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, Assist

______________

General

Counsel,

Deposit Insurance

Colleen B. Bombardier,
_______________________

Senior

Corporation, Andrew Sparks,

_____________

Counsel,

Fede

Paul E. Peck,
____________

John
____

Emory and Drummond & Drummond were on briefs for plaintiff.

_____
___________________
Jeffrey Bennett with whom
_______________

Melinda J. Caterine,
___________________

Clare S. Bened
______________

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

Maine, dismissing its complaint to

a $275,000

promissory note

Roland and Ora

Court for

District of

collect the amount due on

executed in

Houde and made payable to

Bank, and to foreclose on

the

1986 by

defendants

the Maine National

the mortgage securing the

Houdes'

indebtedness.

The

Houdes

cross-appeal

court's denial of four pretrial motions.

from the

district

For the reasons set

forth below, we affirm the district court's order.

I.
I.

In

$275,000

November 1986,

from the Maine

insured national

venture.

Roland and

Ora

Houde borrowed

National Bank ("MNB"),

banking association, to finance

They executed a

note and allonge made

a federally

a business

payable to

MNB (collectively the "Note" or "Houde Note"), and secured by

a mortgage on property located

insolvency in January

in Maine.

After MNB declared

1991, ownership of the Note

the FDIC as receiver, the FDIC says.

passed to

The FDIC also says that

it

transferred the

National Bank

After

assets

Houde

("NMNB"), a

the dissolution

were

recounted

by

Note

purchased

the FDIC,

briefly

to the

bridge bank set

of NMNB

by

in

Fleet

passed

-3-

to

up by

July 1991,

Bank

the

New

and

Maine

the FDIC.

many of

the

FDIC as

rest,

the

its

as

duly

appointed receiver for NMNB.

was

among

the remaining

The FDIC asserts that the Note

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

Corporation ("Recoll") to manage

NMNB.

hired

Recoll

Management

the receivership assets

of

The FDIC maintains that Recoll took over management of

the Note

as well

as other obligations

These other obligations

Concrete,

corporation

shareholder,

owed by

the Houdes.

included loans from MNB

to Turcotte

of

which

that were guaranteed

Concrete filed

for bankruptcy

bankruptcy

proceeding,

negotiated

an

agreement

Mr.

Houde

by the Houdes.

in 1991, and

Recoll,

in June

was

on

behalf

1993

Turcotte

as part

of

resolving

50%

of the

the

FDIC,

Turcotte

Concrete's

debt

Agreements

and

Agreement").

negotiated

(the

"Conditional

Promissory

According

with the

to

Houdes

evidenced by the Note.

Conditional

Agreement

obligations,

by

its

Amendment

Notes,"

the

to

or

FDIC,

Guaranty

"Conditional

Recoll

concerning their

separately

personal debt

The Houdes, however, contend that the

resolving

own

obligations on the Note.

terms,

Turcotte

released

Concrete's

their

personal

On this theory, they have

made no

payments on the Note since June 1993.

In July

state

1994, the

court to collect

FDIC sued

the amount

-4-

the Houdes in

due on

the Note

Maine

and to

foreclose

on the

removed the

the

action to the

District of

summary

judgment

indebtedness

mortgage securing

on

Maine

and

on

the

the

Conditional Agreement.

in

Note

the

debt.

United States District

then moved

ground

had

been

to

that

The Houdes

Court for

dismiss or

their

discharged

for

personal

by

the

The district court denied the motions

September 1994, concluding that there were genuine issues

of

fact as

Agreement.

the

to the

In

meaning

released them

that

the

as for summary

Conditional

from the

Undisputed Material

summary

of the

early 1995, the Houdes moved

pleadings as well

their claim

and intent

Note.

In

for judgment on

judgment, reiterating

Agreement

unambiguously

the Houdes'

Statement of

Facts submitted in connection with their

judgment motion,

the Houdes

acknowledged that

FDIC had been appointed as receiver for MNB.

moved to dismiss, or for a

that

the servicing

violated the Maine

516(1).

Conditional

the

The Houdes also

default judgment based on a claim

agreement between

champerty statute.

The FDIC cross-moved

the

FDIC and

See 17-A
___

Recoll

M.R.S.A.

for summary judgment.

In May

1995, the district court denied these motions.

A jury

trial was

scheduled for

early June

1995.

Shortly

before trial,

seeking

to preclude the

standing to

motion.

the

recover on

The

FDIC filed

motion in

Houdes from questioning

the Note.

district

court

The Houdes

denied

the

limine

the FDIC's

opposed this

motion

without

-5-

addressing the merits

of the standing issue.

At trial, the

parties stipulated that

(1) the FDIC possessed

Note,

(2) the

Houdes'

signatures

authentic, and

(3) the

Houdes had made

Note

since June

original

1993.

Note which

The

on

the

indorsed to any other entity.

to

documents

no payments

FDIC offered

was payable

the original

were

on the

in evidence

MNB and

had not

The FDIC called as

the

been

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:

(2) the Note

(1) the FDIC was

appointed receiver

of MNB,

passed to

bridge bank set up

by the FDIC, (3) the FDIC dissolved NMNB,

(4) the Note passed to the FDIC as receiver for NMNB.

NMNB, a

Golden

testified that

the Note was

Fleet Bank purchased

not among the NMNB

___

from the FDIC.

The FDIC

assets that

did not offer

or have with it any public or business records evidencing the

transfers to which Golden testified.

The

the

Houdes objected

introduction of

Golden's testimony

the

to Golden's testimony

Note

in

was inadmissible

evidence,

and to

arguing

hearsay, as

he had

that

no

personal knowledge of the transactions to which he testified.

In addition, they argued that Golden's testimony was

best evidence of

court

the transactions in question.

sustained the

Houdes'

objection and

-6-

not the

The district

struck Golden's

testimony.

The FDIC

allow

to

it

then requested a

obtain

documentation

short continuance to

of

transactions to which Golden had testified.

a continuance, granting judgment as

of the

Houdes.

The

whatsoever on which

is entitled

court stated

the

underlying

The court denied

a matter of law in favor

that there was

"no basis

a jury could conclude that the plaintiff

to enforce this note."1

In response to the FDIC

counsel's

indication

that

he

would

file

motion

for

reconsideration of the directed verdict later that afternoon,

the

court

indicated

that

it

would

not

reconsider

____________________

1.

The district court ruled from the bench:

There is

a complete gap in

the evidence

between

the

time

the

lawfully

in

the

possession

National

Bank

and

bank

of

Maine
the

document was in Maine National Bank,

and

ultimately came to rest

in the possession of
there is

no formal

that Maine

this plaintiff, and

proof, first

National Bank ever

receivership, if

so, what

respect

of the

to

any

institution

as

specifically what
to

title

was

to

the time that it

the

[sic]

of all

went into

happened with
assets

result

of

happened with

this note and mortgage.

of that
that,
respect

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

its

to that

note, and what has been referred

to as its
among,

many transitions in

apparently

New

ownership

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.

-7-

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

against its

that the FDIC's claim to

makers, the

Houdes, fails as

enforce the Note

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

its requisite

the

FDIC

interest in the

never

transactions

procure records that

Note.

presented competent

through

which

it

would establish

The Houdes

proof

allegedly

of

reply that

the various

acquired

lawful

ownership

having,

and possession

in their

They argue that

of

the

view, been

Note, Golden's

rightly

testimony

stricken as

without such competent evidence,

hearsay.

the FDIC's

case failed as a matter of law.

The

concluded

presenting

that it was

proper

district court

that the

FDIC had

sufficient

dismissed the case

failed to

evidence to

a party entitled to

the FDIC's claim.

meet its

establish,

burden of

prima facie,

enforce the Note.

proof of ownership, the Note

as a basis for

because it

Without

would not be admissible

The question, of

course,

would not be whether the FDIC's right to enforce the Note was

-8-

conclusively established

made out

but whether

to go to the jury.

jury to

find for

court

may determine

grant

a motion for judgment as

party.").

the

a case

was

See Fed. R. Civ. P. 50(a) ("If

___

. . . there is no legally sufficient

reasonable

enough of

evidentiary basis for a

[a] party

issue against

on [an]

issue, the

that party

and may

a matter of law against that

1. The FDIC's Burden of Proof

1. The FDIC's Burden of Proof

The FDIC argues

that possession of the Note

sufficient basis for it to

it could enforce

set

forth

in

succeeds by

title

infra.
_____

in

be entitled to a presumption that

the Note.

The FDIC

FIRREA,2 providing

operation of

all its

law to a

assets,

FIRREA, however,

see 12
___

asset

points to federal law,

expressly

like the

that

failed bank's

U.S.C.

does not spell

needs to prove in order to

transferred

was a

the FDIC

right and

1821(d)(2)(A),

out what

the FDIC

show its entitlement to sue on

Note.

The

Supreme

left unaddressed

Court has

recently held

that matters

in FIRREA

controlled by

state law. O'Melveny & Myers v. FDIC,

__________________
____

are

114 S.

Ct. 2048, 2054 (1994).

supplement FIRREA in

We

look, therefore, to Maine law

determining what the FDIC,

of NMNB, needed to show for

to

as receiver

it to be found a party

entitled

Institutions Reform,

Recovery,

____________________

2.
and

FIRREA is

the Financial

Enforcement Act

of

1989, 103

various sections of 12 and 18 U.S.C.

-9-

Stat.

183, codified

in

to enforce the Note.

See, e.g.,
___ ____

F.3d 1276, 1293-94 (4th Cir.

whether

RTC is a

Cir. 1989)

1994) (holding that question of

holder in due course

law); see also FDIC v.

_________ ____

(1st

RTC v. Maplewood Invs., 31

___
________________

is governed by state

Grupo Girod Corp.,

_________________

(applying

Puerto

Rico

869 F.2d 15,

law

whether the FDIC was a holder in due course);

Assocs., 780 F. Supp. 60,

_______

World Univ. Inc., 978 F.2d

_________________

63 (D. Me. 1991).

to

17

determine

FDIC v. Bandon
____
______

But see FDIC v.

_______ ____

10, 13-14 (1st Cir.

1992) (pre-

O'Melveny case).
_________

The

applicable Maine law,

set forth in

Uniform Commercial Code, Negotiable Instruments, 11

the Maine

M.R.S.A.

3-1101

et seq.,3
________

provides

that

note

qualifying

as a

____________________

3.

The

Maine Uniform Commercial

after the execution

of the Note but before

the Conditional Agreement

lawsuit

in

Code was amended

question.

in 1993,

the execution of

and before the institution

The

earlier

version

of the

of the

Maine

Uniform Commercial Code, Negotiable Instruments, was codified

at 11 M.R.S.A.

3-101, et seq. (repealed in 1993).

_______

Both
litigation

parties

that the

have

Note is

Houdes in

their appellate

submitted

to

argued

that

the

taken
a

in

this

negotiable instrument

(the

brief, and

district court),

the Note

the

is not

position

the
and

FDIC in
neither

a negotiable

motions
party has

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.

___________________________________

Management Corp., 132

________________
the

absence of

burden would be
the common law

B.R. 205, 208-09 (D. Mass.

an applicable

statute,

v. Stadium
_______
1991).

the FDIC's

subject to Maine common law.

In

initial

In discerning

requirements for the FDIC to show

that it is

entitled to enforce the variable interest rate Note, we would

be

inclined

enforcing

to

look

to

the

statutory

requirements

negotiable instruments by analogy.

have not argued

otherwise and as it

for

As the parties

is hard to see

how the

outcome of this case would change in any event, we proceed on

-10-

negotiable

instrument can

"nonholder[s]

be

enforced

by "holder[s]"

and

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

was

not

not a "holder"

indorsed

"negotiated."5

to

under Maine law because

the

FDIC

See 11 M.R.S.A.
___

and

the Note

therefore

was

not

3-1201 ("[I]f an instrument

____________________

the assertion that the Note is a

negotiable instrument under

Maine law.

4.

The

effect

version
before

of

the Maine

1993 also

Uniform

Commercial

Code in

provided that

holders as

well as

transferees

with the

rights

negotiable

instrument.

See
___

of

holders

11 M.R.S.A.

could

enforce

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

This Circuit has held that

the instant situation.

the federal doctrine is generally

not applicable to the FDIC in its receivership capacity.

Capitol Bank & Trust Co.
_________________________
(In

re

604 Columbus

Ave.

See
___

v. 604 Columbus Ave. Realty Trust

_______________________________
Realty

Trust),

968 F.2d

1332,

__________________________________________
1352-53

(1st Cir. 1992) (stating

due course

doctrine does not

that the federal holder in

apply to the FDIC

as receiver

except in the case of a purchase and assumption transaction);

see also FDIC
________ ____

v. Laguarta,
________

Cir. 1991) (same).

939 F.2d 1231,

1239 n. 19

(5th

But see Campbell Leasing, Inc. v. FDIC,

_______ _______________________
____

901 F.2d 1244, 1249 (5th

Cir. 1990) (stating that the

may enjoy federal holder in due

FDIC

course status whether acting

in its corporate or receivership capacity); Firstsouth, F.A.

_________________
v.

Aqua Constr., Inc., 858

___________________

F.2d 441,

(providing FSLIC-Receiver with

443 (8th

Cir. 1988)

federal holder in

due course

status).
We
federal

note

holder in

that

the

continuing

due course doctrine

circuit split has arisen as

viability

of

is questionable.

the
A

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.
__________________________
1317,

1327-28 (11th

Southeast Bank N.A., 83

____________________

Cir. 1996).

This court

has not

F.3d
yet

-11-

is

payable to

transfer

an

person, negotiation

requires

of possession of the instrument and its indorsement

by the holder.");6

672 A.2d

identified

see also Calaska Partners Ltd. v. Corson,

________ _____________________
______

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

prerequisite to enforcing

FDIC had

to show,

the Note against the

as a

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

1203 provides:

If the transferee is not a holder because

the

transferor

transferee

is

did

time

the transferor
of

indorse,

nevertheless

entitled to enforce
if

not

the

person

the instrument . . .
was a

holder at

the

transfer. . . .

Because

the

transferee is

not a holder, there

is no

presumption . . . that the transferee, by

producing the instrument,
payment.

The

is entitled to

instrument, by its

is not payable to the transferee

terms,
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

__________________________

3-

____________________

expressed an opinion as to the effect of O'Melveny & Myers on

_________________
the doctrine.
In any
situation for

event, the present case does

which the doctrine

not present a

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"

1993 statute, 11 M.R.S.A.

is similarly defined in
3-202 (repealed in 1993).

-12-

the pre-

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

(1)

FDIC

was

required

to

prove

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

receiver for

brought this

NMNB.

its capacity

as

The NMNB was allegedly a bridge bank set

up pursuant to 12 U.S.C.

failure of MNB.

action in

1821(n) by the FDIC following the

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
an order
so is
he

is

without indorsement

instrument is not

not aided by the

entitled

instrument

. .

a holder and

presumption that

to
. .

of

recover
The

on

terms of

the
the

obligation do not run to him, and he must

account

for

unindorsed

his
paper

possession
by

of

proving

the
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).

-13-

that

the instrument

What remained,

proper

the FDIC

therefore, was

transfer of

the Note

possessed

for the

to

it in

was the

FDIC to

original.

establish a

its suing

capacity

(receiver of NMNB) from the Note's holder, MNB.

The first step in this transfer could rather easily

have

been established

transfer of

given the

all the holder's

the FDIC as receiver for

showing that the

provisions of

FIRREA.

(MNB's) rights in the

Note to

MNB could be demonstrated simply by

FDIC became the

receiver of MNB.

Once

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

failed

institution

succeeding under federal law to:

(i)

all

rights,

privileges

of

the

titles,
insured

powers,

and

depository

institution, . . .

(ii)
assets

title to
of

the

books, records,

any previous

conservator

and
or

other

legal

custodian

of

such

institution.

12 U.S.C.

1821(d)(2)(A).

The most

what additional

title

to

the

subsequent and

bank, NMNB.
___________

serious problem

proof is

Note

was

needed to

Maine

instant case

prove that

transmitted to

present capacity

Under the

in the

the

is

enforceable

FDIC

in

its

as receiver of the bridge

________________________

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

-14-

[i.e., the FDIC as receiver

of NMNB] has acquired the rights

of a holder [MNB]."

11 M.R.S.A.

As

the FDIC were suing

stated above, if

receiver

showing

of

MNB, nothing

that

more

of such receivership,

the Note, for the FDIC

it was

3-1203, Comment 2, supra.

_____

would

in the capacity of

be required

coupled with a

than

production of

to become entitled to the presumption

entitled to payment.

receiver of a different entity,

But the FDIC

NMNB.

is suing as

There is no automatic

transfer provided by federal law of the assets of the FDIC as

receiver of

a failed bank to a bridge

automatic transfer from

a bridge bank back to

the termination of the bridge bank.

A key

below

properly

transfer

of the

established

Note to

from NMNB to

The FDIC relied

show

this.

FDIC's

the

FDIC as

formation

NMNB, the demise

of

record

NMNB,

of NMNB

the

and the

its receiver, and the transfer of

the FDIC as receiver

Golden testified,

of

1821(n).

is whether the

on the testimony of its

receivership

subsequent

the

the FDIC upon

See 12 U.S.C.
___

question, therefore,

appointment of the FDIC as

the Note

bank, nor is there an

MNB,

dissolution of NMNB,

NMNB's receiver.

among

the

of that entity.

witness, Golden, to

other things,

creation

of

and the Note's

The

to the

NMNB,

the

transfer to

court, however,

struck

Golden's testimony.

We agree

having taken over the Houde

and not claiming

with the

court that

Golden,

file only two weeks before trial

direct personal knowledge of

these events,

-15-

could not testify to them over objection.

602 ("A witness

may not testify to a

See Fed. R.
___

Evid.

matter unless evidence

is

introduced sufficient

to

support

finding

witness has personal knowledge of the matter.")

custodian of

the Houde file,

the

well have

business records, admissible

hearsay rule, that may have proved

underlying transactions, see

___

Fed. R. Evid.

803(6), the

FDIC did not have any of the underlying documents with

trial.

such

Nor was

as

receiver of

803(8),

the FDIC prepared

might establish

MNB and

901(b)(7)

the

to offer

appointment

NMNB respectively.

(indicating

that

Thus, the

it at

public records

of the

See Fed.
___

public

admissible as an exception to the hearsay rule

self-authenticating).

the

Although, as

his testimony might

been sufficient to authenticate

under an exception to the

that

FDIC

as

R. Evid.

records

are

and generally

FDIC was without admissible

evidence of

that

its ownership

it was

evidence

of the Note.

unprepared at

after Golden's

The

the time to

testimony

FDIC conceded

present alternative

was struck,

although it

said it could obtain the relevant evidence if the court would

grant a

court

brief continuance.

declined

evidence.

to

Without

permit

Without such a

the

Note

to

foundation, the

be

the Note in evidence, the

received into

FDIC felt that

it could not proceed.8

____________________

8.

After a lengthy

that there was

the Note

discussion in which the

court indicated

insufficient evidence of foundation

into evidence

and that

-16-

even if

the FDIC

to allow
were to

Attempting

foundation evidence,

Note was

other

third party by

of

an

justify

the FDIC

never indorsed

than MNB,

absence

to

never made

on

Note

admissible

payable to

bridge bank.

the

of

that because

could not have

the FDIC or the

indorsement

lack

now argues

and

it plainly

the

anyone

been sold

But

the

to a

while the

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.

We

Undisputed

the

note that

the Houdes,

in

their Statement

of

Material Facts submitted to the district court in

conjunction

conceded

3-1203, Comment 2, supra.

_____

with

their

earlier

that the FDIC was

FDIC created NMNB,

summary

judgment

motion,

appointed receiver for MNB, that

that the

FDIC appointed

itself the

____________________

provide

additional documentation

proper foundation,
Final

Pretrial

continuance.

it would be

Order,

the

and witnesses

to

in violation of
court

declined

lay the

the court's
to

grant

The following colloquy then took place:

[FDIC's Counsel]:

Then,

your

witnesses.

Honor,

we

have no

further

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.

-17-

receiver

of NMNB, and

that "[i]t was

through these various

transactions

that the FDIC acquired the Note

in this action."

. . . at issue

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

an estoppel argument.9

Note, nor did it make

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.

FDIC mentions the

Moreover, although the

Houdes' admission in its

appellate brief,

it does not

any

other

should, at

make a "judicial

coordinated

estoppel" argument, or

argument, as

this late date,

(stating that

why

be binding on

United States v. Caraballo-Cruz,

_____________
______________

1995)

to

the admission

the Houdes.

52 F.3d 390, 393

"issues adverted

to

indeed

in a

See
___

(1st Cir.

perfunctory

____________________

9.

The FDIC did indicate to

the court, several hours

the court directed the verdict

file

a motion

"there
Houdes.

The district

reconsider the
prepared
submit

binding
judge

of

the verdict

because

admissions" submitted
indicated that

decision because

to argue
a motion

for the Houdes, that it would

for reconsideration

were judicial

after

that point at

the FDIC
trial.

for reconsideration.

he

by the

would not

should have
The FDIC

been

did not

Moreover, the

FDIC

makes no argument on appeal that the district court's refusal

to reconsider was an abuse of discretion.

-18-

manner,

unaccompanied

argumentation,

omitted).

are

by

deemed

some

effort

waived")

at

developed

(internal

quotations

Given the FDIC's failure to raise

timely fashion

before the

district court

the matter in a

and to

argue the

matter on appeal, we regard it as having been waived.

The FDIC

take judicial

also argues

notice of

that this

the failure of

court should

MNB and

now

the taking

over of its assets by the FDIC.

at trial below, the district

judicial

notice

of

these

appointment of

the FDIC

announced

relied

and

This point was also not made

court never being asked to take

facts.

It

as receiver

upon

as

is

true

of MNB

a matter

of

that

the

was previously

fact

in

two

published opinions of this court issued prior to the district

court proceeding

opinions

by the

under review, as

well as in

several prior

of the District of Maine, including opinions issued

very

judge who

presided over

the present

trial.10

____________________

10.
320,

See, e.g., United States v. Fleet Bank of Maine, 24 F.3d

___ ____ _____________
___________________
322

(1st

Cir.

1994)

(reviewing a

decision

district court judge who decided the present case,

of Appeals stated:
. . . was

declared

of

the

the Court

"In January 1991, the Maine National Bank

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

present case, Court of

the federal Comptroller
National]

Bank

court

judge who

Appeals stated:

decided

"[I]n January

of the Currency declared

insolvent

and

appointed

the

receiver."); Mill Invs. v. Brooks Woolen Co., 797

___________
__________________
49,

the
1991,

the [Maine
FDIC

as

F. Supp.

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).

-19-

Nonetheless, the

FDIC's judicial

several reasons.

First,

even assuming

judicial notice of the failure

case

requested the

notice argument

court to

fails for

a court

could take

of the MNB, no party in

take such

action.

this

While the

district court might well have taken judicial notice of these

well-known facts

unless

requested.

even assuming

did

sua sponte,

See
___

it was not

Fed. R.

Evid. 201(c),(d).

the district court,

take judicial

notice of

required to

the

or this court

failure of

do so

Second,

on appeal,

the MNB,

the

appointment of the FDIC as its receiver, and perhaps even the

creation of

the bridge bank,

the FDIC from its

these facts would

burden of showing

not relieve

a transfer of the

Note

from

the

bridge bank

institution.

We

there was

to

the

FDIC

as receiver

for

that

These are not matters for judicial notice.

conclude,

no error in

therefore,

with

some regret,

the district court's ruling

that

that, on

the record as it stood, the FDIC had failed to meet its legal

burden.

the

We

case as

hold that the record justified

matter of

law

on the

the dismissal of

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

receiver

FDIC argues

of NMNB

failed

that even

to

make out

showing the transactions by which

assuming

the FDIC

prima facie

it acquired the Note,

as

case

the

-20-

court's

it could

refusal to grant the FDIC a continuance during which

procure the

constituted an

necessary records

abuse of discretion.

We

and other

evidence

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

break

and

the FDIC

then asked,

at

first asked

10:30

a.m.,

for a

that the

two-hour

case

be

continued until the next

day.

The district

judge indicated

that he

to recess the case

because "[t]his

was not willing

case should have been prepared

judge noted

documents

that even if

or

admissible,

testimony

weeks ago."

In addition, the

he did allow the

continuance, any

the

over objection,

FDIC

produced

because

it

would

not

would violate

be

the

court's Final Pretrial Order, which required a designation of

all

exhibits

and

witnesses

witnesses' testimony.

and

description

The judge stated:

I am not going to continue this case, . .

.
up,

to do so means opening the entire case

probably

discharging this

jury

so

of

the

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
the

and the

elaborate procedure

that

Court has in place to see that these

cases are properly tried.

When reviewing a district court's decision

continuance, broad

discretion must

-21-

be

to deny

granted and

only

"unreasonable and

arbitrary insistence

in

the

face

of

justifiable

necessitate reversal.

F.2d

532,

545 (1st

Cir.

(1986)); see also

_________

(1983).

request

for

delay"

will

United States v. Rodriguez Cortes, 949

_____________
________________

Torres, 793 F.2d 436, 440

______

889

upon expeditiousness

In determining

1991)

(citing United States

______________

v.

(1st Cir.), cert. denied, 479 U.S.

____________

Morris
______

v. Slappy,
______

1, 11

denial of

a continuance

constitutes an abuse

of discretion, the court

must consider

the particular facts

and circumstances

Torres,
______

793 F.2d

reasons

in

at 440.

support

of

whether a

461 U.S.

The court

the request,

of each

case.

should consider

the

amount

of

See
___

the

time

requested,

whether

the

movant

has

predicament, the inconvenience to

the jury

and

the

opposing

contributed

the court, the

party, and

the

to

his

witnesses,

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

may

be so, but it overlooks a

admissible in court.

This

number of factors pointing in

the other direction, among them

the presence of the jury and

-22-

the court's

prepared

reasonable expectation

for

"surprised"

trial.

that it

concerning its

The

had to

ownership of

FDIC

put

that the

contends

FDIC would

that

forth admissible

the Note.

However, we

it

be

was

evidence

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

from challenging

The

FDIC was

adversaries

approach

the FDIC's

plainly on

who refused

on

these

preliminaries.

its

burden by

matters

it

recognized

standing to

notice

technical

calling

but

Unfortunately,

hearsay

relaxed "common

nonetheless

problem

seems

inherent

testimony, nor to have taken the trouble to have

with

sense"

requisite

it understood

questioning

it

Note.

was dealing

FDIC showed that

Golden and

them

enforce the

that it

to take

Indeed, the

did.

the

the court denied, to preclude

him on

the

not

to

have

in

Golden's

with it the

necessary supporting documents.

The court was

special competence

entitled to expect the FDIC

in actions such

as this.

This

to have

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.

action was strict,

and we can imagine some

-23-

While the court's

judges who would

have assessed the

cannot say

situation more charitably to the

that it abused

its discretion in not

FDIC, we

giving the

FDIC additional time to remedy its lack of preparation.

See,
___

e.g.,
____

that

Rodriguez Cortes,
_________________

949

F.2d

at

545

(holding

district court did not abuse its discretion in denying motion

for continuance in

time

witness to testify

that

indicated on hotel registration card was incorrect when

defendant had

months and had

costs

order to obtain

been in

possession of the

ample time to

of trials, especially

time card

obtain a witness).

before juries, and

for six

Given the

the adverse

effects

of delay

in

trials, judges must

these matters.

one case

on

other litigants

be allowed a considerable

seeking

discretion in

We find no abuse here.

III.
III.

Because we find

directed a

its

verdict in favor

discretion

continuance, we

in

need

Houdes' cross-appeal.

Affirmed.
Affirmed.
_________

that the

district court

of the Houdes and

denying

not reach

the

the

FDIC's

properly

acted within

request

issues raised

for

in

the

-24-