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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Hester v. Landau (6/29/2018) sp-7254

Hester v. Landau (6/29/2018) sp-7254

          Notice:   This opinion is subject to correction before publication in the P                    ACIFIC  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, email  



                      THE SUPREME COURT OF THE STATE OF ALASKA                                      

TRACY  HESTER,                                                      )  

                                                                    )      Supreme  Court  No.  S-15809  

                                Appellant,                          )  


                                                                    )      Superior Court No. 3AN-11-06873 CI  

           v.                                                       )  


                                                                    )     O P I N I O N  


AURORA LANDAU; SHOWBOAT                                             )  


SHOW CLUB ANCHORAGE, LLC;                                                                                    

                                                                    )     No. 7254 - June 29, 2018  


TERRY MAURICE STAHLMAN;                                             )  


and ESTATE OF JAMES GOARD;                                          )  


                                Appellees.                          )  



                     Appeal from the Superior Court of the State of Alaska, Third  


                     Judicial District, Anchorage, Mark Rindner, Judge.  


                     Appearances:  Michael A.  Stepovich, Stepovich & Vacura  


                     Law Office, Fairbanks, for Appellant.  Kenneth W. Legacki,  


                     Anchorage,   for  Appellee  Landau.                             No   appearance  by  


                     Appellees  Showboat  Show  Club  Anchorage,  LLC;  Terry  


                     Maurice Stahlman; or Estate of James Goard.  


                     Before:  Stowers, Chief Justice, Winfree, Maassen, Bolger,  


                     and Carney, Justices.  


                     CARNEY, Justice.


                     WINFREE, Justice, concurring.



                     A woman sued her former employer for unpaid compensation, naming the  


company and both of its owners as defendants.  One of the owners died while the suit  

----------------------- Page 2-----------------------


was pending, and the former employee substituted the owner's estate in the proceedings.  


Judgment was eventually entered in favor of the former employee.   A year later the  


deceased owner's widow moved for relief from the judgment as the sole beneficiary of  


his estate, arguing that neither her husband nor the estate had been properly served with  


notice of the suit. The former employee responded that service had been proper and that,  


in any case, the widow did not have authority to file a motion on behalf of the estate.  


The court denied the motion on the ground that the widow had not shown good cause for  


relief from the judgment. We affirm on the alternate ground that the widow did not have  


authority to act on the estate's behalf.  




                    Aurora Landau was a dancer at the Showboat Show Club in Anchorage.  


In April 2011 she filed a complaint in superior court against Showboat Show Club  


Anchorage,  LLC,  seeking  to  recover  unpaid  wages,  overtime  compensation,  and  


impermissible  deductions  from  her  earnings.                           Her  suit  also  named  the  LLC's  two  


members and managers, Terry Stahlman and James Goard.  Stahlman, also the LLC's  


registered  agent,  was  personally  served  a  summons  and  complaint  for  all  three  


defendants at his Anchorage residence, which was listed in the LLC's state licensing  


reports as the entity's principal office and both Stahlman's and Goard's member address.  


                    It appears undisputed that Goard actually lived in Fairbanks. Yet Landau's  


efforts to serve Goard consisted of unsuccessfully sending the summons and complaint  


by certified mail to Stahlman's Anchorage residence and then serving Goard's copies of  


the summons and complaint on Stahlman at the same residence.  


                    Stahlman responded to the summons and complaint stating that he had  


settled the claim, but Landau later advised the court that no payment had been made and  


the settlement had failed. Landau then moved for entry of default against Goard and the  


LLC.  When Landau sought Goard's default, Landau's attorney asserted in his affidavit  

                                                               -2-                                                         7254

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that service on Goard had been accomplished by leaving the summons and complaint                                                                                                                                                                                                                                                                                                                                                                 

with Stahlman, "a person of reasonable age and discretion at the address of record                                                                                                                                                                                                                                                                                                                                                                                  

pursuant to the Corporations Section, State of Alaska, for service on James Goard," and                                                                                                                                                                                                                                                                                                                                                                                              

 attaching the return of service to his affidavit.                                                                                                                                                                                                                 The attached return of service for Goard                                                                                                                                                           

 said   that   the   summons   and   complaint   were   left   with   Stahlman   at   his   Anchorage  

residence, which was described as "the defendant['s] usual place of residence."                                                                                                                                                                                                                                                                                                                                                                                                          A  

 deputy clerk entered their default in February 2012.                                                                                                                                                                                                                                                   In April the LLC appeared before                                                                                                                             

the court through counsel, and shortly thereafter the court set aside the default with                                                                                                                                                                                                                                                                                                                                                                                         

respect to it.                                                          The default remained in effect as to Goard.                                                                                                                                                                                                                

                                                                            Goard died in April 2012.                                                                                                                                       His widow, Tracy Hester, is evidently his                                                                                                                                                                                                  

 estate's sole beneficiary.                                                                                                                      Robert Nesbitt sought appointment as the estate's personal                                                                                                                                                                                                                                             

representative in September but was not appointed by the probate court until April 2013.                                                                                                                                                                                                                                                                                                                                                                                                                     

                                                                            On August 21 the court held a trial setting conference for Landau's claims                                                                                                                                                                                                                                                                                                               

 against the LLC, Stahlman, and Goard.                                                                                                                                                                                             The court noted that Goard was dead and re-                                                                                                                                                                                                            

 entered default against the LLC because it no longer was represented by counsel.                                                                                                                                                                                                                                                                                                                                                                                               In a   

later colloquy between the court and Landau's attorney, the court noted that once notice                                                                                                                                                                                                                                                                                                                                                                                

 of a party's death is on the record, the court must dismiss claims against the decedent                                                                                                                                                                                                                                                                                                                                                               

                                                                                                                                                                                                                                                                                 1  Landau's attorney acknowledged that  

unless there is a party                                                                                                substitution within 90days.                                                                                                                                                                                                                                                                                                                                    

                                      1                                     Alaska Civil Rule 25(a) provides:                                                                                                                                                                 

                                                                            If a party dies and the claim is not thereby extinguished, the

                                                                            court   may   order   substitution  of   the   proper   parties.     The

                                                                            motion for substitution may be made . . . by any party, and

                                                                            shall be served on the parties as provided in Rule 5 and upon

                                                                            persons not parties in the manner provided in Rule 4 for the

                                                                            service of a summons.                                                                                                           Unless the motion for substitution is

                                                                            made not later than 90 days after the death is suggested upon

                                                                            the   record   .   .   .   ,   the   action   shall  be   dismissed   as   to   the


                                                                                                                                                                                                                                              -3-                                                                                                                                                                                                                               7254

----------------------- Page 4-----------------------

he "may have to bring in the estate."                                                

                               Trial began on December 19 and was then continued to a later date.                                                                                           On  

 December 31 - more than 90 days after the August 21 hearing, after the first day of trial                                                                                                  

had concluded, and while Nesbitt's petition for appointment was pending in probate                                                                                                  

 court - Landau moved to substitute the Estate of James Goard as a defendant in Goard's                                                                                            

place. The court granted the substitution the following month, even though an estate had                                                                                                     

                                               2   Landau then notified the putative estate that she had an interest.3  

not yet been opened.                                                                                                                                                                                   

                               Trial concluded June 18, 2013. In July the court found Stahlman, Goard's  


 estate, and the LLC jointly and severally liable for Landau's damages.   Landau was  


 awarded atotal of$74,383.23 indamages, prejudgment interest, penalties, andattorney's  


 fees and costs. She then notified the Goard estate by filing a copy of the judgment in the  


probate proceeding.  


                               In November 2014, a year after the estate was notified, Hester moved for  


relief from judgment under Alaska Civil Rule 60(b) "as sole beneficiary of the Estate of  


 James Goard."  She argued that neither Goard, his estate, nor herself as sole beneficiary  


                1	             (...continued)


                               deceased party.


But cf. Estate of Lampert ex rel. Thurston v. Estate of Lampert ex rel. Stauffer, 896 P.2d  


 214, 217-18 (Alaska 1985) (holding court did not err by enlarging time for substitution  


 after death of party).  

                2              We have previously made clear that a party may not sue a decedent without  


 first  obtaining  appointment  of  a  personal  representative  to  give  the  court  personal  


jurisdiction.                      Hamilton  v.  Blackman,  915  P.2d  1210,  1215-16  (Alaska  1996).  


 Rule 25(a)'s substitution process appears to similarly contemplate that there actually be  


 an estate opened and a personal representative named who would substitute for the  


 deceased party.  


                3              See AS13.16.070 (providing for filing demand for noticeagainstunopened  




                                                                                                -4-	                                                                                      7254

----------------------- Page 5-----------------------

had ever been properly served with the complaint.  She further argued that Landau had  


moved to substitute the estate after the deadline set by Civil Rule 25(a). Throughout the  


motion Hester asserted her status as "sole beneficiary of the Estate" as the basis for her  




                     Landau responded that all relevant persons, including Hester, had been  


properly  served  and  that  Hester  had  not  shown  good  cause  to  vacate  the  default  


judgment.  She also noted that Hester was not the estate's personal representative and  


argued that she therefore lacked standing to object to the substitution of the estate or to  


the default judgment.  Hester's reply repeated her arguments that Goard had not been  


properly served and argued that Hester had interest-injury standing because, as the sole  


beneficiary, her financial interest in the case was identical to that of the estate.  


                     The superior court denied Hester's motion in December 2014, stating that  


the defendants had been properly served and that both Goard and Hester "were aware of  


the litigation and the default."  The court found that Hester had not shown good cause  


to vacate the judgment because she had not shown that the outcome of the suit might be  


different if relief were granted.   The court did not address the dispute over Hester's  


standing to act for the estate.  


                     Hesterappealed, arguing that neither Goard nor his estatehadbeenproperly  


served with notice of the litigation and that the default judgment entered against the  


estate should be vacated. We ordered supplemental briefing on Hester's standing to seek  


relief from judgment on behalf of the estate.  




                     Statutory  interpretation  is  a  question  of  law  to  which  we  apply  our  


                                                                -5-                                                         7254

----------------------- Page 6-----------------------


independent judgment.                      


                       We have not previously addressed whether the sole beneficiary of an estate  


who is not its personal representative has legal authority to appear in court on behalf of  


the estate.   We conclude that Alaska's probate code gives that authority only to the  


estate's personal representative. We therefore affirm the superior court's order denying  


Hester's motion for relief from judgment on the alternate ground that Hester did not have  


the authority to file the motion.5  


                       "Weinterpretstatutes'accordingtoreason,practicality,and common sense,  


taking into account the plain meaning and purpose of the law as well as the intent of the  


                  6                                                                                                           7  but we also  

                      Statutory interpretation begins with the text's plain meaning,                                                         

drafters.' "                                                                                                   


                                                                                                                                 8   Because  

consider legislative history, even when the text "is facially unambiguous."    


Alaska adopted the Uniform Probate Code (UPC) "in its entirety" in 1972,9  the UPC's  


           4           Statev. Ketchikan GatewayBorough                             ,366P.3d86,90 (Alaska2016) (citing                    

State v. Schmidt            , 323 P.3d 647, 655 (Alaska 2014)).              

           5           Brandner v. Pease, 361 P.3d 915, 920 (Alaska 2015) ("We may affirm the  


superior court on any basis supported by the record, even if that basis was not considered  


by the court below or advanced by any party." (quoting Smith v. Stafford, 189 P.3d 1065,  


 1070 (Alaska 2008))).  


           6           Colemanv.McCullough, 290 P.3d413,414(Alaska2012) (quoting Thoeni  


v. Consumer Elec. Servs., 151 P.3d 1249, 1258 (Alaska 2007)).  


           7           Ward v. State, Dep't of Pub. Safety, 288 P.3d 94, 98 (Alaska 2012).  


           8           Estate of Kim ex rel. Alexander v. Coxe, 295 P.3d 380, 387 (Alaska 2013)  


(quoting State, Commercial Fisheries Entry Comm'n v. Carlson, 270 P.3d 755, 762  


(Alaska 2012)).  


           9           In re Estate of Bavilla, 343 P.3d 905, 909 (Alaska 2015) (citing Jaworski  



                                                                       -6-                                                                 7254

----------------------- Page 7-----------------------

commentary is "instructive in interpreting the Alaska probate statutes."                                                  10  


                       Alaska  probate  law  defines  and  establishes  various  roles  for  people  


connected to a decedent or an estate.  One role is that of an "interested person," which  

"includes heirs, devisees, children, spouses, creditors, beneficiaries, and other persons  

                                                                                             11  Hester is an interested person  


having property rights in or claims against" the estate. 

with respect to the Goard estate because she is a beneficiary of the estate. Landau is also  


an interested person because she has a claim against the Goard estate. Interested persons  


have specific rights under Alaska law. For example, they have the right to seek informal  


probate of a will,12  to receive notice of hearings and other actions of the court,13  and to  


demand that a personal representative give bond.14  


                       Personal representatives play a key role in administering and distributing  


                 15   They are "under a duty to settle and distribute the estate of the decedent in  

the estate.                                                                                                                                      


accordance with the terms of" the will16  and "have statutory powers enabling them to  


collect, protect, sell, distribute and otherwise handle all steps in administration without  


            9          (...continued)  


v. Estates of Horwath ex rel. Streets, 277 P.3d 753, 759 (Alaska 2012)).  

            10         In re Estate of Baker                , 386 P.3d 1228, 1233 (Alaska 2016) (citing                                   In re   

Estate of Maldonado, 117 P.3d 720, 728 (Alaska 2005)).  


            11         AS   13.06.050(26).  

            12         See  AS   13.16.090(a)(3),  (d).  

            13         See  AS   13.06.110;  AS   13.16.620.  

            14         See  AS   13.16.265.  

            15         See  AS   13.16.015;  AS   13.16.245-.440.  

            16         AS  13.16.350(a).  


                                                                        -7-                                                                7254

----------------------- Page 8-----------------------


further order of the [c]ourt."                   Personal representatives are authorized to take a number                       

of   different   types   of   actions   in   "acting   reasonably   for   the   benefit  of   the   interested  



persons."          One of these is the authority to "prosecute or defend claims[] or proceedings  



                                                                          Another  provision  gives  the  personal  

.  .  .  for  the  protection  of  the  estate." 


representative "the same standing to sue and be sued . . . as the decedent had immediately  



before death."             Although neither provision explicitly states that this grant of authority  


is exclusive or that no other person may take such actions on behalf of the estate, the  


only person to whomthey delegate authority is the personal representative. Neither these  


provisions nor any other part of the probate code grants such authority to anyone else.  


                     A provision of a related statute bolsters this reading. Part of Alaska's Code  



of  Civil  Procedure  deals  with  "Survival  and  Wrongful  Death  Actions." 


Statute 09.55.570 specifies that "[a]ll causes of action by one person against another . . .  


survive  to  the  personal  representatives  of  the  former  and  against  the  personal  



                                                  The legislative record of Alaska's adoption of the UPC  

representatives of the latter." 

                                                                                                                          23  and was  



indicates that AS 09.55.570 was offered as an amendment to the UPC bill 

           17        UNIF . P     ROBATE   CODE   art. III, general cmt. (U                      NIF . L  AW   COMM'N   1969),  


           18        AS   13.16.410.  

           19        AS   13.16.410(22).  

           20        AS   13.16.350(c).  

           21        AS  09.55.570-.585.  

           22        AS  09.55.570.  

           23         1972  House  Journal  937,  940.  

                                                                   -8-                                                             7254

----------------------- Page 9-----------------------


subsequently adopted.                             Both the version adopted in 1972 and the current statute specify                                               

that it is the personal representative who is authorized to proceed in actions relating to                          

                                                                                                    25  When considered together with the  

the death of the person whose estate they represent.                                                                                                                     

grant of standing to sue and be sued in AS 13.16.350(c), this provision confirms that the  


legislaturespecifically intended thepersonal representativeto bethelegalactor on behalf  


of an estate.  


                           The probate code's provisions concerning the appointment and removal of  


a personal representative also support this view.   They establish requirements for a  


person to be appointed as personal representative and, critically, to exercise the powers  


of the office.  In order "to acquire the powers and undertake the duties and liabilities of  


a personal representative of a decedent, a person must be appointed by order of the court  


                                                                                      26    The personal representative may also be  

or registrar, qualify, and be issued letters."                                                                                                        


required to file a bond.27                          The personal representative's duties and powers "commence  


upon  appointment,"  although  they  also  "relate  back  in  time"  to  prior  acts  by  the  


                                    28   The personal representative has the power to ratify actions taken on  

appointed person.                                                                                                                                                         


behalf of the estate by others prior to the representative's appointment, but this ability  

does   not   extend   to   actions   taken   by   others   after   appointment   of  a  personal  


             24            See Ch. 78,  4, SLA 1972.  The statute was amended slightly in 1973 to        

its present form.                  See  Ch 56,  34, SLA 1973.                   

             25            Compare AS 09.55.570 with Ch. 78,  4, SLA 1972.  


             26            AS 13.16.015 (with exception regarding Foreign Personal Representatives  


in AS 13.21 not applicable here).  


             27            See AS 13.16.255.  


             28            AS 13.16.340.  


                                                                                    -9-                                                                             7254

----------------------- Page 10-----------------------


                            The probate code takes care to ensure that there is no lapse in the estate's                                                                 

representation once a personal representative is appointed.                                                                    Under AS 13.16.290(c), a                               

personal representative may resign the position after giving notice, but the resignation  

is not effective until a successor has been appointed and the estate's assets have been                                                                                       

turned   over   to   the   successor.     A   personal  representative's   appointment   ultimately  

                                                                            30       The  code's  careful  prevention  of  a  gap  in  

terminates   when   probate   is   over.                                                                                                                                           

representation of the estate would not be necessary if a beneficiary could simply step in  


to perform the representative's duties or exercise the representative's authority.31  


                            The probate code provides other remedies to interested persons short of  


authorizing them to act as an estate's legal representative. First, AS 13.16.275(a) allows  


any  interested  person  to  petition  the  probate  court  for  an  order  "to  secure  proper  


performance of the personal representative's duty."  Second, AS 13.16.295(a) permits  

an interested person to "petition for removal of a personal representative for cause at any  


time." And if an interested person is unable to prevent a personal representative's breach  


              29            Id.  (relating to the "[t]ime of accrual of duties and powers" of the personal                                                             

representative);  see  UNIF . P                            ROBATE  CODE,  supra  note 17,  3-701 cmt. ("The sentence                                                 

concerning ratification is designed to eliminate technical questions that might arise                                                                                         

concerning the validity of acts done by others                                                  prior to         appointment." (emphasis added)).                      

              30            See AS13.16.290(a)-(b) (providing thattermination ofappointment occurs  


through an order closing the estate or one year after the filing of a closing statement).  


              31            As Landau notes, a personal representative has a fiduciary duty to the  


estate; interested parties do not.  See AS 13.16.350(a) ("A personal representative is a  


fiduciary who shall observe the standards of care applicable to trustees . . . .  A personal  


representative is under a duty to settle and distribute the estate . . . as expeditiously and  


efficiently as is consistent with the best interests of the estate."). In cases with more than  


one interested person, allowing a single interested person to act on behalf of the entire  


estate could lead to serious conflicts of interest.  


                                                                                        -10-                                                                                 7254

----------------------- Page 11-----------------------

of   fiduciary   duty   by   one   of   these   methods,   that   person   may   sue   the   personal  

representative for the damage or loss under AS 13.16.395.                                      

                          Alaska   probate   law   thus   establishes   a   comprehensive   scheme   for   the   

                                                                                          32      This  scheme  relies  on  the  personal  

representation   of   an   estate   in   legal   matters.                                                                                                 

representative to act on the estate's behalf and does not allow others to exercise those  


powers.  Because Hester was not the estate's personal representative, she did not have  


the authority to act on its behalf.33                                  Whatever defects may have existed in the original  


service of Goard or the later substitution of his estate, Hester did not have the legal right  


to move for relief from judgment on the estate's behalf.  


V.           CONCLUSION  

                           The order of the superior court is AFFIRMED on the alternate ground that  


Hester did not have the legal authority to bring the motion for relief from judgment.  


             32            Cf. Sinka v. N. Commercial Co.                              , 491 P.2d 116, 118 (Alaska 1971) (holding                          

that the Uniform Commercial Code provides "a comprehensive scheme for recovery of                                                                                       

damages" for certain types of injuries).                    

             33           Because we do not address or resolve the merits of the motion for relief  


from judgment, our opinion does not foreclose the estate, as the party with the proper  


legal authority, from bringing a similar motion in the superior court.  


                          Hester also argued in her supplemental briefing that she is a real party in  


interest pursuant to Alaska Civil Rule 17(a) and thus has the authority to bring the  


motion for relief from judgment. Rule 17(a) is inapplicable to Hester's motion for relief  


from judgment because Hester is not prosecuting  an action in the name of a real party  


in  interest  as  required  by  the  text  of  the  civil  rule.                                               See  Alaska  R.  Civ.  P.  17(a).  


Accordingly, given the rule's inapplicability to the facts of this case, we do not further  


address this argument.  

                                                                                  -11-                                                                           7254

----------------------- Page 12-----------------------

WINFREE, Justice, concurring.                           

                                    I agree with today's decision. I write separately to highlight what I believe                                                                                                      

to be serious service of process questions that will remain unanswered in light of that                                                                                                                                           


                                    Effective service of a summons and complaint on a competent individual                                                                                                      

requires:   (1) actual personal service; (2) leaving the papers at the person's dwelling                                                                                                                            

house or usual place of abode with another person of suitable age and discretion then                                                                                                                                           

residing there; (3) delivering the papers to an agent authorized by appointment or law to                                                                                                                                              

receive them; or (4) completed signed delivery by registered or certified mail with return                                                                                                                                  

                    1  If service cannot be made through these methods, a party may apply to the court  


for alternative service methods.2  


                                    James Goard apparently lived in Fairbanks. AuroraLandau'sinitial service  


efforts for Goard consisted of unsuccessfully sending the summons and complaint by  


certified mail to Terry Stahlman's Anchorage residence and then delivering Goard's  


copies of the summons and complaint to Stahlman at that same residence.  But Landau  


had not applied to the court for permission to serve Goard at Stahlman's residence.  


                                    When Landau sought Goard's default, Landau's attorney asserted in his  


affidavit that service on Goard had been accomplished by leaving the summons and  


complaint  with Stahlman, "a person of reasonable age and discretion at the address of  


record pursuant  to the Corporations Section, State of Alaska, for service on James  


Goard,"  attaching  the  return  of  service  to  his  affidavit.                                                                                                  It  is  unclear  exactly  what  


Landau's  attorney  meant  by  address  of  record  with  the  Corporations  Section  for  


"service" on Goard, but it is clear that the address was the one listed for Goard with the  


                  1                 Alaska  R.  Civ.  P.  4(d)(1),  (h).  

                  2                 See  Alaska  R.  Civ.  P.  4(e).  

                                                                                                                -12-                                                                                                                     7254  

----------------------- Page 13-----------------------


Corporations  Section  for  purposes  of  his  relationship  to  Showboat  Show  Club  


Anchorage LLC.  The attached return of service for Goard said that the summons and  


complaint were left with Stahlman at his Anchorage residence, which was described as  


"the defendant[']s usual place of residence." The return of service as to Goard was false;  


Stahlman's  Anchorage  residence  was  not  Goard's  usual  place  of  residence,  it  was  


Goard's LLC-related address.  


                    This raises questions that will remain unanswered by this court in light of  


today's decision that Goard's widow lacked standing to bring an Alaska Civil Rule 60(b)  


motion on Goard's estate's behalf. Alaska Civil Rule 4(d)(1) permits individual service  


by leaving papers at a person's dwelling house or usual place of abode.  Could Landau  


effectively ignore that provision by instead unilaterally choosing to leave service papers  


at an address Goard had listed with the state for LLC purposes, even though it apparently  


was not Goard's dwelling house or usual place of abode?  When an individual member  


of an LLC, a partner in a partnership, or a shareholder in a corporation has an address  


listed  with  the  state  on  a  required  filing,  is  that  address  -  as  a  matter  of  law,  


notwithstanding Rule 4(d)(1) and without regard to Rule 4(e) - an effective service  


address for the individual with respect to a lawsuit arising from the entity's operations?  


                    The superior court apparently answered "yes" to one or both of those  


questions.  Today's decision leaves the superior court's answer(s) unreviewed.  

                                                               -13-                                                         7254

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