J-A05021-17

                          2017 PA Super 112




DAVID G. OBERDICK                         IN THE SUPERIOR COURT OF
                                                PENNSYLVANIA
                 v.

TRIZECHAHN GATEWAY, LLC, TRIZEC
R&E HOLDINGS, LLC, SUCCESSOR-BY-
MERGER TO TRIZECHAHN GATEWAY,
LLC, TRIZEC HOLDINGS II, INC., TRIZEC
HOLDINGS II, LLC, F/K/A
TRZ HOLDINGS II, INC., SUCCESSOR-
IN-INTEREST TO TRIZECHAHN
GATEWAY, LLC, KATHLEEN G. KANE,
ESQUIRE, TED R. JADWIN, ESQUIRE,
NEAL H. LEVIN, ESQUIRE, FREEBORN &
PETERS LLP, ALBERT J. ZANGRILLI, JR.,
ESQUIRE, AND YUKEVICH, MARCHETTI,
LIEKAR & ZANGRILLI, P.C.,


SALLY G. OBERDICK

                 v.

TRIZECHAHN GATEWAY, LLC, TRIZEC
R&E HOLDINGS, LLC, SUCCESSOR-BY-
MERGER TO TRIZECHAHN GATEWAY,
LLC, TRIZEC HOLDING II, INC., TRIZEC
HOLDINGS II, LLC, f/k/a
TRZ HOLDINGS II, Inc., SUCCESSOR-IN-
INTEREST TO TRIZENCHAHN GATEWAY,
LLC, KATHLEEN G. KANE, ESQUIRE, TED
R. JADWIN, ESQUIRE, NEAL H. LEVIB,
ESQUIRE, FREEBORN & PETERS LLP,
ALBERT J. ZANGRILLI, Jr., ESQUIRE,
AND YUKEVICH, MARCHETTI, LIEKAR &
ZANGRILLI, P.C.,


APPEAL OF: TRIZECHAHN GATEWAY,
LLC, TRIZEC R&E HOLDINGS, LLC,
J-A05021-17


SUCCESSOR-BY-MERGER TO
TRIZECHAHN GATEWAY, LLC, TRIZEC
HOLDINGS II, INC., TRIZEC HOLDINGS
II, LLC, f/k/a TRZ HOLDINGS II, INC.,
SUCCESSOR-IN-INTEREST TO
TRIZECHAHN GATEWAY, LLC, KATHLEEN
G. KANE, ESQUIRE, TED R. JADWIN,
ESQUIRE, NEAL H. LEVIN, ESQUIRE,
FREEBORN & PETERS LLP, ALBERT J.
ZANGRILLI, JR., ESQUIRE, and                  No. 745 WDA 2016
YUKEVICH, MARCHETTI LIEKAR &
ZANGRILLI, P.C.


                 Appeal from the Order entered April 19, 2016,
              in the Court of Common Pleas of Allegheny County
               Civil Division at No(s): GD 15-4365, GD 15-4384




DAVID G. OBERDICK                             IN THE SUPERIOR COURT OF
                                                    PENNSYLVANIA
                    v.

TRIZECHAHN GATEWAY, LLC, TRIZEC
R&E HOLDINGS, LLC, SUCCESSOR-BY-
MERGER TO TRIZECHAHN GATEWAY,
LLC, TRIZEC HOLDINGS II, INC., TRIZEC
HOLDINGS II, LLC, F/K/A
TRZ HOLDINGS II, INC., SUCCESSOR-
IN-INTEREST TO TRIZECHAHN
GATEWAY, LLC, KATHLEEN G. KANE,
ESQUIRE, TED R. JADWIN, ESQUIRE,
NEAL H. LEVIN, ESQUIRE, FREEBORN &
PETERS LLP, ALBERT J. ZANGRILLI, JR.,
ESQUIRE, AND YUKEVICH, MARCHETTI,
LIEKAR & ZANGRILLI, P.C.,


SALLY G. OBERDICK

                    v.



                                    -2-
J-A05021-17


TRIZECHAHN GATEWAY, LLC, TRIZEC
R&E HOLDINGS, LLC, SUCCESSOR-BY-
MERGER TO TRIZECHAHN GATEWAY,
LLC, TRIZEC HOLDING II, INC., TRIZEC
HOLDINGS II, LLC, f/k/a
TRZ HOLDINGS II, Inc., SUCCESSOR-IN-
INTEREST TO TRIZENCHAHN GATEWAY,
LLC, KATHLEEN G. KANE, ESQUIRE, TED
R. JADWIN, ESQUIRE, NEAL H. LEVIB,
ESQUIRE, FREEBORN & PETERS LLP,
ALBERT J. ZANGRILLI, Jr., ESQUIRE,
AND YUKEVICH, MARCHETTI, LIEKAR &
ZANGRILLI, P.C.,


APPEAL OF: TRIZECHAHN GATEWAY,
LLC, TRIZEC R&E HOLDINGS, LLC,
SUCCESSOR-BY-MERGER TO
TRIZECHAHN GATEWAY, LLC, TRIZEC
HOLDINGS II, INC., TRIZEC HOLDINGS
II, LLC, f/k/a TRZ HOLDINGS II, INC.,
SUCCESSOR-IN-INTEREST TO
TRIZECHAHN GATEWAY, LLC, KATHLEEN
G. KANE, ESQUIRE, TED R. JADWIN,
ESQUIRE, NEAL H. LEVIN, ESQUIRE,
FREEBORN & PETERS LLP, ALBERT J.
ZANGRILLI, JR., ESQUIRE, and
YUKEVICH, MARCHETTI LIEKAR &
ZANGRILLI, P.C.                             No. 1162 WDA 2016


               Appeal from the Order Entered April 19, 2016
            In the Court of Common Pleas of Allegheny County
                    Civil Division at No(s): GD 15-4365


BEFORE: GANTMAN, P.J., BENDER, P.J.E., and MOULTON, J.

OPINION BY BENDER, P.J.E.:                       FILED APRIL 19, 2017

     Appellants, TrizecHahn Gateway, LLC, Trizec R&E Holdings, LLC,

successor-by-merger to TrizecHahn Gateway, LLC, Trizec Holdings II, Inc.,



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J-A05021-17



Trizec Holdings II, LLC, f/k/a TRZ Holdings II, Inc., successor-in-interest to

TrizecHahn Gateway, LLC (referred to collectively as “Trizec”), Kathleen G.

Kane, Esq., Ted R. Jadwin, Esq., Neal H. Levin, Esq., Freeborn & Peters LLP,

Albert J. Zangrilli, Jr., Esq., and Yukevich, Marchetti, Liekar & Zangrilli, P.C.

(jointly referred to as “Appellants”), appeal from the April 19, 2016 order,

denying their motion for summary judgment.               After careful review, we

reverse and remand for proceedings consistent with this opinion.

       We glean the following facts and procedural history from the record.

Trizec was the landlord of David G. Oberdick’s (“Mr. Oberdick”) former law

firm. Trizec obtained a $3.3 million judgment against Mr. Oberdick and his

partners for unpaid rent, after they abandoned their office lease and refused

to pay the outstanding rent.1           In 2007, as part of its collection efforts,

Trizec brought a claim against Mr. Oberdick and his wife, Sally G. Oberdick

(“Mrs. Oberdick”) (collectively “the Oberdicks”), in the Court of Common

Pleas of Allegheny County under the Pennsylvania Uniform Fraudulent

Transfer Act (“PaUFTA”) (referred to as “UFTA action”). The Oberdicks filed

preliminary objections to the complaint in the UFTA action.

       On January 23, 2008, before the UFTA action proceeded any further in

state court, Mr. Oberdick filed a voluntary Chapter 7 bankruptcy petition in

the United States Bankruptcy Court for the Western District of Pennsylvania.

____________________________________________


1
 This judgment was affirmed on appeal by the Pennsylvania Supreme Court.
See Trizechahn Gateway LLC v. Titus, 976 A.2d 474 (Pa. 2009).



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J-A05021-17



The UFTA action was subsequently removed to the bankruptcy court, at the

Oberdicks’ request, and was litigated therein as an adversary proceeding

(“UFTA adversary action”).2 After the parties engaged in litigation of some

preliminary matters, Trizec filed an Amended Complaint on February 14,

2010.     See Bankruptcy Court Opinion (“BCO”), 3/26/13, at 4.3              The

bankruptcy trustee was then substituted for Trizec as the plaintiff in the

____________________________________________


2
  On April 22, 2008, the Oberdicks filed a notice of removal in the United
States Bankruptcy Court for the Western District of Pennsylvania at No. 08-
20434 MBM, in which the Oberdicks averred that “the [UFTA action] is a core
proceeding within the meaning of Section 157 of Title 28 of the United
States Code in that it ‘arises under,’ ‘arises in,’ and/or is ‘related to’ a
[d]ebtor’s case under the Bankruptcy Code,” and therefore, they requested
that the “entirety of the [UFTA action]” be removed from the Allegheny
County Court of Common Pleas to the bankruptcy court. See Notice of
Removal, 4/22/08, at 1-3.
3
    In its Memorandum Opinion, the bankruptcy court explained:

        The gravamen of the [UFTA adversary action] as set forth in the
        Amended Complaint is that [Mr. Oberdick] engaged in fraudulent
        transfers when, subsequent to the initiation of the Lease
        Litigation in July 2000, he deposited his individual earnings from
        the law firm of Meyer, Unkovic & Scott, LLP … into a PNC Bank
        checking account that he jointly owned with Mrs. Oberdick in a
        tenancy by the entireties…. This was done primarily through the
        means of an electronic direct deposit. The contention is that
        such deposits constituted “transfers” under PaUFTA, and that
        such transfers by [Mr. Oberdick] were fraudulent, either actually
        or constructively because they had the effect of shielding [Mr.
        Oberdick’s] individual compensation from the reach of his
        creditors, such as Trizec, by converting it into entireties
        property.

Id. at 5-6.




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J-A05021-17



UFTA adversary action.           After extensive litigation, the bankruptcy court

entered judgment on March 26, 2013, in favor of the Oberdicks, and

dismissed the UFTA adversary action in its entirety.

       In March of 2015, after termination of the bankruptcy case, the

Oberdicks each brought a one-count complaint against Appellants under the

Dragonetti Act, 42 Pa.C.S. § 8351, et seq.4         On September 28, 2015, the

Oberdicks each filed amended complaints              in their   respective   cases.

Thereafter, the two matters were consolidated (hereinafter referred to as

“Dragonetti action”).5 Appellants moved for summary judgment and averred

that the Oberdicks’ claims are preempted by the Bankruptcy Code. By order

dated April 19, 2016, the trial court denied Appellants’ motion for summary

judgment.6
____________________________________________


4
  Mr. Oberdick filed a Complaint in the Court of Common Pleas of Allegheny
County on March 24, 2015, at No. GD-15-4365. On the same date, Mrs.
Oberdick filed a separate complaint in the Court of Common Pleas of
Allegheny County at No. GD-15-4384.
5
  By order of court dated January 28, 2016, the action at GD-15-4384 was
consolidated into the action at GD-15-4365. Notwithstanding consolidation,
the court ordered that Mr. and Mrs. Oberdick would each retain their
independent substantive claims and requests for relief. See Trial Court
Order, 1/28/16.
6
  The April 19, 2016 order was amended on May 19, 2016, to include the
following requisite language for a permissive appeal:

       [T]his Order involves a controlling question of law as to which
       there is a substantial ground for difference of opinion and that an
       immediate appeal from the Order may materially advance the
       ultimate termination of this matter. In particular, what portion,
(Footnote Continued Next Page)


                                           -6-
J-A05021-17



      On May 25, 2016, Appellants filed a timely notice of appeal at Docket

No. 745 WDA 2016, seeking review of the denial of summary judgment as a

collateral order, pursuant to Pa.R.A.P. 313. On June 17, 2016, Appellants

separately filed a petition for permission to appeal at Docket No. 66 WDM

2016, seeking review of the same order as a discretionary appeal from an

interlocutory order, pursuant to Pa.R.A.P. 1311.7 By per curiam order dated

August 9, 2016, this Court granted Appellants’ petition for permission to

appeal and consolidated the two appeals at Docket No. 745 WDA 2016.8

      Herein, Trizec presents the following questions for our review:

      1. [Trizec] filed fraudulent-transfer claims against [the
         Oberdicks] in state court, which [the Oberdicks] removed to
                       _______________________
(Footnote Continued)

      if any, of [the Oberdicks’] claims are preempted per Stone
      Crushed [Partnership v. Kassab Archbold Jackson &
      O’Brien, 908 A.2d 875 (Pa. 2006)] (and McCue [v.
      Brandywine Realty Trust, 2013 WL 300893 (Pa. Cmwlth.
      January 4, 2013)]) and more specifically, whether claims based
      upon “procurement, initiation and/or continuation of civil
      proceedings” after removal of the underlying matter to
      bankruptcy court are preempted as a matter of law.

See Trial Court Order, 5/19/16; see also 42 Pa.C.S. § 702(b).
7
   In their petition, Appellants averred a controlling question of law as to
whether federal bankruptcy law preempted the Dragonetti claims, because
the basis for the Dragonetti action, although brought in state court, was
litigated in bankruptcy court.
8
  After granting the petition for permission to appeal, this Court transferred
the appeal at miscellaneous Docket No. 66 WDM 2016 to regular appeal
Docket No. 1162 WDA 2016. Thereafter, the appeal at Docket No. 1162
WDA 2016 was consolidated by per curiam order with the appeal at Docket
No. 745 WDA 2016.



                                            -7-
J-A05021-17


         bankruptcy court after one of them filed a voluntary
         bankruptcy petition. The Bankruptcy Code and Rules preempt
         state-law wrongful-use-of-civil-proceedings claims based on
         litigation in bankruptcy court.      Where [the Oberdicks]
         removed the underlying action to bankruptcy court before
         pleadings closed and thereafter litigated exclusively in
         bankruptcy court, do the Bankruptcy Code and Rules preempt
         any state-law wrongful-use-of-civil-proceedings claim?

      2. [The Oberdicks] filed wrongful-use-of-civil-proceedings claims
         based on fraudulent transfer litigation that they removed to
         bankruptcy court, and which were litigated there by the
         bankruptcy trustee.      The federal Barton [D]octrine bars
         actions against bankruptcy trustees, trustee’s counsel, and
         other officers of the court without the bankruptcy court’s
         leave. Did [the Oberdicks] have to obtain leave to pursue
         their action against a creditor, and its attorneys, that, among
         other things, financed the trustee’s litigation, and therefore
         functioned as the equivalent of court-appointed officers?

      3. [Appellants] were denied summary judgment based on the
         federal Barton Doctrine. Pennsylvania courts have previously
         recognized that an order denying summary judgment based
         on a complete federal defense to a state law claim is
         appealable as a collateral order. Is the denial of summary
         judgment based on the Barton Doctrine defense appealable as
         a collateral order?

Appellants’ Brief at 3-4.

      Our standard of review with respect to a trial court’s decision to grant

or deny a motion for summary judgment is well-settled:

            A reviewing court may disturb the order of the trial court
      only where it is established that the court committed an error of
      law or abused its discretion. As with all questions of law, our
      review is plenary.

            In evaluating the trial court’s decision to enter summary
      judgment, we focus on the legal standard articulated in the
      summary judgment rule. Pa.R.C.P. 1035.2. The rule states that
      where there is no genuine issue of material fact and the moving
      party is entitled to relief as a matter of law, summary judgment
      may be entered. Where the non-moving party bears the burden


                                    -8-
J-A05021-17


       of proof of an issue, he may not merely rely on his pleadings or
       answers in order to survive summary judgment. Failure of a
       non-moving party to adduce sufficient evidence on an issue
       essential to his case and on which it bears the burden of proof
       establishes the entitlement of the moving party to judgment as a
       matter of law. Lastly, we will view the record in the light most
       favorable to the non-moving party, and all doubts as to the
       existence of a genuine issue of material fact must be resolved
       against the moving party.

Thompson v. Ginkel, 95 A.3d 900, 904 (Pa. Super. 2014) (citations

omitted).

       Appellants argue that they were entitled to summary judgment as a

matter of law, because the Dragonetti action brought by the Oberdicks in

state court is entirely preempted by the Bankruptcy Code and Federal Rules

of Civil Procedure. The Oberdicks counter that preemption does not apply

here, because the Dragonetti action arises from litigation “procured, initiated

and continued in Pennsylvania state court.”9 Oberdicks’ Brief at 8.


____________________________________________


9
 The Oberdicks’ Dragonetti action asserts wrongful use of civil proceedings
pursuant to 42 Pa.C.S. § 8351(a), which provides:

       (a)    Elements of action.—A person who takes part in the
              procurement, initiation or continuation of civil proceedings
              against another is subject to liability to the other for
              wrongful use of civil proceedings:

              (1)    He acts in a grossly negligent manner or without
                     probable cause and primarily for a purpose other
                     than that of securing the proper discovery, joinder
                     of parties or adjudication of the claim in which the
                     proceedings are based; and

              (2)    The proceedings have terminated in favor of the
                     person against whom they are brought.



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J-A05021-17



        We begin our analysis with a review of the controlling case law

regarding bankruptcy law preemption.               In Stone Crushed, the Supreme

Court of Pennsylvania granted allowance of appeal to determine, as a matter

of first impression for the Court, whether the Bankruptcy Code preempts the

entire field of bankruptcy, including a state tort claim for abuse of process

based upon bankruptcy court proceedings. The Court conducted an in-depth

review of the relevant case law from other jurisdictions.          Ultimately, the

Court concluded that “the Bankruptcy Code and Federal Rules of Civil

Procedure preempt [an appellant’s] rights pursuant to state law for

compensation in a wrongful use of civil proceedings or abuse of process

claim grounded in bankruptcy court proceedings.”             Stone Crushed, 908

A.2d at 887 (emphasis added). The Court based its holding on the following

reasons: (1) Congress evinced an intent to govern the whole field; 10 and (2)
____________________________________________



10
     In reaching its conclusion, the Stone Crushed Court explained:

        The Supremacy Clause of the United States Constitution controls
        federal preemption. Congress has the undisputed power to
        preempt state law in areas of federal concern. Such preemption
        does not need to be explicit in a statute invalidating a state law.
        If the area in question is one of traditional state concern, it
        should be presumed that Congress did not intend to supersede
        state authority absent a clear and manifest legislative purpose to
        the contrary.

        Congress’ intent to preempt state law may be express or implied
        and … may be found where Congress has legislated in a field so
        comprehensively that it has implicitly expressed an intention to
        occupy the given field to the exclusion of state law.
(Footnote Continued Next Page)


                                          - 10 -
J-A05021-17



Fed.R.Civ.P. 11 (“Rule 11”), 28 U.S.C. § 1927, and the Bankruptcy Code

potentially   provide      for   the    equivalent   protection   afforded   by   this

Commonwealth to its citizens in a Dragonetti Act claim. Id. at 880.

      Following the holding in Stone Crushed, it is clear to this Court that,

at the very least, the Dragonetti Act claims related to Appellants’ actions in

bankruptcy court are preempted by bankruptcy law. It is the preemption of

the claims which relate to Appellants’ actions in state court prior to the

removal to bankruptcy court, however, that remains in question. Guided by

the Court’s reasoning in Stone Crushed, we conclude for the reasons stated

herein that the entire Dragonetti action brought against Appellants is

preempted by the Bankruptcy Code and Federal Rules of Civil Procedure.

      First, despite the fact that the underlying UFTA action was initially filed

in state court, the Oberdicks did not even wait for a ruling on their

preliminary objections to the complaint before removing the case to

bankruptcy court.         Trizec subsequently filed an amended complaint in

bankruptcy court, which then became the basis of the UFTA adversary

action.   The matter was fully litigated in bankruptcy court.            Hence, the

underlying action which gave rise to the Dragonetti action is clearly

“grounded in bankruptcy court proceedings.” See id. at 887.
                       _______________________
(Footnote Continued)

Id. at 880-881 (internal citations omitted). After its analysis of the relevant
case law, the Court was persuaded that “the [Bankruptcy] Code’s provision
of remedies and sanctions implies an intent to govern sanctions as they
relate to bankruptcy court proceedings.” Id. at 886.



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J-A05021-17



       We further note that the majority of the assertions made by the

Oberdicks in their amended complaint refer to Appellants’ conduct in

bankruptcy      court.      See     Oberdicks’     Amended    Complaint,       9/28/15.

Specifically, the Oberdicks aver - among other things - that Trizec failed to

timely   respond     to   discovery     requests   during    the   adversary    action,

disregarded deadlines set by the bankruptcy court and applicable bankruptcy

rules of procedure, and failed to identify any specific, allegedly fraudulent

transfers during the adversary litigation. See id. at 6-10.           The Oberdicks

further allege that Appellants failed to respond to their efforts at resolution

of the adversary action. Id. at 12. After careful review of the record, it is

abundantly clear that the Oberdicks’ claims under the Dragonetti Act are

“grounded in bankruptcy court proceedings,” so as to subject them to

preemption by the Bankruptcy Code and Federal Rules of Civil Procedure.

See Stone Crushed, 908 A.2d at 887.

       Finally, the Oberdicks chose to litigate the UFTA action in bankruptcy

court and subjected themselves to the federal bankruptcy rules and laws.

As stated in Stone Crushed, the Oberdicks were provided equivalent - if not

greater - protection under the Bankruptcy Code,11 the federal rules,12 and 28
____________________________________________


11
   See 11 U.S.C. § 105(a) (providing “[t]he court may issue any order,
process, or judgment that is necessary or appropriate … to prevent an abuse
of process”).
12
  See Fed.R.Civ.P. 11; see also Fed.R.Bank.P. 9011 (adopting Rule 11 for
purposes of bankuptcy cases.)
(Footnote Continued Next Page)


                                          - 12 -
J-A05021-17



U.S.C. § 1927,13 against frivolous claims and/or abuse of process, as

afforded them under the Dragonetti Act. Nevertheless, the Oberdicks failed

to avail themselves of these protections during the seven year duration of

Mr. Oberdick’s Chapter 7 bankruptcy case. As a matter of policy, it seems

only fair that the Oberdicks should now be precluded from benefiting from a

similar state cause of action.             As acknowledged by the Pennsylvania

Supreme Court, “part of the policy underlying preemption … is to prevent

litigants from forum shopping to achieve a different result in federal court

than they could obtain in state court.”             Stone Crushed, 908 A.2d at 887



                       _______________________
(Footnote Continued)

      Rule 9011 requires … that attorneys’ submissions to the court
      not be “presented for any improper purpose, such as to harass
      or to cause unnecessary delay or needless increase in the cost of
      litigation,” that legal assertions be “warranted by existing law,”
      and that “factual contentions have evidentiary support.”
      Fed.R.Bankr.P. 9011(b).        If any of these requirements is
      violated, a court has the discretion … to impose sanctions, which
      may be initiated by motion or sua sponte by the court. Id.
      9011(c).

In re Miller, 730 F.3d 198, 203 (3d. Cir. 2013). See also Fed.R.Bank.P.
1008 (requiring filings to be verified or contain an unsworn declaration of
truthfulness under penalty of perjury). Bankruptcy Rules 1008 and 9011
provide protection against perjury and frivolous claims, similar to Rule 11.
Stone Crushed, 908 A.2d at 886.
13
    “Any attorney … who so multiplies the proceedings in any case
unreasonably and vexatiously may be required by the court to satisfy
personally the excess costs, expenses, and attorneys’ fees reasonably
incurred because of such conduct.” 28 U.S.C. § 1927.




                                           - 13 -
J-A05021-17



(quoting Werner v. Plater-Zyberk, 799 A.2d 776, 782 (Pa. Super.

2002)).14

       Based on our determination that bankruptcy law preempts the claims

asserted in the state court Dragonetti action, we need not address the

remainder of Appellants’ claims.           We reverse the trial court’s denial of

summary judgment and remand for proceedings consistent with this opinion.

       Judgment reversed. Case remanded. Jurisdiction relinquished.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 4/19/2017




____________________________________________


14
   The Werner court further explained that “the Bankruptcy Code
demonstrates Congress’s intent to create a whole system under federal
control therefore mandating that the adjustment of rights and duties within
the bankruptcy process itself is uniquely and exclusively federal, thereby
precluding state law remedies for abuse of its proceedings.” Werner, 799
A.2d at 791.



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