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Date: 05-23-2017

Case Style: In re Kathleen M. Grant v. John D. Grant

Case Number: 34321-9-111

Judge: Fearing

Court: Court of Appeals of Washington on appeal from the Superior Court, Kittitas County

Plaintiff's Attorney: Jim Marston

Defendant's Attorney: Jim Denison

Description: This appeal pits the importance of finality in litigation against
the requisite for a full accounting of assets in a marital dissolution. Based on Washington
statutes and the Supreme Court's wisdom in Yeats v. Estate of Yeats, 90 Wn.2d 201, 580
P.2d 617 (1978), we side with an inclusive accounting. In this partition action, we
reverse the trial court's ruling that a dissolution decree's grant to the husband of the
"balance of the assets" effectively disposed of the husband's interest in a retirement
account when the list of assets presented to the earlier dissolution court omitted the
account.
No. 34321-9-III
Grant v. Grant
FACTS
This appeal arises from an action to partition the former husband's interest in a
retirement plan never mentioned in a 2010 divorce decree. The subject couple, Kathleen
and John Grant, married on November 18, 1978, and separated on June 23, 2009. During
the marriage, John Grant worked for the Washington State Department of Revenue for
twenty years. John is a certified public accountant. During the marriage, Kathleen Grant
cleaned houses and later operated a pizza parlor. The pizza business lost money.
Since Kathleen Grant seeks to partition her former husband's interest in his
Washington State Public Employees Retirement System (PERS) pension plan, the parties
filed accusatory declarations that detail their respective views as to whether Kathleen
knew of John's participation in the plan at the time of the dissolution. John Grant insists
that the couple often discussed the existence of the retirement plan. Kathleen's father
labored for the State of Washington and retired with a state pension. Kathleen received
the parties' mail, which occasionally included PERS statements and newsletters. The
parties discussed John switching from one PERS plan to another plan. According to
John, Kathleen saw pay stubs that showed a contribution to the PERS plan. Kathleen told
the couple's children that John should keep his retirement plan. During the divorce
action, John provided Kathleen all records needed for her to ascertain the parties' assets.
John questions how Kathleen came to learn about his retirement plan, if she lacked
2
No. 34321-9-111
Grant v. Grant
knowledge of the plan before the divorce. He observes that Kathleen sought a portion of
his retirement account only after his payments to her ended.
In her declaration, Kathleen Grant declares that the couple rarely discussed
finances. John handled the couple's investments. She did not open mail addressed to her
husband. Kathleen did not handle John's pay stubs since the State paid John by direct
deposit. According to Kathleen, John never mentioned a retirement account through his
employment. When Kathleen referenced "his retirement" to the children and to the
dissolution court, she spoke of 40l(k)s, individual retirement accounts, and an investment
account or two, not an unknown retirement plan.
Without the assistance of an attorney, the couple, in February 2010, petitioned for
marital dissolution. The petition, prepared by Kathleen, read:
We have made a marital settlement agreement dividing our property
and our bills. We are satisfied with this agreement. The attached
agreement was signed freely and voluntarily by each of us, and we intend to
be bounded [sic] by it.
Clerk's Papers (CP) at 36. Our copy of the petition lacks any attachment. Kathleen
Grant and John Grant may agree on only one proposition-the parties intended to divide
their assets evenly.
On May 10, 2010, Kathleen Grant appeared before the Kittitas County Superior
Court for entry of a decree of dissolution. The trial court, unconvinced of the soundness
of the proposed decree, rejected the proposed decree. The following colloquy, in part,
3
No. 34321-9-III
Grant v. Grant
occurred between Kathleen and the dissolution court:
The Court: Okay. I don't understand what the loan calculator's in
here for.
[KATHLEEN GRANT]: Well, as opposed to taking out his
retirement and all that and get fines, penalties, he's going to pay me
quarterly. Or, if you wanted to break it down to monthly, it would be 2,000
a month. And that way he can still, you know, keep his-
The Court: He is a [Certified Public Accountant]?
[KATHLEEN GRANT]: Uh-huh. As I said, the reason he set it up
like that was as opposed to take everything out of his retirement-
CP at 27 (emphasis added).
On May 24, 2010, Kathleen and John Grant appeared before the Kittitas County
Superior Court for entry of the same dissolution decree. The trial court then entered
findings of fact, conclusions of law, and a decree of dissolution. Two sections of the
decree respectively divided the property among husband and wife as:
3.2 Property to be Awarded the Husband
The husband is awarded as his separate property the property set
forth in Exhibit copy attached A [sic]. This exhibit is attached or filed and
incorporated by reference as part of this decree.
The husband is awarded as his separate property the property set
forth in the separation contract or prenuptial agreement executed by the
parties on (date) Feb. 1, 2010. The separation contract or prenuptial
agreement is incorporated by reference as part of this Decree. The
prenuptial agreement or, pursuant to RCW 26.09.070(5), the separation
contract is filed with the court.
The husband is awarded as his separate property the following
property (list real estate, furniture, vehicles, pensions, insurance, bank
accounts, etc.): See attachement.
3 .3 Property to be Awarded to the Wife
The wife is awarded as her separate property the property set forth in
Exhibit copy attached B [sic]. This exhibit is attached or filed and
4
No. 34321-9-III
Grant v. Grant
incorporated by reference as part of this decree.
The wife is awarded as her separate property the property set forth in
the separation contract or prenuptial agreement referenced above.
The wife is awarded as her separate property the following property
(list real estate, furniture, vehicles, pensions, insurance, bank accounts,
etc.): See attachment.
CP at 77-78 (boldface omitted). The decree lacked any attachment. The parties,
nonetheless, attached two signed pages to the findings of fact and conclusions of law.
The first page read:
Marital Settlement Agreement
AGREEMENT TO DISTRIBUTION OF ASSETS
WE (JOHN D. AND KATHLEEN M. GRANT) AGREE THAT
KATHLEEN RECEIVES $178,000 AND OWNERSHIP AND ALL
RIGHTS TO GRANT'S PIZZA PLACE. JOHN RECEIVES THE
BALANCE OF THE ASSETS AND OWNERSHIP OF THE HOUSE.
NOTE: THIS AGREEMENT DOES NOT INCLUDE PERSONAL
PROPERTY WHICH WILL BE DIVIDED BASED ON OTHER
METHODS AS AGREED.
METHOD OF DISTRIBUTION TO KATHY.
$$$ DUE TO KA THY
WELLS FARGO - CHECKING
(12/21/09)
WELLS FARGO - CD (MAT 3/15/10)
LOAN RECEIVABLE - KT
NOTE RECEIVABLE - PAY ABLE ON
DEMAND
BALANCE
$178 000
(20,000)
(31,000)
(20,000)
(107,000)
0
CP at 73. The parties did not define or identify the personal property to be divided on
other methods. Page two repeated page one, but, on page two, someone wrote "paid"
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No. 34321-9-111
Grant v. Grant
next to the two Wells Fargo entries and "due" next to the loan and note receivable entries.
CP at 74.
John Grant testifies that the parties attached a third page to the findings of fact,
although our copy of the findings of fact omits any such attached page. The third page,
according to John, explained how the parties reached the division of assets. The page
read:
ASSET DISTRIBUTION
$$$$$
PERSHING- JOINT ACCT 120,000
WELLS FARGO - CHECKING 32,000
WELLS FARGO - CD 31,000
WELLS FARGO SA VIN GS 25,000
LOAN RECEIVABLE - KT 20,000
PERSHING - IRA 40,000
WA STATE DEFERRED COMP 88,000
GPP [Grant's Pizza Place] 100
HOUSE 100
TOTAL ASSETS 356,200
$$$ DUE TO KA THY
WELLS FARGO - CHECKING (12/21/09)
WELLS FARGO - CD (MAT 3/15/10)
LOAN RECEIVABLE - KT
NOTE PAY ABLE ON DEMAND
BALANCE
KATHY
60,000
16,000
15,500
12,500
10,000
20,000
44,000
100
0
178,100
178,000
(20,000) Paid
JOHN
60,000
16,000
15,500
12,500
10,000
20,000
44,000
0
100
178,100
(31,000) Paid $31,600
(20,000) Starting 6/1/2010
(107,000) Starting 6/1/2010
0
WE AGREE THAT KATHLEEN RECEIVES $178,000 AND
OWNERSHIP AND ALL RIGHTS TO GRANTS PIZZA PLACE. JOHN
RECEIVES THE BALANCE OF THE ASSETS AND OWNERSHIP OF
THE HOUSE.
CP at 164. We assume that the entry for Washington State Deferred
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No. 34321-9-III
Grant v. Grant
Compensation refers to an asset other than John's pension plan. At the time of the
divorce, John Grant worked for the State of Washington and participated in the
State's PERS pension plan. We lack any information as to the value of the PERS
account at the time of the divorce. John Grant drafted all of the lists and divisions
of property.
The litigation between the parties includes more than the dissolution action and
this later partition suit. On May 3 1, 2013, Kathleen Grant moved in Clark County
Superior Court for relief from the 2010 dissolution decree and alleged that she knew not
of John's PERS pension at the time of dissolution. By agreement of the parties, the trial
court dismissed the motion for relief from judgment.
Kathleen Grant did not relent. On January 6, January 15, and March 31, 2014,
she, in Kittitas County Superior Court, again moved for relief from the 2010 decree of
dissolution. We do not know the purpose of three motions, rather than one motion. In
her motions, she argued that John Grant's failure to disclose his PERS plan constitutes an
extraordinary circumstance that invalidated the divorce decree. The trial court denied the
motions for relief.
On June 13, 2014, Kathleen Grant filed an amended motion for relief from the
decree. Kathleen supported the June motion with attachments and a declaration that
provided:
7
No. 34321-9-III
Grant v. Grant
I was led to believe by a lack of financial disclosure in discussions
with John that the 40l(k)s and IRAs, personal investments, and savings was
the sum total of all our assets. This was to be our entire savings and
investments for retirement in conjunction with his social security. The
State of Washington PERS Plan was not included in this envisioned
retirement scenario. A review of the Distributions of Assets attached to the
Decree of [Dissolution] and Findings of Fact make no mention of a
retirement plan through the State of Washington.
CP at 156. John Grant filed a responsive declaration that listed the reasons why Kathleen
knew of his PERS pension plan. On August 11, 2014, Kathleen filed a second amended
motion for relief from judgment and responsive declaration. The trial court denied the
motion and awarded John $6,762.72 in attorney fees.
PROCEDURE
We now move to the lawsuit on appeal. On March 30, 2015, Kathleen Grant filed
a complaint for partition of personal property on the ground that the 2010 trial court did
not divide John Grant's PERS pension in the marriage dissolution decree. In response,
John did not assert as affirmative defenses res judicata or collateral estoppel arising from
earlier litigation. In his answer to the complaint, John raised the affirmative defense of
waiver. He does not assert this defense on appeal.
John Grant filed a motion for summary judgment, which motion he supported with
a declaration. Kathleen Grant responded with a supporting declaration. She declared
facts undermining John's evidence of her knowledge of his state pension account. John's
responsive declarations included a response to a request for admission sent him by
8
No. 34321-9-111
Grant v. Grant
Kathleen, wherein John stated "that [he] provided to Kathleen Grant all records,
statements and other written information necessary for her to determine and verify the
extent of and accuracy of the values of all assets acquired during the marriage." CP at
275,280.
The trial court granted John Grant summary dismissal of Kathleen Grant's suit for
partition. The trial court also granted John's request for $10,120.00 in attorney fees and
$38.15 in costs.
as:
Kathleen Grant moved for reconsideration. She listed the material contested facts
That Kathleen Grant had knowledge of the contested asset;
That the family court had knowledge of the contested asset;
That the language in attachment "A" to the decree of dissolution
awarding "the balance of the assets" was sufficient to put both Ms. Grant
and the court on notice that the PERS account existed;
That Kathleen Grant and the court in the dissolution matter
intended the language in attachment "A" to the decree of dissolution
awarding "the balance of the assets" to the Defendant in this matter.
CP at 318-19. The trial court denied the motion for reconsideration.
LAW AND ANALYSIS
On appeal, Kathleen Grant asserts two principal arguments. First, John Grant and
she own the PERS retirement plan as tenants in common because the 2010 dissolution
decree failed to mention and allot the plan to John. Kathleen's knowledge of the PERS
plan is irrelevant to this first contention. Second, John breached his fiduciary duty by
9
No. 34321-9-III
Grant v. Grant
hiding the existence of the PERS plan from her, and this concealment invalidates the
decree's disbursement of property. We rule in favor of Kathleen on her first argument
and thus do not address the second contention.
The 2010 marital dissolution decree did not list John Grant's PERS pension plan
as an asset, and the decree awarded John "the balance of assets" not specifically awarded
to Kathleen Grant. On appeal, Kathleen contends the divorce decree provision "the
balance of the assets" failed to divest the community interest in John's pension because
of the pension's significance and her lack and the trial court's lack of knowledge of the
existence of the asset. .
RCW 26.09.050 declares, in part:
(1) In entering a decree of dissolution of marriage ... , the court
shall ... make provision for the disposition of property and liabilities of the
parties.
RCW 26.09.080 controls the court's division of property and debt:
In a proceeding for dissolution of the marriage ... , the court shall,
without regard to misconduct, make such disposition of the property and
the liabilities of the parties, either community or separate, as shall appear
just and equitable after considering all relevant factors including, but not
limited to:
(1) The nature and extent of the community property;
(2) The nature and extent of the separate property;
(3) The duration of the marriage or domestic partnership; and
( 4) The economic circumstances of each spouse or domestic partner
at the time the division of property is to become effective, including the
desirability of awarding the family home or the right to live therein for
reasonable periods to a spouse or domestic partner with whom the children
reside the majority of the time.
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No. 34321-9-111
Grant v. Grant
RCW 26.09.070 permits the parties to enter into property settlement agreements.
The statute reads:
( 1) The parties to a marriage ... upon the filing of a petition for
dissolution of their marriage ... , may enter into a written separation
contract providing for ... the disposition of any property owned by both or
either of them . . . .
(3) If either or both of the parties to a separation contract shall at the
time of the execution thereof, or at a subsequent time, petition the court for
dissolution of their marriage ... , the contract ... shall be binding upon the
court unless it finds, after considering the economic circumstances of the
parties and any other relevant evidence produced by the parties on their
own motion or on request of the court, that the separation contract was
unfair at the time of its execution.
These three marital dissolution statutes promote a just, equitable, and fair allocation of
property between the parties regardless of any agreement earlier reached. The statutes
direct the dissolution court to ensure a fair distribution.
A dissolution court cannot decree a fair allocation of assets and debts without the
court gaining thorough knowledge of the parties' property and liabilities. Thus, the
Supreme Court has held that a settlement agreement or decree of dissolution must
adequately identify the assets so as to permit the court to approve the agreement or make
proper division. Yeats v. Estate of Yeats, 90 Wn.2d at 206 (1978). At a minimum, the
documents must put the parties and the court on notice that the assets exist. Yeats v.
Estate of Yeats, 90 Wn.2d at 206. On this basis, we hold that the 2010 divorce decree
failed to distribute John Grant's interest in his PERS retirement plan and the parties hold
11
No. 34321-9-111
Grant v. Grant
an equal share in the plan as of the date of the divorce.
Community property not disposed of in a dissolution is owned thereafter by the
former spouses as tenants in common. Yeats v. Estate of Yeats, 90 Wn.2d at 203; Chase
v. Chase, 74 Wn.2d 253,258,444 P.2d 145 (1968); Northwestern Life Insurance Co. v.
Perrigo, 47 Wn.2d 291,293,287 P.2d 334 (1955). Likewise, a spouse's pension plan not
disposed of in a divorce decree is owned by the former spouse as tenant in common. In
re Marriage of Buchanan, 150 Wn. App. 730, 735-36, 207 P.3d 478 (2009); Barros v.
Barros, 34 Wn. App. 266, 269, 660 P.2d 770 (1983). The reason for this rule is that the
court did not exercise its jurisdiction over the property. Sears v. Rusden, 39 Wn.2d 412,
416, 23 5 P .2d 819 (1951 ). If the property rights of the parties are not brought before the
court in some manner, such rights are not and cannot be affected by the decree. Sears v.
Rusden, 39 Wn.2d at 416. The undistributed property becomes subject to partition or
other appropriate declaratory relief. Lambert v. Lambert, 66 Wn.2d 503, 510, 403 P.2d
664 (1965); Olsen v. Roberts, 42 Wn.2d 862,864,259 P.2d 418 (1953).
Yeats v. Estate of Yeats informs our decision. Agnes and William Yeats divorced
after twenty-four years of marriage. A property settlement agreement, approved by the
dissolution court, read:
"With respect to property both real and personal acquired by
Husband and Wife during their marriage and owned by them or either of
them at the time of their separation, the same has heretofore been equitably
divided and apportioned between the parties as set forth in Exhibit "A"
attached hereto and they hereby ratify and confirm such division.
12
No. 34321-9-111
Grant v. Grant
Section 6 Support and Maintenance of Wife
Wife accepts the payments specified in and to be made under this
Section ... in lieu of any interest in and to any and all property which
Husband now owns or may hereafter acquire ...
II. INSURANCE:
The Husband shall maintain in effect for the benefit of the Wife life
insurance on the life of the Husband in the amount of $10,000.00 naming
the Wife as sole beneficiary thereof."
Yeats v. Estate of Yeats, 90 Wn.2d at 204. At the time of the execution of the agreement,
nine life insurance policies insured the life of William in the face amount of $28,000 with
a cash surrender value of approximately $1,000 and three policies insured Agnes with a
face amount of $7,550 and a cash surrender value of$1,775. An additional $75,000
policy, for which William's employer paid, insured William's life. Five months after the
dissolution, William married Jeanie. Six months later, William died. Jeanie brought suit
to recover her community share in the policies insuring William.
The trial court and the Supreme Court granted Agnes Yeats her requested
recovery. The Supreme Court wrote:
None of the policies is mentioned, much less fully described in the
settlement agreement. The boilerplate language quoted above was not
adequate to dispose of the policies. While one might assume that the
parties intended that each receive the policies on his or her life, one cannot
learn that from the terms of the agreement. It is pure speculation to
determine what the parties intended or what the agreement meant. We hold
that there must be sufficient specificity in settlement agreements or decrees
of dissolution to identify the assets and their disposition. The requisite
13
No. 34321-9-111
Grant v. Grant
specificity is not present here inasmuch as the policies were not even
mentioned.
Yeats v. Estate of Yeats, 90 Wn.2d at 205. The high court also observed:
It is impossible for the court to perform its statutorily mandated
duties if it is unaware of the nature and extent of the property. Even a
general description of the insurance policies would make known that such
assets existed. This is necessary before the court or the parties can consider
them in evaluating the dispositive scheme.
Yeats v. Estate of Yeats, 90 Wn.2d at 205.
John Grant principally relies on the language in his settlement agreement
allocating the "balance of the assets" to him. We observe that the agreement in Yeats
contained similar language in that Agnes disclaimed any interest in any and all property
of William. This language did not suffice to distribute unlisted assets to William Yeats.
Other Washington decisions support our conclusion. In Lambert v. Lambert, 66
Wn.2d 503 (1965), the Supreme Court reversed the trial court's refusal to partition a
minor stock account undistributed at the time of the divorce. Since the decree failed to
mention the account, the wife retained a one-half interest in the account.
Inln re Marriage of Monaghan, 78 Wn. App. 918,899 P.2d 841 (1995), the
dissolution decree divided the parties' community property equally, designated by two
separate property schedules. The property schedule awarded to Robert Monaghan,
among other items, his dental practice, subject to an interest in favor of Dolores
Monaghan, in an amount computed as fifty percent of the gross funds received in excess
14
No. 34321-9-111
Grant v. Grant
of $80,000.00, from the sale of the dental practice. The husband shortly thereafter sold
his dental practice, but the sale did not include the practice's accounts receivable. The
wife brought a partition action to recover one-half of the accounts accrued during the
marriage. This court awarded her a community share in the accounts since the divorce
decree failed to list the asset. We noted that, when property is held as tenants in
common, our Supreme Court has held that the parties intended them to share the property
equally, unless the court is shown otherwise.
The Washington high court's ruling in Robinson v. Robinson, 37 Wn.2d 511,225
P.2d 411 (1950) may conflict with our holding. The dissolution decree awarded to the
husband "all other property" and the wife renounced any interest in such property. The
Supreme Court held that the decree granted the husband all assets, even assets about
which the wife had no knowledge. We choose to follow the more recent and better
reasoned Yeats v. Estate of Yeats, rather than Robinson v. Robinson. Washington public
policy supports a full accounting before the dissolution court so that the court may
equitably allocate assets.
John Grant insists that Kathleen Grant knew of his PERS retirement account, and
he then attacks the fairness of her years later claiming an interest in the account. We
observe that Kathleen mentioned "his retirement" during the first attempt to gain the
dissolution court's signature on the 2010 decree. John may be correct that Kathleen
knew of the account, but she denies such knowledge. Kathleen could have been confused
15
No. 34321-9-111
Grant v. Grant
with John's deferred compensation program with the State or other retirement accounts
when she referred to "his retirement." John was a certified public accountant. As an
accountant, John should have known to thoroughly list assets on an asset sheet. Although
Kathleen managed a pizza parlor, we do not know the extent of her financial acumen.
With certain contracts, we require the parties place contractual terms in writing so that
the parties do not later dispute the character of those terms. The law also encourages
divorcing parties to fully disclose and consign all assets to writing to preclude future
disputes.
We note that both John Grant and Kathleen Grant testify that the parties intended
to split their assets in half. We question how the parties could evenly pare their property
when the division fails to account for a major asset such as a retirement account. We do
not know the value of the account at the time of dissolution, but presuppose a generous
worth because John had worked for the State for twenty years. We also question how the
dissolution court could determine the fairness of the division of property without John
Grant listing his PERS plan on a sheet of assets shown to the court and attaching a value
to the plan.
John Grant argues that this court's ruling will lead to a requirement that a
divorcing couple list each fork, spoon, pen, and pencil on a list of assets presented to the
trial court at the time of the divorce decree at the risk of a later legal squabble. We do not
worry about this horrible. We doubt parties will incur the expense of a later partition
16
No. 34321-9-111
Grant v. Grant
action to untine a fork or parcel a pencil. Also Our Supreme Court addressed this
concern in Yeats v. Estate of Yeats. Settlement agreements and decrees of dissolution
must include sufficient specificity to identify the assets and their disposition. Yeats v.
Estate of Yeats, 90 Wn.2d at 205. Nevertheless, a property description suffices if it
allows the court to perform its statutorily mandated duties while aware of the nature and
extent of the property. A general description of an asset and lumping some common
assets together may dispose of most personal property so long as doing so does not
impinge on the court's equitable duties. Yeats v. Estate of Yeats, 90 Wn.2d at 205.
We conclude that, based on the undisputed facts, the 2010 dissolution decree
failed to allocate the PERS retirement pension to John. Although Kathleen did not seek a
summary judgment ruling in her favor before the trial court, when the facts are not in
dispute, this court may grant summary judgment to the nonmoving party. lmpecoven v.
Department of Revenue, 120 Wn.2d 357,365,841 P.2d 752 (1992); Lelandv. Frogge, 71
Wn.2d 197,201,427 P.2d 724 (1967); Washington Association a/Child Care Agencies v.
Thompson, 34 Wn. App. 225, 234, 660 P.2d 1124 (1983).
The trial court entered findings of fact challenged by Kathleen Grant on appeal.
Because we may resolve this appeal without addressing the findings, we do not discuss
them.
Tenants in common are presumed to own equal shares in the property unless they
prove otherwise. We remand to the trial court for entry of an order declaring Kathleen
17
No. 34321-9-III
Grant v. Grant
Grant to hold a one-half interest as a tenant in common in John Grant's PERS pension
plan to the extent of the plan's value at the time of marital dissolution.
By motion filed after she filed her opening and reply briefs, Kathleen Grant seeks
an award of reasonable attorney fees and costs on appeal pursuant to RCW 26.09.140.
RAP 18.1 (b) requires a party seeking an award of reasonable attorney fees to devote a
section of her opening brief to the request. Kathleen failed to comply with this rule.
Therefore, we deny her request for an award of reasonable attorney fees and costs.

Outcome: We vacate the trial court's order dismissing Kathleen Grant's partition action and
grant of reasonable attorney fees and costs to John Grant. We remand to the trial court
for entry of an order declaring Kathleen an equal tenant in common with John in John
Grant's PERS pension plan to the extent of the plan's value at the time of marital
dissolution.

Plaintiff's Experts:

Defendant's Experts:

Comments:



 
 
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