What happens if you print a test page from the printer properties screen. There will be nothing wrong with the printer. It is getting info from the driver that is requesting that type of paper and the printer knowing there is not that paper loaded will not work. The easy fix if it happens every time is to set tray 3 as type prepunch and it should work. Keep in mind if another computer requests a job from that printer and its driver settings are correct, then it will ask for plain letter in tray 1.
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