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Henlopen Landing Homeowners Association, Inc. v. Vester

Court of Chancery of Delaware

August 1, 2019

HENLOPEN LANDING HOMEOWNERS ASSOCIATION, INC., Petitioner,
v.
RUSSELL H. VESTER and JAKARA VESTER, Respondents, RUSSELL H. VESTER and JAKARA VESTER, Counterclaim Plaintiffs,
v.
HENLOPEN LANDING HOMEOWNERS ASSOCIATION, INC., and PREMIER PROPERTY & POOL MANAGEMENT, LLC, A/K/A PREMIER PROPERTY MANAGEMENT, Counterclaim Defendants.

          Date Submitted: April 5, 2019

          Michael R. Smith, of THE SMITH FIRM, LLC, Seaford, Delaware, Attorney for Petitioner Henlopen Landing Homeowners Association, Inc. and Counterclaim Defendant Premier Property & Pool Management, LLC.

          Richard H. Morse and Meghann O. Karasic, of COMMUNITY LEGAL AID SOCIETY, INC, Wilmington, Delaware, Attorneys for Respondents.

          MEMORANDUM OPINION

          Glasscock, Vice Chancellor Judge.

         A court of equity is, fundamentally, a forum to address those agency problems arising where ownership and control of assets are separated. One such instance involves ownership of real property in restricted developments, where owners have ceded certain rights over use and development of realty via deed restrictions, as enforced by homeowners' associations. In twenty-odd years on the bench, I have tried many disputes between property owners and homeowners associations, testing the limits of the exercise of such enforcement. In nearly every such case, the homeowner believes she has been singled out for unfair and overbearing-even tyrannical-treatment by the associations. At times, this belief is vindicated; at other times, not.

         The matter before me is of this ilk, but with a twist. This case was originally brought by the Henlopen Landing Homeowners Association, Inc. (the "Association") to enforce deed restrictions against the Plaintiffs Russell and JaKara Vester (together, the Vesters), who own a house in the Henlopen Landing development near Five Points, south of Lewes. The purported deed restriction violations have all been mooted during the course of the litigation, and the Association's only remaining claim is for a mootness fee, which I will address by separate opinion.

         The remaining portion of the action is the Vesters' Amended Counterclaim. The twist is that the Vesters are an interracial couple with an autistic son, among other children. The Vesters contend that the actions of the Homeowners were motivated by animus against their race, their son's medical condition, and the fact that they had children, in violation of the Delaware and Federal Fair Housing Acts. Their Amended Counterclaim seeks relief solely under those Acts.

         The matter was tried over one day. This is my post-trial decision. It is clear to me that the Vesters are sincere in their belief that they have been discriminated against for invidious reasons, in violation of the Fair Housing Acts. It is also clear that some of the violations of deed restrictions alleged by the Association against the Vesters were picayune, and at least one action-excluding the Vester family from the use of the community pool as coercion to remedy unauthorized alteration of the Vester driveway-persisted long after the underlying issue was remedied, and to that extent was ultra vires and improper. And I acknowledge that animus on racial, familial status, and disability grounds are among the evils that the Fair Housing Acts were created to remedy. Nonetheless, I find that the Vesters failed to prove that the Association-or its property management agent, Defendant Premier Property & Pool Management, LLC, a/k/a Premier Property Management ("Premier")-acted for reasons of animus regarding the Vesters' race, familial status, or disability, so as to be liable under the Acts. My reasoning follows.

         I. BACKGROUND

         Counterclaim-Defendant Henlopen Landing Homeowners Association, Inc. initiated this litigation. However, trial was held to decide only the Counterclaim-Plaintiffs Russell and JaKara Vester's counterclaims to the Association's Petition. The facts that follow are only those relevant to those counterclaims, and were either stipulated by the parties or proven by a preponderance of the evidence at trial.

         A. The Parties

         On November 11, 2010, the Counterclaim-Plaintiffs, [1] the Vesters, purchased a home in a housing development, Henlopen Landing, south of Lewes, Delaware.[2]The Vesters are married and are an interracial couple.[3] They have four children, one of whom, ZaKai, according to his mother, has autism, evidence of which was not established at trial, but was represented to (and accepted as true by) the Association as early as June 27, 2011.[4]

         Petitioner and Counterclaim-Defendant Henlopen Landing Homeowners Association, Inc. is a non-profit Delaware corporation.[5] Henlopen Landing is subject to the Declaration of Covenants, Conditions and Restrictions for Henlopen Landing (the "Declaration") and bylaws and regulations promulgated under that authority.[6] According to the parties, the Declaration empowers the Association to govern Henlopen Landing.[7]

         Counterclaim-Defendant Premier Property & Pool Management, LLC was the property management company for the Association, at the relevant times to this litigation.[8]

         B. Administration of Henlopen Landing

         1. The Declaration

         Property in the community of Henlopen Landing is subject to the Declaration. As the Declaration describes, the developer of Henlopen Landing established the Association for the purpose of, among other things, "maintaining and administering the Common Area; . . . administering and enforcing covenants, conditions and restrictions . . .; [and] adopting and enforcing rules and regulations."[9] Furthermore, pursuant to the Declaration, the Association had the "power to provide, and shall provide . . . [e]stablish and operate the Henlopen Landing Architectural Board . . . ."[10]

         The Henlopen Landing Architectural Board (the "ARB") was given the "exclusive jurisdiction over all original construction, modifications, additions or alterations made on or to all existing improvements . . ." in Henlopen Landing.[11]The Declaration specifically mentions "fence[s]" and "paving for driveways" as examples of structures that cannot "be erected, placed or altered" before review and written approval by the ARB.[12] The ARB was tasked with establishing "design and development guidelines and application and review procedures, "[13] but the ARB could "authorize variances for compliance with any of the provisions of [the standards] when circumstances . . . require . . . ."[14]

         The Declaration itself contains certain limitations on the improvements that homeowners can make to their property in Henlopen Landing. Pertinent here is a provision on fences, according to which, "[f]ences, boundary walls, boundary line hedges and shrubberies shall be prohibited within the front yard area of the lots and in general, shall not be closer to the front of the lot than one-half (1/2) of the length of the side of the dwelling unit. The height of any such fence, boundary wall, boundary line hedge or shrubbery along the side of a unit shall not exceed four feet (4'-0")."[15] Fences were only permitted with "[p]rior written approval . . . from the Henlopen Landing Architectural Board."[16] Also pertinent is a provision regarding any action that "will affect drainage of stormwater."[17] An application for such action needs "to include a certification of non-effect of said plans from a professional engineer licensed in the State of Delaware."[18]

         The Declaration limits what homeowners can do to the common property of Henlopen Landing and provides that "[n]o person shall alter in any way any Common Area except with the written permission of the Developer or Association."[19] The Declaration also includes limitations on activities on a homeowner's property, such as "Garbage/Trash Disposal." According to the Declaration, the Developer or the Association were to establish "reasonable standards" for "garbage and trash receptacles or similar facilities."[20] These "receptacles shall be placed only at the front of the dwelling in an enclosure approved by the Developer or [the Association] and placed adjacent to the driveway for the dwelling in a location approved by the Developer or Association."[21]However, "[i]f an Owner does not have a receptacle or similar facility approved by the Developer or Association, all garbage and trash must be kept in the Owner's garage . . . ."[22]

         If a homeowner committed an infraction of the Association's published rules and regulations, or breached or was in default of any of the covenants or provisions of the Declaration, that homeowner's rights to use Henlopen Landing's common areas could be suspended.[23] If an infraction is singular and nonrecurring, suspension of rights cannot exceed ninety days, following "notice from the Board of Directors."[24] If an infraction is continuous or recurring, suspension, again following notice, could extend up to ninety days after the infraction ceases or is remedied.[25]

         2. Enforcing of the Declaration and Bylaws

         The Declaration permitted the Association to hire a property manager for Henlopen Landing.[26] Premier, as the property manager, issued notices to homeowners for violations of or non-compliance with the Declaration or promulgated bylaws.[27] It did so after conducting its own inspections or after receiving "credible" reports from other homeowners in the community.[28] However, only the Association, and not Premier by itself, had the authority to suspend the right of homeowners to use Henlopen Landing's common areas in response to violations of the Declaration.[29] Premier also acted, generally, as a liaison between homeowners and the Association, and specifically between homeowners and the ARB.[30]

         C. The Vesters' Application for Architectural Modifications of their Property

         1. The Vesters' Requests

         On June 27, 2011, [31] the Vesters submitted a request to the Architectural Review Board (the "ARB") for five architectural modifications to their property.[32]The Vesters requested that they be permitted to: (1) install an irrigation well; (2) install a gazebo; (3) install a driveway expansion; and, most relevant here, (4) install a six-foot-high fence that encompasses the side door of their garage.[33] With respect to the fence request, the Vesters indicated that they sought two exceptions to Section 8.2.1 of the Declaration, concerning fencing.[34] First, the Vesters asked to exceed the four foot height limit and build to a height of six feet because their "child has special needs" and "could easily climb a 4 foot fence."[35] Second, the Vesters asked to "fence more than 1/2 of [their] side yard where our door for entrance to the garage is located to allow [them] the ability to let [their] dog outside in inclement weather."[36]

         With respect to the request to expand the driveway, the Vesters attached a "Contract Proposal and Receipt" from a contractor that performed asphalt paving; the proposal did not include any information on the grading or slope of the driveway.[37] Mrs. Vester also attended an ARB meeting on July 1, 2011, at which she presented the four requests to the ARB.[38]

         Mrs. Vester testified that the reason provided in her request for extension of the fence to encompass the garage side door-to accommodate the family pet-was pretextual. According to Mrs. Vester, the fence location variance, like the height exception, was intended to accommodate her child, ZaKai's special needs, by allowing him access to the backyard through the garage.[39] Mrs. Vester testified that she worried that this real reason might be problematic for the ARB.[40] Mrs. Vester had discussed the matter with a neighbor who had a fence that enclosed her side door, and based on that conversation, Mrs. Vester decided to instead indicate that the fence location was for her pet (the same reason that Mrs. Vester testified her neighbor had given, resulting in approval of the variance).[41] The Vesters' home does have several other doors that lead to their backyard;[42] however, Mrs. Vester believed that enclosing the garage's side door was in the best interest of her special needs child, ZaKai.[43]

         2. The Architectural Board's Decision

         After Mrs. Vester presented her request in-person to the ARB, the Review Board met and made a decision on the Vesters' architectural modifications request.[44]On July 7, 2011, Premier e-mailed Mrs. Vester the ARB's decision.[45] The ARB approved the Vester's request for a six-foot-tall fence but denied the request to extend the fence far enough to enclose the Vesters' garage side door.[46] Regarding the fence requests, the ARB wrote, "[a]fter a presentation from the Vesters regarding the needs of their child, the Board decided to grant approval for a [fence] . . . totaling 6'. The case for hardship was established. As a condition of approval the fence cannot be more than 1/2 the way up the side of the house . . . ."[47]

         The ARB approved several of the Vesters' other requests, including installation of a gazebo and installation of an irrigation well.[48] The ARB deferred decision on the Vester's' driveway extension request, and asked the Vesters to submit "a plan from the contractor indicating the slope of the driveway is interior not exterior."[49]

         3. The Vesters' Attempt to Appeal the ARB's Decision on the Fence

         After receiving the ARB's decisions, Mrs. Vester e-mailed Kate Roach of Premier on July 7, 2011.[50] Mrs. Vester asked that the ARB reconsider its decision on the location of the fence.[51] Mrs. Vester noted in the same e-mail that others in the community had received permission to build fences in similar locations "for the same reason [the Vesters had] requested;"[52] presumably, to allow their pets to go from garage to backyard. Again, this reason was pretextual. Mrs. Vester also asked that the ARB consider that a fence enclosing their side garage door would prevent others from tampering with the Vesters' sprinkler system controls and other vandalism.[53] Mrs. Vester, however, did not disclose in her written request for reconsideration her real reason for the fence extension, to accommodate her son's special needs.[54] At least one home in Henlopen Landing has a fence that encloses the exterior side door of its garage.[55]

         In regard to the driveway extension, Mrs. Vester wrote to Ms. Roach that "[u]pon closer review of the proposal from the asphalt company we see that they did specify grading and the extension is to conform to the existing driveway which should clarify that the grading and slope is in fact interior . . . I have also asked the contractor(s) if they could clarify this issue as well and all have stated that the proposal should make that clear and that they do not do 'grading plans.'"[56]

         On the same day, Ms. Roach replied by e-mail to Mrs. Vester and wrote that she would direct Mrs. Vester's concerns to the ARB and that either she or the ARB would respond to Mrs. Vester.[57] The practice at the time was for Premier to receive requests for the Association, including architectural modification requests made to the ARB, and prepare the requests for review by Association (and the ARB).[58]

         On July 13, 2011, Mrs. Vester e-mailed Ms. Roach to follow-up on the request for the ARB to reconsider their decisions on the fence and driveway.[59] Ms. Roach responded on July 14, 2011, writing "All has been approved."[60]

         4. The Vesters Proceed with the Driveway Extension

         The Vesters had sought and received a second proposal from the contractor set to perform the paving and modification of their driveway.[61] This second proposal indicated that the work would be conducted to conform to the "existing driveway grade. All the way to road."[62] However, it does not appear that Premier, or the ARB, received this second proposal from the Vesters before August 4, 2011, [63] the day on which the Vesters' driveway was modified.

         The Vesters, however, believed they had the necessary approval from the ARB to proceed on all of their modifications, given Ms. Roach's July 14, 2011 email stating, "All has been approved."[64] As a result, on August 4, 2011, the Vesters proceeded to alter their driveway.[65] An inspector for Premier was alerted to the alteration and stopped by the Vesters' home to discuss the driveway work being done that day.[66]

         The Vesters completed their driveway alteration on August 4, 2011.[67] Prior to August 4, 2011, several homeowners in Henlopen Landing had altered their driveways without prior approval from the Association.[68] On August 22, 2011, the Association requested the opinion of an engineer on the driveway drainage in order to bring the Vesters' driveway into compliance.[69] Prior to August 22, 2011, the Association had never required a homeowner to provide the opinion of a professional engineer licensed in Delaware on storm water drainage when the homeowner proposed (or completed) a driveway alteration.[70] While the Declaration technically required such an opinion, [71] the ARB had, at most, instead requested a plan indicating slope from the contractor performing the work.[72] Again, however, the record does not show that the ARB had, by this point, received the second proposal of the Vesters' contractor indicating that the slope of the driveway would not be altered.

         On August 24, 2012, almost a year after their driveway alteration, the Vesters provided the Association with the opinion of a professional engineer, which demonstrated that the drainage of the Vesters' driveway, as altered, would have no impact on the storm water management of Henlopen Landing.[73]

         D. The Vesters' Purported Violations

         1. Violations Other than Driveway Non-Compliance

         a. Violations Alleged Before June 2011

         Prior to submitting their application for architectural modifications in late-June 2011, the Vesters received a number of notices of non-compliance or violation of the Henlopen Landing bylaws.[74] Specifically, in April and May 2011, the Vesters received notices alleging violations of bylaws on street parking, [75] noise, [76] operating a business out of their home, [77] playground equipment, [78] and parking a commercial vehicle in their driveway.[79]

         On May 22, 2011, Premier sent the Vesters a letter "concerning the series of citation letters [the Vesters had] received since [their] settlement in Henlopen Landing."[80] The letter acknowledged that one such citation letter was sent in error because Premier had applied the bylaw of a different community.[81] A citation regarding playground equipment was also issued in error, apparently by mistake of one of Premier's inspectors.[82] In apparent response to concerns that the Vesters had raised to Premier over the series of citation letters, Premier explained in their letter that violation notices are issued in response to inspections or "credible report from a Board, Committee or Owner Member," but that in the future, Premier would first "attempt to reach the owner [subject to a potential violation notice] by phone if a citation is at all questionable."[83] As a result, Premier removed citations for "Commercial Vehicles, Play Yard Equipment and Operating a Business" from the Vesters' "owner record."[84]

         b. Violations Alleged After June 2011

         i. Plantings in the Common Area

         Before the Vesters purchased their home in Henlopen Landing, several small, shrub-like trees had been planted in front of the home, in an area between the street and the sidewalk.[85] When the Vesters moved in, the trees were dead.[86] This area, the Vesters concede, is considered part of the "common area" of Henlopen Landing.[87] After moving in, and around December 2010, the Vesters replaced some of the small, dead trees with new, live trees.[88] The Association considered the planting of these trees to be a violation of the Declaration.[89] Prior to January of 2012, the Vesters were unaware that the plantings were considered to be in the common area of Henlopen Landing and that the Association considered the plantings to be a violation of the Declaration.[90] The Vesters removed the plantings before August 22, 2012.[91]

         ii. Placement of Garbage Receptacles

         The Declaration dictated that "garbage receptacles" be stored either within a homeowners' garage or "at the front of the dwelling in an enclosure approved by the Developer or Association and placed adjacent to the driveway for the dwelling in a location approved by the Developer or Association."[92] Prior to January of 2012, the Vesters were unaware that the placement of their trash cans was in violation of the Declaration.[93] After January 2012, the Vesters stored their trash cans in several locations, in an attempt to satisfy the Association; all were considered by the Association to be in violation of the Declaration.[94] In 2016, the Vesters built an enclosure for their trash cans, which the Association considers appropriate.[95]

         2. The Vesters' Driveway Modification and Loss of Pool Access

         While the Vesters may not have been aware of Association's position that their plantings and their placement of garbage receptacle were considered violations, the Vesters were aware that the Association considered the driveway modification to be non-compliant. On August 4, 2011, the same day the Vesters altered their driveway, the Vesters' pool key card, which gave them access to the community pool at Henlopen Landing, was disabled.[96] The decision was made by the Association, and performed by Premier.[97] The Association (through Premier) informed the Vesters that suspension of their pool access was in response to the Vesters' alteration of their driveway without prior approval.[98]

         Mrs. Vester discovered that her pool access had been deactivated when she and her family attempted to enter the pool area a few days after August 4, 2011.[99]Mrs. Vester understood the reason given for the pool access deactivation was the Vesters' driveway modification, [100] but believed she had obtained the requisite approval for the driveway modification because of, among other things, her communication with Premier that her requests had been "approved."[101] Mrs. Vester also believed that Premier (and the Association) had received her contractor's second proposal, which she believed satisfied the ARB's concerns on drainage.[102]There is no evidence, however, that such was the case.

         Premier, under instruction from the Association, did not reactivate the Vesters' pool access, despite the Vesters' requests.[103] Mrs. Vester e-mailed Premier and made several visits and calls to their office.[104] She sent an August 10, 2011 email, in which Mrs. Vester detailed her frustration with Premier and the Association, the efforts she had taken to reactivate her pool access, the reasons she believed that her driveway modification had been previously approved, and the importance of pool access to her special needs child.[105] Mrs. Vester concluded the e-mail by stating that if her pool access was not reactivated and her concerns not addressed, she "will be forced to seek the advice of an attorney."[106]

         Ultimately, the Vesters' pool access and key card were not restored until August 17, 2014, which represents a period of over three years without access.[107]

         E. The Vesters and the Association Both Seek Recourse

         1. The Vesters' Complaint with Delaware Division of Human Resources

         On November 23, 2011, the Vesters filed a pro se complaint with the Delaware Division of Human Resources (the "DDHR") against the Association, alleging housing discrimination.[108] The DDHR then prepared a complaint it sent to the Association on December 21, 2011, accompanied by a questionnaire that the Association was required to fill out.[109] The Association completed its response to the questionnaire on January 13, 2012.[110] The Vesters received the Association's response in January of 2012, and at that time learned that the Association considered the Vesters to be in violation of the Declaration because of the plantings and the garbage receptacles, in addition to their driveway.[111] The record produced at trial does not indicate how the DDHR investigation was resolved.

         2. The Association Initiates Litigation in the Court of Chancery

         Prior to October 12, 2011, the Association's counsel had already begun drafting a complaint against the Vesters.[112] On February 7, 2012, the Association filed a Complaint against the Vesters in the Court of Chancery.[113] The Association brought three counts for violations of the recorded restrictions in the Declaration, and sought injunctive relief.[114] The three violations were for the driveway, the plantings, and the trash cans.[115] As described, these violations have been resolved. On August 15, 2017, the Association's claims were dismissed as moot, following Oral Argument on the Vesters' Motion for Summary Judgment on the same day.[116]

         F. Evidence in the Record of Discriminatory Intent

         The gravamen of the Vesters' Amended Counterclaim is that they have been discriminated against by the Association and the other homeowners of Henlopen Landing. The body of evidence supporting this claim comes almost entirely from Mrs. Vester's testimony. Mrs. Vester testified that other homeowners in Henlopen Landing or employees of Premier made comments to her indicating that "some people" in Henlopen Landing believed it "should be like a retirement community, "[117] that she was told that she "should be on a cul-de-sac if [she has] kids, "[118] and that she received violation notices initiated by the complaints of other homeowners because, according to Mrs. Vester, those homeowners did not like children, and/or did not approve of interracial marriage and biracial children.[119] Mrs. Vester's testimony as to those statements was not supported by the testimony of others (or record evidence), including, in some cases, those who she stated shared such comments with her.[120]

         G. The Association and the Vesters' Currently

         The Association concedes that the Vesters are currently in compliance with the Declaration and by-laws governing Henlopen Landing.[121] As mentioned, the Vesters' pool access was restored on August 17, 2014. However, the Vesters never constructed a fence enclosing their backyard. They still desire to construct a six-foot-tall fence that enclose the side door of their garage. The record does not reflect why the fencing that was approved to accommodate ZaKai was not built. Since their request to extend the fence was denied, the Vesters have provided additional information regarding ZaKai's disability to the association.[122]

         H. Procedural History

         The procedural history of this case is long; interested readers should consult the docket. Suffice it to say, this action began with the Association's Petition, filed on February 7, 2012. The action was removed to Federal Court and then remanded (to this Court).[123] After more than seven years (and a Master's report, exceptions to the Master's report, motion practice, and judicial mediation), [124] trial was held on February 19, 2019 on only the Vesters' counterclaims (which added Premier as a party to this litigation). The Petitioner's claims, as mentioned, have been mooted.

         II. ANALYSIS

         My discussion is below. I note that there are a number of inconsistencies between the allegations of the Amended Counterclaim, the pretrial stipulation, and the post-trial briefing. In an attempt to address the Counterclaim-Plaintiffs' claims comprehensively and efficiently, my analysis is organized by the three alleged statutory violations (each alleging a corresponding violation of both the Federal and Delaware Fair Housing Acts)[125] as set forth in the Amended Counterclaim. With respect to each, I set out the statutory elements of the claims as the parties have stipulated in the pretrial order.[126] I then address the arguments of the parties regarding the evidence of record as set out in the post-trial briefing, and then, to the extent necessary, any other allegations to the extent not waived.

         A. Intentional Discrimination

         In Counts I and IV of their Amended Counterclaim, the Vesters allege that the Association and Premier have intentionally discriminated against them based on their race, their familial status, and their child's disability, in violation of State and Federal Fair Housing law.[127] To establish a prima facie case of intentional discrimination the Vesters must prove that a similarly situated party, during a similar time period, was treated differently by the Association (or Premier), and that this disparate treatment was due, in part or in whole, to discriminatory intent.[128]Discriminatory intent, in turn, may be shown through either direct or circumstantial evidence.[129] If circumstantial evidence is employed, the McDonnell Douglas burden shifting framework is employed, whereby: the Vesters must show the Counterclaim-Defendants acted with discriminatory animus towards them; which shifts the burden to the Defendants to show that acts were taken with a non-discriminatory interest; which would again shift the burden to the Vesters to show that alternative practice was available, which has a less disparate impact and meets the legitimate needs of the Defendants.[130]

         1. The Suspension of the Vesters' Pool Access

         The only discriminatory act to which the Vesters point in post-trial briefing is the suspension of their access to the community pool. It is clear that for three years, the Vesters' access card was disabled, and thus the Counterclaim-Defendants treated the Vesters differently than other property owners, who had use of the pool. However, the Vesters have failed to show that their use of the pool was suspended because of their race, familial status, or disability (or other impermissible criteria).

         The Vesters applied to the ARB for permission to alter their driveway. Such alteration, per the Declaration, requires written permission of the ARB. Driveway alteration can affect storm water drainage. Such an action therefore requires "a certification of non-effect of said plans" on drainage from a professional engineer licensed in the State of Delaware.[131] The Vesters' application, however, did not attach such a certificate, nor did it even contain a statement from the contractor addressing drainage. I note that the record suggests that the ARB has been inconsistent on what it has required regarding proof that a driveway alteration will not affect drainage, from nothing, to a statement by the contractor. After the ARB considered the Vesters' application, it deferred the matter, and requested "a plan from the contractor indicating ...


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