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04/13/95 RUSSELL H. EWERT v. DREXEL NATIONAL BANK

April 13, 1995

RUSSELL H. EWERT, PLAINTIFF-APPELLEE,
v.
DREXEL NATIONAL BANK, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Cook County. The Honorable Kenneth L. Gillis, Jude Presiding.

Released for Publication May 26, 1995.

Presiding Justice Cousins delivered the opinion of the court: Gordon and McNULTY, JJ., concur.

The opinion of the court was delivered by: Cousins

PRESIDING JUSTICE COUSINS delivered the opinion of the court:

Defendant, Drexel National Bank, appeals from the trial court's order of November 18, 1993, which granted plaintiff, Russell H. Ewert, an award of prejudgment interest in the amount of $8,954.70 as well as post-judgment interest on a prior judgment awarding plaintiff $80,000 in damages in connection with plaintiff's claim against defendant for breach of an employment agreement signed by the parties. On appeal, defendant contends that because the National Bank Act provides that the board of directors of a national banking association organization may discharge its officers "at pleasure" (see 12 U.S.C. § 24 (1982)), the employment agreement which restricts defendant's ability to discharge plaintiff without incurring liability is void and unenforceable and, as a result, the trial court erred in determining that plaintiff, under the employment agreement, may recover for being terminated from his employment before the expiration of the three-year agreed-upon tenure of employment with defendant.

We affirm.

BACKGROUND

Defendant is a national banking organization organized under the laws of the United States with its principal place of business in Chicago, Illinois. Plaintiff was appointed to the position of president and chief operating officer of defendant by defendant's board of directors. On February 9, 1989, plaintiff and defendant signed an "employment agreement" which provided that plaintiff would be employed by defendant in that position for a three-year term at a salary of at least $100,000 per year. The agreement permitted defendant to unilaterally terminate plaintiff's employment at any time and for any reason upon written notice. However, the agreement also contained a severance agreement which provided that if defendant terminated plaintiff's employment before the end of the agreed-upon three-year tenure, such termination would not affect defendant's obligation to continue to pay plaintiff his salary for the remaining period of the agreement and defendant would be obligated to pay plaintiff severance benefits equal in amount to plaintiff's salary under the agreement.

On April 25, 1989, defendant informed plaintiff by letter that his employment was terminated. From May 1989 until April 1991, in accordance with its obligation under the severance agreement, defendant paid plaintiff semi-monthly severance benefits equal to plaintiff's salary under the employment agreement. In or around April 1981, defendant's attorney advised plaintiff that defendant would no longer pay plaintiff severance benefits under the severance agreement. Thereafter, defendant ceased paying plaintiff such benefits.

On March 12, 1992, plaintiff filed a complaint against defendant seeking recovery for loss of severance benefits based on the following legal theories: (1) breach of contract; and, in the alternative, (2) promissory estoppel. On May 26, 1992, defendant filed an answer to the portion of plaintiff's complaint based on a breach of contract theory as well as a motion to dismiss the portion of plaintiff's complaint based on a promissory estoppel theory. In defendant's answer, defendant averred, as an affirmative defense, that because the National Bank Act provides that a national banking association organization has the power to dismiss its officers "at pleasure" (see 12 U.S.C. § 24 (1982)), the severance agreement is unenforceable and void to the extent that it forbids plaintiff's discharge except under penalty of compensating plaintiff for the full term of the agreement.

On June 15, 1992, plaintiff filed an answer to defendant's affirmative defense wherein plaintiff denied defendant's allegation that the National Bank Act (see 12 U.S.C. § 24 (1982)) renders unenforceable and void the parties' severance agreement to the extent that it forbids plaintiff's discharge except under penalty of compensating plaintiff for the full term of the agreement. On July 29, 1992, plaintiff filed a response to defendant's motion to dismiss the portion of plaintiff's complaint based on a theory of promissory estoppel. On August 5, 1992, defendant filed a response in support of its motion to dismiss the portion of plaintiff's complaint based on a promissory estoppel theory.

On November 13, 1992, after a hearing on the matter, the trial court entered an order dismissing the portion of plaintiff's complaint based on a theory of promissory estoppel, but granted plaintiff leave to amend the pleading within 28 days.

On December 10, 1992, plaintiff filed an amended complaint which again alleged an action for breach of contract and further amended plaintiff's claim based on a theory of promissory estoppel. On January 11, 1993, defendant filed an answer to the portion of plaintiff's complaint asserting an action for breach of contract as well as a motion to dismiss the portion of plaintiff's amended complaint which asserted a cause of action based on a theory of promissory estoppel. In defendant's answer to the amended complaint, defendant again asserted as an affirmative defense that because the National Bank Act provides that a national banking association organization has the power to dismiss its officers "at pleasure" (see 12 U.S.C. § 24 (1982)), the severance agreement is unenforceable and void to the extent that it forbids plaintiff's discharge except under penalty of paying plaintiff compensation for the full term of the agreement.

Subsequently, on March 11, 1993, the trial court entered an order granting defendant's motion to dismiss the portion of plaintiff's amended complaint which sought ...


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