afternoon good afternoon your honor may it please the court i'm rachel boone katz on behalf of the appellant's and i'm here today with stuart scott and i would like to reserve five minutes of my time for a bottle if i may say thank you when fifth third drafted this contract it promised its early advance customers a one hundred twenty percent a p r it didn't have to other banks that have this exact same loan explicitly told their customers that the a p r would increase if the longer repaid before thirty days but fifth third didn't do that instead it promised a very low a p r for a loan like this and then explicitly told customers to go out and compare that a p r with other loans other lending vehicles and that's something that's only possible to do if if third was using the definition of a p r that's generally accepted in the industry and then fifth third breach that contract breached that promise by not actually providing a loan with one hundred twenty percent a p r now the bank's contract also said that the loan would cost one dollar for every ten dollars borrowed we don't deny or dismiss that language but these terms are incompatible and when you have the presence of irreconcilable terms that makes a contract in big us and it can't be dismissed on is it's true if you focus just on that language but they when but the problem is we can't just focus on that language we have to look at the underlying contract is that the way to look at it of course the contracts always have to be read as a whole that's one of our basic canons of construction and the contract that first page those key terms that you're talking about your honor it makes both promises that the loan would cost one dollar for every ten dollars borrowed but also that the loan would carry a one hundred and twenty percent a p on the first page later if you look through those terms and conditions there's a chart and explains again very clearly that e p are the in your percentage rate one hundred twenty percent and again that's what makes this contract different from what other banks do it would have been very easy for fifth third to disclaim a promise of a fixed unchanging a p r other banks just say that right there in their contract you can put some  whatnot but here there's a promise for one hundred twenty percent a p r and to the extent that that conflicts are but heads with the one for ten promise you have an irreconcilable or a ambiguous now i understand that fifth third argues that it changed the definition of a p r in this contract that it took the generally accepted federally mandated definition of a p and instead turn it into a formula that's completely arbitrary and results in one hundred twenty percent no matter how long the loan is outstanding but the problem is that under ohio law if you're going to change the plain language or the generally accepted definition of a term in a contract it has to be clearly apparent that you're doing so and it's not here why isn't it i mean they give a definition of what a p r means that we have a case from the then i'm happy to address that case also your honor if you look at just to start with the definition of a p r in the contract it's not just the formula that they say that goes to one hundred twenty percent always the sentence right before that in the definition explains that the a p r is the quote cost of credit expressed as a yearly rate well the formula that they're giving is not the cost of credit expressed as a yearly rate indeed the cost of credit expressed as a yearly rate is verbatim from the federal regulations what the typical generally accepted a p r is in an a p r has to be based on the duration of the load if you are going to pay fifteen dollars to borrow one hundred bucks well that's a lot more expensive if you're borrowing that money for fifteen days or two days as opposed to knowing it for thirty days or longer right the daily cost of borrowing the loan is a lot more so what they have in that formula is not your cost of credit expressed as a yearly rate this is not a case like your honor mentioned j t n versus keeping case where there's a key there there's a clear redefinition of a term in the contract there's other terms of this contract to the don't make any sense unless you're using the actual definition of a p r and not this contrived formula for example in the contract the bank tells customers that the purpose of the a p r the whole reason they're even giving the p r is so that customers can quote compare the cost of using this product against other forms of credit that's on page ninety nine thirty four i was wondering why that wasn't just a question begging point in other words they say here's what it is you can use this to compare how other loans work what does that tell you they're using one form of a p r versus another oh it still has a percentage and that percentage might be different with another loan well i think there are there are a couple answers your honor first of all the whole idea of being able to compare an a p r is that you're comparing apples to apples they're not telling you oh you can take this and try and do some calculus and then try and compare it to other loans and indeed the district court found in this case that you couldn't calculate the actual a p r based on the formula and definition that they give you here so there would be no way that a consumer could compare unless they were using the same meaning of the term and indeed that's the rings of the term a p r that's why congress mandates that it be put on every single financial disclosure so that people can make comparisons that they're not tripped up by fine print and things like that so to go to your truth in lending act like maybe it's deceptive or maybe even there was fraud in the inducement here but you haven't pled fraud in the inducement and i assume that's because the remedy would be rescission and you know opposition you want damages if it doesn't just go to the truth in lending at claim here your honor because it's the words in the contract itself tell customers that they can go and compare this and that goes to what do they mean by the term a p r for example fifth third is very cautious to tell customers this is an expensive type of credit right go and shop go and look these are wor in the contract it's not just general background statutory truth in lending act stuff in the contract itself is telling customers to go compare it's also telling customers that this is the cost of credit expressed as a yearly rate later on in the contract it says the a p r is the cost of funds borrowed over a one year period none of this makes any sense if you're using a contrived arbitrary formula out of the damages work if you're right about this the way they would work is every just so and this is what's funny about that case i mean it is a conflict but it just seems quite a very given that they were so front about this is ten percent well i don't think especially at a motion to dismiss that you can pick and choose which promise  you're going to follow i think about a contract if you're buying a team lots of cigarettes right in your contract says a pack of marlboros six fifty for each pack that's the lowest price of allowed by law well you know you're going to pay six fifty and maybe you do pay six fifty for that pack of cigarettes but if it's not the lowest price allowed by law well then you still have a breach of contract claim because you didn't get what the full promise was here in particular fifth third puts this promise of one hundred twenty percent a p r on the first page of its terms and conditions in bowls and then not only does it make this unequivocal promise about how much your loan will cost as an a p it doubles down on it and in the contract tells you to go and compare it to other lending products they can get that advantage of the market and tell customers that and now disclaim that one hundred twenty percent a p r altogether  lowest price allowed by law in your example really a contract term or is it just again and perhaps praja and claim that to induce me to buy the clearly stated term of six dollars and fifty cents in other words the contract terms are you pay six dollars fifty cents you get a grip that the contract of the contractor and the lowest price isn't really a contractor and it's just something to induce me to enter into the contract for which i might have another remedy to get my money back but not damages all i don't think that's right your honor because we have to read the words of the contract with their plain meaning and it's telling the customers as a key feature some disclosure on a back page that is thumb asterix fine print it's telling its customers the plain meaning of this contract if you get a one hundred twenty percent a p r for this loan it's not like an advertisement we're not talking about just fine out somewhere that's saying you know this is the lowest price allowed by law or something like that that might just be an inducement this is your contract this is a key feature based on fifth circuit third own drafting of the contract and again then it doubles down on this promise that for you that sort of putting it doubles down for you to be right the meaning of the mines was that there were two things they were learning the consumer one was the price of the payday loan would be more than ten percent and it wouldn't be more than one twenty percent calculated daily that's that's the way we're supposed to make sense out of this that that's what that's what the contract means is not right i'm not saying that there is no but that's what it has to mean for you to be right yes that both of those things are promised in the contract which is funny it's funny i was going to think there was a meeting of the minds about such a strange idea well i'm not sure that it would be the first contract that's poorly drafted or has inconsistent terms and that's exactly what happens when you have inconsistent terms you're not sure with the meetings of the minds as well that it can't be dismissed on a motion to dismiss prematurely that if you would mind just chatting a little bit about that before you get your full rebuttal but just what role does the stage of the case really play here because i soon both of you at the end of the days think this is really a legal issue i mean is is this case going to really profit from discovery are we just if you win and we just may get summary cross motions for summary judgment shortly and it's not all that's going to happen i i don't know what discovery in this case would show your honor certainly when you're dealing with a contract that is ambiguous that has incompatible terms extrinsic evidence is appropriate there may be course of dealings with the party other documents other things about this loan that are relevant or how that read this carefully is to me while these are these are all things that can be asked at the next stage of the case there may indeed even be affirmative defenses that that come up i'm not sure what the next stage will bring for a jury trial so what you're expecting that happen  i don't entirely know what to expect if extrinsic evidence or other things like that don't clarify the meaning of this contract then a court would use the canon of contra pref renda and construe against the draft or but certainly at this stage when you exactly whether a contract is ambiguous is a question of law but what the contract then actually means is a question of fact that would go to the terms here are very difficult to reconcile when you're reading the contract it's all there's no fact finding now right all we have right now is really that as a matter of law and you you have as a backup position we'd like that afternoon your i understand you're worn out behalf of the upolu fifth third bank plaintiffs are asking this court to replace the definition of a p r that is in the early access contract with a different method for calculating a a periodic rate based a p r or could be a fixed rate in this case it's a fixed rate it is it not an interest rate it's a it's an interest rate but not one that's computed periodically ok not the case that is not necessarily the case i can't speak to whether it's you have or have it normally yes i don't know whether you can say it's normally or not normally but i can say that there are different kinds of a p r and i think this really the central contention that runs through all of the plaintiff's arguments in this appeal is that there is only one way to calculate a p r and there's only one kind of a but wait but maybe a fair way to put that is there's a customary a traditional way and if you're not clear we're going to assume that's the way it's being used and yet here we are clear we have a definition of a p r that says it is the transaction fee which is very crystal clear stated as one for ten or ten percent you have examples and we have examples but examples don't always tell you how an example can line up with the ten percent which is all that happened it doesn't prove that's how it always works and it says the a p r is a measure of the cost of credit express statements now are sent out i do beg your bank sends out a monthly statement to these checking account holders so you send out twelve statements but other banks might send out quarterly statements and under your your formula you have ten percent times the number of statements wrong so you come up with one hundred twenty percent interest rate on a yearly basis on that but if the other variable we saw no four statements the year the a p r would be forty percent would it not that that is correct based on the formula so you standard that comes from the regulations that were in effect at that time so if you look at regulations see twelve c f r two to six point fourteen see three that provision of regulations he tells you exactly how to calculate or disclose in a p r for a loan though the customer is supposed to compare a b e r and knowing how many statements he gets with how many statements another bank would send out and that's easy to compare the rate of interest i mean that's rather confusing as to the extent that there's confusion there as judge berra pointed out that's strictly a tingle issue for the contract claim which is all that's before this on his view that most of the loans would be out for a shorter period of time but he also five if the contract is misleading as judge bear found is it not by definition also explain why ok well i would i would think that if it's misleading if by definition it also has to be in big us i don't see how you can i differentiate the two well judge barrett found made that finding but also founded on the  in his reasoning i know i think i think that's logically inconsistent but judge judge paraphrasing was and i think i think he was correct was that the words on the page are not ambiguous they're subject to only one interpretation and that one interpretation happens to comport with the crystal clear in multiple provisions which say you're going to pay one for ten one dollar for every ten dollar vans and the contract also said very clearly and in quoting the contract that that flat transaction fee of ten percent will apply without regard to how long in advance remains outstanding ok but you turn at ten percent fee as interest on your first page i mean i think you agreed with you that a p r refer to the end you will percentage rate of interest i think you agree with me on that i it's it says it's interest and it says it's not interest at page three of your frequently asked questions so but there is no interest charge associated with the advance well page one of your contract says the if you will percentage rate of interest is one hundred twenty percent interest and then you say there is no interest i mean i think that's an us or inconsistent is it not quote the question i don't think is whether we label this interest or not the question before the core i think it's very important to consumers know what the consumer wants to compare the rates because they are interested in how much interest you charge i mean they're not doing it for other reasons they want to know what the interest rate is and i think the interest rate is this another point you say there is no interest i can't let him answer a couple these questions ok so i think much of what you're raising judge griffen goes to how user friendly this product is the word that was used in doug burns opinion of misleading i think goes to that as well because he was saying he was making that finding based on his view that most of these loans will be taken out for a shorter period of time so the a p r has disclosed in the contract might not be as user friendly as it should be that's clearly a tailor either a computer periodic plea or it can be a one time upfront fee and in fact if you look at paragraph forty four of the plaintiff's complaint they clearly understood that because they allege and i'm quoting from their complaint judge griffin early access loans feature no interest charges that are computed periodically on an outstanding unpaid balance rather the plain of say the interest charges are computed up front one time only and a paragraph one twenty six of their complaint they said fifth thirds early access transaction fee is interest so the question isn't whether we use the word interest or not the question is how do we define the a p r which is which is at the heart of what the plaintiff's appeal is all about but you must concede the normal use of interest is not what well that's not the normal way to use the word again your honor if there clearly is an a p r calculation out there in the real world that is based on flat fees because if we look at regulations e they even have an example that they put in the pending example six it cited in our brief in their exit their hypothetical loan was a hundred dollar loan taken out the midpoint of the monthly cycle so it was not for the full month and it was a three percent transaction fee and there was also a periodic rate on top of that that as a related to the transaction fee of three percent what the example instructed pursu an example sex of appendix aff did exactly what we're doing so i think it's not correct to say that there's only one a p r out there and it has to be a periodic lee computed interest rate basis for a p r i think judge larson are there any errors in the contract regarding the examples of the formula there is your honor it's a if there's a typographical error in one of the formula recitation eight of your brief it's the example of the one hundred dollar advance with a ten dollar transaction fee equals zero point one percent point one percent you don't actually should have been ten percent and you're representing to the customer that it's point one percent is that not at least you're contract hey i was erroneous mathematical count computations it's a type of graphical error that i don't think altered the clear meaning of the narrative taxed definition that immediately preceded that so what was left was a transposition of the formula from decimal points to percentage or from percentage to death small and the percentage sign remained in there that was the year what do you think the customers are trying to compare are they trying to compare the percentages not i think that if they are trying to use this for comparing purposes they would be comparing two products with like like structured a p r s of which there were many in existence and in fact to proceed we know there is some overlap i agree with you it's not enough that there's some overlap though between these two cases these two claims there's going to be discovery on one of them just it just seems really funny to me given the relationship between the two claims not to allow discovery and both of them and then you know what seems fair from my perspective is we write something that doesn't mean you lose is a matter of law it's not suggestive of that at all but it just acknowledges there's some it's not exactly clear how these normally are used but people would perceive them and so forth i don't think i don't think that should mean that much discovery and then  it up for summary judgment motion which is not ruling just on the pleadings we know the other one's going to take that exact path i'm just not sure why that isn't the fair thing to do is long as we don't write the opinion in a way that  dictates that you would lose is a matter of law and summary judgment that i would fight very aggressively if i were in your shoes that seems the opposite of fair but i just don't why should we think about it that way but you rather i would also like to fight a for for months of the opinion as written because this is a contract that doesn't contain any ambiguity this is a contract that the five that said up front that one hundred twenty percent a p r equates to the one for ten it reflects the one for time it fully disclosed the formula understanding that there was a typographical error and one of the two times they set forth that formula not in the other time and that's clear on its face and what this court ought not to allow is for a party to create any ambiguity by reaching outside the contract for what they contend to be a standard definition of the term that is defined in the contract and that's not the way contract construction works see interest is defined in the  contract but a p r is in it's the a p r that really is at issue here a p r is very clearly defined as it was in other cases they reach the same result as this one for example some are say that you're just saying the question is whether a p r is the normal interest way of thinking about  some flat fee wait thinking about it and well this contract said your transaction fee is ten percent without regard to how long you took it out and plaintiffs these these very plaintiffs knew this from their own experience because as alleged  complaint they took out a loan sometimes of the same principal amount for different periods of time in always paid the same transaction fee of ten comes out a bill that both promises to me it's compatible to have two promises we won't charge more than ten percent no charge more than one hundred twenty percent a p r calculated daily you get the better of the promise why isn't that consumer friendly and possible i'm just going to contract they want more than ten percent that where the two claims arise from the same operative facts and while the claim has very different elements then the be taught intervening some cognitive dissonance in your head right well i think we fully recognize that these claims have different moving parts and they have different elements and they have different forms of relief that are being sought but what they don't have is a separate operative fact basis i mean in both cases in both claims the plaintiffs are focusing on the same language in the same contract and the back at the bottom of both claims is their grievance that they somehow paid too much for the loans that they took out but when there's act kind of overlap notwithstanding the different elements of the claims now we stand in different purposes of a breach of contract or our common law contract it versus our federal regulations regarding tea but you've been arguing for quite a while that you can have something different you can't you can easily have a violation without having broken a contractual promise but they both come from the same operative facts title seven is very different in breach of contract two but this court in  overruled a fifty four b certification in that case the case about the promise in the contract was not to retaliate so they were the same thing true but i mean the operative facts here are also bound up with the same contractual provisions they didn't say we promise not to do a t live violation i don't think it's really the same well your honor their their claim and both has to do with what they contend to be a promise about a claims i can't speak to their your honor i think their plainest in my experience they tend to take extraordinarily broad discovery on every claim and i don't think either of these would be any exception to that i don't think i think it would be you say it's the same i mean this is another tension point you say it's the exact same factual predicate for both claims so presumably this would not add to their discovery cost well i'm right about that i guess i hesitate to believe that we we determine we construe country x depending on the cost of discovery i'm not that's not what i'm saying but i'm just i asked my question very practical way that's all i'm referring back to right is the cost of it or you have discovery in the suddenly realize wow this came should have gone beyond the sixty that's the that's the risk of accepting your point and that's a claim that if that's correct they can raise it at the end of the case the way it's supposed to be done in  properly comfort jurisdiction in this court they there was no jurisdiction for appellate review based on a piecemeal appeal for breach of contract claim alone just listen i cut you off  thank you your honors i'm of course happy to answer any of the questions about those points that were raised and like to start if i may by talking about that small case that my friend here is multiple times that he's actually really supports us here because in that case the court found that there was no breach of contract because that contract explicitly told customers in that second line of the promise it says this will be one hundred twenty percent a p except if the loan is repaid before thirty days your a p r will increase here we have a contract that has an unequivocal one hundred twenty percent a p r and it's not just a technical description or something else this is not only a key feature of the loan but it's also telling you what your overall cost of the loan will be that's an important thing that people look to in rely on and having a promise of an unchanged one hundred twenty percent a the standard definition is that correct i think if you're looking at what the district court here found was that a consumer actually couldn't do that let their cut i mean i don't know if that's a finding of fact to which we have to defer unless clearly erroneous but it seems kind of like a black or white crack like it is or it isn't but i think you're comparing the loans because they've told you that this loan equates to a one hundred twenty percent a p r so you can take that they're telling you what it's going to be if you because you think a p r should bear in this contract the standard definition then you would use the standard definition that others are using and you could compare much more easily obviously but they do have a definition of a p r in the contract and my question is is it and then they say you can use this a p r to compare well maybe just with great difficulty is that then a breach of contract well i'm really bad at math though i'm not exactly sure how you would take their formula and reformulate it and somehow then be able to compare it to the typical definition of any p r and maybe that's just because i'm bad at math but i'd guess that it be very hard for a reasonable customer to to figure that out and i think it's important here to know that there is no definition of a p r that is based on the number of times that your bank just sends you a summary of your checking account i think there's a lot of talk here about regulation z and what was allowed during the time and what not but i think it's important to make clear that there is not a definition of a p r that doesn't take into account either the duration of the loan or your billing cycle when you're being charged for things there is not a definition of a p r definition in the contract well i think i understand that there's that one formula in the contract but the contract of course has to be read as a whole and even that definition section even if you're just looking at that fine print the sentence before it tells you that you are getting that the a p r is the cost of credit expressed as yearly rate rate if you if that is true then that next sentence that they're relying on doesn't make any sense it's better read as being an expression of the formula if the loan is a thirty day loan and indeed that's exactly what the district court figured was going on he said hey they're using a thirty day so which one does because you know these things are all paid back in fewer than thirty five days in the function of statement cycle seems a little funny in that world zip which way  here i mean so they're measuring this they talk about statements cycles and that makes a lot more sense with a longer term loan i'm just trying to figure out which way it cuts that these things are all paid back and if you wouldn't thirty five days so well if they're paid back in fewer than thirty five days like if they're paid back and fourteen days for example that means you're going to have you potentially are going to have a lot higher a p r than what they're telling you got that but you don't have a lot of statements in thirty five days is my point is not true i get a statement every day no no of course not they're usually thirty days or whatever so it's just a funny i'm trying to figure out which way that cuts that they're using that phrase in you know i actually think it by my inclinations it favors you that there paula that's language that you would use in traditional definitions of a p r is my for instance think it's a funny way to talk about something that gets paid back in thirty five days and it's a funny way to measure it but i just i think it's very confusing and i also think just bringing up another canon of of contract instruction it renders the a p r here completely meaningless they're just taking your transaction cost multiplying it totally arbitrary number that has nothing to do with your actual loan and of course we're to read contracts so promises aren't sorry but they were mean they would have been in trouble had they not mention a p r they had to mention a b or under t l a you have to mention a but i just bring back to my original point your honor teela doesn't require you to make a promise of us fixed unchanging and variable a p r and that's why they could have done exactly like the small case exactly like other cases that they cite and just if it's repaid that it within their rights to the example they give is accurate it's accurate if your loan is repaid on thirty days but of course the loans call the next case