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insolvent, the Federal Deposit Insurance Corporation (FDIC) was
appointed as receiver. The FDIC refused to accept further
assignments of sales contracts as repayment. The taxpayers
ceased making payments and filed an action against the FDIC. The
action was settled after the FDIC agreed to accept $350,000 in
full satisfaction of the indebtedness, on which the then balance
was $799,463. The Court of Appeals held that the contested
liability doctrine did not apply because the amount of the
taxpayers’ debt was at all times liquidated. The Court stated,
in part:
In addition, the Preslars’ characterization of
their dispute with the FDIC as the culmination of their
dispute over the ranch loan is not faithful to the
evidence. The dispute with the FDIC focused only on
the terms of repayment; it did not touch upon the
amount or validity of the Preslars’ debt. * * * In
sum, the Preslars’ underlying indebtedness remained
liquidated at all times. [Id. at 1330.]
We agree with respondent that the rationale of Preslar and
similar cases applies to the balance of petitioner’s Mastercard
account as of the time in May 1996 that he made a $1,000 payment
and acknowledged the balance of $29,837.61 before the payment.
Petitioner has not disputed that he owed reimbursement to MBNA
for the $1,200 cash advance in August 1996 and the $10 cash
advance fee, and those amounts also appear to be liquidated.
We do not agree with respondent, however, that Mastercard’s
subsequent posting of various finance charges and late payment
fees to petitioner’s account creates a liquidated indebtedness.
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Last modified: May 25, 2011