Federal Deposit Insurance Corp. v. Houde

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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