November 1 2011
DA 11-0026
IN THE SUPREME COURT OF THE STATE OF MONTANA
2011 MT 271
RAY WILLIAMS,
Plaintiff and Appellant,
v.
PLUM CREEK TIMBER COMPANY, INC.,
and JOHN DOES 1 THROUGH 5,
Defendants and Appellees.
APPEAL FROM: District Court of the Eleventh Judicial District,
In and For the County of Flathead, Cause No. DV-07-487(C)
Honorable Stewart E. Stadler, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Santana N. Kortum, Kortum Law Office, PLLC, Kalispell, Montana
For Appellee:
Todd A. Hammer, Angela K. Jacobs, Hammer, Hewitt, Jacobs
& Quinn, PLLC, Kalispell, Montana
Submitted on Briefs: September 22, 2011
Decided: November 1, 2011
Filed:
__________________________________________
Clerk
Justice James C. Nelson delivered the Opinion of the Court.
¶1 Ray Williams brought this action in the District Court for the Eleventh Judicial
District, Flathead County, alleging that he was wrongfully discharged from Plum Creek
Timber Company (Plum Creek). Plum Creek moved for summary judgment contending
that it had good cause to terminate Williams. The court granted Plum Creek’s motion
and Williams appeals. We reverse and remand for further proceedings consistent with
this Opinion.
¶2 Williams raises the following issue on appeal: Whether the District Court erred in
granting Plum Creek’s Motion for Summary Judgment based on its determination that
Williams was not wrongfully discharged from his employment.
Factual and Procedural Background
¶3 Williams went to work for Plum Creek in its Columbia Falls mill in 1988. Over
the next 18 years he held various positions and performed numerous tasks and
assignments. In the spring of 2006, Plum Creek determined that it could no longer
supply enough logs to run its Columbia Falls mill at eight hours production capacity per
week. To keep the mill profitable and to avoid layoffs, Plum Creek decided to reassign
25 employees to other mills.
¶4 The determination as to which employees would be reassigned was based on a
written pre-transfer evaluation form which graded employees in four categories:
discipline, versatility, attendance and skill. Employees were given a score of one, two or
three points in each category. The scores were then averaged and the employees with the
highest averages were transferred to other mills or plants. While the reassigned
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employees retained their same rates of pay as well as their company seniority for vacation
and retirement benefits, they lost their plant seniority.
¶5 The category of discipline was assessed as follows: employees with no
disciplinary actions received one point; employees with a minor disciplinary action, such
as a verbal warning, received two points; and employees with a major disciplinary action,
such as a written warning or suspension, received three points. Williams received one
point in this category.
¶6 The category of versatility was assessed as follows: employees who could operate
three or more machines received one point; employees who could operate two or more
machines or who could operate one machine and grade lumber or scale received two
points; and employees who could not operate any machines, grade lumber or scale
received three points. Williams received three points in this category which he asserts
was error on Plum Creek’s part. He contends that he should have received only one point
in this category because he had experience grading lumber and he could operate seven
machines including a planer hoist, feeder, sorter, paper wrapper, paper-wrapper feeder,
fork lift and stacker.
¶7 The category of attendance was assessed as follows: employees who missed fewer
than 16 hours in the preceding 12 months received one point; employees who missed
between 16 and 32 hours in the preceding 12 months received two points; and employees
who missed more than 32 hours in the preceding 12 months received three points.
Williams received two points in this category; however, Plum Creek admits that it
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incorrectly assessed Williams’ attendance record and that he should have received only
one point.
¶8 And finally, the category of skill was assessed as follows: employees who were
hourly supervisors, graders, stocker operators, head scalers, or primary sawmill operators
received one point; employees who were machine operators received two points; and
employees who were laborers, chain pullers or trim pickers received three points.
Williams received three points in this category. He contends that this was error as he
graded lumber everyday and he had the ability to operate at least seven different
machines.
¶9 Williams was reassigned to Plum Creek’s Evergreen Plywood Mill on April 11,
2006, where he was placed on a 90-day probationary period. Since he was a reassigned
employee and had no seniority at the Evergreen mill, the only position he was eligible for
was as a plugger operator. This position involves taking out defects and knots in sheets
of plywood so that they will meet certain quality standards and grades. Williams had no
experience in this job and, although he improved over time, he failed to perform at a fast
enough pace to satisfy his supervisors. Plum Creek terminated Williams’ employment at
the end of his probationary period, July 12, 2006.
¶10 Williams brought this action under the Wrongful Discharge from Employment Act
(Title 39, chapter 2, part 9, MCA) alleging that Plum Creek violated the express
provisions of its written employment policies by failing to apply those policies
consistently and equally to all employees. Williams further alleged that Plum Creek
violated those policies by reassigning him to a new plant based on an erroneous
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evaluation, wrongfully demoting him to a position in which he had no experience, and,
ultimately, terminating his employment.
¶11 Plum Creek moved for summary judgment contending that it had good cause to
terminate Williams and that it did not violate its employment policies by doing so. In
support of its contentions, Plum Creek points out that Williams’ inability to meet
production standards at the Evergreen mill was good cause for his termination. Plum
Creek also points out that its Hourly Employee Handbook provides that although
performance issues would be communicated to probationary employees, such employees
could be terminated without progressing through every step set forth in the disciplinary
guidelines.
¶12 The District Court granted Plum Creek’s Motion for Summary Judgment on the
basis that no wrongful discharge took place since Williams was discharged for good
cause. Williams appeals the District Court’s order and judgment.
Standard of Review
¶13 We review a district court’s grant or denial of a motion for summary judgment de
novo and apply the same criteria under M. R. Civ. P. 56 as applied by the district court.
Stowers v. Community Medical Center, Inc., 2007 MT 309, ¶ 10, 340 Mont. 116, 172
P.3d 1252 (citing North 93 Neighbors, Inc. v. Bd. of County Com’rs, 2006 MT 132, ¶ 17,
332 Mont. 327, 137 P.3d 557). M. R. Civ. P. 56(c)(3) provides that summary judgment
should only be granted when “the pleadings, the discovery and disclosure materials on
file, and any affidavits show that there is no genuine issue as to any material fact and that
the movant is entitled to judgment as a matter of law.”
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¶14 Furthermore, the party moving for summary judgment must demonstrate that no
genuine issues of material fact exist. Hickey v. Baker School Dist. No. 12, 2002 MT 322,
¶ 12, 313 Mont. 162, 60 P.3d 966 (citing Casiano v. Greenway Enterprises, Inc., 2002
MT 93, ¶ 13, 309 Mont. 358, 47 P.3d 432, overruled in part and on other grounds by
Giambra v. Kelsey, 2007 MT 158, 338 Mont. 19, 162 P.3d 134). Once this has been
accomplished, the burden then shifts to the non-moving party to prove by more than mere
denial and speculation that a genuine issue of material fact does exist. Roy v. Blackfoot
Telephone Co-op., 2004 MT 316, ¶ 11, 324 Mont. 30, 101 P.3d 301 (citing Fulton v.
Fulton, 2004 MT 240, ¶ 6, 322 Mont. 516, 97 P.3d 573). “A ‘material’ fact is a fact that
‘involves the elements of the cause of action or defenses at issue to an extent that
necessitates resolution of the issue by a trier of fact.’ ” Arnold v. Yellowstone Mountain
Club, LLC, 2004 MT 284, ¶ 15, 323 Mont. 295, 100 P.3d 137 (citing Mountain West
Bank, N.A. v. Mine and Mill, 2003 MT 35, ¶ 28, 314 Mont. 248, 64 P.3d 1048).
¶15 In evaluating a motion for summary judgment, the evidence must be viewed in the
light most favorable to the non-moving party and all reasonable inferences must be drawn
in favor of the party opposing summary judgment. Prindel v. Ravalli County, 2006
Mont. 62, ¶ 19, 331 Mont. 338, 133 P.3d 165 (citing Lopez v. Great Falls Pre-Release
Services, 1999 MT 199, ¶ 16, 295 Mont. 416, 986 P.2d 1081). In addition, we review the
legal conclusions made by a district court to determine whether the court erred. Andrews
v. Plum Creek Mfg, LP., 2001 MT 94, ¶ 5, 305 Mont. 194, 27 P.3d 426 (citing Bruner v.
Yellowstone County, 272 Mont. 261, 265, 900 P.2d 901, 903 (1995)).
Discussion
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¶16 Whether the District Court erred in granting Plum Creek’s Motion for Summary
Judgment based on its determination that Williams was not wrongfully discharged
from his employment.
¶17 Williams argues on appeal that the District Court erred in granting Plum Creek’s
Motion for Summary Judgment because questions of material fact still exist with respect
to whether the pre-transfer evaluation form was part of Plum Creek’s written personnel
policy; whether Plum Creek violated its written personnel policy in demoting and
transferring Williams; whether this allegedly wrongful demotion was directly related to
Williams’ termination; and, ultimately, whether Williams was wrongfully discharged. In
response, Plum Creek asserts that Williams’ reassignment to another mill had nothing to
do with his subsequent discharge. Plum Creek maintains that Williams was discharged
for good cause because he did not satisfactorily perform his job duties.
¶18 The Wrongful Discharge from Employment Act (WDEA) is the exclusive remedy
for a wrongful discharge from employment in Montana. Mysse v. Martens, 279 Mont.
253, 267, 926 P.2d 765, 774 (1996) (citing § 39-2-902, MCA). The WDEA defines
“discharge” to include a constructive discharge “and any other termination of
employment, including resignation, elimination of the job, layoff for lack of work, failure
to recall or rehire, and any other cutback in the number of employees for a legitimate
business reason.” Section 39-2-903(2), MCA. A “legitimate business reason” is a reason
“that is neither false, whimsical, arbitrary or capricious, and it must have some logical
relationship to the needs of the business.” Andrews, ¶ 18 (quoting Buck v. Billings
Montana Chevrolet, Inc., 248 Mont. 276, 281-82, 811 P.2d 537, 540 (1991)). We have
recognized that “economic reasons are legitimate business reasons justifying discharge of
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an employee.” Andrews, ¶ 18 (quoting Cecil v. Cardinal Drilling Co., 244 Mont. 405,
409, 797 P.2d 232, 234 (1990)).
¶19 “Constructive discharge,” on the other hand, is defined as “the voluntary
termination of employment by an employee because of a situation created by an act or
omission of the employer which an objective, reasonable person would find so intolerable
that voluntary termination is the only reasonable alternative.” Section 39-2-903(1),
MCA. However, “[c]onstructive discharge does not mean voluntary termination because
of an employer’s refusal to promote the employee or improve wages, responsibilities, or
other terms and conditions of employment.” Section 39-2-903(1), MCA.
¶20 A discharge is wrongful under the WDEA only if:
(a) it was in retaliation for the employee’s refusal to violate public
policy or for reporting a violation of public policy;
(b) the discharge was not for good cause and the employee had
completed the employer’s probationary period of employment; or
(c) the employer violated the express provisions of its own written
personnel policy.
Section 39-2-904(1), MCA. And, “good cause” is defined in the WDEA as “reasonable
job-related grounds for dismissal based on a failure to satisfactorily perform job duties,
disruption of the employer’s operation, or other legitimate business reason.” Section
39-2-903(5), MCA.
¶21 In the instant case, Plum Creek contends that either a discharge or a constructive
discharge is a prerequisite to asserting a wrongful discharge claim under the WDEA.
Plum Creek argues that reassigning Williams to another mill was not a discharge and,
since Williams did not voluntarily resign at that time, neither can it be considered a
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constructive discharge. Plum Creek further argues that Williams’ decision to remain
employed cut off any liability that could fall upon Plum Creek for exercising its right to
reassign him. Thus, according to Plum Creek, the only discharge in this case was
Williams’ discharge for failing to meet the production standards required for his new
position at the Evergreen mill, and it is undisputed that that discharge was for good cause.
Therefore, Plum Creek maintains that Williams has no claim under the WDEA.
¶22 In contrast, Williams argues that Plum Creek erroneously focuses on whether it
had good cause to terminate Williams after his demotion and transfer to the Evergreen
mill instead of focusing on the actions Plum Creek took that led up to Williams’
demotion and transfer. To that end, Williams asserts that Plum Creek’s earlier actions are
directly linked to his subsequent termination. Hence, Williams contends that he was
wrongfully discharged because Plum Creek violated its own written personnel policy by
inaccurately rating Williams under the reassignment criteria and thereby causing his
demotion, transfer and subsequent termination.
¶23 Plum Creek relies on our decisions in Pankratz Farms, Inc. v. Pankratz, 2004 MT
180, 322 Mont. 133, 95 P.3d 671, and Clark v. Eagle Systems, Inc., 279 Mont. 279, 927
P.2d 995 (1996), to support its contentions that Williams’ decision to accept a position at
the Evergreen mill rather than resigning precludes Williams’ claim under the WDEA and
cuts off any liability that could fall upon Plum Creek for reassigning Williams. However,
we conclude that our decisions in these two cases do not support these contentions.
¶24 Pankratz concerns a dispute between the partners and shareholders in a family
farming and ranching operation. Walter Pankratz owned a grain farming and cattle
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ranching enterprise which he incorporated in 1975 for estate planning purposes. Walter
subsequently acquired additional farm and ranch lands, and as the enterprise grew, all six
of Walter’s sons became active in the business. Pankratz, ¶¶ 17-19.
¶25 In 1978, the six brothers entered into a written partnership agreement to formalize
their operations and to become eligible for certain federal funding. The partnership
agreement provided for equal sharing of profits and losses, and required unanimous
agreement on all actions or decisions affecting the partnership. Dissension among the
brothers began to surface in the mid to late 1980s, and they became noticeably divided.
In 1991, the partnership agreement was amended to provide for actions and decision-
making by a 2/3 vote of the partners. Pankratz, ¶¶ 20-23.
¶26 Beginning in 1995, the brothers entered into a series of negotiations for the
purchase of the interests in the partnership and corporation of two of the brothers,
including Marvin, the eldest brother. Marvin rejected each of the proposed buyouts. In
early May 1997, the corporation reduced the salaries of its employees, including Marvin,
from $500 per month to $50 per month. Marvin was also assigned several operational
tasks. Marvin performed some, but not all, of the assigned tasks. On June 23, 1997,
Marvin received a notice formally terminating his employment for failing to perform the
assigned tasks. Pankratz, ¶¶ 26-30. Additional problems with the partnership and the
corporation ensued and, eventually, both sides initiated legal action. Pankratz, ¶¶ 37-38.
¶27 The only action pertinent to our discussion here is Marvin’s claim for wrongful
discharge. As to that claim, the majority partners argued that they were justified in
terminating Marvin’s employment because he refused to perform various tasks assigned
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to him. However, Marvin argued that the corporations’ issuance of pay cuts in May 1997
constituted a breach of his employment agreement and effectively terminated his
employment well before he received formal notice of his discharge for cause the
following June. Based on that rationale, Marvin claimed that his termination was
wrongful under the WDEA. The District Court denied Marvin’s claim. Pankratz, ¶ 71.
¶28 On appeal, this Court determined that while Marvin received a greatly diminished
salary for his services, the record showed that the salary cuts were consistent with the
corporation’s past practices of reducing salaries for economic purposes, and that the
salary cuts affected each of the partners equally. Thus, we held that Marvin’s argument
that the corporation effectively terminated his employment when it issued the salary cuts
was without merit because Marvin remained in the active employ of the corporation. We
also held that because good cause existed for Marvin’s termination from employment the
following June when he refused to perform the tasks assigned to him, the district court
did not err in dismissing his claim for wrongful discharge. Pankratz, ¶¶ 73-74.
¶29 Pankratz is distinguishable from the instant case because there was nothing
directly linking the salary cuts in that case to Marvin’s later discharge for refusing to
perform the tasks assigned to him since the record in Pankratz showed that the salary cuts
were consistent with the corporation’s past practices and affected each of the partners
equally. Not so in the case sub judice where there are disputed issues of material fact
regarding whether Plum Creek’s alleged violations of the express provisions of its written
personnel policy were directly linked to Williams’ discharge based on Plum Creek’s
alleged failure to apply that policy consistently and equally to all of its employees.
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¶30 Likewise, we cannot conclude that Clark is supportive of Plum Creek’s contention
that Williams’ has no claim under the WDEA. In Clark, Eagle Systems contracted with
Burlington Northern Railroad (BN) to provide ramp, drayage, and mechanical services
for BN at its Billings terminal. Eagle Systems was also responsible for loading and
unloading trains in a timely manner. Clark was employed with Eagle Systems as the
terminal manager from 1985 until November 21, 1991. On that date, Clark’s supervisor
notified Clark that he was being replaced the next day as terminal manager and that he
was being demoted to the position of utility person. Clark, 279 Mont. at 282, 927 P.2d at
997. Clark reported for work the following morning and worked as a utility person until
several months later when he became disabled and was no longer able to perform his
duties. Clark, 279 Mont. at 285, 927 P.2d at 998.
¶31 Clark filed a complaint alleging a cause of action for age discrimination against
Eagle. The district court concluded that the WDEA applied in this case because a jury
might conclude that Clark’s demotion qualified as a discharge within the meaning of the
WDEA. Nevertheless, the court concluded that there was good cause for Clark’s
reclassification and granted Eagle’s motion for summary judgment on that basis. Clark,
279 Mont. at 283-84, 927 P.2d at 997-98.
¶32 We held on appeal in Clark that the district court reached the correct result even
though it did so for the wrong reasons. Contrary to the district court’s determination, we
held that under § 39-2-904, MCA, the WDEA was inapplicable because there was no
termination of Clark’s employment. Clark, 279 Mont. at 285-86, 927 P.2d at 999.
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¶33 We conclude that Clark is distinguishable from the instant case because unlike
Williams who was terminated shortly after his demotion and transfer, Clark was never
terminated from his employment. Consequently, we find no merit in Plum Creek’s
contention that Williams has no claim under the WDEA.
¶34 Citing McConkey v. Flathead Electric Co-op., 2005 MT 334, ¶ 26, 330 Mont. 48,
125 P.3d 1121, Plum Creek asserts that an employer has the right to exercise discretion
over who it will employ and keep in employment, and that it is inappropriate for courts to
become involved in the day-to-day employment decisions of a business. While this is
generally true, the law requires that an employer may not discharge an employee for
other than good cause or violate the express provisions of its own written personnel
policy in discharging said employee. Section 39-2-904(1), MCA.
¶35 Plum Creek also asserts that Williams was not “demoted” as he did not suffer any
loss in pay. However, the term “demotion” does not only mean a loss in pay, it also
means “to reduce to a lower grade or rank.” Webster’s New American Dictionary 139
(Merriam-Webster, Inc. 1995). Here, Williams lost his plant seniority status and, because
of that loss, the only job available to him at the Evergreen mill was as a plugger operator.
In addition, Williams was put on a 90-day probationary period even though he had been
with Plum Creek for 18 years. Regardless of whether it is referred to as a “demotion” or
as a “reassignment,” there still remains a disputed issue of material fact regarding the
accuracy of Williams’ rating on the pre-transfer evaluation form which led to his transfer
and subsequent termination.
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¶36 Plum Creek notes in its brief on appeal that it does have written personnel policies
that apply to all hourly employees; however, Plum Creek claims it did not violate those
policies in reassigning Williams to another mill. Plum Creek maintains that it’s written
personnel policies are contained in the Hourly Employee Handbook which provides in
part that “Plum Creek reserves the right to transfer employees to other jobs for [reasons]
which include but are not limited to planning, production, efficiency, discipline and
training . . . .”
¶37 Nevertheless, Williams argues that Plum Creek instituted a new written policy, its
pre-transfer evaluation form, to determine which employees should be transferred to other
facilities. Thus, Williams contends that whether this evaluation form may be considered
part of Plum Creek’s written personnel policies presents a disputed issue of material fact
that must be decided by a jury. He also contends that whether Plum Creek violated the
express provisions of that personnel policy by failing to apply it consistently and equally
to all employees presents an additional disputed issue of material fact.
¶38 We held in Kearney v. KXLF Communications, Inc., 263 Mont. 407, 869 P.2d 772
(1994), that a written personnel policy does not necessarily have to be an employee
handbook. In that case, employer KXLF notified employee Kearney that he was being
removed as news director and given the position of sports director instead. Kearney
resigned and filed suit contending that he was constructively discharged and that KXLF
had violated its personnel policy by not providing him with annual evaluations before his
discharge. Kearney, 263 Mont. at 411-12, 869 P.2d at 774. Because Kearney’s expert
witness had to interpolate the existence of a written personnel policy from several
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writings, the district court determined that KXLF did not have an express written policy
and dismissed the part of Kearney’s WDEA claim that was based on a violation of a
written personnel policy. Kearney, 263 Mont. at 417, 869 P.2d at 778.
¶39 On appeal, this Court pointed out that Kearney’s expert witness testified that
KXLF had a written policy of performing annual evaluations based upon the existence of
pre-printed evaluation forms and an internal memo. In reversing the District Court, this
Court held that “[i]n this instance, Kearney was entitled to have a jury determine whether
he met the threshold requirement of showing that KXLF’s personnel policy expressly
required annual evaluations of all its employees.” Kearney, 263 Mont. at 418, 869 P.2d
at 778.
¶40 In this case, the record indicates that Plum Creek does have a written personnel
policy. The record also indicates that Plum Creek used a written pre-transfer evaluation
form to grade each of its employees on various criteria to determine which employees
should be demoted and transferred. Viewing the evidence in Williams’ favor as the
non-moving party, Prindel, ¶ 19, we conclude that conflicting inferences could be drawn
from this evidence and that reasonable persons could conclude that the evaluation form
was part of Plum Creek’s written personnel policy, that Plum Creek violated the express
provisions of that policy by failing to apply it consistently and equally to all of its
employees, that Plum Creek wrongfully demoted and transferred Williams, and that this
demotion and transfer was directly linked to Williams’ discharge. See Hager v. J.C.
Billion, Inc., 2008 MT 167, ¶ 22, 343 Mont. 353, 184 P.3d 340 (whether a demotion
constitutes a discharge is a question of fact for a jury to decide).
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¶41 We have repeatedly held that summary judgment is an extreme remedy and should
never be substituted for a trial if a material factual controversy exists. Spinler v. Allen,
1999 MT 160, ¶ 16, 295 Mont. 139, 983 P.2d 348 (citing Montana Metal Buildings, Inc.
v. Shapiro, 283 Mont. 471, 474, 942 P.2d 694, 696 (1997)). Fact finding is the province
of the jury at trial, not that of the district court on summary judgment. “ ‘[W]eighing the
evidence is . . . a classic jury function’ and we are reluctant to remove that function from
the jury’s purview.” Andrews, ¶ 21 (quoting Braulick v. Hathaway Meats, Inc., 1999 MT
57, ¶ 14, 294 Mont. 1, 980 P.2d 1). Consequently, if there is any doubt as to the
propriety of a motion for summary judgment, it should be denied. Rogers v. Swingley,
206 Mont. 306, 312, 670 P.2d 1386, 1389 (1983); Cheyenne Western Bank v. Young, 179
Mont. 492, 496, 587 P.2d 401, 404 (1978).
¶42 We hold in this case that the District Court erred in granting Plum Creek’s Motion
for Summary Judgment as disputed issues of material fact still exist. See Hager, ¶ 22
(whether an employer violated its own written policies is a question of fact for the jury);
Andrews, ¶¶ 21-22 (summary judgment held to be inappropriate where the evidence
established the possibility of a wrongful discharge).
¶43 Reversed and remanded for further proceedings consistent with this Opinion.
/S/ JAMES C. NELSON
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We Concur:
/S/ MIKE McGRATH
/S/ MICHAEL E WHEAT
/S/ BRIAN MORRIS
/S/ JIM RICE
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