all right our next case for today is harry dia against capital management services mr stern capital management services sent a letter to my client that offered a settlement of her debt and said that it was accepted then discover bank the creditor might i fall squarely in dunmore if that's the right that's in dunbar so i have a couple of questions for you one of them may seem weird but i have really not found an answer to it i understand that the filing of attend ninety nine  form is required if six hundred dollars or more is it issue but does anybody ever file one when it's five hundred dollars is it actually for been to file it or is it just that people must start filing at six hundred my understanding is that two aspects of it that let me just be clear because there's a lot to that regulation there are other acts there are other sort of exceptions one of the side is not being relevant there is and also the only requirement is that you report the amount of principal the stated principal there's no requirement to to report forgiven interest or other charges that may have a d right ok but the form does allow you to report that so it can be reported and so to directly as your question i think that i covered entity that that is obliged to report can also report voluntarily but we've alleged in the complaint that discover like other credit card companies does not report unless they are legally required to do so and that's how we get to the impossibility to ask you this i mean we struggle sometimes with the unsophisticated consumer test and we attribute a little bit more savvy to people than some of the circuits do but actually the letter doesn't say a word about the internal revenue service the letter says and discover may file a one thousand and ninety nine capital c form so wouldn't you have to know that that was an i r s form is that something everybody knows a everybody knows but i think i did i would argue that well under two things number one that we're we're not twenty six standard so we get the real we're entitled to the benefit of the reasonable inferences judge priest back in fact made a point about that that even though it doesn't say i arrest it's it's understood from the sentence and i think that enough people get some form i mean there's a lot in a whole variety of to ninety nine for i know and and so i think people understand that if you're filing you know who discover bank the filing with a ninety nine c either you're completely ignorant you have no idea what that is or you have some understanding that you've seen tonight in some form you know you  because if it's possible the discover might file that form then it seems to me the nd half of the sentence might be analyzed the same way to dunbar half of the sentence was analyzed although you respond dollars we say they never ever do it what we're worried about ultimately in the fair debt collection practices act is heavy handed you know tactics and scaring somebody that the i r s is going to suddenly become involved in their personal affairs might be such a tactic if that's really the case but as it is i don't know it's a pretty it's a pretty  small statement discover may file this form but maybe that may not and i think there's you know include i think the cases have distinguished that iris reporting language in some form from the it says which cannot legally be taken that's one issue so in a sense it if they could legally take it that that wouldn't apply but it says or this is not intended to be taken and i think that that covers this situation that four hundred dollars of principal for a discover card account and four hundred dollars of principle for an account i've seen you know if capital management had to have sort of two parts that one part is what i'd like to see what the law is and what but the other one is what i think where the law where the law is i would say is that it's easy enough for them to you know in their computers know what the numbers are and just omit that language you know from the form letter when it's being generated but there are cases that unlike this case the talk about when  that that the creditor may have an obligation may have an obligation to file a tenancy if the amount for a given in principle exceeds six hundred dollars then they've told the consumer so you have the case that  know by reading the letter that says oh that only applies when it's six hundred and one dollars it's acknowledge them or they know their debt is not six hundred dollars or more so they know that it can never happen it was your difference between principle and interest there is for usually those letters have a whole lot of  interest pub you know that's correct usually on these credit card debts by the time they get there it's a lot of interest because of the way you know they compound interest and it gets added back in but but clearly if you have a situation effect situation where  the total amount claimed is less than six hundred dollars fifty nine cents if it's less than that there's no way there's going to be a ten on the nine issue so if a letter says the creditor may issue and ninety nine dollars in those circumstances where the amount forgiven is six hundred dollars or more but i read in the letter the consumer knows you know that doesn't apply to me and so i think that that would would be lawful i think so you could do a for believing that dunbar need entirely dispositive on this case while capital management believes that number is entirely dispositive here to minimum the district court was correct and ruling that the language hears conditional does not imply the capital management can do something that they're not authorized to do but why is it with this we're not talking about the may have tax consequence your opponent has rightly said that dunbar takes care of that and least in the nd letter six hundred which it with you know the prompt option the two part the three part and so saying you may file something that you're in fact not going to file it seems misleading well you know there's two parts to that st of all the total balance of that was one thousand eight hundred and ninety three dollars forty three cents that letter indicated that the consumer can also come call in to discuss payment arrangements quite often consumers do call in to dusk discuss payment arrangements even know the letter states that the that the capital management for instance would only settle would settle for these these amounts and then the consumer says i can only settle for i only have two hundred dollars i only have one hundred dollars and under that hypothetical the undisputable to the debtor may face potential tax consequences so even based upon the net's a tax consequences so that's not the the one thousand and ninety nine dollars c you know so the november letter you can have a single payment of one thousand three hundred and forty three better could have called in and said i can only afford to pay two hundred dollars total that's even less that's even less than the debtor and you didn't even offer that and you know to get that far down the set of hypotheticals not misleading to say to somebody i might file a form with the i r s the one thousand and ninety nine c with respect to your account when in fact the probability that you were going to do that that that's why i asked the question about whether discover or anybody else for that matter ever files one thousand and ninety nine cs for the fun of it you know when they have a three hundred dollars forgiveness or a two hundred dollar forgiveness and as far as i can tell people don't do that and certainly on this record it is alleged it could be further factual investigation down the line that it's alleged in this record that discover never files a to ninety nine see what what you know you really have to have come from mars not to know what you know well nd of all your point your honor if you're looking at the sequencing of the letters the settlement offers as the that the settlement offer to the consumer is in fact greater so to your point that it leaves the implication that the consumer will call and try to pay the debt in all in fact here the settlement offers got more significance of the consumer so it leads more to the implication that settling the debt was what capital management fact discover was trying to have happen here rather than trying to compel the debtor in some way to pay the debt in full and that's what the cases ultimately look at both the at the donmar looked at and that's what the court the court looked at in the taylor case which was the condition one the conditional in nature of the language is language ultimately is conditional it's dollars seems to me would be awfully well you're on to the issue with that is that there are multiple exceptions that apply to reporting requirements not only based upon sixty nine thousand six hundred the requirement capital management is provided certain information when an account is placed with them and ultimately the end of the day disk discover not capital management is the entity that makes the determination on whether or not there's going to be some sort of one thousand and ninety nine dollars c the ultimate needs to get filed so capital management makes extending the the ten year nine information based upon the information that they're provided by discover but if discover provides an information as in the november letter saying that basically the highest forgiveness is five hundred and forty eight dollars it really doesn't take a genius computer programmer to know that five hundred and forty eight is less than six hundred and discover isn't going to file a one thousand and ninety nine now i agree with you that you have a slightly more complicated case with the january the december in january letters because the reduction in december was seven hundred and thirty five dollars and it was nine hundred and twenty seven dollars in january and that would require somebody to know how much of that was principle and how much of it was interest and it doesn't appear nearly as clear on its face at least to me but the november letter is unambiguous and just to go back to your arms i want you know i think i don't think my hypothetical earlier fairly explained it but the consumer can call in and make a payment it doesn't necessarily need to be the payment contemplated in the letter so if that if the consumer called to call in to make some sort of settlement agreement with with capital management and or discover that implicated tax that had tax implications and that would not be if we struck if we struck out that language and it wasn't in that letter and the consumer seven months later and the end of the year got a attorney nine from discover they would call in and say why am i getting this  hundred dollars and by the way we're forgiving a lot of debt and so you're going to get a tax form well the problem with that is we can't definitively make that statement because there are exceptions that are that the two apply and if you say you are going to get a tax form that would be least you might get a tax form in that situation that's what other settlement options in these letters i may start with which with which larry referencing specifically well i'm going to look here's the october letter here's the november in an effort to liquidate as may we're making the following settlement offers a b c and then they tell you how to pay maybe you can do a post dated check our representatives and then there's this sort of vague for payment arrangements it sounds still like it's letter says to make to make you can call into capital management or do that says the amount of money you want to save is in your control but it's all in reference to a b and c as i read this letter again you're out of the consumer could call on to make a payment arrangement other than what  contemplated in the end it doesn't say that in the letter it says you can make a different settlement offer and we might accept it or we might not net never does it say that in this letter i am looking at the letter if you don't see that at the end of the day this link with language is ultimately conditional which was found permissive in don barr in taylor and in the end but the thing about dunbar is that it could have happened and the question is conditional language enough to bail you out for a circumstance that is never going to happen if i grant you that your honor one i believe that it could happen here but to the th circuit when it looked and done by when the th circuit looked at district court's decision and sledge be sand and look at a circumstance where there would never have been tax implications to the consumer and and the the th circuit and this quote start this court and in the end dumbar said that the language in that case was permissible in that language in that case said under certain circumstances there may be there may be tax implications it did not say but on the facts of dunbar that was true i mean i really hate to dig into our opinions all the way down to some district court opinion that somebody cited well i think that was important in because it was reference specifically in the end it said the can the conditional language was was acceptable and there were circumstances where and  again and that's the people might have gotten some money they might have won the lottery something in that sludge be sans case that there were certain the there would not have been tax implications to certain individuals and the and the such and the dummer court said that languished it was permissible hundred or less than six hundred they've been sued i mean i think you saw from up from that from our brief that the court has been sued for any such type of language we are discussing possible exceptions that may apply to the six hundred dollars threshold that's why this language is  o as possible until in terms of trying to advise the consumer that there may be tax implications but also there may be exceptions that may apply all you had to do is put a period after there may be tax consequences but we believe th i just wanted to say was it in my response to judge rover's question about how they could buy the forms and could they come up with a form i think the cases cited in the brief roan it's that the a settlement where morton was six hundred dollars or more is being written off that there that may be conditional may be a requirement to report the i r s and and so i think that's sort of is the way the court reason that they