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Dennis Millikan and Vicki Millikan v. City of Noblesville and KACE, LLC

Court: Indiana Court of Appeals
Date filed: 2020-12-07
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                                                                       FILED
                                                                Dec 07 2020, 8:50 am

                                                                    CLERK
                                                                Indiana Supreme Court
                                                                   Court of Appeals
                                                                     and Tax Court




ATTORNEYS FOR APPELLANTS                                  ATTORNEYS FOR APPELLEE
James A. Nickloy                                          CITY OF NOBLESVILLE
Craig C. Siebe                                            Bryan H. Babb
Nickloy & Barry LLP                                       Jonathan W. Hughes
Noblesville, Indiana                                      Bose McKinney & Evans LLP
                                                          Indianapolis, Indiana
                                                          Michael A. Howard
                                                          Noblesville, Indiana
                                                          ATTORNEYS FOR APPELLEE
                                                          KACE, LLC
                                                          David A. Given
                                                          Matthew C. Olsen
                                                          Faegre Drinker Biddle Reath
                                                          LLP
                                                          Indianapolis, Indiana



                                            IN THE
    COURT OF APPEALS OF INDIANA

Dennis Millikan and Vicki                                 December 7, 2020
Millikan,                                                 Court of Appeals Case No.
Appellants-Plaintiffs,                                    20A-PL-1061
                                                          Appeal from the
        v.                                                Hamilton Circuit Court
                                                          The Honorable
City of Noblesville and KACE,                             Paul A. Felix, Judge
LLC,                                                      Trial Court Cause No.
Appellees-Defendants.                                     29C01-1812-PL-11935




Court of Appeals of Indiana | Opinion 20A-PL-1061 | December 7, 2020                    Page 1 of 16
      Kirsch, Judge.


[1]   Dennis Millikan (“Dennis”) and Vicki Millikan (together, “the Millikans”)

      appeal the trial court’s grant of summary judgment in favor of the City of

      Noblesville (“Noblesville”) and KACE, LLC (“Kace”) (together, “the City”)

      and denial of their motion for summary judgment regarding the Millikans’

      action to quiet title in property they claimed to have adversely possessed. The

      Millikans raise the following issue for our review: whether the trial court erred

      in granting summary judgment in favor of the City and in denying the

      Millikans’ motion for summary judgment because the Millikans assert that the

      designated evidence showed that they had substantially complied with Indiana

      Code section 32-21-7-1(a) in that they had a reasonable and good faith belief

      that they were paying the taxes on the disputed property.

[2]   We reverse and remand.


                                  Facts and Procedural History
[3]   From 1972 until 2018, the Millikans owned and lived on property located at

      17309 Willowview Road, Noblesville, Indiana (“the Millikan Property”).

      Appellant’s App. Vol. II at 23, 25. The entire northern boundary of the Millikan

      Property was bordered by a Conrail railroad right of way that is approximately

      fifty feet in width, north to south. Id. at 23. To the north of the railroad right of

      way and the Millikan Property is the Park 32 West subdivision; Lot 5 of the

      Park 32 West subdivision and the Millikan Property were divided by the

      Court of Appeals of Indiana | Opinion 20A-PL-1061 | December 7, 2020       Page 2 of 16
      railroad right of way. Id. The action from which this appeal arose concerned a

      portion of the railroad right of way; specifically, the rectangular portion that

      extends twenty-five feet north from the centerline of the former railroad tracks

      and 277 feet west from Willowview Road (the “Disputed Property”). Id. at 23,

      25, 27, 72.

[4]   The plat for the Park 32 West subdivision was recorded in 1978. Id. at 74. Lot

      5 is in the southeast corner of Park 32 West, and directly north of the Millikan

      Property divided by the old railway line. Id. Kace acquired Lot 5 in 2011, from

      Maggie Investments, LLC, and Maggie Investments, LLC acquired Lot 5 in

      2004 from Ronald and Pamela Kinsey. Id. at 37, 62-63.


[5]   By 1982, Conrail had abandoned the railway and the right of way that ran

      between the Millikan Property and Lot 5. Id. at 23. The Millikans began to

      exercise control over the railroad right of way in 1982 when Dennis personally

      removed the rails, ties, and stone that formed the railroad track. Id. at 23-24,

      35, 39. Dennis used many of the wooden railroad ties to build the backstop of a

      shooting range that ran from south to north on the Millikan property, and the

      backstop made use of the natural berm upon which the railroad had run. Id. at

      24-25.

[6]   The Millikans cut down the hedgerow on the Disputed Property and planted

      grass and a row of evergreen trees. Id. at 23, 32-34, 35, 39. For the next thirty-

      three years, the Millikans watered, fertilized, and mowed the grass on the


      Court of Appeals of Indiana | Opinion 20A-PL-1061 | December 7, 2020      Page 3 of 16
      Disputed Property, and raked leaves, trimmed and cared for the trees they had

      planted. Id. at 24, 35, 37, 38, 39. When Dennis mowed the Millikan Property,

      he also mowed the Disputed Property so that the grass was always the same

      length and appeared to be one, continuous yard. Id. at 24, 32-34, 35, 39.

      Nobody other than the Millikans ever mowed or maintained the Disputed

      Property between 1982 and 2016. Id. at 24, 36, 37, 38, 39. The Millikans’

      neighbors, including a previous owner of the Kace property, recognized the

      Disputed Property as belonging to the Millikans. Id. at 35-36, 37, 39-40.


[7]   On November 6, 1991, the Millikans recorded an “Affidavit In Support Of

      Vesting Interest In Abandoned Railroad Right Of Way” (“the 1991 Affidavit”)

      with the Hamilton County Recorder. Id. at 24, 27-29. The 1991 Affidavit

      contained a legal description that included the entire railroad right of way that

      bordered the Millikan Property, including the Disputed Property. Id. at 24.

      The 1991 Affidavit claimed that the Millikans owned the Disputed Property in

      fee simple but that a deed containing a complete description of the railroad right

      of way was not known to exist. Id. at 27-29. The 1991 Affidavit also stated that

      the Millikans’ real estate was adjacent to and along the south side of the

      railroad right of way and that the railroad right of way was abandoned. Id. It

      further stated that the Millikans made the affirmations contained in the 1991

      Affidavit for the purpose of establishing vested title in the railroad right of way,




      Court of Appeals of Indiana | Opinion 20A-PL-1061 | December 7, 2020       Page 4 of 16
      including the Disputed Property, pursuant to Indiana Code section 8-4-35-51

      and then reiterated the legal description of the entire railroad right of way. Id.

      Under this statue, the Millikans received title to the southern portion of the

      railroad right of way but not the Disputed Property. Ind. Code § 8-4-35-5 (now

      Ind. Code § 32-23-11-10). The Recorder’s Office stamped the 1991 Affidavit as

      “duly entered for taxation.” Id. at 24, 27.


[8]   No property taxes were ever assessed on the Disputed Property. Id. at 24, 49,

      51. Drainage assessments were assessed on the Disputed Property for the years

      2009-2015, payable in the years 2010-2016, but there were no special

      assessments payable on the Disputed Property for the years 2000-2009. Id. at

      145. No designated evidence was presented addressing the existence or

      nonexistence of special assessments on the Disputed Property prior to the year

      2000. The Millikans paid property taxes and special assessments due on the

      Millikan Property. Id. at 135-36. Noblesville was listed as the owner of record

      of the Disputed Property as the result of a 1991 quitclaim deed from White

      River, Noblesville, and Westfield Railroad, Inc. Id. at 178-79. Noblesville was



      1
          The current version of this statute is found as Indiana Code section 32-23-11-10 and states in pertinent part:

               (b) If a railroad abandons its right to a railroad right-of-way, the railroad’s interest vests in the
               owner of the right-of-way fee with a deed that contains a description of the real property that
               includes the right-of-way.
               (c) If a deed described in subsection (b) does not exist, then the railroad’s interest vests in the
               owner of the adjoining fee. The interest of the railroad that vests in the owner of the adjoining
               fee is for the part of the right-of-way from the center line of the right-of-way to the adjoining
               property line.



      Court of Appeals of Indiana | Opinion 20A-PL-1061 | December 7, 2020                                       Page 5 of 16
      aware that the quitclaim deed conveyed nothing because the grantor had no

      ownership interest in the Disputed Property. Id. at 176. Despite this

      knowledge, Noblesville paid the drainage assessments on the Disputed Property

      that were payable in the years 2010-2016. Id. at 145.


[9]   In approximately 2014, Noblesville began showing interest in acquiring the old

      railroad right of way for use as the Midland Trace Trail. Id. at 25. On August

      7, 2014, Dennis attended a public hearing on the issue at Hazel Dell

      Elementary School where he informed the Noblesville City Engineer that the

      Millikans owned the entire railroad line property that ran along the northern

      border of the Millikan Property. Id. When Noblesville ordered an appraisal of

      the railroad right of way, Dennis met with the appraiser on September 30, 2015

      and told him that the Millikans owned the Disputed Property, which the

      appraiser noted in his report to Noblesville. Id. at 25, 43. Despite this

      knowledge of the Millikans’ claim of ownership, Noblesville entered into an

      agreement with Kace, by which Kace was to transfer title to a portion of the

      Disputed Property to Noblesville. Id. at 25, 44-48, 49-50, 86-90. On December

      15, 2015, Kace signed a Warranty Deed transferring title to a portion of the

      Disputed Property to Noblesville and retaining a strip on the north side of what

      it sold to Noblesville that was approximately five feet in width and 277 feet in

      length. Id. at 86-90. Kace never, at any point in time, maintained or used any

      portion of the Disputed Property. Id. at 24-25.




      Court of Appeals of Indiana | Opinion 20A-PL-1061 | December 7, 2020        Page 6 of 16
[10]   In July of 2016, Noblesville filed a condemnation action to acquire a portion of

       the south half of the railroad right of way from the Millikans. Id. at 25.

       Noblesville and the Millikans eventually settled the condemnation action, and

       Noblesville acquired the portion of the south half of the old railroad right of

       way that it sought for the Midland Trace Trail. Id. at 26. Even after the

       Midland Trace Trail was completed, Kace did not mow the grass on the portion

       of the Disputed Parcel to the north of the trail, allowing that strip of property to

       become overgrown. Id. at 25, 80.


[11]   On December 14, 2018, the Millikans filed their complaint for title by adverse

       possession and trespass against the City. Id. at 4. The Millikans filed their first

       amended complaint on December 28, 2018. Id. at 5. On March 1, 2019, the

       Millikans filed a motion to dismiss the claim of trespass from the complaint,

       which the trial court granted on March 4, 2019, leaving a single claim for title

       by adverse possession. Id. at 6.


[12]   On November 5, 2019, the Millikans filed their motion for summary judgment

       as to their claim for title by adverse possession, along with designated evidence.

       Id. at 18-110. Noblesville filed its response on January 13, 2020, along with its

       designated evidence, which Kace joined. Id. at 111-56. The Millikans filed

       their reply to the City’s response and a motion for leave to file supplemental

       designation of evidence on January 23, 2020. Id. at 157-68. The trial court

       granted the Millikans’ motion for leave to file supplemental designation of



       Court of Appeals of Indiana | Opinion 20A-PL-1061 | December 7, 2020       Page 7 of 16
       evidence on January 24, 2020. Id. at 192. On March 10, 2020, the trial court

       held a hearing on the Millikans’ motion for summary judgment. Id. at 191.


[13]   On March 16, 2020, the trial court issued its order denying the Millikans’

       motion for summary judgment and granting summary judgment to the City. Id.

       at 13-15. In the order, the trial court found that the Millikans had satisfied “the

       common law elements of adverse possession to the Disputed Property,” but that

       they “failed to prove they have substantially complied with the requirements of

       [Indiana Code section 32-21-7-1], which requires an adverse claimant to have a

       reasonable and good faith belief that [they] paid the Special Assessments due

       during the period of adverse possession.” Id. at 13. The Millikans filed a

       motion to correct error on March 25, 2020, in which they pointed out that title

       had irreversibly vested in them many years before any special assessments were

       assessed against the Disputed Property. Id. at 193-95. On April 14, 2020,

       Noblesville filed its motion to deny the motion to correct error, which Kace

       joined. Id. at 199-205. The Millikans filed a reply on April 16, 2020. Id. at

       206-09. On April 27, 2020, the trial court denied the Millikans’ motion to

       correct error. Id. at 16-17. The Millikans now appeal.


                                       Discussion and Decision
[14]   When reviewing the grant or denial of a motion for summary judgment, we

       apply the same standard as the trial court: whether there is a genuine issue of

       material fact and whether the moving party is entitled to judgment as a matter

       of law. Anonymous Dr. A v. Foreman, 127 N.E.3d 1273, 1276 (Ind. Ct. App.
       Court of Appeals of Indiana | Opinion 20A-PL-1061 | December 7, 2020      Page 8 of 16
       2019) (citing Monroe Guar. Ins. Co. v. Magwerks Corp., 829 N.E.2d 968, 973 (Ind.

       2005)). We stand in the shoes of the trial court and apply a de novo standard of

       review. FLM, LLC v. Cincinnati Ins. Co., 973 N.E.2d 1167, 1173 (Ind. Ct. App.

       2012) (citing Cox v. N. Ind. Pub. Serv. Co., 848 N.E.2d 690, 695 (Ind. Ct. App.

       2006)). Our review of a summary judgment ruling is limited to those materials

       designated to the trial court. Ind. Trial Rule 56(H); Thornton v. Pietrzak, 120

       N.E.3d 1139, 1142 (Ind. Ct. App. 2019), trans. denied. Summary judgment is

       appropriate only where the designated evidence shows there are no genuine

       issues of material fact and the moving party is entitled to judgment as a matter

       of law. T.R. 56(C). For summary judgment purposes, a fact is “material” if it

       bears on the ultimate resolution of relevant issues. FLM, 973 N.E.2d at 1173.

       We view the pleadings and designated materials in the light most favorable to

       the non-moving party. Id. Additionally, all facts and reasonable inferences

       from those facts are construed in favor of the non-moving party. Id. (citing

       Troxel Equip. Co. v. Limberlost Bancshares, 833 N.E.2d 36, 40 (Ind. Ct. App.

       2005), trans. denied). The initial burden is on the moving party to demonstrate

       the absence of any genuine issue of fact as to a determinative issue, at which

       point the burden shifts to the non-movant to come forward with contrary

       evidence showing an issue for the trier of fact. Hughley v. State, 15 N.E.3d 1000,

       1003 (Ind. 2014).


[15]   A trial court’s grant of summary judgment is clothed with a presumption of

       validity, and the party who lost in the trial court has the burden of


       Court of Appeals of Indiana | Opinion 20A-PL-1061 | December 7, 2020      Page 9 of 16
       demonstrating that the grant of summary judgment was erroneous. Henderson v.

       Reid Hosp. and Healthcare Servs., 17 N.E.3d 311, 315 (Ind. Ct. App. 2014), trans.

       denied. We will affirm upon any theory or basis supported by the designated

       materials. Id. When a trial court grants summary judgment, we carefully

       scrutinize that determination to ensure that a party was not improperly

       prevented from having his or her day in court. Id.


[16]   The Millikans argue that the trial court erred when it granted summary

       judgment in favor of the City and denied the Millikans’ motion for summary

       judgment. The Millikans assert that they obtained title of the Disputed

       Property through adverse possession because, in addition to satisfying the

       common law requirements of adverse possession as the trial court found, they

       also satisfied Indiana Code section 32-21-7-1(a). They contend that they openly

       maintained exclusive possession and control of the Disputed Property for a

       twenty-seven-year period prior to there being any evidence of special

       assessments being due on the Disputed Property and that they were not

       required to pay special assessments that did not exist during that twenty-seven-

       year time period. Therefore, they maintain they had already obtained title to

       the Disputed Property before the special assessments were even assessed. 2 The



       2
         The City argues that this argument is waived because the Millikans raised it for the first time in their motion
       to correct error. We disagree. Although the Millikans may have more clearly stated their issue in their
       motion to correct error, it does appear that they had raised the issue in their summary judgment motion that
       they had satisfied Indiana Code section 32-21-7-1(a) prior to when the drainage assessments were assessed.
       Specifically, in their summary judgment brief and their reply to the City’s response to the motion for
       summary judgment, the Millikans argued that they began to exercise control over the Disputed Property in

       Court of Appeals of Indiana | Opinion 20A-PL-1061 | December 7, 2020                               Page 10 of 16
       Millikans further argue that, even if they were required to comply with Indiana

       Code section 32-21-7-1(a) after the ten-year possessory period ended, they

       satisfied the statute’s good faith requirement because they recorded the 1991

       Affidavit claiming ownership of the Disputed Property and the Recorder’s

       Office marked that affidavit as “duly entered for taxation,” which they

       reasonably believed had evidenced they were taking responsibility for the

       Disputed Property for tax purposes and that their annual property tax bill

       would include any special assessments that were due on the Disputed Property.

[17]   “‘[T]he doctrine of adverse possession entitles a person without title to obtain

       ownership to a parcel of land upon clear and convincing proof of control,

       intent, notice, and duration[.]’” Hardin v. McClintic, 125 N.E.3d 643, 651 (Ind.

       Ct. App. 2019) (quoting Fraley v. Minger, 829 N.E.2d 476, 486 (Ind. 2005)).

       There are four traditional elements to adverse possession at common law:

       control, intent, notice, and duration. Bonnell v. Cotner, 50 N.E.3d 361, 364 (Ind.

       Ct. App. 2016) (citing Fraley, 829 N.E.2d at 486). “The requisite period of time

       for adverse possession is ten years.” Celebration Worship Ctr., Inc. v. Tucker, 35

       N.E.3d 251, 254 (Ind. 2015). Here, the trial court found that the Millikans




       1982 and that the Disputed Property was not subject to taxes or assessments and none were due. Appellant’s
       App. Vol. II at 94, 99, 159-62. They argued in several places that they had obtained title before the assessments
       were due. Id. at 95, 97, 98, 101, 158, 159, 161. They further argued that their filing of the 1991 Affidavit
       invited taxation, and because it was filed well before any assessments were due on the Disputed Property,
       this assertion supported that the Millikans were arguing that they had satisfied the statute before the
       assessments were due. Id. at 95, 97, 98-99, 158, 161.

       Court of Appeals of Indiana | Opinion 20A-PL-1061 | December 7, 2020                               Page 11 of 16
       satisfied these common law elements of adverse possession, Appellant’s App. Vol.

       II at 13, and the City does not dispute that the Millikans have established all of

       these elements with respect to the Disputed Property. Instead, the trial court

       found that the Millikans did not satisfy Indiana Code section 32-21-7-1(a).


[18]   In addition to these elements, Indiana Code section 32-21-7-1(a) imposes a

       requirement that an adverse possessor “pay all taxes and special assessments

       that the adverse possessor reasonably believes in good faith to be due on the real

       property during the period the adverse possessor claims to have adversely

       possessed the real property.” “Substantial compliance satisfies this statutory tax

       payment requirement ‘where the adverse claimant has a reasonable and good

       faith belief that the claimant is paying the taxes during the period of adverse

       possession.’” Celebration Worship Ctr., 35 N.E.3d at 254 (quoting Fraley, 829

       N.E.2d at 493). “Once the elements of adverse possession are established, fee

       simple title to the disputed tract of land is conferred upon the possessor by

       operation of law, and title is extinguished in the original owner.” Id. at 254 n.2.

       “Once title vests in a party at the conclusion of the ten-year possessory period,

       the title may not be lost, abandoned, or forfeited, even where the party pays

       rent to the titleholder, agrees to a survey to attempt to find the true boundary

       line, expresses satisfaction with a survey whose results are inconsistent with the

       property adversely possessed by him, or states that he does not claim the land

       and offers to buy it.” Fraley, 829 N.E.2d at 487 (internal citations omitted).




       Court of Appeals of Indiana | Opinion 20A-PL-1061 | December 7, 2020     Page 12 of 16
[19]   In its order denying the Millikans’ motion for summary judgment and granting

       summary judgment to the City, the trial court found that the Millikans did not

       satisfy Indiana Code section 32-21-7-1(a). Appellant’s App. Vol. II at 13.

       Specifically, the trial court found that the Millikans failed to prove they

       substantially complied with the requirements of the statute, which required

       them to have a reasonable and good faith belief that they paid the special

       assessments due during the period of adverse possession. Id. The trial court

       found that the Millikans did not pay property taxes on the Disputed Property

       but that it did not appear that any were ever assessed because “title appears in

       the name of [Noblesville],” according to one of the City’s exhibits.3 Id. at 14.

       The trial court further found that, because they paid taxes and assessments on

       the south part of the railroad right of way, the Millikans should have known

       that they were not paying the taxes and assessments on Disputed Property and,

       therefore, did not act reasonably and in good faith when they did not receive a

       tax bill for the Disputed Property. Id.


[20]   The designated evidence showed that there were not any taxes or special

       assessments assessed on the Disputed Property until 2010. The Millikans began

       exercising control over the Disputed Property in 1982 and continued for

       approximately twenty-eight years before the drainage assessments that the City




       3
         The exhibit relied on by the trial court only showed tax records from 2011-2016 and, therefore, only showed
       that title was in the name of Noblesville for that time period. See Appellant’s App. Vol. II at 133.

       Court of Appeals of Indiana | Opinion 20A-PL-1061 | December 7, 2020                           Page 13 of 16
       argued, and the trial court found, were due on the Disputed Property. The

       Millikans presented designated evidence that there were no property taxes

       assessed on the Disputed Property while they possessed and maintained the

       land. Id. at 24, 49, 51. In November 1991, they filed the 1991 Affidavit,

       asserting title over the entire railroad right of way, including the Disputed

       Property, which the Recorder’s Office stamped as “duly entered for taxation.”

       Id. at 24, 27. The Millikans believed that this 1991 Affidavit put the taxation

       authorities on notice that they were taking responsibility for taxation of the

       Disputed Property. Although they were mistaken in their belief that they

       obtained possession of the Disputed Property pursuant to then Indiana Code

       section 8-4-35-5, contrary to the trial court’s findings, the Millikans were not

       paying taxes on one property (the south right of way) and not another (the

       Disputed Property) during the period of adverse possession. The designated

       evidence showed that no taxes or assessments were due for the Disputed

       Property until after the period of adverse possession had passed.

[21]   Under previous Indiana cases, adverse claimants have been found to have

       satisfied the taxation statute where they never paid taxes on the adversely

       possessed property because no taxes were ever assessed on the property, and

       this court reasoned that “only the taxes falling due on the property need be

       paid; where no taxes are assessed none need be paid.” Colley v. Carpenter, 362

       N.E.2d 163, 167 (Ind. Ct. App. 1977) (citing Longabaugh v. Johnson 321 N.E.2d

       865, 868 (Ind. Ct. App. 1975)). In the present case, because no taxes or


       Court of Appeals of Indiana | Opinion 20A-PL-1061 | December 7, 2020     Page 14 of 16
       assessments were assessed and due on the Disputed Property during the period

       of adverse possession, we conclude that the Millikans substantially complied

       with the statutory tax payment requirement because they had a reasonable and

       good faith belief that they were paying the taxes during the period of adverse

       possession. This is particularly true because there were no taxes or assessments

       assessed on the Disputed Property for a least twenty-eight years after the

       Millikans began asserting control and possession of the Disputed Property and

       for at least eighteen years after they filed their 1991 Affidavit. A party

       substantially complies with the statutory tax payment requirement “‘where the

       adverse claimant has a reasonable and good faith belief that the claimant is

       paying the taxes during the period of adverse possession.’” Celebration Worship

       Ctr., 35 N.E.3d at 254 (quoting Fraley, 829 N.E.2d at 493).


[22]   “Once the elements of adverse possession are established, fee simple title to the

       disputed tract of land is conferred upon the possessor by operation of law, and

       title is extinguished in the original owner.” Id. at 254 n.2. Once title vests in a

       party at the conclusion of the ten-year possessory period, the title may not be

       lost, abandoned, or forfeited. Fraley, 829 N.E.2d at 487. Therefore, for at least

       a ten-year period, beginning in 1982, the Millikans substantially complied with

       the taxation statute because they had a reasonable and good faith belief that

       they were paying the taxes during the period of adverse possession as no taxes

       were assessed on the Disputed Property during that period of time. We, thus,

       find that the trial court erred in granting summary judgment in favor of the City


       Court of Appeals of Indiana | Opinion 20A-PL-1061 | December 7, 2020         Page 15 of 16
       and in denying the Millikans’ motion for summary judgment. We reverse and

       remand to the trial court to enter summary judgment in favor of the Millikans.

[23]   Reversed and remanded.


       Pyle, J., and Tavitas, J., concur.




       Court of Appeals of Indiana | Opinion 20A-PL-1061 | December 7, 2020   Page 16 of 16