APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SECOND DIVISION
508 N.E.2d 337, 155 Ill. App. 3d 633, 108 Ill. Dec. 176 1987.IL.549
Appeal from the Circuit Court of Cook County; the Hon. Albert Green, Judge, presiding.
PRESIDING JUSTICE SCARIANO delivered the opinion of the court. BILANDIC and STAMOS, JJ., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE SCARIANO
This case involves Edward A. Williams' (Williams) claim against the Federal Deposit Insurance Corporation as receiver for the Tri-State Bank (Tri-State) to collect compensation for certain services he allegedly rendered to Tri-State. The FDIC counterclaimed, contending that Williams was indebted to Tri-State pursuant to a promissory note. The trial court granted summary judgment in favor of the FDIC on Williams' claim as well as on the counterclaim and awarded the FDIC its attorney fees. The TSB Corporation and Central National Bank (Central) are not parties to this appeal. The only questions presented for review are whether the trial court erred in granting summary judgment in favor of the FDIC as count IV of Williams' amended complaint and on the counterclaim and whether the award of attorney fees was warranted by the evidence. We affirm.
Williams was an officer, director, and shareholder of TSB, an Illinois bank holding company, since its inception in 1974, at which time TSB purchased 91.7% of the common stock of Tri-State. As a result of the acquisition, Williams became a member of Tri-State's board of directors and eventually succeeded to the positions of chairman of the board of directors and acting chief executive, which he held from February 1980 until his resignation in December 1980. The Tri-State purchase was financed by a $1,800,000 loan from Central, made possible by TSB's pledge of the Tri-State stock to Central as collateral. TSB did not have any significant assets other than the Tri-State stock, and TSB financed its loan payments to Central with the dividends from the stock.
In January 1979, the FDIC issued to Tri-State a proposed "Cease and Desist Order" demanding, among other things, that Tri-State increase its capitalization and cease paying dividends to its shareholders. Tri-State subsequently stopped paying dividends to TSB, which, as noted previously, owned over 90% of the outstanding shares of Tri-State. Without the dividends, TSB was unable to make its payments to Central and consequently defaulted on the loan.
Williams claims that after receiving the proposed cease and desist order, he negotiated with Central to restructure TSB's debt and also sought other investors for additional capital. Williams alleges that in October 1979, he and TSB entered into an oral agreement with Central whereby Central agreed that it would not demand payment on the defaulted loan, but would instead restructure the indebtedness, invest $300,000 in TSB to satisfy the FDIC's requirements, and forebear from selling the pledged bank stock, provided that Williams gained control of TSB and waived collecting any compensation for his services as an employee of Tri-State. Williams maintains that he performed his obligation under the agreement by acquiring rights to 6,700 additional shares of TSB stock, replacing two officers and directors of Tri-State, and waiving receipt of his salary for his services, effective June 1, 1980, and for as long as the debt of TSB to Central remained in default. Williams asserts, however, that Central breached the oral agreement with Williams and TSB on November 26, 1980, by refusing to restructure the debt of TSB and causing the shares of Tri-State pledged to it by TSB to be cancelled and new shares issued directly to Central, thereby giving Central control over Tri-State.
Central also allegedly threatened to sell certain shares of Tri-State stock which Williams had pledged to Tri-State to secure a personal loan. On August 8, 1980, more than three months prior to the date when Central gained control of Tri-State by allegedly breaching the agreement with Williams, Williams made a demand promissory note with Tri-State as payee in the amount of $140,000 for the purpose of restructuring his then existing personal loans. On the face of the note and by attached security documents signed by Williams, Williams pledged a certificate of deposit, two trust accounts in the Evanston Bank, and a savings account as collateral. When Williams did not make any payments on the note, Tri-State, on May 7, 1981, offset $23,166.68 of one of the accounts assigned to it by Williams as security and applied it against accrued interest. On October 7, 1981, Tri-State offset the remaining $3,429.65 of the pledged account against the outstanding principal, thus reducing the principal amount to $136,570.35.
After Central's alleged breach of the oral agreement, Williams filed a three-count complaint in chancery seeking injunctive and other relief. Williams later amended his complaint to include five counts. Counts I, II, and III of his amended complaint alleged breach of the purported
On October 8, 1982, the Commissioner of Banks and Trust Companies of the State of Illinois took possession of Tri-State, appointed the FDIC as its receiver, and filed a complaint for dissolution of the bank. The FDIC was subsequently granted leave to be substituted for Tri-State as a party to this action. The FDIC answered Williams' amended complaint, alleging that counts I, II, and III failed to state a cause of action against Tri-State, responding to count IV with the affirmative defense that Williams waived any claim to compensation, and responding to count V with the affirmative defense that Federal law precluded redemption of the stock of a bank in liquidation.
The trial court subsequently granted the FDIC's motion for summary judgment on all counts of plaintiff's amended complaint as well as on the counterclaim previously filed by Tri-State against Williams. The court first found that counts I, II, and III failed to state a cause of action. Concerning count IV, the court stated:
"FDIC's affirmative defense of waiver to Count IV of plaintiff's amended complaint is taken as true, based upon plaintiff's omission to respond to the defense. Furthermore, the facts presented to the court have proven the affirmative defense. Williams' claim in Count IV for ...