This case was last updated from Los Angeles County Superior Courts on 07/26/2022 at 11:40:18 (UTC).

HANKEY CAPITAL, LLC A CALIFORNIA LIMITED LIABILITY COMPANY VS CRESTLLOYD, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, ET AL.

Case Summary

On 06/24/2021 HANKEY CAPITAL, LLC A CALIFORNIA LIMITED LIABILITY COMPANY filed a Property - Other Real Property lawsuit against CRESTLLOYD, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY. This case was filed in Los Angeles County Superior Courts, Santa Monica Courthouse located in Los Angeles, California. The Judge overseeing this case is MARK A. YOUNG. The case status is Pending - Other Pending.
Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    *******1113

  • Filing Date:

    06/24/2021

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Property - Other Real Property

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judge

MARK A. YOUNG

 

Party Details

Plaintiffs

HANKEY CAPITAL LLC A CALIFORNIA LIMITED LIABILITY COMPANY

HANKEY CAPITAL LLC

Defendants

CRESTLLOYD LLC A CALIFORNIA LIMITED LIABILITY COMPANY

DOES 1 THROUGH 100 INCLUSIVE

CRESTLLOYD LLC

Not Classified By Court

LANES THEODORE

INTERESTED-THIRD-PARTY NILE NIAMI

Attorney/Law Firm Details

Plaintiff Attorneys

WRUBLE JEFFREY STUART

ERIEKSON NEIL

 

Court Documents

Notice - NOTICE RECEIVERS FIRST REPORT FOR THE PERIOD ENDING JULY 31, 2021 RECEIVERS INVENTORY

8/10/2021: Notice - NOTICE RECEIVERS FIRST REPORT FOR THE PERIOD ENDING JULY 31, 2021 RECEIVERS INVENTORY

Declaration - DECLARATION OF JESSICA WELLINGTON RE NOTICE OF EX PARTE APPLICATION FOR ORDER SHORTENING TIME TO HEAR RECEIVERS MOTION FOR ORDER AUTHORIZING RECEIVER TO RETAIN AND EMPLOY BRUTZKUS GUBNER

7/21/2021: Declaration - DECLARATION OF JESSICA WELLINGTON RE NOTICE OF EX PARTE APPLICATION FOR ORDER SHORTENING TIME TO HEAR RECEIVERS MOTION FOR ORDER AUTHORIZING RECEIVER TO RETAIN AND EMPLOY BRUTZKUS GUBNER

Proof of Service (not Summons and Complaint)

7/21/2021: Proof of Service (not Summons and Complaint)

Order - ORDER APPOINTING RECEIVER; ISSUING TRO AND OSC WHY RECEIVER SHOULD NOT BE CONFIRMED PENDENTE LITE AND WHY PI IN AID OF RECEIVER SHOULD NOT BE GRANTED

7/2/2021: Order - ORDER APPOINTING RECEIVER; ISSUING TRO AND OSC WHY RECEIVER SHOULD NOT BE CONFIRMED PENDENTE LITE AND WHY PI IN AID OF RECEIVER SHOULD NOT BE GRANTED

Notice - NOTICE OF NON-RECEIPT OF OPPOSITION TO ORDER TO SHOW CAUSE WHY RECEIVER SHOULD NOT BE CONFIRMED PENDENTE LITE AND WHY PRELIMINARY INJUNCTION IN AID OF RECEIVER SHOULD NOT BE ISSUED

7/21/2021: Notice - NOTICE OF NON-RECEIPT OF OPPOSITION TO ORDER TO SHOW CAUSE WHY RECEIVER SHOULD NOT BE CONFIRMED PENDENTE LITE AND WHY PRELIMINARY INJUNCTION IN AID OF RECEIVER SHOULD NOT BE ISSUED

Declaration - DECLARATION OF THEODORE LANES ISO UNOPPOSED EX PARTE APPLICATION

7/1/2021: Declaration - DECLARATION OF THEODORE LANES ISO UNOPPOSED EX PARTE APPLICATION

Declaration - DECLARATION OF W. SCOTT DOBBINS ISO UNOPPOSED EX PARTE APPLICATION

7/1/2021: Declaration - DECLARATION OF W. SCOTT DOBBINS ISO UNOPPOSED EX PARTE APPLICATION

Complaint

6/24/2021: Complaint

Civil Case Cover Sheet

6/24/2021: Civil Case Cover Sheet

Notice of Ruling

6/22/2022: Notice of Ruling

Minute Order - MINUTE ORDER (CASE MANAGEMENT CONFERENCE)

6/20/2022: Minute Order - MINUTE ORDER (CASE MANAGEMENT CONFERENCE)

Status Report

6/3/2022: Status Report

Receiver Bond

7/7/2021: Receiver Bond

Receiver Bond

7/7/2021: Receiver Bond

Receiver Bond

7/7/2021: Receiver Bond

Other - - OTHER - RECEIVER'S SECOND REPORT FOR THE PERIOD ENDING AUGUST 31, 2021 - RECEIVER'S INVENTORY (UPDATED)

9/20/2021: Other - - OTHER - RECEIVER'S SECOND REPORT FOR THE PERIOD ENDING AUGUST 31, 2021 - RECEIVER'S INVENTORY (UPDATED)

Motion for Order - NOTICE OF MOTION AND RECEIVERS MOTION FOR ORDER AUTHORIZING RECEIVER TO EMPLOY VISTA SOTHEBYS INTERNATIONAL REALTY AND WESTSIDE ESTATE AGENCY

10/4/2021: Motion for Order - NOTICE OF MOTION AND RECEIVERS MOTION FOR ORDER AUTHORIZING RECEIVER TO EMPLOY VISTA SOTHEBYS INTERNATIONAL REALTY AND WESTSIDE ESTATE AGENCY

Ex Parte Application - EX PARTE APPLICATION FOR ORDER SHORTENING TIME TO HEAR RECEIVERS MOTION FOR ORDER AUTHORIZING RECEIVER TO EMPLOY VISTA SOTHEBYS INTERNATIONAL REALTY AND WESTSIDE ESTATE AGENCY;

10/6/2021: Ex Parte Application - EX PARTE APPLICATION FOR ORDER SHORTENING TIME TO HEAR RECEIVERS MOTION FOR ORDER AUTHORIZING RECEIVER TO EMPLOY VISTA SOTHEBYS INTERNATIONAL REALTY AND WESTSIDE ESTATE AGENCY;

48 More Documents Available

 

Docket Entries

  • 12/06/2022
  • Hearing12/06/2022 at 08:30 AM in Department M at 1725 Main Street, Santa Monica, CA 90401; Status Conference

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  • 12/06/2022
  • Hearing12/06/2022 at 08:30 AM in Department M at 1725 Main Street, Santa Monica, CA 90401; Case Management Conference

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  • 06/22/2022
  • DocketNotice of Ruling; Filed by Hankey Capital, LLC (Plaintiff)

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  • 06/20/2022
  • Docketat 08:30 AM in Department M, Mark A. Young, Presiding; Case Management Conference - Held - Continued

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  • 06/20/2022
  • DocketMinute Order ( (Case Management Conference)); Filed by Clerk

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  • 06/03/2022
  • DocketStatus Report; Filed by Hankey Capital, LLC (Plaintiff)

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  • 05/02/2022
  • Docketat 08:30 AM in Department M; Case Management Conference - Held

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  • 05/02/2022
  • Docketat 08:30 AM in Department M; Case Management Conference ((21SMCV01113)) - Held

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  • 05/02/2022
  • Docketat 08:30 AM in Department M, Mark A. Young, Presiding; Non-Appearance Case Review (ReBankruptcy) - Held

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  • 05/02/2022
  • Docketat 08:30 AM in Department M; Non-Appearance Case Review (ReBankruptcy) - Held

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59 More Docket Entries
  • 07/02/2021
  • DocketOath of Receiver; Filed by Theodore Lanes (Non-Party)

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  • 07/01/2021
  • DocketDECLARATION OF THEODORE LANES ISO UNOPPOSED EX PARTE APPLICATION; Filed by Hankey Capital, LLC (Plaintiff)

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  • 07/01/2021
  • DocketDECLARATION OF W. SCOTT DOBBINS ISO UNOPPOSED EX PARTE APPLICATION; Filed by Hankey Capital, LLC (Plaintiff)

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  • 07/01/2021
  • DocketDECLARATION OF DAVID E. MARK ISO UNOPPOSED EX PARTE APPLICATION; Filed by Hankey Capital, LLC (Plaintiff)

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  • 07/01/2021
  • DocketEx Parte Application (UNOPPOSED EX PARTE APPLICATION OF PLAINTIFF HANKEY CAPITAL, LLC FOR ORDER APPOINTING RECEIVER; TEMPORARY RESTRAINING ORDER; ORDER TO SHOW CAUSE WHY RECEIVER SHOULD NOT BE CONFIRMED AND WHY PRELIMINARY INJUNCTION SHOULD NOT BE GRANTED; MEMORANDUM...); Filed by Hankey Capital, LLC (Plaintiff)

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  • 06/25/2021
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 06/24/2021
  • DocketNotice of Case Assignment - Unlimited Civil Case; Filed by Clerk

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  • 06/24/2021
  • DocketCivil Case Cover Sheet; Filed by Hankey Capital, LLC (Plaintiff)

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  • 06/24/2021
  • DocketSummons (on Complaint); Filed by Hankey Capital, LLC (Plaintiff)

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  • 06/24/2021
  • DocketComplaint; Filed by Hankey Capital, LLC (Plaintiff)

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Tentative Rulings

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Case Number: *******1113 Hearing Date: July 23, 2021 Dept: M

CASE NAME: Hankey Capital, LLC v. Crestlloyd, LLC, et al.

CASE NO.: *******1113

MOTION: Order to Show Cause Re: RE: Preliminary Injunction

HEARING DATE: 07/23/2021

Background

This action is for a judicial foreclosure of deed of trust. On July 2, 2021, this Court ordered the appointment of a receiver over the real property that is the subject matter of this action, located at 944 Airole Way, Los Angeles, CA 90077 (APN: 4369-026-021), (the “Receivership Property”).

In October 2018, plaintiff Hankey Capital, LLC (“Plaintiff’) loaned defendant/borrower Crestlloyd, LLC (“Borrower”), the principal sum of $82,500,000.00 (the “Loan”) in order to finance the development of the Receivership Property. To memorialize the Loan, on or about October 25, 2018, Plaintiff and Borrower entered into a written construction loan agreement (the “CLA”), a true copy of which is attached to the accompanying declaration of Plaintiff’s president, w. Scott dobbins as exhibit 1. (See also Dobbins Decl., ¶ 7.) At or about the same time borrower executed and delivered to Plaintiff a written promissory note (the “October 2018 Note”) for the principal sum of $82,500,000.00. (Dobbins Decl., ¶ 7; Id., Exh. 2.) Additionally, Plaintiff and Borrower entered into a written security agreement (“Security Agreement”), and Borrower executed and delivered to Plaintiff a construction deed of trust, security agreement and fixture filing with assignment of rents (the “TD”) to and for the benefit of Plaintiff, to secure repayment of the Loan. (Dobbins Decl., ¶ 7; Id., Exhs. 3, 4.)

After the Loan was originally made, Plaintiff and Borrower agreed to modify the Loan several times, so that by August 2020 the Loan was increased to $106,000,000 and the maturity date was extended to October 31, 2020 (the “Maturity Date”). (Dobbins Decl., ¶¶ 8–11; Id., Exhs. 5–10.) Each of the foregoing instruments are collectively referred to herein as the “Loan Documents.” As of June 17, 2021, the Borrower is alleged to have materially breached the Loan Documents by:

  1. Failing to pay the Loan at maturity;

  2. Failing to pay taxes assessed to the Receivership Property;

  3. Failing to pay mechanic’s lien claimants and avoid the recording of one or more claims of mechanic’s lien against the Receivership Property; and

  4. Failing to complete construction on the Receivership Property.[1]

On May 24, 2021, Plaintiff filed this action’s verified complaint (“Complaint”) against the Borrower for a judicial foreclosure of the deed of trust and for specific performance. On July 1, 2021, Plaintiff filed an ex-parte application requesting: 1) the appointment of a receiver for the property at issue; 2) the issuance of an “Order to Show Cause as to why a receiver should not be confirmed and why a preliminary injunction should not be issued”; and 3) A Temporary Restraining Order in aid of the receiver or otherwise enjoining Borrower, their respective members, agents, property managers, employees, assignees, successors, representatives, and all persons acting under, in concert with, or for Borrower, from certain conduct with respect to the Receivership Property.

In support of its request for that this Court appoint a receiver, Plaintiff argued that by the terms of the TD, as modified from time to time, following a default under the terms of the Loan Documents, Plaintiff may seek the appointment of a receiver. Plaintiff claimed it was entitled to specific performance by Borrower of the terms, conditions, and provisions of the Loan Documents, and was entitled to the appointment of a receiver, which the Court has since appointed.

On July 2, 2021, this Court ordered that Theodore Lanes (the “Receiver”) be appointed as receiver of the Receivership Property. The Receiver has the power and authority to take possession of the Property, to manage and operate the Property, to sell the Property, if necessary, and to collect rents, issues, and profits therefrom. The Court also issued a temporary restraining order to enjoin the Borrower, their respective members, agents, property managers, employees, assignees, successors, representatives, and all persons acting under, in concert with, or for Borrower, from certain conduct with respect to the Receivership Property. The temporary restraining order was designed to help the Receiver manage the Receivership Property. It was intended to prevent anyone from interfering with the Receiver\'s management and from concealing documents or money.

Subsequently, the Court issued the pending “Order to Show Cause Re: RE: Preliminary Injunction,” set to be heard on July 23, 2021. The Borrower has not filed any opposition papers to the pending order. Plaintiff seeks a preliminary injunction that would functionally continue the temporary restraining order for the pendency of this action.

Legal Standard

A preliminary injunction is pre-trial equitable relief granted for the purpose of preserving the status quo and preventing irreparable harm that will occur before trial. (Code Civ. Proc., ;; 525–533.) Thus, irreparable harm must be imminent as opposed to harm in the future.

In deciding whether to issue a preliminary injunction, a court must weigh two interrelated factors: (1) the likelihood that the moving party will ultimately prevail on the merits and (2) the relative interim harm to the parties from issuance or non-issuance of the injunction. (Butt v. State of California (1992) 4 Cal.4th 668, 677–678.)

Preliminary injunctions that mandate affirmative acts that change the status quo are rarely granted. In fact, granting of a mandatory injunction pending trial is not permitted except in extreme cases where right to injunction is clearly established. (Shoemaker v. County of Los Angeles (1995) 37 Cal.4th 618, 625.)

Real property is usually deemed unique, and not compensable in damages, and injunctive relief is therefore readily granted. (See Civ. Code, ; 3387.)

Analysis

Here, Plaintiff submitted an application to the Court for a preliminary injunction enjoining Borrower, et al., from engaging in certain conduct with respect to the Receivership Property. (Code Civ. Proc., ; 526.) Plaintiff’s application is based upon the Complaint on file with the Court, and the declarations attached to the pending application. At issue, is whether the Plaintiff is likely to ultimately prevail on its judicial foreclosure sale claim which for which the preliminary injunction is mainly relevant.

The Court takes judicial notice of the following documents attached to Dobbins Decl.: 1) the CLA entered into by the Parties on October 25, 2018; 2) the October 2018 Note; 3) the Security Agreement; 4) the recorded Construction Deed of Trust, Security Agreement, and Fixture Filing with Assignments of Rents; 5) the December 2019 Note; 6) the written First Modification of Construction Loan Agreement (the “First Modification of CLA”); 7) the Modification of Deed of Trust (the “Modification of TD”); 8) the Amended and Restated Promissory Note (the “Note”); 9) the “Second Modification of CLA”; 10) the “Second Modification of TD; and 11) a loan history report for the Loan. (Id.)

Likelihood of Success on the Merits

The Court concludes that Plaintiff is likely to ultimately succeed on the merits in this matter. In California, there is only one form of action for the recovery of any debt, or the enforcement of any right secured by a mortgage or deed of trust: that action is foreclosure, which may be either judicial or nonjudicial. (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1236; see also Code Civ. Proc., ;; 725a, 726(a).) A deed of trust to real property acting as security for a loan typically has three parties: the trustor (borrower), the beneficiary (lender), and the trustee. (Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 926.) The beneficiary or trustee named in a deed of trust or the mortgagee named in a mortgage with the power of sale on real property or any interest therein to secure a debt or other obligation, or their successors in interest, have the right to bring suit to foreclose the deed of trust or mortgage with the power of sale in the same manner and subject to the provisions, rights, and remedies relating to the foreclosure of a mortgage upon the property. (Code Civ. Proc., ; 725a.)

To begin with, on October 25, 2018, Borrower executed a promissory note, security agreement, and construction deed of trust encumbering the Receivership Property, in exchange for a loan in the principal amount of $82,500,000.00 from Plaintiff, in order to finance the completion of Borrower’s development of the Receivership Property. (Dobbins Decl., Exhs. 1–3.) The deed of trust identified the lender (that is, the beneficiary) as Hankey Capital LLC, and named Chicago Title Company. as the trustee. The deed of trust was recorded with the Los Angeles County Recorder’s Office on November 6, 2018. Borrower executed a Modification of Deed of Trust (the “Second Modification of TD,” and, together with the First Modification of TD and the TD, the “Deed of Trust”) to and for the benefit of Plaintiff, to secure repayment of the Loan. (Dobbins Decl., Exh. 10.) On or about August 31, 2020, the Second Modification of TD was recorded in the Los Angeles County Official Records as document number 20201030024.

Pursuant to the terms of the amended Loan Documents, the Borrower promised to repay Plaintiff the principal amount of $106,000,000, together with interest from the date of the initial disbursement computed on the principal balance thereof from time to time outstanding. In addition, the Borrower was to make monthly payments of interest-only in arrears on the disbursed and unpaid principal balance of the Note, as more fully set forth in the Note. The Loan Documents further provide for a higher rate of interest in the event of a default, and further provide that if a payment is late by five or more days, the Borrower is obligated to pay a late charge equal to 5% of the overdue amount.

The submitted evidence demonstrates that Plaintiff performed all of the conditions, covenants, and promises on their respective part to be performed pursuant to the Loan Documents, as amended. Moreover, the submitted evidence demonstrates that as of June 17, 2021, the Borrower materially breached the Loan Documents by:

  1. Failing to pay the Loan at maturity;

  2. Failing to pay taxes assessed to the Receivership Property;

  3. Failing to pay mechanic’s lien claimants and avoid the recording of one or more claims of mechanic’s lien against the Receivership Property;

  4. Failing to provide financial information as required by the Loan Documents; and

  5. Failing to complete construction on the Receivership Property.[2]

Based upon the evidence submitted by Plaintiff, the Court concludes that Plaintiff is a beneficiary named in the deed of trust at issue with the power of sale for the Receivership Property. Thus, Plaintiff is entitled to bring a suit to foreclose the deed of trust to the Receivership Property. (See Dobbins Decl., Exh. 4, p. 12, ; 4.02 (Foreclosure by Power of Sale).) Accordingly, the Plaintiff is likely to ultimately succeed on the merits.

Relative Interim Harm to The Parties from Issuance/Non-Issuance.

In evaluating interim harm for purposes of determining if Plaintiff is entitled to a preliminary injunction, the court compares the injury to plaintiffs in absence of injunction to injury defendant is likely to suffer if injunction is issued. (Shoemaker v. County of Los Angeles (1995) 17 37 Cal.App.4th 61.)

Here, the Court finds that Plaintiff would suffer great harm in the interim if the Court does not enjoin the Borrower, et al., from certain conduct that may potentially affect the proceeding with its foreclosure sale. The Receiver has been appointed to preserve, protect, and manage the Receivership Property, and to complete the construction and to sell the Receivership Property. The Receivership Property provides the only source of recovery of Defendant’s debt owed to Plaintiff, the several other lenders who are subordinate to Plaintiff’s position, and the mechanic’s lien claimants. Since the Receiver has assumed possession and control of the receivership Property, it is essential to enjoin Plaintiff from taking any action (e.g., waste or transfer of deed of trust) that could further diminish the Receivership Property’s value and damage collateral. (Dobbins Decl., ¶ 20.)

Plaintiff has submitted evidence to show that it offered/granted a modification or the opportunity to discuss a modification of the Loan with Borrower. However, Borrower has defaulted on the Loan. Thus, Plaintiff is entitled to sell the home. To that end, the Receiver was appointed to finish development of the Receivership Property for purposes of a foreclosure sale. By granting the pending application, the status quo would be preserved. Moreover, real property is conventionally deemed unique, not compensable in damages, and injunctive relief is therefore readily granted. (See Civ. Code, ; 3387.) Last, the Borrower’s harm is minimal since it is not an individual and the Receivership Property is not Borrower’s residential home. Here, the Borrower has halted any further construction of the Receivership Property.

Undertaking

In order to obtain the preliminary injunction, Code Civ. Proc., section 529 requires the Plaintiff to provide an undertaking. (See ABBA Rubber Co. v. Seaquist (1991) 235 Cal. App. 3d 1, 10 [finding that bond is an "indispensable prerequisite to the issuance of a preliminary injunction" and the duty to order a bond is "mandatory, not discretionary"]). In addition, an injunction is void without an undertaking. (See Federal Automotive Services v. Lane Buick Co. (1962) 204 Cal. App. 2d 689, 695 [holding injunction inoperative and of no effect because the order did not require a bond]). Code Civ. Proc., section 529, identifies the amount of the undertaking to be any damages, not exceeding an amount to be specified, the defendant may sustain by reason of the injunction, if the Court finally decides that the Plaintiff was not entitled to the injunction.

Here, the Borrowers damages would be the loss of the use of the funds it could recover from the sale of the property. Plaintiff has offered evidence to identify that $100,000.00 is the amount of the potential damages that the Borrower might suffer if the Court finally decides that the Plaintiff is not entitled to the preliminary injunction. On July 7, 2021, the Receiver filed a receiver bond in the Receiver’s name for an undertaking pursuant to Code Civ. Proc., section 567(b), in the amount of $100,000.00

Accordingly, the Court grants the pending application.

CONCLUSION

Therefore, the Court GRANTS the pending application.


[1] See Dobbins Decl., ¶¶ 12, 13.

[2] See Dobbins Decl., ¶¶ 12, 13.

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