-
USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 95-1853
FEDERAL DEPOSIT INSURANCE CORPORATION,
AS RECEIVER FOR NEW MAINE NATIONAL BANK,
Plaintiff, Appellant,
v.
ROLAND HOUDE AND ORA HOUDE,
Defendants, Appellees.
____________________
No. 95-1854
FEDERAL DEPOSIT INSURANCE CORPORATION,
AS RECEIVER FOR NEW MAINE NATIONAL BANK,
Plaintiff, Appellee,
v.
ROLAND HOUDE AND ORA HOUDE,
Defendants, Appellants.
____________________
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. Gene Carter, U.S. District Judge] ___________________
____________________
Before
Boudin, Circuit Judge, _____________
Campbell, Senior Circuit Judge, ____________________
and Lynch, Circuit Judge. _____________
____________________
Jaclyn C. Taner, Counsel, with whom Ann S. DuRoss, Assistant _________________ ______________
General Counsel, Colleen B. Bombardier, Senior Counsel, Federal _______________________
Deposit Insurance Corporation, Andrew Sparks, Paul E. Peck, John B. _____________ ____________ _______
Emory and Drummond & Drummond were on briefs for plaintiff. _____ ___________________
Jeffrey Bennett with whom Melinda J. Caterine, Clare S. Benedict _______________ ___________________ _________________
and Bennett and Associates, P.A. were on briefs for defendants. ____________________________
____________________
July 24, 1996
____________________
CAMPBELL, Senior Circuit Judge. The Federal Deposit _______________________
Insurance Corporation ("FDIC") appeals from an order, entered
in the United States District Court for the District of
Maine, dismissing its complaint to collect the amount due on
a $275,000 promissory note executed in 1986 by defendants
Roland and Ora Houde and made payable to the Maine National
Bank, and to foreclose on the mortgage securing the Houdes'
indebtedness. The Houdes cross-appeal from the district
court's denial of four pretrial motions. For the reasons set
forth below, we affirm the district court's order.
I. I.
In November 1986, Roland and Ora Houde borrowed
$275,000 from the Maine National Bank ("MNB"), a federally
insured national banking association, to finance a business
venture. They executed a note and allonge made payable to
MNB (collectively the "Note" or "Houde Note"), and secured by
a mortgage on property located in Maine. After MNB declared
insolvency in January 1991, ownership of the Note passed to
the FDIC as receiver, the FDIC says. The FDIC also says that
it transferred the Houde Note briefly to the New Maine
National Bank ("NMNB"), a bridge bank set up by the FDIC.
After the dissolution of NMNB in July 1991, many of its
assets were purchased by Fleet Bank and the rest, as
recounted by the FDIC, passed to the FDIC as the duly
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appointed receiver for NMNB. The FDIC asserts that the Note
was among the remaining assets transferred to it. All
parties agree, in any case, that the original Note was in the
possession of the FDIC at trial.
The FDIC says that it hired Recoll Management
Corporation ("Recoll") to manage the receivership assets of
NMNB. The FDIC maintains that Recoll took over management of
the Note as well as other obligations owed by the Houdes.
These other obligations included loans from MNB to Turcotte
Concrete, a corporation of which Mr. Houde was a 50%
shareholder, that were guaranteed by the Houdes. Turcotte
Concrete filed for bankruptcy in 1991, and as part of the
bankruptcy proceeding, Recoll, on behalf of the FDIC,
negotiated an agreement in June 1993 resolving Turcotte
Concrete's debt (the "Conditional Amendment to Guaranty
Agreements and Promissory Notes," or "Conditional
Agreement"). According to the FDIC, Recoll separately
negotiated with the Houdes concerning their personal debt
evidenced by the Note. The Houdes, however, contend that the
Conditional Agreement resolving Turcotte Concrete's
obligations, by its own terms, released their personal
obligations on the Note. On this theory, they have made no
payments on the Note since June 1993.
In July 1994, the FDIC sued the Houdes in Maine
state court to collect the amount due on the Note and to
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foreclose on the mortgage securing the debt. The Houdes
removed the action to the United States District Court for
the District of Maine and then moved to dismiss or for
summary judgment on the ground that their personal
indebtedness on the Note had been discharged by the
Conditional Agreement. The district court denied the motions
in September 1994, concluding that there were genuine issues
of fact as to the meaning and intent of the Conditional
Agreement. In early 1995, the Houdes moved for judgment on
the pleadings as well as for summary judgment, reiterating
their claim that the Conditional Agreement unambiguously
released them from the Note. In the Houdes' Statement of
Undisputed Material Facts submitted in connection with their
summary judgment motion, the Houdes acknowledged that the
FDIC had been appointed as receiver for MNB. The Houdes also
moved to dismiss, or for a default judgment based on a claim
that the servicing agreement between the FDIC and Recoll
violated the Maine champerty statute. See 17-A M.R.S.A. ___
516(1). The FDIC cross-moved for summary judgment. In May
1995, the district court denied these motions.
A jury trial was scheduled for early June 1995.
Shortly before trial, the FDIC filed a motion in limine
seeking to preclude the Houdes from questioning the FDIC's
standing to recover on the Note. The Houdes opposed this
motion. The district court denied the motion without
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addressing the merits of the standing issue. At trial, the
parties stipulated that (1) the FDIC possessed the original
Note, (2) the Houdes' signatures on the documents were
authentic, and (3) the Houdes had made no payments on the
Note since June 1993. The FDIC offered in evidence the
original Note which was payable to MNB and had not been
indorsed to any other entity. The FDIC called as a witness
James Golden, the FDIC account officer, who had only been the
custodian of the Houde file for the two weeks prior to trial.
Golden testified to the series of events occurring after the
failure of MNB up until the time of trial: (1) the FDIC was
appointed receiver of MNB, (2) the Note passed to NMNB, a
bridge bank set up by the FDIC, (3) the FDIC dissolved NMNB,
(4) the Note passed to the FDIC as receiver for NMNB. Golden
testified that the Note was not among the NMNB assets that ___
Fleet Bank purchased from the FDIC. The FDIC did not offer
or have with it any public or business records evidencing the
transfers to which Golden testified.
The Houdes objected to Golden's testimony and to
the introduction of the Note in evidence, arguing that
Golden's testimony was inadmissible hearsay, as he had no
personal knowledge of the transactions to which he testified.
In addition, they argued that Golden's testimony was not the
best evidence of the transactions in question. The district
court sustained the Houdes' objection and struck Golden's
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testimony. The FDIC then requested a short continuance to
allow it to obtain documentation of the underlying
transactions to which Golden had testified. The court denied
a continuance, granting judgment as a matter of law in favor
of the Houdes. The court stated that there was "no basis
whatsoever on which a jury could conclude that the plaintiff
is entitled to enforce this note."1 In response to the FDIC
counsel's indication that he would file a motion for
reconsideration of the directed verdict later that afternoon,
the court indicated that it would not reconsider its
____________________
1. The district court ruled from the bench:
There is a complete gap in the evidence
between the time the bank [sic] was
lawfully in the possession of Maine
National Bank and the title to the
document was in Maine National Bank, and
the time that it ultimately came to rest
in the possession of this plaintiff, and
there is no formal proof, first of all
that Maine National Bank ever went into
receivership, if so, what happened with
respect to any of the assets of that
institution as a result of that,
specifically what happened with respect
to this note and mortgage. And there is
no proof or evidence sufficient to permit
a jury to reach a verdict in favor of the
plaintiff with respect to what happened
to that note, and what has been referred
to as its many transitions in ownership
among, apparently New Maine National
Bank, Fleet Management Corporation, Fleet
Bank and RECOLL Management Corporation,
and ultimately its transfer back into the
possession of FDIC. It is not even clear
that the note ever left the possession of
the FDIC in the first place, but all of
that is completely in doubt.
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decision. The court issued a final judgment dismissing the
FDIC's action on June 8, 1995.
II. II.
The FDIC contends that the district court erred in
finding that the evidence of the FDIC's ownership of the Note
was so inadequate that the FDIC's claim to enforce the Note
against its makers, the Houdes, fails as a matter of law.
Alternatively, the FDIC argues that the district court abused
its discretion in refusing to grant a brief continuance so as
to enable the FDIC to procure records that would establish
its requisite interest in the Note. The Houdes reply that
the FDIC never presented competent proof of the various
transactions through which it allegedly acquired lawful
ownership and possession of the Note, Golden's testimony
having, in their view, been rightly stricken as hearsay.
They argue that without such competent evidence, the FDIC's
case failed as a matter of law.
The district court dismissed the case because it
concluded that the FDIC had failed to meet its burden of
presenting sufficient evidence to establish, prima facie,
that it was a party entitled to enforce the Note. Without
proper proof of ownership, the Note would not be admissible
as a basis for the FDIC's claim. The question, of course,
would not be whether the FDIC's right to enforce the Note was
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conclusively established but whether enough of a case was
made out to go to the jury. See Fed. R. Civ. P. 50(a) ("If ___
. . . there is no legally sufficient evidentiary basis for a
reasonable jury to find for [a] party on [an] issue, the
court may determine the issue against that party and may
grant a motion for judgment as a matter of law against that
party.").
1. The FDIC's Burden of Proof 1. The FDIC's Burden of Proof
The FDIC argues that possession of the Note was a
sufficient basis for it to be entitled to a presumption that
it could enforce the Note. The FDIC points to federal law,
set forth in FIRREA,2 providing expressly that the FDIC
succeeds by operation of law to a failed bank's right and
title in all its assets, see 12 U.S.C. 1821(d)(2)(A), ___
infra. FIRREA, however, does not spell out what the FDIC _____
needs to prove in order to show its entitlement to sue on a
transferred asset like the Note. The Supreme Court has
recently held that matters left unaddressed in FIRREA are
controlled by state law. O'Melveny & Myers v. FDIC, 114 S. __________________ ____
Ct. 2048, 2054 (1994). We look, therefore, to Maine law to
supplement FIRREA in determining what the FDIC, as receiver
of NMNB, needed to show for it to be found a party entitled
____________________
2. FIRREA is the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989, 103 Stat. 183, codified in
various sections of 12 and 18 U.S.C.
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to enforce the Note. See, e.g., RTC v. Maplewood Invs., 31 ___ ____ ___ ________________
F.3d 1276, 1293-94 (4th Cir. 1994) (holding that question of
whether RTC is a holder in due course is governed by state
law); see also FDIC v. Grupo Girod Corp., 869 F.2d 15, 17 _________ ____ _________________
(1st Cir. 1989) (applying Puerto Rico law to determine
whether the FDIC was a holder in due course); FDIC v. Bandon ____ ______
Assocs., 780 F. Supp. 60, 63 (D. Me. 1991). But see FDIC v. _______ _______ ____
World Univ. Inc., 978 F.2d 10, 13-14 (1st Cir. 1992) (pre- _________________
O'Melveny case). _________
The applicable Maine law, set forth in the Maine
Uniform Commercial Code, Negotiable Instruments, 11 M.R.S.A.
3-1101 et seq.,3 provides that a note qualifying as a ________
____________________
3. The Maine Uniform Commercial Code was amended in 1993,
after the execution of the Note but before the execution of
the Conditional Agreement and before the institution of the
lawsuit in question. The earlier version of the Maine
Uniform Commercial Code, Negotiable Instruments, was codified
at 11 M.R.S.A. 3-101, et seq. (repealed in 1993). _______
Both parties have taken the position in this
litigation that the Note is a negotiable instrument (the
Houdes in their appellate brief, and the FDIC in motions
submitted to the district court), and neither party has
argued that the Note is not a negotiable instrument even
though, with its variable interest rate, the Note is arguably
not a negotiable instrument under the pre-1993 version of the
Maine Uniform Commercial Code. See e.g., FSLIC v. Griffin, ________ _____ _______
935 F.2d 691, 697 n.3 (5th Cir. 1991), cert. denied, 502 U.S. ____________
1092 (1992); New Conn. Bank & Trust Co., N.A. v. Stadium ___________________________________ _______
Management Corp., 132 B.R. 205, 208-09 (D. Mass. 1991). In ________________
the absence of an applicable statute, the FDIC's initial
burden would be subject to Maine common law. In discerning
the common law requirements for the FDIC to show that it is
entitled to enforce the variable interest rate Note, we would
be inclined to look to the statutory requirements for
enforcing negotiable instruments by analogy. As the parties
have not argued otherwise and as it is hard to see how the
outcome of this case would change in any event, we proceed on
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negotiable instrument can be enforced by "holder[s]" and
"nonholder[s] in possession of the instrument who [have] the
rights of [] holder[s]." See 11 M.R.S.A. 3-1301.4 The FDIC ___
is plainly not a "holder" under Maine law because the Note
was not indorsed to the FDIC and therefore was not
"negotiated."5 See 11 M.R.S.A. 3-1201 ("[I]f an instrument ___
____________________
the assertion that the Note is a negotiable instrument under
Maine law.
4. The version of the Maine Uniform Commercial Code in
effect before 1993 also provided that holders as well as
transferees with the rights of holders could enforce a
negotiable instrument. See 11 M.R.S.A. 3-201, Comment 8 ___
(repealed 1993).
5. The federal holder in due course doctrine, which provides
a buffer for the FDIC against certain defenses, does not give
the FDIC the status of a "holder" in the instant situation.
This Circuit has held that the federal doctrine is generally
not applicable to the FDIC in its receivership capacity. See ___
Capitol Bank & Trust Co. v. 604 Columbus Ave. Realty Trust _________________________ _______________________________
(In re 604 Columbus Ave. Realty Trust), 968 F.2d 1332, __________________________________________
1352-53 (1st Cir. 1992) (stating that the federal holder in
due course doctrine does not apply to the FDIC as receiver
except in the case of a purchase and assumption transaction);
see also FDIC v. Laguarta, 939 F.2d 1231, 1239 n. 19 (5th ________ ____ ________
Cir. 1991) (same). But see Campbell Leasing, Inc. v. FDIC, _______ _______________________ ____
901 F.2d 1244, 1249 (5th Cir. 1990) (stating that the FDIC
may enjoy federal holder in due course status whether acting
in its corporate or receivership capacity); Firstsouth, F.A. _________________
v. Aqua Constr., Inc., 858 F.2d 441, 443 (8th Cir. 1988) ___________________
(providing FSLIC-Receiver with federal holder in due course
status).
We note that the continuing viability of the
federal holder in due course doctrine is questionable. A
circuit split has arisen as to whether the doctrine is still
valid after O'Melveny & Myers, supra. Compare DiVall Insured _________________ _____ _______ ______________
Income Fund Ltd. Partnership v. Boatmen's First Nat'l Bank of ____________________________ _____________________________
Kansas City, 69 F.3d 1398, 1402 (8th Cir. 1995) and Murphy v. ___________ ___ ______
FDIC, 61 F.3d 34, 38 (D.C. Cir. 1995) (holding that O'Melveny ____ _________
& Myers leaves no room for common law D'Oench doctrine) with _______ _______ ____
MotorCity of Jacksonville v. Southeast Bank N.A., 83 F.3d __________________________ ____________________
1317, 1327-28 (11th Cir. 1996). This court has not yet
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is payable to an identified person, negotiation requires
transfer of possession of the instrument and its indorsement
by the holder.");6 see also Calaska Partners Ltd. v. Corson, ________ _____________________ ______
672 A.2d 1099, 1104 (Me. 1996) (holding that holder in due
course status is not conferred when financial instruments are
transferred in bulk to the FDIC).
Not being a holder, the FDIC had to show, as a
prerequisite to enforcing the Note against the Houdes, that
it was a transferee in possession entitled to the rights of a
holder. See 11 M.R.S.A. 3-1203. Comment 2 following 3- ___
1203 provides:
If the transferee is not a holder because
the transferor did not indorse, the
transferee is nevertheless a person
entitled to enforce the instrument . . .
if the transferor was a holder at the
time of transfer. . . . Because the
transferee is not a holder, there is no
presumption . . . that the transferee, by
producing the instrument, is entitled to
payment. The instrument, by its terms,
is not payable to the transferee and the
transferee must account for possession of
the unindorsed instrument by proving the
transaction through which the transferee
acquired it. Proof of a transfer to the __________________________
____________________
expressed an opinion as to the effect of O'Melveny & Myers on _________________
the doctrine.
In any event, the present case does not present a
situation for which the doctrine was created. The federal
holder in due course doctrine is designed to protect the FDIC
from claims unascertainable from the books of the failed
institution, a purpose unrelated to the present.
6. The term "negotiation" is similarly defined in the pre-
1993 statute, 11 M.R.S.A. 3-202 (repealed in 1993).
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transferee by a holder is proof that the _________________________________________
transferee has acquired the rights of a _________________________________________
holder. At that point the transferee is _______
entitled to the presumption . . . .
(emphasis added).7 Thus, in order minimally to be entitled
to the presumption under Maine law that it could enforce the
Note, the FDIC was required (1) to prove a sufficient
transfer from a holder (here MNB, to which the Note was made
payable by the Houdes) to the FDIC in its present capacity as
receiver of NMNB, and (2) to produce the Note at trial.
2. The Evidence At Trial 2. The Evidence At Trial
The FDIC brought this action in its capacity as
receiver for NMNB. The NMNB was allegedly a bridge bank set
up pursuant to 12 U.S.C. 1821(n) by the FDIC following the
failure of MNB. The FDIC produced the Note at trial, and the
parties stipulated that the signatures were authentic and
____________________
7. The result would not be different under the pre-1993
version of the Maine Uniform Commercial Code which provided:
[T]he transferee without indorsement of
an order instrument is not a holder and
so is not aided by the presumption that
he is entitled to recover on the
instrument . . . . The terms of the
obligation do not run to him, and he must
account for his possession of the
unindorsed paper by proving the
transaction through which he acquired it.
Proof of a transfer to him by a holder is _________________________________________
proof that he has acquired the rights of _________________________________________
a holder and that he is entitled to the _________________________________________
presumption. ___________
11 M.R.S.A. 3-201, Comment 8 (repealed in 1993).
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that the instrument the FDIC possessed was the original.
What remained, therefore, was for the FDIC to establish a
proper transfer of the Note to it in its suing capacity
(receiver of NMNB) from the Note's holder, MNB.
The first step in this transfer could rather easily
have been established given the provisions of FIRREA. A
transfer of all the holder's (MNB's) rights in the Note to
the FDIC as receiver for MNB could be demonstrated simply by
showing that the FDIC became the receiver of MNB. Once a
receivership of a failed bank takes place, the transfer of
the failed bank's assets to the FDIC occurs by operation of
law -- the FDIC as receiver of a failed institution
succeeding under federal law to:
(i) all rights, titles, powers, and
privileges of the insured depository
institution, . . .
(ii) title to the books, records, and
assets of any previous conservator or
other legal custodian of such
institution.
12 U.S.C. 1821(d)(2)(A).
The most serious problem in the instant case is
what additional proof is needed to prove that enforceable
title to the Note was transmitted to the FDIC in its
subsequent and present capacity as receiver of the bridge ________________________
bank, NMNB. Under the Maine negotiable instruments law, ___________
there has to be "[p]roof of a transfer to the transferee by a
holder" of the Note, establishing "proof that the transferee
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[i.e., the FDIC as receiver of NMNB] has acquired the rights
of a holder [MNB]." 11 M.R.S.A. 3-1203, Comment 2, supra. _____
As stated above, if the FDIC were suing in the capacity of
receiver of MNB, nothing more would be required than a
showing of such receivership, coupled with a production of
the Note, for the FDIC to become entitled to the presumption
that it was entitled to payment. But the FDIC is suing as
receiver of a different entity, NMNB. There is no automatic
transfer provided by federal law of the assets of the FDIC as
receiver of a failed bank to a bridge bank, nor is there an
automatic transfer from a bridge bank back to the FDIC upon
the termination of the bridge bank. See 12 U.S.C. 1821(n). ___
A key question, therefore, is whether the record
below properly established the formation of NMNB, the
transfer of the Note to NMNB, the demise of NMNB and the
appointment of the FDIC as its receiver, and the transfer of
the Note from NMNB to the FDIC as receiver of that entity.
The FDIC relied on the testimony of its witness, Golden, to
show this. Golden testified, among other things, to the
FDIC's receivership of MNB, the creation of NMNB, the
subsequent dissolution of NMNB, and the Note's transfer to
the FDIC as NMNB's receiver. The court, however, struck
Golden's testimony. We agree with the court that Golden,
having taken over the Houde file only two weeks before trial
and not claiming direct personal knowledge of these events,
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could not testify to them over objection. See Fed. R. Evid. ___
602 ("A witness may not testify to a matter unless evidence
is introduced sufficient to support a finding that the
witness has personal knowledge of the matter.") Although, as
custodian of the Houde file, his testimony might well have
been sufficient to authenticate business records, admissible
under an exception to the hearsay rule, that may have proved
the underlying transactions, see Fed. R. Evid. 803(6), the ___
FDIC did not have any of the underlying documents with it at
trial. Nor was the FDIC prepared to offer public records
such as might establish the appointment of the FDIC as
receiver of MNB and NMNB respectively. See Fed. R. Evid. ___
803(8), 901(b)(7) (indicating that public records are
admissible as an exception to the hearsay rule and generally
self-authenticating). Thus, the FDIC was without admissible
evidence of its ownership of the Note. The FDIC conceded
that it was unprepared at the time to present alternative
evidence after Golden's testimony was struck, although it
said it could obtain the relevant evidence if the court would
grant a brief continuance. Without such a foundation, the
court declined to permit the Note to be received into
evidence. Without the Note in evidence, the FDIC felt that
it could not proceed.8
____________________
8. After a lengthy discussion in which the court indicated
that there was insufficient evidence of foundation to allow
the Note into evidence and that even if the FDIC were to
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Attempting to justify the lack of admissible
foundation evidence, the FDIC now argues that because the
Note was never indorsed and never made payable to anyone
other than MNB, it plainly could not have been sold to a
third party by the FDIC or the bridge bank. But while the
absence of an indorsement on the Note strengthens the
argument that no one acquired a title superior to that of the
FDIC, it does not by itself meet the FDIC's burden to
"account for possession of the unindorsed instrument by
proving the transaction through which the transferee acquired
it." 11 M.R.S.A. 3-1203, Comment 2, supra. _____
We note that the Houdes, in their Statement of
Undisputed Material Facts submitted to the district court in
conjunction with their earlier summary judgment motion,
conceded that the FDIC was appointed receiver for MNB, that
the FDIC created NMNB, that the FDIC appointed itself the
____________________
provide additional documentation and witnesses to lay the
proper foundation, it would be in violation of the court's
Final Pretrial Order, the court declined to grant a
continuance. The following colloquy then took place:
[FDIC's Counsel]: Then, your Honor, we have no further
witnesses.
THE COURT: I take it the Plaintiff rest [sic] at
this time?
[FDIC's Counsel]: Yeah.
THE COURT: Does the defendant rest?
[Houdes' Counsel]: Defendant rest [sic] on the complaint and
moves for directed verdict.
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receiver of NMNB, and that "[i]t was through these various
transactions that the FDIC acquired the Note . . . at issue
in this action." The Houdes' subsequent facile recanting of
this admission might arguably be the sort of "fast and loose"
play which leads a court to impose judicial estoppel. See ___
Patriot Cinemas, Inc. v. General Cinema Corp., 834 F.2d 208, _____________________ ____________________
212 (1st Cir. 1987). However, the FDIC made no effort during
the trial to offer the Houdes' Statement in evidence in order
to establish its own ownership of the Note, nor did it make
an estoppel argument.9 In a case such as this with well over
a hundred docket entries, the district court can scarcely be
expected to recall, sua sponte, a fact listed in one document
submitted by the Houdes to the court. Moreover, although the
FDIC mentions the Houdes' admission in its appellate brief,
it does not make a "judicial estoppel" argument, or indeed
any other coordinated argument, as to why the admission
should, at this late date, be binding on the Houdes. See ___
United States v. Caraballo-Cruz, 52 F.3d 390, 393 (1st Cir. _____________ ______________
1995) (stating that "issues adverted to in a perfunctory
____________________
9. The FDIC did indicate to the court, several hours after
the court directed the verdict for the Houdes, that it would
file a motion for reconsideration of the verdict because
"there were judicial binding admissions" submitted by the
Houdes. The district judge indicated that he would not
reconsider the decision because the FDIC should have been
prepared to argue that point at trial. The FDIC did not
submit a motion for reconsideration. Moreover, the FDIC
makes no argument on appeal that the district court's refusal
to reconsider was an abuse of discretion.
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manner, unaccompanied by some effort at developed
argumentation, are deemed waived") (internal quotations
omitted). Given the FDIC's failure to raise the matter in a
timely fashion before the district court and to argue the
matter on appeal, we regard it as having been waived.
The FDIC also argues that this court should now
take judicial notice of the failure of MNB and the taking
over of its assets by the FDIC. This point was also not made
at trial below, the district court never being asked to take
judicial notice of these facts. It is true that the
appointment of the FDIC as receiver of MNB was previously
announced and relied upon as a matter of fact in two
published opinions of this court issued prior to the district
court proceeding under review, as well as in several prior
opinions of the District of Maine, including opinions issued
by the very judge who presided over the present trial.10
____________________
10. See, e.g., United States v. Fleet Bank of Maine, 24 F.3d ___ ____ _____________ ___________________
320, 322 (1st Cir. 1994) (reviewing a decision of the
district court judge who decided the present case, the Court
of Appeals stated: "In January 1991, the Maine National Bank
. . . was declared insolvent and the Federal Deposit
Insurance Corporation . . . was appointed its receiver.");
Bateman v. FDIC, 970 F.2d 924, 926 (1st Cir. 1992) (reviewing _______ ____
a decision of the district court judge who decided the
present case, Court of Appeals stated: "[I]n January 1991,
the federal Comptroller of the Currency declared the [Maine
National] Bank insolvent and appointed the FDIC as
receiver."); Mill Invs. v. Brooks Woolen Co., 797 F. Supp. ___________ __________________
49, 50 (D. Me. 1992) (acknowledgement of same district court
judge that FDIC was appointed receiver of MNB); Cardente v. ________
Fleet Bank of Maine, 796 F. Supp. 603, 606 n.1 (D. Me. 1992) ____________________
(same).
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Nonetheless, the FDIC's judicial notice argument fails for
several reasons. First, even assuming a court could take
judicial notice of the failure of the MNB, no party in this
case requested the court to take such action. While the
district court might well have taken judicial notice of these
well-known facts sua sponte, it was not required to do so
unless requested. See Fed. R. Evid. 201(c),(d). Second, ___
even assuming the district court, or this court on appeal,
did take judicial notice of the failure of the MNB, the
appointment of the FDIC as its receiver, and perhaps even the
creation of the bridge bank, these facts would not relieve
the FDIC from its burden of showing a transfer of the Note
from the bridge bank to the FDIC as receiver for that
institution. These are not matters for judicial notice.
We conclude, therefore, with some regret, that
there was no error in the district court's ruling that, on
the record as it stood, the FDIC had failed to meet its legal
burden. We hold that the record justified the dismissal of
the case as matter of law on the narrow but dispositive
ground declared by the district court.
3. The Denial of the FDIC's Requested Continuance 3. The Denial of the FDIC's Requested Continuance
The FDIC argues that even assuming the FDIC as
receiver of NMNB failed to make out a prima facie case
showing the transactions by which it acquired the Note, the
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court's refusal to grant the FDIC a continuance during which
it could procure the necessary records and other evidence
constituted an abuse of discretion. We review the district
court's refusal to grant a continuance solely for an abuse of
discretion. See United States v. Neal, 36 F.3d 1190, 1205 ___ _____________ ____
(1st Cir. 1994).
Counsel for the FDIC first asked for a two-hour
break and then asked, at 10:30 a.m., that the case be
continued until the next day. The district judge indicated
that he was not willing to recess the case because "[t]his
case should have been prepared weeks ago." In addition, the
judge noted that even if he did allow the continuance, any
documents or testimony the FDIC produced would not be
admissible, over objection, because it would violate the
court's Final Pretrial Order, which required a designation of
all exhibits and witnesses and a description of the
witnesses' testimony. The judge stated:
I am not going to continue this case, . .
. to do so means opening the entire case
up, probably discharging this jury so
that new procedures, pretrial procedures
about these documents can be carried out
in accordance with the prior order of the
court. It would make a complete mockery
of the systematic pretrial preparation of
cases and the elaborate procedure that
the Court has in place to see that these
cases are properly tried.
When reviewing a district court's decision to deny
a continuance, broad discretion must be granted and only
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"unreasonable and arbitrary insistence upon expeditiousness
in the face of a justifiable request for delay" will
necessitate reversal. United States v. Rodriguez Cortes, 949 _____________ ________________
F.2d 532, 545 (1st Cir. 1991) (citing United States v. ______________
Torres, 793 F.2d 436, 440 (1st Cir.), cert. denied, 479 U.S. ______ ____________
889 (1986)); see also Morris v. Slappy, 461 U.S. 1, 11 _________ ______ ______
(1983). In determining whether a denial of a continuance
constitutes an abuse of discretion, the court must consider
the particular facts and circumstances of each case. See ___
Torres, 793 F.2d at 440. The court should consider the ______
reasons in support of the request, the amount of time
requested, whether the movant has contributed to his
predicament, the inconvenience to the court, the witnesses,
the jury and the opposing party, and the likelihood of
injustice or unfair prejudice attributable to the denial of a
continuance. See United States v. Saccoccia, 58 F.3d 754, ___ ______________ _________
770 (1st Cir. 1995), cert. denied, 116 S. Ct. 1322 (1996). ____________
The FDIC argues that the district court's refusal
to grant a continuance led to injustice and unfair prejudice.
It contends that the time needed to gather the necessary
evidence would not have greatly inconvenienced the court, the
jury or the Houdes, and that some of the documents would have
been self-authenticating records admissible in court. This
may be so, but it overlooks a number of factors pointing in
the other direction, among them the presence of the jury and
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the court's reasonable expectation that the FDIC would be
prepared for trial. The FDIC contends that it was
"surprised" that it had to put forth admissible evidence
concerning its ownership of the Note. However, we see no
reason for the FDIC to have been surprised. The Houdes had
challenged the ability of the FDIC to enforce the Note as an
affirmative defense in their answer and had later objected to
the FDIC's motion, which the court denied, to preclude them
from challenging the FDIC's standing to enforce the Note.
The FDIC was plainly on notice that it was dealing with
adversaries who refused to take a relaxed "common sense"
approach on these technical but nonetheless requisite
preliminaries. Indeed, the FDIC showed that it understood
its burden by calling Golden and questioning him on the
matters it did. Unfortunately, it seems not to have
recognized the hearsay problem inherent in Golden's
testimony, nor to have taken the trouble to have with it the
necessary supporting documents.
The court was entitled to expect the FDIC to have
special competence in actions such as this. This suit had
been commenced ten months earlier and, as said, the FDIC knew
the Houdes would challenge its standing to enforce the Note.
It was the FDIC's failure to have prepared its case for trial
that led to the request for a continuance. While the court's
action was strict, and we can imagine some judges who would
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have assessed the situation more charitably to the FDIC, we
cannot say that it abused its discretion in not giving the
FDIC additional time to remedy its lack of preparation. See, ___
e.g., Rodriguez Cortes, 949 F.2d at 545 (holding that ____ _________________
district court did not abuse its discretion in denying motion
for continuance in order to obtain witness to testify that
time indicated on hotel registration card was incorrect when
defendant had been in possession of the time card for six
months and had ample time to obtain a witness). Given the
costs of trials, especially before juries, and the adverse
effects of delay in one case on other litigants seeking
trials, judges must be allowed a considerable discretion in
these matters. We find no abuse here.
III. III.
Because we find that the district court properly
directed a verdict in favor of the Houdes and acted within
its discretion in denying the FDIC's request for a
continuance, we need not reach the issues raised in the
Houdes' cross-appeal.
Affirmed. Affirmed. _________
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Document Info
Docket Number： 95-1853
Filed Date： 8/1/1996
Precedential Status： Precedential
Modified Date： 9/21/2015