good morning your honor honors donald stevenson representing appellant ohio university and my voice gets to soft let me know if it is a problem i sometimes have  case involves an appeal of a ever summary judgment motion and involves a case in which the state of ohio had originally set up  medical school in athens lies and appalachian because of a perceived need for more doctors for the people of ohio and as part of the authorizing legislation he had required at least eighty percent of out of student out of state students he committed to practice medicine in ohio for at least five years and students who signed a contract with missions like dr hart and did and needed them to practice medicine state of ohio for five years had a better chance of being admitted dr hawkins signed the contract was admitted received a subsidized medical education were received by ohio university from the state of ohio and were expended on behalf of dr hawkins and so when they hear mark for they were marked for all medical students and she was one of those medical students it was understood from the very beginning that there was going to be a subsidy dies education and how do you apportion a portion of a building the electricity tailored to say that it has to be received by the student and i think in looking at the congressional scheme is in the administration he presented a report every year to the chancellor the report that's in the record is at page one forty nine and in exhibit two it lists all the subsidies for your stuff these received by students by your graduation and her your graduation this is page one fifty one of the record she was you eighty four thousand dollars as a direct subsidy for medical education it also shows that that year she received approximately between nine and ten thousand dollars   as applied it obviously is not a penalty as conceived because it's simply that the cost of educating a replacement doctor but maybe an application it's unfair and so we in an ex fact it wasn't contemplated that she would pay the cost of her subsidy it was contemplated that she would pay the cost of a replacement doctor is that what the eighty four thousand represent no eighty four represents what she w s subsidies she received a portion of the subsidies she actually at the university had wanted to exact the maximum penny based on the contract with admission it would have sued on the clinical subsidy and the other subsidies as well and by looking at a two hundred fifty one you can see that the clinical subject subsidy was with between nine and ten thousand dollars a year they could have sued her for an additional at a minimum of least and it says to constitute a loan there must be a contract whereby one party transfers the find quantity of money goods or services to another and the other party agrees to pay for the sum or items transferred at a later date you see the problem and i understand your argument alone if they had said will hire and said look we will we'll give you a half to wish invent a thing if you promise to practice in ohio for five years and then she goes to medical school and then just leaves and doesn't stay in  then if they said ok now you all us that have to ration because we offered it to you and that would quote i don't think anybody doubt that that was a loan but what you're what you're asking her to pay back isn't what she got it's what it costs to educate somebody else now right what she got was an education is worth millions knew when you have services how do you estimate what the services are going to be worth if you go back to let's he's you started earlier in your argument saying well you know there's a certain overhead there costs of buildings electricity somebody can do that accounting and say here's the benefit we conferred on you now pay it but that's not what they're saying well this is obviously a case of first impression all of the cases that i read  or or rise on whether or not there was a contract entered into before the student entered in and receive the benefit conferred which in this case was services and that contractors here at that point the cases all say except for a few narrow ones that are disapproved and all the circuit cases that you look at the form and the substance and you exist you go to the substance first over the form and we have an unusual situation that doesn't fit into the standard situation because you know it's a service contract but it's one in which the benefit is of in the form of a subsidised education it's the novel situation but and so it's one it's very well adapted to having a his report will show a footnote showing that he adjusted it because i me is appropriated throughout the school year so there's no way to have a sum certain in advance it would fail the test of some of the of the things now they were thinking in terms of the subsidy the cost of educating a doctor this is a rational reasonable way to set damages certainly is but the problem is we're dealing with the statute and we're not trying to decide what's reasonable requirement for somebody either you've got to change the stature i'm sure universities are able to have it with congress to change or are you going to change your contract and the fact that you now have a statute doesn't quite fit and a contract quite clear is your problem well it's mostly a problem it's also respectfully your problem because you look at the statutory scheme and interpret it in terms of congressional intent and try to realize what congress intended and i think that this was the type of program that congress intended to protect but talking in terms of changing the statu that is an excellent point because we have an exemption scheme in five twenty three a id i've even forgotten how many twenty or so recent amendments this is the only exception it has a hardship exception congress since one thousand eight hundred seventy eight they didn't act it is constantly expanded exception and because you know the congressional intent is that you are supposed to interpret student loan broadly it is given out for the students so that would enable the statute to still advance the importance of a fresh start but it gives a hardship exception so that this is one single exception where by the constant expanding of the statute the the student loan exception that they are instructing the courts to interpret it broadly and this again is the first case that i can find where there was an agreement executed in advance you do have a contract for services which the student agrees to pay later at a later time and because of service there the medical education they don't know exactly how much is going to be and their damages are a replacement doctor they set price as the record for a replacement doctor but at no time has this ever been a draconian penalty on anyone it can be interpreted i don't believe yeah i don't i don't think the alternatives are and i saw a little reflection of this in the briefs think the argument about whether it's a penalty or repayment of a loan seems to me to be a kind of a false division because it may be not only it may be a perfectly good liquidated damages clause but that doesn't make every payment of usually it's money in this case it wasn't money it was a subsidized education but it was services it was a metal kill education and we have the agreement in advance and the issue my name is larry cox i represent dr hawkins we have analyzed this contract as a service contract i would notice the court was very interested in whether or not the alternatives and whether or not a some certain could have been determined i would draw the court's attention to section thirty three thirty seven point one zero which is in the record which provides that the school that the board of trustees  for the medical college result is this if the school sets the tuition rubble it knows in advance what will be the amount of the subsidy it could have calculated that subsidy now it is true but they might not have been able to calculate a three year two and three of a medical education on the other hand with and the credit industry open in lending permits the notion that you will advance up to a certain so so had they wished to have made a sum and held the doctor accountable they could have done that but they didn't moreover in this particular case there was an they had a reciprocal agreement dealing with out of state students and getting people to come back into the state and in that particular case the school had them sign an agreement that there would be a partial reduction  amount or forgiveness or a full forgiveness in advance if they served this was not done it has been our position from the outset that this is the statute does not create a student loan program nor does it authorize a student loan program nor is it intended to authorize recovery of a subsidy it is a statement of policy and it is important to note that this is different from us from the united states department of health and human services versus in which scholarships grants were provided as a means to bring physicians into areas where there was where physicians were under represented there were means to do it none of them were employed as i've already said drawn the court's attention to the physician shortage area scholarship program that was a a a program that would have allowed  to accomplish the policy end they wanted without doing what they did the the law on this point is rather simple mr and i think clear mr stevenson has fairly quoted to the court the fact that it contract is required that the in addition of the contract there must be a contemporaneous transfer an acknowledgement of responsibility to repay sums advance nothing in this record reflects that sort of behavior or business plan additionally and taking a look at the at the coliseum but it's all right we will consider you for admission under favorable circumstances if you agree to serve five years or four or five years of practice in ohio what did it say happens if you don't they said the time of the breach of the college of aussie apathic medicine to provide medical education to one medical student to be determined by accepted accounting methods by the college in point of fact it is not it is not the cost of with the remedy that they crafted there could only be liquidated damages there were other remedies i would note that the policy of five twenty three eight is to protect the source of the funds i suppose in a larger sense one could argue well counsel you're protecting the public school that is not the purpose of five twenty three eight is to make sure that the funds that are advanced to the to the students and i would  i would draw the court's attention to rosen and oregon case at the trial court level at page nine thirty eight in which the court says that the purpose of five twenty three eight is to preserve the solvency of the student loan program so funds will be available for such future students in this particular case we're not even close to that the contract of service is a recovery of the cost for a subsidy of some future student to replace the students who fail to serve there this is not a circumstance in which the doctor got a free education by the evidence presented in the ohio action it was clear that on a letter directed to ohio university doctor hawkins had incurred at that time two thousand and three ninety eight thousand seven hundred twenty one dollars and seventy two cents she is paying the heel loans and consolidated loans that resulted from the cost of her education i would draw the court's attention to ohio smith not necessarily for any acid test but for this fact in that particular case mr smith said that he signed it because he intended he wanted to improve his chances of getting in to medical school that's one of the reasons he stated i would offer it to the court as emblematic of the notion that it is not unlike the issue of credit life and disability insurance in connection with a loan it is the crisis of the moment if i sign for the insurance i'm sure felt that crisis i point is that at that time she then went on to be admitted to pay for her education i would i would it is not in the record but there were reasons this is not simply a willful each and i think i'm can't fairly argue that this court i would say that when one considers the purpose for five point three eight when one considers the requirements that have been universally affirmed i would note that in the commissioner of i r s versus valley morris plan in one circuit case it was recognized citing again rosen that the term loan is a narrow given a narrow construction it is not defined in statute it is not defined in legislative history it is defined to some degree by black's law dictionary and i federal common law having said that your honor i will reserve any remaining time i service contract except as a basis for being alone he mentioned some certain which doesn't appear to be an issue with the panel but this is not a case of first impression when or where end all be to wish an agreement said is no to wish and so you would not agreement terms of what the sum certainly is you'd have to go to an outside source which would simply be there to wish and schedule to determine what the amount repaid by reference to an outside source but that outside source i would think under the statute would have to be determining point edge occasional benefit had  faced with all of these cases is that none of them involve services per se quantifying services such as training for medical education it was they didn't pay the tuition they  they unilaterally didn't pay their tuition they didn't pay the bill they didn't pay their student fees always are easily quantified here we have something that falls within the rent definition she's be provided with services and so you're going to be the first court to evaluate whether the almighty dollar rules and everything has to be narrowly construed in terms of dollars or whether  educational purpose that congress wants you to put the student loan exception to can cover this situation where it is quantified quantified by saying it's for services it's also quantified in setting the amount that's going to be paid back i know this is a tough case but it is one which gets we're clearly within the congressional purpose this is the type of program that congress wants to protect and you know and it serves an even more important purpose perhaps in protecting the people of ohio and  so that when we look at loan we just have to look there's an agreement at the beginning and we see that agreement at the beginning and we have all the terms that are required but it's a little bit different and it's going to be up to you to determine whether you make that leap or not but it's not a great step it's a small thank you