United States v. First National Bank of Circle

First National Bank of Circle (defendant) made loans to Fort Belknap Builders (Builders), which failed to pay federal withholding and FICA taxes despite paying its employees' wages. The government sued the Bank under a statute imposing liability on lenders who fund employers' wages knowing the employer cannot or will not pay its required taxes. The Bank's general-denial answer did not specifically dispute supplying funds to Builders, and the parties later agreed to a pretrial order listing five specific Bank defenses -- none of which claimed the Bank never supplied funds at all. At the start of trial, the Bank moved for summary judgment on exactly that new theory -- that it had merely arranged financing as an agent rather than supplying funds itself -- and the court granted it. The government appealed.