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05/04/87 Robert A. Withall, v. Capitol Federal Savings of

May 4, 1987

ROBERT A. WITHALL, PLAINTIFF-APPELLANT

v.

CAPITOL FEDERAL SAVINGS OF AMERICA, F/K/A CAPITOL FEDERAL SAVINGS & LOAN ASSOCIATION, ET AL., DEFENDANTS-APPELLEES



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIRST DIVISION

508 N.E.2d 363, 155 Ill. App. 3d 537, 108 Ill. Dec. 202 1987.IL.579

Appeal from the Circuit Court of Cook County; the Hon. Alan E. Morrill, Judge, presiding.

APPELLATE Judges:

JUSTICE O'CONNOR delivered the opinion of the court. QUINLAN, P.J., and BUCKLEY, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE O'CONNOR

This is an appeal from an order dismissing all five counts of a complaint seeking damages for libel per se, libel per quod, and abuse of process. At issue on appeal is: (1) whether a finding that defamatory allegations in the complaint were untrue and made without reasonable cause negates the absolute privilege generally accorded pleadings; (2) whether the discovery rule can be construed to allow the statute of limitations to run from the time of the destruction of the privilege rather than from the time of the publication of the defamatory statements; and (3) whether plaintiff's complaint pleads a cause of action for abuse of process.

On November 21, 1984, the plaintiff, Robert A. Withall (Withall) filed a five-count verified complaint against Capitol Federal Savings of America (Capitol) and Thomas G. Przyborski (Przyborski) individually and as Capitol's executive vice-president. Withall alleged as follows: For approximately 34 years (from 1946-1980), he had been regularly employed in the banking and thrift industry in increasing positions of trust and confidence. During that time he was required to and did submit to inquiry from bonding authorities to allow his employers to obtain a surety bond to cover any loss that might occur from a violation of this trust.

In August 1976, he was employed by Capitol as a loan officer. As a necessary prerequisite to employment by Capitol, Withall provided Capitol's surety with the information necessary to demonstrate his integrity and to allow the surety to issue a bond covering his employment.

In May 1978, Withall became a member of Capitol's loan committee, then comprised of president C. James Salak and executive vice-president Przyborski. Despite the fact that he performed all of his duties in an honest, good, and workmanlike manner, he was terminated by Capitol on July 15, 1979. He was subsequently reemployed in the banking industry in another position of trust and confidence that also required that a surety issue a bond to cover his employment.

On June 16, 1980, Hinsdale Federal Savings and Loan Association filed an action against Capitol in the circuit court of Cook County alleging Capitol's breach of contract and misrepresentation in connection with a loan participation agreement to which both associations had been parties. Przyborski and Capitol's counsel interviewed Withall regarding the loan transaction in question and confronted him with allegations that certain loan documents were missing.

Following the interview, on July 11, 1980, Capitol filed an action against Withall and other defendants. The unverified complaint alleged that Withall conspired to defraud Capitol by obtaining the proceeds of an inflated first mortgage loan on a portion of property and that in furtherance of the conspiracy he removed or concealed certain files and concealed the scheme from Capitol by destroying certain business records.

On November 7, 1980, Capitol Federal, through its executive vice-president, Przyborski, filed under oath a proof of loss under fidelity bond with Fidelity & Deposit Company of Maryland. In it, Capitol realleged the statements made in the July 11, 1980, unverified complaint and stated that Capitol had sustained a loss in the amount of $1,135,000 through the dishonesty of loan officer Robert Withall.

In a January 14, 1981, unverified amended complaint, Capitol alleged:

"(e) Defendant Withall removed certain records from the files of Capitol so that the second loan transaction with the Defendants would not be known to the Board of Directors and the Loan Committee of Capitol, and did cause the Plaintiff to disburse the sum of $650,000 to the Defendants, based upon the ...


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