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Rohr v. Reliance Bank

United States District Court, E.D. Missouri, Eastern Division

May 28, 2015

JERRY VON ROHR, Plaintiff,
v.
RELIANCE BANK, Defendant.

MEMORANDUM AND ORDER

CAROL E. JACKSON UNITED STATES DISTRICT JUDGE

This matter is before the court on the motion of defendant Reliance Bank for summary judgment. Plaintiff Jerry Von Rohr has filed a response in opposition and the issues are fully briefed.

I. Background

In 1998, plaintiff was employed by Reliance Bancshares, Inc., as its chairman, president, and chief executive officer. The term of the original agreement was sixty calendar months. Employment Agreement, ¶3(a) [Doc. #44-2]. On September 1, 2001, the plaintiff and defendant[1] entered into an amended employment agreement that stated in relevant part:

(a) Term of Employment. Effective September 1, 2001, the period of Executive’s employment under this Agreement shall continue for a period of thirty-six (36) full calendar months thereafter. Commencing September 1, 2002, this Agreement shall continue for consecutive three (3) year periods unless either party terminates the same by giving written notice to the other not less than sixty (60) days before September 1, each year. If notice of termination is given as aforesaid, this Agreement shall continue for the balance of the term herein provided and then will terminate at the end thereof. . .

Amended Agreement, ¶1(a) [Doc. #44-3].

On June 16, 2011, a special meeting of the defendant’s board was convened to discuss plaintiff’s employment. Letter dated Oct. 3, 2011, at 3 [Doc. #44-8]. The board believed that plaintiff’s employment contract would expire on August 31, 2011, so long as they gave him at least 60 days’ notice. During the meeting, “a majority of the Board quorum present voted to give you written notice that your Employment Agreement would not be renewed.” Several reasons for the decision were identified including, as relevant here, “the opinion that your leadership was significantly responsible for the Bank’s current financial condition.” Id. at 3-4. That same day, the defendant notified plaintiff in writing that his employment agreement would not be renewed and his employment would be terminated effective September 1, 2011. The notice was “provided according to the terms contained in Paragraph 1(a)” of the amended agreement. Letter dated June 16, 2011 [Doc. #44-4].

Plaintiff asserted that his employment contract did not end for another year and claimed that he was entitled to compensation for one year’s salary, contributions to his retirement plan, and other benefits. The defendant contacted the Federal Deposit Insurance Corporation (FDIC) to inquire whether the compensation plaintiff sought constituted a “golden parachute” payment. The FDIC responded that the requested payments indeed qualified as a golden parachute and could not be made to plaintiff unless the defendant submitted an application certifying that plaintiff was not responsible for the bank’s troubled condition. The defendant never filed an application requesting authority to make the payments. See Administrative Record at 000023 [Doc. #8].

On February 15, 2013, plaintiff filed this action asserting a breach of contract claim and seeking a declaration that the compensation and benefits he requested do not constitute a golden parachute under federal law and regulations. On September 17, 2013, plaintiff asked the FDIC to determine whether the payments he seeks are a golden parachute. The court stayed proceedings while his request was pending before the FDIC. On October 28, 2013, Mark Moylan, deputy regional director for the FDIC’s division of risk management, issued a determination that the payments plaintiff seeks would constitute a prohibited golden parachute under the Federal Deposit Insurance Act (FDIA), 12 U.S.C. 1828(k)(4)(A) and the FDIC’s regulations, 12 C.F.R. § 350.1. The parties agreed that Mr. Moylan’s determination constituted the final decision on the FDIC and asked the court to review the decision under the Administrative Procedures Act, 5 U.S.C. §§ 701-706. On May 20, 2014, the court determined that plaintiff had not met his burden of showing that the FDIC decision was arbitrary and capricious and upheld the FDIC’s decision. [Doc. #13].

II. Legal Standard

Rule 56(a) of the Federal Rules of Civil Procedure provides that summary judgment shall be entered if the moving party shows “that there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law.” In ruling on a motion for summary judgment the court is required to view the facts in the light most favorable to the non-moving party and must give that party the benefit of all reasonable inferences to be drawn from the underlying facts. AgriStor Leasing v. Farrow, 826 F.2d 732, 734 (8th Cir. 1987). The moving party bears the burden of showing both the absence of a genuine issue of material fact and its entitlement to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986); Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). Once the moving party has met its burden, the non-moving party may not rest on the allegations of his pleadings but must set forth specific facts, by affidavit or other evidence, showing that a genuine issue of material fact exists. United of Omaha Life Ins. Co. v. Honea, 458 F.3d 788, 791 (8th Cir. 2006) (quoting Fed.R.Civ.P. 56(e)). Rule 56 “mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex Corporation v. Catrett, 477 U.S. 317, 322 (1986).

III. Discussion

Defendant seeks summary judgment based on the doctrine of impossibility, arguing that it cannot comply with the contractual obligations plaintiff alleges without violating federal law.

Under Missouri law, “‘impossibility’ is explained as follows: ‘If a party, by contract, is obligated to a performance that is possible to be performed, the party must make good unless performance is rendered impossible by an Act of God, the law, or the other party.’” Breitenfeld v. Sch. Dist. of Clayton, 399 S.W.3d 816, 835 (Mo. 2013) (en banc) (quoting Farmers’ Elec. Co–op., Inc. v. Missouri Dep’t of Corr., 977 S.W.2d 266, 271 (Mo. 1998) (en banc)). “[W]hen a contractual duty cannot be performed without violating the law, the duty of performance is discharged.” Kansas City, Missouri v. Kansas City, Kansas, 393 F.Supp. 1, 6 (W.D. Mo. 1975) (citing Ellis Gray Milling Co. v. Sheppard, 222 S.W.2d 742 (Mo. 1949) and Stein v. Bruce, 366 ...


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