Indiana Court Decisions – March 25-April 7, 2021

Keywords Court opinions

Indiana Court of Appeals

March 25

Criminal — Arson of Parole Office/Double Jeopardy

Jason E. Morales v. State of Indiana


A man who set fire to a government building to destroy evidence of pornography constituting parole violations will have one of his arson convictions vacated after the Indiana Court of Appeals used recent caselaw to find a double jeopardy violation.

During a routine search of Jason Morales’ home, Travis Carter, Morales’ parole officer, found a hidden flash drive and evidence of a pornographic file on Morales’ laptop. The terms of Morales’ probation prohibited him from viewing porn, so when Carter took the laptop, Morales told his girlfriend he was “gonna burn the parole office up.”

True to his word, Morales broke into the Vigo County Community Corrections building with a pry bar and used an accelerant to ignite several fires in the parole offices. About 60 people were inside at the time, but no one was hurt.

Morales was identified on security footage, and he was eventually convicted of Level 2 felony burglary and two counts of Level 4 felony arson and was found to be a habitual offender. He received a 36-year sentence.

On appeal in Jason E. Morales v. State of Indiana, 20A-CR-913, Morales unsuccessfully challenged the Vigo Superior Court’s rejection of his “reasonable theory of evidence” jury instruction, which he claimed was mandatory under Hampton v. State, 961 N.E.2d 480, 491 (Ind. 2012). The Court of Appeals disagreed.

“Morales’s argument, planted entirely in Hampton’s soil, cannot bloom,” Judge Leanna Weissmann wrote. “… Morales’s statement to his girlfriend that he would burn the parole office was direct evidence of the actus reus. Hampton does not apply because the actus reus evidence was not solely circumstantial.”

Morales also did not convince the appellate court that his burglary and arson convictions violated common law double jeopardy protections. Following the new double jeopardy analysis under Wadle v. State, 151 N.E.3d 227 (Ind. 2020), the panel determined that the arson statute does not permit multiple punishments and that arson is not a lesser included offense of burglary with intent to commit arson.

“Neither is arson a lesser included offense of burglary under the other subsections of the lesser included offense statute,” Weissmann wrote. “No attempted crime was charged, and the differences between Level 4 felony arson and Level 2 felony burglary vary in more ways than just level of harm or culpability. …

“… Although we reject Morales’s common law claim, we sua sponte address a different double jeopardy issue: whether his convictions for two counts of arson for setting the same fires violate the statutory prohibition on substantive double jeopardy,” Weissmann continued. “The arson convictions differed in only one respect. One was based on arson ‘under circumstances that endanger life’ under Indiana Code § 35-43- 1-1(a)(2), and the other was based on arson damaging the property of Vigo County with a pecuniary loss of at least $5,000.00 under Indiana Code § 35-43- 1-1(a)(3).”

The court’s analysis of that double-jeopardy question followed Wadle’s sister opinion, Powell v. State, 151 NE.3d 256 (Ind. 2020). Powell addresses “whether ‘the same act may be twice punished’ as ‘two counts of the same offense.’”

“Morales set a series of fires within the parole offices during a thirty-minute period immediately after burglarizing the building in the middle of the night. Those fires simultaneously damaged the building and endangered human life,” Weissmann wrote for the panel. “He was charged and convicted of arson under Indiana Code § 35-43-1-1(a)(2) and -(3). Our Supreme Court in (Matthews v. State, 849 N.E.2d 578 (Ind. 2006)) determined multiple arsons charged under those subsections constitute one transaction. 849 N.E.2d at 587. The facts of this case, as charged and as proven, establish that the two arson counts are a single offense.

“We therefore conclude Morales impermissibly was convicted of two counts of arson for setting fires with multiple consequences already encompassed in each individual count. … We reverse the trial court’s judgment in part and remand with instructions to the trial court to vacate one of the arson convictions,” the panel concluded.

In a separate concurring opinion, Judge Robert Altice pointed to his prior concurrences in two double jeopardy cases: Shepherd v. State, 155 N.E.3d 1227 (Ind. Ct. App. 2020), and Rowland v. State, 155 N.E.3d 637 (Ind. Ct. App. 2020). Those cases “merely stated” that Wadle left common law double jeopardy principles standing, rather than engaging in an analysis on that issue.

“The subsequent line of cases, which all held otherwise, thoroughly analyzed the issue. I am persuaded by these cases, particularly the detailed analysis in (Jones v. State), 159 N.E.3d at 61-62. Therefore, I now fully concur in the case at hand,” Altice wrote.


March 26

Civil Plenary — INDOT Action/Billboard Permit Revocation

Indiana Department of Transportation v. FMG Indianapolis LLC, et al.


The Indiana Department of Transportation was within its authority to revoke longstanding permits for nonconforming billboards along State Road 32 in Hamilton County, an appeals court ruled, reversing regulatory and trial court rulings in favor of the billboard owners. A trade group had warned such a ruling could lead to billboard permit revocations “any time, for any reason.”

Stephen and Jeffory Roudebush and FMG Indianapolis have had an INDOT permit for a pair of billboards along SR 32 and a 30-year lease since 1998. The billboards have stood since 1974.

However, the state highway department in June 2016 informed the owners that one of the signs was illegal and must be removed. The owners challenged that determination and an administrative law judge sided with them under what she called a “fundamental fairness doctrine,” and the Hamilton Superior Court agreed, leading INDOT to appeal.

The Indiana Court of Appeals reversed in Indiana Department of Transportation v. FMG Indianapolis LLC, et al., 20A-PL-00215.

Senior Judge Randall Shepard wrote that INDOT had the authority to revoke the permit and order one of the billboards removed, noting among other violations that the structures were not side-by-side billboards as permitted, but separate structures, making it a public nuisance under Ind. Code § 8-23-20-26(a) (1993).

Likewise, the panel held the statute of limitations did not bar INDOT’s efforts to remove a nuisance and the department cannot be estopped from regulating the signs because doing so could risk the receipt of federal highway funding if the state were found to be in violation of the Highway Beautification Act of 1965 and other federal laws and regulations covering billboards.

Finally, the panel addressed the “fundamental fairness” rulings below, noting that the Outdoor Advertising Association of Indiana joined this suit as amicus in support of the billboard owners.

“The Association contends that if the Court accepts INDOT’s arguments, it would have a ‘profound effect’ on Indiana’s outdoor advertising industry in that INDOT would be allowed ‘to revoke a permit at any time, for any reason.’” Shepard wrote. “… While we recognize the outdoor advertising industry’s reliance on INDOT’s permitting of billboards, we do not agree with its extreme prediction of random, baseless revocations. Far from being unjustified, INDOT’s action in revoking the Owners’ permit is authorized because of the Owners’ representations in their permit application that were inconsistent with the statutes and regulations in effect at that time. Furthermore, a sign not conforming to the statutes and regulations is a continuing public nuisance, for which an action to abate is not barred by the statute of limitations.”

The COA declined to address the association’s constitutional arguments that were not raised by either party and therefore may not be raised by friends of the court.

“We conclude that INDOT’s order revoking the Owners’ sign permit and ordering that one of the signs be removed is not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance law, and the Owners, whose burden it was to show such, have failed. The trial court’s reversal of the order of the Commissioner was in error,” the panel concluded, reversing and thereby reinstating INDOT’s permit revocation.

Civil Plenary — Quiet Title Post-Bankruptcy/Jurisdiction

Ocwen Loan Servicing, LLC v. Dorothy Chambliss


An Indiana trial court order in favor of a Hammond homeowner in her quiet title action following a bankruptcy was vacated by the Indiana Court of Appeals, which found the trial court lacked jurisdiction.

The Indiana Court of Appeals vacated summary judgment for the homeowner in Ocwen Loan Servicing, LLC v. Dorothy Chambliss, 20A-PL-1050, and remanded to the Lake Superior Court with directions to dismiss the action.

Dorothy Chambliss and her husband bought the property in question 50 years ago but refinanced multiple times before they filed a Chapter 13 bankruptcy petition in 2004. The Northern District of Indiana Bankruptcy Court discharged the petition in 2009, after which they continued to make mortgage payments. Chambliss’ husband died in 2011.

In 2014, Chambliss secured a mortgage loan modification with a principal balance of more than $65,000, monthly payments of $335 for three years, followed by a balloon payment for the balance. However, the modification was never recorded, so Chambliss moved for a quiet title. She and Ocwen both moved for summary judgment, and the trial court ruled in Chambliss’ favor.

“The parties agreed that the issue before the trial court turned on an interpretation of Chambliss’ bankruptcy case to determine whether Ocwen had a valid lien on the Property, or stated differently, whether the Mortgage executed by Chambliss in 2002 had survived the Chapter 13 bankruptcy,” Judge Rudy Pyle III wrote. Ocwen presented evidence that the mortgage survived discharge of the bankruptcy petition. Chambliss contended that Ocwen had failed to protect its security interest because it had failed to record the mortgage.

But the COA found the trial court lacked jurisdiction altogether.

“By filing her complaint to quiet title, Chambliss commenced an adversarial proceeding to challenge the viability of Ocwen’s secured claim following her Chapter 13 bankruptcy. Essentially, Chambliss attempted to use a quiet title action as a sword to cut off Ocwen’s rights under the Mortgage by asserting that her Chapter 13 bankruptcy had extinguished the Mortgage and Ocwen’s rights thereunder,” Pyle wrote.

“If — after paying on the Mortgage for more than eight years after her bankruptcy discharge, including three years of paying on the Loan Modification Agreement — Chambliss was unclear regarding the legal effect of her Chapter 13 bankruptcy discharge order in relation to the Mortgage with Ocwen, she should have sought relief or clarification from the bankruptcy court that had entered the order at issue instead of filing a state court action seeking to have the trial court interpret the legal effect of her bankruptcy cause.”

The COA cited Goodman v. Serine, 6 N.E.3d 481, 483-84 (Ind. Ct. App. 2014) to illustrate the limited jurisdiction Indiana trial courts have over bankruptcy proceedings. “Because this appeal solely involves a bankruptcy matter that was subject to the bankruptcy court’s jurisdiction, we vacate the trial court’s judgment and direct it to dismiss this quiet title action,” the panel concluded.


March 29

Domestic Relation, Children — Divorce/Child’s Name Change, Support

Brent C. Faulk v. Callie J. (Bissell) Faulk


The Indiana Court of Appeals has remanded a divorce dispute after finding that the trial court erred in legally changing a child’s name and in calculating the father’s child support obligation.

Before giving birth to her son, Callie Faulk moved out of her marital residence and filed for divorce from Brent Faulk. Their son was born in August 2018 and given the surname “Bissell,” his mother’s maiden name, rather than “Faulk,”his father’s surname, before the father was able to visit the child in the hospital.

During a March 2020 hearing, the father asked that the child’s surname be changed to Faulk, and the mother asked that his surname either not be changed or be changed to Bissell-Faulk. A dissolution decree issued by the Boone Superior Court, among other things, changed the child’s surname to Bissell-Faulk and ordered that father pay $208 per week in child support.

Father appealed, and the Indiana Court of Appeals affirmed in part, reversed in part and remanded in the case of Brent C. Faulk v. Callie J. (Bissell) Faulk, 20A-DC-1432.

The appellate panel first held that the trial court erred in changing the child’s surname to “Bissell-Faulk,” finding it had no authority to do so.

“The only statute that would authorize a name change for Child is Indiana Code Section 34-28-2-2, which requires ‘a parent or guardian who wishes to change the name of a child’ to file a petition, which ‘must be verified’ and ‘must state in detail the reason the change is requested,’” Judge Terry Crone wrote for the appellate court.

Finding that none of the required procedures were followed in the case at hand, the appellate panel reversed and remanded with instructions to vacate the child’s name change.

The COA likewise found that the trial court abused its discretion by not imputing income to mother in calculating her weekly gross income for child support purposes. It noted that in calculating mother’s weekly gross income, the trial court used her annual salary of $48,000 as a schoolteacher.

“Although Mother is gainfully employed in a full-time position, her decision not to seek work during her summer break is guided by her desire to spend time with Child and to avoid incurring more childcare costs,” Crone wrote. “… Nevertheless, Mother’s rent-free living arrangement with her parents unquestionably reduces her living expenses and frees up money to support Child. Accordingly, we reverse and remand with instructions to include the value of Mother’s in-kind benefits in the calculation of her weekly gross income for child support purposes and amend the decree accordingly.”

Lastly, the appellate panel found no abuse of the trial court’s discretion in adopting an 11% true-up for calculating father’s child support obligation or in placing limits on father’s opportunities for additional parenting time.

Writing separately, Judge Patricia Riley penned a partial dissent from the panel’s analysis and conclusion about the father’s request to change the child’s surname.

“Even though I agree with the majority’s analysis that the legislature instituted a procedure for the name change of a minor child in Ind. Code Ch. 34-28-2, it should be noted that neither the parties nor the trial court relied on this statute or proceeding but rather formulated the request for the name change as an issue within the framework of the dissolution proceeding and Mother did not object to proceeding as such,” Riley wrote.

“… I acknowledge that there has been a change in modern attitudes and practices regarding the surname of children born in and out of wedlock. Thus, I do not suggest, as was considered in (Laks v. Laks, 540 P.E.2d 1277 (Ct. App. Ariz. 1975)) that predominant consideration should be given to a father’s interest in preserving the family name through his child, nor do I suggest that a traditional right exists for a child to bear his or her father’s surname,” she continued. “However, in light of the specific circumstances of this case, I cannot conclude that it would be in the Child’s best interest to be given a hyphenated family name. … Accordingly, based on the evidence before us, I find that the trial court abused its discretion by hyphenating the Child’s surname.”


March 31

Civil Collection — Retail Ejectment, Attorney Fees/Reversal

I-65 Plaza, LLC, and Bassam A. Abdulla v. Indiana Grocery Group, LLC


An appellate panel has reversed for a cellphone kiosk owner subleasing space in an East Chicago supermarket after finding a Lake County judge erred in granting a motion for immediate possession by a new sublessor.

Bassam Abdulla entered into a sublease with SVT, LLC in November 2015 to operate a Boost Mobile kiosk inside SVT’s supermarket. The sublease provided that the initial term would be from Jan. 1, 2016, through Dec. 31, 2017; the first extended term would be from Jan. 1, 2018, through Dec. 31, 2019 and the second extended term would be from Jan. 1, 2020, through Dec. 31, 2021.

In August 2017, SVT assigned the sublease to Indiana Grocery Group, which filed a complaint for ejectment against Abdulla in March 2020, based on Abdulla’s alleged failure to exercise his option to extend the sublease.

IGG filed a motion for immediate possession and a show-cause hearing was granted by the Lake Superior Court. Abdulla filed a response to IGG’s motion, and less than an hour before the hearing, IGG filed a reply to Abdulla’s response in which it submitted new evidence, made new arguments, and asserted a new claim.

The day after the hearing, Abdulla filed a motion for leave to file a surreply. But without ruling on Abdulla’s motion, the trial court issued an order granting IGG’s motion for immediate possession. It further granted IGG’s motion to strike Abdulla’s motion for leave to file a surreply and ordered Abdulla to pay IGG $750 in attorney’s fees.

The Indiana Court of Appeals reversed in I-65 Plaza, LLC, and Bassam A. Abdulla, v.Indiana Grocery Group, LLC, 20A-CC-1537, first finding the trial court erred in granting IGG’s motion for immediate possession.

The appellate court reversed and remanded on the procedural basis that IGG did not file the written undertaking required by Indiana Code Section 32-30-3-6, pointing out that a plaintiff must file a written undertaking before a court may issue an order of preliminary possession.

It likewise agreed with Abdulla’s assertion that the one-year overlap between the initial Term and the first Extended Term in the amended sublease was an obvious ambiguity that must be resolved “by consideration of extrinsic evidence to determine with reasonable probability which party is entitled to possession of the leased premises pursuant to Indiana Code Section 32-30-3-5.”

Next, the appellate court similarly found the trial court erred in its grant of IGG’s motion to strike Abdulla’s motion for leave to file a surreply and in awarding IGG attorney’s fees.

“Contrary to IGG’s assertion in its motion to strike, Abdulla’s surreply is not simply a ‘rehashing’ of arguments already made to the trial court; it is a detailed response, supported with relevant case citations and the November 2017 letter from IGG, to new evidence and arguments that IGG submitted mere minutes before the show-cause hearing,” Judge Terry Crone wrote for the appellate court.

“As for IGG’s contention that a surreply is not permitted by the Indiana Trial Rules or the Lake County Local Rules, we note that those rules do not prohibit a surreply to be filed with leave of court; in any event, Trial Rule 81(H) allows a court to ‘suspend or modify compliance’ with any local rule ‘if the interests of justice so require.’ We believe that the interests of justice were not served by the trial court’s granting of IGG’s motion to strike (and corresponding request for fees) in this case. In other words, the trial court abused its discretion, and therefore we reverse,” it wrote.

Lastly, the appellate court noted that IGG cited no authority for its fee request in its motion, and the trial court cited none for its fee award in its order. As such, it also reversed the fee award.

Civil Plenary — Employment Noncompete Agreement/Preliminary Injunction

Rex Carroll v. Long Tail Corp., d/b/a CodeClouds


The Indiana Court of Appeals reversed part of a trial court order restricting a Fort Wayne businessman from competing for web development business with his former employer’s clients he had serviced first as a contractor and later as an executive.

Rex Carroll began working for Long Tail Corp., which did business as CodeClouds, as an independent contractor paid on a commission sales basis. Company cofounders Kinkar Saha and Brian Hill spent significant time training Carroll in the affiliate marketing sector of their business, which the opinion described as “a segment of e-commerce industry in which a series of interveners generate sales by directing traffic for businesses and people to websites.”

Carroll agreed to evenly split with the company any revenue he produced, and by January 2017, Carroll was named director of business development for CodeClouds. He later signed a document that Hill said he thought was from LegalZoom titled “Non Solicitation, and Confidentiality Agreement.” The document defined Carroll as “the ‘Contractor’” and provided for the nonsolicitation of customers and contractors of CodeClouds and LongTail.

In October 2018, Carroll was made vice president of sales for CodeClouds, but he resigned in September 2019, taking with him various business records and returning a company computer with a factory reset and nothing on it.

“At some point after leaving, Carroll formed Sketch Frames, a business that competes with CodeClouds,” Judge Elaine Brown wrote. CodeClouds moved for an injunction and sued for damages and the Allen Superior Court granted a preliminary injunction enjoining Carroll from soliciting CodeClouds or LongTail customers.

Carroll challenged the injunction on interlocutory appeal in Rex Carroll v. Long Tail Corp., d/b/a CodeClouds, 20A-PL-1285, but the appellate panel affirmed the injunction in large part.

The COA upheld the injunction barring Carroll’s solicitation of various CodeClouds division customers and Long Tail’s former customers. However, the panel ruled the nonsolicitation agreement barring Carroll from soliciting contractors was unenforceable, blue-penciling that portion of the trial court order.

The agreement named Carroll as “the contractor” at one point “but it does not define ‘Contractor’ elsewhere,” Brown wrote. “As written, the NSA extends to any Contractor of the Company and not just to those who have access to or possess any knowledge that would give a competitor an unfair advantage. Based upon [Heraeus Med., LLC v. Zimmer, Inc., 135 N.E.3d 150, 152 (Ind. 2019)], we conclude that the covenant related to Contractors is overbroad and unenforceable. Accordingly, we reverse this portion of the trial court’s preliminary injunction.”

Civil Plenary — Long-Term Disability Insurance/Declaratory Judgment

The Lincoln National Life Insurance Company v. Beverly M. Kennedy


The Indiana Court of Appeals ruled for an insurer in a dispute over long-term disability benefits, finding its policy excluded Social Security benefits and affirming an order that the recipient refund monthly payments, with interest, that the insurance company overpaid.

The appellate court granted no relief to Beverly M. Kennedy, a former employee of the University of Louisville who was unable to work after December 2010. At that time, she applied for long term disability insurance the university had offered through Lincoln National Life Insurance Co. After initially denying her claim for benefits, Kennedy sued in Kentucky and Lincoln National settled, paying her a monthly benefit of $2,322 effective in June 2011. The payments continued for more than three years.

Kennedy also applied for Social Security disability benefits, which were ultimately awarded with a date of disability determined as Sept. 21, 2010. Lincoln National brought the instant suit in Washington County, Indiana, where Kennedy resides, and in October 2019, the Washington Circuit Court granted partial summary judgment to each party.

The trial court found Lincoln National was entitled to offset Kennedy’s Social Security disability benefits because both were awarded for the same disability as prohibited by the policy. The court ruled for Kennedy that “the Policy was ambiguous regarding the amount of the offset and strictly construed that ambiguity against Lincoln National to hold that it was only entitled to offset the amount of Kennedy’s SSDBs after her Medicare Part B insurance premiums had been deducted,” Judge Patricia Riley wrote for the panel.

“The trial court further ordered that any reimbursement to Kennedy from Lincoln National would be subject to accrued interest at 12%, compounded annually. On November 18, 2019, Lincoln National filed a motion to correct error, and Kennedy filed a motion to reconsider. On March 9, 2020, the trial court entered an amended order on summary judgment which was materially the same as its October 18, 2019, order apart from directing that any reimbursement to Lincoln National from Kennedy would also be subject to 12% annual interest. On April 22, 2020, the trial court stayed proceedings, including Kennedy’s request for class certification, until the resolution of this appeal,” Riley wrote.

“Based on the foregoing, we conclude that Lincoln National was entitled to full summary judgment as a matter of law based on the Policy’s provisions, and therefore, we reverse the trial court’s grant of partial summary judgment to Kennedy and enter summary judgment in favor of Lincoln National,” the panel concluded. “In addition, we conclude that the trial court did not abuse its discretion when it ordered that Lincoln National was entitled to reimbursement of overpaid benefits, subject to interest.”

The case is The Lincoln National Life Insurance Company v. Beverly M. Kennedy, 20A-PL-837.


April 7

Estate, Supervised — Declaratory Judgment/Remand for Gift Evaluation

Kenneth J. Schaefer v. Estate of Cletus P. Schaefer, Deceased


A son who inherited the family business from his father must make his assets available for an appraisal after the Indiana Court of Appeals determined he may have received a “gift” subject to an abatement.

In November 2015, Cletus Schaefer executed the third codicil to his will providing, among other things, that his son Kenneth Schaefer would receive “(a)ll of my interest and ownership in Schaefer and Schaefer, LLC,” the family business, including “any and all farm machinery, tools and farm vehciles … .” Kenneth would receive the bequest only after he paid $1,000 per acre into his father’s estate – an amount that would then be equally distributed to Cletus’ other son, Donald, and his two daughters, Joy Brock and Jill Mehling.

Cletus died in June 2016, and Kenneth paid $277,500 into the estate within five months, per the instructions in Section D(2) of the third codicil. Then in 2017, Cletus’ daughters, who were the personal representatives of his estate, submitted an inventory showing that the items referenced in Section D(2) totaled $1,043,802.

In July 2019, the sisters petitioned for Kenneth to disclose assets and permit an appraisal, alleging their brother “has knowledge of and/or is in possession of certain oil production equipment … that was owned by the decedent and which may not be fully known or identified to them, and which should be included in the estate’s assets.” Kenneth objected, claiming he purchased the assets in question under the terms of the third codicil after his father’s death. But his sisters argued his payment under Section D(2) was not an “‘option to purchase’ the assets identified” but rather was “a condition precedent to the vesting of a specific bequest of the stated assets.”

The Spencer Circuit Court agreed with the sisters, entering declaratory judgment in April 2020 and finding that the language in Section D(2) was not an option to purchase, so the assets were “potentially” subject to abatement and the personal representatives could conduct discovery of the property. The proceedings were stayed pending appeal, and the Indiana Court of Appeals partially reversed in Kenneth J. Schaefer v. Estate of Cletus P. Schaefer, Deceased, 20A-ES-1007.

Specifically, Judge Melissa May wrote for a unanimous appellate panel that the language giving Kenneth the option to pay $1,000 per acre was an option to purchase.

“However,” May continued, “the amount Kenneth paid pursuant to that language, $277,500, was not the market value of the personal property at the time he purchased it.” Rather, “According to the Amended Inventory, the personal property was possibly worth more than that amount.”

“Here, while Kenneth gave consideration for a portion of the items he purchased under Cletus’ will, he possibly received a portion of it without providing compensation therefor. An appraisal would quantify the property Kenneth received that was a gift — that is, anything valued in excess of $277,500,” May wrote for the panel. “… Based thereon, we hold that the value of any personal property owned by Kenneth by virtue of the exercise of his option to purchase pursuant to Section D(2) that exceeds the $277,500 he paid was a gift or a legacy and is subject to abatement for the payment of the Estate’s debts, charges, and legacies.”

The case was remanded for proceedings.•

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