Rosenberger v. United Community Bancshares, Inc
2017 IL App (1st) 161102
| Ill. App. Ct. | 2017Background
- Rosenberger was hired as CenTrust’s Chief Lending Officer under a 3‑year employment agreement that promised severance equal to two times annual base salary if terminated without "Cause."
- CenTrust was designated a troubled institution under a July 25, 2012 Consent Order; FDIA golden‑parachute restrictions and implementing regs (12 C.F.R. pt. 359) apply to severance for institution‑affiliated parties.
- UCB’s executive committee issued a detailed October 15, 2013 performance‑correction plan requiring weekly progress reports; Rosenberger disputed the plan but offered to work on a reporting format in a October 30 letter.
- UCB terminated Rosenberger for "cause" on November 5, 2013 and declined to pay $406,400 in severance; Rosenberger sued for breach of contract for unpaid severance.
- UCB moved for summary judgment asserting legal impossibility under FDIA §1828(k) because the severance is a prohibited golden parachute (no agency approval in record); alternatively it argued Rosenberger was fired for cause.
- The trial court granted summary judgment for UCB on impossibility; on appeal the court reversed and remanded, finding genuine issues whether (a) UCB could have sought FDIC/OCC approval (the "white‑knight" exception) and (b) Rosenberger was terminated for cause.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FDIA golden‑parachute rules make performance objectively impossible | Rosenberger: he qualifies for the "white‑knight" exception and either party could have sought FDIC/OCC approval, so impossibility fails | UCB: payment is a prohibited golden parachute for a troubled institution and no agency consent exists, so performance is impossible | Reversed trial court: genuine fact issue exists whether required certifications could be made and approval sought; impossibility not established as a matter of law |
| Whether Rosenberger was terminated for "cause" under the contract (failure to follow reasonable instructions) | Rosenberger: he disputed the performance plan, offered to cooperate on weekly reports, and was terminated shortly after — not clearly failure to follow instructions | UCB: Rosenberger rejected the plan and failed to comply with weekly reporting requirement, so cause existed | Remanded: factual dispute exists whether he refused to follow reasonable instructions — summary judgment inappropriate |
Key Cases Cited
- Material Service Corp. v. Department of Revenue, 98 Ill. 2d 382 (Ill. 1983) (a prevailing party who obtained all relief in trial court cannot cross‑appeal)
- Michigan Avenue Nat’l Bank v. State Farm Ins. Cos., 83 Ill. App. 3d 507 (Ill. App. Ct. 1980) (party asserting impossibility bears the burden)
- Staton v. Amax Coal Co., 122 Ill. App. 3d 631 (Ill. App. Ct. 1984) (employer bears burden to prove employee misconduct justifying termination)
- Mitchell v. Jewel Food Stores, 142 Ill. 2d 152 (Ill. 1991) (whether employee disobeyed orders is a question for the factfinder)
- Rohr v. Reliance Bank, 826 F.3d 1046 (8th Cir. 2016) (summary judgment appropriate where employee failed to rebut bank’s evidence that necessary regulatory certifications could not be made)