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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Schmitz v. Yukon-Koyukuk School District (11/17/2006) sp-6079

Schmitz v. Yukon-Koyukuk School District (11/17/2006) sp-6079, 147 P3d 720

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA
                    
DAVID SCHMITZ, )
) Supreme Court No. S- 11683
Appellant, )
) Superior Court No. 4FA-03-789 CI
v. )
)
YUKON-KOYUKUK SCHOOL ) O P I N I O N
DISTRICT, CHRISTOPHER SIMON, )
and DOES 1 THROUGH 10, ) No. 6079 - November 17, 2006
)
Appellees. )
)
Appeal    from     the
          Superior Court of the State of Alaska, Fourth
          Judicial District, Fairbanks, Randy M. Olsen,
          Judge.

          Appearances:   D.  Randall   Ensminger,   Law
          Offices  of  D. Randall Ensminger, Fairbanks,
          for Appellant.  Howard S. Trickey and Matthew
          Singer,  Jermain  Dunnagan  &  Owens,   P.C.,
          Anchorage, for Appellees.

          Before:   Bryner,  Chief  Justice,  Matthews,
          Eastaugh,  and  Carpeneti, Justices.   [Fabe,
          Justice, not participating.]
                    
          BRYNER, Chief Justice.
     
I.   INTRODUCTION
          David   Schmitz   negotiated  a   contract   with   the
Yukon-Koyukuk School District to teach at the Coldfoot School for
the  2001-2002  school year.  The contract gave  him  tenure  and
provided that if the district eliminated his position he would be
assigned  to the districts central office in Fairbanks.  Although
the  contract  contained no grievance provisions, it incorporated
the  terms  of the collective bargaining agreement (CBA)  between
the  district and the teachers union, which set out a  three-step
grievance process.  The district terminated the Coldfoot position
and transferred Schmitz to Fairbanks in January 2002; soon after,
it transferred Schmitz again, to Huslia, and notified him that he
would not be retained after the school year ended.  Schmitz  sued
the  district,  asserting breach of contract  and  various  other
claims.   The  superior court dismissed these claims  on  summary
judgment,   ruling  that  Schmitz  had  failed  to  exhaust   his
administrative remedies under the CBA.  We affirm,  holding  that
the  CBAs grievance procedures applied to Schmitzs contract, that
Schmitz failed to exhaust his remedies as required under the CBA,
and  that  he  made  no timely offer of evidence  to  excuse  his
failure to meet this requirement.
II.  FACTS AND PROCEEDINGS
          David   Schmitz   negotiated  a   contract   with   the
Yukon-Koyukuk  School District to be a teacher  at  the  Coldfoot
school  for the 2001-2002 school year.  The contract stated  that
[s]hould it become necessary to eliminate the position because of
decreased  enrollment . . . Mr. Schmitz will be employed  by  the
District  as  a Reading Specialist, operating out of the  Central
Office.   The central office is in Fairbanks.  The contract  also
stated that [t]his contract creates no obligation on DISTRICT  to
offer  continuing  employment to TEACHER except  as  provided  by
Alaska  Law.   Mr.  Schmitz  is  tenured  on  the  first  day  of
employment  with  Yukon Koyukuk School District  because  of  his
previous  five  (5)  successful years of  employment  with  Yukon
Koyukuk School District.
          The   contract   had   no  grievance   or   arbitration
provisions.  But it stated that TEACHER shall abide by applicable
laws,  regulations, policies of the Yukon Koyukuk School District
Board of Education, procedures established by DISTRICT, and terms
and  conditions  of the Negotiated Agreement, as may  be  amended
from time to time.
          It  is  undisputed that the contracts  term  Negotiated
Agreement  referred to the collective bargaining  agreement  (the
CBA)  between the Yukon-Koyukuk School District and the  teachers
union,  the  Middle  Yukon-National  Education  Association  (the
Association).   The  CBA  prescribed a three-step  grievance  and
arbitration process to be followed if any dispute arose under the
CBA.  Step I involved filing a letter with ones supervisor.  Step
II involved sending a letter to the districts superintendent, who
was  required  to  hold  a hearing.  And  Step  III  allowed  the
Association to demand arbitration.
          Schmitz began work at the Coldfoot school on August 16,
2001.   In January 2002 the district eliminated Schmitzs position
at  the  Coldfoot school because of decreased enrollment, and  it
transferred him to the central office in Fairbanks.  Schmitz then
agreed  to  teach  at  Jimmy Huntington  School  in  Huslia  from
February  18 through March 1, 2002.  Although the assignment  was
supposed  to  be  temporary,  on March  1  the  school  districts
superintendent,  Christopher Simon,  informed  Schmitz  that  the
district  needed to keep Schmitz in Huslia for the  rest  of  the
school year.
          Schmitz immediately sent a letter of objection to Simon
and the school board, complaining that the permanent reassignment
to  Huslia would force him to live 250 miles away from  his  wife
and children, against his wishes.  Schmitz also noted that he had
recently  suffered injuries in an accident that required  him  to
receive therapy that was unavailable in Huslia.
          On March 14 Schmitz followed up with a Step I grievance
letter  to his immediate supervisor, Doc Lantz, the principal  of
Jimmy  Huntington  School.  In his letter, Schmitz  asked  to  be
returned  to the district office in Fairbanks, alleging that  his
involuntary  transfer violated both the CBA and his contract;  he
also  said  that he had heard that the district might not  retain
him  for the following school year, asserting that, since he  was
tenured, this would violate the CBA.
          On March 26 Lantz responded to Schmitz, suggesting that
he  deal  directly with Simon.  Schmitz wrote a Step II grievance
letter  to Simon on April 1, restating his complaints and  asking
Simon to set up a Step II conference.
          The  Step  II  conference was scheduled for  April  11,
2002.   On  April 10, the day before the hearing, Simon  formally
notified  Schmitz that the district would not  retain  him  as  a
teacher the following year.
          Simon   held   the   Step  II  grievance   hearing   by
teleconference on April 11, as scheduled.  In a letter  sent  the
following day, April 12, Simon denied Schmitzs Step I and Step II
grievances.  The letter informed Schmitz that the district viewed
his  reassignment  to Huslia as permissible  under  his  teaching
contract  because  the contract . . . does  not  state  that  you
cannot  be transferred from the district office should  the  need
arise.  As to the tenure issue, Simon stated that Schmitzs  right
to  claim tenure was a right created by state law rather than  by
individual  contract  and  that, in  the  districts  view,  under
AS 14.20.150(e), Schmitz would not become tenured until the first
instructional  day  of the third year of employment  in  the  new
school  district.   Simon sent a copy of  the  denial  letter  to
Association President Heidi Wright, as required under the CBA.
          Schmitz  did  not attempt to file a Step III  grievance
for  arbitration, nor did he ask Wright to file such a  grievance
on  his  behalf.  Instead, after the 2001-2002 school year ended,
he simply obtained other employment.
          In  April  2003,  one year after the Step  II  hearing,
Schmitz filed a superior court action against the school district
and  Simon (collectively the District), claiming compensatory and
punitive   damages  for  breach  of  contract,  misrepresentation
regarding  the  job  site and tenure, intentional  infliction  of
emotional distress, and intentional interference with contract.
          The District moved for summary judgment, asserting that
Schmitz  had  failed  to  exhaust  available  administrative  and
contractual  remedies by neglecting to file a Step III  grievance
as required under the CBA.
          In  response,  Schmitz asserted that the  CBA  did  not
apply  to  his case.  Because his claims arose from the Districts
breach  of  his  teaching contract rather than from  any  alleged
violation  of the CBA itself, Schmitz argued, he had no  duty  to
exhaust  the CBAs grievance requirements.  He did not claim  that
he   had  exhausted  or  tried  to  exhaust  the  CBAs  grievance
requirements;  nor did he claim that he had made  any  effort  to
convince  the Association to pursue a Step III grievance  on  his
behalf.
          The  superior  court  rejected Schmitzs  arguments  and
granted  the  Districts motion for summary  judgment,  concluding
that Schmitz had failed to exhaust his remedies under the CBA.
          Schmitz moved for reconsideration, contending that  the
court had overlooked or misconceived the fact that Plaintiff  did
request  that the Association pursue a Step 3 grievance  and  was
turned  down.  In a memorandum accompanying this motion,  Schmitz
asserted  for  the first time that he had actually  attempted  to
exhaust  his  administrative remedies but that he had  been  told
that  the  Association would not pursue his complaints.   Schmitz
sought to support his new claim with affidavits from himself  and
his attorney, D. Randall Ensminger.
          In  his  own  affidavit, Schmitz alleged  that  shortly
after  the District rejected his Step II grievance in April 2002,
he  called  Rod Pfisterer, the UniServe Director for  NEA-Alaska,
and  asked if the Association would file a Step III grievance  on
his  behalf. According to Schmitz, Pfisterer responded  that  the
Association  would  not be able to file the Step  III  grievance,
because  [Schmitzs]  complaints involved  issues  that  were  off
agreement.    Schmitz did not believe that he had ever  put  this
request in writing or received a written response.
          Ensmingers affidavit confirmed  that, sometime  between
March  2002  and  the  end of the summer of  2002,  Schmitz  told
Ensminger  that  the Association had turned  down  his  Step  III
grievance  because his complaints were off agreement.   Ensminger
noted  that  it made such perfect sense that the Association  had
refused  to file the Step 3 grievance for him because it did  not
involve issues covered by the negotiated agreement that I did not
investigate the matter further at that time.  Ensminger also said
that   when   he  was  later  preparing  Schmitzs  complaint   in
April 2003, he telephoned NEA-Alaskas Director, Ray Goad, to  see
if  the  Association might help with the costs of the litigation.
According  to  Ensminger, Goad responded that they would  not  be
able  to  do so because the dispute was based on complaints  that
were off agreement.
          Although Schmitz acknowledged that he had not disclosed
this  information  to the court in opposing the Districts  motion
for  summary judgment, he explained that his belated offer of the
evidence  was entirely . . . a result of a strategic decision  by
his attorney, Ensminger, who had thought that it would be best to
oppose  the  summary judgment motion solely on the  legal  ground
that  the  CBAs  grievance procedures did not apply  to  Schmitzs
claims.
          Superior  Court  Judge Randy M. Olsen  denied  Schmitzs
motion  for  reconsideration, concluding that  the  new  evidence
concerning  the  Associations refusal should have been  disclosed
before  the court entered its original ruling and, alternatively,
that, even if this evidence were considered, it would not raise a
material  issue of disputed fact concerning Schmitzs  failure  to
meet the exhaustion requirement.
          Schmitz appeals.
III. STANDARD OF REVIEW
          We  review  de novo an order granting summary judgment,
determining whether any genuine issue of material fact exists and
whether  the  moving  party is entitled to judgment  on  the  law
applicable  to the established facts.1  We review  for  abuse  of
discretion   a   trial  courts  order  denying   a   motion   for
reconsideration.2
IV.  DISCUSSION
     A.   Superior Courts Ruling on Summary Judgment
          
          1.   Applicability of exhaustion requirement

          We  have  repeatedly  held that  employees  must  first
exhaust  their  contractual or administrative remedies,  or  show
that  they  are  excused from doing so, before  they  may  pursue
direct judicial actions against their employers.3  Schmitz argues
that  because his teaching contract was entirely independent from
the  CBA, the CBAs grievance provisions did not cover his  claim,
so  he had no obligation to exhaust the grievance procedures  set
out  in  the  CBA.   Since  his  teaching  contract  included  no
grievance  requirements,  he argues, he  had  no  contractual  or
administrative remedies to exhaust.
          The  CBA states that [a] Grievance shall mean a written
claim  by  a  grievant  that  a dispute  or  disagreement  exists
involving  interpretation or application of  the  terms  of  this
Agreement. (Emphasis added.)  The CBA Step III, part 1  grievance
provision states:
          In   the  event  that  the  grievant  is  not
          satisfied  with  the disposition  of  his/her
          grievance  at Step II, or in the  event  that
          he/she   does  not  receive  notice  of   its
          disposition within five (5) days in Step  II,
          and  provided that the grievance concerns the
          meaning  of  this Agreement or  any  part  or
          parts  of  it  or concerns an alleged  breach
          hereof,    the   Association   may    request
          arbitration within ten (10) days.
          
(Emphasis added.)
          According  to Schmitz, because this provision specifies
that a grievance must concern the meaning of this Agreement,  the
Step  III arbitration process can be invoked only when a  dispute
concerns  the meaning of the CBA.  Since his claims  concern  his
teaching  contract rather than the CBA, he reasons,  he  did  not
have to follow CBA grievance procedures.  Schmitz argues that his
decision  to  follow  Step I and Step II  provisions  should  not
prejudice  his right to pursue his claims in court.  In  Schmitzs
view,  the Step I and Step II grievances merely show that he  did
more than he was required to do.
          These   arguments  are  unpersuasive.    The   teaching
contract  between Schmitz and the District includes no provisions
for  disputes arising under its provisions.  But it does  specify
that the TEACHER shall abide by . . . terms and conditions of the
          Negotiated Agreement.  As the District observes, this phrase
incorporates  the CBA by reference, including its  grievance  and
arbitration provisions.  In light of this provision, the District
reasons, the CBA and the teaching contract merge, so Schmitz  was
required to follow CBA grievance provisions.
          The  Districts  argument has  merit.   When  a  writing
refers  to another document, that document becomes constructively
a  part of the writing, and in that respect the two form a single
instrument.4   Here, Schmitzs teaching contract referred  to  the
CBA,  or  Negotiated  Agreement, expressly requiring  Schmitz  to
abide by . . .  terms and conditions of the Negotiated Agreement.
Moreover,  the CBA referred to all individual teaching contracts,
effectively embedding its terms in each individual contract:
               The  policy  set forth herein  shall  be
          included   by   written  reference   in   the
          individual contracts of all teachers employed
          by  the Yukon-Koyukuk School District.   This
          Negotiated  Agreement, hereafter referred  to
          as  the Agreement, shall be made part of  the
          teachers  individual  comprehensive  contract
          with  the  same  force and effect  as  though
          fully set forth herein.
          Given  the  teaching  contracts and CBAs  reciprocating
reference   provisions,   the  teaching  contract   unequivocally
incorporated  the terms and conditions of the CBA,  and  the  CBA
encompassed the teaching contract.  Because the teaching contract
had no conflicting provisions relating to grievances, it required
Schmitz to abide by the CBA grievance provisions  including  Step
III  in asserting his claims.
          2.   Futility
          Schmitz similarly contends that his claims fell outside
the jurisdiction of the arbitration contemplated by the CBAs Step
III  provisions.   Noting  that  the  CBAs  grievance  provisions
authorized  arbitrators to decide only issues arising  under  the
CBA,  Schmitz  insists that his claims raised  questions  arising
under  his teaching contract.  Because the arbitrator would  have
had  no authority to decide his claims, Schmitz argues,  it would
have been futile for him to pursue Step III arbitration under the
CBA.   But  this  argument mistakenly assumes that  the  teaching
contract  and CBA are completely independent  the same assumption
we  rejected in addressing Schmitzs claim that he had no duty  to
follow  the  CBA  grievance process.  Because  the  CBA  and  the
teaching  contract  contained  mutual  incorporation  provisions,
Schmitzs  claims  did not arise exclusively  under  the  teaching
contract.
          Schmitz further posits that arbitration would have been
futile because the terms of the CBA created a conflict that would
have  precluded the arbitrator from deciding his claims.  Schmitz
points   out  that  the  CBAs  provisions  governing   Step   III
arbitration  expressly denied arbitrators the power or  authority
to  make  any decisions which require the commission  of  an  act
prohibited  by  law or which is violative of the  terms  of  this
Agreement.  The CBA further required arbitrators to refer[]  back
to  the parties without decision or recommendation any case  that
          they lacked authority to decide.
          Because  the  District  asserted  in  response  to  his
Step  II  grievance that the CBA entitled it to reassign  him  to
Huslia  after  his  transfer to Fairbanks, Schmitz  contends,  an
arbitrator  who found that the teaching contract gave  Schmitz  a
valid  right  not  to  be  reassigned could  never  enforce  this
provision: because this contractual right would conflict with the
terms  of  the  CBA,  the  jurisdictional restrictions  governing
Step  III  arbitration would require the arbitrator to refer  the
case back to the parties. Similarly, Schmitz reasons that because
the  District  asserted that state law precluded it  from  giving
Schmitz tenure, it would have been futile to seek arbitration  on
his  claim that his contract entitled him to receive tenure.   In
each  instance, Schmitz asserts, because his contract  creates  a
valid  right that conflicts with the CBA or state law, his claims
fall beyond the scope of the arbitrators powers under the CBA.
          But  these  arguments are flawed by the  same  mistaken
assumption that defeated Schmitzs previous arguments:  they  fail
to  recognize  that Schmitzs contract expressly incorporated  the
CBA,  which  in  turn  required compliance  with  all  terms  and
provisions of the CBA and with all requirements imposed by  state
law.   Because  these  requirements are  parts  of  the  teaching
contract,  it seems unlikely that the contract could properly  be
construed  to  embody  any  valid and  enforceable  promise  that
violated  the CBA or the law.  Although Schmitz insists that  his
claims  would  have  required  an  arbitrator  to  enforce  valid
contractual provisions at odds with the CBA or the law, he  fails
to  explain  how  such  a  conflict  realistically  might  arise.
Moreover,  even  if  we assumed that Schmitzs claims  might  have
resulted  in  this  kind of conflict, the mere possibility  of  a
conflict  would not suffice to establish futility.   Instead,  to
establish futility on the face of the CBA, Schmitz would have  to
show  that  the  CBAs jurisdictional provision would  necessarily
preclude  an  arbitrator from deciding his claims on any  grounds
that  might avoid the jurisdictional conflict  a showing  Schmitz
fails to make.
          We  thus  find  no  merit in Schmitzs contentions  that
arbitration would have been futile as a matter of law.
          3.   Compliance with exhaustion requirement
          Schmitz   alternatively   argues   that   the    record
demonstrates that he actually did comply with the CBAs exhaustion
requirements.   Specifically,  Schmitz  claims  that   undisputed
evidence  before  the  court when it ruled  on  summary  judgment
showed  that he did all that he was authorized to do in  pursuing
his  administrative remedies under the CBA.  He notes that  under
Step III, only the Association may request arbitration;  the  CBA
contains  no  provision  authorizing or requiring  an  individual
teacher  to request Step III arbitration.  Schmitz further  notes
that  the  union  countersigned his  Step  I  grievance,  and  it
received  copies of Simons decision on Steps I and  II.   Because
the  Association had all the necessary information to decide  for
itself  whether  to pursue a Step III grievance, Schmitz  claims,
the CBA required him to do nothing further.
          But  this argument conflicts with our case law.  In our
past  decisions addressing CBAs that required employees to pursue
grievances through their unions, we have consistently ruled  that
a unions failure to file a grievance does not by itself establish
that   the  CBAs  remedies  were  exhausted.   Instead,  we  have
emphasized that employees in such cases must show that they  made
good  faith  efforts to request the union to pursue a  grievance,
and that they have received some form of refusal.5
          Here,  standing alone, evidence of Schmitzs  compliance
with  Step I and Step II and the Associations subsequent  failure
to  request  arbitration was insufficient to establish exhaustion
Schmitz  was  required to show both that he  made  a  good  faith
effort  to  pursue a Step III claim through the  Association  and
that he received some form of refusal from the Association.   Yet
Schmitz made no such showing in response to the Districts  motion
for  summary  judgment.  When the superior court  ruled  on  that
motion,  the  only  record  evidence  concerning  the  Step   III
grievance was an affidavit of union representative Heidi  Wright,
who  insisted  that Schmitz had never asked her to bring  a  Step
III grievance and that she had never declined to help Schmitz  in
the  process.  Wright further attested that she would  have  been
willing  .  . . to provide assistance to Schmitz had he requested
it.
          Accordingly,  based on the record at the  time  of  its
ruling, the superior court correctly granted summary judgment  to
the District on the ground that Schmitz had failed to exhaust his
remedies under the CBA.
     B.   New Evidence Offered on Reconsideration
          As already mentioned in the statement of facts, Schmitz
offered  new  evidence addressing the exhaustion  issue  when  he
moved  for  reconsideration after the court granted the Districts
motion for summary judgment.  Relying on this evidence, he argued
that he had complied with the CBAs exhaustion requirements, or at
least  had  shown  that  he was excused from  further  compliance
because  the  Association  would not  have  pursued  a  Step  III
grievance.
            Schmitz  renews these arguments on  appeal.   But  in
denying  Schmitzs motion for reconsideration, the superior  court
found  that  Schmitzs new evidence was untimely, ruling  that  he
could  have  filed it before the ruling on summary  judgment  but
failed  to submit it for strategic reasons.  Unless the  superior
court  abused  its discretion in so finding, we must  affirm  its
decision  to deny reconsideration and refuse to consider Schmitzs
appellate arguments based on this untimely evidence.6
          In   moving   for  reconsideration,  Schmitz   candidly
acknowledged that his new evidence had been available earlier but
that  his attorney had opted to withhold it for tactical reasons.
Specifically,  after  asserting  that  the  superior  court   had
overlooked a  material fact, the memorandum accompanying Schmitzs
motion for reconsideration explained:
          Th[e]  material fact is the fact  that  there
          exists a question of fact with respect to the
          issue  of  whether  or not  Plaintiff   David
          Schmitz   did   or   did  not   request   his
          Association  to pursue a Step 3 grievance  on
          his  behalf.  The reason that the  Court  has
          overlooked  or  misconceived  this  fact   is
          entirely  as a result of a strategic decision
          made  by undersigned counsel.  This strategic
          decision  was  to not oppose the  Motion  for
          Summary Judgment on the facts, but rather  to
          oppose the Motion based on the law.  That is,
          Plaintiffs   undersigned  counsel  determined
          that it would be best to oppose the Motion  .
          .  .  based on the argument that the  subject
          matter  of  Plaintiffs  complaints  were  not
          within   the  jurisdiction  for  a   Step   3
          grievance  based  on  the  express   limiting
          language   of   the   collective   bargaining
          agreement[.]
          
          In denying the motion for reconsideration, the superior
court relied on this concession, concluding that Schmitzs belated
efforts to submit the evidence were unjustified in light  of  his
earlier tactical choice:
               It  is  clear from the underlying Motion
          for  Summary  Judgment  that  exhaustion   of
          administrative  remedies  was   the   central
          issue.   Pursuant  to Civil  Rule  56(c)  any
          dispute  of facts needed to be set out  in  a
          statement   of  genuine  issues.    Strategic
          decisions were made, and the Court cannot act
          on a change of strategy after the decision.
          
          Given   Schmitzs  concession  that  his   counsel   had
previously withheld the newly offered evidence of exhaustion  for
tactical  reasons, the record amply supports the superior  courts
determination that the evidence could not properly be offered for
the  first  time  as a basis for reconsideration.   The  superior
court  did  not abuse its discretion in so ruling.  Although  the
superior  court went on to deny reconsideration on an alternative
ground  as well  concluding that Schmitzs new evidence would  not
have  raised a material factual dispute on the issue of  futility
in  any  event  the courts primary finding that the evidence  was
untimely provides an independent and adequate basis for affirming
its order denying reconsideration, thus making it unnecessary  to
consider  what impact the new evidence might have had if  it  had
been timely filed.
V.   CONCLUSION
            For  the  reasons  set  forth above,  we  AFFIRM  the
superior courts judgment.
_______________________________
     1     Grant  v.  Anchorage Police Dept,  20  P.3d  553,  555
(Alaska  2001)  (citing Cozzen v. Municipality of Anchorage,  907
P.2d 473, 475 (Alaska 1995)).

     2     Neal & Co., Inc. v. Assn of Village Council Presidents
Regl Hous. Auth.,  895 P.2d 497, 506 (Alaska 1995).

     3    State v. Beard, 960 P.2d 1, 5 (Alaska 1998).

     4    11 Williston on Contracts  30:25 (4th ed.).

     5     See,  e.g.,  Beard, 960 P.2d at 5; Casey  v.  City  of
Fairbanks, 670 P.2d 1133 (Alaska 1983).

     6    A trial courts decision on a motion for reconsideration
will  not  be  reversed on appeal absent an abuse of  discretion.
Neal & Co., Inc., 895 P.2d at 506.

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