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Ruvalcaba v. Mega Construction Corp.


July 14, 2008


On appeal from Division of Workers' Compensation, Department of Labor, Claim Petition No. 1994-000029.

Per curiam.


Argued April 7, 2008

Before Judges Graves and Sabatino.

Mega Construction Corporation (Mega) appeals from a judgment of the Division of Workers' Compensation which awarded benefits to petitioner, Jesus Ruvalcaba, for a total permanent disability, and awarded a counsel fee to petitioner's attorney in the amount of $36,000, of which respondent was required to pay $21,600 (sixty percent).

On appeal, respondent presents the following arguments:











After considering these contentions in light of the record, the applicable law, and the arguments of counsel, we affirm the compensation judge's determination that petitioner is one-hundred percent disabled because that determination is fully supported by substantial credible evidence. However, given the absence of findings regarding the reasonableness of the counsel fee award, we remand that issue to the judge of compensation for reconsideration.

Petitioner was born on August 12, 1944, in Galeana, Mexico. He possesses no formal education, and spent his childhood assisting his father as a farmer. In 1971, petitioner left Mexico for the United States, where he worked in Chicago, Illinois planting "grass and little trees" on the freeways and around the city. In between trips back and forth to Mexico, petitioner was subsequently employed in a cardboard factory and with Nationwide Beef, before finding employment as a "drywall finisher" in Houston, Texas in 1977. From Houston, petitioner moved to Dallas, and then to San Antonio, before relocating to New Jersey in 1986.

In New Jersey petitioner "worked for other companies first," but he ultimately found employment with Mega, performing the same drywall finishing duties he learned in Houston. On October 11, 1993, Mega "sent [petitioner] to tape a house" but failed to provide him with the scaffolding necessary to reach the sixteen foot high ceiling. Petitioner improvised by constructing a makeshift platform out of planks. On the first day, this structure worked without incident. When petitioner arrived at the worksite the next day, "the sweepers or cleaners had taken everything down and thrown it out into the dumpster," so he retrieved more planks and once again constructed his own scaffolding. While performing his drywalling duties, one of the planks broke causing petitioner to fall eleven or twelve feet to the floor.

As a result of the fall, petitioner suffered "fractures and dislocations at C5-6 and C6-7" vertebras in his neck, two broken wrists, and injury to his left shoulder. On October 25, 1993, petitioner "underwent a massive fusion from the base of his skull almost at C5 all the way down to T1, stabilizing it with wire as well as bone grafting" from his hip. Following the accident, petitioner was in the hospital for "approximately one month."

Plaintiff filed a workers' compensation claim, and in 1995, he settled with Mega "for a 60 percent partial total award." Thereafter, the parties agreed to modify the settlement to reflect a seventy percent partial total award, and the modification was memorialized in a court order dated January 17, 2002. The last compensation payment made by Mega occurred on February 20, 2003. Up to that date, Mega had paid petitioner $29,369.57 in temporary disability and $168,840 in permanent disability. Pursuant to those awards, petitioner's attorney received counsel fees totaling approximately $31,000.

In June 2005, petitioner filed an application with the Division of Workers' Compensation to modify the January 17, 2002, compensation award. A trial was held before a workers' compensation judge on April 21, August 21, August 25, October 27, and November 17, 2006. Petitioner testified on April 21, 2006, and four physicians, two for petitioner and two for Mega, testified on each of the subsequent dates. On May 4, 2007, the compensation judge issued an oral decision finding petitioner completely and totally disabled, and on May 25, 2007, the compensation judge awarded a counsel fee to petitioner's attorney in the total amount of $36,000.

Petitioner testified at trial, through an interpreter, that prior to the accident he never had any medical problems. However, as a result of the accident, petitioner testified he has been unable to work. Since the last increase in his disability award on January 17, 2002, petitioner stated his injuries "hurt[] a lot more, and it also hurts when I drive, and for example, if I want to look to the left, I have to take my body and move it . . . to be able to see on the left side." Petitioner also alleged his worsening condition affected his relationship with his grandchildren because he was unable to "pick them up, or play with them or do anything with them at all." Additionally, petitioner testified his condition was adversely affected his ability to engage in "sexual relations," and his injuries make it difficult for him to sleep. Psychologically, petitioner said he "just [doesn't] feel good about things," and he stated: "I feel bored and I feel stressed, and then I'll get up and go out and walk around a little bit and I'll just come back and lay down, and just [be] bored."

On cross-examination, petitioner admitted to complaining of the same physical and psychological conditions in 2002, but explained "from then until now, the problems have gotten greater." He also testified that he did not feel he could work in any capacity because he only knows how to do "heavy labor work."

The first witness for petitioner was Dr. Bruce Johnson, a board certified psychiatrist and neurologist. Dr. Johnson evaluated petitioner one time on August 12, 2005. During his physical evaluation, Dr. Johnson observed decreased reflex and muscle weakness in petitioner's left triceps and reduced sensation in "the first and second fingers to pinprick examination." Dr. Johnson described the pinprick test as an objective examination using a sharp pin to test "the capabilities of the nerves to function." In this case, Dr. Johnson found petitioner "did not respond showing that there was damage to the nerves of C7 distribution." Similarly, petitioner's left triceps responded slowly to a reflex text, which is an objective reaction examination "[t]hat can . . . not be faked," indicating "damage to the nerves supplying the elbow."

Dr. Johnson's examination revealed a "decreased sensation to pinprick exam over the left deltoid, which is the distribution of the axillary nerve" and a "decreased sensation over the distribution of the radial nerve, which is the back side of the hand." Furthermore, the doctor observed "weakness of the flexor muscles, the extensor apparatus of the right wrist, and decreased brachioradialis reflex with reduced grip and grasp of the right hand. Examination of the left hand showed sensory changes over the fourth metacarpal bone, also the distribution of the radial nerve with decreased grip and grasp of the left hand."

Dr. Johnson concluded petitioner was suffering from radiculopathy, "a degenerative neurological disease," which "will progress because of the severity of it. The surgery was only partially successful in relieving the symptoms. The pain has actually progressed . . . and his functioning has increasingly gotten worse and his depression and anxiety has not gotten any better . . . ." According to Dr. Johnson, "when you have a severe injury in the neurological system, the nerves degenerate over time and that's a chemical reaction." Thus, Dr. Johnson testified he "would expect a worsening" of petitioner's condition in the future.

Using criteria established by the American Psychiatric Association, Dr. Johnson concluded petitioner "was depressed and nervous over his inability to . . . work and support his family. . . . He expressed subjectively feelings of hopelessness and depression. Poor sexual relations. He was sad also about his pain and inability to work, inability to drive and sleep." Petitioner rated twenty-two on the Beck Inventory Rating for Depression, which Dr. Johnson concluded was indicative of "a moderate degree of depression." On the other hand, while stating petitioner "has significant psychiatric impairment," Dr. Johnson could not say "[w]hether it was increased or not" since his last disability evaluation in 2002, because Dr. Johnson did not evaluate him then. Dr. Johnson also found that petitioner's physical injuries and depression were both "causally related to the incident of October 12th, 1993," and he concluded petitioner "was totally disabled."

Next, Dr. Martin Riss, who was board certified in family practice and geriatrics, testified on petitioner's behalf. Dr. Riss examined petitioner in February 1995, February 2001, and on August 9, 2005. In all three examinations, Dr. Riss performed range of motion tests on different areas of petitioner's body. In all but one test, petitioner's range of motion remained stagnant or decreased between the 2001 and 2005 exams, leading Dr. Riss to conclude petitioner was experiencing "a progressive deterioration in the ranges of motion. Literally, he's at a minimal number on most of these exams. So, he's barely rotating, barely side bending . . . ." In Dr. Riss's opinion, "[w]hatever abilities or mobilities he had in 2001, he's lost considerable ground."

Regarding petitioner's prospect for future employment, Dr. Riss stated "[h]e is not somebody who can reasonably expect to ever be hired for mechanical labor that involves, not only his back, but unfortunately his neck, his shoulder, his arm[.]

[T]his is a very, very grave problem." Like Dr. Johnson, Dr. Riss concluded petitioner's condition "has significantly worsened between 2001 and now," and the petitioner is "disabled orthopedically to the extent of 100 percent of the total."

The first witness for Mega was Dr. Ivan Dressner, a board certified psychiatrist and neurologist. He examined petitioner on November 22, 2005, for "at least 40 minutes," but he testified he had "no independent recollection of seeing this man." Thus, Dr. Dressner testified exclusively from his written report.

Neurologically, Dr. Dressner noted petitioner was "[n]ormal to pin, tough, temperature, position and vibratory sensation throughout." He stated he "didn't find anything wrong with [petitioner's] cranial nerves. His hearing was normal, his vision was normal." Dr. Dressner also testified that petitioner's strength was normal and his "reflexes were equal and active." Contrary to Dr. Johnson's conclusions, Dr. Dressner stated petitioner did not suffer from radiculopathy. Instead, any problems he had were purely orthopedic. On cross- examination, Dr. Dressner adamantly refused to give an orthopedic evaluation: "He has healed fractures of his neck, he's not going for any treatment, he doesn't take any pain medicine. He's lucky to be alive. He broke some bones. He got better. Why should that make him unable to work? My answer is ask an orthopedist."

Psychologically, Dr. Dressner stated petitioner "feels very lucky because he could have been killed." He concluded petitioner "was not depressed" and "he was not anxious." On the other hand, Dr. Dressner admitted he did not ask petitioner questions, which could lead to the conclusion petitioner was depressed. Rather, the doctor seemed to believe asking such questions would only "lead the patient," and he noted, "you can make up a psychiatric abnormal exam simply by" asking such questions.

Ultimately, Dr. Dressner "found no evidence of neurological or psychiatric dysfunction at all." He therefore concluded petitioner "had no permanent neurological or psychiatric disability from his accident of 1993."

The final witness was Mega's expert Dr. Fredric Brustein, a board certified internist and psychiatrist. Dr. Brustein evaluated petitioner on three occasions in 1995, 2001, and 2005.

With regard to his most recent examination, Dr. Brustein testified that petitioner told him his symptoms were "essentially the same in his neck, left shoulder, and wrists" as when Dr. Brustein last saw him. Moreover, the doctor performed range of motion tests in 2005, which indicated "no change" from his examination in 2001. Dr. Brustein's examinations also included pinprick, reflex, sensation, and strength tests. While noting "some mild increased muscle tone or spasm in the . . . cervical paraspinals and shoulder girdle," Dr. Brustein found all the tests "checked out normal" for "any type of cervical radiculopathy." Dr. Brustein also testified that, with the exception of Dr. Johnson, no doctor ever diagnosed petitioner with cervical radiculopathy, nor did petitioner have "radicular complaints in any of th[e] the records" he reviewed.

On the other hand, Dr. Brustein agreed petitioner was no longer able to perform "manual labor jobs," and it would be difficult for petitioner to find future employment. According to Dr. Brustein, "with [petitioner's] limited education and the fact that all he knows is manual labor, in the real world, it would be very difficult for him to find a position, unless he very much wanted to work."

On May 4, 2007, the compensation judge rendered an oral decision finding petitioner was "permanently and totally disabled from the accident." The court reviewed the testimony of all four physicians as well as the petitioner. In doing so, the court found petitioner to be credible in his description of his increased pain, limited abilities, and psychiatric problems resulting from the accident. Moreover, the compensation judge "gave a lot of weight" to Dr. Riss's testimony, and "found Dr. Johnson's exam and testimony to be extensive." On the other hand, the court found that Dr. Dressner "had the petitioner all wrong." Accordingly, the court "gave more weight" to Dr. Johnson's testimony.

The compensation judge's findings and conclusions included the following:

It's really a double finding, if you will. I find that he is, even if there was no [o]dd-[l]ot doctrine in our law, it wouldn't matter, I find him to be 100 percent disabled. I don't think there's any possibility the man can work. He's not a functioning unit, his quality of life is so diminished that his whole entire day consists of a walk and a nap, and that's the extent of his life in a depressed state of mind. Therefore, because of those reasons, under [N.J.S.A.] 34:15-36[,] I find him to be totally and permanently disabled because of his physical and neuropsychiatric permanent impairment caused by the compensable accident with no fundamental or marked improvement in such condition . . . expected. In addition, even if I didn't find him permanently disabled, I . . . would apply the [o]dd-[l]ot [d]octrine. . . .

[E]ven if I only found him to be 75 percent, there would be a finding of total disability . . . because of the [application] of the [o]dd-[l]ot [d]octrine . . . .

In an order dated May 25, 2007, the compensation judge awarded $84,045 representing payment of benefits from January 14, 2003, through May 8, 2007. The judge also determined "[p]ayments will continue into the future under [N.J.S.A. 34:15-12(b)]."

On May 25, 2007, the compensation judge rendered an oral decision on counsel fees. Under N.J.S.A. 34:15-64(a), a workers' compensation judge "may allow to the party in whose favor judgment is entered, costs of witness fees and a reasonable attorney fee, not exceeding 20% of the judgment." While the judge noted that respondent's counsel requested a credit for counsel fees previously awarded to petitioner's attorney, he ultimately determined plaintiff's counsel should receive "the maximum fee" in the amount of $36,000. The compensation judge reasoned as follows:

The only difference is how does counsel get paid, and at first glance I thought about just awarding the $36,000 and apportioning it out, and there is enough money from petitioner's share to pay his -- from his share and respondent would pay its share, but petitioner's counsel does submit something that's interesting, and that is that it should get paid in accordance with the accrual of the 12-B payments that the petitioner will continue to receive, up to a maximum of $36,000. So, that it doesn't become speculative, in terms of what it will get, thereby distinguishing it or really agreeing with what [Rivera v. Metro. Maint. Co., 197 N.J. Super. 629 (App. Div. 1989)] . . . kind of alludes to, and I think that makes sense, and let petitioner's counsel get his fee over the course of a period of a few years, I guess it will be, and there's no speculation as to that. The only issue is whether or not, you know, the law says he should get $36,000 no matter how much time and how many cases -- how many times the matter is reopened, in terms of it's fee, but I don't think that's the way, you know -- the statute talks about the 20 percent of a judgment, the rules talk about . . . a $36,000 cap, but I think that you have to look at everything and take everything into account, and I did that here, and I think that in all fairness, think the petitioner's counsel is entitled to the maximum fee. So, I'm going to enter a judgment today accordingly and award the fee, and it will be accrued accordingly.

After determining $36,000 was the total amount petitioner's counsel should receive, the judge awarded the sum of $16,809, which is twenty percent of the petitioner's $84,045 award. He also ruled petitioner's counsel would get the remaining sum of $19,191 "in accordance with the accrual of the [N.J.S.A. 34:15-12(b)] payments that the petitioner will continue to receive."

The standard of appellate review in a workers' compensation case is the same standard applicable to any other non-jury case. Brock v. Pub. Serv. Elec. & Gas Co., 149 N.J. 378, 383 (1997). The scope of our review is limited to "whether the findings made could reasonably have been reached on sufficient credible evidence present in the record, considering the proofs as a whole, with due regard to the opportunity of the one who heard the witnesses to judge of their credibility." Close v. Kordulak Bros., 44 N.J. 589, 599 (1965) (internal quotations omitted). See also Kovach v. Gen. Motors Corp., 151 N.J. Super. 546, 549 (App. Div. 1978) ("It must be kept in mind that judges of compensation are regarded as experts."). In the presence of sufficient credible evidence, a compensation judge's findings of fact are binding on appeal, and those findings must be upheld "even if the court believes that it would have reached a different result." Sager v. O.A. Peterson Constr., Co., 182 N.J. 156, 164 (2004).

Under N.J.S.A. 34:15-27, "[a] formal award, determination and rule for judgment or order approving settlement may be reviewed within 2 years from the date when the injured person last received a payment upon the application of either party on the ground that the incapacity of the injured employee has subsequently increased." See also Calicchio v. Standard Brands, Inc., 1 N.J. Super. 276, 279 (App. Div. 1949) ("[A]additional compensation may be awarded where proof of increased disability is established by competent evidence. . . . [T]he [Division of Workers' Compensation] may modify an award of compensation to accord with an after occurring enlargement or diminution of the incapacity so found to have ensued from the established compensable injury."). The statutory definition of permanent, total disability is found in N.J.S.A. 34:15-36: "'Disability permanent in quality and total in character'" means a physical or neuropsychiatric total permanent impairment caused by a compensable accident or compensable occupational disease, where no fundamental or marked improvement in such condition can be reasonably expected." See also Zabita v. Chatham Shop Rite, Inc., 208 N.J. Super. 215, 220 (App. Div.) ("Total and permanent disability exists where a worker is 'rendered unemployable in a reasonably stable job market' after a work-related accident, 'notwithstanding that factors personal to the individual play a contributory part in such unemployability.'" (quoting Katz v. Twp. of Howell, 67 N.J. 51, 62 (1975))), certif. granted, 107 N.J. 45 (1986), appeal dismissed, 107 N.J. 139 (1987). Unlike a claim for permanent partial disability, "a finding of permanent total disability cannot be made unless the injured person cannot be reasonably expected to make a fundamental or marked improvement." Ramos v. M & F Fashions, Inc., 154 N.J. 583, 597 (1998).

When an employee seeks additional compensation, alleging increased disability, the employee "has the burden of proving by the preponderance of the evidence not only the fact of increase but also that it is causally related to the original accident and resulting injury." Schiffres v. Kittatinny Lodge, Inc., 39 N.J. 139, 148-49 (1963). Proof of increased disability must be based upon "demonstrable objective medical evidence," and not solely on the "petitioner's subjective complaints." Perez v. Pantasote, Inc., 95 N.J. 105, 116 (1984); see also Colon v. Coordinated Transp., Inc., 141 N.J. 1, 10 (1995) ("Although a doctor is permitted to consider a petitioner's subjective complaints, the doctor must also present either clinical or laboratory findings of 'observable, measurable, physical manifestations' of injury to satisfy the 'demonstrable objective medical evidence' standard." (quoting Saunderlin v. E.I. Du Pont Co., 102 N.J. 402, 412 (1986))). On the other hand, it is within the province of the compensation judge to accept the expert opinion of petitioner's physicians, while rejecting the opinions of the employer's expert physicians. Paul v. Baltimore Upholstering Co., 66 N.J. 111, 121-22 (1974).

Furthermore, under the "odd-lot doctrine" a petitioner may receive a compensation award in accord with a finding of total and permanent disability, even if the petitioner's physical disability is not one-hundred percent. In Lewicki v. N.J. Art Foundry, 88 N.J. 75, 81 (1981), the New Jersey Supreme Court noted the odd-lot doctrine holds "that the petitioner, while not totally disabled, nevertheless might be unemployable because of 'handicaps personal to the worker over and above the limitations on work capacity directly produced by his accidental injury.'" (Quoting Germain v. Cool-Rite Corp., 70 N.J. 1, 9 (1976)). "[I]f, because of handicaps personal to the worker over and above the limitations on work capacity directly produced by his accidental injury, he is unemployable on a regular basis in a reasonably stable job market, he is to be considered totally disabled for workmen's compensation purposes." Germain, supra, 70 N.J. at 9.

The odd-lot doctrine is codified in N.J.S.A. 34:15-36, which states: "Factors other than physical and neuropsychiatric impairments may be considered in the determination of permanent total disability, where such physical and neuropsychiatric impairments constitute at least 75% or higher of total disability." Such factors include petitioner's "age, education, training, background, post-accidental neurological and emotional condition." Oglesby v. Am. Dredging Co., 64 N.J. 538, 548 (1974). For instance, in Germain, supra, 70 N.J. at 9, the Court reversed the Appellate Division, finding petitioner had established a prima facie case for permanent and total disability under the odd-lot doctrine because of his physical disability combined with his "unfamiliarity with English and his psychiatric condition."

In this case, the compensation judge correctly found petitioner "to be permanently and totally disabled from the accident," which occurred on October 12, 1993. Moreover, even if this finding was erroneous, the judge reached "the conclusion that [petitioner] fits the [o]dd-[l]ot [d]octrine" because he was "at least 75 percent" disabled and was sixty-two years old, possessed "at best, a third grade education," and was severely limited in his ability to understand and speak English. Both findings are supported by "sufficient credible evidence in the record." Sager, supra, 182 N.J. at 163.

The petitioner presented both objective and subjective medical evidence of his increased disability. Although the compensation judge relied on the decrease in petitioner's range of motion as observed by Dr. Riss during three examinations in 1995, 2001, and 2005, the judge also referenced Dr. Johnson's sensation (pinprick) test and reflex (hammer) test, which "everybody agreed . . . are objective findings." Thus, petitioner's subjective complaints of increased pain and decreased function as well as Dr. Riss's range of motion findings were buttressed by Dr. Johnson's objective examination, including pinprick and hammer tests.

In workers' compensation cases, medical opinions frequently differ. See Quiles v. N.J. Metals Co., 37 N.J. 91, 98 (1962) ("[A]s is not uncommon, there are sharp conflicts in the medical opinions."). And it is within the discretion of the compensation judge to accept the medical testimony of some physicians while rejecting the testimony of others. Paul, supra, 66 N.J. at 121-22. In this case, the compensation judge fully explained why he relied on the findings and conclusions of petitioner's experts, and we perceive no legitimate basis to intervene. See Smith v. John L. Montgomery Nursing Home, 327 N.J. Super. 575, 579 (App. Div. 2000) ("The judge of compensation carefully explained why he considered certain medical conclusions more persuasive than others. That he gave more weight to the opinion of one physician as opposed to the other provides no reason to reverse this judgment.").

Finally, contrary to Mega's assertions, it is clear petitioner is unable to obtain employment. Petitioner is an uneducated immigrant, whose employment history is exclusively limited to manual labor. He is sixty-two years old, and the injury he suffered required a "massive fusion" of vertebrae in his back. None of the experts suggested petitioner could engage in manual labor, and even Mega's expert admitted "in the real world, it would be very difficult for [petitioner] to find a position." See, e.g. Clark v. Am. Can Co., 4 N.J. 527, 534 (1950) ("The fact that [petitioner] was and is able to do certain sedentary work does not mean that he has ceased to be totally disabled or that he has rehabilitated himself."); Cleland v. Verona Radio, Inc., 130 N.J.L. 588, 595 (Sup. Ct. 1943) ("[The] ability for 'light' or intermittent work or labor is not inconsistent with total incapacity."). While petitioner may be able to perform certain "sedentary work," it is clear he is not employable. Therefore, the compensation judge did not err in concluding petitioner was unemployable.

Under N.J.S.A. 34:15-64(a), the compensation judge "conducting any hearing under this chapter may allow to the party in whose favor judgment is entered, costs of witness fees and a reasonable attorney fee, not exceeding 20% of the judgment." "The use of the term 'judgment' embodies the full amount of the award." Fletcher v. Ehrlich, 122 N.J. Super. 382, 386 (App. Div. 1973).

Although discretion is afforded a compensation judge's award of counsel fees, we have previously stated:

This court has the responsibility of determining the propriety of the fee awarded. To do so there must be a record which we can scrutinize in reaching that decision. Here we have nothing but the compensation judge's conclusion based on his "knowledge with cases of this type." That factor is hidden within the judge's mind.

We cannot appraise it. We have no proof of the nature and extent of the services rendered. It is our conclusion that petitioner's attorney has the burden of demonstrating the extent of his efforts, including the time actually spent in rendering services. Of course, he may also demonstrate his expertise and experience in the particular medical-legal field involved and any other factor which he deems relevant to the valuation of his services. Such proofs shall be by affidavit or other testimony related to the issue. [Barbarevech v. Johns-Manville Prods. Corp., 143 N.J. Super. 31, 34 (App. Div. 1976), certif. denied, 73 N.J. 58 (1977).]

In Barbarevech, the award of counsel fees was remanded for "express and specific findings and conclusions demonstrating the basis for [the judge's] decision." Id. at 35. This court cited Barbarevech favorably in Gromack v. Johns-Manville Prods. Corp., 147 N.J. Super. 131, 137 (App. Div. 1977), but noted "[t]he judge of compensation need require such proofs only in cases involving a request for a substantial attorney's fee." Id. at 136 n.2. The court in Gromack also added "that the reasons for allocating the award as between the employer and the petitioner should also be set forth by the judge." Id. at 136-37.

Unfortunately in this case, the compensation judge failed to set forth specific reasons for awarding counsel fees in the amount of $36,000, and he did not state any reasons for the apportionment of the fee. Thus, it is impossible to determine whether the fee award was "reasonable" as required by N.J.S.A. 34:15-14(a). We therefore reverse the order awarding counsel fees and remand the issue to the compensation judge for such supplementary proceeding as may be necessary and appropriate to render a reasoned decision. Following the remand proceedings, the compensation judge must identify the various factors taken into consideration, and he must set forth specific findings and conclusions demonstrating the basis for the counsel fee award and its apportionment between the parties.

Affirmed in part, reversed and remanded in part for further proceedings consistent with this opinion. We do not retain jurisdiction.


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