First United Financial Corporation v. United States Fidelity & Guaranty Company

96 F.3d 135, 1996 U.S. App. LEXIS 26095, 1996 WL 518023

• Court: Court of Appeals for the First Circuit
• Decided: September 27, 1996
• Docket: 95-60554
• Status: Published

Opinions

PER CURIAM:

The judgment of the district court is affirmed for the following reasons:

1. No issue of coverage is raised by First United in the summary judgment record. It contends that Paul Broadhead and expert witnesses, by their depositions, testify that employees of First United Bank dishonestly caused it to buy loan participations that led to losses. We agree with the district court that this testimony fails to prove dishonesty. Broadhead only concludes, “on reflection,” that O’Dom and his officers were part of a dishonest plot when O’Dom said these were good loans. He refers to a banking relationship by which First United Bank took many loans, most of which were profitable to the Bank, and all of which were taken with the right to return to the selling bank until reimbursement was stopped by the FDIC in 1984, long after the assailed transactions in which O’Dom participated.

The expert testimony was, likewise, properly rejected by the court. Their opinion of dishonesty goes beyond the scope of expertise. They looked at boxes of documents and the relationships between O’Dom and the notorious Herman Beebe and concluded that O’Dom was dishonest. Their conclusion will not substitute for evidence of dishonesty. By their knowledge of banking practices they may only assist and not replace the fact finder.

2. U.S.F. & G. cannot be faulted for its response to the claim against First United Bank by attorney Turley in 1986 and 1987. The proof of loss filed by the Bank on June 29, 1987 must be taken in context with the discussions between the parties. The Bank claimed no losses caused by its employees but only called for protection against liability claimed against it on behalf of the lawyer for its stockholders. When that claim was abandoned, the surety properly ceased its activity.

3. We would reach the same result if this appeal were from a judgment as a matter of law after trial but upon this same evidence. The admissibility of expert testimony is governed by the same rules, whether at trial or on summary judgment. And we review the decision of the trial court by the same abuse of discretion standard. Christophersen v. Allied-Signal Corp., 939 F.2d 1106, 1109, cert. denied, 503 U.S. 912, 112 S.Ct. 1280, 117 L.Ed.2d 506 (1992). For this reason, the concurring opinion is both unnecessary and unhelpful. The writer of that opinion tries to justify his product by saying that admissibility of the expert opinion is not the issue here. The district court ruled that there was no evidence of dishonesty. Counsel for appellee has taken that position in the district court and in this court. Judges need not initiate nice questions for legal exercise.

AFFIRMED.