STONE v. WINTER ENTERPRISES, P.C. et al
Filing
11
OPINION FILED. Signed by Judge Robert B. Kugler on 12/11/12. (js)
NOT FOR PUBLICATION
(Document No. 6)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
___________________________________
:
:
:
Plaintiff,
:
:
v.
:
:
:
WINTER ENTERPRISES, P.C. t/a and/or :
d/b/a SIGNATURE SMILES;
:
SUPERIOR SMILES, LLC t/a and/or d/b/a :
SIGNATURE SMILES; SCOTT BROOKS :
t/a and/or d/b/a BROOKE SCOTT, LLC,
:
and t/a and/or d/b/a SIGNATURE SMILES; :
SCOTT BRUGGEWORTH, individually :
and as the corporate alter ego of WINTER :
ENTERPRISES, P.C., SUPERIOR SMILES :
PLUS, LLC and SCOTT BROOKS;
:
ANNIKA BRUGGEWORTH, individually :
and as the corporate alter ego of WINTER :
ENTERPRISES, P.C., SUPERIOR SMILES :
PLUS, LLC, and SCOTT BROOKS;
:
and JOHN DOES 1-5 and 6-10,
:
:
Defendants :
___________________________________ :
JANE STONE,
Civil No. 12-465 (RBK/JS)
OPINION
KUGLER, United States District Judge:
Plaintiff Jane Stone has brought suit against an array of business entities and individuals
for alleged violations of the Family & Medical Leave Act (“FMLA”), 29 U.S.C. § 2601 et seq.
(2006), and the New Jersey Family Leave Act (“NJFLA”), N.J.S.A. 34B:11B-1 et seq. (2011).
Currently before the Court is Defendants’ Motion to Dismiss Plaintiff’s complaint for failure to
1
state a claim upon which relief can be granted (Doc. No. 6). See Fed. R. Civ. P. 12(b)(6). For
the reasons stated below, the Court reaches the following conclusions: Plaintiff’s FMLA claim
will survive against the business entity Defendants, as well as against Defendant Annika
Bruggeworth in her individual capacity. Plaintiff’s NJFLA claim will be dismissed without
prejudice as against all Defendants. Finally, all of Plaintiff’s claims will be dismissed against
Defendant Richard Bruggeworth, both in his individual capacity and as owner and operator of
the business entity Defendants.
I.
FACTUAL BACKGROUND 1
Defendants 2 operate five dental offices in the State of New Jersey called “Signature
Smiles,” employing more than fifty people across all their locations. Compl. ¶¶ 13, 15-16.
Defendants Winter Enterprises, P.C., Superior Smiles, LLC, and Scott Brooks are the business
entities used to operate Signature Smiles. These entities are owned and managed by Defendants
Scott Bruggeworth and Annika Bruggeworth,. Id. at ¶¶ 17-18.
Plaintiff was employed as a full-time office manager from August 23, 2010 until
September 9, 2011 at the Carneys Point office, which is located within seventy-five miles of the
other four locations. Id. at ¶¶ 11, 14. On August 22, 2011, upon learning that her mother had
suffered a stroke, she advised her supervisor that she would need to take “family leave.” Her
supervisor directed her to contact Defendant Annika Bruggeworth. 3 Plaintiff left voicemails
with Defendant Bruggeworth on August 22 and August 25. Id. at ¶¶ 23, 26. On August 31,
Bruggeworth called Plaintiff to discuss her job performance. Bruggeworth told Plaintiff that she
1
When considering the sufficiency of the factual allegations in a plaintiff’s complaint, the Court, for purposes of
deciding a motion to dismiss under Fed. R. Civ. P. 12(b)(6), assumes such allegations to be true. See Fowler v.
UPMC Shadyside, 578 F.3d 203, 211 (3d Cir. 2009).
2
Plaintiff’s complaint names five specific defendants (in addition to ten John Doe defendants): two individuals and
three business entities. For purposes of simplicity, the Court’s use of the term “Defendants” will refer generally to
the Signature Smiles dental practice that employed Plaintiff from August 23, 2010 until September 9, 2011.
3
The Court’s subsequent references to “Defendant Bruggeworth” or “Bruggeworth” will refer to Annika
Bruggeworth as opposed to her husband Scott Bruggeworth.
2
should be “nicer” at work; during the same conversation, Bruggeworth also said that she would
have to “check into” the family leave request but that in the meantime, Plaintiff should “change
her attitude.” Compl. ¶¶ 28-29.
On September 9, Plaintiff happened to inform her supervisor that a coworker had made a
certain clerical error. Shortly thereafter, Defendant Bruggeworth contacted Plaintiff to say that
she had heard Plaintiff was “talking about” this co-worker. Id. at ¶ 33. Before Plaintiff could
explain the situation further, Bruggeworth informed her that she had been terminated.
Plaintiff alleges that Defendants’ decision to terminate her employment was motivated by
her request for family leave. Accordingly, she brought suit in this Court, claiming that
Defendants had violated her rights under the FMLA and the NJFLA. Defendants subsequently
filed the instant motion to dismiss.
II. DISCUSSION
A.
Legal Standard
Federal Rule of Civil Procedure 12(b)(6) allows a court to dismiss an action for failure to
state a claim upon which relief can be granted. When evaluating a motion to dismiss, “courts
accept all factual allegations as true, construe the complaint in the light most favorable to the
plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff
may be entitled to relief.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009)
(quoting Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008)). In other words, a
complaint survives a motion to dismiss if it contains sufficient factual matter, accepted as true, to
“state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949
(2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007).
3
To make this determination, a court conducts a three-part analysis. Santiago v.
Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010). First, the court must “tak[e] note of the
elements a plaintiff must plead to state a claim.” Id. (quoting Iqbal, 556 U.S. at 675). Second,
the court should identify allegations that, “because they are no more than conclusions, are not
entitled to the assumption of truth.” Id. at 131 (quoting Iqbal, 556 U.S. at 680). Finally, “where
there are well-pleaded factual allegations, a court should assume their veracity and then
determine whether they plausibly give rise to an entitlement for relief.” Id. (quoting Iqbal, 556
U.S. at 680). This plausibility determination is a “context-specific task that requires the
reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at
679. A complaint cannot survive where a court can only infer that a claim is merely possible
rather than plausible. Id.
B.
The FMLA
The FMLA seeks to “balance the demands of the workplace with the needs of families”
by entitling employees under certain conditions 4 5 “to take reasonable leave for medical
reasons.” Conoshenti v. Public Serv. Elec. & Gas Co., 364 F.3d 135, 140-41 (3d Cir. 2004)
(quoting 29 U.S.C. § 2601(b)(1)-(2)). Pursuant to regulations promulgated by the Department of
Labor, an employer may not discriminate against employees who have made use of FMLA
leave; specifically, employers “cannot use the taking of FMLA leave as a negative factor in
4
A party asserting rights under the FMLA must demonstrate that both the employee and employer are “covered”
under the Act. One such requirement is that the employer employ fifty or more employees. 29 U.S.C. §
2611(4)(A)(i) (2006). Defendants, in a footnote to their reply brief, argue that Plaintiff must meet the so-called
“integrated employer” test because Plaintiff is allegedly seeking to combine the number of employees from separate
entities to satisfy the fifty employee threshold requirement. The Court finds that consideration of this issue, if it is
even applicable, is premature at this time. It will suffice for purposes of deciding the instant motion that Plaintiff
has alleged that Defendants (meaning the business and individual entities used to operate the five Signature Smiles
dental offices in New Jersey) “employ an excess of fifty employees across their locations.” Compl. ¶ 15.
Defendants are free to raise the integrated employer issue at a later stage in the litigation, such as on a motion for
summary judgment.
5
Plaintiff appears to have pled properly the threshold requirements establishing that both she and her employer are
covered by the FMLA. See 29 U.S.C. § 2611(2)-(4).
4
employment actions.” 29 C.F.R. § 825.220(c) (2009). This provision has given rise to a socalled “retaliation claim”; in order to prevail on such a claim, a plaintiff must show that (1) she
took an FMLA leave 6; (2) she suffered an adverse employment decision; and (3) the adverse
decision was causally related to the leave. Conoshenti, 364 F.3d at 135.
C.
The NJFLA
The NJFLA creates the same general entitlement as does the federal FMLA: an employee
may take time off of work to tend to family issues and upon her return must be restored either to
her previous position or one with equivalent “benefits, pay, and other terms and conditions of
employment.” See Santosuosso v. NovaCare Rehabilitation, 462 F. Supp. 2d 590, 596 (D.N.J.
2006) (citing N.J.S.A. § 34:11B-7). In order to make out a prima facie case that a defendant
employer has violated the NJFLA, a plaintiff must show that
(1) plaintiff was employed by defendant; (2) plaintiff was
performing satisfactorily; (3) a qualifying member of plaintiff’s
family was seriously injured; (4) plaintiff took or sought to take
leave from his employment to care for his injured relative; and (5)
plaintiff suffered an adverse employment action as a result.
DePalma v. Building Inspection Underwriters, 794 A.2d 848, 859 (N.J. App. Div. 2002). The
plaintiff has the burden of producing “some credible evidence of each element of the cause of
action.” Id.
III.
ANALYSIS
Defendants’ brief in support of their motion to dismiss Plaintiff’s claim presents five
arguments, four of which will receive consideration here. 7
A.
“Improper Lumping” of Defendants
6
The Third Circuit has interpreted this language broadly, finding that it is enough that a plaintiff simply requests,
rather than commences, FMLA leave. Erdman v. Nationwide Ins. Co., 582 F.3d 500, 509 (3d Cir. 2009).
7
The fifth argument concerns the availability of either punitive or emotional distress damages under the FMLA.
Plaintiff, in her opposition brief to Defendants’ motion, has consented to the dismissal of her claims for these types
of damages, thereby obviating the need to consider Defendants’ fifth argument. Opp. Br. 13.
5
Defendants’ first line of attack on the sufficiency of Plaintiff’s complaint involves the
Plaintiff’s choice to name three business entity defendants and two individual defendants in her
complaint. Specifically, Defendants assert that Plaintiff’s claim must be dismissed because
Plaintiff has failed to make “any specific factual allegation against Winter Enterprises, Superior
Smiles Plus, Scott Brooks or Dr. [Scott] Bruggeworth.” Def.’s Br. in Support of Mot. to Dismiss
6. Defendants rely on ProCentury Ins. Co. v. Harbor House Club Condominium Assoc., Inc.,
652 F. Supp. 2d 552 (D.N.J. 2009) for the proposition that such pleading deficiencies can be fatal
to a plaintiff’s claim where the defendants are “left to guess as to what the facts and allegations
giving rise to alleged liability might be for each defendant.” Def.’s Br. in Support of Mot. to
Dismiss 6 (citing ProCentury, 652 F. Supp. 2d at 560-61).
ProCentury has little persuasive value in the present context. That case, concerning a
dispute over insurance coverage, involved a complex set of claims and counterclaims, all of
which were based on common law theories of contract and tort law. See id. at 554-55. The
portion of the opinion that Defendants cite involved the insured party’s allegation of negligence
on the part of his insurer’s agent. Given the rather attenuated relationship between these parties,
the insured was obliged to test the boundaries of New Jersey negligence law by attempting to
establish that an insurer’s agent owes a duty to an insured. Ultimately, in resting upon this
uncertain legal ground, the insured’s claim was deemed deficient because “nowhere [did] it
articulate what particular duty [the insurer’s agent] had to [the insured] in this situation but more
importantly how it failed to fulfill that duty.” Id. at 560. Because the insured failed to explain
how these basic requirements of any negligence claim applied to the parties in that specific case,
the ProCentury court granted the insurer’s agent’s motion to dismiss.
6
The instant claim, on the other hand, suffers from no such deficiencies. Plaintiff’s
complaint alleges that all five Defendants “operate a dental practice” at the specific Carneys
Point, NJ location where Plaintiff was employed from August 23, 2010 to September 9, 2011.
Compl. ¶ 7. It further alleges that the three business entity defendants “are all utilized to operate
‘Signature Smiles,’ have common ownership and management, common business practices,
common finances, [and] a common website.” Id. at ¶ 17. Finally, the Complaint identifies Dr.
Scott Bruggeworth as an “owner[] and/or operator[] of the corporate defendants.” Id. at ¶ 18.
Despite Defendants’ contention that Plaintiff has failed to articulate how principles of FMLA
and NJFLA liability apply to each of the four defendants, the Court finds Plaintiff’s logic quite
straightforward: Plaintiff worked for a dental practice; that practice is formally organized as
three separate business entities that operate in concert with each other; the business entities are
owned and managed by Dr. Bruggeworth and his wife Annika; Plaintiff’s employment in the
dental practice was terminated, and Plaintiff argues that such termination violated the FMLA and
the NJFLA. Thus, all the business entity defendants are on notice that, as Plaintiff’s employer,
they may be liable if Plaintiff were to prevail. As owner of the business entities, Dr.
Bruggeworth may also be liable if Plaintiff can prevail on her veil-piercing or alter ego claims
(discussed infra in Part III.B). Thus, the Court fails to understand how the instant Complaint
leaves Defendants having “to guess as to what the facts and allegations giving rise to alleged
liability might be for each defendant.” Def.’s Br. in Support of Mot. to Dismiss 6 (citing
ProCentury, 652 F. Supp. 2d at 560-61). Accordingly, Defendants’ motion to dismiss cannot
succeed on a theory of “improper lumping.”
B.
Veil-Piercing and Alter Ego Allegations
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Defendants’ next argument is that Plaintiff has failed to allege facts that support theories
of either corporate veil-piercing or alter ego liability with respect to the five Defendants. Def.’s
Br. in Support of Mot. to Dismiss 7. Because Plaintiff has brought suit under both federal and
New Jersey statutes, it is necessary to consider the requirements for imposing this type of
liability under Third Circuit and New Jersey common law.
i.
Federal Law
In this Circuit, the veil-piercing inquiry generally involves a determination of whether
“the debtor corporation is little more than a legal fiction.” Trustees of Nat. Elevator Indus.
Pension, Health Benefit and Educational Funds v. Lutyk, 332 F.3d 188, 194 (3d Cir. 2003). This
inquiry involves consideration of the so-called Pisani factors:
[G]ross undercapitalization, failure to observe corporate
formalities, nonpayment of dividends, insolvency of debtor
corporation, siphoning of funds from the debtor corporation by the
dominant stockholder, nonfunctioning of officers and directors,
absence of corporate records, and whether the corporation is
merely a facade for the operations of the dominant stockholder.”
Id. (referencing United States v. Pisani, 646 F.2d 83, 88 (3d Cir. 1981)). In addition, while a
party need not allege “actual fraud as a prerequisite for piercing the corporate veil,” the factual
situation must include an “element of injustice or fundamental unfairness.” Id.
ii.
New Jersey Law
Under New Jersey law, veil-piercing is appropriate if the parent entity has “so dominated
the subsidiary that it had no separate existence but was merely a conduit for the parent.” State,
Dept. of Env. Protection v. Ventron Corp., 468 A.2d 150, 164 (N.J. 1983). 8 In addition, the
8
Trial courts in this District have recast the “dominance” requirement thusly: “there must be such unity of interest
and ownership that the separate personalities of the corporation and the individual no longer exist.” The Mall at IV
Group Properties, LLC v. Roberts, No. 02-4692, 2005 WL 3338369 at *3 (D.N.J. Dec. 8, 2005) (citing 1 William
Meade Fletcher et al., Fletcher Cyclopedia of the Law of Private Corporations, § 41.30 (perm. ed. rev. vol. 1999));
MSA Products, Inc. v. Nifty Home Products, Inc., No. 11-5261, 2012 WL 2132464 at *2 (D.N.J. June 12, 2012)
8
proponent of veil-piercing must show that the “parent has abused the privilege of incorporation
by using the subsidiary to perpetrate a fraud 9 or injustice, or otherwise to circumvent the law.”
Id. (citation omitted).
iii.
Application
Plaintiff has made the following factual allegations concerning the three business entity
Defendants: they have “common ownership and management, common business practices,
common finances, [and] a common website.” Compl. ¶ 17. Regarding the individual
Defendants, Plaintiff alleges that they are “the owners and/or operators of the corporate
defendants.” Id. at ¶ 18. Simply stated, these allegations are nowhere near sufficient to support
a veil-piercing or alter ego claim under either Third Circuit or New Jersey law. At best, Plaintiff
has alleged one of the Pisani factors: that by commingling their finances, the business entity
defendants do not observe corporate formalities. See Lutyk, 332 F.3d at 194. But Plaintiff has
not alleged the existence of any other factor. Cf. Trevino v. Merscorp, Inc., 583 F. Supp. 2d 521,
529-30 (D. Del. 2008) (applying the Pisani factors and granting defendant’s motion to dismiss
plaintiff’s alter ego claims because, among other reasons, an allegation of only one Pisani factor
was not enough to give rise to the necessary inference that the defendants in question “operated
as a single economic entity”). Thus, such scant pleading strongly suggests that Plaintiff has
failed to allege the type of “dominance” by the parent over a subsidiary required under New
Jersey law, Ventron, 468 A.2d at 164, as well as the circumstance required under Third Circuit
(citing IV Group Properties, 2005 WL 3338369 at *3). Notably, however, the Court could find no New Jersey state
case embracing such language. In addition, at least one Third Circuit panel has suggested that it is appropriate as a
matter of New Jersey law to consider the Pisani factors when determining whether the parent entity has dominated
the subsidiary. See Craig v. Lake Asbestos of Quebec, Ltd., 843 F.2d 145, 150 (3d Cir. 1988) (applying New Jersey
law). Nevertheless, the Court, for the reasons expressed herein, finds Plaintiff’s veil-piercing and alter ego claims so
lacking that resort to these federal cases appearing to interpret New Jersey law would have no effect on its analysis.
9
Courts in this District interpreting the Ventron case have found that the proper standard does not require proof of
common law fraud, but rather some “less rigid showing.” See, e.g., Hunt Const. Group, Inc. v. Farina, No. 11-4933,
2012 WL 72286 at *3 (D.N.J. Jan. 10, 2012); IV Group Properties, 2005 WL 3338369 at *3.
9
precedent that the corporation in question “is little more than a legal fiction.” Lutyk, 332 F.3d at
194.
The Court need not make this determination conclusively, however, because Plaintiff’s
Complaint is absolutely deficient with respect to the second requirement of the federal and state
veil-piercing doctrines. That is, Plaintiff has failed to allege any “element of injustice or
fundamental unfairness,” Lutyk, 332 F.3d at 194, or, relatedly, any attempt to “perpetrate a fraud,
injustice, or [other circumvention of] the law,” Ventron, 468 A.2d at 164, concerning
Defendants’ business. On this basis, then, the Court concludes that Plaintiffs have not alleged
facts sufficient to support a claim for alter ego or veil-piercing liability under either federal or
New Jersey law. 10
C. Individual Liability Allegations
Defendants assert that the NJFLA, unlike FMLA, does not allow for individual
supervisor liability. Def.’s Br. in Support of Mot. to Dismiss 9. Plaintiff does not appear to
dispute this contention. The FMLA’s definition of “employer” includes, among other things,
“any person who acts, directly or indirectly, in the interest of an employer to any of the
employees of such employer.” 29 U.S.C. § 2611(4)(A)(ii)(I). This language has provided the
basis for individual supervisor liability under the FMLA. Haybarger v. Lawrence County Adult
Probation & Parole, 667 F.3d 408, 417 (3d Cir. 2012). However, such language is not found in
the definition of “employer” in the NJFLA. See N.J.S.A. 34:11B-3(f). Further, the Court could
not find any New Jersey cases imposing individual supervisor liability under the NJFLA. Thus,
Plaintiff’s NJFLA claim against Defendant Annika Bruggeworth in her individual capacity as
10
As a result of this determination, and because Plaintiff has voluntarily withdrawn its individual liability claim
against him, Pl.’s Opp. Br. 9, Defendant Scott Bruggeworth will be dismissed from the case.
10
Plaintiff’s supervisor will be dismissed. The FMLA claim against Ms. Bruggeworth, however,
will stand. See Haybarger, 667 F.3d at 417.
D. Inadequate Factual Allegations
Finally, Defendants claim that Plaintiff has not alleged facts regarding the circumstances
of her termination sufficient to state a prima facie retaliation case under either the FMLA or
NLFLA. Both statutes will be considered in turn.
i. FMLA Prima Facie Case
As stated above in Part II.B, in order to sustain her FMLA retaliation claim, Plaintiff
must allege facts indicating that (1) she took an FMLA leave; (2) she suffered an adverse
employment decision; and (3) the adverse decision was causally related to the leave.
Conoshenti, 364 F.3d at 135.
Plaintiff was employed by Defendants. Compl. ¶ 11. She advised her supervisor that she
would need to take “family leave” in order to take care of her mother who had just suffered a
stroke. Id. at ¶ 20. This is sufficient to satisfy the first element. See Erdman v. Nationwide Ins.
Co., 582 F.3d 500, 509 (3d Cir. 2009). When Plaintiff was then terminated from her job, she
suffered an “adverse employment decision,” thereby satisfying the second element. See id.
Plaintiff left two voicemails regarding her leave request with Defendant Bruggeworth.
Compl. ¶¶ 23, 26. Defendant Bruggeworth never responded to Plaintiff concerning her request.
Instead, Defendant Bruggeworth first reprimanded Plaintiff about her job performance, and then,
some weeks later, terminated her employment. Id. ¶¶ 28, 34. The Court finds that these factual
allegations are just enough to satisfy the third element of causation. 11 Thus, Plaintiff has stated
11
The Court is aware that both parties have submitted various certifications presenting additional facts potentially
relevant to the issue of causal relation. Despite Defendants’ argument to the contrary, the Court concludes that these
additional documents should not be considered in deciding the instant motion to dismiss. Instead, its inquiry is
11
an FMLA retaliation claim against Defendants that “plausibly gives rise to an entitlement to
relief.” See Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010) (quoting Iqbal, 556
U.S. at 680)).
ii. NJFLA Prima Facie Case
To state a claim under the NJLFA, a plaintiff must allege facts showing that
(1) plaintiff was employed by defendant; (2) plaintiff was
performing satisfactorily; (3) a qualifying member of plaintiff’s
family was seriously injured; (4) plaintiff took or sought to take
leave from his employment to care for his injured relative; and (5)
plaintiff suffered an adverse employment action as a result.
DePalma v. Building Inspection Underwriters, 794 A.2d 848, 859 (App. Div. 2002). Based on
the allegations in Plaintiff’s Complaint cited in the preceding subsection, Plaintiff has satisfied
elements one, three, four, and five of a prima facie case under the NJFLA.
However, nowhere in the Complaint does Plaintiff allege that she was performing to the
satisfaction of her employer. To the contrary, all relevant indications in the Complaint suggest
that her employer was not satisfied with her job performance at all. See Compl. ¶¶ 28, 33. For
these reasons, Plaintiff has failed to plead properly all five elements of her prima facie case
under the NJFLA. Accordingly, this claim will be dismissed.
IV. Conclusion
For the reasons stated above, Defendants’ motion to dismiss Plaintiff’s Complaint under
Rule 12(b)(6) will be granted in part and denied in part. Specifically, Plaintiff’s FMLA claim
will survive against the business entity Defendants, as well as against Defendant Annika
Bruggeworth in her individual capacity. Plaintiff’s NJFLA claim is dismissed without prejudice
limited to the face of Plaintiff’s complaint. The Court will, however, be pleased to consider these materials if
Defendants file a motion for summary judgment on Plaintiff’s remaining claims.
12
as against all Defendants. 12 All of Plaintiff’s claims will be dismissed against Defendant
Richard Bruggeworth, both in his individual capacity and as owner and operator of the business
entity Defendants. The Court will issue an appropriate order.
Dated:
12/11/12
/s/ Robert B. Kugler
_
ROBERT B. KUGLER
United States District Judge
12
Because the Court bases its decision to dismiss this claim on a pure pleading deficiency, Plaintiff may move to
amend her complaint to cure this defect.
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