J-A25012-24
2025 PA Super 45
MATTHEW SELBOVITZ : IN THE SUPERIOR COURT OF : PENNSYLVANIA : v. : : : STREAMLINE SOLUTIONS LLC : : DANIEL KIRK AND CLARISA KIRK : No. 1431 EDA 2023 : : v. : : : NINETEENTH STREET DEVELOPMENT : LLC, STREAMLINE SOLUTIONS LLC : AND HARMAN DEUTSH CORP. : : DAVID BUTERA : : : v. : : : NINETEENTH STREET DEVELOPMENT : LLC, STREAMLINE SOLUTIONS LLC : AND HARMAN DEUTSH CORP. : : NICHOLAS AUGER : : : v. : : : NINETEENTH STREET DEVELOPMENT : LLC, STREAMLINE SOLUTIONS LLC : AND HARMAN DEUTSH CORP. : :
APPEAL OF: EVANSTON INSURANCE COMPANY
Appeal from the Order Entered June 9, 2023 J-A25012-24
In the Court of Common Pleas of Philadelphia County Civil Division at No(s): April Term, 2019 No. 01575, Sept. Term, 2019 No. 001268, Sept. Term, 2019 No. 001351, Sept. Term, 2019 No. 001353
BEFORE: OLSON, J., DUBOW, J., and SULLIVAN, J.
OPINION BY OLSON, J.: FILED FEBRUARY 25, 2025
In this consolidated matter, 1 Appellant, Evanston Insurance Company,
appeals from the June 9, 2023 order entered in the Court of Common Pleas of
Philadelphia County that denied Appellant’s petition to intervene. 2 We affirm.
The trial court summarized the pertinent procedural history as follows:
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1 On October 12, 2020, the trial court consolidated, for purposes of discovery
and trial, the four cases identified supra and filed at trial court docket numbers April Term, 2019 No. 01575, Sept. Term, 2019 No. 001268, Sept. Term, 2019 No. 001351, and Sept. Term, 2019 No. 001353, with the case filed at trial court docket number Sept. Term, 2019 No. 001353 serving as the lead case. Trial Court Order, 10/12/20.
2 Appellant appeals as of right from a collateral order pursuant to Pennsylvania
Rule of Appellate Procedure 313(b). See Pa.R.A.P. 313(b) (stating, “[a] collateral order is an order separable from and collateral to the main cause of action where the right involved is too important to be denied review and the question presented is such that if review is postponed until final judgment in the case, the claim will be irreparably lost”); see also Bogdan v. Am. Legion Post 153 Home Ass’n, 257 A.3d 751, 755-757 (Pa. Super. 2021) (permitting an insurance company to challenge, as a collateral order pursuant to Rule 313(b), an order denying its petition to intervene for purpose of securing special interrogatories relating to damages); K.C. v. L.A., 128 A.3d 774, 780 (Pa. 2015) (stating, an “order denying intervention is one type of order which must be appealed within thirty days of its entry under Rule of Appellate Procedure 903, or not at all, precisely because the failure to attain intervenor status forecloses a later appeal” (citation, original quotation marks, and emphasis omitted)).
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In 2019, four plaintiffs[3] brought these consolidated suits against Streamline Solutions, LLC (“Streamline”), Nineteenth Street Development, LLC (“19th Street”), and Harman Deutsch Corporation (“Harman Deutsch”) for building and design defects in their new homes. Appellant [] was not a named party in any of the suits, but [it] provided defense counsel to Streamline and 19th Street under their commercial [] insurance polic[ies].
A jury trial started on June 5, 2023, and was scheduled to last ten days, including jury deliberations. [Appellant] fîled a petition to intervene, for the purpose of submitting special jury interrogatories,4 on June 7, 2023. Counsel for [Appellant] and 19th Street’s personal counsel [(that is to say, counsel who was not appointed pursuant to the insurance policy to represent 19 th Street during the trial)5] both sent letters to the trial court throughout the day of June 8[, 2023. Appellant] requested expedited review of [its] petition and [a] shorten[ed] time period [for parties] to respond from 20 days to 1 day. 19 th Street[, through its personal counsel,] objected to the last-minute nature of the petition, and requested at least 5 days to respond. The [trial] court held a hearing the morning of June 9, 2023[,] and denied [Appellant’s] petition for being so late[, i.e., unduly delayed,] as to cause undue prejudice to plaintiffs.
3 Collectively, the plaintiffs were Matthew Selbovitz, Daniel Kirk and Clarisa Kirk, David Butera, and Nickolas Auger.
4 Appellant asked to submit special jury instructions to facilitate subsequent
determinations of whether any component of the jury’s compensatory award, if any, fell outside of the scope of coverage of the insurance policies. Petition to Intervene, 6/7/23, at ¶11 (stating, “special jury interrogatories [] would ask the jury to specifically allocate any damages awarded, so that [an] award of damages, if any, can be allocated between uncovered and potentially covered damages”).
5 19th Street’s personal counsel became involved because, as discussed in greater detail infra, defense counsel appointed to represent Streamline and 19th Street under the terms of the insurance policy had a conflict of interest as it pertains to Appellant’s request to intervene.
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Trial Court Opinion, 9/25/23, at 2 (extraneous capitalization omitted). This
appeal followed.6
Appellant raises the following issues for our review:
1. Did the trial court err in denying [Appellant’s] petition to intervene for the limited purpose[] of submitting special interrogatories to the jury when the action presented numerous and substantial insurance coverage questions and [Appellant] had a right to intervene, by rule and this Court’s controlling authority, to have the jury answer factual questions that would enable [Appellant] and its insureds to allocate the jury’s compensatory damages award between uncovered and potentially covered damages?
2. Did the trial court err in denying [Appellant’s] petition to intervene for the limited purpose[] of submitting special interrogatories on the grounds it would be prejudicial when there was no prejudice to any party and the special interrogatories would have caused neither confusion nor delay?
3. Did the trial court err in denying [Appellant’s] petition to intervene for the limited purpose[] of submitting special interrogatories on the grounds it would be untimely when the petition was filed during the pendency of the action?
4. Since the trial court abused its discretion and committed an error of law in denying [Appellant] intervention, should a fact[-]finder on remand, whether [in] a new jury [trial or in a proceeding before the trial court], answer [Appellant’s] special interrogatories?
Appellant’s Brief at 3-4 (extraneous capitalization omitted).
6 The trial court did not order Appellant to file a concise statement of errors
complained of on appeal pursuant to Pennsylvania Rule of Appellate Procedure 1925(b). The trial court filed its Rule 1925(a) opinion on September 25, 2023.
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Collectively, Appellant’s first three issues challenge the trial court’s
denial of its petition to intervene. “It is well[-]established that a question of
intervention is a matter within the sound discretion of the [trial] court [] and
unless there is a manifest abuse of such discretion, its exercise will not be
interfered with on review.” Bogdan, 257 A.3d at 757 (citation omitted).
Pennsylvania Rule of Civil Procedure 2327 provides,
Rule 2327. Who May Intervene
At any time during the pendency of an action, a person not a party thereto shall be permitted to intervene therein, subject to these rules if
(1) the entry of a judgment in such action or the satisfaction of such judgment will impose any liability upon such person to indemnify in whole or in part the party against whom judgment may be entered; or
(2) such person is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the [trial] court or of an officer thereof; or
(3) such person could have joined as an original party in the action or could have been joined therein; or
(4) the determination of such action may affect any legally enforceable interest of such person whether or not such person may be bound by a judgment in the action.
Pa.R.Civ.P. 2327. Pennsylvania Rule of Civil Procedure 2329 further provides
Rule 2329. Action of Court on Petition
Upon the filing of the petition and after hearing, of which due notice shall be given to all parties, the [trial] court, if the allegations of the petition have been established and are found to be sufficient, shall enter an order allowing intervention; but an application for intervention may be refused, if
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(1) the claim or defense of the petitioner is not in subordination to and in recognition of the propriety of the action; or
(2) the interest of the petitioner is already adequately represented; or
(3) the petitioner has unduly delayed in making application for intervention or the intervention will unduly delay, embarrass[,] or prejudice the trial or the adjudication of the rights of the parties.
Pa.R.Civ.P. 2329. “Reading Rule 2329 in conjunction with Rule 2327, the
effect of Rule 2329 is that if the petitioner is a person coming within one of
the classes described in Rule 2327, the allowance of intervention is not
discretionary, but is mandatory, unless one of the grounds for refusal of
intervention enumerated in Rule 2329 is present.” Shirley v. Pennsylvania
Legis. Reference Bureau, 318 A.3d 832, 853 (Pa. 2024) (citation and ellipsis
omitted).
Assuming the non-party comes within one of the classes described in
Rule 2327, a trial court may, in its discretion, deny the request for intervention
if, inter alia, the party seeking intervention has done so with undue delay or
intervention will unduly prejudice the trial. See Pa.R.Civ.P. 2329(3); see also
Jackson v. Hendrick, 446 A.2d 226, 228 (Pa. 1982) (stating, Rule 2329(3)
“permits a [trial] court to refuse an application for intervention if the petitioner
has unduly delayed in making application for intervention” (quotation marks
omitted)); Maginley v. Robert J. Elliott, Inc., 498 A.2d 977, 979
(Pa. Super. 1985) (stating that, undue delay warrants denial of an
intervention petition); In re T.T., 842 A.2d 962, 965 (Pa. Super. 2004)
(stating, “especially where the party proposing its intervention has had ample
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notice and opportunity to protect its interests earlier, [a trial court may deny
intervention if allowing] intervention at such a late date would unduly
prejudice the interests of a party in whose favor the matter has been resolved”
(original brackets and citation omitted)). As this Court long-ago explained,
“[i]t is the general rule that an intervention is not a proper proceeding where
it will have the effect of retarding the principal suit, of delaying the trial of the
action, or requiring that the case shall be reopened for further evidence, of
changing the position of the original parties, or of complicating the case and
producing a multifariousness of parties and causes of action.” Tonkonogy v.
Levin, 162 A. 315, 316 (Pa. Super. 1932). “The question of whether the
putative intervener has been dilatory is one within the discretion of the trial
court whose decision will not be disturbed absent a manifest abuse of that
discretion.” T.T., 842 A.2d at 964; see also Jackson, 446 A.2d at 228-229;
7 Goodrich-Amram 2d § 2329:8 (stating, “[a]s a general rule, [] a long and
unexplained delay will bar intervention”).
In the case sub judice, Appellant contends that the underlying cases
against the insured-defendants “presented numerous and substantial
coverage questions” as to what portion of a damages award, if any, was
covered under the insurance policies. Appellant’s Brief at 13-14. Appellant
argues that, after the trial court determined that defense counsel (that is,
counsel provided by Appellant in accord with the terms of the insurance
policies to represent Streamline and 19th Street at trial) could not seek jury
instructions related to coverage issues because defense counsel’s “duties of
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loyalty in the action lay with the insured[-defendants [(Streamline and 19 th
Street)] and not with Appellant’s interest,]” the trial court erred in denying its
petition to intervene. Id. at 12. Appellant asserts that, based upon the trial
court’s determination regarding defense counsel’s representation obligations
(defense counsel’s duty of loyalty was to Streamline and 19 th Street), it was
the only entity that could “represent and assert its interests to sort which
portions of the jury’s compensatory award was uncovered, and which portion,
if any, was potentially covered” by the insurance policies. Id.
In response, Appellees (collectively, the plaintiffs in the underlying
causes of action) contend that Appellant filed its petition to intervene two days
after the trial started and after several of plaintiffs’ witnesses had already
testified. Appellees’ Brief at 10. Appellees assert that Appellant’s filing of a
petition to intervene at this point during the trial was prejudicial because
plaintiffs’ “expert strategy may have been different to address aspects of
damages and timing[, and, moreover, Appellant’s proposed] jury
interrogatories risked confusing the jury.” Id. Appellees argue that Appellant
admitted it was aware eleven months prior to filing its petition to intervene
that there were “insurance coverage issues.” Id. at 11. Appellees contend
that, despite knowing of the “insurance coverage issues,” Appellant, without
explanation, delayed filing a petition to intervene until after plaintiffs began
presenting their case to the jury. Id. at 11-13. For these reasons, Appellees
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assert, the trial court did not abuse its discretion in denying the petition to
intervene.7 Id. at 13.
In denying Appellant’s petition to intervene, the trial court explained,
Since [Appellant] was providing the legal defense for Streamline and 19th Street, [it] had long been aware of this action and the possible coverage issues. Nevertheless, [Appellant] did not file a declaratory judgment action nor did [it] petition to intervene and submit [its] special interrogatories until after the trial had already begun. The [trial] court noted that had [Appellant] brought [its petition] even a week before the trial [started, its] petition would have been viewed far more favorably. Plaintiffs’ counsel explained that had [plaintiffs] had the opportunity to consider the information submitted in the interrogatories sooner, they may have presented an expert on certain categories of damages or focused more heavily on issues relating to the timing of the underlying events. The [trial] court agreed.
Ultimately, granting [Appellant’s] eleventh-hour petition to intervene would have unduly prejudiced plaintiffs and likely caused a delay in the trial.
Trial Court Opinion, 9/25/23, at 4 (record citations and extraneous
capitalization omitted).
Upon review, we discern no abuse of discretion in the trial court’s order
denying Appellant’s petition to intervene on the grounds that Appellant unduly
delayed presenting its petition to intervene and intervention would prejudice
the trial and the adjudication of plaintiffs’ claims. The record demonstrates
7 Counsel, who represented the individual interests of 19 th Street with regard
to the petition to intervene, filed a letter with this Court on September 3, 2024, indicating that 19th Street “joins in the arguments made by [Appellees] and incorporates their brief as through fully set forth herein.” 19 th Street Letter, 9/3/24.
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that defense counsel appointed by Appellant pursuant to the terms of the
insurance policies entered his appearance on September 15, 2020. See Entry
of Appearance, 9/15/20. Thus, at some point prior to September 15, 2020,
Appellant became aware of the nature of the claims against its insureds and
that insurance coverage under its policies may be triggered by the claims
thereby requiring Appellant to provide a defense.
On July 14, 2022, the trial court entered an order that, inter alia,
directed “all person who have the authority to negotiate and settle the case,”
which included the parties, an insurance representative, and anyone who is
needed to ratify a settlement agreement, to participate in a mandatory
settlement conference. Trial Court Order, 7/14/22. As counsel to Appellant
stated, Appellant put Streamline and 19th Street on notice in July 2022, and
again in December 2022, that there were “coverage issues,” namely that some
aspects of potential recovery by the plaintiffs may not be covered under the
terms of the insurance policies. N.T., 6/9/23, at 20; see also id. at 25
(stating, “I [(referring to Appellant’s counsel)] clearly put the parties on notice
that there were issues with coverage”). Thus, as early as July 2022 (and
perhaps earlier), Appellant understood that there was a need for special jury
interrogatories to facilitate a later assessment of which components of any
compensatory damage award would be covered under the terms of the
insurance policies.
On July 22, 2022, the trial court scheduled jury selection to commence
on June 1, 2023, and the start of trial on June 5, 2023. See Trial Court Order,
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7/22/22, see also Trial Court Order, 7/26/22. On June 7, 2023, after the
start of trial, Appellant filed a petition to intervene “for the limited purpose of
proposing special jury interrogatories that would ask the jury to specifically
allocate any damages awarded, so that [an] award of damages, if any, can be
allocated between uncovered and potentially covered damages insured by the
[insurance policies.]” Petition to Intervene, 6/7/23, at ¶11. Appellant
asserted, in its petition, that its “interests are not protected by any party to
the [a]ction, and allocation of any verdict is needed to avoid a general verdict
that would make it difficult, if not impossible, to determine what damages, if
any, are potentially covered by the [insurance policies] and which, if any, are
excluded from coverage.” Id. at ¶12.
To support its petition to intervene, Appellant relied on this Court’s
decisions in Bogdan, supra, and Butterfield v. Giuntoli, 670 A.2d 646
(Pa. Super. 1996) for the proposition that “an insurer should seek special
interrogatories to address issues as to whether damages that may be awarded
are within or outside of the coverage afforded by its policies.” Petition to
Intervene, 6/7/23, at ¶39. While we agree that Rule 2327 permits an insurer
to intervene in a case for purpose of pursuing special interrogatories to
address allocation of any damages awarded, i.e. damages covered by the
policy verses damages not covered by the policy, such intervention does not,
in accord with Rule 2329, come without discretionary limitations. See
Shirley, 318 A.3d at 853; see also Pa.R.Civ.P. 2327, Pa.R.Civ.P. 2329.
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In Butterfield, supra, a jury, in the underlying medical malpractice
case, awarded, inter alia, punitive damages as part of a general verdict in
favor of Butterfield and against four defendant-physicians and the hospital
that employed the four physicians. Butterfield, 670 A.2d at 648. While the
interests of the hospital’s insurer were represented during the underlying
medical malpractice trial,8 none of the parties, including the insurance
company, requested special interrogatories to confirm whether the jury
imposed direct or vicarious liability against the hospital. Id. Butterfield, upon
receiving judgment in her favor in the underlying case, filed a writ of execution
to garnish and execute upon the debt. Id. at 649. On cross-motions for
summary judgment filed by Butterfield and the insurance company in the
garnishment action, the trial court found that Butterfield “could not meet [her]
burden of proof on the issue of whether the [insurance] policy covered the
punitive damages [entered] against [the hospital] because [she] could not
show whether the damages were assessed vicariously, for which there may
be coverage under Pennsylvania law, or whether the damages were assessed
directly, for which coverage [was] precluded.” Id. at 650. As such, the trial
court denied summary judgment in favor of Butterfield and granted summary
judgment in favor of the hospital’s insurance company. Id. On appeal, this ____________________________________________
8 The hospital’s insurer was “present in the courtroom every day of the trial[,
attended] all discussions held in chambers between the parties[, and] was in regular contact outside of court with the defense attorneys handling the case. In essence, [the insurer] fully participated in [the] case short of entering [its] appearance.” Butterfield, 670 A.2d at 658.
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Court found that the insurance policy was ambiguous and neither specifically
included nor excluded coverage for punitive damages. Id. at 653. Finding no
specific exclusion of coverage for punitive damages in the policy, this Court
held that Butterfield met her burden of showing potential coverage of the claim
for punitive damages and that the burden shifted to the insurance company
to, inter alia, prove that the jury assessed punitive damages solely on the
basis of direct liability and that such damages were excluded under the policy.
Id. at 654, 657. Ultimately, this Court held that the insurance company did
not satisfy its burden. Id. at 658. This Court reasoned that, “[w]hile in court,
in chambers, or through the defense attorneys handling the case, [the
insurance company] had the opportunity to request specific instructions on
the question, specific interrogatories, or special verdict forms.” Id. Moreover,
this Court explained that, pursuant to Rule 2327(1), the insurance company
had the right to seek intervention, if necessary, to resolve the issue. Id. at
658 and n.15. This Court found that the insurance company “had the
opportunity to resolve the issue by submitting specific instructions, specific
interrogatories before or immediately after the verdict, or by seeking
intervention, yet declined to do so based on its own independent assessment
of the law.” Id. at 658.
While we agree with Appellant that Butterfield, supra, stands for the
proposition that an insurance company, such as Appellant, has the right to
seek intervention, pursuant to Rule 2327(1), for the purpose of submitting
special interrogatories regarding damages; Butterfield does not go so far as
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to automatically permit intervention by an insurance company for the
purpose of submitting special interrogatories at any point during the pendency
of a case. Rather, the Court in Butterfield simply reenforced that Rule 2327
permits a non-party, such as Appellant, to seek intervention but did so without
analyzing (because intervention was not actually sought in Butterfield)
whether intervention would satisfy the requirements of Rule 2329, i.e., the
absence of undue delay and prejudice. See Shirley, 318 A.3d at 853
(requiring an analysis under 2329 if the party seeking intervention satisfies
Rule 2327).
Similarly, we find Appellant’s reliance on Bogdan, supra, to be of no
avail. In Bogdan, Bogdan brought an action against the American Legion
Post 153 (“American Legion”) for negligence, negligent security, and punitive
damages. Bogdan, 257 A.3d at 753. The American Legion’s insurance
company provided the establishment a legal defense in the underlying suit,
subject to the right to deny coverage under, inter alia, a punitive damages
exclusionary clause in the insurance policy. Id. While the underlying case
was still in the discovery stage, the insurance company filed a petition to
intervene “for the purpose of securing a special jury verdict form and answers
to interrogatories to allow a clear determination of the basis for the jury’s
verdict[.]” Id. at 754. The trial court denied the insurance company’s petition
to intervene pursuant to Rule 2329(3), finding that the insurance company
acted with undue delay in bringing the petition. Id. at 754, 757-758. The
trial court reasoned that, without explanation, the insurance company filed its
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petition to intervene nearly two years after the underlying lawsuit commenced
and, in so doing, wasted two years in which the insurance company “could
have been a party and pursued a litigation strategy to ensure that its interests
were protected.” Id. at 757. In finding that the trial court abused its
discretion in denying the petition to intervene, the Bogdan Court found that
the insurance company “had no reason to be involved until special
interrogatories in relation to the verdict could be submitted[ and, therefore,]
could not have ‘wasted two years’ as the parties still had not finished the
discovery stage at the time [the insurance company] filed its petition to
intervene.” Id. at 758.
We find the circumstances under which the Bogdan Court reversed the
trial court’s order denying intervention to be factually distinct from the case
sub judice. In Bogdan, as this Court explained, the petition was filed before
the completion of discovery and before the start of trial while, in the
case sub judice, Appellant filed its petition to intervene after the completion
of discovery and after the start of trial at a point when the plaintiffs had
already presented a portion of their case-in-chief. Id. As the Bogdan Court
explained, it was not undue delay for the insurance carrier to forgo seeking
intervention because discovery was still ongoing and the time for the
submission of special interrogatories had not yet ripened. Id.
In the case sub judice, as the trial court found, and the record supports,
Appellant did not file its petition to intervene until almost 11 months after it
informed Streamline and 19th Street of coverage issues that necessitated
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special interrogatories, and only after the start of the trial following plaintiffs’
presentation of a portion of their case-in-chief. See Trial Court Opinion,
9/25/23, at 2; see also N.T., 6/9/23, at 14. Moreover, the record reveals
that, by the time Appellant submitted its petition to intervene, the parties had
already begun to formulate jury instructions, as evidenced by the submission
of points of charge prior to the start of trial, on May 25, 2023. Under these
circumstances, we concur with the trial court that Appellant acted with undue
delay in filing its petition to intervene for the limited purpose of special
interrogatories, because Appellant knew, at least as early as July 2022, of
coverage issues surrounding a potential general verdict in favor of plaintiffs.
See Pa.R.Civ.P. 2329(3).
We also concur with the trial court that intervention at this stage would
have been prejudicial to the plaintiffs as they had already presented a portion
of their case. As counsel for plaintiffs stated, if Appellant’s petition to
intervene had been filed prior to the start of trial, plaintiffs “may have
presented an expert on certain categories of damages [or] expert testimony
that focused more heavily on [] certain timing issues [of damages, which may
have affected the coverage of those damages under the terms of the insurance
policies].” N.T., 6/9/23, at 14-15; see also Trial Court Opinion, 9/25/23, at
4.
Order affirmed.9 ____________________________________________
9 In light of our disposition herein, we dismiss Appellant’s fourth issue as moot.
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Date: 2/25/2025
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