORE: BOWES, J., NICHOLS, J., and MUSMANNO, J.

MEMORANDUM BY BOWES, J.:                        FILED JANUARY 24, 2020

     John J. and Bonnie L. Bernadowski appeal from the August 28, 2018

judgment in favor of Ameriprise Financial, Inc., Ameriprise Finance Services,

Inc., Riversource Life Insurance Company, and Daniel S. Henderson

(collectively “Ameriprise”), on their claims under the Unfair Trade Practices

and Consumer Protection Law (“UTPCPL”). After thorough review, we affirm.

     The facts relevant to the Bernadowskis’ claims are as follows. In 1995,

John received a gift of $23,000 from his father. He contacted Ameriprise to

discuss investing the money, and he and Bonnie subsequently met with

Ameriprise financial advisor Daniel Henderson. John, age forty-nine at the
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time, conveyed that it was his goal to retire at age sixty, and that he hoped

that the gift from his father might help him achieve that goal.

        The Bernadowskis paid $400 for a detailed financial analysis of their

future needs in retirement.    The analysis revealed that their savings were

insufficient to enable John to retire at age sixty. Assuming a four percent

inflation rate, $39,000 to invest, and three different hypothetical after-tax

interest rates, Ameriprise offered them several plans to try to meet their

retirement goal.     Mr. Henderson recommended that John increase his

contributions to his employer’s qualified retirement plan by six percent. He

also advised John to transfer $39,329 from cash assets and bonds into a

flexible annuity as it would afford the growth opportunity of equities, with the

added benefits of tax deferral and flexibility. The model allocation showed an

11.25% return, based on annualized historic before-tax rates of returns for

similar investments. However, it expressly stated that there was no guarantee

that the investment would continue to provide the same return it had in the

past.

        Despite the foregoing recommendations, Mr. Bernadowski did not

increase his annual contribution to his work retirement plan. Nor did he place

a lump sum of $39,000 into the variable annuity. Rather, he deposited $3,037

into the annuity, and contributed an additional $1,500 per month. As of May

1997, Mr. Bernadowski had paid $25,545.49 into the annuity.

        In May 1997, Mr. Bernadowski had a heart attack and could no longer

work. His long-term disability benefits did not permit him to continue the

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$1,500 monthly payments. Nonetheless, the annuity had grown to $32,000

in six years. In 2002, the Bernadowskis withdrew $23,500 from the annuity

and placed it in other investments with Ameriprise.

       In the meantime, on April 23, 2001, the Bernadowskis commenced this

action against Ameriprise by writ of summons.1 The Bernadowskis filed their

complaint on December 11, 2013, and alleged violations of Pennsylvania’s

UTPCPL, fraudulent and negligent misrepresentations, breach of fiduciary

duty, and negligent supervision. Partial summary judgment was granted on

their claims for breach of fiduciary duty and negligent supervision, and the

Bernadowskis voluntarily dismissed the misrepresentation claims. At the time

of trial, only claims under the UTPCPL remained.

       At trial, Mr. Bernadowski acknowledged that Mr. Henderson advised him

to increase his contribution into his company-matched qualified retirement

fund by six percent, or $3,385 annually, but he did not follow that advice.

N.T. Nonjury Trial, 5/21-24/18, at 39.           Mr. Bernadowski testified that Mr.

Henderson told him that, “[t]he $39,000 would be invested in the flexible

annuity to provide enough funds for me to retire at age 60,” but admitted that

he did not transfer the recommended sum. Id. On direct examination, Mr.
____________________________________________


1 The Bernadowskis opted out of a class action filed against Ameriprise. The
instant case was one of hundreds filed in Allegheny County against various
insurance companies for deceptive sales of life insurance policies and
annuities. The cases were designated as complex, and assigned to the
Honorable R. Stanton Wettick, Jr. Cases against Metropolitan Life Insurance
were tried first, and cases against other insurers were stayed during that time.



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Bernadowski was shown the model portfolio allocating fifty percent of his

investment to growth funds, forty-five percent in growth/income funds, and

five percent into income funds, which had annualized historic rate of return of

11.25 percent.2 Mr. Bernadowski testified that he was told he would receive

an 11 percent interest rate from the annuity. Id. at 54.

       On cross-examination, Ameriprise established that the Bernadowskis

remained clients, and Mr. Bernadowski testified that he continued to see

Michael Carretta twice per year over twenty-two years regarding his other

investments with Ameriprise. Id. at 63. Mr. Carretta was at the meeting

where the annuity application was completed.          Id. at 62.     Counsel for

Ameriprise used Mr. Bernadowski’s deposition testimony to refute his claim

that Mr. Henderson guaranteed an eleven percent return or showed him a

document that promised such a return. Id. at 97. Both Mr. Henderson and

Mr. Carretta testified that they do not make promises or guarantees about

rates of return. Moreover, the documents themselves disclaimed any notion

that such rates were future projections, and explained that they were

“estimated before-tax rate of return based on historic data” and not a

“guarantee” that this type of investment portfolio would continue to perform
____________________________________________


2 There was no allegation that the historic rate of return of 11.25 percent was
a misrepresentation. While Appellants attempted to characterize the model
portfolio as a projection of future returns in excess of eleven percent, the trial
court was unpersuaded that such a representation was made. In light of Mr.
Bernadowski’s goal to retire at age sixty, he had only ten years in which to
attempt to make up the significant savings shortfall to accomplish that goal.
Equities, whether in mutual funds or an annuity, were the only vehicle that
could possibly yield the rate of return necessary.

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as it had in the past.     Plaintiffs’ Exhibit 4 at 20 (Financial Management

Proposal, Model Portfolio) (discussed at N.T. Nonjury Trial, 5/21-24/18, at 74-

75).

       The case was tried non-jury before the Honorable Michael A. Della

Vecchia from May 21 through 24, 2018. On June 4, 2018, the court entered

a verdict in favor of Ameriprise. The court concluded that Ameriprise did not

make any false representations, written or oral, about the annual return from

the variable annuity. The court found no promise or guarantee of an eleven

percent return, and that the documents adequately conveyed that the returns

were not future projections.      Following the denial of post-trial motions,

judgment was entered on the verdict on July 31, 2018.

       The Bernadowskis timely appealed and complied with the trial court’s

directive to file a Pa.R.A.P. 1925(b) concise statement of errors complained of

on appeal, and the court issued its opinion.       The Bernadowskis present

multiple issues for our review:

       1. The trial court erred in determining that Plaintiffs failed to
          prove by a preponderance of the evidence that [Ameriprise]
          had violated the UTPCPL since the greater weight of the
          evidence supported a finding that [Ameriprise] made knowing
          misrepresentations in the sale of the deferred variable annuity,
          that Plaintiffs justifiably relied upon those misrepresentations
          in purchasing the deferred variable annuity from [Ameriprise],
          and suffered financial harm as a result thereof.

       2. The trial court erroneously made the following factual
          determinations contrary to the greater weight of the evidence:

             (a)   The information provided to John Bernadowski
                   regarding the deferred variable annuity contained

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                  sufficient disclaimer language to inform or which
                  should have informed the Bernadowskis that the
                  product he was purchasing would not earn an
                  consistent annualized rate of return of 11% as alleged
                  by Plaintiff to have been represented at the time of
                  sale;

            (b)   Defendant Henderson, as a licensed insurance agent
                  and the Bernadowskis’ Financial Advisor, provided
                  sufficient information to John Bernadowski such that
                  he knew or should have known that the product he
                  was purchasing would not earn a consistent
                  annualized rate of return of 11% as alleged by Plaintiff
                  to have been represented at the time of sale;

            (c)   That Plaintiffs knew or should have known that the
                  representations regarding the performance of the
                  deferred variable annuity made at the time of sale
                  were not guaranteed and/or that Defendants made no
                  representations as to the future performance of the
                  deferred variable annuity at the time of sale;

            (d)   That Plaintiffs had suffered no ascertainable loss as
                  result of [Ameriprise’s] misrepresentations.

      3. The trial court erred in finding that Mr. Bernadowski’s decision
         to remain with American Express Financial Advisors, and to rely
         upon investment advice provided by Michael Carretta after Mr.
         Bernadowski learned that misrepresentations had been made
         by Defendant Henderson with regard to the deferred variable
         annuity was relevant to the determination of whether
         misrepresentations had been made in the sale of the deferred
         variable annuity.

      4. The trial court erred in finding that Plaintiffs did not prove by a
         preponderance of the evidence that [Ameriprise] possessed the
         necessary scienter to prove a violation of the UTPCPL.

Appellants’ brief at 3-4 (unnecessary capitalization omitted).

      In this appeal, we are reviewing the decision of a trial court following a

non-jury trial. We begin with the applicable standard and scope of review.



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            Our appellate role in cases arising from non-jury trial
      verdicts is to determine whether the findings of the trial court are
      supported by competent evidence and whether the trial court
      committed error in any application of the law. The findings of fact
      of the trial judge must be given the same weight and effect on
      appeal as the verdict of a jury. We consider the evidence in a light
      most favorable to the verdict winner. We will reverse the trial
      court only if its findings of fact are not supported by competent
      evidence in the record or if its findings are premised on an error
      of law.

      We will respect a trial court’s findings with regard to the credibility
      and weight of the evidence unless the appellant can show that the
      court’s determination was manifestly erroneous, arbitrary and
      capricious or flagrantly contrary to the evidence.

J.J. Deluca Co. v. Toll Naval Assocs., 56 A.3d 402, 410 (Pa.Super. 2012)

(citations and quotation marks omitted). We will reverse the trial court only

if its findings are based on an error of law or unsupported by competent

evidence of record. Boehm v. Riversource Life Ins. Co., 117 A.3d 308,

321 (Pa.Super. 2015).

      Although the Bernadowskis couch each issue in terms of trial court error,

the alleged error in each instance is that the trial court’s findings are against

the weight of the evidence. In such cases, our review is exceptionally limited.

      Appellate review of a weight claim is a review of the exercise of
      discretion, not of the underlying question of whether the verdict
      is against the weight of the evidence. Because the trial judge has
      had the opportunity to hear and see the evidence presented, an
      appellate court will give the gravest consideration to the findings
      and reasons advanced by the trial judge when reviewing a trial
      court’s determination that the verdict is against the weight of the
      evidence. One of the least assailable reasons for granting or
      denying a new trial is the lower court’s conviction that the verdict
      was or was not against the weight of the evidence and that a new
      trial should be granted in the interest of justice.



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       It is not the role of an appellate court to pass on the credibility of
       witnesses; hence[,] we will not substitute our judgment for that
       of the factfinder. Thus, the test we apply is not whether we would
       have reached the same result on the evidence presented, but
       rather, after due consideration of the evidence which the trial
       court found credible, whether the trial court could have reasonably
       reached its conclusion.

Fazio v. Guardian Life Ins. Co. of Am., 62 A.3d 396, 413 (Pa.Super. 2012)

(internal quotation marks and citations omitted).           “We will respect a trial

court’s findings with regard to the credibility and weight of the evidence unless

the appellant can show that the court’s determination was manifestly

erroneous, arbitrary and capricious[,] or flagrantly contrary to the evidence.”

J.J. Deluca Co., supra at 410 (quoting Ecksel v. Orleans Const. Co., 519

A.2d 1021, 1028 (Pa.Super. 1987)).

       This is a cause of action under the UTPCPL, 73 P.S. § 201-2 et seq. The

Bernadowskis alleged that Ameriprise made misrepresentations violative of

§ 201-2(4)(v), (vii), (ix), (xiv), (xv), and the pre-1997 amendment version

of the catchall provision of the UTPCPL, § 201-2(4)(xxi).3 The latter prohibited

“‘fraudulent     conduct’     that    created    a   likelihood   of   confusion   or

misunderstanding.” Id. In order to prevail on a claim under the UTPCPL,

____________________________________________


3 On December 4, 1996, effective in sixty days, the Legislature amended the
catchall provision of the UTPCPL, 73 P.S. § 201-2(xxi), to prohibit “deceptive
conduct” as well as fraudulent conduct. In Gregg v. Ameriprise Fin., Inc.,
195 A.3d 930, 937 (Pa.Super. 2018), this Court held that the amendment
“expanded the UTPCPL’s protections beyond fraudulent representations[,]”
but that we had mistakenly clung to the pre-amendment view that a showing
of fraud was necessary to maintain a cause of action. The parties agreed
herein that this cause of action pre-dated the 1997 amendment, and that a
showing of fraudulent conduct was necessary for the Bernadowskis to prevail.

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plaintiffs are required to prove all elements of common law fraud by a

preponderance of the evidence. Those elements are: “(1) misrepresentation

of a material fact; (2) scienter; (3) intention by the declarant to induce action;

(4) justifiable reliance by the party defrauded upon the misrepresentation;

and (5) damage to the party defrauded as a proximate result.”            Boehm,

supra at 324 (quoting Ross v. Foremost Ins. Co., 998 A.2d 648, 654

(Pa.Super. 2010)).

      The Bernadowskis argue that the trial court erroneously limited its

inquiry as to whether there had been fraud for purposes of the UTPCPL to the

question of whether Ameriprise or its agents misrepresented a guaranteed

return rate of eleven percent with the proposed variable annuity. They claim

that their UTPCPL claim was not premised on such a guarantee, but rather, on

“Defendants’ failure to explain to [Mr.] Bernadowski that they lacked any

reasonable basis to project rates of return into the future.” Appellant’s brief

at 52. They add that, “the use of [the financial analysis and model portfolio]

and the emphasis placed on the 11% rate of return created a reasonable

expectation in [Mr.] Bernadowski that [Ameriprise] had a reasonable basis for

projecting an 11.25% [rate] of return, and that the annuity was the vehicle

to provide that 11.25% return.” Appellants’ brief at 49. In support, they cite

Eisenberg v. Gagnon, 766 F.3d 770 (3d Cir. 1985) (applying Pennsylvania

law), where proof that Ameriprise “presented future returns without disclosing

that they lacked any reasonable basis to believe that the projected future


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returns were attainable” was sufficient to support a violation. Appellants’ brief

at 42.    The Bernadowskis argue further that, even absent an affirmative

misrepresentation, the distinction between “historical” rates and the likely

return in the future was misleading to the unsophisticated investor like Mr.

Bernadowski.

       The Bernadowskis’ attempt to recast their claim is unavailing.4 Counsel

for the Bernadowskis represented to the trial court multiple times, “Our claim

is based upon the promise of the 11 percent return, so whatever amount [Mr.

Bernadowski] put in, he would get 11%.” N.T. Nonjury Trial, 5/21-24/18, at

460; see also id. at 451, 461 (stating that “11% return is the alleged

fraudulent misrepresentation” and reiterating position that the representation

at issue was that if the Bernadowskis followed Ameriprise’s allocations, they


____________________________________________


4 Appellants complain that the trial court’s emphasis “on the amount of money
paid into the annuity demonstrates its mistaken perception of Bernadowski’s
claim, since the misrepresentation alleged in the case was not that
Bernadowski could retire at age 60, but rather that the annuity could
reasonably be expected to have a rate of return of 11% for at least ten years.”
Appellants’ brief at 70. However, the trial court was merely addressing Mr.
Bernadowski’s testimony that he was told by Mr. Henderson that, “The
$39,000 would be invested in the flexible annuity to provide enough funds for
me to retire at age 60.” N.T. Nonjury Trial, 5/21-24/18, at 39. In anticipation
that Mr. Bernadowski would suggest that this was a fraudulent
misrepresentation upon which he relied in purchasing the variable annuity,
the court rejected that notion. The court concluded that Mr. Bernadowski’s
failure to follow through on the multi-pronged approach advocated by
Ameriprise, including the advice that he increase by six percent his yearly
contributions to his employer’s retirement plan, foreclosed any reasonable
likelihood that he would have the funds necessary to retire at age sixty.



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would get an 11 percent return).               The Bernadowskis argued that the

handwritten box around the dollar amounts in the eleven percent column in

the financial analysis evidenced Ameriprise’s representation that a variable

annuity would produce a guaranteed rate of return in excess of eleven

percent.5    Their damages were calculated on the difference between the

“promised rate” of eleven percent and the actual rate of return. In light of the

foregoing, we reject the Bernadowskis’ contention that the court erred in

focusing on the eleven percent return in concluding that the Bernadowskis

failed to prove the fraudulent misrepresentation by a preponderance of the

evidence.

       After due consideration of the evidence which the trial court found

credible, we find that the trial court reasonably reached its conclusion that

Ameriprise did not misrepresent an eleven percent return. Mr. Bernadowski

candidly admitted that it was difficult to remember what was said and who

was present in 1996. Id. at 83. When his counsel asked him at trial, “What

interest rate were you told you were going to receive in this annuity?” he

responded unequivocally, “11 percent.”             Id. at 54.   However, on cross-

examination, Mr. Bernadowski wavered.                  Ameriprise introduced Mr.

Bernadowski’s deposition testimony where he professed to have little


____________________________________________


5 The trial court found that the handwritten notation was nothing more than
“a listing of performance if various rates of interest were earned[,]” and did
not state that an eleven percent return was guaranteed. Trial Court Opinion,
10/26/18, at 8.

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recollection of what Mr. Henderson stated in the third meeting, except that

“[Mr. Henderson] said if we, quote, if this is done right, your flexible annuity

will – it will help in the long run, close quote.” Id. at 89 (quoting deposition

of John Bernadowski, at 50). He initially testified that Mr. Henderson showed

him documents depicting an eleven percent return, but upon further

questioning, he clarified that he “didn’t say that [Mr. Henderson] showed me

a document with that on.” Id. at 96 (quoting deposition of John Bernadowski

at 131). He corrected, “I said I found a document with that on.” Id. Mr.

Bernadowski further conceded that the document actually said, “a flexible

annuity could earn you 11 percent a year.”6 Id. at 97.

       Mr. Henderson and Mr. Carretta both testified that they never

guaranteed or represented to a client that he or she would receive a particular

rate of return on a variable annuity.          See id. at 360, 407.   The “model

portfolio” expressly stated that it was based on “the annualized historic rate


____________________________________________


6At trial, Ameriprise pointed out that Mr. Bernadowski’s deposition testimony
changed considerably after he spent the one-hour lunch break with his
counsel. After lunch, Mr. Bernadowski testified as follows in his deposition:

       My total goals when I came there was to retire at age 60. I told
       Mr. Henderson I had that $23,000 and it was given to me by my
       dad, and I took care of my dad when he was elderly, and that
       money was not replaceable. And when he suggested the variable
       annuity, he said it would gain 11 percent, quote, and you’ll be able
       to attain your goals to retire at age 60, plus defer taxes, close
       quote.

N.T. Nonjury Trial, 5/21-24/18, at 92 (quoting Deposition Testimony of John
Bernadowski, at 59).

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of returns.”   Plaintiffs’ Exhibit 4 at 20 (Model Portfolio).   The returns are

“estimated” and “not an illustration or guarantee of the performance of any

specific investment.” Id. It cautioned further that, “[t]here is no guarantee

that this combination of investment categories will perform as they have in

the past.” Id.

      Based on the oral testimony and the written documentation, the court

found there was no fraudulent misrepresentation by Mr. Henderson or other

Ameriprise personnel of a guaranteed eleven percent rate of return on the

variable annuity.   Ameriprise’s explanation of the historical rates, together

with the written disclaimer, were sufficient to apprise Mr. Bernadowski that an

eleven percent rate of return in the future was not guaranteed. Viewing the

evidence in the light most favorable to Ameriprise as the verdict winner, we

find support for the trial court’s conclusion, and we have no basis to disturb

it.

      Next, the Bernadowskis claim that the court, sitting as factfinder, made

the following factual findings that were contrary to the greater weight of the

evidence: (1) the      disclaimer language was sufficient to inform Mr.

Bernadowski that there was no guaranteed rate of return of eleven percent;

(2) Mr. Henderson, as a licensed financial adviser, provided enough

information to Mr. Bernadowski to inform him that the annuity would not earn

a consistent rate of eleven percent; (3) the Bernadowskis knew or should have

known when they purchased the variable annuity that its future performance


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was not guaranteed; and (4) the Bernadowskis suffered no ascertainable loss

as a result of Ameriprise’s alleged misrepresentations.

      The court considered the disclaimer language and found it adequate to

apprise the Bernadowskis that the estimated returns were historic only and

not a guarantee of future performance. Trial Court Opinion, 10/25/18, at 9.

Absent a misrepresentation, the trial court did not need to reach the issue of

whether the Bernadowskis justifiably relied or whether they suffered an

ascertainable loss.   Appellants are simply rearguing the facts without

developing any persuasive argument that the court, sitting as fact finder,

could not have reached its conclusions on the weight of the evidence

presented. As Ameriprise correctly notes, viewing the evidence in the light

most favorable to it as the verdict winner, and giving the findings of fact of

the trial judge the same weight and effect as a jury verdict, we have no basis

to reverse the trial court’s findings. See e.g., Rissi v. Cappella, 918 A.2d

131, 136 (Pa.Super. 2007).

      Next, the Bernadowskis allege that the trial court erred in finding it

relevant that Mr. Bernadowski opted to remain a client of Ameriprise after

learning that there was no guaranteed rate of return of eleven percent on the

annuity. We note preliminarily, the Bernadowskis’ counsel did not object to

the admission of such evidence, and cannot now be heard to complain that it

was error to admit it. See Pa.R.E. 103(a)(1) (providing in order to preserve

challenge to admission of evidence, there must be “a timely objection, motion


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to strike or motion in limine stating the specific ground of objection”); see

also McEwing v. Lititz Mut. Ins. Co., 77 A.3d 639, 649 (Pa.Super. 2013)

(finding issue of expert’s qualifications waived on appeal where party did not

contemporaneously object on that basis).         Furthermore, the factfinder was

free to consider all competent evidence of record.         In making credibility

determinations as to whether Ameriprise fraudulently misrepresented the rate

of return on a variable annuity, the trial court could consider whether one

allegedly betrayed by a professional in a position of trust would reasonably

choose to continue that relationship. This allegation of error is wholly lacking

in merit.

          Finally, the Bernadowskis contend that the trial court erred in finding

that they did not prove by a preponderance of the evidence that Ameriprise

possessed the necessary scienter to prove a violation of the UTPCPL. Again,

absent a misrepresentation, the trial court did not have to reach the issue of

scienter, and furthermore, it did not make a specific finding as to scienter.

The issue is meritless.

          For all of the foregoing reasons, the Bernadowskis’ claims warrant no

relief.

          Judgment affirmed.

          Judge Musmanno joins the memorandum.

          Judge Nichols concurs in the result.




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Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 1/24/2020




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