Archive for July, 2011

Lack of Prosecution in Foreclosure Cases

About a month ago, I had an interesting hearing on a Motion to Dismiss for Lack of Prosecution.  Ten months had passed with no record activity (nothing at all in the court file), so I filed a Notice of Intent to Dismiss for Lack of Prosecution, as contemplated by Fla.R.Civ.P. 1.420(e).  In the ensuing sixty days, the only document that appeared in the court file was a Notice of Appearance (by a new attorney for Plaintiff).  That sure sounds to me like a “lack of prosecution,” huh?  One year and the only thing the Plaintiff did was hire a lawyer. 

I filed a Motion to Dismiss for lack of prosecution, citing Chemrock Corp. v. Tampa Electric Co., 23 So. 3d 759 (Fla. 1st DCA 2009).  Chemrock held that a document filed within the 60-day window after a notice of intent to dismiss would not preclude dismissal unless it was designed to advance the case towards judgment.  Under a littany of cases (interpreting the old version of the rule, which Chemrock deemed to apply to the 60-day window), a Notice of Appearance did not qualify. 

Opposing counsel cited Pagan v. Facilicorp, Inc., 989 So. 2d 21 (Fla. 2d DCA 2008) and Edwards v. City of St. Petersburg, 961 So. 2d 1048 (Fla. 2d DCA 2007).  These cases are in direct conflict wiht Pagan, as they hold that any paper filed in that 60-day window precludes dismissal for lack of prosecution, regardless of whether it advances the case towards judgment. 

So here we have two different appellate courts, and they disagree about how the rule should be applied.  Personally, I think the analysis and rationale in Chamrock is the far better way to apply the rule.  As the First District explains, if the law is not as it held, a plaintiff “will be able to continue the litigation perpetually by filing similar acknowledgements (“Yes — we have still not done anything”) whenever a notice of lack of prosecution is filed.”  23 So. 3d at 673. 

In other words, if Chemrock is not the law, then a plaintiff can do nothing to advance a case towards judgment but can nonetheless prevent dismissal of the case merely by filing any innocuous paper (Notice of Unavailability of Counsel, Notice of Change of Address, etc.).  Such a rule would have no “teeth” whatsoever, as it would be virtually impossible to dismiss a case for lack of prosecution, even where the plaintiff is doing nothing. 

Under my example, above, a plaintiff could do nothing for 10 months, but then right before the 60-day window passes, file the Notice of Appearance and avoid dismissal. 

With what is transpiring in foreclosure cases today, our court system desperately needs Rule 1.420(e) to be applied as the First District held in Chemrock.  Rightly or wrongly, trial court judges are desperately trying to find ways to adjudicate/dispose of cases.  Allowing Rule 1.420(e) to have some “teeth,” as it did for many years prior to the amendment of the rule in 2006, would enable judges to appropriately dismiss cases, ease the burden of clogged dockets, and ensure a revenue stream to the courts via additional filings.  After all, more dismissals for lack of prosecution (without prejudice) means more filings and more filing fees.  This would be an incredibly pragmatic way to deal with a huge, state-wide problem.

So what does the Florida Supreme Court do?  Disapproves the First District’s decision in Chemrock and approves Pagan and Edwards.  What does this mean?  A plaintiff can file any piece of paper in the sixty-day period after 10 months of no activity and prevent dismissal.  In other words, unless the plaintiff’s lawyer is totally unconscious for a year, a dismissal for lack of prosecution is basically impossible. 

With all due respect, this is the absolute wrong time for such a rigid rule.  It’s totally impractical.  Our courts are flooded with an unprecedented number of foreclosures – many of which have had little or no activity for long periods of time – and now is when the Florida Supreme Court makes it harder to dismiss cases? 

I find the last paragraph of Justice Pariente’s concurring opinion quite telling:

Unfortunately, the significantly diminished resources available to the trial courts, including lost case managers and the flood of mortgage foreclosure cases, have taxed our trial courts to the limit, making active case management more difficult in all cases.  Regardless, the bottom line is that these problems cannot be solved by using Rule 1.420(e) to dismiss cases where the litigants intend to continue to prosecute the case to a conclusion.

Justice Pariente acknowledges the problem, but she refuses to create a rule to help fix it.  With all due respect, Justice Pariente (and every other justice except for Justice Quince, who appropriately dissented), you missed this boat here. 

I understand the rationale for the Court’s decision.  However, the Court’s refusal to ”use Rule 1.420(e) to dismiss cases” will only cause trial court judges to adjudicate/dispose of cases in other ways.  In other words, if the judges can’t dismiss cases under Rule 1.420(e), then they’re going to dispose of cases in other, less appropriate ways.

To illustrate, I’ve blogged previously about how Florida’s Fifth Judicial Circuit (Hernando, Marion, Lake) was employing a procedure whereby if a Plaintiff was not prosecuting a case, the judges would “administratively close” the file.  There is absolutely zero legal authority for such a procedure – it’s something that the judges are simply not allowed to do.  In fact, a recent decision out of the Fourth District held as much:

the trial court may have considered the case dormant and simply ordered the closing of the file, a procedure not found in the Florida Rules of Civil Procedure or case law.  In doing so, the plaintiff’s case fell into a dark void in the courthouse.  Florida RCP 1.420(e) articulates the correct process to be utilized by litigants and trial courts when a case has been dormant too long.  The trial court erred in directing the clerk to close the file. 

Arzuman v. Budin, 36 FLW D371 (Fla. 4th DCA 2011). 

When I first saw this procedure being employed, I inquired with court personnel in the Fifth Circuit about why this was being done.  Two different personnel admitted to me that the court was employing this procedure because it enabled them to report a case as “closed,” i.e. not active, even though the case was not over.  In other words, the court would look better to the legislature (or whomever else those numbers were reported to). 

Suffice it to say I was not pleased.  After all, these Orders which “administratively close” a case are terribly biased towards plaintiffs, as they enable a case to be “closed,” yet allow the case to be re-opened whenever the plaintiff chooses, even years later (as opposed to dismissed, which requires a new lawsuit and a new filing fee).  Why should the plaintiff, after months/years of inactivity, get to wake up one day and say “OK, I’m ready to prosecute my case now?” 

Months ago, I had a lengthy discussion/argument with the General Counsel for the Fifth Circuit about this procedure.  When the Budin case came out, I thought for sure the Fifth Circuit would change its procedure on an administrative level.  Nope.  This week, I received another Order Administratively Closing Case.  So I wrote the General Counsel another email, reminding her of Budin and asking that this procedure cease. 

After a series of unpleasant emails about it (where she berated me for criticizing the judiciary and said she felt “compelled” to report me to The Florida Bar, yet, ironically, accused me of trying to intimidate the court), she told me she had discussed the matter with the Chief Judge and that he was not going to change the procedure.  My remedy was to bring an appeal, i.e. to handle the issue on a case-by-case basis.  To clarify, I had informed her of Budin, she talked to the Chief Judge, and yet the Court was continuing to employ a procedure that, if we’re being honest, clearly has no legal basis. 

So, Justice Pariente, do you see the point now?  You may think Rule 1.420(e) shouldn’t be “used to dismiss cases.”  But the trial court judges in Florida are so inundated with cases that your refusal to create a rule enabling them to dismiss dormant cases has resulted in trial court judges employing procedures like this … “closing” cases administratively without any legal basis to do so. 

But it’s worse than that.  The backlog of cases (and having their hands tied on dismissals) is causing judges to do other inappropriate things as well.  In Hillsborough, judges have been denying motions without notice and without a hearing.  As I write this, I find myself writing a letter to the judges in Hillsborough trying to convince them that I should get a hearing on my motions to dismiss before the judge denies them.  After all, even the senior judges (who were soundly cricitized by many) were often granting these motions. 

Respectfully, is that what this has come to?  I have to convince judges to give me a hearing (on motions that, in similar cases, have often been granted)? 

Look at it this way … Which is better – adopting a version of Rule 1.420(e) that has some “teeth,” enabling cases to be dismissed where they’ve been dormant, or leaving so many dormant cases active that judges are so overwhelmed they feel compelled to dispose of cases by denying motions without notice and without hearing? 

Which is better – adopting a version of Rule 1.420(e) that has some “teeth,” and enables cases to be dismissed when they’ve been dormant, or having judges arbitrarily, with no procedure/rule in place whatsoever, choose to “administratively close” a case without notice, at their 100% whim/discretion? 

I feel, respectfully, like the Florida Supreme Court is out of touch with what is going on in trial courts throughout the state.  It’s as if they’re parents who are talking to their child about sex/abstinence for the first time and the “child” is 23 and just graduated college. 

Florida’s court system is a mess.  In some senses, it’s a free-for-all, with different judges in different counties employing various “procedures” to dispose of cases.  It’s long past time that the Florida Supreme Court was willing to take stock of the situation and employ rules that can help everyone get through the mess.

Mark Stopa

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Continuances of Summary Judgment Hearings

I’ve said many times that it’s best to retain Stopa Law Firm (or any foreclosure defense attorney, for that matter) from the inception of the foreclosure lawsuit, as otherwise, the homeowner risks waiving viable defenses to foreclosure.  That said, many homeowners retain us just before a hearing is scheduled on the bank’s Motion for Summary Judgment.  If you haven’t retained a lawyer already, it is imperative that you do so before the summary judgment hearing, as otherwise you’re unlikely to convince the judge to deny summary judgment.  In other words, if you don’t retain a lawyer before the summary judgment hearing, you might as well say goodbye to your house. 

In recent weeks, I’ve seen an interesting dynamic take place when we are retained and a summary judgment hearing has already been scheduled.  In this situation, i.e. where the bank thought the homeowner was unrepresented, set a summary judgment hearing, and then we appear as counsel, we quickly file a flurry of documents upon being retained – typically a Notice of Appearance, Motion to Vacate Default, Motion to Dismiss, pertinent discovery, a Motion to Continue the Summary Judgment hearing, an affidavit in opposition to summary judgment, and objections to the propriety of the bank’s affidavits. 

Initially, my goal is to make opposing counsel and/or the presiding judge realize the hearing should not proceed, mostly because (1) it does not belong on an uncontested, mass-motion calendar (since my arguments will take 5-10 minutes at minimum, and most judges don’t want those matters heard on those calendars); and (2) the motion to vacate default and motion to dismiss should be heard first, prior to the Motion for Summary Judgment. 

Often, opposing counsel agrees, and appropriately so.  After all, a homeowner’s right to defend a foreclosure case is vastly different depending on whether a default is in place, so it makes sense to have the hearing on this motion first, before summary judgment.  To illustrate, in a situation just like this, the Chief Judge of Florida’s Twelfth Circuit (Sarasota and Manatee Counties), Lee Haywood, agreed with me on this point, issuing an Order cancelling the summary judgment hearing, ruling the motion to vacate default should be heard first.  Notably, he did so without the need for a hearing – that’s how clear the issue is.

This was a breath of fresh air – a judge reviewing the file and appropriately ruling the motion for summary judgment shouldn’t be heard at a mass-motion calendar with other motions pending.  Why was that so refreshing?  Well, unfortunately, it doesn’t always work that way.

I recently had a similar situation where I was retained shortly before a summary judgment hearing.  Opposing counsel wouldn’t agree to re-set the hearing (ignoring my plea that the motion to vacate default be heard first), and I couldn’t get a hearing on our emergency motion for continuance.  So I attended the hearing and waited for an hour on a rocket-docket of uncontested cases for my case to be called.  When it was, things unfolded just as I expected – my hearing was continued; the judge didn’t want to hear the contested motions on that mass-motion calendar. 

How frustrating – I sought a continuance of the hearing, was unable to procure one, and waited for over an hour to argue, only to be told the hearing was continued. 

Anyway, over my staunch objections, the hearing was re-set for just two weeks later (meaning I still didn’t have enough time to get a hearing on the motion to vacate default before the summary judgment hearing).  So I went to a second summary judgment hearing, waited for nearly an hour, and argued against summary judgment.  As I did, opposing counsel argued the default was still in place, and I, of course, argued we had moved to vacate the default.  So what did the judge do?  Continued the summary judgment hearing to enable the motion to vacate default to be heard.  So what was the end result?  I attended two different hearings, before two different judges, opposed summary judgment both times, only to have the court rule what I had suggested from the outset, that the hearings be cancelled until the motion to vacate default could be adjudicated.  Perhaps more frustrating, when I tried to object to another continuance (since the summary judgment motion had already been heard twice, at counsel’s insistence), the judge refused to let me be heard, prompting me to write this letter to the judge.

So what’s the moral of the story? 

First, even if a summary judgment hearing is set (and you haven’t retained counsel), don’t give up.  If you hire a lawyer, even at the last minute, there’s a fair chance the summary judgment hearing will be continued.  Often, the judge may not agree right away, but invariably, if a motion to vacate default is pending, it’s like the court will require that motion to be heard first, resulting in a continuance of the summary judgment hearing.  And while a continuance may not sound great, it’s certainly better than the motion being granted and a Final Judgment being entered.  (Of course, if there is no continuance and the hearing proceeds, you still have a fighting chance of having the motion denied.)

Second, judges should look at the entire picture in a case, not just the specific issue set before him/her.  Judge Hayworth did this quite well, appropriately ruling the summary judgment hearing should not take place until the Motion to Vacate Default was adjudicated.  Other judges should do the same.  Respectfully, I shouldn’t have had to go to court, twice, sit for an hour, twice, and oppose summary judgment, twice, only to have the court finally rule that the Motion to Vacate Default should be heard first, particularly when that’s what I had requested all along.

Mark Stopa

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What is the Downside of Strategic Default

Below is a great question I just received on this blog and my response.


I am up to date on my mortgage. Under the water +60K
Got divorced, things are getting more difficult to pay but still making it
Credit score is excellent
I am approved to a buy a primary residence much cheaper than what I owe now and I will rent the one I am living by doing this will save like 40% of mortgage
If I rent the one I am living and don’t pay the bank I will eventually foreclose but will have saved some $
My credit will be affected for 7 years.
Crunching the numbers it makes sense to me.

My assets will be all on retirement savings 401k and IRA
What is the downside of this? Thanks.


This is a great question, and I suspect many people are in this type of situation. 

If you’re all set to purchase a similar home for less than you owe on your current home, the downside to defaulting on the home you currently have is that the bank forecloses (eventually), obtains a deficiency judgment against you, and collects on that judgment because/if you have assets.  The younger you are, and the more assets you have, the greater the risk.  The older you are, and the fewer assets you have, the less the risk. 

For instance, if you’re 60, and your only assets are the new home you’re buying (your homestead) and your retirement accounts, then the downside here is quite minimal – the bank probably won’t ever collect on the deficiency even if it gets one. 

If you’re 35 and have assets, the risk is greater.  In that scenario, you’d have 30 years left in the work force, so the risk of garnishing wages is higher (since judgments are good for 20 years in Florida, and you’ll undoubtedly be earning wages for many years to come).  However, even in that scenario, it’s quite possible the bank won’t pursue a deficiency, that you can settle the case without a deficiency, or that you could reduce or eliminate the deficiency through a bankrupcy. 

There is no right or wrong answer in this type of scenario – it depends on each person’s situation.  Hopefully, these generalities give you a good idea on how to proceed.

Mark Stopa

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Failure to Amend = Dismissal With Prejudice

I’ve said many times that if you defend your foreclosure case then you never know what good may come of it.  Today, I saw another example of that.

I filed a Motion to Dismiss early in 2011.  It was pretty standard.  The motion was granted, and the judge’s Order gave the plaintiff 20 days to amend.  That was over two months ago and the plaintiff never amended.  So I got creative.  I wrote this letter to the judge, enclosing this Renewed Motion to Dismiss

As the motion reflects, I asked that the judge enter an Order dismissing the case with prejudice unless the plaintiff amended within a certain number of days.  In response, the judge did exactly what I asked – he entered this Order saying the case was dismissed with prejudice unless the Plaintiff filed an Amended Complaint within 10 days. 

Last week, the 10 days passed and the plaintiff did nothing.  Hence, this case has been dismissed with prejudice. 

Reasonable lawyers, and even reasonable judges, can disagree about what “with prejudice” means in the context of mortgage foreclosure cases.  However, it is clear this case is over, and the homeowner, at worst, has an argument that the plaintiff is barred from re-filing a new lawsuit.  

Note that there wasn’t anything terribly special about what I did here.  I didn’t prove the bank committed fraud.  I didn’t prove any nefarious acts.  I simply defended the case and utilized the rules of procedure to my advantage.  Consider this another illustration of why you should defend your foreclosure case!

Mark Stopa

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A typical inquiry, and my response

Below is a comment posted on this blog and my Response, below. 

The question here is not atypical, so my Response is something that can be applied universally.

In 2009 I became unemployed when the company I worked for almost went bankrupt and remained unemployed for just about one year. After spending just about all of my savings in saving the home and other financial obligations, I applied for a bank modification (IndyMac Bank) and was accepted. Much to my surprised the bank decided to lump the unpaid months to the back end of the mortgage raising it to @ $268K. The house is worth in today’s market approximately $180K.

Since the employment opportunities here in the State of Florida were extremely poor within my line of work, namely Aerospace, I had no choice but to accept a position in Cincinnati, OH that paid a salary commensurate with my experience. I spent eleven months paying for two households with the hope that the situation would improve in Florida. Finally, about three months ago I was able to obtain an interview with a company located in the Jacksonville area, and subsequently, was extended a job offer. The job offered paid approximately $3,000 less than my salary in the previous company.

Again, I found myself paying for two households while struggling to make ends meet. I accepted this position simply because it would allow me to be with my wife more often than when I was living in OH. We are planning to relocate to the Jacksonville area but I am trapped with the current home.

After much deliberation with my wife, we have decided that it is not worth our while to continue to hang on to the house when the possibilities of turning it into a positive investment are quite remote. We are not gamblers by nature. Our decision is to stop making payments on the house and eventually foreclose on the property. I am current on my payments but would like to explore my options including eliminating the possibility for the bank to pursue a financial deficiency against us. I did speak to your receptionist this morning but I wanted to follow my voice message with this e-mail.

Your legal counseling regarding this matter will be greatly appreciated.


I cringed when I read your first paragraph.  I hate seeing people tell me they spent all their savings on a mortgage that, in retrospect, they clearly can’t afford.  Obviously you cannot change the past, but this is a good illustration to anyone else reading this that depleting savings to pay a mortgage is almost never a good idea.  As for you, I hope you see that it’s not a good idea to keep spending any savings you have left. 

I also cringed when I read how you were making payments under a temporary modification.  I’ve heard horror story after horror story about this.  As you indicate, even in a best-case scenario, all that happens is the arrearages get put on the back of the mortgage.  (Worst case is that you keep paying and get foreclosed anyway, not realizing the foreclosure suit was proceeding forward.)  Basically, a temporary modification is like a doctor putting stitches on a wound that needs surgery or a tourniquet – you can keep trying to re-stitch the wound, but eventually, something else is needed to fix the problem. 

Given your situation, it certainly seems reasonable for you to go with your instinct – stop making payments, stop the bleeding, try to save money, and try to get a deficiency waiver.  Eventually, you’ll save enough money that you can afford to start somewhere fresh, with a new house, and unlike now, you won’t be paying a lot more for that house than it’s worth.  Yes, there is risk here (i.e. the risk you don’t get a deficiency waiver), and that doesn’t sound like your preference, but from the situation you have described, I’m not sure you have much choice. 

We’d be happy to help you as you embark on this next stage of your financial future.

Mark Stopa

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Quantitative Easing Explained

This video is making the rounds on Youtube. 

Yes, it’s a cartoon, but if it weren’t a must-watch, I wouldn’t be putting it here. 

Mark Stopa

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How the Casey Anthony Verdict Applies in Foreclosure Defense

At first blush, today’s verdict in the Casey Anthony trial appears to have nothing to do with foreclosure defense.  After all, Casey Anthony is a murderer (in all probability), whereas, contrary to what banks want everyone to believe, homeowners in foreclosure certainly aren’t criminals. 

Today’s “not guilty” verdict is another illustration, though, of one inescapable truth – when a case goes to trial, you never know what a jury is going to do.  Even in a case like Casey Anthony where the evidence seems strong (30 days without reporting child missing, out partying, puts dead body into trunk, then trash bag, duck tape over mouth, numerous lies to police), you just never know for sure how the judge/jury is going to rule.  

Yes, most foreclosure trials are bench trials (with a judge, not a jury), but the moral is still the same.  If you go to trial, you never know for sure what the outcome will be.  Here, the evidence was viewed as overwhelming to most observers, yet the verdict was a “not guilty.”

Everyone who works in the criminal justice system is well aware of this uncertainty.  Banks and their lawyers are as well.  And that’s the moral of the story – homeowners need to recognize the uncertainty and use it to their advantage in foreclosure lawsuits.  How?  Simple.  Just like Casey Anthony did, force the bank to go to trial. 

We all know (now more than ever) that the outcome at trial is never certain.  Banks and their lawyers know that as well.  Hence, if you’re a homeowner, you should force the bank to prove its entitlement to foreclosure – through trial if necessary.  If you’re willing to hold their feet to the fire, you never know (as we saw today) what kind of unexpected result you might procure. 

So if you’re thinking about whether to defend a foreclosure, remember Casey Anthony.  Don’t remember her for the vile, disgusting things she did; remember her for the way the criminal justice system sometimes creates results that you might not anticipate, even if you think you have no defense.

Mark Stopa

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July 4, in the Words of our Forefathers

July 4.  Independence Day.  A federal holiday.  A time for family and friends, fireworks, picnics, and barbecues.  But do we ever think about what the day actually means? 

Independence Day commemorates the adoption of the Declaration of Independence on July 4, 1776, declaring independence from the King of Britain.  You may think it’s archaic and inapplicable to modern events, but take a moment to read it.  I just did, and it’s really compelling, particularly the Preamble.     

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are Life, Liberty, and the pursuit of Happiness.  That to secure these rights, governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any form of Government becomes destructive of these ends, it is the Right of the People to alter or abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.  Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed.  But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Depotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

This is, of course, our forefathers’ explanation for declaring our independence from Britain.  Read the reasons closely.  Anything jump out at you?  It sure did for me…

– Governments are formed by the people, deriving their powers from the people, to ensure everyone’s right to life, liberty, and the pursuit of happiness.

– A change in government should not be made lightly.  But when a government engages in repeated abuses, it is the right if not the duty of the people to abolish that government and create a new one. 

As you celebrate July 4, think about these words; they should be a wake-up call for every American. 

Our government is supposed to be run by the people for the people.  Not Wall Street.  Not the rich and powerful.  The people.  Yet it feels more and more like our government is run by the rich and powerful, for the rich and powerful. 

We are trillions in debt.  Who has this helped? 

Millions of Americans have been foreclosed.  Who has this helped? 

Wall Street took billions of dollars of our money.  Who has this helped? 

Millions of Americans are struggling with foreclosure while Wall Street rakes in record profits.  What is our government doing to fix this?

If our forefathers were still alive, I wonder if they’d be leading a new revolution.  If that sounds radical or extremist, think about what’s happening today and read the words of our forefathers:

When a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute Depotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their security.

I still think our country is the best in the world, and I’m not trying to start a revolution.  What I’m saying is that it’s up to all of us to take action to speak out against the repeated abuses in Wall Street and our government.  It’s our government, and it’s up to all of us to fix it.  It won’t be easy, but if we don’t try, then we might as well have never declared our independence from Britain in the first place.

Mark Stopa

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