Appeal from the Circuit Court of Cook County. Honorable Kenneth L. Gillis, Judge Presiding.
The Honorable Justice Rizzi delivered the opinion of the court: Greiman, P.j., and Tully, J., concur.
The opinion of the court was delivered by: Rizzi
The Honorable Justice RIZZI delivered the opinion of the court:
Plaintiff, Larry Villarreal, brought this suit to recover damages for breach of an oral contract entered into between him and Civic Federal Savings Bank, a federal savings bank, and based upon a cause of action arising from 12 CFR 545.121(b) (1995). Defendant, Metropolitan Bank & Trust Company, is the successor to Civic Savings Bank; hereafter, Civic Federal Savings Bank and Metropolitan Bank & Trust Company shall be referred to jointly as the Bank. The Bank filed a 2-619(7)(9) motion to dismiss on the bases that the alleged contract is unenforceable under the provisions of the Statute of Frauds and that it is unenforceable because it lacks consideration. 735 ILCS 5/2-619(7)(9) (West 1992). The trial court granted the Bank's motion, and dismissed the case with prejudice. We reverse and remand.
The Bank is regulated by the United States Office of Thrift Supervision. Villarreal was the Chief Executive Officer, Chairman of the Board, and President of the Bank, which is located in Chicago, Illinois. Another Bank officer, Lawrence Kelliher, allegedly committed certain crimes, including bank fraud. There was an investigation of Kelliher by the United States Office of Thrift Supervision, which involved all officers of the Bank, including Villarreal, who is related to Kelliher.
Under the circumstances, on May 7, 1990, Villarreal was asked by the Bank to withdraw as Chief Executive Officer of the Bank, pending a resolution of the investigation that arose from the actions of Kelliher. Also, on May 7, 1990, there was an oral agreement between Villarreal and the Board of Directors of the Bank that if he withdrew, he would be indemnified and reimbursed for any investigation expenses and legal fees incurred by him in the matter of his own defense arising from his service as the Chief Executive Officer and Director of the Bank.
In addition, Villarreal alleges in the complaint that on May 7, 1990, there was an oral agreement between Villarreal and the Bank which provided:
"Plaintiff would withdraw as Chief Executive Officer of Civic Federal pending a resolution of the legal problems that arose from the actions of Kelliher. In exchange for withdrawing as Chief Executive Officer of Civic Federal, Civic Federal would pay to Plaintiff his salary from the time he withdrew as Chief Executive Officer until it was determined whether or not any action would be taken against the Plaintiff. However, if any action was taken against the Plaintiff by any governmental agency as a result of his actions as Chief Executive Officer, then Civic Federal would not be required to pay Plaintiff his salary from the time he withdrew as Chief Executive Officer until it was determined whether or not any action would be taken against the Plaintiff."
On May 7, 1990, Villarreal withdrew as Chief Executive Officer of the Bank. Thereafter, Villarreal incurred investigation and legal expenses of $30,323.03 in connection with the Kelliher investigation, by reason of his having been the President and Chief Executive Officer of the Bank during the period that was involved in the investigation.
Although Villarreal was under investigation in the Kelliher matter, no formal action was ever taken against Villarreal by any governmental agency as a result of his actions or conduct with the Bank. As a result, on December 17, 1991, the Board of Directors authorized payment of $30,323.03 to Villarreal for his investigation expenses and legal fees, and payment of $120,416.61 for seventeen months lost wages; in 1990, Villarreal's salary was $85,000 per year. On the same day, December 17, 1991, the Board of Directors of the Bank notified the United States Office of Thrift Supervision in writing of its intent to pay the $30,323.03 and $120,416.61 to Villarreal. The Bank's December 17, 1991 letter provides:
It is proposed that indemnification would be made in accordance with the Agreement attached hereto and incorporated herein by reference which provides (a) the payment of $120,416.61 which represents 17 months' salary (calculated on the salary in place on May 7, 1990); (b) $1,000.00 which represents the pro rata portion of the profit realized by the Association on the sale of a 1987 Mercedes Benz; and (c) reimbursement and legal fees in the aggregate amount of $30,323.03.
Appended hereto and incorporated herein by this reference is a Certificate of Corporate Secretary attesting to the action taken by the Board of Directors of Civic at its regular meeting held December 16, 1991 approving this submission and authorizing the payment under the ...